The Influence Of Employee Commitment On Organizational Performance

Project and Seminar Material for Business Administration and Management BAM

The Influence Of Employee Commitment On Organizational Performance


Abstract


This study examines the influence of employee commitment on organizational performance with special interest in Nigeria Bottling Company. Much of the interest in analysing employee commitment stems from concern for the behavioural consequences that are hypothesised to result from it. This paper focuses on the influence of employee commitment on Organisational Performance and Employees’ turnover. Both descriptive and explanatory research methodologies were adopted in this study. A five point numerically scaled Likert-Type questionnaire was constructed and administered among selected Staff of Nigeria Bottling Company. The research hypotheses were tested using the Pearson Correlation Coefficient. The result shows that: the level of employee commitment of the Staff of Nigeria Bottling Companyis very high; there is a fairly high relationship between employee commitment and organizational performance ; there is also a very high relationship between employee commitment and employees’ turnover etc. Some of the recommendations made are that: the management should hire employees who are likely to become linked to the organization; management should create clear and realistic job and organizational previews.


Chapter One


1.0 Introduction

1.1 Background of the Study

Today it becomes necessary for every organization to have full level of its employee commitment in order to have outstanding performance on long term basis. Currently employees act like entrepreneurs when they work in a team and every member of the team tries his level best to prove himself the best amongst all others. Those things increase their commitment level in the organization that ultimately increases the performance of the organization.

In the past organizations provide job security to its employees to improve their commitment level in the organization and to improve their productivity. Higher level of employee commitment in the organization for individual projects or to the business is assumed as a major reason for better organizational performance that leads to organizational success.

One aspect of employee organization linkages that has received broad attention from both managers and behavioural scientists is the concept of employee commitment. The concept’s popularity is increasing due to the assumed impact organizational commitment has on employees and organizational performance. Employees in modern organizations are increasingly expected to show effort, motivation and initiative. The success of an organization depends not only on how the organization makes the most human competences, but also how it encourages commitment to an organization

Organizational commitment has an important place in the study of organizational behavior. This is in part due to the vast number of works that have found relationships between organizational commitment and attitudes and behaviors in the workplace

Nowadays et al. (1994) define commitment as “the relative strength of an individual’s identification with and involvement in a particular organization”. They mention three characteristics of commitment Bateman and Strasser state that organizational commitment has been operationally defined as “multidimensional in nature, involving an employee’s loyalty to the organization, willingness to exert effort on behalf of the organization, degree of goal and value congruency with the organization, and desire to maintain membership” (p.95). Nowday, Steers, and Porter (1979) identified commitment-related attitudes and commitment-related behaviors. Porter et al. (1974) Schultz, discuss three major components of organizational commitment as being “a strong belief in and acceptance of the organization’s goals, a willingness to exert considerable effort on behalf of the organization, and a definite desire to maintain organizational membership Porter et al., 1974, 1976; Koch and Steers, 1978; Angle and Perry, 1981). Furthermore, Batemen and Strasser (1984) state that the reasons for studying organizational commitment are related to “(a) employee behaviors and performance effectiveness, (b) attitudinal, affective, and cognitive constructs such as job satisfaction, (c) characteristics of the employee’s job and role, such as responsibility and (d) personal characteristics of the employee such as age, job tenure” (p. 95-96).


1.2 Statement of the Problem

Employees with high levels of commitment and job involvement go on work in time and are usually more motivated to put extra efforts, on the other hand, employees having minor level of commitment and job involvement are least motivated and have more excuses such as illness or transportation problems etc. as compared to highly committed employees (Blau, 1986; Blau, & Boal, 1987).employee commitment may be cost saving since committed employees are highly motivated that mean that they don’t need much financial rewards for their work, though it doesn’t necessarily means that such top performing employees should not receive financial rewards and recognitions at all, but the expenses of the organization may decrease at this point (Mowday, Steers, & Porter, 1979; Zanini, 2007).

Organizational researchers from all around the world consider the job involvement as an important factor which influence both employees’ as well as organizational outcomes (Lawler, 1986). Employees with high levels of job involvement make the job a central part of their personal character and focus most of their attention on their jobs (Hackett, Lapierre, & Hausdorf, 2001). They are likely to exhibit less unexcused lateness and unexcused absences than employees with lower levels of job involvement.

Employers are sometimes baffled when their highly-rated employees under-perform and others resign and leave the organization. Management fail to understand why some employees are not committed to the organization even though they have proactively implemented fair compensation policies and human resource (HR) practices to motivate and retain them. It can be costly if employees are not committed in their jobs, and if they lack the motivation to exercise their full potentials.


1.3 Objectives of the Study

The general objective of this study is to examine employee commitment in the Nigerian Business Environment using Nigeria Bottling Company Maiduguri as a Case Study.

The specific objectives of the study are as follows, to:

  1. Investigate the impact of employee commitment on organizational performance.
  2. Examine the relationship between employee commitment and employees turnover.
  3. Examine the dimensions of employee commitment.

1.4 Research Questions

  1. What is the impact of employee commitment on organizational performance?
  2. What is the relationship between employee commitment and employees turnover?
  3. What is the dimensions of employee commitment?

1.5 Research Hypotheses

Based on the research questions, the following hypotheses was tested during the course of the study:

Hypothesis I
  • Ho: That employee commitment does not enhance organizational performance.
  • H1: That employee commitment enhances organizational performance.
Hypothesis II
  • Ho: That employee commitment does not reduce employees’ turnover.
  • H1: That employee commitment reduces employees’ turnover.

1.6 Significance of the Study

This research topic will be beneficiary to Nigeria bottling company (NBC )., management and also corporate organizations both in the private and public sector as well as potential researchers who may want to make references from this research project, especially, after the project has been completed. The result of this project analysis will lead to a better understanding on factor that influence high level of employees commitment on organisational performance, without exhibiting excuse on lateness, dissatisfaction, non performance, absence from work etc.

The results of this study will not only contribute to the awareness of the relationship between the variables but it will also direct managers as well as the management of the on factors that influence employee’s commitment toward organisational performance. It will also serves as the body of knowledge.

It will be useful for potential researchers: be it undergraduate or post graduate students, who are writing similar projects, references can be made to this project.

The recommendations can be used in helping organizations not just in the Nigeria bottling company (NBC). But as well as other sectors of the economy. By this study, different organizations can reduce the rate of employee turnover and increase their productivity and profitability.


1.7 Scope and Limitation of the Study

The study will be limited to Nigeria Bottling Company (NBC) plc and the usual problems associated with survey research methodology, will constitute some of the limitations to the research.

  1. Respondents’ apathy: uncooperative attitude of respondents
  2. Inability to reach busy executives, i.e. not being able to reach the top executives of Nigeria bottling company (NBC) because they were in one meeting or the other.

The scope of this work is limited by time and geographical factors. Due to the very short nature of the time assigned for the execution and submission of this work.

This research work is designed to cover the following areas these include: theoretical framework of employee’s commitment, approach and concept of motivation and satisfaction on employees performance, employees job involvement, etc


1.8 Organization of Study

The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.


Chapter Five


Summary of Findings, Conclusion and Recommendations

5.1 Summary of Findings

The major findings of the study are highlighted below:

  1. It was found that the level of employee commitment of the Staff of Nigeria Bottling Company is very high. Although the reason for this is not known, it may not be unconnected to the job security which the workers of the company enjoy;
  2. It was also found that the workers of the company are, to some extent, concerned about the performance of the company. This is an affirmation of their commitment to the company. iii.The analyses further revealed that majority of the workers of the company are generally satisfied with their jobs and therefore, they do not intend to leave the company;
  3. The result of the first hypothesis testing showed that there is a fairly high relationship between employee commitment and organizational performance in Cocoa-Cola Company Plc.
  4. Lastly, the result of the second hypothesis testing revealed that there is a very high relationship between employee commitment and employees’ turnover. This means that employees’ turnover rate is highly determined by the level of employee commitment of the workers.

5.2 Conclusion

The empirical results indicate that there is a fairly high relationship between employee commitment and organizational performance in Nigeria Bottling Company implying that employee commitment improves the company’s performance. It was therefore deduced that organizational performance can simply be improved through employee commitment. It was also found that there is a very high relationship between employee commitment and employees’ turnover meaning that employees’ turnover rate is highly determined by the level of employee commitment of the workers.

Examinations of the relationship between employee commitment and performance have a long history in organizational studies, mostly at the individual level of analysis and mostly in cross-sectional studies, yet the debate concerning productive worker continues to this day. It is interesting to note that when we move from the individual to the organizational level of analysis, the same questions arise: Are companies with committed workers more productive? Researchers have predicted that the relationship between employee attitudes and organizational performance is complex, and it is too simplistic to assume that satisfaction attitudes lead to improved organizational performance-some do and some do not, and some employee attitudes apparently are the result of organizations’ culture.


5.3 Recommendations

Based on the findings, the following recommendations are hereby suggested:

Since it was found that there is a fairly high relationship between employee commitment and organizational performance, the management of companies are advised to hire employees who are likely to become linked to the organization. Before they hire workers, they will have to look for congruence between the individual’s values and goals and the organization’s values and goals. Values alignment and identification is central to every conceptualization of employee commitment.

The organization must exhibit a high level of commitment to its employees. If employees are concerned about losing their jobs, there is very little likelihood of high level of employees’ commitment. If people are not given adequate resources, facilities and training they will not be likely to view the organization as being committed to them as well.


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