Organizational Commitment

• “an identification with the goal’s and values of the organisation, a desire to belong to the organisation and a willingness to display effort on behalf of the organisation.”

• It is recognised as the key factor in employee- employer relationship

Discussion Question

• What creates a desire to remain a member of an organization?

Feelings ..

Job satisfaction

• What one wants in a job and what one has in a job.

• Factors which affects Job Satisfaction : degree of autonomy, working conditions, equitable rewards, opportunities to grow etc..

• Outcomes : more productivity, less absenteeism, less turn over, and more org effectiveness

Motivation

• Motivation is a process that starts with physiological or psychological deficiency or need that activates behaviour or drive that is aimed at a goal or incentive.

• Motivated employees help organizations to survive and it becomes more productive

Types of Commitment (Mayer & Allen Theory)

• Affective commitment

• Continuance commitment • Normative commitment

Three Types of Organizational Commitment

Drivers of Overall Organization Commitment

Affective Commitment

• Employees who feel a sense of affective commitment identify with the organization, accept that organization’s goals and values, and are more willing to exert extra effort on behalf of the organization.

Continuance Commitment

• Continuance commitment exists when there is a profit associated with staying and a cost associated with leaving.

• Tends to create a more passive form of loyalty.

Normative Commitment

• The sense that people should stay with their current employers may result from personal work philosophies or more general codes of right and wrong developed over the course of their lives.

• Build a sense of obligation-based commitment among employees.

Discussion Questions

• Which type of organizational commitment (affective, continuance, or normative) do you think is most important to the majority of employees?

• Which do you think is most important to you?

Employees who are not committed to their organizations engage in withdrawal behavior

Psychological and Physical Withdrawal

Withdrawal Behaviors• Exit : Exit is a form of physical

withdrawal in which the employee either ends or restricts organizational membership.

• Voice : Voice is an active and constructive response by which employees attempt to improve the situation.

• Loyalty : Loyalty is passive and constructive; employees remain supportive while hoping the situation improves on its own.

• Neglect : Neglect is a form of psychological withdrawal in which interest and effort in the job decreases

Conclusion

• Downsizing makes it more challenging to retain valued employees.

• The turnover cost would be so high for the organization.

• The turnover and recruitment cost for a mid-level manager according to national averages is estimated as $ 64000

Potential Effects: TurnoverPotential Effects: Turnover

Activity Cost

Newspaper ads $8,000

Search firm fees $10,000

Interview costs $4,000

Managerial time $4,000

Work put on hold $2,000

Overload on team $4,000

Training for new employee

$6,000

Potential Effects: Turnover Potential Effects: Turnover

Activity Cost

Lost contracts, customers, and or accounts

$8,000

Lowered office morale

$2,000

Loss of other employees

$3,000

Signing bonus & other perks

$6,000

Relocation expense $7,000

The Final Tab $64,000

• From an affective commitment perspective, employer strategies could center on increasing the bonds that link employees together.

• From a continuance commitment perspective, the priority should be to create a salary and benefits package that creates a financial need to stay.

• From a normative commitment perspective, the employer can provide various training and development opportunities for employees.

• If withdrawal behaviors occur, stop the progression in its early stages.

Employee commitment in IT sector

• The overall Job satisfaction was measured using the 15-item questionnaire

• Job security, interest, opportunity for advancement, appreciation, company policy and management practises...

• intrinsic aspects of job, salary, supervision, social aspects of job,

• Working conditions, communication, hours, ease, benefits ,and fair treatment

• organizational commitment was measured using the revised Organizational Commitment Scales (Meyer, Allen and Smith 1993) that is,

• The Affective Commitment Scale (ACS), the Continuance Commitment Scale (CCS) and the Normative Commitment Scale (NCS)

Findings of the survey

• The level of organizational commitment was moderate, with relatively higher variability in affective commitment.

• The employees are staying back with the organization because of the cost of leaving the organisation

• IT employees were showing only a moderate level of job satisfaction.

• highest satisfaction levels were• related to the social aspects of the job, working

conditions (excluding working hours), interest (from intrinsic aspects of the job), job security, communication, and ease of the job (as an intrinsic aspect of the job)

• lowest satisfaction levels for working hours, supervision, appreciation from management, and salary

• i.e. employees are dissatisfied with the working hours, supervision, appreciation from management and the salary they are getting.

• The most important motivational factors for IT employees were good wages, promotion/growth, job security, interesting work, and appreciation of work.

• Correlation : job satisfaction vs affective commitment and normative – Positive

• This indicates that higher the level of job satisfaction greater the level of affective commitment and normative commitment

• Organizational commitment was highest for IT professionals in the 40 - 50 yr. age group.

• In particular, commitment was lowest for IT professionals in the 30 - 40 yr age group

• no significant difference in organizational commitment between men and women IT professionals

• But significant difference in commitment between married and single IT professionals.

• If an IT organization can give importance to salary, benefits, fair treatment, opportunities and supervision it can reduce employee turnover and can increase affective commitment of its employees.

• The most important challenge of an organization is to retain the talented work force.

• It should motivate the employees which results in better job satisfaction and thereby improve the organizational commitment