UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ LE ANH HUNG ANTECEDENTS OF EMPLOYEES' LOYALTY TO THE ORGANIZATION THROUGH THE MEDIATING ROLE OF JOB SATISFACTION ID: 22120125 MASTER OF BUSINESS (Honours) SUPERVISOR: DR. PHAM QUOC HUNG Ho Chi Minh City - Year 2015 123doc i Acknowledgements Firstly, I would like to express deep gratitude to my supervisor who has given me great supervision and advice in this process. His feedback and guidance as well as knowledge in this field were very valuable and useful throughout the all process of research. Secondly, I have a high grateful to all respondents who spent their valuable time to answer my questionnaire.
Especially, I feel many thanks by my support of friend who delivered my questionnaires to others and helped me collect data as well as assisted many sources for my task. Thirdly, I express my gratitude to my colleague at AMECO. Ltd, they assumed my work when I must have finished every stage of this research. At last, my sincere thanks owe to my family who supported me both of physical and mental conditions to complete this study.
Le Anh Hung 123doc ii ABSTRACT Labor force is a vital factor to contribute the successful of organization. But retention of loyalty employees are challenging. The purpose of the study is to determine the factors impact on the employee loyalty. The research model included dependent variable "employee loyalty" and mediator variable "employee satisfaction" as well as four independent variables, namely: relationship with immediate supervisor, supportive management style, training and honest communication.
It means that the study carried out to know how the impact of independent variables on employee loyalty and employee satisfaction. Secondly, this study is also find out how the relationship between employee satisfaction and employee loyalty. The research used the quantitative approach to collect data. Data was collected from 350 employees who worked for five companies at Ho Chi Minh city, Dong Nai province, Vung Tau and Binh Duong Province.
In data analysis, the result showed that independent variables has impact on dependent variable. For example: relationship with immediate supervisor, training and honest communication had impact on employee satisfaction. Secondly, relationship with immediate supervisor, training and honest communication had impact on employee loyalty. That is a pity, there was not relationship between employee satisfaction and employee loyalty.
Moreover, the research had some of hypothesis that satisfied. So, the model research had some change. Based on the research result, it will suggest manager understand the relationship between employer and employee, deeply. KEYWORDS: Relationship with immediate supervisor, supportive management style, training and honest communication, employee satisfaction and employee loyalty.
123doc iii Contents Acknowledgements. ii LIST OF TABLES. v LIST OF FIGURES. v LIST OF ABBRVATION.
vii CHAPTER 1: INTRODUCTION. Statement of the problem. The Scope and Limitation. 5 CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENTS.Factors affecting both employee satisfaction and employee loyalty .Impact of Employee satisfaction toward loyalty.
18 CHAPTER 3: RESEARCH METHODOLOGY. Research method and procedure. Relationship with immediate supervisor. Supportive management style.Data analysis method.
29 CHAPTER 4: DATA ANALYSIS. Confirmatory Factor Analysis (CFA). Multiple Regression Analysis. Contributions and implications.
Recommendations for the future research. 53 Appendix 1: English Questionnaire. 53 Appendix 2: Vietnamese Questionnaire. 54 Appendix 3: Result of the descriptive analysis.
55 Appendix 4: Result of the reliability test. 58 Appendix 5: Pearson correlation Coefficient. 60 Appendix 6: Result of CFA. 61 Appendix 7: Result of multiple regression analysis.
68 123doc v LIST OF TABLES Table 4.1: Gender of respondent.1: Scales items for employee loyalty.2: Scales items for employee satisfaction.3: Scales items for relationship with immediate supervisor.4: Scales items for training.5: Scales items for supportive management style.6: Scales items for honest communication.7: Main measure of CFA.1: Characteristic of Sample.2: Result of reliability test.3: Pearson correlation Coefficient.4: Validity and Reliability.51 123doc vi LIST OF FIGURES Figure 2.1: The research process.46 123doc vii LIST OF ABBRVATION WTO : WORRLD TRADE ORGANNIZATION APEC : ASIA-PACIFIC ECONOMIC COOPERATION AFTA : ASEAN FREE TRADE AREA ASEM : THE ASIA-EUROPE MEETING VAM : VIET NAM ASSOCIATION OF MECHANICAL INDUSTRY CFA : CONFIRMATORY FACTOR ANALYSIS 123doc 1 CHAPTER 1: INTRODUCTION 1. In the 21 century, the countries undergo many huge problems in the world. One of them was financial issue. Caudron (as cited in Kelli, 2001) agreed that there have been many companies that are downsizing due to slow periods in recent years.
Viet Nam is also affected more or less. Simultaneously ,Viet Nam is affected by financial crisis storm and Economic recession from 2008. It took many people to lose job, companies were bankruptcy. In 2012, there were 54.261 dissolution enterprises (Xuan Than, 2013), it increased 60.
Viet Nam Joins the WTO and APEC which made trade more dynamic. Thus, it excited domestic firms more and more interested. Enterprise want to improve their competitiveness in order to occupy the market. Enterprise should update many things to respond real situation.
For example management systems, business strategy, human resource management, financial management, internal controls. Tran Van Hung. (2011a) stated that Conditions created a competitive advantage that was investment and development of human resources with high quality. Thereby, this study only focused on human resource management field.
Human management is an important aspect of organizational processes. A well-managed business organization normally considers the employees as the primary source of productivity gains. These organizations consider employees rather than capital as the core foundation of the business and contributors to develop firm. To ensure the achievement of firm goals, the organization creates an atmosphere of commitment and cooperation for its employees through policies that facilitate employee satisfaction.
Satisfaction of human 123doc 2 resource finds close links to highly motivated employees. Motivating employees and developing loyalty or commitment to increase productivity and reduce turnover rates. F (2001) referred that "Loyalty is the key to success in today's economy"(p.Loyalty will be defined as the tendency of an employee to continue working for the same employer. Nighat Naeem (2013) stated that" Employee satisfaction is one of the main and important issues of all time.
Employees are the key player in organization so their commitment with organization is very important"(p. To get more achieving in the world market and domestic market is becoming an difficult more than it has been ever. Hence, maintaining the stable labor force is very important of enterprise which is also unvalued asset."Employees are more loyal and productive when they are satisfied" ( Hunter & Tietyen, as cited in Bulent Aydin & Adnan Cevlan, 2008, p. The purpose of this study is to examine the relationship between employee loyalty and employee satisfaction.
The study also find out the impact of other factor toward employee loyalty with employee satisfaction. Such as relationship with immediately supervisor, training program, supportive management style and honest communication. The research only discover in Engineering company because there are following reason .Firstly, mechanical engineering is one in eight key industry at Vietnam. Engineering industrial is a brand of economic that has particularly important position for the development of the economy because it is a produce industry which creates machinery and equipment supply for the other industry.
In fact, the world does not has any country to implement the successful of industrialization and modernization process so that does not has a strong mechanical industry, the development of mechanical industry is both foundation and driving for the development of the different professions in society, it also has a positive impact on the services sector through the development of the distribution network. Secondly, researcher want to interest in mechanical engineering. Because researcher passion this field so long. Statement of the problem.
Viet Nam is entering the economic integration process. Viet nam joined some economic organization. Such as WTO, AFTA, ASEM, APEC.So the enterprise had not only opportunities but also challenges. The mechanical engineering was belong to important development program of government which did not avoid difficult and challenges.
Next, I list some following difficult. For example: lack of capital, model equipment, high qualified manpower. According to Doanh nghiep co khi va doi song magazine, Mr Nguyen Van Thu who is president of VAMI. he said that the criterions to develop mechanical engineering, firstly, reducing the lack of capital.
Secondly, increasing the qualified staff. Lastly, government has appropriate policies (Hoang Son, 2014). Tran Anh Tuan was deputy president of Trung tam du bao nguon nhan luc va thi truong lao dong TpHCM who talked about the candidate registered to study the social and technical sector less than economic sector. So, this lead to lack the human resource in this sector (Hội thảo tập huấn nghiệp vụ tư vấn hướng nghiệp và tuyển sinh ĐH – CĐ, 2013).Tran Van Hung (2011b) said that the high quality workforce will continue to be a shortage and scarcity in some areas such as mechanical engineering, automation, atomic physics, the international trade business, accounting and auditing, bank.
Initially, human resources was the main problem in many field that included mechanical engineering. Secondly, labor force supplied low quantity and quality. Thirdly, skilled employees had low quantity. if they would have low loyalty, they can give up present job to find out new job in high benefit.
Hence, to investigate factors affecting towards employee loyalty and satisfaction which is necessary. It suggest manager know how to understand employee and how to retain stable workforce. The matters will contribute the development during the economic integration with industrialization and 123doc 4 modernization. Hereby, this study want to investigate factors affecting towards employee loyalty and satisfaction in the mechanical engineering 1.
The aim of this study is to identify factors affecting the employee loyalty which will be divided three specific purpose below: 1. To investigate factors impact towards employee loyalty. Such as relationship with immediately supervisor, training, supported management style, honest communication and employee satisfaction 2. To evaluate the relationship between employee satisfaction and employee loyalty.
To investigate factors impact towards employee satisfaction. Such as relationship with immediately supervisor, training, supported management style, honest communication 1. It is very essentials to do this research because it give many benefit. Firstly, this study tried to find the factors impacted on employee loyalty and employee satisfaction.
Secondly, these results help manager know how to improve a satisfaction and loyalty their employee. In addition, this is basic research in order to do more survey in future. At last, this study is fulfilled in economic integration so it becomes more important because of retaining and developing human resource is very crucial matter. The Scope and Limitation.
The study only survey employees who are working for engineering company. In addition, the study will use quantitative method to collect and process the data. 123doc 5 The limitation of this study is a sample size which is collected some organizations in Binh Duong, Dong Nai, Vung Tau province and Ho Chi Minh City. Thus the reality of results will change if the survey is done in widen places.
This research was written in five chapters below: Chapter 1: Introduction: This part gave an overall review of entire research; a brief background of the research. Another item had the problem statement and the research objectives. Chapter 2: Literature Review: This chapter is heavily which contain the reviews of the various literature and previous studies. It related to this research topic.
It contains the discussion of the various articles, journals and research studies. One will divide into four parts which are theoretical background of the conceptual framework, hypothesis development and research model. Chapter 3: Research Methodology: This chapter focus on discussion of research method where it describe the procedure of how the research carry out in terms of the research design and setting, data collection method, sampling design, measurement scales and data analysis method. Chapter 4: Data Result: This part includes the overall result and analysis of questionnaire.
The result will be present in chart and table.