MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY ------------ LE NGOC LAN EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES MASTER THESIS IN BUSINESS ADMINISTRATION HO CHI MINH CITY – 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------ LE NGOC LAN EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES Subject: Master of Business Administrator Code: 06.02 MASTER THESIS IN BUSINESS ADMINISTRATION SUPERVISOR: Dr. PHAM QUOC HUNG HO CHI MINH CITY – 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Firstly, I wish to express my deepest gratitude to my supervisor, Dr. Phạm Quốc Hùng, for giving me insightful guidance and valuable advice throughout undertaking of this study. I also thank to all respected lecturers of the eMBA19 course of for their devotions during the training, which enrich my knowledge in order to implementing this study successfully.
My heartfelt thanks to respondents, who provide me supportive attitude and honest answer to make a good and solid database for the analysis. Finally, I would like to say thanks to my beloved friend and family members, whom have given me much support, encouragement and assistance with this thesis. Le Ngoc Lan Ho Chi Minh City, September 2013 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com COMMITMENT I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work.
Le Ngoc Lan 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT CHAPTER 1 - INTRODUCTION TO THE STUDY. Practical significances of the study. Research scope and approach. 12 CHAPTER 2 - LITERATURE REVIEW.
Human Resource Management .1 Human Resource Management Pratices .2 Human Resource Management effects on Intention To Leave. Organizational Citizenship Behaviour .1 Definition of OCB .2 The important of OCB. Research model and hypotheses.1 The effects of HRM on OCB .2 The effect of Retention Oriented Compensation on Intention to Leave .3 The effect of Formalized Training on Intention to Leave .4 The effect of OCB on intention to leave.5 The mediating role of OCB. 20 CHAPTER 3 - RESEARCH METHODOLOGY.
The pilot study .1 Pilot study phase 1 .2 Pilot study phase 2. Methods of data analysis .3 Confirmatory factor analysis .4 Analysis of Variance (one-way and two-way ANOVA) .5 Multiple regression analysis .6 Testing mediation with regression analysis. 32 CHAPTER 4 - DATA ANALYSIS. Profiles of qualified respondents.
Reliability of the measurements. Confirmatory factor analysis. 38 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.2 Testing residuals of dependent variable .3 Effect of Perceived HRM Practices (Retention-oriented Compensation and Formalized Training) on Organizational Citizenship Behaviour (H1 & H2) .4 Effect of Perceived HRM Practices (Retention-oriented Compensation, Formalized Training) and Organizational Citizenship Behaviour on Employees’ Intention to Leave (H3, H4 & H5) .1 Effect of Perceived HRM Practices (Retention-oriented Compensation and Formalized Training) on Employees’ Intention to Leave (H3 & H4) .2 Effect of Organizational Citizenship Behaviour on Employees’ Intention to Leave (H5) .5 The mediating effect of Organizational Citizenship Behaviour on the relationship between Perceived HRM Practices and Employees’ Intention to Leave (H6 & H7). Discussion of findings.
Contribution of the current study. Limitation and further research. 54 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURE Figure 2-1: Partial model by Nishii and Wright, 2004. 14 Figure 2-2: Hypothesized Research Model.
21 Figure 3-1: Research process. 23 Figure 3-2: Mediating model. 33 Figure 4-1: Hypothesized model. 38 Figure 4-2: Modified model.
42 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLE Table 3-1: Measurement scales of independent variables. 24 Table 3-2: Measurement scales of dependent variable. 26 Table 3-3: Assessing Fit Indices. 31 Table 4-1: Variables included in the Analysis.
35 Table 4-2: Socio-demographic Characteristics of The Qualified Samples. 36 Table 4-3: Summary of Cronbach Alpha Measures across Variables. 37 Table 4-4: Assessing Fit Indices – Hypothesized Model. 40 Table 4-5: Standardized Regression Weights – Hypothesized Model.
41 Table 4-6: Assessing Fit Indices – Modified Model. 43 Table 4-7: Descriptive Statistics and Correlations. 44 Table 4-8: Model Summary of H6. 49 Table 4-9: Coefficients of H6 hierarchical regression.
50 Table 5-1: Research Purposes, Hypotheses and Results. 52 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This study seeks to investigate the mediating role of organizational citizenship behavior on the relationship between perceived HRM practices and employees’ intention to leave. The study was conducted in Ho Chi Minh City, Vietnam with the sample of 182 employees. The results showed that Organizational Citizenship Behaviour mediates the relationship between retention-oriented compensation and employees’ intention to leave.
In addition, the study also finds that there are no relationship between formalized training and organizational citizenship behavior; hence, organizational citizenship behavior does not mediate the relationship between formalized training and employees’ intention to leave These findings suggest that HR practitioners should monitoring organizational citizenship behavior to better predict employees’ intention to leave, in order to make timely adjustment on retention-oriented compensation system. KEYWORDS: Organizational Citizenship Behaviour, Perceived HRM practices, Retention-Oriented Compensation, Formalized Training, Employees’ Intention to Leave. 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 - INTRODUCTION TO THE STUDY 1. Research background Employees are extremely crucial to the organization since their value to the organization is essentially intangible and not easily replicated (Meaghan & Nick 2002).
And employee’s intention to leave remains one of the most widely researched topics in organizational analyses due to its significant effects on organizations (DeMicco & Giridharan 1987; Dyke & Strick 1990; Cantrell & Saranakhsh 1991; Denvir & Mcmahon 1992) (as cited in Mahmud, 2011). Muhammad et al. (2011) noted that there is a positive relationship between HRM practices with employee retention. However, there are very few studies investigated how human resource management practices effects on the intention to leave of employees, and how employees react on that.
In the past decades, OCB has received much attention from researcher. In relatively uncomplicated production environments, the extra efforts on the part of the employee may seem minor, but a growing number of jobs is becoming more complicated, consisting of large numbers of unstructured tasks, so more discretion is with the employee, and thus the difference between a good performer and a bad performer becomes increasingly large (Hunter et al. Despite such an important role of OCB, it is surprising to note that past studies often seem to ignore how employees’ behavioural reactions affect the relationships between HRM practices and employee’s intention to leave (Guest, Michie, Conway and Sheehan 2003; Morrison 1996). Organizations need employees who anticipate and monitor rapid changes in the business, and figure out how to deal with these changes to sustain or enhance effectiveness (Organ, Podsakoff and MacKenzie 2006).
Therefore, it is argued that the employees’ organizational citizenship behaviour (OCB), in particular, is involved in their behavioural process to help explain the HRM-performance relationship (Lam et al, 2009). 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Lam et al. (2009) have conducted a study to understand the mediating role of Organizational Citizenship Behaviour (OCB) in the relationship between perceived human resource management practice and employees’ intention to leave. The study’s result provide a strong indication that the effects of HRM practices (i., retention-oriented compensation and formalized training in this study) on intention to leave (the universalistic proposition) might not be so simple, meaning there might be some behavioral facts mediating the relationship (Lam et al, 2009).
The result may help managers with a more effective strategy in retaining people with the organization. However, that study has been conducted in a joint-venture of Japan- China which might not be appropriate in Vietnam context. Moreover, the sample coverage of the study is limited in one company which is not diversified enough to reflect the mediating role of OCB on the relationship between perceived human resource management practices and employees’ intention to leave. Hence, this study aims to investigate the mediating role of OCB on the relationship between the perceived human resource management practice and employees’ intention to leave in Vietnam context.
Research objective The purpose of this study is to examine the mediating role of organizational citizenship behavior on the relationship between perceived human resource management practices and the intention to leave of employees. Accordingly, the study aims at answering the question as below: Whether Organizational Citizenship Behavior mediates the relationship of perceived human resource management and employee intention to leave in organization in Vietnam? 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Practical significances of the study The practical relevance of this study is that it gives insight in how perceived HRM practice affects employees’ intention to leave that are becoming increasingly important for organizations. The results of the study are meaningful for implementation HRM to lower the intention to leave.
Manager would have a clearer direction to use HRM as a powerful tool in control employee’s intention to leave. Research scope and approach This study is conducted in Ho Chi Minh City, which is the biggest city in Vietnam. Ho Chi Minh City is chosen for the study for its diversified workforce who comes from different organizational, that provides a diversity perceived human resource practices. This chosen also make the study feasible (with time and resource limited) for online survey method.
The target of this study are those who working for the organization for at least 6 months. This timeframe is to ensure that respondents have time to digest the organizational perceived human resource practices and there is enough time for their organizational behavior to impact on the relationship between human resource management practice and their intention to leave. The study includes 2 phases. First is the pilot to check the comprehension of the questionnaire and to examine the measurement scales.
The main phase is conducted later to test the hypothesis and confirm the research model. Research structure The study includes 5 chapters: Chapter 1: Introduction. This chapter provides the research background, research objectives, research scope and approach. 12 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Chapter 2: Literature review.
This chapter provides theoretical and empirical background behind the hypothesized research model. Chapter 3: Research methodology. This chapter details the methodologies used to conduct this research. Chapter 4: Data analysis.
This chapter is conducted based on the collected data to test the hypothesis and answer research questions. In this chapter, the author discusses the results; provide practical implication, and possible direction for future research. 13 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2 - LITERATURE REVIEW This chapter covers a review of relevant literature regarding the construct of proposed model. The author reviews the literature of OCB, HRM, and employee retention.
Human Resource Management Human resource management is critically important because employees are often viewed as invaluable assets of organizations (Redman and Wilkinson 2001). Employees’ intention to leave has received much attention from human resource management practices.1 Human Resource Management Pratices Nishii and Wright (2004) also investigated the relation between HR practices and firm performance. They distinguish five levels; part of the model is described below: Figure 2-1: Partial model by Nishii and Wright, 2004 Intended HR Actual HR Perceived HR Employees’ Organization practices practices practices reaction performance Nishii and Wright (2008) (cited in Karina, 2009) refer the conceptualization of employees’ perceptions of HRM as perceived HR practices, and further specified these as employee perceptions and experiences.