Why is Managing Employee Commitment

1
Why is Managing Employee Commitment Loyalty
Important?

• Firms compete for competitive advantage through
  their employees. Attracting retaining highly
  committed employees is key
• Difficult task because job changes are more
  frequent
• highly skilled employees have lots of options
  
• dual career pressures
• corporate decisions to expand and contract
• because of technological economic changes

2
Why is Managing Employee Commitment Loyalty
Important?

• If mobility is the name of the game, we must
  learn to create commitment quickly (i.e., expect
  shorter employee cycle times within our firms)
  AND maintain commitment among stayers" who see
  people come and go
• Commitment entails feelings of loyalty, duty and
  psychological involvement to various targets
  organizations, jobs, careers, unions, teams, even
  the work itself

3
Why is Managing Employee Commitment Loyalty
Important?

• Take an accountant Loyalty could be to
• ones employing organization (Deloitte)
• ones career (loves being a CPA)
• ones job (likes being audit manager)
• the work itself (derives pleasure from
• completed audit)
• Managerial focus tends to be on organizational
  commitment but commitment to other targets can
  also be successfully managed

4
Putting Commitment Back in the Workplace

• Why should organizations be concerned with
  employee loyalty?
• Why has commitment declined in recent years?
• What can we do to restore commitment?

5
Why should organizations be concerned with
employee loyalty?

• Loyalty has declined. In a recent survey, only
  45 said they felt strong, personal attachment
  to their employer and 34 felt any obligation to
  stay with current employer
• Many undesirable consequences associated with low
  commitment work environments

6
PROBLEMS IN LOW WORK COMMITMENT ENVIRONMENTS

• ? Organizational Performance
• ?Absenteeism
• ?Turnover (Customer Sat)
• Half leave lt 3 years
• Effort expenditure
• Quality initiatives
• ? Theft
• ? Job dissatisfaction
• ? Willingness to be relocated

7
Financial Outcomes of Work Commitment
Strategy toenhance 1996 ROI Performance TQM Downs
izing or Re-engineering Employee Involvement
(Commitment)
Used 15 15.4 19.1
Did not Use 15 13.4 13.4
N216 Source Lawler
8
REASONS FOR DECLINE IN COMMITMENT

• 1. Corporate America has not met its obligations
  to employees
• a. Downturns layoffs, hours compensation
  cut
• b. Mergers Acquisitions employees terminated
  
• c. Experiments with two-tiered pay systems
• d. Increased use of temps contract employees
• Societal values have changed
• organizations have failed to
• accommodate these changes
• a. Importance of work ethic
• b. Work/family balance issues
• c. Diversity issues

9
MYSTERY VALUE EXERCISE
Response options Strongly
Strongly disagree Disagree
Neutral Agree agree (1)
(2) (3) (4)
(5) 1. Hard work makes a man or woman a
better person. 2. Wasting time is as bad as
wasting money. 3. A good indication of a
persons worth is how well he or she does on
the job. 4. If all other things are equal, it
is better to have a job with a lot of
responsibility than one with little
responsibility.
10
REASONS FOR DECLINE IN COMMITMENT
3. The experience of paid employment has not met
expectations of post-boomers a.
Standard of living b. Flatter orgs and
lower rate of advancement c. Career is not
progressing according to plan
(disillusioned by practice, employer
impediments) 4. Growing numbers of jobs
do not foster commitment a. Low
challenge b. Few opportunities for growth
c. Rising education levels among
U.S. citizenry
11
How Can Commitment be Restored? It depends on
what type(s) of commitment are deficient
1. Corporate America has not met its obligations
to employees People are no longer loyal to
employers? (low org. commitment) 2. Societal
values have changed organizations have failed
to accommodate these changes Self-worth is no
longer derived from paid employment? More value
attached to family or leisure time than paid
employment? (low work ethic org commitment) 3.
The experience of paid employment has not met
expectations of post-boomers Disappointment with
employment or career? (low career org
commitment) 4. Job does not foster commitment?
(low job involvement)
12
Affective Work Organizational
Ethic Commitment
Endorsement
Continuance
Organizational
Commitment Job
Career
Involvement Commitment
FIVE BASIC FORMS OF WORK COMMITMENT
13
CONTINUANCE
AFFECTIVE ORGANIZATIONAL
ORGANIZATIONAL COMMITMENT
COMMITMENT
SIDE-BET Need to
Desire to GOAL APPROACH
continue continue
CONGRUENCE (exchange
working for an working for an
APPROACH model) organization
organization
(limited alternatives) (goal
congruence)
Continuance Commitment vs. Affective
Commitment
14
ORGANIZATIONAL COMMITMENT
I. Continuance Commitment Definition
Loyalty to an organization based on accumulated
investments that will be
lost upon leaving Sample Too much of
my life would be disrupted if I left my
Measure present organization. A
changeable Attitude II. Affective Commitment
Definition The extent to which individuals
identify with and have
goals consistent with the organizations
Sample I feel like Im part of the family
at my organization. Measure A
changeable Attitude
15
WORK ETHIC ENDORSEMENT
Definition Extent to which one
intrinsically values
work as an end in itself Sample The
most important things that happen in Measure
life involve work May be a Value or
Personality Trait May vary with age or cultural
group
16
CAREER/PROFESSIONAL COMMITMENT
Definition The importance of ones
career Sample I like this
occupation too well to give it up Measure May
be a Deep-Seated Attitude Resistance to change
because of life-long dream to pursue and
educational investment
17
JOB INVOLVEMENT
Definition The degree of absorption in
work activity an
individual experiences. Sample I
live, eat, and breathe my job. Measure May be
a Very Changeable Attitude Can be affected by
task assignments
18
Job Involvement
Continuance Organizational Commitment
Work Ethic Endorsement

Career Commitment
Affective Organizational Commitment
Interrelationships Among Forms of Work
Commitment
19
Restoring Work Commitment

• Handle via selection
• Lengthy socialization to instill/reinforce
• values
• Sponsoring continuing education
• Mentorship programs
• Pay-for-skill reward systems
• Development of career plans with HR staff
• Increase side bets
• Promote identity with firm more we
• Training to improve (a) communication, team
• building, etc. (b) employee skill sets
• Policies to reduce home/work conflict
• Job design, enrichment
• Use of teams, participative decision-making
• More job autonomy

Work Ethic (difficult to change)
Career Commitment Organizational
Commitment Job Involvement (easiest to
change)