The Link Between Perceived HRM Practices and Employee Intention to Stay
Purpose – This study seeks to explain the motivations behind employees’ intention to stay in private higher education institutions (PHEI) in Malaysia. This study adds value by developing a conceptual framework that proposes perceived human resource management (HRM) practices as key role in explaining employees’ intention to stay. Furthermore, this study argues that organizational citizenship behavior (OCB) is a potential mediator that might explain how employees’ intention to stay occurs. In addition, this study proposes that leader-member exchange (LMX) moderates the relationship between OCB and employees’ intention to stay. Design/methodology/approach – Relevant literatures are reviewed and assessed critically. Originality/value – This study explored the relationship between perceived HRM practices and employees’ intention to stay in Malaysia’s PHEIs. By using Social exchange theory, this paper proposes that perceived HRM practices are uniquely positioned to support the organization’s performance in terms of employee intention to stay with the intervention of OCB and LMX.
Keywords: Human Resource Management (HRM) PracticesOrganizational Citizenship Behavior (OCB)Leader Member Exchange (LMX) and Employees’ Intention to Stay
The success of an organization depends on high-performing employees. High-performing employees the most valuable assets for the organizations and difficult to replace, so they become the key competitive advantage for an organization (Mello, 2011). The goals of every organization are to deliver services and make profit. These goals cannot be achieved without the contributions and support of competent and capable employees (Johanim, Tan, Zurina, Khulida, & Mohamad, 2012). However, some organizations face problems in retaining talented employees due to high turnover rate. One of the main challenges face by PHEIs in Malaysia is high lecturers’ turnover rate. Lecturers’ turnover rate in Malaysian PHEIs is at an alarming rate (Hashim & Mahmood, 2011; Zakaria, Jidi, Zani, Mislan, & Eshak, 2014; Saraih, Zuraini, Sakdan, & Razli, 2017). According to National Higher Education Research Institute (2004), the turnover rate of lecturers in private universities and colleges was 45.45 percent respectively in 2004 (Rathakrishnan, Ng, & Tee, 2016). Malaysian Employers Federation (MEF) also reported that the average turnover rate for the education sector was 29.28 percent in 2011. The number of academic staffs in Malaysian PHEIs, showed a declining rate in the total number of academic staffs from 32,992 (the year 2010) to 24,476 (the year 2013) although the number of institutions keeps on growing (Department of Statistic Malaysia, 2015). Besides, Critical Skills Monitoring Committee (CSC) has reported that university and higher education professional academician is one of the critical occupations in Malaysia with a marginal growth of 11.06 percent in one-year period (Talent Corp critical Occupational list 2016/2017, p. 75).
The number of private higher education institutions in Malaysia is increasing in accordance to the country’s intention to become an educational hub in the Asian region (Grapragasem, Krishnan, & Mansor, 2014). As of 31st March 2018, there are 53 private universities, 36 college universities, 10 branch campus of foreign universities and 378 colleges in the country (Ministry of Higher Education Malaysia, 2018). Table
The statistic presented in term of gross output, colleges and universities education registered the highest value of RM7.5 billion (69.9 percent) to the total (Department of Statistics Malaysia, 2016). Currently, PHEIs are facing intensive competition as many of them are struggling to position and rebranding themselves in the marketplace. However, the shortage of lecturers is a major problem to the education institutions. The turnover rate of lecturers mainly due to the dissatisfaction of HRM practices (Khan, Ahmed & Sarker, 2010). HRM practices such as recruitment and selection, training and development, performance appraisal, reward and recognition and career opportunities play a significant role in influencing employee attitude and behavior which can enhance employees’ intention to stay in organization in private higher education industry (Hong, Hao, Kumar, Ramendran, Kadiresan, 2012; Harun, Shahid, & Othman, 2016). HRM practices will be more successful and effective when the employees’ voluntary to work extra beyond their official job descriptions. Hence, they will feel a sense of belonging to their organization and this voluntary behavior indirectly will help to enhance intention to stay. The voluntary behavior is referring to Organizational Citizenship Behavior (OCB) (Cesário & Magalhães, 2017). Thus, the existence of OCB in organizations is expected to increase intention to stay in the organization.
Support from a leader is also an important factor to encourage employee’s OCB and intention to stay in the organization. According to Dansereau, Graen and Haga (1975), leaders develop different exchange relationship with their employees. Employees engaged in high quality social exchange relationship with employer tend to stay longer with organizations. Lo, Ramayah and Kueh Swee Hui (2006) emphasized in their study that the relationship between leader and members of the organization played a significant role in terms of motivating employees to perform citizenship behavior. High quality relationship positively associated with the employee retention (Ertuck &Vurgun, 2015).
To compete effectively and gain a competitive edge in a global marketplace, lecturers are always the most valuable assets for PHEIs to achieve its organizational goals. This also can be achieved by providing organizations with information on factors that influence intention to stay in the organization. Therefore, the purpose of this study to understand (1) how perceived HRM practices can promote intention to stay (2) how perceived HRM practices can encourage OCB from lecturers; (3) how OCB leads to intention to stay; (4) how OCB mediates the relationship between perceived HRM practices and (5) how the perception of LMX would further moderate the existing relationship between OCB and intention to stay.
As highlighted in the previous section, PHEIs are facing high lecturers’ turnover rate. The continuous leaving of lecturers may not be a good sign in the long run as lecturers not only act as the most valuable assets but also the disseminators of knowledge to students. Lecturers play a very significant role for the institutions in producing the highly capable and holistic graduates (Saraih et al., 2017). The issue of the lecturers’ turnover in Malaysian PHEIs is alarming and given the fact that turnover is cost. Hence, it is argued that it would be more beneficial to investigate factors that may retain the lecturers for institutions and industry. Dubosc and Kelo (2011) reported that one important reason why employees leave the organization is due to the inappropriate HRM practices to address the challenges properly. Many organizations in Malaysia do not provide a continuous training program for their employees and reward and recognition are not adequate to provide the desired reward to the lecturers, less respect and recognition has been given to their contribution (Morris, Yaacob & Wood, 2004; Hong et al., 2012). These factors lead to the lecturers lose their interest in their jobs. They may have the intent to leave options either to accept better offers within or out of education industry. Besides that, the organization sometimes neglects to provide development programs for lecturers (Hong et al., 2012).
Branham (2005) suggested there are seven main reasons why employees leave; low pay, lack of recognition, limited career advancement, untrustworthy leadership, poor management practices, unfulfilling jobs and dysfunctional work cultures. All these factors are closely linked to HRM practices, thus, a proper understanding of the relationship between perceived HRM practices and intention to stay will help organizations make the right decisions in achieving organizational goals and maximize their profits (Johanim et al., 2012). Although the previous study confirmed the link between HRM practices and intention to stay, but limited knowledge on the integration effect of perceived HRM practices, OCB and intention to stay has been reported. The relationship between perceived HRM practices and intention to stay may not be so simple, and the present study suggests that OCB might be mediating the relationship. Thus, this study proposes the integration effect of these variables in the context of PHEIs in Malaysia. OCB is propose as a mediator since there are inconsistence findings regarding the relationship between HRM practices towards intention to stay (Chew & Chan, 2008; Johanim et al., 2012; Liew, Rahman, Patah & Rahman, 2016).
In addition, in explaining factors contributing to employees’ intention to stay, it is essential to consider LMX as motivated employees to stay longer with an organization (Saeed, Waseem, Sikander & Rizwan, 2014; Ertuck &Vurgun, 2015). Thus, this present study proposes that their leader (direct supervisors) may have an important role to play in terms of intention to stay in the organization. To illustrate further, an employee will be motivated to perform his job if given sufficient guidance from leader through proper recruitment and selection, training and career opportunities, appraised through effective performance standard and rewarded equally according to performance standard. To date, the intervention of LMX in OCB and intention to stay study has received little attention from HRM and OCB literature. LMX has become a moderator for many different studies and contexts (Buch, 2015; Lo, Ramayah, Min & Songan, 2010; Johnson, Truxillo, Erdogan, Bauer & Hammer, 2009). Therefore, this study proposes to test the role of moderating variable (LMX) in the relationships between OCB and intention to stay among lecturers in the context of PHEIs.
The following sub-research questions are framed to answer the research questions:
Does perceived HRM practices positively related to intention to stay in Malaysia’s PHEIs?
Does perceived HRM practices positively related to OCB?
Does OCB positively related to intention to stay in Malaysia’s PHEIs?
Does OCB mediate the relationships between perceived HRM practices and employees’ intention to stay in Malaysia’s PHEIs?
Does LMX moderate the relationship between OCB and employees’ intention to stay in Malaysia’s PHEIs?
Purpose of the Study
The following sub-research objectives are framed to accomplish the main objectives:
To explore the relationship between perceived HRM practices and intention to stay in Malaysia’s PHEIs.
To explore the relationship between perceived HRM practices and OCB.
To examine the relationship between OCB and intention to stay in Malaysia’s PHEIs.
To examine if OCB mediate the relationship between perceived HRM practices and intention to stay in Malaysia’s PHEIs.
To investigate if LMX moderates the relationship between OCB and intention to stay in Malaysia’s PHEIs.
To achieve the stated purposes and answer the research questions, a systematic review of literature was conducted by using an archival method. This research is grounded on a solid theoretical framework combined the secondary data. This study employs a methodology to review the articles cited in the databases such as Taylor and Francis Online, Sage, Science Direct, Springer link, Emerald and Wiley Online Library with the current topic of HRM practices, OCB, LMX, intention to stay and education. The secondary data analysis of current literature was studied in order to construct a solid theoretical structure as a foundation for this study.
Review of Literature
Intention to stay
Scholars have defined intention to stay in various ways, but it essentially means the intention of the employee to stay in the organization. An intention to stay is defined as employees have the willingness to stay in the current employment relationship on long-term basis (Johanim et al., 2012). This study defines intention to stay as willingness of the lecturers to stay longer in PHEIs. Thus, it would interest to explore intention to stay among lecturers in the context of PHEIs industry. Research on employees’ intention to stay has been conducted by several researchers at the different context, industries, cultures and countries using different variables. Sengupta and Dev (2013) highlighted in their study that the employee’ willingness to retain in the organization can be related with the personality of the individual, the characteristics of the job and the organization he or she is working for. Eketu and Ogbu (2015) also have studied the relationship between social intelligence and employee intention to stay among workers in the hospitality industry. They suggested that organization should encourage employees by sending them for training, seminars, conferences and workshops to avoid turnover (Eketu & Ogbu, 2015). Therefore, it is important to every organization to explore the factors that can increase employees’ intention to stay.
Perceived Human Resource Management Practices
Many previous research HRM practices were covered in many different issues and contexts. Researchers and scholars have given several definitions of HRM Practices. According to Huselid (1995), the best HRM practices areas are recruitment and selection, socialization, job design, training and development, participation, career development, performance appraisal, employee reward and job security. The most common cited practices of HRM practices include recruitment and selection, reward and recognition (Sanjeevkumar & Wee, 2012,), performance appraisal (Harun et al., 2016), training and development (Liew et al., 2016) and career opportunities (Asil, Akhlagh, & Maafi, 2013). In term of context, most of the past research that explored the influence of perceived HRM practices on intention to stay was focus on hospitality, manufacturing, construction and software industry (Eketu & Ogbu, 2015; Asil et al., 2013; Johanim et al., 2012; Liew et al., 2016). In regards to the role of HRM practices on individual outcomes, HRM practices also play a key role in influencing the attitudes and behavior of employees (Santhanam, Kamalanabhan, Dyaram, & Ziegler, 2015). Therefore, in the context of this study, the PHEIs must incorporate perceived HRM practices to enhance intention to stay. This study defines perceived HRM practices in four areas including recruitment and selection, training and development, performance evaluation, reward and recognition and career opportunities. Therefore, it is proposed that:
Proposition 1: Perceived HRM practices are positively related to intention to stay.
Organizational Citizenship Behavior
OCB has been defined as an “individual behavior that is discretionary, not directly and explicitly recognized by the formal reward system, and in the aggregate promotes the efficient and effective functioning of the organization” (Organ, 1988, p. 4). Kinicki and Kreitner (2008) defined OCB as behaviors consisting of employee behaviors that are beyond the job descriptions. Organ (1988) classifies five dimensions of OCB; conscientiousness, altruism, civic virtue, courtesy, and sportsmanship. In 2000 Podsakoff, MacKenzie, Paine, and Bachrach, have identified almost 30 different forms of behaviors in the examination of the literature and classified them into seven common dimensions (Podsakoff et al, 2000: 513-563): Helping behavior, sportsmanship, organizational loyalty, organizational compliance, individual initiative, civic virtue and self-development. This study defines OCB as the positive behaviors that lecturers contribute to their organization. Therefore, this study proposes unidimensional to measure OCB as a mediator to the relationship between perceived HRM practices and intention to stay.
OCB may support the role that HRM practices in determining the extent to which employees create an intention to stay their current employment relationship (Organ, Podsakoff & MacKenzie, 2005). Prior research has demonstrated that positive perceptions of HRM practices influence employees to exhibit more OCB (Lam, Chen & Takeuchi, 2009) and to be less likely to quit (Takeuchi & Takeuchi, 2013). Alfes, Shantz, Truss and Soane (2013) found that HRM practices were significantly related to OCB. It showed where employees’ perceptions of HRM practices were positive, OCB will enhance, and employee retention will increase. Previous evidence also indicates a positive relationship between OCB and employees’ intention to stay (Chinomona, Dhurup & Joubert, 2017). An employee with OCB, not only accomplish their job responsibilities but also to take care of those around them, such as assisting their co-workers. In addition, they tend to be more cooperative in the workplace and can tolerate with inconvenient. Consequently, employees with high OCB tend to stay in the organization for longer periods. Thus, it is interesting to investigate how HRM practices affect the intention to stay through their engagement of OCB. This present study highlight the role of OCB as a mediator that intervene in a relationship the between perceived HRM practice and employees’ intention to stay in PHEIs. Therefore, it is proposed that:
Proposition 2: Perceived HRM practices are positively related to OCB.
Proposition 3: OCB is positively related to intention to stay.
Proposition 4: OCB mediates the relationship between perceived HRM practices and intention to stay.
Leader Member Exchange
Social exchange relationships have been studied in more recent years exchange relationships between supervisors and employees often referred to LMX (Blau, 1964). One important factor that employees take into consideration while deciding to stay with the organization is their perception of the relationship between leader and member. High-quality relationships between employee and leader will lead to employee commitment and retention (Cropanzano & Mitchell, 2005). LMX suggests that supervisors should treat their employees as individuals, understanding that each person is distinctive (Green, Craven, Scott, & Gonzales, 2006).
Measurement of LMX has changed over the years. This modification of the measure has occurred from our learning through research and theorizing about LMX. Moreover, although multiple factors were generated for the larger measures, the Cronbach alphas for the single measure were consistently in the 80%–90% range (Graen & UhlBein, 1995). The LMX-7 instrument has been widely used and has been shown to have predictive validity and internal reliability (Cogliser, Schriesheim, Scandura, & Neider, 1999). Therefore, this current study suggests one dimensional of LMX-7 to measure LMX as moderator to the relationship between OCB and intention to stay.
LMX has strongly significant relationship with OCB (Ozdevecioglu, Demirtas & Kurt, 2015; Hsiung & Bolino, 2018) and intention to stay (Bang, 2011). In particular, this has shown that employees who have high-quality LMX relationships are more likely to engage in OCBs, less likely to withdraw from the organization, and less likely to feel negative about their careers (Dulebohn, Bommer, Liden, Brouer & Ferris, 2012.). Thus, this is vital in PHEIs, since supervisors often need to influence and motivate subordinates to increase their commitment and effort. Therefore, this present study proposes the role of LMX as moderator to influence the relationship between OCB and intention to stay. Therefore, it is proposed that:
Proposition 5: LMX moderates the relationship between OCB and intention to stay.
As discussed in the literature review, this study proposes an integrated framework as depicted in figure
In conclusion, the present study provides an expanded understanding of the impact of perceived HRM practices on intention to stay in the PHEIs industry. This study also provides fresh insights on relationship between perceived HRM practices, OCB and intention to stay. Furthermore, the current study also shed some light on the role of OCB as a mediator and LMX as a moderator. Besides that, other researchers can use this finding to deepen their understanding or to find the solution to these issues will be even better. Therefore, PHEIs need to emphasize on perceived HRM practices to enhance intention to stay. Overall, this study also has made significant contributions to the gaps in the literature by linking perceived HRM practices, OCB, LMX and intention to stay in the context of PHEIs in Malaysia.
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