Exploring Employee Commitment in a Service Organization in the Health Care Insurance Industry

By Kontoghiorghes, Constantine; Bryant, Nancy | Organization Development Journal, Fall 2004 | Go to article overview

Exploring Employee Commitment in a Service Organization in the Health Care Insurance Industry


Kontoghiorghes, Constantine, Bryant, Nancy, Organization Development Journal


Abstract

This study sought to identify the key predictors of employee commitment in a service organization in the health care insurance industry. The strongest predictors were found to be company satisfaction, the extent to which one's job takes advantages of talents and abilities, and the extent to which the organization emphasizes doing things right the first time. A work environment conducive to a continuous learning culture was also found to be highly associated with employee commitment.

Introduction

Today, times are changing and are changing fast. The only thing that remains constant in organizational life is change. Clearly, lifetime employment is dead. Careers are becoming portfolios of activities and people increasingly have multiple careers. Companies are becoming more and more flexible and self-designing. They understand that organizational competitiveness will ultimately depend on their capability to configure people and design a system for optimal execution of strategy (Mohrman & Lawler III, 1998). "As a result, the future effectiveness of most organizations increasingly depends on the very human resources who feel that the company is no longer committed to them and who do not know what the future holds. Herein lies the rationale for the complete and total transformation of the human resources function" (Mohrman & Lawler III, 1998, p. 211).

In the old days, loyalty and commitment functioned as two-way phenomena that were reinforced by a psychological contract that existed between the organization and the employee. Not long ago employees joined an organization with the expectation of a career. That is, aside from permanent employment, employees expected the company to give them the opportunity to grow, develop, and advance hierarchically. Further, employees expected their wages to increase with time, experience, and performance. They expected a fair wage for the work they did and they did not expect their salaries to be at risk. Employees also saw the company, not themselves, as responsible for providing opportunities for growth, development, and careers. In return, they rewarded the organization with loyalty and did what the company needed to have done in order to be competitive (Mohrman & Lawler III, 1998).

As noted though, times have changed. "The latest rash of downsizing, restructuring, outsourcing, and hollowing has put an end to the old psychological contract, and new contracts are emerging in reaction to the new situation... We appear to be entering an era of highly differentiated psychological contracts" (Mohrman & Lawler III, 1998, p. 219). The new contracts, which are established with different groups of employees-core workers, contract workers, and temporary and part-time workers-will have to acknowledge the needs and motivations of each particular group of employees (Mohrman & Lawler III).

According to Finegold (1998), the new psychological contract can take the form of a learning contract. Under this learning contract the employer and employee commit to ongoing competency development. While the organization is not able to offer employment security, it pledges to increase the employability of its workers and managers by investing in their continuous skill development and providing them with opportunities and rewards for using these skills. Further, under this learning contract, if the organization's focus changes and thus the competencies of a particular employee are no longer needed, then the organization should help that person retrain for new opportunities, either in the organization or outside it. According to Mohrman and Lawler, however, "if the new contracts do not give employees a stake in the performance of the organization, the organization is unlikely to obtain anything like the depth of commitment found in the old era of two-way loyalty" (p. 220).

In terms of previous research, employee commitment has been one of the most popular organizational research subjects during the last three decades (Benkhoff, 1997; Eby, Freeman, Rush, & Lance, 1999; Zeffane, 1994).

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Exploring Employee Commitment in a Service Organization in the Health Care Insurance Industry
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