Volume 12 Number 2 February 2015 Serial
Jour na l of U S-China
Public Adm inist rat ion
Volume 12, Number 2, February 2015 (Serial Number 112)
Contents
Management Issues and Innovation
Employee-Management Cooperation: The Key to Employee Productivity
81 M. A. Akkas, Anannay Chakma, Mohammad Ikbal Hossain
The Relationships Among Four Factors and Turnover Intentions at Different Levels of Perceived Organizational Support
89 Thanawatdech Thirapatsakun, Chanongkorn Kuntonbutr, Panisa Mechida
Local Government and Public Policy
Local Government E-Procurement Practices in Indonesia: Accountability, Efficiency, and Barriers
105 Rachmat Hidayat
The German Policy and the Kosovo—Case Shadings and Hesitations (1989-1999)
115 Elton Demollari
Financial Analysis and Economical Issues
123 Lib ěna Kantnerová
A Study on Finance in Haulage
Effects of Globalization on National Competitiveness of Entrepreneurs: Opportunities and Threats
134 M. Hakan Yalçınkaya, Co şkun Çılbant, Neslihan Yalçınkaya, İsmet Güneş
Multi Population Development and Health Security
Multiculturalism as One of the Primary Determinants of Growth
144
B łażej Balewski, Małgorzata Franaszek
Conditions for Development of the Private Health Insurance in Poland
153 Lukasz Jasinski
Journal of US-China Public Administration, February 2015, Vol. 12, No. 2, 81-88
doi: 10.17265/1548-6591/2015.02.001
DAVID PUBLISHING
Employee-Management Cooperation: The Key to Employee Productivity
M. A. Akkas, Anannay Chakma, Mohammad Ikbal Hossain Dhaka University, Dhaka, Bangladesh
This paper aims at examining the importance of cordial and high-level cooperation between management and employees, as identical partners in industrial advancement and progress. There is a legislative obligation to form a participative committee at the industrial enterprises in Bangladesh to achieve labor-management cooperation, but the majority of the executives mainly in the private sector, have ill-treated this prerequisite of regulation. Based on an interview with a good number of respondents (managers, union leaders, experts, and political leaders), the study has attempted to identify the obstacles that stand in the way of cohesive cooperation between these two parties. The important factors deterring collaboration according to the respondents are: mutual mistrust between management and labor, class distinction between managers and employees, labor disputes, politicization of labor unions resulting in intra- and inter-union rivalries, worker’s backwardness, problem of determination of a collective bargaining agent, and infringement of labor laws, among others. Because of these factors, this committee has not yielded effective results. The prevailing climate is not encouraging cooperation, rather inhibiting the same. Finally, some suggestions such as top management support and commitment, confidence in people, employment security, trust, adequate information, reward, friendly working environment, acceptance of change, interaction between managers and employees, and timely feedback have been recommended which may help create congenial labor-management cooperation at the plant level as a means of establishing industrial peace and achieving higher productivity.
Keywords: labor-management cooperation, politicization of labor union, collective bargaining, participative committee
The concept of employee-management cooperation is relatively new but very attractive and found to be effective in the Western countries and Japan. Currently, it has gained more popularity in the changed economic and business world characterized by stiff foreign competition, changes in technology and deregulation. These economic and social trends certainly favor cooperative efforts in business and industrial fields. In view of these changes, accommodation of labor and management to each other’s needs (win-win bargaining) is more appropriate than the old adversarial win-lose approach. It is of much importance to establish a cooperative relationship between management and labor in order to succeed in the competitive business world. Management experts are of the view that by accommodating one another’s need, management and labor can
Corresponding author: M. A. Akkas, M.Com, MBA, professor, Department of Management, Dhaka University, Dhaka, Bangladesh; research fields: human resource management and knowledge management. E-mail: prof.akkas@gmail.com. Anannay Chakma, MBA, lecturer, Department of Management, Dhaka University, Dhaka, Bangladesh; research field: human resource management. E-mail: anannayductg@gmail.com. Mohammad Ikbal Hossain, MBA (HRM), research associate, Dhaka University, Dhaka, Bangladesh; research fields: human resource management and corporate governance. E-mail: ikbalsmn@gmail.com.
82 EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY achieve two goals at once: increase productivity and improve quality of work life. Empirical studies suggest
that productivity and quality of work life go hand in hand (Cascio, 1995; Davis, 1990). In the current climate of wants and needs, there is no other alternative. The win-lose approach must change if enterprises are to remain competitive in the international marketplace. Through cooperation, both parties can replace reactive measures with proactive approaches. Proactive efforts benefit the union and the company by saving time and expenses.
The goals of employee-management cooperation are to increase productivity, promote industrial democracy, avoid conflict, and obtain benefits for both parties, not to bargain over the division or distribution of gains. Each party has to serve its own interest by cooperating with others. By working together, management and workers can find ways to lower costs and provide superior value to customers. These savings can mean higher profits for the company and better contract for the union. Human relations and behavioral experts strongly feel that productivity or industrial progress depends on a cordial and sound union-management relationship. Both management and workers are the equal partners of industrial progress and prosperity. Gatchalia (2012) argues that the term “Workplace cooperation is now understood as a broad concept connoting mutual commitment between labor and management to working together and working smarter”. Specifically, its goal is to develop an ideal situation where management and workers are full partners in identifying problems in the workplace, crafting solutions to those problems, and implementing the agreed-upon solutions. The idea is that greater cooperation between labor and management on matters of mutual concern can create a more satisfying and productive workplace. The process involves employee participation in day-to-day decision-making that affects their jobs. The structures and procedures enable the partners to redesign work to encourage group problem-solving, open information sharing, teamwork, and skill development.
Many experts believe that people are the key to productivity. The excellent firms in the USA, according to Peters and Waterman (1982), also encourage productivity via people. Productivity through people does not involve too much cost. Akio Morita (1986), the pioneer of the big Sony Corporation, rightly says that: “Assets make things possible, but people make things happen”. It is people that make the difference between success and failure.
Drucker (1994) argues that union leaders have a tendency to resist changes. In his opinion, only voluntary and cordial cooperation can reduce workers’ resistance to change when they know that changes will not cause any inconvenience to them. Both employees and managers are concerned about organization and workplace productivity, because without it, management will not be able to provide unionized workers with high wages, benefits, and job security. To address these economic and productivity issues, union and management have entered into a number of joint cooperative programs such as quality circles and quality improvement teams, formal employee-management forums and joint committees, quality of working life activities, shared governance (co-determination councils), and employee involvement initiatives including self-managed teams. Employee-management forums are formal vehicles for bringing labor and management together under a spirit of cooperation and partnership. Darby (2006) surveyed 55 employers and 66 unions in Canada about labor-management committees. She concluded that joint committees have the potential to improve communication, result in fewer grievances, and enhance employee-management relations.
Methodology
This paper is based on both primary and secondary data. A total of 100 respondents were selected randomly from 10 different types of organizations. Respondents consist of labor leaders, workers, managers,
EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY
and employee directors. They were asked to state three most important factors affecting the employee-management cooperation of their enterprises. Ten respondents did not give any responses. A total of 270 responses from 90 respondents were obtained. With a view to getting a fair picture of the overall situation of labor-management cooperation, in addition to the question-answer method of the sample survey, the author had informal discussions with two of the respondents of each category. Relevant labor laws, books, and journals were also examined to know about employee-management cooperation in Bangladesh.
Improving Productivity Through Cooperative Employee-Management Relations
Under this circumstance, fostering union-management cooperation to solve the problem of organizational ineffectiveness cannot be ignored. Productivity improvement is the only way of addressing the challenge of globalization, which is characterized by international competition, deregulation, and automation. It also determines people’s standards of living within a particular country. Thus, the citizens of the highly productive country are likely to have notably higher standards of living than the citizens of a country with low productivity. Improved productivity mitigates the workers’ demand for higher wages and employers’ demand for higher return on investment. How does a business or industry improve its productivity? Numerous specific suggestions made by the experts for improving productivity generally fall into two broad categories: improving research and development (R&D) operation and increasing employee cooperation through participation (Pfeffer, 1998).
R&D activities are expensive and risky, but it does not mean that R&D is less important. The reality is that the poor developing countries like Bangladesh cannot easily increase R&D activities due to resource constraints (Akkas, 1994). But these countries can easily modify and change the existing management practices, particularly modify and change human resources management to enhance quality and productivity. Drucker (1994) rightly says, “Japanese firms succeed in the competitive business world by establishing a cooperative relationship between management and employee”. Now it is important to explain the concept of employee-management cooperation.
Concept of Employee-Management Cooperation
Employee-management cooperation is a state of relations where employee and management work together to accomplish certain goals using mutually acceptable means. It is the outcome of a continuous process of enhancing mutual trust and respecting through sharing information, discussion, consultation, and negotiation. It is a scheme of workers’ participation process on matters not covered by collective bargaining agreements. It should be fully integrated into organizational culture. People are the greatest asset of an organization and each individual has the potential to strengthen and change the organization. Good ideas are not reserved for management only a wide range of topics exist when employees and managers are recognized and addressed by all the parties, the potential for better solution exist.
Employee-management cooperation is often confused with collective bargaining, although these two are not the same or identical. Employee-management cooperation, as viewed by Weinberg (1988), is not an alternative to free collective bargaining, rather it extends collective bargaining beyond its traditional limits that is to deal with issues of mutual interest without impairing either party’s bargaining strength. Collective bargaining deals with matters of the divergence of interests, while labor-management cooperation deals with matters of common interest. The underlying principle is that there are many matters of common concerns to managers and workers, which can best be handled by cooperating. Employee-management cooperation is not a
84 EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY replacement for collective bargaining (Weihrich, 1996). Instead, it should be viewed as a supplement to
collective bargaining. Employee-management cooperation can be understood as any mode of bargaining or joint discussion in which the objective is to improve the well-being of both parties (Cooke, 1990; Kochan & Osterman, 1994).
Employee-management cooperation can occur by setting up an Employee Management Council (EMC). EMC is a voluntary association of representatives of workers and management who meet to identify and resolve issues of common interest (Gatchalia, 2012). These issues are normally separated from and outside of the scope of a contract or collective bargaining agreement if there is a union. A number of obstacles can be identified which prevent joint cooperative efforts between management and labor (Pfeffer, 1998). The main barriers are as follows:
(1) Managers may not like to accept the legitimacy of the union; (2) Union officials are ideologically found to oppose, not to cooperate with management; (3) Internal union politics may hinder forming cooperative ventures with management; (4) The fear among union members that cooperation with management may lead to the erosion of the
benefits that they have worked so hard to attain; (5) Critics also argue that innovative workplace practices undermine union power by co-opting employees by forcing the alignment of employee interests with those of management; (6) In some instances, employee-management committees or employee involvement forums may be considered unlawful if they are deemed to have been “set-up” by management as a means of usurping union prerogative.
Employee-Management Cooperation Scenario in Bangladesh
We are living in an interdependent world. It is a reality that we live in a borderless economy. We cannot avoid it. Unfortunately, the business firms of all the countries do not have equal access to this free world trade. It is productivity that makes the difference between success and failure. The developed countries are winning this trade war due to their higher productivity growth. They are almost monopolizing the benefits of free trade. The business organizations of poor countries like Bangladesh are facing big challenges unleashed by the globalization. Many industrial units are being closed down. Many people are losing jobs and thus living in abject poverty. Consequently, many young and bright people are leaving the country to change their lots. The country is lagging far behind in the race of employee productivity. Because of fierce international competition, worldwide customers are now able to choose among several international competitors.
Employee-management relations can be cooperative or they can be adversarial. As mentioned earlier, cooperative employee-management relations are a definite asset for a firm, especially for one in a competitive situation. Unfortunately, an adversarial relationship between management and organized labor has been prevailing in the country for the last few decades. Adversarial relations make it nearly impossible to implement significant and lasting change that will benefit customers. These poor relations between union and management may be responsible for poor industrial performance. Adversarial situations can be marked by a number of confrontations between management and labor in the country. Workers are highly politicized and fragmented. They are more loyal to the party to which they belong and less to the organization. Anderson, Hossain, and Sahota (1991) maintain that unions act more as political entities, not as economic agents in Bangladesh. Every political party has its own labor front (Akkas, 2001b). They often engaged in inter-union rivalries and conflicts.
EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY
Most of the time, the problem starts when a union affiliated with one political party tries to overthrow the existing Collective Bargaining Agent (CBA) affiliated with a different political party. This is done when the mentor—political party gets elected to hold state power. Management cannot take proper action against these unions having political affiliation. All these non-cooperative activities may result in decline of output and employment (Mondal, 1998). Now the relevant questions are: What are the barriers that stand in the way of the effective union-management cooperation in the country like Bangladesh? What are the ways out? This paper addresses these burning issues in the context of Bangladesh.
Impediments Standing in the Way of Employee-Management Cooperation in Bangladesh
The reasons for lack of cooperation identified by the managers and union leaders are many and varied in nature. Both parties have a tendency to claim themselves fair and honest and put blame on another party. Among the most important of these barriers are the following:
(1) Most of the managers are reluctant to give up their exclusive control over organizational policy and strategy. They think that decision-making is their job, not the union or workers’. Managers think that the participation committee may threaten their prerogatives considerably. The decision-making authority in Bangladeshi organizations is highly centralized (Akkas, 2001a);
(2) Managers are reluctant to take the risk involved in depending on others. They do not trust the subordinates, and consequently, they do not like to share power with the workers; (3) Managers bring allegations against the union for their political affiliation. According to managers, politicization of union is the root of many formidable problems such as workers’ loyalty to the political party, multiple unions, and inter-union rivalries. In Bangladesh, trade unions are product of multi-party politics. They are more loyal to the party to which they belong and less to the organization. All these non-cooperative activities may result in decline of output and employment (Mondal, 1998);
(4) Managers underestimate the intelligence and potentials of their subordinates. They hold the view that most of the union leaders are not well-educated and trained, and consequently, they cannot meaningfully participate in the decision-making process;
(5) Managers complain that union’s leaders often make unreasonable demands. They do not consider the financial ability of the organization. They are more concerned about their rights and almost indifferent to their duties and obligations, that is higher productivity;
(6) Managers make allegations against union leaders’ involvement in corruption. A manager of a commercial bank says, “Union puts undue pressure on managers to get a favorable decision and even union leaders are engaged in extorting money from management”. Union leaders are rated very poor in ethical and moral practice;
(7) The union alleges that managers do not treat them as equal partners of management in joint-bodies. “We are not equal partners in reality”, says a union leader; (8) Union leaders allege that a scheme of cooperative management is not given adequate publicity. This has resulted in low awareness and appreciation among workers in labor-management cooperation scheme; (9) Union leaders also ridicule the idea of playing managers. After all, they are not paid to manage. Union leaders feel that cooperative participation is a waste of time for them, because it serves management’s interest; (10) Union leaders feel that managers may use cooperative committee as an alternative to the union. Union leaders feel that in the name of cooperation, managers may weaken the union’s bargaining power;
86 EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY (11) Union leaders allege that managers are biased and unfair in their dealings with workers. They play
dirty game of rule and divide with unions; (12) Union leaders complain that their managers are very self-centered. Employers and managers regard their enterprises as their personal property and seek a higher return on their investment without due regard to the workers’ well-being. For example, the minimum wage in the Ready Made Garments (RMG) sector is Taka 5,300 ($68) per month. Employers have a tendency to monopolize the financial gains;
(13) Unions resist productivity enhancement programs when these programs become a threat to their job security. In the name of cooperation and efficiency improvement, management may reduce the number of workers;
(14) Unions may perceive that there are no adequate rewards for accepting additional responsibility. Unions claim that managers and employers monopolize almost all benefits. There is no need to extend cooperation; (15) Another important barrier to sound employee-management cooperation is the weak communication link between management and workers’ representatives and between workers’ representatives and workers.
How to Foster Sound Employee-Management Cooperation in Bangladesh
Institutionalizing cooperative relationships is not an easy task. Management, workers, and union leaders must agree on a concept of cooperation, participation, and frank and open consultation for all kinds of production problems. An employee-management cooperation effort must be uniquely tailored to reflect the needs and culture of a specific organization. While the factors that are significant in the successful operation of labor-management cooperation committees differ from country to country, management, union leaders, experts, and political leaders highlighted some crucial points, which are discussed below:
(1) Without management support and commitment, cooperative labor-management schemes cannot succeed. Top management and workers must realize that industrial peace or progress lies with the cooperation between labor and management. They must believe the fact that “either cooperate or perish”. Managers must provide a vision for the firms and inspire others to commit themselves to this vision;
(2) The attitudes of managers toward workers must be positive. Managers must treat their people with respect and dignity because people have a lot of positive potentials. When employees are well treated by the boss, they are likely to develop a positive attitude toward supervision and management (Luthans, 2008). In Japan, however, managers and workers see themselves as one group, and the result is that everyone is highly committed and motivated. The basic idea underlying the Japanese approach is to bring management and workers together as partners;
(3) Managers must have confidence in the people. Trust in subordinates is the foundation for delegating authority. They must set a good example of trust. A manager gets things done through people. Effective managers are increasingly being described as coaches rather than bosses. He must respect the individuality of a worker;
(4) Unions should be provided with all relevant information. The trade unions of the Toyota Company, for example, receive information about the company’s financial position and production schedules. The result is a more efficient production and happier employees;
(5) Guaranteed employment security is essential to utilizing employee potential. People resist productivity improvement schemes when they feel threatened to lose jobs. This threat of losing jobs due to increased productivity is termed as soldiering by F. W. Taylor (1917), the father of scientific management. Japanese
EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY
employees are innovative and welcome to changes because they know that their jobs are well-secured. Changes will not cause displacement. Resistance to change can slow the innovation process;
(6) Profit sharing, gain sharing, and employee stock ownership plan (ESOP) incentives can be used to motivate employees to perform better. Advocates contend that the workers extend support and cooperation to increase productivity if they are convinced that they will enjoy adequately the benefits derived from the increased cooperative efforts (Ouchi, 1981). All employees will work together toward the organization’s best interest;
(7) Management must reward workers for their creative behavior. Managers must have tolerance for mistakes, make employee feel that mistakes will not be punished, focus on mistakes as learning opportunities; (8) The manager must create a family friendly working environment. Excellent companies of USA, according to Peters and Waterman (1982), introduced flexible working schedule and this informal organizational climate may result in robust company growth;
(9) Employees would be more responsive to accept change if they participate in identifying and choosing among improvement ideas. Managers must create a climate that contributes to a free and open exchange of ideas. Union and management should jointly set productivity growth goals (Cascio, 1995; Griffin, 2000). Union leaders demand a true participation in managerial decision-making at all levels, including union representation on the board of directors. Union representation on the board is highly practiced in Germany. This practice is called self-determination;
(10) Employee-management relations or cooperation is about the interactions between workers and employers, and between their respective organizations, as influenced by government and other work-related issues. Communication lies at the very heart of manager-employee relations and the quantity and quality of communication between management and workers at the enterprise level are significant factors in establishing and maintaining harmonious industrial relations. Communication channels should ideally provide management with feedback regarding programs or policies and their implementation;
(11) Empowering employee may be a great factor for promoting effective employee-management cooperation. It adds dynamism to the employer-employee relationship by giving workers not only a voice in decision-making on matters that affect their interest and welfare, but also an opportunity to contribute creative, innovative ideas to achieve enhanced product or service quality and productivity;
(12) Politicization of trade union must be stopped in the greater interest of the country, because the inter-union rivalry has hindered the effectiveness of employee participation in cooperative activities.
Conclusions
It can be concluded that both management and workers must realize the fact that they can only meet their demand for increased profit and wage by enhancing productivity, which depends, to a large extent, on cooperative relationships between them. Without productivity improvement, organizations cannot withstand the challenge of fierce international competition, which in turn may eventually jeopardize workers and managers’ jobs. Organizational survival will depend on its ability to increase productivity. Managers and workers, therefore, should forget their narrow vested interests and work together as a cohesive team for the greater interest of the organization in particular and the country in general. Both are equal partners of industrial peace and progress. They are no more enemies; rather the enemy is international competitors. Employers and union leaders have a joint responsibility for achieving joint labor-management collaboration.
88 EMPLOYEE-MANAGEMENT COOPERATION: THE KEY TO EMPLOYEE PRODUCTIVITY
References
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Review, 20(2), 21-42. Akkas, M. A. (2001b). Politicization of trade unionism in Bangladesh: Causes and consequences. Journal of Business Studies, 22(1), 10. Ali, M. A., & Shams, M. N. S. (2000). Trade unionism in Bangladesh—A survey of the impact of trade unionism on wage,
employment and work environment in the manufacturing sector. The Jahangirnagarn University Review, 11(1), 27-46. Anderson, H., Hossain, N., & Sahota, G. S. (1991). The effect of labor laws and labor protection on employment and industrialization in Bangladesh. The Bangladesh Development Studies, 19(1), 23-35. Cascio, W. F. (1995). Managing human resources: Quality of work life and productivity, and profit. New York: McGraw-Hill Inc. Cooke, W. N. (1990). Labor-management cooperation. Kalamazoo, M.I.: W.E. Upjohn Institute for Employment Research. Cooke, W. N. (1998). Factors influencing the effect of joint union-management programs on employee-supervisor relations.
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Centre, Queen’s University, Kingston, Ontario. Davis, K. (1990). Organizational behavior at work (10th ed.). New Delhi: McGraw-Hill Companies, Inc. Drucker, P. F. (1994). The practice of management. New York: Harper and Brothers. Gatchalia, G. C. (2012). Workplace cooperation and labor management council. Asian Productivity Organization, Tokyo, Japan. Griffin, R. W. (2000). Management. Singapore: McGraw-Hill. Kochan, T. A., Katz, H. C., & McKersie, R. B. (1984). The transformation of American industrial relations. New York, N.Y.:
Basic Books. Kochan, T., & Osterman, P. (1994). The mutual gains enterprise. Boston, USA: MIT Press. Luthans, F. (2008). Organizational behavior. New Jersey: McGraw-Hill Inc. Mondal, A. H. (1998). Trade unionism, wages and labor productivity in the manufacturing sector of Bangladesh. Research Report
No. 133, BIDS, Dhaka. Morita, A. (1982). Made in Japan. New York: McGraw-Hill. Ouchi, W. (1981). Theory Z: How American business can meet the Japanese challenge. Reading, M.A.: Addision-Wesley. Peters, T. J., & Waterman, R. H. (1982). In search of excellence. New York: Harper and Row. Pfeffer, J. (1998). The human equation: Building profits by putting people first. Boston, M.A.: Harvard Business School Press. Taylor, F. W. (1917). The principles of scientific management. New York: Harper and Brothers. Weihrich, H. (1996). Management excellence: Productivity through cooperation. New York: McGraw-Hill Book Company. Weinberg, R. S. (1988). The mental advantage. Champaign, I.L.: Leisure Press.
Journal of US-China Public Administration, February 2015, Vol. 12, No. 2, 89-104
doi: 10.17265/1548-6591/2015.02.002
DAVID PUBLISHING
The Relationships Among Four Factors and Turnover Intentions
at Different Levels of Perceived Organizational Support
Thanawatdech Thirapatsakun, Chanongkorn Kuntonbutr, Panisa Mechida Rajamangala University of Technology, Thanyaburi, Thailand
The last few years have confirmed what was mostly feared: Thai private hospitals industry has affected from a shortage of professional nurses and turnover intention. This paper occurs mainly about the relationships among four factors and turnover intention at different levels of perceived organizational support are clarify for the mentioned above. The sample was 890 professional nurses who obtain a professional nurse license and are entitled to perform their work in hospitals in Thailand. The results revealed that three components job demand, work schedule flexibility, and financial reward, best explained turnover intention. The result indicated that job demand had an influence on turnover intention through work engagement. Moreover, perceived organizational support had an effect on turnover intention through work engagement. Additionally, there was insignificant difference in terms of the fit of the structural models for the high and low level of perceived organizational support, indicating there is no moderating effect of perceived organizational support on the relationship between job demand and work engagement. This paper synthesizes some suggestion and discusses the relationships among four factors and turnover intention at different level of perceived organizational support to improve to reduce causing and affecting of worker shortage and turnover intention.
Keywords: context of different levels, perceived organizational support, turnover intention
Since 2005, the Thai private hospitals industry has faced significant effects from a shortage of professional nurses and turnover intention. Meanwhile, the government has promoted Thailand as the regional center of excellent health care and as the medical hub in Asia, and the Thai private hospitals industry benefits from the 2015 launch of the Asian Economic Community (AEC). Regarding medical tourism in Thailand, the volume of international patients traveling to Thailand increased by 16% and generated US$ 1.3 billion in 2007, with a prediction of US$ 4.3 billion in 2012 (Kanchanachitra et al., 2012, p. 775). However, while the annual increase of 16% in international patients is maintained during 2005 to 2015, the private sector needs 49,991 nurses (Pagaiya & Noree, 2009). Thailand has well-positioned itself to become the medical hub of Asia, with at least
Corresponding author: Thanawatdech Thirapatsakun, Ph.D., Managing Director of Thayawat Engineering and Construction Co., Ltd., special instructor in Faculty of Business Administration, Rajamangala University of Technology, Thanyaburi, Thailand; research fields: quality work, high performance work systems, turnover intention, productivity management, Energy Management System Audit, construction management, and employment relation and regulation in Thailand. E-mail: thanawat8@hotmail.com.
Chanongkorn Kuntonbutr, D.B.A., associate professor, dean, Faculty of Business Administration, Rajamangala University of Technology, Thanyaburi, Thailand; research fields: international business and international management, industrial relations, employment relation, and labour regulation in Thailand. E-mail: Ck959@yahoo.com.
Panisa Mechida, Ph.D., associate professor, Faculty of Business Administration, Rajamangala University of Technology, Thanyaburi, Thailand; research fields: organizational performance and employee well-being, and tourism marketing strategy in Thailand. E-mail: mechinda.panisa@gmail.com.
90 RELATIONSHIPS AMONG FOUR FACTORS AND TURNOVER INTENTIONS
400 hospitals of which 130 private general hospitals are in the Bangkok area and 299 private general hospitals are in the urban area (Ministry of Public Health, 2005). The term “medical tourism” describes tourists who travel overseas to obtain healthcare, dental, and surgical care while having the opportunity to combine it with visiting tourist attractions of that country. In 2004, Thailand’s Government adopted a five-year strategic plan to develop the country into the “Center of Excellent Health of Asia”. This strategic plan, advanced by the Ministry of Public Health, concentrated on three main areas of health care: (1) medical service and healthcare services which include spa and traditional massages; (2) long-stay healthcare products and services; and (3) Thai herbal product [The Thai Board of Investment (BOI) Review]. Due to an approval of the strategic plan to develop Thailand, it aims to promote the related sectors consisting of medical care service, health promotion tourism, and Thai herbal and health products. The core business of the medical care service in the private hospital sector has now more than a hundred private hospitals that is able to accommodate foreign customers all over the country. Medical tourism is defined to people traveling as being able to obtain medical care service in a standard hospital or medical center. The activities include treatments, health prevention, and health rehabilitation (e.g., physical check-ups, medical treatments, dentistry, cosmetics surgery, and transsexual surgery). The target areas are divided into three based on the characteristics of a potential in terms of tourism and medical care service. The potential private hospitals refer to the hospitals which fulfill the criteria such as providing medical care services with modern medical equipment and technology by the specialists/doctors and providing convenient and quick services with hospitality. In addition, these private hospitals have the potential to accommodate foreign tourists with persons to provide assistance (i.e., interpreter and the foreign client care staff) and the facilities such as comfortable rooms, international foods, multimedia, and communication systems.
Based on several reports, however, it is clear that the nursing profession in Thailand is in crisis. The problems concerning the nursing practice include the work environment, remuneration, and opportunities for advancement. Some private hospitals also suffer from shortages of personnel, because many nurses leave for continuing education, resign as a result of dissatisfaction with their welfare or the administration, or pursue jobs in other fields (Srisuphan et al., 1998). Simones, Villeneuve, and Hurst (2005) noted that the nursing shortage appears to be caused by several factors including fewer young people entering the work force, the low social value of nursing, and the negative perception of the working conditions of nurses. Additionally, nurses perceive an increase in job stress. At the same time, there is an increasing importance of new employees, acknowledgment of advancements in technology, globalization, demographic trends, constantly changing work roles, and expectations along with increasing work demands, which could lead to work overload, job dissatisfaction, and job stress (Beehr & Glazer, 2005). Thus, employers are exploring various incentive strategies to improve retention of their workforce and to support employees’ growth aspirations. This study was conducted to investigate the factors that decrease turnover.
This study contributes to the existing literature on the relationships among job demands, work engagement, work schedule flexibility, financial reward, and turnover intentions in the context of different levels of perceived organizational support and addresses strategic implications for practitioners. First, this study examined job demand, work engagement, work schedule flexibility, and financial reward on turnover intentions. These factors may influence different levels of perceived organizational support that is moderated between job demand and work engagement, both of which are crucial for practice and gap areas of research. Second, the study provides better understanding of the perceived organizational support that may be an extrinsic motivator
RELATIONSHIPS AMONG FOUR FACTORS AND TURNOVER INTENTIONS
to employees because it fosters employee engagement, creating low-level turnover intention. Another purpose of this study was to examine perceived organizational support as a possible moderating variable with multi-group equivalent applications for determining a measurement that operates equally across the different populations of the group in the model approach.
Literature Review
There is an abundance of research that aims to explain the relationships among job demand, work engagement, work schedule flexibility, financial reward, and turnover intentions in the context of the different levels of perceived organizational support. Employees who have to work increasingly long work hours may have different work and leisure expectations, but according to one article, employees want to work fewer working hours (Major, Klein, & Ehrhart, 2002). Furthermore, long working hours may result in other negative effects, such as trouble in balancing home and work life leading to psychological distress (burnout), decreased performance, and decreased job satisfaction (Frone, Russell, & Barnes, 1996; Major et al., 2002). Work schedule flexibility enhances employees’ quality of life at work and lessens the degree to which work and family roles conflict (Baltes, Briggs, Huff, Wright, & Neuman, 1999; Major et al., 2002). In addition, Rosin and Korabik (2002) found work schedule flexibility is beneficial in motivating employees, particularly in high performing professions, and can decrease turnover. Hence, hypothesis 1 (H1) was formulated as follows:
H1: Work schedule flexibility has a negative effect on an employee’s turnover intention. According to the index of organizational reactions (IOR), Kahn and Byosiere (1992) found that employees
would feel obligated to continue to work if the organization did not provide financial rewards or compensation for their resources and benefits, and employees are more likely to disengage from their work role. Rhoades, Eisenberger, and Armeli (2001) found that if employees did not receive fair and just rewards, they would withdraw and disengage from the organization. Financial reward systems are particularly useful for controlling the turnover of employees who are high performers, because the more rewards provided under an employee performance contingent system the more satisfied and less likely to leave these employees would be (Allen & Griffeth, 2001). Without performance contingent rewards, the relationship between financial rewards and turnover intention becomes positive such that individuals who are not rewarded are much more likely to leave rather than employees who are rewarded. While this may be true, there may be many factors that cause turnover, not just financial rewards (Trevor, Gerhart, & Boudreau, 1997). In addition, based on the workplace culture, rewards for task completion show high satisfaction and low turnover and are indicators of the desire of employees to stay in a workplace (March, Guetzkow, & Simon, 1958). The rationale and evidence provided in the earlier studies led to hypothesis 2 (H2), as follows:
H2: Financial reward has a negative effect on an employee’s turnover intention. Maslach and Jackson (1986) supported the hypothesis that states that the presence of specific demands
(work overload and personal conflicts) predicts burnout and dissatisfaction, which increases turnover. When employees are stressed and have personal conflicts within their jobs, they experiences burnout or health problems. These situations caused them to leave their organization. Based on these ideas, the hypothesis 3 (H3) was formulated as follows:
H3: Job demand (JD) is positively related to turnover intention (TI). Demerouti and Cropanzano (2010) as well as Schaufeli and Salanova (2007) supported the idea that
engagement is associated with employees’ positive attitude, proactive job behaviors, higher levels of
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psychological well-being, and increased individual job and organizational performance. These factors decrease turnover intention. Moreover, Demerouti, Bakker, Nachreiner, and Schaufeli (2001) conducted a study of employees with high work demands and controlled for the presence of high time pressure and higher levels of engagement. Job demands were positively related to burnout and disengagement (Schaufeli & Bakker, 2004). In addition, Hu, Schaufeli, and Taris (2011) and Llorens, Bakker, Schaufeli, and Salanova (2006) found that job demands were negatively associated with work engagement. Low job demands may have a positive effect on engagement. Harter, Schmidt, and Hayes (2002) supported the finding that engagement levels were positively correlated with business unit performance and the level of turnover intention of employees. Thus, hypothesis 4 (H4) was expressed as follows:
H4: The relationship between job demands (JD) expressing negative turnover intention (TI) are mediated by work engagement (WE). Perceived organizational support is defined as the extent to which employees perceived how an organization values an employee’s contributions and cares about his or her well-being (Eisenberger, Huntington, Hutchinson, & Sowa, 1986). Bishop, Scott, and Burroughs (2000) supported the idea that organizational support can positively influence organizational commitment and thus reduce turnover intention. Moreover, Rhoades et al. (2001) stated that perceived organizational support and affective organizational commitment are associated with significant reductions of voluntary turnover. In addition, Stinglhamber and Vandenbergehe (2003) also stated that perceived organizational support is able to reduce turnover. Some investigators proposed that perceived organizational support heightens performance, decreases absenteeism, and reduces the possibility of employees quitting their jobs (Mowday, Porter, & Steers, 1982; Eisenberger et al., 1986). According to Kahn (1990), a supportive environment allows employees to experiment and try new things and even to fail without fearing the consequences. In addition, perceived organizational support may lead to positive effects through employee engagement (Sak, 2006). Employees will likely be more committed to the organization than when they do not perceive organizational support (Dessler, 1999). As a result, hypothesis 5 (H5) was formulated as follows:
H5: The relationship between perceived organizational support (POS) and turnover intention (TI) is negative and is mediated by work engagement (WE). Kahn (1992) supported underlying variables related to or linked with H4 and stated that perceived organizational support as a moderating variable can be generalized from psychological safety involving a sense of being that is able to exhibit and employ the self without negative consequences. Moreover, Sak (2006) stated that perceived organizational support might lead to positive consequences through an employee’s engagement. Hence, hypothesis 6 (H6) was expressed as follows:
H6: Perceived organizational support (POS) moderates the relationship between job demands (JD) and work engagement (WE) such that the relationships between transformational and transactional behaviors are related to job demands (JD) and to work engagement (WE).
Benchmarks in the literature have focused on the models of the antecedents of work engagement that occur when an employer experiences the suitable blend of workload, control, reward, sense of community fairness, and value congruence (Maslach, 1998). Possible positive consequences of engagement for an organization include outcomes such as increased profit and productivity, increased customer satisfaction, decreased turnover, and a sense of employee well-being with a higher job score (Harter et al., 2002). In addition,
RELATIONSHIPS AMONG FOUR FACTORS AND TURNOVER INTENTIONS
the research of Schaufeli and Bakker (2004), Hallberg and Schaufeli (2006), and Sak (2006) supported the relationship between engagement and turnover intentions (i.e., work engagement negatively predicted an intention to leave). However, there is a relationship between engagement and turnover where an employee with low engagement is considered to be a “threat” to the organization and has a high risk of turnover (Gostick & Elton, 2007). Thus, the hypothesis 7 (H7) was constructed as follows:
H7: Work engagement (WE) has a significant negative relationship to the outcome variables of turnover intention (TI).
Methodology
The research method is quantitative. Specifically, this study examined the associated hypotheses for different variables. Figure 1 illustrates the conceptual framework of the study.
Figure 1. The conceptual framework. Notes. POS—Perceived Organizational Support, JD—Job Demand, WE—Work Engagement, TI—Turnover Intention, WS—Work Schedule Flexibility, FR—Financial Reward; * a comparison of the POS of a professional nurse group (low level and high level of POS groups).
Research Design
The data used to test the hypotheses were collected from a sample of 890 professionals who had worked in the private health care service sector (medium and large sized hospitals with more than 51 beds) of medical tourism in Thailand. To ensure valid and reliable research procedures, on site interviews were conducted with
40 volunteers during participation in a pre-test phase. Responses to closed-ended questions using a 7-point Likert scale survey were analyzed, and then, the statistical relationships were determined.
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Measurement of Variables (Exogenous, Endogenous)
Data were collected from questionnaires with eight sections consisting of personal demographics and work status, job demands, work engagement, perceived organizational support, turnover intention, work schedule flexibility, and financial reward. The 9-item scale in the perceived organizational support section is based on unidimensionality of Eisenberger et al.’s (1986) scale. Cronbach’s alpha for this scale was 0.90 (Rhoades & Eisenberger, 2002). The 26-item scale in the job demand section was adopted from the job content questionnaire (JCQ) of Karasek’s (1985) scale. Cronbach’s alpha for this scale was estimated ranging from