Employee Commitment in Vietnam: A case study within a large technology company

Melanie Powell1 and Linh Le2

1. University of Derby, Derby Business School, Senior Lecturer in Economics2. University of Derby, Derby Business School, MSc student

University of Derby, Derby Business School, Kedleston Road, Derby, DE22 1GBTel: 01332 591432 e-mail: m.j.powell@derby.ac.uk

Stream 5Working Paper

Abstract

Purpose: This paper aims to extend knowledge of the importance of the cultural

dimension in Asian organisational commitment and to identify some initial evidence of

factors affecting employee commitment in Vietnam.

Methodology: This paper examines the literature on organisational commitment and

examines how cultural differences in organisational commitment in Asian contexts. It

applies a five-component model of organisational commitment based on Wang (2004).

Data was collected using an electronic questionnaire format in one global high

technology telecommunications company in Vietnam. Hypotheses are drawn from the

literature and tested using the sample data with Anova and correlation.

Findings: This paper supports the use of the five-component model the Vietnam cultural

context, and supports previous findings that affective, active continuance and value

commitment are the most important components in the Asian context. It also finds

evidence that HRM practice at the organisational and manger level significantly increase

commitment.

Research Limitations: The study is small and focused on one company.

Practical Implications: The results suggest large global companies entering Vietnam

should focus organisational HRM practice on active continuance and value commitment.

Originality: This is the first study to consider the five-component model in a Vietnamese

context.

Keywords: Organisational commitment, cross-cultural, Vietnam, five-factor model.

Introduction

There is an established literature on the nature of organisational commitment, factors

affecting commitment and the relationship between increased commitment and positive

organisational outcomes. HRM practice is seen as a key factor in developing

organisational commitment and supporting positive outcomes. However, the main models

are derived from Western culture and practice. Cross cultural studies in China, Japan and

Korea have shown evidence of cultural differences in commitment and understanding

these differences and their impact of HRM practice is increasingly important in the

globalised economy. Vietnam is one of the fastest growing economies in South East Asia,

attracting foreign direct investment and multinationals with established HR practice

(World Bank, 2013), yet relatively little is known about employee commitment in

Vietnam. This research is an initial exploration of the nature of commitment within a

large multinational technology company in Vietnam.

Literature Review

Commitment is widely defined as the extent of an individual’s loyalty and attachment to

an organisation, linked to the degree of effort an individual will exert to support of the

organisation’s goals (Ashraf et al., 2012: Redman and Snape, 2005; Tella et al., 2007).

The widely-used three-component commitment model of Meyer and Allen (1991) is

based on the earlier work of Becker (1960), Porter et al. (1974) and Mowday et al. (1979).

The model identifies organisational commitment through attachment or involvement

(affective commitment), through the cost of stopping involvement (continuance

commitment) and through a degree of obligation (normative commitment).

Many studies show that employee commitment is closely connected to organisational

benefits with positive influences on productivity, quality and competitiveness, and that

commitment is linked to HR practice (Ashraf et al. 2012; Fiorito et al. 2007). Cooper-

Hakim and Viswesvaran, (2005) and Meyer et al, (2002) show committed employees are

less likely to quit their jobs, less likely to be absent, more likely to engage and have

higher levels of satisfaction. Loi et al., (2006) suggest effective HR practice indicates

concern for the employee which raises affective commitment. Coyle-Shapiro and

Conway (2005) argue that trust, fairness and delivering promises are the factors through

which HR practice affects continuance commitment but increasing trust can also raise

attachment and hence affective commitment (Michaelis et al, 2009). Where HR practice

establishes high quality exchange relationships in the work experience, employees

reciprocate in a positive and beneficial way (Gould-Williams and Davies, 2005). HR

practice can increase the perceived level of organisational support which positively

affects commitment (Allen et al. 2003).

Empirical evidence suggests work experience factors such as level and fairness of reward

distribution, clarity of employee’s role, freedom from conflict, job challenge, opportunity

for promotion, supervision consideration, and participation in decision making, all affect

affective and continuance commitment. (Ito and Brotheridge, 2005; Parish et al. (2008).

Older, female, married and longer tenure workers have higher levels of affective

commitment (Peterson, 2004; Salami, 2008; Sulliman and Iles, 2000), but the evidence is

inconsistent (Meyer and Maltin, 2010).

Overall, affective commitment is widely found to be the most dominant factor in

organisational commitment. As the underlying model and much of the evidential support

is derived from Western culture and organisational practice, more recent analysis has

focused on the applicability of the model in other cultural settings. Cross cultural studies

show evidence of cultural differences in commitment levels between Western and Asian

employees and the differential impact of high commitment HR practice in multinational

firms (Andreassi et al. 2014; Kooiji et al., 2010). Using the three dimension model of

Myer and Allen (1991) and the cultural dimensions model of Hofstede (1980),

collectivism and power distance have been shown to be related to affective, continuance

and normative commitment levels (Fischer and Mansell, 2009; Froese, F. and Peltokorpi,

V. (2011). Most studies of commitment in collectivist and high power-distant cultures

have focused on China, Japan and Korea.

Fischer and Mansell (2009) argue that affective commitment is higher in collectivistic

culture because loyalty and attachment to the organisational group is stronger. The

provision of workplace benefits and retirement funds may increase affective commitment

more in individualist compared to collectivist cultures as individual focused attachment is

more important in the former. (Aub’e et al., 2007). Employees in individualist cultures

are more likely to pursue personal goals where there is a conflict between their own goals

and the group’s goals (Gelade et al., 2008) and focus on cost/benefit calculations, so

HRM practice aimed at reducing conflict may also have more effect on continuance

commitment in individualist cultures. Fischer and Mansell (2009) suggest that

relationships in collectivist cultures are determined by moral obligations within the

family or wider community and the normative nature of relationships increases normative

commitment to the organisation. In individualist cultures, mutual obligations and duties

are weaker, making normative commitment less important (Belias and Koustelios, 2014).

Family pressure, loyalty and respect for leaders are other factors that may increase the

importance of normative commitment in collectivist cultures (Meyer and Allen, 1991;

Meyer and Parfyonova, 2010).

The Meyer and Allen (1991) model has been extended to examine whether different

aspects of continuance commitment should be separated, including the lack of

employment choices and loss of employer benefits, but the empirical results generally

support the three component model. (Chen & Francesco 2003; Hackett et al. 1994; Jaros,

1997; Tayyab, 2007). However, Wang (2004) argues that value commitment derived

from Mayer & Schoorman (1992) is important in Chinese collectivist culture where

employees are more likely to accept organisational goals to support the employer-

employee relationship. Value commitment assesses the willingness of an employee to

exert effort for the organisation. Wang (2004) also argues that continuance commitment

should be separated into an active element, e.g. desire to stay because of on-the-job

training, and a passive element, e.g. desire to stay because of family commitments or no

better job. In collectivist cultures, employees consider opportunities for personal

development more than losing benefits in the decision to stay. Wang (2004) incorporates

these into a five component model for use in collectivist cultures and found the model

more appropriate for both state-owned and foreign owned organisations in the

Guangdong region of China.

Wong and Tong (2014) compare Wang’s five component model against the Meyer and

Allen three component model using confirmatory factor analysis on a large sample of

ICT professionals in Hong Kong. Wong and Tong (2014), find the five component model

is a better model in Hong Kong’s ITC sector environment and suggest that the

geographical closeness of Hong Kong and Guangdong may lead to similar cultural

values. Like Wang (2004), they find that value, affective and active continuance

commitment are the strongest components of organisational commitment, and find

passive continuance and normative commitment the weakest components (Wang 2004).

Wong and Tong (2014) found no effect of demographic variables on affective

commitment. Gender had no effect on other commitment measures, but tenure with the

organisation was positively correlated with both active and passive continuance as well as

normative commitment. Workers with longer tenure are more likely to be offered high

value training and promotion increasing active continuance commitment, as well as have

higher fringe benefits increasing passive continuance commitment, and their level of

obligation to the organisation is higher. They found age had a significant positive

correlation with passive continuance and normative commitment which might relate to

industry specific experience, retirement funds and fewer alternatives for older workers.

Marriage had a significant negative effect on active continuance and value commitment

and a positive effect on passive continuance suggesting married employees might be

more concerned with stability rather than work benefit, experience or values of the

organisation.

Wong and Tong (2014) examine other studies which find the three component model a

better fit for organisational commitment in Pakistan, (Tayyab, 2007) and Turkey, (Wasti,

2005) suggesting this may be due to differences between Asian and near Asian cultures

and the extent to which business in these areas are operating in high-valued competitive

and globalised markets. They conclude that where value commitment is important,

strategy development should be transparent and more clearly linked to employee needs.

This research aims to extend knowledge of the importance of the cultural dimension in

Asian employee commitment and to identify some initial evidence of factors affecting

employee commitment in Vietnam. Vietnam is located in South East Asia and has a

population of 89.71 million people with the total GDP is around USD 171.4 billion

(World Bank, 2010). It is one of the fastest growing economies in the region and a

destination for foreign investment. Many established global companies have move their

production to Vietnam rather than China in recent years (World Bank, 2010). As an

advancing Asian economy, with the characteristics of a collectivist and high power-

distance culture, value commitment within the five component model may be important

in assessing commitment and developing HRM practice in global companies within

Vietnam.

Methodology

The data was collected via an anonymous questionnaire delivered in electronic format to

100 male and 100 female employees drawn from graduate educated employees in

administration, management and technical jobs in a major global Vietnamese

telecommunications company. The respondents were all working in the capital city

branch in Vietnam. The company has 25,000 employees working across Vietnam,

Cambodia, Laos, Haiti, Mozambique and Peru with a developed HR function. The

sample contains employees in a high technology sector in a major city competing in high

valued, globalised industry. In the Wong and Tang (2014) study, 97.4% of the sample

had professional diplomas, bachelor or masters degrees. Our sample was equally

stratified by gender to increase the proportion of female respondents to further examine

the effect of gender on commitment. Wong and Tong (2014) found no effect of gender,

but the percentage of females in their sample (18.7%) was small. The questionnaire was

translated into Vietnamese but an English version was available.

The five commitment variables were measured using mean scores over questions based

on the questionnaire in Wang (2004). Each question has a five-point Likert scales with

‘1’ equal to strongly disagree and ‘5’ equal to strongly agree. In addition to demographic

questions, respondents were asked to rate factors affecting their personal level of overall

commitment to the organisation using five-point Likert scales. Similar attitudinal

questions were asked on whether different demographic factors affected commitment to

work in Vietnam more generally.

The hypotheses to be tested from these variables are:

H1: Affective, value and active continuance commitment are the strongest components of

commitment in a high technology sector in Vietnam.

H2: Demographic factors are not associated with affective commitment in a high

technology sector in Vietnam.

H3: Gender has no effect on organisational commitment in a high technology sector in

Vietnam

H4: Tenure, age and marriage have a positive effect on passive continuance commitment

in a high technology sector in Vietnam.

H5: Marriage has a negative effect on active continuance and value commitment in a high

technology sector in Vietnam.

To assess the potential route through which HRM policy could affect commitment within

the organisation, respondents were asked to rate the organisation’s achievement over five

factors associated with HRM policy. These factors were the level of conflict, the fairness

of wages and appraisal, and levels training and promotion, support for employees, and

inspiring leadership within the organisation. All questions used a five-point Likert scale

with ‘1’ equal to strongly disagree and ‘5’ equal to strongly agree. The mean score of the

five questions for each respondent was used to measure the HRM practice effect. Kooij

et al., (2010) argue that HRM practice should be assessed using employee perceptions

rather than written policies. The specific impact of manager/supervisor effectiveness was

measured using three questions on manager effect on clarity of roles, understanding

employee needs and encouraging team decision making in the organisation. Again, all

questions used a five-point Likert scale and the mean score was used to measure manager

effect.

The hypotheses to be tested from these variables are:

H6: The level of commitment is positively associated with employee perception of lack

of conflict, fairness, training and promotion, support and leadership in a high technology

sector in Vietnam.

H7: The level of commitment is positively associated with employee perception of

manager/supervisor effect on clarity of roles, understanding employee needs and

supporting team decision making in a high technology sector in Vietnam.

The data were analysed within SPSS using descriptive statistics, mean score tests for

hypotheses 1-5 and correlation analysis for hypotheses 6 and 7.

Results and Discussion

The response rate was 50 percent and 100 usable questionnaires were completed. The

demographic distribution of the sample is shown in Table 1. All respondents were

graduates and 40% had post graduate qualifications. 52% of respondents were female,

82% were younger than 34 years, 37% were married. Only 14% had worked for the

company for 5 years or more, 47% had tenure of 2 years but less than 5 years, and 39%

had tenure less than 2 years.

Table 1. Sample Demographics

Variable % Male 48Female 52Single 63Married 37UG Degree 60Post Graduate Degree 4018-24 years old 3625-34 years old 4635-44 years old 845> years old 10<2 years at company 392<5 years at company 475 > years at company 14

The level of organisational commitment across the five components is shown by the

mean scores in Table 2. Affective commitment is the strongest component overall,

followed by active continuance and value components. There is an overall similarity to

that found by Wang (2004) and Wong and Tong (2014) but value commitment was not

the strongest component. However, normative and passive continuance commitment have

the smallest scores as in the other studies. The variation of scores around the mean is

largest for normative commitment (27%) and smallest for value commitment (10%)

suggesting high similarity of perceptions around value commitment but far less similarity

for normative commitment. Whilst all the skew values are small, the normative

commitment skew is the largest positive showing the majority of values were below the

mean. As respondents measure of value commitment is more consistent than their

measure of normative commitment, it indicates that the drivers of value commitment are

likely to be internal to the organisation rather than externally accepted cultural factors.

Using Friedman’s two way analysis of variance by ranks shows that the distributions

across the components are not the same, p=0.000. The evidence supports H1, that

affective, value and active continuance commitment are the strongest components of

organisational commitment in the high technology sector in Vietnam.

Table 2. Importance of Components of Commitment

Commitment Component Median Mean

Standard. Deviation/

Mean

Pearson Skew

Affective 3.67 3.63 0.17 -0.48Active Continuance 3.67 3.57 0.13 -0.62Passive Continuance 3.33 3.32 0.15 0.00Normative 3.33 2.70 0.27 0.46Value 3.67 3.55 0.10 0.14

Table 3 shows the mean score differences and the significant results of Anova analysis on

the commitment components by demographic factors. Unlike Wong and Tong (2014), but

predicted from other studies, we find a positive significant association for female gender

for affective commitment. Females have higher scores than males for affective

commitment, but no other demographic factor significantly affected affective

commitment in this cultural setting. This sample captured a wider group of highly

qualified female employees which may explain the finding. Whilst H2 and H3 are

rejected, the results suggest the only demographic association with affective commitment

in this high technology sector in Vietnam is gender. The only significant affect of age

was on active continuance commitment, rather than the hypothesised passive continuance

commitment, Employees over 35 years old had higher active continuance commitment

scores. Whilst H4 and H5 are rejected, the results suggest the effect of age is through

active rather than passive continuance. The difference may indicate that older higher

skilled employees in the telecommunications sector are in short supply in Vietnam and

this group have more alternative opportunities, and if so, they may be offered better

extensive training and promotion increasing active continuance commitment. The

significant positive effect of tenure on active continuance commitment was also found in

Wong and Tong (2014) but no effect was found on other components. Younger workers

with more tenure may also attract more training and promotion opportunities increasing

active continuance commitment.

Table 3. Significant Effect of Demographic Factors.

Between Group Anova Mean ScoresDegrees of freedom F Probability

Affective Commitment by Gender

Male 3.49Female 3.77 1 5.67 .019

Active Continuance Commitment by Age (Years)

18-24 3.61

25-34 3.44

35-44 3.75

45> 3.87

3 3.06 .032

Active Continuance by Tenure (Years)

< 2 3.63

2>5 3.45

5<10 3.81

10> 3.83

3 2.76 .047

To examine the route through which HRM practice at both the organisational level and at

the manager/supervisor level is associated with commitment components, correlation

analysis was used. Table 4 shows the results across the two HRM practice measures and

the five components of commitment.

Table 4 Correlation of Commitment Components against HRM practice measures

Pearson

Correlation

Coefficient

Affective Active

Continuance

Passive

Continuanc

e

Normative Value

HRM practice at

organisational level

-0.127

p=0.210

0.633**

p=0.000

0.313**

p=0.002

0.301**

p=0.002

0.598**

p=0.000

HRM practice at

manager/supervisor

level

-0.013

p=0.900

0.327**

p=0.001

0.067

p=0.510

0.083

p=0.410

0.295**

p=0.003

Significant at the 0.05 level (2-tailed).*

Significant at the 0.01 level (2-tailed).**

The results in Table 4 show no linear association between perceived HRM practices at

the organisational or manager/supervisor level on affective commitment contradicting the

suggested route by Loi, (2006). H6 is supported in all components except affective

commitment. Given the organisation has high income benefit provision and is employing

staff in a collectivist culture, the lack of effect on affective commitment may result from

individual focused attachment being less important as suggested by Aub’e et al., (2007).

However, there is significant positive effect of both routes on active continuance

commitment supporting Coyle-Shapiro and Conway (2005). The positive significant

effect of HRM practice at the organisational level supports their view that higher levels of

training and promotion may raise active continuance commitment strongly in a

collectivist culture, whilst higher fringe benefits may raise the perceived cost of leaving,

raising passive continuance commitment.

The positive significant effect of organisation wide HRM practice on both normative and

value commitment may be driven by perceptions of fairness and inspirational leadership

in the organisation rather than promotion and training. It seems likely that

managerial/supervisory effect is significant and positive for value commitment as it

relates to the desire to make effort for the organisation (monitored by managers) as well

as accepting organisational values, whereas normative commitment is dominated more by

external factors.

Employee perceptions of what affects their general commitment to the organisation in

this study are shown in Table 5. The values are the percentage that agreed or strongly

agreed that the level of the factor affected their commitment to the organisation. The

largest percentage of agreement was on opportunities for promotion; being trusted in their

job; level of benefits, bonus, leave and work/life balance; fairness in wages, benefits and

performance appraisal; clarity of roles and responsibilities; degree of personal

effort/investment and levels of participation in decision making. The smallest percentage

of agreement was on family pressure; duty to repay investment in the individual; moral

obligation; and attachment to leaders. These are in line with the findings on the

importance of affective, value and active continuance in the study.

Table 5 Perceived factors affecting commitment

Perceived Factor % Perceived Factor %

Opportunities for promotion/training 88 Sense of belonging to a team 70

Fairness in wages, benefits, performance appraisal

85 Freedom from conflict 67

Being trusted in the organisation 81 Fear of losing benefits 61

Benefits, bonus, leave, work-life balance

81 Attachment to leaders 51

Personal effort/investment in the job 76 Duty to repay company investment 44

Clarity of roles/responsibility 76 Moral obligation 39

Levels of participation in decision making

76 Family pressure 25

Conclusions

The analysis in this study provides further evidence that the five-component model of

organisational commitment may be more relevant in Asian cultures. The evidence

supports the five-component model in a major Vietnamese city using a globally

competitive company, in a sector where employees have high and transferable technology

skills and employers provide high-commitment HRM practices. Affective, active

continuance and value commitment are the strongest components in this type of cultural

environment and passive continuance and normative commitment the weakest

components. Only gender, age and job tenure were found to be significant demographic

factors affecting commitment in the anticipated direction. Whilst this is a limited study, it

indicates that Vietnam’s cultural environment may affect organisational commitment in a

similar way to China.

The study also suggests that organisation wide HRM practice may significantly raise

commitment in all components except affective commitment in Vietnam. Also, that HRM

practice at the manager/supervisor level can significantly raise both active continuance

and value commitment, which are important overall in this cultural environment. Hence

organisations entering Vietnam, particularly in high technology sectors, should focus

HRM practice on active continuance and value commitment.

Whilst there is no evidence here to suggest HRM practice influences the level of affective

commitment, this is a small study and the perceived factors included only two questions

linked to affective commitment.

The study results are limited by the small size of the sample and the focus on one high

technology company and the lack of comparative analysis. Future research should test the

three and five-factor models in other Vietnamese high technology sectors and other

industrial and professional sectors and explore further, the link between HRM practice

and affective commitment.

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