IMPACT OF EMPLOYEE COMMITMENT ON ORGANIZATIONAL PERFORMANCE

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IMPACT OF EMPLOYEE COMMITMENT ON ORGANIZATIONAL PERFORMANCE

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

In an era of limited resources, governments at all levels are pressured to produce maximum output with the least input. A great deal of attention has been given to a variety of Performance improvement strategies, including public-private partnership, and Balanced Score Card (BSC), in the hope that such strategies are a starting point for Performance improvement. It should be noted, however, that no Performance improvement strategy alone is perfect. As such, various strategies should be used at the same time. Since Performance improvement is a function of too many factors, ranging from top management support to feedback on budget based decisions, it is essential to be aware that all factors are equally important (Holzer & Callhan, 1998; Lee, 2000a).

Among others, the backdrop of Performance improvement is an employee’s desire to be maximally productive. As Guy (2002) points out, “it is the people who, in the long term, control the Performance of any organization” (p.307). Even if there might be a number of reinvention efforts and top management support, unless employees at all levels are willing to improve Performance, all efforts toward Performance enhancement will come to nothing.

Modern day Organization is concerned with the analysis and diagnosis of the factor that determine organizational effectiveness, and the planning and delivery of programmes to increase that effectiveness. Organizations want to obtain the commitment of their employees. Management would like its employees to identify with the values, norms and artefacts of the organization, hence the need for organizational culture. Management needs to explain and imbibe its culture in its employees; this will enable the employee to get familiar with the organizational system. During this process of explanation, the employee learns about the organizational culture and decides whether he can cope with it or not. This means that each organization is a learning environment. It is the proper understanding of the organizational culture that the performance of theemployee in the organization. Performance is the extent to which an individual is carrying out assignment or task. It refers to the degree of accomplishment of the task that makes up an employee’s job (Cascio, 2006).

Commitment has a rational element: Most people consciously decide to make commitments, then they thoughtfully plan and carry out the actions required to fulfill them (Meyer, et al, 2004).Because commitments require an investment of time as well as mental and emotional energy, most people make them with the expectation of reciprocation. That is, people assume that in exchange for their commitment, they will get something of value in return—such as favors, affection, gifts, attention, goods, money and property. From this perspective, this paper sheds light on the importance of a multidimensional view of employee commitment. This paper starts with an assumption that the previous concept of organizational commitment may not tell the whole story about individual performance and Performance. Identifying multiple foci of employee commitment beyond the organization helps explain various motivational bases among employees toward Performance improvement efforts.

Most organizations have realized that the performance of their workers play a vital role in determining the success of their organization (Zheng, 2010). In view of this, it is important for employers and managers alike to know how to get the best from their workers. Ali (2012) opines that one of the antecedent determinants of workers’ performance is believed to be employee commitment. Akintayo (2011) notes that one of the reasons why commitment has attracted much research attention is that organizations depend on committed staff to create and maintain competitive advantage and achieve superior performance.

Organizations value employee commitment because it is typically believed to reduce withdrawal behaviour, such as lateness, absenteeism and leaving the organization. These values no doubt appear to have potentially serious consequences for overall organizational performance.

James (2009) posits that employees with sense of employee commitment are less likely to engage in withdrawal behaviour and are more willing to accept change. It is pertinent to note that workers, who show less commitment to an organization, will direct their commitment directions; thus, it is important to know how to develop the right type and level of employee commitment to ensure that the committed employees are retained. Employees who develop a high level of employee commitment tend to be highly satisfied and are fulfilled by their jobs. In the current global economic scenario, organizational change is a continuous process that requires support of all employees in the hierarchical structure.

Committed employees who are highly motivated to contribute their time and energy to the pursuit of organizational goals are increasingly acknowledged to be the primary asset available to an organization (Hunjra, 2010). They provide the intellectual capital that, for many organizations, has become their most critical asset. Moreover, employees who show commitment to the organization and the achievement of their objectives are more suitable to generate the social capital that facilitates organizational learning.

Employee commitment plays a very key role in improving the organizational performance. The organizational performance can be measured using company financial performance, employee turnover, return on equity and so on. It was acknowledged that organizational performance can be enhanced by involving employees in decision making that will ultimately increase their commitment in the organization.

Currently employees act like entrepreneurs, when they work in a team and every member of the team tries his or her best to prove himself amongst all others. Those things increase their commitment level in the organization that ultimately increases the performance of the organization.

The high labour turnover, absenteeism, lateness and non-challant attitude of many employees in Nigeria are believed to be as a result of less commitment from the workers. It is against this backdrop that the researcher has decided to research on the effect of employee commitment on organizational performance in Nigeria, with Innoson Technical and Industrial Company Limited as a study.

STATEMENT OF THE PROBLEM

The consequences of less commitment from employees are devastating to an organization. They include under-performance, resulting from absenteeism, lateness, poor attitude to work and resignation. Lack of commitment by employees leads to poor performance as they do not work to their full potential and this has affects the performance of the organization. Employees are the pivot on which the growth, survival and achievement of the organizational objectives are dependent on. Their inability to fulfill these goals will spell doom for the organization.

An organization, without committed employees is likely to lose its highly skilled employees to other organizations.

OBJECTIVES OF THE STUDY

The broad objective of the study is to examine the effect of employee commitment on organizational performance. While, the specific objectives include to:

Identify the relationship between employee commitments to the profitability of the organization.
Examine the extent to which employee commitment affects employee turnover.

RESEARCH QUESTIONS

The following research questions were formulated in line with the objectives.

What is the relationship between employee commitments to the profitability of the organization?
To what extent does employee commitment affect employee turnover?

RESEARCH HYPOTHESES

Based on the research questions, the following hypotheses were formulated.