Work force retention: Role of work environment, organization commitment, supervisor support and training & development in ceramic sanitary ware industries in India

Umamaheswari S; Krishnan, Jayasree Article Work force retention: Role of work environment, organization commitment, supervisor support and training & development in ceramic sanitary ware industries in India Journal of Industrial Engineering and Management (JIEM) Provided in Cooperation with: The School of Industrial, Aerospace and Audiovisual Engineering of Terrassa (ESEIAAT), Universitat Politècnica de Catalunya (UPC) Suggested Citation: Umamaheswari S; Krishnan, Jayasree (2016) : Work force retention: Role of work environment, organization commitment, supervisor support and training & development in ceramic sanitary ware industries in India, Journal of Industrial Engineering and Management (JIEM), ISSN 2013-0953, OmniaScience, Barcelona, Vol. 9, Iss. 3, pp. 612-633, https://doi.org/10.3926/jiem.1885 This Version is available at: https://hdl.handle.net/10419/188785 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc/3.0/ Journal of Industrial Engineering and Management JIEM, 2016 – 9(3): 612-633 – Online ISSN: 2013-0953 – Print ISSN: 2013-8423 http://dx.doi.org/10.3926/jiem.1885 Work Force Retention: Role of Work Environment, Organization Commitment, Supervisor Support and Training & Development in Ceramic Sanitary Ware Industries in India Umamaheswari S1 , Jayasree Krishnan2 1Sathyabama University (India) 2St. Joseph’s College of Engineering (India) [email protected], [email protected] Received: January 2016 Accepted: June 2016 Abstract: Purpose: Although retention of employees has become hot topic in this career turbulent era, practically no empirical research is carried out in the fast growing ceramic sector till now and this research fills the gap in the literature. The literatures surveys reported that organization commitment is an important determinant of retention and work environment, supervisor support and training and development are the most relevant antecedents increasing commitment towards organization. This paper examines the impact of the above factors over organization commitment and explores the effects of organization commitment on retention, and verifies the mediating effect of organization commitment on the relationship between proposed factors and retention. Design/methodology/approach: A survey was completed by 416 employees working in five ceramic sanitary ware factories located at different places in India. Questionnaire consisting of items adopted from previous researches were used to collect data. The selection of respondents was based on the simple random sampling. Findings: Findings reveals that organization commitment influences retention and all the above factors enhances it. Moreover organization commitment partially mediates the relationship between proposed factors and retention. However multiple regression analysis indicated that training and development did not have any notable influence on retention. -612- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 Research limitations/implications: This study was conducted in a particular country and also in a particular sector of manufacturing industry, which limits generalization. Possibility of bias towards their organization and assumption that respondents know about their organization are other limitations. Practical implications: This paper offers recommendations to HR (Human resource) managers that they should extend their support to work environment, supervisor support and training and development in order to generate better relationship with employees and to reduce their likelihood of leaving the company. Originality/value: This article makes significant contribution to most turnover prone Indian environment, highlighting the important factors to be given priority for employee’s retention. Keywords: work environment, supervisor support, training and development, organization commitment, employee retention 1. Introduction The fierce competition globally for skilled employees has made it pertinent for manufacturing industries to exert more attention upon retention of skilled workforce. However talent, an intangible asset and managing talented employees create a number of challenges and retention process become more exigent, especially with this new generation of workforce exceptionally mobile and always looking for better opportunities (Bogdanowicz & Bailey, 2002; Correia de Sousa & van Dierendonck, 2010). Employee turnover rates over next five years is predicted to rise to 23.4% and the number of global departures in 2018 is expected to be 192 million (Biswas, 2013). Further surveys predicted that highest turnover rate of 26% in India (Hay Group, 2013) placing India in the eye of employee turnover storm. The data base of Docquier and Rapoport (2009) reveals that more than one million skilled Indian emigrants worldwide in 2000, placing India second just to the Philippines among developing countries for the number of skilled emigrants living in the organization for economic cooperative and development (OPED) countries such as Australia, USA and the UK. Also bulk number of H1-B visa holders (1,54,726) in the USA, a visa aimed at skilled category in the year 2008 reveals the large number of skilled professionals migration aiming greener pastures. This plight of skilled workforce affects Indian organizations alarmingly. The loss of skilled workers not only slow down the success of “make in India” scheme, but also will make the quest of achieving India’s vision to become a developed nation in the year 2020, a challenging task. Moreover the world of business community swirls towards skilled workers as their talents are highly -613- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 valuable for their successful business operations, which can create the possibilities of employee’s poaching and in coming years the companies will go to “war for talent” (Beechler & Woodward, 2009). The best insurance against attrition is not to hope for lack of opportunities outside, but to build strong internal conditions which act like a glue to employees (Biswas, 2013) and organization in India must give serious thought to what drives employee’s commitment (Sinha, 2013). A large number of researches were attempted to answer the question what determines employees intention to quit by investigating possible antecedents of employee’s intention to quit, (Kramer, Callister & Turban, 1995; Saks, 1996; Kalliath & Beck, 2001) and the researches supported that lack of commitment is the most immediate determinant of intention to quit (Igbaria, Meredith & Smith, 1994; Firth, Mellor, Moore & Loquet, 2004; Parasuraman, 1982) and commitment to organization can significantly reduce the intention to quit (Somers, 1995; Meyer, Stanley, Herscovitch & Topolnytsky, 2002; Paré & Tremblay, 2007; Bagraim, 2010). Commitment is a multi-foci concept and an employee can be committed to his/her job, supervisor, peer, or organization (Boshoff, 2000; Morin, Morizot, Boudrias & Madore, 2010; Paillé, Fournier & Lamontagne, 2011) Also a large body of researches confirmed the positive relationship of organization commitment to retention (Steers, 1977; Jaros, 1997; Carmeli & Weisberg, 2006; Neininger, Lehmann-Willenbrock, Kauffeld & Henschel, 2010; Firth et al., 2004; Ingram & Lee, 1990). Hence it would be argued that, if employee’s organization commitment level is highly significant, probability of their continuation will be high. Organization now-a-days are searching for all possible ways to motivate employee’s attachment towards their working place (Mitchell, Holtom & Lee, 2001; Rousseau, 2004). The two specific ways suggested by Rousseau (1998) to strengthen employee’s organization commitment are (1) increasing the perception of organizational membership (2) demonstrating the employees that they are valued by organization. The current human resource practices found that work environment (WE) supervisor support (SS) and training & development (T&D) are the variables most relevant to increase commitment towards organization since these factors either demonstrates organizational care and support for employees or creates a sense of belonging and a positive feeling of identification. This paper tries to fill in the gap in the literature by examining the impact of WE, SS and T&D, over Organization commitment (OC) among employees of ceramic sanitary ware factories in India, a sector which is unattended, as well as to predict the effects of OC on retention. It also investigates whether organization commitment mediates the effects of above factors on retention. -614- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 2. Research Motivation Ceramic is a diverse industry and contains several categories of products including sanitary ware. The ceramic industry in India came into existence about a century ago and has matured over time to form an industry base. Over the years, the industry has been modernising through new innovations in product profile, quality and design to emerge as a modern worldclass industry ready to take global competition. The ceramic products are produced both in organized as well as unorganized sector over the last two decades the technical ceramic segment has recorded an impressive growth. The Indian ceramic industry ranks at 8th position in the world and produce around 2.5% of global output. The industry provides employment to 5.50 lakhs of people of whom 50,000 are directly employed. During 2008, India was the 24th largest trading nation in the world and Asia pacific holds a significant market share in ceramic sanitary market. Asia –pacific is thus expected to maintain its dominance in the global market owing to the steady growth in China, India and Thailand. The ceramic sanitary ware market estimated to be valued around 4.27 million USD in 2014 is projected to reach 46 billion USD in 2019 (Ceramic industry in India a trade perspective; Ceramic Sanitary Ware Market by Product 2015). The quarterly survey in Indian manufacturing industries 2014, predicted a strong growth in ceramic sector (over 10%) in April- June 2014-15 (FICCI, 2014). Also increasing population in the developing nations and increasing standard of living of the people accelerated the growth. Due to this the requirement of work force is increased and on the contrary, India suffers highest turnover rate (26%) (Hay Group, 2013). Further the “Swach Bharth” scheme of government of India increased the requirements of sanitary ware products, thereby enhancing the need of work force. In addition, anticipated nearly $ 1 trillion of investment in the years to 2018 with half of them expected from private financing, there will be huge demand for labourtotally 14% of employment in the organized sector-and raising turn over in these activities (Biswas, 2013). Moreover the plight of skilled category of work force in search of greener pastures (Docquier & Rapoport, 2009) also makes the situation worse and there is an immediate need to ascertain the factors which would prevent the turnover to the maximum extent in the ceramic sanitary ware industries. 3. Literature Review 3.1. Work Environment Most of the manufacturing organization felt the need of creating a motivating environment to help employees fully expose their capabilities (Shalley, Gilson & Blum, 2000). Employees get benefited by work environment that provide sense of belonging (Miller, Erickson & Yust, 2001) and provision of -615- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 generous personalization policies and sound control on workspace (Wells & Thelen 2002) enhance the motivation levels of employees to commit with organization for a longer period. Some of the work environment variables, supervisor support, promotion, co-worker relationship, general working conditions (Richards, O’Brien, & Akroyd, 1994), Social support (Haggins, 2011), perceived organization support (Casper, Martin, Buffardi & Erdwins, 2002) participation in decision making (Subramaniam & Mia, 2001) are predictors of organization commitment. The presence of job autonomy (Dunham, Grube & Castaneda, 1994), positive feedback (Hutchison & Garstka,1996) also helps to increase commitment of employees. Innovative and supportive organization sub culture (Lok, Westwood & Crawford, 2005) and ownership of any kind given to employees (Klein, 1987) have strong positive relationship with commitment. The researches (Earle, 2003) identified that requirements of different generations varies and the way they prioritise the value of work environment differs. Hence focus of organization must be on how to provide better working environment so as to maintain better relationship with employees (Levi, 2002). Significant relationship prevails between organization work climate and employees commitment towards organization (Vanaki & Vagharseyyedin, 2009; Valentine, Godkin & Lucero, 2002). Thus organisation which provide employee-friendly work environment crates a good sense of trust among the employees that organisation cares them and this will become a major factor considerably related to their commitment. Hence the hypothesis proposed is: H1: Work environment will be positively related to OC. 3.2. Supervisor Support The role of supervisor is vital for organization and several studies confirmed that good relationship between supervisor and sub ordinates enhances employee’s job-satisfaction (Newsome Jr & Pillari, 1992), which is considered as a pathway leading to organization commitment (Landsman, 2008). Monitoring workloads and supervisor subordinate relationship by management may not only reduce stress but also increase job satisfaction and commitment to organization (Firth et al., 2004). Trust in supervisor has an important role to play in promoting organization commitment (Perry, 2004). Employees who perceived high support from supervisor expressed stronger feelings of affiliation and loyalty to the organization as perceived support related to supervisor’s evaluation, the relationship with supervisor plays important role between employee and organization (Eisenberger, Fasolo, & Davis-LaMastro, 1990). Supervisor support was found to be an important antecedent of organization commitment (Arzu-Wasti, 2003). Further support from supervisor has a positive effect on organization commitment of employees (Dockel, 2003; Landsman, 2008; Joao, 2010; Heish, 2012). Therefore hypothesis is as follows. H2: SS will be positively related to OC. -616- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 3.3. Training and Development To enhance employees’ performance to meet global challenge managerial learning frame work is required (Garg & Rastogi, 2006). The more knowledge the employee acquire, the more will be their performance. The necessity of increased skills and efficiencies of employees had been felt by organization and they are investing on training programmes. (Huselid, 1995). Provision of training and development opportunities to make employees feel that their organization value them and this increases their attachment towards organization (Dockel, 2003). The researchers Newman, Thanacoody & Hui (2011) examined the impact of employee’s perception of training on organizational commitment and they predicted the importance of training as a tool to enhance the affective commitment of employees. Skills of workforce is a credential factor for manufacturing industries to compete favourably their business rivals and provision of training and development opportunities are positively related to the commitment of employees towards their organization. (Dockel 2003; Newman et al., 2011; Ahmad & Bakar, 2003; Al‐ Emadi & Marquardt, 2007; Bartlett, 2001; Owens, 2006). Therefore the hypothesis is as follows. H3: T&D will be positively related to OC. 3.4. Organization Commitment and Retention Organization commitment is getting attention due to its ability to produce desirable outcomes for the people and organization (Haldar & Pareek, 2009). Organization commitment is the most immediate predictor of turnover intention (Igbaria et al., 1994; Parasuraman, 1982) and commitment is negatively related to turnover (Cooper-Hakim & Viswesvaran, 2005). When organization seek to foster a philosophy of commitment employee’s likelihood of seeking other jobs is lowered (Arthur, 1994) and lack of commitment influences intention to quit (Firth et al. 2004). Several studies confirmed that commitment to organization is positively related to retention (Steers, 1977; Jaros,1997; Carmeli & Weisberg, 2006; Neininger et al. 2010; Firth et al. 2004). The above findings gives evidence that organization commitment is an important factor for employee retention and the hypothesis is as follows. H4: OC will be positively related to retention. -617- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 3.5. Mediating Role by Organization Commitment Simultaneous effects on retention of employees by various factors and OC have been done by many researchers. According to study by Eisenberger et al. (1990), since supervisors are considered to be representatives of organization, perceived supervisor support leads to perceived organization support and able to increase organization commitment and thereby reduce switching over, because individuals tend to respond positively to managements support. Several studies have found that OC mediates the relationship between antecedents of OC with employee retention (Pare & Tremblay, 2007; Juhdi, Pa’wan & Hansaram, 2013; SamGnanakkan, 2010). Given that proposed factors are related to OC and OC related to retention, it is possible that OC mediates the relationship between proposed factors and retention. Hence the last hypothesis is as follows. H5: OC will mediate the relationship between proposed factors and retention. 4. Methodology 4.1. Sample and Procedures The participants of the survey were employees of ceramic sanitary ware factories in India. Given the difficulty to obtain permission to distribute questionnaire from authorities, the researchers managed the distribution to five ceramic sanitary ware factories, located in different places, each of them having more than 150 employees after giving assurance of anonymity. Employees of production, marketing, finance and HR were utilised for this survey. Each factory was provided 120-130 questionnaire forms with a brief note indicating the purpose of the research. The distribution and collection of forms were conducted by the researchers themselves with the help of few HR department staffs. Totally 550 questionnaire were distributed to employees and 416 usable questionnaire were received back representing a response rate of 75%, the selection of the respondents was based on the simple random sampling. Around 81% of the respondents were of 25-45 age group and 73% of them possess post graduate and professional qualification while 57% of the respondents falls under 5-15 years of experience. Regarding designation, middle level managers were dominating in the industry and majority of them belong to production department. Work environment was measured utilizing 4 items adopted from Chew (2004). The example items are “overall this organization is a harmonious place to work” and “workers and management get along in this organization”. The reliability coefficient (α) for the items is 0.703 which is above the acceptance level of 0.700 and provides support to the items. -618- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 Supervisor support was measured using 4 questions adopted from Dockel (2003) and the reliability coefficient (α) for the items is 0.713 provides reasonable level of consistency. Example items are “My supervisor looks for opportunities to praise positive employee performance, both privately and in front of others” and “My supervisor often lets me know how well he thinks I am performing job”. Training and Development was measured using 7 items adopted from Dockel (2003) and Chew (2004) the reliability coefficient for the items (α = 0.818) gives good level of support to the items. Example items are “I have the opportunity to be involved in activities that promote my professional development” and “people are properly oriented and trained upon joining this organization”. Organization commitment items were adopted from Mowday, Steers and Porter (1979) that consists of 7 items. The reliability coefficient for the items (α = 0.794) gives good level of support to the items. Examples items are “for me this is the best of all possible organizations for which to work” and “I find that my values and the organization’s values are very similar”. Finally employee retention was measured using 8 items adopted from Njoroge (2007) and Wang (2012). The reliability coefficient for the items is 0.867 gives good level of support to the items. Examples items are “I like the way my firm does the business and what it stands for” and “Enjoying my job”. Respondents were asked to respond the questionnaire on a Likertscale range from 1- 5, 1 = strongly disagree and 5 = strongly agree. Statistical package for the social sciences (SPSS 16.0) has been employed for analysing the data’s collected. All the items were subjected to an assessment of content validity as per the procedure described by Hinkin (1998). A correlation matrix (item by item) of the data was calculated and that matrix was subjected to principle component analysis. A commonly used rule specifies that only variables with loadings greater than 0.40 on a factor should be considered “significant” and used in defining that factor. If nothing beyond this is done, the value of the analysis is limited (Comrey, 1978). The factor loadings of all the items were above 0.40 with no major cross loadings. Further all the items meet Ford, MacCallum and Tait’s (1986) heuristic guidelines for meaningful and representative of the construct and examination, and are taken for analysis. -619- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1885 References Agarwal, R., & Ferratt, T.W. 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