The moderating role of employability on the relationship between job insecurity and commitment to change

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The moderating role of employability on the relationship between job insecurity and commitment to change
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  The moderating role of employability on the relationship between job insecurity and commitment to change Hina Jawaid Kalyal NUST Business School, National University of Sciences and Technology, Pakistan Erik Berntson, Stephan Baraldi and Katharina Näswall Stockholm University, Sweden Magnus Sverke Stockholm University, Sweden and North-West University, South Africa Abstract The development of commitment to change is an underresearched area especially in non-western settings. The aim of the present study was to determine whether employability can moderate the negative effects of job insecurity on individuals’ commitment to change. A survey method approach was used to collect 149 responses from managers of a large public sector organization in Pakistan undergoing restructuring. Hierarchical multiple regression results suggest that employability is an important coping resource during organizational change as it helps mitigate the negative effects of  job insecurity on the most desirable form of commitment to change, namely affective commitment to change. Theoretical and practical implications of the study are discussed. Keywords commitment, control, human resource management, public sector, restructuring Introduction The organizational development literature includes a considerable amount of research supporting change as a viable solution for organizational success and survival (Lines, 2004; Pfeffer, 1994; Piderit, 2000; Stace and Dunphy, 1991). This type of argumentation generally adheres to a systems theory view, in which a dynamic, and often hostile,  Article Corresponding author: Hina Jawaid Kalyal, NUST Business School, National University of Sciences and Technology, H-12, Islamabad, 44000, Pakistan.Email: hina.kalyal@nbs.edu.pk  Economic and Industrial Democracy31(3) 327–344© The Author(s) 2010Reprints and permissions: sagepub.co.uk/journalsPermissions.navDOI: 10.1177/0143831X09351214eid.sagepub.com  by guest on April 19, 2016eid.sagepub.comDownloaded from   328 Economic and Industrial Democracy 31(3) environment poses continuous threats to organizations, and that organizations therefore need to constantly change in order to adapt to their environment (Hirsch and De Soucey, 2006). A common goal of such change efforts is increasing efficiency and productivity in order to keep abreast of competition (Burke, 2002). Although limited reorganizational efforts are common to most work environments, many larger organizations commit themselves to fundamental restructuring processes, which often have a significant effect on many of their employees (Weick and Quinn, 1999).Regardless of whether organizational change is essential for organizational survival or not, the literature also provides evidence that organizational changes, planned or unplanned, act as a source of stress for the employees due to the element of uncertainty associated with them. Uncertainty in the organizational environment can lead to the fear of job loss among employees (Greenhalgh and Sutton, 1991; Hartley, 1991). Although organizational change may be welcomed in certain cases where individuals are prepared to deal with the changing situation (Ashford, 1988), it may be considered a threat in economies with fewer job opportunities (Armknecht and Early, 1972), and result in  perceptions of job insecurity. The way employees perceive the organizational change initiatives is essential for the success of the change, and may depend on how insecure the employees are made to feel during the change. According to Herscovitch and Meyer (2002), commitment is one of the most important factors involved in employee support for the change initiatives.The present study addresses an important gap in the literature by investigating the relationship between job insecurity and the three dimensions of commitment to change described by the Herscovitch–Meyer three component model of commitment to change (Herscovitch and Meyer, 2002) – affective, continuance and normative commitment to change – and testing how this relationship may be affected by a person’s  perceived employability.Another important aspect of this study is its cross-cultural context. The Herscovitch and Meyer (2002) model has not been tested extensively outside North America and only two studies to date have tested it in an Asian context (Chen and Wang, 2007; Meyer et al., 2007). Also, there exists very little empirical literature on organiza-tional change in general and on commitment to change in particular in Pakistan. The present study is an attempt not only to study factors related to commitment to change but also to gain an insight into the little researched South Asian management  perspective. Commitment to change Given the importance of gaining employee support for the success of any organizational change initiative, it becomes imperative to identify factors that will lead to the develop-ment of positive beliefs and attitudes towards change (Cordery et al., 1993). Herscovitch and Meyer (2002: 475) define commitment to change as ‘a force (mind-set) that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative’. This definition was developed on the basis of Meyer and Herscovitch’s (2001) argument that, regardless of the focus of commitment, it should reflect the essence of the commitment phenomenon. Following Allen and Meyer’s (1990) three-dimensional by guest on April 19, 2016eid.sagepub.comDownloaded from   Kalyal et al. 329 representation of commitment to organizations, three types of commitment to change have been defined – affective, continuance and normative (Herscovitch and Meyer, 2002). Although both organizational commitment and commitment to change could be expected to make employees more inclined to support their organization’s change efforts, commitment to change is a better predictor of employees’ active support of change (Herscovitch and Meyer, 2002).Affective commitment to change is based on the realization of benefits of the change, and the willingness to support the change initiative. This type of commitment is likely to develop when individuals realize the importance and value of change. According to Herscovitch and Meyer (2002), affective commitment to change depends upon the information and clarity regarding the need and purpose of change and the ability to cope with these changes. This type of commitment to change has been related to both compliance and behavioural support for the change initiative (Herscovitch and Meyer, 2002).Continuance commitment to change is a cost-based commitment and reflects ‘a recognition that there are costs associated with failure to provide support for the change’ (Herscovitch and Meyer, 2002: 475). According to this definition, the cost factor depends on the lack of viable alternatives and the investments made in the organization in terms of time and effort. When employees feel unable to deal success-fully with the changes, either due to lack of clear-cut information regarding the pur- pose of change and expected benefits or the perceived inability to deal with new challenges and requirements of change, they feel trapped in their job roles. Such indi-viduals do not relate to the change or find it beneficial but simply commit themselves to the change process because they have to and, hence, show minimal support for it. Even if continuance commitment to change does not indicate resistance to change, it is nevertheless a less positive form of commitment (Herscovitch, 1999), in that it is related only to compliance with the change, and not to active behavioural support (Herscovitch and Meyer, 2002). An organization going through change with employees who only comply may have problems carrying out the change initiative successfully in the long run. Normative commitment to change is an obligation- or reciprocity-based commitment, reflecting a sense of duty towards the organization and the change process. This type of commitment to change, which reflects ‘a sense of obligation to provide support for the change’, develops when employees recognize that the organization is fulfilling its duties or honouring the psychological contract that exists between the two parties (Herscovitch and Meyer, 2002: 475). Along with affective commitment to change, normative commit-ment has been related to both compliance to and behavioural support of the change initia-tive (Herscovitch and Meyer, 2002), making this type of commitment an important  prerequisite for a successful change process. The relationship between job insecurity and commitment to change When an organization is under competitive pressures to make changes like restructuring, the long-term job security of employees is invariably threatened (Brockner et al., 1992; Parker et al., 1997; Probst, 2003; Sims, 1994). Beer and Nohria (2000) have pointed out by guest on April 19, 2016eid.sagepub.comDownloaded from   330 Economic and Industrial Democracy 31(3) that the solution to the underperformance of public sector organizations lies in economic incentives, layoffs and restructuring of the organizations. However, the fear of layoffs after restructuring creates job insecurity among employees and the uncertainty arising out of the restructuring process may adversely affect the very objectives it is meant to achieve: performance improvement through organizational change. This would be espe-cially true for countries like Pakistan, where employment opportunities are few and far  between (Hyder, 2007). Changes may also be more stressful for individuals employed in the public sector for whom a secure and long-term job has more value than a higher paying one (Cimons, 1996).Greenhalgh and Rosenblatt (1984: 438) defined job insecurity as a ‘perceived pow-erlessness to maintain desired continuity in a threatened job situation’ and argued that it is based on the individual’s perceptions and interpretations of the immediate work envi-ronment. Employees feel ill at ease by the prospect of change, viewing it as a threat to their relationship at work, their financial security and their daily routine (De Witte, 1999; Nadler, 1987). The negative attitudes towards change are generally due to the  perception of a lack of control over the stressful situation (Bordia et al., 2004; DiFonzo and Bordia, 1998).Job insecurity is considered a potent stressor (Barling and Kelloway, 1996; Olson and Tetrick, 1988) which makes it difficult to achieve change objectives (Greenhalgh and Sutton, 1991; Hartley, 1991). Research has shown that job insecurity may not only have an adverse effect on employees’ performance and perceived organizational support, but that it also tends to increase resistance to change (Noer, 1993; Rosenblatt and Ruvio, 1996). It is generally assumed that insecure employment situations give rise to lack of flexibility which is detrimental for the organizational change process, whereas an assur-ance of job security, on the other hand, may give rise to openness to change (Chawla and Kelloway, 2004). Due to its stressful nature, job insecurity is likely to have deleterious effects on a factor critical for the success of a change initiative: employee commitment to change. Numerous studies, including two meta-analyses (Cheng and Chan, 2008; Sverke et al., 2002), have documented that job insecurity is associated with negative work attitudes, lower performance and stronger inclinations to turnover in the organization, as well as impaired well-being. Uncertain job situations lead to an increase in job insecurity (Greenhalgh and Sutton, 1991; Hartley, 1991), resulting in resistance to organizational change (Noer, 1993) and decreased levels of job satisfaction and organizational commit-ment (Ashford et al., 1989; Davy et al., 1997). As shown by Herscovitch and Meyer (2002), commitment to change is closely related to commitment to the organization, and thus is a fundamental aspect of an underlying form of general commitment. In line with this reasoning, job insecurity can be expected to affect commitment to change similarly to its effect on organizational commitment, that is, negatively.However, job insecurity may relate differently to the three dimensions of commitment to change. Affective commitment to change reflects a willingness to support change  because of an understanding of its intrinsic advantages, and normative commitment to change is based on a sense of duty towards the organization’s change initiatives. These two types of commitment to change are expected to be negatively affected by job inse-curity perceptions, but for different reasons (Herscovitch and Meyer, 2002). As affective by guest on April 19, 2016eid.sagepub.comDownloaded from   Kalyal et al. 331 commitment largely depends on the clarity of a given situation, and job insecurity often is based on a lack of a clear future perspective, job insecurity is expected to be related to lower levels of this form of commitment. And since normative commitment to change is  based on the employee perceiving that the employer has fulfilled its obligations, and job insecurity may be perceived as a breach of such obligations, normative commitment to change is also expected to be negatively related to job insecurity.On the other hand, job insecurity is expected to be associated with higher levels of continuance commitment to change, since the uncertainty inherent in job insecurity  perceptions may influence employees to make efforts directed at not losing their job. Continuance commitment to change is associated with compliance to the change, and such compliance may be seen as a good strategy to remain employed. Indeed, employees experiencing job insecurity may show some support for the change initiatives just to retain their jobs for fear that non-compliance may lead to loss of employment. Based on this reasoning we made the following prediction:  Hypothesis 1 : Job insecurity is (a) negatively associated with affective commitment to change, (b) positively associated with continuance commitment to change and (c) nega-tively associated with normative commitment to change. The moderating role of employability  How can commitment be expected from individuals facing uncertain employment condi-tions? The answer may lie in the personal ability of individuals to deal with uncertain situations. One important factor that is expected to enhance employees’ ability to deal with change-associated uncertainty is employability, which is a person’s self-perceived ability of finding a new job based on his or her competencies (Berntson et al., 2006). It has been argued that employability is a factor that may moderate job insecurity’s rela-tionship with its various outcomes, for instance, commitment (Sverke and Hellgren, 2002). In a study by Silla et al. (2008) it was found that employability moderated the association between job insecurity and life satisfaction such that employable individuals reported better life satisfaction than their colleagues with lower levels of employability when experiencing high job insecurity.It is expected that the negative effects of job insecurity on commitment to change may  be mitigated by factors that provide a sense of control to employees regarding change (see Barling and Kelloway, 1996). Control has been defined as ‘an individual’s beliefs, at a given point in time, in his or her ability to effect a change, in a desired direction, on the environment’ (Greenberger and Strasser, 1986: 165). An important factor associated with control over change is perceived employability, that is, individuals’ perceived abil-ity to find alternative employment. Berntson et al. (2006) argue that during the process of organizational change, the employee’s self-assessment of being able to find a new job  becomes important. Employees are more likely to feel more committed to the change  process when they are able to see the associated benefits and feel confident about their own importance for the organization. Kluytmans and Ott (1999) suggest that perceived employability is related to the willingness and ability of an employee to adapt to changes in the job content and the extent to which their know-how and skills can be applied outside the organization.  by guest on April 19, 2016eid.sagepub.comDownloaded from 
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