Developing Organizational Commitment
According to our studies, top performing companies can count on the unfailing commitment of more than 90% of its personnel. The company average is somewhere around 73%. Companies experiencing problems generally obtain results lower than 60%.
What percentage of your company’s employees and management are truly committed and motivated?
Commitment is key
A common characteristic of high performing companies is the ability to develop a very strong commitment by its employees and management, towards the organization. Herman Simon, based on an in-depth study of successful medium sized companies, concluded in the April 1992 edition of the Harvard Business Review, that “Closeness to the customer, integration of technology and marketing and employee identification with the company” constitute the principal factors of corporate competitiveness. More recently (1996), Frederick F. Reichheld, a director of Bain & Company in Boston, concludes in his book The Loyalty Effect that great companies like State Farm, Toyota/Lexus, and John Deere owe their success to the loyalty of their customers, employees and owners. A key determinant of a company’s performance, therefore, is the level of organizational commitment shown by its employees at all levels.
We have catalogued and examined over 3,000 recent studies that dealt with the specific effects of organizational commitment. These studies were carried out in the United States, Europe and Asia. We have learned, from them, that commitment has a significant impact on work performance. Turnover, discipline, absenteeism, resistance to stress, self-esteem and openness to change are all positively affected. This last finding is particularly important. It allows us to better understand the phenomenon of adapting to, or resisting, change. As employees identify more with their organizations: the more flexible will they be; the less will they resist change; and, the more adaptable will they be to changing environments.
How often have we all heard “We have tried everything… quality circles, reengineering, not to mention total quality…and we’re no further ahead!”. Perhaps with ISO…”. The success rate of these programs, even when disguised as part of a process, is indeed very low – usually no more than 15 to 20 percent. Why? Our research suggests that at least 80% of an organization’s employees at all levels must be committed to it, for it to succeed in its total quality, reengineering or work reorganization efforts.
But how can organizational commitment be developed? What are the aspects of an organization’s management which will contribute the most to its employees being committed to it? Is it pay or then again competent supervision? Does effective communication influence organizational commitment? … Or working relationships with colleagues?
We are now able to answer these questions.
Six management factors responsible for organizational commitment
Applying the above criteria to the data from our 85 studies allowed us to identify six (6) management factors that determine organizational commitment despite company location (North America or Europe), company size (large or small), sector (manufacturing or service) and organizational level (employee or manager). The multiple correlation coefficient of these six management factors with organizational commitment reaches .78, which is a very high level of correlation. These results truly represent a major discovery for executives and managers who wish to improve employee organizational commitment and the performance of their organizations.
The management factors responsible for developing employee organizational commitment, presented in decreasing order of importance are:
• Perception that the employee is treated with respect and consideration by the organization
• Perception that the organization is highly concerned with quality and customer service
• Clearly defined job and responsibilities
• A stimulating job
• Quality of information given to employees on the company’s plans and activities
• Perception of administrative effectiveness
• We have put together a questionnaire (DQOC) that measures employee commitment and the six factors contributing to its development.
Respect and consideration
Employee perception of respect and consideration has a critical impact on organizational commitment. Consequently, it is impossible to develop a high level of organizational commitment and motivation if employees do not feel that they are being treated with respect and consideration and do not feel that they are valued or appreciated by their supervisors and the company which employs them. Its impact is irrefutable.
But how does one go about improving the perception that employees have on whether they are being treated with respect and consideration or not?
Unfortunately, there are no easy solutions or quick fixes. It cannot be cured by the simple force of implementing various so-called “miracle programs”! Rather, it needs to be the object of a comprehensive strategy that considers the following variables: external factors affecting the organization(customers, headoffice, investors, etc.); management values and style; as well as the history, culture, structure, policies and management practices of the organization. A total commitment by everyone is required to improve or create a climate of respect and consideration. It should be mentioned that 360° Feedback is an interesting and effective technique to significantly modify the attitudes and behaviors of management and employees and to develop an organizational culture that values people.
Quality and customer service
How employees perceive what level of importance their company places on the quality of their products or services and customer service also strongly influences the level of commitment they will have towards the company (see Table 2).
As we can observe, employees tend to identify with an organization that respects them as well as its customers.
Total quality has definitely contributed to the design of quality and customer service improvement programs, the value of which is undeniable. It is important when implementing these programs, however, that they be part of a total strategy aimed at developing a high level of employee commitment across all organizational levels.
A clear understanding of the work to be done has a significant and positive affect on developing organizational commitment. This result came as a surprise to us, as we did not foresee its importance.
It needs to be noted that job clarity, within the context of our diagnostic studies, refers to how precisely supervisors communicate to their employees what has to be done and what their expectations are, rather than a detailed job description.
Management training on supervisory techniques, leadership or communication should consider the importance of communicating precisely when assigning tasks or projects and include exercises on this subject.
For over fifty years, psychologists have recognized that self-actualization (i.e. the full use of one’s personal and professional potential) is an important factor in motivation and psychological well-being.
The results of our work clearly demonstrate that a job that allows the employee to use his/her aptitudes, professional knowledge and judgment significantly contributes to the employee’s commitment to the organization.
Job enrichment and employee autonomy are two key components that should support any strategy aimed at improving this factor.
Information on the company’s plans, activities, accomplishments and financial performance is also seen to contribute significantly to employee organizational commitment.
Our research indicates that the importance of this factor increases during periods when the company is experiencing difficulties or a crisis, at which time employees feel insecure and uncertain about the future.
Organizational commitment is finally affected by the employee’s perception of how well the company is managing its resources. Moreover, a company concerned about controlling its costs and increasing productivity is more likely to have employees that identify with it, than companies that are loosely managed. Therefore, it was not surprising for us to find that a company’s action to reduce staff does not affect organizational commitment when it is properly done, i.e. with respect and consideration for people.
Many techniques are available to improve the effectiveness of a company’s administration. The method we prefer, however, consists of asking each employee and each team of an organization to identify their internal and external customers and, following consultation with them, to improve the services provided while being cost conscious.
Management factors that do not contribute to organizational commitment
We have briefly described the management factors that contribute to employee organizational commitment. Examining the other management factors (see Table 1), those observed not to be related to organizational commitment, is also very revealing.
One could believe for example that a company’s public image will influence organizational commitment. Our results indicate that this factor has very little impact on organizational commitment and then, only for employees of some rurally-based companies.
Organizational commitment is not influenced by compensation.
It has long been believed that supervision plays an intermediary and key role in the relationship between the company and its employees. Therefore, it was felt that employee satisfaction with the company’s supervisory practices would result in employees being highly committed to the organization. Our research refutes this hypothesis. We have found no significant relationship between employee perception on supervision and organizational commitment. In other words, managers and employees alike were able to distinguish between the attitudes and behaviors of individual supervisors and the company’s total culture.
Finally, it is highly interesting that employee participation programs have no impact on organizational commitment. These programs are often perceived, both by employees and managers, as superficial and manipulative attempts by the company to “motivate” employees. All too often these programs are viewed by some senior executives as quick ways for changing things without truly being committed to change and puts questioning their own beliefs and their organization’s culture into question.
Conclusion: no progress without measurement
We agree with Frederick F. Reichheld, who concludes in his recent book The Loyalty Effect, that a company’s loyalty to its clients and employees has always been one of the great engines of business success, and it is still at the heart of every company with an enduring record of productivity and profitable growth. We further feel that an organization’s success is built on the competence and commitment of its employees regardless of organizational level. It is therefore in its best interest to identify and nurture these two qualities in all of their people.
As a result of our research, the management factors that generally contribute to developing a high level of organization commitment are now known: Consideration and respect; quality and customer service; job clarity; stimulating job; company information; and administrative effectiveness.
Developing employee organizational commitment is simple and complex at the same time. It essentially consists of measuring organizational commitment and the management factors underlying its development. However, the sad reality is that most organizations will not take the time to assess themselves. They fail to realize that it is only through measurement that variances can be identified, corrective action taken and ultimately an organization’s performance improved.
Organizational commitment is directly related to corporate performance and success. It therefore should be a constant preoccupation for directors and managers of all organizations.
- The following services are flexible and can be readily adapted to your specific company needs.
- Adaptation of our organizational commitment questionnaire to the specificities of your company
- Development and distribution of a communication plan for personnel targeted by this study
- Pretesting the questionnaire
- Administration of the questionnaire using the WEB or other appropriate methods
- Application of our very efficient statistical analysis strategy
- Preparation of a successful organizational commitment development strategy
- Preparation and presentation of a study report to company management