The impact of quality of work life and organizational commitment on job performance of employees in the vietnamese banking sector

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Ngoc Tuan THE IMPACT OF QUALITY OF WORK LIFE AND ORGANIZATIONAL COMMITMENT ON JOB PERFORMANCE OF EMPLOYEES IN THE VIETNAMESE BANKING SECTOR MASTER OF BUSINESS (HONORS) Ho Chi Minh City Year 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Ngoc Tuan THE IMPACT OF QUALITY OF WORK LIFE AND ORGANIZATIONAL COMMITMENT ON JOB PERFORMANCE OF EMPLOYEES IN THE VIETNAMESE BANKING SECTOR MASTER OF BUSINESS (HONORS) SUPERVISOR: Dr TRAN PHUONG THAO Ho Chi Minh City Year 2017 ACKNOWLEDGEMENT Firstly, I would like to express my gratefulness to my supervisor Dr Tran Phuong Thaofor her professional guidance, intensive support, valuable suggestions, instructions and continuous encouragement during the time of research and writing this thesis I would like to express my deepest appreciation to ISB Research Committee for their valuable time as their insightful comments and meaningful suggestions were contributed significantly for my completion of this research My sincere thanks also go to all of all of my lecturers at International Business School- University of Economics Ho Chi City for their teaching and guidance during my Master course Last but not least, I would like to thanks my family, whom were always supporting me and encouraging me with their best wishes ABSTRACT This study uses three components of quality of work life and three components of organizational commitment to investigate the impacts of quality of work life and organizational commitment to job performance in the Vietnam banking sector This research framework was tested through a survey on employees from banks in Ho Chi Minh City A total of 259 questionnaires collected and analysed using including sample descriptive statistic, reliability analysis, exploratory factors analysis, CFA, and SEM.The findings of this research showed significant and positive effects of quality of work life and organizational commitment on job performance Furthermore, the research found that there is a positive relationship between quality of work life and organizational commitment Key words:quality of work life, organizational commitment, job performance, survival needs, belonging needs, knowledge needs, affective commitment, continuance commitment, normative commitment i TABALE OF CONTENTS LIST OF TABLES iii LIST OF FIGURES iv CHAPTER : INTRODUCTION 1.1 Research background 1.2 Research Problems 1.3 Research Objectives 1.4 Scopes of the study 1.5 The significane of the study 1.6 Structure of the study: CHAPTER : LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 2.1 Theoretical foundations 2.2 Overview on job performance, quality of work life and organizational commitment 10 2.2.1 Job performance 10 2.2.2 Quality of work life 11 2.2.3 Organizational commitment 13 2.3 Hypothesis development 15 2.3.1 Quality of work life and job performance 15 2.3.2 Organizational commitment and job performance 16 2.3.3 Quality of work life and organizational commitment 17 2.4 Research model 18 2.5 Chapter summary 19 CHAPTER RESEARCH METHODOLOGY 21 3.1 Research process 21 3.2 Research design 22 3.2.1 Questionnaire design 22 3.2.2 Measurement scale 23 3.3 Qualitative method 26 3.4 Main survey 26 3.4.1 Sampling 26 3.4.2 Data analysis method 27 3.5 Chapter summary 30 ii CHAPTER : DATA ANALYSIS AND DATA RESULTS 31 4.1 Preliminaries of data analysis 31 4.2 Reliability analysis 32 4.3 Exploratory Factor Analysis 34 4.4 Confirmatory Factor Analysis (CFA) 35 4.5 SEM Testing and Bootstrap Method 38 4.5.1 SEM Testing 38 4.5.2 Bootstrap method 40 4.6 Discussion 41 4.7 Chapter summary 42 CHAPTER CONCLUSION AND IMPLICATIONS 43 5.1 Conclusions 43 5.2 Managerial implications 44 5.3 Directions for future research 45 REFERENCES 46 iii LIST OF TABLES Table 4.1 Summary of employees’ profile 31 Table 4.2 Cronbach’s Alpha 32 Table 4.3 KMO and Bartlett's Test 35 Table 4.4 Standardized regression weights 37 Table 4.5 The AVE items 38 Table 4.6 Regression weights 40 Table 4.7 Standardized Regression Weights (bootstrap standard error) n =1000 40 iv LIST OF FIGURES Figure 2.1 Conceptual framework of the study 19 Figure 3.1 Research Process 21 Figure 4.1 CFA model 35 Figure 4.3 Structural results 39 CHAPTER : INTRODUCTION 1.1 Research background Human resource management plays critical role in modern business today because of its impacts on organizational success as well as retaining talent people Human resource is denoted as an empathy factor and the employees’ attitude impacts directly on customer satisfaction and perception which may lead to higher customer loyalty as well as customer commitment (Parasuraman, Zeithaml and Berry, 1985) Thus, human resource is considered as key factors impacting on service quality and customer satisfaction Job performance leads to the performance of any organizations including banks Employee performance is according to their level of motivation, which encourages them to come to work regularly, work diligently, flexibly Besides, the level of motivation also helps employees be willing to carry out the necessary tasks When the employees are not satisfied with their jobs, they will perform at their low contributions So, it is required to increase job performance of human resources in the banking sector Many prior studies show that job performance is affected by a number of factors including quality of work life and organizational commitment The impact of these factors are investigated in a wide range of studies including Nguyen and Nguyen(2012),Sirgy, Efraty, Siegel and Dong(2001),Fu and Deshpande (2014) Accordingly, Mohan and Kanta (2013) showed that quality of work life influences on efficiency and productivity of company Moreover, creating quality of work life will make employees feel satisfactory Therefore, quality of work life plays a vital role in attracting and keeping the genius May, Lau and Johnson (1999) also showed that organizations offering the better quality of work life has more advantages in hiring and retaining good employees In the meantime, organizational commitment is the individual's psychological attachment to the organization among its employees (Murthy, 2013; Lamba & Choudhary, 2013) Organizations commitment may attract and retain staff to have longer tenure 1.2 Research Problems The banking finance industrieshave existed for hundreds of years, and became the heart of the modern economy.In recents years, with development of Vietnamese banking system, workforce demand is rising The banks also encounter many challenges in the workforce competency environment Therefore, the high quality workforces are well focused in developing To evaluate quality workforces, job performance is an important criterion for outcomes and success of employees (Campbell, McCloy, Oppler, Sager, Schmitt, & Borman, 1993) Therefore, it is necessary for bank’s managers to investigate factors which affect job performance of their employees in the Vietnamese banking sector This research focuses on explaining job performance by examing the effects oftwo factors which are quality of work life and organizational commitment on job performance 53 Tett, R P., Guterman, H A., Bleier, A., & Murphy, P J (2000) Development and content validation of a “hyperdimensional” taxonomy of managerial competence Human Performance, 13(1), 205–251 54 APPENDIX A Questionnaires in English Dear participants, I am a member of Master of Business Class, a Master Program in English of University of Economics Ho Chi Minh City At the present, I have been doing a research to identifythe impact of quality of work life and organizational commitment on job performance of employees in banking industry Please kindly share your own thinking on the issues given in this questionnaire All your ideas will help for the success of my research I CONTENT OF THE QUESTIONNAIRE: Please express the degree of your agreement with statements given below (Indentify your rating by circling the number) Rating scale: Strongly disagree to Strongly agree No Scale Your rating Survival needs My job provides good health benefits I am satisfied with what I’m getting paid for my work My job does well for my family 5 Belonging needs I have good friends at work I have enough time away from work to enjoy other things in life I feel appreciated at work Knowledge needs 55 I feel that my job allows me to realize my full potential My job allows me to sharpen my professional skills My job helps me develop my creativity Affective commitment 10 I would be very happy to spend the rest of my career with this organization 11 I really feel as if this organization’s problems are my own 12 I feel a strong sense of belonging to my organization; 13 I not feel like ‘‘part of the family’’ at my organization 14 I not feel ‘‘emotionally attached’’ to this organization 15 This organization has a great deal of personal meaning for me Continuance commitment 16 It would be very hard for me to leave my organization right now, even if I wanted to; 17 Too much in my life would be disrupted if I decided I wanted to leave my organization now; 18 Right now, staying with my organization is a matter of necessity as much as desire 19 I feel that I have too few options to consider leaving this organization 20 One of the few serious consequences of leaving this organization would be the scarcity of available alternatives If I had not put so much of myself into this organization, I might consider working elsewhere 21 Normative Commitment 22 I would feel guilty if I left the organization now 23 I not feel any obligation to stay with my current employer 24 Even if it were to my advantage, I not feel it would be right to leave my organization 25 This organization deserves my loyalty; 26 I would not leave my organization right now because I have a sense of obligation to the people in it; 56 27 I owe a great deal to my organization Job performance 28 I believe I am an effective employee 29 I am happy with the quality of my work output 30 My manager believes I am an efficient worker 31 My colleagues believe I am a very productive employee II INDIVIDUAL INFORMATION: Your gender: □ Male □ Female How old are you? □ 18-25 □ 26-35 □ 36-45 □ 46-60 At present, your job at your bank is □ Teller □ Credit officer (Individual credit officer and corporate credit officer) □ Back officer □ Others Your net income per month: □ < millions VND □ 5- 10 millions VND □ 10 – 20 millions VND 57 □ > 20 millions VND What kinds of the ownership of your bank? □ State – owned Bank □ Joint - Stock Commercial Bank □ Joint – Venture Bank □ Wholly foreign-owned Bank □ Foreign bank’s Branch How many years have you been at your banking job? □ ≤ year □ 2-5 years □ – 10 years □ > 10 years 58 APPENDIX B Questionnaires in Vietnamese Kính gửi Anh/ Chị, Trần Ngọc Tuấn, học viên cao học Trường Đại Học Kinh Tế TP.Hồ Chí Minh.Hiện thực đề tài nghiên cứu “Tác động Chất lượng sống công việc Cam kết gắn bó với tổ chức đến Kết công việc nhân viên ngành ngân hàng” Bảng khảo sát gửi đến Anh/ Chị nhằm mục đích ghi nhận lại ý kiến cá nhân Anh/ Chị vấn đề nghiên cứu Mong Anh/ Chị dành chút thời gian giúp thực bảng khảo sát Mọi thông tin cá nhân bảo mật dùng cho mục đích nghiên cứu Xin lưu ý: Không có câu trả lời sai, tất ý kiến Anh/ Chị có giá trị cho nghiên cứu I PHẦN CHÍNH Đồng ý Hoàn toàn đồng ý 5 Những nhu cầu tinh thần sống Tôi có người bạn tốt nơi làm việc 5 Ô số 1: Hoàn toàn không đồng ý Ô số 2: Không đồng ý Ô số 3: Trung lập Ô số 4: Đồng ý Ô số 5: Hoàn toàn đồng ý Hoàn toàn không đồng ý Không đồng ý Trung lập Xin cho biết mức độ đồng ý Anh/ Chị phát biểu sau cách đánh dấu (X) vào ô tương ứng, với: Những nhu cầu thiết yếu sống Công việc mang đến cho hỗ trợ tốt chăm sóc sức khỏe Tôi hài lòng với mức lương trả cho công việc Công việc giúp ích cho sống gia đình Ngoài công việc, có đủ thời gian để hưởng thụ thứ khác sống Tôi cảm thấy coi trọng nơi làm việc 59 Những nhu cầu học hỏi sống Tôi cảm thấy công việc giúp nhận khả tiềm ẩn Công việc cho phép đào sâu kỹ chuyên môn thân Công việc giúp phát triển khả sáng tạo thân 5 5 5 5 5 5 5 5 5 Kết công việc Tôi tin nhân viên làm việc hiệu Tôi cảm thấy hài lòng với chất lượng công việc 14 Gắn bó tự nguyện Tôi cảm thấy hạnh phúc gắn bó nghiệp tổ chức Tôi thực nhận thấy nhữngkhó khăn tổ chức gặp phải khó khăn Tôi cảm thấy thuộc tổ chức Tôi không cảm thấy tổ chức phần gia đình Tôi không cảm thấy gắn bó mật thiết với tổ chức 15 Tổ chức có nhiều ý nghĩa cá nhân 10 11 12 13 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Gắn bó bắt buộc Thật khó cho để rời khỏi tổ chức làm lúc muốn Có nhiều điều bị phá vỡ sống rời tổ chức Ở lại tổ chức lúc điều cần thiết Tôi cảm thấy lựa chọn công việc khác rời tổ chức Một hậu nghiêm trọng rời khỏi tổ chức lựa chọn thay cho Nếu không đặt thân nhiều vào tổ chức này, có lẽ tìm công việc khác Gắn bó đạo đức Tôi cảm thấy có lỗi phải rời khỏi tổ chức lúc Tôi không cảm thấy bắt buộc phải lại tổ chức với cấp Ngay có điều kiện thuận lợi để rời khỏi tổ chức, không muốn rời khỏi tổ chức lúc Tổ chức mang lại công cho Tôi không rời khỏi tổ chức cảm giác có nghĩa vụ người Tôi nợ tổ chức thỏa thuận 60 30 Cấp tin rẳng người nhân viên làm việc hiệu 31 Đồng nghiệp tin người nhân viên có hiệu suất làm việc cao II THÔNG TIN CÁ NHÂN Xin vui lòng cho biết giới tính Anh/ Chị □ Nam □ Nữ Xin vui lòng cho biết tuổi Anh/ Chị □ 18-25 □ 26-35 □ 36-45 □ 46-60 Xin vui lòng cho biết vị trí công việc Anh/ chị ngân hàng □ Giao dịch viên □ Nhân viên tín dụng (cán tín dụng cá nhân cán tín dụng doanh nghiệp) □ Bộ phận hỗ trợ kinh doanh □ Khác Xin vui lòng cho biết thu nhập trung bình tháng Anh/Chị □ Dưới triệu VNĐ/tháng □ Từ triệu- 10 triệu VNĐ/tháng □ Từ 10 triệu – 15 triệu VNĐ/tháng □ Từ 15 triệu VNĐ/tháng trở lên 61 Loại hình ngân hàng/anh chị làm? □ Ngân hàng có vốn nhà nước □ Ngân hàng TMCP vốn nhà nước □ Liên doanh □ 100% vốn nước □ Chi nhánh ngân hàng nước Việt Nam Thâm niên Anh/Chị: □ ≤ năm □ 2-5 năm □ – 10 năm □ > 10 năm 62 APPENDIX C Rotated component matrix 829 787 828 715 660 736 265 Factor AC1 AC2 AC3 AC4 AC5 AC6 CC1 639 CC2 702 CC3 632 CC4 798 CC5 823 CC6 648 NC1 817 NC3 770 NC4 711 NC5 824 NC6 828 QS1 QS2 QS3 QB1 QB2 QB3 QK1 858 QK2 810 QK3 793 JP1 759 JP2 801 JP3 797 JP4 797 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization a Rotation converged in iterations 818 875 643 762 708 830 63 APPENDIX D Total Variance Explained Factor Initial Eigenvalues Total Extraction Sums of Squared Loadings Rotation Sums of Squared Loadingsa Total % of Cumulative Total % of Cumulative Variance % Variance % 6.936 23.121 23.121 6.565 21.883 21.883 3.715 12.382 35.503 3.355 11.184 33.067 3.308 11.028 46.531 2.952 9.841 42.908 2.571 8.572 55.102 2.193 7.308 50.217 2.109 7.030 62.133 1.762 5.875 56.091 1.698 5.658 67.791 1.348 4.495 60.586 1.037 3.457 71.249 674 2.246 62.832 891 2.971 74.219 835 2.782 77.001 10 649 2.163 79.165 11 582 1.940 81.105 12 525 1.751 82.856 13 463 1.543 84.399 14 443 1.478 85.877 15 424 1.413 87.290 16 388 1.293 88.583 17 361 1.202 89.785 18 328 1.092 90.877 19 312 1.041 91.918 20 293 978 92.896 21 281 936 93.832 22 268 893 94.725 23 255 849 95.574 24 236 786 96.360 25 228 759 97.119 26 217 722 97.841 27 186 619 98.460 28 166 553 99.013 29 154 513 99.526 30 142 474 100.000 Extraction Method: Principal Axis Factoring a When factors are correlated, sums of squared loadings cannot be added to obtain a total variance 4.913 3.921 4.029 3.369 2.834 3.588 3.443 64 APPENDIX E No Original English scales Original Vietnamese scales Final Comments Vietnamese version Survival needs– items (Những nhu cầu thiết yếu sống) My job provides good health benefits I am satisfied with what I’m getting paid for my work My job does well for my family Công việc mang đến cho lợi ích tốt cho sức khỏe Công việc mang đến cho hỗ trợ tốtvề chăm sóc sức khỏe 5/5 respondents suggested to explain Vietnamese specific meaning of "good health benefits " Tôi hài lòng với mức lương trả cho công việc Tôi hài lòng với mức lương trả cho công việc 5/5 respondents agreed with this Vietnamese word Công việc tốt cho gia đình Công việc giúp ích cho sống gia đình 2/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning Belonging needs – items (Những nhu cầu tinh thần sống) I have good friends Tôi có người at work bạn tốt nơi làm việc Tôi I have enough time away from work to enjoy other things in life I feel appreciated at Tôi cảm thấy coi work trọng nơi làm việc Tôi có đủ thời gian để hưởng thụ thứ khác sống Tôi có người bạn tốt nơi làm việc 5/5 respondents agreed with this Vietnamese word Ngoài công việc, có đủ thời gian để hưởng thụ thứ khác sống 4/5 respondents recommended the researcher to add the phrase "Besides working" in the first sentence to make Vietnamese meaning more understandable Tôi cảm thấy coi trọng nơi làm việc 5/5 respondents agreed with this Vietnamese word Knowledge needs – items (Những nhu cầu học hỏi sống) Tôi cảm thấy công việc I feel that my job giúp nhận allows me to realize cách đầy đủ my full potential khả tiềm ẩn Tôi cảm thấy công việc giúp nhận khả tiềm ẩn 5/5 respondents agreed with this Vietnamese word 65 My job allows me to sharpen my professional skills Công việc cho phép đào sâu kỹ chuyên môn thân Công việc cho phép đào sâu kỹ chuyên môn thân 5/5 respondents agreed with this Vietnamese word My job helps me develop my creativity Công việc giúp Tôi phát triển khả sáng tạo thân Công việc giúp phát triển khả sáng tạo thân 5/5 respondents agreed with this Vietnamese word Affective commitment – items (Gắn bó tự nguyện) 10 I would be very happy to spend the rest of my career with this organization Tôi cảm thấy hạnh phúc gắn bó nghiệp tổ chức Tôi cảm thấy hạnh phúc gắn bó nghiệp tổ chức I really feel as if this organization’s problems are my own Tôi thực nhận thấy vấn đề tổ chức vấn đề Tôi thực nhận thấynhững khó khăn tổ chức gặp phải khó khăn 3/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning I feel a strong sense of belonging to my organization; Tôi cảm thấy thuộc tổ chức Tôi cảm thấy thuộc tổ chức 5/5 respondents agreed with this Vietnamese word I not feel like ‘‘part of the family’’ at my organization Tôi không cảm nhận tổ chức phần gia đình Tôi không cảm thấy tổ chức phần gia đình 5/5 respondents agreed with this Vietnamese word 14 I not feel ‘‘emotionally attached’’ to this organization Tôi không cảm thấy gắn bó mật thiết với tổ chức Tôi không cảm thấy gắn bó mật thiết với tổ chức 5/5 respondents agreed with this Vietnamese word 15 This organization Tổ chức có has a great deal of personal meaning for nhiều ý nghĩa cá nhân me Tổ chức có nhiều ý nghĩa cá nhân 5/5 respondents agreed with this Vietnamese word 11 12 13 5/5 respondents agreed with this Vietnamese word Continuance commitment – items (Gắn bó bắt buộc) 16 It would be very hard for me to leave my organization right now, even if I wanted to; Thật khó cho để rời khỏi tổ chức làm lúc muốn Thật khó cho để rời khỏi tổ chức làm lúc muốn 5/5 respondents agreed with this Vietnamese word 66 17 Too much in my life would be disrupted if I decided I wanted to leave my organization now; Cuộc sống có nhiều điều bị phá vỡ định rời khỏi tổ chức Có nhiều điều bị phá vỡ sống rời tổ chức 1/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning 18 Right now, staying with my organization is a matter of necessity as much as desire Ngay lúc việc lại tổ chức điều cần thiết Ở lại tổ chức lúc điều cần thiết 3/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning Tôi cảm thấy lựa chọn khác rời khỏi tổ chức Tôi cảm thấy lựa chọn công việc khác rời tổ chức 1/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning 19 I feel that I have too few options to consider leaving this organization 20 One of the few serious consequences of leaving this organization would be the scarcity of available alternatives Một hậu nghiêm trọng rời khỏi tổ chức lựa chọn thay với Một hậu nghiêm trọng rời khỏi tổ chức lựa chọn thay cho 2/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning If I had not put so much of myself into this organization, I might consider working elsewhere Nếu không đặt thân nhiều vào tổ chức này, có lẽ xem xét công việc khác Nếu không đặt thân nhiều vào tổ chức này, có lẽ tìm công việc khác 5/5 respondents agreed with this Vietnamese word 21 Normative Commitment – items (Gắn bó đạo đức) 22 I would feel guilty if Tôi cảm thấy có lỗi Tôi cảm thấy có lỗi 5/5 respondents I left the phải rời khỏi tổ phải rời khỏi agreed with this chức lúc tổ chức lúc Vietnamese word organization now 23 I not feel any obligation to stay with my current employer Tôi không cảm thấy bắt buộc phải lại công ty/tổ chức với cấp Tôi không cảm thấy 5/5 respondents bắt buộc phải lại tổ agreed with this chức với cấp Vietnamese word 24 Even if it were to my advantage, I not feel it would be right to leave my organization Ngay có thuận lợi, không cảm thấy có quyền để rời khỏi công ty/tổ chức Ngay có điều kiện thuận lợi để rời khỏi tổ chức, không muốn rời khỏi tổ chức lúc 2/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning 67 25 This organization deserves my loyalty; Tổ chức đối đãi Tổ chức mang 1/5 respondents công lại công cho advised to adjust meaning of statement to make clear Vietnamese meaning Tôi không rời khỏi tổ chức cảm giác có nghĩa vụ người 2/5 respondents advised to adjust meaning of statement to make clear Vietnamese meaning 26 I would not leave my organization right now because I have a sense of obligation to the people in it; Tôi không rời khỏi tổ chức có cảm giác nghĩa vụ người đó; 27 I owe a great deal to my organization Tôi nợ với tổ chức Tôi nợ tổ chức 5/5 respondents agreed with this thỏa thuận lớn thỏa thuận Vietnamese word Job performance – items (Kết công việc) 5/5 respondents agreed with Vietnamese meaning of four sentences ... research contributes to the understanding of quality of work life and organizational commitment, and their impact on job performance within the context of Vietnamese business organizations in generally... Question 1: Doesquality of work life affect job performance of employees in the Vietnamese banking sector? Question 2: Does organizational commitment affect job performance of employees in the Vietnamese. ..UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Ngoc Tuan THE IMPACT OF QUALITY OF WORK LIFE AND ORGANIZATIONAL COMMITMENT ON JOB PERFORMANCE OF EMPLOYEES IN THE VIETNAMESE