The Effect of Employees Commitment on Organizational Performance on Financial institutions In Buea
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Therefore in order to improve the performance of organizations, employee commitment is necessary as it promotes level of individual employee performance. An employee who is committed in the work place is of great value to the organization as they may need little or no supervision to accomplish the tasks assigned to them.
The purpose for conducting the research was to establish the effect of employee commitment on organizational performance in the Financial Institutions. The research questions that guided the study included: (i) what extent does employee commitment affect organizational performance? (ii) What are the factors determining employee commitment on organizational performance in the Financial Institutions in Buea? (iii) What is the level of commitment of employees in the Financial Institution in Buea?
This study used the case of the financial institutions in Buea to investigate the effects of employee’s commitment on organizational performance. The study adopted a descriptive research design. The target population of the study was 60 employees drawn from the various functions of the organization. A sample of 40 was selected though stratified sampling. The questionnaire was used as the instrument of data collection. Past success of the company, training and development, salary, team cooperation among other organizational factors were found to have a great influence of employee commitment. The study explored six (6) determinants of employee commitment on organizational performance which include; (i) Relation with co-workers (ii) compensation and pay (iii) Safety at work (iv)Respect for hierarchy (v) Transparency and Accountability (vi) Consistency Rate. The study revealed that out of the six determinants, the employees viewed compensation/pay, relation with co-workers and safety at work as their main determinant of job satisfaction.
The findings obtained from the study show that organizational factors have a strong influence on employee commitment. These factors include; salary, past success of the company, training and development, leadership and management style, working environment, team cooperation, organizational structure, job redesigning. The findings also indicated that individual factors strongly influence employee commitment highly. These factors include; opportunity for personal advancement, demographic factors, employee job satisfaction, involvement in decision making, level of stress generated from the job, personal needs alignment to company objectives, relationship with fellow employees, attainment of job feedback, trust between employee and co-workers, respect for hierarchy. The level of employee’s commitment was also assessed. It came to light that, the level of employee commitment in the financial institutions in Buea is averagely high. From the data, on a scale of 100, 72% of the employees of the financial institution in Buea are commitment to their jobs.
The study concluded that organizational factors had a very great influence on the level of employees’ committed in the organization. The elements include; salary given by employer, past success of the company, training and development, leadership and management style, working environment, team cooperation, organizational structure and job redesigning. Individual factors play a critical role in influencing the level of employee commitment is a conclusion that was made. Most respondents agreed that employee commitment has a great influence on the performance of the organization. Employee dedication on their work effects on the organizations performance include; turnover, quality and quantity of work produced, absenteeism, degree to which safety practices are observed, degree to which employees feel stressed by their job.
Estimating the performance of the organization has always been of interest to management teams and researchers. In this regard, some researchers focused on determining definitions and how to measure organizational performance. The history of organizational performance is classified into six different sub-categories. Performance is one of the most argued concepts about which there has never been an argument among researchers and theorists. This index with different definitions have been used in various disciplines like; airline, education, management, and computer science. Organizations perform various activities to accomplish their organizational objectives. It is these repeatable activities that utilize the processes for the organization to be successful that must be quantified in order to ascertain the level of performance and for management to make informed decisions on where, if needed, within the processes to initiate actions to improve performance. Measuring performance in organizations usually involves implementation and monitoring of the organizational strategy that sets a standard ratio between the goal proposed and the results obtained (Simons, 2000).
A fairly clear statement on the concept of organizational performance was issued by (Etzioni, 1921), in which he believed that, the frequent assessments of the organizations have been carried out in relation to the achievement or non- achievement of the set objectives and goals. However, in Etzioni’s suggestion, the resources that an organization needs to achieve its objectives and aspirations were not taken into consideration. Other researchers like; (Chandler 1922), and (Thompson 1917) apparently nurtured an idea of organizational performance similar to that of Etzioni’s. Researchers like this argue that the ultimate criterion of organizational performance is its growth and long term survival. In other word, continuous improvement of organizational performance forms its vital objective. What these definitions had in common was the “effectiveness” or realization of the objective component of organizational performance.
Today, it becomes necessary for every organization to have full level of its employee’s commitment in order to have outstanding performance on long term basis. In the past, organizations provide job security to its employees to improve their commitment level and their level of productivity in the organization. Most organizations have realized the performance of their workers plays a vital role in determining the success of the organization (Zheng et al. 2010; Ajila and Awonsui, 2004). As such, it is important for employers and managers alike to know how to get the best of their employees. Presently, the business world has a big competition and in the competitive world, every organization is facing new challenges regarding creating committed workforce into the organization. Human resources are the greatest assets to face this business world competition in an organization. Because the employee’s behavior at work. Contributes either positively or negatively to the success of their organization. While some employees may behave in ways that may be described as and constructive as helpful, others embark on acts that maybe described as destructive and harmful to the organization.
The employees constructive, workplace behaviors can view the employee’s organizational commitment, which is defined by Mowdray (1974), as consisting of three components; identification with the goals and values of the organization, a desire to belong to the organization and a willingness to display effort on behalf of the organization. Committed employees are characterized as loyal, productive members of work organization (Porter et al, 1974).
Employee commitment is highly valuable. Studies have highlighted that commitment has a great effect on the successful performance of an organization. Affective commitment revolves around an individual employee’s connection with the company in terms of how well they evaluate their interaction and involvement in company affairs. High commitment among employees has been found to be inversely related to employee turnover in an organization. The result of these is improved performance among employees indicating that strong commitment is directly related to improved organizational performance (Wang. 2010). Committed employees are willing and likely to work with the involved organizations for a longer period. Because of their level of commitment, experience and expertise, their output is phenomenon meaning that they increase customer satisfaction (Conway and Monks, 2002). Among the parameters for their commitment could be things like; salary, pension, tenure, benefits and family commitment, among other things involved with exiting the organization (Loi, 2006).
Empirical studies (Owoyeni et al, 2011 and Boxall & Macky, 2007) have shown that high commitment practices improve performance, job productivity and service quality. Boxall and Macky (2007) argue that when employees have high commitment work practices this increases their level of commitment to the organization resulting in increased individual performances as well as the overall organizational performance (Owoyemi et al, 2011). Employees dedication to the work place can be associated with the human resources practices that is recruitment, selection and performance appraisal, it can as well be employed in developing certain psychological connections (Owoyemi et al, 2011).
There have been various classification of employee attitude and attachment towards their organizations such as loyalty, devotion and commitment in the extant literature. The concept of commitment was firstly introduced to literature in 1960 by Becker and it was explained as one mechanism producing consistent human behavior. Later during the 1970’s, a variety of studies were carried out on the concept of organizational commitment. One of the important studies of the literature was carried out in 1974 by Lyman Porter et al., which was concerned with organizational commitment and turnover intentions of the employees. In the recent review of literature for antecedents and consequences of organizational commitment, the most encountered antecedents are found to be personal characteristics, organizational structure, tenure, rewards, training and work values whilst the consequences are mainly increased employee performance, motivation and lower turnover intentions. The antecedent of organizational commitment in health sector is job motivation.
People are the most important drivers of a company competitive advantage factors (Maugo, 2013). Therefore, the purpose of this study is to investigate factors affecting employees’ commitments, identify relationship between employees’ commitment and organizational performance and finally, identify the effects of employees’ commitment upon the organizational performance in the case of the Buea Municipal Council. The Buea council was created in 1997. This institution is there to provide services to the public of Buea Cameroon. Local councils in Cameroon lack the human resources to professionally conceive, plan and implement projects. Truly, the inadequate planning skills can hamper their commitment and hence an effect on the performance of the organization. This is practically so because most councils in Cameroon employ staffs based on political inclination instead of professional competencies. As such, incompetent people are placed in positions which they can’t handle. This coupled with the fact that they are rarely given proper training to improve their capacity hence their commitment to their jobs and an increase in organizational performance.
The accumulation of financial assets at a more rapid rate than the accumulation of nonfinancial assets is called financial development according to Shaw (1973). According to Levine (2004), financial development occurs when financial instruments, financial markets and financial intermediaries, reduce without necessarily eliminating the costs of obtaining information, the costs of executing contracts and the costs of transaction, as a consequence do a better job by offering financial functions. Economists’ understanding of the nature and relationship which exist between financial systems and economic growth has evolved over time. The role of the financial system on economic development has attracted and received increased attention from both academia and policy makers (Ndikumana 2001), with resulting divergent views emerging.
Over the past decades, focus on this area has increased, with mixed findings which remains a theoretical and empirical controversy (Boulika and Trabelisi 2002). Financial development has played a leading role in many developing economies. There is a widespread believe among policy makers that financial development enhances productivity which promotes growth.
The relationship between employees and their job performance is becoming ever clearer and many organizations talk about the importance of employee commitment according to Ashkanasy et al. (200). The effectiveness of the organization depends on the contribution of the people who work in them which is the key factor of organizational performance (Patterson et al, 2003). There is no general agreement as to what can increase an employees’ commitment to the organization as every organization is defined from another (Hurter, 2008). A preliminary observation and investigation conducted by the researcher during her period of internship with the financial intuitions in Buea, it was observed from the records of 2016 of the financial records that the rate of capacity to produce results beyond target has dropped from 85% to 75%. Also, employee punctuality and commitment to duty fell from 60% to 50%. The failure in municipal service delivery by national and local government in many municipalities like Buea in developing countries has often been attributed to inequitable resource allocation, low revenue collection, low service coverage, mismanagement, low institutional capabilities, corruption, lack of transparency and accountability, mastery of job skills, respect for the institution, and for preservation of image, loyalty and respect for hierarchy, absenteeism and commitment to duties and assigned. Tasks. All these are individual and organizational indicators of employee and organizational performance. This therefore means that a drop in one of these symbols will lead to a general fall in the performance of the organization. Thus making the organization not to be performance
This study aims to assess the commitment of employees in the organizational performance of financial institutions in Buea. This study focuses on employee’s commitment towards their work, through which sort of task employees can be more involved in their work and what tasks they find more challenging to be highly engaged and committed in their work.
Individuals work for money but they can switch from one work to another for more money. At the same time people want to be proud of their company, they want very good relationships with co-workers. There are several factors which affect employees in the organization. In case of commitment of employees in work are most likely linked with the prevailing culture, organizational performance and environment in the organization. Performance management and employee’s satisfaction hence commitment are the two area that are can be one of the main reasons which poses management challenges. This research is to find out the level of commitment in financial institutions in Buea, reasons why employees will and will not be committed in the financial institutions and how to address this issue. So the problem statement for this research is formulated as follows: The effect of employee commitment on organizational performance.
Other reasons for employee commitment includes: employment opportunities, individual characteristics, positive co-existence, and structure of the organization, employee motivation, leadership and management styles and performance appraisal systems (Scott, 2007). Based on this discussed, the problem the study Wants is to examine the extent of employee commitment affects organizational performance, noting that these factors can affect employees commitment both positively and negatively. Thus, the study will provide answers to the following research questions.
The main research question is what is the effect of employee commitment affect organizational performance of financial intuitions in Buea, specific questions; include;
What is the effect of affective commitment on organizational performance of financial Intuitions in Buea?
What is the effect of continuance commitment on the organizational performance of financial institutions in Buea?
What is the effect of normative commitment on the organizational performance of financial institutions in Buea?
The main objective of this study is to examine the effect of employee commitment on organizational performance of financial institutions in Buea, Specific objectives include
- To examine the effect of affective commitment on the organizational performance of financial intuitions in Buea.
- To examine the effect of continuance commitment on the organizational performance of financial institutions in Buea.
- To examine the effect of normative commitment on the organizational performance of financial intuitions in Buea.