In emerging business environment, employee is the most valuable capital for an organization to survive. From data entry work to management of organization, employee plays the role of maintaining daily activities and as well as achieving organization's goal. Without employees, organization might not be able to operate and perform well. Thus, company's productivity will be decreased and finally unable to compete with other organization in the emerging society. Therefore, organizations are trying their best to retain employees to avoid being abandoned or ruled off from the market.
Before an organization try to retain their employees, there's a necessary for organization to understand the factors that caused an employee intend to stay or leave. However, the difficulties of retaining, manage turnover, and attracting the employees within an organization are getting higher and higher in all industries. Also, Banking industry too has no exception.
Based on US analysis of voluntary turnover and total turnover of 2010, banking and finance industry indicated among of the highest turnover rate. It accounted 11.7% of the voluntary turnover rate in the whole country. This means that it leads to serious problem to the banking industry in United States. To cope with the situation, it's vital to identify the reasons and the factors that determine employee's intention to stay or leave in an organization.
Many studies had been carried out by researcher regarding this critical problem. One of the studies stated that job satisfaction has been identified as an important factor in the working lives for occupational groups. Besides, job stress experienced by employees is also one of the important factor affect how the committing with organization. Nevertheless, in banking industry, it has always been criticized that employees are facing problem in the working environment which will affect the level of commitment with the bank.
In addressing this issue, the present study focuses on investigating the main factors that determine employee's intention to stay or leave in banking industry.
1.2 Research background
In Malaysia, financial service sector which include banking has accounted 16% of the total gross national products in 2007 making it the largest contributor among service industries. From the figure above, this shows that banking industry is considering as one of the most important elements in stimulating Malaysia economic growth. Since the role of the banking sector in enhancing economic growth through financial intermediation is significant (Sanusi,2011), therefore banking industry which consider having a higher rate of turnover among employees, is losing their advantage to rule over other competitors.
In addition, as the global economy becomes increasingly knowledge based, organizations that can successfully retain their human resources have an advantage over organizations that cannot (Will et al.2009). As a result, organizations that have better retention strategies to retain their employees can maintain in the business market and perform better than others especially in the banking industry.
There are many studies done by previous researchers internationally regarding this issue but there are few done within Malaysia. Thus, this research focuses on doing in a particular state in Malaysia. As for whole, it is crucial to find out the factors that determine the intention to stay of employees so that management can make effective effort on retaining employees, especially in banking industry.
1.3 Problem statement
For many organizations, there is always a problem in handling the employees due increased market competitions, unexpected risks, and especially the turbulent global economic conditions. Most of them are striving to survive and become the best to dominant the business world but not all can did it due to insufficient of workforce. However, there is no doubt that one of the biggest challenges for most of the organization today is the ability to retain their employees.
Therefore, in this competitive market, competition and the lack of availability of highly talented and skilled employees make finding and retaining talented employee's major priorities for organizations (Fegley, 2006). In order to attract and retain the best talent anywhere in the world, an organization must have a strong and positive employer brand (Brewster et al. 2005).
The problem of managing turnover and retaining employees happens in most of the industry where some of it such as banking industry is more serious than others. However, study on retention always starts from the turnover perspective of people. Therefore, according to few researchers, turnover is one of the most studied behaviors in human resource management research (Tae & Barry, 2008; Carl & Michael, 2004; James, 2001). This is because people's behavior causes an individual action either to leave or to stay in the organization.
In banking industry over the world, it has become so popular that most of the banks face problem in recruiting and retaining its employees. Thus, each of the them from the entire world is competing to provide attractive strategies in recruitment process and to promote the loyalty among the existing employees in the organization. According to Will et al.(2009), the explanation of the phenomenon of employee turnover has offered both psychological and organizational and economic in the social sciences. On the other hand, Taris and Feij (2001) suggest that an employee's intention to leave decreased until the employee's valued level for this extrinsic value was reached. This means that the more employee is satisfied, the longer and higher chance for him or her to stay in the organization.
Previous study from C. P. Maertz Jr & R. W. Griffeth (2004), they found in their study that organizational commitment and job satisfaction are significant determinants of turnover intention. While in a study by Bishop et al.(2005), he showed that organizational commitment can be stimulated by perceived organization support.
As a whole, employees' intention to stay in the particular organization might due to different reason. Therefore, this study is to determine the most influencing factors between a few variables.
1.4 Research questions
a) What is the relationship between organization commitments towards employees' intention to stay?
b) What is the relationship between job satisfactions towards employees' intention to stay?
1.5 Research objectives
a) To identify the relationship between organizational commitment towards the employee's intention to stay.
b) To identify the relationship between job satisfaction towards the employee's intention to stay.
1.6 Hypothesis
H10 : There is no significant relationship between organizational commitment with intention to stay among employees.
H1A : There is significant relationship between organizational commitment with intention to stay among employees.
H20 : There is no significant relationship between job satisfaction with intention to stay among employees.
H2A : There is significant relationship between job satisfaction with intention to stay among employees.
1.7 Research scope
The research scope covered was within the banking industry located within Kuantan, Pahang, Malaysia. The study of this research focused on the intention stay factors among banking industries' employees and respondents were those employees under the chosen bank in Kuantan. Employees respond for the survey were from the lower level category in the organization.
1.8 Research framework
Organization Commitment
Affective Commitment
Continuance Commitment
Normative Commitment
Job Satisfaction
Working Environment
Rewards
Job Burnout
Job Stress
Intention to Stay
Figure 1.1 : Research Framework
1.9 Significance of research
The findings from this study provide a better understanding to Malaysian employees especially within the banking industry. Through this research, it will brings the denotation on helping us to have a deeper point of view on the factors that can increase the intention to stay among employees within the organization and also the unwillingness of employees to remain in the organization. Besides, it also gives the Malaysia's employers more information on which will be the most appropriate and effective strategies that can be implement to increase the employees retention with the result we archive from the survey or questionnaires.
When the more an organization understands and knows what their employees are heading for, the more employees will stay loyal to the organization. Lastly, the research result can also be a referral for other organization that needed the information in the future.
1.10 Conclusion
In summary, this chapter had proposed a broad view on employees' turnover intention from global perspective. Moreover, chapter also includes the most recent data regarding the turnover rate in various industries in Malaysia based on the Malaysia Employees Federation. Others relevant information about this study includes problem statement, research question, research objectives, scope of study, research framework, significance are added to complete this chapter.
CHAPTER 2
LITERATURE REVIEW
2.1 Introduction
This chapter will discuss the employees' turnover intention including the definition of turnover and turnover intention. Besides, this chapter also includes the other variables that are related to intention of employees to stay. One of the variables reviewed was job satisfaction where some of the theoretical views were stated out. Lastly, this chapter stated out some of the previous study regarding intention to stay of the employees within the organization.
2. 2 Employees turnover and turnover intention
Based on Taylor (2002), he mentioned that one of the biggest and greatly cost to an organization is employee turnover. He also argued in the same paper that unwanted, undesirable, and voluntary attrition that companies experience when highly valued employees quit to take another job somewhere else is a much bigger problem than the frequency of business layoffs. Thus, organization needs to make employees feel as a part of the organization in order to keep them loyal to the company. As Taylor
(2002) mentioned, employees need to feel like their contributions to the organization are appreciated.
One's intention to turnover is due to his or her behavioral which lead to the intention to quit. According to Abassi and Hollman (2000), turnover is derives as the worker's rotation around the labor market; between firms, jobs and occupations; and between the states of employment and unemployment. Turnover can be branch into two categories which is the voluntary and involuntary. The proceeding of dismissal of employees refers to the involuntary turnover whereas voluntary turnover is the resignation of employees.
Below are five highlighted reason for employees turnover in the organization (Abassi et al. 2000):
Hiring practices;
Managerial style;
Lack of recognition;
Lack of competitive compensation systems; and
Toxic workplace environments.
In addition, (Abassi et al. 2000) further their discussion by highlighting hiring practices, managerial style, and recognition and workplace environments as a stimulus for turnover within the organization.
While for Tan, Vicky Tiong and Ngoh (2007) in their study at few foreign companies had identified variables that related to turnover intention. Those variables can be divided into three broad categories such as the demographic factors (employee's age, gender, marital status and number of children); organizational factors (an employee's length of service, salary drawn and number of staff); attitudinal factors (job satisfaction, work-related stress and level of commitment in the organization).
Researchers Bigliardi, Petroni and Ivo Dormio (2005) derive the intention to leave refer to individual's perceived likelihood that they will be staying or leaving the employer organization. Meanwhile Souza-Poza and Sousa-Poza (2007) define intention to leave as the reflection of the subjective probability that an individual will change his or her or job within a particular period and it is an immediate precursor to the actual turnover.
Withdrawal behaviors are included as one of the variables related to turnover intention. Based on study, some of the researchers relate job satisfaction with organizational commitment because they believed that with right organizational measures, it will help to improve employees' attitudes and in turn improve their performance. Thus, one way to approach it is by examining withdrawal behaviors of the employees. For instance, withdrawal behaviors are defined as behavior involving physical withdrawal, such as absenteeism and turnover (Falkenburg & Schyns, 2007). Often, the negative attitudes would cost the organization greatly. In addition, another research by Carmeli (2005) study on social workers from health institutions found that organizational culture that provide challenging job are able to diminishes the employee's absenteeism and their withdrawal intentions from the occupations, job and organization.
On the other hand, personal factors such as a sense of powerlessness and a lack of personal control at work also found by researchers to evoke the intentions to quit (Firth et al.,2004). Therefore, behavioral intention to quit has been found by researchers to be strong predictor of personal turnover across industries and theoretically is believed to be an important antecedent to turnover (Gregory et al. ,2007).
A number of researchers have tried to have better understanding on the unexplained turnover intentions and decisions. They also suggest that the traditional models are narrowly focused on how dissatisfaction triggers one's withdrawal and measures used to gauge the relevant attitudes must be improved (Sharon, Holt & Rilovick, 2008). Therefore, Griffeth (2005) have begun to address the issue by improving measures used to access and individual's evaluation of external employment opportunities.
Based on Newton et al.(2004) research, they proposed that large numbers of research support the idea that organizational commitment has strongly related with turnover. They also concluded in the study that organization commitment is one of the significant factor impacts on turnover intention.
2. 2. 1 Mobley's turnover theory
Mobley's turnover theory (1977) has established a broad explanation for the psychological turnover process. This model is developed based on a few former previous studies which includes the study of Porter and Steer's model (1973) of met-expectation and intent to leave and study of March and Simon's theory (1958) about ease and the desirability of work concept.
The figure attached below is a schematic representation of the turnover decision process. Firstly, the termination decision process can be termed as a sequence of cognitive stages. It is start with the process of valuing the existent job and is then followed by the emotional state of fulfillment or dissatisfaction. However, one of the significances of dissatisfaction is to initiate thought of quitting.
Secondly, this step is where the evaluation of the expected utility of search such as loss of work time and of the cost of quitting. The next step would be behavioral intention to search for alternatives if the costs are not that high and if the perceived possibility of finding a substitute is available. It is then followed by the actual search and evaluation of alternatives if they are alternatives exists.
It is then followed by the comparison of the alternatives with the present job. Thus, it will stimulate to the behavioral intention to quit if the comparison favors the alternative which will in turn trigger the final decision of the particular individual to quit (Mobley, 1977).
However, the Mobley's turnover model features frail on empirical evidence for the theoretical distinction among his explanatory constructs (Hom&Griffeth, 1991). Therefore, one of the well-known theoretical alternatives Hom&Griffeth (1991) enhanced Mobley's model by argued that Mobley's theory did not have sufficient empirical evidence for the conceptual distinction among his explanatory constructs.
Nevertheless, there are also similarities among their findings to some extent showed a likely potential intermediate step in the turnover process but yet there exists a major difference. In their study, it resulted that the "Intention to Quit" takes place before an "Intention to Search".
Figure 2. 1 : Mobley's Employee Turnover Decision Process Model
Source : (Mobley, 1977: p.238)
Intention to stay
In an organization, the importance in retaining employees is increasing due to the rising competition in business market to retain talent workers. According to Arthur (2001), intention to leave or stay is affected by employees' job satisfaction and commitment to the organization. Besides, there is wide-ranging of researches done presenting that when employees are satisfied with their jobs and committed to their organization, thus they will have a lower tendency to leave their organizations. Another researcher name Hewitt (2004) proposed the definition of intention to stay in an organization reflects the employee's level of commitment towards his or her organization and the willingness to remain employed.
Intention to stay is the inverse of intention to leave or turnover of the employees in an organization. Since the turnover of an employee will indirectly incur a high cost for recruiting and maintaining another employee (Abbasi & Hollman 2008), therefore some researcher think that highlighted and put more concern on intention to stay is better rather than turnover.
On the other hand, a study by Taylor (2002) pointed out that employees need to feel the sense of being as a part of organization in order to retaining them. This is because humans like to perceive the feelings as their contribution and sacrifice are appreciated (Taylor, 2002). Thus, various retention programs can be plan in order for the process to be work effectively.
Lastly, researchers pointed out the Social Exchange Theory which suggested that if a people feel that he or she accepted advantage from others, it will in turn feel an commitment and thus will think of compensate by loyalty and effort (Mossholder, Settoon and Henagan, 2005). Since the focus of Social Exchange Theory is on citizenship behavior where workers ended in finding for other job because they feel responsible to remain and payback for the organization, therefore workers loyalty obviously will fit its framework. (Rhoades & Eisenberger, 2002). While the loyalty and effort can be seen through the individual's commitment towards his or her job and the strong intention to stay with the current employer.
Organizational commitment
Commitment which is considered as a variable was found by to be inversely related to turnover (Chang, Du and Huang, 2006). According to Allen and Meyer (1990), they defined organizational commitment as "a state of mind, reflecting the relationship between employees and organizations and implying the employee's decision on whether to remain in the organization. From the past, the concept of organizational commitment has attracted considerable interest in an attempt to understand and clarify the intensity and stability of an employee's dedication to the organization (Mester, Visser, Roodt & Kellerman, 2003).
Based on a study, career development and suitable training are said to increase organizational commitment. Thus, organizations may need to identify suitable training and career development needs for individuals (Wetland, 2003). Furthermore, job satisfaction and organizational commitment are found to be interrelated as the more satisfied one is, the more committed they are to the organization (Firth et al. , 2004).
Another study has been suggested that personality dimensions or one's character may mediate the effect of both job satisfaction and organizational commitment and one's intentions to quit (Firth et al. , 2004). Apart from that, studies done by Schiebel and Pochtrager (2003) have also reported that organizational ethics increases employees' commitment (Schiebel & Pochtrager, 2003). There is one previous research done in Anglo cultures which can supports the proposition that those with higher organizational commitment and job satisfaction are less likely to have intentions to quit (Firth et al. , 2004).
Generally speaking, before turnover, the organizational commitment will have an important impact on turnover intention. It is therefore rational to make organizational commitment a variable to measure employee turnover intention in the actual measurements (Wang Yu-mei, Cong Qing, 2007). In addition, organization must be able to satisfy employees in order to make them loyal to the firm (McLean and Andrew, 2000).
Meyer and Allen's three component model of commitment
One of the most widely used models to describe organization commitment is the Meyer and Allen three components model which classified into affective, continuance, and normative commitment. Affective and continuance were first proposed and then followed by the normative commitment at latter.
Affective commitment
The definition of affective commitment based on Meyer & Allen (1991) is where the worker's affective or emotional attachment, identification with, and involvement towards their organization. Affective commitment will arise accordingly when employees amass positive work experience. Besides, they also indicated that the main driver of affective commitment is the work experience. For instance, a study by few researchers found that employees who have invested a great deal of time, effort and energy in an organization may be reluctant to leave the organization (Meyer et al. , 2002).
Continuance commitment
Continuance Commitment derived by (Meyer and Allen, 1984; Becker 1960) proposed it is representing the perceived costs associated with leaving the original organization. The potential costs of leaving an organization includes wasting of time and effort spent acquiring nontransferable skills, losing attractive benefits, giving up seniority based privileges, or having to uproot family and disrupt personal relationship. In addition, Meyer & Allen (1990) stated that workers who stay in the organization based on continuance are because he or she needs to do so. However, Allen & Meyer proposed that although continuance commitment may well keep an employee tied with the organization, but it is unlikely to produce a high level of performance.
Normative commitment
Normative Commitment is the last being introduced and it is least studied by researchers. In normative component, it is concern with the reflection feelings of employees' moral belief on his or her obligation to continue with the organization. The feelings of obligation usually develop from familial and societal norms before he or she ever enter an organization (Meyer & Allen, 1991). This means that the employee rotates around their feeling of commitment and devotion to the organization (J. P. Meyer & N. J. Allen, 1997). Besides, according to Meyer & Allen (1990), those employees with high level of normative commitment will most probably have the feeling that they are ought to stay with the organization.
2. 5 Job satisfaction
In accordance with Falkenburg & Schyns (2007), job satisfaction is seen as consisting satisfaction with different aspects of the job and work situation. Research done by Griffeth, et al. (2000) suggests that variables such as job satisfaction and organizational commitment are mediating factors for the actual action of quitting. They added that if an employee who is less satisfied with his or her job would be more likely to quit.
While according with Adam (2010), one of the major causes of employee's decision to leave organizations begins with a sense of low job satisfaction. According with him, "job satisfaction represents a person's emotional feelings about his or her work. When work is consistent with employees' values and needs, job satisfaction is likely to be high. "
It has been suggested that one's disposition contributes to job satisfaction in that individuals are disposed to be satisfied or not satisfied with their jobs (Heller et al. , 2002). Heller et al. (2002) found that the big five partially contributed to job satisfaction in that when you control for the big five, the relationship between job and life satisfaction is reduced. The other research done by researchers has also shown that internals develop the relationship with managers to a greater extent than externals, resulting in favorable working reactions like job satisfaction for internals (Martin et al. , 2005).
In addition, a meta-analysis study done by Lambert et al. (2002) on this issue emphatically points out that a fundamental way of decreasing employee turnover is to raise the level of job satisfaction. This can be done by making employees understand of the degree to which information about their job, details of the organization, and significant work issues which is positively related to job satisfaction (Lambert et al. , 2002).
However, this study only focuses at four of the elements categories under the job satisfaction. Those elements include working environment, rewards, job stress, and job burnout and it is discussed as below:
2. 5. 1 Working environment
Based on Zeytinoglu & Denton (2005), working environment is considered one of the most important factors in employee's retention. Research done by Bigliardi, Petroni & Ivo Dormino (2005) stated that turnover is motivated by the dissatisfaction of the individual with some aspect of working environment. Working environment includes job, co-workers or the organization itself. It may also due to the organization with some aspect of the individual such as poor performance or attendance (Bigliardi et al. , 2005).
In addition, Bigliardi, Petroni and Ivo Dormino (2005) in their study also pointed that the process of turnover is motivated by the dissatisfaction of the individual with some aspect of the work environment (including the job, co-workers or organization), or the organization with some aspect of the individual, such as poor performance or attendance. Thus, an employee with high withdrawal intention to leave the organization might finally leave his or her job.
On the other hand, Ramlall,(2003) in his study found that many employees are strive to work and to stay in those organization that provide good and positive work environment. This is because they wanted to feel that they are valued and making difference in the organization.
2. 5. 2 Rewards
Rewards can be categories into extrinsic and intrinsic whereby example of extrinsic will be bonus or increase in salary for good performers while intrinsic are such as recognition and promotion to excellent workers. Besides, reward is the thing which offers by the organization in any form in response of employee's contribution that encourage employees motivated for doing well with positive behavior in future. According to Silbert (2005), rewards are very vital because it has enduring impression on employees and support the perception of employees that they are valued. Although compensation offer recognition but the non-monetary forms of recognition are also cannot be ignored. This is because recognition from bosses, team members, coworkers and customer enhance loyalty (Walker, 2001).
There are some authors suggest that extrinsic work aspects and social relations at work not only affect job satisfactions, but also intention to leave the current position (Hegney et al. , 2006). For instance, Taris and Feij (2001) suggest that an employee's intention to leave decreased until the employee's valued level for this extrinsic value was reached. If the extrinsic supply was increased over the valued level then an employee was more likely to leave the company rather than stay.
2. 5. 3 Job burnout
Job burnout is defined as exhaustion of mental or emotional strength or inspiration. It is usually resulted due to continued stress or frustration. Emener (1979) suggested that the indication of job burnout is a result from few aspects includes lack of necessary resources, responsibility with no or less authority or lack of recognition for one's achievement. According to study from Liu Lanlan (2005), it is found that the job burnout have the significantly positive prediction to the turnover intention when researching the relationship among the job characteristics, job burnout and turnover intention (Liu Lanlan, 2005).
Additionally, Bian Ren(2004) also discovered the result that job burnout could influence significantly the organizational commitment and the turnover intention in the case of excluding the impact of the demographic variables and organizational variables, but the different parts had different functions.
2. 5. 4 Job stress
Job stress occurs when employees perceive an imbalance between their work demands and their capability and resources to meet these demands. Other factors can lead to work stress includes tension or conflict with other employees, poor supervision or management, job insecurity or lack of opportunity to develop, and dangerous work environments.
Thus, overfull workload will break the balance and then job stress increases the employee turnover intention by its negative impact on job satisfaction and organizational commitment (S. Ang, S. Slaughter, & K. Y. Ng, 2002).
2. 6 Theory related to job satisfaction
Job satisfaction has been suggested by many researchers in which satisfy or fulfill one individual needs from various different ways. However, there are also theories related to job satisfaction such as Herzberg Two Factors Theory, Social Exchange Theory, and Maslow Hierarchy of Needs and these are being discussed below:
2. 6. 1 Herzberg two factors theory
Herzberg is a theorist who uses the needs satisfaction to explain job satisfaction. In his theory, it implies that fulfillment of human needs determines the level of job satisfaction of employees (Dubrin, 2011). According to Schermerhorn et al. (2000), Frederick Herzberg theorized that employee satisfaction depends on two sets of issues, which are hygiene issue and motivator issue. Hygiene factors in this theory refers to sources of job dissatisfaction and these are associated with the environment in which people work, but any improvement in these factors will only prevent the people from being dissatisfied.
For the motivation factors, job satisfaction can be increase by intrinsic to the job and job content. Motivation factors in Herzberg theory includes are achievement, recognition, the work itself, responsibility and advancement. Unfortunately, nowadays most researchers tend to focus on the cognitive processes rather than on underlying needs. Therefore, the need approach has been de-emphasized and job satisfaction is now assessed as an attitudinal variable in the research.
Frederick Herzberg theorized that employee satisfaction classified in two issues in which are hygiene issue and motivator issue (Schermerhorn et al. 2000). As shown in Table 2. 1, Two Factors Theory is developed and it is known as the Motivator-Hygiene Theory.
Source: Adapted from Schermerhorn, J. R. , Jr. Hunt, J. G and Osborn, R. N. (2000).
Organizational Behaviour (7th ed). New York: John Wiley & Sons, Inc.
Figure 2. 2: Source of Dissatisfaction and Satisfaction in Herzberg Two factors Theory
The hygiene factors were classified by Herzberg as the table above. First factor would be the organizational policies where this will help to guide employees within the organization. Next factor is on the quality of supervisor. Supervisor is the one who dealing and working with the lower employees at most time and therefore it is crucial and organization must very caution in choosing or selecting an employees to be the supervisors (Syptak et al. , 1999). Often, supervisor's quality and attitude too will affect the satisfaction of the subordinates.
Following factor is on the employees pay where Herzberg disclosure that an employee that perceive low wages will in turn make he or she to be dissatisfied while those with higher pay does not necessarily can satisfy or motivate them. Then it continue with the forth factor that is the working conditions or working environment. Providing a better working condition is whereby the organization set up a comfortable working environment, keep facilities and equipment up-to-date. For the interior, personal working place can be provided to each employee. With a good working condition, employees will be more satisfy and organization runs smoother.
The fifth hygiene factor is the relationship with peer. Syptak et al. (1999) suggest that chances and opportunities should be given to employees towards socializing with others during lunch or break time in order to strengthen the relationship and teamwork among colleagues. However, Schermerhorn et al. (2000) study stated three more hygiene factors that most of the books did not included which is the security, status, and relationship with subordinates.
Besides hygiene factors, improvement on satisfaction of employees can be start by making effort on motivator factors. The motivation issues are those related to job content. Motivation factors can be divided into six where it is what people actually do at their workplace. First of all, the sense of achievement factor can motivate people. This is done through the supervisor whereby subordinates to be allocate in a right position so that they can fully utilize their talent and skills to perform better in the task. The next motivator factor is advancement. For advancement, organization may support the employees by further studies or giving rewards for those perform well in their work or position. Besides, organization may also give recognition or new title complement for best employees. This will not only beneficial to employees but as well as the organization because this can result in more professional and knowledgeable employees (Syptak et al. , 1999).
According to Schemerhorn et al. (2000), they discover a factor in the Herzberg's theory which is the growth factor where they found that employer or the organization can encourage creativity and innovation among the workers as a motivator. Furthermore, setting up or make effort for a library can encourage and motivate employees to reference and do more reading on book or knowledge material that relevant to their work. Then the following motivator factor is the work itself. According to Syptak et al. (1999), organization should help individuals believe that the work that they are doing is important to the organization. The employees will be motivated and make full interest into their work when they are told that their tasks are meaningful.
The sixth motivator factor is recognition. Workers with good performance and acknowledgement by the organization can help to retain the level of their satisfaction. As a result, all the employees will favor the ir organization especially for those who did their job well Syptak et al.
(1999). Lastly, it is the responsibility factor. Syptak et al. (1999) suggest that given authority and responsibility will not only encourage them at the same time also let them feel better and more confident. Besides, responsibility can motivate employees when they perceive ownership of their work.
2. 6. 2 Maslow's hierarchy of needs theory
According to Pearson (1991), Abraham Maslow's Hierarchy of Needs Theory, as shown in Figure 2. 2, identifies five distinct levels of individual needs. From the top, is the need for self-actualization, stream down to esteem needs, social needs, safety needs and the basic need is survival and physiological needs.
Source: Heinz weihrich, M. V. (2010). Management : A Global and Entrepreneurial Perspective 13/e. Nel Delhi: Tata MacGraw Hill Education Private Limited.
Figure 2. 3 Maslow's Hierarchy of Need
The second theory related to job satisfaction is the Maslow's Hierarchy of Needs theory. In this theory, Maslow assumes that there are some needs which consider being more important than others and it must be satisfied before the other needs care able to survive as motivator for people. Maslow theory of are categories from the lowest to highest need includes biological and physiological, safety needs, love and belonging, self-esteem, and self-actualization.
This theory begins with the explanation of people to fulfill their biological and physiological needs where they done through the work carried out in their daily life (Furnham, 1995). The basic needs of life are describe as the beginning and simplest element to be fulfill before the other needs. Example of physiological needs includes air, food, water, shelter, warmth, sleep and others. When all these are being fulfilled, people start to put concern on the safety needs in their life.
Based on Maslow in his theory, he mentioned that safety needs is the needs for security, protection from various dangers, protection from law and stability. They hope that they are protected in terms from physical to interpersonal (Furnham, 1995). Social needs come up when people safety needs is fulfilled. In this stage, concern for people will put on belonging and love as it becomes the motivator for them. They will tend to search for affection, relationship with family and others, love, belongings and so on. All three motivation factors mentioned above are those categories in the lower level needs of Maslow's Hierarchy of Needs.
Next is the starting of the higher level needs. According to Furnham (1995), self-esteem and self-actualization needs are include in the higher order needs. Self-esteem involves the need for achievement, need for respect from others to fell self-worth, need for status and reputation, need for recognition from others, and need for responsibility. With all these needs, an individual tend to have self-confidence to be develop inside the people (Furnham, 1995). Once all the above are fulfilled, the final and the highest need arrive which is the self-actualization. This need is concern with the personal growth and fulfillment, to have self-abilities to the highest and to be most creative extent.
Overall, Maslow's theory stresses out the importance of individual in organization to improve and this will indirectly change the people needs. As a result, people will put more effort so that they can achieve non-stop in their needs and satisfaction (Samad, 2006). Finally, a study done by Price (2001) has consistently reported that job satisfaction is one of the factors or reasons for employee intentions to leave the organization.
2. 7 Relationship between organizational commitment and job satisfaction
A study by C. P. Maertz Jr & R. W. Griffeth (2004) shows that organizational commitment and job satisfaction are significant determinants of turnover intention. They also mentioned that these two constructs are the affective forces in the employee turnover process and the causal mediators of predictors (C. P. Maertz Jr & R. W. Griffeth, 2004). Therefore, employees who perceive higher job satisfaction scores and more committed to their organizations will less likely to have the intention to quit.
Besides, studies shows that organizational commitment indirectly influences the job satisfaction. Definitely, there's difference between organizational commitment and job satisfaction. Organizational commitment is the emotional responses which an employee feels towards his organization whereas job satisfaction can be defined as the responses that an employee has towards any job. Nevertheless, these two variables are highly interrelated. For an instance, while an employee has positive feelings towards the organization, its values and objectives, is possible for him to be unsatisfied with the job he has in the organization (Meyer et al. ,2002).
On the other hand, job satisfaction has also been associated with organizational commitment (Boles, et al. , 2007; Pool and Pool, 2007; Brown and Peterson, 1993), which is understood as "psychological bond between people and organizations" (Buchanan 1974; Tett and Meyer, 1993).
Based on Klaus, et al. , (2003) studies show work challenging (intrinsic motivation) effect may impact on affective organizational commitment. However, study also found that the employees with continuance commitment possible to be partially to stay with organization. It can be seen in some studies that work itself (intrinsic motivation) is directly affecting the job satisfaction and also the organizational commitment (Eby et al. , 1999).
2. 8 Retention
A study by Cascio (2003) describes that retention is an initiatives taken by the management to keep their employees from leaving the organization. The example of initiatives are such as rewarding employees for performing their jobs effectively, ensuring harmonious working relations between employees and managers, and maintaining a safe, healthy working environment.
In a study on employees' retention, skill-based pay systems have been found to improve employee retention, whereas group incentive plans have been associated with high turnover (Guthrie, 2000). Besides, in Mathis and Jackson (2003) study, they found that most of the managers believe that money is the major retention factor. It can be seen by many of the employees cite better pay or higher compensation for leaving one employer for another (Mathis and Jackson, 2003). However, compensation is also a critical element in attracting and retaining employee in a competitive labor market. This may include the professionals in the high-tech industry (S. Ang, S. Slaughter, and K. Y. Ng, 2002). All these are because people nowadays are more towards pursuing the balance between work and life.
Another study by Mercer Report (2003), he concluded that employees will stay if they are rewarded fairly and adequately. This is because employees are more likely to feel they are attached and want to stay with organizations that they perceive as more caring (Cullen et al. , 2003). Furthermore, they are also more likely to be satisfied as their role and job expectations are clearer.
2. 9 Previous studies
Based on a study done by researchers from Hashemite University on faculty members' intentions to stay in Jordanian Public Universities, they found that the two intervening psychological variables which are job satisfaction and organizational commitment had positive effects on intent to stay. Moreover, finding also found that satisfaction and commitment each accounted for separate indirect effects in the model (Al-Omari, A. A. , Qablan, A. M. & Khasawneh S. M. , 2008).
A study by F. Calisir, C. A. Gumussoy, & I. Iskin (2009) done on IT professionals examined on the impact of job stress, stressors, organizational commitment, locus of control, and job satisfaction on intention to quit. Resulted from the study, it indicates that all the relations except job stress-job satisfaction are found to be significant. Apart from that, researchers also found that intention to quit job is explained by organizational commitment and job satisfaction where organizational commitment has strongest impact on the intention to quit.
Yujing Zhang & JIancheng Chen (2010) in their research proposed that affective forces and motivation to protect existing resources are both mediators in the relationship between on the job embeddedness and intention to stay. Besides, they found another underlying explanation for those predictors in employee retention research which is the intervening motivational mechanisms that link on-the-job embeddedness to employees' intensions to stay.
WB Zheng，Sharan Kau & Jun Wei (2009) in their empirical research contrasting of talents retention between samples of China and Malaysia suggest that different specialty types, factors influence technical and executive talents' withdraw tendency from organizations indicates with relative high homogeneity or low replace ability and relatively high withdraw tendency. Employees with dual identity meaning he or she is a senior administrative manager and have high-level technical or special talent. They perceive advantages in the organization and form the main groups where key talents belong and the key retention objects and incitation in the management practices for retaining talents in those organizations. Furthermore, study also found that key retention for achieving talents' job satisfaction and organizational commitment for Malaysian employees will be equity of reward and job-coupling. While for the China organization, key-degree and performance visibility have positive effect on withdraw tendency but off-job recompense and reward fairness exhibit negative effects on withdraw tendency. Since it has conflict with the duality of talents, therefore organization in China should make effort so that they can achieve talents high job satisfaction and organizational commitment.
The result of the study indicates that the major predictor of intention to leave was due to job satisfaction. While the major predictor for job satisfaction was psychological empowerment (June et al. 2003). Besides, result also emphasize on the importance of creating and maintaining a work milieu in which participative management thrives. In addition, it also stressed out affirmance on the monitoring on satisfaction is important and evaluating and implementing strategies to address the dimensions of satisfaction that the data indicate need improvement.
Pascal Paille´, Pierre-Se´bastien Fournier & Sophie Lamontagne (2011) concluded from their research on finding relationships between commitments to the organization, the superior and the colleagues, and the intention to leave among truckers that company is the closest entity to employees or truckers. They also discover the reducing chances on intention to leave are due to the commitment to colleagues and dispatcher. Other than this, the study provides more realistic approach for manager to make improvement on trucker retention by using few foci of commitment.
2. 10 Conclusion
This chapter had presented the review literature reviews and relevant previous studies that are related to the turnover process, intention to stay, and retention. Besides, it also includes the discussion on the variables that are related to the turnover intention in the organization. On the other hand, previous studies had found that intention to leave is influence either directly or indirectly by the job satisfaction and organizational commitment.
CHAPTER 3
METHODOLOGY
3.1 Introduction
This chapter presents a description of the study design and methodology used in this research. Besides, it also discussed in details on the statistical procedures that use to complete the research and analyses the data. Furthermore, this chapter includes other elements such as study design, sampling, sample population, sampling method of the study, instrument, pilot test, and data collection methods.
3.2 Research design
The purpose of this study is to examine the factors which can lead to the intention to stay among employees. Variables related to intention to stay include organizational commitment and job satisfaction.
In the study, the method of quantitative approach was chosen for data collection. This is because quantitative approach is more suitable for numerical data and analyzed by statistical test. For instance, questionnaire is the instrument for quantitative method. Research design chooses the survey method because it is more convenient and reliable. Furthermore, this method is not very time consuming compares other methods. (Sekaran, 2003)
Research Question
Objectives and Goals
Literature Review
Methodology
Result Analysis
Data Analysis
Conclusion
Problem Statement
Figure 3. 1: Systematic Research Process (Resources: Sekaran, 2000)
3.3 Population &sampling
According to Sekaran (2003), Sampling design and size are very important elements for every study or research because it can help researcher to conclude and generalize it to the population (Uma Sekaran, 2003).
The population for this study was represented by employees from two banks which are roughly about 120 people. From the population, the sampling chosen was 100 employees from both the participated banks within Kuantan district.
3.3.1 Sampling method
The sampling method used in this study to determine the sample is the simple probability sampling technique. The sampling size of the study is determined based on the Krejie and Morgan's table (1970).
3.4 Data collection method
The data collection method for this study consists of two types which include the primary and secondary data.
3.4.1 Primary data
Primary data in this study was collected from the original collected data from the questionnaires survey to analyze and get results. Therefore, questionnaires are the primary research data for this study.
3.4.2 Secondary data
Secondary data for this study was collected from journals, related reference books, newspapers, and other related previous researches. Besides, other relevant information resource such as theses also is as a part of resource for the study.
3.5 Research instruments
The questionnaire was one of the main tools in collecting data from respondents in this study. One of the advantages of using questionnaire to collect data is because it is cost and time saving. In addition, results acquired from questionnaire are easy to analyze and interpret. The questionnaire for this study is mean to gather the relevant information on the intention to stay among employees in the banking industry in Kuantan area.
Since the questionnaires for this study were all established, thus the questionnaires were developed by adopting the Meyer, Allen, & Smith, (1993) organizational commitment questionnaires into the survey form.
In addition, Statistical Package for Social Science (SPSS) is also one of the tools in this research as it helps in analyse the data collected from respondents to get a result for the study.
For every research, the design and types of questionnaire to be used will mainly depend on the particular study that had been carried out. Questionnaire prepared for this research are divided into three distinct sections respectively are Section A, Section B, and Section C. Besides, the whole questionnaire was conducted in English for better understanding of the respondents.
For section A of the questionnaire, a few questions being conducted which is related to the basic background information about the respondent. While for the section B, questions are prepared to identify the factor that might causes intention to stay among employees including organizational commitment and job satisfaction in the organization. Lastly for section C, questions prepared are regarding on employees intention to stay.
3.6 Pilot study
Based on Chua (2006), pilot study is defined as a study within a small-scale which is conducted before the actual study was done. Besides, pilot study include of pre-testing a research tool, just as a new data collection process. In pilot study, feasibility determination is use to ensure that the concepts or methods behind a study idea can be work well before starting on the actual research. Thus, the questionnaire was tested on its reliability and the researcher will know whether it is understood by the respondents.
This test was done by using 20 respondents to check on the reliability of questionnaires before proceed to the actual study.
3.7 Reliability and validity
The measurement of reliability of the questionnaire was tested by using Cronbach's alpha or some called alpha coefficient. This test is to shows the internal consistency of the questionnaire. According to Uma Sekaran (2003), the closer value of Cronbach's alpha to 1, the higher the reliability it is. However, if the coefficient value is lesser than 0. 06, is it said to have poor reliability while those from 0. 08 and over are considered acceptable.
3.8 Data analysis
In a study, data analysis is important as it help to summarize all the data for a final conclusion. Data gathered from the questionnaire were analyzed using the Statistical Package for Social Science (SPSS) software. This study conducted two types of analysis which include descriptive analysis and inference statistics.
3.8.1 Descriptive analysis
Descriptive analysis method such as the mean and median was used to analyze the data in this study. It is done using the Statistical Software Package for Social Science (SPSS) and the statistical analysis result from analysis is shown by histogram, pie chart and others. Besides, descriptive statistics such as frequency and percentage are used to describe the respondent's characteristics.
3.8.2 Inferential statistics
The inferential statistical test in this study will be done with the use of Pearson correlation coefficient. Pearson Correlation Coefficient test can only be use when the data is normally distributed.
Pearson Correlation Coefficient
In this study, Pearson Correlation Coefficient was used to analyze and shows the degree of linear relationship between the independent and dependent variables. The symbol for correlation is indicated by r and the range is from -1. 00 to +1. 00. As the higher the coefficient archived, the higher the relationship between variables.
For this study, Pearson Correlation Coefficient test was use to find the relationship between organization commitment and job satisfaction towards the employees intention to stay in an organization.
In addition, this test was used to determine the most correlate sub factors under organization commitment and job satisfaction title which had influence towards employees' intention to stay.
3.9 Conclusion
In summary, this chapter had explained methods and procedures for the whole study to be conducted. It includes from the starting on selecting the samples until the result are collected being analyzed. Besides, this section also emphasized the on the test to be done for analyzing the data collected.
CHAPTER IV
DATA ANALYSIS
Introduction
In the previous chapter, the research methods for this study have been stated and explained. Thus, in this chapter, it will include analyzing and explanations of the findings. A number of test including reliability analysis, data, descriptive analysis and inferential analysis were discussed.
Return rate
A total of 80 questionnaires were distributed to all the selected respondents within banking industries in Kuantan, Pahang. A number of 64 questionnaires were collected back from the 80 total questionnaires distributed and used in this study. The questionnaires collected for this study represent a response rate of 80%.
Reliability pilot test
Table 4.1 : Pilot Test
Factors
Cronbach's
Alpha (α)
N- Items in Scale
Respondents
Organizational Commitment
0.828
12
20
Job Satisfaction
0.913
16
20
Intention to stay
0.829
4
20
Total
0.949
32
20
Based on the above Table 4.1, Cornbach's Alpha (α) of the pilot test from this study was 0.949 for the total of 32 questions. The pilot test was participating by 20 respondents whom were the employees from the banks of Kuantan, Pahang. Since the reliability level is higher than 0.7, the actual survey was allowed by distributing questionnaires to the target respondents.
Reliability analysis
Based on Ferreira and Palhares (2008), the Cronbach's Alpha was used to determine reliability test and at the same time it also measures the internal consistency of each items. Thus, in this study, Cronbach's alpha coefficients were used as the measurement for each factor test score and each item in the questionnaires. This includes organizational commitment, job satisfaction, and intention to stay in order to make sure that these variables can be used as a measurement. The reliability tests were then done both for pilot study as well as the actual study.
The value of Cronbach's Alpha a questionnaires must be greater than 0.70 according to (Ferreira and Palhares, 2008). Nevertheless, there are also some references accepting values lower than 0.70. When the value of Cronbach‟s alpha (α) coefficient gets nearer to the value 1, this shows the higher the internal reliability of the multi-item scales.
Table 4.2 Reliability Test (Actual Study)
Factors
Cronbach's
Alpha (α)
N- Items in Scale
Respondents
Organizational Commitment
0.799
12
64
Job Satisfaction
0.753
16
64
Intention to stay
0.796
4
64
Total
0.862
32
64
According to the Table 4.2 above, the total Cronbach's Alpha values resulted in the actual study from 32 questionnaires was 0.862. While for each factor, the alpha value for organizational commitment shows a value of 0.799, job satisfaction 0.753, and intention to stay showed 0.796. The values are based on a total number of 64 respondents from this research. Overall, the value showed a good internal consistency as the total Cronbach's value reached 0.862 which is greater than 0.70.
Comparison of pilot study and actual study for reliability test
From the table 4.1, Cronbach's alpha for pilot study contributed a value of 0.949 while the actual study from table 4.2 contributed a value of 0.862. Therefore, it was found that these two values have a gap of 0.087. It was considered quite large gap as usually the reliability test for pilot and actual study will only have slightly difference in value. This gap was due to a few negative questions contains in the survey that might have confused those respondents when answering.
Descriptive analysis
In this study, descriptive analysis was chosen to explain and describe the main structures of the data collected in quantitative terms. This analysis objective is to quantitatively summarize a data set, rather than being used to support inferential statements about the population that the data represent.
After that, statistical descriptive analyses were done on the collected data to observe the distributions value, the central tendencies and the dispersions. This analysis was represented by frequencies, means and standard deviations. In order to achieve the research objective, this analysis method was used to interpret the demographical data.
In the next part, descriptive analysis was conducted to analyze the frequencies distribution of the respondents. In other words, frequencies distribution is a type of method of placing and presenting the collected data. Respondent's background and information were covered in the descriptive analysis which consists of gender, age, ethnic, education level, and years of working with the bank.
Respondent background
In this part, it contains the analysis of respondent background information involves gender, age, ethnic, education level, and years of working with the bank. Frequency and percentages for each component were illustrated in the table and pie chart.
Gender
In this study, there were 25 males and 39 females out of a total of 64 respondents participated in this study as shown in the frequencies distribution.
Table 4.3 : Gender
Frequency
Gender (%)
Male
25
39.1
Female
39
60.9
Total
64
100.0
Figure 4.1 : Gender
From Table 4.3, it showed that 25 respondents or 39.1 % of the respondents was male while the female was represented by 39 respondents or 60.9 % of the total respondents in the study.
Age
Table 4.4 : Age
Frequency
Age (%)
< 20 years
5
7.8
20 - 30 years
21
32.8
30 - 40 years
25
39.1
40 - 50 years
13
20.3
> 50 years
0
0.0
Total
64
100.0
Figure 4.2 : Age
From the Figure 4.2, the analysis of the research showed 7.8 % or 5 respondents working in those banks were less than 20 years old, followed by 32.8 % (21 respondents) respondents between 20 - 30 years old. The major age group of the respondents in this study falls on 30 - 40 years old which consists of 25 out of the total respondents. On the other hand, respondents whom their age was between 40 - 50 years old accounted a number of 20.3 % (13 respondents). Lastly, there is no respondent that falls in the age group of 50 and above.
Ethnic
Table 4.5 : Ethnic
Frequency
Ethnic (%)
Malay
25
39.1
Chinese
32
50.0
Indian
7
10.9
Others
0
0.0
Total
64
100.0
Figure 4.3 : Ethnic
According to Table 4.5, it is obvious that most of the respondents are Chinese which consists of 32 respondents or 50% of the total respondents. It is then followed by Malay respondents which account 25 respondents or 39.1%. The minority of the ethnic falls on Indian where there were only 7 respondents or 10.9% from the total of 64 respondents. In this study, there are no other races besides Chinese, Malay, and Indian.
Education level
Table 4.6 : Education Level
Frequency
Education Level (%)
Secondary
20
31.3
High School
14
21.9
Diploma
18
28.1
Degree or Higher
12
18.8
Total
64
100.0
Figure 4.4 : Education Level
From the table 4.6 above, education level were classified into four categories which includes secondary, high school, diploma, and degree or higher. Figure 4.4 shows that highest percentages of the respondents were from secondary school which accounted 31.3 % or 20 of the total respondents. Next, it is followed by high school respondents of 14 people or 21.9 % and diploma respondents of 18 people or 28.1 %. As in the figure 4.4, the highest education levels, degree or higher consist of 18.8 % or 12 respondents from overall survey participants.
Years Working with bank
Table 4.7 : Years Working with Bank
Frequency
Years Working with Bank (%)
Less than 6 months
5
7.8
6 months - 1 year
7
10.9
1 - 2 years
14
