UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Ngoc Tuan THE IMPACT OF QUALITY OF WORK LIFE AND ORGANIZATIONAL COMMITMENT ON JOB PERFORMANCE OF EMPLOYEES IN THE VIETNAMESE BANKING SECTOR MASTER OF BUSINESS (HONORS) Ho Chi Minh City Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Ngoc Tuan THE IMPACT OF QUALITY OF WORK LIFE AND ORGANIZATIONAL COMMITMENT ON JOB PERFORMANCE OF EMPLOYEES IN THE VIETNAMESE BANKING SECTOR MASTER OF BUSINESS (HONORS) SUPERVISOR: Dr. TRAN PHUONG THAO Ho Chi Minh City Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Firstly, I would like to express my gratefulness to my supervisor Dr. Tran Phuong Thaofor her professional guidance, intensive support, valuable suggestions, instructions and continuous encouragement during the time of research and writing this thesis. I would like to express my deepest appreciation to ISB Research Committee for their valuable time as their insightful comments and meaningful suggestions were contributed significantly for my completion of this research.
My sincere thanks also go to all of all of my lecturers at International Business School- University of Economics Ho Chi City for their teaching and guidance during my Master course. Last but not least, I would like to thanks my family, whom were always supporting me and encouraging me with their best wishes. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This study uses three components of quality of work life and three components of organizational commitment to investigate the impacts of quality of work life and organizational commitment to job performance in the Vietnam banking sector. This research framework was tested through a survey on employees from banks in Ho Chi Minh City.
A total of 259 questionnaires collected and analysed using including sample descriptive statistic, reliability analysis, exploratory factors analysis, CFA, and SEM.The findings of this research showed significant and positive effects of quality of work life and organizational commitment on job performance. Furthermore, the research found that there is a positive relationship between quality of work life and organizational commitment. Key words:quality of work life, organizational commitment, job performance, survival needs, belonging needs, knowledge needs, affective commitment, continuance commitment, normative commitment. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com i TABALE OF CONTENTS LIST OF TABLES.
iii LIST OF FIGURES. iv CHAPTER 1 : INTRODUCTION .4 Scopes of the study .5 The significane of the study .6 Structure of the study:. 5 CHAPTER 2 : LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT.2 Overview on job performance, quality of work life and organizational commitment.2 Quality of work life .1 Quality of work life and job performance .2 Organizational commitment and job performance.3 Quality of work life and organizational commitment. 19 CHAPTER 3 RESEARCH METHODOLOGY .2 Data analysis method.
30 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii CHAPTER 4 : DATA ANALYSIS AND DATA RESULTS .1 Preliminaries of data analysis .3 Exploratory Factor Analysis .4 Confirmatory Factor Analysis (CFA) .5 SEM Testing and Bootstrap Method. 42 CHAPTER 5 CONCLUSION AND IMPLICATIONS. Directions for future research. 46 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii LIST OF TABLES Table 4.1 Summary of employees’ profile .3 KMO and Bartlett's Test .4 Standardized regression weights .5 The AVE items .7 Standardized Regression Weights (bootstrap standard error) n =1000.
40 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iv LIST OF FIGURES Figure 2.1 Conceptual framework of the study. 39 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 CHAPTER 1 : INTRODUCTION 1.1 Research background Human resource management plays critical role in modern business today because of its impacts on organizational success as well as retaining talent people. Human resource is denoted as an empathy factor and the employees’ attitude impacts directly on customer satisfaction and perception which may lead to higher customer loyalty as well as customer commitment (Parasuraman, Zeithaml and Berry, 1985). Thus, human resource is considered as key factors impacting on service quality and customer satisfaction.
Job performance leads to the performance of any organizations including banks. Employee performance is according to their level of motivation, which encourages them to come to work regularly, work diligently, flexibly. Besides, the level of motivation also helps employees be willing to carry out the necessary tasks. When the employees are not satisfied with their jobs, they will perform at their low contributions.
So, it is required to increase job performance of human resources in the banking sector. Many prior studies show that job performance is affected by a number of factors including quality of work life and organizational commitment. The impact of these factors are investigated in a wide range of studies including Nguyen and Nguyen(2012),Sirgy, Efraty, Siegel and Dong(2001),Fu and Deshpande (2014). Accordingly, Mohan and Kanta (2013) showed that quality of work life influences on efficiency and productivity of company.
Moreover, creating quality of work life will LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 make employees feel satisfactory. Therefore, quality of work life plays a vital role in attracting and keeping the genius. May, Lau and Johnson (1999) also showed that organizations offering the better quality of work life has more advantages in hiring and retaining good employees. In the meantime, organizational commitment is the individual's psychological attachment to the organization among its employees (Murthy, 2013; Lamba & Choudhary, 2013).
Organizations commitment may attract and retain staff to have longer tenure.2 Research Problems The banking finance industrieshave existed for hundreds of years, and became the heart of the modern economy.In recents years, with development of Vietnamese banking system, workforce demand is rising. The banks also encounter many challenges in the workforce competency environment. Therefore, the high quality workforces are well focused in developing. To evaluate quality workforces, job performance is an important criterion for outcomes and success of employees (Campbell, McCloy, Oppler, Sager, Schmitt, & Borman, 1993).
Therefore, it is necessary for bank’s managers to investigate factors which affect job performance of their employees in the Vietnamese banking sector. This research focuses on explaining job performance by examing the effects oftwo factors which are quality of work life and organizational commitment on job performance. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 Work is considered as an important part of life as we spend one-third of our each day for it. What happens at the workplace has impacts and affects our individual life.Therefore, quality of work life is an important part which brings a quality life for each individual.Many studies emphasis on quality of work life in North America while the concept in Asia has been less concerned(Chan, 2007).In Vietnam, there are a few study researchesabout quality of work life and job performance (Nguyen & Nguyen, 2010; Nguyen & Nguyen, 2012).
However, these researches only focused on the marketing industry. Therefore, it is necessary to study the relationship between quality of work life and job performance among employees in Vietnamese banking sector. Besides developing quality workforce, workforce transition issue from banking sector to more profitable industries became a big problem for banks. In hard times, banks want their experienced and talented employees to stay on to share difficulties and possess strong commitment to serving customers for the business interest.
So, committed staff is valuable human capital for the banks. Harter, Schmidt, and Hayes(2002) also suggested that commitment is important for meaningful business results and due to increasingly competitive business environment committed workforce has now become a matter of survival for every organization. Therefore it is necessary toexplore the impact of organizational commitment on job performance in Vietnamese banking sector. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.3 Research Objectives The objective of this study is to examine the impact of quality of work life and organizational commitment on job performance among employees in the Vietnamese banking sector.
More specifically, three research questions are given as follows: Question 1: Doesquality of work life affect job performance of employees in the Vietnamese banking sector? Question 2: Does organizational commitment affect job performance of employees in the Vietnamese banking sector? Question 3: Doesquality of work life affect organizational commitment of employees in the Vietnamese banking sector? 1.4 Scopes of the study The object of this study is employees of banks in Ho Chi Minh City. The research is conducted in Ho Chi Minh City which is known as one of the biggest economic centers of Vietnam. The research only approaches to factors concerning in organizational commitment and quality of working life with job performance. Other factors impact on job performance being out of the topic of this research.5 The significane of the study This research contributes to the understanding of quality of work life and organizational commitment, and their impact on job performance within the context of LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 Vietnamese business organizations in generally and within Vietnamese banking sector in particularly.
The findings provide a significant opportunity for managers perceives that some aspects of employees’ quality of work life can have a positive impact on their job performance as well as organizational commitment. Based on this finding, it is very important for business organizational management to design work requirements, build appropriate policy in order to improve employees’ quality of work life, so that employees can enhance organizational commitment and job performance as well.6 Structure of the study: The structure of the study consists five chapters: Chapter 1: Introduction This chapter presents research background of the study, as well as, research problems, research objectives, research methodology and scopes. Chapter 2: Literature Review, Hypotheses, and Research model This chapter, this study provides the literature review and presents the fundamental ideas on two main constructs: quality of work life and organizational commitment. In this chapter, the conceptual model of the study and the hypotheses of the study are also presented.
Chapter 3: Research Methodology LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 Research process, measurement scales, questionnaire design, data collection method, sampling design, and data analysis method are presented more details in this chapter. Chapter 4: Data Analysis All of data collected from the survey are analyzed. The final model of the study is built based on the results of those analyses. Depending on output results from the analyzing, the relationship of those factors as mentioned in the study model will be examined.
Chapter 5: Conclusions, Implication, and Limitation Conclusions present the findings in the study. The researcher suggests managerial implementations based on the result of previous chapters, and give limitations that impact on the finding as well as future direction. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 7 CHAPTER 2 : LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT This chapter mainly introduces the theories, which are proposed by many scholars in academic field and are related to all the concepts and research model. At first, it introduces the definition of quality of work life, organizational commitment, and job performance.
Next, the previous research of these concepts and their related discussion are mentioned. Finally, based on these theories and the relation of previous research, the hypotheses of relationship among these constructs and conceptual model are proposed.1 Theoretical foundations Quality of work life Sirgy et al. (2001) stated that “there are two main theoretical approaches in the Quality of work life literature; it is need satisfaction and the other is spillover”. The need satisfaction approach to quality of work life is based on need-satisfaction models developed by Maslow, Frager and Cox (1970).
The main idea of this approach to quality of work life is that people have basic needs which they can be satisfiedby their jobs. Employees acquire satisfaction from their jobs to the scope that their jobs can meet these needs. Porter (1961) developed a quality of work life to measure need satisfaction in the organizational context based on Maslow Hierarchy of needs.