Examine the mediating role of organizational citizenship behaviour in the relationship between perceived human resource management practices and intention to leave of employees

MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY ------LE NGOC LAN EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP

MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY

- -LE NGOC LAN

EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES

MASTER THESIS IN BUSINESS ADMINISTRATION

HO CHI MINH CITY – 2013

MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY

- -LE NGOC LAN

EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES

Subject: Master of Business Administrator

Code: 06.34.01.02

MASTER THESIS IN BUSINESS ADMINISTRATION

SUPERVISOR:

Dr PHAM QUOC HUNG

HO CHI MINH CITY – 2013

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ACKNOWLEDGEMENT

Firstly, I wish to express my deepest gratitude to my supervisor, Dr Phạm Quốc Hùng, for giving me insightful guidance and valuable advice throughout undertaking of this study

I also thank to all respected lecturers of the eMBA19 course of for their devotions during the training, which enrich my knowledge in order to implementing this study successfully

My heartfelt thanks to respondents, who provide me supportive attitude and honest answer to make a good and solid database for the analysis

Finally, I would like to say thanks to my beloved friend and family members, whom have given me much support, encouragement and assistance with this thesis

Le Ngoc Lan

Ho Chi Minh City, September 2013

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COMMITMENT

I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work

Le Ngoc Lan

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TABLE OF CONTENT

CHAPTER 1 - INTRODUCTION TO THE STUDY 10

1.1 Research background 10

1.2 Research objective 11

1.3 Practical significances of the study 12

1.4 Research scope and approach 12

1.5 Research structure 12

CHAPTER 2 - LITERATURE REVIEW 14

2.1 Human Resource Management 14

2.1.1 Human Resource Management Pratices 14

2.1.2 Human Resource Management effects on Intention To Leave 15

2.2 Organizational Citizenship Behaviour 15

2.2.1 Definition of OCB 15

2.2.2 The important of OCB 17

2.3 Research model and hypotheses 17

2.3.1 The effects of HRM on OCB 17

2.3.2 The effect of Retention Oriented Compensation on Intention to Leave 19

2.3.3 The effect of Formalized Training on Intention to Leave 19

2.3.4 The effect of OCB on intention to leave 20

2.3.5 The mediating role of OCB 20

CHAPTER 3 - RESEARCH METHODOLOGY 22

3.1 Research design 22

3.2 Research process 22

3.3 Questionnaire development 23

3.4 The pilot study 27

3.4.1 Pilot study phase 1 27

3.4.2 Pilot study phase 2 27

3.5 Main study 28

3.5.1 Target population 28

3.5.2 Sampling design 28

3.5.3 Data collection 28

3.6 Methods of data analysis 29

3.6.1 Data cleaning 29

3.6.2 Reliability 29

3.6.3 Confirmatory factor analysis 30

3.6.4 Analysis of Variance (one-way and two-way ANOVA) 31

3.6.5 Multiple regression analysis 31

3.6.6 Testing mediation with regression analysis 32

CHAPTER 4 - DATA ANALYSIS 35

4.2 Data cleaning 35

4.3 Profiles of qualified respondents 35

4.4 Normality analysis 37

4.5 Reliability of the measurements 37

4.6 Confirmatory factor analysis 38

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4.7 Hypotheses testing 43

4.7.1 Correlation analysis 43

4.7.2 Testing residuals of dependent variable 45

4.7.3 Effect of Perceived HRM Practices (Retention-oriented Compensation and Formalized Training) on Organizational Citizenship Behaviour (H1 & H2) 45

4.7.4 Effect of Perceived HRM Practices (Retention-oriented Compensation, Formalized Training) and Organizational Citizenship Behaviour on Employees’ Intention to Leave (H3, H4 & H5) 46

4.7.4.1 Effect of Perceived HRM Practices (Retention-oriented Compensation and Formalized Training) on Employees’ Intention to Leave (H3 & H4) 46

4.7.4.2 Effect of Organizational Citizenship Behaviour on Employees’ Intention to Leave (H5) 47

4.7.5 The mediating effect of Organizational Citizenship Behaviour on the relationship between Perceived HRM Practices and Employees’ Intention to Leave (H6 & H7) 47

CHAPTER 5 - DISCUSSION 52

5.1 Discussion of findings 52

5.2 Contribution of the current study 53

5.3 Practical implications 53

5.4 Limitation and further research 54

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LIST OF FIGURE

Figure 2-1: Partial model by Nishii and Wright, 2004 14

Figure 2-2: Hypothesized Research Model 21

Figure 3-1: Research process 23

Figure 3-2: Mediating model 33

Figure 4-1: Hypothesized model 38

Figure 4-2: Modified model 42

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LIST OF TABLE

Table 3-1: Measurement scales of independent variables 24

Table 3-2: Measurement scales of dependent variable 26

Table 3-3: Assessing Fit Indices 31

Table 4-1: Variables included in the Analysis 35

Table 4-2: Socio-demographic Characteristics of The Qualified Samples 36

Table 4-3: Summary of Cronbach Alpha Measures across Variables 37

Table 4-4: Assessing Fit Indices – Hypothesized Model 40

Table 4-5: Standardized Regression Weights – Hypothesized Model 41

Table 4-6: Assessing Fit Indices – Modified Model 43

Table 4-7: Descriptive Statistics and Correlations 44

Table 4-8: Model Summary of H6 49

Table 4-9: Coefficients of H6 hierarchical regression 50

Table 5-1: Research Purposes, Hypotheses and Results 52

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ABSTRACT

This study seeks to investigate the mediating role of organizational citizenship behavior on the relationship between perceived HRM practices and employees’ intention to leave

The study was conducted in Ho Chi Minh City, Vietnam with the sample of

182 employees

The results showed that Organizational Citizenship Behaviour mediates the relationship between retention-oriented compensation and employees’ intention to leave In addition, the study also finds that there are no relationship between formalized training and organizational citizenship behavior; hence, organizational citizenship behavior does not mediate the relationship between formalized training and employees’ intention to leave

These findings suggest that HR practitioners should monitoring organizational citizenship behavior to better predict employees’ intention to leave,

in order to make timely adjustment on retention-oriented compensation system

KEYWORDS: Organizational Citizenship Behaviour, Perceived HRM

practices, Retention-Oriented Compensation, Formalized Training,

Employees’ Intention to Leave

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CHAPTER 1 - INTRODUCTION TO THE STUDY 1.1 Research background

Employees are extremely crucial to the organization since their value to the organization is essentially intangible and not easily replicated (Meaghan & Nick 2002) And employee’s intention to leave remains one of the most widely researched topics in organizational analyses due to its significant effects on organizations (DeMicco & Giridharan 1987; Dyke & Strick 1990; Cantrell & Saranakhsh 1991; Denvir & Mcmahon 1992) (as cited in Mahmud, 2011)

HRM practices with employee retention However, there are very few studies investigated how human resource management practices effects on the intention to leave of employees, and how employees react on that

In the past decades, OCB has received much attention from researcher Inrelatively uncomplicated production environments, the extra efforts on the part of the employee may seem minor, but a growing number of jobs is becoming more complicated, consisting of large numbers of unstructured tasks, so more discretion is with the employee, and thus the difference between a good performer and a bad performer becomes increasingly large (Hunter et al., 1990) Despite such an important role of OCB, it is surprising to note that past studies often seem to ignore how employees’ behavioural reactions affect the relationships between HRM practices and employee’s intention to leave (Guest, Michie, Conway and Sheehan 2003; Morrison 1996)

Organizations need employees who anticipate and monitor rapid changes in the business, and figure out how to deal with these changes to sustain or enhance effectiveness (Organ, Podsakoff and MacKenzie 2006) Therefore, it is argued that the employees’ organizational citizenship behaviour (OCB), in particular, is involved in their behavioural process to help explain the HRM-performance relationship (Lam et al, 2009)

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Lam et al (2009) have conducted a study to understand the mediating role of Organizational Citizenship Behaviour (OCB) in the relationship between perceived human resource management practice and employees’ intention to leave The study’s result provide a strong indication that the effects of HRM practices (i.e., retention-oriented compensation and formalized training in this study) on intention

to leave (the universalistic proposition) might not be so simple, meaning there might

be some behavioral facts mediating the relationship (Lam et al, 2009) The result may help managers with a more effective strategy in retaining people with the organization However, that study has been conducted in a joint-venture of Japan-China which might not be appropriate in Vietnam context Moreover, the sample coverage of the study is limited in one company which is not diversified enough to reflect the mediating role of OCB on the relationship between perceived human resource management practices and employees’ intention to leave

Hence, this study aims to investigate the mediating role of OCB on the relationship between the perceived human resource management practice and employees’ intention to leave in Vietnam context

1.2 Research objective

The purpose of this study is to examine the mediating role of organizational citizenship behavior on the relationship between perceived human resource management practices and the intention to leave of employees Accordingly, the study aims at answering the question as below:

Whether Organizational Citizenship Behavior mediates the relationship of perceived human resource management and employee intention to leave in organization in Vietnam?

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1.3 Practical significances of the study

The practical relevance of this study is that it gives insight in how perceived HRM practice affects employees’ intention to leave that are becoming increasingly important for organizations

The results of the study are meaningful for implementation HRM to lower the intention to leave Manager would have a clearer direction to use HRM as a powerful tool in control employee’s intention to leave

1.4 Research scope and approach

This study is conducted in Ho Chi Minh City, which is the biggest city in Vietnam

Ho Chi Minh City is chosen for the study for its diversified workforce who comes from different organizational, that provides a diversity perceived human resource practices This chosen also make the study feasible (with time and resource limited) for online survey method

The target of this study are those who working for the organization for at least 6 months This timeframe is to ensure that respondents have time to digest the organizational perceived human resource practices and there is enough time for their organizational behavior to impact on the relationship between human resource management practice and their intention to leave

The study includes 2 phases First is the pilot to check the comprehension of the questionnaire and to examine the measurement scales The main phase is conducted later to test the hypothesis and confirm the research model

1.5 Research structure

The study includes 5 chapters:

Chapter 1: Introduction This chapter provides the research background, research objectives, research scope and approach

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CHAPTER 2 - LITERATURE REVIEW

This chapter covers a review of relevant literature regarding the construct of proposed model The author reviews the literature of OCB, HRM, and employee retention

2.1 Human Resource Management

Human resource management is critically important because employees are often viewed as invaluable assets of organizations (Redman and Wilkinson 2001) Employees’ intention to leave has received much attention from human resource management practices

2.1.1 Human Resource Management Pratices

Nishii and Wright (2004) also investigated the relation between HR practices and firm performance They distinguish five levels; part of the model is described below:

Figure 2-1: Partial model by Nishii and Wright, 2004

Nishii and Wright (2008) (cited in Karina, 2009) refer the conceptualization

of employees’ perceptions of HRM as perceived HR practices, and further specified these as employee perceptions and experiences The response to HR practices depends on the employee’s individual interpretation of the practices

HRM practices typically include providing extensive training and development opportunities, designing fair job and performance appraisal processes, developing incentive pay systems and so forth (Koch and McGrath 1996)

Intended HR

practices

Actual HR practices

Perceived HR practices

Employees’

reaction

Organization performance

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2.1.2 Human Resource Management effects on Intention To Leave

The direct effect of HRM, such as selection, training, compensation, and performance management, on employees’ intention to leave has been demonstrated

by much research For example, as cited in Lam et al , 2009, Park, Ofori-Dankwa and Bishop (1994) suggested that attractive pay can discourage employees’ intention to leave an organization Shaw, Delery, Jenkins and Gupta’s study (1998) echoes Park et al.’s (1994) findings, with data from 277 organizations in the trucking industry They posited that the use of three sophisticated HRM practices, namely high pay, attractive benefits, and electronic monitoring, resulted in a lower employee attrition rate Likewise, Rahim, Magner, Antonioni and Rahman (2001) discovered the role of employees’ understanding that distributive justice’s relationship on merit pay reduces intention to leave

However, researchers seem to neglect examining how these effects work Guest et al (2003) argued that HRM indeed has its roots in organizational psychology and is built on behavioural theories such as the theories of commitment and motivation These theories indicate some relationship between HRM practices and employees’ intention to leave Some researchers (e.g., Morrison 1996; Boselie and Wiele van der 2002; Guest et al 2003) have suggested that research should examine the extent of the effects of employees’ attitudes and behaviours on the relationship between HRM and intention to leave Nonetheless, little work has been done to explore the details of the behavioural mediating effects engaged in this relationship

2.2 Organizational Citizenship Behaviour

2.2.1 Definition of OCB

Organizational Citizenship Behaviors (OCBs) is described in 1988 by Organ

as “discretionary behaviors, not directly or explicitly recognized by the formal reward system and that in aggregate promote the effective functioning of the organization” (p.4) Since Organ introduced the concept of OCB into organizational research, it has tended to be conceptualized in terms of positive contributions to the

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colleagues and to the organization, which implies an active positive contribution Besides, it is widely accepted among contemporary organizational behavior theorists, that organizational citizenship behaviors have an accumulative positive effect on organizational functioning (Wagner & Rush, 2000)

In attempting to further define organizational citizenship behavior, Organ (1988) highlights five specific categories of discretionary behavior

• Altruism (e.g., helping new colleagues and freely giving time to others) is typically directed toward other individuals but contributes to group efficiency by enhancing individuals’ performance

• Conscientiousness (e.g., efficient use of time and going beyond minimum expectations) enhances the efficiency of both an individual and the group

• Sportsmanship (e.g., avoids complaining and whining) improves the amount of time spent on constructive endeavors in the organization

• Courtesy (e.g., advance notices, reminders, and communicating appropriate information) helps prevent problems and facilitates constructive use of time

• Civic Virtue (e.g., serving on committees and voluntarily attending functions) promotes the interests of the organization

Obviously, supervisors cannot demand or force their subordinates to perform OCB Similarly, the employees do not or cannot expect any kind of formal rewards for these discretionary behaviors However, as Organ (1997) noted, the supervisors

do regularly take into account and reward OCB exhibited by the subordinates both directly and indirectly (e.g preferential treatment, performance ratings, promotions, etc) Another important assertion, especially in Organ's (1988) founding work on OCB, is that these behaviors are often internally motivated, arising from within and sustained by an individual's intrinsic need for a sense of achievement, competence, belonging or affiliation

Farh et al (1997) shown sthat there are two types of citizenship behaviors exist in the OCB measures: (1) active positive contributions or commissions (e.g., helping others) and (2) avoiding engaging in behaviors that are harmful to others or

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to one’s organization (e.g., not abusing others’ rights) This latter behavior that tends to be labeled as omission is a passive behavior that is based on the moral rule

“Do no harm,” or more specifically “Do no harm through action” (Baron, 1998)

2.2.2 The important of OCB

Organ (1988) argued that OCB is held to be vital to the survival of an organization Organ further elaborated that organizational citizenship behavior can maximize the efficiency and productivity of both the employee and the organization that ultimately contribute to the effective functioning of an organization Besides, Katz stated that an organization which depends solely upon its blueprints of prescribed behavior is a very fragile social system” (1964, p.132) In 1966, Katz and Kahn stressed that organizational well-functioning heavily depends on extra-role behaviors, therefore managers need employees who do more than what is described

in the work contract (cited in Funda, 2010)

Organizations need employees who anticipate and monitor rapid changes in the business, and figure out how to deal with these changes to sustain or enhance effectiveness (Organ, Podsakoff and MacKenzie 2006)

2.3 Research model and hypotheses

2.3.1 The effects of HRM on OCB

Some empirical researches on the relationship between HRM practices and employees’ intention to leave have shown that two major HRM practices are associated with intention to leave: compensation and training (Schnake and Dumler 1997; Shaw et al 1998; Ngo, Turban, Lau and Lui 1998) (cited in Lam et al., 2009)

In 1986, Tajfel and Turner 1986 states that employees strive for a sense of self and social identity Compensation and training, which enhance an individual’s self-concept and social identity, can provide such feelings by demonstrating that invaluable employees are fairly rewarded and are well invested in for career development (Lam et al., 2009) Moreover, according to Blau (1964), if employees enjoy benefits supported by their organizations, they may develop a sense of

However, finding out how compensation systems are tightly linked to employees’ intention to leave if the relationship appears to be mediated by OCB is remained for further investigating For those reasoning, this study aims at answering whether retention-oriented compensation and formalized training increase employees’ engagement in OCB

The litterature reveals that little research has been conducted to posit the relationship among HRM practices, OCB, and intention to leave

Although recent studies have demonstrated that enhanced perceptions of justice are positively related to OCB (Williams, Pitre and Zainuba 2002), the same studies have also demonstrated that pay-for-performance is negatively related to OCB (Podsakoff and MacKenzie 1994; Deckop, Mangel and Cirka 1999) These findings seem to suggest that equity-based compensation systems discourage the engagement in OCB This paradox reveals the need for further research on the relationships among compensation, OCB, and employees’ intention to leave We argue that retention-oriented compensation is likely to increase the engagement of OCB Besides, the study by Tuiji et al (2007) supported that OCB can be enhanced

by HRM practices Therefore, the first hypothesize is stated as following:

Hypothesis 1: The use of retention-oriented compensation is positively

related to the engagement of OCB

As many studies have also supported that effective training would enhance the organizational performance (Koch and McGrath 1996; Ferratt et al 2005) The authors propose that formalized training may be directed at encouraging OCB Organ et al (2006) stated that organizations may provide formalized training for

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employees to perform OCB In addition, training can help employees prepare for other positions in the organization and increase their abilities to move forward (Noe, Wilk, Mullen and Wanek 1997) Thus, we suggest that employees should voluntarily engage in discretionary behaviour to improve their knowledge, skills, and abilities in order to prepare for future promotion Therefore, the second hypothesize is stated as following:

Hypothesis 2: An emphasis on providing formalized training is positively

related to the engagement of OCB

2.3.2 The effect of Retention Oriented Compensation on Intention to Leave

According to Steers and porter, the research on compensation clearly shows a link between the rewards a company offers and those individuals that are attracted

by the compensation into working for the firm, and those employees who will continue to work for the business (1991) A study by Murphy (2003) also suggested that the compensation an organization provides clearly influences the decision employees make about the organization and turnover Moreover, research by Roya

et al (2011) reveal that strategic compensation practices led to perceived fulfillment

of psychological contract and the latter, in turn, led to higher affective organizational commitment Besides, employees with higher levels of affective organizational commitment who perceived a fulfillment of psychological contract were less likely to leave an organization That drive to a hypothesis that Retention oriented compensation may negatively related to employees’ intention to leave

Hypothesis 3: Retention oriented compensation may negatively related to

employees’ intention to leave

2.3.3 The effect of Formalized Training on Intention to Leave

Bartel (1995) indicated that training makes workers perform better in their jobs And training is a way to bridge gaps between skills acquired during initial education and skills required at the job (De Grip, Heijke, & Willems, 1998) In addition, acquired skills become outdated as a result of technological and

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organizational change; training is an instrument to prevent skills obsolescence (Bishop, 1997) Trained workers are more versatile in their job (Groot & Maassen van den Brink, 2000) All this implies that job training is important for one’s occupational career; hence, probably impact to employee’s intention to leave That drive to a hypothesis that formalized training may negatively related to employees’ intention to leave

Hypothesis 4: Formalized training may negatively related to employees’

intention to leave

2.3.4 The effect of OCB on intention to leave

Chen, Tjosvold and Fang (1998) showed that OCB is negatively related to employee turnover Consistently, research by Dorothea (2012) support that Employee engagement is related positively to OCB The same study also stated that employees who exhibited higher levels of engagement were found to contribute to their organizations with higher levels of individual OCB This is probably because OCB signals the employee’s sense of belonging to the organization, as well as his or her intention to stay in the organization Moreover, by engaging in OCB, employees may also expect that they will be rewarded by being promoted or be given a salary increase That makes thm less likely to leave the organization (Organ et al 2006) This drive to the third hypothesis:

Hypothesis 5: OCB may negatively relate to employees’ intention to leave 2.3.5 The mediating role of OCB

Many studies showed that HRM practices may decrease the probability of an employee leaving an organization (e.g., Huselid 1995; Huang 1997; Rahim et al 2001; Boselie and Wiele van der 2002) Meanwhile, Organ et al (2006) indicates that HRM practices encourage employees’ engagement of OCB; and OCB, as the author noted above, decreases the likelihood of employees leaving the organization That drive to a hypothesis that OCB may mediate the relationship between

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perceived HRM practices (i.e retention oriented compensation and formalized training) and employees’ intention to leave

Hypothesis 6: OCB mediates the negative relationship between

retention-oriented compensation and employees’ intention to leave

Hypothesis 7: OCB mediates the negative relationship between formalized

training and employees’ intention to leave

Figure 2.2 below shows the hypothesized relationships among perceived HRM practices, OCB and intention to leave

Figure 2-2: Hypothesized Research Model

Retention-oriented

compensation

Formalized training

Organizational Citizenship

Intention To LeaveH1: +

H2: +

H5: H6

-H7H3:-

H4:-22

CHAPTER 3 - RESEARCH METHODOLOGY

In chapter 2, literature concerning the research model of this study was discussed Chapter 3 presents the research methodology used to modify and evaluate the measurement scales, the research model, and the hypotheses This chapter consists of: research design, measurement scales of observation variables, pilot test

of measurement scales, and introduction of the main study analysis

The purpose of this chapter is to discuss the methods used in this study Items that will be addressed include research design, questionnaire development, translation of the questionnaire, pilot study, target population, sample frame, sample size, sample selection, sample characteristics, data collection and methods of data analysis

3.1 Research design

There are 2 phases in this study: the pilot study (comprising of 2 sub-phases) and the main study Pilot study sub-phase 1 referred to deep interview with small group of target participants (n = 5) to check the content and meaning of words which were used in the measurement scales Based on that, the draft questionnaire was modified for next phase of pilot study Pilot study phase 2 was conducted using online survey method with larger group of target participants (n = 50) The purpose was to examine the internal consistency of the measurement scales, response rate, and quality of response

After the pilot study, the main study was conducted using online survey method (web-based, docs.google.com) and face to face interview to assess the measurement scales, to test the hypotheses and to confirm the proposed research model

3.2 Research process

This study has been conducted in a process showed in Figure 3.1

The questionnaire in this surveys were translated and back-translated into Vietnamese in line with cross cultural translation procedures (Harkness &

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Schoua-Glusberg, 1998) Committee approaches were used for translation Committee or parallel translation involved several translators who made independent translations of the same questionnaire as recommendation from Brislin (1980) (as cited in Harkness & Schoua-Glusberg, 1998) At a reconciliation (consensus, revision) meeting, translators compared the translations, reconciled discrepancies and agreed on a final version which taped the best of the independent translations or, alternatively, appeared in the course of discussion In this study, the author used the committee of two translators

The survey’s questionnaire contained 3 sections, measuring perceived human resource practices which are Compensation, Training and Organizational Citizenship Behaviour According to Babbie’s (1998) recommendations, short instructions were given at the beginning of each section All items were assessed on Likert-type scales on which 1 represents “strongly disagree” and

7 represents “strongly agree”

Table 3-1: Measurement scales of independent variables

OCB Organizational Citizenship Behaviour (Cronbach’s Alpha: 0.771)

OCB1 Conducts personal business on company time (e.g., trading stocks,

shopping, going to barber shops)

OCB2 Views sick leave as a benefit and makes excuses for taking sick leave

OCB3 Willing to help colleagues solve work-related problems

OCB4 Willing to assist new colleagues in adjusting to the work environment

OCB5 Takes credit, avoids blame, and fights fiercely for personal gain

OCB6 Complies with company rules and procedures even when nobody is

watching and no evidence can be traced

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OCB7 Uses illicit tactics to seek personal influence and gain with harmful

effect on interpersonal harmony in the organization

OCB8 Uses company resources to do personal business (e.g., company phones,

copy machines, computers, and cars)

OCB9 Does not mind taking on new or challenging assignments

OCB10 Takes one’s job seriously and rarely makes mistakes

OCB11 Willing to cover work assignments for colleagues when needed

OCB12 Actively attends company meetings

OCB13 Eager to tell outsiders good news about the company and clarify their

misunderstandings

OCB14 Often speaks ill of the supervisor or colleagues behind their backs

OCB15 Makes constructive suggestions that can improve the operation of the

company

COM Compensation (Cronbach’s Alpha: 0.780)

COM1 Individual performance in the job is important in determining wages of

employees in your company

COM2 Bonuses determination in your company is based primarily on age and

seniority of employees

COM3 Wages and bonuses are fairly determined in your company

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COM4 The standard of bonuses determination in your company is satisfactory

COM5 The standard of wages determination in your company is satisfactory

COM6 The wages level in your company is high in comparison to other

organizations

TRA Training (Cronbach’s Alpha: 0.939)

TRA1 The contents and variety of training programmes offered in your

company are satisfactory

TRA2 The amount and duration of training programmes offered in your

company are satisfactory

TRA3 In your company, many ‘non-technical’ training programmes have

already been systematized

TRA4 Compared to other organizations, extensive training programmes are

provided for employees in their jobs in your company

TRA5 In your company, training programmes are conducted by professionals

and experienced managers or trainers

TRA6 In your company, many ‘technical’ training programmes have already

been systematized

Table 3-2: Measurement scales of dependent variable

ITL Intention To Leave (Cronbach’s Alpha: 0.913)

ITL1 Is there any likelihood that you would resign from the organization?

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ITL2

How likely is it that you would not continue to be a staff of the organization during your tenure of employment with your present company?

ITL3 Do you have any intentions of resigning from the organization?

These items were based on Lam et al (2009) All items were measured using 7-point Likert scales anchored by 1 = strongly disagree and 7 = strongly agree

3.4 The pilot study

3.4.1 Pilot study phase 1

After complete the translation of the questionnaire, the author conduct a pretest with a group of 5 people who are studying in the same MBA course and are working for an organization Participants of this study would not be interviewed in the main study in next step The comments related to the translation of the questionnaire were mainly suggestions concerning words and phrases that make the translations better and less sensitive so that respondents could give a rating that best fit with their reality After the revision finished, the author had the final the questionnaire

3.4.2 Pilot study phase 2

In phase 2 of the pilot, the author used the final draft questionnaire completed

in the above pilot phase 1 to carry out interviews with subjects of the study The author distributed 60 paper sheets of questionnaire The author get back 56 responses Out of the 56 returned questionnaire, there were 6 missing-answer questionnaires which were eliminated

Based on the data collected, the evaluation of the questionnaire was the processed, e.g did the subjects of the study understand the questions correctly? Were they willing to provide information? The reliability and validity of the measurement scales was preliminarily tested with collected data using Cronbach’s

Sampling method: Sampling technique provides a range of methods which

enable you to reduce the amount of data you need to collect by considering only data from a sub-group rather than all possible cases or elements (Saunders and Thornhill, 2000) For the purpose of the study, a non-probability sampling design in the form of a convenience was adopted and considered to be appropriate to gather the data

Sample size: In this study, the author used the theory proposed by Hair et al

(2006), in which the sample size should be at least 50, at best 100 Tabachnick & Fidell’s (1989) (as cited in Green, 1991) suggested that number of subjects for each predictor or independent variable in regression analysis should be 5-to-1 In this study, due to the fact that there were a total of 30 items in the questionnaires, the required sample size of this study was 150 Therefore the total of 182 valid responses for sample size the author received in this study was satisfied

3.5.3 Data collection

Data collection process: Sampling method of this study was a convenience sampling Snowball sampling was defined as building a sample through referrals (O’Leary, 2004) Faugier & Sargeant (1997) asserted that whilst recognizing the personal bias and distortion inherent in snowball sampling as

a price which must be paid in order to gain an understanding of these hidden populations and their particular circumstances, the confidence that develops in

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a relationship over a period of time is perhaps the best guarantee of sincerity (Foote Whyte 1982) and should increase the validity of the data

Main study’s fieldwork was conducted from June 6, 2013 to June 20, 2013

by the author The main study was firstly supposed to be conducted using online survey method For the first one week, there were only 36 correspondents online The author then decided to conduct face to face interviews Most of the participants

in the face to face interviews are students of postgraduate courses of the University

of Economic, Ho Chi Minh city The others were the author’s acquaintances The author received back 179 sheets After cleaning, the author had a data of 182 qualified responses, which would then go into analysis

3.6 Methods of data analysis

3.6.1 Data cleaning

The survey applies both online interview and face to face interview The data cleaning for online interviews involve the checkup of predefined criteria (having full time job, and having been working in an organizational for at least 6 months) For face to face interviews, the author also check if any missing rating because it is not automatically check as the online interviews The author also reviewed the reverse-scored questions to double check if they were logically answered

3.6.2 Reliability

The author used Cronbach Alpha to test the internal consistency of measurement The Cronbach alpha reliability coefficient is traditionally reported in statistics as the measure of internal consistency of responses across the set of items (Schumacker & Lomax, 2004) According to Churchill (1979), Cronbach’s alpha is one of the most widely indicators used to assess the internal level of measurement and it must be calculated prior to further analysis Alpha coefficient values between 1.0, denoting perfect internal consistency, and 0.0 denoting no internal reliability Nunnally (1978) suggested that the scale should have the Cronbach’s alpha value equal 0.7 or higher for acceptable internal consistency

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3.6.3 Confirmatory factor analysis

The author conducted confirmatory factor analysis (CFA) before conducting hypotheses test in order to evaluate the model fit or whether the data fit the hypothesized measurement model

Kline (2010) stated that Confirmatory Factor Analysis is commonly used in social research While Exploratory Factor Analysis is a theory-generating method, Confirmatory Factor Analysis is a theory-testing model (Stevens, 1996) Hence, it is appropriate when the dimensionality of a set of variables for a given population is already known from the previous research The purpose of Confirmatory Factor Analysis is to investigate whether the proposed dimensionality and factor-loading pattern fits a new sample from the same population, which means the confirmatory aspect of the analysis In other words, CFA evaluates a priori hypotheses, and is largely driven by theory Every aspects of the CFA model is specified in advance (Brown, 2006) The specification of CFA is strongly driven by theory or prior research evidence Meanwhile, the goal of EFA is to identify factors based on data and to maximize the amount of variance explained Gorsuch (1983) stated that exploratory methods should be "reserved only for those areas that are truly exploratory, that is, areas where no prior analyses have been conducted" (p 134)

In this study, the author developed the hypothesized model based on solid literature review and examination of related theories Therefore, CFA proves to be more suitable for this study as compared to EFA analysis

To evaluate the model fit, the following indices are consider: chi-square (χ²) - this values is reported as the index of absolute fit, which assesses the extent to which the covariances estimated in the model match the covariances in the measured variables (Kline, 2011) In addition, the comparative fix index (CFI; Bentler, 1990), Jo¨reskog- So¨rbom goodness-of-fit index (GFI), and the root mean square error of approximation (RMSEA; Steiger, 1990) are also taken into account These indexes indicate the extent to which a research model provides an improved overall fit relative to a null model or independence model in which the correlations among observed variables are assumed to be zero The CFI and GFI have been

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considered the best approximations of the population value for a single model The RMSEA is considered as a “badness of fit” index and it is best fit when the value equal zero The greater value it has, the worse fit a model is (Kline, 2005) Reported fit indices and their desired range are summarized in table 3-3

Table 3-3: Assessing Fit Indices

value for a good

fit

Absolute fit indices

Incremental Fit Indices

Source: Hair et al., 2006; Tabachnick & Fidell, 2007; Kline, 2011; Hu & Bentler,

1999

3.6.4 Analysis of Variance (one-way and two-way ANOVA)

The author applies Analysis of Variance (one-way ANOVA) to test the equality of means between gender and age groups After that the author followed up with a two-way ANOVA analysis to confirm whether the effect of age on intrinsic motivation was true between gender groups

3.6.5 Multiple regression analysis

Regression analysis is a statistical process for estimating the relationships among variables Before implementing the regression, each predictor was calculated

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its mean value (arithmetic mean) It aims to minimize the problems of collinearity (Aiken and West, 1991) Then, the centered variables were used as regression model’s variables This linear multiple regression model was conducted to test the hypotheses of the study All criterion requirements to have a best regression estimate method were tested and confirmed

There are three major analytic strategies in multiple regression: standard multiple regression, sequential (hierarchical) regression, and statistical (stepwise) regression (Tabachnick & Fidell, 2007) In the standard multiple regression, all independent variables enter into the regression equation at once, and each one is assessed as if it had entered the regression after all other independent variables had entered In the sequential (hierarchical) multiple regression, independent variables enter the equation in an order specified by the researcher Each independent variable (or set of independent variables) is assessed in terms of what it adds to the equation

at its own point of entry In the statistical (stepwise) multiple regression, the order of entry of independent variables is based solely on statistical criteria

Given that the regression strategy allows the researcher to control the advancement of the regression process, sequential regression considered to be best for theoretical reasons or for testing explicit hypotheses (Tabachnick & Fidell, 2007) It allows explicit hypotheses to be tested about the proportion of variance attributable to some independent variables after variance due to independent variables already in the equation is accounted for Standard regression simply assesses relationships among variables and answers the basic question of multiple correlation Statistical regression is a model-building rather than model testing procedure The main purpose of the present study was to test a series of theoretical hypotheses, therefore, sequential (hierarchical) multiple regression strategy was chosen for conducting multiple regressions in this study

3.6.6 Testing mediation with regression analysis

Mediation is a hypothesized causal chain in which one variable affects a second variable that, in turn, affects a third variable The intervening variable, M, is

A mediating relationship is significant when it satisfies four conditions (Howell, 2002, citing Baron & Kenny, 1986):

1 There is a significant relationship between the independent variable and

the mediator (path a)

2 There is a significant relationship between the mediator and the dependent

variable (path b)

3 There is a significant relationship between the independent variable and

the dependent variable (path c)

4 When the mediator and the independent variable are used simultaneously

to predict the dependent variable, the previous significant part between the

independent variable and the dependent variable (path c) is now greatly reduced

(partial mediation) or ideally nonsignificant (full mediation)

To test for mediation, as recommended by Cohen, Cohen, West, and Aiken, (2003), hierarchical multiple regressions were used as below:

Mediators (M)

Independent

variables (X)

Dependent variables (Y)

c

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First step: Enter all independent variables (Xi) into the prediction of the

dependent variable (Y) to determine the total effect (βtxi) of each independent

variable

Second step: Enter all independent variables (Xi) and all mediating variables

(Mj) into the prediction of the dependent variable (Y) to determine the total effect (βmj) of each mediating variables and the coefficients (βxi) of each independent variable The differences between the total effects (βtxi) and the coefficients in the second equation (βxi) of independent variables indicate the portions of these effects that are mediated by mediators If the coefficient in the second equation (βxi) of an

independent variable is nonsignificant (the independent has no effect), there is full mediation for the effect of the variable on the dependent variable If the coefficient

is reduced but remains significant, there is partial mediation for the effect of the variable on the dependent variable (Howell, 2002)

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CHAPTER 4 - DATA ANALYSIS

This chapter presents sample demographic, statistical analysis, tests of hypotheses, answers to research questions and other findings from this study The data collected from the survey were analyzed using EXCEL, SPSS 20.0, and AMOS 20.0 software Data analysis included descriptive statistics, confirmatory factor analysis (CFA), and regression analysis The reliability and validity of survey instruments were also examined

Table 4-1: Variables included in the Analysis

Variables Description

4.2 Data cleaning

The author has collected a total of 251 responses After the screening step to delete some missing answered items, there are 182 responses with full qualified answers to be used in the data analysis procedures

4.3 Profiles of qualified respondents

Among the 182 qualified respondents, 72 respondents (39.6%) were male, and 110 (60.4%) were female Respondents with the age ranging from 22-24 years old is 44.0% (80 respondents); 26-30 years old is 32.4% (50 respondents); and above 30 years old is 23.6% (43 respondent) 75.3% (137 respondents) are employee and 24.7% (45 respondents) are manager Working years with current company was split into less than or equal to 1 year (28.0%), 2-3 years (21.4%), more than 3 years (17.0%) 17% (31 respondents) are working for a state owned-company, 32.4% (59 respondents) are working for private company, 12.6% (23

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respondents) working for joint-stock company, 23.6% (43 respondents) working for foreign company, 2.7% (5 respondents) are working for joint venture company, the remained 11.5% (21 respondents) did not specify their company type The results of the participants’ characteristics are presented in Table 4-2

Table 4-2: Socio-demographic Characteristics of The Qualified Samples

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4.4 Normality analysis

Skew, or lack of symmetry in the frequency distribution, and kurtosis, the departure from a normal distribution, affect inferential statistics, especially the mean, the standard deviation, and correlation coefficient estimates (Schumacker & Lomax, 2004) Table 4-3 shows that skew and kurtosis measures for all items are below thresholds of 3 and 5 respectively (Kline, 2005) This indicates no major problem for the normality of variables, which is in line with the assumption of multiple regression Therefore, the author proceeds with other analysis steps

4.5 Reliability of the measurements

Reliability analysis revealed Cronbach Alpha of larger than 0.70 for all four variables According to Nunnally (1978), a Cronbach Alpha of 0.70 is acceptable In detail, Organizational Citizenship Behaviour was measure by 15 items (OCB1 to OCB15) and had a Cronbach Alpha of 0.771 Perceived retention-oriented compensation system was measured by 6 items (COM1 to COM6) and had a Cronbach Alpha of 0.780 Perceived formalized training was measured by 6 items (TRA1 to TRA6) and had a Cronbach Alpha of 0.939 Employees’ intention to leave was measured by 3 items (ITL1 to ITL3) and had a Cronbach Alpha of 0.913 The reliability result showed that Cronbach Alpha of all factors is good for further testing

Table 4.3 summarized Cronbach Alpha measures across variables More details on measurement reliability test results can be found in Appendix B

Table 4-3: Summary of Cronbach Alpha Measures across Variables

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4.6 Confirmatory factor analysis

The hypothesized first-order 30-observed variables CFA model is shown in Figure 4-1 Results of the CFA model suggested that the model could be improved

to better fit with the data (GFI, CFI and TLI indices, see Table 4-4) Standardized regression weights analysis (factor loading) show that there are seven items’ values are far below 0.500 (see Table 4-5), which means these items were short of convergent validity Therefore, the author decided to delete items COM2, OCB1, OCB6, OCB10, OCB12, OCB13, OCB15) from the initial model The modified model indicated improvement in each index (i.e GFI, CFI, TLI and RMSEA) Base

on Modification indices, the author also make some correlation link, all indices met the desired range Therefore, the modified first-order 23-item CFA model was shown to be a good model (see Table 4-6) and applicable to further data analysis

Figure 4-1: Hypothesized model

The circles represent the latent constructs and the rectangles represent the observed measures (variables)

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