Developing an explanatory risk management model to comprehend the employees' intention to leave public sector organization
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Prihandinisari, Carolina; Rahman, Azizur; Hicks, John Article Developing an explanatory risk management model to comprehend the employees' intention to leave public sector organization Journal of Risk and Financial Management Provided in Cooperation with: MDPI – Multidisciplinary Digital Publishing Institute, Basel Suggested Citation: Prihandinisari, Carolina; Rahman, Azizur; Hicks, John (2020) : Developing an explanatory risk management model to comprehend the employees' intention to leave public sector organization, Journal of Risk and Financial Management, ISSN 1911-8074, MDPI, Basel, Vol. 13, Iss. 9, pp. 1-18, https://doi.org/10.3390/jrfm13090200 This Version is available at: https://hdl.handle.net/10419/239294 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. 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/4.0/
Journal of Risk and Financial Management Article Developing an Explanatory Risk Management Model to Comprehend the Employees’ Intention to Leave Public Sector Organization Carolina Prihandinisari 1,2, Azizur Rahman 3,* and John Hicks 4 1Section Head of Withholding Income Taxes at Directorate of Tax Regulations, Directorate General of Tax, Ministry of Finance, Jakarta 12190, Indonesia; [email protected] 2School of Management and Marketing, Charles Sturt University, Wagga Wagga, NSW 2678, Australia 3School of Computing and Mathematics, Charles Sturt University, Wagga Wagga, NSW 2678, Australia 4School of Accounting and Finance, Charles Sturt University, Bathurst, NSW 2678, Australia; [email protected] *Correspondence: [email protected]; Tel.: +61-2-69334744 Received: 10 July 2020; Accepted: 1 September 2020; Published: 4 September 2020 Abstract: This paper reviews research and theory on the important topic of labour turnover resulting from issues related to job performance and/or job satisfaction which have, in turn, been initiated by changes in work motivation. We focus on labour turnover in the public sector—a neglected area of public administration research—and propose an explanatory model of the development of the intention to leave an organization. The model first describes the relationships between work motivation and job performance and/or job satisfaction. It then explains how changes in performance and/or satisfaction result in the formation of an intention to leave public service employment. The paper concludes by identifying key areas for future research. Keywords: financial incentives; public service motivation; job performance; job satisfaction; intention to leave 1. Introduction There is an increasing financial risk management issue arising in many organizations due to a high level of employees’ turnover. These organizations are typically suffering from significant costs for employee replacement as well as operational disruptions. There is a growing literature on the topic of employee turnover research (e.g., Tett and Meyer 1993;Griffeth et al. 2000;Podsakoffet al. 2007;Zimmerman and Darnold 2009;Van Iddekinge et al. 2011). Many researchers found that a range of issues are associated with employee overall behavioral aspects that could trigger resignation. This research provides an explicit account of how an employees’ intention to leave an organization develops and the important factors that drive to leave the organization. Over the last several decades, a number of employees’ turnover models have been developed by researchers (see, e.g., Bluedorn 1982a;Hellman 1997;Allen and Griffeth 1999;Peterson 2004; Luna-Arocas and Camps 2008;Steel and Lounsbury 2009;Chen et al. 2011). These models range from a theoretical development of employees’ turnover puzzles to turnover process modeling. Most of the studies also mainly focused on a typical standpoint of the human resource improvement, especially in the private sector organizations. However, it is significant to analyze an organizational risk management perspective as well, with a focus to the public sector organizations. Bluedorn (1982a) developed a unified model of turnover which combined three previous models: (i) the casual turnover model (Price 1989), (ii) the intermediate linkages model (Mobley 1977), and (iii) the organizational commitment model (Porter et al. 1974). According to this study, employees’ intention J. Risk Financial Manag. 2020,13, 200; doi:10.3390/jrfm13090200 www.mdpi.com/journal/jrfm
J. Risk Financial Manag. 2020,13, 200 2 of 18 to quit from an organization is negatively associated with the level of commitment to organization and positively associated with active job searching status. Commitment to the organization is positively linked to both job satisfaction and promotion opportunity, but negatively associated with potential role of conflict, equity, education, or skill development, and routinization, etc. Ultimately, the decision to leave an organization is particularly impacted by some significant factors such as intention to leave, routinization, employee’s age, and workplace environment and opportunity (Bluedorn 1982a). Another model suggests that there have been three distinct routes which led employee to resign from an organization (Allen and Griffeth 1999). First, there was the route associated with a desire to move, as might arise as a result of issues related to job satisfaction, job commitment, or an option to move as appropriate for remuneration contingency. Second, there was the route that arose through the ease of movement as exemplified by the number and quality of alternatives in the job market and moderated by the visibility of those jobs. The final route was in reaction to performance-related shocks associated with, for example, salient performance feedback, or an unsolicited job offer. In existing literature, most of the studies have primarily concentrated on finding key factors for employee turnover (Ellett et al. 2007;Luna-Arocas and Camps 2008), examining link between employees’ work motivation and turnover (Maertz and Griffeth 2004), job performance, and turnover (Allen and Griffeth 1999;Nyberg 2010), public service motivation and turnover (Bright 2008), and employees’ sex and turnover (Sousa-Poza and Sousa-Poza 2007;Rutherford et al. 2012). Some other research also compared the worker’s turnover between the public sector and private sector organization (e.g., see Carmeli and Weisberg 2006;Wang et al. 2012). Moreover, many scholars have found that there is a significant association between employees’ turnover and job satisfaction (Mobley 1977;Hellman 1997; Steel 2002;Chiu and Francesco 2003;Boswell et al. 2005;Carmeli and Weisberg 2006;Spector et al. 2007; Bright 2008;de Moura et al. 2009;Lambert and Hogan 2009;Liu et al. 2010;Chen et al. 2011;Delobelle et al. 2011;Grissom et al. 2012;Wang et al. 2012;Mihajlov and Mihajlov 2016). For example, a recent study in Serbia demonstrates that job satisfaction plays a significant role in the overall courses of turnover, and employees in the public sector have a higher level of extrinsic job satisfaction with a lower level of turnover intentions compared to employees in the private sector (Mihajlov and Mihajlov 2016). With only a few exceptions, research on turnover has been undertaken exclusively in a business or private sector context as well as from an organizational human resource development perspective. Research on employee turnover in the public sector is still very rare (Meier and Hicklin 2008), especially in a viewpoint of risk management of public sector organizations. To fill this gap in the literature, this review paper proposes an explanatory risk management model to empirically examine the nexus between work motivation and job performance and job satisfaction, and then assesses the impact of job performance and job satisfaction on the intention to leave a public sector organization through the model to minimize effects and potential risk to the organization due to turnover. In this context we have adopted a different perspective in research. The key novelty of this study can be divided into two folds. Firstly, our proposed explanatory model is based on extensive literature review of various behavioral psychology theories from private sector research. As the public sector research, and specially risk management research in public sector is still rare, this paper will fill-in such a research lacuna by focusing on public organizations. Secondly, it adopts a conceptual nature of connecting both theoretical research and public sector organizational research with risk management perception by offering a contemporary organizational risk management model and detailed constituents of it with validation from important literature in one place. This will bring significant benefits to prospective empirical research in the domain of public sector risk management. The paper is organised as follows. The next section presents an explanatory risk management model of the intention to leave public sector employment. The model is based on a review of the behavioral psychology literature from private sector research. This section also provides an account of various fundamental arguments around the concepts of work motivation. Section 3considers the literature related to the establishment of relationships between work motivation, job satisfaction and job performance. Section 4provides an assessment of significant determinants of intention to leave the
J. Risk Financial Manag. 2020,13, 200 3 of 18 organization with a particular focus on the public sector context. Finally, Section 5provides a summary of the findings and suggests directions for future research. 2. An Explanatory Risk Management Model Extensive research has linked job satisfaction to turnover intentions. Other variables, such as gender, work motivation, organizational factors, and job performance, have been considered in the literature as moderating or mediating factors. Our model describes the relationships between work motivation and each of job performance and job satisfaction. It also examines how employees’ intention to leave public sector organizations can be influenced by their job performance and job satisfaction. Additionally, this research considers the work motivation which comprises the concepts of intrinsic and extrinsic work motivation as well as the public service work motivation. Based on these traditional and contemporary concepts in this research area, we propose an explanatory risk management model of the development of the intention to leave an organization which is illustrated in Figure 1. J.RiskFinancialManag.2020,13,xFORPEERREVIEW3of20 theorganizationwithaparticularfocusonthepublicsectorcontext.Finally,Section5providesa summaryofthefindingsandsuggestsdirectionsforfutureresearch. 2.AnExplanatoryRiskManagementModel Extensiveresearchhaslinkedjobsatisfactiontoturnoverintentions.Othervariables,suchas gender,workmotivation,organizationalfactors,andjobperformance,havebeenconsideredinthe literatureasmoderatingormediatingfactors.Ourmodeldescribestherelationshipsbetweenwork motivationandeachofjobperformanceandjobsatisfaction.Italsoexamineshowemployees’ intentiontoleavepublicsectororganizationscanbeinfluencedbytheirjobperformanceandjob satisfaction.Additionally,thisresearchconsiderstheworkmotivationwhichcomprisestheconcepts ofintrinsicandextrinsicworkmotivationaswellasthepublicserviceworkmotivation.Basedon thesetraditionalandcontemporaryconceptsinthisresearcharea,weproposeanexplanatoryrisk managementmodelofthedevelopmentoftheintentiontoleaveanorganizationwhichisillustrated inFigure1. Figure1.Anexplanatoryriskmanagementmodeldepictingpathwaysofemployeeturnoverinthe publicsector. Workmotivationdrivesemployeestoperformcongruentlywiththeorganizationsʹobjectives.It isobviousfromthemodelthatworkmotivationisakeyfactorinfluencingtheemployees’intention toleaveorganizationthroughbothjobperformanceandjobsatisfaction.So,itisimportanttomanage thisgrowingriskofemployeeturnoverinthepublicsectororganizationthroughassessingimpacts ofthosefactors.Arangeofresearchhasbeenconductedtoexploreandmodeltheoriesofwork motivation.Forexample,theplethoraoftheoriesonmotivationproposedanintegrativecontext mainlybasedonachronologicalorderofmotivation(e.g.,seeLocke1991).While,someresearchers consideredthe1960sand1970stobethe“goldenage”ofworkmotivationtheorybecauseofthe considerableadvancesinourunderstandingoftheconceptthatweremadeduringthisperiod(Steers etal.2004). AccordingtothestudybyLocke(1991),motivationaltheoriescanbeclassifiedintoagroupof sevenelementssuchas‘needs’,‘values’,‘goals’,‘expectancyandself‐efficacy’,‘performance’, ‘rewards’,and‘satisfaction’.Lockeexplainedtheelementsasfollows. Needs:“Theconceptofneedexplainswhylivingorganismact”.Theoriesofmotivationbased onneedsincludeMaslow’shierarchyofneedstheoryandDeci’sself‐determinationtheory. Values:Incontrasttoneeds,whichareinnate,valuesareinconsciousnessandacquired.Values aretheconnectionbetweenneedsandaction.LockeincludedMcClelland’sneedforachievement theory,Miner’srolemotivationtheory,andVroom’sexpectancytheorywithinthiselement. Goals:Thereflectionoftheperson’svaluesarefoundinthegoalstheyset.Goalsaredefinedas applicationsofvaluestospecificsituations.Goaltheory(LockeandLatham1990)explainshowgoals affectactionbyaffectingtheintensity,duration,anddirectionofaction. Figure 1. An explanatory risk management model depicting pathways of employee turnover in the public sector. Work motivation drives employees to perform congruently with the organizations’ objectives. It is obvious from the model that work motivation is a key factor influencing the employees’ intention to leave organization through both job performance and job satisfaction. So, it is important to manage this growing risk of employee turnover in the public sector organization through assessing impacts of those factors. A range of research has been conducted to explore and model theories of work motivation. For example, the plethora of theories on motivation proposed an integrative context mainly based on a chronological order of motivation (e.g., see Locke 1991). While, some researchers considered the 1960s and 1970s to be the “golden age” of work motivation theory because of the considerable advances in our understanding of the concept that were made during this period (Steers et al. 2004). According to the study by Locke (1991), motivational theories can be classified into a group of seven elements such as ‘needs’, ‘values’, ‘goals’, ‘expectancy and self-efficacy’, ‘performance’, ‘rewards’, and ‘satisfaction’. Locke explained the elements as follows. Needs: “The concept of need explains why living organism act”. Theories of motivation based on needs include Maslow’s hierarchy of needs theory and Deci’s self-determination theory. Values: In contrast to needs, which are innate, values are in consciousness and acquired. Values are the connection between needs and action. Locke included McClelland’s need for achievement theory, Miner’s role motivation theory, and Vroom’s expectancy theory within this element. Goals: The reflection of the person’s values are found in the goals they set. Goals are defined as applications of values to specific situations. Goal theory (Locke and Latham 1990) explains how goals affect action by affecting the intensity, duration, and direction of action.
J. Risk Financial Manag. 2020,13, 200 4 of 18 Expectancy and self-efficacy: These two concepts influence the process of setting up goals. The motivational theories which are included in this category are expectancy theory and social-cognitive theory (Locke 1991). Performance: Goals and self-efficacy are considered as the most immediate and direct motivational determinants of performance. Typical attribution theory explains people’s attribution on their performance and how such attributions affect subsequent passions and actions. Rewards: People’s action or performance are driven by rewards and therefore rewards can modify people’s behaviour. Motivational theories which focused on rewards are behaviour modification theory and the equity theory. Satisfaction: Some theories explain the relation between work and job satisfaction. These include Herzberg’s two-factor (motivation–hygiene) theory, Hackman and Oldham’s job characteristics theory, and Locke’s satisfaction theory. In the above framework, the researcher has emphasized values as the motivation core, because values are the keys that make every individual as unique and guide them to real choices and effective actions. Values and rewards has a strong correlation as well. Locke (1991) motivation sequence framework also indicates that goals, self-efficacy, and performance are important motivational core, which determines the individual’s activities. In an alternative review on motivational theories Steers et al. (2004) classified motivation theory into two groups: content theory and process theory. Factors that regulate and manage individual and social behaviour can be explained by content theory such as the motivation-hygiene theory (Herzberg et al. 1962). The motivation–hygiene theory proposes two types factors (Herzberg 1974) which are: (1) motivation factors such as achievement (i.e., a job itself will give an employee a sense of stimulated feeling of having done something worthwhile), recognition (i.e., an employee will be well recognized and/or praised for each of their successes by the supervisors and colleagues), responsibility (i.e., an employee must take responsibility of their job task with ownership to complete the task), growth (i.e., an employee should get opportunity to learn new skills through professional development and/or formal educational training), advancement (i.e., an employee should get an equal opportunity to be promoted at a higher level), and tasks in the occupation (i.e., everyday tasks in the work must be inspiring, diverse, and/or offer a good range of creative challenges); and (2) hygiene factors such as salary (i.e., a fair and reasonable salary structure which must be expediently competitive with other institutes within the same business domain), status and security (i.e., an employee should have a solid status in the organization and feel secure about their job without any significant risk of being jobless), supervision (i.e., an employee should get fair and appropriate supervision with their independence to do better and grow), relationship (i.e., an employee should work in a healthy, functional, and cooperative and collegial workplace without any bullying or cliques), work conditions (i.e., workplace environment and tools must be contemporary, safe, functional, and hygienic), and company policies (i.e., all policies need to be open, fair and equivalent for everyone within the company and their competitors). Over time, these concepts in motivation factors and hygiene factors have evolved into the terms "intrinsic motivation" and "extrinsic motivation", respectively. This theory and terms have been widely applied in many literature (e.g., Carmeli and Weisberg 2006; Furnham et al. 2009;Maidani 1991;Park et al. 1988;Sachau 2007;Smith and Shields 2013). Typically, intrinsic motivation is related with job content, while later is correlated with extrinsic motivation. According to Herzberg (1974), achievement, recognition for achievement, job itself, responsibility, growth and advancement are intrinsic motivation factors, whereas, policy and administration of the organization, supervision strategies, interpersonal relationship between employees, workplace environments and conditions, job status, salary, and work security are extrinsic motivation factors. Given that intrinsic motivation was positively associated with job satisfaction, Herzberg proposed a technique of job enrichment through increasing intrinsic motivation to make jobs more interesting. Later on the work of Hackman and Oldham (1976), in developing the job
J. Risk Financial Manag. 2020,13, 200 5 of 18 characteristics model, which advocated work redesign or job enlargement, was strongly influenced by the motivation–hygiene theory. Others argued that extrinsic motivation also contributes to job satisfaction. This debate gave rise to the initial use of the terms intrinsic motivation and extrinsic motivation as explained by Sachau (2007). When people work to fulfil hygiene needs they are responding to extrinsic motivation. That is, they are moved to act by life factors external to the job. Intrinsic motivation, on the other hand, refers to factors that influence work behaviour that are directly related to the nature of the work itself. Thus, when Herzberg controversially wrote that “money is not a motivator” (see p. 381), he was not saying that money could not move people to work. He was arguing that money was not an intrinsic motivator, but rather an extrinsic motivator as its value lay in its ability to acquire the goods and services on which life and life-style were based. A similar distinction between intrinsic and extrinsic motivation was proposed by Ryan and Deci (2000) in developing their self-determination theory (SDT). Here, intrinsic motivation was defined as “the doing of an activity for its inherent satisfactions rather than for some separable consequences” (p. 56). Extrinsic motivation was defined as “a construct that pertains whenever an activity is done in order to attain some separable outcome” (p. 60). Moreover, their study identified four stages, external regulation, introjection, identification, and integration, though which extrinsic motivation is transformed into intrinsic motivation. The most autonomous form of extrinsic motivation is integration, i.e., a complete blending of external drivers and self-values for a particular action. Debate has arisen over the potential impact of extrinsic rewards on intrinsic motivation with the view emerging that extrinsic rewards may weaken intrinsic motivation. Empirical research, however, is inconclusive. Following a meta-analytic study Wiersma (1992) noted that “it is not supported when task performance is measured while the extrinsic reward is in effect”. On the other hand Deci et al. (1999), based on a meta-analysis of 128 past experiments, claimed that “tangible rewards tend to have a substantially negative effect on intrinsic motivation”. Finally, in considering work motivation for the public sector, we must ask if the motives that drive people to serve in public or community development are likely to be different to those in non-public sector occupations. Perry and Wise (1990) asserted that there exists a public service motivation (PSM) which can be defined as “an individual’s predisposition to respond to motives grounded primarily or uniquely in public institutions and organizations” (see p. 368). Building on this, Perry and Hondeghem (2008) argued that public service motivation is composed of “individual motives that are largely, but not exclusively, altruistic and are grounded in public institutions” (refer to pp. 3–4). Perry (1997) also investigated the antecedents of public service administration, and proposed five sets of correlates: parental socialization, religious socialization, professional identification, political ideology, and individual demographics. The work of Vandenabeele (2007,2008,2011) explained the theoretical framework of PSM, provided a measurement scale for PSM, and identified the antecedent of PSM which was related to the institutional development of PSM. Vandenabeele (2007) proposed a hypothetical framework that positioned PSM within the theories of institutionalism, SDT, and the person–organization fit theory. It assumed that “the degree of institutions respond to the individual psychological needs of relatedness, competence and autonomy, institutionalized public service values will be internalized more autonomously in the individual identity” (p. 553). Furthermore, he hypothesized “to the degree that a public service identity is more autonomous, it will result in a more consistent and intense public service behaviour, given that the institution in which the individual operates embraces the public service values” (p. 553). However, Vandenbeele acknowledged that further research was require to provide empirical validity to his theory. In existing public administration literature, PSM has been considered as one of the key research topics at both national and international levels (Bright 2013). As the study of Pedersen (2013) confirmed that the PSM dimension of “public interest” was positively associated with attraction to public sector employment, as a support for one of Perry and Wise (1990) propositions.
J. Risk Financial Manag. 2020,13, 200 6 of 18 3. Examining Relationship between Work Motivations and Job Performance and Job Satisfaction The key three links between work motivation and job performance, work motivation and job satisfaction, and job performance and job satisfaction are examined in this section in line with the evidences from the literature. Although there is a range of studies available in this area of research which primarily focused on private sector, our focus here is on the public sector. Therefore, we will mainly rely on most of the resources from the public sector research which are consistent to validate our analysis. 3.1. Relationship between Work Motivations and Job Performance Herzberg (1968) examined the relationship between work motivation and job performance by comparing a group of workers who had been enriched with motivator factors (intrinsic motivations which included achievement, responsibility, recognition, growth, and learning) with a control group. He observed that the test group had better performance and attitudes towards their job than the control group and concluded that motivator factors (intrinsic motivation) had a positive relationship to job performance. With respect to extrinsic motivations, Sachau (2007) adopted Herzberg’s notion that “hygiene factors have an escalating zero point” (see p. 386). That is “once a person has experienced a new higher level of a given hygiene factor, the new level becomes the minimal acceptable level”. Thus, both intrinsic and extrinsic motivations have been identified as critical factors driving job performance. Studies have consistently reported a positive relationship between job performance and intrinsic motivation (Dysvik and Kuvaas 2010,2013;Grant 2008;Joo et al. 2010). Similarly, research generally supports the presumption that extrinsic rewards (a form of extrinsic motivators) will be positively related to job performance (Bonner and Sprinkle 2002;Condly et al. 2003;Dysvik and Kuvaas 2013;Garbers and Konradt 2014). However, some authors warn that findings with respect to extrinsic rewards should be used prudently—especially in relation to task complexity. With respect to public service organizations, Perry and Wise (1990) proposed that (1) A higher level of PSM of an individual is favourable to join a public sector organization; (2) PSM is positively correlated with job performance; and (3) Individual employees’ performance can be easily managed if the public sector organizations appoint workforce having a higher level of PSM. Subsequent studies have provided empirical validation of these hypotheses (see Naffand Crum 1999;Alonso and Lewis 2001;Bright 2007). While the first two of these three studies found a significantly positive relationship between PSM and job performance, the third study added to it by showing that the relationship was stronger when person–organization (P-O) fit was introduced as a mediating factor. Vandenabeele (2009) undertaking research in public sector organizations in Belgium, confirmed that PSM was significantly related to job performance (as well as to both job satisfaction and organizational commitment). Further, research with Italian nurses (Bell é 2013) found that individuals with higher PSM had stronger job performance. Interestingly, Bell é (2013) also argued that “PSM is a dynamic state” and “the levels of PSM found among an organization’s employees may be not wholly determined by attraction-selection-attrition mechanisms but may also be influenced by the organization to some extent”. 3.2. Relationship between Work Motivation and Job Satisfaction The motivation-hygiene theory is frequently used in contemporary research. Several studies have revealed that both work motivation and hygiene factors have positive relationship with employees’ job satisfaction (e.g., Furnham et al. 2009;Islam et al. 2011;Sell and Cleal 2011;Smith and Shields 2013). A sample of 107,292 observations from 49 countries has been used in a study by Huang and Vliert (2003), which reveals that various extrinsic job characteristics have a strong and significant relationship
J. Risk Financial Manag. 2020,13, 200 7 of 18 with job satisfaction in all countries. It also demonstrates that the strength of correlation is higher for data from richer countries, having better social security, more individualistic values, and relatively a less power distance culture. Moreover, a study on job satisfaction in West Germany, Great Britain, the United States, Hungary, Norway, and Israel has revealed that there is a positive and statistically significant associations of both intrinsic and extrinsic rewards, relationships with administration and work-relations with colleagues to job satisfaction (Westover and Taylor 2010). However, intrinsic rewards were found to have the dominant influence. Furthermore, PSM was found to have an insignificant impact on job satisfaction, although PSM-fit proved to be significant. Counteracting this finding was the work of Taylor and Westover (2011). They used the same survey (the International Social Survey Program, ISSP), but chose different countries (the USA; Canada; Great Britain; Germany; France; Denmark; and Norway), and found that PSM was significantly related to job satisfaction in government employees. 3.3. Relationship between Job Satisfaction and Job Performance The relationship between employees’ job satisfaction and job performance remains a very important topic in organizational risk management processes. It is generally held that job satisfaction has an insignificant impact on job performance. Lawler and Porter (1967) cite the Brayfield and Crockett (1955) review study on this issue in which they conclude “there is little evidence in the available literature that employee attitudes bear any simple relationship to performance on the job” (see p. 21). This conclusion has resulted in the issue being frequently re-examined. Lawler and Porter (1967) demonstrate that there is a positive and persistent relationship between job satisfaction and job performance. They stated that “satisfaction is an important variable from both a theoretical and a practical point of view despite its low relationship to performance” (see p. 24). Locke (1970), who took into consideration motivational theories (including expectancy theory, goal-setting theory, and achievement theory) inferred that “the effect of performance on satisfaction is viewed as a function of the degree to which performance entails or leads to the attainment of the individual’s important job values”. Iaffaldano and Muchinsky (1985) concluded that job satisfaction had an insignificant impact on job performance. Judge et al. (2001), on the other hand, found a high and significant correlation and declared that it was “premature to dismiss the relationship” (see p. 389). They encouraged future research on the issue—proposing an integrative model of the relationship between job satisfaction and job performance (see p. 390). This call was answered by Schleicher et al. (2004) who found a larger and significant correlation had existed between job satisfaction and job performance when moderated by affective-cognitive consistency. Subsequently Borgogni et al. (2010) confirmed “job satisfaction affects job performance, along with the organizational tenure” (refer to p. 288). Finally, Nyberg (2010) concluded that “performance was statistically significant and positively associated with job satisfaction”. Therefore, our proposed model considers these two factors as the mediating factors of the development of the intention to leave an organization from the overall work motivation. 4. Determinants of the Intention to Leave an Organization It can be very costly for an organization when its highly competent employees may have voluntary disengagement to the organization’s perspectives. So, this organizational risk to me managed effectively specially in the public sector as it is a growing concern for many countries. According to a study by Hellman (1997), typical risks include employee replacement costs as well as operational disruptions. Often the individuals’ perception of their prospects for generating a higher level income from private sector organizations can drive to leaving a public sector organizations. There is extensive research into turnover intentions, (e.g., see Bluedorn 1982b;Swailes and Fahdi 2011;Carmeli and Weisberg 2006; Nyberg 2010).
J. Risk Financial Manag. 2020,13, 200 8 of 18 A meta-analysis by Zimmerman and Darnold (2009) concluded that the relationship between job performance and intention to quit is “both negative and modest”. It was also recognized that the relationship could be mediated by other factors, such as job satisfaction. Nyberg (2010) on the other hand, concluded “the negative relationship between performance and voluntary turnover was stronger when pay growth was high than when pay growth was low” (see p. 449). This result implied that the high performers were more likely to stay within the organization when pay growth was high. A similar finding was associated with the prevalence of promotion prospects. High performing employees were found to have a higher propensity to voluntarily resign when the unemployment rate rose, as they believed that they could seize the better opportunities in a competitive labour market than the lower performing employees. Typically, a low level job satisfaction is connected to a turnover intention. For instances, A recent study by Mihajlov and Mihajlov (2016) has revealed that public sector employees have higher extrinsic job satisfaction and lower turnover intentions compared to their counterparts in the private sector. Job satisfaction affects organizational commitment, which then successively effects intention to leave organization (Bluedorn 1982b), and job satisfaction and affective commitment have been significantly related to turnover intentions (Carmeli and Weisberg 2006). Another research also demonstrates that job satisfaction was a statistically significant mediator of performance–voluntary turnover relationship (Nyberg 2010, p. 449). These findings are repeated in several studies (Hellman 1997;Tett and Meyer 1993;Griffeth et al. 2000;Hom and Kinicki 2001;Chen et al. 2011). Finally, Tett and Meyer (1993) conducted a path analyses based on meta-analytic findings of the relationships between job satisfaction, organizational commitment, and turnover. They found that job satisfaction had a high negative correlation with turnover intention and that this impact was stronger than that of organization commitment. So, the overall findings suggest that job satisfaction is one of the best predictive measurement of employees’ intention to leave the organization, which is in consistent with the funding in other research (e.g., Griffeth et al. 2000). 4.1. The Public Sector Context Our goal in this paper is to examine the influence of work motivation, job performance, and job satisfaction on the intention to leave an organization—especially in the contexts of the public sector organizations and the risk management in public sector. Employee voluntary turnover has been an important issue of both practical and theoretical significance. Voluntary turnover could be driven by many factors, such as low job satisfaction, poor individual or organizational performance, or external factors (i.e., unemployment rate). Public sector management has evolved over the last three decades. In this 21st century’s business environment, the public sector organization need a higher level of accountability and transparency than in the past century. Research and innovations in public administration and new public management concepts can be useful to meet this progressive demand. A relevant example could be the Organization for Economic Co-operation Development (OECD), which has pushed reform agendas to its member countries. Moreover, governments in many countries have already launched public sector organizational reform to tackle their internal social and economic crises or meet to international demand and standards. Therefore, in the globalized services providing environments public sectors’ financial organizations are in a huge challenge to reform and provide better outcomes and performance to local, national and international communities. When an organization is under reform, it employees not only face with changes related to their job design, salary arrangements, and performance appraisal system, but also they must meet specific performance target at individual and organizational levels. They require appropriate professional developments to equip themselves with high levels of work motivations to accomplish and align themselves to their organizational targets. The professional development opportunities may be limited in many public sector organization. As a result, a high proportion
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