Do “high commitment” human resource practices affect employee commitment?

Abstract

Relying on a cross-level paradigm and on social exchange theory (i.e., perceived organizational support) I explore the relationships among human resource practices, trust-in-management, and organizational commitment. Individual-level analyses from a sample of 1689 employees from 180 credit unions indicate that trust-in-management partially mediates the relationship between perceived organizational support and organizational commitment. Cross-level analyses using hierarchical linear modeling indicate that human resource practices affect the relationship between perceived organizational support and organizational commitment or trust-in-management.

Introduction

In a survey of over 7500 U.S. workers, Watson Wyatt International found that companies with highly committed employees experienced greater 3-year total returns to shareholders (112%) than companies with low employee commitment (76%; Watson Wyatt, 1999). They also found that human resource practices and trust in management had the strongest impact on building commitment.

As Watson Wyatt’s survey implies, human resource practices and trust may provide two avenues that corporate executives can use to increase the commitment of their workforce. Academic research conducted at the organizational level suggests that human resource practices affect organizational outcomes by shaping employee behaviors and attitudes Arthur 1994, Huselid 1995, Wood and de Menezes 1998. More specifically, systems of “high commitment” human resource practices increase organizational effectiveness by creating conditions where employees become highly involved in the organization and work hard to accomplish the organization’s goals Arthur 1994, Wood and de Menezes 1998—in other words, by increasing their employees’ commitment to the organization. However, ironically, these studies have provided estimates of the strength of the relationship between high commitment human resource practices and measures of organizational effectiveness without investigating the relationship between human resource practices and employee commitment.

Similarly, researchers have not systematically developed or tested theories linking trust and commitment; however, incidental to tests of other variables or theories, they have found significant correlations between commitment and employees’ trust in a specific individual (e.g., their supervisor or leader) Folger and Konovsky 1989, Pillai et al 1999, Podsakoff et al 1996 or generalized trust-in-management (e.g., Gopinath and Becker 2000, Kim and Mauborgne 1993, Pearce 1993). These estimates suggest that further study of the nature of the relationship between trust and commitment would be fruitful, especially if theory-based.

The motivational processes of social exchange theory and the norm of reciprocity (e.g., Blau 1964, Homans 1961) may explain the relationships among human resource practices, trust-in-management and employee commitment Eisenberger et al 1990, Settoon et al 1996, Wayne et al 1997. A well-established stream of research rooted in social exchange theory has shown that employees’ commitment to the organization derives from their perceptions of the employers’ commitment to and support of them Eisenberger et al 1990, Hutchison and Garstka 1996, Settoon et al 1996, Shore and Tetrick 1991, Shore and Wayne 1993, Wayne et al 1997. The research suggests that employees interpret organizational actions such as human resource practices Settoon et al 1996, Wayne et al 1997 and the trustworthiness of management Eisenberger et al 1990, Settoon et al 1996 as indicative of the personified organization’s commitment to them. They reciprocate their perceptions accordingly in their own commitment to the organization. Only a few studies have explored the role of human resource practices in this model (e.g., Allen 1992, Guzzo et al 1994, Miceli and Mulvey 2000, Wayne et al 1997) and none has explored the role of trust.

The purpose of this study is to investigate the relationships among human resource practices, trust-in-management, perceptions of organizational support, and organizational commitment. I rely on a “meso” paradigm recognizing that these variables exist at different levels of analysis (organizational and individual) but nonetheless interact and affect each other House et al 1995, Rousseau 1985. I use a social exchange lens relying specifically on the role of perceptions of organizational support to explore the processes that link these factors. I test the relationships with data from a sample of over 1600 employees from 180 credit unions. I explore individual-level hypotheses using hierarchical linear regression and cross-level hypotheses using hierarchical linear modeling.