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HUMAN RESOURCE MANAGEMENT PRACTICES LINKAGE WITH ORGANIZATIONAL COMMITMENT AND JOB SATISFACTION
Asta Savaneviciene1, Zivile Stankeviciute2
2

Kaunas University of Technology, Lithuania, asta.savaneviciene@ktu.lt Kaunas University of Technology, Lithuania, zivile.stankeviciute@stud.ktu.lt

Abstract
Although all types of resources are essential for organizational success, the literature seems to accept that human resources and their management have a significant impact on organizational performance. Assuming HRM does influence performance there appears to be no consensus on the nature of HRM practices and categorization of performance outcomes, also little attention is paid to exploring the processes through which the impact takes place. The paper reveals the nature of HRM practices and the content of organizational commitment and job satisfaction. The paper proposes an answer to the question - how HRM practices can influence organizational performance. The approach of impact is based on AMO framework, which discloses the importance of employees abilities, motivation and opportunity to participate. Besides, the paper presents empirical research showing that skill-enhancing, motivation-enhancing and engagementenhancing HRM practices have a positive relations with affective human resource reactions: organizational commitment and job satisfaction. Keywords: human resource management, performance, organizational commitment, job satisfaction. JEL Classification: J28, M12, O15.

Introduction
The context in which the organizations operate continues to evolve: rapid environmental change, globalization and competition to provide innovative services create new challenges and requirements. The organizations need to exploit all of their resources as a means of achieving competitive advantage and due to this fact testing the added value of human resource management (HRM) to organizational performance has become increasingly popular. Much of these research has demonstrated statistically significant relationships between HRM practices and firm profitability (Arthur, 1994; Huselid, 1995; Delery and Doty, 1996; Guthrie, 2001) and confirmed the assumption that human resources and their management serve as a strategic asset to the organization (Kazlauskaite & Buciuniene, 2008). However, according to Guest (1997), in order to improve the understanding on the impact of HRM on performance three theories are in demand: a theory about HRM, a theory about performance and a theory about how they are linked. Concerning HRM there is no agreed or fixed list of HRM practices that are used to define or measure human resource management, similarly the debate regarding best fit and best practice approaches exist. However, in recent year new trend was established: the AMO framework presents a specific way of defining HRM. Regarding the theory about how HRM and Performance are linked, it is acknowledged that "there is a little understanding of the mechanisms though which HRM practices influence performance (Delery, 1998). This precise mechanisms could be considered to outline what is taking place in the so-called black box stage between HRM practices and performance (Purcell Kinnie, Hutchinson, Rayton & Swart, 2003), consequently numerous models have been proposed suggesting mediating variables (Becker, Huselid, Pickus & Sprat 1997; Guest, 1997; Purcel et al,. 2003; Wright & Nishii, 2006). The AMO framework including employees abilities, motivation and opportunity to participate is one of the key models for black box opening. As regards to performance outcomes, Dyer and Reeves (1995) proposes an essential causal chain that HRM practices must impact human resources related outcomes before the organization could expect to see an impact on organizational, financial and market based outcomes (Wright, Gardner & Moynikan, 2003). According to Macky & Boxall (2007), the scientific literature assumes a causal link flowing from HRM practices to organizational performance via the responses of employees. Organizational commitment and job satisfaction are two affective human resource reactions that are crucial in HRM and performance linkage due to their nature - while employee may be placed as central to mediating the impact HRM practices have on performance, their reactions to such practices are core subjects of research. The research problem includes question: what and how HRM practices effect affective human resource reactions: organizational commitment and job satisfaction?

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The research aim is theoretically and empirically to examine the link between HRM practices and affective human resource reactions: organizational commitment and job satisfaction. Methods: The theoretical part of paper is built on the analysis and synthesis of scientific literature; data collection questioning survey; data analysis descriptive, discriminant and correlation analyses.

HRM-Performance linkage: HRM practices, mediating variables and affective human resource reactions
HRM practices. The accurate assessment of the relationship between HRM practices and performance requires reliable and valid assessment of practices (Gardner, Moynihan, Park &Wright, 2001), however there is no consensus on HRM practices yet (Katou & Budhwar, 2010). In scientific literature there is a debate about the optimum ways in which HRM can be utilized to contribute to a organizations success. As outcome of these debates two main approaches have been proposed: "best fit and best practice (Paauwe & Boselie, 2005). The best practice approach advocates universalism, by arguing that the organizations should have improved performance if they adopt best practices in the way they manage people, irrespective of context. Meanwhile, the main idea of the "best fit approach is that human resource strategy will be more effective when it is appropriately integrated with its specific organizational and environmental context (Alleyne, Doherty & Greenidge, 2006). However, Boselie, Dietz & Boon (2005) identified that in more than haft articles, published after 2000, AMO framework is used. This framework presents a certain commonality around how HRM is operationalized when exploring the relationship between HRM and performance (Paauwe, 2009). It focuses on the importance of taking into account variables at the individual level like employees skills and competences (A = abilities), their motivation (M = motivation) and their opportunity to participate (= O) (Boselie et al., 2005). Boselie (2010) underlines that the AMO framework proposes that specific HRM practices often termed high performance work practices (HPWPs) enhance the three main components of the model. This fact allows to distinguish HRM practices into 3 groups (skill-enhancing, motivationenhancing and empowerment-enhancing HRM practices) and emphasizes the increased improvement in employee decision making, motivation and commitment (Theriuo & Chatzoglou, 2009). Affective human resource reactions. Dyer and Reeves (1995) posited four levels of organizational performance outcomes (Boselie & van der Wiele, 2002; Pauwe & Boselie, 2005): human resource reactions /employee outcomes (affective, cognitive and behaviour); organizational outcomes (productivity, quality, efficiencies); financial outcomes (profit, sales); market based outcomes (market value). This categorization emphasizes 2 significant things (Colakoglu, Lepak & Hong, 2006): first, HRM practices have their most immediate impact on employees since employee outcomes are in a closer line of sight to the practices; second, HRM practices have the strongest effect on employee outcomes, as these outcomes are to some extent the initial goal for designing the HR practices. It has long been recognized that intermediate outcomes are central to a more complete understanding of how HRM drives organizational performance (Becker & Gerhart, 1996). The fact that employees outcomes have largely remained dormant in research is ironic as all the theoretical rationales of how HRM affects performance rests on the assumption that it is through these employee outcomes (Legge, 2005; Paauwe, 2009). Assuming that attitudes significantly and substantially predict future behaviour (Kraus, 1995), organizational commitment and job satisfaction as two affective human resource reactions are essential for organizations to gain competitive advantage through the effective human resources utilization and HRM practices implementation. Job satisfaction. Job satisfaction is an attitude that individuals maintain about their jobs (Pool, 1997). Similarly sounds the definition provided by Brief (1998) job satisfaction is an internal state that is expressed by affectively and cognitively evaluating an experienced job with some degree of favour or disfavour (Whitman, van Rooy & Viswesvaran, 2010). Currie (2001) suggests that satisfaction is related to the degree to which an individual is satisfied with the terms and conditions of employment and the factors that make up the physical work environment (Baptiste, 2008). Therofore, individuals may be satisfied with their salaries and relations with their peers and not satisfied with promotion possibilities. Organizational commitment. The concept of organizational commitment refers to a persons affective reactions to characteristics of his employing organization (Baptiste, 2008). There is no agreement in scientific literature on definition: Mowday, Porter & Steers (1979) define organizational commitment as a strong belief in the organizations goals and values and a willingness to exert considerable effort on behalf of

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the organization (Buciuniene & Skudiene, 2008), while Kanter (1968) perceives commitment as the attachment for an individuals fund of affectivity and emotion to the group (Meyer & Allen, 1991). Based on different definitions, Meyer and Alllen (1991) identified three components of commitment affective, continuance and normative (Kumpikaite & Rupsiene, 2008). Affective commitment refers to the employees attachment to, identification with and involvement in the organization. Continuance commitment refers to an awareness of the costs associated with leaving the organization. Finally, normative commitment refers to a feeling of obligation to continue employment (Jernigan, Beggs & Kohut, 2002). Summing up, it could be stressed that committed employees have a strong belief in and acceptance of the organizations goals, show a willingness to put effort on behalf of the organization and have a strong desire to maintain membership with the organization (Baptiste, 2008). Mediating variables. According to Becker and Huselid (2006), the HRM - performance link is not as direct as suggested by the prior strategic HRM literature: there is mediating variables through which HRM influence organizational performance. Through this unexplained mechanisms, so-called black box HRM practices are supposed to convert to performance (Edgar & Geare, 2009). Among other models, exploring how HRM practices actually work, the widely accepted theoretical basis is the AMO framework (Bartel, 2004; Harney & Jordan, 2008). According to Purcell et al. (2003), people perform better when: 1) they are able to do so; 2) they have the motivation to do so, 3) their work environment provides the necessary support and avenues for expression. These statements mirrow the sense of the AMO framework and highlight that within this framework, employees capability sets the upper limit of performance, motivation influences the degree to which this capability is turned into action, and opportunity refers to enhancing avenues for the capability of employees to be expressed and to the removal of barriers that may prevent workers from utilizing their capacity for labour (Macky & Boxall, 2007). Based on the theoretical approach, a virtual representation of HRM practices linkage with affective human resource reactions is shown in Figure 1. HRM practices: - Skill-enhancing - Motivation-enhancing - Empowerment-enhancing AMO framework: - Abilities - Motivation - Opportunity to participate Human resource reactions: - Job satisfaction - Organizational commitment

Figure 1. HRM practices linkage with human resource reactions

Research methodology
According to Yin (1994), research strategy should be chosen as a function of the research situation, while both qualitative and quantitative methods involve weaknesses and strengths (Amaratunga, Baldry, Sarshar & Newton, 2002). It is very important to get a persuasive research result, therefore the choosing of one or several suitable methods can be the vital part of the research work (Shahalizadeh, Amirjamshidi & Shahalizadeh, 2009). Sample. The data are derived from research conducted among employees working in one service sector organization in Lithuania. The questionnaire was given to 67 employees (in the organization apart top and line managers work 77 employees). A total of 62 questionnaires were returned giving a 92 per cent response rate. The average age was 44,3 and the majority of respondents had a higher university degree (87,1 per cent). 35,5 per cent of employees work in the organization longer than 10 years, 43,5 per cent are occupied less than 5 years. Data collection: questioning survey using questionnaire. Human resource management practices. Although there is considerable variation in what HRM practices are measured in empirical studies (Moynihan, Gardner, Park & Wright, 2001) we choose to measure skill-enhancing, motivation-enhancing and empowerment-enhancing HRM practices in accordance with Subramony (2009) proposed the content of HRM bundles. The core of the ability construct is based on perceived opportunities for job-based skill training, recruiting to ensure availability of large applicant pool, structured tools for selection and job descriptions generated through job analysis. The concept of motivation is built on ideas of formal performance appraisal process, incentive plans, linking pay to performance and opportunities for internal career mobility. The concept of opportunity to participate is built on employee involvement in work 923

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process/outcomes, formal grievance procedure, job enrichment, autonomous work groups and employee participation in decision making. In totally 30 statements were included. Using a five-point Likert scale (1=strongly disagree, 4= strongly agree, 5= no opinion), respondents were asked to indicate the extent to which they agree each practice occurs in the organization. Two human resource reactions are measured job satisfaction and organizational commitment. Job satisfaction was measured using 16 items from the 20-item short form of Minnesota Satisfaction Questionnaire. The instrument was design to measure intrinsic and extrinsic job satisfaction. The general organizational commitment was measured using four statements drawn from the measure developed by Mowday et al. (1979) (Kumpikaite & Rupsiene, 2008). The affective, continuance and normative commitment was measured using 15 items from Allen and Meyers (1990) original construct. Using a fivepoint Likert scale (1=strongly disagree, 4= strongly agree, 5= no opinion), responds were asked to indicate the extent to which they agree with each of statements concerning job satisfaction and organizational commitment. Data analysis (using SPSS 12.0): Statistical analysis carried out by applying methods of descriptive statistics and performing discriminant (non parametric Kruskal Wallis test) and correlation analysis.

Results
HRM level. The research results allow to state that the employee assess the best the level of skillenhancing HRM practices (mean 3,1), on the second place - empowerment-enhancing HRM practices (mean 2,6), on the third place - motivation-enhancing HRM practices (mean 2,5). In relation to skill-enhancing HRM practices, the employee agree that training knowledge they use in daily activities (93,55 per cent) and that the competition is an essential condition in order to get job in this organization (87,10 per cent). However, only 66,13 per cent of respondents accept that during competition they need to make exercises related to work nature. The analysis reveals that the organization apply person-organization fit strategy (66,52 per cent of respondents agree with this) when selecting people, underlying that it focus on how well the individual fits with the culture or values of the company and hire people with the capacity to work well with other employees. The empowerment-enhancing practices are aimed at delegating decision-making authority and responsibility down the hierarchy and facilitating employees participation and voice (Subramony, 2009). On the top of rating these practices are statements regarding systems to encourage feedback from employees: 87,10 per cent of respondents think that they can express their opinion during the meetings, 66,13 percent agree with statement that the organization pay the respect to their voice. However, the results indicate that employee are not enough involved in decision making: only 35,48 per cent are members of working groups. Due to this factor the organization miss possibility to use creativity of all employees and do not employs advantages of employees participation which can provide management with some legitimacy for its actions on the grounds that ideas have been put forward by workers and or at least considered by them before decision are ultimately made (Baptiste, 2008). According to Subramony (2009), motivation-enhancing practices help direct employees efforts toward the accomplishment of work objectives and provide them with the inducements necessary to engage in high levels of performance. The research results let to highlight that on the top of rating are HRM practices concerning formal performance appraisal process: 91,94 percent state that formal appraisal takes regularly, 85,48 per cent are convinced that the appraisal results are used for decisions making. In the middle of rating are practices regarding promotion within the organization: 46,77 per cent of respondents are persuaded that vertical career is possible, 40,32 per cent that horizontal career is possible. Following Pfeffer (1995), we can state that an emphasis on promotion from within the organization provide a sense of fairness and justice among the employees. On the bottom of rating are statements concerning wages: only 22,56 per cent approve that wages correspond to workload, just 16,13 per cent think that work results influence wages. Organizational commitment level. According to survey results, the organizational commitment is high (mean 2,9), however despite the fact, that 88,71 per cent of respondents are satisfied with organization as work place and 85,48 per cent would choose the same organization for work again, just 56,46 per cent would recommend for the best friends to start to work here. These findings could be explained either by the fear of competition or by the fact that the organization isnt so good place for work. Most committed are elder (over the age 50) employee (mean 3,2), least employees up to 30 years (mean 2,5).

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Among organizations employees normative commitment level is the poorest of the three dimensions of commitment (mean 2,18). 50,0 per cent of respondents state that they were not taught to believe in the value of remaining loyal to one organization, 45,2 per cent agree that these days people move from company to company too often. Only 27,4 percent of respondents state that they wouldnt feel that it was wrong to leave the organization if something better came along. Whereas normative commitment refers to the employees feelings of obligation and need to work (Buciuniene & Skudiene, 2008), it could be drawn the conclusion that employee do not feel indebted to this organization. The analysis of three dimensions of commitment reveals that affective commitment is dominant (mean 2,7). The employee feel identification with organization and an emotional involvement with an organization: 85,5 per cent of respondents feel a strong sense of belonging to the organization, 79,0 per cent feel like part of the family, 71,0 per cent - would be very happy to spend the rest of career with this organization. However, from another side the employee do not treat organizations problems as their own (61,3 per cent separate problems). In relation to continuance commitment (mean 2,47), 83,9 per cent of respondents are afraid of what might happen if they quit job right now without having another one lined up; 48,4 per cent do not see career possibilities (one of the few negative consequences of leaving this organization would be the scarcity of available alternatives). The findings reflect the socioeconomic situation in Lithuania and reveal that employee are compelled to commit to the organization because the cost associated with leaving are too high. Under such circumstances employee make the decision to stay in organization and save the position. Job satisfaction level. The level of job satisfaction is quite high (mean 2,73), however intrinsic satisfaction (mean 2,71) is higher than an extrinsic job satisfaction (mean 2,65). In relation to intrinsic satisfaction, on the top of the rating are statements which are outcomes of skillenhancing HRM practices (93,5 per cent are satisfied with the chance to work alone, 80,6 per cent are content with chances to do different things from time to time) or which are outcomes of engagementenhancing HRM practices (90,3 per cent are satisfied with changes to do something that makes use of the abilities). At the least (only 38,7 per cent) the respondents are satisfied with the chance to be somebody in the community. The research reveals differencies concerning intrinsic satisfaction in separate employees age groups: employees up to 30 years old feel the minimal intrinsic satisfaction (mean 2,37), the most intrinsic satisfied (mean 2,80) are workers over the age 50. As regard to extrinsic job satisfaction, the satisfaction concerning line managers are identified: 93,5 per cent of respondents are satisfied the way the line managers are handling worker; 90,3 per cent with competence of line managers in making decisions. These findings let to conclude that line managers do not act as robot conformist in enacting HRM policies (Harney & Jordan, 2008) and that the employees in the organization are content with the way how line managers undertake people management activities. It worthwhile to mention, that the same trend concerning extrinsic satisfaction in separate employees age groups shows up: the most extrinsic satisfied (mean 2,94) are workers over the age 50. The results of correlation analysis. The results of correlations between HRM practices and affective human resource reactions are shown in Table 1. Table 1. Correlation between HRM practices and affective human resource reactions 1
1 2 3 4 5 Skill-enhancing HRM practices Motivation-enhancing HRM practices Engagement-enhancing HRM practices Organizational commitment Job satisfaction 1,00

2
0,321* 1,00

3
0,405** 0.606** 1,00

4
0,483** 0,314* 0,293* 1,00

5
0,411** 0,533** 0,551** 0,634** 1,00

Notes: *mutual correlation is significant at p<0,05; **mutual correlation is significant at p<0,01 The correlations in Table 1 show that meaningful statistical relationships are between HRM practices: skill-enhancing HRM practices weak correlate with motivation-enhancing HRM practices (r=0,321, p<0,05) and with engagement-enhancing HRM practices (r=0,405, p<0,01); meanwhile, motivation-enhancing HRM practices medium significantly correlate with engagement-enhancing HRM practices (r=0,606, p<0,01). These results allow to draw the conclusion that investment in one HRM practices kind (for example in skillenhancing HRM practice, like training) stimulates the level of other HRM practices.

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Other meaningful statistical relationship is between skill-enhancing HRM practices and organizational commitment (r=0,483, p<0,01) and job satisfaction (r=0,411, p<0,01). These findings suppose that enhancing skills of employees stipulated by HRM practices, like job-based skill training; recruiting to ensure availability of large applicant pool; structured tools for selection, determine the increased organizational commitment and job satisfaction. One more meaningful statistical relationship is between motivation-enhancing HRM practices and organization commitment (r=0,314, p<0,05) and job satisfaction (r=0,533, p<0,01). Therefore it is possible to state that the enhancement of motivation allows to avoid or to reduce number of employees whose commitment to organization or job satisfaction are low. Engagement-enhancing HRM practices appropriately correlate with organization commitment (r=0,291, p<0,05) and job satisfaction (r=0,551, p<0,01). Accordingly it could be stated that employee participation, feedback systems and employees participation at decision making create the atmosphere, where employee are satisfied with organization as the work place, positively rate the activities of organization, treat the organization as place again to start to work (organizational commitment), and where the employee are satisfied (job satisfaction). The results of correlations between HRM practices and separate kinds of organizational commitment and job satisfaction are shown in Table 2. Table 2. Correlation between HRM practices and separate kinds of organizational commitment and job satisfaction
Affective commitment 0,374** 0,235 0,413** Intrinsic job satisfaction 0,371** 0,423** 0,533** Extrinsic job satisfaction 0,419** 0,598** 0,517))

1 2 3

Skill-enhancing HRM practices Motivation-enhancing HRM practices Engagement-enhancing HRM practices

Notes: *mutual correlation is significant at p<0,05; **mutual correlation is significant at p<0,01

The results of this research suggest that the optimal choice of specific HRM practices interventions depends on the desired outcome. When affective employees commitment is required, skill-enhancing and engagement-enhancing HRM practices are considered to be the right choice. Providing employees with opportunities for further development through skills and job-based training, like facilitating employee participation and voice using upward feedback mechanisms, stimulates affective commitment. When intrinsic or extrinsic job satisfaction is required, HRM practices that enhance skill, motivation and opportunity to participate are deemed to be important. The possibilities to do different things from time to time, to use own work methods and abilities, to feel the steady employment promote intrinsic job satisfaction. The career possibilities, the match of work amount and workload and line managers, who, according employees perception, are competent and treat them fairly, force the extrinsic job satisfaction. In summing up, it could be stated, that skill-enhancing, motivation-enhancing, engagement-enhancing HRM practices stimulate organizational commitment and job satisfaction and due to this the organization should appraisal and select such ways to manage human resource that strengthen employees belief in the organizations goals and values and willingness to put efforts on behalf of organization, and the satisfaction with the terms and conditions of employment and physical work environment.

Conclusions
The contribution of human resources and their management to the overall achievement of organizational objectives in dynamic business environment is increasingly acknowledged. The literature has garnered much empirical evidence supporting that HRM enhance organizational performance, however in order to improve the understanding on the impact of HRM on performance a theory about HRM, a theory about performance and a theory about how they are linked are in demand. There is no consensus regarding which HRM practices constitute a theoretically complete set of HRM practices and how conceptually these practices can be categorized. However, the AMO framework presents a

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certain commonality around how HRM is operationalized and proposes HRM practices that influences employees abilities to work, motivation and opportunity to participate. HRM practices do not lead directly to organizational performance, the AMO framework proposes the intermediate mechanisms through which it is supposed HRM practices are converted to performance. Human resource reactions to HRM practices are at the heart of all HRM and organizational performance linkage models, because the link between employee reactions and their subsequent behaviour is critical. Organizational commitment comprises a strong belief in and an acceptance of the organizations goals and values; a willingness to exert considerable effort on behalf of the organization; a strong desire to maintain membership in the organization. Job satisfaction is an attitude that individuals maintain about their jobs. The results indicate that the employee assess the best the level of skill-enhancing HRM practices, further go empowerment-enhancing HRM practices and ultimately - motivation-enhancing HRM practices. Among organizations employees normative commitment level is the poorest of the three dimensions of commitment and intrinsic satisfaction is higher than and extrinsic job satisfaction. The results suggest that skill-enhancing HRM practices mostly stimulate organizational commitment, motivation-enhancing HRM practices, while engagement-enhancing HRM practices force job satisfaction. Affective commitment can be improved by increasing HRM practices that enhance opportunity to participate and motivation.

References
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