current events research for tutor faith

Promoting Organizational Citizenship Behaviour Through High Involvement Human Resource

Practices: An Attempt to Reduce Turnover Intention

Yu Ghee Wee Mohamed Dahlan Bin Ibrahim

Faculty of Entrepreneurship and Business

Universiti Malaysia Kelantan Kota Bharu, Kelantan, Malaysia

[email protected]; [email protected]

Kamarul Zaman Ahmad College of Business Administration

Abu Dhabi University Abu Dhabi

United Arab Emirates [email protected]

Yap Sheau Fen Department of Marketing, School of

Business Monash University, Selangor,

Malaysia [email protected]

Abstract— This study examines the possibility of inducing organizational citizenship behavior (OCB) through human

resource (HR) philosophy and high involvement HR practices

administered at the workplace. Leader-member exchange (LMX)

is posited to be a potential mediator. Data was collected from

hotel frontline employees and analyzed through structural

equation modeling. Findings show that HR philosophy drives the

formulation of the bundles of high involvement human resource

practices and such philosophy contributes to employees’

willingness in exhibiting citizenship behavior directed at

individuals (OCBI) as well as organizations (OCBO) as a whole.

High involvement HR practices, however, do not elicit OCB but

are significantly related to LMX, a new theoretical insight which

should invite future research. Although exchanges between

supervisors and subordinates are proven to have influences on

employees’ willingness in performing OCB, LMX does not

mediate the relationship between high involvement HR practices

and OCB. Overall, hotel frontline employees participated in this

study exhibit more of OCBO as a whole, rather than OCBI; and

such behavior reduce their intention to leave. Both theoretical

and practical implications as well as avenues for future research

are discussed.

Keywords - Organizational citizenship behavior, human resource philosophy, human resource practices, leader-member exchange.

I. INTRODUCTION

For decades, researchers have concluded that HR practices have a major impact on employee productivity and commitment (Huselid, 1995; Huselid et al., 1997; Pfeffer, 1998; Pfeffer and Veiga, 1999; Vandenberg et al., 1999; Wright et al., 2005). This essential role of HR practices are further affirmed when scholars introduced the concept of ―high performance work systems‖, also called ―high

involvement work practices‖ (Walton, 1985; Womack et al., 1990; Lawler et al., 1995; Wood, 1999) -- a belief that employees are organizational asset rather than simply an expense to be incurred (Wood and Wall, 2002). Although

conceptually supported and empirically tested on various measurement scales and differing dimensions, none of the studies have firmly reported any significant relationship between bundles of high involvement HR practices and OCB. Organ (1988:4) defined OCB as ―individual behavior that is

discretionary, not directly or explicitly recognized by the formal reward system, and that in aggregate promotes the effective functioning of the organization.‖ Such behavior is

―discretionary‖ because these extra role performances are

neither specified in job specification nor employment contract, thus not formally required from employees and not enforced.

Meanwhile, some employees respond negatively toward HR practices due to the attributions they make about the management‘s purposes in implementing such practices (Nishii et al., 2008). For example, organizations train and develop employees in all aspects so as to avoid their skills from being confined to only one specific area and subsequently job rotation can follow to prevent boredom at workplace. Employees may, however, perceive such move to be motivated by a desire from management to cut cost associated with reduction in number of hiring, thus they react negatively and resent such practice. It is, therefore, suggested in this paper that HR practitioners can realign employees evaluation on HR practices by creating a ―visible‖ attribution they can rely upon – HR philosophy. In addition, while HR practices at work though proven to be highly effective in inducing positive employees‘ behavior, such practices are contingent upon the relational infrastructure formed among employees within the organization. In other words, relationship between subordinate and supervisor, in particular may still affect employees‘ contentment with the work

environment as a whole in the organization. Thus, this study departed from previous research in

four aspects. Firstly, since the units of analysis for this study are operational or frontline employees from five-star hotels, researcher focused on the essential four major conventional HR practices, namely selective staffing, extensive training,

Annual International Conference on Human Resource Management and Professional Development for the Digital Age (HRM&PD) Copyright © GSTF 2011 ISSN: 2251-2349 doi: 10.5716/2251-2349_HRM&PD52

performance evaluation and performance-based pay –a high- involvement model proposed by Lawler (1986) which is seen as the primary engine behind the evolution of contemporary strategic HR management (McMahan, Bell, & Virick, 1998). Secondly, HR philosophy is suggested to be the driver not only for these high involvement HR systems but also OCB. Thirdly, this study is the first to posit supervisor-subordinate relationship (LMX) as the mediator between the links between HR systems and OCB. Lastly, the researcher proposes an integrated model, by relating the above propositions as a viable strategy in reducing employees‘ turnover intention.

II. LITERATURE REVIEW

The essence of OCB sparked off as early as 1964 when Katz (1964) introduced the importance of a class of discretionary and spontaneous behavior that are beyond explicit role requirements, that are essential for organizational effectiveness. Examples of OCB include willingness to help, gestures of goodwill, cooperation among co-workers, prevention of problem, contribution of ideas and so forth. This widespread interest in OCB stems from the fact that these helping behavior contribute significantly to organizational effectiveness because such behavior ―lubricate‖ the social

machinery of the organization and reduce conflicts, thus increasing efficiency at the workplace.

A. HR philosophy, high involvement HR practices and organizational citizenship behaviour

Employees‘ perception over high involvement HR practices

could be realigned and reaffirmed through the HR philosophy embraced by the organization. While very limited studies recognize the need to inputting HR philosophy as the main driver for effective HR systems to be in place, no researcher has attempted linking HR philosophy with the inducement of OCB. An organization‘s HR philosophy dictates the over- arching beliefs and values with regards to how employees should be treated (Schuler, 1992). Bae and Lawler (2000) confirmed that HR management values significantly contributed to the formulation of high involvement HR strategy. Butler, Ferris and Napier (1991), Lado and Wilson (1994), Noe et al. (1997) and Ulrich (1997) conclude that when top management values human capital as a source of competitive advantage, this will enhance its link to HR management function, where the stream of practices are more integrative and invites reciprocity, and consequently its employees is more likely to foster commitment and trust that are the main ingredients for OCB. Eisenberger et al. (1986) and Witt (1991) contend that employees form generalized beliefs about the extent to which their organization appreciates their contribution and cares about them, and such beliefs lead to OCB. Therefore, the researchers posit: Hypothesis 1: There is significant relationship between HR philosophy and high involvement HR practices. Hypothesis 2: There is significant relationship between HR philosophy and subordinates‘ willingness in exhibiting OCB.

Underpinned by a social exchange model and relational approach, the application of high involvement HR practices signifies management long-term investment on employees and invites a sense of obligation on part of employees to reciprocate by exhibiting discretionary behavior which contribute to organizational effectiveness (Blau, 1964) such as working cooperatively with others and spend less time doing things that do not benefit the organization (Leana and Van Buren, 1999). Significantly, Morrisson (1996) maintains that an organization‘s approach to HR management is instrumental in inducing OCB. In this study, four conventional high involvement HR practices are bundled and seen as vital in encouraging the performance of OCB based on the following justifications:

 Selective Staffing An organization‘s selection and socialization practices play

significant roles in establishing the tone of employee- employer relationship (Shore and Tetrick, 1994). Selective staffing policy requires an organization to spend a great amount of time and money in choosing candidates rigorously on the basis of how well they fit into the organization‘s overall culture. Employees who have gone through intensive selection process and passed various selection tests before getting hired, would have been proud to be selected and share the same organizational identity with others who are subsequently recruited. Strong identification with organizational objectives formed in the early stage of selection fosters the social machinery among employees and elicit helping behavior.

 Extensive Training As Lee (2001) pointed out, employees must have the knowledge, skills, capability, and opportunity to perform both their prescribed and their extra-role behavior. Such knowledge, skills and capability can only be attained through continuous training and development programme. OCB can be elicited when employees are offered various kinds of training and development programme. The great amount of energy spent in coordinating various kinds of seminars and workshops as well as financial resources invested by management to further improve employees‘ skills at work, lay foundation for social exchange relationship.

 Performance Evaluation and Performance-Based Pay Fair performance appraisal conducted in organization and rewards offered based on the performance of employees signify the highest level of recognition given by management on employees‘ work. When employees are evaluated based on

objective criteria—according to the goals assigned to him or her—rewards and benefits that follow convey that their great performance are applauded and given credit because they have been responsible for activities that help organization to reach the stated objectives. A high level of perceived equity signals to employees that the organization supports them and has their well-being at heart (Eisenberger et al., 1986; Lawler, 1986). In summary, the researchers contend that:

Hypothesis 3: There is significant relationship between bundles of high involvement HR practices and subordinate‘s willingness in exhibiting OCB.

B. Mediator: Leader-Member Exchange (LMX)

Based on the role-making model of leader-member exchange (LMX) (Scandura and Graen, 1984) and complemented by research suggesting one‘s relationship with supervisor forms

the foundation of their work perceptions and organizational experience (Gertsner and Day, 1997; Wayne et al., 1997), it is proposed that LMX could be a pivotal mediator of the relationship between high involvement HR practices and employees‘ willingness in performing OCB. One may expect

subordinates‘ perception on high involvement HR practices to

be significantly related to their relationship with supervisors because almost all decisions related to HR activities lie with supervisors. The positive outcomes of high involvement HR practices can only be felt when the exchanges between subordinate and supervisor are considerably high. Hence, the effect of ―social capital‖ in contributing to pooling ―human

capital‖ as desired should never be ignored. Lepine et al. (2002) in a meta-analysis of literature on OCB confirmed leader support as its strongest predictor. Hypothesis 4: There is significant relationship between LMX and subordinate’s willingness in exhibiting OCB. Graen and Scandura (1987) suggested a three-phase model of LMX development, namely role taking, role making, and role routinization. In this research study, the effectiveness of these three role development stages are proposed to be subjected to and highly dependent on the implementation of the four conventional HR practices as bundled.

Specifically, in the first phase – role taking, supervisor executes a ‗sent role‘ (request, demand and assign) and upon receiving the role allocated to him or her, subordinate responses by carrying out the specified duties. Gradually, supervisor may allocate additional roles depending on how receptive subordinate is in accepting and performing the tasks. In the arms of HRM, such role taking process is often facilitated during the selection process and complemented further by the training and development programs held in the organizations. During the selection stage, supervisor exchanges information on the role and duties subordinate has to play. Such information could only be delivered if high quality exchanges exist between leader and member. And subsequently, this will channel the leader to analyzing the training needs and customize development programme according to individuals. Thus, the process of ‗moulding the role‘ for the employees is often embedded in

HR systems characterized by high quality exchanges between supervisor and subordinate.

In the next stage – role making – roles become more clearly defined. Tasks completed by the subordinate will be reviewed and discussed and high-quality LMX relationships begin to unfold in which each part contributes to the growth of the relationship. Clearly, such review is often conducted

through performance evaluation, followed by the provisional of rewards and benefits. In perfecting the role making process, supervisor may release tangible and intangible resources to subordinate, in exchange for their successful collaboration on task accomplishment. Increased influence, task opportunities and autonomy in task completion may be provided by supervisor, a sign of support towards subordinate‘s work.

In the final stage of role routinization – the behavior between the supervisor and subordinate becomes interlocked. A dyadic understanding evolves in which role expectations become more routinized and supervisors and subordinates continue to collaborate closely on tasks. And finally, when role becomes stable in the last stage, provision of bundled high involvement HR practices (i.e. selective staffing, extensive training, performance evaluation and performance-based pay) which dictates the future prospect of employee in the organization, becomes an important concern.

Hence, social exchange relationship mooted out from employees‘ satisfaction over the implementation of high

involvement HR practices is contingent upon the exchanges they have with supervisors. If the response to an exchange is not positive or if the exchange never occurs, opportunities to develop high quality exchanges are limited and relationships will likely remain at lower levels of LMX development (Dienesch and Liden, 1986; Uhl-Bien et al., 2000). Thus, the researcher proposes: Hypothesis 5: Leader-member exchange significantly mediates the relationship between high involvement HR practices and OCB.

C. OCB and Turnover Intention

The relationship between OCB and turnover intention has not been well researched and properly documented empirically in Malaysia. Empirical studies have explored the relationship among OCB, quit intention, and actual turnover. Chen et al. (1998) and MacKenzie et al. (1998) reported a negative link between OCB and quit intention. Similarly, both studies confirmed an even stronger negative association between OCB and actual turnover. Such findings affirm that such helping behavior enhance group attractiveness, cohesiveness and support, thus subsequently decreasing voluntary turnover (George and Bettenhausen, 1990; MacKenzie et al., 1998). The researcher posits: Hypothesis 6: There is significant relationship between OCB and subordinates’ turnover intention.

III. METHODOLOGY

Data was collected from frontline employees working in five- star hotels located in Malaysia. Out of the 85 five-star hotels identified from the membership directory of Malaysian Association of Hotels (MAH), 40 hotels from 13 states in Malaysia agreed to allow their employees to take part in this research study. To avoid problems associated with common method variance, data was collected from both subordinates

and supervisors. Only employees who have worked for at least or more than two years were eligible to participate. This was to ensure that the employees were in a justified position in assessing HR philosophy, high involvement HR practices and their relationships (LMX) they had with the supervisors as well as their turnover intentions. We then proceeded with distributing the second part of the questionnaire consisting of OCB measurement scales to the respective supervisors. Similarly, to ensure a fair evaluation on subordinate‘s OCB, we made sure that this identified supervisor had known the subordinate for at least two years. All constructs except for demographic details, were assessed on the 7-point Likert scale, where 1 represents ‗strongly disagree‘ and 7 ‗strongly agree‘. The researchers adapted subscales of high involvement HR practices from Bae and Lawler (2000) and six-item HR philosophy developed by Lewin and Yang (1992). LMX is assessed using the LMX-7 measure (Scandura and Graen, 1984). And the researchers employed OCB measures that were developed by Williams (1988). Turnover intention was measured on 3-item scale by Camman et al. (1979).

IV. FINDINGS

A. Descriptive analysis, exploratory factor analysis, correlations and reliability

A total of 768 sets of questionnaire were distributed but only 514 were returned. These matched surveys were completed by 514 subordinates and 183 supervisors, yielding response rates of 67% and 73% respectively. On average, these supervisors evaluated OCB of three subordinates each, who work in the same department. Based on the correlation coefficients, all of the hypothesized relationships are supported, with each of the construct reporting acceptable reliability, i.e. alpha coefficient exceeding 0.50 (George and Mallery, 2003) and some beyond 0.70 (Nunnally, 1978), as shown in Table 1. Table 1 Means, Standard Deviations, Reliabilities and Correlations

Mean SD SS ET PE PB HRP PH LMX OCBI OCBO

SS 5.24 1.04 (0.777)

ET 5.16 0.88 .142** (0.744)

PE 5.29 0.89 .348** .277** (0.643)

PB 5.05 0.94 .281** .482** .447** (0.703)

HRP 4.99 0.57 .600** .607** .681** .754** (0.678)

PH 4.80 0.90 .207** -0.028 0.086 0.057 .159** 843

LMX 4.80 0.62 .409** 0.044 .231** .248** .434** .380** (0.554)

OCBI 4.89 0.79 .275** 0.033 .140** .147** .245** .399** .411** (0.728)

OCBO 5.06 0.89 .204** -0.033 .094* .099* .228** .711** .502** .487** (0.882)

TI 3.55 1.51 -.100* -0.025 0.032 -0.034 -0.092 -.101* -.199** -.098* -.226** (0.859)

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed). SD= Standard deviation HRP= High involvement HR practices SS= Selective staffing PH=Human resource philosophy ET= Extensive training LMX= Leader-member exchange PE= Performance evaluation PB=Performance-based pay OCBI=Organisational citizenship behavior directed at individuals OCBO= Organisational citizenship behavior directed at organisation TI= Turnover intention

B. Confirmatory Factor Analysis

Confirmatory factor analysis (CFA) was conducted to examine the construct validity on the proposed model which includes all of the 46 items (before elimination of the six items which loaded poorly in EFA) and the fit obtained is unacceptable

(χ 2 = 2139.99, χ

2/df = 2.206, p-value = 0.000, TLI = 0.839, CFI = 0.849 and RMSEA = 0.052). Similar items which had poor loadings in EFA, ITC and CITC analyses report very high modification indices and severe residual errors in CFA. Therefore, researchers decided to remove several items. Upon such elimination, measurement model retains 41 items with acceptable model fit indices reported (χ

2 = 1313.65, χ

2/df = 1.728, p-value = 0.000, TLI = 0.911, CFI = 0.917 and RMSEA = 0.041). Loadings for all the 41 items are recorded with standardized estimates exceeding 0.50 and critical ratio (C.R.) exceeding 1.96.

C. Structural Equation Modeling

Table 2 shows the output of hypothesized relationships as proposed in the research framework. The SEM output reflects a satisfactory model fit for the proposed model (χ2= 1399.07, χ

2/df = 1.829, p-value = 0.000, TLI = 0.898, CFI = 0.905 and RMSEA = 0.043). Thus, the model exhibited a fit value exceeding or close to the commonly recommended threshold for the respective indices.

Table 2 Output of structural equation modeling

Fit indices: χ 2 = 1399.07, χ

2/df = 1.829, p-value = 0.000, TLI = 0.898, CFI = 0.905 and RMSEA = 0.043 a S.E. is an estimate of the standard error of the covariance. b C.R. is the critical ratio obtained by dividing the covariance estimate by its standard error. *Correlation is significant at 0.05 level (2-tailed) **Correlation is significant at 0.01 level (2-tailed) ***Correlation is significant at 0.001 level (2-tailed)

Hypothesis 1 could be fully supported because there is a significant relationship shown between HR philosophy and high involvement HR practices. HR philosophy is significantly related to employees‘ willingness in exhibiting

OCBI as well as OCBO with path coefficients of 0.229 and 0.751 respectively. Thus, hypothesis 2 is substantiated. Hypothesis 3, however, could not be supported because there is no significant relationship found between high involvement HR practices and either of the OCB. Nevertheless, remarkable theoretical contribution is found in the study when LMX is found to be significantly related to high involvement HR practices. Hypothesis 4 can be fully supported because LMX is significantly related to both OCBI and OCBO. However, hypothesis 5 which proposes LMX as the potential mediator could not be accepted because the requirements by Baron and Kenny (1986) were not fulfilled. Since high involvement HR practices do not influence employees‘ willingness in

Estimate S.E. C.R. Critical ratios

HRP <--- PH 0.047 0.023 2.077 *0.134

LMX <--- HRP 0.789 0.244 3.227 **0.243

OCBI <--- PH 0.284 0.071 3.984 ***0.229

OCBO <--- PH 0.865 0.085 10.153 ***0.751

OCBI <--- HRP 0.307 0.221 1.39 0.086

OCBO <--- HRP -0.066 0.148 -0.449 0.02

OCBI <--- LMX 0.328 0.07 4.71 ***0.3

OCBO <--- LMX 0.334 0.05 6.61 ***0.329

TI <--- OCBO -0.377 0.101 -3.727 ***0.216

TI <--- OCBI -0.026 0.095 -0.275 -0.016

performing extra-role behaviors, it is impossible to posit LMX as the mediator which may affect the relationship between these HR practices and OCB. Hypothesis 6 can only be partially supported because only OCBO, and not OCBI, is negatively related to employees‘ turnover intention (p-value < 0.001, path coefficient = -0.216).

V. DISCUSSION AND CONCLUSION

Overall, the measurement model found in this research study is acceptable with key indices exceeding the threshold values. All measures in CFA have high standardized factor loadings exceeding 0.50 and critical ratio exceeding 1.96 (+/-), providing support for adequate convergent validity. Therefore, the bundles of high involvement human resource practices which are perceived as important by frontline employees are selective staffing, extensive training, performance evaluation and performance-based pay. Although tested in different context, consistent with Bae and Lawler (2000) findings, HR philosophy embraced by these five-star hotels is significantly related to the bundles of high involvement HR practices. Interestingly, as supported by findings from Eisenberger et al. (1986) and Witt (1991), when this philosophy sets the tone right by conveying to frontline employees that they are appreciated and treated as long term asset, these employees exhibit more willingness in performing OCBI--helping behavior dedicated to the individuals in organization as well as OCBO--discretionary behavior that is directed at organization.

Nonetheless, contrary to findings in Western countries (Podsakoff et al., 2000), bundles of high involvement HR practices in this research study do not significantly lead to employees‘ OCB. This research study

produces similar results with Pare and Tremblay (2007) which examined the effects of five high involvement HR practices, ranging from recognition, empowerment, competence development, fair rewards to information sharing on OCB but reported no significant relationship. This may be attributed to previous evidence claiming the complexity of the nature of HRM and the ―black-box‖ phenomena in which the direct effect of HR practices on organizational performance is often unexplained.

Consistent with the empirical evidence put forward by Liden et al. (1997), Settoon et al. (1996) and Wayne et al. (1997), LMX reports significant relationship with both OCBI and OCBO. Since no relationship is recorded between high involvement HR practices with OCB, thus the proposition of LMX as the potential mediator is not supported. Because respondents are made up by frontline employees who are of non-supervisory and non- managerial, they might not perceive quality exchanges with supervisor as particularly relevant or important. Also, the Malaysian culture embraces collectivism and is more hierarchical in nature where power distance tends to be higher, compared to Western countries, thus exchanges between subordinate and supervisor may have been somehow limited (Hofstede, 1997) and insufficient to elicit OCB. GLOBE studies (Gupta et al., 2002) ranked Malaysia at the top among the Southern Asia cluster on humane orientation, implying Malaysians‘ high tendencies to yielding to superior

authority, respecting hierarchical relationships (Abdullah, 1996; Ansari et al., 2004) and expecting leadership style to be paternalistic (Farh and Cheng, 2002). Nevertheless, this research study provides a new insight whereby high involvement HR practices are found to be significantly related to LMX. This shows that such HR practices facilitate the exchanges between subordinate and supervisor in the three stages of role taking, role making and role routinization.

Finally, output for hypothesis 6 supports the findings of Chen et al. (1998) and MacKenzie et al. (1998) where OCBO, not OCBI, is negatively related to employees‘

intention to quit. Frontline employees in this research study who exhibit helping behavior directed to benefit organization as a whole (OCBO) are less likely to quit. Overall, this batch of frontline employees are more inclined to perform OCB which benefits organization as a whole (OCBO), and dedicating to specific individuals.

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