Employee Commitment in Vietnam: A case study within a large technology company
Melanie Powell1 and Linh Le2
1. University of Derby, Derby Business School, Senior Lecturer in Economics
2. University of Derby, Derby Business School, MSc student
University of Derby, Derby Business School, Kedleston Road, Derby, DE22 1GB
Tel: 01332 591432 e-mail: m.j.powell@derby.ac.uk
Stream 5
Working Paper
Abstract
Purpose: This paper aims to extend knowledge of the importance of the cultural
dimension in Asian organisational commitment and to identify some initial evidence of
factors affecting employee commitment in Vietnam.
Methodology: This paper examines the literature on organisational commitment and
examines how cultural differences in organisational commitment in Asian contexts. It
applies a five-component model of organisational commitment based on Wang (2004).
Data was collected using an electronic questionnaire format in one global high
technology telecommunications company in Vietnam. Hypotheses are drawn from the
literature and tested using the sample data with Anova and correlation.
Findings: This paper supports the use of the five-component model the Vietnam cultural
context, and supports previous findings that affective, active continuance and value
commitment are the most important components in the Asian context. It also finds
evidence that HRM practice at the organisational and manger level significantly increase
commitment.
Research Limitations: The study is small and focused on one company.
Practical Implications: The results suggest large global companies entering Vietnam
should focus organisational HRM practice on active continuance and value commitment.
Originality: This is the first study to consider the five-component model in a Vietnamese
context.
Keywords: Organisational commitment, cross-cultural, Vietnam, five-factor model.
Introduction
There is an established literature on the nature of organisational commitment, factors
affecting commitment and the relationship between increased commitment and positive
organisational outcomes. HRM practice is seen as a key factor in developing organisational
commitment and supporting positive outcomes. However, the main models are derived
from Western culture and practice. Cross cultural studies in China, Japan and Korea have
shown evidence of cultural differences in commitment and understanding these differences
and their impact of HRM practice is increasingly important in the globalised economy.
Vietnam is one of the fastest growing economies in South East Asia, attracting foreign
direct investment and multinationals with established HR practice (World Bank, 2013), yet
relatively little is known about employee commitment in Vietnam. This research is an
initial exploration of the nature of commitment within a large multinational technology
company in Vietnam.
Literature Review
Commitment is widely defined as the extent of an individual’s loyalty and attachment to
an organisation, linked to the degree of effort an individual will exert to support of the
organisation’s goals (Ashraf et al., 2012: Redman and Snape, 2005; Tella et al., 2007). The
widely-used three-component commitment model of Meyer and Allen (1991) is based on
the earlier work of Becker (1960), Porter et al. (1974) and Mowday et al. (1979). The model
identifies organisational commitment through attachment or involvement (affective
commitment), through the cost of stopping involvement (continuance commitment) and
through a degree of obligation (normative commitment).
Many studies show that employee commitment is closely connected to organisational
benefits with positive influences on productivity, quality and competitiveness, and that
commitment is linked to HR practice (Ashraf et al. 2012; Fiorito et al. 2007). CooperHakim and Viswesvaran, (2005) and Meyer et al, (2002) show committed employees are
less likely to quit their jobs, less likely to be absent, more likely to engage and have higher
levels of satisfaction. Loi et al., (2006) suggest effective HR practice indicates concern for
the employee which raises affective commitment. Coyle-Shapiro and Conway (2005)
argue that trust, fairness and delivering promises are the factors through which HR practice
affects continuance commitment but increasing trust can also raise attachment and hence
affective commitment (Michaelis et al, 2009). Where HR practice establishes high quality
exchange relationships in the work experience, employees reciprocate in a positive and
beneficial way (Gould-Williams and Davies, 2005). HR practice can increase the perceived
level of organisational support which positively affects commitment (Allen et al. 2003).
Empirical evidence suggests work experience factors such as level and fairness of reward
distribution, clarity of employee’s role, freedom from conflict, job challenge, opportunity
for promotion, supervision consideration, and participation in decision making, all affect
affective and continuance commitment. (Ito and Brotheridge, 2005; Parish et al. (2008).
Older, female, married and longer tenure workers have higher levels of affective
commitment (Peterson, 2004; Salami, 2008; Sulliman and Iles, 2000), but the evidence is
inconsistent (Meyer and Maltin, 2010).
Overall, affective commitment is widely found to be the most dominant factor in
organisational commitment. As the underlying model and much of the evidential support
is derived from Western culture and organisational practice, more recent analysis has
focused on the applicability of the model in other cultural settings. Cross cultural studies
show evidence of cultural differences in commitment levels between Western and Asian
employees and the differential impact of high commitment HR practice in multinational
firms (Andreassi et al. 2014; Kooiji et al., 2010). Using the three dimension model of Myer
and Allen (1991) and the cultural dimensions model of Hofstede (1980), collectivism and
power distance have been shown to be related to affective, continuance and normative
commitment levels (Fischer and Mansell, 2009; Froese, F. and Peltokorpi, V. (2011). Most
studies of commitment in collectivist and high power-distant cultures have focused on
China, Japan and Korea.
Fischer and Mansell (2009) argue that affective commitment is higher in collectivistic
culture because loyalty and attachment to the organisational group is stronger. The
provision of workplace benefits and retirement funds may increase affective commitment
more in individualist compared to collectivist cultures as individual focused attachment is
more important in the former. (Aub’e et al., 2007). Employees in individualist cultures are
more likely to pursue personal goals where there is a conflict between their own goals and
the group’s goals (Gelade et al., 2008) and focus on cost/benefit calculations, so HRM
practice aimed at reducing conflict may also have more effect on continuance commitment
in individualist cultures. Fischer and Mansell (2009) suggest that relationships in
collectivist cultures are determined by moral obligations within the family or wider
community and the normative nature of relationships increases normative commitment to
the organisation. In individualist cultures, mutual obligations and duties are weaker,
making normative commitment less important (Belias and Koustelios, 2014). Family
pressure, loyalty and respect for leaders are other factors that may increase the importance
of normative commitment in collectivist cultures (Meyer and Allen, 1991; Meyer and
Parfyonova, 2010).
The Meyer and Allen (1991) model has been extended to examine whether different aspects
of continuance commitment should be separated, including the lack of employment choices
and loss of employer benefits, but the empirical results generally support the three
component model. (Chen & Francesco 2003; Hackett et al. 1994; Jaros, 1997; Tayyab,
2007). However, Wang (2004) argues that value commitment derived from Mayer &
Schoorman (1992) is important in Chinese collectivist culture where employees are more
likely to accept organisational goals to support the employer-employee relationship. Value
commitment assesses the willingness of an employee to exert effort for the organisation.
Wang (2004) also argues that continuance commitment should be separated into an active
element, e.g. desire to stay because of on-the-job training, and a passive element, e.g. desire
to stay because of family commitments or no better job. In collectivist cultures, employees
consider opportunities for personal development more than losing benefits in the decision
to stay. Wang (2004) incorporates these into a five component model for use in collectivist
cultures and found the model more appropriate for both state-owned and foreign owned
organisations in the Guangdong region of China.
Wong and Tong (2014) compare Wang’s five component model against the Meyer and
Allen three component model using confirmatory factor analysis on a large sample of ICT
professionals in Hong Kong. Wong and Tong (2014), find the five component model is a
better model in Hong Kong’s ITC sector environment and suggest that the geographical
closeness of Hong Kong and Guangdong may lead to similar cultural values. Like Wang
(2004), they find that value, affective and active continuance commitment are the strongest
components of organisational commitment, and find passive continuance and normative
commitment the weakest components (Wang 2004).
Wong and Tong (2014) found no effect of demographic variables on affective commitment.
Gender had no effect on other commitment measures, but tenure with the organisation was
positively correlated with both active and passive continuance as well as normative
commitment. Workers with longer tenure are more likely to be offered high value training
and promotion increasing active continuance commitment, as well as have higher fringe
benefits increasing passive continuance commitment, and their level of obligation to the
organisation is higher. They found age had a significant positive correlation with passive
continuance and normative commitment which might relate to industry specific
experience, retirement funds and fewer alternatives for older workers. Marriage had a
significant negative effect on active continuance and value commitment and a positive
effect on passive continuance suggesting married employees might be more concerned with
stability rather than work benefit, experience or values of the organisation.
Wong and Tong (2014) examine other studies which find the three component model a
better fit for organisational commitment in Pakistan, (Tayyab, 2007) and Turkey, (Wasti,
2005) suggesting this may be due to differences between Asian and near Asian cultures
and the extent to which business in these areas are operating in high-valued competitive
and globalised markets. They conclude that where value commitment is important, strategy
development should be transparent and more clearly linked to employee needs.
This research aims to extend knowledge of the importance of the cultural dimension in
Asian employee commitment and to identify some initial evidence of factors affecting
employee commitment in Vietnam. Vietnam is located in South East Asia and has a
population of 89.71 million people with the total GDP is around USD 171.4 billion (World
Bank, 2010). It is one of the fastest growing economies in the region and a destination for
foreign investment. Many established global companies have move their production to
Vietnam rather than China in recent years (World Bank, 2010). As an advancing Asian
economy, with the characteristics of a collectivist and high power-distance culture, value
commitment within the five component model may be important in assessing commitment
and developing HRM practice in global companies within Vietnam.
Methodology
The data was collected via an anonymous questionnaire delivered in electronic format to
100 male and 100 female employees drawn from graduate educated employees in
administration, management and technical jobs in a major global Vietnamese
telecommunications company. The respondents were all working in the capital city branch
in Vietnam. The company has 25,000 employees working across Vietnam, Cambodia,
Laos, Haiti, Mozambique and Peru with a developed HR function. The sample contains
employees in a high technology sector in a major city competing in high valued, globalised
industry. In the Wong and Tang (2014) study, 97.4% of the sample had professional
diplomas, bachelor or masters degrees. Our sample was equally stratified by gender to
increase the proportion of female respondents to further examine the effect of gender on
commitment. Wong and Tong (2014) found no effect of gender, but the percentage of
females in their sample (18.7%) was small. The questionnaire was translated into
Vietnamese but an English version was available.
The five commitment variables were measured using mean scores over questions based on
the questionnaire in Wang (2004). Each question has a five-point Likert scales with ‘1’
equal to strongly disagree and ‘5’ equal to strongly agree. In addition to demographic
questions, respondents were asked to rate factors affecting their personal level of overall
commitment to the organisation using five-point Likert scales. Similar attitudinal questions
were asked on whether different demographic factors affected commitment to work in
Vietnam more generally.
The hypotheses to be tested from these variables are:
H1: Affective, value and active continuance commitment are the strongest components of
commitment in a high technology sector in Vietnam.
H2: Demographic factors are not associated with affective commitment in a high
technology sector in Vietnam.
H3: Gender has no effect on organisational commitment in a high technology sector in
Vietnam
H4: Tenure, age and marriage have a positive effect on passive continuance commitment
in a high technology sector in Vietnam.
H5: Marriage has a negative effect on active continuance and value commitment in a high
technology sector in Vietnam.
To assess the potential route through which HRM policy could affect commitment within
the organisation, respondents were asked to rate the organisation’s achievement over five
factors associated with HRM policy. These factors were the level of conflict, the fairness
of wages and appraisal, and levels training and promotion, support for employees, and
inspiring leadership within the organisation. All questions used a five-point Likert scale
with ‘1’ equal to strongly disagree and ‘5’ equal to strongly agree. The mean score of the
five questions for each respondent was used to measure the HRM practice effect. Kooij et
al., (2010) argue that HRM practice should be assessed using employee perceptions rather
than written policies. The specific impact of manager/supervisor effectiveness was
measured using three questions on manager effect on clarity of roles, understanding
employee needs and encouraging team decision making in the organisation. Again, all
questions used a five-point Likert scale and the mean score was used to measure manager
effect.
The hypotheses to be tested from these variables are:
H6: The level of commitment is positively associated with employee perception of lack of
conflict, fairness, training and promotion, support and leadership in a high technology
sector in Vietnam.
H7: The level of commitment is positively associated with employee perception of
manager/supervisor effect on clarity of roles, understanding employee needs and
supporting team decision making in a high technology sector in Vietnam.
The data were analysed within SPSS using descriptive statistics, mean score tests for
hypotheses 1-5 and correlation analysis for hypotheses 6 and 7.
Results and Discussion
The response rate was 50 percent and 100 usable questionnaires were completed. The
demographic distribution of the sample is shown in Table 1. All respondents were
graduates and 40% had post graduate qualifications. 52% of respondents were female, 82%
were younger than 34 years, 37% were married. Only 14% had worked for the company
for 5 years or more, 47% had tenure of 2 years but less than 5 years, and 39% had tenure
less than 2 years.
Table 1. Sample Demographics
Variable
Male
Female
Single
Married
UG Degree
Post Graduate Degree
18-24 years old
25-34 years old
35-44 years old
45> years old
<2 years at company
2<5 years at company
5 > years at company
%
48
52
63
37
60
40
36
46
8
10
39
47
14
The level of organisational commitment across the five components is shown by the mean
scores in Table 2. Affective commitment is the strongest component overall, followed by
active continuance and value components. There is an overall similarity to that found by
Wang (2004) and Wong and Tong (2014) but value commitment was not the strongest
component. However, normative and passive continuance commitment have the smallest
scores as in the other studies. The variation of scores around the mean is largest for
normative commitment (27%) and smallest for value commitment (10%) suggesting high
similarity of perceptions around value commitment but far less similarity for normative
commitment. Whilst all the skew values are small, the normative commitment skew is the
largest positive showing the majority of values were below the mean. As respondents
measure of value commitment is more consistent than their measure of normative
commitment, it indicates that the drivers of value commitment are likely to be internal to
the organisation rather than externally accepted cultural factors. Using Friedman’s two way
analysis of variance by ranks shows that the distributions across the components are not
the same, p=0.000. The evidence supports H1, that affective, value and active continuance
commitment are the strongest components of organisational commitment in the high
technology sector in Vietnam.
Table 2. Importance of Components of Commitment
Commitment
Component
Affective
Active Continuance
Passive Continuance
Normative
Value
Median
3.67
3.67
3.33
3.33
3.67
Mean
3.63
3.57
3.32
2.70
3.55
Standard.
Deviation/
Mean
0.17
0.13
0.15
0.27
0.10
Pearson
Skew
-0.48
-0.62
0.00
0.46
0.14
Table 3 shows the mean score differences and the significant results of Anova analysis on
the commitment components by demographic factors. Unlike Wong and Tong (2014), but
predicted from other studies, we find a positive significant association for female gender
for affective commitment. Females have higher scores than males for affective
commitment, but no other demographic factor significantly affected affective commitment
in this cultural setting. This sample captured a wider group of highly qualified female
employees which may explain the finding. Whilst H2 and H3 are rejected, the results
suggest the only demographic association with affective commitment in this high
technology sector in Vietnam is gender. The only significant affect of age was on active
continuance commitment, rather than the hypothesised passive continuance commitment,
Employees over 35 years old had higher active continuance commitment scores. Whilst H4
and H5 are rejected, the results suggest the effect of age is through active rather than
passive continuance. The difference may indicate that older higher skilled employees in
the telecommunications sector are in short supply in Vietnam and this group have more
alternative opportunities, and if so, they may be offered better extensive training and
promotion increasing active continuance commitment. The significant positive effect of
tenure on active continuance commitment was also found in Wong and Tong (2014) but
no effect was found on other components. Younger workers with more tenure may also
attract more training and promotion opportunities increasing active continuance
commitment.
Table 3. Significant Effect of Demographic Factors.
Between Group Anova
Affective Commitment by
Gender
Mean Scores
Male
3.49
Female 3.77
Active Continuance
18-24
Commitment by Age (Years)
25-34
3.61
35-44
3.75
45>
3.87
3.44
Degrees of
freedom
F
Probability
1
5.67
.019
3
3.06
.032
Active Continuance by
Tenure (Years)
<2
3.63
2>5
3.45
5<10
3.81
10>
3.83
3
2.76
.047
To examine the route through which HRM practice at both the organisational level and at
the manager/supervisor level is associated with commitment components, correlation
analysis was used. Table 4 shows the results across the two HRM practice measures and
the five components of commitment.
Table 4 Correlation of Commitment Components against HRM practice measures
Pearson
Affectiv
Active
Passive
Normativ
Value
Correlation
e
Continuanc
Continuanc
e
Coefficient
e
e
HRM practice at -0.127
0.633**
0.313**
0.301**
0.598**
organisational level p=0.210
p=0.000
p=0.002
p=0.002
p=0.00
0
HRM practice at -0.013
manager/superviso
p=0.900
0.327**
0.067
0.083
0.295**
p=0.001
p=0.510
p=0.410
p=0.00
r level
3
Significant at the 0.05 level (2-tailed).*
Significant at the 0.01 level (2-tailed).**
The results in Table 4 show no linear association between perceived HRM practices at the
organisational or manager/supervisor level on affective commitment contradicting the
suggested route by Loi, (2006). H6 is supported in all components except affective
commitment. Given the organisation has high income benefit provision and is employing
staff in a collectivist culture, the lack of effect on affective commitment may result from
individual focused attachment being less important as suggested by Aub’e et al., (2007).
However, there is significant positive effect of both routes on active continuance
commitment supporting Coyle-Shapiro and Conway (2005). The positive significant effect
of HRM practice at the organisational level supports their view that higher levels of training
and promotion may raise active continuance commitment strongly in a collectivist culture,
whilst higher fringe benefits may raise the perceived cost of leaving, raising passive
continuance commitment.
The positive significant effect of organisation wide HRM practice on both normative and
value commitment may be driven by perceptions of fairness and inspirational leadership in
the organisation rather than promotion and training.
It
seems
likely that
managerial/supervisory effect is significant and positive for value commitment as it relates
to the desire to make effort for the organisation (monitored by managers) as well as
accepting organisational values, whereas normative commitment is dominated more by
external factors.
Employee perceptions of what affects their general commitment to the organisation in this
study are shown in Table 5. The values are the percentage that agreed or strongly agreed
that the level of the factor affected their commitment to the organisation. The largest
percentage of agreement was on opportunities for promotion; being trusted in their job;
level of benefits, bonus, leave and work/life balance; fairness in wages, benefits and
performance appraisal; clarity of roles and responsibilities; degree of personal
effort/investment and levels of participation in decision making. The smallest percentage
of agreement was on family pressure; duty to repay investment in the individual; moral
obligation; and attachment to leaders. These are in line with the findings on the importance
of affective, value and active continuance in the study.
Table 5 Perceived factors affecting commitment
Perceived Factor
%
Perceived Factor
%
Sense of belonging to a team
70
Freedom from conflict
67
81
Fear of losing benefits
61
Benefits, bonus, leave, work-life 81
balance
Attachment to leaders
51
Personal effort/investment in the job 76
Duty to repay company investment
44
Clarity of roles/responsibility
Moral obligation
39
Family pressure
25
Opportunities
promotion/training
Fairness in wages,
performance appraisal
for 88
benefits, 85
Being trusted in the organisation
76
Levels of participation in decision 76
making
Conclusions
The analysis in this study provides further evidence that the five-component model of
organisational commitment may be more relevant in Asian cultures. The evidence supports
the five-component model in a major Vietnamese city using a globally competitive
company, in a sector where employees have high and transferable technology skills and
employers provide high-commitment HRM practices. Affective, active continuance and
value commitment are the strongest components in this type of cultural environment and
passive continuance and normative commitment the weakest components. Only gender,
age and job tenure were found to be significant demographic factors affecting commitment
in the anticipated direction. Whilst this is a limited study, it indicates that Vietnam’s
cultural environment may affect organisational commitment in a similar way to China.
The study also suggests that organisation wide HRM practice may significantly raise
commitment in all components except affective commitment in Vietnam. Also, that HRM
practice at the manager/supervisor level can significantly raise both active continuance and
value commitment, which are important overall in this cultural environment. Hence
organisations entering Vietnam, particularly in high technology sectors, should focus HRM
practice on active continuance and value commitment.
Whilst there is no evidence here to suggest HRM practice influences the level of affective
commitment, this is a small study and the perceived factors included only two questions
linked to affective commitment.
The study results are limited by the small size of the sample and the focus on one high
technology company and the lack of comparative analysis. Future research should test the
three and five-factor models in other Vietnamese high technology sectors and other
industrial and professional sectors and explore further, the link between HRM practice and
affective commitment.
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