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THESIS FINAL

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THESIS FINAL

  1. 1. REWARDS AND RETENTION: THE ROLE OF AFFECTIVE COMMITMENT GENEVIEVE WINSOME KARLEIN KRLGEN001 A research report submitted in partial fulfilment of the requirements for the award of the Honours in Organisational Psychology (Change Management). University of Cape Town 2013 Supervisor: Anton Schlechter COMPULSORY DECLARATION: This work has not been previously submitted in whole, or in part, for the award of any degree. It is my own work. Each significant contribution to, and quotation in, this dissertation from the work, or works of other people has been attributed, cited and referenced. Signature: Date: 23/10/2013
  2. 2. Rewards and Retention: The Role of Affective Commitment 2 TABLE OF CONTENTS 1. Abstract 3 2. Introduction 3 Rewards 4 Affective Commitment 6 Affective Commitment and Retention 6 Financial and Non-Financial Rewards and Affective Commitment 7 Retention, Affective Commitment and Rewards 8 The Average Income Effect 9 3. Method 10 Research Design 10 Instruments 10 Reward Scales 10 Affective Commitment Scale 11 Intention to Stay Scale 12 Average Monthly Income 12 Population 12 Sample and Procedure 12 Statistical Analysis 13 4. Results 13 Reliability 13 Validity 14 Descriptive Statistics 15 Inferential Statistics: Results Relating to Hypotheses 16 5. Discussion 17 Limitations of the Present Study 20 Recommendations for Future Research 21 Theoretical and Practical Implications 22 6. References 24 7. Appendices 30 A: Conceptual Model 30 B: Sample Demographics 31 C: Mediation Analyses Results 32 D: Questionnaire 33 E: Permission Letters 40
  3. 3. Rewards and Retention: The Role of Affective Commitment 3 ABSTRACT One of the largest human resource management issues is employee retention. The aim of this study was to examine the relationships between extrinsic rewards (both financial and non- financial), intrinsic rewards (non-financial), employee affective commitment and employee intentions to stay or remain employed by their current organisation. In addition the study examined the role of an individual’s average monthly income in moderating the relationship between financial/non-financial rewards and affective commitment. The sample included individuals currently employed by an organisation. Data was collected from 225 participants in 29 organisations across the Western Cape, South Africa. Correlation, regression, mediation and moderation analyses were used to analyse survey data. Findings suggest that extrinsic financial rewards are the strongest predictor of variance in affective commitment. Additionally, affective commitment was found to mediate the relationship between satisfaction with both financial and non-financial rewards and an employee’s’ intention to stay. The study highlighted how both financial and non-financial reward systems relate positively to affective commitment and therefore should be used to improve employee retention. INTRODUCTION The highly competitive environment in which most organisations find themselves requires them to maintain a sustainable competitive advantage in order to survive. An efficient, skilled and productive work force is vital in developing and maintaining a competitive advantage. This is because human capital is strongly associated with business performance (Newman & Sheikh, 2012). A committed, engaged and dedicated work force is a valuable asset as it cannot easily be imitated by organisations’ competitors (Ansari, 2011). Although investing in human resources and retaining them is fundamental to success, employee turnover still remains one of the major issues in human resource management today (Longnecker & Shanklin, 2004). Since there is often a limited supply of highly skilled individuals and the costs of turnover are high, organisations have to ensure the retention of their valued employees. Turnover generally brings a loss in skills and increased financial costs associated with the replacement of these skills (Meyer, Stanley, Herscovitch & Topolnytsky, 2002). These losses in skills can ultimately cost organisations the opportunity to remain competitive in their respective industries (Gardner, Wright & Moynihan, 2011).
  4. 4. Rewards and Retention: The Role of Affective Commitment 4 In prior literature, organisational commitment has emerged as one of the major factors influencing employee retention. Furthermore, affective commitment has appeared as a significant contributor towards an employee's intention to stay with an organisation, as it represents the emotional attachment an individual has for the organisation and their subsequent desire to remain a member (Ansari, 2011). It is therefore fundamental that organisations value and develop affective commitment in employees through human resource systems aimed at fostering it (Gardner et al., 2011). The challenge for organisations is therefore to establish how they can best develop systems that foster affective commitment. A number of factors have been associated with increased employee commitment, however among the most effective and widely used are financial and non-financial reward systems. These rewards systems refer to all the benefits, whether they are financial in the form of tangible monetary rewards or non-financial, such as employees’ positive experiences and feelings arising from their job (Newman & Sheikh, 2012). Research surrounding which type of rewards best predict affective commitment has however obtained mixed results (Malhotra, Budhwar & Prowse, 2007). Workforces often comprise groups of individuals that share different needs, desires and values; yet research concerning how rewards may influence the development of affective commitment within these various groups is limited (Rahman, Hussain & Hussain, 2011). This is especially true when investigating the role an employees’ current income plays in predicting an employees’ preference for financial or non-financial rewards (Young, Worchel & Woehr, 1998). It seems logical to assume that employees from lower income groups may prefer financial rewards over non-financial; however little research has investigated such preferences for these groups. This lack of research surrounding the different types of rewards and their subsequent relationship with affective commitment limits the possibility of maximising affective commitment through developing customised and effective reward systems, as a tool for retention (Gardner et al., 2011). Thus, within the conceptual framework outlined above at least two research questions emerge: are financial and non-financial rewards related to affective commitment, and are these relationships moderated by an employee’s average income? Furthermore: is affective commitment positively related to the intention to stay? Rewards Reward systems are often instilled to promote employee performance, increase motivation and improve retention (Dzuranin, & Stuart, 2012; Gkorezis & Petridou, 2012). The existing
  5. 5. Rewards and Retention: The Role of Affective Commitment 5 literature defines two main types of rewards, namely intrinsic and extrinsic rewards. These rewards can then be further classified as financial or non-financial in nature. Intrinsic rewards These are the emotional rewards that an employee gains when performing tasks inherent to the content of their job: tasks which motivate them (Malhotra et al., 2007; Newman & Sheikh, 2012; O'Driscoll & Randall, 1999). Such emotional rewards can also arise from the way in which an employee is allowed to perform these tasks and the feedback and recognition received for performing these tasks correctly (Newman & Sheikh, 2012). Extrinsic rewards These can be defined in terms of features that are not inherent to the job content: organisational rewards and social rewards are examples. Organisational rewards are rewards designed to motivate performance and increase retention and typically include features like pay, benefits and promotional opportunities (i.e. they can be financial or non-financial in nature) (Malhotra et al., 2007). Social rewards, however, are a result of the employee’s interaction with others at work (i.e. their satisfaction with a supervisor’s conduct towards them; friendly, helpful and supportive peers; and positive interactions with subordinates) (Malhotra et al., 2007; Newman & Sheikh, 2012). As an objective of the present study is to determine which aspects of human resource- reward systems relate to positive outcomes (affective commitment) in employees, the role of extrinsic social rewards becomes less valid as organisations have limited control over the relationships existing between employees (Malhotra et al., 2007; Newman & Sheikh, 2012). Financial rewards Financial extrinsic rewards refer to the tangible monetary rewards an organisation provides for each employee. These include overtime and bonus pay and a multitude of additional benefits including medical aid or pension fund contributions and life insurance. Non-financial rewards Non-financial rewards include both extrinsic organisational rewards, intrinsic task rewards (which are inherent to the content of the job itself) and the investment in training of employees. Non-financial extrinsic organisational rewards are those rewards offered by the organisation which can include certificates, promotions and time off. Intrinsic task rewards are non-financial in nature and include motivational job characteristics such as participation
  6. 6. Rewards and Retention: The Role of Affective Commitment 6 in decision making, autonomy, role clarity, skill variety and feedback (Malhotra et al., 2007). Employees also value their organisation’s attempts to invest continually in developing their skills through training, as this increases their capabilities and improves their opportunities for career advancement (Chew & Chan, 2008). Therefore training emerges as playing an integral role in overall satisfaction with reward packages and can be regarded as an important non- financial motivator and intrinsic reward (Malhotra et al., 2007). For this reason the conceptual framework of reward systems utilised in this study includes both financial and non-financial extrinsic organisational rewards and non-financial intrinsic rewards (i.e. involving tasks and training) (Figure 1). Figure 1: Graphic representation of rewards categorisation for the present study Affective Commitment Affective commitment refers to the emotional bond an employee has with their organisation: that is, the bond that results from emotional identification with the organisation. This emotional identification is created through the employee’s affective attitude towards the values and goals of their organisation (Ansari, 2011; O'Driscoll, & Randall, 1999; Patrick & Sonia, 2012). Affective Commitment and Retention Previous literature suggests that affective commitment is positively associated with retention, as a committed employee (one who is involved in, and enjoys their membership of the organisation) has the desire to remain a member (Allen & Meyer, 1990; Ansari, 2011; Meyer et al., 2002; O'Driscoll & Randall, 1999; Patrick & Sonia, 2012). This desire to remain a member would be seen in an employee who develops a strong emotional bond for the organisation as a result of their belief that the organisation is dependable in looking after their interests, and who respects the goals and values of their organisation in terms of how employees are treated and what business goals are pursued (Dunham, Grube & Castañeda, Non-Financial Rewards Extrinsic Organisational Rewards Instrinsic Task andTraining Rewards Financial Rewards Extrinsic Organisational Rewards
  7. 7. Rewards and Retention: The Role of Affective Commitment 7 1994). The emotional bond between an employee and an organisation reflects affective commitment and encourages individuals to behave in a way that benefits the organisation, with the main behavioural effect being the desire to continue in the employment relationship. This emotional bond therefore contributes to a reduction in overall voluntary employee turnover (Gardner et al., 2011; Patrick & Sonia, 2012). Organisational commitment does not comprise affective commitment alone. Continuance commitment is created through an employee’s belief in the anticipated costs and drawbacks of leaving, and normative commitment is created through the moral obligation felt towards their organisation. It is logical to assume that affective commitment will have the most significant effect on retention, as an employee who is emotionally attached to the organisation would be one more likely to stay than one who stays solely out of obligation or because of the drawbacks of leaving (Ansari, 2011). Although prior literature suggests that all three forms of commitment have a negative relationship with voluntary turnover, affective commitment has the strongest negative relationship with turnover intentions (Luchak & Gellatly, 2007). A meta-analysis involving 155 studies and 50,146 employees revealed a significant negative correlation between affective commitment and actual turnover (r= -0.23, p<0.05) (Meyer et al., 2002). Turnover intentions had the largest negative correlation with affective commitment (r= -0.51, p<0.05) when compared to the other forms of commitment (normative commitment r= -0.39, p<0.05 or continuance commitment r= -0.17, p<0.05) (Meyer et al., 2002). Therefore the present study opted to focus on affective commitment rather than the other forms of organisational commitment when examining retention. Turnover intention (intention to leave) is used as a measure that predicts turnover, however when seeking to predict whether an employee wants to stay with an organisation one would measure their intention to stay (McCarthy, Tyrrel & Lehane, 2007). Therefore the intention to stay should have the opposite relationship with affective commitment from that of turnover intentions (McCarthy et al., 2007). Based on the arguments presented above the following hypothesis was proposed; H1: A significant positive relationship exists between affective commitment and intention to stay. Financial and Non-Financial Rewards and Affective Commitment Research suggests that employees who are satisfied with their employee benefits (HR reward systems) respond by developing greater affective commitment towards the organisation, as they feel that their organisation cares for their interests (Mahal, 2012; Malhotra et al., 2007;
  8. 8. Rewards and Retention: The Role of Affective Commitment 8 Newman & Sheikh, 2012). This may be because employees perceive their organisation to be committed towards their wellbeing when they receive the rewards that they value. Previous research has found the antecedents of affective commitment to include intrinsic non-financial rewards such as perceived job characteristics of task autonomy, task significance, task identity, skill variety, supervisory feedback and the ability to influence decisions at work (Dunham, Grube & Castañeda, 1994). This is in accordance with literature which supports the view that intrinsic rewards are more closely associated with organisational commitment than extrinsic rewards (Newman & Sheikh, 2012). In opposition another stream of literature suggests that extrinsic rewards (both financial and non-financial) are more powerful determinants of affective commitment than non-financial intrinsic rewards, as organisations have direct control over their provision. Therefore if employees value their organisation’s HR reward systems (perceiving these to consider their needs), this will increase their identification with the organisation and their attachment to it (Mahal, 2012). Based on the above, the following hypotheses were formulated: H2: Employee satisfaction with financial rewards is positively related to their level of affective commitment. H3: Employee satisfaction with non-financial rewards is positively related to their level of affective commitment. H4: Employee satisfaction with extrinsic financial rewards, extrinsic non-financial rewards and intrinsic non-financial rewards predicts variance in affective commitment. Retention, Affective Commitment and Rewards Affective commitment has been seen to influence retention positively and thus investigation into the elements that encourage affective commitment is essential in order to maintain a competitive advantage (Ansari, 2011). Research surrounding retention, affective commitment and rewards indicates that the satisfaction with rewards, which best predict affective commitment, has included benefits such as; role clarity, fair reward allocation (financial/non- financial), promotional opportunities and career development (Malhotra et al., 2007; Newman & Sheikh, 2012; O'Driscoll & Randall, 1999; Patrick & Sonia, 2012). The reason that these rewards increase affective commitment in employees could be that when an employee feels that they have control and autonomy (non-financial intrinsic task rewards), they believe their supervisor provides valuable training (intrinsic reward) and provides rewards fairly (financial and non-financial extrinsic organisational rewards); thus their emotional identification with the organisation increases (Mahal, 2012; Malhotra et al., 2007). Consequently, if HR reward systems use rewards designed to motivate and empower
  9. 9. Rewards and Retention: The Role of Affective Commitment 9 employees; and employees value these systems for meeting their needs, they should display increased affective commitment, which, ultimately, reduces turnover (Chew & Chan, 2008; Gardner et al., 2011). Therefore although research has identified that a direct relationship exists between satisfaction with rewards and employee intentions to stay, affective commitment is believed to mediate this relationship through the affective attitudinal change towards the organisation that takes place in employees (Chew & Chan, 2008). Therefore the following hypotheses were formulated based on the arguments above; H5: Affective commitment mediates the relationship between satisfaction with financial rewards and an employee’s intention to stay H6: Affective commitment mediates the relationship between satisfaction with non-financial rewards and an employee’s intention to stay The Average Income Effect Literature suggests that those individuals who earn less would prefer extrinsic financial rewards over non-financial rewards (Angle & Perry, 1983; Loscocco, 1990). However this research is limited and has obtained mixed results (Young, Worchel & Woehr, 1998), with some research suggesting that an employee’s income level indirectly affects their preference of rewards when predicting affective commitment, as valued rewards would contribute to affective commitment more than rewards that an employee does not care for (Patrick & Sonia, 2012; Young, Worchel & Woehr, 1998). An individual’s average monthly salary may therefore moderate the relationship between rewards and affective commitment. Therefore it is important to understand workforce diversity in preference for financial and non-financial rewards, in order to design better suited reward systems that cater for employees in different income brackets and working environments. The following hypotheses concerning the effect income has on the relationship between affective commitment and rewards were formulated based on the arguments presented above; H7: An employee’slevel of income moderates the relationship between satisfaction with financial rewards and affective commitment. H8: An employee’slevel of income moderates the relationship between satisfaction with non-financial rewards and affective commitment. For a full conceptual model of the variables under investigation see Appendix A.
  10. 10. Rewards and Retention: The Role of Affective Commitment 10 METHOD Research Design A quantitive correlational research approach was undertaken to establish the relationships between the variables under investigation. This was done through the collection of numerical data, which was analysed using various statistical methods (Aliaga & Gunderson, 2000). A descriptive research design was employed to investigate the hypotheses and aimed at determining which variables were associated with employee retention (Jonassen, 1996). The hypotheses were tested using cross-sectional data obtained through both online and paper- and-pencil based questionnaires. Instruments The research questionnaire consisted of three scales measuring satisfaction with rewards (17 items), affective commitment (6 items) and the intention to stay (4 items). A total of twenty eight items (with average monthly income included) were used in the inferential analyses. For affective commitment and intention to stay scales an interval 5-point, Likert scale (1 = strongly disagree, 2= disagree, 3= neutral, 4= agree and 5 = strongly agree), assumed to have equidistant points between each of the scale components, was used to measure a participants level of agreement to a particular statement (Velleman & Wilkinson, 1993). Five- point Likert-type response scales were used for all scales in the questionnaire as research has supported that the coefficient alpha of reliability with Likert scales increases up to five points and then levels off (Hinkin, 1998). A neutral response point was used to cater for those participants who may have felt indifferent towards the presented item. A participant who strongly agreed with an item demonstrated high affective commitment and strong intentions to stay. None of the items in the questionnaire were reverse coded. Reward Scales The reward sub-scales were sub-divided into extrinsic financial rewards, extrinsic non- financial rewards and intrinsic non-financial rewards. The extrinsic non-financial and intrinsic financial scales were adapted from Malhotra, Budhwar and Prowse’s (2007) statements to simplified items listing of each type of reward. For each of the reward items presented, participants were asked to indicate their level of satisfaction regarding their organisation’s provision of that specific reward. The scale used ranged from (1= highly dissatisfied, 2= dissatisfied, 3= neutral, 4= satisfied, 5= highly satisfied). Items were selected
  11. 11. Rewards and Retention: The Role of Affective Commitment 11 for each scale based on the Exploratory and Confirmatory Factor Analyses results for each item. The items with the highest factor loadings, indicating construct validity, were selected. Extrinsic financial rewards Items one to five of the reward scale were classified as extrinsic financial rewards. These included tangible financial compensation and benefits (i.e. pay, bonuses, medical aid and pension fund) from the organisation as defined by Longnecker and Shanklin (2004). Extrinsic non-financial rewards Items six to eight of the rewards scale were defined as promotional opportunities and working conditions. Items one and two from Malhotra’s et al., (2007) promotional scale, who had originally drawn these items from Mottaz (1988) and Young, Worchel and Woehr’s (1998) scales, were adapted for use in the present study. The three-item promotional scale was found to have high internal consistency (Conbrach α= .91) and a Confirmatory Factor Analysis revealed the items to have high construct validity (Malhotra, Budhwar & Prowse, 2007). Item one from Malhotra’s et al., (2007) two- item working conditions scale, which had a Conbrach alpha of (α = .89) and was of satisfactory construct validity, was drawn and adapted. Intrinsic non-financial rewards Items nine to seventeen of the rewards scale were classified as intrinsic non-financial rewards. All of these items were drawn from Malhotra’s et al., (2007) intrinsic rewards sub- scales, which included scales for training (Conbrach α = .73), role clarity (Conbrach α = .85), skill variety (Conbrach α = .76), autonomy (Conbrach α = .82), feedback (Conbrach α= .82) and participation (Conbrach α = .76). Additionally, through Confirmatory Factor Analysis, these sub-scales were seen to display construct validity (Malhotra et al., 2007). For training, item three from the original three-item scale was selected. In terms of role clarity items one, two and five from the original five-item scale was selected. For skill variety, item one from the original two-item scale was selected. For autonomy, item two from the original three-item scale was selected. For feedback, original scale items one and two were selected and lastly for the participation scale, items one and two were combined for use in the present study. Affective Commitment Scale Items used in the present study were adapted from Allen and Meyer’s (1990) eight item Affective Commitment Scale. In a review of over forty studies, Allen and Meyer (1996) found the scale to have satisfactory internal consistency (Conbrach α ≥ .85). Evidence of
  12. 12. Rewards and Retention: The Role of Affective Commitment 12 construct validity has been found through both Exploratory (EFA) (Allen & Meyer, 1990; McGee & Ford, 1987; Reilly & Orsak, 1991), and Confirmatory Factor Analysis consistently indicating that AC items load as a one dimensional scale (Meyer, Allen & Gellatly, 1990; Moorman, Niehoff & Organ, 1993; Shore & Tetrick, 1991). However items three: ‘’I really feel as if this organisation’s problems are my own’’ and seven: ‘’this organisation has a great deal of personal meaning for me’’ from the original scale were not included in the present study as the EFA loadings for these items were low (Malhotra et al., 2007). As item one from the original scale was ambiguous, it was simplified to ‘’I am very happy being a member of this organisation’’. Lastly items four, five, six and eight from the original scale were adapted from negatively worded items which were reverse coded to positive items; allowing for a score of five on each scale to reflect a high level of affective commitment. Intention to Stay (IS) Scale Item three in the present studies IS scale was developed by Cammann, Fichman, Jenkins and Klesh (1979). The original three-item scale was considered reliable (internal consistency) (Conbrach α = .79) (Chen, Hui & Sego, 1998). Items four and seven in the present study originated from the Intention to Stay Questionnaire (ISQ) (Martin & Roodt, 2007; Riley, 2006), which also displayed internal consistency (Conbrach α= .895) (Martin, 2007). Item six was taken from Price and Mueller’s (1986) four-item scale which was of high internal consistency (Conbrach α = .90) (Kim, Price, Mueller & Watson, 1996; Price & Kim, 1993). Items were selected from the above-mentioned scales based on face validity. Average Monthly Income Participants were asked to provide either their gross (before tax and deductions) annual package or their gross monthly income. Data for gross annual package was then converted to average gross monthly income, by dividing the figure provided by twelve. Population The empirical work in this study consisted of gathering data from participants. The population consisted of employees who were at the time employed by an organisation. Sample and Procedure Approval was granted by the ethics committee at the University of Cape Town to conduct this research. Convenience sampling was used to obtain data from participants. Data was collected by four post graduate students studying in the field of Business Management
  13. 13. Rewards and Retention: The Role of Affective Commitment 13 studies, namely Organisational Psychology. Data collection began by seeking permission from employers or management at certain organisations in the Western Cape, South Africa. Researchers assured the respondent organisations that their company and employee information would be kept anonymous. Reassurance was both verbal and additionally through a cover letter outlining the purpose of the study, voluntary participation and the issues of confidentiality and anonymity. This allowed the research team to gain entry into a number of organisations to administer the paper-and-pencil questionnaires. There was no specific time limit given to complete the questionnaire, however on average it took ten minutes to complete. The online version of the questionnaire, including its cover letter was forwarded to managers of various organisations who were asked to complete and forward the questionnaire to their subordinates. This snowballing technique created a wider scope for data collection. Participants were removed if more that 25% of their data was missing for the questionnaire. Table 1 (see Appendix B) outlines the demographics of the sample. Statistical Analysis Statistical Program for the Social Sciences (SPSS) version 21 was used for all analyses. Reliability in terms of internal consistency (Conbrach alpha) and total item correlations were used to determine which items should be omitted from further analyses. Principal Component Analysis was used to demonstrate construct validity, establishing whether each sub-scale was unidimensional. A standard multiple regression was used to establish which predictor variables (extrinsic financial/non-financial and intrinsic non-financial rewards) best predicted variance in affective commitment. Bivariate correlations established the relationships between the rewards and commitment as well as commitment and retention. Howell’s (2009) moderator analysis tested the effect income has on the relationship between rewards and affective commitment. Baron and Kenny’s (1986) procedure for mediator analysis tested if affective commitment mediated the relationship between rewards and retention. RESULTS Reliability Scales were considered for further analysis if they had a Conbrach alpha of at least .7 and item-total correlations of no less than .3 (Burns & Burns, 2008). Reliability analysis revealed all scales to have acceptable internal consistencies (α ≥.7) and additionally, all items within the scales had high item-total correlations (> 0.30). Subsequently no items were omitted as scales were confirmed to be reliable. Results are illustrated in Table 2.
  14. 14. Rewards and Retention: The Role of Affective Commitment 14 Table 2: Reliability:Internal consistenciesof scales used in the present study. Scale Cronbach’s alpha coefficient (α) Item- total correlations Total number of items in scale Extrinsic financial rewards (s) .755 .429< r <.592 5 Extrinsic non-financial rewards (s) .779 .549< r <.699 3 Intrinsic non-financial rewards (s) .916 .626< r <.777 9 Affective commitment .928 .738< r <.893 6 Intention to stay .808 .592< r <.704 4 Note. (s)= satisfaction with rewards mentioned above. Validity Principle Component Analysis was used to establish construct scale validity. The Principle Component Analysis was conducted if the Kaiser-Meyer-Olkin measure of sampling adequacy was above .50, indicating that validity analysis was appropriate. Additionally Bartlett’s test of sphericity had to be significant, indicating that the variables within the scales correlate (Matsunaga, 2010). Components were considered irrefutable if they had eigenvalues greater than 1, which is the critical value beyond which components are deemed as relevant (Kaiser, 1965). Additionally, factor loadings in component matrices had to be above .30; indicating that a significant correlations between items and the components (Burns & Burns, 2008). Lastly, items are not to cross-load, which is constituted by a discrepancy between the primary and secondary loadings of less than 0.3 (Matsunaga, 2010). The scales under investigation met all the above conditions and validity results are reflected in Table 3. The extrinsic-financial rewards scale revealed two components; the results for the first component are shown in Table 3. The second component had an eigenvalue of 1.2 and accounted for 24% of the variance. Direct Oblimin rotation was used to establish how items loaded on each component. Items which loaded on the second component included items four and five, which measured satisfaction towards medical aid and pension fund. These items can be interpreted as indirect (benefits not received physically in cash) financial rewards, whereas the remaining items measured more direct financial-rewards such as pay, bonuses and increases. However, direct or indirect, the items constituted financial rewards. Thus the scale was treated as unidimensional and remained aggregated as a whole. The intrinsic non-financial rewards scale revealed two components; the results for the first component are shown in Table 3. The second component had an eigenvalue of 1.17 and explained 13% of the variance. Items 9, 15, 16, and 17 loaded on the second component.
  15. 15. Rewards and Retention: The Role of Affective Commitment 15 These items included feedback/recognition, participation and the provision of training which are theoretically different to the remaining intrinsic reward items, which were associated with rewards gained through satisfaction with one’s physical job tasks, roles and responsibilities. Both literature and the Cattell’s (1966) scree plot supported the view that intrinsic rewards comprise of all of the above constructs. The scale was thus treated as unidimensional. Table 3: Validity results using Principle Component Analysis. Rotation method:Oblimin with Kaiser Normalisation. Note. AC= affective commitment, IS= intention to stay, EFRS= satisfaction with financial rewards (extrinsic), NFRS= satisfaction with non-financial rewards, ENFRS= satisfaction with non-financial rewards (extrinsic), INFRS= satisfaction with non-financial rewards (intrinsic). Descriptive Statistics The mean scores indicate that participants had relatively high levels of affective commitment and moderate satisfaction regarding financial rewards (extrinsic) and non-financial rewards (extrinsic and intrinsic). In terms of intention to stay the average participant indicated that they felt neutral towards remaining employed by their organisation (see Table 4). Table 4: Descriptive Statisticsfor the variables in the present study. Note. N= the number of participantsincluded for each scale, Mean= the average, SD= the standard deviation from the mean and (s) = satisfaction. Scale KMO Bartlett’s test of sphericity Sig df X2 Eigen value 1st component Explained variance (%) Minimum factor loading Maximum factor loading No. of items AC .896 .001 1065.05 15 4.46 74.2 .820 .935 6 IS .768 .001 274.33 6 2.52 63.0 .776 .845 4 EFRS .682 .001 337.7 10 2.56 51.2 .577 .806 5 ENFRS .664 .001 187.08 3 2.08 69.52 .785 .885 3 INFRS .891 .001 1298.4 36 5.38 60.00 .696 .852 9 Scale N Mean SD Affective commitment 224 3.57 .95 Intention to stay 224 3.00 1.01 Average monthly income(before tax and deductions) 139 24630.66 49565.05 Financial rewards-extrinsic (s) 219 3.30 .84 Non-financial rewards (s) 220 3.30 .77 Extrinsic non-financial (s) 218 3.17 .90 -Intrinsic non-financial (s) 220 3.41 .80
  16. 16. Rewards and Retention: The Role of Affective Commitment 16 Inferential Statistics: Results Relating to Hypotheses The Pearson correlation coefficient revealed significant and moderate to strong relationships between all the variables in study (Cohen, 1988). Hypotheses one, two and three were all supported. Results are illustrated in Table 5. Table 5: Pearson correlation coefficient matrix for the variables under investigation. Intention to stay EFRS NFRS ENFRS INFRS Affective commitment .690** (n=224) H1 .493** (n=219) H2 .510** (n=220) H3 .484** (n=218) .476** (n=220) Intention to stay .576** (n=219) .595** (n=220) .527** (n=218) .572** (n=220) Note. **= Significant at the p<0.01 level. EFRS= satisfaction with financial rewards (extrinsic), NFRS= satisfaction with non-financial rewards, ENFRS= satisfaction with non-financial rewards (extrinsic), INFRS= satisfaction with non-financial rewards (intrinsic). A standard multiple regression was used to test the fourth hypothesis, where a number of conditions had to be met: Firstly, the predictor variables (extrinsic financial rewards, extrinsic non-financial rewards and intrinsic rewards) all inter-correlated below the standard of r= 0.7, thus indicating no multicollinearity (Burns & Burns, 2008). Secondly, the data set comprised of 225 valid cases, therefore the condition of fifteen cases per independent variable for the regression was satisfied (Burns & Burns, 2008). The regression analysis was significant (F3, 217= 32.19, p<.001), with 30.1% of unique variance in affective commitment explained by the predictor variables (independent variables) (R =.560). The hypothesis was supported, with extrinsic financial rewards as the strongest predictor of affective commitment, (represented by the following regression equation; y= 1.15+ .311x) as demonstrated in Table 6. Table 6: Standard Multiple Regression:Standardised beta coefficients (β) of the predictor variablesof affective commitment. Predictor variable β t p Extrinsic financial rewards .27** 3.66 .000 Extrinsic non-financial rewards .18* 2.06 .04 Intrinsic rewards .19* 2.28 .023 Note.** Significant at the p<0.01 level; * Significant at the p<0.05 level. A mediation analysis was used to test hypotheses five and six (Baron & Kenny, 1986). To investigate whether affective commitment mediated the relationship between financial
  17. 17. Rewards and Retention: The Role of Affective Commitment 17 rewards and intention to stay, as well as the relationship between non-financial rewards and intentions to stay; where the following conditions for the mediation analysis had to be met. The path from independent variable [extrinsic financial (EFRS)/ non-financial rewards (NFRS)] to the mediating variable and from mediating to the dependent variable (intention to stay) must be a significant relationship. The results of the simple regression analyses are illustrated in Table 7(see Appendix C). The direct relationship between both EFRS/NFRS and intention to stay were then analysed, and the beta coefficients (simple regression) were compared to the beta coefficients of EFRS/NFRS in the standard multiple regressions. A mediating relationship was found as the beta coefficients decreased significantly for both EFRS and NFRS in the standard multiple regressions when compared to the beta coefficients for EFRS and NFRS in the simple regressions respectively. Finally a partial correlation was computed which controlled for affective commitment. It was established that affective commitment acted as a partial mediator for the relationship between both financial and non- financial rewards and intention to stay as both partial correlations were significant. The hypotheses were thus supported as seen in Table 7 (see Appendix C). A moderation analysis was used to test hypotheses seven and eight (Howell, 2009). Howell’s (2009) moderation analysis requires the computation of centred means for the independent variable (EFRS/NFRS) and the moderating variable (average monthly income). The centred product of both these centred means are then placed as the interaction term in a hierarchical regression; where EFRS/NFRS and average monthly income are placed as the predictors (independent variables) of affective commitment (dependant variable). The hierarchical regression analysis was significant (F3, 137=16.122, p<.001), revealing that hypothesis seven was unsupported due to the fact that the centred product of financial rewards and gross monthly income was not a significant predictor of affective commitment (β=-.05, t=-.525, p=.60). For hypothesis eight the hierarchical regression was significant (F3, 137= 13.069, p< .001); however the centred product of non-financial rewards and gross monthly income was not a significant predictor of affective commitment (β = -.04, t= -.370, p=.71). Therefore an employees’ income level was not found to moderate the relationship between their satisfaction with EFRS/NFRS and affective commitment in the present study. DISCUSSION The research objective for this study was to demonstrate how satisfaction with financial and non-financial rewards is strongly linked to higher levels of affective commitment in
  18. 18. Rewards and Retention: The Role of Affective Commitment 18 employees, thus motivating employees to stay and therefore leading to improved retention for organisations. The abovementioned objective was achieved. The second research objective was to demonstrate the role an individual’s average monthly income had in moderating the relationship between rewards and affective commitment. This objective was not fulfilled. Findings relating to the first hypothesis revealed that an employee who is affectively committed to their organisation is likely to stay there. This finding is consistent with prior research supporting the theory that affective commitment is positively associated with employee intentions to stay (Ansari, 2011; Meyer et al., 2002; O'Driscoll & Randall, 1999; Patrick & Sonia, 2012). Findings relating to hypotheses two and three indicated that an employee’s satisfaction with financial (r=.493; p<.001) and non-financial rewards (r=.51; p<.001) has both a strong and positive relationship to how affectively committed employees are towards their organisation. These findings are consistent with previous empirical work which states that the presence of effective rewards systems within an organisation relates strongly to increased affective commitment in its employees (Mahal, 2012; Malhotra et al., 2007; Newman & Sheikh, 2012). Additionally, non-financial rewards (which comprise extrinsic and intrinsic rewards) had a slightly stronger relationship to affective commitment than financial rewards did. It must be noted however that these two findings were only marginally different, so that a more reliable conclusion would equate the effects of financial and non-financial rewards. Findings relating to hypothesis four, however, did offer more insight into which specific types of reward best predict variance in affective commitment. Findings relative to hypothesis four demonstrated that employee satisfaction associated with financial benefits (pay, bonuses, increases, medical aid and pension fund contributions) was superior (β= .27, t= 3.66, p=.001) to both extrinsic non-financial organisational rewards (β= .18, t= 2.06, p=.04) (promotional policies, opportunities for career advancement and working conditions conducive to job performance) and intrinsic rewards (β= .19, t= 2.28, p=.023) (motivational job characteristics such as: skill variety, autonomy, role clarity, feedback, participation and training) in its ability to predict variance in affective commitment. This finding provides new insight into two opposing themes of literature related to whether extrinsic or intrinsic rewards are best associated with affective commitment (Gardener et al., 2011; Malhotra, Budhwar & Prowse, 2007). One view claims that extrinsic rewards lead to higher levels of affective commitment than intrinsic rewards do (Goulet & Frank, 2002;
  19. 19. Rewards and Retention: The Role of Affective Commitment 19 Miao, Newman, Sun & Xu, 2013) and the other theme highlights that intrinsic rewards have the largest influence on organisational commitment, particularly in western societies (Steijn & Leisink, 2006). The present study’s findings suggest that extrinsic financial rewards are superior to both extrinsic non-financial and intrinsic non-financial rewards in predicting affective commitment. Therefore it may not be expedient to categorise rewards simply as extrinsic (financial or non-financial rewards- offered by the organisation) or intrinsic (non-financial rewards- inherent to one’s job) without additionally considering whether these are financial or non-financial in nature. Employers need to consider the fact that monetary rewards seem to have more relevance than intrinsic and extrinsic non-financial rewards in creating and maintaining a committed workforce. This could be because emerging economies such as South Africa place a greater importance on extrinsic financial benefits than is found in Western countries, where individuals enjoy an overall higher standard of living and are thus less receptive to financial rewards (Newman & Sheikh, 2012). Another explanation could be that organisations have better control over extrinsic rewards than over intrinsic rewards (Angle & Perry, 1983). However, all types of reward should still be considered, as deprivation of any one type may have a negative impact on commitment, regardless of whether other rewards remain coexistent (Miao et al., 2013). Hypotheses five and six supported the limited amount of prior literature in the assumption that affective commitment mediates the relationship between satisfaction with financial (Farrell & Rusbult, 1981) and non-financial rewards on the one hand and an employee’s intention to stay on the other (Chew & Chan, 2008). What this suggests is that an employee who is appropriately rewarded is more affectively committed and thus more likely to stay with their organisation. However the findings for both hypotheses five and six suggest that the mediation was partial, indicating that a direct relationship (between rewards and the intention to stay) may exist even when affective commitment is not present. For example, an individual may consider staying with their organisation solely because they would lose certain financial pay or non-financial benefits by leaving. This could also hypothetically speak to continuance commitment in that previous empirical work has demonstrated that continuance commitment, like affective commitment, is strongly linked to satisfaction with extrinsic benefits (Malhotra et al., 2007; Newman & Sheikh, 2012).
  20. 20. Rewards and Retention: The Role of Affective Commitment 20 The literature suggests that those individuals who earn less should prefer extrinsic financial rewards over non-financial rewards (Angle & Perry, 1983; Loscocco, 1990). Since this literature has similarly been limited and has obtained mixed results (Young, Worchel & Woehr, 1998), the present study aimed to contribute to the existing theory. However the study’s hypotheses were unsupported. Findings relating to hypotheses seven and eight showed that an employee’s level of income (average monthly income before tax and deductions) did not moderate the relationship between satisfaction with financial or non- financial rewards and affective commitment in this study. This could be attributed to individuals’ preference for extrinsic rewards regardless of what salary they earn, or it could be contingent on the fact that thirty eight per cent of participants within the study were reluctant to provide information regarding their salary, impeding the possibility of an accurate statistical analysis (Tabachnick & Fidell, 1996). Participants who did respond, may have inflated or understated their salary, either to seem more socially desirable or in an attempt to conceal their information (Paulhus, 1991). This could have occurred regardless of anonymity, as managers often collected paper-and-pencil surveys from their staff. Another factor could be that participants may not have accurately recalled the amount which they earn before tax and deductions as readily and correctly as they could recall their net salary. Limitations of the Present Study The first limitation is characteristic of the study’s design which followed a correlational approach with the result that cause and effect between the variables could not be quantified (Gay, 1996). It is therefore unclear as to whether affectively committed employees positively perceive their rewards as more satisfying or whether a positive perception of rewards leads to increased commitment. The same can be said for employees’ intentions to stay; we cannot distinguish whether those that do not want to leave become affectively committed or whether affective commitment leads to reduced turnover intentions. Response bias could also be an issue, as the length of the questionnaire totalled sixty items, or seventy six items when including the demographic section. As the questionnaire was a collation of four separate studies, thirty two questions were not relevant to the current study, and with no incentive to complete the survey participants may have become demotivated. Additionally, participants may have been fatigued and therefore may not have answered to the best of their ability (Lavrakas, 2008).
  21. 21. Rewards and Retention: The Role of Affective Commitment 21 Thirdly, the sample size equated to two hundred and twenty five participants. Research shows that one hundred participants is the minimum requirement for making decisions based on statistical findings, yet larger sample sizes increase power and decrease estimation error (Cohen, 1992). In general, samples size below two hundred are regarded as poor, two hundred as fair, three-hundred as good; and five hundred is considered robust against estimation error (Tabachnick & Fidell, 1996). Therefore a sample of five hundred or more should be utilised to obtain more accurate results: however, time and financial constraints limited this possibility. Fourthly, the online data collection procedure limited the controls over which type of individual was answering the questionnaire. This restricted the possibility of controlling for extraneous variables relating to testing conditions and the selection of the target population: for example, it could not be determined whether participants were genuinely and currently employed by an organisation or not. The participants were approached through convenient sampling methods and thus did not originate from any specific industry, nor were randomly selected. It is therefore not possible to determine which rewards systems suit particular organisations operating in various industries, so that in turn it would be incorrect to infer the results to all industries. With this limitation in mind, it was however possible to determine that the present study’s largest proportion of participants came from the retail, technology, financial and telecommunication industries respectively, with eighty six per cent of the population being drawn from organisations operating in the Western Cape, South Africa. Recommendations for Future Research Workforces often consist of groups of individuals that share different needs, desires and values, hence future research could aim to examine more specifically which types of rewards are best suited for certain industries operating in South Africa. This could provide insight into how best to design reward systems that foster affective commitment and retention in different contexts. Methodological approaches could include stratified sampling procedures where organisations in particular industries are randomly selected and approached. Random sampling of participants would result in representative samples and allow for accurate conclusions to be drawn. This process would however be impractical and would require immense funding, thus making it preferable simply to administer the questionnaire to a large number of participants in order to gain an accurate representation. Furthermore, all testing conditions should remain standardised, with researchers personally administering the
  22. 22. Rewards and Retention: The Role of Affective Commitment 22 questionnaires. Future studies should offer incentives for participants to become involved in the study and should similarly ensure that questionnaires are concise: this would likely increase willingness to participate and ensure more accurate responses from participants. Further investigation into the non-financial extrinsic rewards should aim to establish whether factors like time off and recognition in the form of certificates and public praise could also have an effect and should thus be included in the scale (Dzuranin & Stuart, 2012). Secondly, the segment of the survey that focused on intrinsic rewards consisted of various constructs (role clarity, autonomy, provision of training, skill variety, feedback and participation), all of which were classified under intrinsic rewards in prior literature. Often, only one to two items might be provided on the questionnaire for assessing a particular construct, as the overall length of the questionnaire was of concern. This therefore limited the possibility of measuring the effects of these sub domains of intrinsic rewards on affective commitment and thus this area should be a goal for future research. Theoretical and Practical Implications The findings are of significance for Human Resource managers interested in enhancing employee commitment and improving organisational efficiency, especially in organisations that are characterised by high employee turnover. Findings demonstrate that significant differences in the antecedents of organisational commitment exist, which speaks to the need for customised and effectively designed reward systems. This emphasises the importance of both financial and non-financial rewards in increasing affective commitment and demonstrates the link between affective commitment and improved employee retention. Additionally it demonstrates how variance in employees’ affective commitment has a strong association with an employees’ satisfaction with the extrinsic financial benefits they receive. This finding may differ in different contexts; thus interventions concerned with promoting the communication of needs between supervisors and subordinates could be beneficial in determining which rewards employees consider to be poorly provided or lacking. Additionally, it could be beneficial to integrate these extrinsic financial rewards systems with performance management systems as a means of further motivating employees to perform. These performance management systems should be consistent in identifying those employees that deserve career advancement, and this opportunity/incentive should be well communicated, as the present study revealed the importance of fair promotional opportunities in predicting affective commitment (Miao et al., 2013).
  23. 23. Rewards and Retention: The Role of Affective Commitment 23 In South Africa, where skill shortages are vast and are coupled with high staff turnover, leading to increased training and recruitment costs, the retention of human capital should be a particular priority for organisations wishing both to increase their profitability and to maintain a competitive advantage. Encouraging affective commitment through effective rewards systems is therefore a priority in that staff turnover is reduced. Effective rewards systems should place emphasis on the role of supervisors in managing their subordinate’s job characteristics, and should seek methods that promote the clear understanding of expectations related to responsibilities. Ways in which the content of tasks and employee responsibility can be adjusted should be investigated in order to increase satisfaction with these intrinsic rewards. Managers should be assessed on their ability to give constructive feedback and to identify employees who require training. Lastly, financial compensation should be evaluated in terms of whether it is sufficient for the position, meets employee needs and responds appropriately to the performance of the employee (Kinnie, Hutchinson, Rayton & Swart, 2005). When these employee needs are met, employees will perceive their organisation as one which takes an interest in their wellbeing. This is the point at which they are most likely to develop affective commitment, thus becoming attached to their organisation and experiencing the desire to stay.
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  30. 30. Rewards and Retention: The Role of Affective Commitment 30 APPENDICES A. Conceptual Model Rewards Retention H1: A significant positive relationship exists between affective commitment and intention to stay. H2: Employees satisfaction with financial rewards is positively related to their level of affective commitment. H3: Employee satisfaction with non-financial rewards is positively related to their level of affective commitment. H4: Employee satisfaction with extrinsic financial rewards, extrinsic non-financial rewards and intrinsic non-financial rewards predicts variance in affective commitment. H5: Affective commitment mediates the relationship between satisfaction with financial rewards and an employee’s intention to stay H6: Affective commitment mediates the relationship between satisfaction with non-financial rewards and an employee’s intention to stay H7: An employees’ level of income moderates the relationship between satisfaction with financial rewards and affective commitment. H8: An employees’ level of income moderates the relationship between satisfaction with non-financial rewards and affective commitment. Affective Commitment (Mediator: H5 & H6) Financial Rewards  ExtrinsicFinancial Rewards Non-Financial Rewards  ExtrinsicNon- financial rewards  IntrinsicNon- financial rewards Intentionsto Stay Average Income Effect (Moderator) H7 H1 H8 H2 H3 H4
  31. 31. Rewards and Retention: The Role of Affective Commitment 31 B. Sample Demographics Table 1: Descriptive sample statistics (n=225) Socio-demographic characteristics M SD N % Gender Male 216 35 Female 65 Age 32.4 10.19 212 Home Language English 213 85.4 Afrikaans 12.7 Xhosa 1 Work status Full time permanent 213 84.2 Fixed term contract 9.4 Part time/ Casual 6.6 Current level of employment Non-Management 208 52.4 Supervisor 10.6 Team Leader 7.2 Middle Management 16.3 Senior Management 8.2 Executive 5.3 Highest Level of education Less than grade 12 or Matric 211 8.5 Grade 12 or Matric 36.5 Diploma 19. Bachelor’s degree 16 Post-graduate degree 20 Months employed at the organisation 60 76 205 Gross monthly income 24630 49565 139 Race Prefer not to answer 209 3.8 Black 2.9 Chinese 0 Coloured 39.2 Indian 17.7 White 36 Other 0.5 Size of organisation Small (0-100) 213 30 Medium (101-200) 12 Large (201 +) 58 Type of organisation Privately owned 206 34.5 JSE listed 16 Multinational company 23 Family business 11 I do not know 15.5 Industry of organisation Basic materials 208 0 Consumer goods 3.8 Financials 16.3 Health care 6.3 Industrials 3.4 Media 1.9
  32. 32. Rewards and Retention: The Role of Affective Commitment 32 Retail 35.1 Travel & Leisure 1.9 Telecommunications 13 Technology 18.3 Note. M=the mean; SD=the standard deviation for the sample; N= the number of participants included in the analysis. % = the valid percentage (total percentage of participants, taking into account missing data). C. Mediation Analyses Results Note.** Significant at the p<0.01 level; * Significant at the p<0.05 level. EFRS= satisfaction with financial rewards (extrinsic), NFRS= satisfaction with non-financial rewards, AC= affective commitment and IS= intention to stay. Table 7: Mediation analysis(Barron & Kenney approach) Hypothesis Number Adjusted R2 F ratio Regression coefficient (β) Gradient coefficient (b) Partial Correlation coefficient Relationship 5 Regressing IS on EFRS .329 108.02** .576** Regression AC on EFRS .239 48.89** .493** Regressing IS on AC .473 201.00** .690** Regressing IS on EFRS & AC .742 132.25** Beta AC .537** .565** Beta EFRS Partial correlation AC(C) .312** .373** Mediation exists r=.375** Partial 6 Regressing IS on NFRS .351 78.95** .595** Regressing AC on NFRS .258 76.97** .511** Regressing IS on NFRS & AC .549 134.09** Beta AC .519** .546** Beta NFRS .329** .429** Mediation exists Partial correlation AC(C) r=.390** Partial
  33. 33. Rewards and Retention: The Role of Affective Commitment 33 D. Questionnaire Note: Scales not relevant to the present study are not shown here (this included an additional 32 items) UNIVERSITY OF CAPE TOWN ORGANISATIONAL PSYCHOLOGY DEPARTMENT HONOURS PROGRAMME 2013 Rewards and Recognition Questionnaire Supervisor: Professor Anton Schlechter Genevieve Karlein Husain Boodhoo Ayesha Gaffoor Hishaam Loofer
  34. 34. Rewards and Retention: The Role of Affective Commitment 34 UCT ORGANISATIONAL PSYCHOLOGY HONOURS PROGRAMME 2013 RESEARCH PROJECT You have been invited to participate in the UCT Organisational Psychology Honours research project. This particular research project requires us to investigate the relationship between various perceived rewards, and employees’ levels of affective commitment, job satisfaction and organisational citizenship behaviour and intention to stay. Your participation may aid us in our understanding of the relationship between these constructs. The results obtained may be published. A brief questionnaire that comprises of a series of questions covering the study’s research questions is attached. The questionnaire should take approximately 30 minutes to complete. We are asking you to complete the questionnaire and return it should you decide to partake in the research project. You will not be exposed to any risks should you decide to participate in this survey. All your responses will remain confidential and your identity anonymous. Participants are allowed to withdraw any point during this study. At the end of the questionnaire, we require that you provide us with your personal details which are essential to this project. Should you decide to complete and submit this questionnaire you are accepting your participation as voluntary. Should you have any questions or concerns relating to the questionnaire or study, you may contact Assoc. Professor Anton Schlechter at Anton.Schlechter@uct.ac.za. The Commerce Ethics Committee at the University of Cape Town has approved this study and the questionnaire. ORGANISATIONAL REWARDSR
  35. 35. Rewards and Retention: The Role of Affective Commitment 35 1.) Rewards Scale Rewards your organisation gives you How you value rewards Please show how much you personally value each of the following rewards by ticking a number from 1 to 5 (1= not at all important to you ; 5= very important to you) How you are rewarded Please indicate how you feel about your current organisations provision of the following rewards by ticking a number from 1 to 5 (1= highly dissatisfied; 5=highly satisfied) Notatall important Not important Neutral Important Very Important Highly dissatisfied dissatisfied Neutral Satisfied Highly satisfied Belowis an example whichshows how to respondto each item. By tickingblock5 in the firstsection,thismeansyouregardstockoptionsasveryimportantto you. By tickingblock1 in the secondsectionthismeansyouare highlyunsatisfiedwithyourorganisations provisionof stockoptionstoyou. e.g. Stock options 1 2 3 4 5 1 2 3 4 5 1 Fair payfor workdone 1 2 3 4 5 1 2 3 4 5 2 Pay increases 1 2 3 4 5 1 2 3 4 5 3 Bonuses 1 2 3 4 5 1 2 3 4 5 4 Medical Aid 1 2 3 4 5 1 2 3 4 5 5 PensionFund 1 2 3 4 5 1 2 3 4 5 6 Effective promotional policies 1 2 3 4 5 1 2 3 4 5 7 Opportunitiesforcareer advancement 1 2 3 4 5 1 2 3 4 5 8 Workingconditionsthatare conducive forhighjob performance 1 2 3 4 5 1 2 3 4 5 9 Trainingto increase personal performance/development 1 2 3 4 5 1 2 3 4 5 10 Clearjobexpectations 1 2 3 4 5 1 2 3 4 5 11 Clearlydefinedjob objectives 1 2 3 4 5 1 2 3 4 5 12 Clearlydefinedjob responsibilities 1 2 3 4 5 1 2 3 4 5 13 A jobthat requiresavariety of skills 1 2 3 4 5 1 2 3 4 5 14 Executionof jobtasksat your owndiscretion (Autonomy) 1 2 3 4 5 1 2 3 4 5
  36. 36. Rewards and Retention: The Role of Affective Commitment 36 2.) Affective Commitment Scale How you feel about your relationshipwith your organisation Please show how much you agree with each of the following statements by ticking a number from 1 to 5 (1=strongly disagree; 5=strongly agree) Strongly disagree Disagree Neutral Agree Strongly Agree e.g. I enjoybeinginvolvedin my organisations’day to day activities 1 2 3 4 5 1 I am veryhappybeinga memberof thisorganisation. 1 2 3 4 5 2 I feel ‘emotionallyattached’tothisorganisation. 1 2 3 4 5 3 I wouldfinditdifficulttobecome asattachedto anotherorganisationasI am to thisone. 1 2 3 4 5 4 I feel like ‘partof the family’atmyorganisation. 1 2 3 4 5 5 I enjoytalkingaboutmyorganisationwithpeople outside it. 1 2 3 4 5 6 I feel a‘strong’sense of belongingtomyorganisation. 1 2 3 4 5 Rewards your organisation gives you How you value rewards How you are rewarded Notatallimportant Notimportant Neutral Important VeryImportant Highlydissatisfied dissatisfied Neutral Satisfied Highlysatisfied 15 Feedbackonjob performance 1 2 3 4 5 1 2 3 4 5 16 Recognitionforgood performance 1 2 3 4 5 1 2 3 4 5 17 Involvedindecisionmaking processes 1 2 3 4 5 1 2 3 4 5
  37. 37. Rewards and Retention: The Role of Affective Commitment 37 3.) Intention to Stay Scale How you feel about your future at your organisation Please show how much you agree with each of the following statements by ticking a number from 1 to 5 (1=strongly disagree; 5=strongly agree) Strongly disagree Disagree Neutral Agree Strongly Agree 1 I often thinkof leaving the organisation. (NA) 1 2 3 4 5 2 It is very possiblethatI will lookfor a new job nextyear. (NA) 1 2 3 4 5 3 If I may choose again,I will choose toworkfor my currentorganisation. 1 2 3 4 5 4 My currentjobsatisfiesmyfinancialneeds. 1 2 3 4 5 5 I would acceptanotherjob withhigher financialrewards than whatI amreceiving at my current job.(NA) 1 2 3 4 5 6 I planto stay withthisorganisationforaslongas possible. 1 2 3 4 5 7 The benefitsprovidedbymycurrentorganisation preventme fromleaving. 1 2 3 4 5 Note. NA= not applicable (not used in the present study)
  38. 38. Rewards and Retention: The Role of Affective Commitment 38 4.) Demographics Section of the survey ABOUT YOURSELF (Please do NOT put your name on any part of this questionnaire) 1. Gender: □ Male □ Female 2. Age(InYears): ___________ 3. Home Language: _____________ 4. Work Status: □ Full time permanent □ Fixedtermcontract □ Part time/Casual 5. Current level ofemployment: □ Non-Management □ Supervisor □ Team Leader □ Middle Management □ SeniorManagement □ Executive 6. Highestlevel ofeducation: □ Lessthan grade 12 or Matric □ Grade 12 or Matric □ Diploma □ Bachelor’sdegree □ Post-graduate degree 7. Months employedat the organisation: _______________________________ 8. Months reportingto supervisor: 9. GrossMonthly income (before tax and deductions): (Or) 10. Gross annual package: 11. Race (for statistical purposes): □ Prefernotto answer □ Black □ Chinese □ Coloured □ Indian □ White □ Other
  39. 39. Rewards and Retention: The Role of Affective Commitment 39 ABOUT YOUR ORGANISATION: 1. The name of the organisation(optional): ______________________________________________________ 2. The size of the organisation: □ Small (0-100) □ Medium(101-200) □ Large (201 +) 3. The type of organisation: □Privatelyownedcompany □ JSE listedcompany □ Multinational Company □ FamilyBusiness □ I do notknow 4. Industry: □ Basic materials □ Consumergoods □ Financials □ Healthcare □ Industrials □ Media □ Retail □ Travel & Leisure □ Telecommunications □ Technology 5. GeographicLocation:(e.g. Retreat,Cape Town,WesternCape) Thank you for completing this questionnaire. The information you have provided is confidential and your results are anonymous
  40. 40. RewardsandRetention:The Role of Affective Commitment 40 E. Permission letters 1.) Permission to conduct survey at 1-UP Cash and Carry
  41. 41. RewardsandRetention:The Role of Affective Commitment 41 2.) Permission to conduct survey at Global ASP Ltd

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