MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY  LE NGOC LAN EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES MASTER THESIS IN BUSINESS ADMINISTRATION HO CHI MINH CITY – 2013 MINISTRY OF EDUCATION AND TRANNING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  LE NGOC LAN EXAMINE THE MEDIATING ROLE OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR IN THE RELATIONSHIP BETWEEN PERCEIVED HUMAN RESOURCE MANAGEMENT PRACTICES AND INTENTION TO LEAVE OF EMPLOYEES Subject: Master of Business Administrator Code: 06.34.01.02 MASTER THESIS IN BUSINESS ADMINISTRATION SUPERVISOR: Dr PHAM QUOC HUNG HO CHI MINH CITY – 2013 ACKNOWLEDGEMENT Firstly, I wish to express my deepest gratitude to my supervisor, Dr Phạm Quốc Hùng, for giving me insightful guidance and valuable advice throughout undertaking of this study I also thank to all respected lecturers of the eMBA19 course of for their devotions during the training, which enrich my knowledge in order to implementing this study successfully My heartfelt thanks to respondents, who provide me supportive attitude and honest answer to make a good and solid database for the analysis Finally, I would like to say thanks to my beloved friend and family members, whom have given me much support, encouragement and assistance with this thesis Le Ngoc Lan Ho Chi Minh City, September 2013 COMMITMENT I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work Le Ngoc Lan TABLE OF CONTENT CHAPTER - INTRODUCTION TO THE STUDY 1.1 Research background 1.2 Research objective 1.3 Practical significances of the study 1.4 Research scope and approach 1.5 Research structure CHAPTER - LITERATURE REVIEW 2.1 Human Resource Management 2.1.1 Human Resource Management Pratices 2.1.2 Human Resource Management effects on Int 2.2 Organizational Citizenship Behaviour 2.2.1 Definition of OCB 2.2.2 The important of OCB 2.3 Research model and hypotheses 2.3.1 The effects of HRM on OCB 2.3.2 The effect of Retention Oriented Compensat 2.3.3 The effect of Formalized Training on Intenti 2.3.4 The effect of OCB on intention to leave 2.3.5 The mediating role of OCB CHAPTER - RESEARCH METHODOLOGY 3.1 Research design 3.2 Research process 3.3 Questionnaire development 3.4 The pilot study 3.4.1 Pilot study phase 3.4.2 Pilot study phase 3.5 Main study 3.5.1 Target population 3.5.2 Sampling design 3.5.3 Data collection 3.6 Methods of data analysis 3.6.1 Data cleaning 3.6.2 Reliability 3.6.3 Confirmatory factor analysis 3.6.4 Analysis of Variance (one-way and two-way A 3.6.5 Multiple regression analysis 3.6.6 Testing mediation with regression analysis CHAPTER - DATA ANALYSIS 4.2 Data cleaning 4.3 Profiles of qualified respondents 4.4 Normality analysis 4.5 Reliability of the measurements 4.6 Confirmatory factor analysis 4.7 Hypotheses testing 4.7.1 Correlation analysis 4.7.2 Testing residuals of dependent variable 4.7.3 Effect of Perceived HRM Practices (Retenti Formalized Training) on Organizational Citizenship Behaviour (H1 & H2) 4.7.4 Effect of Perceived HRM Practices (Retenti Formalized Training) and Organizational Citizenship Behaviour on Employees’ Intention to Leave (H3, H4 & H5) 4.7.4.1 Effect of Perceived HRM Practices (Retention-oriented Compensation and Formalized Training) on Employees’ Intention to Leave (H3 & H4) 4.7.4.2 Effect of Organizational Citizenship Behaviour on Employees’ Intention to Leave 47 (H5) 4.7.5 The mediating effect of Organiza relationship between Perceived HRM Practices and Employees’ Intention to Leave (H6 & H7) CHAPTER - DISCUSSION 5.1 Discussion of findings 5.2 Contribution of the current study 5.3 Practical implications 5.4 Limitation and further research LIST OF FIGURE Figure 2-1: Partial model by Nishii and Wright, 2004 14 Figure 2-2: Hypothesized Research Model 21 Figure 3-1: Research process 23 Figure 3-2: Mediating model 33 Figure 4-1: Hypothesized model 38 Figure 4-2: Modified model 42 LIST OF TABLE Table 3-1: Measurement scales of independent variables 24 Table 3-2: Measurement scales of dependent variable 26 Table 3-3: Assessing Fit Indices 31 Table 4-1: Variables included in the Analysis 35 Table 4-2: Socio-demographic Characteristics of The Qualified Samples 36 Table 4-3: Summary of Cronbach Alpha Measures across Variables 37 Table 4-4: Assessing Fit Indices – Hypothesized Model 40 Table 4-5: Standardized Regression Weights – Hypothesized Model 41 Table 4-6: Assessing Fit Indices – Modified Model 43 Table 4-7: Descriptive Statistics and Correlations 44 Table 4-8: Model Summary of H6 49 Table 4-9: Coefficients of H6 hierarchical regression 50 Table 5-1: Research Purposes, Hypotheses and Results 52 ABSTRACT This study seeks to investigate the mediating role of organizational citizenship behavior on the relationship between perceived HRM practices and employees’ intention to leave The study was conducted in Ho Chi Minh City, Vietnam with the sample of 182 employees The results showed that Organizational Citizenship Behaviour mediates the relationship between retention-oriented compensation and employees’ intention to leave In addition, the study also finds that there are no relationship between formalized training and organizational citizenship behavior; hence, organizational citizenship behavior does not mediate the relationship between formalized training and employees’ intention to leave These findings suggest that HR practitioners should monitoring organizational citizenship behavior to better predict employees’ intention to leave, in order to make timely adjustment on retention-oriented compensation system KEYWORDS: Organizational Citizenship Behaviour, Perceived HRM practices, Retention-Oriented Compensation, Formalized Training, Employees’ Intention to Leave CHAPTER INTRODUCTION TO THE STUDY 1.1 Research background Employees are extremely crucial to the organization since their value to the organization is essentially intangible and not easily replicated (Meaghan & Nick 2002) And employee’s intention to leave remains one of the most widely researched topics in organizational analyses due to its significant effects on organizations (DeMicco & Giridharan 1987; Dyke & Strick 1990; Cantrell & Saranakhsh 1991; Denvir & Mcmahon 1992) (as cited in Mahmud, 2011) Muhammad et al (2011) noted that there is a positive relationship between HRM practices with employee retention However, there are very few studies investigated how human resource management practices effects on the intention to leave of employees, and how employees react on that In the past decades, OCB has received much attention from researcher In relatively uncomplicated production environments, the extra efforts on the part of the employee may seem minor, but a growing number of jobs is becoming more complicated, consisting of large numbers of unstructured tasks, so more discretion is with the employee, and thus the difference between a good performer and a bad performer becomes increasingly large (Hunter et al., 1990) Despite such an important role of OCB, it is surprising to note that past studies often seem to ignore how employees’ behavioural reactions affect the relationships between HRM practices and employee’s intention to leave (Guest, Michie, Conway and Sheehan 2003; Morrison 1996) Organizations need employees who anticipate and monitor rapid changes in the business, and figure out how to deal with these changes to sustain or enhance effectiveness (Organ, Podsakoff and MacKenzie 2006) Therefore, it is argued that the employees’ organizational citizenship behaviour (OCB), in particular, is involved in their behavioural process to help explain the HRM-performance relationship (Lam et al, 2009) 10 APPENDIX IV – CONFIRMATORY FACTOR ANALYSIS (CFA) Table 4-2: Standardized Regression Weights – Modified Model Items OCB2 OCB3 OCB4 OCB5 OCB7 OCB8 OCB9 OCB11 OCB14 COM1 COM3 COM4 COM5 COM6 TRA1 TRA2 TRA3 TRA4 TRA5 TRA6 ITL1 ITL2 ITL3 70 APPENDIX V - MULTIPLE LINEAR REGRESSION ANALYSIS (MLR) Appendix 5-1: Testing correlation of constructs Correlations Gender Pearson Correlation Sig (2-tailed) N Age Pearson Correlation Sig (2-tailed) N Position Pearson Correlation Sig (2-tailed) N Tenure Pearson Correlation Sig (2-tailed) N COM Pearson Correlation Sig (2-tailed) N TRA Pearson Correlation Sig (2-tailed) N OCB Pearson Correlation Sig (2-tailed) N ITL Pearson Correlation Sig (2-tailed) N ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) 71 Appendix 5-2: Testing assumptions for residuals of dependent variable 72 Appendix 5-3: The MLR analysis on the effect of Retention-oriented Compensation and Formalized Training on Organizational Citizenship Behaviour Model Summary c Model R a 233 331 b a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, TRA, COM c Dependent Variable: OCB Model Regression Residual Total Regression Residual Total a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, TRA, COM c Dependent Variable: OCB 73 Coefficients a Model (Constant) Gender Age Position Tenure (Constant) Gender Age Position Tenure COM TRA a Dependent Variable: OCB Appendix 5-4: The MLR analysis on the effect of Retention-oriented Compensation and Formalized Training on Employees’ Intention to Leave Model Summary Model a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, TRA, COM c Dependent Variable: ITL c R a 263 457 b 74 Model Regression Residual Total Regression Residual Total a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, TRA, COM c Dependent Variable: ITL Model (Constant) Gender Age Position Tenure (Constant) Gender Age Position Tenure COM TRA a Dependent Variable: ITL 75 Appendix 5-5: The MLR analysis on the effect of Organizational Citizenship Behaviour on Employees’ Intention to Leave Model Summary c Model R 263 329 a a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, OCB c Dependent Variable: ITL Model Regression Residual Total Regression Residual Total a Predictors: (Constant), Tenure, Gender, Position, Age b Predictors: (Constant), Tenure, Gender, Position, Age, OCB c Dependent Variable: ITL Model (Constant) Gender Age Position Tenure (Constant) Gender Age Position Tenure b OCB a Dependent Variable: ITL 76 Appendix 5-6: The mediating effect of Organizational Citizenship Behaviour on the relationship between Perceived HRM Practices and Employees’ Intention to Leave (H6 & H7) Model Summary d Model a Predictors: (Constant), Tenure, Gender, Job_Pos, Age b Predictors: (Constant), Tenure, Gender, Job_Pos, Age, COM c Predictors: (Constant), Tenure, Gender, Job_Pos, Age, COM, OCB d Dependent Variable: ITL ANOVA d Model Regression Residual Total Regression Residual Total Regression Residual Total a Predictors: (Constant), Tenure, Gender, Job_Pos, Age b Predictors: (Constant), Tenure, Gender, Job_Pos, Age, COM c Predictors: (Constant), Tenure, Gender, Job_Pos, Age, COM, OCB d Dependent Variable: ITL 77 Coefficients Model (Constant) Gender Age Job_Pos Tenure (Constant) Gender Age Job_Pos Tenure COM (Constant) Gender Age Job_Pos Tenure COM OCB a Dependent Variable: ITL a 78 ... to examine the mediating role of organizational citizenship behavior on the relationship between perceived human resource management practices and the intention to leave of employees Accordingly,... reflect the mediating role of OCB on the relationship 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