MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------ PON MEAN SOVITH THE RELATIONSHIP BETWEEN HUMAN RESOURCE MANAGEMENT PRACTICES AND ORGANIZATIONAL COMMITMENT IN CAMBODIA THESIS OF MASTER OF BUSINESS ADMINISTRATOR HO CHI MINH CITY – 2012 TIEU LUAN MOI download : skknchat@gmail.com MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------ PON MEAN SOVITH THE RELATIONSHIP BETWEEN HUMAN RESOURCE MANAGEMENT PRACTICES AND ORGANIZATIONAL COMMITMENT IN CAMBODIA Subject: Master of Business Administrator Code: 06.02 THESIS OF MASTER OF BUSINESS ADMINISTRATOR ADVISOR: DR. PHẠM QUỐC HÙNG HO CHI MINH CITY – 2012 TIEU LUAN MOI download : skknchat@gmail.com i ACKNOWLEDGEMENT I would like to take this opportunity to express my gratitude to all those who have helped and supported me during the time I conducted the study. First of all, I would like to express my deepest gratitude to my advisor, Dr. Pham Quoc Hung, for his sincere guidance to my thesis.
His advices are crucially important and valuable for me to finish this thesis. Besides, I would like thank you Dr. Tran Ha Minh Quan and all professors, lecturers for his/her enthusiastic support. Secondly, I would like to show sincere gratitude to University of Economics Ho Chi Minh City and Vietnamese government for giving me the opportunity to pursue my mater degree.
Thirdly, I would like to send special thank you to my beloved friends, Mr. Sokun and Mr. Viet, their guidance had broken the rusty iron door of SPSS hardship. Gian Phong, Mr.
Tuan and Miss. Chung, their support and materials play an important role for my accomplishment. Moreover, I would like to express special thank to all of my class mates (EMBAK19). Without all of their help, today would not have happened.
Lastly, I wish to thank my parents, Sam Pon and Heng Mean. Their love provided my inspiration and was my driving force. I owe them everything and wish I could show them just how much I love and appreciate them. I hope that this work would make them proud.
Pon Mean Sovith Ho Chi Minh, December 2012 TIEU LUAN MOI download : skknchat@gmail.com ii COMMITMENT I hereby would like to commit that the thesis, “The relationship between human resource management practices and organizational commitment in Cambodia”, was accomplished based on my independent and serious studies and researches. The data was collected in reality and it has clear origins. In addition to that, the data would be trust-worthily handled and it has never been released in any menu. Pon Mean Sovith TIEU LUAN MOI download : skknchat@gmail.com iii TABLE OF CONTENT ACKNOWLEDGEMENT.
II TABLE OF CONTENT. III LIST OF TABLE. V LIST OF FIGURE .1 SETTING OF THE STUDY .2 THE PROBLEM AND MOTIVATION FOR THE STUDY.3 THE GOAL OF THE RESEARCH .4 STRUCTURE OF THE STUDY. 5 CHAPTER 2 LITERATURE REVIEW.3 Relationship between personal variables and organizational commitment 11 2.3 HUMAN RESOURCE MANAGEMENT PRACTICES .1 The concept of human resource management practices .2 The association of HRM practices and organization commitment .1 Training and development.
23 CHAPTER 3 RESEARCH METHODOLOGY .1 Perceived organizational support .4 TRANSLATION OF THE QUESTIONAIRE. 27 TIEU LUAN MOI download : skknchat@gmail.5 THE PILOT STUDY .8 SELECTING THE SAMPLE AND COLLECTING DATA .10 METHOD OF DATA ANALYSIS .4 Analysis of variance (Anova). 33 CHAPTER 4 RESULTS ANALYSIS .1 Measuring human resource management practices .2 Measuring Organizational Commitment .5 EXPLORATORY FACTOR ANALYSIS (EFA) .1 EFA implementation for independent variable.2 EFA implementation for dependent variable .1 For affective commitment (AC) as dependent variable .2 For continuance commitment (CC) as dependent variable. 65 CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS .4 LIMITATION AND FURTHER RESEARCH RECOMMENDATION 68 APPENDIX.
81 TIEU LUAN MOI download : skknchat@gmail.com v LIST OF TABLE Table 3. 1: Normality descriptive statistics. 2: Sample description statistic. 3: Cronbach’s Apha of scale factor: Training and development.
4: Cronbach’s Apha of scale factor: Teamwork. 5: Cronbach’s Apha of scale factor: Compensation / Incentive. 6: Cronbach’s Apha of scale factor: Performance appraisal. 7: Cronbach’s Apha of scale factor: Affective commitment.
8: Cronbach’s Apha of scale factor: Continuance commitment. 9: Kmo and Bartlett’s test. 10: Total variance explained. 11: EFA analysis result Of HRM Practice’s factors.
12: KMO And Bartlett’s test. 13: Total variance explained. 14: EFA analysis result of organizational commitment. 17: Regression model summary.
20: Hypothesis and research results. 21: Regression model summary. 24: Hypothesis and research result. 25: Mean of control variable.
1 TIEU LUAN MOI download : skknchat@gmail.com vi LIST OF FIGURE Figure 1. 1: Structure of the study. 1: Hypothesis and research results. 65 TIEU LUAN MOI download : skknchat@gmail.com 1 ABSTRACT This study is to describe and investigate the relationship between human resource management (HRM) practices and organizational commitment in Cambodia.
The human resource management practice will be discussed here including Training and development, Compensation/incentive, Teamwork, and Performance appraisal. In addition, the organizational commitment elements are including affective commitment and continuance commitment. Finding of this study should be shared to, especially, HRM department and managerial level of the organization, so that they can configure and decide the way how future HRM practices oriented. The study would, on the other hand, allow them to have better understanding of HRM practices and fully utilize their potentials for the effectiveness of the organization and, of cause, encourage employee commitment.
Key words: HRM practices, organizational commitments, Cambodia TIEU LUAN MOI download : skknchat@gmail.com 2 CHAPTER 1 INTRODUCTION 1.1 SETTING OF THE STUDY Nowadays, Organizational changes are increasingly becoming a major component of everyday organizational functioning. The basic principles of doing business successfully are fundamentally changing. The historical boundary between customer, supplier and competitors is increasingly becoming blurred (Allio, 1993). Many organizations have responded to these competitive pressures by downsizing, restructuring and transformation, and thus created a less secure organizational climate.
Traditionally, product technology and process, accessible capital sources, and so on, were essential to win the competition; however, at present, these kinds of resources, suggested by Pfeffer (1994), fail to fulfil their roles to defeat competitors. The decreased vitality of those primitive resources has drawn practitioners and academics’ attentions to explore other types of assets which can capture and retain competitive advantage and at the same time, are not easily imitated and copied by competitors (Barney 1991). The question of the kind of asset that can provide sustainability, competitive advantage, and superior organizational commitment has been asked and discussed among managers and scholars over the past decades. As a result, the finding of human resources as a valuable intangible asset of an organization is the critical answer to clarify all doubts on how organizations could compete in the market, achieve superior performance, realize competitive advantage, and, on the other hand, improve organizational commitment over a very long time, or possibly forever.
Of cause, Ulrich (2002) argues that the competitive edge of companies no longer lies in its product, but in its people. According to Gunnigle, Heraty and Morley (1971), TIEU LUAN MOI download : skknchat@gmail.com 3 people are the lifeblood of organizations and they represent the most potent and valuable resources of organizations. No organization can perform at peak levels unless each employee is committed to the organization’s objectives and works as an effective team member. Therefore, the commitment of the competent employees plays an important role in the success of the organization.2 THE PROBLEM AND MOTIVATION FOR THE STUDY Organizations in Cambodia are no exception to the competition environment.
Although the employees get paid so well, some or most of them, however, are not satisfied with their work environment. They are less motivated, and have no commitment for the organization. Therefore, it results in so many employees decided to change their jobs or leave their organization. This current environment is accompanied by poor human resource management practices and shortage of skilled, competent and committed employees.
Moreover, some organizations are currently losing competent employees to their competitors for the competitive salaries and benefits. Turnover among these competent employees may, however, result in interruptions in normal operations, loss of efficiency, increase replacement and recruitment cost, project delays, increase customer dissatisfaction, scheduling difficulties and the depletion of the organization’s intellectual capital. When an organization loses a critical employee, there is negative impact on innovation, consistency in providing service to customers may be jeopardized, and major delays in the delivery of services to customers may occur (Abbasi and Hollman, 2000). In addition, Bennett and Durkin (2000) states that the negative effects associated with a lack of employee commitment include absenteeism and turnover.
They found that employee commitment is positively related to organizational outcomes TIEU LUAN MOI download : skknchat@gmail.com 4 such as job satisfaction, motivation and attendance. Committed employees usually act in the interests of their organization and/or the customers being served by the organization (Romzek, 1990). Furthermore, they tend to generate high performance business outcomes as measured by increased sales, improved productivity, profitability and enhanced employee retention (Roger, 2001). Consequently, lack of employee commitment threatens the survival of the organization because a loss of a competent employee is a loss of competitive advantage for the organization.
Of cause, the results of the study would help human resource management department of the organizations to utilize HRM practices that will encourage employee commitment toward the organization. The study will, on the other hand, contribute to the body of knowledge by providing more proof and information on the relationship between HRM practices and organizational commitment.3 THE GOAL OF THE RESEARCH The main purpose of the research is to cover the aspects of human resource management practices that have an influence on employee commitment and furthermore to be able to determine the relationship between the two. Besides, in order to determine the correlation between the control variables and employee commitment or HRM practices. The results of the research would participate in the decision on how future HRM practices will be configured within the organization being researched in order to induce and maintain organizational commitment from the employees.
Therefore, the relationship between human resource management practices and organizational commitment of the organizations in Cambodia are the main objective of the study. TIEU LUAN MOI download : skknchat@gmail.4 STRUCTURE OF THE STUDY The study is divided into five chapters. Besides this introductory chapter in which the problem is defined, the research motivated and the aim as well as method of the study provided, the chapters are organized as follows: Chapter 2: Literature review The literature review section is divided into two main sections; a review on the literature on organizational commitment and HMR practices. The organizational commitment section has the following topics: • The concept of organizational commitment and the below elements are selected and discussed: - Affective commitment, - Continuance commitment • The influence of personal characteristics (age, gender, and organizational tenure) on organizational commitment.
The HRM practices section has the following major topics: • The concept of HRM practices • The association of HRM practices and organization commitment The literature review incorporates the construct of both HMR practices and organizational commitment. It offers an operational definition and history of both HMR practices and organizational commitment adopted by the researchers. Both reviews conclude with propositions from literature aimed at guiding the investigation TIEU LUAN MOI download : skknchat@gmail.com 6 of the relationship between HMR practices and organizational commitment undertaken in this study. Chapter 3: Research methodology The research methodology chapter describes the methodology employed in the investigation of the relationship between HRM practices and the commitment of employees at the organization in Cambodia.
Chapter 4: Results analysis This chapter contains the results, descriptions of the results followed by the analysis of the relationship (interpretation of the results) and explanations on what the researcher subscribes to the results. Chapter 5: Conclusions and recommendations The thesis ends with conclusions and recommendations on further research on the relationship between HMR practices and organizational commitment.