Investigating the Relationship between Organizational Learning Culture, Job Satisfaction and Turnover Intention in it SMEs

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IT workers are critical to IT companies because of their knowledge and experiences in fast-changing nature of technology. Turnover can be a crisis for all industries and companies, particularly for IT Company, because losing a worker can cause
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  International Journal of Innovative Ideas (IJII)Volume 12(1), pp. 8-23, APRIL 2012 8 Investigating the Relationship between OrganizationalLearning Culture, Job Satisfaction and TurnoverIntention in it SMEs Raheleh Emami 1 , Ebrahim Moradi 2 , Durrishah Idrus 3 ,   Dhaifallah Obaid Almutairi 4   1 Faculty of Management and Human Resource Development Universiti Technologi Malaysia 2 Faculty of Management and Human Resource Development Universiti Technologi Malaysia 3 KPJ International College of Nursing and Health Sciences 4  Ministry of Higher Education, King Abdulaziz Military Academy, Kingdom Of Saudi Arabia   { 1 emraheleh2@live.utm.com, 2 mhebrahim2@live.utm.my  3 durrishah@kpjic.edu.my, 4 dalmutairi2002@yahoo.com} Abstract- IT workers are critical to IT companies because of their knowledge and experiences in fast-changing nature of technology. Turnover can be a crisis for all industries and companies, particularlyfor IT Company, because losing a worker can cause financial and non financial problems for ITcompanies. The purpose of this descriptive, co-relational and cross-sectional study is to gain a betterunderstanding of the relationships between organizational learning culture and job satisfaction of employees, and their impact on turnover intention at IT companies in, Iran, in 2011. Data werecollected by distribution of three questionnaires based on job satisfaction survey (JSS), organizationallearning culture (DLOQ) and Turnover intention (SLI) among 132 employees of these IT companiesthrough a simple random sampling method. Correlation analysis was done on the data gathered fromthe questionnaire based on 95% of confidence level. The results of the study indicated that, there wasa significant and moderate positive correlation among the seven dimensions of organizational learningculture and job satisfaction. The correlations between the seven dimensions of organizational learningculture and turnover intention were all negative. Job satisfaction also had a strong negativerelationship with turnover intention. Further, the present study suggests that there is an indirectimpact of organizational learning culture on turnover intention when job satisfaction is considered asa mediator. As organizational learning culture and job satisfaction have strong correlation withturnover, it is important to reinforce them by applying the right human resource policies. Keywords: Organizational learning culture; Job satisfaction; Turnover intention  1. INTRODUCTION At present, factors such as economy, globalization, technology and innovation have significantlyinfluenced the business circumstances. In order to face a diversity of challenges, organizations are  International Journal of Innovative Ideas (IJII)Volume 12(1), pp. 8-23, APRIL 2012 9 compelled to acquire core competencies and maintain their competitive advantage. Thus, knowledgegeneration and distribution have become more important than what they have been in the past [1]. Inlieu of the recent development in the economy worldwide and the fast-changing development ininnovation and technology, organizations have to deal with constant needs in learning for theiremployees ’ development. However, the environment and culture of an organization may affect thetypes and numbers of learning-related proceedings and worker job satisfaction at the workplace.Retaining employees in organizations are a huge challenge for the management. In this context, if anorganization is unable to fulfill the employees ’ requirements and the employees are not satisfied with their work conditions, turnover may happen. This is confirmed by the research conducted by Schultz[2] in which they described that high job satisfaction is associated with worker ’ s positive attitudes which lead to high job performance and low intention to leave. There have been many studiesconducted specifically in the field of Information System (IS) to understand the issues related to IT/ISpersonnel, and this is due to the assumption that (IS) employees are different from others. Hence, theyshould be studied separately. Turnover phenomenon in the IT industry is usually due to the gapbetween IT graduates and demanding market, the retirement of senior experts and the growth andchange in IT applications.Westlund & Hannon [3] stated that retaining information technology employees had been aproblem in many organizations for decades. Baroudi [4] stated that IS personnel were costly andscarce resources. IT/IS professionals turnover rate was reported up to 100% annually in India [5].This is happening in many other countries and Iran is not excluded. From the perspective of ITcompanies, turnover happens due to the stiff competition in hiring employees who have goodtechnological skills and background. Staff pinching is common and when this happens, organizationsare losing a lot in terms of their human capital. Research has shown that the cost of training anddeveloping a new employee is more than the cost of keeping the current ones. It has been proven thatthe average cost of a worker ’ s turnover is 150% of his or her salary [6]. According to Grant [7],knowledge is the most strategically significant resource of the firm ” . This includes the knowledge in employees ’ brains that sometimes could not be transformed to any form of explicit knowledge and will only be retained in the organization as long as the employee is working there. Therefore, themove of an employee can be a loss of critical knowledge. It is also a critical financial factor wherebyit is rather costly to train new employee as the replacement of the ones who have left. 2. LITERATURE REVIEWOrganizational Learning Culture According to Marquardt [8], organizational learning focused on the procedure and proficiencies of knowledge development. A learning organization refers to the principles, characteristics, and systemsof an organization that make and learn collectively. In general, organizational learning is defined interms of process and behavior, and a learning organization is conceived as an entity [9]. Based onKontoghiorghes, Awbre, & Feurig [10] four differential features between the two terms have beenoffered [11]. First, organizational learning is considered as a learning process; in distinction, alearning organization is regarded as a form of organization. Second, learning happens logically inorganizations, thus the learning organization requirements to be developed. Third, the literature onorganizational learning emerges from the descriptive and academic investigation; by dissimilarity, theliterature on the learning organization has developed mostly from prescriptive and realistic demands. Fourth, organizational learning focused on the personality learner, and knowledge resided in theindividual; whereas, in a learning organization, learners do at the individual, group, and  International Journal of Innovative Ideas (IJII)Volume 12(1), pp. 8-23, APRIL 2012 10 organizational levels, and knowledge is positioned not only in individuals, but also in theorganization ’ s memory of the particular learning organization. Organizational learning culture isgenerally focused on research studies associated to the concept of a learning organization [12]. Table 1:   Definition of Learning Organization Source: Researchers own construction (2011). Job Satisfaction Job satisfaction is recognized as an significant subject in organizational behavior because of itssignificance to the physical and emotional health of employees [17]. In fact, job satisfaction is areflection of an employee ’ s behavior that leads to attractive outcomes and is typically measured indegrees of multiple perceptions using multiple constructs or categories [18]. Spector (1997) defined itas “ how people feel about their jobs and different aspects of their jobs. It is the extent to which peoplelike or dislike their jobs ” (p. 2). Overall, job satisfaction is associated with an employee ’ s satisfactionfrom both psychological and physical perspectives. Thus, job satisfaction is recognized as a complexconstruct that comprises both intrinsic and extrinsic factors [19]. Herzberg & Mausner (1959)identified the intrinsic as derived from internally job-related rewards, such as recognition,achievement, work itself, advancement, and responsibility. Extrinsic factors result from externallyenvironment-related rewards, such as wages, company policies and practices, technical facets of supervision, interpersonal relations in supervision, and working conditions. All of these features arerelated to organizational culture. Based on these definitions, organizational culture can have asignificant effect on worker ’ s job satisfaction . In general, job satisfaction is assessed in many levelsand can be examined from multiple viewpoints using multiple constructs or scales [18]. For example,the Job Description Index (JDI), developed by Smith & Kendall [20] defines five aspects of a job:work, pay, promotion, supervision, and coworkers. Spector [21] identified nine subscales for the JobSatisfaction Survey (JSS): pay, promotion, supervision, fringe benefits, contingent rewards, operatingconditions, coworkers, nature of work, and communication. The importance of each facet or subscalecan be different to some extent. As a result, these facets or subscales may have varied significantlywhen evaluating overall job satisfaction (Spector,1997). Turnover Intention Turnover intention is regarded as the most general predictor of turnover. Price [22] definedturnover as “ the degree of individual movement across the membership boundary of a social system ” .Fishbein [23] stated that turnover intention is “ the best single predictor of an individual ’ s behaviorwill be a measure of his intention to perform that behavior ” . In fact, turnover can be separated intovoluntary and involuntary (Price, 1977). Mobley [24] defined turnover intention as the intention to Definition of Learning Organization “ An organization that make possible the learning of all its members and consciously transforms itself (p. 1). ”   Author [13] “ A learning organization is an organization that facilitates learning for all of its members, and thereby continuously transforms itself (p. 19) ” .  [14] “ An organization in which workers are repeatedly gaining and sharing newknowledge and are willing to apply that knowledge in building resolutions orperforming their job (p. 282) ”  [15] “ A learning organization is a consciously supervised organization with learning as essential factors in its values, visions and aims as well as in itsdaily process and their evaluation (p. 71) ”  [16]  International Journal of Innovative Ideas (IJII)Volume 12(1), pp. 8-23, APRIL 2012 11 quit a work on a voluntary basis. It can be defined as the intention to voluntarily change companies orto quit the labor market altogether [25]. Turnover and IT Workers Turnover in IT employees has been an issue since the 1970s and has often been studied. Studieshave reported a 25-35% turnover rate for IT employees in 500 studied firms and 15-20% turnover ratehas been estimated for IT employees in all firms [26]. Studies conducted among the IT workers havealso found relationships between job satisfaction, turnover, and organizational commitment. Studieson IT professionals have found that job satisfaction has a strong influence on turnover intentionswhereby it has been demonstrated that there has been a negative relationship between job satisfactionand turnover [26-27]. The explanation for a negative relationship between job satisfaction andturnover in IT workers is that, a dissatisfied IT worker will likely escape the unfavorable work environment by quitting the job. Bluedorn developed a unified model of turnover which synthesizesother models. Bluedorn ’ s model states that organizational commitment is a result of job satisfaction, and an predecessor of turnover [28]. Based on Joseph, Ng, Koh, & Ang [29], turnover intentions havea positive relationship with actual turnover behavior for IT professionals. The Relationship between Organizational Learning Culture and Job Satisfaction Based on the previous discussion, the characteristics of learning organization include severalfacets, such as knowledge sharing, organizational learning capacity, workplace learning, innovation,empowerment, team work, and so forth. In general, work and organizational conditions are mainlyinfluenced by the situational approach of job satisfaction [30]. The characteristics of a learningorganization may, then, have some impact on job satisfaction. There are a number studies on jobsatisfaction related to individual characteristics of the learning organization. Mikkelsen, Ogaard &Lovrich [31] identified a positive connection between learning climate and job satisfaction. KellerKeller, Julian & Kedia [32] reported that work climate has a significant impact on job satisfactionand team productivity, especially participation, cooperation, and work importance. Rowden & Ahmad[33] concluded that workplace learning promoted a high level of job satisfaction among employees.Chiva & Alegre [30] declared that organizational learning ability through a stimulating work environment has effects in developing employee ’ s competencies and job satisfaction.  Hypothesis 1: Organizational learning culture will be positively related to job satisfaction. The Relationship between Organizational Learning Culture and Turnover Intention Although organizational learning is among the most widespread and fastest-growing interventionsin HRD practice, the context of organizational learning culture related to its interaction with turnoverintention has not been explored extensively (LeeKelley, et al., 2007)[34][34]. In the context of socialexchange theory, employees who receive sufficient and relevant training opportunities inorganizations might be more reluctant to leave their organization [35]. Thus, if employees perceivethat they have more training opportunities, then it may result in diminishing their turnover intention.Karatepe, Yavas & Babakus [36] suggested that job resources, including supervisory support,training, empowerment, and rewards, increase employee ’ s job satisfaction and reduce their turnoverintention. Pare & Tremblay (2007) indicated that competence development and information sharinghave a negative effect on turnover intention. Egan, Yang, & Bartlett [37] demonstrated that a learningculture impacted job satisfaction; in addition, a learning culture was mediated by job satisfaction, witha negative effect on turnover intention. LeeKelley, Blackman & Hurst [34] conducted a studyexploring learning organizations and the retention of knowledge workers in the IT industry. The  International Journal of Innovative Ideas (IJII)Volume 12(1), pp. 8-23, APRIL 2012 12 Organizational Learning Culture Continuous learningInquiry and dialogueTeam learningEmpowerment Embedded systemSystem connectionStrategic leadership   Job Satisfaction PayPromotionSupervisionFringe benefitsContingent rewardsOperating proceduresCoworkersNature of work Communication   TurnoverIntention researchers have applied Senge ’ s five learning organization disciplines to explore the relationshipbetween job satisfaction and turnover intention. They concluded that shared vision, which is one of the learning disciplines, has a negative relationship to turnover intention because knowledge workershave strongly influenced by shared vision and showed decreased turnover intention.  Hypothesis2: Organizational learning culture will be negatively related to turnover intention. The Relationship between Job Satisfaction and Turnover Intention Most of theories of turnover consider it as an outcome of employees ’ job dissatisfaction( Bluedorn, 1982; Mobley & Fisk ,1982)[38-39][38-39]. The theories explain that people who disliketheir work will think about leaving the work, intend to search for alternative employment, and intendto quit the organization [40]. A number of empirical studies have confirmed the important role of jobsatisfaction in influencing turnover intention [29, 41]. Griffeth, Hom, & Gaertner [42] meta-analysisindicated that the overall job satisfaction displayed the highest relationship to turnover intentionamong all types of job attitudes. Igbaria & Greenhaus [43] demonstrated that job satisfaction has adirect impact on intent to quit and an indirect effect through organizational commitment on theturnover intention of IT professionals. This assertion has been confirmed by previous study thatdemonstrates a negative association between job satisfaction and turnover intention.  Hypothesis3: Job satisfaction will be negatively related to turnover intention. The Theoretical Framework of the Study As a result, according to the above review of the literature, a hypothesized structural equationmodel is shown in Figure 1. Fig.1.Conceptual Framework 
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