The impact of Organizational Commitment on Employees Job Performance. "A study of Meli bank" Negin Memari Department of Business Management, Islamic Azad University, Sanandaj branch, IRAN Omid Mahdieh Department of Management and Information Science, University of Medical Sciences,Tehran, IRAN Ahmad Barati Marnani Department of Management and Information Science, University of Medical Sciences,Tehran, IRAN Abstract This study investigates the relationship between organizational commitment and employees job performance in Meli Bank in Kurdistan Iran. The results revealed a positive relationship between organizational commitment and employees job performance. In the comparative analysis of three dimensions of organizational commitment, normative commitment has a positive and significant correlation with employees job performance. Furthermore, the study explores the employees job performance with four demographic variables, resulting that male employees are high performer vis-à-vis their female counterparts. The implications and limitations are also discussed at the end of the paper. Keywords: IMPACT ; ORGANIZATIONAL COMMITMENT ; EMPLOYEES JOB PERFORMANCE.; STUDY OF MELI BANK Introduction The study of employee s job performance and organizational commitment is of foremost importance to the top-level management of the organizations. Somersl & Birnbaum (1998) studied the relationship of career commitment to performance effectiveness and resulted in a positive relationship. Job satisfaction is not the single dependent variable of commitment; it also has numerous other outcomes in the organizations. Jackofsky (1984), found out that low commitment is leading to high rate of turnover, whereas higher the level of job satisfaction through job security entails high level of organizational commitment which further leads to improved employees job performance (Yousuf, 1997). Job performance has been defined as work performance in terms of quantity and quality expected from each employee (business dictionary). Pioneers (Meyer and Allen 1990) of organizational commitment suggest three types of organizational commitment that are, affective commitment which measures an employee's emotional attachment to, identification with, and involvement in the organization, normative commitment reflects pressures on an employee to remain with an organization resulting from organizational obligations. Continuance commitment refers commitment associated with the costs that employees perceive are related to leaving the organization. Organizational Commitment COPY RIGHT 2013 Institute of Interdisciplinary Business Research 164
is seeking the same impacts on women as it is on men, but in some instances women react differently (Chusmir 1984). Connectivity of colleagues and the style of management can enhance commitment of employees and are considered as an important asset of the company (Nijhof, de jong, and Beukhof 1998). Commitment of employees can be an important instrument for improving the performance of the organizations. In most of the organizations the high rate of stress leads to lower satisfaction and in turn produces very low organizational commitment (Elangovan 2001). The higher level of communication in organization led to higher level of commitment and there by increased performance (Chen, Silverthorne and Hung 2005). A study conducted by Chughtai and Zafar (2006), among university teacher of Pakistan concluded that highly committed teachers outperform vis-à-vis uncommitted teachers. This study primarily focuses on the impacts of low/high commitment towards the employee s job performance. The study is conducted in Meli bank in sanandaj of Iran province. LITERATURE REVIEW Some of the available relevant literature has been discussed below to have an insight of the previous work done on the subject. (Shore, Barksdale & Shore, 1995) studied 231 managers and 339 subordinates in multinational firms in United States and found that affective commitment and job performance are positively correlated. (Somers & Birnbanm, 1998) studied the relationship of work related commitment and input on employee job performance, however their findings suggested that career commitment is positively related to job performance but no relationship existed between organizational commitment and job performance. Both affective and normative commitments were found unrelated to job performance. (Lee & olshfski, 2002) studied the behavior of organizational commitment of the firefighters in New York and their study led to believe that organizational commitment offers considerable promise in describing the positive behaviors. Furthermore, Individuals take jobs, they identify with the role attached to the job, they become committed to doing the job, and they behave according to the expectations attached to that job. (Suliman & Lles, 2002) explored the nature of organizational commitment in three industrial units in Jordan by using employees' job performance and five demographic variables. Their research revealed that that organizational commitment comprises three-dimensional concept. The findings also uncovered a positive relationship between commitment (all the three components) and job performance. Moreover, organizational commitment and its three dimensions present positive and negative relationships with age, sex, education, job status, and organizational tenure variables. (Chen, Silverthrone and Hung, 2006) studied the relationship of the organizational commitment, communication and job performance. Their COPY RIGHT 2013 Institute of Interdisciplinary Business Research 165
research findings indicated that there are positive relationships between organizational communication, organizational commitment and job performance. This finding suggested that companies strengthen their communication channels and processes in order to strength their accounting professionals organizational commitment and job performance. (Clarke, 2006) studied the commitment and network performance in UK based health care units and found that commitment may play a significant role specifically with performance outcomes. The researcher found that statistically both affective and normative forms of commitment have significant impact on performance. Affective commitment was positively related to network performance. The finding that continuance commitment was negatively related to network performance suggests that the relationship between commitment and performance within networks is certainly not straightforward. (Rashid, Sambasvani & Joari, 2003) studied 202 managers in Malaysian companies and their research findings suggested that corporate culture and organizational commitment are interrelated and both have far reaching impacts on the performance. The above literature review reveals that there is some definite relationship exists between organizational commitment and employee s job performance. VARIABLES The variables under study are organizational commitment as independent variable and employee s job performance as dependent variable. Commitment has been further disintegrated into three parts affective, normative and continuance. Meyer and Allen (1990) defined commitment as the employee s feelings of obligation to stay with the organization: feelings resulting from the internalization of normative pressure exerted on an individual prior to or following entry. While the job performance of employees has been defined as work performance in terms of quantity and quality expected from each employee. THEORETICAL FRAMEWORK The relationship between independent variable, Organizational Commitment and dependent variable, Job Performance is shown diagrammatically in figure A. The independent variable, organizational commitment has positive or negative impacts on job performance of the employees, as the literature suggests that organizational commitment and job performance are significantly correlated. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 166
PROBLEM OF THE STATEMENT The primary focus of this research paper is to investigate the relationship between organizational commitment i.e. affective, normative and continuous commitment and employees job performance in oil gas sector of Pakistan. HYPOTHESIS From the above problem statement the following proposition (hypotheses) is developed. H1. There is a positive significant relationship between organizational commitment and employees job performance? H2. Affective commitment is positively and significantly related to employee s job Performance. H3. Continuance commitment is positively and significantly related to employee s job performance. H4. Normative commitment is positively and significantly related to employee s job performance METHODS 1) Sample A total of 230 questionnaires were distributed and personally administered among employees of personnel of Meli bank in sanandaj. Filled 153 questionnaires were received, thus constituting a 66.52 % response rate. Descriptive statistics was applied which indicates that the sample comprises 80.4 % male and 19.6 % female. The sample further indicates that 24.8 % accounted for age group between 25-30, 43.8 % were possessing bachelor degrees. 31.4 % respondent belongs to private sector and 68.6 % were from public sector. 2) Measure The tool used for measuring organizational commitment in terms of affective, normative and continuance has been developed by Allen and Meyer (1991). The scale comprises eight items, however, Meyer and Allen (1997) shortened the original eight-item scale to six item scale each and is being used for this study. The tool used for measuring job performance has been developed by Willams & Anderson (1991) using four items on a five point Likert point scale. Statistical methods Statistical tool such as correlation matrix and regression were used for data analysis. Their details are discussed in the following sections. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 167
Table. 1 Descriptive Statistics. Descriptions Percentage Gender Male Female 80.4 19.6 Age Below 25 25-30 31-35 36-40 41-45 46-60 17.6 24.8 18.3 19.6 8.5 11.1 Qualification SSC HSSC BS MA MS 4.6 3.9 43.8 42.5 5.2 Correlation matrix Correlation test was conducted to verify the existence of relationship between the independent variable i.e. organizational commitment and the dependent variable employees job performance. Regression analysis Relative strength of relationship between employees job performance and organizational commitment in oil and gas sector was examined though regression analysis. Results The results obtained by the data analysis are discussed in the following sections. Table 2 Correlation Matrix Variables Mean SD 1 2 3 4 5 6 7 8 9 1. Age 3.098 1.5801 2. Gender 0.196 0.3983 -.282* 3. Qualification 3.398 0.8377.055-0.137 1 4. Job Performence 3.261 0.6461-0.154-0.002 5. Affective 2.983 0.5297.303* * -0.011 Commitment 6. Affective 3.115 0.6559 -.166* -0.06.282*.256* Commitment 8. Normative 3.285 0.6302 -.261** -0.063.322*.369*.324* Commitment 9. Organizational 3.131 0.211* * -0.052 -.285** -0.041.374*.688* Commitment The Pearson correlation table indicates that the organizational commitment is positively and significantly correlated with job performance (0.374 (**), ** P <.01) which is supported by Suliman and Lles (1999) who found value 0.72 (**). Correlation analysis establishes that affective commitment has COPY RIGHT 2013 Institute of Interdisciplinary Business Research 168
significant relationship with job performance (0.218 (**) P <.01), which is also supported by the findings of Suliman and Lles (1999) (0.65 (**) p <.05) and further substantiated by the findings of, Chen, Silverthorne, Hung (2006). Significant relationship between affective commitment and job performance (.0282 (**), P <.01), and also between normative commitment and employees job performance (0.322 (**), P<.01) is indicted in the correlation matrix. **. Correlation is significant at the 0.01 level *. Correlation is significant at the 0.05 Table 3 Regression Analysis: I n d e p e n d e n t Beta t-value P-value Constant Variable 1.56 4.487.000 OC 0.218 4.938.000 AC 0.218 2.731.007 CC 0.282 3.609.000 NC 0.322 4.161.000 Table 3 presents the regression coefficient of independent variable i.e. Organizational commitment and its dimensions on dependent variable Job Performance. The regression analysis accounted for 13 % variance in Job performance. All the three dimensions have significant affects on Job performance. On further analysis, out of three dimension of Organizational commitment, normative commitment has positive and significant relationship on employees job performance. Discussions The purpose of current study was to examine the relationship between organizational commitment (Affective commitment, Continuance commitment and Normative commitment) and Job N= 153, R Square = 0.140 Adjusted R square = 0.137 F = 24.386 performance in the oil and gas sector of Pakistan. Job performance emerged as a determinant of Organizational commitment thus hypothesis 1 is accepted. Respondents answers to various questions showed that they feel relaxed in terms of their work environment and have increased organizational commitment which entailed high job performance. The correlation and regression table data also suggests that hypothesis H2, H3, and H4 are also accepted. Out of the three dimensions normative commitment has significant affects on Job performance. The findings also reveals that the demographic variables such as, age of the respondents both in public and private sectors has no significant variation in their job performance. However the respondents with age group below 25 years have high performance as compared to other age categories. The results also indicate that the males were higher performers vis-à-vis Female. Likewise private sector employees exhibited high sense of performance levels than employees in the public sector. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 169
REFERENCES Aamir Ali Chughtai and Sohail Zafar (2006), Antecedents and consequences of Organizational Commitment Among Pakistani University Teachers, Applied H.R.M Research,11 (1), 39-64. Abubakr Suliman and Paul Iles (2000),Is continuance commitment beneficial to organizations? Commitment-performance relationship: a new look Journal of Managerial Psychology, 15 (5), 407-426. A.R. Elangovan, Causal ordering of stress, satisfaction and commitment, and intention to quit: a structural equations analysis, Leadership & Organization Development Journal, 2001, 22(4), 159-165 Darwish A. Yousef, (1998), Satisfaction with job security as a predictor of organizational commitment and job performance in a multicultural environment, International Journal of Manpower, 19 (3), 184-194 Darwish A. Yousef, (2002) Job satisfaction as a mediator of the relationship between role stressor and organizational commitment: A study from an Arabic cultural perspective, journal of managerial Psychology, 17 (4), 250-266 Ellen F. Jackofsky 1984), Turnover and Job Performance: An Integrated Process Model The Academy of Management Review, 9 (1), 74-83 Gary Dessler (1993), How to Earn Your Employees' Commitment The Academy of Management Executive, 13 (2), 58-67 John P. Meyer., David J. Stanley. Lynne Herscovitch and Laryssa Topolnytsky (2002), Affective, Continuance and Normative commitment to the Origination: A Meta-analysuis of Antecedents, Correlates and Consequences, Journal of Vocational Behaviour, 61, 20-52. John P. Meyer., Natalie J. Allen (1991), A three component conceptualization of Organizational commitment, Human Resource Management Review, 1 (1), 61-89. John P. Meyer, P. Gregory Irving, Natalie J. Allen, Examination of the Combined Effects of Work Values and Early Work Experiences on Organizational Commitment, Journal of Organizational Behavior 1998, 19 (1), 29-52 Jui-Chen Chen, Colin Silverthorne and Jung-Yao Hung 2006,Organization communication, job stress, organizational commitment, and job performance of accounting professionals in Taiwan and America, Leadership & Organization Development Journal, 27 (4), 242-249 Leonard H. Chusmir (1982), Job Commitment and the Organizational Woman, The Academy of Management Review, 7 (4 ), 595-602 Lynn McFarlane Shore, Kevin Barksdale, Ted H. Shore (1995), Managerial Perceptions of Employee Commitment to the Organization, The Academy of Management Journal,38 (6)1593-1615 COPY RIGHT 2013 Institute of Interdisciplinary Business Research 170
Mark John Somers and Dee Birnbaum (1998), Work-Related Commitment and Job Performance: It's also the Nature of the Performance That Counts, Journal of Organizational Behavior, 19 (6), 621-634 Nicholas Clarke (2006), The relationships between network commitment, its antecedents and network performance, Management Decision, 44 (9), 1183-1205 Olugbenga jelil. Ladebo, joseph mubo. Awotunde, Emotional and Behavioral reactions to work overload: Self-efficacy as a moderator, current research in social psychology,13 (8),86-100 Seok-Hwan Lee and Dorothy Olshfski (2002), Employee Commitment and Firefighters: It's My Job, 62, Special Issue: Democratic Governance in the Aftermath of September 11, 2001, Public Administration Review, 108-114 Wim J. Nijhof Margriet J. de Jong, Beukhof Bezo (1998), Employee commitment in changing organizations: an exploration, Journal of European Industrial Training, 22 (6)243 248 Yoash Wiener (1982), Commitment in Organizations: A Normative View, The Academy of Management Review, 7 (3), 418-428 Zabid Abdul Rashid, Murali Sambasivan and Juliana Johari (2003), The influence of corporate culture and organizational commitment on performance, Journal of Management Development, 22 (8), 708-728 COPY RIGHT 2013 Institute of Interdisciplinary Business Research 171