THE EFFECT OF ORGANIZATIONAL COMMITMENT ON WORD-OF-MOUTH INTENTIONS IN RECRUITMENT IN CHINA by .Tuo Sun A thesis submitted to the Graduate Faculty of Auburn University in partial fulfillment of the requirements for the Degree of Master of Science Auburn, Alabama August 4, 2012 Keywords: organizational commitment, word-of-mouth intentions, Chinese hotel industry Copyright 2012 by Tuo Sun Approved by Baker Ayoun, Chair, Assistant Professor of Nutrition, Dietetics, and Hospitality Management Kyungmi Kim, Assistant Professor of Nutrition, Dietetics, and Hospitality Management David Martin, Assistant Professor of Nutrition, Dietetics, and Hospitality Management ii ABSTRACT The purpose of this paper is to find out the relationships between three components of organizational commitment and word-of-mouth intentions. This study examines the correlations between three components of organizational commitment [affective commitment, continuance commitment, and normative commitment] and rumored intentions among the staff employed in two hotels located in Mainland China. Initially, there were four hotels being contacted, but only two of them agreed to participate in the research. A total number of 120 hotel employees participated in a questionnaire survey. The results of this study indicate that there are direct correlations between the three components of organizational commitment [OC] and ?word-of-mouth? [WOM] intentions. The effects of normative commitment in predicting the amount of WOM intentions is especially significant considering the preferences of those adhering to Confucian culture. Limited number of job-related variable, relatively small sample size and translation issue are limitations of the current study, but the results could serve hotel managers in China to take actions to increase the OC level among employees, and hence increase the possibility for employees to engaged in WOM intentions. The paper is the first article that focusing on the relationship between OC and WOM intentions among employees in the Chinese hospitality industry. iii ACKNOWLEDGEMENTS I would like to acknowledge and express my sincere gratitude to my committee members, Dr. Baker M. Ayoun, Dr. Kyungmi Kim, and Dr. David Martin for their continual support throughout my graduate studies. I would also like to thank my father, Sun Junfu, for his social networking with hotels in China. Especially, I would like to thank the General Manager and all the employees of the participated hotels. Without their participation, the study would not have been properly conducted. iv TABLE OF CONTENTS ABSTRACT ii LIST OF TABLES vi CHAPTER I. INTRODUCTION ............................................................................................... 1 Background ......................................................................................................................... 1 Significance of the Study .................................................................................................... 5 The Structure of the Study .................................................................................................. 5 CHAPTER II. LITERATURE REVIEW ................................................................................... 7 Organizational Commitment ............................................................................................... 7 A three-component conceptualization of organizational commitment ............................... 9 Affective Attachment .......................................................................................................... 9 Perceived Costs ................................................................................................................. 10 Obligation ......................................................................................................................... 11 Word of Mouth Communication ....................................................................................... 12 Word-of-Mouth in Recruitment ........................................................................................ 14 Employee Referrals and Networking ................................................................................ 15 The Relationship between OC and WOM ........................................................................ 17 Literature Review Implication for the Current Study ....................................................... 18 CHAPTER III. METHODS ..................................................................................................... 19 Sampling and Participants................................................................................................. 19 Measures ........................................................................................................................... 19 v .Questionnaire development .............................................................................................. 19 Dependent Variable: Word-of-Mouth intentions ............................................................... 20 Independent Variables: The components of Organizational Commitment ....................... 20 Reliability of the scales in the current study ..................................................................... 21 Data Analysis .................................................................................................................... 21 CHAPTER IV. RESULTS ........................................................................................................ 23 CHAPTER V. DISSCUSSION ................................................................................................ 27 Overview ........................................................................................................................... 27 Management Implication .................................................................................................. 28 Limitations and Implications for Future Research............................................................ 29 REFERENCES ........................................................................................................................ 31 APPENDIX .............................................................................................................................. 37 vi LIST OF TABLES Table 1: Demographic Profile of Respondent 23 Table 2: Means, Standard Deviations, and Correlations among Study Variables 25 Table 3: Multiple Regression on WOM intentions on AC, CC, and NC 26 Table 4: Multiple Regression of WOM intentions of Categorical Data 26 1 Chapter 1 Introduction Background Since 1978, China has gone through a dramatic economic transformation. This has increased economic growth and sustained capital accumulation. Additionally, it has further developed the major composition of output; shifting from an agricultural society to an industrialized and service-oriented one. (Zheng, Kjetil, & Favrizio, 2011). In 2010, China's GDP was valued at $5.87 trillion with an average annual growth rate of 9.5% over the last three decades. This surpassed Japan's $5.47 trillion, making China the world's second largest economy, preceding only America. China possesses the potential to become the world's largest economy [by nominal GDP] as early as 2020 (Adam & Shamin, 2010). With the adoption of opening policies in recent years, China?s service economy has also developed at a surprising rate. In 2009, the value of the service economy comprised 43.4% of China?s GDP (Zhenrong & Dongying, 2011). The growing rate of China?s economy is remarkable. However, it too faces the global problem of lacking talented employees. In consideration of the current business environment, human capital is one the most valuable assets companies invest in. Recruitment plays a vital role in this concept, for it is responsible for employing the most gifted workers into an organization. (Rynes & Cable, 2003). Regardless of the unpredictable nature of the economy, recruitment remains an important function for harnessing human resources for three main reasons. Primarily, vacancies of human capital will continually be difficult to fill and this dilemma will always exist. This can keep organizations in fierce competition with 2 one another, which can attract the limited number of potential applicants even in a loose labor market (Ployhart, 2006). Secondly, the majority of applicants who are gifted have the option of carefully investigating prospective employers. This can force organizations to compete with each other for acquiring the most talented employees, initiating a ?war for talent.? (Chapman, Uggerslev, Caroll, & Piasentin, 2005). Thirdly, demographic trends, such as a smaller supply of young workers and the retirement of baby boomers, indicate that recruitment is going to become an even more important aspect in the future (Saks, 2005). John, Park, and Zhang (2005) reported that the official urban unemployment rate in China was 4.1 percent in the fourth quarter of 2011. They also mentioned that the actual unemployment rate could be approximately 11 percent. As previously mentioned, the shortage of high quality employees is the leading predicament for China. By far, the growing need for talented employees in China represents the prime management challenge facing both multinational and locally owned businesses. In a survey of American-owned enterprises in Shanghai, China, 37% of the participating companies said that recruiting talent was their leading operational problem. This was greater than the portion of individuals who cited regulatory concerns, lack of transparency, bureaucracy, or infringement of intellectual-property rights as leading issues. In addition, 44% of Chinese executives claimed that their biggest barrier to their global ambitions was the insufficient supply of talented employees (Lane & Pollner, 2008). As the gravity of this shortage becomes more and more renowned, how to attract talented employees becomes the most significant question. In order to enhance the appeal of an organization?s qualities, recruitment should include specific information about the expectations of an organization. This should then be successfully communicated by an employer to the desired target group of potential applicants. (Barber, 1998). The majority of previous research was typically conducted with the goal of 3 discovering the effect of company-dependent recruitment sources, such as advertisement and employee testimonials, which are under the organizations? direct control (Cable & Turban, 2001). In contrast, little research has been performed on company-independent sources, such as employee referrals. This is a form of word-of-mouth [WOM] communication that is not under an organizations? direct control, which provides either positive or negative information to potential applicants. In fact, compared with company-dependent sources, company-independent sources might be perceived as providing more credible information, considering that they do not have any bias or requirements in promoting their organization (Van Hoye & Lieven, 2005). Like other popular human resource concepts, the results of employee?s WOM comments have been thoroughly studied. For example, Collins and Stevens (2002) discovered that WOM comments have the potential to make organizations more appealing during recruitment. However, few studies have been conducted that center around ascertaining the disadvantages of WOM. This makes it unclear to organizational operators about which factors motivate employees to provide positive WOM comments (Van Hoye, 2008). Organizational Commitment [OC] may not only represent the correlations between OC and WOM, but also a more global connection between the employee and the organization. Organizational commitment [OC] is generally viewed as a multidimensional and psychological state that mainly focuses on the employee?s relationship with the organization (Meyer & Allen, 1997). Meyer and Allen (1991) proposed that organizational commitment could be divided into three distinct components: affective commitment, continuance commitment, and normative commitment. This 3-component theory has been confirmed by other researchers and substantiated by several factor analyses. (Cohen, 1996; Dunham, Grube, & Castenada, 1994; Hackett, Bycio, & Hausdorf, 1994). 4 Each of the three components of OC has its own formation mechanism (Meyer & Allen, 1997). Affective commitment is the emotional attachment of workers to the organization employing them. This component of OC also represents the identification and involvement the staff has with the business that employs them. The awareness workers possess about the consequences of unemployment or discontinuing their association with an organization is called ?continuance commitment.? Normative commitment, however, is centered around the level of obligation and personal values that employees possess, which is subjective to the culture, education, parental influence, and personal experience of the worker. By the influence of Confucianism, being loyal to supervisors is a common value accepted by most of Chinese people. Chen, Tsui, and Farh (2002) stated that the importance of OC is not as significant as the importance of the loyalty to supervisors especially under the China?s background. However, from one perspective, loyalty should be categorized as a type of normative commitment. From another perspective, as employees getting promotion, the loyalty to the low level supervisors would eventually be placed on higher level supervisors. Since the organization is consisted of different levels of supervisors, the loyalty from employees to supervisors could be viewed as the loyalty to the organization, a type of commitment towards the organization. Hence significance of OC in China should not be neglected. Many research studies have illustrated that OC is also closely correlated to several business outcomes such as turnover intentions, turnover behaviors (DeConick & Bachmann, 2011), and job performance (Meyer, Paunonen, Gellatly, Goffin, & Jackson, 1989). Since OC has demonstrated that is could be a precursor of many business outcomes, it is within reasonable conjecture that OC would also be the forerunner of WOM in the realm of recruitment. However, research trying to correlate OC with WOM is scarce, which provides the motivation to carry out studies focusing on this particular connection. In this study, the 5 relationships between three components of OC and WOM intentions among hotel employees are investigated. The goal of this study is to explore the correlations between the three components of OC and WOM intentions among hotel employees in China. These results could aid Chinese hotel operators in not only increasing the OC level among their employees, but further motivating them to actively engage in positive WOM intentions and to realize the benefits of hiring talented individuals. Significance of the Study As previously stated, the shortage of talented employees is increasingly becoming a serious problem for China. Making organizations more appealing is an effective way to resolve the detrimental issue at hand. Accounting for the several, potential advantages of WOM in recruitment, it is necessary for business operators to be skilled in promoting WOM behavior. The objective of this study is to explore whether OC is a major precedent of WOM in the realm of recruitment. The results of this study could serve to fill in the gaps in current literature centering around the outcomes of OC and the influence of WOM in recruitment. The results of this current study will also provide hospitality operators with ideas about how to motivate positive WOM among employees. This study is conducted within the scope of the Chinese hotel establishments. Future research can now be conducted in comparison to different countries. Therefore, it will delve into the possible regional effects of the correlations between OC and WOM in the area of recruitment. The Structure of the Study In this study, Chapter I provides an introduction and background about the relationship this study has set out to explore. Chapter II provides a review of relevant literature, emphasizing the concept of Organizational Commitment (OC) and Word-of-Mouth 6 (WOM). In addition, Chapter II will also address the 3-component OC [affective commitment, continuance commitment, and normative commitment] and the effect of WOM in recruitment. The methods involved in this study include sampling, data collection, measurement, and statistical analysis of the study, which will be detailed in Chapter III. The presentation of this study?s results will be offered in Chapter IV. Chapter V provides discussion of the results, as well as the managerial implications, study limitations, and directions for future research. 7 Chapter 2 Literature Review Organizational Commitment In recent decades, the concept of organizational commitment (OC) has become more popular in the literatures of business and human resource management. The idea of OC has been studied thoroughly both as a precedent and a consequence of other business-related variables. As a precedent, OC has been utilized to predict the absenteeism of employees (Reichers, 1985; Steers & Rhodes, 1978), job performance (Larson & Fukami, 1984; Mowday et al, 1982), turnover intentions, behavior (Tett & Meyer, 1993; Mowday et al, 1982), and organizational citizenship behavior (Williams & Anderson, 1991). The success of OC has been related to personal characteristics, professional status, job characteristics, group/leader relations, and organizational characteristics (Meyer & Allen, 1984; Mowday et al, 1982; Morris & Sherman, 1981; Stevens et al, 1978; Steers, 1977; Stone & Porter, 1975; Grusky, 1966). Other studies have utilized OC in reference to the correlation between other work-oriented variables. Mowday et al. (1979) acknowledged that employees with greater levels of OC were more motivated to exert higher levels of energy in their job performances. Mathieu and Zajac (1990) declared that the correlation between OC and work-motivation was predictable. Mowday et al. (1982) highlighted the importance for employees, organizations, and even the general public to fully understand the variables associated with OC. For employees, high levels of OC in reference to their property may benefit them both extrinsically [e.g., wages and benefits] and psychologically [e.g. intrinsic job satisfaction and relationships with coworkers]. In consideration of organization perspective, OC may reduce harmful behaviors such as tardiness and turnover. In addition, "extra-role" behaviors such as 8 creativity or innovation, which have the potential to keep organizations more competitive, are attributes predisposed to more committed employees. (Katz & Kahn, 1978). On a societal level, higher OC may yield a lower turnover rate and, consequently, would increase national productivity and work quality. Among those studies there are varying definitions and different measures of organizational commitment. Kanter (1968) uses the phrase ?cohesion commitment? to better define the ?attachment of an individual?s fund of affectivity and emotion to the group?. Buchanan (1974) defined OC as a ?partisan, affective attachment to the goals and values of the organization, to one?s role in relation to the goals and values, and to the organization for its own sake, apart from its purely instrumental worth?. Mowday et al (1979) conceptualized commitment as ?the relative strength of an individual?s identification with and involvement in a particular organization?. However, OC is generally considered the bond an employee has to their organization. The most commonly studied types of OC have been attitudinal and behavioral. Attitudinal OC is defined as the relative strength of an individual's identification and involvement in a particular organization. Conceptually, it can be characterized by at least three factors: (a) strong beliefs and acceptance of an organization's goals and values; (b) a willingness to exert considerable effort on behalf of the organization; and (c) a strong desire to maintain membership in the organization. (Mowday et al., 1982) In the attitudinal approach, research has predominantly been conducted to characterize the precedents contributing to the development of employee commitment and the behavioral effects of this commitment (e.g., Steers 1977; Buchanan 1974). In contrast, the studies of behavioral commitment examine how employee allegiances develop and how to properly address this issue. In the behavioral approach, research has focused primarily on how behavior that benefits organizations could be reapplied under different conditions and how such behaviors influence the changes in employee attitude (e.g., O?Reil & Caldwell, 1981; Pfeffer & Lawler, 9 1980). A three-component conceptualization of organizational commitment Meyer and Allen (1987) produced a model of commitment that contains three components respectively labeled ?affective,? ?continuance,? and ?normative? commitment. These three approaches have their own individual effects on the connection between employees and organizations. However, the mechanism of each effect varies. Employees with strong, affective commitment remain employed at a certain organization because they want to, those with strong continuance commitment remain because they need to, while those with strong normative commitment remain out of obligation (Meyer & Allen, 1991). The general themes of these three components of organizational commitment are, in summation, affective attachment, perceived costs, and obligations. Affective Attachment The first component, which is affective commitment, is considered to be an affective or emotional attachment of an employee to their organization. So much so, that the committed individual possesses a strong sense of identification, involvement, and joy for their occupation within an organization. Kanter (1968) defined ?cohesion commitment? as ?the attachment of an individual's fund of affectivity and emotion to the group.? In the study conducted by Buchanan (1974), organizational commitment was described as a ?partisan, affective attachment to the goals and values of the organization, to one's role in relation to the goals and values, and to the organization for its own sake, apart from its purely instrumental worth.? Recently, the majority of scholars have accepted the classification of organizational commitment, developed by Porter and his colleagues. Mowday, Steers, & Porter, 1979). These scholars characterize organizational commitment as ?the relative strength of an 10 individual's identification with and involvement in a particular organization? (Mowday et al., 1979). The customary measurement of attitudinal commitment is a scale, also developed by Porter and his colleagues (Mowday et al., 1979). This measurement is a 15-item scale that possesses the appropriate psychometric properties (Allen & Meyer, 1990). Reported by Hom, Katerberg, & Hulin (1979), the weakness of this 15-item scale is the overlap in the content of the OC and its correlating behavioral measures. Perceived Costs The second component of OC is continuance commitment, which has also been referred to as ?calculated commitment? by other researchers. This component of commitment was defined as a tendency to ?continue engaging in consistent lines of activity? based on the individual's recognition of the ?costs,? or lost side-bets, associated with discontinuing their employment (Farrell & Rusbult, 1981; Becker, 1960). To clarify, workers remain employed at a certain organization because they have ?side bets,? or sunk costs (e.g., a pension plan), invested in the organization. Consequently, if they quit their profession, they are forced to pay this cost. Becker (1960) established that ?continuance OC? is "a structural phenomenon which occurs as a result of individual-organizational transactions and alterations in side-bets or investments over time". Kanter (1968) defined ?continuance commitment? as a link that forms when there is a ?profit associated with continued participation and a ?cost? associated with leaving.? The continuance commitment has been also determined by Stebbins (1970) to be the ?awareness of the impossibility of choosing a different social identity considering the immense penalties in making the switch.? To measure the continuance commitment, Ritzer and Trice (1969) created a scale, modified by Hrebiniak and Alutto (1972), which is becoming the most regularly utilized measurement. This measurement employs a series of virtual incentives (e.g. increases in payment, professional status, leisure time, and opportunity 11 for promotion) to discover the motivation behind a respondent?s choice to change their profession. However, some scholars doubt the legitimacy of this scale by arguing that the scale measures affective commitment rather than continuance commitment. (Meyer & Allen, 1984; Stebbins, 1970). Obligation The third component of commitment is normative commitment. This structure of OC is the level of responsibility and conviction an individual holds in relevance to their occupation. Wiener (1982) defines ?commitment? as the ?totality of internalized normative pressures that make employees behave in a way which meets organizational goals and interests,? and suggests that employees act merely because ?they believe it is the ?right? and moral thing to do?. In the view of Wiener (1982), the formation of normative commitment is influenced by organizational actions [e.g., selection, socialization procedures] and individual predispositions [e.g., familial/cultural socialization, personal-organizational value congruence, and generalized loyalty or duty] (Wiener, 1982). This study proposes a model of how commitment develops chronologically and considers OC in its evaluations about the connections between employees and their organization. In some studies, normative commitment has been merged as a branch of attitudinal or calculative commitment, or is distinguished from the commitment category. For example, Allen and Meyer (1990) suggest that although the feelings of obligation to maintain employment in an organization cannot be categorized as feelings of desire, they might, however, be correlated with AC. Other researchers have defined ?personal norms? as ?internalized moral obligation.? While this serves to influence certain behaviors, it is not referred to as ?commitment? (e.g. Prestholdt, Lane, & Mathews, 1987; Schwartz, 1973; Schwartz & Tessler, 1972). Wiener and Vardi (1980) developed a measurement to better understand normative 12 commitment. This measurement is a 3-item scale requesting that respondents provide their sentiments about the level of loyalty and obligation they feel to their employer. It asks if ?a person should be loyal to his organization, make sacrifices on its behalf, and not criticize it.? In Allen and Meyer?s study, a 24-item scale was developed containing 3 sub-scales: the affective commitment scale (ACS) including 8 items, the continuance commitment scale (CCS) with another 8 items, as well as the normative commitment scale (NCS) with the final 8 items. It is more rational to view affective, continuance, and normative commitment as distinguishable components, rather than categories of attitudinal commitment, considering that employees are capable of experiencing each of these psychological states to different degrees. Some employees, for example, might possess strong continuance commitment to their organization, but may lack the conviction to remain employed at a specific business for a lengthy period of time. Other employees may have a strong desire to stay in their organizations, but they fail to be concerned about the potential costs associated with terminating their profession. Therefore, the ?net sum? of these three components of organizational commitment reflect each of these separate psychological states. Word of Mouth Communication Word-of-mouth (WOM) is defined as an interpersonal communication that is specifically independent of the organization?s marketing activities, organizational substance, and its products (Bone, 1995). Harrison-Walker (2001) defines the word-of-mouth (WOM) interaction as ?informal, person-to-person communication between a perceived non-commercial communicator and a receiver regarding a brand, a product, an organization, or a service.? This concept has been thoroughly researched and demonstrates the solid influence it has on the judgments of products. For example, consumers rely heavily on WOM 13 when choosing a physician (Feldman and Spencer, 1965), comparing different automotive diagnostic centers (Engel, Blackwell, & Kegerreis, 1969), and when buying a new product or service (Brown & Reingen, 1987; Arndt, 1967). There are three key characteristics of word-of-mouth communication. Primarily, word-of-mouth is verbal, informal interaction that occurs between people as a ?social? phenomenon. (Buttle, 1998). Secondly, word-of-mouth can be viewed as a particular type of ?information source? about an organization or its products. (Cohen & Golden, 1972). Lastly, word-of-mouth is a ?company-independent? information source; one that is not under the direct control of the organization (Bone, 1992). There are two categories of motivations in conducting WOM communication: intrinsic and extrinsic. Intrinsic motivation is defined as a behavior ?that is performed for its own sake rather than for the purpose of acquiring material or social rewards? (Pinder, 1998). Individuals who have positive attitudes towards their profession are more likely to engage in WOM behavior based on intrinsic motivation. Employees who possess positive impressions about their employers are more likely to be intrinsically motivated into making constructive referrals without external pressures. This behavior can be justified in three ways, which are not exclusive to each other (Shinnar, Young, & Meana, 2004). The first is self-involvement, meaning that employees engage in WOM because they possess positive sentiments towards their organization. The second explanation is self-confirmation. By making referrals, employees are able to confirm to themselves that they have employed themselves in best possible environment. The third explanation is other involvement. Employees may simply engage in WOM because they have the desire to help or share the benefits of joining the organization with their peers. In Dichter?s study (1966), product or service recommendations have been proven to serve as a means for channeling self-involvement and enhancing self-confirmation. Lindberg-Repo (1999) conducted similar research, discovering that the way loyal customers engaged in WOM communication to friends, relatives, and co-workers 14 on their third or more visit, varied significantly compared to the way first-time customers engaged in WOM. The loyal customers used WOM communication as a means of explaining the rationality of increasing prices and to justify the consecutiveness of their visits to their desired destination. However, this behavior was not observed among first-time visitors. Lindberg-Repo (1999) mentioned that loyal customers had strong ?advocacy bonds? which highlight their willingness to recommend friends and colleagues that they join them next time. In addition, there are four dimensions of WOM that could influence its effect. Initially, WOM is not limited to face-to-face communication. WOM could also occur via telephone or the Internet. (Dellarocas, 2003; Smith & Vogt, 1995). Secondly, due to its exclusive characteristics, WOM could be initiated by all social roles, such as relatives, friends, acquaintances, and even complete strangers (Smith & Vogt, 1995; Brown & Reingen, 1987). Lastly, word-of-mouth could emerge based on the motivations of the source (e.g., positive or negative feeling towards job) as well as the recipient (e.g., advice seeking), or could even occur coincidentally (Mangold, Miller, & Brockway, 1999). Finally, word-of-mouth does not always have the distinct purpose of promoting the organization or product; it can contain both positive and negative information (Bone, 1995; Smith & Vogt, 1995). Word-of-Mouth in Recruitment Word-of-Mouth as a recruitment source is defined as an interpersonal communication that is independent of the organization?s recruitment activities, about an organization as an employer or about specific jobs (Van Hoye & Lievens, 2007; Bone, 1995). In the recruitment context, WOM also plays the role of a company-independent social source. The only difference is that the information WOM covers is generally about employment issues. (Cable & Turban, 2001; Bone, 1992; Cohen & Golden, 1972). Like other forms of 15 WOM, the effect of occupation-related word-of-mouth can be influenced by its mode (e.g., face-to-face vs. telephone), source (e.g., relatives vs. complete strangers), motives (e.g., random ideas vs. negative impression of the source), and valence (e.g., positive vs. negative) (Cable & Turban, 2001; Mangold et al., 1999; Smith & Vogt, 1995; Herr et al., 1991; Brown & Reingen, 1987). Several studies have examined the outcomes of word-of-mouth as a recruitment source. Cable, Aiman-Smith, Mulvey, and Edwards (2000) determined that the truthfulness of the applicants? beliefs about organizational culture would not be influenced by WOM. Collins and Stevens (2002) demonstrated a reoccurring trend of receiving positive word-of-mouth based on observed organizational appeal and self-reported application decisions using a student sample. Moreover, Van Hoye and Lievens (2005) found that positive word-of-mouth has effect on enhancing the positive perceptions of students in reference to organizational appeal, even if they were exposed to negative publicity. While the majority of studies focus on positive WOM, the effect of negative WOM should not be overlooked. For example, Van Hoye and Lievens (2007) showed that receiving harmful word-of-mouth negatively affected the students? perceptions of an organization?s appeal. Furthermore, Skowronski and Carlston (1987) demonstrated that negative information is more influential than positive information and usually forms additional impressions. Potential employees would process the negative WOM more acutely and would further reinforce their negative impression of a certain organization over time. Employee Referrals and Networking Employee referrals and networking also have been studied in previous recruitment research. Essentially, these two concepts could be classified as specific subtypes of WOM. Employee referrals are provided exclusively by employees, rather than other categories of professional roles. (Zottoli & Wanous, 2000). It has become quite common for organizations 16 to encourage their employees to refer friends and relatives to apply for vacant positions. This is likely because employee referrals are cost-effective (Morehart, 2001) and provide significant, positive outcomes for the recruited employees and the organization in pre-hire and post-hire perspectives. From the pre-hire perspective, employee referrals could benefit the quantity and quality of the applicant pool and they could offer new employees pre-hire knowledge that could aid them in better merging into the organization. From the post-hire perspective, comparatively, employees recruited through formal sources, such as advertisement, were found to have superior job performance (Kirnan, Farley, & Geisinger, 1989), longer tenure (Kirnan et al., 1989), and higher levels of professional satisfaction (Breaugh, 1992). This occurrence can be explained by two ideas. The first idea, proposed by Breaugh and Starke (2000), is the concept that job previews elicited by older employees to new individuals are more accurate. William et al., (1993) developed the second idea, which illustrates that employee referrals may generate job-relevant individual differences. Not only do employee referrals positively affect the potential employee?s attitude, but they also positively influence current employees and job recommenders? attitudes toward their organization. Based on Festinger?s (1957) Cognitive Dissonance Theory and Bem?s (1972) Self-Perception Theory, the variances of employee attitude could be influenced by arguments or actions. Festinger (1957) proposed that ?cognitive dissonance? occurs when individuals? beliefs are conflicting with one another or when individuals found that their behaviors were not consistent with their beliefs. When cognitive dissonance occurs, the individual automatically evaluates different solutions to reduce the dissonance: to either change their beliefs or behave in another way to achieve mental agreement. In this case, if an employee is engaging in positive WOM intentions of behavior [for some kind of incentive], but with a negative attitude toward organization, in order to reduce the dissonance, they will attempt to adjust their attitude toward their organization. This change ultimately benefits both 17 the employee and the organization. At the employee level, a consistency of attitude and behavior allows them to achieve higher professional satisfaction. At the organizational level, employees with consistently positive attitudes and behavior have the capability to yield higher productivity and better performance. Bem (1972) developed an idea that, like an external observer, individuals form their attitudes by observing their own behaviors. In this case, if individual with a negative attitude notices that they are forming positive WOM behavior, they may reevaluate their attitude towards an organization. Additionally, Kardes (1999) explaines that by making a referral, a recommender?s attitude would change by carefully engaging in a conversation with their friends or relatives. When recommenders are advocating, they may place more emphasis on positive facets of the organization and neglect the negative facets of the organization subconsciously. This phenomenon will help recommenders possess positive attitudes toward their organization despite their previously held negative attitude. Networking is also a subcategory of word-of-mouth. It is often initiated by job seekers with the particular motivation of gathering information about potential occupations (Wanberg et al., 2000). The results of previous research have shown that networking is constructive for the reemployment of applicants (Wanberg et al., 2000). The Relationship between OC and WOM The results of previous research heavily emphasize the relationship between OC and other variables. Therefore, it is logical to assume there are strong connections between OC and WOM. Shinnar, Young, and Meana (2004) attempted to discover the relationship between WOM in recruitment and professional attitude. Considering the fact that Pinder (1998) identifies job satisfaction and organizational commitment as the two most widely studied aspects of professional attitudes, in the study of Shinnar et al. (2004), job satisfaction 18 and normative commitment are predicted as correlating consequences of WOM. They focus on normative commitment because there was a lack of incentive for making referrals in experimental simulations. The results demonstrated that engaging in an employment recommendation leads to an increase in normative commitment for the recommender immediately after engaging in a referral. Literature Review Implication for the Current Study Previous research has already set the precedent that OC influences job performance and turnover intentions. However, the research concerning labeling OC as a precursor of WOM in recruitment has not been substantiated. While the majority of research has focused on the effect of WOM in recruitment on pre-hire and post-hire outcomes (Williams et al., 1993; Breaugh, 1992; Kinnan et al., 1989), few studies have addressed employee recommenders who make referrals to their peers. In addition, previous employee referral research did not focus on the hotel employees and used a relatively small sample, primarily from western countries. For example, Van Hoye (2008) chose Belgian nurses as sample; Van Hoye and Lievens (2009) use Belgian Defense as sample. The only research that found correlations between OC with WOM, conducted by Shinnar et al. (2004), did not examine the relationships between all three components of OC with WOM. Therefore, the question of which OC component has the principal effect on predicting WOM is not clear. In this study, Chinese hotel employees were chosen as sample. The questionnaire was developed to examine the relationship between all three components of OC with WOM in order to acutely define the different predictions associated with these components. 19 Chapter 3 Methods Sampling and Data Collection In this study, Chinese hotel employees were employed as the target group to be questioned. Due to the limited relationship net of the researcher, only four 5-star hotels in China were invited to participate in the study; two individually-owned medium-size hotels franchised by a local hospitality management corporation, located in Hebei province, agreed to participate. Three hundred questionnaires were translated into Chinese (simplified) and then mailed to the hotels. Blank questionnaires were placed at the exits of the dining rooms. Employees voluntarily picked up questionnaires to fill out at their convenience. There were two locked survey drop-off boxes placed near the exits of the dining rooms to collect the completed questionnaires. Each completed questionnaire was sealed in an envelope to ensure anonymity. After collecting all the completed questionnaires, the heads of HRD of the two hotels mailed those questionnaires to the campus address of the author. Measures Questionnaire development Based on the precedents that previous research has set, the intention of the current questionnaire is to define the relationships between the three components of OC and WOM intentions. The first part of the questionnaire contains demographic questions (age, education level, gender, tenure, and hometown). The second part of the questionnaire is a scale, developed by Smither et al. (1993), which measures the level of the employees? WOM intentions. There are three scales developed by Allen and Meyer (1990) to measure AC, CC 20 and NC, and these scales comprise the third part of the questionnaire. For ethical consideration, the survey was examined by the IRB of Auburn University and approved. The specific elements of the individual parts of the questionnaire will be discussed in more detail in the following paragraphs. Dependent Variable: Word-of-Mouth intentions The 3-item employee recommendation-intentions scale, developed by Van Hoye (2008), was employed to measure word-of-mouth intentions among participants. This scale was created based on previous research (Bauer, Truxillo, Sanchez, Craig, Ferrara, & Campion, 2001; Smither, Reilly, Millsap, Pearlman, & Stoffey, 1993). However, some terminology from the original scale was modified. One sample item is ?I would recommend my organization as an employer to others.? Previous research failed to scrutinize the reliability or validity of the 3-item scale. In this current study, the reliability of the scale was 0.822. All the sample items were rated on a 5-point ?Likert Scale?, ranging from 1 [strongly disagree] to 5 [strongly agree]. Independent Variables: The components of Organizational Commitment There are several scales developed by different scholars to measure organizational commitment. This study utilizes the 3-component OC scale developed by Allen and Meyer (1990). As previously mentioned, the overall OC level should be the ?net sum? of the 3-component OC level. (Allen & Meyer, 1990). In this way, it is more effective to employ the 24-item scale rather than other scales because they are not able to represent all categories of OC. In the majority of studies, the 3-component OC scales are used to measure OC. For example, Kuusio, Heponiemi, Sinervo, and Elovainio (2010) use the ?Affective Commitment 21 Scale? (ACS), which is derived from the 24-item scale to measure affective commitment. Gormley and Kennerly (2010) use all three scales to measure affective, continuance, and normative commitment. Yao and Wang (2006) use the ACS and Normative Commitment Scale (NCS) to measure both affective commitment and normative commitment. Shore and Wayne (1993) use the ACS and Continuance Commitment Scale (CCS) to measure affective commitment and continuance commitment. Previous research has recorded that alpha coefficients of ACS range from 0.74 to 0.89, while the alpha coefficients of CCS range from 0.69 to 0.84. For NCS, the alpha coefficients range from 0.69 to 0.79 (Allen & Meyer, 1990; Mayer et al., 1989; Allen & Smith, 1987). These items were rated on a 5-point ?Likert-scale? ranging from 1 [totally agree] to 5 [totally disagree]. Reliability of the scales in the current study All of the scales were analyzed to determine their accuracy [the WOM scale, Affective Commitment Scale (ACS), Continuance Commitment Scale (CCS), Normative Commitment Scale (NCS), Combined Organizational Commitment Scale (COCS)]. These results illustrate that the coefficient alphas of the WOM scale, ACS, CCS, and OCS are 0.822, 0.706, 0.771, and 0.85, indicating that the accuracy of these scales is adequate. However, the coefficient alpha of NCS is only 0.584. After removing the third NCS item (3. ?Jumping from organization to organization does not seem at all unethical to me?), the coefficient alpha of NCS increased to 0.609. This indicates that the reliability of the refined, 7-item NCS is appropriate. Data Analysis Collected data was analyzed using SPSS 19.0 for Windows. The mean values and standard deviations of all variables were calculated as descriptive statistics. Pearson 22 Correlation, Spearman Correlation and Multiple Regressions were utilized to examine the connections between organizational commitment and word-of-mouth intentions. 23 Chapter 4 Results One hundred and twenty of the distributed questionnaires were returned, yielding a 40% response rate. Table 1 illustrates that 44.2 % of the respondents are males, while females account for 55.8 % of the sample. Hotel #1 comprises 40 of the respondents, while the respondents from the other hotel account for approximately 67 % of the sample. The majority of the sample?s ages range from 18 to 39 years of age, accounting for 75 % in total. 62.7 % of respondents are from the Hebei province, while respondents from Northeastern provinces (Heilongjiang, Jinlin, Liaoniang) account for 22.6 % of the sample. Compared to respondents from other provinces, who account for 12.7 % of the sample, this is a significantly larger group. Approximately 77.5 % of the respondents reported that the tenure they possess in their current occupation is less than 6 years. Approximately 72 % of respondents possess high school or same level institution diplomas (three years), while only 4.2 % of respondents graduated from a four-year college. Table1. Demographic profile of respondents Value label N Percentage Gender Male 53 44.2 Female 67 55.8 Total 120 100.0 Participating hotel Hotel #1 40 33.3 Hotel #2 80 66.7 Total 120 100 24 Age 18-29 47 40.5 30-39 40 34.5 40-49 27 23.3 50-59 2 1.7 Total 116 100.0 Hometown Hebei 74 63.2 North-East three provinces 29 24.8 Inner Mongolia 7 6.0 Other 7 6.0 Total 117 100.0 Tenure in current position Less than 3 years 60 50.0 3 years -6 years 33 27.5 More than 6 years 27 22.5 Total 120 100.0 Educational level High school or same level 86 71.7 Two-year college 29 24.2 Four-year college 5 4.2 Total 120 100.0 25 As illustrated in Table 2, Affective Commitment (AC) level, Continuance Commitment (CC) level, Normative Commitment (NC) level, and the combined Organizational Commitment (COC) level were found to be positively correlated with WOM intention level. With respect to demographic variables, males were found to be more likely to engage in Word-of-Mouth (WOM) intentions [p<0.05], while their AC [p<0.05], CC [p<0.01], NC [p<0.01], and COC levels [p<0.01] are also higher. In addition, respondents from Hotel #2 showed higher levels of WOM, AC, CC, NC, and COC [p<0.01]. Education level was negatively correlated with independent variables and dependent variables [p<0.01]. This indicates that as the level of education increases, employees are not more likely to engage in WOM intentions and subsequently, possess a lower level of organization commitment. To test which component of organizational commitment has the stronger effect in explaining the incremental variance in Word-of-Mouth intentions, multiple regression analyses were conducted. The results in Table 3 indicate that the higher employee AC level, the more they intend to engage in WOM intentions [?=0.27, P<0.01]. In addition, the higher the employee NC level, the higher the probability that employees will engage in WOM intentions [?=0.25, P<0.05]. The effect of CC in explaining variance in WOM intentions is relatively small compared with AC and NC. However, CC is marginally and statistically significant as a positive predictor of WOM intentions [?=0.17, P<0.10]. Ultimately, the model illustrates 34% of the variance in WOM intentions [F (3, 114) = 20.66, P<0.01]. 26 In order to identify the possible variances of the results with the use of additional, contextual variables, another multiple regression analysis for categorical data was conducted. In categorical regression analysis, nominal variables and ordinal variables are transformed into interval variables. A multiple regressions analysis is then applied to those transformed variables. The results shown in Table 4 state that NC is still a strong, positive predictor of WOM intentions [?=0.48, P<0.05]. Overall, the combined model illustrates 37% of the variance in WOM intentions [F (21, 90) = 4.13, P<0.01]. Table 3. Multiple Regression Results of WOM Intentions on AC, CC, and NC (n=120) Variable ? T P AC 0.27 2.49 0.01 CC 0.17 1.91 0.06 NC 0.25 2.34 0.02 R2 = 0.35 and adjusted R2 = 0.34. Table 4. Multiple Regression Results of WOM Intentions with Categorical Variables (n=120) Variable ? F P Hotel -0.07 0.13 0.88 Gender -0.03 0.11 0.90 Age 0.16 1.80 0.17 Education 0.11 0.45 0.71 Hometown 0.08 0.64 0.43 Tenure -0.07 0.30 0.58 AC 0.34 1.64 0.20 CC 0.30 1.01 0.37 NC 0.48 4.91 0.01 R2 = 0.49 and adjusted R2 = 0.37. 27 Chapter 5 Discussion Overview The results of this study indicate that high levels of the three components of Organizational Commitment (OC) increase an employee?s willingness to engage in WOM intentions. This expands the research conducted on the outcomes of OC, considering that previous researches were focused mainly on discovering the relationships between OC and job performance, turnover intention, turnover behavior, and Organizational Citizenship Behavior (OCB). Podsakoff (2000) believes that employee endorsements are a particular kind of OCB. Word-of-Mouth (WOM) intention, a verbal form of endorsement, should also be counted as a particular kind of OCB. In this particular instance, the current study supports previous research, which indicates that OC is a predictor of OCB (Williams & Anderson, 1991). It should be noted that the first regression results suggest that AC, CC, and NC are effective predictors of WOM intentions. However, while conducting the second regression analysis for categorical data, the effects of AC and CC are not important enough to explain the incremental variance of WOM intentions. Nevertheless, NC is still a predictor of WOM intentions [?=0.35, P<0.05]. This result could be justified by the conclusions of the study conducted by Brislin (1993), which suggest that in Eastern cultures, especially in China, obedience and obligation are strong cultural standards. Throughout the growth of children, they absorb these cultural norms from their parents, teachers, peers, and even acquaintances. As a result, by gradually internalizing their own cultural norms, the motivation to associate with certain groups and organizations becomes an innate instinct of the Chinese. This specific 28 cultural feature may lay a foundation for normative commitment. This may indicate that the effect of normative commitment on influencing employee attitudes toward their organization is greater than the effects of AC and CC. In the context of Eastern culture, the predictable influence of normative commitment on employee behavior is stronger (Yao & Wang, 2006). As previously mentioned, the focus in earlier studies has been predominantly placed on demonstrating the idea that OC level could have influence in other professional categories [job performance, attendance, turnover behaviors], omitting the predictability of OC on WOM intentions. The study conducted by Shinnar et al (2004) uses job satisfaction and organizational commitment as measurement of occupational attitude, and correlates this attitude with employee referral behavior. In this study, OC is categorized into two parts: instrumental and normative commitment. The results only verified one of their four hypotheses, which state that ?engaging in an employment recommendation will lead to an increase in normative commitment for the recommender immediately after engaging in referral.? The current study treats the concept of OC with more importance and carefully analyzes the relationships between the three components of OC and WOM intentions. The results indicate that all three components have the potential to be effective predictors of WOM intentions. The abilities of affective commitment and normative commitment are much stronger, especially in a Chinese context that values Confucian culture. Normative commitment seems to be the most successful predictor of WOM intentions. This current study additionally proves that OC is an effective predictor of WOM intentions, especially considering that the respondents are all Chinese hotel employees. In this circumstance, this study effectively fills in the gaps in former studies by focusing specifically on the relationship between OC and other occupational variables using eastern employees as a sample. Management Implication 29 It is commonly known that word-of-mouth (WOM) communication is a company-independent recruitment source that cannot be controlled directly by the organization (Cable & Turban, 2001). In this way, HR departments should motivate employees to engage in WOM intentions and behavior by influencing the precedents of WOM intentions. In this current study, the results indicate that the three components of organizational commitment: AC, CC, and NC are effective predictors of WOM intentions. However, it begs the interesting question in HR departments of how to increase the levels of these components of organizational commitment. To increase the AC level, for example, hotels could hold celebration parties or special entertainment for employees to let them fully enjoy everything their organization has to offer. To increase the CC level, Chinese CEOs and middle-level managers could supply personal favors for their subordinates, such as giving special financial support if the employee is ever in dire financial need [outside of the organization?s regular compensation system] (Li, Ahlstrom, & Ashkanasy, 2010). Based on these results, the magnitude of NC should not be ignored. For example, before HR departments assign an individual to a certain department, the candidate should fill out a questionnaire designed to measure their organizational commitment level. HR departments should examine the completed questionnaire carefully, especially the NC section. After the recruitment procedure, HR departments can create training materials and hold lectures for employees that stress the value of loyalty to their organization. Limitations and Implications for Future Research This study has several limitations. Initially, the research was focused on discovering the relationship between Organizational Commitment (OC) and Word-of-Mouth (WOM) intention. However, word-of-mouth behavior has not been investigated due to the lack in presence of a valid scale. Moreover, there are additional antecedents that have the potential to 30 influence WOM intentions, such as professional satisfaction and procedural justice perceptions (Posthuma & Campion, 2005). However, in this study, the effects of these antecedents have not been compared to that of OC. Therefore, a conclusion cannot be definitely made that OC is the most significant antecedent of WOM intentions among other precedents. Secondly, the relatively small sample size reduces the power of the current study. The sample hotels are located in the northern China and most of the respondents originated from the Hebei province. This makes it difficult to generalize the results of the current study in hotels located in other parts of China. Third, the questionnaire was developed based on English version scales, despite the fact that all respondents are Chinese. To make sure the items of the questionnaires could be fully understood, the original English version was translated into Chinese (simplified). There could be several language variances in the translated questionnaire. However, the translated questionnaire was carefully reviewed and refined by other independent sources who excel in both languages. For future research, more antecedent variables should be incorporated into studies in order to compare the predictive abilities of those antecedents. In this way, it can be determined which antecedent has the most powerful effect on WOM intentions and behaviors. WOM behavior should also be integrated into studies as dependent variables with WOM intentions. A more accurate WOM intention and behavior scale should be developed in the future. To increase the legitimacy and the universal aspects of this study?s results, future researchers should attempt to enlarge the sample size and should select samples in more diverse areas of China. 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You are invited to participate in a research study which surveys the effect of organizational commitment on word-of-mouth intentions in recruitment in China. The study is being conducted by a research team from the Hotel and Restaurant Management Program at Auburn University, U.S.A. You were selected as a possible participant because you are a hospitality employee. If you decide to participate in this research study, you will be asked a set of questions concerning your level of organizational commitment and word-of-mouth intentions. Your total time commitment will be approximately 10 minutes. There are no risks associated with participating in this study greater than those encountered in daily life. If you participate in this study and provide your contact information, you can expect to receive a summary of the study results. If you change your mind about participating, you can withdraw at any time during the study. Your participation is completely voluntary. If you choose to withdraw, your data can be withdrawn as long as it is identifiable. Your decision about whether or not to participate or to stop participating will not jeopardize your future relations with Auburn University, and the Hotel and Restaurant Management Program. Any data obtained in connection with this study will remain anonymous. The result of the research study may be published, but your identity will not be associated with your responses in any published format. If you have any questions about the study, please feel free to call the researchers at +1 334-332-9036 or send e-mail to tzs0013@auburn.edu . If you have questions about your rights as a research participant, you may contact the Auburn University Office of Human Subjects Research or the Institutional Review Board by phone (334)-844-5966 or e-mail at hsujec@auburn.edu or IRBChair@auburn.edu . HAVING READ THE INFROMATION ABOVE, YOU MUST DECIDE IF YOU WANT TO PARTICIPATE IN THIS RESEARCH PROJECT. IF YOU DECIDE TO PARICIPATE, THE DATA YOU PROVIDE WILL SERVE AS YOUR AGREEMENT TO DO SO. 38 39 40 41