The Effects of Human Resource Management Practices on Organizational Commitment – The Case of Viettel Group45314

EDESUS Proceeding 2019 (33 of 1531) The Effects of Human Resource Management Practices on Organizational Commitment – The Case of Viettel Group Thi Huong Dang(1),(*), Thi-Ngoc Bich Chu (1) (1) VNU University of Economics and Business, Vietnam National University, Hanoi, Vietnam * Correspondence: huongdth@vnu.edu.vn Abstract: This paper explores the effects of human resource management practices on the employee commitment in Viettel Group The framework is proposed based on inheriting and adjusting from previous empirical studies Data were collected from 270 employees in Viettel Group through a questionnaire survey from February to April 2019 and processed by SPSS The result shows that Training, Performance Appraisal, Compensation; Career Planning, and Employee Participant have positive effects on employees' commitment at Viettel Group Based on these results, the article proposes some suggestions to enhance the commitment and attachment of Viettel Group's employees to the organization Keywords: Human Resource Management Practices, Organizational Commitment Introduction In today's turbulent business environment, human resources are among the most valuable assets of any organization, determining the success of the organization With their knowledge and endless creativity, human resources are important success factors contributing to organizations' competitive advantages (Barney 1991; Singh 2004) Therefore, organization's strategies have recently been focusing on improving human resource management (HRM) practices to achieve sustainable development This, however, implies fiercer competition for high - quality workers Maintaining the workforce, especially high-quality ones, is becoming increasingly difficult In order to succeed, organizations need to know how to retain employees, to strengthen organizational commitment, to avoid the phenomenon of "the grass is always greener on the other side” – desire of employees to switch from one company to another Retaining the workforce by organizational commitment rather than by contract or by sanctions is considered a new sustainable, humane trend, which brings more value to the organization To testify this fact, researches about the linkage between HRM practices and organizational commitment have recently gained high attention Authors have identified evidence of HRM practices on organizational commitment in various organizations and they have found their substantial positive influence In Vietnam, however, few studies have EDESUS Proceeding 2019 (34 of 1531) been conducted, especially taking into consideration different types and sizes of organizations Our purpose, therefore, is to fill this gap We analyze and assess influential factors on organizational commitment in order to provide useful suggestions Our results will further provide additional hints on the linkage between HRM practices and organizational commitment in various types of organizations in Vietnam Conceptual framework and hypotheses 2.1 Literature review Globally, many researches have focused on HRM and the effects of HRM practices on performances and on organizational commitment Noe et al (2006) states that HRM refers to the policies, practices and systems that affect the relationship between the organization and its employees HRM includes the practices that are designed to provide and coordinate the human resources of an organization HRM is considered as the crucial practice of improving the close relationship between employers and employees (Farnham and Pimlott 1990) Guest (1997) and Pfeffer (1998) describe the main dimensions of HRM practices: selection (selective hiring of new personnel), training, appraisal, rewards, job design, involvement, status and security and sharing (extensive sharing of financial and performance information throughout the organization) Guest (1997) notes that the commitment and involvement of employees play an important role in HRM practices Other studies, for example Ramlall (2003) and Singh (2004), analyze the elements of HRM practices too; both authors point out that these practices are closely linked to achieve the goal of establishing and retaining high-quality, committed human resources for an organization Singh (2004) further states that all practices are equally important and each of them needs to work well to complement each other Tran, K.D (2011) studies HRM practices in Vietnam and indicates 12 functions of HRM; she concludes that if these functions work well, HRM will obtain better results and the commitment of employees will be strengthened and it will become more effective Regarding organizational commitment, Mowday et al (1979) affirm that organizational commitment is the relative strength of an individual's identification with, and involvement in, a particular organization According to the authors, organizational commitment can be characterized by three factors: a strong belief in, and acceptance of, the organization’s goals and values; a willingness to exert considerable effort on behalf of the organization; and a strong desire to maintain membership in the organization For brevity, they are stated respectively, as Belief, Effort, and Loyalty Guest (1994) and Legge (1995) confirm this view, stating that the commitment of employees plays a crucial role in HRM practices Commitment, rather than being obedience due to a controlled system, is built on belief and mutual trust generated in the working environment The papers of Meyer and Allen (1991) and Northcraft and Neale (1996) agree that the commitment of employees to the organization is meant to be a loyal and positive work attitude combined with the wish of remaining in the organization EDESUS Proceeding 2019 (35 of 1531) Furthermore, they also mention a shared belief and acceptance of the organization's target and values as a primary element of commitment Several researches put in evidence the linkage between HRM practices and organizational commitment, for instance Ritzer and Trice (1969); Meyer and Smith (2000); Paul and Anantharaman (2004) and Browning (2006) Particularly, Ritzer and Trice (1969) find a positive relationship between compensation-benefits packages and the commitment of employees Bartlett (2001) confirms that training activities are positively associated with the commitment of employees Meyer and Smith (2000) find a significant impact of career development, appraisal employees' performance and compensation on the commitment of employees Paul and Anantharaman (2004) identify the link between HRM and organizational commitment in the software industry in India Browning (2006) analyses the impact of HMR practices on the commitment of employees in service companies in South Africa Payne and Huffman (2005) stress the link between HRM practices and turnover rate Employees quit often when they feel to have no perspectives even if they commit or if they feel the organization does not keep its promises Studies of Shahnawaz and Juyal (2006) and Qiao et al (2008) also find a positive association between HRM practices and organizational commitment in consultancy, research, fashion, and IT industry in China In Vietnam, some few studies on the relationship between HRM practices and organizational commitment have been conducted Ho, H.T & Pham, H.L (2012) find a relation between the the support in the workplace and the commitment of employees Pham, T.A & Nguyen, T.H.D (2013) point out the connection between compensation, career development opportunities, job definitions and organizational commitment The paper of Nguyen, N.T (2015), by using random samples collected from many companies, shows that HRM practices has, on average, a positive impact on organizational commitment in all its three main aspects (normative commitment, continuance commitment, and affective commitment) In short, previous studies have found the positive link between HRM practices and organizational commitment The number of researches in Vietnam, however, is rather exiguous, particularly studies considering different businesses and organizations operating in foreign markets The present study aims at filling the gap by providing evidence on the linkage between HRM practices and organizational commitment in Viettel Group We believe these results are important given the present high level of competition for human resources in a developing country like Vietnam, requiring organizations to pay more attention on employees 2.2 Research model and hypotheses The conceptual framework of this study is based on the findings of previous researches about the link between HRM practices and organizational commitment Seven dimensions of HRM practices are adopted from the studies of Guest (1997); Pfeffer (1998); and Singh (2004) These dimensions have been modified in the study of Tran, K.D & Van, M.L (2006) for the case of Vietnam These seven dimensions of HRM practices include: Job EDESUS Proceeding 2019 (36 of 1531) Definition, Selection, Training, Performance Appraisal, Compensation, Career Planning and Employee Participation Measurements of organizational commitment have been developed by Mowday et al (1979) and have been subsequently modified in the work of Tran, K.D (2006) to adapt to the Vietnamese case Three aspects of commitment are: Loyalty, Pride, and Effort This study further includes Willingness as an additional measure for organizational commitment since Willingness is considered as the strongest expression of employee’s commitment and fulfillment This indicator is particularly relevant to Viettel Group's culture; it is added based on theory and on the results of interviews with ten researches, experts, managers and employees of Viettel Group Figure shows the framework of the link between HRM practices and organizational commitment Job Definition H1 (+) Selection H2 (+) Training H3 (+) Performance Appraisal H4 (+) H5 (+) Compensation Carreer Planning Employee Participation H6 (+) Organizational commitment Loyality Pride Effort Willingness H7 (+) Figure Research Model (Source: Based on previous studies and authors' proposal) Research Hypotheses From the theories and conceptual framework, we propose seven hypotheses as below: H1: Job Definition has a positive effect on organizational commitment H2: Selection has a positive effect on organizational commitment H3: Training has a positive effect on organizational commitment H4: Performance Appraisal has a positive effect on organizational commitment H5: Compensation has a positive effect on organizational commitment EDESUS Proceeding 2019 (37 of 1531) H6: Career Planning has a positive effect on organizational commitment H7: Employee Participation has a positive effect on organizational commitment Methodology 3.1 Measurement and Questionnaire Seven dimensions of HRM practices and measurement instruments are adopted from the studies of Guest (1997); Pfeffer (1998); and Singh (2004) They then have been modified in the study of Tran, K.D & Van, M.L (2006) for the case of Vietnam In which, Job Definition was measured by four items, Selection was measured by four items, Training with five items, Performance Appraisal with five items, Compensation with four items, Career Planning was measured by five items, and Employee Participation with items Meanwhile, organizational commitment is described by four factors: Loyalty, Pride, Effort, and Willingness The first three factors (Loyalty, Pride, Effort) have been developed Mowday et al (1979) and then have been modified by Tran (2006), while the Willingness factor has been firstly introduced in this study after thorough interviews with ten experts of HRM, executives inside and outside of Viettel Group Each factor was represented by three items slightly changed to be more suitable for this study The statements were then assessed by respondents based on a five-points Likert scale where indicates “Strongly disagree” and indicates “Strongly agree” The questionnaire has been first tested on 30 employees of Viettel Group to ensure its intelligibility and clearness After collecting employees' comments, the questionnaire has been further adapted and used for the official survey 3.2 Sampling and data collection The official survey was conducted at Viettel Group This is Vietnam's largest telecommunications group, 100% state-owned and operated by the Ministry of Defense The group is considered as one of the fastest-growing telecommunications companies in the world Measured by subscribers, it is among the top 15 global telecommunications companies By revenues, it is ranked in the top 40 global telecommunications companies Viettel Group currently invests in ten countries across three continents (Asia, America, and Africa), with a total population of more than 240 million people By 2020, it will expand the investment to markets with a population of 400-500 million people and it will rank in the top 10 global telecommunications companies Convenient sampling was used to conduct the survey To ensure the representativeness of the sample, we followed Hair et al (1992), according to which the sample size should be five times the number of the variables In this study, we use 42 observed variables for assessment of HRM practices and organizational commitment, therefore the sample size is estimated around 210 The actual number of questionnaires sent out was 300 EDESUS Proceeding 2019 (38 of 1531) The official survey was conducted from February to April 2019 through various methods: online survey on the Google Form platform, email survey, and direct paper questionnaires A total of 283 questionnaires were collected, in which 270 were valid for the study (response rate 90%) The data were coded, entered, cleaned, processed and analyzed using the statistical software SPSS Results Among the 270 questionnaires that were returned completed, 64.4% were answered by male respondents and 35.6% by female This ratio is in line with the typical gender distribution of technology and telecommunications enterprises In terms of employment duration, 14.1% of respondents have worked at the company for “less than years”, 54.5% for “between 3-5 years”, and 31.5% for “more than years” Cronbach's Alpha test is used to assess the reliability of the variables and the scales Most seven dimensions of HRM practices and the four dimensions of organizational commitment had Cronbach’s Alpha coefficient greater than 0.7 (Table 1); all 42 scales had corrected item-total correlation greater than 0.5 Therefore, all variables and scales in the proposed model can be considered reliable (Nunally & Burnstein 1994) Table Cronbach’s Alpha Variables Cronbach’s Alpha N of Items 1.Job Definition 0.765 Selection 0.69 Training 0.878 Performance Appraisal 0.872 5 Compensation 0.841 Career Planning 0.861 Employee Participation 0.847 Source: own compilation The results of exploratory factor analysis (EFA) show that the KMO value is equal to 0.885 with a significance level of 0.000 Considering that Hair et al (1998) propose a lower threshold of 0.5 for reliability, our results indicate that using EFA in this study is appropriate The Rotated Component Matrix result shows that rotation converges in 42 variables, in which 30 variables belong to the seven factors of HRM practices and the remaining 12 variables belong to the four factors of organizational commitment The Pearson correlation coefficients, with significance level