Do HR-practices reduce turnover intentions and is this relation mediated by employee engagement?

Transcription

1 Do HR-practices reduce turnover intentions and is this relation mediated by employee engagement? A survey on the effects of HR-practices on Dutch employees Master thesis Human Resource Studies Author: Hanneke H.H.M. Banken (S350358) h.h.m.banken@uvt.nl St. Annastraat EL Nijmegen Supervisors: Second assessor: Dr. Ad Vossen & Dr. Karina van de Voorde Dr. Renée de Reuver Period: February 2010 December 2010 Theme: HRM and Performance

2 Abstract Currently, organizations realize the fact that employees are one of the most valuable assets for an organization. Therefore organizations have to put a lot of energy in motivating and satisfying their personnel, to retain their best people. The aim of this study was to examine if perceived HR practices, aimed at the AMO-model, have influence on turnover intention and if this relation is (partially) mediated by engagement. In order to test the hypotheses in this study, data has been gathered through a questionnaire under 454 employees, who worked in different organizations in the Netherlands. Data on HR practices, turnover intention and engagement has been gathered at the individual level. Multiple regression analyses have been performed in order to gain results. Based on the results of this study, a clear answer to the question if perceived HR practices have an effect on turnover intention and if this relation is (partially) mediated by engagement, could be formulated. Several interesting results emerged in this study. In line with previous research, the results supported the existence of a significant negative effect of HR practices on turnover intention and a significant positive effect of HR practices on engagement. Engagement also had a significantly positive effect on turnover intention and partially mediated the relation between HR practice ability and turnover intention. Engagement also partially mediated the relation between HR practice opportunity to participate and turnover intention. Therefore this study emphasizes the importance of HR practices and engagement in order to lower turnover intentions. Keywords: perceived HR practices; engagement; turnover intention; AMO-model; mediation. 2

3 Index Introduction 4 Turnover intention 6 HR practices 6 Engagement 8 Method 12 Research Design 12 Description of sample 13 Instruments 14 Control variables 16 Data Collection 17 Analyses 17 Results 17 Descriptive analysis 17 Regression analyses 18 Path analysis 21 Additional analysis 23 Conclusion and Discussion 24 Limitations and directions for future research 27 Practical Implications 29 References 30 Appendix A: Organizations 34 Appendix B: Scales 35 Appendix C: Factor analyses 39 Appendix D Population data CBR 43 3

4 Introduction To survive in the dynamic global economy nowadays, organizations have to be aware of the fact that it is crucial to retain and motivate their personnel. Employees are one of the most valuable assets for an organization and might, with competent management, result in sustained competitive advantage (Boselie, 2002). An important question is how organizations can accomplish sustained competitive advantage through employees? And more important, how can HR practices be of influence? HR practices like training and development, selecting, rewards, assessment, promotion and autonomy may enhance the chance of retaining and motivating employees. The main focus in this research is the perception of employees to discover how they perceive HR-practices and which practices are important to them. Employees can perceive HRpractices differently than line-managers or senior-management, because these groups may have different intentions with those practices (Nishii & Wright, 2008). A practical example to prove the importance of good people management is the reorganization of ABN AMRO Bank in ABN AMRO offered their employees a severance pay and the employees could decide whether to take the payment and leave or to stay in the organization and receive no extra payment ( What ABN AMRO expected to happen was that their best people, who were working for ABN AMRO for years, never would leave the organization and the people who are not that important would take the money, but results showed the opposite (Trouw, 2002). ABN AMRO lost a lot of money and knowledge after the reorganization. This example indicates that when organizations do not use their HR practices right, people will quit their job and this can cause a lot of damage to an organization. Turnover continues to be a serious problem for businesses especially voluntary turnover which may be very expensive for organizations (Sigler, 1999). Retaining staff is commonly a better investment than the cost of recruiting replacements (Mitchell et al., 2001; Farrel, 2001). Unfortunately, many organizations fail to either acknowledge turnover as a legitimate organizational problem. Declining turnover could be a method to accomplish competitive advantage through employees. Lower turnover costs are an opportunity for organizations to use this saved amount on better investments. Thus, to retain employees, what do they actually need to function (optimal) and to be happy in their jobs? The last two conditions have become more important to deal with these days (De Lange, De Witte & Notelaers, 2008). In the last few years the concept engagement became more popular (Halbesleben & Wheeler, 2008; Saks, 2006). Engagement refers to a high level of positive affective-motivational state of fulfilment that is characterized by vigour, dedication and absorption (Schaufeli, Salanova, Gonzalez-Roma & Bakker, 2002, p.74). Engaged employees have less intention to leave the organization because they love their work (Lockwood, 2007) and less engagement by employees may be a significant predictor of turnover intention (De Lange, De Witte & Notelaers, 2008). If employees are more engaged at work, they may be more willing to stay, but how can organizations influence engagement at their employees? 4

5 Bakker and Demerouti (2007) were roughly the first researchers who investigate the mediating effect of engagement between the relation of job resources and performance. They discovered that job resources like autonomy and supervisory coaching are the main predictors of engagement and consequently lead to higher job performance. Bakker and Demerouti (2007) created the job demands-resources (JD-R) model to conceptualize these relations. According to the literature review of Schaufeli and Bakker (2004) the antecedents of engagement are job resources like support, training and autonomy. These kinds of job resources appear to have a positive effect on engagement and can be related to HR practices. This research wants to investigate if bundles of HR practices also have an effect on engagement like job resources did in earlier research. Within the scope of this research the HR practices are defined according to the AMO-model (Appelbaum, Bailey, Berg & Kalleberg, 2000). Three bundles of HR practices are formed in this model. The AMO-model claims the expectation that when organizations focus on the improvement of abilities, motivation and opportunity to participate by employees, this will lead to higher efforts of employees and to positive effects for organizational performance. So if these objectives of HR practices (AMO) may influence turnover intention, this relation between could be mediated by engagement. This research could give organizations information about which HR bundle influence engagement and turnover intention the most. Organizations can adapt to this knowledge and thus can try to decline turnover intentions. A positive effect for employees may be possible when organizations want to make their employees more engaged, which means more possibilities for employees to educate themselves, to receive a bonus or to get more responsibilities. Academic relevance of this research is to enrich the literature on engagement. Literature on engagement is less represented concerning investigating the influence of HR practices on engagement. While the engagement concept has a great deal of interest these days, the academic and empirical research about the mediating effect of engagement is less treated (Saks, 2006; Schaufeli & Bakker, 2004). Furthermore this research will enrich the literature about HR practices and performance because this research is at individual level and not at business unit level (Bowen & Ostroff, 2004; Wright & Boswell, 2002). Especially the relation between HR practices and turnover intention is poorly researched at the individual level and more attention has to be devoted to the way employees perceive HR practices which influences their behaviour and performance (Wright & Nishii, 2007). Objective of this study is to gain insight into the relations between HR practices, turnover intention and engagement at the individual level, in order to investigate if the relation between HR practices and turnover intention is mediated by engagement. This will lead to the following research question: To what extent do perceived HR practices influence turnover intentions of employees and is this relation (partially) mediated by the employees engagement? To answer this research question a survey will be performed under Dutch employees. In the next paragraph the theoretical background of the including variables will be explained. 5

6 Theoretical background In this paragraph the concepts turnover intention, HR practices and engagement will be explained and grounded with relevant literature. Also the relations between these concepts will be explained as a basis for the hypotheses and at the end a conceptual model will be presented. Turnover intention The theory on turnover shows that turnover intention is the best predictor of whether an employee will leave the organization (Hom & Griffeth, 1991; Griffeth, Hom & Gaertner, 2000). This paper is based at the individual level and on data from workers still employed in their workplaces, and thus, the construct turnover intention is preferred instead of the construct turnover. Turnover intentions can be defined as the probability that the employee might quit within an organization due to several reasons. HR practices HRM refers to all those activities associated with the management of work and people in firms and in other formal organizations (Boxall & Purcell, 2003, p.1). In other words, managing people and work by means of the right use of HR policies and HR practices. HR policies can be seen as directions and rules about how to manage personnel, and HR practices are the resources that are needed to accomplish the goals of the policy. Researchers argue that the implementation of HR practices can be linked to reinforced organizational productivity and can create strategic and sustainable competitive advantage (Allen, Shore & Griffith, 2003; Den Hartog & Verburg, 2004). HR practices can be seen as a bundle of practices, which is supposed to influence the attitudes and behavior of employees. These attitudes and practices may in turn affect the organizational performance (Huselid, 1995). HR practices are ideally suited to ensure a better welfare for employees and to achieve a better performance for the organization. There are a lot of HR practices and a distinction within the HRM literature concerns the number of practices examined (Wright & Boswell, 2002). Recent research has focused on sets of HR practices, most of these research studies treat multiple HR practices as a system, also mentioned as a high performance work system (HPWS) (Huselid, 1995). This approach tends to assume that individual practices can substitute for or even conflict with other practices, and thus to really examine the impact of HR practices on any variable of interest, research has to be done with the entire system of HR practices (Delery, 1998). Significant disagreement exists about how to combine these practices but the shared assumption is that multiple, rather than single, practices must be examined (Wright & Boswell, 2002). An appropriate example of a construct of HPWS is the AMO-model of Appelbaum et al. (2000). The AMO-model was mentioned in 27 out of 42 empirical papers in the period , which means that this theory received much intention compared to other theories in that period (Boselie et al., 2005). This theoretical framework shows that HR practices are expected to influence individual and business performance via the workforces ability (e.g. using selective 6

7 hiring, training), motivation (e.g. using pay for performance), and opportunity to participate (e.g. using teams, autonomy and suggestion systems) (Gerhart, 2005). The AMO-model (Appelbaum et al., 2000) suggests that: Performance = f {employees Ability, Motivation and Opportunity to participate} HR practices Ability/skills Motivation/in centives Opportunity to participate Effective Discretionary Effort Firm performance Figure 1: Representation of the AMO-model This figure illustrates that people perform well when they are able to do their job (A) (they have the skills and knowledge); they have the motivation (M) to perform (they will do the job because they feel adequately interested and incentivized) and their work environment gives them the needed support like autonomy or the opportunity to participate (O) (Boxall & Purcell, 2003). In this research these three bundles are going to be measured separately because it is considered that these bundles may differ in their effect on employee outcomes (Boselie, Dietz & Boon, 2005). Thus, to get more consciousness of the effects of the AMO-model and to discover which bundle has the most effect, three separate hypotheses will be formulated. The model of Nishii and Wright (2008) shows that the HR practices that form a HPWS can be measured at both the individual and the group level. Their research showed that when a research wants to measure employee perceptions the best level of analysis to choose is the individual level of analysis. The employee perceptions of HR practices may vary as a function of differences in schemas, values, personality and other individual variables. Perceived HR practices can be measured by asking employees about the HR practices of the organization (Nishii & Wright, 2008). Furthermore, since the Wright and Boswell study (2002), the individual perspective of analysis has been poorly treated in the HR literature. These are the main reasons to choose for a study of multiple practices at the individual level. Relation HR- practices and turnover intention Studies suggest that HR practices affect organizational outcomes by shaping employee behaviors and attitudes (Huselid, 1995). Employees perceptions of HR practices are antecedents of employee reactions (attitudes and behaviors) but received little theoretical and empirical attention in the HR literature. Nonetheless Nishii and Wright (2008) and Boxall and Purcell (2003) arguing that perceived HR practices influence employees attitude and behavior, which means that when employees experience their HR practices positively then the employees are more 7

8 willing to stay. Huselid (1995) found that HR practices such as employee recruitment and selection procedures, compensation and performance management systems, employee involvement, and employee training have a significant impact on employee turnover. More specifically, high performance work practices (HPWP) increase organizational effectiveness by creating conditions where employees become highly involved in the organization and work hard to accomplish its goals (Eisenberger et al., 1997). Extensive empirical research has been carried out on the linking of HR practices and employee turnover, especially at the organizational level (Shaw et al., 1998; Delery et al., 2000). Boselie et al. (2005) were able to identify 27 empirical articles on HR and turnover in the time period It may be assumed that when many studies at organizational level are arguing that this relationship is significant, this may also account at the individual level. However, little explanation for how HR practices influence individual turnover intentions has been offered (Guest & Conway 1999; Allen et al., 2003). Different studies who did investigate this individual relationship had different outcomes, for example Huselid (1995) found that skills (ability bundle) had a significant negative effect on employee turnover but motivation did not have a significant effect on employee turnover. However Eddleston (2008) and Saks (2006) did found a significant negative effect of salary, which belongs to the motivation bundle in the AMO-model, on turnover intention. Furthermore low job autonomy and supervisor support have also a significant negative effect on turnover intention (De Lange, De Witte & Notelaers, 2008). According to the above significant negative outcomes and the mentioned literature the following hypotheses are formulated: Hypothesis 1a: HR practices aimed at reinforcing employees ability have a negative effect on turnover intention. Hypothesis 1b: HR practices aimed at reinforcing employees motivation have a negative effect on turnover intention. Hypothesis 1c: HR practices aimed at reinforcing employees opportunity to participate have a negative effect on turnover intention. Engagement Before the concept engagement was widely known in the academic literature the concept is often compared with other constructs. Recent empirical research that exists about engagement compared this concept with other concepts like job embeddedness, job involvement and job commitment because some researchers thought the concepts were very much alike and wanted to investigate if engagement is a unique construct (Saks, 2006; Hallberg & Schaufeli, 2006; Halbesleben & Wheeler, 2008). They found that engagement is a distinct and unique construct that is associated with individual role performance (Saks, 2006; Hallberg & Schaufeli, 2006; Halbesleben & Wheeler, 2008). At the same time engagement predicts employee outcomes, organizational success and financial performance (Harter et al., 2002). 8

9 Over the years there were a few definitions of engagement formed but the most utilized and recent definition and the one that will be used in this research is the definition of Schaufeli, Salanova, Gonzalez-Roma and Bakker (2002, p.74) and also Bakker, Schaufeli, Leiter and Taris (2008). Engagement is a positive, fulfilling, work-related state of mind that is characterized by vigour, dedication, and absorption. As implied in its definition, engagement has three primary components. Vigour refers to high energy that is invested in work performance, even in cases where performance is challenging. Dedication is characterized by strong involvement in one s work, which results in positive feelings about work such as pride and inspiration. Finally, absorption is a state of engrossment in work such that one has difficulty detaching from work (Schaufeli, Salanova, Gonzalez-Roma & Bakker, 2002, p.74; Bakker, Schaufeli, Leiter & Taris, 2008). In short, engaged employees have high levels of energy, are enthusiastic about their work and want to perform well. Relation between HR practices and engagement Looking at the literature, a number of studies can be found that support the fact that HRpractices have a positive effect on employees (e.g. Huselid, 1995; Appelbaum et al., 2000; Nishii & Wright 2008). Unfortunately, there are no empirical studies found that focus on the relation between perceived HR practices and engagement. Although there is a theory, that could explain the possible relation between HR practices and engagement. The social exchange theory (SET) argues that when individuals interact over time, they experience the need to reciprocate the support and assistance of the other person, called the norm of reciprocity (Cropanzano & Mitchell, 2005). For example, if an employer helps an employee, this employee feels obliged to do something in return. Individuals experience a strong urge to respond positively on favors. If both parties tolerate and stick to the rules of exchange, a mutual, trusting and loyal relationship evolves (Cropanzano & Mitchell, 2005). In this research the exchange between employer and employee would be the resources that the organization provides and the level of engagement by employees. When employees receive more resources, they might be more engaged at work what could lead to better performance. According to Nishii and Wright (2008) the research on the perceptions of employees about HR practices is an underdeveloped research area. Most research in this area has focused on the relationship between HRM, organizational performance and other aspects like motivation and OCB (Van de Voorde, 2009). The difference between research on HRM and research on perceived HR practices is that HRM is mostly perceived by line-managers and perceived HR practices are perceived by employees. Nevertheless Appelbaum et al. (2000) found that HR practices aimed in the AMO-model lead to discretionary effort which means that employees are willing to walk the extra mile for their organization. When employees are engaged at work they are also dedicated to their job and put a lot of energy in their job. Because HR practices can influence employees attitudes like discretionary effort it is assumed that HR practices can also influence employees engagement. 9

10 Schaufeli and Bakker (2004) reviewed researches that were done concerning engagement in 1999 until The existing empirical research on the factors that predict engagement argue that job resources and self efficacy are predictors of engagement (Schaufeli & Bakker, 2004). Since the relation between HR practices and engagement is not investigated before, a few similar studies are found. Saks (2006) examined the relation of job characteristics on engagement. Job characteristics can be seen as work challenges, variety, use of different skills, personal discretion and the opportunity to make important contributions (Kahn, 1990, 1992). Saks (2006) also found a significant positive effect of job characteristics on engagement but found a negative non-significant effect of rewards and recognition on engagement. This finding is in contrast with the expectation in this research, that HR practices have a positive effect on engagement. Still reward is a practice to reinforce the motivation of employees and is considered as a positive predictor of engagement in this study. Furthermore Xanthopoulou et al. (2009) found a significant positive effect of job resources on engagement. Job resources refer to physical, social or organizational aspects of the job that are functional in achieving work-related goals, reduce demands and the associated costs, and stimulate personal growth and development (Bakker & Demerouti, 2007). Job resources like for example job autonomy has a significant positive effect on engagement (De Lange, De Witte & Notelaers, 2008; Xanthopoulou et al., 2009). Since there is no empirical literature found about the relation between HR-practices aimed at AMO-model on engagement the comparison is made with job resources and job characteristics and therefore the following hypotheses are formulated: Hypothesis 2a: HR practices aimed at reinforcing employees ability have a positive effect on engagement. Hypothesis 2b: HR practices aimed at reinforcing employees motivation have a positive effect on engagement. Hypothesis 2c: HR practices aimed at reinforcing employees opportunity to participate have a positive effect on engagement. Relation between engagement and turnover intention The driving force behind the popularity of engagement is that it has positive consequences for organizations. There is a general belief that there is a connection between engagement and business results (Harter, Schmidt & Hayes, 2002; Boselie, 2002; Schaufeli & Bakker, 2004; Saks, 2006). However, engagement is an individual-level construct and if it does lead to business results, it first has to impact individual-level outcomes. Along these lines, there is reason to expect engagement to be related to individuals attitudes, intentions, and behaviors. Researchers of engagement have found significant relationships with turnover intention (De Lange, De Witte & Notelaers, 2008; Saks, 2006; Halbesleben & Wheeler 2008). Harter, Schmidt and Hayes (2002) concluded that engagement is related to meaningful business- and job outcomes like turnover intention. 10

11 The link between engagement and turnover intention result from high levels of investment in and dedication to work. Employees who are highly engaged may find it difficult to detach from the job, in large part because they have invested so much energy in the job and because they have high levels of identification with the work that they do (De Lange et al., 2008). As specified by Conservation of Resources (COR) theory (Hobfoll, 1998; Halbesleben, 2006) proposes that individuals are motivated by the desire to obtain and protect resources, or those things they personally value. When resources are acquired through their employer, they might want to invest further to obtain additional resources (Hobfoll, 2001). Individuals tend to take steps to protect their current resources and are quite careful in their investment of resources (Hobfoll, 2001). Thus, when employees have job resources that are very important to them they are more engaged at work and are not willing to leave the organization, because they are afraid of not having the same resources in another organization. As it developed from the above mentioned literatures, it is expected that engagement will be related strongly to turnover intention. Overall engagement is consistently and negatively associated with turnover intention (Harter, Schmidt & Hayes, 2002). In other words, people who enjoy their work and put a lot of effort in their work have the intention to stay. Hypothesis 3: Engagement will have a negative effect on turnover intention. Relationship HR practices, engagement and turnover intention According to Boxall and Purcell (2003) and Nishii and Wright (2008) there is a relation between HR practices, employee attitude/behavior and employee outcomes. Thus, when HR practices have a positive effect on employees attitude/behavior, employees are positive set. When employees like their jobs and are willing to put a lot of effort in their work they do not want to leave the organization, which can be considered as a positive employee outcome. As stated in the COR- theory of Hobfoll (2001) when employees are content with their resources, which they receive from their employer, they want to protect these resources. So employees are afraid of losing these resources when they would leave the organization. Employees will think that they do not receive the same resources in another organization. Thus, when organizations offer their employees resources they need, the employees are happy with their job resources and try hard to keep them instead of looking for another job. Also the SET-theory (Cropanzano & Mitchell, 2005) argues that employees are more or less engaged, depending on the resources that their organization provides. When employees have many resources, they are more engaged in their work and that could lead to less turnover intentions. If employees receive many resources they will feel appreciated and want to do something in return, they bring themselves more deeply into their work which could lead to positive outcomes like better performance or less turnover intentions. When organizations do not succeed in providing these resources, employees are more likely to disengage themselves from their job (Saks, 2006). 11

12 The motivational process of the job demands resources (JD-R) model (Bakker & Demerouti, 2007) suggests that job resources are the main initiators of employees engagement and consequently of enhanced performance. According to the relation between HR practices and engagement mentioned earlier, HR practices could be compared with job resources. Also Schaufeli and Bakker (2004) found in their review that engagement was negatively related to turnover intention and mediated the relationship between job resources and turnover intention. Therefore it is predicted that engagement has a partial mediating effect in the relation between HR practices and turnover intention. Hypothesis 4a: Engagement has a partial negative mediating effect in the relation between HR practices aimed at reinforcing employees ability and turnover intention. Hypothesis 4b: Engagement has a partial negative mediating effect in the relation between HR practices aimed at reinforcing employees motivation and turnover intention. Hypothesis 4c: Engagement has a partial negative mediating effect in the relation between HR practices aimed at reinforcing employees opportunity to participate and turnover intention. Conceptual model The variables that will be investigated in this study are recapitulated in the figure below. Core objectives of HR Practices Ability Motivation Employee Engagement Turnover Intention Opportunity - Figure 2: Representation of the conceptual model used in this study Method Research Design To answer the research question: To what extent do perceived HR practices influence turnover intentions of employees and is this relation (partially) mediated by employees engagement?, the choice was made for a cross-sectional survey. The data have been collected by a questionnaire at a single point in time. The sample was taken from different organizations in the Netherlands. Since information about the core position of the population is missing the 12

13 representativeness of the sample cannot be established. Demographic features about the working population in the Netherlands were compared with the demographic features of the sample in this research (CBS, 2009, Appendix D). Demographic features like age and gender were almost similar but features like education level, branch and function were not similar or were not comparable through lack of information about the respondents. Thus, this sample is still not representative to the population. Uncertainty about external validity was however considered on this research but the core objective of this research was to test the hypotheses, internal validity, instead of generalizing results. The perceived HR practices had to be measured at the individual level, therefore individual employees formed the unit of analysis in this research. Description of sample The participants in the present study were employees of different organizations in the Netherlands. A convenience sample was taken out of the population of 34 different organizations which conduct to a heterogeneous research group (the organizations are described in Appendix A). These organizations consist of 60 units and established an employee response rate of 61% 1. Because the data was collected by nine students the overall response rate could not be discovered. The decision has been made to use the response rate of this researcher only, which could be perceived as an indication of the overall response rate. This study was carried out at individual level of analysis and at the end the sample consisted of 454 respondents/employees (N=454). In the sample were almost as much men as women included. The age of the respondents ranged from 18 up to 63 years, with an average age of 38 years (SD=11.5). The vast majority of the respondents had secondary vocational education (MBO, 31, 5%) or higher vocational education (HBO, 37, 2%) as their highest education. Table 1 depicts a summary of the demographic features with regard to the whole sample. Because the respondents worked in 34 different organizations and within these organizations the respondents were operative in 60 different units, the data was nested. It had to be ensured that the answers of respondents were not too much influenced by the organization they worked for. The calculation of ICCs was used to test for this matter. The ICC(1) parameter estimated interrater reliability which means the amount of variance in individual level responses attributable to the organization (Bliese, 2000). If the ICC(1) scores are low, the scores of the respondents do not substantially depend on the organization. The ICC(2) parameter can be interpreted as the reliability of the mean organization scores, the higher this ICC score is, the better the reliability of the mean organization score is (Bliese, 1998). Outcomes of these ICC scores are depicted in Table 2. The ICC(1) scores were low (<.1) which means that the scores of the respondents did not depend on the organization they worked for. ICC(2) scores were high (>.7) and therefore the mean organization scores were reliable, except the score for turnover 1 N= 68 respondents who worked in five different organizations. 13

14 intention which was.58. This score cannot be considered as good, however the score was tolerable. Table 1: Demographic features of the sample Features N % Mean Age Gender: Female/Male 219/ /47.8 Unknown Education VMBO, LBO, LTS MAVO, HAVO, VWO, HBS, MMS MBO HBO WO Different education Unknown education Tenure (years) Instruments A questionnaire was used to collect all data. This questionnaire was composed by nine students and two supervisors to test the value of human resource management on business performance. This questionnaire consisted of 16 scales and for this research only three scales were used. These relevant scales were perceived human resource management (AMO), engagement and turnover intention and are shown in Appendix B. The scales in the questionnaire were derived from existing questionnaires. The scales have been used previously with satisfactory reliability values. Still, Cronbach s alpha and explorative factor analysis for each scale was performed. To test which items form a scale (validity) factor analysis was used and Cronbach s alpha was used to test the scale in its reliability. Turnover Intention: Turnover intention was measured by a scale of Colarelli (1984). This scale was composed of three items, an example item was: "I frequently think of quitting my job". These items estimate to which extent respondents are thinking about leaving the organization. The items had answering categories ranging from strongly disagree (1) to strongly agree (5), Cronbach s alpha of this scale in previous research was 0.75 (Colarelli, 1984). In this research Cronbach s alpha was 0.81 and these three items measured intention to quit for 72.15% (Appendix C: Table 1). Factor analysis was less important for this scale because it consisted of only three items which can be considered as the minimum for one scale. Engagement: Engagement was assessed with a shortened version of the Utrecht Work Engagement Scale (UWES) (Schaufeli et al., 2002). The original scale contains, consistent with the explanation of engagement used in this study (Schaufeli et al., 2002), three factors; vigour, dedication and absorption. Vigour was measured with three items (e.g. At my work, I feel 14

15 bursting with energy ); dedication with three items (e.g. I am enthusiastic about my job ), and at last absorption was also measured with three items (e.g. I am immersed in my work ). The original version of this scale consisted of 16 items and this shortened version of nine items only. This nine-item-scale was tested by Schaufeli and Bakker (2004) and was considered as a reliable and valid scale for measuring engagement. A 7-point Likert scale, ranging from one ( Never ) until seven ( Always/Every day ) was used. In earlier research factor analysis showed that this three-factor-structure is superior to a one-factor model, although these three factors are closely related (Schaufeli & Bakker, 2004). Correlations between the three scales are usually exceeding 0.65 (Schaufeli & Bakker, 2003). The reliability (Cronbach s alpha) of the three scales was widely sufficient and was between 0.80 and 0.90 (Schaufeli et al., 2002). In this research factor analysis showed that the selected nine items measured one factor with a Kaiser-Meyer-Oklin (KMO) value of.92, the Bartlett s test of Sphericity was significant and these items explained 68.19% variance (Appendix C: Table 2). This scale had a Cronbach s alpha of 0.94, which is high. As stated in the meta-analysis of Schaufeli and Bakker (2004), when the research is focused on the whole concept of engagement and not on the three separate constructs, the use of one-factor model is recommended. A reason why these three subscales did not emerge in this sample might be because the three factors were not clear enough to be understood in three different subscales by respondents in this shortened version. Perceived HR practices: Perceived HR practices were measured by a scale that was based on Appelbaum et al. (2000), Kroon, Van de Voorde and Van Veldhoven (2009), Boselie (2002), Den Hartog and Verburg (2004) and de Kok et al. (2002). The answering categories were ranging from strongly agree (1) to strongly disagree (5). This scale was subdivided in five subscales to measure HR practices (AMO) instead of three subscales like the AMO-model. These five subscales were: strict selection (four items), development and career opportunities (seven items), rewards (five items), performance evaluation (five items), participation and communication (four items). According to earlier research this scale measures the AMO-model in a way that the first two scales measuring ability, the third and fourth scale measuring motivation and the last scale measures opportunity to participate. Examples of items were: Strict selection: Are selection tests used in your organization? A Development and career opportunities: Does your company offer formal internal training? Rewards: Does your company pay higher than average salaries? M Performance evaluation: Does your company have a formal performance evaluation system? Participation and communication: Are employees involved in strategic decisions O in your organization? 15

16 These items were subjected to principal components analysis (PCA) using SPSS version 16. Results of this factor analysis were six components, which did not correspond to the theory, and did not yield a simple structure. Because of many violations the six component structure was not satisfying. Next option was to investigate a forced five component structure but these components did not attain a theoretical distribution of the items. This forced five component structure obtained too many violations and was not satisfying for this research. The results for a forced structure of three and two components were respectively also not satisfying and yielded no simple structure (Appendix C: Table 3). Hence, despite the fact that ability, motivation and opportunity to participate did not seem to be three distinct constructs in this data, they still will be considered as such to be still able to test the hypotheses. Support for this decision was found by the reliability of the three separate subscales. The first two subscales had a good internal consistency, with a Cronbach s alpha coefficient of.84 for ability with ten items and.78 for motivation with also ten items. The third subscale had a Cronbach s alpha of.64 with four items that could be considered as tolerable. In previous research all categories of practices had satisfying Cronbach s alphas with an average of 0.69 (Kroon, Van de Voorde & Van Veldhoven, 2009). A possible reason for the unpleasant outcomes of the factor analysis might be that these scales were mostly measured by line-managers or senior-management instead of employees. Table 2 describes the scale characteristics used in this research. Table 2: Scale Characteristics Variables Items Answer Cat. Alpha ICC(1) ICC(2) 1. Ability Motivation Opportunity Engagement Turnover intention Control variables Individual-level studies tended to control for a standard range of suitable personal characteristics such as age, gender, tenure and educational level (Boselie, Dietz & Boon, 2005). To test the model on spurious influences, the following control variables were used; tenure (measured in years), educational level (low, middle and high) and age (measured in years). These individual-level variables were obtained from the employee survey. Age might influence the relationship between HR practices and turnover intention, because older employees find security more important than younger employees and are often more afraid of not finding another job if they should leave their present job. Tenure might be an influencing control variable because when employees are working for a long time in an organization they have build a career or want 16

17 to stay because they were grown up in the organization. The last control variable educational level might affect the results because mostly the higher educated employees may be more ambitious and may have more different jobs in different organizations so may have more intentions to leave. This control variable was distributed into three categories; low, middle and high. To measure this control variable a dummy variable was constructed with high education as the reference group. Data Collection Nine students of Tilburg University in the Netherlands handed out or ed questionnaires to line-managers and employees to collect data needed for testing the hypotheses. Employees and line-managers were asked to fill in the questionnaire, which took approximately 20 to 25 minutes to complete. Each questionnaire was accompanied by a cover letter, which explained the procedure of the questionnaire and anonymity was guaranteed. The employees returned the questionnaire by the included self-addressed envelope or by . In this study only the employee questionnaires were used. Analyses Before factor- and reliability analyses, the data was checked for outliers and missing values by making use of the statistical analyzing program SPSS version 16. The outliers that did arise were restored after verifying the original answers given in the specific questionnaires. Descriptive analyses were performed to detect missing values and exposed no extremely high numbers of unexpected missing data for the research variables. For the statistical analyses, the option pairwise exclusion was used to manage these missing values. This option ensures that cases are excluded only if they have missing data that is required for the specific analysis (Pallant, 2007). Moreover, the assumption of normality was tested and indicated that the scores were reasonably normal. To test the hypotheses of this study, multiple regression analysis and path analysis have been used. The independent variables were entered in the first model and the control variables in the second model. Hypothesis 4 measured a mediation effect and after multiple regression the Sobel test was used to test if the mediation effect was significant. To measure not only the direct effects in the model path analysis was applied. Results The data will be analysed at two levels: the descriptive and the explanatory level. First the descriptive analysis, including correlations between the variables, will be presented and after that regression- and path analysis will be explained. Descriptive analysis The means, standard deviations and correlations of the research variables in this study, including the control variables, are provided in Table 3. Table 3 shows that all the including variables in the conceptual model have significant correlations (p<0.01). HR practices (A, M and 17

18 O) and engagement are significant negatively correlated to turnover intention and HR practices (A, M and O) are significant positively correlated to engagement. Which means for example that the more HR practices are aimed at reinforcing employees opportunity to participate, the less employees want to leave the organization (r=-.226, p<0.01) and the more they are engaged at work (r=.329, p<0.01). This also counts for the variables ability and motivation and these correlations are in agreement with the theoretical expectations. Regarding the control variables a surprising outcome was the correlation of age and engagement (r=.20, p<0.01). This is surprising because the expectation was that older employees are less engaged at work. On average, the respondents reported their engagement as relatively high (M=4.92, SD=1.17) and their turnover intentions as relatively low (M=1.98, SD=.81). Not surprising, engagement and turnover intention correlate significantly negative with each other (r=-.442, p<0.01). Since the correlation between the independent variables is considerably high the possibility of collinearity was checked while running the regression analyses. Collinearity may occur when independent variables are highly correlated (i.e. they overlap (almost) completely). When ignored, this can result in misleading regression results (Keith, 2006). Collinearity can be analyzed in SPSS by performing collinearity diagnostics. Results show a Tolerance value of.59,.60 and.77 for the variables ability, motivation and opportunity to participate, exceeding the minimum of.10 sufficiently (Pallant, 2007). These results indicate that the collinearity did not influence the regression results. Table 3: Means, standard deviations and correlations (N=454) Variables Mean SD Abilityª (1-5) Motivationª (1-5) ** 3. Opportunityª (1-5) **.436** 4. Engagementª (1-7) **.231**.329** 5. Turnover intentionª (1-5) ** -.215** -.266** -.442** 6. Age ** -.157* 7. DumEduLow DumEduMiddle * *.102* -.295** 9. Tenure ** -.181**.685**.199**.053 **. Correlation is significant at the 0.01 level (2-tailed) *. Correlation is significant at the 0.05 level (2-tailed) ª Higher values reflect a greater degree of the variable Regression analyses To test the first three hypotheses 1a, 1b and 1c multiple regression analysis was applied. First, the independent variables (HR practices) were entered in model one and engagement was added in model two. In model three the control variables age, tenure and education level were enclosed (Table 4). The second model explained 22.1% (R²) of the variance in turnover intention and indicated a significant model, F (4, 407) = , p=.00 (Table 4). After adding the control variables in model three, the third model explained little more variance in turnover intention, namely 23.9% (F (8, 403) = , p=.059) in total, however this change was nearly significant. 18

19 After adding the control variables the R² hardly changed which means that the control variables have only a small effect in the model. In Table 4 can also be seen that the R² increased substantially after adding engagement to the model. This means that engagement explained most of the variance in turnover intention in this sample. Hypothesis 1a stated that HR practices aimed at reinforcing employees ability have a significant negative effect on turnover intention. However the individual effect of ability on turnover intention was not significant (β=.070, p=.226). Therefore it must be concluded that hypothesis 1a is rejected. On the other hand hypotheses 1b and 1c did result in significant outcomes. This implies that HR practices aimed at reinforcing employees motivation and opportunity to participate have a significant negative effect on turnover intention. Motivation had the strongest direct effect of the three HR practices on turnover intention (β= -.122, p=.034) (see Model 3, Table 4). In the first model of this regression, when only the HR practices were added to the regression, opportunity to participate had the strongest effect on turnover intention. It is interesting to see that when engagement was entered in the second model the effect of opportunity to participate decreased and motivation did hardly change. Opportunity to participate had an effect of β= -.117, p=.023. Therefore, support was found for hypotheses 1b and 1c; HR practices aimed at reinforcing employees motivation and opportunity to participate have a significant negative effect on turnover intention. Table 4: Multiple regression predicting turnover intention, standardized coefficients Model 1(β) p-value 2 (β) p-value 3 (β) p-value Ability Motivation Opportunity Engagement Age Tenure Dum_Education Low Dum_Education Middle R² F R² R² F R² Hypotheses 2a, 2b and 2c were also tested by means of multiple regression analysis. First, the independent variables were entered in model one and the control variables were added in model two. The first model explained 13.2% (R²) of the variance in engagement and presented a significant model, F (3, 408) = , p=.00 (Table 5). After adding the control variables age, educational level and tenure, the second model explained significantly more variance in engagement, namely 17.7% (F (7, 404) = , p=.00) in total. Hypothesis 2a stated that HR 19

20 practices aimed at reinforcing employees ability have a significant positive effect on engagement. This direct effect of ability on engagement was significant (β=.162, p=.007). Also opportunity to participate had a positive significant effect on engagement (β=.229, p=.00). However motivation did not yield a significant positive effect on engagement (β=.043, p=.471). This means according to the theory that HR practices aimed at reinforcing employees motivation like pay for performance and rewards, do not result in a positive effect on engagement by employees. To recapitulate, hypotheses 2a and 2c are confirmed but hypothesis 2b was rejected. Opportunity to participate had the strongest direct effect of the three HR practices on engagement, which is not surprising since the previous results showed in Table 3 and Table 4. Table 5: Multiple regression predicting engagement, standardized coefficients Model 1(β) p-value 2(β) p-value Ability Motivation Opportunity Age Tenure Dum_Education Low Dum_Education Middle R² F R² R² F R² Hypothesis 3 predicted that engagement will have a significant negative effect on turnover intention. To test hypothesis 3, HR practices were entered into model one, then engagement was added in model two, after that the control variables were added in model three (Table 4). This was the same model as the model used by testing hypotheses 1a, 1b and 1c. The separate effect of engagement on turnover intention was significant (β= -.371, p=.00) therefore hypothesis 3 is confirmed. This effect can be considered as rather strong which means that the more employees are engaged at work, the less intentions employees have to leave the organization. In order to test hypotheses 4a, 4b and 4c, whether engagement partially mediates the relationship between HR practices aimed at reinforcing employees ability, motivation and opportunity to participate and turnover intention, the including direct effects had to be significant. One can only speak of a significant indirect effect if both included bivariate direct effects are significant. Since the direct effects of ability and opportunity to participate on engagement and the direct effect of engagement on turnover intention were significant, these indirect effects had to be tested for significance. Motivation did not have a significant positive effect on engagement, therefore no mediation effect was found of engagement in the relation of HR practices aimed at 20

21 reinforcing employees' motivation on turnover intention in this study. Thus hypothesis 4b was rejected. The Sobel test was applied to test the significance of the two indirect effects (MacKinnon & Dwyer, 1993). The z-value of the mediation effect of engagement in the relation between ability and turnover intention was (p<.05) and the z-value of the mediation effect of engagement in the relation between opportunity to participate and turnover intention was (p<.05). Both indirect effects can be considered as significant because the z-values are larger than the absolute value of As a result hypotheses 4a and 4c were confirmed, meaning that engagement partially mediated the relation of HR practices aimed at reinforcing employees ability and opportunity to participate on turnover intention. Research model: A recapitulation A recapitulation of the findings is presented in Figure 3. This figure shows the research model that function as the theoretical basis of this study. Beta-values are given for the direct relationships and the R square scores were given for the proportions explained variance in engagement and turnover intention. The dotted lines refer to the non-significant relationships. Core objectives of HR Practices Ability β.070 β -.122* r.609** β.162** Motivation β.043 Employee Engagement β -.371** Turnover Intention r.421** r.436** Opportunity β.229** R²= 17.7% R²= 23.9% β -.117* Note. ** p< 0.01 * p < 0.5 Figure 3: Research model after multiple regression, standardized coefficients Path analysis After multiple regression, path analysis was conducted because multiple regression mostly yields direct effects only. The interest in the total effects of the variables was the main reason to carry out path analysis. Path analysis makes many aspects of multiple regression more understandable, and is often a better option for explanatory analysis of non-experimental data (Keith, 2006). In this research path analysis was used to measure the total effects of the independent variables and the results are given in Table 6 and Table 7. In Table 6 the total effects of HR practices and engagement on turnover intention were 21

22 presented. A striking finding was the total effect of ability on turnover intention. After multiple regression ability did not have a significant direct effect on turnover intention, but path analysis showed that ability has a notable total effect on turnover intention (β= -.219), which is almost as high as the other included variables. The advantage of path analysis is that it measures the total effect of variables and more specific findings can be found. If path analysis was not conducted the conclusion would be that ability does not have a significant direct effect on turnover intention. This means that ability might be considered as less important than the other two variables. So after the findings of path analysis it is important for organizations to concentrate on HR practices aimed at reinforcing employees ability because it does have a negative effect on turnover intention concerning this data. It is important to mention that these outcomes cannot be tested on significance in SPSS, so it is not possible to make inferences about the population, it only involves conclusions about this specific sample. Furthermore the strongest effect is still the total effect of engagement on turnover intention. From the three HR practices, opportunity to participate had the strongest total effect on turnover intention, which was β= While testing hypotheses 1a, 1b and 1c by multiple regression, motivation had the strongest direct effect of the three HR practices on turnover intention. This can be explained by the fact that motivation did not have a significant direct effect on engagement while opportunity to participate had and when the indirect effect was measured the effect of opportunity to participate was increasing strongly in contrast to motivation. Table 6: Total effects on turnover intention after path analysis, standardized coefficients (β) Direct effect Indirect effect Spurious effect Unknown effect Total effect on Turnover intention = Ability ns = = = Motivation ns = = = Opportunity = = = Engagement = = =

23 Table 7: Total effects on engagement after path analysis, standardized coefficients (β) Direct effect Unknown effect Total effect on Engagement Ability = Motivation ns = = Opportunity = In Table 7 the total effects on engagement were measured and the same surprising result arises. First, motivation had no significant direct effect on engagement but after path analysis there was a total effect of motivation on engagement. The same situation took place with ability in its relation to turnover intention in Table 6. With a total effect of β=.199 motivation did have a notable total effect on engagement. Moreover opportunity to participate still had the strongest effect on engagement (β=.297). What should be taken into account is that all three bundles have an effect on both turnover intention and engagement, therefore what resulted after multiple regression was not quite complete. Additional analysis After multiple regression and path analysis another question came up: What happens if we use the aggregated scale of HR practices? This means that what would happen if the HR practices are measured by one variable instead of three separate variables. This aggregated scale consisted of the three subscales together and the reliability of this scale was.88. The reliability was also that high because of the many included items (24). This additive research model was added to prove the appropriateness of the original model, to use the AMO-model as three different variables. The additive research model (Figure 4) can also be seen as a benchmark model, because it is possible to compare the outcomes of both models. Figure 4 illustrates that all the direct relations in the additive research model are significant, while in the original research model not all HR practices had a significant direct effect. The mediating role of engagement between the relation of HR practices and turnover intention was also supported in this additional analysis (z=-5.237, p<.05). Also interesting is the fact that the original research model has higher proportion explained variances (R²) in both engagement and turnover intention, which means that the disaggregated HR practices in the original research model explained more variance in both engagement and turnover intention. So it was appropriate 23

24 to separate the AMO-model construct into three different constructs in this study, because different employee outcomes occurred. This outcome supports the research of Boselie, Dietz and Boon (2005). Engagement β.326** R²= 15.5% β -.381** AMO β -.116* Note. ** p< 0.01 * p < 0.5 R²= 22.4% Figure 4: Additive research model, standardized coefficients Turnover Intention In the next section, the results of the hypotheses will be discussed and the research question will be answered. In addition, the limitations of this research are described and recommendations for future research and practical implications are formulated. Conclusion and Discussion Previous research has mainly focused on the effects of HR practices on organizational outcomes and job performance. Most of these studies measured HR practices through managers instead of through employees perceptions. Furthermore engagement is a fairly new construct and little empirical research has been done about the mediation effect of this construct. Hereby, too little attention has been paid to the employees' perceptions of these HR practices and to the outcomes of these perceptions. Therefore this study has examined if perceived HR practices, aimed at the AMO-model, have an influence on turnover intention and if this relation is (partially) mediated by engagement. The sample consisted of 454 employees whose data, gathered through a questionnaire, were used to test the different hypotheses in this research and to answer the research question. Data on HR practices, turnover intention and engagement has been gathered at the individual level. Several interesting results emerged in this study. In line with previous research, the results supported the existence of a significant negative effect of HR practices on turnover intention, a significant positive effect of HR practices on engagement. Engagement also had a significantly positive effect on turnover intention. Therefore this study emphasizes the important need for organizations to deal with HR practices and engagement to lower the turnover intentions in their organization. One important finding is that HR practices aimed at reinforcing employees opportunity to participate is the best predictor for both engagement and turnover intention, compared to ability and motivation. With regard to the mediating effects, engagement partially mediated the relation between ability and turnover intention negatively and the relation between 24

25 opportunity to participate and turnover intention was also partially negatively mediated by engagement. These, and other results, are discussed below. HR practices and turnover intention Hypotheses 1a, 1b and 1c stated that HR practices aimed at reinforcing employees ability, motivation and opportunity to participate have a significant negative effect on turnover intention. As was expected, the results of this study show that when HR practices aimed at reinforcing the motivation and opportunity to participate of the employees, employees have less turnover intentions. These results support existing research (e.g. Eddleston, 2008; Saks, 2006; De Lange, De Witte & Notelaers, 2008). The negative effect of these HR practices on turnover intention can be explained by the fact that these HR practices are focused on the motivation and opportunity to participate of employees. Putting these practices to use would increase the motivation and participation of employees, which eventually leads to less turnover intentions. This finding emphasizes the importance for employers/managers to create their HR practices in a way to increase the motivation and opportunity to participate among their employees. The expectation that ability has a negative effect on turnover intention was not confirmed in this research. A possible reason for this non-significant effect could be that when an organization offers and requires much training to increase the skills of employees, these employees have to put much effort in their jobs and expect compensation for their effort. When compensation does not occur, like a bonus or promotion, employees may feel less valued and respected and could want to leave the organization. Another explanation may be found in the questionnaire, where the questions in the scale for measuring ability were hard to answer for employees, which may have influenced the results. A question like "My department offers the use of selection interviews for selecting new employees? may be better answered by managers instead of employees. In this sample the feeling emerged that a lot of employees did not know which selection methods are used in their organization. It is demotivating that the respondents had to give an answer to questions they actually not know, because the option I don t know was not an option in this questionnaire. This could have influenced the results of hypothesis 1a, which was as mentioned before, not confirmed. HR practices and engagement Hypotheses 2a, 2b and 2c stated that HR practices aimed at reinforcing employees ability, motivation and opportunity to participate have a significant positive effect on engagement. In line with the expectation, this study confirmed that the more HR practices are aimed at reinforcing the ability and opportunity to participate of employees, the more employees are engaged at work. These results support existing research (e.g. Xanthopoulou et al., 2009; Saks, 2006; De Lange, De Witte & Notelaers, 2008). These positive effects of ability and opportunity to participate on engagement can be clarified by the fact that when employees get the chance to improve their skills and obtain participation, feel important and valued, which lead to more 25

26 engaged employees. The data in this study did not confirm the positive relationship between HR practices aimed at reinforcing employees motivation and engagement. A reason could be that employees find other resources like autonomy or training possibilities more important than the payment they receive. As mentioned in the theoretical framework HR practices influence organizational and individual performance, but in most studies the relation between HR practices and job performance is studied instead of the relation between HR practices and behaviors or attitudes like engagement. Motivation practices like rewards could be of influence on job performance, because mostly when employees receive a payment for performance they work harder, which is a feature of engagement, but does this make employees really more engaged at work? According to the SET-theory when employees receive resources they want to do something in return. What could be the difference between motivation and the other HR practices is that mostly bonuses are related to performances, which count for every employee in the same situation. When an employee receives resources like autonomy or training they feel more special, because only he or she is receiving these resources and not every employee who is in the same situation. When employees feel more special and appreciated it might lead to more engagement at work. This could be an explanation for the fact that motivation did not have a significant direct effect on engagement. Another study illustrates the common mistake of only taking financial factors into account when pursuing high levels of staff retention (Saks, 2006). This could mean that financial factors only have an effect when the other resources are available for the employees. So pay for performance and bonuses are important, but only if the other resources are available. In this study HR practices aimed at reinforcing employees motivation do not make the employee directly more engaged. Engagement and turnover intention The expectation of Hypothesis 3, that engagement will have a negative effect on turnover intention is confirmed in this study. This finding supports previous research (i.e. Harter, Schmidt & Hayes, 2002; Boselie, 2002; Schaufeli & Bakker, 2004; Saks, 2006). This means that when employees are more engaged at work they have less intentions to leave the organization. The unstandardized beta indicates that an increase of 1 point at the engagement scale leads to a decrease of.256 point at the turnover intention scale. Engagement appears to be the best predictor of turnover intention in this study. Mediating effect of engagement in the relation between HR practices and turnover intention Two significant mediating effects were found in this study. Engagement mediated the negative relation between HR practices aimed at reinforcing employees ability and turnover intention. This negative mediating effect was also found for HR practices aimed at reinforcing employees opportunity to participate. The expected mediating effect of engagement in the relation between motivation and turnover intention was not confirmed in this study. This can be 26

27 explained by the fact that the direct effect of motivation on engagement was not significant in this sample. The two significant mediating results support the SET-theory (Cropanzano & Mitchell, 2005) and the COR-theory (Hobfoll, 2001). These outcomes also support the findings of Bakker & Demerouti (2007), Schaufeli and Bakker (2004) and Saks (2006) who stated that engagement mediate the relation between job resources and employee outcomes like turnover intention. This research may enrich the existing research in a way to present significant mediating effects of engagement in the relation between HR practices and turnover intention. It has to be mentioned that this sample was not representative to the population. So these results cannot be generalized but can be a motivator for future research. If these results could emerge from this sample, the same results may arise from a representative sample. Path analysis These findings imply that in order to decrease the turnover intentions among employees, organizations should pursue HR practices aimed at reinforcing employees ability, motivation and opportunity to participate. All three bundles appeared to be important to improve employees engagement and to lower turnover intentions. Path analysis represented a more clear view about the total effects of each variable in this research and showed that motivation did have an effect on engagement and that ability did have an effect on turnover intention. If path analysis was not performed, then these results would not occur after multiple regression. It has to be mentioned that these findings could not be tested on significance in this study, which means that conclusions from the path analyses should be handled with care. Additional analysis The main conclusion after additional analysis was that it was appropriate to use the disaggregated scale by measuring HR practices instead of the aggregated scale because the disaggregated scale explained more variance in engagement and turnover intention in this study. It is necessary to look at HR practices as specific bundles to find out which HR practices are most effective on employees. Limitations and directions for future research There are some limitations to this study that should be considered when interpreting the results. First it needs to be taken into account that the use of a cross-sectional design makes it difficult to make any causal inferences about the relations among HR practices, engagement and turnover intentions. It is recommended for future research to use a longitudinal research design, to be able to draw conclusions over multiple periods in time. This design makes it possible to show how effects between HR practices, engagement and turnover intention will be over time and gives insights in the actual time ordering of the variables at stake. 27

28 A second limitation was the use of convenience sampling that led to a non-representative sample in this study. Thus, the results in this study cannot be generalized to the larger population. A solution would be to use random sampling, because this method makes it easier to generalize results. Another consequence of this data gathering process is that there were many different organizations included in this study who are operating in multiple sectors, which makes this sample heterogeneous. These differences cause a lot of unwanted variance in the data that could not be controlled for in this study. In future research a more homogeneous sample would increase the internal validity of this study. A third limitation is related to the questionnaire. This study is an inventory of the AMO model made at the individual level. In fact only employees are surveyed. Employees were assessed by whether they consider the HR practices are present in their organization. It is questionable whether employees are able to assess HR practices such as Appelbaum et al. (2000) intended. The respondents in this research indicated that some questions about the HR practices were difficult to answer. So it could be that the AMO-model was not assessed in the right way by the respondents, which might have caused biases in the results. An explanation for this matter might be that this questionnaire is only used on line-managers or senior management and is barely used on employees, so it is possible that some questions were too difficult for respondents to answer. To measure perceptions of employees about HR practices, the questions in the questionnaire need to be more understandable and relevant for employees in the future. A fourth limitation of this study is related to the low validity of the AMO construct in the questionnaire. There were problems with constructing the HR practices in SPSS. Compared to previous research, where the validity of the AMO constructs were satisfying, are in this study, both spontaneous and forced solutions of Principal Component Analysis (PCA) not satisfying and provide no clear structure between the items. Therefore, the items of the HR practices scale were separated into three constructs that are equivalent to the theoretical backgrounds of the AMOmodel. Although the reliability analyses provided sufficient results, this way of defining the components might have influenced the results of this study. Because in earlier research, that used this questionnaire, the sample mostly existed of only managers. This could explain the fact that in this sample the validity of the HR practices scale is weak. The last limitation of this study is related to path analysis. After this analysis the results were interesting and satisfying but there was one difficulty. The outcomes of this analysis could not be tested for significance in this study. The program AMOS is a good system to test path analysis for significance, through lack of time and knowledge about this program, this research was not able to accomplish this. Recommended for future research is to use path analysis and to test the results from the path analysis for significance, because the outcomes of this study are interesting for future research to discover if these findings are really significant. Next to the limitations and recommendations for future research already mentioned above, these and some other additional and important recommendations are exposed in this 28

29 study. Since age, as a control variable, showed to be related to engagement in this study, it seems interesting for future research to give this variable a more prominent role. Regarding to the questionnaire used in this study the option I don t know has to be added, to protect the study for incorrect answers which could influence the results. It is also interesting to study what effect engagement could have on teams, instead of individual employees. When an employee is highly engaged, the possibility could be that this will affect the whole team. Practical Implications Despite these limitations and recommendations for future research, the results of this study do provide practical implications as well. Most results provide interesting insights for organizations. Organizations need to be aware of the perceptions that employees have regarding to HR practices, because employees perceptions could differ from the perceptions of managers about HR practices. Organizations have to find out what their employees need and have to pay attention to those facts to make them more engaged at work and to lower the turnover intentions. It is also important for organizations to focus on all these three bundles of HR practices because after path analysis all the bundles had a numerous total effect on both engagement and turnover intention. The fact that motivation did not seem to make employees directly more engaged should help employers to focus initially on the other HR practices and then at HR practices who reinforced the employees motivation. Senior management has to realize that increasing employees engagement is important for lowering the turnover intentions. When organizations can lower these intentions they could save money for other investments. Organizations can implement HR practices in a way that could lead to higher engaged employees. They therefore need to make line-managers conscious of the actions they can undertake to improve engagement through the perceptions of employees about HR practices. Furthermore, this study differs to other research by focusing on the perceptions of employees on specific HR bundles, while other studies are more focused on the actual HR practices. Another recommendation for organizations is to focus less on the actual HR practices and more on the perceived HR practices. So, to find out what their employees need to be able to higher employees engagement and in turn, to lower turnover intentions. Organizations could implement a system for employees to give their opinions so that the management will know what is going on in the minds of their employees. After this study it is clearly that the perceptions of employees are very important to increase engagement and to eventually retain personnel. 29

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33 Sigler, K.J. (1999). Challenges of employee retention. Management Research News, 22, 1 5. Van de Voorde, K. (2009). HRM, Employee Well-being and Organizational Performance: A Balanced Perspective. Tilburg: Ridderprint Offsetdrukkerij B.V. Wright, P.M., & Boswell, W.R. (2002). Desegregating HRM: A review and synthesis of micro and macro human resource management research, Journal of Management, 28, Xanthopoulou, D., Bakker, A.B., Demerouti, E., & Schaufeli, W.B. (2009). Work engagement and financial returns: A diary study on the role of job and personal resources, Journal of Occupational and Organizational Psychology, 82, Internet articles: chten_in.html Branch Data D4=0&D5=0&D6=0,3-6,8-12,14-17&D7=a&D8=0,4,l&HDR=T,G7&STB=G1,G2,G3,G4,G5, G6&VW=T Education and Age Data Gender Data

34 Appendix A: Organizations List of including organizations: - CIZ, Healthcare branch; - Minos Pallas, Catering industry; - CBS, Economic sector; - Café Karel, Catering industry; - Cofely, Technology branch; - St. Leergeld, Foundation branch; - DAS, Insurance branch; - Abab, Accountancy branch; - Kompro/Panasonic, Retail branch; - Gemeente Amsterdam, Government; - Alons & Partner, Consultancy branch; - Interpolis, Insurance branch; - Gemeente Houten, Government sector; - Omnext, Technology branch; - CZ, Health insurance branch; - Notubiz, Multimedia branch; - Alliander, Energy supplier; - Hurks vd Linden, Supermarket branch; - Ernst & Young, Financial services branch; - Gemeente Oss, Government branch; - Perfumery Douglas, Retail branch; - Radboud pharmacy, Healthcare branch; - Gana Advice group, Insurance branch; - Rabobank Oss, Financial services branch; - De Waalboog, Healtcare branch; - Texis BV, Security branch; - Citaverde College, Education branch; - AC Rest. & Tulip Inn, Catering industry; - The Health group; Healthcare branch; - Leolux, Furniture factory; - Hago, Cleaning business - Sita Netherlands, Garbage processing; - Rabobank Netherlands, Financial services branch; - Unknown, one company wanted to be anonymous. 34

35 Helemaal mee oneens Grotendeels mee oneens Neutraal Grotendeels mee eens Helemaal mee eens Hanneke Banken, 2010 Appendix B: Scales Perceived HR practices scale: Deze vragen gaan over het personeelsbeleid op uw afdeling. Geef per stelling aan in hoeverre u de stelling juist vindt voor uw afdeling. Mijn afdeling biedt: 1 het gebruik van selectie-interviews voor het selecteren van nieuwe medewerkers. 2 het gebruik van selectietests (bijvoorbeeld intelligentie, persoonlijkheid, interesse) voor het selecteren van nieuwe medewerkers. 3 het gebruik van assessment centers voor het selecteren van nieuwe medewerkers. 4 het gebruik van gespecialiseerde selectiebureaus voor het selecteren van nieuwe medewerkers enige vorm van opleiden formele interne bedrijfstrainingen externe trainingen de mogelijkheid om vaardigheden verder te ontwikkelen sociale vaardigheidstrainingen zoals communicatietraining of presentatietraining managementtraining en -ontwikkeling

36 11 formele carrièretrajecten hogere salarissen dan marktconform is naast het basissalaris een bonus of andere financiële extra s naast het basissalaris een individuele prestatiebeloning naast het basissalaris een team- of afdelingsgebonden prestatiebeloning een systeem voor winstdeling een formeel functionerings- en beoordelingssysteem jaarlijkse evaluatie van prestaties in een gesprek beoordeling van prestatie meerdere keren gedurende het jaar in een gesprek gezamenlijk overeengekomen prestatiedoelen beoordeling van teamprestatie als onderdeel van mijn beoordeling werkoverleg betrokkenheid bij het maken van beleid deelname in zelfsturende teams betrokkenheid bij beslissingen over het selecteren van een nieuwe collega

37 Engagement scale: Deze vragen gaan over uw bevlogenheid. Kunt u aangeven in welke mate de volgende stellingen van toepassing zijn? 1 = Nooit 2 = Sporadisch (een paar keer per jaar of minder) 3 = Af en toe (eens per maand of minder) 4 = Regelmatig (een paar keer per maand) 5 = Dikwijls (eens per week) 6 = Zeer dikwijls (een paar keer per week) 7 = Altijd (dagelijks) 82 Op mijn werk bruis ik van energie Als ik werk voel ik me fit en sterk Ik ben enthousiast over mijn baan Mijn werk inspireert mij Als ik s morgens opsta, heb ik zin om aan het werk te gaan Wanneer ik heel intensief aan het werk ben, voel ik mij gelukkig Ik ben trots op het werk dat ik doe Ik ga helemaal op in mijn werk Mijn werk brengt mij in vervoering

38 Helemaal mee oneens Mee oneens Neutraal Mee eens Helemaal mee eens Hanneke Banken, 2010 Turnover intention scale: Deze vragen gaan over uw verloopintentie. Kunt u aangeven in welke mate u het eens bent met de volgende stellingen? 117 Als het aan mij ligt, werk ik over een jaar nog steeds bij deze organisatie Ik denk er vaak over om te stoppen met mijn baan Ik ben van plan om een andere baan te gaan zoeken binnen nu en een jaar

39 Appendix C: Factor analyses Turnover intention Table 1: Turnover intention: Principal factor analysis Factor 1 Vraag 117 Als het aan mij ligt, werk ik over een jaar nog steeds bij deze organisatie..859 Vraag 118 Ik denk er vaak over om te stoppen met mijn baan..864 Vraag 119 Ik ben van plan om een andere baan te gaan zoeken binnen nu en een jaar..825 Eigenvalue Total variance explained 72.15% Extraction Method: Principal Component Analysis. (selection: eigenvalues > 1.00) a. 1 components extracted. 39

40 Engagement Table 2: Engagement: Principal factor analysis Factor 1 Vraag 82 Op mijn werk bruis ik van energie..847 Vraag 83 Als ik werk voel ik me fit en sterk..829 Vraag 84 Ik ben enthousiast over mijn baan..842 Vraag 85 Mijn werk inspireert mij..869 Vraag 86 Als ik s morgens opsta, heb ik zin om aan het werk te gaan..772 Vraag 87 Wanneer ik heel intensief aan het werk ben, voel ik mij gelukkig..809 Vraag 88 Ik ben trots op het werk dat ik doe..806 Vraag 89 Ik ga helemaal op in mijn werk..855 Vraag 90 Mijn werk brengt mij in vervoering..799 Eigenvalue Total variance explained 68.19% Extraction Method: Principal Component Analysis. (selection: eigenvalues > 1.00) a. 1 components extracted. 40