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UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business VO LE TRUNG HAU THE IMPACT OF EMPLOYEE PERCEPTION ON JOB PERFORMANCE WITH MEDIATING ROLE OF EXTRA ROLE BEHAVIORS IN VIETNAM MO[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business VO LE TRUNG HAU THE IMPACT OF EMPLOYEE PERCEPTION ON JOB PERFORMANCE WITH MEDIATING ROLE OF EXTRA-ROLE BEHAVIORS IN VIETNAM MOTORBIKE MARKET MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR PHAM NGOC THUY ID: 22150021 Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgement Apart from the efforts of me, the on time completion of the thesis largely on the encouragement and guidelines of many others I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this thesis I would like to express my appreciation to Dr Pham Ngoc Thuy – my instructor She provided me with tremendous support, help and motivations Without her instructions and guidance, I would not finish this thesis The guidance and supports received from ISB, classmates, friends and family are also very important to me I am grateful for their constant support and help LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The impact of employee perception on job performance with mediating role of extra-role behaviors in Vietnam motorbike market Abstract This study examines the impact of employee perception of conscientiousness, organizational justice and organizational identification on job performance of frontline employee in the context of Vietnam motorbike retail market It also investigates the mediation effect of customer-directed and employee-directed extrarole behavior on above relationships By using structural equation modeling, these impacts were empirically tested with a sample of 252 frontline employees working at motorbike retail dealers in Vietnam The result reveals conscientiousness, organizational justice and organizational identification as positive predictors of job performance Furthermore, the relationships are indicated to mediate by extra – role behaviors Overall, the mediating effect of customer – directed extra – role behaviors are stronger than employee – directed extra – role The impact of conscientiousness and organizational justice to job performance was mediated by both extra – role behaviors In the other hand, while this study shows the mediation effect of customerdirected extra-role behavior on the relationship of organizational identification and job performance, the mediation effect of employee-directed extra-role behaviors on the relationship is not support Key words: conscientiousness, organizational justice, organizational identification, extra-role behaviors, job performance, Vietnam motorbike retail LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Table of content Introduction Theoretical background and hypotheses 2.1 Employee perception and job performance model 2.2 Extra-role behaviors 10 2.3 Conscientiousness as employee perception 11 2.4 The Perception of Organizational justice and organizational identification 12 2.5 The mediating role of extra-role behaviors 13 Research method 16 3.1 Research procedure 16 3.2 Data collection and sample 17 3.3 Measurement scale 19 Analysis and results 21 4.1 Scale validation 21 4.2 Structural Equation Modeling 23 Theoretical Implication 27 Managerial implication 31 Limitation and future research 33 Conclusion 34 Appendix A: Sources of questionnaire item 35 Appendix B: Pilot research guidelines and revised questionnaires (English version) 37 Appendix C: Survey form and questionnaires (Vietnamese version) 40 Appendix D: List of motorbike retail store taking place in quantitative research 42 Appendix E: CFA result of measurement scale (standardized) 44 Appendix F: SEM result of direct model 45 Appendix G: SEM weights and standardized result of structural model 46 Appendix H: Standardized result of structural model 47 Reference 48 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of table and figure Figure 1: Proposed model 10 Table 1: Demographic information of sample 19 Table 2: Cronbach’s Alpha of factors 21 Table 3: Composite reliable, average variance extracted and correlation 23 Figure 2: standardized path coefficient of the direct relationship 24 Figure 3: structural model of mediation mechanism 25 Table 4: Direct effect and indirect effect of hypothesis relationship 27 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Introduction With the rapid growing and urbanization, Vietnam motorbike market has developed significantly in both production and consume over the past decade As a developing country, Vietnamese people still use motorbike as main transportation vehicle which every household have at least one motorbike, usually more than one As a result, Vietnam motorbike market becomes an intriguing location for investors which the competition is intense between foreign motorbike makers as well as between domestic motorbike retailers Most notably, there was a fierce competition between Chinese manufacturers and Japanese manufacturer early 2000s which Chinese motorbike makers changed the context of motorbike industry with their low price strategy (Nguyen, 2007) Under such circumstance, the current leading Japanese suppliers had to respond to the challenge by developing sustainable competitive advantages through their internal resources (Nguyen, 2007) Recently, the context of Vietnam motorbike industry continues to develop a significant ground of competition between foreign suppliers which contains of major brand names such as Honda, Yamaha, Suzuki, SYM and Piaggio According to the report of Vietnam Association of Motorcycles Manufactures (2018), the total sales volume of major manufactures in 2017 was over 3.2 million motorbikes (1) Due to the dynamic of the competition, Vietnam motorbike retailers understand that they have to keep evolving and improving to adapt to the changing market and retain their market share Considering the important of human capital as a sustainable competitive advantage, it is vital for Vietnam motorbike retailers in to enhance their knowledge about frontline employee in order to LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com optimize their decision – making process regarding recruitment, training and evaluation The role of frontline employee is widely agreed as critical factors to the success of organizations in various contexts such as retail, banking or service (Lindblom, Kajalo & Mitronen, 2016; Handa & Gulati, 2014; Wallace, de Chernatony & Buil, 2011) Bagdare (2015) indicates that frontline employee is the most significant determinants of retail customer mood and shopping emotional experience According to Steffen and Atorough (2015), frontline employee is the key driver of the customer loyalty and satisfaction which were inevitable to train a proficient and sociable frontline employee to avoid negative behaviors from customers However, most previous studies only examine companies in developed country, neither or limited studies investigate Vietnam market or Vietnamese organizations Various researchers and practitioners insist to apply these framework models in other cultural locations and settings which might generalize difference results and improve our understanding of profound knowledge (Reychav & Sharkie, 2010; Usmani & Jamal, 2013; Maxham, Netemeyer & Lichtenstein., 2008) This paper’s goal is to further the exposure of literature by examining both employee perception and extra-role behaviors as the antecedents of frontline employee job performance in the context of motorbike retail in Vietnam It is a well-known fact that employee perception influence employee attitude and behaviors during their day-to-day performance (Lindblom et al., 2016; Reychav & Sharkie, 2010) If the employees have a positive perception of the organization, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com they are more likely to perform discretionary behaviors which eventually improve individual performance (Elorza et al., 2016) Punia (2011) indicates that high performers would be more likely to have a good perception of their work and organization In the literature of retail, there are possible constructs of employee perception that impact job performance, such as conscientiousness, organizational justice and organizational identification Particularly, the personality trait of conscientiousness is considered as the employee perception of their wellbeing and responsibility toward their job (Handa & Gulati, 2014) Otherwise, organizational justice and organizational identification are included as perspective and feeling of frontline employee toward their supervisor and organization which motivated them for higher performance (Usmani & Jamal, 2013; Lichtenstein, Netemeyer & Maxham 2010) Arguably, employee perceptions are important determinants of employee positive behavior as well as job performance Extra – role behaviors are another important asset which significantly enhance the result of frontline employee in retail context Generally, there are two distinct categories in the study of employee job performance, including in-role behaviors and extra-role behaviors While in-role behaviors refer to task performance directly related to job description, extra-role behavior is a set of behaviors that go beyond their obligations to contribute to their organization (Wallace et al., 2011) Other researches has focused on extra-role behaviors as discretionary behavior to measure the outcome of employee (Elorza, Harris, Aritzeta and Balluerka, 2016; Wallace et al., 2011; Maxham et al., 2008) The definition of extra-role behaviors is extended to which employees go beyond their role to help customers as well as their co-workers LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com (Reychav & Sharkie, 2010) Despite the important of extra – role behaviors toward job performance, the understanding of extra – role behaviors, especially in motorbike retail in Vietnam, is quite vague With the high demand of motorbike in Vietnam, many motorbike retail store tend to focus only on the profit rather than strategy to develop their human capital From the observation of author, frontline employees at retail store in Vietnam have the tendency to nothing or provide minimum supportive to their customers Some employees only come to work to finish their daily task while don’t show any dedication to the overall success of their organization Although the performance of employees and retail store still keep an acceptable sales result at the moment, it’s necessary for motorbike retailers to understand and focus on different components of their employee performance for long-term and sustaining success Therefore, this study includes extra-role behaviors in the performance model to explore their impact to frontline employee in Vietnam motorbike industry Both customer-directed and employee-directed extra – role behaviors are accounted as the determinants of frontline employee’s job performance To summary, the present study aims to investigate how employee perception of conscientiousness, organizational justice and organizational identification influence behaviors and job performance of frontline employees in motorbike retail stores The objective is to examine a number of possible employee perceptions that could improve frontline employee’s job performance Moreover, this study will also investigate extra-role behaviors toward employee and customer as mediator in the relationship of employee perceptions and job performance These finding will LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com help to optimize human capital resources of motorbike retail store tin Vietnam through better recruitment, HR decision, training and evaluation Theoretical background and hypotheses 2.1 Employee perception and job performance model Employee Perception is widely argued as the antecedent of higher performance level as well as the behaviors and motivation of employee (Lichtenstein et al., 2010; Punia, 2011; Haumann, Ahearne & Wieseke, 2015) The study of Lindblom et al (2016) focuses the relationship between employee perception and employee job performance by examining the perception of charismatic leadership Similarly, perception of trust is indicated to be a significant factor of employee discretionary behavior (Reychav & Sharkie, 2010) Extending research has stated the strong influence of employee perception to employee job satisfaction which has positive effect to employee job performance (Usmani & Jamal, 2013) After reviewing the retail literature of employee perception, this study adapted three categories of employee perceptions from the model of Maxham et al (2008) that can positive impact employee behavior and job performance in their investigation of retail value chain There are three constructs of employee perceptions including in this study which are the perception of (1) conscientiousness, (2) organization justice and (3) organization identification Thus, the present study proposes a model to support above relationship in Figure The model also hypothesizes that extra-role behaviors which included employeedirected and customer-directed extra – role behaviors will have a mediating role in the relationship of employee perception and job performance LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... frontline employee in retail context Generally, there are two distinct categories in the study of employee job performance, including in -role behaviors and extra -role behaviors While in -role behaviors. .. both employee perception and extra -role behaviors as the antecedents of frontline employee job performance in the context of motorbike retail in Vietnam It is a well-known fact that employee perception. .. their constant support and help LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The impact of employee perception on job performance with mediating role of extra -role behaviors in Vietnam