Organizational Commitment - Principles of Management

Along with job satisfaction, managers need to ensure that employees have reasonably high levels of organizational commitment. Organizational commitment refers to an employee’s emotional attachment to, identification with, and involvement in a particular organization.

It is the employee’s pride and loyalty toward the organization. Managers need to pay attention to this attitude because loyal employees are less likely to quit their jobs and be absent from work. They also tend to provide better customer service because long-tenure employees have deeper knowledge of work practices, and clients like to do business with the same employees.

Employees with greater commitment also have higher work motivation as well as somewhat superior job performance. Notice that we recommended that employees should have “fairly high” levels of organizational commitment. Employees with very high loyalty tend to have high conformity, which results in lower creativity. There are also cases of dedicated employees who have violated laws to defend the organization. However, most companies suffer from too little rather than too much employee loyalty.

WATCH OUT FOR CONTINUANCE COMMITMENT!

Organizational commitment is different from continuance commitment . Whereas organizational commitment is an emotional bond to the organization, continuance commitment is a calculative attachment.Employees have high continuance commitment when they do not particularly identify with the organization where they work but feel bound to remain there because it would be too costly to quit.

In other words, they choose to stay because the calculated (typically financial) value of staying is higher than the value of working somewhere else. You can tell someone has high calculative commitment when she or he says, “I hate this place but can’t afford to quit!” This reluctance to quit may be due to the risk of losing a large bonus by leaving early or because the employee is well established in the community.

Unfortunately managers seem to confuse organizational commitment with continuance commitment. Executives often tie employees financially to the organization through low-cost loans, stock options, deferred bonuses, and other “golden handcuffs.” For example, several Wall Street brokerage firms boast that fewer than 10 percent of their employees quit each year, but one of the key reasons is that most staff participate in a deferred compensation scheme in which performance bonuses are held back for at least two years.

If the employee quits, every penny of the deferred bonus is forfeited. James McCarthy is fighting to get $287,000 that he earned as a broker at Smith Barney, but the company says it can refuse to pay his bonus because he quit his job.

Financial incentives might reduce turnover, but they also increase continuance commitment, not employee loyalty. Research suggests that employees with high levels of continuance commitment have lower performance ratings and are less likely to engage in organizational citizenship behaviors!

Furthermore, unionized employees with high continuance commitment are more likely to use formal grievances, whereas employees with high organizational commitment engage in more constructive problem solving when employee–employer relations sour. Although some level of financial connection may be necessary, employers still need to win employees’ hearts (organizational commitment) beyond tying them financially to the organization (continuance commitment).

BUILDING ORGANIZATIONAL COMMITMENT

There are almost as many ways to build organizational loyalty as topics in this textbook, but the following list is most prominent in the literature:

  • Justice and support: Employee loyalty is higher in organizations that fulfill their obligations to employees and abide by humanitarian values, such as fairness, courtesy, forgiveness, and moral integrity. These values relate to managers need to continually pay attention to the fairness of their decisions, such as the distribution of rewards and resources. The more justice employees perceive, the higher their loyalty to the organization. Similarly, organizations that support employee wellbeing tend to earn higher levels of loyalty in return.
  • Shared values: The definition of organizational commitment refers to a person’s identification with the organization, and that identification is highest when employees believe their values are congruent with the organization’s dominant values.
    Values congruence makes employees feel more comfortable with corporate decisions.
  • Trust: Trust is defined as a psychological state comprising the intention to accept vulnerability based on positive expectations of the intent or behavior of another person. Trust means putting faith in the other person or group. It is also a reciprocal activity: To receive trust, you must demonstrate trust.

Employees identify with and feel obliged to work for an organization only when they trust its leaders. This explains why layoffs are one of the greatest blows to employee loyalty:
By reducing job security, companies reduce the trust employees have in their employer and the employment relationship.

  • Organizational comprehension: Organizational commitment is a person’s identification with the company, so it makes sense that this attitude is strengthened when employees understand the company, including its past, present, and future. Thus loyalty tends to increase with open and rapid communication to and from corporate leaders, as well as with opportunities to interact with coworkers across the organization.
  • Employee involvement: Employees feel that they are part of the organization when they contribute to decisions that guide the organization’s future. This employee involvement also builds loyalty because giving this power demonstrates the company’s trust in its employees.

Organizational commitment and job satisfaction represent two of the most often studied and discussed attitudes in the workplace. Each is linked to emotional episodes and cognitive judgments about the workplace and relationships with the company.

Emotions also play an important role in another concept that is on everyone’s mind these days: stress. Indeed, managing work-related stress is central to managing employee well-being. Over the next few pages we will examine the stress process, its causes, and, most important, how to improve employee well-being by managing work-related stress.


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