Retaining Core Staff: The Impact of Human Resource Practices on Organisational Commitment
Chew, Janet, Girardi, Antonia, Entrekin, Leland, Journal of Comparative International Management
As organisations battle to get the most from their existing people in an environment characterised by skill shortages, the role of human resource practices in fostering employee engagement and commitment is paramount. This paper reports the findings of an Australian study, which examined the current relationship between human resource management practices and the retention of core (critical) employees working in nine organisations. This research specifically, reports on the conditional nature of the relationship between organisational and human resource practices, and commitment. The findings of the study have important implications for human resource academics and practioners.
Strategic human resource management (SHRM) is at a critical point, poised between becoming a strategic business partner or receding into oblivion, as there is much debate about its relevance and contribution to the bottom-line and organisational effectiveness (Lawler & Mohrman, 2003: Jamrog & Overholt, 2004: Ulrich, 1998). As organisations battle to get the most from their existing people in an environment characterised by skill shortages, the role of human resource management in fostering employee attachment and commitment is paramount. If strategic human resource management is to tip the balance towards being perceived as a business partner, it appears that a consolidated approach toward identifying those human resource practices which foster and support attachment to the organisation is key.
Traditionally, within the employment relationship, employees exchanged their loyalty and hard work for the promise of job security. In the contemporary environment, changes in organisational structure towards more flexible work practices and the decline in job security, have altered the psychological contract between employer and employee (Allan, 2002; Wiens-Tuers, 2001). The new form of psychological contract is visible in placement practices, which see organisations focus on non-core and part-time workers to gain flexibility at lower cost (Cappelli, 1999; Kalleberg, 2000). Because of these organisation-wide changes, the essence of attachment between employer and employee has changed.
The old contract of employee loyalty in exchange for job security and fair work has dissolved (Overman, 1998). Current employers emphasise "employability" rather than long-term loyalty in a specific job (Cappelli, 1999; Ko, 2003). The trend these days, seems to be geared towards having a 'career portfolio' (1) (Handy, 1995; Hays & Kearney, 2001). Replacing the old employment deal, the new psychological contract suggests that the employer and the employee meet each other's needs for the moment but are not making long-term commitments.
It is suggested that commitment to one's professional growth has replaced organisational commitment (Bozeman & Perrewe, 2001; Powers, 2000). Instead of job security, employees now seek job resiliency; opportunities for skill development and flexibility in order to quickly respond to shifting employer requirements (Barner 1994). Employees seem to take greater responsibility for their own professional growth in order to increase their career marketability (Finegan, 2000).
Employee commitment, it seems, has become a casualty of the transition from an industrial age to an information society.
Commitment is a belief which reflects "the strength of a person's attachment to an organization" (Grusky, 1966, p. 489). Researchers have suggested that reciprocity is a mechanism underlying commitment (Angle & Perry, 1983; Scholl, 1981) and that employees will offer their commitment to the organisation in reciprocation for the organisation having fulfilled its psychological contract (Angle & Perry 1983; Robinson, Kraatz & Rousseau, 1994). By fulfilling obligations relating to, for example, pay, job security, and career development, employers are creating a need for employees to reciprocate, and this can take the form of attitudinal reciprocity through enhanced commitment and consequently influence employees to stay with the organisation (Becker & Huselid, 1998; Capelli, 2000; Furnham, 2002; Oakland & Oakland, 2001; Wagar, 2003)
Previous studies of the concept of commitment (Mowday, Porter & Steers, 1982; Meyer & Allen 1991) have substantiated that employee commitment to the organisation has a positive influence on job performance and a negative influence on intention to leave or employee turnover. …