The Impact of Early Employment Influences on the Development of Organizational Commitment

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1 The Impact of Early Employment Influences on the Development of Organizational Commitment Dr. Liu, Chu-Mei, Department of International Business, Ching Yun University, Taiwan ABSTRACT This effort is a by-product of a research activity on the effectiveness a pharmaceutical company s training program for newly hired sales representatives. Change in organizational commitment is measured at two points in the early employment of new salespersons in order to isolate the effects of early employment exposure of the medical representatives, a period of 18-month wherein attrition of new employees is high. Training satisfaction and perceived reward equity related negatively to change in organizational commitment, while manager commitment showed positive relationship during the first six months on the sales job. Research and managerial implications are given. Keywords: Organizational commitment, training satisfaction. INTRODUCTION It is a common concern and key goal for organization s HRD units to seek measurements that accurately estimate the commitment of their employees and develop programs and activities that increase the said commitment to the This is highly critical for the study s target company because of its perceived high turnover of newly recruited medical representatives within their provisional period, extending to a 18-months time frame. A widely researched topic in psychology and management is the concept and role of organizational commitment (OC). This construct has been linked to the important outcomes performance and turnover (Hom and Griffeth, 1995). Likewise, it is shown to have an intermediate and mediating linkage between antecedent variables and these outcome variables in the researches of Johnston, Parasuraman, Futrell, and Black (1990) and Sager and Johnston (1989). While the organizational commitment construct has received the most attention in the psychology and management literature, it is also important in marketing and this discipline is starting to focus its attention on the construct. This attention is primarily due to the importance of commitment in understanding the actions of sales employees and the relationship between employees and organizations. One limitation of most OC research is that it has measured commitment at a single point in time during employment. The purpose of this paper, therefore, is to assess the status of the organizational commitment construct and introduce a new way of looking at OC especially in early stages of employment (Johnston et al., 1990) wherein the target company seems to be having problems. In the current study, OC is measured at two points in time during the first six months of employment for new salespersons thereby allowing a measure of change in OC. Focus is on three early employment factors identified during the interviews of medical representatives, managers and supervisors: training satisfaction, perceived reward equity and manager commitment. These constructs have not received a great deal of attention in OC research, but typically play an important role in early socialization of salespersons (Wanous, J.P. 1980). Since the literature provided limited research on the antecedents of interest, this effort is conceptualized as an exploratory study.

2 The choice of the target participants is not dictated only by the company s problem of attrition but also facilitation of control for experiential and other tenure variables that might influence or play important role in shaping employees subsequent attitudes and behaviors (Allen and Meyer, 1990; Dubinsky, Howell, Ingram, and Bellenger, 1986; Wanous, 1980; Youngblood, Mobley, and Meglino, 1983). The dynamic nature of new employees being socialized into an organization (Dubinsky et al., 1986) requires more longitudinal study to capture the dynamics of OC over time (Youngblood et al., 1983), However, the main objective is to focus on the crucial initial period of employment in an organization, which according to Allen and Meyer (1990) plays an important role in the development of future employees subsequent attitudes and work behaviors. Organizational Commitment Organizational commitment (OC), or the commitment of an employee to his or her employing organization, has received much attention in the literature (Hunt and Morgan, 1994), however, different definitions continue to be used, e.g.: Commitment: (1) prior actions of a person staking some originally extraneous interest on his following a consistent line of activity; (2) a recognition of this side bet; and (3) the resulting consistent behavior (Becker, 1960). Organizational Commitment: The relative strength of an individual s identification with and involvement in a particular organization; (1) a strong belief in an acceptance of the organization s goals and values; (2) a willingness to exert considerable effort on behalf of the organization, and (3) a strong desire to maintain membership in the organization (Steers, 1977). Organizational Commitment and its tri-components: affective, continuance, and normative - Affective: employees emotional attachment to, identification with, and involvement in, the organization. Continuance: based on the costs that employees associate with leaving the organization. Normative: employee s feelings of obligation to remain with the organization (Allen and Meyer 1990). The above-mentioned authors and studies reveal the multi-disciplinary research and the differing streams of thought as to the nature of OC. Becker (1960) prompted an increase in attention to commitment in organization, but there was little development until Buchanan (1974) and Porter, Steers, Mowday, and Boulian (1974) released their researches. According to Mathieu and Zajac (1990), the latter work has given birth to the most widely used measure of OC, the Organizational Commitment Questionnaire (OCQ). More definitions of OC evolved when authors began to define OC in terms of its sub-components, instead of the old single construct approach. (Meyer and Allen, 1984). The affective component is closely aligned with the Porter et al. (1974) OCQ scale (Randall, Fedore, and Longenecker, 1990). The other two components proposed by Allen and Meyer (1990; Meyer and Allen, 1984, 1991) are continuance commitment and normative commitment, also known as moral commitment (Jaros et al., 1993). Although most researchers define OC in a global sense, the measurement used tends to follow a component approach. Although there is certainly a chicken-and-egg debate over the relationship between job satisfaction and organizational commitment, several researchers have made the case that job satisfaction is a predictor of organizational commitment. Commitment should lead to improved relationships and performance, such that job performance, perceptions of alternatives, intention to search or leave, and turnover as outcomes influenced by organizational commitment. Antecedents of Commitment. Mathieu and Zajac s (1990) meta-analysis identified the following antecedents to organizational commitment: personal characteristics (i.e., age, tenure, sex, ability), role states (i.e., role ambiguity, role conflict, role overload), job characteristics (i.e., task autonomy, challenge, job scope), group-leader relations (i.e., group cohesiveness, leader initiating structure, participative leadership), and organizational characteristics (i.e., size, centralization). Hunt and Morgan (1994) added internalization, identification, and compliance to the growing list of antecedents.

3 At the level of the commitment components, Dunham, Grube, and Castanada (1994) listed task autonomy/identity, supervisory feedback, organizational dependability, perceived participatory management, age, and tenure as antecedents of affective commitment. For normative commitment, they indicated coworker commitment, organizational dependability, and participatory management as antecedents. Finally, they mentioned age, tenure, career satisfaction, intent to leave as antecedents of continuance commitment. Whitener, and Walz (1993) listed attractiveness of alternatives and comparison with others balance of rewards and costs as primary indicators of affective commitment. Outcomes of Commitment. There is more agreement on the potential outcomes of OC. In general, commitment should lead to improved relationships and performance. The outcomes influenced by OC are listed as job performance, perception of alternatives, intention to search or leave, and turnover (Jaros et al., 1993; Mathieu and Zajac, 1990; Whitener and Walz, 1993). Note that all of these outcomes are important to organizations. METHODOLOGY Sample. The population of interest is sales force newcomers. The sample consists of all new sales recruits entering the target multi-national pharmaceutical, and on their job within an 18-month time frame. All respondents were first surveyed at corporate headquarters on the first day of formal training (8 hours for 15 days). At the time of the second survey, respondents were already deployed across the country in different divisions of the As expected, there was attrition of new salespeople before the time of the second survey. The 18-month window produced a sample of 300 new sales trainees. Due to the high turnover rate through the six months the second survey administered via mail did not reach as many subjects. Still a 76% response rate of those still with the company produced 228 surveys. The retrieved questionnaires were matched with the time one surveys. The age of the participants ranged from 21 to 56, with a mean of 23.6 and an average of 14.9 years of education. The sample was 76.4 percent male. Instruments. Two survey instruments were developed to collect data from respondents. Both surveys were comprised of Likert-type response formats. The content of the survey instruments was based on interviews with employees from the target company and a review of literature. Where possible, validated scales were used for construct measurement. Some adaptations were necessary due to survey instrument constraints and company requirements. Organizational commitment (OC). Since the participants are newcomers, the affective commitment scale (Meyer and Allen, 1991) was used. The affective component is commonly equated with organizational commitment. In fact, Dumhan et. al. ( 1994) and Randall et al. (1990) found that the OCQ converge with the affective component of the Meyer and Allen scale. Furthermore, there is little chance to develop a meaningful continuance or normative commitment to the organization in the early employment stage. Affective commitment, at least, measures initial impressions and attitudes of the recruits toward the The six-item version of the affective commitment scale used in current study has previously demonstrated an alpha reliability of.85 (Meyer, Allen and Smith, 1993) and during its validation for the current effort, the estimated alpha (.89) is even higher. Scale items used in the study are shown in Appendix 1. Training satisfaction (TS). Training comprises an important part of the early period of employment, particularly in a medical representative (sales force) setting with a high degree of company-specific information and procedures to learn. In addition, familiarity with the product technical and medical aspect must be developed. Medical representatives success is largely determined by the quality of training they

4 receive. Therefore, satisfaction with training should play a role in a salesperson s commitment to the organization. This construct was measured with a five-item scale developed specifically for this study (see Appendix 1). Perceived reward equity (PRE). The reward system was of particular interest in the sample company for this study. This has been identified by company-sponsored research as main factor of medical representative shifting to other companies. PRE is defined as the extent to which salesperson perceive that their rewards are fair in relation to their effort and performance. It is similar to the construct found by Whitener and Walz (1993) to relate positively to affective commitment. PRE was measured with a four-item scale developed for this study (see Appendix 1). Manager commitment (MC). Similarly, manager commitment (i.e., medical representative commitment to the area manager) was selected based on the unique job of a medical representative, not only in the sample company, but also in the pharmaceutical industry. Medical representatives work under an area manager, but do not have significant interaction with the organization. Therefore, their feelings toward their area manager are likely to influence their feelings toward the This construct indicates the nature of attachment; medical representatives have toward their area manager. It was measured with a fiveitem scale designed for this study (see Appendix 1). ANALYSIS OF RESULTS The five construct measures exhibited acceptable reliability and validity. Exploratory and confirmatory factor analyses both revealed items loading correctly on the hypothesized constructs. All but a few items had factor loadings of.30 or higher, and no items cross-loaded significantly on other dimensions (see Table 1). The results show a total of percent of the variability can be explained by the four constructs studied. Organizational commitment accounted for the highest amount of the variance (20.747) followed by manager commitment accounting for percent. The loadings of the items with Factor 4 show apparent inability of the present training program to cope with the need of the new recruit. This could also mean that the background of the new recruit, especially their educational background is deficit to the requirement of their job. In summary it point to the need for the training program to be continually up-dated to make it jibe with the dynamics of job/personnel requirements. The lowest alpha reliability was.71 for training satisfaction. After analysis of factor validity, scale reliability and inter-item correlations, it was decided to keep all scale items and use summated scales to represent the constructs training satisfaction, perceived reward equity, manager commitment, and organizational commitment. When the difference of the levels of organizational commitment between the first and second survey were collated, 51.4 percent of the participants indicated a decline in the level of their commitment. The mean average difference, however, is much smaller in value when compared to the increase in average value of the other group (those showing higher commitment levels in the second survey). Thus, when the mean average of the total sample was estimated, results registered an increase in the level of organizational commitment. During the first survey, organizational commitment level was based on expectations from initial knowledge about the company and the job applied for. The standardize beta coefficient of training satisfaction ( 0.258, t=4.850) and perceived reward equity ( 0.183, t=3.422) shows positive significant contribution of these two antecedent constructs. The third antecedent construct, manager commitment,

5 likewise produced a positive standardize beta coefficient ( 0.258), however, the contribution is not significant (t=0.741). The value of adjusted R 2 stood at.382 indicating that 38.2 percent of the variability of organizational commitment is accounted for by the three antecedent constructs. Table 1. Rotated Component Matrix Component Factor 1 Factor 2 Factor 3 Factor 4 I do not feel a strong sense of belonging to e-02 the I do not emotionally attached to the E-02 The company has a great deal of personal e meaning for me. I do not feel like part of the family at the I would be very happy to spend the rest of e my career with the I really feel as if any problems the E company may have are my own When someone praises my manager, it E E-02 feels like a personal insult to me. When I talk about my manager, I usually E-02 say we rather than they. My manager s successes are my E successes. When someone praises my manager, it feels like a personal compliment. I feel a sense of commitment to my E manager. To what extent are you fairly rewarded considering the responsibilities you have? To what extent are you fairly rewarded for the amount of effort you put forth? To what extent are you fairly rewarded for 9.340E the stresses and strains of you job? To what extent are you fairly rewarded for E the work you have done well? My sales training materials were not as e extensive as I expected. The company provides enough initial E sales training. The division provides enough continuing sales training. My sales training at the company allows me to be a better salesperson, no matter where I sell I wish I could get additional training E Eigenvalues % Variance Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 8 iterations.

6 When the dependent variable is replaced with the difference between the OC levels of survey 2 and 1, the value of adjusted R 2 went up to.409, meaning the three constructs now explains 40.9 percent of the incremental changes happening in value of the difference of OC levels between the two periods. All the standardize beta coefficients are positive and significant, with manager commitment showing the strongest effect ( 0.258). Table 2. Regression Coefficients Dependent Variable: Organizational commitment (time 1) Unstandardized Coefficients Standardized Coefficients B Std. Error Beta t Sig. (Constant) Training satisfaction Perceived reward equity Manager commitment 3.562E Dependent Variable: OC(time 2) OC (time 1) Unstandardized Coefficients Standardized Coefficients B Std. Error Beta t Sig. (Constant) Training satisfaction Perceived reward equity Manager commitment a Dependent Variable: OC(time 2) OC (time 1) DISCUSSIONS AND IMPLICATIONS From a research perspective. This study points to the need to examine organizational commitment in different ways. Results show that OC should be treated always as a static construct. There is strong indication that looking at changes in OC over time, creates new insights on the dynamics of its antecedents. In this study, three variables were identified to have an influence in early changes in OC, however, they were identified because of the unique situation of the Thus these findings must be interpreted only within the context of the Additional research is needed to determine whether these variables have similar influence in other organizations or whether other antecedent variables can be identified. From a managerial perspective. Company management must pay more attention to early employment experiences. New salespersons need the training to feel competent and able to meet company mandated and/or personal objectives. Results indicate that dissatisfaction with training may contribute a great deal to declines in commitment to the organization, often leading to other negative outcome. Salespeople need to feel like they are fairly rewarded for their efforts. It is an accepted fact that during the provisionary period, new recruits usually subordinate their priority, from sustaining to just be only in. They put extra effort at this stage without expected equivalent reward such that their status is change from provisionary to permanent after the six-month period. This may be a particularly serious issue at the target Salespeople have primary contact to the organization via their immediate sales manager. Commitment to the organization appears to be partly due to a commitment to the area manager. Therefore, it is important to build strong relations at the area manager level.

7 LIMITATIONS AND FUTURE RESEARCH DIRECTION One limitation is the sample time frame. Although it provided an advantage over cross-sectional studies, it is still limited to two data points. The time gap between surveys is, likewise, a possible source of interference from extraneous variables. Another limitation is the size and type of sample. While the company sales force sample provides a strong test of theory, this limits generalizability of the results. Hence, replication with other sales forces, other types of employees, and in other industries will be helpful towards the establishment of the general application of the tested theory. The response rates were high, but there still are possible limitations due to attrition. Deeper analysis showed that in the instant case, the company s high turnover rate during the survey gap involved new recruits who were classified as predominantly low performers. Hence, the effects of the antecedent variables on this type of recruits are not longer captured by the phase 2 survey and consequently in the OC level change analytical results. Future research is needed to further examine the dynamics of changing organizational commitment in early sales force employment. Extensions could include additional independent variables and possible outcomes of change in organizational commitment. More rigorous testing can then incorporate structural equation modeling or response surface methodology (Edwards, 1994) to better isolate the role of change in organizational commitment.

8 REFERENCES Allen, N.J. and Meyer, J.P. (1990) The Measurement and Antecedents of Affect, Continueance and Normative Commitment to the organization, Journal of Occupational Psychology, Vol 63 No 1, pp Becker, H.H. (1960) Notes on the Concept of Commitment, American Journal of Sociology, Vol 66 No 1, pp Buchanan, B. (1974), Building Organizational Commitment: The Socialization of Managers in Work Organizations, Administrative Science Quarterly, Vol 19 No 4, pp Dubinsky, A.J., Howell, R.D., Igram, T.N., and Belleger, D.N. (1986) Salesforce socialization. Journal of Marketing, Vol 50 No 4, pp Dunham, R.B., Grube, J.A., and Castenada, M.B. (1994), Organizational Commitment: The Utility of an Integrative Definition, Journal of Applied Psychology, Vol 79 No 3, pp Hom, P. W. and Griffeth, R.W. (1995), Employee turnover, Cincinnati, OH: Southwestern College Publishing. Hunt, S.D. and Morgan, R.M. (1994), The Commitment-Trust Theory of Relationship Marketing, Journal of Marketing, Vol 58 No 3, pp Jaros, Stephen J., Jermier, J.M., Koehler, J.W., Sincich, T. (1993), Effects of Continuance, Affective, and Moral Commitment on the Withdrawal Process: An Evaluation of Eight Structural Equation Models, Academy of Management Journal, Vol 36 No 5, pp Johnston, M. W., Parasuraman, A., Futrill, C.M., and Black, W.C. (1990). A longitudinal assessment of the impact of selected organizational influences on salespeople s organizational commitment during early employment, Journal of Marketing Research, Vol 27 No 3, pp Mathieu, J.E. and Zajac, D.M. (1990), A Review and Meta-Analysis of the Antecedents, Correlates and Consequences of Organizational Commitment, Psychological Bulletin, Vol 108 No 2, pp Meyer, J.P. and Allen, J.N. (1984), Testing the Side Bit Theory of Organizational Commitment: Some Methodological Considerations, Journal of Applied Psychology, Vol 69 No 3, pp Meyer, J.P. and Allen, J.N. (1991). A Three-Component Conceptualization of Organizational Commitment, Human Resource Management Review, Vol 1 No 1, pp Meyer, J.P., Allen, J.N., and Smith, C.A. (1993). Commitment to Organization and Occupations: Extension and Test of Three- Component Conceptualization, Journal of Applied Psychology, Vol 78 No 4, pp Porter, L.W., Steers, R.M., Mowday, R.T., and Boulian, P.V. (1974), Organizational Commitment, Job Satisfaction and Turnover among Psychiatric Technicians, Journal of Applied Psychology, Vol 59 No 5, pp Randall, D.M., Fedor, D.B., Longenecker, C.O. (1990), The Behavioral Expression of Organizational Commitment, Journal of Vocational Behavior, Vol 36 No 2, pp Sager, J.K. and Johnston, M.W. (1989), Antecedents and outcomes of organizational commitment: A study of salespeople, Journal of Personnel Selling and Sales Management, Vol 9 No 1, pp Steers, R.M. (1977), Antecedents and Outcomes of Organizational Commitment, Administrative Science Quarterly, Vol 22 No 1, pp Wanous, J.P. (1980), Organizational entry: Recruitment, selection, and socialization of newcomers, Reading, MA: Addison Wesley. Whitener, E.M. and Walz, P.M. (1993), Exchange Theory Determinants of Affective and Continuance Commitment and Turnover, Journal of Vocational Behavior, Vol 42 No 2, p.265. Youngblood, S.A., Mobley, W.H., and Meglino, B.M. (1983), A longitudinal analysis of the turnover process, Journal of Applied Psychology, Vol 68 No 3, pp

9 APPENDIX 1. CONSTRUCT SCALES Construct Organizational commitment reliability =.89 (time 1).92 (time 2) Training satisfaction reliability =.71 Perceived reward equity reliability =.91 Manager commitment reliability =.88 Scale Items I do not feel a strong sense of belonging to the (R). I do not emotionally attached to the (R). The company has a great deal of personal meaning for me. I do not feel like part of the family at the (R). I would be very happy to spend the rest of my career with the I really feel as if any problems the company may have are my own. My sales training materials were not as extensive as I expected. (R). The company provides enough initial sales training. The division provides enough continuing sales training. My sales training at the company allows me to be a better salesperson, no matter where I sell. I wish I could get additional training. (R). To what extent are you fairly rewarded considering the responsibilities you have? To what extent are you fairly rewarded for the amount of effort you put forth? To what extent are you fairly rewarded for the stresses and strains of you job? To what extent are you fairly rewarded for the work you have done well? When someone praises my manager, it feels like a personal insult to me. When I talk about my manager, I usually say we rather than they. My manager s successes are my successes. When someone praises my manager, it feels like a personal compliment. I feel a sense of commitment to my manager. (R) = reverse coded item