MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGÔ VĂN QUẰN The Impact of Perceived Organizational Support on Job Performance, the Mediation of Job Engagement A Study of Commercial Banks in Viet Nam MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City, 2012 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGÔ VĂN QUẰN The Impact of Perceived Organizational Support on Job Performance, the Mediation of Job Engagement A Study of Commercial Banks in Viet Nam MAJOR: BUSINESS ADMINISTRATION Code: 60.34.01.02 MASTER THESIS Supervisor: Dr PHẠM QUỐC HÙNG Ho Chi Minh City, 2012 ACKNOWLEGEMENT First, I would like to thank to our supervisor of this study, PhD Pham Quoc Hung for his valuable guidance and advice He inspired me greatly to work in this study His willingness to motivate me contributed tremendously to my study I also would like to thank him for providing me valuable documents, information as the guidance of my study Besides, I would like to thank all teachers of the Ho Chi Minh City of Economics (EUH) for providing me and student like us with a valuable knowledge, good environment and facilities to complete our researches I also would like to thank Mr Nhat Truong, from The Poly-Technique University Ho Chi Minh City for supporting me to analyze the research data by using Amos with statistical technique SEM My thanks and appreciations also go to my colleague in developing the project and people who have willingly helped me with their abilities Finally, I would like to express my gratitude and thanks towards my parents, sistsers, friends for their understanding, kind co-operation and encouragement which help me in completion of MBA programe and this study, for their support in giving me such attention and time Without helps of the particular that mentioned above, I would face many difficulties while doing this study INDEX Page CHAPTER 1: INTRODUCTION 1.1 Executive abstract .1 1.2 Purpose of the study 1.3 Questions of the study .3 1.4 Scope of the study 1.5 Framework of the study CHAPTER 2: LITERATURE REVIEW .4 2.1 Perceived organizational support (POS) 2.2 Job engagement - Physical engagement (PE) - Emotional engagement (EE) - Cognitive engagement (CE) .8 2.3 Job performance (JB) 2.4 Related theories and antecedent researches .10 2.5 Hypothesis development 16 * Research model .18 CHAPTER RESEARCH METHODOLOGY .18 3.1 Research design .19 3.2 Questionnaire development 20 3.3 Translation of the questionnaires 22 3.4 Variable control .23 3.5 The pilot study 24 3.6 Target population .25 3.7 Sample size .26 3.8 Selecting the sample and collecting data 26 3.9 Methods of data analysis 28 3.9.1 Data Screening 28 3.9.2 Normal Distribution Examining 28 3.9.3 Reliability .28 3.9.4 Confirmatory factor analysis (CFA) & Structural equation modeling (SEM) 28 CHAPTER 4: RESULT OF DATA ANALYSIS 37 4.1 Descriptive statistics 37 4.2 Normal Distribution Examining 41 4.3 Reliability 42 4.4 Confirmatory factor analysis (CFA) 45 4.5 Structural equation modeling (SEM) 49 4.6 Sumary of model test .55 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 57 5.1 Summary of all hypotheses .57 5.2 Conclusions and implications 58 5.3 Limitations and recommendations 62 CHAPTER 6: LIST OF REFERENCES 63 APPENDIX 67 CHAPTER 1: INTRODUCTION 1.1 Executive abstract In the context of the international economic tendency, WTO integration, Vietnam now has both opportunities and challenges for organizations to raise pressure on the competitiveness of the product, services, brand, and human resources In particular, human resources is considered a key advantage for organizations to develop their businesses, it is a valuable asset to help organizations improve their competitiveness and performance Currently, the reciprocity responsibility norms were popular applied in organization in Viet Nam, however majority of organizations have not sufficiently invested interest and improve the system of human resource management in the area of relation between between perceived organizational support and job performance Due to this reason, there remain areas that both employers and employees not have in common As a result, the consequence of this shortcoming in HR Management, to some extent, has caused employees were not motivated to compensate beneficial treatment and the organizations did not obtain expected business outcome According to previous studies such as studies of (Pfeffer J 1998); (Huselid, MA 1995), (Guest 1997), (D Hartog and RM Verburg 2004), (Singh K 2004), human resource practices have important influence on the performance of the business By studying factors contributing to the effective human resource management, it proves that preceived organizational support (POS) takes an important position in this area POS contributes to increase employees’ performance (POS) to help organizations reach their objectives The behavioral outcomes of POS mentioned herewith include increases, decrease in role and Job performance The study of effective Human resource (HR) management, specifically relationship between perceived organizational support (POS) and job performance also measures of man-power resource to achieve set targets of organizations; help managers with solutions to encourage and motivate employees to work effectively in conditions of tight labour market, where changing knowledge management practices and global convergence of technology has redefined the nature of work, and in the context of limited talent resources in manpower market By studying the impact of Perceived Organizational Support on Job Performance it has been seen that there are mediation factors also contribute to establishing relation between Perceived Organizational Support on Job Performance Following Kahn (1990) people employ and express themselves physically, cognitively, emotionally and mentally during role performances” By This reason this study also analyzes related mediation factors to support to the relation of Perceived Organizational Support on Job Performance As we know that there is little theory or empirical observation accounts for the role of perceived organizational support, engagement as a means through which organizations can create competitive advantage In particular, not many researches examine the role of engagement as mechanism that links employee characteristic and organizational factors to job performance This can be explained why the situation is the same in Viet Nam, not many research and specific study on the Perceived Organizational Support and Job Performance Also, almost no research and no specific study on the Perceived Organizational Support and Job Performance in Viet Nam The majority of organizations in Viet Nam has not yet invested interest and improves their system of human resource management in this specific area Due to this reason, the topic we choose for our thesis is studying “The Impact of Perceived Organizational Support on Job Performance, the Mediation of Job Engagement - A Study of Commercial Banks in Viet Nam By this study, we will expect to find out solution on how to improve manpower resource management in commercial banks in Viet Nam, especially solutions relating to factors affecting the impact of Perceived Organizational Support on Job Performance, the Mediation role of Job Engagement in Commercial Banks in Viet Nam For the result, the study is expected to explain how bank community should respond to challenges of human resource so as to get satisfactory staff’s performance and satisfactory business outcome through the factors of Perceived Organizational Support and Job Engagement 1.2 Purpose of the research The purpose of this research is to study the impact of Perceived Organizational Support on Job Performance and related mediation factors to the relation of POS–Job Performance (JB) in commercial banks in Viet Nam, specifically: - Relationship between perceived organizational support and job performance in banks in Viet Nam - Investigating mediation factors that are affecting relationship between perceived organizational support and job performance in banks in Viet Nam - Evaluating affect of find factors that are positively affecting job performance in banks in Viet Nam; find factors that are positively affecting relationship between perceived organizational support and job performance in banks in Viet Nam - Offer measures to improve the impact of perceived organizational support to job performance in banks in Viet Nam, help banks to improve business performance and enhance their ability to attract, motivating, satisfying and keep qualified employees, encourage the employee to work in an effective way 1.3 Questions of the research With the above mentioned background, there arise question required to be studied so as to have solution as follows: What is the common relationship between perceived organizational support and job performance in commercial banks in Viet Nam? Which factors can be applied to improve the impact of perceived organizational support and job performance in commercial banks in Viet Nam, which are key factors? Can the improvement of relation of perceived organizational support and job performance promote and develop competitive advantage and performance outcome of commercial bank in Viet Nam? 1.4 Scope of the research Study subjects: staffs and managers of commercial banks in Vietnam Since HR Management is a very broad research theme, this research only focuses on studying scientific basis to help managers understand the factors that relationship between perceived organizational support and job performance so that they can implement these tools in banks This research is limited in the scope of the Impact of Perceived Organizational Support on Job Performance, related Mediation of Job Engagement (PE) in commercial banks in Viet Nam 1.5 Framework of the study Introduction Research problem Research questions Research objectives Literature review Hypothesis Empirical model Data collection Descriptive statistic Data analysis Conclusion, recommendation and limitation CHAPTER 2: LITERATURE REVIEW Chapter is to review theories of Perceived Organizational Support on Job Performance and related mediation factors to the relation of POS–Job Performance (JB) including Physical engagement (PE), Emotional engagement (EE), Cognitive engagement (CE), and Job performance (JB) This Chapter also presents related theories, antecedent researches; hypothesis development and proposed research model Most of the research in Organizational behavior has been concerned with three attitudes: job satisfaction, job involvement, and organizational commitment Other attitudes are also attracting attention from the researchers, including perceived organizational support (POS) and employee engagement In our research we concentrate in studying the relation of organizational support, employee engagement and job performance in the context of commercial bank in Viet Nam: 2.1 Perceived organizational Support (POS): As one of definition, POS is the degree to which employees believe that their organization values their contributions and cares about their well-being (Eisenberger, Huntington & Sowa, 1986; Rhoades & Eisenberger, 2002) POS is generally thought to be the organization’s contribution to a positive reciprocity dynamic with employees, as employees tend to perform better to pay back POS (Rhoades & Eisenberger, 2002) Research on perceived organizational support observed if managers are concerned with their employees’ commitment to the organization, employees are focused on the organization’s commitment to them For employees, the organization serves as an important source of socioemotional resources, such as respect and caring; and tangible benefits, such as wages and medical benefits Being regarded highly by the organization helps to meet employees’ needs for approval, esteem, and affiliation Positive valuation by the organization also provides an indication that increased effort will be noted and rewarded Employees therefore take an active interest in the regard with which they are well taken care of by their employer Organizational support theory (OST: Eisenberger, Huntington, Hutchinson, & Sowa, 1986; Rhoades & Eisenberger, 2002; Shore & Shore, 1995) indicated that in order to meet socioemotional needs and to assess the benefits of increased work effort, employees form a general perception concerning the extent to which the organization values their contributions and cares about their well-being Such perceived organizational support (POS) would increase employees’ felt obligation to help the organization reach its objectives, their affective commitment to the organization, and their expectation that improved performance would be rewarded Behavioral outcomes of POS would include increases in in-role and extra-role performance and decreases unexpected outcome and behaviors from employees Although there were relatively few studies of POS until the mid 1990’s, research on the topic has developed in the last few years Rhoades and Eisenberger’s (2002) metaanalysis covered some 70 POS studies carried out through 1999, and over 300 studies ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGÔ VĂN QUẰN The Impact of Perceived Organizational Support on Job Performance, the Mediation of Job Engagement A Study. .. improve the impact of perceived organizational support and job performance in commercial banks in Viet Nam, which are key factors? Can the improvement of relation of perceived organizational support. .. Investigating mediation factors that are affecting relationship between perceived organizational support and job performance in banks in Viet Nam - Evaluating affect of find factors that are positively