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Redefining the Human Resource
Paradigm in Changing Cultural, Social
and Economic Environment
Chief Editor
Dr. S. S. Bhakar
Editor
Dr. Gaurav Jaiswal
Published by
Prestige Institute of Management, Gwalior, MP, India
And
Bharti Publications, New Delhi, India
Copyright © Prestige Institute of Management, Gwalior
All rights reserved, No part of this publication may be reproduced or transmitted, in
any form or by any means, without permission. Any person who does any
unauthorized act in relation to this publication may be liable to criminal prosecution
and civil claims for damages.
First Published, 2015
ISBN: 978-93-85000-10-2
Online Published in India:
Prestige Institute of Management
Opp. Deen Dayal Nagar, Airport Road,
Gwalior, MP - 474020, India
And
Bharti Publications
4819/24,
Floor, Ansari Road, Darya Ganj
New Delhi - 110002, India
3rd
ISBN: 978-93-85000-10-2
Page 3
Preface
Redefining the Human Resource Paradigm in Changing Cultural, Social and
Economic Environment
The success of human resource department used to be evaluated on the basis of
Organizational loyalty among the employees of all the hierarchical positions in the
organization. With change in focus of the employees from organizational loyalty to
occupational or professional commitment has made this task extremely difficult. The
employees today seek psychological contract with own inner spiritual self rather than with
the organizations making the task of HR professional further difficult to convert these
employees into loyal employees. The employees today have started focusing on acquiring
skills for the profession rather than organization specific skills. Employees are not satisfied
with the specific skills training required for fulfilling the responsibilities in the current
organization. Flat organizational structures have further reduced the inducements
(promotional avenues) that the HR executives had with them to keep the employees loyal
to the organization.
Social networking has made information flow between individuals rather than through
organizations. The information thus travels at lightning speed. Organizations, in order to
do well in this environment need to be flexible and responsive. Human resource personnel
need to reintegrate the processes, policies and system to take advantage of this
development. Social-networking has brought with it intense competition, liberalization,
through speed and accessibility across the globe. Fast paced changes social-networking will
continue to dominate and revolutionize the business landscape well beyond the 21st
century posing new challenges and opportunities to the HR professionals.
Employees today have access to the information about opportunities based on their skills
across the globe for work. Therefore, providing competitive salaries and other benefits with
your local competitors is not going to be effective for retaining employees.
The presence of multinational companies across multiple countries has brought workers
belonging to diverse cultures together working on common projects. The cross cultural
work force requires to be handled with far more cultural, social and religious sensitivity.
The presence of multiple generations working together have further complicated the
matters for HR department.
Managers are continually being confronted with new and ever-changing competitive
pressures from deregulation, globalization, ubiquitous connectivity and the convergence of
industries and technologies. Managers’ ability to respond rapidly to these challenges is
based on having a sophisticated and facile organizational and technical infrastructure, and
a degree of information-technology flexibility that traditional approaches cannot provide.
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Page 4
Increasingly, even at global companies known for their competitive and technical savvy,
the gap between emerging strategic direction and HR department’s ability to support it is
significant and debilitating.
Organizations now expect HR to contribute in strategy formulation and align HR strategy
to the organizational strategy through returns on investment computed for each strategic
initiative. This requires a significant shift in orientation as current HR professionals justify
their strategic initiatives through computation of reduction in cost rather than benefits in
financial terms that the strategic initiative if likely to provide.
This book is based on the selected research papers from the ones that were presented in the
first National HR seminar organized by Prestige Institute of Management, Gwalior on
November 01, 2014. The book brings together research contributions from several
academics and industrial professionals on the main theme of the seminar ‘Redefining the
Human Resource Paradigm in Changing Cultural, Social and Economic Environment’
and provides understanding on the term sustainability and has comprehensive coverage
on managing sustainability through innovations in the process of innovating. The current
book has been organized to cover ‘Redefining the Human Resource Paradigm in
Changing Cultural, Social and Economic Environment’.
The book has been divided into three sections. The first section includes research papers on
recent developments in the area of Human Resource Management. This section includes
Eight chapters, they are: Evaluating Impact of Market Orientation on Organizational
Commitment and Team Spirit among the Employees; Transformational Leadership,
Organisational Culture and Climate among Bankers; Factors Affecting Employees
Commitment towards Organization with Special Reference to Service Sector; Assessment
of Impact Different Compensation Plans on Organizational Commitment and Job
Satisfaction; Customer Perception and Satisfaction of Service Quality in Public and Private
Sector; Antecedents of Personal Financial Planning - A Demographic Study; Employee
Relationship Management (ERM): An Investigation in Insurance Sector; Repositioning
Leadership Development: A Practitioner’s Perspective.
The Second section contains eleven chapters on Human Resource Management in changing
political, social and economic environment. They are: Impact of Student Attitude and
Perception toward Internet Learning; Impact of Organisational Climate on Motivation and
Job Satisfaction of Middle Level Executives: a study of manufacturing industries of
Gwalior region; Perceived Organizational Support and Withdrawal Intentions: A Study
Among Faculty Members; A Study of Determinants of Spending and Saving Behaviors of
Non-Working Women; Effect of Store Image on Consumer Store Brand Purchase
Frequency & Perceived Quality of Store Image; Determinants of Informal Groups in
Workplaces - An Empirical Study; Organization Climate Influencing Job Satisfaction and
Job Performance; Investors Psychology Towards Investment in Gold; Talent Management
With Special Reference to “IBM”; Work life Balance: A social Issue in redefining Human
Resource Paradigm; Redefined HR practices in Indian software Industry
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Page 5
The Third and last section of the book contains eleven chapters on application of Human
Resource Management concept in other management areas. They are: Gender Disparities in
Completing School Education in India; Interaction of Key Economic Variables and Stock
Market in India; Organizational Trust, Quality of Work Life and Job Satisfaction: A Study
on Banks; Behavioral Traps in Investing; Talent Retention: A Major Challenge in Modern
Corporate Culture; Study of hotel employee’s satisfaction in Jharkhand; Organizational
Citizenship Behaviour: A Road Ahead; A New Beginning at the Spark Golf Resort; Are
you employable?
The book will provide greater insights into the new developments in the area of Human
Resource Management in the changed cultural, social and economic environment. The
research papers included in the book are a useful source for the scholars and researchers
looking for base material in the area of Human Resource Management.
EDITORS
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Page 6
Table of Contents
Table of Contents ...................................................................................................................................... 7

SECTION – I .................................................................................................................................... 13

RECENT DEVELOPMENTS IN THE AREA OF HUMAN RESOURCE MANAGEMENT ...................... 13

Evaluating Impact of Market Orientation on Organizational Commitment and Team Spirit among
the Employees: A Study of Banking Industry ................................................................................. 14
Ruturaj Baber, Prerana Baber and Dr. U.N Shukla......................................................................... 14

Transformational Leadership, Organisational Culture and Climate among Bankers .................... 22
Gaurav Jaiswal and Prof. S. K. Singh .............................................................................................. 22

Factors Affecting Employees Commitment towards Organization with Special Reference to
Service Sector................................................................................................................................. 32
Monika Kanchan and Monika Jain ................................................................................................. 32

Assessment of Impact Different Compensation Plans on Organizational Commitment and Job
Satisfaction..................................................................................................................................... 40
Silki Gupta ...................................................................................................................................... 40

Customer Perception and Satisfaction of Service Quality in Public and Private Sector ................ 46
Amit Kumar and Garima Mathur ................................................................................................... 46

Antecedents of Personal Financial Planning - A Demographic Study ............................................ 53
Navita Nathani ............................................................................................................................... 53

Employee Relationship Management (ERM): an investigation in Insurance sector at Gwalior .... 63
Pranshi Singh .................................................................................................................................. 63

Repositioning Leadership Development: A Practitioner’s Perspective ......................................... 79
Shilpa Kabra Maheshwari and Jaya Yadav ..................................................................................... 79

SECTION – II ................................................................................................................................... 90

HUMAN RESOURCE MANAGEMENT IN CHANGING POLITICAL, SOCIAL AND ECONOMIC
ENVIRONMENT .............................................................................................................................. 90
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Page 7

Impact of Student Attitude and Perception toward Internet Learning ......................................... 91
Amitabha Maheshwari, Umesh Holani and Abhijeet Saban .......................................................... 91

Impact of Organisational Climate on Motivation and Job Satisfaction of Middle Level Executives:
a study of manufacturing industries of Gwalior region ............................................................... 106
Richa Banerjee and Subeer Banerjee ........................................................................................... 106

Perceived Organizational Support and Withdrawal Intentions: A Study among Faculty Members
..................................................................................................................................................... 116
Chanda Gulati, Nischay K. Upmanyu and Pratiksha Kulshrestha ................................................. 116

A Study of Determinants of Spending and Saving Behaviours of Non-Working Women ............ 123
Nandan Velankar, Neha Velankar, Urvashi Garud, Tanya Singh and Ratan Prabha Chauhan ..... 123

Effect of Store Image on Consumer Store Brand Purchase Frequency & Perceived Quality of
Store Image .................................................................................................................................. 134
Prabhat Kumar Singh Kushwah .................................................................................................... 134

Determinants of Informal Groups in Workplaces - An Empirical Study ...................................... 144
Shilpa Sankpal, Nischay Upamannyu, Vivek Gaur and Avadhesh Rathor .................................... 144

Organization Climate Influencing Job Satisfaction and Job Performance ................................... 154
Sunil Misra and Vineet Jain .......................................................................................................... 154

Investors Psychology towards Investment in Gold ...................................................................... 168
Vinod K. Bhatnagar, Shilky Yadav and Shilpa Yadav .................................................................... 168

Talent Management with Special Reference to “IBM” ................................................................ 181
Nutan Chauhan ............................................................................................................................ 181

Work life Balance: A social Issue in redefining Human Resource Paradigm................................ 197
Dr. Anita Singh ............................................................................................................................. 197

Redefined HR practices in Indian software Industry ................................................................... 205
Ram Kumar Paliwal ...................................................................................................................... 205

SECTION – III ................................................................................................................................ 211
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
APPLICATION OF HUMAN RESOURCE MANAGEMENT CONCEPT IN OTHER MANAGEMENT
AREAS........................................................................................................................................... 211

Gender Disparities in Completing School Education in India ...................................................... 212
Tarika Singh, Seema Mehta, Manish Dubey, MD Shams Aghaz and Mayank Juneja .................. 212

Interaction of Key Economic Variables and Stock Market in India .............................................. 222
Tripti Tripathi ............................................................................................................................... 222

Organizational Trust, Quality of Work Life and Job Satisfaction: A Study on Banks ................... 230
Shikha Gurjar, Dr. Priyadarshini Nagori and Prati Raizada .......................................................... 230

Behavioral Traps in Investing ....................................................................................................... 237
Kavita Indapurkar ......................................................................................................................... 237

Talent Retention: A Major Challenge in Modern Corporate Culture........................................... 243
MANISHA RAJ ............................................................................................................................... 243

Study of Hotel Employee’s Satisfaction in Jharkhand .................................................................. 251
Praveen Srivastava ....................................................................................................................... 251

Organizational Citizenship Behaviour: A Road Ahead ................................................................ 259
Snigdha Dash ................................................................................................................................ 259

Are You Employable? ................................................................................................................... 275
Supriya Jha ................................................................................................................................... 275

A New Beginning at the Spark Golf Resort .................................................................................. 281
Priyanka Dubey, Madhavi Mishra and Rahul Pratap Singh Kaurav.............................................. 281

Human Resource Planning and Success of an Organization ........................................................ 284
Anita Sharma................................................................................................................................ 284

Enhancing the Livelihood of Rural People Through Sustainable Development: A Study Of IWMP
Of Shimla District ......................................................................................................................... 292
Promila Raita, Sandeep Paatlan and Jayati .................................................................................. 292
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List of Contributors
Abhijeet Saban
Student, Prestige Institute of Management, Gwalior
Amit Kumar
Student, Prestige Institute of Management, Gwalior
Anita Sharma
Assistant Professor, Dream Valley College, Gwalior
Avadhesh Rathor
Student, Prestige Institute of Management, Gwalior, MP
Chanda Gulati
Assistant Professor, Prestige Institute of Management, Gwalior
Dr Seema Mehta
Associate Professor, IIHMR, Jaipur
Dr. Amitabaha Maheswari
Assistant Professor, Prestige Institute of Management, Gwalior
Dr. Anita Singh
Associate Professor, IMS Ghaziabad, UP
Dr. Garima Mathur
Associate Professor, Prestige Institute of Management, Gwalior
Dr. Gaurav Jaiswal
Assistant Professor, Prestige Institute of Management, Gwalior
Dr. Jaya Yadav
Associate Professor, Amity Business School, Amity University,
Noida, India
Dr. Nandan Velankar
Assistant Professor, Prestige Institute of Management, Gwalior
Urvashi Garuda
Faculty (Management) ICM, Jiwaji University, Gwalior
Dr. Nischay K. Upmanyu
Assistant Professor, Prestige Institute of Management, Gwalior
Dr. Nutan Chauhan
Asst. Prof., Department of Commerce and Management, Shree Ram
Institute of Management and Technology, Dibai, BSR.
Dr. Praveen Srivastava
HOD (I/c), Department of Hotel Management and Catering
Dr. Priyadarshini Nagori
Faculty, SOS in Jiwaji University, Gwalior
Dr. Rahul P. S. Kaurav
Assistant Professor, Prestige Institute of Management, Gwalior,
India.
Dr. Richa Banerjee
Assistant Professor, Prestige Institute of Management, Gwalior
Dr. Shilpa Sankpal
Assistant Professor, Prestige Institute of Management, Gwalior
Dr. Subeer Banerjee
Dean, Maharaja Institute of Management & Technology, Gwalior
Dr. Sunil Misra
Associate Professor, Advent Institute of Management Studies,
Udaipur
ISBN: 978-93-85000-10-2
Page 10
Dr. Supriya Jha
Assistant Professor, Amity School of Business, Amity University,
Noida(U.P.)
Dr. Tarika Singh
Associate Professor, Prestige Institute of Management, Gwalior
Dr. Tripti Tripathi
Faculty of Management Studies, Jiwaji University, Gwalior(M.P),
Dr. U.N Shukla
Registrar, ABV Hindi Vishwavidhalaya, Bhopal
Dr. Vineet Jain
Assistant Professor, Advent Institute of Management Studies,
Udaipur
Dr. Vinod K. Bhatnagar
Assistant Professor, Prestige Institute of Management, Gwalior
Dr.Navita Nathani
Associate Professor, Prestige Institute of Management, Gwalior
Jayati
Research Scholar- IITTM- PTU- Collaborative Programme
Madhavi Mishra
Student, MBA 3rd semester, PIM-Gwalior, India.
Manish Dubey
Assistant Professor, Prestige Institute of Management, Gwalior
Manisha Raj
Assistant Professor, Amity School of Economics, Amity University,
Noida
Mayank Juneja
Alumni, Prestige Institute of Management, Gwalior
MD Shams Aghaz
Alumni, Prestige Institute of Management, Gwalior
Monika Jain
Research Scholar, Jiwaji University, Gwalior
Monika Kanchan
Research Scholar, Jiwaji University, Gwalior
Neha Velankar
TGT, St. Teresa's Sr. Secondary School, Gwalior
Prabhat K. Singh Kushwah
Assistant Professor, Prestige Institute of Management, Gwalior
Pranshi Singh
Student, Jiwaji University, Gwalior
Prati Raizada
Student, Prestige Institute of Management, Gwalior
Pratiksha Kulshresta
Student, Prestige Institute of Management, Gwalior
Prerana Baber
Research Scholar, Jiwaji University, Gwalior
Priyanka Dubey
Student, MBA 3rd semester, PIM-Gwalior, India.
Prof. Kavita Indapurkar
Professor, Amity School of Economics, Amity University, Noida
(U.P.)
Prof. S. K. Singh
Professor, SOS in Commerce & Business Studies, Jiwaji University,
Gwalior
Prof. Umesh Holani
Professor, SOS in Commerce & Business Studies, Jiwaji University,
Gwalior
ISBN: 978-93-85000-10-2
Page 11
Promila Raita
Research Scholar-HPU Shimla- Department of Economics
Ram Kumar Paliwal
Assistant Professor, Prestige Institute of Management, Gwalior
Ratan Prabha Chauhan
Prestige Institute of Management, Gwalior
Ruturaj Baber
Assistant Professor, Prestige Institute of Management, Gwalior
Sandeep Paatlan
Research Scholar-IITTM-PTU- Collaborative Programme
Shikha Gurjar
Assistant Professor, Maharaja Institute of Management &
Technology, Gwalior
Shilky Yadav
Student, Prestige Institute of Management, Gwalior, MP
Shilpa Kabra Maheshwari
Research Scholar, Amity Business School, Amity University,
Noida, India
Shilpa Yadav
Student, Prestige Institute of Management, Gwalior, MP
Silki Gupta
Research Scholar, Jiwaji University, Gwalior
Tanya Singh
Alumni, Prestige Institute of Management, Gwalior
Technology, BIT Mesra (Deemed University) Ranchi, Jharkhand.
Vivek Gaur
ISBN: 978-93-85000-10-2
Student, Prestige Institute of Management, Gwalior, MP
Page 12
SECTION – I
RECENT DEVELOPMENTS
IN THE AREA OF HUMAN
RESOURCE
MANAGEMENT
ISBN: 978-93-85000-10-2
Page 13
Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
Chapter 1
Evaluating Impact of Market Orientation on
Organizational Commitment and Team Spirit
among the Employees: A Study of Banking
Industry
Ruturaj Baber, Prerana Baber and Dr. U.N Shukla
ABSTRACT
The role of market orientation has been deeply evaluated and examined by the scholars all over the world. More
so ever, the business performance has been most examined outcomes of market orientation all over the
industries. Earlier researches have indicated that market orientation positively affects business performance
both economic and non-economic. The present study briefly examines the impact of market orientation on
behavioural outcomes of employees. The study is aimed towards to check whether market orientation has any
impact on organizational commitment or team spirit among the employees in banking sector. The sample of
217 senior executives was collected from Madhya Pradesh. Statistical tools like correlation and linear
regression were used to examine the collected data. The results of the study indicate that market orientation
positively affects both organizational commitment and espirit de corps among the employees.
Keywords: Market Orientation, Organisational Commitment, Team Spririt.
Introduction
Market orientation has been considered as an important tool for a firm’s superior performance and
long-term success in today’s highly competitive business environment.
Market orientation is
simply asserted as implementation of marketing concept. It is assuring that an organization is
performing activities described in the concept of marketing, that are ; (1) generation information
about customer and market; (2) distribution of information among the corporate functions of an
organization; (3) responding accordingly to the information disbursed. Market orientation has been
considered as a very important concept in the field of marketing in present times. The firms which
follow the concept of market orientation are trying enhance their “understanding of customers”
whilst constantly developing and delivering superior solutions to them through timely
responsiveness (Baber, 2014). The first attempts were made by Kotler (1977); Shapiro (1988) and
Payne (1988) to address the implementation issue of marketing concept. Later on the new
perspectives emerged which addresses implementation of marketing concept within marketing
literature, this was termed as market orientation. Kohli & Jaworski (1990); Narver & Slater (1990);
Ruekert (1992) and Deshpande', Farley, & Webster (1993) developed five different perspectives
which visualized market orientation as a key towards implementation of marketing concept. These
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
are: Decision-making perspective (Shapiro, 1988), market intelligence perspective (Kohli & Jaworski,
1990), culturally based behavioural perspective (Narver & Slater, 1990), strategic perspective
(Ruekert, 1992) and customer orientation perspective (Deshpande', Farley, & Webster, 1993). The
concept of marketing and its implementation has now taken pace in India during second decade of
21st century. The concept of market orientation has been adopted by most of the companies
belonging to various sectors in India. The major changes have been observed in services and
manufacturing sector.
One of the non-economic outcomes of Market Orientation has been organizational commitment. It is
the individual's psychological attachment to the organization (Wikipedia, 2013). Bhuian and AbdulMuhmin (1997) viewed organizational commitment as an intrinsic feeling or a set of intentions that
enhances the desire of an employee to stay with an organization. It is also expressed as the
obligation of an employee to stay with the organization (Hackett, Bycio, & Hausdorf, 1994). It was
found in the studies that commitment of employee was consequence of market orientation. Kohli
and Jaworski (1990) argued that implementing market orientation in an organization makes an
employee psychologically and socially content due to its benefits. It enhances the sense of pride
among the employees working for an organization. Jaworski and Kohli (1993) found a strong and
positive relationship between market orientation and organizational commitment and proved
organizational commitment as an outcome of market orientation.
Next important behavioural outcome of employees of market orientation is espirit de corps among
the employees. It means sense of team spirit among the employees. Henry Fayol (1916) defined
esprit de corps as “Promoting team spirit will build harmony and unity within the organization.”
Zeithmal, Berry, & Parsuraman (1988) suggested that enhanced team sprit among the employees
increased the perception of service qualty among the customers. Kohli and Jaworski (1990)
suggested that by implementation of market orientation in an organization could lead to
enhancement of esprit de corps. Their suggestion was tested empirically (Jaworski and Kohli, 1993),
a significant relationship was identified between market orientation and esprit de corps. Shoham
and Rose (2001) in their cross national study hypothesised a relationship between market orientation
and business performance in. Their results were parallel with previous studies (Kohli & Jaworski,
1990; Jaworski & Kohli, 1993; Siguaw, Brown, & Widing, 1994), thus implicating esprit de corps as a
consequence of market orientation.
The present study is aimed to examine the impact of market orientation on organizational
commitment and espirit de corps among the employees of private and public sector banks.
Review of literature
Glazer (1991) and Glazer and Weiss (1993), thoroughly examined the various dimensions of Market
Orientation on the strategic perspective given by Shapiro (1988). Glazer (1991), highlighted that
organizations should focus upon collection of information. He quoted examples of Fedex (USA),
American Airlines (USA), McKesson (USA) and Panasonic (Japan), these all organizations gained
competitive edge over other players in the market through their efficient information collection
systems (Baber, 2014).
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
Narver and Slater (1993) stated that “Market Orientation is a business culture committed to the
continuous creation of superior value for customers. The value of a seller to a buyer is the difference
between what the buyer perceives as the total benefits (want satisfactions) offered by the seller and
what the buyer perceives as the total money, time, and energy expenditures required to acquire and
use the perceived benefits.”
Narver and Slater (1995) stated that Market Orientation is perfected by entrepreneurial drive. It
results in creating a strong foundation for organizational learning. Authors also stated
organizational learning as an imperative factor of a market oriented organization and empirically
examined the effects on market orientation under different industry settings.
Maltz and Kohli (1996) in their article also suggested that managers should have assess to frequency
and formality of intelligence sharing and should implement various strategies to expand cross
functional allocation of intelligence.
Cervera, Molla', and Sanchez, (2001) conducted an empirical research on Market Orientation of
public organizations. The authors inspected precursors and consequences of market orientation in
public organizations. The authors via their study associated performance enhances with market
orientation. Hampton, Wolf, Albinsson, and McQuitty (2009) also empirically examined the
association between Market Orientation and level of professionalism of of professors at universities.
The study indicated that market orientation is positively associated with level of professionalism of
university’s professors and it lead towards enriched university performance. The positive after effect
of university performance was retention of student in the university for other courses too.
Bunic (2007) simulated the research of Jaworski and Kohli (1993) and examined in Croatian
manufacturing companies. The author agreed with the views of Jaworski and Kohli (1993) and
stated that “MO can improve a firm's non-economic performance, viewed as the function of
employees organizational commitment and espirit de corps”. The results of examination exhibited a
positive and extremely significant relationship between market orientation and espirit de corps.
Lings (2004) studied the construct of market orientation and also examined consequences of internal
market orientation in an organization. Author empirically examined the relationship between
internal and external market orientation. The results of the study indicated a positive and significant
relationship between internal market orientation and performance. The author also suggested that
internal Market Orientation results in employee satisfaction and fosters employee’s organizational
commitment.
Based upon the reviewed literature examining relationship between market orientation and espirit
de corps and organizational commitment following hypotheses are proposed:H1:- Overall Market Orientation positively affects organizational commitment of employees
of an organization.
H2:- Overall Market Orientation positively affects Espirit de corps among the employees of
an organization.
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
Figure 1.1: Proposed Model for the study
Market
Orientation
Organizational
Commitment
Esprit De
Corps
Development of Scale and Research Methodology
Primary data was collected for the research. The convenience sampling method was used to collect
the data to understand the market orientation of and its impact on organizational commitment and
espirit de corps among the employees of private and public sector banks of Madhya Pradesh. The
self-administered questionnaires were provided to the respondents. The MARKOR scale developed
by Jaworski and Kohli (1993) was used to measure level of market orientation. 5-point Likert type
scale was used to record the responses of the respondents. The information related to employees of
banks was collected using internet. The respondents comprised of top management executives and
senior executives who were part of decision making. The 300 self-administered questionnaires
containing 16 items, were sent through postal services to 35 private and public sector bank
headquarters located in Madhya Pradesh. In the beginning, the response rate was only 40%. Via
consistent telephonic conversations by researchers and his associates, the response rate increased. In
the end, 230 responses were collected and out of those 217 responses were reported usable (response
rate of 72%).
Results and Interpretations
The collected data was analysed with the help of IBM SPSS 20.0.
Gender
Male
Female
Total
Table 4.1: Gender
Frequency
137
80
217
%age
63.1%
36.9%
100%
It can be seen in table 4.1 that the total respondents, 137 respondents (63%) were male and 80
respondents ( 37%) were females.
Bank Type
Private Sector Banks
Public Sector Banks
Total
Table 4.2: Bank wise respondents
Frequency
111
106
217
%age
51.2%
48.8%
100%
It is seen in table 4.2 that 111 respondents (51.2%) were employed in private sector banks. 106
respondents (48.8%) were employed in public sector banks.
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
Table 4.3: Cronbach’s Alfa reliability coefficient and descriptive statistics for total data
No. of
Cronbach’s Alfa
Standard
Variables
Mean
Items
Coefficient
Deviation
Overall Market Orientation
11
0.783
4.23
0.38
Employee’s Organizational Commitment
2
0.725
4.38
0.63
Espirit de Corps
3
0.663
4.10
0.56
N= 217
Table 4.3 indicates that all the three variables Cronbach’s Alfa score was more than 0.6, indicating
that the data collected was reliable and can be further used.
Table 4.4 displays the correlation between overall market orientation and espirit de corps and
organizational commitment among the employees of public and private sector banks.
1
2
3
Table 4.4: Correlation Coefficient between overall Market Orientation and its consequents
Variables
1
2
Overall Market Orientation
1
.515**
Organizational Commitment
1
Espirit de Corps
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
3
.214**
.264**
1
Linear regression was used to study causal relationship between market orientation and espirit de
corps and organizational behaviour. Table 4.5 examines the relationship between overall Market
Orientation of private and public sector banks in Madhya Pradesh and employee’s organizational
commitment and espirit de corps.
Table 4.5: Effect of overall Market Orientation on employee commitment and Espirit de corps: Standardized Regression
Coefficients
Independent Variable
Dependent Variables
Employee Commitment
Espirit de Corps
Overall Market Orientation
0.862***
0.320***
R
0.515a
0.214
R2
0.265
0.046
ΔR2
0.261
0.041
N
217
***p < .001
**p < .01
*p < .05
It was observed in table 4.5 that overall Market Orientation in banks of Madhya Pradesh and
employee’s organizational are positively related and statistically significant (B= 0.862, p < 0.001). The
R also exhibits a significant correlation between the overall Market Orientation and business
performance (R=0.515). Overall Market Orientation in private and public sector banks in Madhya
Pradesh explains for total 26.1 % (ΔR2 =0.261) of variance on employee’s organizational commitment.
Table 4.5 also indicated that overall Market Orientation in banks of Madhya Pradesh and employee’s
organizational are positively related and statistically significant (B= 0.320, p < 0.01). It can be inferred
that increase in overall Market Orientation by 1, the espirit de corps among employees was also
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increases by 0.320. The R also exhibits a significant correlation between the overall Market
Orientation and espirit de corps (R=0.214). It indicates a positive but weak relationship between the
variables. Overall Market Orientation in private and public sector banks in Madhya Pradesh
explains for total 4.1 % (ΔR2 =0.041) of variance in espirit de corps among the employees (Baber,
2014).
H1
H2
Table 4.6: Status of hypotheses
Overall Market Orientation positively affects organizational commitment of employees of
an organization.
Overall Market Orientation positively affects Espirit de corps among the employees of an
organization.
Supported
Supported
Limitation of the Research
Following are the limitations of the research:1. Due to the relatively small sample size various statistical tools were not used. Next study
should utilize large sample sizes so that the results could be more precise.
2. Only two behavioural outcomes on employees were examined. Through extensive literature
review more behavioural outcomes of market orientation should be examined.
3. The study was pertained only to Madhya Pradesh, A state in India. India being a developing
nation and banking sector in India operates under rigid rules and regulations. Thus the
results of the study cannot be generalized.
4. The respondents were far spread across the Madhya Pradesh. It created a major constraint
and lead towards small number of responses.
Conclusion
The concept of market orientation has been identified as most important concept and its
implementation has delighted scholars and academicians from past five decades. The developed
model has potential because modern marketing activities are not only customer centric but also
can result in positive behavioural outcomes from the employees of an organization.
References
1. Baber, R. (2014). Antecedents and Concequents of Market Orientation: A Study of Public and Private
Sector Banks in Madhya Pradesh. Unpublished Thesis. Gwalior, Madhya Pradesh, India: Jiwaji
University.
2. Bhuian, S. N. (1998). An Empirical Examination of Market Orientation in Saudi Arabian
Manufacturing Companies. Journal of Business Research, 43(1), 13-25.
3. Bunic, Z. (2007). Influence of Market Orientation on Business Performance: Case of Croatian
Manufacturing Companies. EDAMBA Journal, 1-17.
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4. Cervera, A., Molla, A., & Sanchez, M. (2001). Antecedents and Consequences of Market Orientation
in Public Organizations. European Journal of Marketing, 35(11/12), 1259-1286.
5. Deshpande', R., Farley, J. U., & Webster, F. (1993). Corporate Culture, Customer Orientation, and
Innovativeness in Japanese Firms: A Quadrad Analysis. Journal of Marketing, 57(1), 23-37.
6. Fayol, H. (1929). Industrial and General Administration. London: Sir Isaac Pitman & Sons.
7. Glazer, R. (1991). Marketing in an Information-Intensive Environment: Strategic Implications of
Knowledge as an Asset. Journal of Marketing, 59(4), 1-19.
8. Glazer, R., & Weiss, A. M. (1993). Marketing in Turbulent Environments: Decision Processes and the
Time-Sensitivity of Information. Journal of Marketing Research, 30(4), 509-521.
9. Hackett, R. D., Bycio, P., & Hausdorf, P. A. (1994). Further Assessment of Meyer & Allen’s 1991
Three-Component Model of Organizational Commitment. Journal of Applied Psychology, 79(1), 1523.
10. Hampton, G. M., Wolk, M., Albinsson, P. A., & McQuitty, S. (2009). Market orientation and
professionalism in higher education. Academy of Educational Leadership Journal, 13(1), 87-101.
11. Jaworski, B. J., & Kohli, A. K. (1993). Market Orientation: Antecedents and Consequences. Journal
of Marketing, 57(3), 53-70.
12. Jaworski, B. J., & Kohli, A. K. (1993). Market Orientation: Antecedents and Consequences. Journal
of Marketing, 57(3), 53-70.
13. Kohli, A. K., & Jaworski, B. J. (1990). Market Orientation: The Construct, Research Propositions, and
Managerial Implications. Journal of Marketing, 54(2), 1-18.
14. Kohli, A. K., Jaworski, B. J., & Kumar, A. (1993b). MARKOR: A measure of market orientation.
Journal of Marketing Research, 30(4), 467.
15. Kohli, A., & Jaworski, B. (1990). Market Orientation: The Construct, Research Propositions, and
Managerial Implications. Journal of Marketing, 54(2), 1-18.
16. Lings, I. N. (2004). Internal Market Orientation: Construct and Consequences. Journal of Business
Research, 57(1), 405-413.
17. Maltz, E., & Kohli, A. K. (1996). Market Intelligence Dissemination Across Functional Boundaries.
Journal of Marketing Research, 33(2), 47-61.
18. Narver, J. C., & Slater, S. F. (1990). Effect of Market Orientation on Business Profitability. Journal of
Marketing, 54(4), 20-35.
19. Narver, J. C., Slater, S. F., & Jacobson, R. (1993). Market Orientation and Business Profitability: An
Analysis of Panel Data. Marketing Science Institute Working Paper Series, 93-121.
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20. Payne, A. (1988). Developing a market oriented organization. Business Horizons, 31(3), 46-53.
21. Ruekert, R. (1992). Developing a Market Orientation: An Organizational Strategy Perspective.
International Journal of Research in Marketing, 9(3), 225-245.
22. Shapiro, B. P. (1988). What the Hell is Market Oriented?”,. Harvards Business Review, 66(6), 119125.
23. Shoham, A., & Rose, G. M. (2001). Market Orientation: A Replication, Cross-National Comparision
and Expansion. Journal of GLobal Marketing, 14(4), 5-25.
24. Siguaw, A. J., Brown, G., & Widing, R. E. (1994). The Influence of Market Orientation of the Firm on
Sales Force Behaviour and Attitudes. Journal of Marketing Research, 31(1), 106-116.
25. Slater, S. F., & Narver, J. C. (1995). Market Orientation and Learning Organization. Journal of
Marketing, 59, 63-74.
26. Zeithmal, V. A., Berry, L., & Parsuraman, A. (1988). Communication and Control Process in the
Delivery of Service Quality. Journal of Marketing, 52(2), 35-48.
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Chapter 2
Transformational Leadership, Organisational
Culture and Climate among Bankers
Gaurav Jaiswal and Prof. S. K. Singh
ABSTRACT
Purpose: The purpose of this paper is to examining the cause & effect relationship between Transformational
Leadership, Organisational Culture and Climate among banking sector employees across regions in India.
Design/methodology/approach: A structured survey was designed and administered to a sample of Gwalior’s
respondents to check the cause & effect relationship between Transformational Leadership, Organisational
Culture and Climate among banking sector employees and to know the underlying factor of the study
variables.
Findings: Significant cause & effect relationship was found between Transformational Leadership and
Organisational Culture but significant cause & effect relationship was not found between Transformational
Leadership and Organisational Climate. Again study resulted in important factors for Transformational
Leadership, Organisational Culture and Climate Banking Sector in India.
Research limitations/implications: The number of respondents is 100 which is small number. Hence the results
may not reflect the true picture.
Keywords: Transformational Leadership, Organisational Culture, Climate, Banking, India.
Introduction
Corporate World has been facing a large number of problems from last few years; Recession,
terrorism and world politics are few of them. Companies are facing these challenges every day and
consistently starving for the sustenance and growth. In such a challenging environment, they have
to adopt new ways to keep up the motivation of the employees. In this quest, some organisations
emerged as the leaders in the market. A very strong reason of such success was the leadership of the
management; leadership, which was able to influence the employees and change their behaviour for
the positive outcomes of organisation; leadership which challenged the environment and turned it
for the benefit of the organisation. Transformational leadership enhances the motivation, morale and
performance of followers through a variety of mechanisms. These include connecting the follower's
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sense of identity and self to the mission and the collective identity of the organization; being a role
model for followers that inspires them; challenging followers to take greater ownership for their
work, and understanding the strengths and weaknesses of followers, so the leader can align
followers with tasks that optimize their performance.
James Macgregor Burns (1978) first introduced the concept of transforming leadership in his
descriptive research on political leaders, but this term is now used in organizational psychology as
well. According to Burns, transforming leadership is a process in which "leaders and followers help
each other to advance to a higher level of morale and motivation".
Organizational culture is the collective behaviour of humans that are part of an organization, it is
also formed by the organization values, visions, norms, working language, systems, and symbols, it
includes beliefs and habits. It is also the pattern of such collective behaviours and assumptions that
are taught to new organizational members as a way of perceiving, and even thinking and feeling.
Organizational culture affects the way people and groups interact with each other, with clients, and
with stakeholders.
Organizational climate (sometimes known as Corporate Climate) is the process of quantifying the
“culture” of an organization, it precedes the notion of organizational culture. It is a set of properties
of the work environment, perceived directly or indirectly by the employees, that is assumed to be a
major force in influencing employee behaviour. Climate and culture are both important aspects of
the overall context, environment or situation.
This research had conducted in India’s banking sector to know the effect of transformational
leadership on organisational Climate & Culture. The data was collected from the private sector
banks of Gwalior Region.
Review of Literature
Lewin, Lippitt and White (1939) focused on the experimentally created social climates on a number
of groups of teenage boys, but failed to provide any conceptual framework or the technique of
measurement of organisation climate. The article mainly emphasized on the relationship between
leadership and so-called ‘social climate’.
Popper et al (2000) examine transformational leadership from a developmental perspective. Their
study shows a positive co-relation between transformational leadership and secure attachment style
of development.
Judge and bono (2001) linked traits from the big five to transformational leadership behavioural and
showed and extraversion and agreeableness positively predicted transformational leadership. They
demonstrated through a meta-analysis that five factors were significantly related to transformational
leadership, but only extraversion and neuroticism were large enough to be practically meaningful.
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Fleishman (1939) discussed the development of leadership attitude and its implications through the
measurement of behavioural scales. The author discussed ‘leadership climate’ as a contract but he
did not explain the concept of climate very elaborately.
Argyris (1958) Attempt to diagnose the group dynamics in a bank , Argyris defined climate in
terms of formal organisation policies ,employee needs, values ,and personalities .This paper also
triggered off the popular ambiguity between culture and climate that persisted till late 70’s in the
realm of organisational studies. The famous book “The human side of enterprise “ (1960) opened a
new horizon of management science. It introduce many pioneering concept of organisational and
industry psychology.
Forehand and Gilmer (1964) defined organisational climate as a set of characteristics that(a) describe
the organisation and distinguish it from other organisations(b) relatively enduring over time and(c)
influence the behaviour of people in the organization.
Rigopoulos (1963) defined organizational climate as a normative structure of attitude and
behavioural standard which provides basis for interpreting the situation and act as a source of
pressure for directing activities.
Litwin and stringer (1968) introduced a very comprehensive frame work of organizational climate.
They identified 6 dimensions of organizational climate that include 1) structure 2) responsibility
3)reward 4)risk5)warmth 6)support. In another book by Litwin and Stringer 1968, emphasis was
given on the concept on climate and its influence on the McClelland’s needs factor of motivation i.e
power, achievement and affiliation; attempts were also made to establish the operationalization of
climate through the assessment of member’s perception. During this time the actual concept of
organizational climate began to take shape.
Schneider and Bartlett (1968) developed a measure of climate. The authors conducted extensive
empirical study on the employees in life insurance companies by developing two sets of separate
dimensions, one managerial level and another for the field agents of the companies. During this time
the studies of organizational climate had established the fact that it can be conceptualized and
measured through the shared perceptions of the organizational members and almost all the
contemporary studies embraced the concept. Managerial behaviour, performance, and effectiveness’
(1970) made an extensive survey of the existing literature and presented four compact dimensions of
organizational climate.
Yetton (1974) focused their research on how leaders make decisions and argued that problems have
different characteristics and should therefore be solved by different decision methods. One of the
criticisms of this theory was that it focused on only one aspect of the situation at a time and thus did
not consider the complexities of the interactions of the situational variables.
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Ekvall’s (1991) empirical work supports change cantered leadership which is active in creating and
supporting renewal within organisational systems. Ekvall and Argonne(1991) argue that change
oriented leaders offer ideas about new ways of doing things, push for growth, initiate new projects,
give thoughts about the future and like to discuss new ideas which are all directly related with
firm’s innovativeness. There was an increasing demand for a change-cantered leadership style in a
wide range of organizations (Ekvall and Arvonen, 1991, 1994).
According to Schein (1985) organizational culture can be defined as “a pattern of basic assumptions
invented, discovered, or developed by a given group as it learns to cope with its problems of
external adaption and internal integration- that has worked well enough to be considered as valid
and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation
to those problems.”
Objectives of the Study

To develop and standardize a measure to evaluate Transformational Leadership,
Organizational culture and Climate.

To know the underlying factors of Transformational Leadership, Organizational culture and
Climate.

To study the cause & effect relationship between Transformational Leadership and
Organizational Culture.

To study the cause & effect relationship between Transformational Leadership and
Organizational Climate.

To open new vistas of further research.
Research Methodology
The study was exploratory in nature with survey method being used to complete the study.
Population included all the employees of Banking Sector in Gwalior Region. Individual Respondents
was the sampling element. Non – Probability Purposive sampling technique was used to select the
sample. The total sample size was 100 Respondents.
Self-designed questionnaires were used for evaluate Transformational Leadership, Organizational
culture and Climate. Data was collected on a likert type scale, where 1 stands for minimum
agreement and 5 stands for maximum agreement. Item to total correlation was applied to check the
internal consistency of the questionnaires. The measures were standardized through computation of
reliability and validity. Regression tests were applied to see the relationship between
Transformational Leadership, Organizational culture and Climate.
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Results and Discussions
Reliability
Reliability tests were carried by using SPSS 16 software and the result of test are given below:
Name of the Variables
Transformational Leadership
Organisational Culture
Organizational Climate
Cronbach's Alpha
.724
.738
.724
N of Items
14
15
13
The reliability test revealed Cronbach’s Alpha value which is more than the standardized value (.7).
It is considered that reliability of all measures were adequate. So the statement in the questionnaire
was treated as reliable statements.
Factor Analysis Tests
Factor analysis was applied to find out the underlying factors of the questionnaires.
Factor Analysis of Transformational Leadership
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.751
724.110
91
.000
KMO and Bartlett’s test is the strength of relationship among variables large enough. KMO
measures of sampling adequacy greater than .70 indicate that the sample size is adequate enough to
consider the distribution as normally distributed. It can be observed from Table no 5 that the
strength of the relationship among the variables is strong, because of the value of KMO statistics is
0.751 respectively and our null hypothesis for Bartlett’s test has been rejected since p-value is 0.000.
Hence the data is not identical, hence it is suitable for factor analysis.
Factor Name
Growing Opportunity
Motivation
Encouragement
Factor Analysis Table of Transformational Leadership
Eigen value
% of Variance No. Of items converged in the factor
4.048
28.196
7
1.777
12.693
4
1.425
10.180
3
1) Growing Opportunity has emerged as the most important factor with a total of 4.048 and % of
variance 28.196.
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2) Motivation has appeared as the second most important factor determinant of the perceived
product quality with a total of 1.777 and % of variance 12.693.
3) Encouragement has emerged as the last factor with a total of 1.425 and 10.180 % of variance
33.823. .
Factor Analysis of Organisational Culture
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.651
256.565
105
.000
The value of KMO statistics is 0.651 respectively and our null hypothesis for Bartlett’s test has been
rejected since p-value is 0.000. Hence the data is suitable for factor analysis.
Factor Analysis Table of Organisational Culture:
Factor Name
Traditional
Goal Oriented
Growth Seeking
Committed employee
Achiever
Working environment
Eigen value
1.703
1.677
1.651
1.644
1.406
1.301
% of Variance
11.352
11.180
11.006
10.959
9.371
8.677
No. Of items converged in the factor
3
3
3
2
2
2
1) Traditional has emerged as the most important factor with a total of 1.703 and % of variance
11.352
2) Goal Oriented have appeared as the second most important factor determinant of the perceived
product quality with a total of 1.677 and % of variance 11.180.
3) Growth Seeking has emerged as the most important factor with a total of 1.651 and 11.006 % of
variance.
4) Committed Employee has appeared as the second most important factor determinant of the
perceived product quality with a total of 1.644 and % of variance 10.959.
5) Achiever has emerged as the most important factor with a total of1.406 and % of variance 9.371.
6) Working Environment has emerged as the most important factor with a total of 1.301and % of
variance 8.677.
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Factor Analysis of Organisational Climate
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.631
222.643
78
.000
The value of KMO statistics is 0.631 respectively and our null hypothesis for Bartlett’s test has been
rejected since p-value is 0.000. Hence the data is suitable for factor analysis.
Factor Analysis Table of Organisational Climate
Factor Name
Teamwork
Transparency
Harmony
Successive planning
Eigen value % of Variance
2.082
16.019
1.883
14.483
1.529
11.764
1.453
11.177
No. Of items converged in the factor
6
3
2
2
1) Team work has emerged as the most important factor with a total of 2.082 and % of variance
16.019.
2) Transparency have appeared as the second most important factor determinant of the perceived
product quality with a total of 1.883 and % of variance 14.483.
3) Harmony has emerged as the most important factor with a total of 1.529 and 11.764 % of variance.
4) Successive planning has appeared as the second most important factor determinant of the
perceived product quality with a total of 1.453 and % of variance 11.177.
Regression Analysis No. 1
Linear regression were applied between Transformational Leadership as the independent factor and
Organisational Culture as the dependent factor.
Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
a
1
.319
.102
.093
10.95296
a. Predictors: (Constant), Transformational Leadership
b. Dependent Variable: Organisational Culture
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Coefficients
Unstandardized
Coefficients
B
Std. Error
38.727
9.432
.560
.168
Model
1
(Constant)
Transformational
Leadership
a. Dependent Variable: Organisational Culture
Standardized
Coefficients
Beta
.319
t
Sig.
4.106
3.337
.000
.001
Y = a + bx
Y= 38.727+ (.560) x
X = Transformational Leadership (independent variable)
Y = Organisational Culture (dependent variable)
The result of regression indicates the independent variable Transformational Leadership” have
impact on the dependent variable Organisational culture signified by the coefficient beta factor of
0.319. Also the T value is significant. As the value of T is 3.337, this is acceptable at 0.1% level of
significance, so we reject the hypothesis that there is no impact of Transformational Leadership on
Organisational culture.
Regression Analysis No. 2
Linear regression were applied between Transformational Leadership as the independent factor and
Organisational Climate as the dependent factor.
Model
1
R
.191a
Model Summary
R Square
Adjusted R Square
Std. Error of the Estimate
.036
.027
10.28122
a. Predictors: (Constant), Transformational Leadership
b. Dependent Variable: Organisational Climate
Model
1
Coefficients
Unstandardized
Coefficients
B
Std. Error
45.687
8.853
.303
.157
(Constant)
Transformational
Leadership
a. Dependent Variable: Organisational Climate
Standardized
Coefficients
Beta
.191
t
Sig.
5.161
1.923
.000
.057
Y = a + bx
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Y= 45.687+ (.303) x
X = Transformational Leadership (independent variable)
Y = Organisational Climate (dependent variable)
The result of regression indicates the independent variable Transformational Leadership have no
impact on the dependent variable Organisational Climate signified by the coefficient beta factor of
0.191. As the value of T value was 1.923., significant at 5.7% level of significance, the hypothesis that
there is no significant impact of Transformational Leadership on Organisational Climate is not
rejected.
Suggestion
1. This study has been done in a very narrow prospective by taking only in Gwalior region
as the sample size is only 100. So it is suggested to take large sample size so that more
appropriate results can be obtained.
2. Further researches can be done by doing comparison of one public organization and
other private organization. .
3. The scope of the study can be widened by increasing the sample size for getting
appropriate results.
4. Workshop regarding enhancement of motivation can be conducted.
5. The research could have been done at various management levels also.
6. The research result can provide the clear view of the employees for the organization,
which can be treated as a tool to change the required norms of the organization.
7. The organization can use the questionnaire to check the Organisational culture and
climate of Banking employees.
Conclusion
This study has resulted in three factors in Transformational Leadership, and seven factors of
Organisational culture and four factors in Organisational climate. The study resulted that
Transformational Leadership have significant cause & effect relationship with Organisational
culture. It means, in Indian banking sector management leadership style is influencing the culture of
banks. Dynamic leadership creates dynamic culture. This study also resulted that Transformational
Leadership have no significant cause & effect relationship with Organisational climate. Such
negative relationship is possible because banks are following traditional rules, regulation & system
and managers have minimum scope to change them which may create no effect on organisational
Climate.
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References
1.
Argyris (1958) Improving organizational effectiveness through transformational leadership. Thousand
Oaks, CA: Sage.
2.
Burns, J. M. (1978). Leadership. New York: Harper & Row
3.
Ekvall’s (1991) Increasing Demand For A Change-Centred Leadership Style in a Wide Range of
Organizations (Ekvall and Arvonen, 1991, 1994).
4.
Fleishman (1939), Organizační climate. Praha, Grada Publishing.
5.
Forehand, G. & Gilmer, B. (1964). Environmental Variation in Studies of Organizational
Behaviour. Psychological Bulletin, 62, 361 –382.
6.
Judge, T.A. & Bono, J.E. (2001). Relationship of core self-evaluations traits—self- esteem,
generalized self-efficacy, locus of control, and emotional stability—with job satisfaction and job
performance: A meta-analysis. Journal of Applied Psychology, 86 (1), 80-92.
7.
Lewin, K., Lippitt, R., & White, R. (1939). Patterns of Aggressive Behaviour in Experimentally
Created ‘Social Climates’. Journal of Social Psychology, 10, 271 – 299.
8.
Litwin, G. & Stringer, R. (1968). Motivation and Organisational Climate. Cambridge, MA: University
Press.
9.
Popper et al (2000). Corporate Cultures: The Rights and Rituals of Corporate Life, 1982 (Addison-
10. Rigopoulos (1963). Organizational and Contextual Influences on the Emergence and Effectiveness of
Charismatic Leadership. Leadership Q., 1999, 10(2),
11. Schein, E. H. (1985). Organizational Culture and Leadership. London: Jossey Bass.
12. Schneider, B., & Bartlett, C.J. (1968). Individual Differences and Organizational Climate: The
Research Plan and Questionnaire Development. Personnel Psychology, 21, 323 – 333.
13. Yetton, P.W. (1974). Participation and Leadership Style: A Descriptive Model of a Manager’s Choice of a
Decision Process. Pittsburgh, PA: Pittsburgh University Press.
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Chapter 3
Factors Affecting Employees Commitment
towards Organization with Special Reference
to Service Sector
Monika Kanchan and Monika Jain
ABSTRACT
In this study, we investigate the factors which are likely to affect the Employees Commitment among Service
Sector Especially in Gwalior, since the Service Sector has been facing higher employee turnover. Employee
engagement is a property of the relationship between an organization and its employees. An "engaged
employee" is one who is fully absorbed by and enthusiastic about their work and so takes positive action to
further the organization's reputation and interests. This research paper has been focus important factor that
directly and indirectly influence employee commitment. The theoretical framework of our study builds upon
the theory of Social Exchange in Employees Commitment among Service Sector. Data was collected by
personally administered questionnaires. 100 Employees working in different Service Sector in Gwalior
participated in the study. SPSS version 20 was used to analyze the data.
Keywords: Employee Commitment, Service Sector, Factor Analysis
Introduction
Employee engagement is center stage in HR and The World of Work right now for good reason.
Engaged employees are better producers, they’re more committed to the organization, and they are
in it for the committed to the organization, and they are in it for the relative long haul. One study in
The Journal of Occupational and Organizational Psychology (yes I do read this stuff!) looked at the
performance of bank employees over a three-year period. Engaged employees were more
committed to the organization, achieved better business outcomes, and achieved superior customer
satisfaction. Interestingly, level of engagement was more important in achieving good performance
than good performance was in creating better engagement. It’s a mind-bender, which is why the five
Ws and one H might be helpful in charting a path to employee engagement
Flexibility has a dramatic positive impact on employee commitment and is one of the most powerful
components of the business case for flexibility. Commitment is higher and burnout is lower for
employees who have access to flexibility compared with those who do not have it. In fact, the
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dramatic effect of flexibility on employee commitment is one of the most powerful components of
the business case for flexibility. An engaged employee is concerned with producing quality work
and believes that she or he has a stake in the organization. "Research by the Corporate Leadership
Council concludes that every 10% improvement in commitment can increase an employee's level of
discretionary effort by 6% and performance by 2%; highly committed employees perform at a 20%
higher level than non-committed employees. Hewitt Associates research finds that double-digit
growth companies have 39% more highly engaged employees and 45% fewer highly disengaged
employees than single-digit growth companies.
Review of Literature
Muhammed Anwer Ul Haq et al (2014) the study investigates the factors which enhance the
commitment of bank officers. In the context, this kind of a stud is unique in itself. The factors of
rewards, support from supervisor, work-family support, job conditions, and career growth
opportunities were hypothesized to have a positive effect on commitment of officers towards their
organization based on the phenomenon of exchange and reciprocity as the main theoretical
underpinnings of this research.
According to Nguyen (2014) Some human resources scholars have emphasized the concept of
psychological contract in that increasing knowledge, skill, communication frequency and quality are
signals of long-term demonstrate from management and in return staff will demonstrate their
commitment.
Andullah (2010) the employees are slightly satisfied with the pays and their say in work-related
decision. People working in the banking sector are mildly committed towards the organizations they
are working for and feel that have a sense of belonging towards it.
Ramay (2012) posited that employee commitment is easy to understand because employees who
have spent most of their lives with the organization should exhibit high commitment. Also with age,
alternative opportunities for employees become limited; thereby enhancing their commitment with
the organization they are working for.
Bashir Sajid (2008) discussed the role of the management in this area is simplified as majority of IT
professionals are more concerned with growth needs and that they are looking for challenge from
work itself.
Teeraprasert (2012) empirical data did not support the conclusion that job satisfaction was affected
by goal orientation and job stress factors because the path coefficient did not exhibit statistical
significance and thus did not affect job satisfaction.
Saeed (2013) investigates influence of retention factors on organizational commitment among
employees working in public schools, colleges and universities of Pakistan.
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Objectives
1. To design develop a standardized measure to evaluate employee commitment.
2. To identifying the underlying factors of employee commitment.
Research Methodology
Population: The population for the study included all the employees of service organizations
situated at the Gwalior.
Sampling Elements: Individual respondent will be sampling element of the study.
Sample Size: Sample size will be 200 respondents of Gwalior. The data will be collected by the
researcher himself after developing rapport with the respondents.
Sampling Technique: Non Probability judgmental sampling technique was used to collect data
Tools to be Used for Data Collection
Self designed questionnaire was used to measures all the variables. The data will be collected on the
scale of 1-7 Likert’s scale.
Tools to Used for Data Analysis


Reliability
Factor analysis
Data Analysis & Results
Reliability Test for All Variables
Reliability test for the variables were carried out by using SPSS software and the reliability test
measures are given below:
Variables
Service Quality
Cronbach's Alpha
.798
Split Half
.764(Un Eq Lth)
N of Items
40
It is being considered that reliability should be more than 0.7 as it can be seen in both table that the
reliability through Cronbach’s alpha test is more than the standard value, hence the three
questionnaires were highly reliable.
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Validity: Face validity of was applied to the questionnaire while selecting the statements (elements)
for the measures and it was found to be very high. It referred to the degree to which all the items
look right and appear to measure the variable for which the questionnaire has been designed based
on the subjective judgment of the examinees who took it.
Kaiser Meyer Olkin measure of Sampling Adequacy and Bartlett’s Test of Sphericity (Employee
Commitment)
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
.841
6.131E2
693
.000
The Kaiser- Meyer-Olkin Measure of Sampling Adequacy Value was .841 indicating that the sample
was adequate to consider the data as normally distributed. The Bartlett’s Test of Sphericity was
tested through Chi-Square value 6.131E2significant at 0% level of significance indicating that the
data has low sphericity and is therefore suitable for factor analysis.
Factor Analysis of Employee Commitment: Principle component factor analysis with Varimax
rotation and Kiser normalization was applied. The factor analysis resulted in 7 factors with 9
iterations. The details about factors, the factor name, variable number and convergence and their
Eigen value is given in the following table:
Table showing factor analysis of Employee commitment
Factor Name
Supervisor
Support
Eigen Value
Items
Total % Variance
8.910
38.8611. I have a clear understanding of what is
expected of me at work.
2. I understand how I can contribute to meet the
needs of our customers.
3. I have been fairly rewarded.
4. Here, senior leaders value employees.
5. Everyone is treated with respect at work,
regardless of who they are.
6. I can concentrate on my job when I am at my
work area.
7. My personal work objectives are linked to my
work area’s business plan.
8. I clearly understand my organization’s
mission.
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Loading
Value
.780
.773
.766
.642
.640
.619
.610
.600
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Job Satisfaction
Career
Opportunity
Appropriate
Control
Favorable
Condition of
Job
4.306
1.708
1.518
1.404
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9. Senior leaders have the capability to make my
organization successful.
10. I am encouraged to take ownership of my
work.
11. There are career opportunities for me at my
organization.
7.069 12. I am satisfied with the working environment
of the company.
13. I am satisfied with job location.
14. I am satisfied with the present working hour.
15. I am happy with my work responsibilities.
16. I feel comfortable in carrying out my
responsibilities.
17. I enjoy work relationships with the people
around me.
18. I like various activities in the firm & love
participating in them.
19. I am happy with overall job security.
20. I am satisfied with the given right to put
forward my opinions.
4.495 21. I think my level of pay is fair.
22. I consider my work load to be quite fair.
23. Generally, the rewards I receive here are quite
fair.
24. I think my job has several responsibilities.
25. Job decisions are made by the manager in a
biased manner.
26. My managers make sure that all employee
concerns are heard before Job decisions are
made.
3.994 27. Less of workload irritates me.
28. I get depressed when I am not working.
29. I love everything about my job.
30. For me, the best form of relaxation is doing
my work.
31. I enjoy my job activities more than my leisure
activities.
3.695 32. I feel relieved when it is time to go home.
33. I wait impatiently for holidays.
34. I am so much interested in my job that I have
little time for my friends.
.592
.586
.427
.740
.718
.690
.597
.553
.512
.447
.376
.311
.741
.550
.512
.491
.433
.399
.729
.724
.546
.411
.332
.737
.538
.510
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Prevalence
Conformity
1.362
1.302
35. While away on leave, I keep on worrying that
my work may be suffering.
3.584 36. If a job-connected problem is not solved by
the time I go home, I keep thinking about it
37. I come early or stay late when I have more
work to do.
38. I am not willing to devote my free time to my
job.
3.425
39. Superior pursues excellence.
40. Concerned with my well-being.
.430
.704
.653
.290
.625
.483
Supervisor Support: I have a clear understanding of what is expected of me at work. (.780), I
understand how I can contribute to meet the needs of our customers. (.773), I have been fairly
rewarded. (.766), here, senior leaders value employees. (.642), everyone is treated with respect at
work, regardless of who they are. (.640), I can concentrate on my job when I am at my work area.
(.619), My personal work objectives are linked to my work area’s business plan. (.610), I clearly
understand my organization’s mission. (.600), Senior leaders have the capability to make my
organization successful. (.592), I am encouraged to take ownership of my work. (.586) & There are
career opportunities for me at my organization. (.427).
Job Satisfaction: I am satisfied with the working environment of the company. (.740), I am satisfied
with job location. (.718), I am satisfied with the present working hour. (.690), I am happy with my
work responsibilities. (.597), I feel comfortable in carrying out my responsibilities. (.553), I enjoy
work relationships with the people around me. (.512), I like various activities in the firm & love
participating in them. (.447), I am happy with overall job security. (.376) & I am satisfied with the
given right to put forward my opinions. (.311).
Career Opportunity: I think my level of pay is fair. (.741), I consider my work load to be quite fair.
(.550), generally, the rewards I receive here are quite fair. (.512), I think my job has several
responsibilities. (.491), Job decisions are made by the manager in a biased manner. (.433) & my
managers make sure that all employee concerns are heard before Job decisions are made. (.399).
Appropriate Control: Less of workload irritates me. (.729), I get depressed when I am not working.
(.724), I love everything about my job. (.546), For me, the best form of relaxation is doing my work.
(.411) & I enjoy my job activities more than my leisure activities. (.332).
Favorable Condition of Job: I feel relieved when it is time to go home. (.737), I wait impatiently for
holidays. (.538), I am so much interested in my job that I have little time for my friends. (.510) &
While away on leave, I keep on worrying that my work may be suffering. (.430).
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Prevalence: If a job-connected problem is not solved by the time I go home, I keep thinking about it
(.704), I come early or stay late when I have more work to do. (.653) & I am not willing to devote my
free time to my job (.290).
Conformity: Superior pursues excellence, (.625) & concerned for my well-being (.483).
Figure depicting various factors of organizational commitment
Job
Satisfacti
on
Superviso
r Control
8.910
Conformit
y
1.302
4.306
Employee
Commitment
Career
Opportun
ity
1.708
1.518
1.362
1.404
Appropria
te Control
Prevalence
Favorable
Condition
Conclusion
This study also discloses that career development and compensation, opposite to our conventional
thinking, are not predictors for organizational commitment. Interestingly, teamwork spirit plays the
most influential role in predicting commitment. The results suggest that if the organization wants to
have a higher commitment of its officers, the outlined factors in the study may be improved. The
results reveal that there is a higher correlation between different supporting factors and Employees
commitment of Service Sector. Regression results show that all factors significantly predict
organizational commitment. Factors affecting the employee commitment of Service Sector include
rewards, support from supervisor, promotion opportunities, work-family support, and favorable
conditions of the job. This study has implications for HR Policies to be devised in such a way as to
focus on turnover intentions among the experienced employees. The results suggest an
improvement of social change by increasing job involvement, perceived organizational support and
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job satisfaction is an efficient way of obtaining highly committed human resource. By employing
such efforts the companies can easily retain their experienced human capital.
References
1.
2.
3.
4.
5.
6.
7.
Abdullah, & Ramay, M. I. (2010). Antecedents of Organizational commitment: A Study of
Banking Sector of Pakistan. Institute of Organization and Management in Industry (ORGMASZ), 5464.
Abdullah, & Ramay, M. I. (2012). Antecedents of Organizatioanl Commitment of Banking Sector
Employees in Pakistan. Serbian Journal of Management Vol 7 No 1 , 89-102.
Bashir, S., & Ramay, M. I. (2008). Determinats of Organizational Commitment: A Study of
Information Technology Professionals in Pakistan. Institute of Behavioural and Applied Management
, 226-237.
Gelaidan, H. M., & Ahmad, H. (2013). The Factor Effecting Employee Commitment to Change in
Public Sector: Evidence from Yemen. International Business Research Vol 6/3, 75-87.
Nguyen, T. N., Mai, K. N., & Nguyen, P. V. (2014). Factor Affecting Employees Organizational
Commitment - A Study of Banking Staff in Ho chi Minh City, Vietnam. Journal of Advanced
Management Science Vol 2 No 1 , 7-11.
Saeed, R., Nayyab, H. H., Lodhi, R. N., Baqir, R., Rehman, M. A., & Mussawar, S. (2013). Impact
of Retention Factors on Organizational Commitment in General Education Diision of Pakistan.
Middle-East Journal of Scientific Research Vol 17 Issue 4, 539-545.
Teeraprasert, S., Piriyakul, R., & Khantanapha, N. (2012). Influencing Factors to Job Satisfaction
and Organizational Commitment in Manufacturing Organizational, Affect to Turnover Intention:
A Context of Thai Fashion Industry. The 2012 International conference on Business and Management ,
(pp. 551-5562). Thailand.
8. ul Haq, M. A., Jindong, Y., Hussain, N., & Anjum, Z.-u.-Z. (2014). Factor Affecting
Organizational Commitment Among Bank Officers in Pakistan. Journal of Business and
Management Vol 16 Issue 4 Ver 1, 18-24.
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Chapter 4
Assessment of Impact Different
Compensation Plans on Organizational
Commitment and Job Satisfaction
Silki Gupta
ABSTRACT
Compensation is the financial and non financial rewards that are provided to the employees for the services
rendered to the organization.thi study is designed to find out the impact of the compensation plan on
organizational commitment and job satisfaction in life insurance corporation and to design, develop &
standardize the measure of compensation plan. the research are work are done at 70 employees of life insurance
corporation which shows that there is no impact of compensation plans on organizational commitment and job
satisfaction. that means compensation plans has no impact on organizational commitment and job satisfaction
in life insurance corporation.
Key Words: Compensation Plan, Organisational Commitment, Job Satisfaction
Introduction
Compensation
Compensation is a wide range of financial and non financial rewards to employees for their services
rendered to the organization. It is paid in form of wages, salary, other benefits such as vacations,
maternity leave, medical facilities etc. compensation helps in motivating the employees and reduce
labor turnover. Compensation can be divided in two different categories, namely, Base
compensation; it involves monetary benefit to the employees in the form of wages and salaries. It is
giving the remuneration to the workers for doing the work. Wages are generally given to the
workers based on hourly, daily, weekly or monthly basis. But salary is the compensation given to
the office employees. Wages may be based on the number of units produced i.e. piece wage system
or the time wage system i.e. the time spent on the job. But salary is always based on the time spent
on the job. When it is difficult to judge the production of the company then the compensation is paid
in form of salary. The second category is Supplementary compensation; Now days the organizations
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use supplementary compensation over and above the base compensation. It helps in satisfying the
employees as well as retaining them for long time. It can be given in form of various services like
housing, medical, educational facility. Supplementary compensation is also called fringe benefit as
well as hidden payroll. The basic purpose of fringe benefit is to maintain efficient human resources
in the organization and to motivate the employees.
Organisational commitment
Organizational commitment has an important place in the study of organizational behavior. This is
in part due to the vast number of works that have found relationships between organizational
commitment and attitudes and behaviors in the workplace.
Furthermore, it state that the reasons for studying organizational commitment are related to “(a)
employee behaviors and performance effectiveness, (b) attitudinal, affective, and cognitive
constructs such as job satisfaction, (c) characteristics of the employee’s job and role, such as
responsibility and (d) personal characteristics of the employee such as age, job tenure.
Organizational commitment has been studied in the public, private, and non-profit sector, and more
recently internationally.
Job satisfaction
Job satisfaction represents a combination of positive or negative feelings that workers have towards
their work. Meanwhile, when a worker employed in a business organization, brings with it the
needs, desires and experiences which determinates expectations that he has dismissed. Job
satisfaction represents the extent to which expectations are and match the real awards.
Job
satisfaction is closely linked to that individual's behaviour in the work place.
Review of Literature
The factors of compensation have been rightly explained by Hayat et al. (2010). They indicate that
pay and benefits are most important predictors of job satisfaction, however, fair system of
promotions within the company, high quality working conditions, good leadership and positive
relationships among the colleagues also influence job satisfaction. An old rule of thumb is that
satisfied worker are happy with their job and happy workers are the source of high profits for an
organization. Lawler (1971) explored the same point by elaborating that workers with elevated job
satisfaction are more determined and prolific, more concerned about the high quality of work and
have lower chances of job turnover. The role of compensation management is inevitable in achieving
this job satisfaction process.
In the study of Kluvers and Tippet (2009) intrinsic rewards including opportunity for growth,
opportunity for achievement, advancements, and challenging tasks and duties in any Not for Profit
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organization help to increase the motivation level of employees, and such motivated employees are
the sign of prosperity and growth for any organization.
Arnolds et al. (2007) found paid holiday is most important reward for the blue collar or labour
workers and the retirement plan is the most important reward for the for the frontline employees
working in an organization. The most important rewards that help to motivate blue collar and
frontline employees are fringe benefits including bonus, retirement benefits, gratuity, housing loans,
paid holidays, educational and medical facilities etc. So rewards are a source of job contentment and
a source of motivation for all levels of employees.
In the words of Warsi et al. (2009) in today’s scenario the market of Pakistan become competitive
day by day. In this competitive market, employers demand highly committed employees.
Employee’s commitment depends upon their satisfaction with their pay packages, jobs and
relationships with other employees.
Compensation is explained by McNamara (2006) it consist issues regarding wage and/ or salary
programs and structures accruing from job descriptions, merit-based programs, bonus-based
programs, commission based programs and so on, while benefits typically refers to retirement plans,
health life insurance, disability insurance, vacation, employee stock ownership plan and so on.
Gomez – Mejia, Balkin and Cardy (2006) suggested employee compensation as comprising of base
pay or cash pay the direct pay given by employer to employee which include overtime pay, salary,
shift allowance, fringe benefits and pay contingent on performance like merit awards, incentive pay,
bonuses and gain sharing while fringe compensating include required programs such as social
security, health benefits, pension plans, paid time off, tuition reimbursement, foreign service
premiums and so on.
Cascio (2003) classify the compensation programme is divided into two, which are, direct and
indirect forms of compensation. Direct compensation has to do with wage and / or salary aspect
while indirect compensation is the fringe benefits a worker enjoys as a result of working in an
organization. Integrating the two into a package that will encourage the achievement of an
organizations goal is what compensation is all about.
Ali & Ahmed (2009) supported the idea that every employee serving in any organization expects
that his organization will provide him healthy working environment, a fair wage to fulfill his needs
and will treat him equally without any biases. Employees can even demand more safety and
security, power and authority and the duties and responsibilities which they perform in their work
premises. Furthermore, they stressed that there is a direct link between organizational performance
and employee performance and if employees performance is enhanced, organizational performance
will enhance automatically.
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Rasheed et al (2010) along with sound mentoring and coaching mechanisms for employee learning
support, motivation of an employee is highly increased by tangible and intangible rewards given to
him against his high performance. In this regard, human resource managers always put their heads
together for developing and improving comprehensive compensation plan for employees.
Lawler (1971) explored the same point by elaborating that workers with elevated job satisfaction are
more determined and prolific, more concerned about the high quality of work and have lower
chances of job turnover. The role of compensation management is inevitable in achieving this job
satisfaction process.
Becker and Zvonkovic (1995) suggested that current job attractiveness increases as the employee
ages due to fewer other employment options. On the other hand, found an insignificant statistical
correlation (r = -.004) between age and affective commitment for a sample of 396 high school
principals.
Gruneberg (1979 identified a number of individual differences such as age, educational level, and
personality difference that affect job satisfaction. He commented that job satisfaction typically
started high, decline, then increased with age. According to Gruneberg (1979) one explanation for
this trend is that individuals became adjusted in their work and life situations. Initial high job
satisfaction declines as job expectations are not met, for example, highly educated individuals
quickly become dissatisfied with job that did not enable full utilization of their talents while
individuals who were ambitious were likely to be dissatisfied when promotion was difficult or
elusive. Then, as the individuals adjusts to the work situation, job satisfaction rises again.
Objectives

To design, develop & standardize the measure of compensation plan.

To find out the impact of compensation plan on job satisfaction in service organizations.

To find out the impact of compensation plan on job commitment in service organizations.
Hypothesis of the Research Work
H 1(null hypothesis) –compensation plan has a direct significant effect on job commitment in life
insurance corporation.
H 2(null hypothesis)- compensation plan has a direct significant effect on job satisfaction in life
insurance corporation.
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Research Methodology
The study was exploratory in nature and random sampling technique was used to select the sample.
Sampling element and sample size: individual employee of Life Insurance Corporation was the
sample element. A total of 70 employees were included in the sample.
Data collection tools: data was collected by using self-designed questionnaire of compensation
plans, organizational commitment, and employee satisfaction containing 24, 15 and 15 questions
respectively.
Data analysis tools: statistical methods like reliability analysis, and linear regression was used
applying SPSS software.
Analysis and Interpretation
Reliability Analysis
Variables
Compensation plan
Organizational commitment
Job Satisfaction
1
2
3
Cronbach Alpha
0.848
0.791
0.793
The cronbach alpha value for compensation plan ,organizational commitment, and job satisfaction
are respectively 0.848,.791 and 0.793.which all are greater than 0.7 so that questionnaire is reliable.
Regression Analysis
H 1(null hypothesis) –compensation plan has a direct significant effect on job commitment in life
insurance corporation.
Model
1
(Constant)
comp
Coefficients
Unstandardized
Standardized
t
Coefficients
Coefficients
B
Std. Error
Beta
8.327
3.574
2.330
.518
.045
.880
11.597
a. Dependent Variable: commitment
Sig.
.025
.000
Collinearity
Statistics
Tolerance
VIF
1.000
1.000
The t value is significant at .000 level of significance which is greater than 0.05 level of significance
hence it can be concluded that compensation plan has not effect on organizational commitment. The
null hypothesis is thus not accepted.
H 2(null hypothesis)- compensation plan has a direct significant effect on job satisfaction in life
insurance corporation.
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Model
1
(Constant)
comp
Coefficients
Unstandardized
Standardized
t
Coefficients
Coefficients
B
Std. Error
Beta
10.244
3.800
2.696
.518
.047
.868
10.904
a. Dependent Variable: sat
Sig.
.010
.000
Collinearity
Statistics
Tolerance
VIF
1.000
1.000
The t value is significant at .000 level of significance which is greater than 0.05 level of significance
hence it can be concluded that compensation plan has not an effect on job satisfaction. The null
hypothesis is thus not accepted.
Conclusion
The present paper was a study of the compensation plan and its impact on organizational
commitment and job satisfaction in life insurance sector. The result shows that compensation plan
has no effect on organizational commitment and job satisfaction in life insurance corporation.
References
1. Becker, T. E., Randal, D. M., & Riegel, C. D. (1995). The Multidimensional View Of
Commitment And Theory Of Reasoned Action. A Comparative Evaluation: Journal of
Management,21(4), 17-638.
2. CA Arnolds and DJL Venter (2007), The strategic Importance of Motivational Rewards
3. Cascio, W.F. (2003). Managing human resources: Productivity, Quality of work, life, profits.
6th ed. New-York : McGraw Hill Higher Education.
4. Gomez -Mejia, L.R., Balkin, D.B., & Cardy, R.L. (2006) Managing human resources. New
Jersey: Pearson Prentice Hall.
5. Lawler, E. E. 1971, Pay and Organizational Effectiveness: McGraw-Hill, New York.
6. Masood Hayat, Gulfam Khan Khalid, Arooj Malik( 2010), Job Satisfaction Among National
Highway Authority Employees. International Review of Business Research Papers Vol.6,
No.1, Page 319-330.
7. McNamara, C. (2008). Employee benefits and compensation: Basics about employee
motivation: Nuts-and-bolts guide to leadership and supervision in business. Minneapolis,
Minnesota: Authenticity Consulting LLC.
8. Rasheed, I, Aslam, H.D and Sarwar, S. (2010). “Motivational Issues for Teachers in Higher
Education: A Critical Case of IUB”. Journal of Management Research, Vol. 2 (2),
9. Reena Ali and M.Shakil Ahmed (2009), The Impact of Reward and Recognition Programs on
Employee’s Motivation and Satisfaction: An Empirical Study. International Review of
Business Research Papers. Vol. 5 No. 4 Page 270-279.
10. Ron Kluvers and John Tippet (2009), The Effect On Motivation of A Change in Rewards.
International Review of Business Research Papers, Vol. 5 No. 5, Page 147-159.
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Chapter 5
Customer Perception and Satisfaction of
Service Quality in Public and Private Sector
Amit Kumar and Garima Mathur
ABSTRACT
The study is aimed to analyze and evaluate the customer perception and satisfaction of service quality in public
and private sector. This is related to several other studies which show the relationship between customer
satisfaction and costumer perception toward service quality. As we know there are several studies which have
been conducted showing the relation between customer perception and satisfaction on service quality. In any
business to customer (B2C) type of environment, satisfying a customer is the ultimate goal and objective.
More often than not, it can be quite an issue. This is perhaps due to the fact that organisation sometimes do not
really understand of what actually goes on in a customer’s mind. In the study the perception of customer
towards service quality was found to be positively correlated with customer satisfaction.
Keywords: Customer Perception, Service Quality, Customer Satisfaction
Introduction
Banks play a very important role in the economic development of every modern state. Banks operate
at the heart of the modern economy. Traditionally, banking had been restricted from private
participation in India and public sector banks had been enjoying complete protection. This scenario
has changed since 1990. The decade of 90s witnessed a sea change in the working of banking in
India. Service quality is one of main elements of customer satisfaction and their intention to
purchase. However, the customers of public and private sector banks different in terms of their
perception of service quality. Private Banks have been observed to be higher on dimensions of
service quality: effectiveness and convenient while, the nationalized banks are better on the
dimensions of price and consistency.
Private bank customers are more satisfied with the services then public banks. Managers in the
banking sector undertake significant efforts to conduct customer satisfaction surveys and it is
appears that customers are saying that they expect good products and quality to their banks and
that may the only thing important to them.
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Customer Satisfaction
Customer satisfaction is a key factor in formation of customer’s desires for future purchase (Mittal &
Kamakura, 2001). Furthermore, the satisfied customers will probably talk to others about their good
experiences. This fact, especially in the Middle Eastern cultures, where the social life has been
shaped in a way that social communication with other people enhances the society, is more
important (Jamal & Naser, 2002). Although satisfaction has been defined as the difference between
expectation and performance, but there are differences between quality and satisfaction. For
example, Parasuraman et al. (1991) say that satisfaction is a decision made after experience while
quality is not the same. On the other hand, in satisfaction literature, expectations for goods is
“would”, while in service quality literature, expectations for goods is “should”.
It is a measure of how products and services provide by any organization meet the expectations of a
customer. It varies from person to person and service to service. A customer can be defined as a user
or potential user of banking services. A customer would include an account holder, or a person
carrying out casual business transactions with a bank. The efficiency of a banking sector depends
upon how best it can deliver services to its target customers. In order to survive in this competitive
environment and provide continual customer satisfaction, the banking services providers are
required to frequently increase the quality of services. In banking business it is seen that only 5%
increase in customer retention can extend 35% profitability.
Customer Perception
A marketing concept that encompasses a customer's impression, awareness and/or consciousness
about a company or its offerings that develops outside conscious awareness. Customer perception is
typically affected by advertising, reviews, public relations, social media, personal experiences and
other channels.
Service Quality
A business with high service quality will meet customer needs whilst remaining economically
competitive. “Quality” is itself a complex term and cannot be explained without mentioning its
various dimensions. For example; Harrison (2000) reviewed the work of Lehtinen and Lehtinen and
proposed the dimensions of physical quality, interactive quality, and organizational quality as three
dimensions of service quality. Although these attempts have had a major role in division of service
quality into process quality and output quality, but they lack enough details. Improved service
quality may increase economic competitiveness. Gronroos (2000) also refers to three dimensions of
output technical quality, service performance quality, and organization’s mental picture.
Furthermore, on this basis, they have referred to five dimensions of service quality in their
researches namely, Reliability, Responsiveness, Assurance, Empathy and Tangibles as a basis for
making a tool for testing the service quality, known as SERVQUAL.
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Literature Review
Abdul Raheem (2005) highlighted the areas in which public sector banks need to improve to survive
in the competition posed by the new entrants in the banking sector. He pointed out that the existing
organizational structure and policies of public sector banks are ill equipped to meet the new
objectives. He emphasized that public sector banks should commit themselves to provide quality
service to survive.
Tiwary (2011) conducted a research in the banking sector and stated that it is necessary to increased
adoption of technology to better meet customer requirements, improve efficiencies, reduce costs and
ensure customer delight and it was the private sector and foreign banks which established the
technological revolution in Indian banking and considering the fact that in the new economy, mind
share leads to market share and mind share is influenced not only by the promotions and
advertisements but more importantly on favourable customer perception which in turn is based on
satisfaction with regard to products, services and interaction. It was found that there is a two-way
relation between satisfaction and service quality. Similarly, Caruana (2002) concluded that customer
satisfaction plays a mediator role in the effect of service quality on service loyalty.
Kumbhar (2011) stated that the private sector banks are providing more satisfied ATM services then
public sector banks and the customer perception about Productivity, Security and Sensitivity, Cost
Efficiency, Problem Handling, Compensation and Contact services related to ATM service is very
less in both the public sector and privates sector banks, Therefore both kinds of banks should be
aware about these facets of ATM service to improve customers satisfaction. Bloemer, et al. (1998)
reported that the mental picture, service quality, and customer satisfaction influence customer
loyalty. The entry of information technology into the banking industry has created a revolution and
it has prompted commercial banks of India to design world-class customer service systems and
practices, to meet the growing customer needs. It is interesting to note that the results are consistent
with the previous studies conducted on customer service aspects, and it has been observed that the
foreign and the new generation private sector banks are serving the customers better.
Jabnoun and Al-Tamimi (2003) examined perceived services quality in commercial banks in the
United Arab Emirates, emphasising the importance of service quality to maintain market share,
concluding that customers value human skills the most in service quality. Many studies have been
conducted on measuring the service quality of Internet Banking also. Liao and Cheung (2005)
present a user-based core framework for evaluating service quality of e-banking. Empirical results
suggest that perceived usefulness, ease of use, reliability, responsiveness, security and privacy and
continuous improvement of e-banking services significantly influence customer attitudes towards
Internet e-banking.
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Objective of the Study
1. To develop and standardized questionnaire to evaluate the perception and satisfaction of
customer towards service quality of public and private sector.
2. To measure the impact of customer perception of service quality on customer satisfaction.
Hypothesis
1. There is no impact of customer perception of service quality on customer satisfaction.
Research Methodology
The Study
The study was causal in nature and analyzing “customer perception and satisfaction of service
quality in public and private banking sector.” The survey method was used for data collection at
Gwalior or outside Gwalior region.
Sample Design
The study population included all the customer of banking sector at Gwalior or outside Gwalior
region and respondents were contacted personally for collecting data. A 5-point Likert type scales
were used for collecting data. In all 127 customers were contacted and out of them only 102
responded. Since two questionnaires were incomplete so a sample of 100 respondents was
considered for further study.
Results and Discussion
The data was put for various tests for analysis.
Consistency Measure
Firstly consistency of all the items in the questionnaire was checked through item to total
correlation. Under this correlation of every item with total was measured, and we have found its
value good.
Reliability Measure
Reliability of Service Quality
Reliability Statistics
Cronbach's Alpha
.741
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Cronbach's Alpha Based on Standardized Items
.742
N of Items
20
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Cronbach's Alpha
.784
Reliability Customer Satisfaction
Reliability Statistics
Cronbach's Alpha Based on Standardized Items
.784
N of Items
14
Reliability test was carried out by using SPSS software and the reliability value through Cronbach’s
Alpha method was .741 of first questionnaire and .784 of second questionnaire and we can see the
value is >.7 so the questionnaire are highly reliable and can be considered for our study.
Regression
Regression is used to find out the impact of one variable on another variable as here we find out the
impact of Service Quality on Customer Satisfaction. For this we used linear regression application in
SPSS Software, and we find out the R-square value which we find out .408 it indicates Service
Quality contributes 40.8% in Customer Satisfaction of employees and F-value in our study is 63.378
means the model is best fitted, and high predictability of model. Beta value is found .639 which is
significant at 5% level of significance indicating that there is positive relationship between Service
Quality and Customer Satisfaction. In this case the hypothesis was rejected and we can say that the
independent variables (Service Quality) have significant impact on dependent variables (Customer
Satisfaction).
Table: showing that Following Values:
Model Summary
Model
R
R
Adjusted Std. Error
Change Statistics
Square R Square
of the
R Square
F
df1
df2
Sig. F
Estimate Change Change
Change
dimension0 1 .639a .408
.401
6.93912
.408
63.378
1
92
.000
a. Predictors: (Constant), Service Quality
1
Model
Regression
Residual
Total
Model
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ANOVA
Sum of Squares
df
Mean Square
3051.729
1
3051.729
4429.931
92
48.151
7481.660
93
a. Predictors: (Constant), Service Quality
b. Dependent Variable: Customer Satisfaction
Coefficients
Unstandardized Coefficients
Standardized
Coefficients
F
63.378
t
Sig.
.000a
Sig.
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1
B
Std. Error
Beta
(Constant)
12.601
4.467
Service Quality
.557
.070
.639
a. Dependent Variable: Customer Satisfaction
2.821
7.961
.006
.000
Discussion
According to above result it was found that there is 40.8% impact of service quality on customer
satisfaction so that banks need to improve the service quality for satisfying the customer more.
In our study the independent variable Service Quality has a positive impact dependent variable
Customer Satisfaction, there are many determinants like public and private sector bank and service
quality and our findings are consistent with Abdul Raheem (2005) highlighted the areas in which
public sector banks need to improve to survive in the competition posed by the new entrants in the
banking sector. And In the banking sector it is necessary to increased adoption of technology to
better meet customer requirements, improve efficiencies, reduce costs and ensure customer delight
It was found that there is a two-way relation between satisfaction and service quality.
Conclusion
The present study was attempted to examine the impact of Service Quality on Customer Satisfaction.
we have applied reliability test regression and Cronbach’s alpha value for tested reliability of items
and then we found the reliability > .7 that means item are highly reliable and internal consistency is
also good which is >.14 and the study is based on find out impact of Service Quality on Customer
Satisfaction for that we have used regression analysis and found significance of B-value is not
significant at 5% level of significance indicating that there is negative relationship between customer
satisfaction and service quality so we can say that the null hypothesis is not rejected, there is impact
of Service Quality on Customer Satisfaction.
References
1. A. Abdul Raheem (2005). Determinants of banking service quality: An Application of Factor
Analysis. Southern Economist – Feb. 2005 – Pg. No. 17-20.
2. Bloemer, J. (1998). Investigating Derivers of Bank Loyalty: The Complex Relationship
between Image, Service Quality and Satisfaction. International Journal of Bank Marketing, 16(7),
276-286.
3. Caruana, A. (2002). Service Loyalty: The Effects of Service Quality and the Mediating Role of
Customer Satisfaction. European Journal of Marketing, 36(7), 811-828.
4. Gronroos, C. (2000). Service Management and Marketing. John Wiley & sons Ltd.
5. Jabnoun, N., & Al-Tamimi, H. A. H. (2003). Measuring Perceived Service Quality at UAE
Commercial Banks. International Journal of Quality & Reliability Management, 20(4), 458-72.
6. Jamal, A., & Naser, K. (2002). Customer Satisfaction and Retail Banking: An Assessment of
Some of the Key Antecedents of Customer Satisfaction in Retail Banking. International Journal
o Bank Marketing, 20(4), 146-160.
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7. Kumbhar Vijay M. (2011). Service Quality Perception and Customers’ Satisfaction in Internet
Banking Service: A Case Study of Public and Private Sector Banks. Cyber Literature: The
International Online Journal, Volume 4 Issue 2, pp.21-30.
8. Liao, & Cheung (2005). Service Quality in Internet E-Banking: A User-Based Core
Framework. e-Technology, e-Commerce and e-Service, 628-631, IEEE International Conference on eTechnology, e-Commerce and e-Service(EEE'05).
9. Mittal, V., & Kamakura, W.A. (2001). Satisfaction, Repurchase Intent, and Repurchase
Behaviour: Investigating the Moderating Effect of Customer Characteristics. Journal of
Marketing Research, Vol. 38(1), 131-142.
10. Tiwary B. K. (2011). Consumer Perception and Satisfaction of Banking Products and
Services – A Comparative Study of Select Indian Public and Private Sector Banks. Indian
Streams Research Journal Vol - I.
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Chapter 6
Antecedents of Personal Financial Planning A Demographic Study
Navita Nathani
ABSTRACT
In the world of growing awareness towards investment avenues, there comes a strong need for planning the
investment in the alternatives present. The present work is a contribution in the literature, towards the
financial planning, which examines the factors responsible for planning an investment among the public,
taking in consideration the age, gender and qualification. The results were computed by using reliability
measure to test the questionnaire and factor analysis which determined the antecedents. This was enhanced by
the use of ANOVA which tested the effect of demographic variables on the financial planning. The results
explained that assured returns, policy planning, budgeting, retirement planning, future prospects are
important factors which are kept in mind while making a financial plan. Also the role of age, gender was
significantly seen in making a sound financial plan.
Keywords: Financial Planning, Retirement Planning
Introduction
Every individual is facing the growing inflation, where it is resulting in diminishing purchasing
power. This decrease in purchasing power is results in trapped in vicious circle of poverty and lower
standard of living. In order to keep all the things balanced, there is a strong need for financial
planning. It is the concept of managing funds considering the present expenditure and future needs,
involving the financial risk. In concrete terms, it involves analyzing the present financial position,
expected financial cash flows, inflation and identified financial objectives to develop a
comprehensive financial planning roadmap. This is aimed at making available the right amounts of
funds at the right time in the future.
The work of Alfest et al (2004) explained personal financial planning as the process of managing
money to achieve personal economic satisfaction. Furthermore, Lai and Tan (2009) elucidated that
personal financial planning moves through the life cycle, several major types of financial planning
insurance, investment, retirement, and estate planning are required.
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Furthermore, the process of financial planning is executed by preparing a financial plan. It is the
determination of future expenditures, on the basis of planning for future cash flows. It depends on
the firm’s goals and objectives that the plan can be of short term duration, medium term or a long
term duration. Short term goals are normally targeted in a 1 – 3 year framework. Medium term goals
fit into a 3-5 year horizon. Long term goals are achieved in a period of 5 years or more. Most
importantly, it helps in planning the absorption of risk, where it can be in the form of adequacy of
insurance, retirement corpus and a diversified portfolio. Also, this helps in providing security to an
individual in times of need, fulfilling requirements after retirement. Apart from the objective of
minimizing risk, the importance of a sound financial planning is seen due to increasing life
expectancy (Lai and Tan, 2009).
Process of Financial Planning
Any investment made is to achieve the objective of wealth maximization, which in turn is the result
of wealth creation (Bharath, 2012). This is achieved by effectual financial planning, which can be
done through the following basic steps:
1. Analysis of Current Financial Position
2. Estimating the future needs
3. Finding and evaluating the investment opportunities
4. Screening and investing in the best alternative
The current financial position can be analysed on the basis of the goal to be achieved. In parlance, it
can be said that goals are determined on the basis of available funds, or funds are made available in
order to achieve goal. But for making an investment, a layman always follows the former idea,
although this can be controversial point too. Assuming the former one to be true, determining the
available funds becomes an important task for a sound financial planning. This can be done on the
basis of funds saved for making profitable investments. The profitable investments are analysed on
the basis of future need of an individual. Taking an example, a person requiring money for his
retirement, when he will not be working, he will be investing in an asset which can yield him atleast
that corpus which can help in meeting daily expenses in future. Therefore, this analysis is known as
calculating the future cash flows. Cash Flows can be in the form of interest every year, or if it a fixed
asset, then capital gain, or in a glimpse can be both. Further, this cash flow calculation helps in
scrutinizing the available alternatives for making investments. The future needs determination helps
in evaluating the class of investments, which is categorized in two forms: (1) Fixed income
investment such as bonds, fixed deposits, preference shares, and (2) Variable income investment
such as business ownership (equities), or property ownership (Bharath, 2012).
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The investments are weighed up on the basis of investment behavior (Kasilingam & Jayabal, 2008).
This phrase means the determination of the reason of investment, volume of investment, and period
of investment. Once the requirements are matched up with alternatives present, investment is made.
This can also in multiple securities at a time, which can be in the form of portfolio. Portfolio can be
debt, which yields interest, and equities can be ordinary stock or preferred, which gives returns in
the form of dividends. It is considered as an optimum decision as it minimizes the risk which in turn
raises the returns.
Alternatives of Investment
There are various investment options available depending on the risk – return profile like Mutual
fund schemes, equities, Bank deposits, bonds, insurance plan. All these are known as different types
of financial products. Financial products refers to instrument that helps to save, invest, get insurance
or get a mortgage. These are issued by various banks, financial institutions, stock brokerages,
insurance providers, credit card agencies and government sponsored entities. Financial products are
categorized in terms of their type or underlying asset class, volatility, risk and return. The financial
markets offer a variety of both simple and complex financial products. It is difficult for the common
person to grasp the downside risks associated with financial products especially if he or she is
confronted by a blitz of clever advertising. Making wrong choices, while choosing financial
products, becomes one of buying in haste and repenting at leisure (Ravikumar, 2013). Market forces
continue to increase the range and complexity of financial products presented to the investors.
Individuals are given an increased role in managing their finances on the assumption that they are
capable of a nuanced understanding of the risk-return characteristics of the investment
opportunities and are able to optimally choose from among them. In this context of increasing role
and complexity, any lack of awareness about the available choices and their characteristics and the
consequent inability to choose products optimally, could significantly affect individuals’ financial
outcomes (Agarwalla, 2012).
This has given rise to financial planning industry. The financial planning industry is relatively new
in our society. However, it is similar to other knowledge-based industries, such as accounting and
law, because financial planners provide a service for a fee to their clients. This exchange relationship
between planner and client must be maintained over time in order for the core product, a financial
plan, to be constructed, implemented, and evaluated for success. Because it takes time for financial
plans to be implemented and monitored, the maintenance of an ongoing relationship between the
planner and the client is key to successful financial planning (Katz, 1996).
Review of Literature
There is large literature present measuring the investment needs of individual. The basic need for
making an investment is to create and maximise the wealth of an individual. The study of Nevins
(2003) proposed an approach, where portfolio should be constructed keeping in mind the goals of
clients. The combination of traditional investment methods and modern portfolio theory improves
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risk measurement and manage according to requirements. This would help in achieving the goal
where, principles and perception can be met. In addition to this, The study of Lusardi and Mitchell
(2005) explained the investment behaviour among workers. They evaluated the factors considered
for making investments among workers, with the available financial literacy among them. The
results explained that through the experiences, investments are done, where interest compounding
and increasing inflation are the important factors of analysis. This explained that people are ware
about the factors for sound financial planning, but despite this there is a small chuck that can do
their retirement planning in a proper manner. Supporting this work, review went strong with the
work of authors Hassan and Lawrence (2007) who examined the effect of various social,
demographic, and economic variables on retirement preparation and discussed ways in which
policy makers can use this information to mandate legislation that will motivate individuals to save
for retirement.
A very important factor responsible for investment is demographic categories. Deb and Chaveli
(2009) revealed the existence of gender differences in taking financial decisions. They used stratified
random sampling, where strata of gender were developed and random were on the basis of entry
into the sample institution i.e. bank, for making investment. Carrying the depth of demographic
variables, the investment awareness was seen in working women, which help them in taking their
investment decisions (Ranjani and Chopra, 2011). Furthermore, the study of Tuan-Hock Ng et al
(2011) made the literature rich through his study, which explained that marital status, age, income
level affect behavioural intention towards investment. Investment experience is another factor
reported to have significantly affected retirement planning intention.
Another view point was represented from the work of Kaur and Kaur (2011), which included the
examining of perception of customers towards investment alternatives. They concluded that
investments are done on the basis of the risk bearing capacity of a person. If a person is a risk avertor
his financial planning will include portfolio investments containing bonds, fixed assets like land.
Further, liquidity is another factor required to create a sound financial plan. In addition to this,
demographic factors significantly impact the financial decisions and hence planning. This work is
supported with the literature of Naidu and Sudhir (2012) who examined the investor’s preference
between active and passive equity mutual funds; their investment pattern, awareness and
satisfaction with the returns from the schemes. They concluded that investor satisfaction is same for
both active and passive equity mutual fund investors; the investor can also invest in passive equity
mutual funds as active funds charge higher fees than passive funds. They also found that fund
ratings have influence on the investor satisfaction; the investors must see the fund ratings before
investing in a mutual fund as only 57.52% (153) of them watch fund ratings before investing in a
mutual fund.
Another important study, which posed the assumptions for making investments (Gayathari, 2012),
elaborated them as: (1) Investors often do not participate in all asset and security categories, (2)
Individual investors exhibit loss-averse behavior, (3) Investors use past performance as an indicator
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of future performance in stock purchase decisions, (4) Investors trade too aggressively, (5) Investors
behave on status quo, (6) Investors do not always form efficient portfolios, (7) Investors behave
parallel to each other, and (8) Investors are influenced by historical high or low trading stocks.
Financial Planning requires sound financial literacy and experience (Agarwal et al, 2012). It is seen
that retired and young individuals in India are using traditional methods for evaluating the
investment decisions, where they are risk averters more than risk bearers, as they are not aware of
significant measures which can contribute in high returns. Also, an important pont was presented,
which said that the literacy of finance is weak due to poor poor performance of the Indian primary
education system.
Objectives of the study

To standardize the measure for evaluating the opinions on various aspects of financial planning

To identify the underlying factors of financial planning.

To compare the individuals’ gender, age and professional level in the opinions on various
aspects of personal financial planning.

To open new vistas for further research.
Research Methodology
The study: The study was empirical and exploratory in nature, which a sample design of 2*3*3
factorial design. The population included the male and female respondents from three professional
level Banking and insurance, Telecom and education and of three age groups >25, 26-30 and 31-36.
The sample size was 300. Individual respondents were the sampling element. Non probability
purposive sampling was applied. The data was collected on a standardized scale of Lai and Tan
(2009) and was used after validation. Data was analysed by using Cronbach alpha reliability test was
applied through SPSS to test the reliability of the questionnaire. Further, factor analysis was done to
identify the underlying factors of personal financial planning. Also, ANOVA was applied to
compare the gender, professional level and age groups.
Results and Discussion
Reliability Measure
Reliability test was carried out by using SPSS software and the reliability test measure are given
below:
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Cronbach’s Alpha:
.825
It was considered that reliability value more than 7 is highly reliable. So all the question were found
reliable.
Validity: The face validity of the questionnaire was found to be high.
Factor Analysis
KMO (Kaiser-Meyer-Olkin measure of sampling adequacy) and Barlett’s test of sphericity was used
to ascertain if the data is appropriate for factor analysis. The Principal Component Analysis of factor
analysis was applied with orthogonal rotation (Varimax) to retain variables whose factor loadings
were over 0.4 and Eigen values were over one.
KMO and Bartlett's Testa
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
a. Based on correlations
.803
1.397E3
253
.000
The KMO and Bartlett test of Sphericity indicates that the data is suitable for factor analysis. The
KMO measures the sampling adequacy should be greater than 0.5 for a satisfactory factor analysis to
precede. Looking at the table above, the KMO measure is 0.803. From the same table, we can see that
the Bartlett's test of sphericity is significant. That is, its associated probability is less than 0.05. In fact,
it is actually .000. This means that the correlation matrix is not an identity matrix. The above facts
indicate that the data collected on determinants of capital structure is suitable for factor analysis.
The factor are calculated with the help of total variance explain. The final 6 factor which come, is
calculated from the rotated component matrixes which is the outcome of SPSS software.
(SEE ANNEXURE TABLE 2)
Factor
Name
Assured
returns
Initial Eigen Value
% of
Total
Variance
4.516
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21.414
Variables / Convergence
Investment is commitment of funds
Money represents one’s
achievement
Money is a symbol of success
Investing is important
Investing is long term success
Difficulty in purchasing insurance
Loading
Similar
results
.533
.558
.585
.552
.406
.419
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Retirement
planning
2.459
11.660
Policy
planning
1.505
7.135
Budgeting
1.391
6.597
Future
prospects
1.014
4.808
Economic
factors
.996
4.724
Afraid of retirement
Afraid of useless man
Retirement causes mental problems
Retirement is difficult adjustment
Insurance is major investment
Adequate insurance program
Proud of investment
Insurance is a form of retirement plan
Spend money carefully
Budget money well
Retirement gives new opportunity
Income from proceeds of estate
Replacement income insurance
essential
Taxes applied to estate
Estate plan cover inflation and standard
of living changes.
.850
.841
.686
.535
.740
.693
.569
.559
.869
.701
Lai &
tan(2009)
.692
.527
.449
.714
.657
Description of factors
1. Assured returns - This factor has emerged as the most important determinant of research with a
total variance of. 21.414. Major elements of this factor include Investment is commitment of
funds (.533), Money represents one’s achievement (.558), Money is a symbol of success (.585),
Investing is important(.552), Investing is long term success(.406), Difficulty in purchasing
insurance(.419).
2. Retirement planning– This factor has emerged as the second most important determinant of
research with a total variance of 11.660. Major factor consisting this factor are Afraid of
retirement (.850), Afraid of useless man (.841), Retirement causes mental problems(.686),
Retirement is difficult adjustment(.535).
3. Policy planning- This factor has a total variance of 7.135. Major element of this factor includes
Insurance is major investment (.740), Adequate insurance program (.693), Proud of
investment(.569), Insurance is a form of retirement plan(.559).
4. Budgeting– This factor emerged as the factor of research with total variance of 6.597 consisting
the factors Spend money carefully (.869), Budget money well (.701).
5. Future prospects- This factor emerged as the factor of research with total variance of 4.808.
Elements of this factor are Retirement gives new opportunity (.692), Income from proceeds of
estate (.527), Replacement income insurance essential (.449).
6. Economic factors- This factor has a total variance of 4.724. Major elements are Taxes applied to
estate (.714), Estate plan cover inflation and standard of living changes(.657).
ANOVA- Test of Variances
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1. Null Hypothesis (Ho) - There is no significant difference in financial planning across gender.
2. Null Hypothesis (Ho) -There is no significant difference in financial planning across educational
level.
3. Null Hypothesis (Ho) - There is no significant difference in financial planning across age group.
Levene’s test for homogeneity of variances assesses whether the population variances for the
groups are significantly different from each other.
(SEE ANNEXURE TABLE 3)Tests of Between-Subjects Effects
Dependent Variable: Respondents
Source
Type III Sum of
Squares
Corrected Model
1482.228a
Intercept
450846.387
gender
520.051
Education level
168.200
Agegrp
525.666
Error
23377.372
Total
1782146.000
Corrected Total
24859.600
Df
Mean Square
F
Sig.
5
1
1
2
2
244
250
249
296.446
450846.387
520.051
84.100
262.833
95.809
3.094
4.706E3
5.428
.878
2.743
.010
.000
.021
.417
.066
The null Hypothesis states that the Levene’s Statistics test has a value of 1.265 and p-value of .221,
predicts that we do not reject the null hypothesis and we conclude that the data do not violate
homogeneity of variance assumption and that is why we will proceed with interpretation of
ANOVA.
In case of Hypothesis 1, the null hypothesis is rejected because F-value is 5.428 at p-value .021 and
concludes that there is significant difference in financial planning across gender. In case of
Hypothesis 2, the null hypothesis is not rejected because F-value is .878 at p-value .417 and
concludes that there is no significant difference in financial planning across educational level. In case
of Hypothesis 3, the null Hypothesis is not rejected because F-value is 2.743 at p-value .066 and
concludes that there is no significant difference in financial planning across age group.
Implications and Suggestions
This study is useful as to know the various factors of financial planning. It helps in understanding
the effect of demographic factors in financial planning decisions. This can help academicians and
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2015
economic think tanks, to understand the opinions of individual’s gender, age and professional level
on various aspects of personal financial planning.
The study could have been improved by including the sample from other regions, whose investment
affects the economic position of the country. This could also be done in a different perspective by
including other alternatives of investment.
Conclusion
The study revealed the six factors of financial planning and they are assured returns, retirement
planning, insurance planning, budgeting, future prospects and economic factors. The results of
ANOVA stated that there is difference in financial planning across gender but there is no difference
in financial planning across educational level and age group. The results were similar to those of Lai
and Tang (2009).
References
1. Altfest, L. (2004), Personal financial planning: Origins, development, and a plan for future
direction, American Economist, 48 (2), 53-60.
2. Annamaria Lusardi and Olivia S.Mitchell,(2005), Financial Literacy and Planning:
Implications for Retirement Wellbeing, University of Michigan Retirement Research Center,
UM05-09, 1-29
3. Dan Nevins, (2003), Goals-based Investing: Integrating Traditional and Behavioral Finance,
Research from Sei Investments,6( 4), 1-24
4. H.Gayathri, (2012), Risk Tolerance Level of the Investors-Psychological Behavioural
Approach, the international journal’s research journal of social science & management, Volume:
02, Number: 06, 102-112
5. K.Bharath, S.Abinaya, R,Vijayaraj and S.Sai Priya, (2012), Investor Behaviour Towards
Various Invesment Avenues -An Empirical Study, the international journal’s research journal
of social science & management, Volume: 02, Number: 08, 1-8
6. K.S Ranjani and Anjali Chopra,(2012), An empirical study on financial awareness of
working women in india ,the international journal’s research journal of social science &
management,01, (06), 268-280
7. Kaur, J., Kaur, M. (2011), Customer Perception towards investment alternatives,
Transformation and Survival of Business Organisation, ISBN:935-059-061-1, 106-113.
8. Kasilingam. R & Jayabal. G (2008), “Impact of Family size and Family Income on the
Investment Behaviour of Salaried Class investors”, Journal of Management & IT, OORJA, Vol
6, No 3 Sep-Dec 2008. pages 93-107.
9. Katz, D. B., (1996). High touch, high tech, Financial Planning, 26 (5), 133-136.
ISBN: 978-93-85000-10-2
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
10. M. Kabir Hassan and Dr. Shari Lawrence,(2007), Financial Preparation for Retirement:
Factors Affecting Retirement Preparation through Employer Sponsored Retirement Plans,
Networks Financial Institute An Indiana State University, WP-09,
11. Madhurima Deb and Kavita Chavali, (2009), A Study of Gender Differences in Investment
Behaviour, Asia Pacific Business Review, Vol. V, No. 3, 45-55
12. Ming-Ming Lai and Wei-Khong Tan, (2009), An Empirical Analysis of Personal Financial
Planning in an Emerging Economy, European Journal of Economics, Finance and
Administrative Sciences, Issue 16, 100-111
13. Prof. Sobhesh Kumar Agarwalla, Prof. Samir Barua, Prof. Joshy Jacob, Prof. Jayanth R.
Varma, (2012), A Survey of Financial Literacy among Students, Young Employees and the
Retired in India, Vikalp Journal of Indian Institute of Management Ahmedabad, 1-31
14. Suresh Naidu and Dr. B.Sudhir, (2012), A Study on Investor Behavior towards Active and
Passive Equity Mutual Funds, the international journal’s research journal of social science &
management, Volume: 02 Number: 05, 198-213
15. T.Ravikumar, (2013), Perceptions towards Financial Literacy in India, the international
journal’s research journal of social science & management, Volume: 02, Number: 09, 61-69
16. Tuan-Hock Ng, Woan-Ying Tay, Nya-Ling Tan, Ying-San Lim, (2011), Influence of
Investment Experience and Demographic Factors on Retirement Planning Intention,
International Journal of Business and Management, Vol. 6, No. 2, 196-203
Retrieved from
 http://www.investorwords.com/2630/investor.html#ixzz2IFurwK00
 http://www.investorwords.com/2599/investment.html#ixzz2IFx4Ypoc
 http://www.investorwords.com/3741/portfolio.html#ixzz2IFyZN5HB
 http://www.investopedia.com/articles/pf/05/060805.asp#ixzz2IFz5x0OE
 http://www.hsbc.co.in/1/2/personal/financial-planning/faqs
 http://mahesana.olx.in/financial-planning-wealth-management-iid-453821796
 http://www.businessdictionary.com/definition/need.html
 http://www.investopedia.com/articles/pf/05/060805.asp#axzz2IR9IMo9E
 http://www.economywatch.com/investment/financial-products.html
ISBN: 978-93-85000-10-2
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Chapter 7
Employee Relationship Management (ERM):
an investigation in Insurance sector at
Gwalior
Pranshi Singh
ABSTRACT
Relationship building and management by employers with employees using a focused approach enforced with
technological support for strengthening the bond and for resolving problems is known as Employee
Relationship Management (ERM). This concept is focused on enhancing the level of employee satisfaction. The
purpose of this study is to recognize the importance of ERM practices and to identify the status of employeremployee relationship in insurance sector at Gwalior. A questionnaire survey method has been used for data
collection where the respondents were the employees at area specified. The respondents were requested to
provide response to each statement by selecting best suitable option out of the three i.e. Agree, Neutral and
Disagree. Insurance companies under investigation are Life Insurance Corporation of India (LIC), ICICI
prudential, etc. The total number of responses received was 28. The questionnaire was mainly focused on
recognizing the human resource management practices, level of employee loyalty, employee satisfaction,
support from top management, remuneration satisfaction etc. From the findings, it is concluded that there is
need for proper implementation of ERM systems which will enhance employee satisfaction and ultimately the
productivity of the organization.
Keywords: Employee Relationship Management, Insurance Sector
Introduction
Employee relationship management (ERM) is a method of equipping a company’s most important
resource—its employees—with the information and training they need to build superior customer
relationships and for overall success of the company. A good relationship is a relationship where
there is a reciprocal exchange of value between two parties (Welch, 2006). Both parties must want to
be part of that relationship and contribute to the relationship to work. Relationship existence can be
seen between two parties when they regularly communicate, they follow transparent working style,
they are sympathetic to each other, they are responsive, they feel empathy with each other, etc.
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Equally important, and very much ignored until recently, is the human element of the equation—a
company’s employees. Employees help define a customer experience with every personal
interaction. While companies expect their employees to deliver superior performance, most
employers fail to give them the tools necessary for planning, training, informing, collaborating, and
supporting activities that directly affect employee and customer satisfaction.
ERM is considered important for improving productivity, as it emphasizes on improving employee
morale, loyalty, communication, change readiness etc.
Literature Review
Within the relationship-marketing framework, a number of different typologies of internal
relationships have been developed with consistent agreement that a relationship exists between the
firm and its employees. In addition, this relationship is being considered crucial for the success of
the organization (Singh and Kumar, 2011).
It has been stated that the firm-employee relationship is the “first” relationship of the firm and must
be strong before the firm can successfully develop any other relationships, including relationships
with customers. The employer is now the ‘seller’ and the employee is the ‘buyer.’ Employees are
now the customers. The employee experience the relationship with the employer from the moment
the employee enters into a workspace.
ERM focuses on building and increasing the asset value of the employee with the main objective of
increasing and nurturing leadership potential and contribution of every employee (Joensson, 2008).
ERM is designed to dramatically increase their effectiveness and contribution to lead to the overall
success of the company (Siebel, 2006).
There are a lot of different issues that can affect employee satisfaction, which has a direct result on
employee productivity and overall corporate culture. Employee relationship management can be
effectively implemented initially by using employee surveys to directly engage employees in the
issues that are most important to them. Some of the core issues that can be controlled with effective
employee relationship management are:

Communication: Open communication is highly essential amongst both employees and
between the employees and the management team. When employees feel that cannot be
heard, they may become frustrated which leads to lowered employee morale. Lowered
morale can result in lowered productivity and an uncomfortable or even hostile work
environment. Employee surveys can serve as a breakthrough by providing better
understanding of how employees feel about communication in the work environment in the
organization.
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
Conflict Management: Problems cannot be neglected when they arise, it’s important to
identify and devise strategies to solve them. This is a fundamental aspect of employee
relationship management. Conflicts may occur between employees and employers or
between employees. Employee relationship management in such case involves providing the
necessary tools to help negotiate and manage conflicts in the organization.

Employee Growth: Employees who feel they are only required to put in their hours and go
home will just do that. If employees feel that they are vital to the organization and may
become valuable asset based on their work, as well as their ability to provide important
ideas, they will work in a better and productive manner which will help the company grow
and develop (Kuo et al., 2010).
ERM involves implementing a dedicated information system for the management of human
resources (referred to as HRIS) which makes it possible to cover all problems that are related with
the relationship between a company and its employees in particular:

Training- An overall training plan preparation is necessary that involves outlining schedules
and quality of training that is to be provided to the new recruits alongside meeting the
internship requests.

Pay- salary bulletins are to be mailed and statements of salary have to be prepared.

Recruiting- New employees have to be recruited and alongside follow up has to be carried
out on the new recruits.

Competence and career management- Competence refers to the implementation of a
standard which permits improved management of jobs within the enterprise and in house
transfers. The basic goal is to value human assets by prioritizing the competences,
knowledge and know-how of employees.

Time Management- Time is an essential and vital resource for every organization and its
management by quantification of the activity of the employees of the company, in particular
with a view to compliance with existing laws(reduction of working hours, payment of
overtime, accounting of vacation, work breaks and absences)

Internal Communication- which permits sensitization and spread of information which
makes it possible to break the isolation of different sectors of the enterprise.
A company will benefit only from Employee Relationship Management technologies if there are
clear guidelines and rules of how these technologies should be used. So a clear set of guidelines is
the need of the hour. A culture that values the employee must pervade the organization before these
technologies can become destructive force which spread a negative morale rather than a positive
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one. Employee Relationship Management tools breaks down the dependency on hierarchal
command and control systems and introduces more and more a self-organizing culture of
employees that are networked to collaborate on points of need.
Technology can definitely assist but old style interpersonal skills and conflict resolution techniques
are still forming the requirements for effective Employee Relationship Management.
In particular there is a lack of understanding of this relationship from the viewpoint of the employee
and little specific knowledge exists in regard to the general internal relationships of the firm, or the
employer-employee relationship. Therefore, there is a need to explore employer-employee
relationships, how they are created and how they might be best measured for most effective
implementation of ERM practices. The purpose of this study is to recognize the importance of ERM
practices and to identify the status of employer-employee relationship in insurance sector at
Gwalior.
Research Methodology
This study is of exploratory nature wherein a questionnaire survey method has been used for data
collection where the respondents were the employees at area specified. The respondents were
requested to provide response to each statement by selecting best suitable option out of the three i.e.
Agree, Neutral and Disagree. Insurance companies under investigation are Life Insurance
Corporation of India (LIC), ICICI prudential, etc. The total number of responses received was 28.
The questionnaire was mainly focused on recognizing the human resource management practices,
level of employee loyalty, employee satisfaction, support from top management, remuneration
satisfaction etc.
Results and Discussions
Samples were collected and further analyzed using tabulation and graph method. Following is
description of the responses received in context of each question mentioned in the questionnaire:
a) My organization provides opportunities to employees to express their views about work.
Particulars
Disagree
Neutral
Agree
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Number of Responses
6
15
7
%
21.43%
53.57%
25%
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2015
Neutral, 15
Agree, 7
Disagree, 6
o
Almost 54% of respondents selected neutral option.
b) Periodical training sessions takes place at my organization
Particulars
Disagree
Neutral
Agree
Number of Responses
2
9
17
%
7.14%
32.14%
60.72%
Agree, 17
Neutral, 9
Disagree, 2
o
Majority of the respondents were all agreed with the statement.
c) My manager involves me in decision making process of the organization.
Particulars
Disagree
Neutral
Agree
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Number of Responses
18
8
2
%
64.29%
28.57%
7.14%
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2015
Disagree, 18
Neutral, 8
Agree, 2
o
Majority of the respondents disagreed upon this statement.
d) I feel loyalty towards the organization.
Particulars
Disagree
Neutral
Agree
Number of Responses
7
11
10
Neutral, 11
%
25%
39.29%
35.73%
Agree, 10
Disagree, 7
o
Almost 40% of the respondents selected neutral option but almost 36% of the respondents
were agreed with the statement.
e) I feel loyalty towards customers and clients.
Particulars
Disagree
Neutral
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Number of Responses
8
9
%
28.57%
32.14%
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2015
Agree
11
39.29%
Agree, 11
Disagree, 8
o
Neutral, 9
Majority were agreed with the statement.
f) My organization provides satisfactory level of remuneration.
Particulars
Disagree
Neutral
Agree
Number of Responses
11
7
10
%
39.29%
25%
35.71%
Disagree, 11
Agree, 10
Neutral, 7
o
Almost 39% of the respondents were disagreed with the statement but almost 35% of the
respondents agreed with the statement.
g) I am satisfied with my job profile.
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Particulars
Disagree
Neutral
Agree
Number of Responses
8
6
14
%
28.57%
21.43%
50%
Agree, 14
Disagree, 8
Neutral, 6
o
Majority were agreed with the statement.
h) There is lack of time for completing the work assigned.
Particulars
Disagree
Neutral
Agree
Number of Responses
3
7
18
%
10.71%
25%
64.29%
Agree, 18
Neutral, 7
Disagree, 3
o
Almost 65% of the respondents were agreed with the statement.
i) My manager understands about my family responsibilities.
Particulars
Disagree
Neutral
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Number of Responses
14
9
%
50%
32.14%
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2015
Agree
5
17.86%
Disagree, 14
Neutral, 9
Agree, 5
o
Majority of the respondents disagreed with the statement.
j) Flexible working schedules are available to me if needed.
Particulars
Disagree
Neutral
Agree
Number of Responses
22
4
2
%
78.57%
14.29%
7.14%
Disagree, 22
Neutral, 4
Agree, 2
Almost 79% of the respondents were disagreed with the statement.
k) My organization provides motivation in monetary and non-monetary terms.
Particulars
Disagree
Neutral
Agree
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Number of Responses
4
5
19
%
14.28%
17.86%
67.86%
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2015
Agree, 19
Disagree, 4
o
Neutral, 5
Almost 68% of the respondents were agreed with the statement.
l) My organization employs a grievance redressal mechanism for resolving conflicts and confusions
among employees.
Particulars
Disagree
Neutral
Agree
Number of Responses
12
11
5
Disagree, 12
%
42.86%
39.28%
17.86%
Neutral, 11
Agree, 5
o
Majority lied in disagree and neutral option for the statement.
m) The working environment of my organization is full of positivity.
Particulars
Disagree
Neutral
Agree
ISBN: 978-93-85000-10-2
Number of Responses
15
9
4
%
53.57%
32.14%
14.29%
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
Disagree, 15
Neutral, 9
Agree, 4
o
Almost 54% of the respondents were disagreed with the statement.
Conclusion
From the findings of the study, it can be concluded that the respondents are satisfied with the
training sessions, their job profile and the motivational practices. Respondents have neutral outlook
on opportunities to employees to express their views about work, loyalty towards organization.
Respondents were agreed upon their loyalty towards customers and clients and lack of time for
completing the work assigned. Respondents are dissatisfied with the working environment of the
organization, existence of effective grievance redressal mechanism for resolving conflicts and
confusions among employees, flexible working schedules, employers understandability about
employees’ personal life, level of remuneration, involvement in decision-making process of the
organization.
Limitations and Future Work
The sample size for the study was low which affects the level of generalization of the findings. More
sample size will have more diversified set of results. Future research may replicate the same study in
other industrial context. Also a comprehensive view can be taken if both employer and employee
perspective is taken into consideration.
References
1. Joensson T. (2008) “A multidimensional approach to employee participation and the
association with social identification in organizations” Employee Relations Vol. 30 No. 6, pp.
594-607.
2. Kuo, T.H., Ho, L.A., Lin, C., Lai,K.K. (2010) "Employee empowerment in a technology
advanced work environment", Industrial Management & Data Systems, Vol. 110 No. 1, pp.24
– 42
3. Siebel (2006) “Linking Employee Relationship Management to Customer Relationship
Management”
White
Paper,
Siebel,
Oracle
Corporation,
USA
(2006)
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2015
http://cdn1.computerworlduk.com/cmsdata/whitepapers/4650/erm-white-paper.pdf
(Accessed on 10th Jan, 2014)
4. Singh, P.N. and Kumar, N. (2011) “Employee relations management” Book, Pearson
Education, pp. 122-136
5. Welch, M. (2006), “Rethinking relationship management: exploring the dimension of trust”,
Journal of Communication Management, Vol. 10 No. 2, pp. 138-55
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ANNEXURE
(TABLE 1)
Reliability Statistics
Cronbach's Alpha
Cronbach's Alpha Based on Standardized
Items
N of Items
.825
.824
23
(TABLE 2)
Rotated Component Matrixa
1
2
Raw
Rescaled
Component
Component
3
4
5
6
1
VAR00012
.533
.637
VAR00004
.558
.610
VAR00003
.585
.604
VAR00011
.552
.600
VAR00013
.406
.472
VAR00010
.419
2
3
.850
.782
VAR00017
.841
.751
VAR00016
.686
.698
VAR00019
.535
.471
.573
6
.504
VAR00005
.740
.712
VAR00008
.693
.693
VAR00014
.569
.578
.518
5
.437
VAR00018
VAR00006
4
.559
.530
.571
VAR00015
VAR00001
.869
.840
VAR00002
.701
.682
VAR00007
VAR00020
.692
.739
VAR00021
.527
.612
VAR00009
.449
.489
VAR00022
.714
.770
VAR00023
.657
.698
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
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Rotated Component Matrixa
1
2
Raw
Rescaled
Component
Component
3
4
5
6
1
VAR00012
.533
.637
VAR00004
.558
.610
VAR00003
.585
.604
VAR00011
.552
.600
VAR00013
.406
.472
VAR00010
.419
.437
2
VAR00018
.850
.782
VAR00017
.841
.751
VAR00016
.686
.698
VAR00019
.535
.471
3
.573
.740
.712
VAR00008
.693
.693
VAR00014
.569
.578
.518
.559
.530
5
6
.504
VAR00005
VAR00006
4
.571
VAR00015
VAR00001
.869
.840
VAR00002
.701
.682
VAR00007
VAR00020
.692
.739
VAR00021
.527
.612
VAR00009
.449
.489
VAR00022
.714
.770
VAR00023
.657
.698
a. Rotation converged in 8 iterations.
(TABLE 3)
Levene's Test of Equality of Error Variancesa
Dependent Variable:respondents
F
df1
df2
Sig.
1.265
16
233
.221
Tests the null hypothesis that the error variance of the dependent variable is equal
across groups.
a. Design: Intercept + femalemale + educationlevel + agegrp
Descriptive Statistics
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Dependent Variable:respondents
femalemale educationlevel
1
1
2
3
Total
2
1
2
3
Total
Total
1
ISBN: 978-93-85000-10-2
agegrp
Mean
Std. Deviation
N
1
87.0000
.
1
2
81.0000
3.46410
3
3
90.0000
.
1
Total
84.0000
4.89898
5
2
85.5000
2.38048
4
3
84.0000
.00000
2
Total
85.0000
2.00000
6
1
81.0000
10.65111
66
2
81.6000
12.34099
5
3
87.0000
5.00000
3
Total
81.2838
10.55776
74
1
81.0896
10.59550
67
2
82.7500
7.95584
12
3
86.5000
3.88587
6
Total
81.7059
9.97476
85
1
87.5000
.70711
2
2
92.6667
3.51188
3
3
91.6667
7.09460
3
Total
91.0000
4.78091
8
1
84.0000
12.72792
2
2
90.0000
6.74007
15
3
65.6667
8.96289
3
Total
85.7500
11.34565
20
1
83.9083
9.80310
120
2
88.3333
9.35542
15
3
89.0000
2.82843
2
Total
84.4672
9.76643
137
1
83.9677
9.72127
124
2
89.4848
7.78669
33
3
81.2500
14.36016
8
Total
84.9394
9.85115
165
1
87.3333
.57735
3
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Redefining the Human Resource Paradigm in Changing Cultural, Social and Economic Environment
2015
2
3
Total
2
86.8333
7.11102
6
3
91.2500
5.85235
4
Total
88.3077
5.82215
13
1
84.0000
12.72792
2
2
89.0526
6.31113
19
3
73.0000
11.87434
5
Total
85.5769
9.93649
26
1
82.8763
10.17951
186
2
86.6500
10.27145
20
3
87.8000
3.96232
5
Total
83.3507
10.14092
211
1
82.9581
10.10306
191
2
87.6889
8.30614
45
3
83.5000
11.14071
14
Total
83.8400
9.99188
250
Tests of Between-Subjects Effects
Dependent Variable:respondents
Source
Type III Sum of
Squares
df
Corrected Model
1482.228a
5
Intercept
450846.387
1
femalemale
520.051
1
educationlevel
168.200
2
Mean Square
F
Sig.
296.446
3.094
.010
450846.387
4.706E3
.000
520.051
5.428
.021
84.100
.878
.417
2.743
.066
agegrp
525.666
2
262.833
Error
23377.372
244
95.809
Total
1782146.000
250
Corrected Total
24859.600
249
a. R Squared = .060 (Adjusted R Squared = .040)
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Chapter 8
Repositioning Leadership Development: A
Practitioner’s Perspective
Shilpa Kabra Maheshwari and Jaya Yadav
ABSTRACT
Organizations in the twenty first century are facing unprecedented challenges that require new ways of
building leaders. With the growing interest (McCauley, Moxley & Van Velsor, 1998) in Leadership
Development. This paper aims to explore the Leadership Development process from the practitioner’s lens in
perspective of an integrated approach to building leadership capability in organisations. The objective is to
study the pillars of Leadership Development to understand the key processes that underpin successful
leadership development and examine implications for building individual and organizational capability. The
paper proposes that a good leadership development design may lead to enhancing leadership capabilities, but
only for a limited time. An integrated approach with key distinct variables of supporting HR practices,
linkages to role & career progression, opportunities to practice leadership and executive support is imperative
for more sustainable Leadership Development processes. The need for a paradigm shift towards more rigorous,
integrated and sustainable leadership development construct is emphasized. Practical implications for
leadership development in organizational context are referred to.
Key Words: Leadership, Leadership Development, Leadership Capability
Introduction
As organizations and business environment continue to become more complex, leadership is the
single most determinant of competitiveness. Leadership capability has long been recognized as a
key factor in simultaneously guiding organizations through challenges and driving them towards
high performance (Bennis, 2003, Maxwell, 1998, Kets De Vries, 2010). Research indicates that
Leadership Development is critical to organizational competitive advantage and performance (Hay
Group, 2000). According to Aon Hewitt, organizations that excel at leader building, edge out the
competition with a surplus of leadership talent, even in the most challenging talent markets; hence,
the growing emphasis and interest in Leadership Development (Avolio, 2004, Conger & Benjamin,
1999; Day, 2001; McCauley, Moxley & Van Velsor, 1998).
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Research studies show increasing focus and investments by organizations on Leadership
Development (Towers Perrin, 2006). According to a survey of the American Management
Association (AMA), more than 25% of organizations spend more than one-third of their annual
training budget on leadership development programs. A recent Booz and Hamilton study ranked
Leadership Development along with managing change as one of the top three business focus areas
for the coming years. Such a heightened interest in the area of Leadership Development has been
simply because of its role in enabling a robust leadership pipeline.
Leadership Development emerged in the western countries during the year 1900 to 2000 and has
spiked up in the last 20 years. But it was the work of Centre for Creative Leadership (CCL) which
has globally popularized the concept of Leadership Development and as a result of which both
practitioners and academia have started laying importance on it. Leadership development
essentially relates to the process of developing an organization’s leadership capability to cope with
the emerging challenges of its environment. Though there is plethora of literature on leadership
development, the determinants of success of Leadership Development processes are not as clear-cut
and there are divergent views on the effectiveness and outcome of such processes. A most often
question asked is, why so few leadership development efforts produce the leaders needed when the
elements of leadership development have been well developed and researched over the past thirty
years.
Notwithstanding the widening base of theoretical and empirical contributions to the area of
leadership development, the field as explored from the practitioner’s angle still remains in its
infancy. Much of existing theory focuses on effective leadership development processes, at the
individual, group, or organizational level. Little emphasis is placed on an integrated leadership
development approach and whole system effect both from the process and outcome effect. This calls
for new ways of exploring leadership development contextualized to organizational needs. This
paper attempts to bridge this gap.
Literature Review
In recent years the conceptual and theoretical foundations of leadership have received increased
attention (Avolio 2005; Bass, 1990; Burns, 1978; Coleman, Fiedler, 1967) more so with the increasing
emphasis on Leadership Development in the organizational context (Avolio, 2004, 2005; Conger &
Benjamin, 1999; Day, 2001; Mccauley, Moxley & Van Velsor, 1998). A mere search on Google throws
up thousands of results on Leadership, Leadership Development, Leadership development process,
programs and the count continues to go up. However, concepts of leadership, ideas about
leadership and leadership practices are the subject of much thought, discussion, writing, teaching
and learning (Depree, 1989).
Wikipedia defines Leadership has as the "process of social influence in which one person can enlist
the aid and support of others in the accomplishment of a common task. Other definitions of
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Leadership extend from process of influence to getting things done (Yukl, 2002) to setting of
directions (Jacobs & Jaques, 1990, Batten, J.D., 1989) to aspects of visioning (Bennis, W, 1989). There
are almost as many definitions of leadership as there are persons who have attempted to define the
concept".
If leadership is so varied, the question remains, can leadership be learnt and how can it be
developed? Peter Drucker opines “Leaders are not born, they are grown.” It suggests that
leadership is a quantifiable set of skills and ways of thinking that can be taught. It also asserts that
Leadership is a science and it is also an art. There is increasing evidence and allusion to the fact that
the ability to lead and leadership can be learnt.
Many seminal ideas about leadership and leadership development have their roots in research
conducted by North American and European scholars in western business organizations. The
concept of leadership often gets misconstrued as leadership development. While “Leadership” is a
process where a person influences others to accomplish an objective and directs the organization in a
way that makes it more cohesive, “Leadership Development” is the process of creating a robust and
sustainable pipeline of leaders. The primary emphasis in leadership development is on building
collaborative group processes and using interpersonal and influence processes to achieve
organizational objectives. Popularized by Centre for Creative Leadership, the term “development”
broadly refers to growth and change in competencies, attitudes, values, knowledge, skills, and
abilities in areas relevant to the individual’s job performance or career progression (Van Velsor,
McCauley & Moxley, 1998).
State of art leadership development occurs in the context of ongoing work initiatives that are tied to
strategic business imperatives (Dotlich & Noel, 1998; Moxley & O’Connnor Wilson, 1998). As stated
by Jeff Schwartz, Deloitte Touche Tohmatsu Global Organization and Change Leader, “Relying on
old methods to address entirely new talent challenges may prove detrimental in today’s global
economy that is desperate for innovation, refreshed leadership programs, and new demographic
and skill gap challenges”. CCL, which has been the driver of significant advances in the theory and
practice of leadership development, developed a general model of development and developmental
experiences. This model describes what needs to be provided, as well as the context (individual and
environmental) that needs to exist, for an experience to bring about development. This framework is
popularly used in thinking about and assessing leadership development programs and activities
(Day, 2001; Van Velsor et al., 1998). Leadership development essentially relates to the process of
developing an organization’s leadership capability to cope with the emerging challenges of its
environment. However, one of the least researched areas is in fact the science of Leadership
Development (Avolio B., 2010)
Leadership
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Firstly, to be able to understand what Leadership Development is, let us understand Leadership.
Leadership is bizarre and so is Leadership Development, the art and science of developing leader’s.
According to Cronin (1984), “Leadership is one of the most widely discussed subjects; and yet it is at
the same time one of the most confusing”. Fred Luthans, in his book Organizational Behavior
(2005), said that "leadership does remain pretty much of a 'black box' or unexplainable concept."
Though the essence of leadership is understood and felt, there is still no one clear definition or
articulation of the word leadership. Bass (1990) too describes Leadership as being “one of the
world’s oldest preoccupations”.
The concept of Leadership has evolved from the earlier times of trait theory (1930’s), more popularly
known as great man theory to behavioral theories (1950’s) to the contingency or situational
leadership theories (Hershey & Blanchard) in 1960’s. While each of the trait, behavioral, and
contingency approaches (Fiedler, 1967) have contributed to the understanding of leadership, none of
the approaches have been able to explain leadership in toto. Much of the research of the last 50 years
has focused on the study of “heroic” leaders. Recent advancements in the study of leadership refer
to concepts of leadership such as transformational leadership, (Avolio, 2005; Bass,1990), Servant
leadership and distributed leadership.
Connotations of Leadership have undergone numerous changes over the years. Although some have
defined leadership in pure conceptual terms as ‘the process of being perceived by others as a leader’,
most behavioral definitions imply certain types of acts or behaviours that may influence others to
serve the goals of a leader or the organization. Wikipedia defines Leadership as the "process of
social influence in which one person can enlist the aid and support of others in the accomplishment
of a common task. Other definitions of Leadership extend from the process of influence to getting
things done (Yukl, 2002) to setting of directions (Batten, J.D., 1989) to aspects of visioning (Bennis,
W, 1989). Many, lthough not all, studies of leadership focus on the nature of leadership in the
workplace. Leadership is probably the most frequently studied topic in the organizational sciences.
If leadership is so varied, the question remains, can leadership be learnt and how can it be
developed? Peter Drucker opines “Leaders are not born, they are grown.” Messmer, 1999 indicates
leadership to be a quantifiable set of skills and ways of thinking that can be taught. Bashford, 2003
also asserts that Leadership is a science and it is also an art. There is increasing evidence to the fact
that the ability to lead and leadership can be learnt.
Leadership Development
Leadership Development emerged in the western countries during the year 1900 to 2000 and has
spiked up in the last 20 years. A shift in leadership development has occurred. While it used to be
that American and European companies had cornered the market on developing the leaders of
tomorrow, our latest round of research shows that Europe is now second to organizations in Asia
Pacific, with India making the fastest progress. Wikipedia defines “Leadership Development’ as any
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activity that enhances the quality of leadership within an individual or organization. While
“Leadership” is a process where a person influences others to accomplish an objective and directs
the organization in a way that makes it more cohesive, “Leadership Development” is the process of
creating a robust and sustainable pipeline of leaders.
The concept of leadership development has taken new connotations with the evolution of the
difference between leader development and leadership development (Day, 2001). Leader
development is described as the “expansion of a person’s capacity to be effective in leadership roles
and processes”. Leadership development is defined as the expansion of a group’s capacity to
produce direction, alignment, and commitment (McCauley et al.). Leader development focuses on
the development of “Leadership in an Individual”, such as desired personal characteristics in a
leader, desired ways of thinking or feeling, ways of behaving. In contrast, Leadership development
focuses on the development of “Leadership as a Process”. This will embody social relationships,
social influences, team dynamics between the leader and his/her team as well as informal networks
within the organization. Leadership Development in addition to enhancing the development of
individual’s as leaders, also focuses on the interpersonal linkages and collaboration between the
individuals within the organization.
Leadership Development: An Integrated Approach
Companies are exploring new accelerated leadership development programs to overcome expected
shortfalls in leadership positions. The underlying gap is the mismatch between what is desired and
what is available. Most organizations see Leadership Development as only developing individuals
whereas leadership development needs to be seen as a more holistic approach and encompass the
concept of “one best way” versus “the many best ways” of leadership development. While it's
tempting to find out prevailing best practices and simply try to duplicate it, progressive
organisations recognize the need for answers that work specifically for them. They see Leadership
Development not as an art only but as a science too. And it's a science that demands evidence-based
leadership concepts and practices, using data systematically to learn from past successes and
failures, while also conducting progressive experiments to find out what types of Leadership
Development frameworks truly make a difference. Many companies do engage in more on-going
leadership development efforts, but these are often disjointed efforts with no coherent plan and a
lack of clearly defined objectives for development of leaders or succession requirements (Conger &
Fulmer, 2003).
Effective leadership development rests on three fundamental pillars of challenge, experience and
support. The standardized and most widely used frameworks of Leadership development comprise
classroom modules on managing self, managing others, managing business and managing change
along with on the job learning, coaching, structured and less structured learning interspersed with
360 degree feedback, Individual Development Plan, coaching connects, action learning and manager
mentorship. Critical competencies to move up the leadership pipeline like knowledge, skills time
horizons (Charan, R., Drotter, S., & Noel, J. (2001) are being complemented and supplemented by
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learning agility, adaptive capacity, resilience, reflection, decision making, complexity and
uncertainty handling. References to other approaches also include references to life changing events
or transformative events called crucibles- a severe test or trial, the most negative from which
extraordinary leaders find meaning in—and learn. The concept of Leaders developing Leaders is
also being seen as an effective development process (Cacioppe, 1998).
Based on practitioner’s experience of a leadership development program carried out in a
manufacturing organisation and literature review this paper proposes an integrated approach to
successful leadership development based on presence of key antecedents and successors in the
overall design and approach. The paper makes the following recommendations:

Assessment of developmental readiness is an important factor while nominating/enrolling
participants for a leadership development program

The assessment of the developmental readiness of participants goes beyond the performance
potential matrix and talent pool data. It is important to assess the attitude and willingness
and commitment of participants to the process of leadership development

The meaning and context of leadership and leadership development both at the individual
and the organizational level needs to be articulated and communicated to the participants.

The common meaning of leadership (success profile, leadership competency framework,
leadership attributes ) and leadership development at the organizational level needs to be
explained, reinforced and understood by all participants, line managers and
champions/steering committee members to enable organizational development

The success of leadership development programs cannot be a standalone program but must
be integrated to other supporting organizational and HR processes
The foundation for all great leadership development initiatives start with the design. A well
designed leadership development program is the key to identifying, attracting, filling and retaining
corporate leadership. In a research white paper has identified seven steps for effective leadership
development including business alignment, identification of business critical roles, career growth
etc. While most standard approaches align very remotely to these seven steps, most significant
linkages to planning for succession, career management, growth and retention of these leaders are
not addressed and lose emphasis in due course. Another perspective which programs fail to factor is
insights into the strategic goals of the organization and business direction. What is called for is an
integrated approach toward’s leadership development. This paper assert that effective leadership
development is a function of the principles of design and integration of the key precursors and
successors of the leadership development program and the stretch and opportunities to practice
leadership
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A. Precursors of Leadership Development
Developmental Readiness - Assessment of the developmental readiness of participants and
willingness to learn and adapt to the nature of the program is a critical ingredient before the
initiation of the leadership development program. At a point of time when most organizations look
at return on investment from such processes the impact the program has made on being able to
produce more effective leaders can greatly be enhanced if the initial homework in pitching the right
candidates is done. Though a number of tools like performance rating, potential evaluation through
assessment centers, superior feedback and emotional intelligence tests are used to avoid derailers,
the impact can be scaled up by rigor and focus on assessment of a participant’s willingness and
ability to unlearn, learn and adapt. It is important to assess the attitude, willingness to change and
commitment to the process of leadership development
Business Alignment – State of the art leadership development occurs in the context of ongoing
work initiatives that are tied to strategic business imperatives (Dotlich & Noel, 1998; Moxley &
O’Connnor Wison, 1998). There is a need to align each leadership development initiative in the
pursuit of a company's business goals and strategic direction as a prerequisite to success Key
leadership development processes need to become embedded in the organization strategy and vice
versa and key questions should be answered:




Do we know what Leadership means to us? Are we clear what Leadership Development
means to our strategic goals?
Do we have the Leadership Development benchmarks for us, for today and for the future?
Is our Leadership development process change responsive?
Does it increase efficiency and productivity while remaining competitive?
Process Anchor - The success of a leadership development program is dependent on the strength
and capabilities of the anchor of the process. The anchor must possess the ability to reflect, uphold
values, build a compelling vision, collaborate within the organization and create a buy in and
mandate for the program. This demands playing the best of HR or line manager as the coordinate of
the extensive effort of the organization. The fact that the anchor is able to look at the larger picture
of the outcomes, is able to tweak and add organizational insights and customize the one size fits all
program to individualized needs will give an edge to the success and credibility of the leadership
development program. A strong anchor will establish, enable and nurture relationships with all
stakeholders to create a learning and development culture within the organization.
Leadership Commitment & Buy In - The most important driver of success is organisational values
that support Leadership Development. Without organisational values that support Leadership
Development, a truly strategic and structured Leadership program will be difficult to achieve
success with. It needs to be supported, committed to and lived out at all levels in the organization
with strong and visible support and role models provided from the top.
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B. Successors of Leadership Development
Leadership Development as a Culture - The meaning and context of leadership (success profile,
leadership competency framework, leadership attributes) and leadership development both at the
individual and the organizational level needs to be explained, reinforced and understood by all
participants, line managers and champions/steering committee members to enable organizational
development at the same pace.
Alignment of HR systems - Progressive Leadership Development needs to be about more than just
succession planning, but also about supporting the individual in making a contribution and
developing across the business through the right HR processes and policies. If an organization raises
expectations with hi potential talented employees then they must be prepared to meet them. It is
easy to identify leaders but organizations must know what to do with it once they have been
identified and groomed. HR processes must integrate leadership development at all levels
supported by cross functional moves, job rotations and mentoring across which will a long way in
building a robust leadership pipeline
Table 2.1 Making sense of the changing integrated model of leadership development
Precursors/Successors
Standard Approach
Integrated Approach
Developmental Readiness Not assessed largely in programs. Integrated as key criteria through
No use of tools except rare the design of program. Assesses
occasions where too it is seen as a through structured tool and
pre selection filter
handheld
through
the
development journey by le
Business Alignment
Integration to the competencies Clear leadership needs and gaps
defined to the business. No line of documented for 3-5 year. Clarity
sight on long term strategic goals on critical roles and skills needed
and on the leadership skills/talent is
integrated
as
part
of
needed for 3-5 years not integrated participant journey
HR
Competence Not assessed in any program. HR facilitator assessed and
Readiness
Facilitated through the external chosen based on same criteria as
agency identified. This leads to lack participants to be able to bring in
of internal context being built into context and alignment to the
program
program
Executive Support
Customary formulation of program Integrated into the culture and
monitoring
committees
and leadership support for talent and
leadership development councils
leadership development is built
into the KPI’s of the Leadership
team. Structured talent reviews
held
Collaboration Network Programs
lay
focus
around Successful
programs
assess
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Index
building leader skills. Enough
focus and weightage is not given to
collaboration skills built, delivered
and assessed
Role and Career Planning
Lack of linkages to career role
change and succession planning
Opportunities to practice
leadership
Built as part of action learning
projects only to work on business
imperative projects
through a collaboration network
index the abilities built around
social
influence
and
true
collaboration on live business
issues
Clear line of sight on the career
path
post
the
leadership
development
journey
and
transition
into
succession
positions. Use of experience
maps to bu
Secondments are built into the
program
design
and
opportunities are made available
for 6-1 yr before moving into
succession positions.
Effective Leadership development is a function of participant readiness, principles of design and
executive support. Participants undergoing Leadership Development do experience change as a
direct result of the Leadership development process, at the individual level as well as the group
level, but the presence of requisite antecedents and successors will scale up the impact of the change.
Conclusion
An integrated Leadership Development framework is an enabler of sustainable Leadership
development needed to manage the complexities of the future. Leadership Development does work
as an agenda toward’s building capability and change to the extent of not only individual change
but also organizational change. But it is no longer enough to look at single issues, it is imperative to
look at the total Leadership Development Value Chain. Architect leadership landscapes and
dimensions requires seamlessly weaving threads of all components together for leadership
development including the state of organization development, culture and leadership commitment
to the process. Smart Leadership Development frameworks need to take a systems view and evolve
sustainable and competitively integrated solutions to today's serious Leadership Development
challenges by addressing all elements of the Leadership Development System. It is hereby proposed
that for Leadership Development Frameworks to work effectively, key antecedents or precursors
and successors or sustainability factors are required. This calls for a renewed look at the Leadership
Development process and the practice of building leader’s. The question to answer should not be
“Should we do away with Leadership Development but ‘What should we do with Leadership
Development to make it more sustainable?’
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SECTION – II
HUMAN RESOURCE
MANAGEMENT IN
CHANGING POLITICAL,
SOCIAL AND ECONOMIC
ENVIRONMENT
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Chapter 9
Impact of Student Attitude and Perception
toward Internet Learning
Amitabha Maheshwari, Umesh Holani and Abhijeet Saban
ABSTRACT
Internet has become the source of all types of information that the students seek for learning. The moment the
student is given assignments or to prepare any write up on any topic the students rush to internet and use
Google to find the required material. The students are on line using internet in excess of three hours chatting
on social networking sites; purchasing different products, down loading material related to their academics.
However, the use of internet and the purpose for which internet varies considerably from student to student
and it largely depends on their attitude towards internet and their perception about the services provided on
internet.
Key Words: Attitude, Perception, Learning,
Introduction
Internet is an International networking system. The Internet can be defined as “network of networks
and is the world’s largest and most widely used network. The Internet can be used as an additional
convenient method. The Internet is a useful tool for all in a technologically advanced world. The
Internet is also widely used in education. The use of Internet for education is very important. It is
now being used to teach in schools and colleges to get more out of it. The Internet offers more
information than the largest libraries in the world. Using the Internet in universities has a positive
value. Many universities around the world are also using Internet for educational purposes for easy
and effective teaching. The Internet has become an essential part in educational institutions since it
plays a vital role in meeting information and communication needs of students, teachers and
institutions.
Teachers are being invited to give their teaching materials and other support resources available
through the Internet. Students use the Internet to communicate not only with friends, but also with
their teachers. Students and teachers can communicate with each other with the help of Internet. It
has an easy access to all information on the latest research reports from anywhere in the world. It
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helps researchers, teachers, students and institutions to disseminate information to more viewers
worldwide through websites. Teachers get useful information about their classes and also download
useful and latest information on the subject. A teacher may ask students to find a topic and related
research on the Internet.
The Internet is also used to replace the traditional classroom lecture. The teachers can place course
notes on web pages, create recordings video of a live conference for presentation to the Internet or
can use combinations of these ideas. Although higher education institution have gained valuable
resources with the Internet and World Wide Web Internet owes much of its magnificent production
of the last thirty years to the efforts of the fellow scholars of colleges and universities. The Internet
also enables various scholars in different places in the world to exchange ideas on various fields of
study.
Internet has also enabled the growth of distance education, both within nations and without
international borders. It is for the benefits that these students, academic institutions and
organizations use Internet as an integral part in improving the quality of education. The event of the
twentieth century is undoubtedly the phenomenon known simply as the Internet or network. The
rapid growth of the Internet in 1990 may be recognized by their greater use. Internet use can be seen
to support and promote the technological revolution that has taken place in education. The Internet
seems to be the most perfect instrument of education that offers students convenience while offering
enormous potential for teaching.
The theory of web-based learning is more refined and complex than those of mere learning (Tsai,
2009), Moreover, many students perceived learning in web-based context to have insights and
details for the learning perspective. This varies that the implementation of web-based directions may
be future prospects for encouraging student’s conceptions of learning. To make proper use of
Internet in all level there is a need to understand the attitudes of students toward the use of it. And it
must be ensured that resources are being used in college legally and if there are problems, then
problem areas must first strike and then put the necessary measures to overcome the problem.
For the student’s attitude toward Internet applications, higher education institution administrator
should know that the purposes for which students are using it as entertainment and sports, for
academic purposes, correspondence and business and social purposes, etc. It is used for educational
purposes or not. Now a day, all schools, colleges and universities are using Internet technology.
With the help of this, schools, colleges and universities, teachers are valuable teaching tool. So to
have more benefits from the resources you need to know about problem areas or barriers, but also
take measures to address the best use of resources as the Internet.
Increasingly, higher educational institutions are investing in Internet services. School is also making
its teaching materials available online. While universities and academics are trying to build the
.Internet, a valuable learning tool, it is necessary to understand what their students’ attitudes toward
Internet applications. As the Internet has become an essential tool for college students and
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professional life, all things that are occurring are normally made through the Internet. Although
Internet students can take many advantages from Internet, but due to some factors, are not aware of
the Internet or the information about the Internet is inadequate because the student’s attitude
toward the Internet is negative or slightly lower. These factors are due to sites that divert the
attention of students of the educational purpose for which the student is using the Internet.
1.1 Conceptual Framework
Educational uses of the internet in the world
The Internet can be used as a supplement to traditional instructional methods. To complement a
lecture, instructors may ask students to find specified Web sites to gain more in-depth knowledge
about a particular topic. An instructor may also ask students to search the Internet for information
on services offered in a particular location. In preparation for a class topic such as diversity, students
may be asked to search the Internet to learn about different ethnic groups or populations at risk.
Internet
Internet is an International networking system. The Internet can be defined as “network of networks
and is the world’s largest and most widely used network. The Internet can be used as an additional
convenient method. The Internet is a useful tool for all in a technologically advanced world. The
Internet is also widely used in education. The Internet has become an essential part in educational
institutions since it plays a vital role in meeting information and communication needs of student’s
education.
Attitude
This definition of attitude allows for one's evaluation of an attitude object to vary from extremely
negative to extremely positive, but also admits that people can also be conflicted or ambivalent
toward an object meaning that they might at different times express both positive and negative
attitude toward the same object. This has led to some discussion of whether individual can hold
multiple attitudes toward the same object. Whether attitudes are explicit (i.e., deliberately formed)
versus implicit (i.e., subconscious) has been a topic of considerable research. Research on implicit
attitudes, which are generally unacknowledged or outside of awareness, uses sophisticated methods
involving people's response times to stimuli to show that implicit attitudes exist (perhaps in tandem
with explicit attitudes of the same object). Implicit and explicit attitudes seem to affect people's
behavior, though in different.
How Internet is being used
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
Finding people: If you've lost track of your childhood sweetheart, now's your chance to find
him or her anywhere in the country. You can use one of the directory services to search the
phone books of the entire United States.

Finding businesses, products, and services: New yellow page directory services enable you
to search by the type of company you're looking for. You can indicate the area code or zip
code to help specify the location. People are shopping for that hard-to-find, special gift item.

Research: Law firms are realizing that a great deal of information they formerly paid $600 an
hour to find from commercial services can be found for almost nothing when they go
directly to the Net. Real estate appraisers use demographic data available on the Net,
including unemployment statistics, to help assess property values. Genetics researchers and
other scientists download up-to-date research results from around the world. Businesses and
potential businesses research their competition over the Internet.

Education: Schoolteachers coordinate projects with classrooms all over the globe. College
students and their families exchange e-mail to facilitate letter writing and keep down the
cost of phone calls. Students do research from their home computers. The latest
encyclopedias are online.

Travel: Cities, towns, states, and countries are using the Web to put up (post) tourist and
event information. Travelers find weather information, maps, transportation schedules and
tickets, and museum hours online.

Marketing and sales: Software companies are selling software and providing updates via the
Net. (The folks making money from the manufacture of floppy disks are looking for new
products. Aside from the large pile of AOL disks we now use as coasters, most software
distribution is migrating to the Net Job searches: Not just for students, the Internet is an
incredible tool for finding a job. It's especially good for students because it provides a
powerful, economical way to conduct a real job search. You can publish your résumé online
for prospective employers. You can check out the Monster board, an impressive compilation
of job-related information that enables you to search by discipline (the area of study — all
searches need the other kind) or geography or a host of other criteria. You can find the
Monster board at Monster.com. If you're not just getting out of school, that is, if you're
already employed, you might want to use caution when using monster.com. If you register
and your employer uses monster.com, your résumé might show up where you least desire it.

Love: People are finding romance on the Net. Singles ads and matchmaking sites vie for
users. Contrary to Internet lore, the Net community is no longer just a bunch of socially
challenged male nerds under 25.
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
Healing: Patients and doctors keep up-to-date with the latest medical findings, share
treatment experience, and give one another support around medical problems. Some
practitioners exchange e-mail directly with their patients.

Investing: People do financial research, buy stock, and invest money. Some companies are
online and trade their own shares. Investors are finding new ventures, and new ventures are
finding capital.

Organizing events: Conference and trade-show organizers are finding that the best way to
disseminate information, call for papers, and do registration is to do it on the Web.
Information can be updated regularly, and paper and shipping costs are dramatically
reduced. Registering online saves the cost of on-site registration staff and the hassle of onsite registration lines.

Nonprofits: Churches, synagogues, and other community organizations put up pages telling
about themselves and inviting new people. The on-line church newsletter always
Four major components of attitude are(1) Affective: emotions or feelings.
(2) Cognitive: belief or opinions held consciously.
(3) Cognitive: inclination for action.
(4) Evaluative: positive or negative response to stimuli ways.
Review of Literature
The education sector has been an early adopter in the world, continually pushing the capabilities of
the network and its applications. Internet has grown from an exclusive environment populated by
technophiles and a typical communication tool and information delivery. Internet became a suitable
tool to support various activities of universities, ranging from research on teaching of routine
administrative tasks (Bell, 2000). The differences in attitude are also experimental in terms of their
original language. That’s one of those who speak English and Spanish at home, the difference found
between the first generation and not first-generation college students (Fornell & Larcker, 1987).
Almost all students at various levels have certain experiences of using the Internet. With the wide
application of teaching Internet-based learning, these students may have more and richer learning
environments based on Internet. However, studies on the fundamental nature of student use of
Internet have not kept pace with their Internet use (Metzger et al., 2003). A model for virtual classes
targeted at developing nations, aims to progress in the development of Internet communications can
be used in developing nations to improve the delivery of high quality learning to its citizens
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submitted by (Amoroso & Cheney, 1998). Virtual learning environments are seen as having the
potential to provide opportunities for active, flexible and individualized learning experiences
(Thompson et al., 1991).
The Internet has become such an integral part everywhere and a potent communication tool, it is
worth investigating exactly how the Internet fits into the daily lives of staff and students of
educational institutions. There is a strong expression of the availability 24 / 7 on the Internet, i.e.,
every hour of every day, allows students and scholars for study and research, self-determination of
the normal hours of work (Gorman, 2003).
The main function of the Internet is used in most conference rooms is an instrument to gather
information for teachers and students and has become one of the first places where teachers and
students will collect data on almost any subject, whether at home or at school, college or University
(Aydn, 2001). Technical support, Web experience, task equivocality, and perceived ease of use affect
the usage of Internet, significantly (Lee & Kim, 2009).Technical support, task equivocality, and task
interdependence are positive related with subjective norm.
Increasingly, higher educational institutions are investing in Internet services. School is also making
its teaching materials available online. While universities and academics are trying to build the
.Internet, a valuable learning tool, it is necessary to understand what their students’ attitudes toward
Internet applications. As the Internet has become an essential tool for college students and
professional life, all things that are occurring are normally made through the Internet. Although
Internet students can take many advantages from Internet, but due to some factors, are not aware of
the Internet or the information about the Internet is inadequate because the student’s attitude
toward the Internet is negative or slightly lower. These factors are due to sites that divert the
attention of students of the educational purpose for which the student is using the Internet.
For the student’s attitude toward Internet applications, higher education institution administrator
should know that the purposes for which students are using it as entertainment and sports, for
academic purposes, correspondence and business and social purposes, etc
1.2 Objective

To re-standardize & modified measure of students attitude, perception and learning habits.

To identify the factors underlying students attitude, perception and learning habits.

To establish the cause & effect relationship between students attitude, perception and
learning habits.
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Development of hypothesis

H01: There is no effect of Gender as fixed factor on learning habits of post graduate student
toward the uses of internet.

H02: There is no effect of place as a fixed factor on learning habit of post graduate students
towards the uses of internet.

H03: there is no effect of age as fixed factor on learning habit of post graduate students
towards the use of internet.

H04: there is no effect of domain as fixed factor on learning habit of post graduate students
towards the use of internet

H05: There is effect of attitude as independent variable on learning habit of post graduate
students towards the use of internet.

H06: There is effect of perception as independent variable on learning habit of post graduate
students towards the use of internet.
2. Research Methodology
The study was Casual in nature and the survey method was used for data collection. Sample design
consists of the size of population, sample element, sampling size and sampling techniques.
Population of the current study was all the postgraduate internet user students at Agra and Gwalior
region.
2.1 Sample
Individual postgraduate student in the age group of 17 to 30 years old were selected for the study.
The sample size was selected carefully by giving an equal importance to gender. The total sample
size was 300 for balancing the gender, place impact we have collected half of sample in each region.
An individual student was treated as element of study. In all 320 questionnaires were distributed
and out of them 287 were received. Finally 278 questionnaires were selected as 09 were not filled
properly.
2.2. Measures
The responses were collected on a Likert type scale of 1 to 5 for all the variables. The measures were
tested for reliability and validity. Content validity of measures was established through a panel of
judges before using the measure for collecting data for the study.
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3. Results and Discussions
3.1 Reliability of Attitude
The reliability was computed by using SPSS 18 software. Cronbach’s alpha reliability test was
applied to check the reliability coefficients were computed for the entire item in the questionnaire.
Construct No.
1
2
3
Constructs Name
Attitude
Perception
Learning
Cronbach's Alpha
.796
.756
.779
No. of Items
17
8
12
Universally, Reliability value is considered good as if it is found more than 0.7. it can also be seen In
the current study that reliability value of all the construct were found more than the standard value
in the current study. Cronbach’s reliability of all the constructs were mentioned above that The
Cronbach’s alpha reliability of student attitude was found to be 0.796, reliability for students
perception was found to be 0.756 and reliability for learning habits was found to be 0.779 .
3.2.1Factor of Attitude
Kaiser Meyer Olkin measure of sampling adequately indicated KMO value of 0.895 meaning thereby
that the sample size was good enough to treat the sampling data as normally distributed
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.895
1173.152
105
.000
Bartlett’s test sphericity which tested the null hypothesis that the item to correlation matrix based on
the responses received from respondents for attitude of internet was an identity matrix. Bartlett’s
test was evaluated through Chi-square test having Chi-square value 1173.152 which is significant at
0.000 level of significant, indicating that null hypothesis is rejected. Therefore it is clear that the item
to item correlation matrix is not an identity matrix and the data were suitable for factor analysis.
3.2.2 Principal components analysis of attitude
Principal components analysis (PCA) was applied on the attitude data collected on learning towards
the uses of internet .The PCA with Kaiser Normalization and varimax Rotation converged on factors
after five iterations of attitude in the current study.
S. No.
1.
Factors
Eigen
Value
Learner confidence 2.430
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%Age of
Variance
14.297
Items Converged
2. Internet is Important like other research tools
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Values
.761
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and technical skill.
2.
3.
4
Lack of educational
utility
Lack of useful
information.
Comforts
requirement
2.121
12.476
1.312
7.718
1.186
6.975
5
Security measures
1.082
6.365
6
Compensating
requirement
1.059
6.228
7
Surfing
Requirement
1.029
6.051
1. Knowledge of Internet is essential for surviving
college
8. Internet use as an integral part of the educational
process
10.comfortable using Internet
13.I don’t like using Internet for important
educational projects
14.Different about using Internet for education
17.Accessing, surfing and browsing the Internet
confuses me
11.Internet contains useless information
12.Internet is difficult to use
9. I access the Internet more at university than at
home
6. I feel overwhelmed using Internet in studies
5. I enjoy Getting information more from written
material than Internet.
15.I have security concern about using Internet
7. I use Internet for learning fun
4. I find the Internet to be as informative as teachers
3. Internet is easier to use than library
.674
.568
.514
.768
.730
.493
.764
.714
.619
.565
.530
.738
.659
.773
.539
.840
16.I find using the Internet at home to be slow
3.2.3 Factor Analysis of Perception
Kaiser Meyer Olkin measure of sampling adequately indicated KMO value of 0.782 meaning thereby
that the sample size was good enough to treat the sampling data as normally distributed.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.782
353.978
10
.000
Bartlett’s test sphericity which tested the null hypothesis that the item to correlation matrix based on
the responses received from respondents for student perception in context of learning throw
internet. Bartlett’s test was evaluated through Chi-square test having Chi-square value 353.978
which is significant at 0.000 level of significant, indicating that null hypothesis is rejected. Therefore
it is clear that the item to item correlation matrix is not an identity matrix and the data were suitable
for factor analysis.
3.2.4 Principal components analysis of Perception
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Principal components analysis (PCA) was applied on the student perception data collected on
learning towards the uses of internet .The PCA with Kaiser Normalization and varimax Rotation
converged on factors of perception in the current study.
S. No.
Factors
1.
Net effectiveness
2
Scarcity of
resource
Eigen
Value
2.201
1.579
%Age of
Variance
27.508
19.741
Items Converged
2. Internet learning will bring new opportunities of
learning.
1 .Internet learning can be an effective method of
learning as it can give I
3. Internet learning will be more flexible method of
learning as it can be done anytime, anywhere.
4. Internet learning will improve communication
between student and facilitator.
5. Internet learning is a quicker method of getting feed
back in learning.
8. Internet learning cannot be used for learning due to
poor networking in the city.
7. Internet learning cannot be used for learning due to
expenses involved in Internet
6. Internet learning cannot be used for learning due to
unavailability of net with a larger number of students.
Learning.
Loading
Values
.717
.671
.653
.612
.585
.758
.739
.688
3.2.5 Factor Analysis learning habit
A Kaiser Meyer Olkin measure of sampling adequately indicated KMO value of .775 meaning
thereby that the sample size was good enough to treat the sampling data as normally distributed.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.775
367.300
66
.000
Bartlett’s test was evaluated through Chi-square test having Chi-square value 367.300 which is
significant at 0.000 level of significant, indicating that null hypothesis is rejected. Therefore it is clear
that the item to item correlation matrix is not an identity matrix and the data were suitable for factor
analysis.
3.2.6 Principal components analysis of learning
Principal components analysis (PCA) was applied on the learning habits data collected on learning
towards the uses of internet .The PCA with Kaiser Normalization and varimax Rotation converged
on factors of learning in the current study.
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S. No.
Factors
1.
Need for overall
development
2
3
Communication
And social needs
Twit impact
Eigen %Age of
Value Variance
3.033
25.279
1.276
1.166
10.637
9.719
Items Converged
1. Learn great deal from peers.
2. Improve integration skills
8. A great chance to share opinions among peers and
instructor
3. Improve generalization skills
9. Broaden my knowledge
6. Online discussion provides useful social
interaction
10. Online discussion is useful to my learning
4. Learning quality is improved by online discussion
5. Improve communication skills
7. I learned a lot from the threaded discussion
activities
Loading
Values
.767
.714
.664
12. Online discussion decreases my learning quality.
11. Most peers’ comments are not very valuable.
.528
.514
.705
.639
.612
.494
.431
.744
.675
3.3 Univariate Analysis
The Univariate ANOVA test was applied to evaluate the effect of Independent variable (Attitude &
Perception) as covariate variable with demographics variable (Gender, place, Age & Domain) on
dependent variable (Attitude and perception).
Levene's Test of Equality of Error Variances; Dependent Variable: Learning habits
F
df1
df2
Sig.
1.525
54
204
.042
Tests the null hypothesis that the error variance of the dependent variable is equal across groups.
a. Design: Intercept + Gender + Place + Age + Domain + Attitude + Perception
To select appropriate Post Hoc test Levene’s test of equality of error variances was applied. The null
hypothesis that the error variance of the dependent variable (Learning habits) is equal across groups
was tested using ‘F’ test. The value of ‘F’ was found to be 1.525 which is significant at 4.2% level of
significance, indicating that Null hypothesis is not rejected at 5% level of significance. Since the no of
groups for the dependent variable are very large (2*2*3*3*5), the error variance of the dependent
variable was in any case likely to be unequal and post hoc tests that are available and are suitable for
equal variances among groups were used.
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Tests of Between-Subjects Effects; Dependent Variable: Learning habits
Source
Type III Sum of
df
Mean Square
F
Squares
Corrected Model
4606.190a
8
575.774
21.904
Intercept
235.127
1
235.127
8.945
Gender
20.294
1
20.294
.772
Place
28.178
1
28.178
1.072
Age
13.309
2
6.654
.253
Domain
362.582
2
181.291
6.897
Attitude
230.164
1
230.164
8.756
Perception
2020.592
1
2020.592
76.869
Error
5782.972
220
26.286
Total
424403.000
229
Corrected Total
10389.162
228
a. R Squared = .443 (Adjusted R Squared = .423)
Sig.
.000
.003
.381
.302
.777
.001
.003
.000
The Univariate ANCOVA model fit is indicated by Adjusted R square which has the value of 0.423
for the current model. Corrected model has been tested for best fit using ‘F’ test having value of
21.904 which is significant at 0.000% level of significance indicating that the model with independent
variable (Attitude & perception) with demographics variables (Gender, Place, Age & Domain) as
fixed factor on Learning habits (dependent variable) as has high fit.
H01: There is no effect of Gender as fixed factor on learning habits of post graduate student
toward the uses of internet.
The effect of Gender as fixed factor is tested through F value Anova test. F value was to be found in
the current study 0.772 which is significant at 38.1% level of significance. Which is significant at 5%
level of significance? Therefore, the null hypothesis is not rejected that indicating that there is no
effect of Gender as fixed factor on learning habits.
H02: There is no effect of place as a fixed factor on learning habit of post graduate students
towards the uses of internet.
The effect of place as a fixed factor is tested through F value was to be found in the current study
1.072 which is significant as at 5%level of significance. Therefore, null hypothesis is not rejected that
indicating that there is no effect place as fixed factor on learning towards the use of internet.
H03: there is no effect of age as fixed factor on learning habit of post graduate students towards
the use of internet.
The effect of age as a fixed factor is tested through F value was to be found in the current study .253
which is significant as at 5%level of significance .Therefore, null hypothesis is not rejected that
indicating that there is no effect age as fixed factor on learning towards the use of internet.
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H04: there is no effect of domain as fixed factor on learning habit of post graduate students
towards the use of internet.
The effect of domain as a fixed factor is tested through F value was to be found in the current study
6.897 which is significant as at 5%level of significance. Therefore, null hypothesis is not rejected that
indicating that there is significant effect of domain as fixed factor on learning towards the use of
internet.
H05: There is effect of attitude as independent variable on learning habit of post graduate
students towards the use of internet.
The effect of attitude as a independent variable is tested through F value was to be found in the
current study8.756 which is significant as at 5%level of significance. Therefore, null hypothesis is
rejected that indicating that there is effect attitude as independent variable on learning towards the
use of internet.
H06: There is effect of perception as independent variable on learning habit of post graduate
students towards the use of internet.
The effect of perception as an independent variable is tested through F value was to be found in the
current study 76.869 which is significant as at 5%level of significance. Therefore, null hypothesis is
rejected that indicating that there is effect perception as independent variable on learning towards
the use of internet.
Results
Here we develop 3 questionnaire of attitude perception learning check the gender difference
graphical and domain difference towards the use of internet. The reliability was computed by using
SPSS 18 software. Cronbach’s alpha reliability test was applied to check the reliability coefficients
were computed for all the items in the questionnaire, normally distributed. Cronbach’s alpha values
were .596, 0.596, .679 respectively. The Univariate ANOVA test was applied to evaluate the effect of
Independent variable (Attitude & Perception) as covariate variable with demographics variable
(Gender, place, Age & Domain) on dependent variable (Attitude and perception). There is no effect
of Gender place age as fixed factor on learning habits of post graduate student toward the uses of
internet. .Therefore, null hypothesis is accepted that indicating that there is no effect of gender, age,
place and domain as fixed factor on learning towards the use of internet. There is effect of attitude
and perception as independent variable on learning habit of post graduate students towards the use
of internet. Therefore, null hypothesis is rejected that indicating that there is effect perception as
independent variable on learning towards the use of internet.
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4. Conclusion
This research was conducted on postgraduate students’ to check the impact of student attitude,
perception toward Internet learning. To attain research object we develop three questionnaires and
identify Attitude, Perception, Learning habits factors which influence student Internet use.
Information was collected through postgraduate students using the Internet. The first section
concludes that 61.3% of total respondents are male and 38.7% are female. Study suggested that the
Internet is an essential tool for students knowledge. Students use the Internet primarily for
educational and research purposes and benefits instead of playing a positive role and participation
in society. However, it provides extensive information on the required assignments, and thus covers
many dimensions’ that meet educational needs. The majority of students feel comfortable using the
Internet. The 231 or 88.3% of respondents responded that the Internet is easier to use and is
important for PG student’s educational purpose.
It is recommended that students should gain their potential for significant and positive use of the
Internet. Students must realize that the Internet is a medium. It is recommended that students
should not waste their time on useless activities. Study results indicated that attitude and subject
area effects on learning habit of postgraduate students throw internet.
5. Limitations
The survey represents Gwalior and Agra post-graduate students only. The results may not be
suitable to generalize for the entire country. As complete list of postgraduates student as per
classification as well as category of the students could not made accessible and all the students were
not within the reach, randomized sampling technique could not used for the study. Though
purposive/ judgmental sampling technique was used, utmost care was taken during selection of the
sample so that the sample was as nearly randomized as possible. As the population for the study
represents the three domains only, the study may not support the opinions of the other domain
internet users.
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4. Amoroso, D. L., & Cheney, P. H. (1998). Testing a Causal Model of end-user Environment:
an Empirical Investigation. Information and Management, 14, 107-113.
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5. Aydn, C. H. (2001). Uses of Internet in Turkey, Educational technology research & development,
V 49, Washington. ISSN: 10421629.
6. Gorman, L. (2003). Unbounded classrooms: NSW HSC. [Online] Available
http://www.global educator.com.
7. Lee, S & Kim, B., G (2009). Factors affecting the usage of intranet: A confirmatory study.
Computers in Human Behavior, 25(1), 191-201.
8. Metzger, M. J., Flanagin, A. J., & Zwarun, L. (2003). College student web use, perceptions of
information credibility and verification behavior. Computers and Education, 41, 271–290.
9. Thompson, R. L., Higgins, C. A., & Howell, J. M. (1991), “Personal computing: toward a
conceptual model of utilization”, MIS Quarterly, 15, pp. 125–143.
 http://crl.du.ac.in/ical09/papers/index_files/ical-94_160_346_1_RV.pdf
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 http://ils.unc.edu/MSpapers/3152.pdf
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Chapter 10
Impact of Organisational Climate on
Motivation and Job Satisfaction of Middle
Level Executives: a study of manufacturing
industries of Gwalior region
Richa Banerjee and Subeer Banerjee
ABSTRACT
Organisational climate and job satisfaction and motivation are distinct but related to each other, and these help
to influence employees’ understanding of the work environment and their level of job satisfaction and
motivation. The objective of this study was to explore the relationship between organisational climates, job
satisfaction and motivation to determine whether the organizational climate influence their level of job
satisfaction and motivation to work in organization.
An organisational climate questionnaire was administered to a convenience sample of 180 employees from a
population of all employees working in the manufacturing industries of the Gwalior regions.
Linear Regression was conducted to predict relationship of organizational climate on job satisfaction and
motivation. The results indicated a relation between organisational climate and the dependent variable of job
satisfaction and motivation.
Key words – Organisational climate, Job Satisfaction, Motivation
Introduction
Organizational Climate
Organisational Climate studies the employees' perceptions and perspectives of an organization. The
surveys address attitudes and concerns that help the organization work with employees to instill
positive changes. . By identifying areas of inefficiency and acting on performance barriers identified
by employees of all levels, an organization gains a fresh and different perspective. Survey analysis
identifies areas of employee satisfaction and dissatisfaction to facilitate management in the creation
of greater workplace harmony and, therefore, increased productivity
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Climate is a set of attributes which can be perceived about a particular organization and/or its
subsystems, and that may be induced from the way the organization and/or its subsystems deal
with their members and environments. Organizational climate is the combined perceptions of
individuals that are useful in differentiating organizations according to their procedures and
practices.
Measurement of climate seeks to identify the components of both bad and good climate, both in
absolute terms and perceptual terms. Bad-climate indicated through Fear, Crisis, Anxiety, Work
place aggression, Employee and executive burn out, Employees turnover, Politicking, Decay,
Hopelessness, stagnation. Bad climate has been linked to ‘Turnover, Stress, Sickness, Poor
performance, Error rate, Wastage, Accidents, and to bad behavior such as Sabotage, Absenteeism,
Go slow, and Bullying etc.
Good climate indicator are; Respect, Support, Entrepreneurialism, Innovation, Cooperation,
Performance, Profitable management, practice, Knowledge management, Organizational learning,
Employees readiness to change, Collective learning, and openness. Good climate has been linked to
describe out comes such as Job satisfaction, Confidence in management, Effective commitment,
Intention to quit, Emotion exhaustion, Faith in organizational Performance and to describe
behavior such as: Risk taking, Departure from the status quo, Open communication, Trust,
Operational freedom and employee development.
Motivation refers to “the reasons underlying behavior” (Guay et al., 2010, p. 712). Gredler,
Broussard and Garrison (2004) broadly define motivation as “the attribute that moves us to do or not
to do something. Intrinsic motivation is motivation that is animated by personal enjoyment, interest,
or pleasure. Extrinsic motivation, which is motivation governed by reinforcement contingencies.
Job satisfaction has been defined in several different ways and a definitive designation for the term
is unlikely to materialize. A simple or general way to define it therefore is as an attitudinal variable:
Job satisfaction is simply how people feel about their jobs and different aspects of their jobs. It is the
extent to which people like (satisfaction) or dislike (dissatisfaction) their jobs. (Spector, 1997)
Rose, 2001) have viewed job satisfaction as a bi-dimensional concept consisting of intrinsic and
extrinsic satisfaction dimensions. Intrinsic sources of satisfaction depend on the individual
characteristics of the person, such as the ability to use initiative, relations with supervisors, or the
work that the person actually performs; these are symbolic or qualitative facets of the job. Extrinsic
sources of satisfaction are situational and depend on the environment, such as pay, promotion, or
job security; these are financial and other material rewards or advantages of a job.
Literature Review
According to Moran and Volkwein (1992), understanding how climates are formed became
important, because it was believed that it would provide a deeper comprehension of the concept and
lead to further conceptual and methodological progress. Initially, organisational climate was viewed
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as an objective construct consisting of organisational attributes such as an organization’s size,
structure and policies. It is these actual conditions that play a primary role in determining people’s
attitudes, values and perceptions of organisational events. This approach, however, is criticized and
its validity questioned, because it does not consider the individual’s perception of organisational
attributes
Job satisfaction means the contentment of the employees because of their jobs. It is the personal
evaluation of the job conditions (the job itself, the attitude of the administration etc.) or the
consequences or (wages, occupational security etc.) acquired from the job Fletcher and Williams,
2006)
Joyce and Slocum, (2004), Fajana (2002) in their work identified a long range of factors combined to
affect individual’s level of satisfaction. These include, supervision or leadership (concern for people,
task, participation), job design (scope, depth, interest, perceived value), working conditions, social
relationships, perceived long range opportunities, perceived opportunities elsewhere, levels of
aspiration and need achievement.
In a review of studies investigating organisational climate and job satisfaction, Peek (2003) found
that organisational climates that exhibit characteristics such as having a high degree of autonomy,
providing opportunities for employees, nurturing relationships among employees, showing interest
in and concern for their employees, recognizing employees’ accomplishments and holding
employees in high regard result in more satisfied workers. Similarly, Brief (1998) found that salary,
benefits and advancement opportunities were components of organisational climate that had a
direct influence on job satisfaction.
In summary, organisational climate and job satisfaction are distinct but
Shammari, 1992; Keuter, Byrne, Voell & Larson, 2000). Organisational
organisational/institutional attributes as perceived by organisational
satisfaction addresses perceptions and attitudes that people have towards
work.
related constructs (Alclimate is focused on
members, while job
and exhibit about their
Although a recent study conducted in a South African call centre found job satisfaction to be
strongly correlated to organisational climate (Fisher, Milner & Chandraprakash, 2007), studies
investigating the relationship between organisational climate and job satisfaction are less frequent in
the literature today, especially in South Africa. A possible explanation could be that studies tend to
focus more on organisational culture (Sempane et al., 2002).
Organizational climate has important outcomes at individual, group, and organizational levels; and
can greatly influence job satisfaction, individual job performance, and organizational performance.
Organizational climate, also helps in determining organizational success, and is important for
achieving organizational effectiveness (Purohit, B., & Wadhwa, A. (2012)
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Organizational climate significantly influences organizational and psychological processes of
communication, problem solving, learning, motivation, efficiency, and productivity of an
organization, as well as, innovation and job satisfaction (Rahimić, Z. (2013)
Objectives
1. To develop and standardize a measure to evaluate the impact of organization climate on
motivation job satisfaction.
2. To study the impact of organizational climate on job satisfaction.
3. to study the impact of organizational climate on motivation of executives
4. To open new vistas for research.
Research Methodology
The study was causal in nature. all the middle level executives of manufacturing organization in
Gwalior region was population of the study. The sample size were 150 respondents was drawn out
of the population by purposive sampling technique were used to carry the research study. Self
designed Questionnaires were used for data collection.
Tools used for analysis.
1
2
3
4
Item to total correlation were used for checking the internal consistency of questionnaire.
Reliability test was applied for checking the reliability of questionnaire
Factor analysis was applied to find out the underlying factors.
Linear regression test was used to measure the impact of organization climate on motivation and
job satisfaction.
Reliability measure
The reliability test was carried out by using the SPSS software and reliability test measures of
Cranach alpha is
S. no
1
2
3
Variable Name
Organization Climate
Motivation
Job Satisfaction
Reliability
0.660
0.610
0.717
No. of Items
10
8
13
Factor analysis
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
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.621
148.647
45
.000
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Principle component factor analysis with varimax rotation and Kaiser Normalization was applied.
The factor analysis resulted in four factors in organization climate and five factors in motivation and
three factors in job satisfaction four evaluation of its impact on the employee’s questionnaire and the
factor were named according to the common nature of the statements. The detailed about the factor
included the factor no., factor name, their Eigen value, items under each factor and their item
loading is given in the table below
S. no
Factor Name
Eigen Value
Total %Variance
2.525
25.250
1
Employee Motivation
2
Organizational Structure
1.508
15.075
3
Participation
1.233
12.333
4
Employee Wellbeing
1.008
10.076
Statement
Loading
6Organization helps to new members
2Management balance problem
4Organization encourages employees
10 People speak openly in the organization.
9 Members keeps job related activities
8 Life depends upon its members.
3 Definite in or out groups.
7 People oriented organization
1 Organization takes care of the peoples.
5 Interest in the progress.
0.807
0.666
0.621
0.885
Description of factor
Employee motivation- This factor has emerged as the most important determinant of organization
climate with total variance of 25.250% major elements constituting this factor include supervisors
encouragement for higher achievement by organization helps to new members, management
balance problems, organization encourages employees.
Organization structure- This is the second important determinant of organization climate with total
variance 15.075%.major element constituting this factor includes people speak openly in the
organization, member keeps job related activities, life depends upon its members.
Participation- This is another important determinant of organization climate with total variance
12.333%. The major element constituting the factor includes definite in or out groups, people
oriented organization.
Employee well being – This is another important determinant of organization climate with total
variance of 10.076%. The major element constituting this factor includes organization take care of the
peoples, interest in the progress.
Motivation
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KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
S. no
Factor Name
1.
recognition
2.
Performance
appraisal
Employee growth
3.
Eigen Value
Total
%Variance
2.207
27.591
1.306
16.329
1.170
14.620
.632
90.283
28
.000
Statement
Loading
7 Organization Motivates for achieving objectives
8Management involve me in decision making
6 Organization recognize & acknowledge
4 effectives performance appraisal system
2 Satisfied by the incentives
1Management interested motivating employees
5 Opportunities are available
3 Relation is good
.775
.705
.600
.811
.801
.833
.614
.613
Description of Factors
Recognition– This factor has emerged as the most important determinant of the motivation with
total variance of 27.591%. Major element constituting this factor includes organization motives for
achieving objectives, management involves me in decision making, organization recognizes and
acknowledge.
Performance appraisal- This factor is another important determinant of motivation with total
variance of 16.329%. The major elements constituting this factor include effective’s performance
appraisal system, satisfaction by the incentives.
Employee growth- This is another important determinant of motivation with total variance of
14.620%. The major element constituting this factor includes management interested motivating
employees, opportunity is available, and relation is good.
Job Satisfaction
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
S. no
Factor Name
1.
Relation with Supervisor
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Eigen Value
Total %Variance
3.127
24.055
.689
267.142
78
.000
Statement
Loading
12 Relation with Supervisor
13 Satisfaction with Job
1Supervisor management capability
.817
.801
.774
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2.
Development
1.918
14.758
3.
Work structure
1.347
10.363
4.
Working conditions
1.140
8.766
5.
Techno benefits
1.011
7.77512
9 Communication with supervisor
8 Company Sponsored training & seminars
3 Flexible work hours
1 Salary
5 Job Security
4 physical work
6 Ability affect decision
10 Supervisor received Organization
2 Benefits
7 Opportunity to technology
.793
.711
.789
.681
.643
.837
.707
.506
.713
.590
Description of Factors
Relation with supervisor- This factor has emerged as the most important determinant of job
satisfaction with total variance of 24.055%. It includes relation with supervisor, satisfaction with job,
supervisor management capability.
Development- This is another important factor of job satisfaction with total variance of 14.758%. The
major element constituting this factor includes communication with supervisor, companies
sponsored training and development.
Work structure- This factor of job satisfaction with variance of 10.363%. It includes flexible work
hours, salary, job security it is important.
Working condition- This factor has emerged as the most important determinant of job satisfaction
with total variance of 8.766%. the major elements constituting this factor includes physical work,
ability affect decision, supervisor received organized.
Techno benefits- This is another most important factor of job satisfaction with total variance of
7.775%. It includes benefits, opportunity to technology.
Regression Analysis
Impact of Organization Climate on Motivation
The regression is calculated by taking the total of organizational climate and Motivation by using
SPSS software. In this Organization climate is independent factor and Motivation is Dependent
variable. Therefore, regression is calculated by taking dependent variable and independent factor
Model
1
(Constant)
motivation
a.
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Coefficients (a)
Unstandardized Coefficients
Standardized Coefficients
B
Std. Error
Beta
22.674
4.752
.473
.148
.307
Independent Variable: organizational climate
t
Sig.
4.772
3.195
.000
.002
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Y= a + b x
Y= 22.674 + (0.307x)
X= Organization Climate (Independent Variable)
Y= Motivation (Dependent Variable)
Null hypothesis is rejected and we can conclude that there is significant impact of organizational
climate on Motivation
Impact of Organization Climate on Job Satisfaction
The regression is calculated by taking the total of organizational climate and Job satisfaction by
using SPSS software. In this organization climate is independent factor and job satisfaction is
dependent variable. Therefore, regression is calculated by taking dependent variable and
independent factor.
Model
1
a.
Coefficients (b)
Unstandardized Coefficients
B
(Constant)
39.651
Organisational climate
.343
Dependent Variable: job satisfaction
Std. Error
3.277
.086
Standardized
Coefficients
Beta
.373
t
Sig.
12.101
3.985
.000
.000
Y= a + b x
Y= 39.651 + (0.373x)
X= Organization Climate (Independent Variable)
Y= Job Satisfaction (Dependent Variable)
Null hypothesis is rejected and we can conclude that there is significant impact of organizational
climate on job satisfaction. The result ensures that the proper and good working climate make
employees more satisfied.
Suggestions for Future Research
According to present research results, we can propose the following topics for future research:
1. Future researches should be done in the forms of qualitative or comprehensive works;
2. Carry out research other variables associated with the organizational climate in the Other
sectors.
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Chapter 11
Perceived Organizational Support and
Withdrawal Intentions: A Study among
Faculty Members
Chanda Gulati, Nischay K. Upmanyu and Pratiksha Kulshrestha
ABSTRACT
Withdrawal Intentions of the employees are the most crucial issue that is faced by majority of organizations.
Employees' commitment and their continued service to any organization may be highly influenced by their
perceived organizational support. The purpose of this study was to measure the effect of POS on the
withdrawal intentions of the employees. POS is assumed to enhance the bonding between the organization and
the employees that lead to increased work effort by employees to meet the organizational goals. This study
indicated a relationship between POS and the intention to withdraw, which shows that employees are tempted
towards better treatment and if not, they intend to leave. The data of the present study were collected from the
teaching fraternity of B-schools in Gwalior region. The detai2led result is elaborated and discussed in the
paper.
Key words – Perceived organizational support, Intention to withdraw
Introduction
Organizational theorists have defined work as a process in which employees’ put their effort and
commitment and get physical and emotional benefits of the organization in exchange. This exchange
relationship between the employer and employee emphasizes the favorable and desirable results
that organizations achieve by treating them generously (Gould, 1979). Organizations commonly
value employee’s loyalty and dedication towards work.
The complete system of each organization sustain on the give and take process. One’s perception is
the most important determinants of his or, her attitude. The employees’ perception is a tool for
measuring their bonding with the organization. Perceived Organizational support explains the
perceptions of the employees about their organization’s commitment with them. Eisenberger, et al.,
(1986; 1990) proposed that ‘commitment is the emotional bonding that is shaped in reciprocity
relationship between two parties.’ Every organization keep a positive or, negative orientation
towards their employees that determine their caring attitude towards their dedication and loyalty.
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Perceived organizational support (POS) is the degree to which extent employees firmly believe that
the concern organization values and care their contribution by fulfilling their socio-emotional
needs. POS relies on reciprocity norm in general employees perform better to reciprocate towards
the organization generous sympathetic treatment. This notion of POS following Norm of reciprocity
bloomed from Eisenberger and Rhoades' organizational support theory.
Eisenberger et al., 1986; Rhoades & Eisenberger, 2002; Eder & Eisenberger, 2008 propounded that
Perceived organizational support is the beliefs of the employees in organization caring attitude in
return of their contributions made towards its development of the organization. POS is mostly
thought to be the organization's contribution to a positive reciprocity dynamic with workers, as
workers tend to perform higher to reciprocate received rewards and favorable treatment. They
defined that the organization’s support is the actual repayment for the hardship of the employees.
This relates to the Social Exchange Theory that generates obligations over time due to
interdependence relationship between two parties. Aselage & Eisenberger, 2003 purported that
employees and organization relationship is based on reciprocity formula that shows organization
can attain its favorable goals through positive commitment and loyalty by their employees.
Withdrawal intention refers to employee’s intention to leave the organization. To keep the
organizational membership, to be punctual and highly committed towards the task assigned by the
organization are the most familiar ways for employees to reciprocate Perceived Organizational
Support. Intention to leave can be defined as the plan of quitting from the present job and look
forward for another. Intention to leave can be the result of job dissatisfaction. There are many factors
through which job dissatisfaction arises
Review of Literature
Eisenberger, et al., (1990) showed that increased POS is highly associated with performance,
attendance, commitment and constructive suggestions for the growth and development of the
organization. Asgari, Silong, Ahmad, & Samah, 2008 realized that POS are related to Organizational
Citizenship Behavior.
Wayne, et al., (1997) found that in American corporations POS and both Organization Citizenship
Behavior and affective commitment are positively related. Eisenberger, et al., (2001) too
demonstrated the same result that indicated positive relationship between POS and both in-role
performance and affective commitment.
Eisenberger, Cummings, Armeli & Lynch (1997) have elaborated the study on POS and determined
that POS enhances job satisfaction and reduces the impact of work condition on Satisfaction.
Shore and Shore (1995) found that human resources practices such as recognition of contributions
made by employees are positively related to POS. Eisenberger, Rhoades, & Cameron (1999)
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indicated that by trusting the employees and giving the autonomy to do the task POS will be
increased. The environmental demands that lead to stress within the organization framework for
example work overload, role ambiguity and role conflict lessens Perceived Organization Support
(Lazarus & Folkman, 1984).
Wayne et al. (1997) argued that training facilities provided by the organization is a strong
communicator of organizational commitment that leads to increased POS.
Dekker and Barling (1995) suggested that reduced flexibility due to formalized rules could reduce
POS generally in large organizations, where individuals feel less cared.
Organizational commitment and employees commitment arises as a felt obligations as per the
reciprocity norms (Eisenberger, Armeli, Rexwinkel, Lynch, & Rhoades, 2001); thus, these need
fulfillment of both the parties impart a strong sense of belonging to the organization. Shore and
Tetrick (1991) found that POS reduces the feeling of entrapment when employees are forced to stay
as the cost of leaving is higher.
Witt (1991) referred Job satisfaction as the employees’ overall affect-laden attitude toward their job.
POS satisfies a socio-emotional need that increases job satisfaction and enhancing performance.
Eisenberger et al., 2001; cf. George & Brief, 1992 stated that POS may support the positive mood of
the employees by contributing to employees’ feelings of worth and competence. Perceived
competence is related to task interest, so by supporting employees’ perceived competence, POS
helps in increasing employee’s interest in the work (Eisenberger et al., 1999).
Nye & Witt, (1992); Witt, (1991) showed a significant relationship between POS and employees
‘desire to remain with the organization by slightly higher pay, more professional freedom or status,
or friendlier coworkers.
D. Allen et al. (1999) reported the relationship of POS to behavioral intentions (eg. absenteeism,
tardiness) to leave (i.e., turnover intention). Showing high attendance, retaining organizational
membership are few most predictable signs to reciprocate POS.
Need and Rationale of the Study
An organization always tries to identify the parameters that are affecting the withdrawal behavior
and intention of its employees as sometimes it becomes very difficult to handle the internal
environmental crisis due to heavy drainage of good employees. It's very difficult to manage the
talented faculties and retain them in an institute because they are the pillars who attract maximum
student’s future placements. This study is aimed at testing POS and withdrawal intention
parameters among teaching fraternity which will help in withdrawing the major perceptions of
faculty members encompassed as Perceived Organizational Support that will reduce the turnover
intentions of employees.
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Objectives of the Study
1. To design and re-standardize measures for evaluating Perceived Organizational Support
and withdrawal intentions in present study’s context.
2. To measure the impact of Perceived Organizational Support on Withdrawal intentions of
faculty members.
3. To open new vista for further study.
Research Methodology
The Study and Sample
The study is empirical in nature. A survey of Management faculty members was conducted to
collect the data. A sample size 120 was taken for the purpose of present study. The sample was
collected by non-probability purposive sampling. The population included faculty members of
different B-schools of Gwalior region.
Tools for Data Collection
The independent variable is the Perceived Organizational Support. The study used the scale
developed by Eisenberger et al., (1997) to measure POS. The dependent variable is the withdrawal
intentions of the faculty members. For measuring withdrawal intentions 3-item scale developed by
Abraham, (2005) was adopted to solicit the response from the respondent. The responses were taken
on the Likert type scale of 1 to 5 where 1 represent strongly disagree and 5 represent the strongly
agree.
Tools for Data Analysis
To measure the reliability of questionnaires Reliability test using Cronbach’s alpha was computed.
To measure the impact of perceived organizational support on the withdrawal intentions Regression
test was applied. The analysis of the data was carried out through the PASW 18 software.
Hypothesis
H01: There is no effect of POS on Withdrawal intentions of faculty members.
Results and Discussion
Reliability Test of Perceived Organizational Support and Withdrawal Intentions
The Cronbach’s Alpha reliability test was applied to compute reliability coefficients for all the items
in the questionnaire by using PASW 18.
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No. of variable
Variable 1
Variable 2
Name of Variable
Perceived Organizational Support
Withdrawal Intentions
Cronbach’s Alpha
0.745
0.951
No. of Items
7
3
It is considered that the reliability value more than 0.7 is considered good enough. The Cronbach’s
Alpha reliability value of POS and withdrawal intentions were found to be 0.745, and 0.951 which
reflect values higher than the standard value 0.7. Therefore, questionnaire was treated as good
measure and apt for the current study.
Regression Analysis
H01: There is no effect of POS on Withdrawal intentions of faculty members.
The linear simple regression analysis was applied to establish cause and effect
relationship
between Perceived Organizational Support and Withdrawal Intentions through PASW 18 software.
Model
R
R Square
1
.731a
.534
Model Summary
Adjusted R Square
Std. Error of the
Estimate
2.77593
Durbin-Watson
.531
a. Predictors: (Constant), POS
b. Dependent Variable: WITHINTENT
1.749
Here, In the regression equation, Perceived Organizational Support was taken as independent
variable and Withdrawal intentions was treated as the dependent variable and the Result of Model
summary indicated through R2 value which was found to be 0.534, indicating that POS having 53.4
% variation on Withdrawal intentions.
ANOVA
Model
Sum of Squares
1
Regression
1044.019
Residual
909.281
Total
1953.300
a. Predictors: (Constant), POS
b. Dependent Variable: WITHINTENT
Df
1
118
119
Mean Square
1044.019
7.706
F
135.485
Sig.
.000a
The goodness fit of the model was tested using ANOVA and the F-value was found to be 135.48
which is significant at the 0.000% level of significance, indicating that the model is good fit.
Coefficients
Model
1
(Constant)
POS
Unstandardized Coefficients
B
19.441
-.518
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Std. Error
.945
.044
Standardized
Coefficients
Beta
-.731
t
Sig.
20.583
-11.640
.000
.000
Collinearity Statistics
Tolerance
VIF
1.000
1.000
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a. Dependent Variable: WITHINTENT
The contribution of individual independent variable was evaluated through computation of β value
for the independent variable POS was -.731 with the T-Test value of 11.640 which was significant at
0.000, indicating that POS contribute significantly to Withdrawal intentions. Therefore, the Null
Hypothesis was rejected, indicating that there is a strong negative relationship between POS and
Withdrawal intentions among faculty members.
Conclusion
The study indicates a significant impact of Perceived Organizational Support on the withdrawal
intentions of faculty members of B-schools in Gwalior region. It was deduced that POS have 53.4%
variation in the withdrawal intentions. Thus, it can be concluded that employees of every
organization keep some or, other type of expectation as the repayment of their hard work and whole
hearted dedication.
Limitations of the Study
Almost all research has its limitation and the study undertaken is not an exception too. This study
has been done in a very narrow area by taking only in Gwalior region and the sample size is also
restricted to 120. The selection of a more representative sample across the country would bring more
comprehensive result. So it is suggested to take large sample size so that more appropriate result can
be obtained. The items taken in questionnaire can also be increased.
References
1. Allen, D., Shore, L., & Griffeth, R. (1999). A model of perceived organizational support.
Unpublished manuscript, University of Memphis and Georgia State University.
2. Aselage, J. and Eisenberger, R. (2003), “Perceived organizational support and psychological
contracts: A theoretical integration”, Journal of Organizational Behavior, Vol. 24 No. 5, pp. 491509.
3. Asgari, A., Silong, D., Ahmad, A., & Samah, B. (2008). The relationships between
transformational leadership behaviors, organizational justice, leader-member exchange,
perceived organizational support, trust in management and organizational citizenship
behaviors. European Journal of Scientific Research, 23(2), 227-242.
4. Dekker, I., & Barling, J. (1995). Workforce size and work-related role stress. Work and Stress,
9, 45–54.
5. Eder, P., & Eisenberger, R. (2008). Perceived organizational support: Reducing the negative
influence of coworker withdrawal behavior. Journal of Management, 34(1), 55-68.
http://dx.doi.org/10.1177/014920630730925
6. Eisenberger, R., Armeli, S., Rexwinkel, B., Lynch, P. D., & Rhoades, L.(2001). Reciprocation of
perceived organizational support. Journal of Applied Psychology, 86, 42–51.
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7. Eisenberger, R., Cummings, J., Armeli, S., & Lynch, P. (1997). Perceived organizational
support, discretionary treatment, and job satisfaction. Journal of Applied Psychology, 82, 812–
820.
8. Eisenberger, R., Fasolo, P., & Davis-LaMastro, V. (1990). Perceived organizational support
and employee diligence, commitment, and innovation. Journal of Applied Psychology, 75, 51–
59.
9. Eisenberger, R., Huntington, R., Hutchison, S. and Sowa, D. (1986), “Perceived
organizational support”, Journal of Applied Psychology, Vol. 71 No. 3, pp. 500-507.
10. Eisenberger, R., Rhoades, L., & Cameron, J. (1999). Does pay for performance increase or
decrease perceived self-determination and intrinsic motivation? Journal of Personality and
Social Psychology, 77, 1026–1040.
11. George, J. M., & Brief, A. P. (1992). Feeling good–doing good: A conceptual analysis of the
mood at work–organizational spontaneity relationship. Psychological Bulletin, 112, 310–329.
12. Gould, S. (1979), “An equity-exchange model of organizational involvement”, Academy of
Management Review, 4 (1), 53-62.
13. Lazarus, R. S., & Folkman, S. (1984). Stress, appraisal, and coping. New York: Springer.
14. Rhoades, L. and Eisenberger, R. (2002), “Perceived organizational support: A review of the
literature”, Journal of Applied Psychology, Vol. 87 No. 4, pp. 698-714.
15. Shore, L. M. and T. H. Shore (1995), “Perceived Organizational Support and Organizational
Justice. In R.S. Cropanzano, and K.M. Kacmar (Eds.), Organizational Politics, Justice, and
Support: Managing the social Climate of the Workplace, London: Quorum Books.
16. Shore, L. M., & Shore, T. H. (1995). Perceived organizational support and organizational
justice. In R. S. Cropanzano & K. M. Kacmar (Eds.), Organizational politics, justice, and support:
Managing the social climate of the workplace (pp. 149–164). Westport, CT: Quorum.
17. Shore, L. M., & Tetrick, L. E. (1991). A construct validity study of the Survey of Perceived
Organizational Support. Journal of Applied Psychology, 76, 637–643.
18. Wayne, S. J., Shore, L. M., & Liden., R. C. (1997). Perceived organizational support and
leader-member exchange: A social exchange perspective. Academy of Management Journal, 40,
82–111.
19. Witt, L. A. (1991). Exchange ideology as a moderator of job-attitudes–organizational
citizenship behaviors relationships. Journal of Applied Social Psychology, 21, 1490–1501.
20. Witt, L. A. (1992). Exchange ideology as a moderator of the relationships between
importance of participation in decision-making and job attitudes. Human Relations, 45, 73–85.
21. Witt, L. A., & Nye, L. G. (1992). Organizational goal congruence and job attitudes revisited
(FAA–AM Publication No. 92-8, pp. 92–98). Washington, DC: Federal Aviation
Administration, Office of Aviation Medicine.
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Chapter 12
A Study of Determinants of Spending and
Saving Behaviours of Non-Working Women
Nandan Velankar, Neha Velankar, Urvashi Garud, Tanya Singh and Ratan Prabha
Chauhan
ABSTRACT
If you’re a spender, you can’t delay the gratification. With cash in front of you, just like the marshmallow, you
can’t resist the urge to have it right now even if you’d have more lately. That’s why you don’t have much
savings in the bank, but it doesn’t bother you. You’ve been happy making purchases and enjoying them in the
moment. It’s worked out well enough for long enough, so you just stick with the habit. But if you’ve realized
that you’re trending toward extreme spending, then you’re probably looking to kick or curb your habit.
Women are in a position to exercise sufficient influence over important family affairs like finance and generally
act as bankers for their husbands. Their influence on decision making in household affairs is being affected due
to certain factors like degree of economic independence, socio cultural pressure, demographic factors, physical
setting etc. but, how far the women have been able to asset and influence decision.
Women are deciding factors in major spending decisions in families as major part of income is spent in
household activities and future planning, thus the proposed research work is focused to find out the
determinants of spending and saving behaviors of non-working women and to check the impact of spending
habits on saving behaviors.
Key Words: non-working women, spending behaviors, saving behaviors, determinants.
Introduction
There are many definitions of what saving is, but the most accepted definition is that saving is
income not spent. In other words, saving is the unconsumed part of disposable income. We can say
that people have a choice between consuming or saving money.
The online business dictionary has the following definition of saving:
“Savings is the portion of disposable income not spent on consumption of consumer goods but
accumulated or invested directly in capital equipment or in paying off a home mortgage, or
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indirectly through purchase of securities” ( Boye, K., Hansen, T., Hveem, D. J., & Torgrimsen, B.
(2008).)
The savings behavior in India went through a complete change since independence. There are a
number of factors affecting Indian household savings. These factors may be behavioral in nature or
other types of factors and they impact the household savings in India in a number of ways.
According to the Keynesian theory, the principal causal factor of saving is earnings or income and
this stood firmly as a proven fact over the passage of time. At the same time, a number of
experiments and observations do not substantiate the capacity of other variable quantities, for
example, inflation rate, rate of interest and tax rates regarding the impact on savings. These findings
raise a very fundamental question: Where does an individual's savings behavior originate from?
What makes one individual a spender" while another individual, with very similar income and other
socioeconomic characteristics, saves a large portion of his or her income?
We all make hundreds of decisions each day. Most of these decisions are quite simple and have few
consequences. Some are complex and have long-term effects on our personal and financial situations
important of them are spending and saving decisions.



SPEND - for daily living expenses, for major expenditures, for recreational activities
SAVE- for long-term financial security
SHARE- to provide local and global assistance to those in need
While many people take pleasure in buying things, savers don’t feel that same way. Instead, you’re
uncomfortable with shopping, and you feel real emotional pain when you’re paying. But what
makes you tick and bring you pleasure as a saver?
Women are the decision makers in major spending activities in families as major part of income is
spent in household activities. Obviously, this isn’t true now, in this day & age. Cooking is as much a
guy’s activity as Personal Finance ought to be a woman’s. Women, in general, don’t show real
eagerness for these activities, for some reasons like Women treating their earning as time pass
activity: The biggest reason for this, is that, since the dawn of time, Man has been the main provider
and the primary bread-winner of the Family, He was responsible for earning and managing money
and taking care of financial goals, Women, on the other hand, were mainly responsible for raising
children and taking care of household activities and to a big extent, maintaining relationships
outside the house and in the community, Women use to be the consumers only in old India but
that’s not true now women are earning equal to the men in family and thus have a different
approach for spending and saving, than what they use to have earlier. Many women in spite of
being qualified enough, and having skills to earn money, view their earning as secondary compared
to men. They “feel” that they are not at the same level, even though it’s not true; most of this is
psychological.
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Literature Review
Furnham (1985) investigated, among others, the relationship between demographic (age, sex,
education, vote and income) and attitudes toward saving money. He found that age was strongly
and linearly related to the respondent’s attitudes to saving and that older people were more positive
towards saving. He also suggested that education discriminated between the various saving
attitudes.
Horioka & Watanabe (1997) tried to estimate net saving of different saving motives to overall
household saving in Japan. They found that the retirement motive and the precautionary motive
were of dominant importance for Japanese households. They also found that net saving for the
bequest motive had a low percentage share of total net saving for all the motives. They also found
that the saving motives vary greatly by age.
Nyhus (2002, p 127-128) found that the precautionary saving motive was the most important saving
motive. She also suggested that women regarded saving as more important than men, with an
overall higher level of reported importance of the different saving motives than men. She also
suggested it to be age differences in the importance of saving motives. The bequest motive was more
important for older age group while the inter vivo transfer motive was more important among the
age group 30-44. She further argued that the precautionary motive, the calculation motive and the
goal-saving motive declined with age.
Harris et.al (2002) did a research on the determinants of household saving in Australia. The
respondents were to give self-enumerated reasons for saving. They found that the top three motives
for saving for households was the retirement motive, saving for holidays (the goal saving motive)
and the precautionary motive. They also found that people regarded the bequest motive as relatively
unimportant. Based on the results they indicated that the main difference in saving motives between
households with and without kids was saving for educational purposes.
Halvorsen (2011) made an observation based on questions on the motives for saving and bequest
from a survey that NOVA conducted in 2001 on Norwegian respondents. When people were asked
about how important the bequest motive was for them, she made a number of observations. Almost
half of the respondents regarded the bequest motive as important, and even among those without
children there was a great share of people that regarded it as an important motive. She noted that
when comparing against other motives for saving, the precautionary motive was the most important
motive, and especially for those over 65 years.
Kasilingam & Jayabal (2011) studied the impact of saving motives on household saving in India.
They argue that the saving rate of an individual or a household is affected not only by their ability to
save but also their willingness to save. While their ability to save is determined by his income and
expenditures, his willingness to save is the saving motives of the individual. An important finding
of their study was that the level of motives had a significant influence on the size of saving. They
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concluded that India had a high savings rate because Indians had a high level of motives to save and
that as long as the Indians continued to have high level of saving motives, the present high level of
saving rate would continue.
Objectives of the Study
1.
2.
3.
4.
To find out the factors determining spending behaviour of non-working women.
To find the factors determining saving behaviour of non- working women.
To check the impact of spending on saving behaviour of non- working women.
To open new vistas for further researches.
Research Methodology
Scope of the Study
The study was exploratory in nature and questionnaire survey was used to complete it. Non
probability Quota Sampling was used. Population was the non working women within Gwalior
region and 50 non working women was the sample size.
Tools Used For Data Collection
We framed a questionnaire with the purpose to study economical and psychological determinants of
the saving behavior of non-working women in Gwalior. One questionnaire for saving and 1 for
spending behavior. Questionnaire has 20 questions each.
Tools Used For Data Analysis
1. Reliability test was applied to check the reliability of the questionnaire with the help of
Cronbach’s Alpha.
2. Factor analysis was applied to find out the determinants of spending and saving behavior.
3. Linear regression was used to check the impact of spending on saving behavior of nonworking women.
Result and Discussions
Cronbach’s Alpha method has been applied to calculate reliability of all items in the questionnaire.
Reliability test using SPSS software and the reliability test measure is given below:
Reliability measure for spending behavior on non-working woman
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Cronbach's Alpha
.707
Reliability Statistics
Cronbach's Alpha Based on Standardized Items
.716
N of Items
20
It is considered that the reliability value more than 0.7 is good and it can be seen that reliability
value is quite higher than the standard value, so all the items in the questionnaire are highly reliable.
Reliability measure for saving behavior on non-working woman
Cronbach's Alpha
.627
Reliability Statistics
Cronbach's Alpha Based on Standardized Items
.627
N of Items
20
It is considered that the reliability value near 0.7 is good and it can be seen that reliability value is
quite closer to the standard value, so all the items in the questionnaire are highly reliable.
Factor Analysis
KMO and Bartlett’s Test and Factor Analysis for spending behavior
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
.535
396.565
190
.000
The KMO score is 0.535 which is higher than 0.5, thus it can be said that, sample is adequate for
factor analysis. The degree of common variance among the twenty variables is “middling" bordering
on “Meritorious".
Bartlett's Test of Sphericity was provided the following results:
Chi-Square value: 396.565
Df: 190
Sig.: .000
Bartlett's Test of Sphericity is highly significant, because (P < 0.05) hence, correlation matrix is not an
identity matrix and therefore factor analysis is appropriate.
1. Factor Details ( SPENDING BEHAVIOR)
Principle component factor analysis with Varimax rotation and Kaiser Normalization was period
details about factors, the factor name variable number and convergence and that eigen value are
given in the table.
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Factor Name
Impatient acts
Strong
financial
position
Eigen Value
Total
% Of
Variance
4.112
20.560
2.622
13.111
Planning for
spending
2.229
11.147
Requirement
1.756
8.781
Calculated
purchasing
1.428
7.141
Product
guiding
Sensible
purchasing
1.313
1.066
6.565
5.331
Variable Convergence/Statement
Loadings
Value
10. After buying something, I wonder if I could have gotten the
same thing for fewer elsewhere.
14. I am a self – reliant person.
08. Opportunity cost always guides my spending decision.
16. I do not think before spending because I think I have enough
money to satisfy my wants.
11. I often buy things spontaneously.
20. I spend less in order to keep sufficient amount of money in my
account all the time.
17. I spend freely because spending I do not have anyone to take
care of.
1.My specific plan for my expenses for month are written down
5. The extensive advertising affects my decision to purchase.
6. Family remains my priority while spending for anything.
.816
9. I priorities my purchase as per the need not desire.
18. I cut my spending when the inflation is high.
4. I think about my current financial position before purchasing
anything.
2. When making major purchase decision, I research them using a
variety of information sources.
15. I always clam down my instincts to buy because I think I have
enough money to satisfy my wants.
12. I often buy thing’s without thinking
13. “Buy now, think about it later” describes me
.773
.632
.482
07. The selling efforts by sales person guide my decision to
purchase
19. I don’t spend judiciously and then worry about not being able
to meet necessary expenses
03. I usually buy only the things I need
.687
.767
.752
.782
.715
.599
.517
.809
.588
.581
.842
.579
.515
.852
.877
.553
Factor Analysis
KMO and Bartlett’s Test and Factor Analysis for saving behavior
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
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.520
270.370
190
.000
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The KMO score is .520 which is higher than 0.5, thus it can be said that, sample is adequate for factor
analysis. The degree of common variance among the twenty variables is “middling" bordering on
“Meritorious".
Bartlett's Test of Sphericity was provided the following results:
Chi-Square value: 270.370
Df: 190
Sig.: .000
Bartlett's Test of Sphericity is highly significant, because (P < 0.05) hence, correlation matrix is not an
identity matrix and therefore factor analysis is appropriate.
Principle component factor analysis with Varimax rotation and Kaiser Normalization was period
details about factors, the factor name variable number and convergence and that Eigen value are
given in the table.
Factor Name
Eigen Value
Future oriented
Total
3.801
% of variance
19.004
Bequeath motive
2.087
10.437
Opportunity cost
1.811
9.056
Family nurturing and
teaching
1.673
8.367
Self
dependency/pension
planning
1.371
6.854
Time value of money
1.262
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6.309
Variable Convergence / Statement
Loadings
Value
06. I save for starting a business in near future
09. I try to save more when interest rates are higher
01. I always prepare a monthly budget in order to control
over spending
18. I save to be able to give presents or gifts to my children
and grandchildren when I don’t have my own income
20. I put a lot of efforts to save and getting information
about saving through various sources like media articles, TV
etc
08. I try to save more when economy is going bad
19. I save to leave money and assets for my children (or
other relatives)
17. I save so that I do not ever need to ask other people for
financial help
03. I save because I have enough income to fulfill my current
needs
14. I believe that small cut in expenses can create pool of
saving
15. I save because it strengthens my financial position.
11. I save because I want to enjoy after work life without
being burden on anyone
16. I do not save because I want to enjoy my present
07. I save because I think money gives birth to money
10. Time value of money calculations often guide my saving
decision
.777
.698
.587
.747
.712
.780
.688
.551
.447
.779
.700
.779
.643
.593
.796
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Dependents
1.172
5.862
02. I plan my expenses so that I don’t have to suffer in
contingency
05. I save to own a home in near future
04. I save because I want better education for my children
12. I save because I have been taught that one should be
prepared for the contingencies
13. I save because I am the only earning member in the
family
.683
.558
.774
.855
.474
Linear Regression Test
H0 - There is no significant effect of spending on saving behavior of non- working women.
Model
1
R
.545a
R Square
.297
Model Summary
Adjusted R Square
Std. Error of the Estimate
.283
7.54370
a. Predictors: (Constant), Spending
b. Dependent Variable: Saving
Durbin-Watson
1.110
This table provides the R and R2 value. The R Value is 0.545, which represents the simple
correlations. It indicates a high degree of correlation. The R2 indicate how much of the dependent
variable, “saving”, is explain by the independent variable, “spending”, is 29.7%.
1
Model
Regression
Residual
Total
ANOVAb
Sum of Squares
df
Mean Square
1154.927
1
1154.927
2731.553
48
56.907
3886.480
49
a. Predictors: (Constant), Spending
b. Dependent Variable: Saving
F
20.295
Sig.
.000a
This table indicate that the regression model predict that the outcome variable significantly well.
Here P < 0.05 and indicates that, overall, the model applied is statistically significantly predict the
outcome variable.
The P Value (.000) < Standard value 0.05, hence the H0 is rejected.
Model
1
(Constant)
Spending
a. Dependent Variable: Saving
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Coefficients
Unstandardized Coefficients
B
31.040
.551
Std. Error
8.820
.122
Standardized
Coefficients
Beta
.545
t
Sig.
3.519
4.505
.001
.000
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The coefficient table provides the information of each predictor variable. Here we have predicted
saving behavior (Dependent Variable) from spending (Independent Variable).
Y= A + BX + e
Y= 31.040+ 0.551X + e
Here,
Y= Dependent Variable (saving)
X= Independent Variable (spending)
e= Error
The linear regression was applied between spending and saving behavior. The result of regression
indicates that independent variable spending has significant effect on saving behavior signified by
coefficient Beta factor 0.545.
Implications of the Study
1. The study will help to set some parameters to evaluate the saving and spending behavior
2. The study can be useful to improve saving habits and reduce or control the necessary
spending
3. This study can be use by different researchers for further research
4. This study may useful for non-working woman’s to evaluate themselves in concern to their
spending and saving behavior
Suggestions
1. The study has been done by taking only a sample of 50 respondents therefore it is suggested
to take larger sample size in order to obtain more accurate results.
2. 2. This study has been done in Gwalior region only so it is suggested to take larger area on
other region so that more appropriate results can be obtain
3. The research can also be conducted with other demographic variables like Qualifications,
Family type, Location etc.
Conclusion
The proposed research work “a study of determinants of spending and saving behavior of nonworking women” of Gwalior region was completed the questionnaire work field by non-working
women of Gwalior region and by applying test like, Reliability, Factor analysis, the data was
analyzed. Many factors were found which determines the spending behavior of non-working
women like; Impatient acts, Strong financial position, Planning for spending, Requirement,
Calculated purchasing, Product guiding and Sensible purchasing, And the factors were ascertained
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to saving behavior of non-working women like; Future oriented Bequeath motive, Opportunity cost,
Family nurturing and teaching, Self dependency/pension planning, Time value of money and
Dependents.
It has been concluded by testing the hypothesis and result were obtained that, spending has
significant effect on saving behavior of non-working women.
References
1. Alessie, R., Lusardi, A., & Aldershof, T. (1997). Income and wealth over the life cycle:
Evidence from panel data. Review of Income and Wealth, 43(1), 1–32.
2. Bajtelsmit, V. L. & Bernasek, A. (1996). Why do women invest differently than men?
Financial Counseling and Planning, 7, 1-10.
3. Barnea, Amir, Henrik Cronqvist, and Stephan Siegel. 2010. Nature or Nurture: What
determines investor behavior? Journal of Financial Economics, 98 (3): 583-604.
4. Bernheim, B., 2009. On the potential of neuroeconomics: A critical (but hopeful) appraisal.
American Economic Journal: Microeconomics 1 (2), 1{41.
5. Bernheim, B., Skinner, J., Weinberg, S., 2001a. What accounts for the variation in retirement
wealth among U.S. households? American Economic Review 91 (4), 832{857.
6. Beverly, S. G., Sherraden, M., Zhan, M., Shanks, T. R. W., Nam, Y., & Cramer, R. (2008).
Determinants of asset building. Center for Social Development Washington University, St.
Louis and New America Foundation.
7. Browning, M., & Lusardi, A. (1996). Household saving: Micro theories and micro facts.
Journal of Economic Literature, 34, 1797–1855.
8. DeVaney, S. A., Anong, S. T., & Whirl, S. E. (2007). Household savings motives. The Journal
of Consumer Affairs, 41, 174–186.
9. Embrey, L., & Fox, J. (1997). Gender differences in the investment decision-making process.
Financial Counseling and Planning, 8(2), 33-40.
10. Fisher, P. J. (2010a). Black-White differences in saving behaviors. Financial Services Review,
19(1).
11. Fisher, P. J. (2010b). Gender differences in personal saving behaviors. Financial Counseling
and Planning, 21(1), 15.
12. Fisher, P. J., & Anong, S. T. (2012). Relationship of Saving Motives to Saving Habits. Journal
of Financial Counseling and Planning, 23(1), 63-79.
13. Fisher, P. J., & Hsu, C. (2012). Differences in household saving between non-Hispanic White
and Hispanic households. Hispanic Journal of Behavioral Sciences, 34(1), 137-159.
14. Furnham, A. (1985). Why Do People Save? Attitudes to, and Habits of, Saving Money in
Britain. Journal of Applied Social Psychology, 15(4), 354-373.
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15. Grable, J. (2000). Financial risk tolerance and additional factors that affect risk taking in
everyday money matters. Journal of Business and Psychology, 14, 625-630.
16. Guiso, L., Jappelli, T., Terlizzese, D., 1992. Earnings uncertainty and precautionary saving.
Journal of Monetary Economics 30, 307}337.
17. Hallahan, T. A., Faff, R. W., & McKenzie, M. D. (2004). An empirical investigation of
personal financial risk tolerance. Financial Services Review, 13, 57-78.
18. Han, C.-K., & Sherraden, M. (2009). Do institutions really matter for saving among lowincome households? A comparative approach. Journal of Socio-economics, 38(3), 475-483.
19. Harris, M. N., Loundes, J., & Webster, E. (2002). Determinants of household saving in
Australia.Economic Record, 78(241), 207–223.
20. Hilgert M A, Hogarth J M (2002) Financial knowledge, experience and learning preferences:
preliminary results from a survey on financial literacy.
21. Hilgert M A, Hogarth J M and Beverly S G (2003) Household financial management: the
connection between knowledge and behavior.
22. Horioka, C. Y., & Watanabe, W. (1997). Why do people save? A micro-analysis of motives for
household saving in Japan Economic Journal, 107(442), 537–552. households. Financial
Counseling and Planning, 4, 11-30.
23. Liao, L., Huang, N., & Yao, R. (2010). Family finances in urban China: Evidence from a
national survey. Journal of Family and Economic Issues, 31, 259–279.
24. Lindqvist, A. (1981). The Saving Behaviour of Households. Subjective measures of
households' saving behaviour. Stockholm, Sweden: Unpublished doctoral dissertation, The
Stockholm School of Economics.
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Chapter 13
Effect of Store Image on Consumer Store
Brand Purchase Frequency & Perceived
Quality of Store Image
Prabhat Kumar Singh Kushwah
ABSTRACT
Is the image or impression of a store in the minds of customer’s Good overall impression of this nature in Store
image terms of products available in the store, the store itself and the experience they expect when shopping at
the store. So it can be said that the store image is actually a reflection of the overall customer satisfaction to
store environment. The study has been divide into five parts, which includes introduction and its sub parts are
conceptual framework, literature review, and objective after this there was research methodology which
includes study, sample and tools for data collection, analytical tools, like this one is a causal study, this
research is purposive non random in nature and it also include the sample size of 300 the data was collected
through questionnaires and its contained 23 items, then tools for data analysis shows that which type of test
have been applied. In this research reliability, and multiple regression test has been applied. Third is result and
discussion, it includes the result of research and discussions means that whether review of literature match
with our result or not and fourth is implication, suggestions, and last The analysis reveals that the stores
image has more effect on consumer perceived quality as compare to consumer store brand purchase frequency
in the Gwalior region.
Key Words: Store Image, Brand Purchase Frequency, Perceived Quality of Store Image
Introduction
Store image is “a store defined in customers’ mind partly based on functional attributes and partly
based on psychological attributes. “As sited in sung jin yoo (2005) by Martineau (1958)
“Store image is built up through experience and totally conceptualized or expected strengthening
that urge consumers to purchase at the specified store. “As sited in sung jin yoo (2005) by Kunkel
and Berry (1968).
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“Store image is a complex of attributes that consumers feel about the store and it is more than a
simple sum of objective individual attributes since parts of attributes interact in consumers’ minds”
as sited in sung jin yoo (2005) by Oxenfeldt (1974)
“Store image means a complex in total dimensions of store attributes that consumer feel and a
complex means that store image consists of various attributes” as sited in sung jin yoo (2005) by
Zimmer and Golden (1988)
“Store image consists of functional and emotional attributes, these are organized in the perceptual
structures of purchasers, and the structures are expectation on overall policies and executions of
retailers”. As sited in sung jin yoo (2005) by Berman and Evans (1995).
“Store brand is used to describe goods that are marked with the name of the shop/store in which
they are sold rather than with the name of the company that produced them. as sited in Kumar,
Nirmalya; Steenkamp, Jan-Benedict E.M (2007)”.
“Store brands are a line of products sold by a retailer under a single marketing identity. They bear a
similarity to the concept of house brands, private label brands (PLBs) in the United States, own
brands in the UK, and home brands in Australia and generic brands. They are distinct in that a store
brand is managed solely by the retailer for sale in only a specific chain of store”. as sited in RC
Balaban, (August 27, 2006)."
“A product that is manufactured and packaged for a particular store or retail chain. For example,
grocery chains often sell store brands of soft drinks and canned vegetables at a price lower than
similar products with well-known brand names” as sited in Jan-Benedict E.M (2003).
“Store branding is a mature industry; consequently, some store brands have been able to position
themselves as premium brands. Sometimes store-branded goods mimic the shape, packaging, and
labeling of national brands, or get premium display treatment from retailers.”
A store brand is a product that is exclusively manufactured for a retailer. The retailer will market the
product under its own brand name. Prices for private brands are usually set cheaper than competing
name brands. Consumers often think that store brands are of lower quality, but that perception is
changing.
“Perceived quality can be defined as the customer's perception of the overall quality or superiority
of a product or service with respect to its intended purpose, relative to alternatives. Perceived
quality is, first, a perception by customers”. By david Aaker.
“Perceived quality has attracted the interest of practitioners and researchers because of a belief in its
beneficial effects on marketing performance. Indeed, the belief that high perceived quality leads to
repeated purchases is the bedrock of any business. Thus a better understanding of the relationship
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between perceived product quality and product involvement, consumer satisfaction and purchase
intentions may help academics develop a model of consumer decision making for goods”. As sited
in Rodoula Tsiotsou (2005) by Cronin & Taylor, 1992;
There are various academics defining the concept of perceived quality
Perceived quality is “a special type of association, partly because it influences brand associations in
many contexts and partly because it has been empirically shown to affect profitability.”As sited in
Somphol Vantamay by Aaker and Joachimsthaler (2000),
Perceived quality is “the consumer’s judgment about a product’s overall excellence or superiority.”
As sited in Somphol Vantamay by Zeithaml (1988)
perceived quality is (1) different from objective or actual quality, (2) a higher level abstraction rather
that a specific attribute of a product, (3) a global assessment that in some cases resembles attitude,
and (4) a judgment usually made within a consumer’s evoked set. .” (As sited in Somphol
Vantamay) by Zeithaml (1988)
Perceived quality is “the customer’s perception of the overall quality or superiority of the product or
service with respect to its intended pur- poses, relative to alternatives.” (As sited in Somphol
Vantamay) by Aaker (1991)
Perceived quality can be defined as the customer's perception of the overall quality or superiority of
a product or service with respect to its intended purpose, relative to alternatives. Perceived quality
is, first, a perception by customers. It thus differs from several related concepts, such as:
a) Actual or objective quality: the extent to which the product or service delivers superior service
b) Product-based quality: the nature and quantity of ingredients, features, or services included
c) Manufacturing quality: conformance to specification, the "zero defects" goal
Literature Review
Wu, Paul C S; Yeh, Gary Yeong-Yuh; Hsiao and Chieh-Ru (2011) investigated the direct effects of
store image on brand image and purchase intention for a private label brand. This study also
investigates the indirect effects mediated by perceived risk and price consciousness on these
relationships.
Farhat, Reshma; Khan and Mustafa (2000) analyzed that brand image is very important for
customers as well as marketers. The study provides an insight into various aspects of brand image.
The purpose of this article is to show that product image influences consumer preferences and
satisfaction through a congruence effect. Based on existing literature, the paper has introduced a
conceptual framework to explain the interrelationships between the various facets of the brands and
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corresponding outcomes. This paper comprehensively examines the self-concept theory and
research in consumer behavior and provides a conceptual framework for future research.
Baker, Julie; Grewal and Dhruv; Parasuraman (1995) studied in which an experimental setting was
used to examine how combinations of specific elements in the store environment, such as ambiance,
design and salespeople, influence customer inferences about merchandise and service quality and
the extent to which these inferences affect store image.
Cudmore and Andrew (2000) has defined that consumers perceive store brands to represent a good
value. The research described in this dissertation investigated the relationship between these
extrinsic cues and perceptions of store brand quality.. Results also indicate that store image and
package similarity are indeed important in determining consumer store brand quality judgments
when consumer store brand knowledge is taken into account
Darley and William K; Jeen-Su Lim (1999) studied that Consumers' evaluations and attitudes of
secondhand stores, are examined with the effects of store image and the general attitude toward
secondhand stores specifically examined..
Champion, Jennifer Clifton; Hunt, James B; Hunt and Tammy G (May 2010) have examined that
the store image is increasingly becoming a means for retailers to differentiate themselves from their
competitors. The present study endeavours to develop an understanding of the relationship between
store image, perceived quality, and willingness to buy. If store image is seen as high, merchandise
quality will more likely be seen as positive, and this will lead to an increased willingness to buy
from the retailer.
Rzem, Haifa; Debabi, and Mohsen (Sep 2012), this study aims to examine the direct effects of
perceptual variables on store brand attitude also investigates effects of store image components on
the main relationships. Consumers were in-store surveyed after doing their shopping. Data were
analyzed using multiple regressions. This study reveals that perceived risk and perceived value are
the principle drivers of store brand attitude.
Rationale of the Study
Nowadays store brands are becoming more popular and reason was stated as quality of store brand
which is related to the consumer buying habits. Store image is built up through experience or
expected strengthening that urge consumers to purchase again and again at the specified store.
Through some dimensions like costumer’s perception about service, store atmosphere, perceived
quality create image in the costumer’s mind. The previous researchers have emphasized on effects of
store image on brand image and purchase intention for a private label brand in the mind of
customers and the reason of this study was to focus on increasing the consumer store brand
purchase frequency and perceived quality.
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Objectives
1. To study the effect of store image on consumer store brand purchase frequency.
2. To study the effect of store image on consumer perceived quality.
Null Hypothesis
1. HO1- There is no significant relationship between store image and consumer perceived
quality.
2. HO2- There is no significant relationship between store image and store brand purchase
frequency.
Research Methodology
The Study
The study was causal in nature and survey method was used to complete it.
Sampling Design

Population: The all the customer who purchase from store which are located in Gwalior city.

Sampling Frame: Since there was no list of all existing customers who purchase from retail
store of Gwalior city so no sampling frame was utilized.

Sampling Element: Individual Respondent was the sampling element.

Sample Size: 300 individual respondents

Sampling Method: Purposive non-random sampling technique was used.
Tools Used For Data Collection
Standardized questioner was utilized to measure store image, consumer store brand purchase
frequency and consumer perceived quality on LIKERT scale 1 to 5 Where 1 stand for minimum
agreement and 5 stand for maximum agreement.
Tools Used For Data Analysis
1. Item to total correlation was used to check the internal consistency of the questionnaires.
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2. Reliability test was applied to check the reliability of the questionnaire with the help of
Cronbach’s Alpha.
3. Multiple regressions were used to find out relationship between different variables.
Result and Discussion
Reliability Test
Cronbach's Alpha
.906
Cronbach's Alpha Based on Standardized Items
.904
N of Items
23
From the above table we can conclude that the calculated value of Cronbach’s Alfa which is (.906)
which is more than the book value of Cronbach’s Alfa which is (0.7) that means questionnaire is
highly reliable.
Regression Test
HO1- There is no significant relationship between store image and consumer perceived quality.
Model Summary
Model
dimension0
R
.703a
1
R Square
.494
Adjusted R Square
.492
Std. Error of the Estimate
2.69536
We know that the model value of R Square is (1) then model will be perfectly fit. From the above
table value of R Square can be clearly observed that the (.494) so model is slightly fit.
ANOVA
1
Model
Regression
Residual
Total
Sum of Squares
2113.881
2164.956
4278.837
Df
1
298
299
Mean Square
2113.881
7.265
F
290.970
Sig.
.000a
From the above table we can conclude that the calculated value of F which is (290.970) more than the
book value which is (0.05) which is significant at a zero percent significant level and it can also be
the significant that 1 % and 5% significant of the level so the difference is significant and hypothesis
is rejected that means there is a significant relationship between store image and consumer
perceived quality.
Coefficients
Model
1
(Constant)
Unstandardized Coefficients
B
Std. Error
5.604
.659
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Standardized Coefficients
Beta
t
Sig.
8.506
.000
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Store Image
.197
.012
.703
17.058
.000
Expected regression line
Y = a+b x+Σ
Where,
Y = dependent variable = consumer perceived quality
a = intercept (constant) = 5.604
b = slope = 0.197
x = independent variable = store image
Σ = random error
Perceived quality = 5.604+0.197store image+ Σ
From the above table we can interpret if other things remain constant, if we increase value of store
image by one unit then perceived quality will be increased by 0.197.
HO2- There is no significant relationship between store image and store brand purchase frequency.
Model Summary
Model
dimension0
1
R
.048a
R Square
.002
Adjusted R Square
-.001
Std. Error of the Estimate
.92875
We know that the model value of R Square is (1) then model will be perfectly fit. From the above
table R Square can be clearly observed that the value of R Square is (.002) so model is not fit.
ANOVA
1
Model
Regression
Residual
Total
Sum of Squares
.588
257.048
257.637
Df
1
298
299
Mean Square
.588
.863
F
.682
Sig.
.410a
From the above table we can conclude that the calculated value of F which is (.682) more than the
book value which is (0.05) which is significant at a zero percent significant level and it can also be
the significant that 1 % and 5% significant of the level so the difference significant and hypothesis is
rejected that means there is a relationship between store image and store brand purchase frequency.
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Coefficients
Model
1
(Constant)
Store Image
Unstandardized Coefficients
B
2.494
.003
Std. Error
.227
.004
Standardized
Coefficients
Beta
.048
T
Sig.
10.989
.826
.000
.410
Expected regression line
Y = a+b x+Σ
Where,
Y = dependent variable = store brand purchase frequency
a = intercept (constant) = 2.494
b = slope = 0.003
x = independent variable = store image
Σ = random error
Store brand purchase frequency = 2.494+0.003store image+ Σ
From the above table we can interpret ate if other things remain constant, if we increase value of
store image by one unit then perceived quality will be increased by 0.003.
Suggestions & Implications
Suggestions
The study can be widened by increasing the sample size for getting appropriate results.
2. It will suggest that store image has more impact on consumer perceived quality as compare
to brand purchase frequency.
3. The study has been done in Gwalior region only so, it is suggested that if this study can be
replicated by using demographics variables and geographic variables adequate results can
be obtained.
4. The research will suggest the store image has more effect on consumer perceived quality.
1.
Implications
1. The study is intended to be useful contribution to understand the relationship of store
image, consumer perceived quality and store brand purchase frequency.
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2. It is also intended to be useful contribution for further research because it provides link
between theory and practice.
3. It will also contribute to the shopkeepers who are direct link to customers.
4. It can prove to be useful for the consumer who is willing to purchase goods on the bases of
store image.
Conclusion
The casual study is based on a survey of 300 shopkeepers and general stores belonging in different
location of the Gwalior region .The variables store image, consumer perceived quality and store
brand purchase frequency .The objective of the study were to identify independent variable which
have most impact on consumer perceived quality and store brand purchase frequency . The result of
regression test reveals that there is significant and positive relationship in store image, consumer
perceived quality and store brand purchase frequency. The conclusion drawn from this research
lead to recommendations for a series of action which if adopted would help to establish the need
store image which can improve the general stores reliability of customers. The analysis reveals that
the stores image has more effect on consumer perceived quality as compare to consumer store brand
purchase frequency in the Gwalior region.
References








A. Parasuraman, Valarie A. Zeithaml and Leonard L. Berry (1988) “SERVQUAL: A MultipleItem Scale for Measuring Consumer Perceptions of Service Quality”, Journal of retailing Vol.
64, No. 1, pp. 12-40.
AR Oxenfeldt (1974) “Developing a Favorable Price Quality Image”, Journal of retailing
Vol.50, pp. 8-14.
B Andrew Cudmore (2000) “The effect of store image, package and price similarity on
consumer perceptions of store brand quality”, Phd thesis of University of south Carolina
UMI number 9969486.
Baker, Julie; Grewal and Dhruv; Parasuraman (1995) “The effect of store atmosphere on
customer quality perceptions and store image”, Volume: 77, Issue: 7.
David A. Aaker and E. Joachimsthaler (2000) “The Brand Relationship Spectrum” California
Management review Vol. 42, No. 4, pp. 8-23.
Evans Joeal R. and Berry Berman (1995) “Principles of Marketing Prentice Hall.
J. Joseph Cronin Jr. and Stevent A. Taylor (1992) “Measuring Service Quality: A
Reexamination and Extension” Journal of marketing Vol. 56, pp.55-68.
Jennifer Clifton Champion and James B. hunt and Tammy G. Hunt (2010), “The Effect of
Retail Store Image on Student Perceptions of Merchandise Quality and Willingness to buy”,
American journal of business research Vol. 3, No. 1, pp. 17-32.
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










John H. Kunkel and Leonard L. Berry (1968) “A Behavioral Conception of Retail Image”,
Journal of marketing Vol. 32, pp. 21-27.
Haifa Rzem and Mohsen Debabi (2012), “Store Image as a Moderator of Store Brand
Attitude”, Journal of business studies quarterly Vol. 4, No. 1, pp. 130-148.
Kevin Lane keller and David A. Aaker (1992) “The Effects of Sequential Introduction of
Brand Extensions” Journal of marketing research Vol. 29, pp. 35-50.
Kumar, Nirmalya; Steenkamp, Jan-Benedict E.M., Private Label Strategy – “How to Meet the
Store Brand Challenge”. Harvard Business Press 2007.
Mary R. Zimmer and Linda L. Golden (1988) “Impressions of Retail Stores: A Content
Analysis of Consumer Images”, Journal of retailing Vol.64, No. 3, pp. 265-293.
Pierre Martineau (1958) “The Personality of the Retail Store”, Journal of Harvard business
reviews Vol. 36, pp. 47-55.
Reshma Farhat and Dr. Bilal Mustafa Khan (2011) “Importance of Brand Personality to
Customer Loyalty: A Conceptual Study”, New media and mass communication, Vol. 1, pp.
4-10.
Robert W. Palmatier, Lisa K. Scheer and Jan-Benedict E.M. (2007) “Customer Loyalty to
Whom? Managing the Benefits and Risks of Salesperson-Owned Loyalty”, Journal of
marketing research Vol. 54, pp. 185-199.
Sung jin yoo (2005) “importance of apparel store image attributes: perceptions of female
consumers” Key words Store image, female consumers, store attributes, (2005).
William K Darley and Jeen-Su Lim (1999) “Effects of store image and attitude toward
secondhand stores on shopping frequency and distance traveled”, International journal of
retail and distribution management, Vol. 27, No. 8, pp. 311.318.
Wu, Paul C. S., Yeh, Gary Yeong-Yuh Hsiao and Chieh-Ru (Feb 2011) “The effect of store
image and service quality on brand image and purchase intention for private label Brands”
Volume-19, Issue-1, Feb 2011.
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Chapter 14
Determinants of Informal Groups in
Workplaces - An Empirical Study
Shilpa Sankpal, Nischay Upamannyu, Vivek Gaur and Avadhesh Rathor
ABSTRACT
Ever since the Hawthorne Studies, there has been a huge interest in the behavior of employees at the workplace.
Informal Groups, and their presence can neither be discounted nor ignored in workplaces. These groups are
source of solace and emotional well-being for its members. They also act as phenomenal sources of information
exchange. They can be damaging if the information reaches people not meant to know it, or if the information
is false and not credited by the facts. In light of this, it is paramount to see what makes people form these kind
of groups, and that was the key of this study. Data was collected from academicians in Educational Institutes
in Gwalior, and was subjected to Exploratory and Confirmatory Factor Analysis. The results have been
described in the paper, and essential three underlying factors emerged which included Individual attributes,
Mutual Goals and Team Dynamics.
Keywords: Informal Group, Emotional Well being
Introduction
Mayo (1949) famously stated: “In every department that continues to operate, the workers have
whether aware of it or not formed themselves into a group with appropriate customs, duties,
routines, even rituals; and management succeeds (or fails) in proportion as it is accepted without
reservation by the group as authority and leader”
Morgan (1997) interestingly stated that employees in their tenure in the organization and wherever
they are will weave a web of groups and coalitions and this coalition establishment is widespread.
The underlying reason is that even in the office, people do not stop playing out their social needs
and belongingness is crucial.
On the basis of Ibarra’s work (1992), Torenvlied and Velner (1998) have elaborated on the key
contents of informal networks. The main contents include

Affect – Friendship, trust and intimacy
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


Political – Influence, power, authority
Production – Advice, Exchange of Instrumental knowledge and innovation
Cultural – Communication and information flow
Almost every basis of formation of the informal network would fall in one of the above categories.
Review of Literature
In a very illustrative and informative analogy, Krackhardt and Hanson (1993) have explained that
the formal network in an organization is like the bones in the skeletal structure and the informal
networks are like the nervous system of a living being. The formal network is strong and rigid and
the nervous system is fragile and flexible. While the nervous system is not easy to touch, the
skeleton can be felt physically. And so, Han (1983) has said that unless an organization is minutely
observed and intentionally studied, it would be difficult to actually see the informal networks
existing within the organization. Waldstrom (2001) likened the informal networks to the World
Wide Web. There is not much formal control on the WWW, and general chaos in the linking of
resources, and yet there is implicit structure in the same. Not all websites are equally important and
some of them are more important simply for their content, and connection with other websites –
something akin to the difference between formal and informal position that people occupy within
the workplace.
Table No 1– Some contrasts between formal and informal organizations
Organization
Elements
Salient goals
Structural units
Basis for communication
Formal
Organization’s
Offices/positions
Offices formally related
Basis for power
Legitimate authority
Control mechanisms
Type of hierarchy
Belonging of individuals
Communication
Origin
Changes over time
Group leadership
Rules
Vertical
Specific
Structured
Planned
Shifts
Explicit
Informal
Individuals’
Individual roles
Proximity: Physical, professional, task, social,
formal
Capacity to satisfy individuals’ needs (often
through expert or referent power)
Norms
Lateral
Ambiguous
Unstructured
Spontaneous
Incremental
Implicit
Based on (Farris, 1979) and as cited in Waldstrom (2001)
In another commentary on the nature of formal and informal networks, Jensen (1995) stated that it
was like the difference between legal laws and laws of science. Formal networks are dependent on
the position of the person within the organizational structure, and while the informal networks levy
position to the individual on descriptive basis and these latter networks can be influenced but not
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completely controlled. However, there is enough support to the tenet that formal and informal
networks co-exist and feed each other, are inseparable and sometimes can’t be separately
distinguished (Mintzberg, 1983; Monge & Eisenberg, 1987; Groat, 1997). Organizational dynamics
are often a subject of the influence of informal networks (Reif & Monczka, 1973; Simon, 1976) and
these informal structures are built around the formal ones.
Ibarra (1992) reflected on the interactions of people within an organization and posited that simply
classifying them into formal and informal was too simplistic. It would be erroneous to overlook the
informal networks and their significance within the operations. Hollingsworth’s (1974) study
reported that the lack of awareness and understanding of the operations of the informal network
within the organization could seriously undermine the managerial performance and successful
accomplishment of the formal goals.
Ultimately, as Farris (1979) pointed out, that the decision makers are often having their own goals
overlapping with the formal goals. There are researchers on the other side, who would like to curtail
the over-stating of importance of informal networks. Ibarra (1992) is careful to state that the
suggested worth of informal networks is often more than the actual, and that often individuals rely
more on the formal structure to fulfill their needs rather than the informal structure. While
transparency and stability was perceptible in a formal network, the same could not be said for the
informal networks.
Also, there is a dearth of studies on how organizational effectiveness is correlated with the informal
networks (Sanders et al, 1998). As stated aptly by Simon (1976), informal organizations are often not
consistent with the structure. Baker (1981) and Han (1983) pointed at several psychological functions
of the informal organizations. Those functions were highlighted as Need for Affiliation, Identity and
Self-Esteem and Social Reality. Other functions included Defense Mechanism and Risk Reduction.
The importance of grapevine communication (the primary structure of information flow within the
organizations as is given) is that through it the ‘need to know’ function is served with much greater
speed than what otherwise could have been extracted. Information can not only be speedily passed
and bulls-eye (Crampton and Hodge, 1998), it can also be yielding for the person angling for such
information who can obtain the same by bypassing the formal information network (Mintzberg,
1975).
Farivar, Farveh; Esmaeelinezhad, Osveh, (2012) studied the impact of informal groups on
organizational performance in the context of Iranian IT companies and reported that for the study,
there was a positive impact of these groups on the performance of the organization.
Objectives of the Study
1. To design, develop and standardize a measure to evaluate contributing factors to informal
groups in workplaces.
2. To identify the factors underlying formation of informal groups and to confirm the factors.
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3. To identify avenues for further research.
Research Methodology
The Study: The study was empirical in nature and survey was used to complete it.
The Sampling Design: The population for this study comprised of academicians serving in full-time
capacity in different undergraduate and postgraduate degree colleges in Gwalior. Individual
academicians were the sampling elements and data was collected from a sample size of 140
academicians. Of these, 70 respondents were male and remaining were female. Non Probability
purposive sampling was used to complete the study. Data was collected in February and March of
2014.
Tools used for data collection: For the purpose of data collection, a self-designed questionnaire was
utilized. The measure was Likert-type and possessed a sensitivity of 5, where the extreme values
namely 1 and 5 represented least agreement and most agreement respectively.
Tools used for data analysis: The following tools were used 



Item to total correlation was used to check the internal consistency of the questionnaires.
Reliability test was applied to check the reliability of the questionnaire with the help of
Cronbach Alpha.
Exploratory Factor analysis was applied to find out the underlying factors contributing to
informal groups.
Confirmatory Factor Analysis using AMOS 18.0 was applied to confirm the factors obtained
through EFA.
Results of the Study
Reliability
Cronbach's Alpha
.810
Reliability Statistics
Cronbach's Alpha Based on Standardized Items
.813
N of Items
13
ITC and reliability statistics were computed together, and it was found that on dropping item
number 8, the reliability improved to .810. Hence, item number 8 was dropped from further
analysis.
Exploratory Factor Analysis
Exploratory Factor Analysis was applied on PASW 18.0 using the Principal Component Analysis
method with Varimax Rotation and Kaiser Normalization. The KMO Measure of Sampling
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Adequacy came out as 0.680 and the value of Bartlett’s Test of Sphericity was 565.102 at .000 level of
significance. The output is indicated in the table below.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
.680
565.102
78
.000
From the above table it is observed that value of KMO measure of sampling adequacy is .680 which
indicates that sample is adequate enough and value of Chi-Square is 565.102 with p- value of .000.
Therefore data is suitable to be considered for factor analysis. The summary of factors as obtained
are presented in the table belowFactor Name
Individual
Attributes
Total Eigen
Percentage of
Value
Variance Explained
2.578
19.835
Crisis
1.929
14.836
Mutual Interest
1.881
14.466
Team Dynamics
1.655
12.728
Description
Items Converged
10.Honesty
2 Personality
12 Life style
11.Attitude
5. Crisis situation.
4.Beliefs
14.Behavior.
1 Mutual goals.
13.Communication.
9 Team work.
7 As a way to release mental pressure.
Factor Loading
.752
.725
.614
.594
.822
.545
.792
.646
.578
.849
.588
Principal Component analysis
Description of Factors:
Individual Attributes – This emerged as the most important dimension of factors contributing to
formation of informal groups within an organization with a variance of 19.835 and an eigen value of
2.578. It comprised Honesty (.752), Personality (.725), Lifestyle (.614) and Attitude (.594).
Crisis– This emerged as the next important dimension of factors contributing to formation of
informal groups within an organization with a variance of 14.836 and an eigen value of 1.929. It
comprised Crisis Situation (.822) and Beliefs (.545).
Mutual Interest – This emerged as the next important dimension of factors contributing to
formation of informal groups within an organization with a variance of 14.466 and an eigen value of
1.881. It comprised Behaviour (.792), Mutual Goals (.646) and Communication (.578).
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Team Dynamics – This emerged as the next important dimension of factors contributing to
formation of informal groups within an organization with a variance of 12.728 and an eigen value of
1.655. It comprised Team Work (.822) and as a way to release mental pressure (.545).
Measurement
To measure the construct of informal group, five point likert scales with anchor 1- strongly disagree
and 5 – strongly agrees.
Validity and Reliability of Measures
This study first conducted a confirmatory factor analysis (CFA), as a first step of Anderson Gerbing
two steps with a maximum likelihood to estimate the measurement model by verifying the
underlying structure of constructs. This study also checked unidimensionality, reliabilities, and
validities of three factor measurement model before testing structural model. Based on CFA results,
composite reliability, convergent validity and discriminate validity of construct of informal groups,
following guideline from previous research (Zeithaml et al., 1996; Anderson & Gerbing, 1988;
Fornell & Larcker, 1981)
The composite reliability scores (CR) are ranging from 0.78 to 0.88 and alpha’s coefficients are
ranging from 0.77 to 0.87 (Fornell & Larcker, 1981). They are all above the recommended cut off of
0.60 (Anderson & Gerbing, 1988) are considered acceptable. The evidence of the convergent validity
of the measure is all confirmatory factor loading around 0.70 and was significant at the alpha level of
0.001 (Zeithmal et al.,1996). Discriminate validity is calculated via AVE results, ranging from 0.50 to
0.64. AVE results are greater than squared correlation which indicate unidemsionality and suggest
that the three factors are distinct to each other’s (Anderson & Gerbing, 1988). Discriminant validity
indicates that a emerged factor does not share significantly share information with other factors. All
measures of the model are reliable and valid overall. That is, the three factor confirmatory
measurement model demonstrated the soundness of its measurement properties.
Confirmatory Factor Analysis
Confirmatory factor analysis (CFA) was used to help the selection process of the scale items. The use
of CFA requires knowledge of the underlying latent variable structure (Byrne, 2001, p.6). A model of
the observed variables must be specified before the factor analysis, whose task then is to test the
goodness of fit between the model and observed data (Byrne, 2001, p.6; Hatcher, 1994, p. 289). In
essence, CFA is a way to test how measured variables represent a smaller number of constructs
(Hair et al. , 2010, p . 693). The analysis helps to identify the factor loading of individual items. Cross
loadings can be studied with the help of CFA. The analysis also helps to define the optimal number
of items. In this research, CFA was also employed to test the clarity of the factor structure of the
Loyalty intention, Customer satisfaction and Brand Image.
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The path diagram now displays the standardized regression weights (factor loadings) for the
common factor and each of the indicators. The squared correlation coefficients between Factor One
and Factor Three was found (R2=0.337), the squared correlation coefficient between Factor One and
Factor Four was found to be (R2=0.680), and the square correlation coefficient between Factor Three
and factor four was found to be (R2=0.554), describing the amount of variance the common factor
accounts for in the observed variables, are also displayed. Additionally, a χ 2 (chi-square) statistic is
listed in the column between the tools and the path diagram.
The fit indices of CFA are showing Goodness of Fit Index (GFI) 0.980 even the adjusted goodness of
the fit Index (AFGI) show a value of 0.950 implying approximate good models. The parsimonious
goodness of fit index (PGFI) is 0.385 which is absolutely below from standard value 0.50 indicates a
good parsimony fit. Although the values of Root mean Square of Residual and Root mean Squared
Residual (RMR) was 0.030 so the model can be treated as the best model. The goodness of fit index
for the CFA model again indicates that the variables studied fit in the data well hence showing a
good fit.
Chi-square
Chi-square (X2) is a traditional measure of overall model fit (Howell, 1997, p. 137; Hu and Bentler,
1999), Chi-square tests the validity of the specifications of factor loadings, factor covariance, and
error variances for the studied model (Byrne, 2001, p. 79). The chi- square statistics is associated with
a probability. Low probability indicates a poor fit of the model (Byrne, 2001, p. 80). For a good model
fit, the probability should be no significant, that is, greater than .05 (Hatcher, 1994, p. 339). There is
also a guideline for the ratio of chi-square and degree freedom (DF). According to Hatcher (1994, p.
339), the chi-square/DF ration should be at least 2. The use of chi-square has major drawback; for
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example, with larger sample sizes the chi-squares can reject a valid model (Bentler and Bonnet, 1980;
Cole, 1987; Kline, 2005, p, 136). Chi-square (χ2) statistic of 10.066 (d f=11), Probability critical ration
0.524 which is very large therefore the null hypothesis that the model is not good fit was rejected,
indicating that the model is a good fit.
Avenues for Further Research
This study has been very narrow in scope and with a small sample size. It can hardly be claimed that
these results can be generalized. In light of this, the biggest research gap that can be filled would be
to replicate the study on a broader group, with a larger sample size. Is there a difference in what
factors are in play in manufacturing versus service firms? That would be an interesting investigation
too.
Conclusion
Ever since the Hawthorne Studies, there has been a huge interest in the behavior of employees at the
workplace. Informal Groups, and their presence can neither be discounted nor ignored in
workplaces. These groups are source of solace and emotional well-being for its members. They also
act as phenomenal sources of information exchange. They can be damaging if the information
reaches people not meant to know it, or if the information is false and not credited by the facts. In
light of this, it is paramount to see what makes people form these kind of groups, and that was the
key of this study. Data was collected from employees of Educational Institutes in Gwalior, and was
subjected to Exploratory and Confirmatory Factor Analysis. The results have been described in the
paper, and essential three underlying factors emerged which included Individual attributes, Mutual
Goals and Team Dynamics.
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25. Monge, P. R., & Eisenberg, E. M. (1987). Emergent Communication Networks. In F. M. P.
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Chapter 15
Organization Climate Influencing Job
Satisfaction and Job Performance
Sunil Misra and Vineet Jain
ABSTRACT
Organisations are facing new challenges and competition which are not unique to any specific organisation or
industry, but all organisations are affected with these changes in the current business scenario. Thus,
organisational climate is constantly challenged by these changes affecting organisations today. Organisational
climate, job satisfaction, and job performance are distinct but related constructs, and they appear to influence
employees’ understanding of the work environment. The objective of this study was to explore the relationship
between organisational climate, job satisfaction, and job performance to determine whether employees’
perceptions of the work environment influence their level of job satisfaction and job performance.
An organisational climate, job satisfaction, and job performance questionnaire was administered to a
convenience sample of 150 employees working in manufacturing organisation. Confirmatory and exploratory
factor analyses were used to investigate the structure of the model. A stepwise regression was conducted and
five dimensions of organisational climate were found to predict job satisfaction, and job performance. The
results indicated a strong positive correlation (r = 0.813, p < 0.01) between organisational climate and the
dependent variable of job satisfaction and job performance.
The findings of this study indicated a positive relationship between organisational climate dimensions, job
satisfaction factors, and job performance. Thus, regardless of how the dimensions are perceived, organisational
climate has an influence on job satisfaction and job performance. Further, it has implication for the line
managers and human resource practitioners that they should be aware about the different biographical groups
as they have different needs which can influence their satisfaction levels and also they differ in their
perceptions of the climate within the organisation that impacts their behavior.
Keywords: Organisational Climate, Job Satisfaction, Job Performance, Effectiveness
Introduction
Liberalization of the Indian business environment and globalization has brought in change and
competition to a extent that was formerly unknown to Indian organizations. The pace with which
business world is changing have generated lot of complexities and generated the competition for
organization. Thus, innovation and research are the keys for the consistent performance and
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perform under all circumstances. Further to develop and retain talented personnel and to meet the
expectations of today’s talent, organizations need to create favorable organizational climate so that
employees can be satisfied from the jobs and be effective.
The evolving competition in the business environment is evident from the increasing number of
industries, which called for good organizational climate that will allow retaining the highly skilled
personnel. But, there had been constant mobility of these talented personnel from one organization
to another and also the organizational climate nature differs from one organization to the other.
Therefore, this study has inimitable significance of organizational climate in relation to the job
performance and satisfaction of people employed in manufacturing industry. Hence, there is a need
to find out and examine the relationship between organizational climate, job performance and job
satisfaction. It is also necessary to identify how best to retain talented people and prevent constant
mobility of them.
Literature Review
In the literature there has been some confusion about the relevance and definition of the climate
concept. The reason for confusion can be found in the literature due to its use to represent seemingly
different climate concepts. Climate can be seen as organizational climate or psychological climate.
Ekvall (1987) states that the organizational climate arises in the confrontation between individuals
and the organizational situation. Organizational climate is the core circle of work environment in the
boundaries of which the employees works. Climate affects each activity in an organization directly
or indirectly and is affected by almost everything that occurs in the organization.
The survival and growth of any organization is directly proportional to the favorable climate and
employees in the organization have to be well conversant with rites, rituals, policies etc. This can
bring sense of belongings among employees and further help in the growth of organization.
Organization climate is of immense importance for utilization of human relations and resources at
all levels (Allen, 2003; Cotton, 2004; Glission & James, 2002). Organization climate has a major
influence on motivation, productivity, performance, and job satisfaction. It is also a major
motivating factor responsible for satisfaction and dissatisfaction of employees and affects the
quantum of their turnover. In this study Organizational climate is defined as the shared perceptions,
feelings and attitudes that organisational members have about the fundamental elements of the
organisation, which reflect the established norms, values and attitudes of the organization’s culture
and influences individuals’ behavior positively or negatively.
Gunter and Furnham (1996) state that organizational climate can directly cause work outcomes that
are either positive or negative. Positive work incentives are those incentives that make work
interesting, e.g., attractive work environment, provision of benefits, job structure, good personnel
policies, and compensation. However, negative work incentives are incentives that make work
unchallenging, boring, dissatisfying and lead to increased absenteeism, turnover, and accidents.
Thus, there is a need to prevent these negative work outcomes and find out which factors within the
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organizational climate lead to satisfaction and enhance performance so as to continually have
satisfied, productive, and efficient work force.
Managers are confronted with increasing challenges of managing effective and efficient
organizations by utilizing human, financial, and technological resources available to them, and
employees want to have the best possible quality of life for themselves and for their families
(Wilson, 1996). Understanding job satisfaction and what it means is not only enviable but also a
critical aspect for both individuals and organizations. Previous studies have shown that
organizational climate dimensions are related to facets of job satisfaction.
Job satisfaction and Job performance are two of the most important function of the personal
management. Job satisfaction is defined as a pleasant feeling that results from the perception that
one’s job fulfills or allows for the fulfillment of one’s important job values. It is a multifaceted
concept, which means different things to different people. In internal state, it is more of an attitude.
It is associated with a personal feeling of achievement, either quantitative or qualitative (Mullins,
1999). It has been widely studied in management literature (Wilson, 1996) and information
generated by research into this area had practical implications for individuals and organizations
alike.
Deshpade (1996) found that organizational climate is associated with high level of satisfaction.
Satisfaction is also a prerequisite for staff retention. Organizations with higher staff retention rates
are naturally better at retaining knowledge, which can lead to better performance and profit for the
business. Improved employee satisfaction reduces the cost of staff turnover, builds loyalty with staff
and positions the company as an employer of choice that attracts talented people to the organization.
In order to ‘survive’, Indian organizations have to undergo massive changes. In this context, it
would be imperative to identify the factors in the organizational environment that have the most
positive impact on the performance of the organization. Among various factors, attitudes and
feelings of the individuals regarding their jobs and job experiences have found to be significantly
affecting the behavior (Herzberg, Mausner, Peterson & Capwell, 1957).
Watkin and Hubbard (2003) study showed that high-performing organisations have climates with
particular measurable characteristics and account for up to 30% of the variance in key business
performance measures. This is supported by research that examined the relationship between the
way in which employees describe their work environments and the relative performance success of
these environments (Wiley & Brooks, 2000). Watkin and Hubbard (2003) contend that climate does
make a difference to organizations’ performance because ‘it indicates how energizing the work
environment is for employees’.
Job satisfaction refers to the individual’s perception and evaluation of the job (Sempane, Rieger &
Roodt, 2002). Weiss (2002) defined job satisfaction in terms of attitudes that individuals have
towards their jobs. Although the definitions of job satisfaction are varied, it is generally considered
to be an attitude or feeling that one has about one’s job that is either positive or negative. Research
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indicates that various factors that have an influence in the job can be divided into two distinct
dimensions, namely extrinsic and intrinsic (Buitendach & De Witte, 2005).
Extrinsic dimensions form part of the job situation and are beyond the employee’s control (Lawler,
1976), such as the work itself, pay, promotion opportunities, working conditions, supervision and
co-workers. Intrinsic factors are self-regulated and a direct result of the individual’s performance.
Robbins, Odendaal and Roodt (2003) point out that intrinsic factors, such as advancement,
recognition, Leader Credibility and achievement, appear to be related to job satisfaction. This study
defined job satisfaction as the feeling individuals have about their jobs.
There are numerous studies investigating the relationship between organisational climate and job
satisfaction, with many researchers finding evidence to support the relationship between the two
constructs (Field & Abelson, 1982; Litwin & Stringer, 1968; Schneider & Snyder, 1975). The studies
investigating the relationship between organisational climate and job satisfaction found that better
organisational climates result in more satisfied workers (Peek, 2003). Similarly, Brief (1998) found
that salary, benefits and advancement opportunities were components of organisational climate that
had a direct influence on job satisfaction. Although a recent study conducted by Fisher, Milner and
Chandraprakash (2007) found job satisfaction to be strongly correlated to organisational climate.
In summary, organisational climate and job satisfaction are distinct but related constructs (AlShammari, 1992). Organisational climate is focused on organisational attributes as perceived by
organisational members, while job satisfaction addresses perceptions and attitudes that people have
towards and exhibit about their work.
Scope
The immediate conclusion that follows from this is that the prime movers of the organization are the
individuals. It is easy to see why satisfaction and performance has accorded such a high position out
of the various facets of human resource management. The reason is simply that unless one has
human resource in the organization whom will the human resource managers manage or whose
energy will they channelize productively and usefully. Keeping this idea into mind this research is
an attempt to study various options that are available both theoretically as well as practically for an
organization to be competitive in fast changing environment of business. Thus, this research
analyses the importance of organizational climate in relation to job satisfaction and job performance
at technical and managerial levels and its implications for every manager in the Organization.
Research Objective
To measure the strength of association among the factors of organizational climate, job satisfaction,
and job performance. To inter relate demographic variable with job satisfaction and job performance
in the organization.
Hypotheses
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H1: Resistance To Change the dimension of organizational climate would significantly predict
factors of job satisfaction and job performance.
H2: Conflict the dimension of organizational climate would significantly predict factors of job
satisfaction and job performance.
H3: Trust the dimension of organizational climate would significantly predict factors of job
satisfaction and job performance.
H4: Leader Credibility the dimension of organizational climate would significantly predict factors of
job satisfaction and job performance.
Research Methodology
The main purpose of research study is to know that which industry of Rajkot city follow the best
way of job satisfaction. The Data regarding the research collected from working staff from industries
of Rajkot city. The necessary information collected through personal interview. The research is
quantitaive research study which is conducted through questionnaire method.
Research Design - Quantitative approach is adopted in order to conduct the research. The primary
data is collected on the basis of the assumed relationship among variables. Hypotheses were framed
and different tests were applied before the final analyses in order to check the reliability and validity
of the data collected.
Sampling Method - Sample was chosen through stratified random sampling method to fill up the
questionnaires.
Sample Size - The Data was collected from 150 respondents from four manufacturing industries of
the Rajkot city. 200 questionnaires were distributed among the employees, but only 150 were eligible
for consideration. Among the filled up questionnaire the sample of 42 was drawn from Amul, 68
from Jyoti CNC, 20 from Forge & Forge and 20 from Balaji respectively.
Data Collection - A total of 67 questions were asked out of which 28 related to Organizational
Climate, 23 questions were related to Job Satisfaction, and 9 questions were related to the Job
Performance. Further, 7 questions were used to collect the demographic information of the
respondent. Five point Likert Scale was used to get the response to the variables of our study.
Organizational Climate: The organizational climate was measured using four concepts: Trust,
conflict, leader credibility, and resistance to change.
Resistance To Change: Resistance to change scale was having 7 items. Reliability of this scale is 0.67
Conflict: Conflict was 7 items scale with Cronbach’s alpha of 0.70.
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Trust: It was 7 items scale having Reliability of 0.59 which is very low.
Leader Credibility: It was 7 items scale and Cronbach’s alpha of the scale is 0.60.
Job Satisfaction: Authors try to measure the satisfaction level of employees through six dimension
like: Pay, promotion, supervision, fringe benefits, nature of job, and relationship with the coworkers.
Pay: It was a 4 items scale and the Cronbach’s alpha of the scale is 0.63.
Promotion: Promotion scale was having 4 items with questions related to quality of work, satisfaction
with promotion, etc. The Cronbach’s alpha of the scale is 0.60.
Supervision: It was a 4 items scale and the Cronbach’s alpha of the scale is 0.61.
Fringe Benefits: Fringe benefit scale was having 4 items measuring equitable and sufficient. The
Cronbach’s alpha of the scale is 0.64.
Job Nature: It was 4 items scale having Cronbach’s alpha of 0.71.
Coworkers: Coworkers scale was having 3 items measuring the
Reliability of the scale is 0.69.
relationship with coworkers.
Job Performance: The scale was having 9 items and Cronbach’s alpha is 0.82 for this scale.
Data Analysis and Interpretation
For the purpose of analysis of data, the Statistical Package for Social Science (SPSS) version 15.0 was
used. The statistics used for data analysis included descriptive statistics, regressions, correlations
and ANOVA. After collection of survey data, an exploratory factor analysis was conducted to
establish the construct validity of the instruments used. The number of dimensions extracted among
the variables was determined by the Eigen value greater than one rule. A principal component
analysis with a varimax rotation was used to choose significant factor loadings.
Correlation Statistics
Std.
Fringe Job Coworkers
Resistan
Leader
Mea
Promoti Supervisi
Performan Rewar
Confli Trus
Deviatio Pay
Benefi Natur Relationsh
ce
To
Credibili
n
on
on
ce
d
ct
t
n
ts
e
ip
Change
ty
Pay
12.38 1.72
1
Promotion 12.69 1.60
-.102 1
Supervisio
12.38 1.69
n
-.028 -.062
1
Fringe
.003 .051
.005
1
Job Nature 13.52 2.44
.045 .160(*)
.137
.244(**) 1
Coworkers 9.71 1.69
.107 .044
.237**
.221**) .237(* 1
12.47 1.87
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*)
Job
Performan 24.51 3.18
ce
.028 .074
-.032
.007
-.131 -.134
1
Reward
.025 .049
.043
.008
.124
-.070
1
-.255(**)
.174(*) 1
-.102
.073
.245(**)
1
-.167(*)
.089
.185(*)
-.054
1
.010
-.004
.155
.119
.084 1
-.021
.387(*
.135
.187(*)
*)
.345(*
.162(*)
.216(**)
*)
Resistance
To Change
.028 .156
.137
Conflict
.204* .142
-.089
Trust
.184( -.100
*)
.100
.109
.065
Leader
Credibilit
y
.005 .100
.086
.238(**)
.252(*
.201(*)
*)
.032
Sample Characteristics
Demographic Variables
Male
Female
Single
Married
Under Graduate
Graduate
Post Graduate
Junior
Middle
Senior
Gender
Maritial Status
Qualification
Position
Frequency
138
12
9
141
15
94
41
23
79
48
Percent
92.0
8.0
6.0
94.0
10.0
62.7
27.3
15.3
52.7
32.0
In order to examine the first hypothesis, simple regression analysis is carried out to see the effect of
organizational Resistance To Change upon the factors of job satisfaction and job performance. The
results were found to be significant (F = 5.815, p< .001). The adjusted R square value was .23 which
indicates that 23% of variance is explained by job performance and factors of job satisfaction in
predicting organizational Resistance To Change dimension of organizational climate. Thus, the
hypothesis was accepted (see below Tables).
Model Summary (b)
Model
1
R
.522(a)
R Square
.272
Adjusted R Square
.225
Std. Error of the Estimate
1.96063
a Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b Dependent Variable: Resistance To Change
ANOVA (b)
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Model
1
Sum of Squares
201.166
538.168
739.333
Regression
Residual
Total
df
9
140
149
Mean Square
22.352
3.844
F
5.815
Sig.
.000(a)
a Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b Dependent Variable: Resistance To Change
Coefficients(a)
Model
1
Unstandardized Coefficients
B
20.374
-.024
.200
.096
.034
.217
.503
-.151
(Constant)
Pay
Promotion
Supervision
Fringe Benefits
Job Nature
Coworkers
Job Performance
Std. Error
3.324
.097
.103
.099
.091
.073
.200
.052
Standardized
Coefficients
Beta
-.018
.144
.073
.029
.239
.383
-.215
t
Sig.
6.129
-.244
1.939
.974
.380
2.964
2.512
-2.910
.000
.808
.054
.332
.705
.004
.013
.004
a Dependent Variable: Resistance To Change
The hypothesis H2 was that conflict the dimension of organizational climate would significantly
predict factors of job satisfaction and job performance. To test this hypothesis, simple regression
analysis was done to investigate how well the organizational climate predicts the job satisfaction and
job performance. The results were found to be significant (F = 5.07, p< .001). The adjusted R square
value was .19 which indicates that 19% of variance in job satisfaction and job performance was
explained by the conflict dimension of organizational climate. Thus, the hypothesis was accepted
(see below Tables).
Model Summary (b)
Model
1
R
.496(a)
R Square
.246
Adjusted R Square
.197
Std. Error of the Estimate
2.09949
a. Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b. Dependent Variable: Conflict
ANOVA (b)
Model
1
Regression
Residual
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Sum of Squares
200.958
617.102
df
9
140
Mean Square
22.329
4.408
F
5.066
Sig.
.000(a)
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Total
818.060
149
a. Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b. Dependent Variable: Conflict
Coefficients (a)
Model
1
Unstandardized Coefficients
(Constant)
Pay
Promotion
Supervision
Fringe Benefits
Coworkers
Job Nature
Job Performance
B
14.898
.195
.166
-.226
.054
.565
.224
-.046
Std. Error
3.560
.103
.110
.106
.097
.214
.078
.055
Standardized
Coefficients
Beta
.144
.114
-.163
.043
.409
.234
-.063
t
Sig.
4.185
1.882
1.504
-2.127
.554
2.639
2.857
-.837
.000
.062
.135
.035
.580
.009
.005
.404
a. Dependent Variable: Conflict
The hypothesis H3 was that organizational standard would significantly predict the job performance
and job satisfaction. To test this hypothesis, simple regression analysis was done. The results were
found to be significant (F = 2.21, p< .05). The adjusted R square value was .07 which indicates that
7% of variance in job satisfaction and job performance was explained by the organizational climate
dimension of Trust. Thus, the hypothesis was partially accepted due to very low variation showed
(see below Tables).
Model Summary (b)
Model
1
R
.353(a)
R Square
.124
Adjusted R Square
.068
Std. Error of the Estimate
2.10059
a. Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b. Dependent Variable: Trust
ANOVA (b)
Model
1
Regression
Residual
Total
Sum of Squares
87.695
617.745
705.440
df
9
140
149
Mean Square
9.744
4.412
F
2.208
Sig.
.025(a)
a. Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
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b. Dependent Variable: Trust
Coefficients (a)
Model
Unstandardized Coefficients
1
(Constant)
Pay
Promotion
Supervision
Fringe Benefits
Coworkers
Job Nature
Job Performance
B
24.732
-.281
-.136
.096
.126
-.454
-.007
-.095
Std. Error
3.561
.103
.110
.106
.097
.204
.079
.055
Standardized
Coefficients
Beta
-.223
-.100
.075
.108
-.352
-.008
-.139
t
Sig.
6.944
-2.718
-1.229
.904
1.297
-2.227
-.093
-1.715
.000
.007
.221
.368
.197
.028
.926
.088
a Dependent Variable: Trust
The hypothesis H4 was that Leader Credibility would significantly predict the job satisfaction and
job performance. The result of simple regression analysis was significant (F = 2.21, p< .05). The
adjusted R square value was .07 which indicates that 7% of variance in job performance and job
satisfaction was explained by the Leader Credibility dimension of organizational climate. Thus, the
hypothesis was partially accepted (see below Tables).
Model Summary (b)
Model
1
R
.353(a)
R Square
.125
Adjusted R Square
.068
Std. Error of the Estimate
2.08970
a Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b Dependent Variable: Leader Credibility
ANOVA(b)
Model
1
Regression
Residual
Total
Sum of Squares
87.017
611.357
698.373
df
9
140
149
Mean Square
9.669
4.367
F
2.214
Sig.
.024(a)
a. Predictors: Job Performance, Pay, Promotion, Supervision, Fringe Benefits, Coworkers, Job Nature
b. Dependent Variable: Leader Credibility
Coefficients (a)
Model
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Unstandardized Coefficients
Standardized
t
Sig.
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1
B
14.448
-.035
.083
.042
.183
-.168
.135
.030
(Constant)
Pay
Promotion
Supervision
Fringe Benefits
Coworkers
Job Nature
Job Performance
Std. Error
3.543
.103
.110
.106
.097
.203
.078
.055
Coefficients
Beta
-.028
.062
.033
.158
-.131
.153
.044
4.078
-.341
.760
.395
1.890
-.829
1.734
.544
.000
.734
.449
.693
.061
.408
.085
.587
a Dependent Variable: Leader Credibility
Conclusion
The main rationale of this study was to measure the strength of association between organisational
climate, job satisfaction and job performance. The results of this study reported a strong positive
relationship between organisational climate and job satisfaction (r = 0.819); organisational climate
and job performance (r = 0.857). The findings of this study thus support hypothesis 1, which
postulated a positive relationship between organisational climate and job satisfaction. These results
were consistent with previous studies investigating the relationship of organizational climate with
satisfaction (Field & Abelson, 1982; Fisher et. al., 2007; Peek, 2003; Schneider & Snyder, 1975).
Limitations of the Research
This research study was conducted in four manufacturing organization of the Rajkot city and
therefore cannot be generalized to other organisations. In addition, only one location of industrial
zone in Rajkot city were considered in this study so the results cannot be generalized to all other
organizations in other zone of Rajkot city.
The researchers also faced some difficulties in getting the questionnaires filled in the last phase.
Because of the end days of the accounting year few of the firms and employees refused to fill up the
questionnaires. There was no uniformity in the answers of the employees and responses were
ambiguous. Further, the researcher provided questionnaires to some of the organizations out of
them some returned half filled and had to be rejected.
Implications for Practitioners and Future Research
This study provided support for the view that line managers and human resource practitioners that
they should be aware about the different biographical groups as they have different needs which can
influence their satisfaction levels and also they differ in their perceptions of the climate within the
organisation that impacts their behaviour. One could speculate that organisations that understand
their employees and are aware of what they need create an environment in which employees can
thrive and be creative and productive.
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The final recommendation relating to the conclusions of this research is that further studies be
conducted to explore the relationship between organisational climate dimensions that are perceived
as being internal to or having a direct influence on the employee and organisational dimensions that
are perceived as being external to or having an indirect influence on employee satisfaction and
performance levels. Also the research was limited to the Manufacturing Industries of Rajkot region
only. Hence, there is a large scope to carry out this research in other industries like IT, Service,
Banking and many other sectors.
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Chapter 16
Investors Psychology towards Investment in
Gold
Vinod K. Bhatnagar, Shilky Yadav and Shilpa Yadav
ABSTRACT
Understanding investors’ behavior is difficult. Investing is simple but knowing the right avenue for
investment is also difficult. The objectives of the study were to design, develop and standardize a measure for
evaluating investor’s psychology towards gold, to determine the underlying factors affecting psychology
towards gold and to know the difference in the investment psychology of male and female towards Gold. We
applied KMO and Bartlett’s test of Sphericity indicates that the data is suitable for factor analysis and found
that the item to item correlation matrix was not an identity matrix. We found that there were seven factors
like Preference and Selection, Good returns, Assortment and decrease risk, Substantial and higher return,
Assessment, Persuade and Occasion which affect investors psychology towards investment in Gold. Our study
also revealed there is no difference in the investment psychology of male and female towards Gold.
Key words: Investors, Gold and Psychology
Introduction
An investor is a person who allocates capital with the expectation of a financial return. The types of
investments include: gambling and speculation, equity, debt securities, real estate, currency,
commodity, derivatives such as put and call options, etc. Gold's out-performance for the last decade,
the sector remains highly under-owned and under-recognized. Moreover, because gold is not a
favorite among the financial elite, positive attention is rarely devoted to the sector. The volatility in
the sector also makes it seem like a "dangerous" investment; when in reality, it is one of the few
remaining safe havens against inflation. The negative press and the false media surrounding gold &
silver will continue to adversely affect investor psychology. It is therefore critical for investors to
look deeper than the surface to discover the truth about investing in this sector and its benefits.
Investor psychology remains at least as important to an asset price as the fundamentals underlying
the asset. Gold as an investment has clearly rebounded from its morose lows of the early 2000's.
According to Levin and Wright (2006), they said that the amount of gold supplied from extraction in
any period is positively related to the gold price in an earlier period. This is because there may be a
substantial time lag before mines react to a price change. The quantity of gold supplied from
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extraction is also negatively related to the amount of extracted gold that is diverted to repay central
banks for the gold leased in the previous period incremented by a physical interest rate in those
cases where the central bank opts for interest to be repaid in gold. Chua, Sick and Woodward (1990)
said that gold moves against the stock markets, especially in periods where stock markets perform
badly and that raise the asset demand for gold. If the beta of gold (βg) rises for a period of time, the
asset demand will fall during that period, but rises when the beta reverts to its lower value.
Therefore the asset demand for gold is negatively related to the current beta and positively related to
the lagged values of beta.
Levin and Wright, (2006) said that when an investor is holding gold, he is giving up on earning
interest on holding another interest bearing asset. This is the cost for holding gold. The price of gold
moves inline or against the real interest rate, depending on the causes that move the real interest
rate. If the interest rate rises because of fear of rising inflation, the gold moves in line with the real
interest rate.
Literature Review
In Indian Context, earlier people used to buy gold in form of jewellery on occasions like marriage,
festival etc. On the investment front, few investors used to buy gold bars. Today you have more
options and slightly better options to invest in Gold. More and more investors are buying Gold
ETFs, as this is one of the best ways to invest in Gold. Another variant is investing in gold mines
across the world. This option is also available through MF route as there are specific MF scheme
investing in gold mining companies across the world.
Worawit Udompaibunsuk, (2003) compared their study into three money saving methods – gold bar
holdings, investment in general fixed income fund, and fixed deposit investment To study the return
rates and the risks of savings in low-risk assets in the form of single securities. Low-risk assets
include fixed deposit, general fixed income fund, and gold bars. The period of the research covered
from January 1, 2002 to December 31, 2002, during which the deposit interest rates of commercial
banks were very low. They found savings in the form of single securities in gold bars yielded higher
return rates and risks than any other types of savings. Savings by depositing money with
commercial banks gave the lowest return rates but no risks, which corresponded with the principle
of “a high return rate has a high risk and a low return rate has a low risk.” The investment in general
fixed income fund was more suitable to other types of savings because of lower risk per unit of
return rate.
Jay Desai, Jairaj Tailor & Rohan Shahi, et.al. (2009) found that buying behavior of gold with regards to
Tanishq stated that people are more price conscious & they feel that the price in Tanishq are more
than what the normal retailers have. Customers also found that the patterns available are lesser than
what they get in the normal retail store. Tanishq is one of the service oriented jewellery shop so
customers are more attracted because of their service People are not affected with the ambiance of
the shop.
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Kulkanya Napompech, Amonsri Tanpipat & Nidpa Ueatrakunkamol, (2010) studied various factors
influencing gold consumption for savings and investments by people in Bangkok Metropolitan area
and suggested that consumers give importance to the ups and downs of oil prices, which rise and
fall in relation to the price of gold.
K. Balanaga Gurunathan & S. Muniraj (2012), evaluated the impacts of Customer awareness and buyer
Behavior on Buying Jewellery Products–Special Reference to Tamil Nadu State and concluded that
jewellery investment is a unstabilizing activity, the result shows gold jewellery with mean of 4.60 in
the first priority , the silver jewellery with mean of 2.30 in the second priority, diamond jewellery
item with of 1.12 in the third priority, new methods of investment like Platinum jewellery with mean
of 0.62 in forth priority of customer buying behaviour and awareness of jewellery in Tamil Nadu
state.
Rohna ‘O Connel (2006) stated that gold has an emotional feeling in Indian context , as it is called as
“Streedhan“ The Indian bride wealth which she takes with her when she marries and which remains
hers. This helps to give gold an important role in empowerment of women. According to another
study conducted on shopping for gold a ritual experience. This study went through reutilization of
gold buying activities keeping three propositions when Indian Women Purchase gold, why they buy
gold and actions & behaviour during purchase. In depth interviews were done. Why, when and
How women purchase jewellery. They concluded with saying gold is artefact within Indian
consumer society and gold buying is ritual activity. Women’s primarily purchased gold for
Jewellery, few were supporting Investment and financial security for family and future.
Mike Caggeso (2008), talked about Money Morning an online investment guide was suggested
various ways of investing in gold. Some are gold coins, gold ETF, gold mining companies gold
futures, bullion gold but the most popular is gold jewellery in Indian market.
Hillier, Draper, and Faff (2006), they categorized studies into five different approaches. The first
approach studies the investment and diversification properties of precious metals when combined
with stock market investments in financial portfolios. The second approach concentrates on the role
of gold as a potential hedging variable in inter-temporal asset-pricing models. The third approach
studies the properties of the return distribution and the possibilities for earning excess returns in the
gold and silver markets, i.e. the efficiency of these markets. The fourth approach studies the
relationships of gold (and silver) to macroeconomic variables and government policy. The final
approach concentrates on the particular features and characteristics of gold (and silver) production
and market processes.
Chua et al. (1990) and Jaffe (1998) found the benefits of diversifying investment portfolios with gold
stocks and generally observed a diversifying effect for gold. Chua et al. found, that the beta of gold
bullion remained virtually indistinguishable from zero thru 1970’s and 1980’s and gold was a
meaningful investment for diversification for both long-run and short-run. By using data from 1971
to 1987, Jaffe constructed 4 portfolios mirroring allocations of typical large institutional portfolios
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with each being different in risk and return. He found that adding 5% gold into all of these
portfolios reduced the risk and increased the return of these portfolios and with 10% gold, the
benefits increased even more.
Hillier et al. (2006) examined the diversification benefits of gold in the US markets and international
markets. They used data from period 1976-2004 for S&P 500 and EAFE and found that gold was
especially useful diversifier in periods with high volatility and poor performance. When comparing
buy-and-hold strategy against switching strategy with gold they found that the former was superior
and over the last 25 years, holding 9.5% gold in portfolio was the optimal allocation.
Capie et al. (2004) examined one aspect of the second role of gold, gold as a hedge against US dollar.
Using data from 1971 to 2002, they applied a variety of statistical techniques to explore the
relationships between gold and the exchange rates of various currencies against the US dollar, with
particular attention paid to the hedging properties of gold in episodes of economic or political
turmoil. The US dollar gold price was found to move in opposition to the US dollar and the
movement was essentially contemporaneous. For each exchange rate considered, a typical weekly
movement against the dollar generated a movement in the gold price of just under one dollar
Levin and Wright (2006) found that the price level and the price of gold moved together in a
statistically significant long-run relationship supporting the view that a one percent increase in the
general price level leads to a one percent increase in the price of gold. However, they found that
there are short-run deviations from the long-run relationship between the price of gold caused by
short-run changes in the inflation rate, inflation volatility, credit risk, the trade-weighted exchange
rate and the gold lease rate. This is consistent with founding’s from Ghosh et al. (2002), Gorton and
Rouwenhorst (2006), Kolluri (1981) and Ranson and Wainwright (2005).
Pindyck (1993) found the futures price data to test the ability of the present value model to explain
the prices of four commodities; copper, lumber, heating oil, and gold. He was found that the present
value model did a poor job in modeling the price of gold. This was partly because gold does not
have the same level of convenience yield like many other commodities.
Diba and Grossman (1984) studied whether the rational bubbles exist, that is if the time series of the
relative price of gold obtained by differencing a finite number of times is non stationary. They found
a close correspondence between the time series of the relative price of gold and the time series
properties of real interest rates, which the theory relates to the time series properties of the
fundamental component of the relative price of gold. Their evidence is consistent with the
conclusion that the relative price of gold corresponds to market fundamentals and the process
generating first differences of market fundamentals is stationary, therefore actual price movements
do not involve rational bubbles.
Chappell and Dowd (1997), made a model for the gold standard which modeled technology and
preferences explicitly and account was also taken of both the durability of gold and the
exhaustibility of gold ore. They examined the steady state and its associated dynamics, and showed
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how the steady-state price level responds to changes in exogenous factors. Provided they had an
interior solution with unminted gold in the steady state, this price level rises with technological
progress in gold mining, and falls with increases in real income and the discount rate.
Ghosh et al. (2004) analyzed monthly gold price data from 1976 to 1999 using co integration
regression techniques. Their study provides empirical confirmation that gold can be regarded as a
long-run inflation hedge and that the movements in the nominal price of gold are dominated by
short run influences.
Rationale of the Study
Gold is one commodity which plays a crucial part during major festivals like Diwali, Christmas, and
year round demand during marriages. So it has a captive market in hands and hearts of the common
man and this has ensured that gold is a preferred investment destination. Coupled with its
simplicity, enigma, liquidity, and global acceptance gold has ruled the roost for many centuries and
there is no visible substitute for it.
Objectives
A study on Investment psychology towards Gold:-
1. To design, develop and standardize a measure for evaluating investor’s psychology
towards gold.
2. To determine the underlying factors affecting psychology towards gold.
3. To understand the difference in the investment psychology of male and female towards
Gold.
Research Methodology
The Study
The study was descriptive in nature and survey has been used to complete it.
Sampling Design
Population: Population was all the investors within Gwalior region.
Sampling Element: Individual Respondent investing in gold has been the sampling element.
Sample Size: 150 individuals including male and female both.
Sampling Method: Non probability Quota Sampling has been used.
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Tools Used For Data Collection
For the purpose of data collection, a self-designed questionnaire has been utilized. Likert-type scale
has been used to measure, where 5 represents strongly agreement and 1 represents least agreement.
Tools Used For Data Analysis
1. Item to total correlation has been used to check the internal consistency of the
questionnaires.
2. Factor analysis has been used to find out the factors which affect psychology of the
investors to invest in Gold.
3. ANOVA Test has been used to understand the investment psychology towards the gold
by public of the Gwalior region.
Analysis and Discussion
Reliability Measure
Reliability test was carried out by using SPSS software and the reliability test are measure are given
below:
Cronbach's Alpha
.635
Reliability Statistics
Cronbach's Alpha Based on Standardized Items
.681
N of Items
19
From the above table, we found that the calculated value of Cronbach’s alpha which is (0.635) which
is less than the standard value of Cronbach’s alpha which is (0.7) but it can be used for further study
because it is more than .5, Hence questionnaire is reliable.
Factor analysis
Factor analysis was calculated by using SPSS software, in this firstly all the data of the items was
loaded in the SPSS software. Then correlation between these items was calculated. The total variance
was calculated which gives the value of variance and cumulative. The total variance is explained in
three ways i.e., first in the initial Eigen value, second were the extraction sum of square loading and
the last was rotation sum of square loading and the rotation covered into six iteration.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.
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.587
1044.717
171
.000
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The KMO and Bartlett’s test of Sphericity indicates that the data is suitable for factor analysis. The
KMO measures the sampling adequacy and it should be greater than .5 for a satisfactory factor
analysis to proceed. Looking at table above, the KMO measure is .587 which is significant at .0 per
cent level of significance. This means the item to item correlation matrix was not a identity matrix.
Calculation of Factor
The factor are calculated with the help of total variance explained the final three factors which come
is calculated from the rotation sum of squared value loading which is the outcome of SPSS software.
Table: 1 Showing Factor Analysis for items of Investment Psychology towards Gold
Factor Name
Eigen Values
%
Cumulative
Variance
%
3.610 19.001
19.001
Variables Converged
Loading
S1-Better investment choice
S2-investing in gold several years
S5-several.assets.in.portfolio
S9-intution.in.gold.investment.gain.high.returns
S10-instant.action.oppurtunity.to.earn
S8-intuition.in.gold.investment.is.always.correct
S11-investment.based.on.rumors
S15-change.in.gold.price.result.good.returns
S16-better.compared.to.other.assets
S17-drop.gold.prices.only.temprory
S20-gold.charm.influnce.to.buy
.628
.681
.758
.718
.808
.512
.548
.772
.535
.805
.692
Total
Preference
and selection
Good returns 2.586
13.612
32.613
Assortment 2.054
and decrease
risk
Substantial 1.787
and higher
return
Assessment 1.437
10.812
43.425
S6-diversified.portfolio
S7-gold.reduce.portfolio.risk
.819
.892
9.405
52.830
S3-keep.in.physical.form
S14-gold.price.always.rise
.765
.736
7.565
60.394
S12-investment.based.on.friends.advice
S13-investment.based.on.family.decision
S19-gender.bias.influence.gold.prices
S4-good returns
S18-gold.demand.more.on.deepawali
.533
.780
.823
.629
.859
Persuade
1.150
6.053
66.447
Occasion
1.114
5.862
72.309
Description of Factors
1. Preference and Selection
This factor has emerged as the first important determinant of research with a total
percentage of variance. This factor has received higher Eigen value of 3.610 with percentage
of value of variance of 19.001.The variable converged for Better investment choice is (.628),
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investing in gold several years (.681), several assets in portfolio (.758),intuition in gold
investment gain high returns(.718),instant action opportunity to earn(.808) and cumulative
%Eigen value is 19.001.
2. Good returns
This factor has received second Highest vale i.e. 2.586 with percentage of value of variance
Explained of 13.612 in this statement even statements were clubbed in this factor. The
variable converged for intuition in gold investment is always correct(.512), investment based
on rumors(.548) ,change in gold price result good returns(.772) ,better compared to other
assets(.535), drop gold prices only temporary(.805),gold charm influence to buy.(.692) and
the cumulative % is 32.613.
3. Assortment and decrease risk
This factor has received the Eigen value among all three i.e 2.054, with percentage of value of
variance Explained of 10.812; in this statement even statements were clubbed in this factor.
The variable converged for diversified portfolio (.819), gold reduce portfolio risk (892) and
total cumulative % is 43.425.
.
4. Substantial and higher return
This factor has received the Eigen value among all three i.e. 1.787, with percentage of value
of variance Explained of 9.405; in this statement even statements were clubbed in this factor.
The variable converged and their loadings of keep in physical form (.765),-gold price always
rise (.736) and cumulative percentage is 52.830.
5. Assessment
This factor has received the Eigen value among all three i.e. 1.437, with percentage of value
of variance Explained of 7.565, in this statement even statements were clubbed in this factor.
The variable converged of investment based on friend’s advice (.533), investment based on
family decision (.780) and cumulative percentage is 60.394.
6. Persuade
This factor has received the Eigen value among all three i.e. 1.150, with percentage of value
of variance Explained of 6.053; in this statement even statements were clubbed in this factor.
The variable converged of gender bias influence gold prices (.823), -good returns (.629) and
cumulative percentage is 66.447.
7. Occasion
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This factor has received the Eigen value among all three i.e. 1.114, with percentage of value
of variance Explained of 5.862; in this statement even statements were clubbed in this factor.
The variable converged and the cumulative percentage is .859 and 72.309 respectively.
ANOVA Results
H01: There is no difference in the investment psychology of male and female towards Gold.
Table: 2 Showing ANOVA Results
Better investment
choice
Investing in gold
several years
Keep in physical form
Earn good returns
Several assets in
portfolio
Diversified portfolio
Gold reduce portfolio
risk
Intuition in gold
investment always
correct
Intuition in gold
investment gain high
returns
Instant action
opportunity to earn
Investment based on
rumors
Investment based on
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
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ANOVA
Sum of Squares
.943
64.930
65.873
.298
134.536
134.833
.181
185.659
185.840
.200
90.173
90.373
.000
126.293
126.293
.087
133.173
133.260
.027
65.973
66.000
.414
117.959
118.373
1.440
149.893
151.333
.190
102.643
102.833
.020
210.673
210.693
.200
Df
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
Mean Square
.943
.439
F
2.149
Sig.
.145
.298
.909
.327
.568
.181
1.254
.144
.705
.200
.609
.328
.567
.000
.853
.001
.981
.087
.900
.096
.757
.027
.446
.060
.807
.414
.797
.520
.472
1.440
1.013
1.422
.235
.190
.694
.275
.601
.020
1.423
.014
.906
.200
.153
.697
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friends advice
Investment based on
family decision
Gold price always rise
Changes in gold price
result good returns
Better compared to
other assets
Drop gold prices only
temporary
Gold demand more at
Deepawali
Gold charm influence
to buy
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
Between Groups
Within Groups
Total
194.073
194.273
1.602
607.571
609.173
.334
145.859
146.193
.002
106.371
106.373
.001
90.559
90.560
.074
176.759
176.833
.600
90.873
91.473
.154
232.086
232.240
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1
148
149
1.311
1.602
4.105
.390
.533
.334
.986
.339
.561
.002
.719
.003
.959
.001
.612
.002
.967
.074
1.194
.062
.803
.600
.614
.977
.324
.154
1.568
.098
.754
Table- 2 shows the F -test values along with significance. Comparing the F test values and
significance values, we see that all ANOVA comparisons favors the acceptance of null hypothesis
that there is no difference in the investment psychology of male and female towards Gold.
Implications
To the students
1. This study is useful for the students to understand the investment psychology towards the
gold.
2. Questionnaire may be used by students for their further research.
3. Reference of the study can also be helpful for the research purpose.
To the organizations
1. This study is useful contribution towards knowing investment psychology for increasing,
investment opportunity.
2. This study can be used by research department for further research.
3. This study useful contribution to understand the investor psychology with reference to
behavioral intensions
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4. It helps to knowing the different parameters on which investor’s psychology can be
measured.
Suggestions
1. The study has been done in a very narrow prospective by taking only 150 respondents as the
sample size. Thus it is suggested to take large sample size so that more appropriate and
accurate result can be obtained.
2. Further research can be done by doing wider prospect of the investor.
3. The study has been done in Gwalior region only so, it is suggested that if this study can be
replicated by using demographic variables.
4. Time constraint for the study can be changed.
Conclusion
The study made an intense effort to study the Investment psychology towards Gold Investment in
Gwalior region. In the ultimate analysis of the study, individual and family characteristics such as
age, gender, marital status, lifestyle, monthly family income, and various factors like safety,
liquidity, investment tool, risks and returns associated with Gold investment determines the
investment behavior of an investor. It should be noted that this study was carried out in one region
covering and focusing on various dimension and the dynamics of the gold investment in order to an
in-depth analysis of the phenomenon. Factor analysis and ANOVA, all the hypotheses were verified.
Thus, study result shows that give more inclination to safety, security, high returns, status,
investment tool and managing uncertainty etc. This study also analyzes the preference towards
various forms of gold investment and discloses that investor’s first choice goes for Ornaments, Gold
Coins, bars and last priority to ETF (Exchange Traded Funds). In Factor analysis, as well those
similar variables are factorized under seven categories as future prospects, Preference and selection
Eigen is value 18.202%, Good returns (13.247%) , Assortment and decrease risk(10.276%), Substantial
and higher return(9.068%), assessment(7.520%), persuade(6.772%), Occasion(5.621%) . This study
also evidences that investment towards various forms of Gold is influenced by the occasion of Gold
investment and by the Gender too with respect to Gold investment behavior of an investor in
Gwalior region.
References
1. Capie F. Mills T.C. and Wood G. (2004). “Gold as a hedge against the US dollar”, World Gold
Council, Research Study no 30.
2. Chappell D. and Dowd, K. (1997). “A simple model of the gold standard”, Journal of Money,
Credit and Banking, vol. 29, pp. 94-105.
3. Cross J. (2000). “Gold derivatives: The market view”, The World Gold Council, referred:
12.2.2007, available: “http://www.gold.org/deliver.php.
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4. Diba B. and Grossman, H. 1984. “Explosive bubbles in stock prices”, American Economic
Review, vol. 78, no. 3.
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6. European Central Bank 2004. “8 March 2004 —Joint statement on gold”, European Central
Bank.
7. Fisher I. (1930). ”The theory of interest”. New York: MacMillan. Ghosh, D.P., Levin, E.J.,
Macmillan, P. and Wright, R.E. 2004. “Gold as an inflation hedge?” Studies in Economics and
Finance, vol. 22, no. 1, pp. 1-25.
8. Granger C.W.J. (1981). “Some properties of time series data and their use in econometric
model specification”, Journal of Econometrics, vol. 16,pp. 121-130.
9. Hillier, D., Draper, P. and Faff, R. 2006. “Do precious metals shine? An investment
perspective”. Financial analysts Journal, vol. 62, no. 2.
10. Hirshleifer D. (2001). Investor psychology and asset pricing. Journal of Finance, Vol. 64, 1533–
1597.
11. Hirshleifer D., Luo, G.Y., (2001). On the survival of overconfident traders in a competitive
security market.
12. John D. Watson, Levin and Wright (2006), Chua, Sick and Woodward, 1990,1913.
13. Jones C. Lichtenberger, R., (1970). Quarterly earnings reports and intermediate stock price
trends. Journal of Finance, Vol. 25, 143–148.
14. K. Balanaga Gurunathan & S. Muniraj, Project on Consumer Awareness and buying
behaviour in Gold and Gold Related Products 2012.
15. Kotler P: Principles of Marketing, Prentice Hall of India, New Delhi, 2003, pp:4-5.
16. Kulkanya Napompech, Amonsri Tanpipat and Nidpa Ueatrakunkamol (2010) Factors
Influencing Gold Consumption for Savings and Investments by People in the Bangkok
Metropolitan Area, International Journal of Arts and Sciences, Vol. 3(7), P. 508 – 520.
17. M. T. Raju and Anirban Ghosh “Stock Market Volatility – An International Comparison”
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18. Pindyck, R.S. 1993. “The present value model of rational commodity pricing”. Economic
journal, vol. 103, pp. 511-530.
19. Rohna O’Connell: India: exiting advances in local gold market (World Gold Council Report
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22. Skinner D. 1994. Why firms voluntarily disclose bad news. Journal of Accounting Research,
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Chapter 17
Talent Management with Special Reference to
“IBM”
Nutan Chauhan
ABSTRACT
In the present complex and rapidly changing socio-economic environment, no business or organization can exist or
grow without effective management of human resources. Talent Management is a realistic plan which facilitates
the categorization and precise extension of internal flair, for leadership and other key positions, which will honor
and drive an organization’s outlook. It is a dynamic process which has to be continuously reviewed for ensuring
organizational necessity in the era of changing business priorities. Today’s global workforce is more mobile than
ever before. Ultimately, organizational success is the most effective evaluation of talent management. Technology
refers the knowledge and utilization of tools, techniques and systems in order to serve a bigger purpose like solving
problems or making life easier and better. Its significance on humans is tremendous because technology helps them
adapt to the environment. Current organizations are operating in an extraordinary, extremely competitive and
disorderly business atmosphere which is characterized by the globalization of business. The new age economy, with
its attendant paradigm shifts in relation to the human capital, in terms of its acquisition, utilization, development
and Retention has placed a heavy demand on today's HR profession. With a dynamically changing and explosive
demand-supply equation, especially against unpredictable attrition trend and cutthroat competition no longer
restricted to local or regional boundaries, a need for strategizing & putting in place a robust mechanism for
attracting and retaining top talent becomes vital for the company’s very survival and growth. When people do jobs
that just don't suit their liking, inclination or temperament, the results, or rather the lack of them will be
disastrously obvious. Low productivity, dissatisfaction, low morale, absenteeism and other negative behavior will
become typical till the employee is shown the door. Or perhaps, there is another option - Talent Management.
The development of high technology including computer technology’s Internet and the telephone has helped
conquer communication barriers and bridge the gap between people all over the world. International Business
Machines Corporation (IBM), incorporated on June 16, 1911, is an information technology (IT) company. IBM
operates in five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems
and Technology and Global Financing. This paper basically based on secondary data and focuses on the impact of
talent management in IBM and to determine the extent to which talent management contributes in enhancing the
productivity, profitability and performance of the organization. This paper also focuses on various challenges in
talent management and tries to find out various solutions to solve these challenges.
Key words: Talent Management, globalization, Technology, retention, IBM.
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Introduction
Modern organizations are operating in an extraordinary, highly competitive and disorderly business
environment which is characterized by the globalization of business. Further, today's global
workforce is more mobile than ever before. With a dynamically changing and explosive demandsupply equation, especially against unpredictable attrition trend and cutthroat competition no
longer restricted to local or regional boundaries, a need for strategizing & putting in place a robust
mechanism for attracting and retaining top talent becomes vital for the company’s very survival and
growth. The new age economy, with its attendant pattern shifts in relation to the human capital, in
terms of its acquisition, utilization, development and retention has placed a heavy demand on
today's HR profession. Today HR is expected to comprehend, conceptualize, innovate, implement
and sustain relevant strategies and contribute effectively towards giving the company its winning
edge. These efforts on the part of the company have resulted in recognizing talent as priority of the
company to maintain competitive edge and talent becoming a strategic priority. In an organization,
there is nothing more crucial than fitting the right employee in the right position. Or else you would
be trying to fit a square peg in a round hole. When people do jobs that just don't suit their liking,
inclination or temperament, the results, or rather the lack of them will be disastrously obvious. Low
productivity, dissatisfaction, low morale, absenteeism and other negative behavior will become
typical till the employee is shown the door. Or perhaps, there is another option - Talent
Management.
Talent consists of those individuals who can make a difference to organizational performance, either
through their immediate contribution or in the longer-term by demonstrating the highest levels of
potential. Talent management refers to the anticipation of required human capital for an
organization and the planning to meet that needs1.Talent management implies recognizing a
person's inherent skills, traits, personality and offering him a matching job. Every person has a
unique talent that suits a particular job profile and any other position will cause discomfort.
Features of Talent Management
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Talent management is the activity of identifying, realizing, and guiding untapped
potential in people.
It means nurturing and developing those people identified of having ability and potential
and it should form part of any organizations recruitment and retention strategy.
It involves individual and organization development in response to a changing and
complex operating environment. Includes the creation and maintenance of supportive
people oriented organizational culture.
Talent management is a center deliberate approach undertaken to attract, develop
and retain people with the aptitude and abilities to meet current and future organizational
needs.
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Talent management brings together a number of important human resources and
management initiatives.
Organizations that, formally decide to manage their talent undertake a strategic analysis of
their current HR process.
Talent management approach is adopted and focused on coordinating and integrating the
following. Like: - Recruitment, Retention, Employee development, attracting talent etc.
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Relevance of Talent Management
Like human capital, Talent Management is gaining increased concentration. Talent management
(TM) brings together a number of important human resources (HR) and management initiatives.
Organizations that formally decide to "manage their talent" undertake a strategic analysis of their
current HR processes. This is to ensure that a co-ordinate, performance oriented approach is
adopted. All the organizations today adopting a Talent Management approach will focus on
coordination and incorporation.
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Recruitment - ensuring the right people are attracted to the organization.
Retention - developing and implementing practices that reward and support employees.
Employee development - ensuring continuous informal and formal learning and
development.
Leadership and "high potential employee" development - specific development
programs for existing and future leaders.
Performance management - specific processes that nurture and support performance,
including feedback/measurement.
Workforce planning - planning for business and general changes, including the older
workforce and current/future skills shortages.
Culture - development of a positive, progressive and high performance "way of
operating".
An important step is to identify the staff or employees (people and positions) that are critical to the
organization. They do not necessarily have to be senior staff members. Many organizations lost a lot
of "organizational knowledge" in the downsizing exercises of a few years ago. The impact of the loss
was not immediately apparent. However, it did not take long for many companies to realize their
mistake when they did not have people with the knowledge and skills to either anticipate or solve
problems that arose2.
Benefits of Talent Management
Talent Management is beneficial to both the organization and the employees.
Benefits from Organization’s point of view
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Increased productivity and capability.
Higher profits per employee.
A better linkage between individuals' efforts and business goals.
Assurance of valued employees.
Reduced turnover.
Increased work surface strength
A better fit between people's jobs and skills.
Benefits from employee’s point of view
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Higher motivation and commitment.
Career development.
Increased knowledge about and contribution to company goals.
Continuous motivation.
Job satisfaction increases.
Feel a sense of job security.
Approaches of Talent Management
www.cipd.co.uk
Inclusive versus exclusive approaches
Some organizations adopt an inclusive approach to talent management creating a ‘whole workforce’
approach to engagement and talent development, while others develop a more exclusive focus
segmenting talent according to need. Regardless of which approach organizations adopt, fairness
and consistency must be applied in all talent management processes. Diversity considerations must
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also be built-into talent management processes to ensure that organizations are able to draw from
the widest pools of talent possible.
Involving the right people
Careful consideration needs to be paid to involving the right stakeholders in the talent management
strategy. Clearly, HR specialists have an important role to play in providing support and guidance
in the design and development of approaches to talent management that will fit the needs of the
organization.
Visible senior-level support is a must and a talent panel is a useful means of ensuring the
involvement of Directors and senior management, especially when it has representation across the
organization. Additionally, line manager support is important at every stage of the process. Line
managers must take responsibility for managing performance, identifying and developing talent in
their own areas but also need to be encouraged to see talent as a corporate rather than a local
resource - see our factsheet on the HR role of line managers.
The Talent Management Loop
Source: www.cipd.co.uk
Attracting talent
The ability to attract external talent depends upon how potential applicants view the organization,
the industry or sector it operates in and whether they share the values of that organization. The
creation of an attractive employer brand is an important factor in attracting external talent. Where
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needed, lower financial rewards can be countered with alternative benefits and employer values
such as social responsibility.
Developing talent
Talent development should be linked to other learning and development initiatives. Appropriate
learning and development interventions are required at relevant stages in a career path for talented
individuals to achieve their maximum potential. Developing talent needs informal as well as formal
learning interventions. These interventions will include conventional development activities but
there is also the opportunity to use creative alternatives such as talent coaching and mobility.
Managing talent
Active steps, plans and activities are needed to retain and engage talent required for the future
health of the organization. Investment in management, leadership and other development activities
will positively impact on talent retention. Organizations should develop a performance culture
where individuals take responsibility for the continuous improvement of business processes and
their own skill development.
Tracking and evaluating talent management
Evaluation of talent management is difficult but necessary to ensure that the investment is meeting
organizational needs. Evaluation requires both quantitative and qualitative data which is valid,
reliable and robust.
Challenges in Talent Management
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Finding the right candidate is the challenge.
Retaining good employees is the next challenge that arises company's brand image
makes these tasks easier.
the financial challenge associated with developing employees and recouping the
investments in their development now that labor markets
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Source: www.it.toolbox.com
There is not a lack of professionals but there is an acute shortage of talented professionals globally.
The scenario is inferior even in developing economies of south East Asia. Countries like U.S and
many European countries have their own set of problems. The problem is of aging populations
resulting in talent gaps at the top. The challenges that the organizations have to face today are:
1. Recruiting Talent
The recent economic recession saw job cuts worldwide. Those who were most important to
organizations in their understanding were retained, other were sacked. Similarly huge
shuffles happened at the top leadership positions. They were seen as crisis managers unlike
those who were deemed responsible for throwing organizations into troubled waters. It is
the jurisdiction of talent management to get such people on onboard, who are enterprising
but ensure that an organization does not suffer for the same.
2. Training and Developing Talent
The downturn also opened the eyes of organizations to newer models of employment - part
time or temporary workers. This is a new challenge to talent management, training and
developing people who work on a contractual or project basis.
3. Attracting and Retaining high quality Talent
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Attracting and retaining enough employees at all levels to meet the needs of organic and
inorganic growth. While organizations focus on reducing employee overheads and dismissal
those who are unessential in the shorter run, it also spreads a wave of de motivation among
those who are retained. The challenge of calibrating talent management practices and
programs to attract and engage our young entrants is critically important to all firms and
particularly so for firms that depend on a strong flow of top talent, such professional service
firms.
4. Developing Leadership Talent
Developing a healthy leadership channel. It is one of the biggest potential threats to many
corporations is a lack of a robust talent pool from which to select future leaders. Leadership
in action means an ability to take out of crisis situation, extract certainty out of uncertainty,
set goals and driving change to ensure that the momentum is not lost. Identifying people
from within the organization who should be invested upon is a critical talent management
challenge.
5. Creating Talented Ethical Culture
Setting standards for ethical behaviour, increasing transparency, reducing complexities and
developing a culture of reward and appreciation are still more challenges and opportunities
for talent management3 .
6. Creating value preposition
Creating a value proposition that appeals to multiple generations. With four generations in
today's workplace, most companies are struggling to create an employee experience that
appeals to individuals with diverse needs, preferences and assumptions.
7. Rounding out the capabilities of hires who lack the breadth of necessary for global
leadership
It's relatively straightforward to identify and assess experts in specific functional or technical
arenas, but much more difficult to determine whether those individuals have the people
skills, leadership capabilities, business breadth, and global diversity sensibilities required for
the nature of leadership today. Increasingly, the challenge of developing these broader skill
sets falls to the corporations.
8. Creating a workplace that is open to Boomers in their "second careers."
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Age prejudice still exists, but smart companies are looking for ways to incorporate the
talents of Boomers and even older workers in the workforce. In many cases, this requires
rethinking roles and work relationships.
9. Overcoming a "norm" of short tenure and frequent movement
Some industries, such as specialty retail, are known for having a very disposable view of
talent. Companies’ intent on changing that norm, such as The Gap, must address both
external influences in the marketplace and an internal mindset.
10. Retaining top performing employees
Retaining the top performing employees in the organization is also a challenge for the
organizations. All top performing employees always try to go in the outside world and to
solve this problem the organizations should take all necessary steps so that good or high
quality talent can be retain in the organization.
a. Filling high-impact positions to support their company’s growth.
b. Optimizing compensation to serve business objectives
c. Keeping employees and focused on high priority goals4.
Ways to manage Talent in the Organization
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Recognize talent: Notice what do employees do in their free time and find out their
interests. Try to discover their strengths and interests. Also, encourage them to discover
their own latent talents. For instance, if an employee in the operations department
convincingly explains why he thinks he's right even when he's wrong, consider moving
him to sales.
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Attracting Talent: Good companies create a strong brand identity with their customers
and then deliver on that promise. Great employment brands do the same, with
quantifiable and qualitative results. As a result, the right people choose to join the
organization.
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Selecting Talent: Management should implement proven talent selection systems and
tools to create profiles of the right people based on the competencies of high performers.
It's not simply a matter of finding the "best and the brightest," it's about creating the right
fit - both for today and tomorrow.
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Retaining Talent: In the current climate of change, it's critical to hold onto the key
people. These are the people who will lead the organization to future success, and you
can't afford to lose them. The cost of replacing a valued employee is huge. Organizations
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need to promote diversity and design strategies to retain people, reward high
performance and provide opportunities for development.
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Managing Succession: Effective organizations anticipate the leadership and talent
requirement to succeed in the future. Leaders understand that it's critical to strengthen
their talent pool through succession planning, professional development, job rotation
and workforce planning. They need to identify potential talent and groom it.
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Change Organization Culture: If the organization wishes to substantially strengthen its
talent pool, it should be prepared to change things as fundamental as the business
strategy, the organization structure, the culture and even the quality of leaders in the
organization.
A rightly managed talent turns out to be a Gold Mine. It's inexhaustible and priceless. It will keep
supplying wealth and value to the organization. In turn, Management needs to realize its worth,
extract it, polish it and utilize it. Don't hoard Talent- spend it lavishly, like a millionaire flashing his
luxuries, because Talent is Wealth!
Talent Management in IBM
International Business Machines, abbreviated IBM and nicknamed "Big Blue", is a multinational
computer technology and IT consulting corporation headquartered in Armonk, New York, United
States. The company is one of the few information technology companies with a continuous history
dating back to the 19th century. IBM manufactures and sells computer hardware and software (with
a focus on the latter), and offers infrastructure services, hosting services, and consulting services in
areas ranging from mainframe computers to nanotechnology. Ginni Rometty is the president and
CEO of IBM.
IBM is listed among the top 10 companies on Fortune magazine's list of "America's Most Admired
Companies." The ranking was based on eight variables like employee talent, innovation, use of
corporate assets, social responsibility, quality of management, financial soundness, long-term
investment value, and quality of products/services.
Fortune was appreciative of IBM for recruiting and retaining the best talent across the world.
Analysts attributed IBM's success to its skilled diverse workforce that included people from almost
all the countries in the world. In 2012, Fortune ranked IBM the No. 2 largest U.S. firm in terms of
number of employees(435,000 worldwide), No. 4 largest in terms of market capitalization, 19th
largest in terms of revenue and 9th in terms of profitability. It has 12 research laboratories
worldwide. In 2013 company made the history of diversity at IBM dates back to 1953 when the then
Chairman and CEO, Thomas J. Watson Jr. (Watson Jr.), issued a letter to the management team in
which he stress a record for most patents generated by a company for 20 consecutive years. Its
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employees have got five Nobel prizes, ten national medals of technology, five national medals of
science, and six turning awards.5
At its recent Connect 2014 event IBM announced IBM Kenexa Talent Suite, an integrated talent
management suite. The release strengthens its Smarter Workforce initiative by combining IBM and
Kenexa products and services in one human capital management (HCM) offering. IBM Kenexa
Talent Suite also addresses increasing efforts by human resources organizations to optimize their
activities through more effective use of technology, a topic covered in our 2014 HCM research
agenda. Specifically, the release integrates talent management process automation capabilities with
collaboration and also can be complemented with its workforce analytics to help organizations be
more efficient and productive; our benchmark research shows these are the leading benefits of using
human capital analytics systems.
IBM gave importance to not only recruiting and retaining the best talent but also to managing them
in such a way that wastage of skills was reduced. IBM developed Human Capital Management
Services software to implement a talent management model within the organization. According to
analysts, IBM's focus on talent management enabled the company to utilize its workforce properly
and also to assess its future talent needs. They felt that the best practices in talent management could
be further used to formulate and implement succession planning and leadership development
strategies.IBM valued its employees as the biggest assets of the company.
Integrated workforce and human capital management solutions
Various strategies which are followed by IBM for managing Talent in their organization are as
follows:
Talent Management
To achieve a balance between talent supply and demand, IBM often redeployed its workforce. The
internal redeployment process was designed to minimize loss of productivity of skilled employees.
Each of IBM's business units had its own resource board that reviewed and approved external job
postings on a regular basis. In case the company had employees with skills matching the criteria,
they were redeployed on the new job instead of recruitment being done externally.
IBM Kenexa Talent Suite
IBM Kenexa Talent Suite helps HR professionals to look at large volumes of employee data – such as
work experience, social engagement, skills development and individual interests – to identify the
qualities that make top performers successful. Organizations and teams can then use those models
to pursue candidates through additional targeted social marketing on social recruiting sites, where
job seekers matching the profile are automatically connected with opportunities matching their
skills.
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Talent Suite helps in attracting, hiring, onboard, engaging and growing employee talent -- using the
latest analytics, mobile and enterprise grade social technologies available today. This integrated set
of talent management cloud solutions helps in growing the talent. It helps in various ways like:
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Helps in Hiring the best person for the job.
Allow to run free the power of workforce.
Helps in Identifying and managing top talent with plans to meet company goals.
Create an engaging, dynamic and productive work experience through a social platform.
Drive fact-based decisions quickly with powerful analytics.6
Women in the Workforce
IBM started recruiting women professionals well before the Equal Pay Act, 1963. A letter issued by
Watson Sr. in 1935 stated, "Men and women will do the same kind of work for equal pay. They will
have the same treatment, the same responsibilities, and the same opportunities for advancement."
IBM's management made efforts to find out what the specific needs of its women employees and
provided women-friendly facilities accordingly. This helped the women in increasing their
productivity while maintaining a proper balance between work and family life. The women
networking groups in IBM actively promoted female mentoring, assisted women to achieve a better
work/life balance, and also conducted programs to encourage girls to seek careers in the IT industry
(Refer to Table I for ‘Filling the Pipeline' programs)
Special Focus on Attracting Women Talent
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Women are only recruitment drives.
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Payment of higher referral bonuses for referring diversity candidates.
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Enterprise-wide focus on growing Women leaders.
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Talent Acquisition: Includes recruitment, skill and behavioral science-based assessments
and on boarding. These integrated functions are designed to provide a deep
understanding of what the best talent looks like and then how to attract, hire and engage
them.
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Talent Optimization: Includes performance management, succession planning and
compensation planning to empower and get the most out of employees.
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Social Networking: Increases productivity with expertise identification and knowledge
discovery – connecting employees and accelerating the time to productivity.7
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Global Technology Services (GTS) includes Strategic Outsourcing Services, Global
Process Services, Integrated Technology Services, Maintenance and GTS Services
Delivery, IT outsourcing services.
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IBM integrates its service management, technology and industry applications with new
technologies, such as cloud computing, analytics and virtualization.
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IBM’s services include Consulting and Systems Integration, and Application
Management Services.
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Systems and Technology provides semiconductor technology, products and packaging
solutions for IBM's own advanced technology needs and for external clients.
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IBM Smart Analytics, IBM Netezza, IBM SmartCloud Entry and IBM BladeCenter for
Cloud. IBM servers use both IBM and non-IBM microprocessor technology and
operating systems. All IBM servers run Linux, a key open-source operating system.
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Global Financing facilitates clients' acquisition of IBM systems, software and services.
Global Financing includes Client Financing, Commercial Financing and
Remanufacturing and Remarketing.
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IBMers value like Dedication to every client’s success, Trust and personal responsibility
in all relationships.8
IBM’s working Environment, future workplace
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Employees are recruited, groomed, employed, evaluated, and compensated… totally
driven by skill, performance, and achievement.
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Employees can clearly see what skills and experience are needed to evolve their careers
in the direction they are most passionate about, and are then matched to the projects,
mentors, and training that are best suited to helping them achieve their career
aspirations.
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Managers can better internalize the skills, interests, and motivations of their team.
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Teams have a better understanding and respect for the skills and achievements each
individual brings to the table.
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IBM- the leader in social business have an opportunity to revolutionize the perception of
work itself and the perception of one’s role in the fabric of the workspace community.
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IBM uses social business tools which are used in organizations to help facilitate work.
Very work-centric apps like Project Management and File Sharing apps, wikis, and
communities are very useful to control flow and share valuable information amongst
teams.
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IBM & Gamified Talent Management IBM’s Assessment testing solutions provide the
Big Data that correlates to an employee’s hard and soft skill sets. IBM is uniquely poised
to offer a gaming solution that evolves the UI on top of HR systems today, making it
more accessible and meaningful to all employees throughout an organization.9
New-Fangled Trends in Talent Management
A number of key trends in talent management have been identified are as follows:
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Businesses increasingly require a workforce that has the flexibility and quickness and are
capable to adapt quickly to new and rapidly changing markets.
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Equipping managers with the tools they need to effectively administer across language,
cultural and national differences will critically influence the effectiveness and performance
of the teams they manage.
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Technology create impact on the design of workspaces, workforce planning, HR systems
and the way many businesses view the workday in the upcoming years.
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Technological innovations like cloud-based applications and mobile devices make it easier
for the workforce to collaborate and work anywhere, any time.
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Best-in-class companies overwhelmingly invest in training and development initiatives,
mentoring and coaching ensuring change-readiness, and the necessary workforce agility to
meet the coming business challenges.
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For international organizations, the diversity of the employee population poses exclusive
people-management challenges framed in a multicultural environment.
Top Employers of the world measure proficiency levels of key human resources so as to
better endow resources in career development and succession planning, with three-year
strategic forecasts in place for organizational competency needs10.
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Conclusion
Talent management implies that companies are strategic and purposeful in how they source, attract,
select, train, develop, retain, promote, and move employees through the organization. From a talent
management point of view, employee evaluations concern two major areas of measurement:
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performance and potential. Current employee performance within a specific job has always been a
standard evaluation measurement tool of the profitability of an employee. However, talent
management also seeks to focus on an employee’s potential, meaning an employee’s future
performance, if given the proper development of skills and increased responsibility.
It is a realistic program which facilitates the identification and systematic development of internal
talent, for leadership and other key positions, which will compliment and drive an organization’s
future vision talent management, was a dynamic process that has to be continuously reviewed to
ensure that organizational requirements are still being met in the light of changing business
priorities. Ultimately, organizational success is the most effective evaluation of talent management.
Most highly successful companies produce extraordinary results from ordinary people. These
ordinary people need to be trained, motivated and inspired by an extraordinary managerial team
drawn from a group of people to be spotted, nurtured and sculpted by those leading the company.
While there are advantages to constant evolution of technology, their evolution has also seen the
increase of its destructive power as apparent in the creation of weapons of all kinds. In a broader
sense, technology affects societies in the development of advanced economies, making life more
convenient to more people that have access to such technology. But while it continues to offer better
means to man’s day to day living, it also has unwanted results such as pollution, depletion of
natural resources to the great disadvantage of the planet. Its influence on society can also be seen in
how people use technology and its ethical significance in the society.
Technology has evolved to serve not just human beings but also other members of the animal
species as well. Technology is often seen as a consequence of science and engineering. Through the
years, new technologies and methods have been developed through research and development. The
advancements of both science and technology have resulted to incremental development and
disruptive technology. The evolution of technologies marks the significant development of other
technologies in different fields, like Nano technology, Biotechnology, Robotics, Cognitive science,
Artificial intelligence and Information technology.
The rise of technologies is a result of present day innovations in the varied fields of technology.
Some of these technologies combine power to achieve the same goals. This is referred to as
converging technologies. Convergence is the process of combining separate technologies and
merging resources to be more interactive and user friendly11.
A talent marketplace is an employee training and development strategy that is set in place within an
organization. It is found to be most beneficial for companies where the most productive employees
can pick and choose the projects and assignments that are ideal for the specific employee. An ideal
setting is where productivity is employee-centric and tasks are described as “judgment-based
work,”.
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In adverse economic conditions, many companies feel the need to cut expenses. This should be the
ideal environment to execute a talent management system as a means of optimizing the performance
of each employee and the organization. Selection offers are large return on investments. Job analysis
and assessment validation help enhance the predictive power of selection tools. However, within
many companies the concept of human capital management has just begun to develop.
Organizations should focus on talent retention and talent management if they want to make highquality reputation in the market. Comprehensible talent management strategy and operational
programs keep a worth in today’s world.
In today’s world, in the adverse situations, where the organizations are facing a lot of problems in
managing and retaining the talent. Various forthcoming trends are coming like cultural diversity,
workforce planning, talent development, technological advancement which are very much helpful
for any organization to be at the top position in this competitive world.
References
1. C:\Users\Microsoft\Desktop\talent mgmt\Talent Management - Opportunities and
Challenges.htm.
2. C:\Users\Microsoft\Desktop\talent mgmt\Today's Top 10 Talent-Management
Challenges - Businessweek.htm
3. http://derekstockly.com au/newsletter-05/018-humancapital.html.
4. http://dschool.stanford.edu/our-point-of-view/
5. http://www.ibm.com/press/socialbusiness.
6. http://www.top-employers.com/nl-BE/Nieuws-en-Inzichten/blog/2013/10/new-trends-intalent-management-for-2014/
7. I:\talent management\IBM About IBM - India.htm
8. I:\talent management\IBM Delivers New Talent Management Suite.htm
9. I:\talent management\IBM Kenexa Talent Suite.htm
10. I:\talent management\Importance of Technology.htm.
11. I:\talent management\Talent management - Wikipedia, the free encyclopedia.htm
12. www.businessweek.com
13. www.cipd.co.uk
14. www.derekstockley.com
15. www.hinduonnet.com
16. www.icmrindia.org
17. www.it.toolbox.com
18. www.joshbersin.com
19. www.management-issues.com
20. www.spiritsglobal.com
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Chapter 18
Work life Balance: A social Issue in redefining
Human Resource Paradigm
Dr. Anita Singh
ABSTRACT
Work-life balance has become a social issue all over the globe. Work–life imbalance has a direct impact on
societal issues, like delayed parenting, declining fertility rates, ageing populations, and decreasing labour
supply. Today an employee is not only expected to meet deadlines but also to give quality output, which is
essential for his survival in the organization. Since the professional scenario is so competitive and the pressure
is so high it becomes highly imperative to maintain a healthy personal life. There are various problems in
trying to maintain a balance as every person is surrounded by four stakeholders- his own personality, job,
family and society throughout his life.
This paper is descriptive and exploratory in nature .The emphasis of this paper is to highlight the significance
of employers’ need for flexibility and employee’s need for work-life balance. It also tries to identify the factors
which lead to Work-life balance and flexibility in organization.
Key Words: Employee, work life balance, IT Company, factor
Introduction
Increased competition from globalization is damaging employees' quality of life. Professional people
in the current scenario are more interested in career opportunities that provide them with increasing
flexibility at their workplace. Working people have different needs at various stages of their working
life. Due to which, people strive for balance in their working hours and their personal commitments.
Work life balance has now become a susceptible matter because it offers evident benefits to
organizations and its success. Work-life balance is not only important for individuals, but also for
employers, the market, and the society. There’s a shift from a single male bread earner family model
to where both parents are participating in paid employment, which has made it difficult to raise
children while the workplace continues to be modeled on male bread earners workers.
Literature Review
Work-life balance has become a social issue all over the world and there is a need to redefine the
norms of the organization. Blunsdon et al (2006) defines Work-life balance as people who control or
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manage the see-saw of both life and career with achievement and satisfaction. It has also been
defined that work and non-work activities (e.g. private holiday, seeing friends, sports) are
compatible and in accordance with the promotion of an individual’s life quality (Kalliath and
Brough 2008, p. 323; Wilkinson 2008, p. 120).
There has also been growing concern over the state of the current labour market with skill shortages
reported across a number of sectors, particularly in highly-skilled sectors, this has prompted many
to consider policies and practices that will not only attract skilled workers, but also improve
retention rates (Pocock, 2005). As a result the notion of the need to investigate and promote worklife balance (WLB) has grown into an important management consideration (De Cieri et al., 2005).
There is increasing evidence that work–life imbalance has a direct impact on societal issues, such as
delayed parenting, declining fertility rates, ageing populations, and decreasing labour supply. It is
documented that work–life balance policies are beneficial for individuals, their families,
organizations, and society. Murphy and Doherty (2011) identified that it is not possible to measure
work life balance in an absolute way as there are personal circumstances which influence the way
that is perceived but establishing a harmony that reflects an individual‘s priorities whereas
employees must draw a firm line between their home and work lives and be confident that the line
is in the right place (Harvard Business Review, page184). Miller (1978) emphasized that earlier the
work life used to begin at age 16 and end at age 70 and now begins at 20 and ends at 62 for most of
the working personals. However, restrained effects of the increase in average length of life over the
last 80 years may be associated with certain changes in work life history as more people reach the
older ages with their health to permit them to enjoy leisure and image of the retirement years. Inspite of that changing view of marriage like relationships also affects work -life balance as many
women are no longer expecting lifelong partners, and consequently they stress the importance of a
acquiring skills and qualifications as stated by researcher Lewis et al.(1999) whereas in contradiction
to the above Milkie and Peltola (1999) stressed that happier marriages are related to a greater sense
of success in balancing work and family.
Tymon et al. (2011) are of the opinion that employees can improve their perceived career success by
balancing long and short –term goals, improving their competence, and communicating openly with
their managers. There are four factors as revealed by Rasdi et al. (2009) which have predictive
potential on managers‘ career success are individual –related factors, organizational -related factors,
managerial competencies -related factors, and the person-environment fit factor. Scott -Ladd and
Marshall (2004) emphasized that participative decision making contributes to performance
effectiveness and led to greater gains in the workplace whereas as Ballout (2008) emphasized that
the individual specific variables will be more likely to predict family – to -work conflict and
perceived career success, while work -specific variables will be more likely to predict work-to-family
conflict and career success. The employees and employers have to identify appropriate strategies for
balancing work and non-work domains in such a way that employees strive to perform work and
family roles successfully, and employers ensure that employees have the necessary infrastructure
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and tailored-made family supportive programs to encourage them to achieve dual-success: success
in family relationships and success in careers.
Business performance can be affected by number of ways but one of these is Work -life balance
policies as in the present scenario of competitive labour market, employers can attract better recruits
by offering Work -life balance policies with having competitive remuneration packages. However,
work -life balance policies can enhance productivity; reduce cost by improving staff retention rates,
decrease negative spill-over’s, reduce extended hours and fatigue to reduce negative effect on
productivity which further minimises stress and contribute to a safer and healthier
workplace(Ratzonetal.,2011).Mohan and Ashok (2011) explained that ―Stress is often developed
when an individual is assigned a major responsibility without proper authority and delegation of
power, inter personal factors such as group cohesiveness, functional dependence, communication
frequency, relative authority and organizational difference between role sender and for real persons.
Work stress and work -life imbalance are correlated with workaholism , regardless of gender (Aziz
and Cunningham, 2008) Supervisor support and work -family culture are related to job satisfaction
and affective commitment (Baral and Bhargava, 2010) .Dealing with the work -family-tension results
the career as subject of social fascination and family as a factual task(Kasperet al.,2005) . There are
strong connections between dimensions of the work place, stress and job satisfaction.
However, other evidence demonstrates that the associated benefits are not always realised and
work–life balance policies can result in reinforced gender inequities and increased levels of work–
life conflict. This paper reviews the ability of work–life balance policies to actually influence some
key social and organisational issues.
Research shows that a good work-life balance can affect a person socially, physically, mentally and
emotionally. Working long hours can lead to serious health conditions such as stress, fatigue, mental
illness and heart disease. The impacts of these problems are far reaching, affecting co-workers,
friends, family and society as a whole. It is very difficult to calculate the full costs to society when
the costs of health care provision and sick leave are taken into consideration, the effects on children
and other dependents, partners and friends.( Rachael Maskell, National Officer Community and
Non Profit Sector Work-Life Balance Survey 2006 Report)
Purpose of the study
The foregoing review summarizes the significance of the work life balance in the society. Although
this paper does not provide a prescriptive method for organizations to follow and to provide a
balanced work life to their employees but, it has tried to identify what factors are important in
impacting an organizations ability to manage.
Methodology
The study is exploratory and analytical in nature. . The data was collected through a structured
questionnaire including 21 statements.. 153 Questionnaire was distributed among the employees of
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HCL Info systems, Accenture, Coca-Cola, and Dell both at managerial and executive level. So as to
ascertain the level of work life balance, for this purpose random sampling was undertaken .Out of
153, 100 fit forms were ascertained for the study
Analysis and discussion
Table 1 shows the demographic profile of the respondents. It depicts that out of the 100 respondents
65 is male and 35 is female. Majority of the respondents are in the age group of 21-30, that shows
that respondents are young executives.
An exploratory factor analysis was carried out to identify the important factors affecting the
employees. The correlations matrices computed & examined reveal that there is enough correlation
to go ahead with factor analysis. KMO measure of sampling adequacy (MSA) for individual
variables show that correlation is sufficiently high for all variables. To test the sample adequacy,
KMO Measure of sampling adequacy is computed, which is found to be 0.660; it indicates that
sample is good enough for sampling. The overall significance tested with Bartlett Test of sphericity
support the validity of the factor analysis of data set. Principal component Analysis with varimax
rotation is employed for extracting factors. 6 factors are extracted accounting 71.855 of variation with
a loss of approx 28 percentage of information. (Refer table 4 and table 5)
Factor Discussion
Factor 1- Balanced Attitude with 20.762 cumulative variance suggests that if employees get time for
hobbies, sports, they have healthy relationship with their colleagues, his/her partner take good care
of children and domestic work, family provides them enough support, and they also get quality
time to spend with their near and dear ones., this suggests that this is very significant social issue.
Balanced attitude leads to good amount of socialization and recreation.
Factor 2- Work stress and workload with 34.264 of cumulative variance indicates that employees do
not get enough sleep, due to heavy workload they are under stress and they have to cancel their
holidays for work, they have lot of workload and travel assignments and work, apart from this they
have to worry about work. Stress affects health of the employees.
Factor 3 Work culture and Support with 45.891 cumulative variance suggests that employees agree
that decent working environment is necessary in which they feel comfortable, their expectations
should match with those of their supervisors or the management and if they get proper support
from the management regarding their family issues, less of the stress will help them to strike a
balance at work and family.
Factor 4 Flexible timing with 56.768 cumulative variance indicates that- company provides good
health care provisions, meeting and training schedules are comfortable, employees have freedom to
choose hours to complete work,. Flexible timing leads to better professional and personal balance,
and employees are satisfied with the services of the company.
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Factor 5 Reward with 64.841 suggests that if employees meet their deadlines they get reward and
appreciation in return .and they are motivated to perform.
Factor 6- Leave Policy with 71.855 cumulative variance, depicts that if friendly leave policy is there
employees are satisfied with the leave system of the company. Company provides enough scope for
managing the personal life and needs of their employees
Conclusion
This study suggests the significance of work life balance in social arena .Research suggests that
organisation which takes measures to establish work-life balance in principle and in practice will
reap the benefits of increased employee involvement and engagement, which certainly enhances the
productivity. Work-life balance must be supported and encouraged at all levels of the organisation,
including senior management, line managers and all staff. This study suggests that while designing
the policies and strategies for work life balance factors like Balanced attitude, workload,, work
culture, flexible time, reward and recognition, adequate and friendly leave policy and management
support should be taken into consideration.
Certainly creating an organisational culture which supports work-life balance is a long-term process.
It involves changing the mindset of the people, their attitude towards the task, belongingness
towards the organisation and their thought about work-life balance so that using flexible working
options and other work-life initiatives becomes accepted and normal for everyone regardless of their
gender, seniority within the organisation or personal commitments.
References
1. Annals of the American Academy of Political and Social Science, Vol. 562, The Evolving
World of Work and Family: New Stakeholders, New Voices, pp. 83 -97 Sage Publications,
Inc. in association with The American Academy of Political and Social Science, URL:
ttp://www.jstor.org/stable/1049651
2. Aziz,S., & Cunningham J., (2008). Workaholism, work stress, work -life imbalance: exploring
ender‘s role. Gender in Management: An International Journal, Vol.23 Iss: 8, pp.553-566,
Emerald Group Publishing Limited.
3. Ballout, H.I. (2008). Work-family conflict and career success: the effects of domain-specific
determinants. Journal of Management Development, Vol.27 Iss: 5, pp.437 -466, Emerald
Group Publishing Limited.
4. Baral ,R., & Bhargava ,S. (2010) ―Work-family enrichment as a mediator between
organisational interventions for work -life balance and job outcomes. Journal of Managerial
Psychology, Vol. 25 Iss: 3, pp. 274-300. Emerald Group Publishing Limited.
5. Blunsdon B. et al., 2006. Work-life Integration: International Perspectives on the Balancing of
Multiple Roles. London: Palgrave, Macmillan. Pp.1-16.
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6. De Cieri, H., Holmes, B., Abbott, J., & Pettit, T. (2005). Achievements and challenges for
work-life balance strategies in Australian organizations. International Journal of Human
Resource Management, 16, 1, 90-103.
7. Equality, Diversity and Inclusion: An International Journal, Vol.30 Iss:4, pp.252 -277,
Emerald Group Publishing Limited.
8. Kalliath, T & Brough, P 2008, 'Work-Life Balance: A review of the meaning of the balance
construct', Journal of Management & Organization, vol. 14, no. 3, pp. 323-327.
9. Kasper, H., Meyer, M., & Schmidt, A. (2005). Managers dealing with work-family -conflict:
an explorative analysis. Journal of Managerial Psychology, Vol. 20 Iss: 5, pp.440 -461.
Emerald Group Publishing Limited
10. Lewis, S., Smithson, J., & Brannen, J. (1999). Young Europeans' Orientations to Families and
Work.
11. Milkie, M. A., & Peltola, P. (1999). Playing All the Roles: Gender and the Work -Family
Balancing Act. Journal of Marriage and Family. Vol. 61, No. 2 , pp. 476-490, National Council
on Family Relations, URL: http://www.jstor.org/stable/353763, Accessed: 10/05/201
12. Miller, Ann R. (1978) .Changing Work Life Patterns: A Twenty-Five Year Review. Annals of
the American Academy of Political and Social Science, Vol. 435, America in the Seventies:
Some Social Indicators. pp. 83-101, Sage Publications, Inc. in association with The American
Academy of Political and Social Science.URL: http://www.jstor.org/stable/1043090,
Accessed: 10/05/2011.
13. Mohan, N., & Ashok J., (2011). Stress And Depression Experienced by Women Software
Professional
14. Murphy, F., &Doherty, L. (2011). The experience of work life balance for Irish senior
Managers.
15. Pocock, B (2005). 'Work-life ‘balance’ in Australia: Limited progress, dim prospects'. Asia
Pacific Journal of Human Resources, vol. 43, no. 2, pp. 198-209
16. Rasdi, R. M., Ismai,l M., Uli, J., & Noah, S. M. (2009). Towards developing a theoretical
framework for measuring public sector managers‘career success. Journal of European
Industrial Training, Vol.33 Iss: 3, pp. 232 -254, Emerald Group Publishing Limited
17. Ratzon, N., Schejter, T., Alon, E. & Schreuer, N. (2011) Are young adults with special needs
ready for the physical work demands? Research in Developmental Disabilities, 32 , 371–376,
ELSEVIER.
18. s in Bangalore, Karnataka, Global Journal of management and Business Research, Global
Journals Inc. (USA), Vol. 11 Issue: 6, Version 1.0 May 2011
19. Scott -Ladd, B., & Marshall, V., (2004) Participation in decision making: a matter of context?
Leadership & Organization Development Journal, Vol. 25 Iss:8, pp: 646 -662, Emerald Group
Publishing Limited.
20. Tymon Jr, W.G., Stumpf, S.A., &Simith, R.R. (2011) Manager Support predicts turnover of
professionals in India. Career Development International, Vol, 16 Iss: 3, pp. 293 -312,
Emerald Group Publishing Limited
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21. Wilkinson, Sara J. 2008, Work-life balance in the Australian and New Zealand surveying
profession , Structural survey , vol. 26, no. 2, pp. 120
Annexure
Table 1: Demographic Profile (Source: Primary data)
Gender
Frequency
65
35
Age
80
12
08
Male
Female
21-30
31-40
Above 40
Percentage
Table 2: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
.660
1219.895
210
.000
Extraction Method: Principal Component Analysis.
Table 3: Total Variance Explained
Extraction Method: Principal Component Analysis.
Table 5: Factor Matrix
Factor Name
Balanced Attitude
Eigen Value
4.360
Variance Explained
26.669
Work stress and
workload
2.835
13.565
Work culture and
Support
2.442
10.437
Flexible timing
2.284
8.698
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Statements
Time for hobbies
Positive attitude
Healthy relations
Caring partner
Family support
Time spent with friends
enough sleep
Cancel holidays
Work load
Travel for work
Worry about work
Decent workplace
Matching expectations
Management support
Good healthcare prov.
Factor Loading
.790
.825
.89
.66
.759
.617
-.596
.568
.735
.622
.794
.775
.867
.687
.703
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Reward
1.695
7.021
Leave Policy
1.473
5.464
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Comfortable schedules and timings
Children don’t affect perf.
Meeting deadline
Reward and satisfaction
Leave system
.723
.623
.601
.852
.782
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Chapter 19
Redefined HR practices in Indian software
Industry
Ram Kumar Paliwal
ABSTRACT
In IT Sector, if a company is economically successful, it means, the management is able to manage human
resource successfully. Software is a wealth and job creating industry, which has in just a few years, grown to
US $ 1 trillion, employing millions of professionals worldwide. A vital part of any successful business is
attracting and retaining productive, happy employees. To this end, companies in India are restructuring their
rewards and recognition programs, as means to retain and motivate their employees. A great workplace
ensures that employees have freedom to execute their ideas and enjoy the work they do. Employees yearn for
appreciation and a favorable environment to work. The HR practices in Indian software companies such as
employees sourcing and human resource development initiatives are remarkably different from the
manufacturing and other service sector companies. The objective of this conceptual paper is to study Human
Resource Practices in Indian IT Companies.
Key words: information technology, Redefined Human Resources practices, Indian Software Industry,
Software, Human Resources development, IT Companies
Introduction
The IT industry has effectively ensured that the old personnel department is gone and done away
with. Human resources today are completely about talent management and retention. Software is a
knowledge driven industry. It requires a team of highly skilled professionals for its success. In recent
times, Software development and information technology enabled services (ITeS) including business
process outsourcing (BPO)/ knowledge process outsourcing services (KPO) industry in India has
emerged as one of the most dynamic and vibrant sectors in India's economy. With a small beginning
in early 80s, it has now grown into a broad based comprehensive industry. Today, the Indian IT
Services and ITES sector employs over 2.97 million knowledge professionals. Almost all major IT
players in the world have set up subsidiaries or collaborations in India. The major attraction being
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an "abundance of technically qualified and cheap software manpower". This may have been the case
before the start of the growth phase, but now there is, in fact, an acute shortage of qualified and
trained manpower. This is getting reflected in the spiraling salaries (one of the highest average
starting salary today), and more importantly, a frequent job-hopping culture. India, today have 7
Indian Institute of Technologies (IITs) and many other Regional engineering colleges / private
colleges imparting IT education. Many HR functions have gone through the process of
transformation over the past decade. This redefinition of the work of Human Resource is intended to
allow a more strategic focus on talent management and organizational capability while
systematizing.
Redefined HR Practices in Software Firms
Recruitment
Although in India there is bulk of engineering graduates every year, among them only 25 percent
have skill to get the job in IT corporate. To overcome the widening gap between IT industry and
engineers produced by the institutions, Human Resource Management of many companies like TCS,
HCL and Congnizant etc. have tied up with several engineering institutes across the country to
provide practical training, required course structure and internship opportunities to the student. By
doing these practices Human Resource Management team wants to improve the knowledge and
skills of the employee. It reduces the training cost of new employees when they are the part of
organization. Some software companies like TCS and Wipro also provide the open platform to
collect the data and the skill set of the employees.
Employee Retention
Employee retention is a challenge for Human Resource Management in any Software company.
Hiring knowledgeable people for the job is essential for an employer. But retention is even more
important than hiring. There are many organizations which are looking for such employees. If a
person is not satisfied by the job he's doing, he may switch over to some other more suitable job. In
today's environment it becomes very important for organizations to retain their employees.
Retention is not only important just to reduce the turnover costs or the cost incurred by a company
to recruit and train. But the need of retaining employees is more important to retain talented
employees from getting poached. Employee Retention is an effort by a business to maintain a
working environment which supports current staff in remaining with the company. Many employee
retention policies are aimed at addressing the various needs of employees to enhance their job
satisfaction and reduce the substantial costs involved in hiring and training new staff.
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Some best practices followed by Human Resource Management to retain employees:







Hire the right people
Have a good system for evaluating performance
Track your levels of retention/turnover and overall employee satisfaction.
Train managers and supervisors in good communication skills so that expectations between
employees and managers can be openly established.
Offer employees a career path and a career development plan.
Have a recognition program that celebrates employees with excellent performance.
Customize benefits and work expectations for individual employees as much as possible.
Working Environment
A great place to work was defined as a place where you trust the people you work for, take pride in
what you do and enjoy the company of people you work with. Positive work environments are
essential for workers' mental and physical well-being, but they aren't created by accident. Good
working conditions arise from values that the company views as important to its mission, such as
ensuring a manageable workload, and promoting two-way communication through open office
spaces and regular team meetings. Workers are also entitled to a safe, hazard-free environment. In
Software Industry Human Resource Management is responsible to provide the environment in
which Employees enjoy their work. It is very important for leader to engage with talent and let them
know when they are doing right and also when they need little bit of coaching.
Training and Development
Profitable businesses recognize that it's not so much what employees currently know that shapes a
company's future; it's what they must eventually know that's most important. In addition, the
degree to which your company is genuinely committed to the training and development of your
employees is a critical factor in attracting and keeping high-performing employees. With in-house
classroom training and development, the traditional and most familiar form of training, a group of
employees gathers in a room and is led through the program by an instructor. These sessions occur
on- or off-site and can be facilitated by trainers who are either employees themselves or outside
specialists.
Pros: The main advantage to classroom training and development (apart from its familiarity) is that
it provides ample opportunities for group interaction and gives instructors a chance to motivate the
group and address the individual needs of students.
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Cons: In-house classroom training requires considerable administrative support (coordinating
schedules, reserving training space, etc.).
Transport Facility
Many progressive companies in India offer a benefit to their employees in terms of a pick-up and
drop facility, (from residence to work and back) thus providing a hassle free commuting experience
to their employees.
Primarily, this benefit is offered by companies in the BPO, IT and Hospitality sector. These sectors
function 24*7 on account of their services and Client requirements. However, there are many other
organizations beyond this sector which extend the aforesaid benefit to their employees. This has
seen as an increasing practice across metro cities in India.
Reasons and Benefits
Some of the key reasons & benefits for providing a transport facility to employees are as follows:






Nature of shift and odd working hours – this limits the employees to use public transport
and therefore the company has to make necessary arrangements
Standard reporting timings – it is a healthy practice in companies where employees are
punctual and report at the same time. To facilitate this, employers many times provide
company transport wherein employees residing a particular area travel to work by company
provided vehicle which ensures they all reach on time and together
Infrastructure issues – India is a developing country and therefore all the large cities are
going through development phase. This of course impacts the traffic and road conditions.
Seeking public transport is usually a challenge in all metro cities of India during peak-rush
hours. Company provided transport addresses this issue
Statutory norms – some states in India have made a statutory provision for providing
company transport to female employees if they work beyond the stipulated hours
Safety – Company-facilitated transport vehicles are well maintained. The chauffeurs are
trained on prevailing traffic rules and safety guidelines and therefore the risk factor during
travel is mitigated. An employee can come and go back home in a relaxed state of mind
Tax free – as per the income tax provisions, a company provided transport facility does not
add any additional tax burden on employees.
Compensation and Reward
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IT sector pays the best and highest package in the Indian Industry. Compensation management is
very important factor in human resource management. Increasing demands of technology coupled
with a short supply of professionals (with the requisite expertise) has increased the costs of
delivering the technology. This makes incentive compensation a significant feature, with the result
that software companies have moved from conventional pay for-time methods to a combination of
pay-for-knowledge and pay-for-performance plans. With the determinants of pay being profit,
performance and value-addition, emphasis is now on profit sharing (employee stock option plans)
or performance-based pay, keeping in view the long-term organizational objectives rather than
short-term production-based bonuses. Skills, competencies, and commitment supersede loyalty,
hard work and length of service. This pressurizes HR teams to devise optimized compensation
packages, although compensation is not the motivator in this industry.
Conclusion
There are no simple solutions, no generic approaches or best practices that will suddenly enable the
Human Resource Management function to become more effective and respected. Human Resource
Management needs to focus on delivering unique talent solutions tailored to each company’s
circumstances and requirements. To do this, Human Resource Management must develop a deep
understanding with the employee’s requirement. As in the above study we have already discussed
the change Human Resource Practices to provide the better working environment, training and
development to satisfied as well as develop them. If the employees of the company find themselves
comfortable in all front then Employee retention will increase.
References




Amy Kates, Downey Kates Associates, (Re)Designing the HR Organizationhttp://c.ymcdn.com/sites/www.hrps.org/resource/resmgr/p_s_article_preview/hrps_iss
ue29.2_designingorga.pdf
Benjamin J. Inyang & Juliana B. Akaegbu, “Redefining the Role of the Human Resource
Professional (HRP) in the Nigerian Public Service for Enhanced Performance” International
Journal of Business Administration, Vol. 5, No. 1; 2014
Dr Mohammed Galib Hussain Emeritus Professor & Rector, Islamiah College, Vaniyambadi,
India
Dr. K. Aparna Rao “Employee Retention-A Real Time Challenges In Global Work
Environment” Principal & Professor, The Oxford College of Business Management,
Bangalore
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Joe Duke II1 & Ekpo Nya Udono1 - 1 Department of Business Management, University of
Calabar, Calabar, Nigeria “A New Paradigm in Traditional Human Resource Management
Practices Journal of Management and Sustainability”; Vol. 2, No. 2; 2012 ISSN 1925-4725 EISSN 1925-4733 Published by Canadian Center of Science and Education
Ms. Anubhuti Shinde Bauskar “Innovative HR Practices and its outcome in organizational
commitment of I.T Professionals - A study” - ISSN 2348 – 8891
Ms. Sucheta Mohapatra “Unique HR Practices In The Indian IT Industry: A Research
Agenda”
Prof. Deepika Pandita - Assistant Professor, SIBM Pune “HR Redefined” http://www.sibm.edu/FacultyResearch/pdf/hrredefined.pdf
Rakesh S. Patil1, Varsha Patil2 and Pratibha Waje 3, 1Head and 3Lecturer 1,3. Sir
Visvesvaraya Institute of Technology, Chincholi (Sinner) Nashik-422 101 (MS), 2 SNG
Institute of Management & Technology, Rajgurunagar, Pune (MS) “Human Resource
Challenges & Practices in IT Industry” Proceedings of the 5th National Conference;
INDIACom-2011 Computing For Nation Development, March 10 – 11, 2011Bharati
Vidyapeeth‟s Institute of Computer Applications and Management, New Delhi
Rakesh Yadav (2013) - Business School, VIT University, Vellore, India. “Human resource
(HR) challenges for the information technology (IT) industry in India” Vol. 7(20), pp. 19501955, 28 May, 2013 ISSN 1993-8233 © 2013 Academic Journals DOI: 10.5897/AJBM11.2419
http://www.academicjournals.org/AJBM
Rethinking
Human
Resources
in
a
Changing
World
https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/hrtransformations-survey/Documents/hr-transformations-survey-full-report.pdf
S. Mohamed Rafique, Assistant Professor, KMG College, Gudiyattam, India “Strategic
Human Resource Management: Practices in IT Industry in India” The International
Journal’s Research Journal of Science & IT Management – ISSN: 2251-1563
Simarjeet Kaur, Jagan Institute of Management Studies, Sector-5, “A study on the
management of human resource personnel in Indian domestic BPO industry”
http://www.middlemarketcenter.org/expert-perspectives/7-employee-retention-strategiesfor-keeping-your-talent
http://economictimes.indiatimes.com/best_company_2013.cms
http://www.sannams4.com/?p=2632
http://www.roberthalf.com/training-and-development
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SECTION – III
APPLICATION OF HUMAN
RESOURCE
MANAGEMENT CONCEPT
IN OTHER MANAGEMENT
AREAS
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Chapter 20
Gender Disparities in Completing School
Education in India
Tarika Singh, Seema Mehta, Manish Dubey, MD Shams Aghaz and Mayank Juneja
ABSTRACT
Purpose: The purpose of this paper is to examining gender differences in completing school education across
regions in India.
Design/methodology/approach: A structured survey was designed and administered to a sample of
Gwalior’s respondents to check the gender difference in completing school education in India and to find out
underlying factors of the same.
Findings: Significant difference was found between male and female respondents. Again study resulted in four
important factors for gender disparity in completing school education in India.
Research limitations/implications: The number of respondents is 100 which is small number. Hence the
results may not reflect the true picture.
Keywords: Disparity; gender; school education; India
Introduction
Gender: Gender is the range of physical, mental, and behavioral characteristics pertaining to, and
differentiating between, masculinity and femininity (http://en.wikipedia.org/wiki/Gender).
Disparity: In terms of education, disparity is the inequality that certain students experience in their
education as compared to other students. The measures of educational success focus on grades, test
scores, drop-out rates, college entrance numbers, and college completion rates
(http://en.wikipedia.org/wiki/Disparity).
School education: State education includes basic education, kindergarten to twelfth grade, also
referred to as primary and secondary education, as well as post-secondary educational institutions
such as universities, colleges, and technical schools funded and overseen by government rather than
private entities (http://en.wikipedia.org/wiki/School education)
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In this research we have to check the gender difference in completing school education in India.
Literature Review
Is gender disparity greater in India? This paper seeks to answer this question by examining gender
disparity in completing school education in Gwalior. Hussain(2010) did a similar study in using A
Gender Disparity Index and found that gender disparities are greater in North India, Based on an
study of teen and child mortality rates, sex ratios and lushness trends, Dyson and Moore (1983) done
that, relation to their South Indian states counterpart, women in Northern states were subjected to
superior levels of prejudice. In fact, Husain and Sarkar (2010) found a reversal of gender disparity at
the secondary and higher secondary levels in several states. Hasan and Mehta’s study (2006) of
college education focuses on disparities across social castes, but ignores gender dimensions, as also
does Sundaram (2006). Thorat (2006) notes gender differences in access to higher education but does
not look at regional variations.
However, certain econometric techniques have emerged that address this issue. These techniques
recognize the residual effect - after taking into account the effect of explanatory variables in
explaining disparity levels between groups - with discrimination (Blinder 1973; Fairlie 2005; Oaxaca
1973).
The significance of learning in monetary expansion (Schultz 1961) and person progress (Sen 1985,
1993) has been widely documented. Recently, the Government of India has made the right to
education a primary right, under its instrument of government, of every child. However, the focus
of policy makers and researchers generally has been on the primary level. The four-five years of
education imparted as primary tutoring is undeniably useful in ensure the practical literacy of
recipients of such education. regardless of the importance of functional literacy, economic returns to
primary education – in terms of increasing probability of securing work, getting better jobs or
bargaining for higher wages – is much less. In judgment, close of schooling marks an vital familiar
sight in the instructive job, and makes children better equipped to fend for themselves in the labour
market.
This inspection was explain by Dyson and Moore (1983) in stipulations of edifying practice – the
commonness of endogamous marriage in South India unspoken that women had more right to use
to her kin, thereby mounting self-sufficiency. Unconventional explanations have been on hand for
this happening. Bardhan (1974) and Miller (1981) have argue that the frequency of wet rice
development in southern states has fashioned demand for women industry, rising their contribution
in profitable activities; this has empower South Indian women. Rosenzweig and Schultz (1982)
analysis also associates differences in child continued existence rates to difference in male and
female work force contribution rates. Jeffrey (1993), on the other hand, links lower levels of gender
disparities in the south to senior levels of State savings on education and health. Murthi et al (1995)
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and Dasgupta et al (2004) also argue that public investment in these spheres in states like Kerala and
Karnataka have promoted female agency and reduce gender differences in demographic outcomes.
Basu's (1992) largely qualitative investigation compare woman agency among South and North
Indian migrants to Delhi slums finds that the previous enjoy greater mobility and self-determination
of appearance than their Northern counterparts. Jejeebhoy's (2001) quantitative swot up concludes
that Tamil women in the South have more mobility and right than women in Uttar Pradesh.
Southern states also performed improved in terms of the rustic person expansion Index - a weighted
common of expenditures, literacy, formal education, life anticipation, and infant mortality rate developed by the Planning Commission (GOI 2002).
This paper examines variations in gender differences in the probability of completing school
education, and employs econometric tests to look at whether such differences are really greater in
Gwalior.
Objectives



To find out the gender difference in completing school education in India.
To find out the factors affecting gender difference in completing school education in
India.
To provide direction for new research.
Hypothesis
Ho1: There is no gender difference in completing school education in India.
Research Methodology
Study: The study is descriptive in nature and survey method was used to collect data from the
respondents. All the students of Gwalior in the age group of 20 to 30 constituted the population for
the study. A sample size of 100 respondents was selected in such a way that the effects of
demographic variables do not affect the results of the study. As far as possible a representative
sample was taken on the basis of all the demographic variables of interest. Individual respondents
(students) were considered as sample elements. Non- probability purposive sampling technique was
used to identify respondents for the study.
Tools for Data Collection: The questionnaire for soliciting responses from the respondents on
“Gender disparities in completing school education in India”. The data was collected on a scale of 1
to 5. Whew 1 stands for minimum agreement with the statement and 5 stands for maximum
agreement with the statement.
Tools Used for Data Analysis:
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1. Reliability of the questionnaire was checked through SPSS soft using Cronbach’s alpha
technique.
2. Validity of the questionnaire was established through face validity method.
3. Factor Analysis technique was used to find out underlying factors of disparities in
completing school education in India.
Reliability: The Cranach’s Alpha reliability coefficient of all the measures was calculated separately
using SPSS software. Reliability was computed to check whether the items selected to evaluate each
variable have enough internal consistency. Each item was tested for its suitability in the measure
through evaluation of reliability after removing each item. If reliability of the measure increases after
removing any of the items; such items were removed from the measure. Such item/s may be
retained in the measure only if it is conceptually essential to retain.
T Test: T Test was used to find gender difference in disparities in completing school education in
India.
Results and Discussion
Reliability Measure
Cronbach’s Alpha method has been applied to calculate reliability of all items in the questionnaire.
Reliability of the data is calculated by using SPSS software and measures the following given value:
Reliability Statistics
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on Standardized Items
.700
.701
N of Items
10
It is considered that the reliability value more than 0.7 is good. In the above table, the reliability is
.700. The reliability found to be good & acceptable for applying the test.
T-Test
One-Sample Statistics
N
Mean
Std. Deviation
Std. Error Mean
VAR00001
100
34.2800
5.47922
.54792
VAR00002
100
1.4500
.50000
.05000
One-Sample Test
Test Value = 0
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VAR00001
VAR00002
t
df
Sig. (2-tailed)
Mean
Difference
62.564
29.000
99
99
.000
.000
34.28000
1.45000
95% Confidence Interval of the
Difference
Lower
Upper
33.1928
35.3672
1.3508
1.5492
The above table of t-test shows that our sample size was 100 in which 55 were male (VAR1) and 45
were female (VAR2). The value of t test is significant at .000 level. This shows that the null
hypothesis is rejected. Hence, there is a difference among male and female on disparity in
completing school education in India.
Factor Analysis
Factor Analysis technique was used to find out underlying factors of disparities in completing
school education in India.
KMO and Bartlett's Test
Further KMO Bartlett’s test was used for sample adequacy. The results are discussed in table below.
The Kaiser Meyer Olkin Measure of Sampling Adequacy value was 0.711 indicating that the sample
was adequate to consider the data as normally distributed. The Bartlett’s Test of Sphericity tests the
null hypothesis that the item-to-item correlation matrix was an identity matrix. The hypothesis was
tested through Chi-Square test; the value of Chi-square was found to be 146.021, which is significant
at 0% level of significance. Therefore, null hypothesis is rejected; indicating that the item-to-item
correlation matrix is not an identity matrix and is therefore suitable for factor analysis.
Principle component factor analysis with Varimax rotation and Kaiser Normalization was applied.
The factor analysis resulted in 4 factors for Investor Psychology. The details about factors, the factor
name, Eigen value, Variables converged; Loadings, Variance% and cumulative% are shown follows
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
df
Sig.
.711
146.021
45
.000
Factor analysis: Factor Description
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Factor name
Total Eigen % of
Items converged
Factors
values
variance
loads
Individual
2.807
28.071
How far you are aware that there is a difference .747
Gender
between Student Classroom Ratio between Male
Performance
and Female.
How far you are aware that there is a difference .696
between Promotion Rates of Male and Female
How far you are aware that there is a difference .684
between Mean Achievement Score of Male and
Female.
How far you are aware that there is a difference .564
between Educational Input Output Ratio of Male
and Female.
Enrollment and 1.212
12.118
How far you are aware that there is a difference .785
Faculty Ratio
between Gross enrollment ratio and Net
Enrollment Ratio.
How far you are aware that there is a difference .700
between Intake rates between Male and Female.
How far you are aware that there is a difference .580
between Pupil Teacher Ratio of Male and Female.
Repetition Rate 1.115
11.146
How far you are aware that there is a difference .856
between Repetition Rates by grades of Male and
Female.
Class Presence 1.074
10.742
How far you are aware that there is a difference -.723
and Equity
between Attendance rates of Male and Female.
How far you are aware that there is a difference .571
between Index of Gender Equity (IGE) of Male
and Female.
Description of factors
1. Enrollment and Faculty Ratio: This factor has included the second most important
determinant of research for total variance 12.118%. The major factors includes How far you
are aware that there is a difference between Gross enrollment ratio and Net Enrollment Ratio
(.785), How far you are aware that there is a difference between Intake rates between Male
and Female (.700), How far you are aware that there is a difference between Pupil Teacher
Ratio of Male and Female (.580).
2. Repetition Rate: This factor has included the third most important determinant of research
total variance 11.146%. The major factors include How far you are aware that there is a
difference between Repetition Rates by grades of Male and Female (.856).
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3. Class Presence and Equity: This factor has included important determinant of research with
total variance 10.742%. The major factors includes How far you are aware that there is a
difference between Attendance rates of Male and Female (-.723), How far you are aware that
there is a difference between Index of Gender Equity (IGE) of Male and Female (.571).
Conclusion
While gender disparity has always been a case in Afro-Asian countries, empirical research has
shown that there may be considerable variation in the nature and extent of such disparities across
countries, and within regions of the same country.
In Indian context because of socio-cultural and economic heterogeneity such regional variation is to
be expected. The available research on demographic indicators have shown that gender disparities
are more accentuated in Northern states of India, like Rajasthan, Uttar Pradesh, Bihar and Madhya
Pradesh. This is also reflected in other spheres – for instance, in labour market (Mukhopadhyay and
Tendulkar, 2006) and health outcomes (Arokiasamy and Jalandhar Pradhan, 2006, Jejeebhoy, 2000,
2001; Vella and Oliveau, 2005).
It would seem logical that such regional patterns will be displayed with regard to gender disparities
in the sphere of education also. Our findings indicated that gender disparities are indeed present in
Gwalior region too. It is strongly indicated by this study that there is a gender differences in
completing school education in India.
Again the study resulted in four factors for gender disparities in completing school education in
India. These are Individual Gender Performance, Enrollment and Faculty Ratio, Repetition Rate and
Class Presence and Equity. The results are important in future research and economy policy
framework contest.
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Chapter 21
Interaction of Key Economic Variables and
Stock Market in India
Tripti Tripathi
ABSTRACT
This study investigates the nature of the casual relationship between the stock prices and key macro economic
variables representing financial sector of the economy for the year 1999-2012, using quarterly data of Bombay
Stock Exchange- BSE- 100. These variables are lending interest rates and industrial production growth rate.
Quarterly data have been collected from 37 companies consistently listed in BSE-100. Augmented Dickey
Fuller Test have been applied to make the data stationery. Bivariate correlation have been applied to test the
relationship between macro economic variables. Bivariate correlation have been applied to check the
relationship of individual macro economic factor of Indian economy to individual company. Granger casuality
have been applied to test the existence of relationship between two variables. Linear relationship was applied to
establish cause and effect relationship between selected macro economic variables as independent variable and
stock returns as dependent variables. The results of the study reveal that lending interest rate does not affect
stock market volatility and industrial production growth rate affects stock market volatility.
Key words: Stock market
Introduction
The movement of stock indices is highly sensitive to the changes in the fundamentals of the
economy and to the changes in the expectations about the future prospects. Expectations are
influenced by macro fundamentals which may be formed either rationally or adoptively on
economic fundamentals.
Indian capital market has undergone tremendous changes since 1991, when the government has
adopted liberalization and globalization more seriously then ever before. As a result there can be
little doubt on the growing importance of the stock market from the point of view of the aggregate
economy. It has been observed that Indian Capital has been valued as a major source of raising
resources for Indian corporate.
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The growth of output in any economy depends on the increase in the savings and investment to a
nations output of goods and services. The financial market helps in the financial diversion of rising
current income into savings/ investments. Indian financial markets have evolved significantly over
several hundred years and are undergoing changes and innovations to improve liquidity. The
capital market and the money market are both growing rapidly in there in the own way. The most
famous capital market of India, Bombay Stock Exchange is growing sharply.
During the last three decades there have been many studies on this relationship. However there is
an acute need to apply more linear techniques as stock price movements is better captured in these
methods. Also there are clearly identified direct beneficiaries of the knowledge. If academicians and
practitioners know the precise macro variables that influence the stock prices and also the nature of
relationship then understanding and predicting stock market behavior would be much simpler with
the help of these economic variables. Using this knowledge the policy makers may try to influence
the stock market or the investors, managers may make appropriate investment or managerial
decision.
Review of Literature
Varying evidence of casual links of stock returns and macro variables have been found in the
literature using various asset pricing specifications. In the context of macro dynamics of stock
returns APT assumes that returns are generated by a number of macro economic factors. It allows
multiple risk factors to explain asset returns. An issue that is the subject of intense debate among
academics and financial professionals are the Macro Economic Factors and Its Impact on Capital
Market. An increasing amount of empirical evidence noticed by several researchers leads to the
conclusion that a range of financial and macroeconomic variables can predict stock market returns.
Several attempts have been made to identify or study the factors that affect asset prices. Some
researchers have also tried to determine the correlation between selected factors and asset prices.
The outcomes of the studies vary depending on the scope of the study, the assets and factors
examined. Following literature gives us an idea about studies on relationship between stock growth
and macro economic variables of different countries. All the studies have considered different
economic variables and used different econometric techniques to find the relationship between
macroeconomic variables and stock prices. As Irving Fisher (1930) noted, nominal interest rate is
decomposed into an expected real rate and an expected inflation component. Likewise Fama and
Schwert (1977) show that the USA common stock returns are negatively correlated to the
expected component of the inflation rate, and probably also to the unexpected component. Similarly
Sharma Kennedy (1977) and Sharma (1983) test the weak-form efficiency of the BSE. Both of these
studies with the former covering the 1963-1973 period and the later encompassing the 1973-1971
period, conclude that Indian stocks generally conformed to random-walk behaviour in that
successive period changes were independent. In the same way Firth (1979) for UK, Maysami (2004)
for Singapore, and Adam and Tweneboah (2008) for Ghana report a significant positive
relationship between inflation (CPI) and stock returns. Similarly Fama (1981) observed negative
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relations between real stock returns and inflation observed during the post-1953 period were the
consequence of proxy effects. Similarly Paddy (1992) contended that, inflation can be singled out to
affect stock market activity as they impinge directly on the state of corporate activity in the country.
Empirically, Atje and Jovanovic (1993) found strong evidence to support the view that stock market
development leads to economic growth. Likewise an important study in this field was done by
Mukherjee and Naka (1995) Vector error correction and co-integration techniques were used to
testify a model of seven equations.
A negative relationship between inflation and equity prices were found. Similarly an important
study for the Japanese economy was done by Manabu Asai and Tsunemasa Shiba (1995)
investigated using Toda and Yamamoto (1995)'s vector autoregressions (VAR) specification and
concluded that macroeconomic variables do Granger cause the stock market variable, while reverse
is not so clear and The lagged stock market variable affects its current value but its impact tend to
diminish in the long-run. Similarly Naka, Mukherjee and Tufte (1996) have analyzed that domestic
inflation and domestic output are the two most prominent factors influencing stock prices.
There have been several studies on this in Indian context Rao & Rajeswari (2000) try to explore the
role being played by a good number of macro economic variables in influencing the stock market
when reduced into a manageable number of economic factors. In the same way Udegbunam and
Eriki (2001) studied inflation rate and the exchange rate has considerable influence in the stock
market movement. An important study was done in the context of Asian countries by Wongbangpo
and Sharma (2002) suggested that, in the long-run, stock prices are positively related to growth in
output. In the short-run, stock prices are found to be functions of past and current values of
macroeconomic variables. Likewise Banerjee Arindam and Ali Mohammed Anwer(2006) examined
the relationship between financial development and economic growth and concluded that stock
markets act as an indicator of economic growth or not depends on the types of economy under
considerations. In the case of developed economies like the US we may derive a positive correlation
but when it boils down to developing nations like ours, it may be difficult to give any definitive
conclusions. Similarly Chen (2008) investigated suggests that among the macroeconomic variables
that are considered, yield curve spreads and inflation rates are the most useful predictors of
recessions in the U.S. stock market according to in-sample and out-of sample forecasting
performance. K. Malarvizhi, Dr. R. Thenmozhi, Dr. M. Jaya (2010) has focused amongst many
macroeconomic factors, the movement of GDP as it plays a crucial role. The cointegration and
Pairwise granger causality test surfaces the fact that there is a bidirectional causal relationship
between GDP and NIFTY,
i.e. changes in stock market will affect GDP and vice versa. An
important study in this field was done by Muhammad Akbar, Shahid Ali, Muhammad Faisal
Khan(2012) examined that the stock prices were positively related with money supply and short
term interest rates and negatively related with inflation and foreign exchange reserves.
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Objective
The main objective of the study was to find out the interrelationship between macro economic
factors and capital market and therefore the study investigates the impact of Lending interest rates
on capital market movements and also to know the impact of industrial production growth rate on
capital market movements.
Hypothesis
Ho1- There is no significant impact of lending interest rate on capital market movements.
Ho2- There is no significant impact of industrial production growth rate on capital market
movements.
Methodology
The research study is descriptive in nature. The study focused on finding out the impact of macro
economic variables on capital market. For the purpose of the study the selected macro economic
variables are lending interest rate, industrial production growth rate. For the purpose of statistical
analysis the companies which are consistently listed in BSE-100 for the period 1999-2012 has been
taken. The study is mainly based on the secondary data. The quarterly prices of the selected macro
economic variables and stocks of thirty seven companies consistently listed in BSE-100 has been
taken.
Time series analysis must be based on stationary data series for drawing useful inferences. Broadly
speaking a data series is said to be stationery if its mean and variance are constant over time and the
value of covariance between two time periods depends only on the distance or lag between two time
periods and not on the actual time at which the covariance is computed. The correlation between a
series and its lagged values are assumed to depend only on the length of the lag and not when the
series started. This property is known as stationary and any series obeying this is called stationary
time series.
A unit root test has been applied to test whether a series is stationery or not. Stationarity conditions
has been tested using Augmented Dickey Fuller test (ADF).
Augmented Dickey Fuller Test
Macro Economic Exogenous
Durbin
Stationarity
t
Probability
Akaike
Factor
Variable
Watson
Log I
Lending Interest
Intercept
-7.2826
0
2.0096
-2.517
Difference
Rate
Ind. Prod. Growth Trend &
II Difference
-6.97014
0
2.0523 4.6265
Rate
Intercept
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Schwarz
-2.44096
4.901568
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Bivariate Correlation was applied to test the relationship between the macro economic variables.
Bivariate correlation was applied to check the relationship of macro economic factor of Indian
economy to individual company.
Granger causality was applied to test the existence of relationship between the two variables.
Granger Causality Test between Macro Economic Factors Causing/ Not Causing Average stock
Returns
Hypothesis
Hypothesis1
Hypothesis 2
Hypothesis1
Hypothesis2
Direction of Causality
Log
DStock does not Granger
1
cause Dlinterest
Dlinterest does not Granger
cause DStock
DStock does not Granger
2
cause DDIndprod
DDIndprod does not Granger
cause DStock
F
P
Remark
14.201
0.0005
Rejected
0.39808
0.5311
Accepted
1.9726
0.152
Accepted
5.1821
0.01
Rejected
Conclusion
Interest has not
caused in Stocks
Ind prod. has
caused Stocks
The results presented in the above table shows that only Industrial Production Growth Rate has
caused in stocks i.e responsible for stock volatility while Lending interest rate has not caused stock.
Linear regression was applied to establish the cause and effect relationship between selected macro
economic variables of the economy Lending interest rate and Industrial Production Growth Rate as
independent variables and stock returns as dependent variables.
Various descriptive statistics are calculated of the variables under study in order to describe the
basic characteristics of these variables. In the table given below various statistics are calculated like
mean, median, maximum value, minimum value and standard deviation.
Variables
Lending Interest
rates of Indian
Economy (%)
Industrial
Production rates
of Indian
Economy (%)
Mean
Maximum
Minimum
S.D
11.64
14
8
1.288
1.69
5
-4
3.343
Lending interest rate mean value is 11.64 with low of 8 and high of 14 and having a standard
deviation of 3.343. Industrial production growth rate mean value is 1.69 with high of 5 and low of -4.
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In applying correlation we recognize three different possibilities. The two set of variables may show
a positive correlation or negative correlation and finally no correlation.
Interest
Lending Interest Rate
Ind. Prod. Growth Rate
1
-0.094
0.506
Ind. Prod. Growth Rate
-0.094
0.506
1
The bivariate correlation reported between Lending interest rate and Industrial Production Growth
Rate of Indian economy is statistically not significant as the value of pearson coefficient correlation is
-0.094 which is significant at 0.506 This suggest that there is no association existed between Lending
interest rate and Industrial Production Growth Rate
The regression analysis indicated that Industrial Production Growth Rate is the superior indicator of
stock market volatility. As out of thirty seven consistently listed companies of BSE-100, twenty six
companies stock prices are affected by the changes in the Industrial Production Growth Rate of
Indian economy (ABB Ltd., ACC Ltd., Ambuja Cements Ltd., Ashok Leyland Ltd., Bank of Baroda
Ltd., Bank of India Ltd., Bharat Petrolium Corporation Ltd., Bharat Heavy Electricals Ltd., Cummins
India Ltd., Dr. Reddy's Laboratories Ltd., Glaxosmithkline Ltd., Grasim Industries Ltd., Hindustan
Petrolium Corporation Ltd., IDBI Bank Ltd., Infosys Technologies Ltd., Mahindra & Mahindra Ltd.,
Ranbaxy Laboratories Ltd., Reliance Industries Ltd., Reliance Infrastructure Ltd., Steel Authority of
India Ltd., Siemens Ltd., State Bank of India Ltd., Tata Chemicals Ltd., Tata Motors Ltd., Tata Power
Co. Ltd., Tata Steel Co. Ltd.).
Further regression analysis reported for inflation that out of thirty seven consistently listed
companies of BSE-100, fifteen companies stock prices are affected by the changes in the inflation
rate of Indian economy ( ACC ltd., Bank of Baroda Ltd., Bank of India Ltd., Bharat Petrolium
Corporation Ltd., Bharat Heavy Electricals Ltd., Glaxosmithkline Ltd., Grasim Industries Ltd., IDBI
Bank Ltd., Mahindra & Mahindra Ltd., Reliance Industries Ltd., Reliance Infrastructure Ltd., Steel
Authority of India Ltd., Tata Chemicals Ltd., Tata Power Co. Ltd., Tata Steel Co. Ltd.).
Conclusion
The study examines the relationship between Indian stock market and a set of macro economic
variables during the period of January 1999- to august 2012. The time series data set employed in
this study comprises the quarterly observations of the BSE-100, lending interest rates and industrial
production growth rate.
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Although there is a moderate correlation between the two and descriptive statistics indicates a
much higher expansion in the stock market variable than real economic variables. The study used
Augmented Dickey Fuller Test to make the data stationary. The study used correlation test to
determine the kind of relationship between the selected macro economic variables of the Indian
economy and companies consistently listed in BSE-100. The study also used Granger casuality test to
determine the causal effect relationship between companies listed in BSE-100 and selected macro
economic factors of the economy. Granger casuality test carried out in order to assess whether there
is potential predictability power of one indicator over the other. Statistical inferences are drawn
from the data by means of significance test and unidirectional causality is seen between them.
Industrial Production Growth Rate do granger cause stock returns. While industrial Production
Growth Rate does not granger cause stock returns. According to the regression test the macro
economic factors that affects the most stock returns volatility is Industrial Production Growth Rate
while Lending interest rate does affect but with a low frequency.
References
1. Adam AM, Tweneboah (2008). Macroeconomic Factors & Stock Market Movement:
Evidences from Ghana, MPRA Paper112556, University library of Munich, Germany.
2. Atje R, Javanovic (1993). Stock Market And development, Euro. Econ. Rev., 37: 632-640.
3. Akbar M, Kundi O (2012). Monetary policy variables and stock prices in Pakistan.
Interdiscip. J. Contemp. Res Bus., 1(6): 84-101.
4. Banerjee Arindam , Ali Mohammed Anwer (2006) “Do Stock market reflect Economic
Growth” Icfai University Press, pp. 15-24.
5. Chen,N.F, Roll, R. and Ross, S.1986. Economic forces and the stock market. Journal of
Business 59 (3): 383-403.
6. Fama, E. F. (1981), „Stock Returns, Real Activity, Inflation, and Money‟, The American
Economic Review, Vol. 71, No. 4, pp. 545-565
[Online] Available
at:
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7. Fisher, I. (1930), The Theory
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Available
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http://www.econlib.org/library/YPDBooks/Fisher/fshToI.html [Accessed 28 June
8. 2009].
9. Firth, M. (1979), „The Relationship Between Stock Market Returns and Rates of Inflation‟,
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10. Malarvizhi, Dr. R. Thenmozhi, Dr. M. Jaya (2010) Impact of gross domestic product on
Indian stock market- An empirical study IJEMR– January 2012-Vol 2 Issue 1 - Online - ISSN
2249 – 2585 - Print - ISSN 2249 – 8672
11. Manabu Asai and Tsunemasa Shiba (1995) Financial engineering and financial markets
2:259-267,1995 kluwer academic publishers, printed in Netherland
12. Mukherjee, T.K and Naka, A 1995. Dynamic relations between macroeconomic variables and
the Japanese stock market: an application of the vector error correction model. The Journal of
Financial Research 18(2): 223-237.
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13. Rao, K. C. and A. Rajeswari, (2000), Macro Economic Factors and Stock Prices in India: A
Study, Paper presented in the Capital Markets Conference 2000,Mumbai
14. Sharma, J. L. and R. E. Kennedy (1977), A Comparative Analysis of Stock Price Behavior on
the Bombay, London and New York Stock Exchanges, Journal of Financial and Quantitative
Analysis, 17, 391-413.
15. Wongbangpo P, Subhash CS (2002). Stock Market and Macroeconomic Fundamental
Dynamic Interactions: ASEAN-5 Countries, J. Asian Econ., 13: 27-51
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Chapter 22
Organizational Trust, Quality of Work Life
and Job Satisfaction: A Study on Banks
Shikha Gurjar, Dr. Priyadarshini Nagori and Prati Raizada
ABSTRACT
The study analyse the impact of Organizational Trust and Quality of work life on Job satisfaction.
Organizational trust provides the basis for employee motivation, effective team-building, open communication,
and employee retention. QWL is a multi- dimensional term which provides a good work life balance and gives
a qualitative boost to total work environment of any organisation. Job satisfaction is defined as the extent to
which individuals are satisfied with their jobs or how they feel about different aspects of their jobs. The
methodology used in the study was survey through questionnaires, which were filled by the bank employees.
The result of the study shows the significant impact of Organizational Trust and Quality of work life on Job
satisfaction.
Key Words: Organizational Trust, Quality of work life, Job satisfaction and Motivation.
Introduction
Organizational Trust
Trust is an essential source of social capital within social systems (Fukuyama, 1996) and, therefore, a
pivotal element of societal functioning. Viewing trust through the lens of social capital has produced
three main streams of analysis that have important implications for organizations. These three
streams examined how trust as a form of social capital was related to reducing transaction costs
within organizations, increasing spontaneous sociability among organizational members, and
facilitating appropriate forms of deference to organizational authorities.
Quality of Work Life
QWL is a multi dimensional term which provides a good work life balance and gives a qualitative
boost to total work environment of any organisation (Neerpal Rathi, 2010). The success of any
organization is dependent on how it attracts, develops, and retains its workforce. Further the
efficiency of any organisation depends on their work environment, working methodology and
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degree of employee satisfaction. The level of employee motivation is dependent on elements like job
security, reward system, job satisfaction, and satisfaction of social, physical and personal needs.
Job Satisfaction
The term 'Job Satisfaction’ refers to the favourableness with which employees view their work and
the term 'Job Dissatisfaction' to the unfavourableness with which they take their work.
Literature Review
Organizational Trust
Vineburgh, James Hollander (2010) found that structural empowerment exhibited a direct and
positive association with perceptions of interactional justice which subsequently had a direct,
positive relationship with perceptions of respect and levels of organizational trust. Respect
demonstrated a direct effect on levels of organizational trust, which then had direct effects on levels
of job satisfaction.
Luhmann and colleagues (1979) defined organizational trust as the appearance that everything is
properly in order. This type of trust is necessary for the effective functioning of such things as
monetary exchange and political power (Lewis & Weigert, 1984). According to Lewis and Weigert,
the absence of the public's trust and confidence in the reliability, effectiveness, and legitimacy of the
cultural symbols such as money and laws would lead to the collapse of modem social institutions.
Therefore, one could expect that individuals would lose trust in individuals with a corresponding
erosion of trust in institutions.
Tschannen-Moran and Hoy (2000) reviewed articles on trust which were written over four decades
before the turn of the millennium. They concluded that trust was a difficult concept to define, as it
was complex and multifaceted and had different bases and degrees, depending on the context of the
trust relationship. Büssing supports this view by stating that trust is ’not at all a straightforward and
clearly defined concept‘.
Hannif Zeenobiyah (2005) investigated three qualities of work life elements which were job content,
working hours & work-life balance, and managerial/supervisory style and strategies and found that
public sector call centre emerges as being inferior in terms of all three measures of QWL. Two factors
were found, first were the public sector status depends up on better working conditions, and second
were that employee-focussed managerial styles are incompatible with efficient and productive call
centre operations.
Tabassuma Ayesha et al (2011) researched and their study reveals that there is a significant
difference exists between male and female employees QWL and it provides valuable implications for
the banks that are growing interest in maintaining gender equity, they also found significant
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differences in overall QWL and the determinants of QWL i.e. compensation, flexibility in work
schedule and job assignment, attention to job design, and employee relations. Thus the private
commercial banks should try to eliminate these differences to improve the overall QWL among all
the employees.
Aketch Josiah Roman (2012) investigated quality of work life on job satisfaction and demonstrated
factors in the strong relationship between employee’s well-being at work and their performance in
the organizations. The result showed QWL generates general attitude towards a job. The importance
of considering QWL, organization performance and motivation was demonstrated for developing
the strong relationship between employee’s well-being at work and performance in organizations.
Job Satisfaction
Sageer Alam et al (2012) researched that employee attitudes typically reflect the moral of the
company. In areas of customer service and sales, happy employees are extremely important because
they represent the company to the public. Thus, every organization should develop strategies that
strengthen the work environment and increase the employee morale and employee satisfaction to
enhance employee performance and productivity, which ultimately results in high profits, customer
satisfaction as well as customer retention.
Objectives
1. To design, develop and standardize a measure to evaluate the Organizational Trust, Quality
of Work Life and Job Satisfaction
2. To analyse the impact of Organizational Trust and Quality of work life on Job satisfaction.
3. To open new vistas for further research.
Hypothesis
Ho: There is no impact of organizational trust and quality of work life on job satisfaction.
Research Methodology
The study was causal in nature and methodology used in the study was survey through
questionnaires, which were filled by the employees of the banks. The bank employees were
considered as the sample. Sample element in research was individual employee from banks and
Sample Size was 200 respondents. Non-Probability purposive sampling technique was used for the
study. Data was collected through Self Designed/standardized Questionnaire on 7 points Likert
type scale where 1 was indicating minimum agreement and 7 will indicate maximum agreement.
Reliability and Regression test were applied for data analysis.
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Reliability
Reliability methods have been applied to calculate the reliability of all items in the questionnaire.
The entire items in the questionnaire were checked by the help of reliability analysis in which we
used Cronbach's alpha by using SPSS software and the reliability test results are as:
Variable
Organizational Trust
Quality of Work life
Job Satisfaction
No. of Items
7
12
15
Cronbach's alpha
.647
.741
.828
It is considered that the reliability value more than 0.7 is good but in case of organizational trust
value is .647 which is slightly lower than 0.7. It has been seen from Item-Total Statistics that the
dropping of any item do not increases the reliability very significantly, so it was decided not to drop
any question from the measure and it was used for further analysis.
Regression
The regression test was applied between organizational trust, quality of work life (independent
variable) and Job satisfaction (dependent variable)
Ho: There is no impact of organizational trust and quality of work life on job satisfaction.
Model Summary
Model
R
R Square
Adjusted R Square
1
.370a
.137
.128
1
1
ANOVA
Sum of Squares
df
Mean Square
1529.329
2
764.664
9661.691
197
49.044
11191.020
199
a. Predictors: (Constant), QWL, OT
b. Dependent Variable: JS
Model
Regression
Residual
Total
1
(Constant)
OT
QWL
Std. Error of the
Estimate
7.00315
Unstandardized
Coefficients
B
Std. Error
34.513
4.393
-.004
.132
.499
.098
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Coefficients
Standardized
Coefficients
Beta
.002
.371
F
15.591
t
Sig.
7.856
.033
5.090
.000
.974
.000
DurbinWatson
1.897
Sig.
.000a
Collinearity
Statistics
Tolerance
VIF
.826
.826
1.210
1.210
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Above tables explained the regression results, where adjusted R square value is 0.128 which means
independent variables explaining 12.8% variance on dependent variable. In Anova table F value is
15.591 which is significant at 0.000 level thus, our null hypothesis was rejected. So there is a
significant impact of independent variables on dependent variable.
Conclusion
The present study has attempted to examine the impact of Organisational trust and Quality of work
life on Job satisfaction. On the basis of above research, it is concluded that organizational trust is
based on certain communicative behaviours such as honesty and openness and is influenced by
three variables: competence, integrity, and rapport. Quality of work life is a process in which
organizations recognize their responsibility to develop job and working conditions that are excellent
for the employee and organization. An effective leader influences the followers in a desired manner
to achieve goals. Job satisfaction is one criterion for establishing the health of an organization,
rendering effective services largely depends on the human resource and job satisfaction experienced
by employees will affect the quality of service they render. The impact of other variables on
efficiency, such as infrastructures and internal relationships is also widely recognized. In the present
changing economic scenario, bank jobs have become more challenging and demanding. So this
study explains the importance of Organisational trust, Quality of work life and Job satisfaction.
References
1. Aarti chahal, Seema chahal, Bhawna Chowdhary, Jyoti chahal (2013), “ Job Satisfaction
Among Bank Employees: An Analysis Of The Contributing Variables Towards Job
Satisfaction” International Journal Of Scientific & Technology Research Volume 2, Issue 8, August
2013 Issn 2277-8616
2. Ayesha Tabassuma, Tasnuva Rahmanb and Kursia Jahanc a,b,cEastern University, Dhaka,
Bangladesh (2011), “Quality of Work Life Among Male and Female Employees of Private
Commercial Banks in Bangladesh” Int. Journal of Economics and Management 5(1): 266 – 282
(2011) ISSN 1823 - 836X
3. Behnam Talebi 1, Mehdi PakdelBonab2, Ghader Zemestani2 and Nasrin Aghdami1 (2012)
“Investigating the Relationship between the Employee’s Quality of Work Life (QWL) and
Their Effectiveness in Banking” European Journal of Experimental Biology, 2012, 2 (5):1839-1842
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OYCF 2000-2001
5. Casio, W.F,(1998), Managing human resources: productivity, quality of work life, profits,
Irwin: McGraw-Hill, Boston, MA., 1998
6. Chan, C.H. and W.O. Einstein, 1990. Quality of Work Life (QWL): What can unions do? SAM
Advanced Management J., 55: 17-22.
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7. Chhabra, T N and P K Taneja (2007), Banking Theory and Practice, Dhanpat Rai & Sons
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8. Cunningham, J.B. and T. Eberle, (1990). A guied to job enrichment and redesign. Personnel
67:56-61.
9. David Card, Alexandre Mas Enrico Moretti and Emmanuel Saez (2010), “Inequality At
Work: The Effect Of Peer Salaries On Job Satisfaction Interdisciplinary”, Journal Of
Contemporary Research In Business Copy VOL 4, NO 11
10. David Card, Alexandre Mas, Emmanuel Saez and Enrico Moretti (2010)
http://www.nber.org/papers/w16396 NBER Working Paper No. 16396, September 2010
JEL No. J0
11. Dr. Meenakshi Gupta and Ms. Parul Sharma (2011), “Factor Credentials Boosting Quality Of
Work Life Of Bsnl Employees In Jammu Region” APJRBM Volume 2, Issue 1 (JANUARY 2011)
ISSN 2229-4104 from Sri Krishna International Research & Educational Consortium
http://www.skirec.com
12. E Glasier, (1976), ―State of the Art, Questions about Quality of Work Life‖, Personnel
13. Fitzgerald, Cortina, L. M., L.F., & Drasgow, F. (2002). Contextualizing Latina experiences of
sexual harassment: Preliminary tests of a structural model. Basic and Applied Social
Psychology, 24, 295-311. Cortina, L. M., Swan, S., Fitzgerald,
14. Fukuyama, F. (1995). Trust: Social Virtues and the Creation of Prosperity. NY: Free Press
15. G Nasl Saraji, H Dargahi (2006), Study of Quality of Work Life (QWL), Dept of Health
CareManagement, School of Allied Medicine, Tehran University of Medical Sciences, Iran.
Iranian J Publ Health, Vol. 35, No. 4, 2006, pp.8-14
16. Gamze Y. TARCAN et al (2002), “Public Hospitals: Public Servants Versus Private
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Personnel Management” Vol 27, pp 321–338.
18. Guna Seelan Rethinam, Maimunah Ismail (2008) : Constructs of Quality of Work Life: A
Perspective of Information and Technology Professionals, University Putra Malaysia,
Malaysia.
19. Hannif Zeenobiyah (2005) “Call Centres and The Quality Of Work Life: A Public/Private
Sector Comparison” [email protected]
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“Effects of Quality of Work Life on Job Performance: Theoretical Perspectives and Literature
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22.
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Prajnan, Vol. XXXVII, No. 3, 2008-09 © 2008-09, NIBM, Pune
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Research Journal , August 2010 ISSN- 0975-3486 RNI: RAJBIL 2009/30097 VOL I ISSUE 11
Laschinger, H. K., Finegan, J., Shamian, J., & Almost, J. Testing Karasek’s (2001) demandscontrol model in restructured healthcare settings: Effects of job strain on staff nurses’ quality
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Locke, E. (1976). The nature and causes of job satisfaction. In M. D. Dunnette (Ed.).
Handbook of industrial and organizational psychology (1297–1349). Chicago: Rand McNally.
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Chapter 23
Behavioral Traps in Investing
Kavita Indapurkar
ABSTRACT
It is universal for humans to sway from excessive optimism to needless pessimism and the booms and busts in
the financial markets is partly linked to investors’ psychology. In one of his speech to the Confederation of
Indian Industry, the then Prime Minister and Economist Dr. Manmohan Singh had commented that “the
mood in India is unduly pessimistic”. He also urged the Indian business leaders to “avoid getting swamped by
a mood negativism”. One of the most eminent economists of all times Prof. J. M. Keynes believed that human
beings often take decisions based on their gut feel rather than making calm calculations. In his all time classic,
The General Theory of Employment, Interest and Money, Prof. J. M. Keynes asserted that “our decisions to do
something positive can only be taken as the result of animal spirits that is a spontaneous urge to action rather
than inaction, and not as an outcome of a weighted average of quantitative probabilities”. In this way to
understand the investors there is a need to go beyond the economic arguments. The present paper is an effort in
this direction and attempts to give an account of psyche of the investors and the psychological traps that lead
them into these mood swings of excessive optimism to needless pessimism.
Key words: Invest psychology, investor mood swings, mood negativism
Introduction
“Animal spirits” was the expression used by Keynes (1936) to describe the human emotions that he
saw as driver of consumer confidence necessary to motivate action. The present paper attempts to
bring about the psychological traps in which investors are trapped while making financial/
investment decisions. In general, psychological or behavioural traps are those that lead the people in
the wrong direction with their lives. It is not astonishing therefore that these influence their financial
decisions as well.
Depending upon what stage an asset is in, there are several psychological drivers that create
delusion and lead the investors into taking wrong decisions almost every time.
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Review of literature
In his paper titled “A psychological Perspective of Financial Panics” Anant Bracha and Elke U.
Weber, the writers have asserted that in order to understand financial crises and panic events there
is a need to go beyond classic economic arguments. The paper presents that the switching from
confidence to panic is shift of investor’s sentiments from optimism to pessimism. The researchers
suggest that policymakers can play a role at the time of panics by providing compelling positive
narratives about the market that may guide the investors and save them from gloom and doom.
In their paper titled “Investor Psychology and Security Market Under and Over Reactions” by Kent
Daniel, David Hirshleifer and Avanidhar Subramanyam the researchers presented a model on
investor overconfidence and on changes in confidence resulting from biased self attribution of
investment outcomes. It asserts that investors overreact to private information signals and underreact to public information signals. Short run and long run positive and negative autocorrelation
were being used to reach to these conclusions.
In his paper titled “Market bubble and Investor Psychology”, Stephen Utkus outlines several
techniques to help moderate and manage emotions that may lead to a bubble. The paper outlines a
model of market bubbles from a behavioural science perspectives, highliting their psychological
origins. The main elements of the model include initial errors in forecasting the future based on the
representativeness heuristic, the emergence of rosy forecasts, the amplification of skewed positive
forecasts and resetting of those forecasts to an excessively cautious level in the subsequent market
crash.
Martin Sewell in his research article titled “Psychology of Successful Investing” presents the
endowment effect that explains the phenomenon in which people value a good or service more
when once their property right to it is established. The loss aversion and risk aversion are both the
consequences of status quo bias effect.
In their paper titled “Behavioural Traps and Innovation” by Alexander Borch and Nicholai
Anderson assert that taking cognitive biases into account can help investors improve the
performance of their investments and may be quite useful in improving the returns on investments
in innovation. However, the researchers also assert that the individuals are not rational when they
make choices to invest and as innovation climbs corporate agendas, the understanding of how it
works and how it can be managed is struggling to keep pace.
Human Emotions in the market
Risk is inherent in any investment although the amount of risk may vary and it comes handy to say,
“More the risk more are the returns less the risk lesser are the returns and no risk there are no
returns”. Similarly, how calculative a human being may be, emotions are inherent in his decision
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making and these emotions sometimes lead the investors to be over zealous and their delusional
thinking leads to a market bubble.
Stages of Asset Bubble
Jean Paul Rodrigue in 2008 presented a model depicting various stages or phases of an asset bubble.
He suggested that in the earlier stage the asset is just born and only a very few are aware about its
existence and still fewer know its potential, money is put as a smart bet. He called it as the stealth
phase. For example the early adopters of software stocks bought its shares only for a few hundreds
that run in thousands today. Overtime, the potential of the assets is realized by the institutional
investors (including pension funds, mutual funds, hedge funds etc.) and those with a lot of money
happen to be aware. Jean Paul Rodrigue called this as awareness phase. The awareness phase fades
when the asset starts getting media attention. This puts in the asset into mania phase as Jean Paul
Rodrigue calls it. The media hype leads all toms, dicks and harrys wanting to join the rally and with
these enthused buyers the price of the asset goes up. At the peak of this phase, the investors
continue to invest under the delusion that the price of the asset will keep on rising forever. This
leads to the next phase that is the bubble phase. There is a slow decline and with this begins the
initial sell off and profit booking. The sell off however, speeds up and converts into a feeling of
uncertainty and fear leading to a further fall in price. And panic selling sets in.
Source: Jean Paul Rodrigue model of stages of asset bubble (2008)
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Traps in investing
When it comes to handling money or investment human beings are not found to be rational and
logical most of the times. There are certain classical forms of dysfunctional psychology that lead to
abnormal investment decisions. Dysfunctional psychology characterizes the behavior deflects from
the normal behavior. This at times influences the behavior of an individual as an investor as well
and lead him into making irrational financial decisions.
The Anchoring Trap
Sometimes human mind considers only that to be correct whatever he thinks originally or finds first.
This creates an anchor against which the human brain compares whatever comes his way later. The
person under this trap over-relies and is over confident about the stock that he buys and even after
certain conditions or suggestions prevail against this, the investor is under the perception and all
will end well. This generally traps those who are less flexible. For example the biotechnology based
company namely Biocon was once bought for Rs. 457 about 10 years from now and an over
confident investor never booked his profits and stands at almost the same price even today.
The sunk cost trap
The investors under this trap try to protect their previous choices/ investment decisions
psychologically. The person is not ready to accept that he made a wrong choice or took a wrong
decision. A person in such a trap the clungs with his investment and decides to leave only when
they at-least break even! For example,
The Confirmation Trap
This trap is associated with the other two discussed earlier. A person in trap tries to confirm about
the correctness of his decisions (often the wrong ones) from those who had either suggested these or
are in the same trap and thus tries to comfort himself.
The trap of turning a blind eye
A person under this trap turns a blind eye towards the prevailing market realities and hides from
confronting the losses. He keeps on postponing the decisions for some unknown time.
The relativity trap
A person must understand that everybody has a different temperament, socio-economic and
psychological set-up. And accordingly, the investment and returns required are (rather should be)
planned. For example, the investment made by a nervy and modestly earning person with a few
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family liabilities would be and should be different from the one who has a lot of money with limited
or no liabilities and is also risk friendly. A person in the relativity trap fails to apprehend this and
should decide to invest for one’s own self
The superiority trap
A person/investor under this trap thinks that they have better knowledge than anybody else and
they are the experts in this area. This generally comes from their level and area in which they are
educated. For example a person/investor with an MBA degree in Finance or professors in finance
may be too good and brilliant in their calculations but these may eventually lead them into the blind
eye trap or the anchoring trap or even the confirmation.
Discussion and Conclusion
Behavioural biases are common in many routine decisions including the financial ones. Sir Issac
Newton has once said, “I can calculate the motion of heavenly bodies but not the madness of the
people”. In spite of the fact that so much has been written about how to avoid losses in financial
markets human psyche is impossible to assess and there are a few typical traps in which people
generally fall again and again. This is because of the more widespread existence of self delusion,
faulty perceptions, greed, stress, temptation, anxiety etc. In the desperation of avoiding realization of
losses one falls in to one or more mind traps and earn more than expected losses. At times in the
heat of the moment or when subject to pressure or excitement, a person falls into one or more of
these mind traps. Every time the reasons may be different but the traps that he falls into are the
same. Well said in Indian philosophy, Kaam, Moh, Mad are the three demons that lead you into
trouble in the long run. The bottom line is that one has to be open and not closed in framing their
opinions and beliefs and let yourself grow with every new idea and thought. One may avoid falling
into one of these traps by keeping oneself open and abreast with the present conditions and
situations.
References
1. Akerlof, George A., and Robert J. Shiller. 2009. Animal Spirits: How Human Psychology Drives
the Economy and Why it Matters for Global Capital. Princeton, NJ: Princeton University Press.
2. Alexander Borch and Nicholai Anderson : Behavioral Traps and Innovation Deloitte Review,
Issue 15 2014 Pg 135-145
3. Anant Bracha and Elke U. Weber: A psychological Perspective of Financial Panics” Anant
Bracha and Elke U. Weber, Discussion Papers, Federal Reserve Bank of Boston NO. 12-7
September 2012
4. Barber, Brad M. and Terrance Odean. 2001. “The Internet and the Investor.” Journal of
Economic Perspectives 15(1):41–54.
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5. Bernanke, Ben, Mark Gertler, and Simon Gilchrist. 1999. “The Financial Accelerator in a
Quantitative Business Cycle Framework” In Handbook of Macroeconomics, Volume 1, ed. J.B.
6. Daniel Kahneman, Paul Slovic and Amos Tversky, eds.Cambridge University Press,
Cambridge, UK. 1982. 32-47.Kindleberger, Charles P. and Robert Aliber. 2005. Journal of
Financial Economics 49(3):307–343.
7. Kahneman, Daniel and Amos Tversky. 1972. ‘Subjective probability: A judgment of
representativeness’. Judgment under uncertainty: Heuristics and biases,
8. Kent Daniel, David Hirshleifer and Avanidhar Subramanyam 1998 Investor Psychology and
Security Market Under and Over Reactions, Journal of Finance Vol. LIII No. 6 December
1998 pg. 1839-1885
9. Martin Sewell: Psychology of Successful Investing, University of Cambridge February 2011
10. Mottola, Gary R. and Stephen P. Utkus. 2009. Group decision-making: Implications for
investment
committees.
Vanguard
Investment
Counselling
and
Research.
institutional.vanguard.com
11. Shiv, Baba, George Loewenstein, Antoine Bechara,Hanna Damasio and Antonio R. Damasio.
2005.‘Investment behaviour and the negative side of emotion’. Psychological Science.
16:435-439.
12. Smith, Vernon L., Gerry L. Suchanek and Arlington W.Williams. 1988. ‘Bubbles, Crashes and
Endogenous Expectations in Experimental Spot Asset Markets’.Econometrica. 56(5). 1119-51.
13. Stephen Utkus : Market bubble and Investor Psychology Vanguard Research February 2011
14. Taylor and M. Woodford, Chapter 21. Amsterdam: Elsevier Science B.V.
15. The American Economic Review 79(1):14–31.
16. The Economics of Finance, Volume 1, ed. G.M. Constantinides, M. Harris and R. Stulz, 1053–
1128.Amsterdam: Elsevier Science B.V.
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Chapter 24
Talent Retention: A Major Challenge in
Modern Corporate Culture
MANISHA RAJ
ABSTRACT
Modern world economy has seen the emergence of business relations between the developed and emerging
economies. Migration of educated people towards better job opportunities has become most prevalent in the
recent era. But if the emerging economies want to catch pace with the already developed western economies
then retaining the qualified labor force is the need of the hour. Further the efficient use of human resource
requires maintenance of basic corporate ethos. Sufficient growth opportunities, basic infrastructure, and
smooth working environment with appropriate delegation of authority is a must.
This paper will focus on the basic problems of talent retention especially from the emerging economy’s point of
view. Obviously a company cannot hold onto all your best people, but it can certainly minimize the loss by
retaining the maximum out of it. So the basic objective of the paper will be to do conceptual analysis of the
problems faced by a company in order to retain its cream employees and later diversify its policies to upgrade
its existent employees through adequate training opportunities.
Key Words: Talent Retention
Introduction
India being one of the most promising countries of the world is reeling under the pressure of
nurturing its demographic dividend and utilizing the same to upgrade is human resource. Our
country is blessed with many natural resources. But all these resources cannot help our country
unless they are tapped, handled and used in a planned way. This can be done only by the people.
Man can develop the resources only when he is wise, healthy, educated and properly trained. Thus,
the real resources of our country are its people. They are our human resources. Further there is a
general acceptance of the fact that society is unable to get the right people at the right time for the
right tasks. In addition to facing severe resource constraints, society also work in different and
difficult markets than do traditional businesses focused on profit alone. HR management, then,
emerges as a key challenge to scale up, growth and sustainability. Recent changes by the
government and the ministry of human resource development has faced daunting challenges in
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retention talent and further upgrading it. Efforts like formation of Knowledge Commission etc. have
been very impressive in framing quality policies for the development of working age people.
New skill formation is a herculean task for an emerging economy like India so retaining the
available talent base should be a primary objective for the country. Retention of talent requires right
kind of training, internal promotions, delegation of authority, better work environment etc.
Constrained economic conditions further highlight the need for organizations to keep their best
people as companies strive to control costs and increase productivity. Talent management strategies
address this dual agenda directly. For example, a Taleo Research global survey found 70 percent of
respondents see an increased need to retain top performers by driving focus on performance
management and career planning in a low-growth economy. Because low talent retention produces
a substantial drain on corporate resources, leaders need to know which practices work and what
they should focus on to retain and motivate their workforce. For instance, a talent management
strategy that allows employees to build a network, seek and find mentors, and help them grow and
develop while feeling more connected and engaged is one means of retention talent. There are many
approaches that have been explored as levers to increase retention, including compensation
packages and rewards, benefits, telecommuting options, and work/life balance initiatives. Each may
have a place in a company’s portfolio of retention strategies.
STRATEGIES OF TALENT RETENTION
Despite the shifted attention to human capital and talent management by their CEOs, many
organizations have already begun to experience the adverse effects of this talent gap. Inability to fill
these positions has led to:





31% Decreased product or service delivery quality
29% Difficulty innovating effectively
27% Cancelled or delayed key strategic initiatives
25% Inability to achieve growth forecasts
20% Inability to pursue a market opportunity
Three critical project management skill sets needed for successful projects are technical project
management skills, leadership skills, and strategic and business management skills. Two in three
organizations (66 percent) found the greatest difficulty in finding resources with adequate technical
project management skills. However, many organizations (over 90 percent) believe that technical
project management skills and strategic and business management skills are teachable, and as such,
are likely to search for talent with good leadership skills whose technical project management and
strategic and business management skills can be honed through training. Further the important
issues that need to be rightly persuaded by a corporate sector to retain skill falls under four
categories as mentioned below:
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



INTELLIGENT RERCRUITMENT OF PEOPLE
ENHANCE LINE MANAGEMENT CAPACITY
CONSTANT FEEDBACK
OPPORTUNITY OF BETTER CAREER PLANNING
Intelligent Recruitment of People
Retaining top performers begins with hiring the right talent in the first place. Top performers will be
strong contributors―employees who are valuable and organizations want to retain. Likewise,
employees who are a good fit for the position and perform well will want to stay with the
organization. During the talent acquisition process, organizations can identify potential top
performers by analyzing the needed skills, experience, and fit, and matching those to the talent
profiles of external candidates. That method of effective recruiting requires a streamlined process.
Automated skills-based matching and automated workflow enable recruiters and hiring managers
to focus on evaluating a short list of quality candidates. Building talent pools of suitable candidates
proactively provides prospective quality hires, as well as lowering sourcing costs. To drive quality
into a selection and recruiting process, the company first defines which quality is for each position in
the company. The selection process should be grounded on the foundation of a proper specification
of the requirements of the job. The staffing department should work with hiring managers to set out
the criteria that will bring about success at a job, including:



Knowledge, skills, and abilities
Attitude and motivation
Cultural fit, both with the organization and with its customers
Recruiters and hiring managers can attract talented employees if they have a sound understanding
of the skills needed and strategic goals of the department and the organization. When the hiring
manager can share goals information with the candidate, it helps clarify and sell the position to
potential employees. It is important that the hiring manager articulate clear expectations, skills
needed, and how the role contributes to the overall success of the department and the organization.
Enhance Line Management Capacity
Once hired the majority of the responsibility for talent retention shifts to the manager. It is the
manager’s role to direct, guide, and evaluates the employee. To best equip managers for their job,
the correlating talent management practices should be embedded in their everyday business
management practices. Hence, managers need visibility into corporate goals and their alignment
with tasks and projects along with both past and expected employee performance in order to
effectively manage in a dynamic business environment.
Constant Feedback
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Employees want a performance review process that provides frequent and fact-based feedback. A
survey of U.S. employees found that 80 percent of respondents want to change something in their
performance reviews. They want fairness and performance-based rewards. Research also indicates
that employees—especially members of Generations X and Y—want feedback and they want it
often: weekly, monthly, and quarterly. Another study’s findings dispute the generational disparity.
In the U.S., it found equal importance and high value placed by 78 million baby boomers and 70
million members of Generation Y on recognition and access to new challenges. When the
performance management process is well designed, it encourages managers and employees to talk
regularly about goals and development plans that can encompass social and unstructured learning
opportunities. At best, the review process seeks to foster bidirectional communication between
employees and their managers about their performance. Meaningful discussions and clear
communication are critical for employee engagement and retention.
Opportunity of Better Career Planning
Many employees, even top performers, do not contemplate career planning until they are
dissatisfied with their current job situation. That dissatisfaction can lead directly to voluntary
turnover if the employee has had no access to information about ongoing career paths within the
organization. The top reason respondents in one study said they left their job was to seek new
challenges or opportunities that were lacking with their previous employer.1In many cases, the
employee’s wants and desires are a black box to the employer.
Studies of the drivers for employee engagement and retention include the importance of challenging
and meaningful work with growing career opportunities.2 A study focused on members of
Generation Y found that career-focused elements such as developing new skills, challenge, and good
career prospects were their dominant attractions when joining their current organization.
A unified talent management solution can provide employees with a self-directed career
development solution based on the same platform with performance data and information on
internal opportunities. On-demand software that provides supportive tools on a Web browser
empowers employees to take responsibility for their own career planning and development.
Employees can create focused and dynamic career plans that engage and motivate. Easy-to-use tools
can dynamically push job opportunities to employees who can pursue careers inside an organization
rather than outside.
Major Challenges in Retention of Talent
1Right Management survey, April 2008.
2 Chartered Management Institute, “Generation Y: Unlocking the Talent of Young Managers,” 2008
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The most successful and enduring organizations in business are those that have a common sense of
mission, a deep respect for their employees (and customers of course), and put time, energy, and
money into building a highly engaging environment. They carefully select the "right people" with
lots of hard work, and once people join they take the time to make sure they have development
opportunities to move up the value curve. But in reality such smooth progress is very difficult.
Social Factors
In a recent speech, I identified one of the factors as “westernization” of workforce. In developing
countries, especially in Asia, workers were happy to have a job and were willing to work long hours,
including over time. There was dedication to completing work and a strong desire to “please” their
superiors and customers. As “western” work standards were introduced, workers were
compensated for non -standard work hours and more opportunities for job better suited to their lifestyle (commute, normal work hours etc) emerged. As worker’s privileges increased – such as more
break time, access to a relaxing environment (also called as “Starbucks effect”) – workers began
seeking for employers who provided them benefits. The second social factor that has impacted
turnover is the relocation of work. In the past, workers, especially young ones, stayed close to their
family and only considered relocating as a last resort. This facilitated their work habits with an easy
going atmosphere when required. Grandparents and family members would take care of the family
during an emergency or provide child care on a regular basis. This social structure has changed
dramatically in many countries. People now relocate farther from their homes and use trains and
airlines for traveling back and forth. There is a loss of family infrastructure and, as a result, workers
are reluctant to work longer hours and on odd shifts.
Economic Factors
With increasing competition for skilled employees, providers started to entice workers with higher
pay and other benefits. Workers soon discovered that they could increase their wages significantly
just by taking a job with a company down the street. workers are also becoming more interested in
equity interest in employers and are savvy about companies’ market financial conditions and
positioning. This has created both a gap and a promised opportunity (when going public) for nonpublic companies.
Employees have also started comparing non-monetary benefits and are becoming more selective in
choosing employers. For example, on-site daycare is a rather unusual benefit in many developing
countries. As mentioned above, when a worker does not have a family support sys
Managing Turnover Successfully
This is an issue resulting from high growth and success. Companies did not have to face this in the
past, when the labor pool was bigger. Providers made sure that they kept recruiting on a large scale,
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knowing that the business would grow to use those employees, and at the same time, backfill the
openings.
Now that growth slowed, this approach is no longer an effective solution for high employee
turnover. Early on, the human resources department was mostly dedicated to recruiting and
training. Now, those departments have to start thinking like older established businesses and create
functions like, organizational development, and succession planning and employee
relations/communication.
We have seen an extreme increase in employee turnover in many of the countries. Twenty percent of
annual employee turnover has become a norm. There are many locations where the turnover has
risen to 50-60 percent, and it has seriously impacted service delivery as well as profitability of BPO
companies.
Monetary Dissatisfaction among Employees
Every organization has a salary budget for every employee who can be raised to some extent but not
beyond a certain limit. Retention becomes a problem when an employee quotes an exceptionally
high figure beyond the budget of the organization and is just not willing to compromise. The
organization needs to take care of the interests of the other employees as well and can’t afford to
make them angry. The salaries of the individuals working at the same level should be more or less
similar to avoid major disputes amongst employees. A high potential employee is always the center
of attention at every workplace but one should not take any undue advantage. One should
understand the limitation of the management and quote something which matches the budget of the
organization. An individual should not be adamant on a particular figure, otherwise it becomes
difficult for the organization to retain him. Remember there is a room for negotiation everywhere.
In the Current Scenario, Where there is no Dearth of Opportunities, Stopping People to Look for
a Change is a Big Challenge
Every organization tries its level best to hire employees from the competitors and thus provide
lucrative opportunities to attract them. Employees become greedy for money and position and thus
look forward to changing the present job and join the competitors. No amount of counseling helps in
such cases and retaining employees becomes a nightmare.
Individuals Speak All Kind of Lies During Interviews to Get A Job
They might not be proficient in branding but would simply say a yes to impress the recruiter and
grab the job. It is only later do people realize that there has been a mismatch and thus look for a
change. Problems arise whenever a right person is into a wrong profile. An individual loses interest
in work whenever he does something out of compulsion. The human resource department should be
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very careful while recruiting new employees. It is really important to get the reference check done
for better reliability and avoid confusions later.
Some Individuals Have a Tendency to Get Bored In a Short Span of Time
They might find a job really interesting in the beginning but soon find it monotonous and look for a
change. The management finds it difficult to convince the employees in such cases. Individuals must
also understand that every organization has some or the other problem and adjustment is required
everywhere, so why not in the present organization? It becomes really difficult for the HR
Department to find out what exactly is going on in the minds of the individual. An individual
should voice his opinions clearly to make things easier for the management.
Unrealistic Expectations from the Job Also Lead to Employees Looking for a Change
There is actually no solution to unrealistic expectations. An individual must be mature enough to
understand that one can’t get all the comforts at the workplace just like his home. Individuals from
different backgrounds come together in an organization and minor misunderstandings might arise
but one should not make an issue out of it. An individual must not look for a change due to small
issues. One needs time to make his presence feel at the organization and must try his level best to
stick to it for a good amount of time and ignore petty issues.
Conclusion
As the population is rising fast and the phase of Baby Boomers (people in the age group 40-58) will
soon be overtaken by Generation X (people in the age group 24-34) it is important for the healthy
growth of the organization that skill formation is maintained and retained within the organization.
Productive training opportunities and unbiased exposure to international corporate market should
be focused upon by the companies so that a sense of satisfaction and a sense of attachment is
intrinsically developed among the employee base at cross hierarchical levels.
Further for emerging economies like India, having decorative human resource management policies
are critical to the economic growth of the country. With limited resources, efficient utilization and
maximization of output will serve as a foundation work to face the broadening challenges thrown
by the western developed economies.
Reference
1. Dr. MahuaMajumdar (2009) Talent Retention in Pharmaceutical Company: A Perspective in
the Modern Era, International Research Journal-ISSN-0974-2882Vol. II Issue 7 August 2007
2. Michael Gregoire (2010) Consistently Acquiring and Retaining Top Talent, Taleo.
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3. Lois Webster (2008) Best Practices of Talent Management and Succession Planning, Trade
Press Services, November 2008
4. Lina Buckingham (2011) Driving Growth in a Storm, Talent Management Magazine,
February 2011
5. Narendra Patil (2011) Tell Me about me, Talent Management Magazine February 2011.
6. Sital Ruparelia (2012) The One Big Secret to Retaining Great People, www.qklim.com
7. D. Guest (1989) Personnel and HRM: Can you tell the Difference? Personnel Management,
Vol. 28, No. 1, January 1989 pp 48-51
8. Kevin Goores (2009) Smart Investing in Talent Management.
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Chapter 25
Study of Hotel Employee’s Satisfaction in
Jharkhand
Praveen Srivastava
ABSTRACT
Hotel industry is an industry which operates 24 hr a day, 7 days a week and 365 days a year. Hence, it asks for
a complete dedication of the employees working in the industry. These employees can be viewed as an internal
customer of hotel, who need to be satisfied in order to satisfy the external customer i.e. guest. In hotel industry,
if external customer is not satisfied, he will neither come back nor recommend the hotel to other prospective
guest. Hence, it is important to satisfy the external guest. This is possible only if internal guest (employees of
hotel) are satisfied. However, due to their long working hour and nature of their work, they get very little time
for themselves and their family. This may led to dissatisfaction among them and they may fail in maintaining
proper work life balance. A dissatisfied internal customer will fail to satisfy external customer and hence hotel
will suffer loss in business. In this backdrop, present study is an attempt to find whether the hotel employee
manages to maintain healthy work life balance by being satisfied with their present life. In order to find that,
diner et al model has been used to find the satisfaction with life of Hotel employees.
Key Word: - Hotel employee, internal customer, work life balance, diner et al model
Introduction
Hotels as one part of hospitality industry have evolved from the very modest beginning of families
and land owners, who opened their homes to travelers. Since hotel operates 24 hr a day, 7 days a
week and 365 days a year. Hence, it asks for a complete dedication of the employees working in this
industry. However, employees have been taken for granted in the hotel sector as the very concept of
internal customer was not clear in hotel industry.
A customer, also client, buyer or purchaser is usually used to refer to a current or potential buyer or
user of the products of an individual or organization, mostly called the supplier or seller. This is
typically through purchasing or renting goods or services. However in certain contexts the term
customer also includes by extension anyone who uses or experiences the services of another.
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However, every business have two kind of customer, one internal and one external. These internal
customers are the staff of the organisation, who are providing their services to the organisation.
External customers are the guest who are availing these services. In the context of hotel, hotel
employees are internal customer and hotel guest are external customers of the hotel. This concept,
where employees are also considered as customers are important for success of hotel. Hence, it
should be understood by the hotel management of Jharkhand state also which is showing growth
after its formation.
Ranchi, the capital city of Jharkhand is witnessing the growth of Hotels in recent year. Property like
Ranchi Ashok, Capitol Hill, Green Horizon, Green Acre, Le Lac and Golden Tulip (now Park Prime)
were providing good services to the guest hailing from different part of the country. Opening of
Radisson Blu, a 116 room hotel has further added to the accommodation capacity of the city. To add
to it the city has many budget hotels like Apsara, Konark, Stakar, Ambassdor which provide
accommodation to the budget tourist and suffice their needs.
Dhanbad is a hub for major industrial activities in Jharkhand. The district is highly industrialized.
With availability of coal in abundance this is the biggest source of income for the area. Fertilizer and
Chemicals industry and a Super phosphate factory are also there. The other important industries are
firebricks industries, glass industry, cement plants etc. Internal infrastructure in the town is good
and facilities are optimum for the visitors. Some of the hotels in Jharkhand are as under:Table 1: List of hotels in Jharkhand
Hotel
Location
Category Room Tariff Range
Amenities
Name
Strength
Hotel Radisson- Blu, Main Road Kadru
5 Star
116
5500 – 12000 Ground Floor Bar. Chic Coffee Shop,
Ranchi
Diversion
Deluxe
Tea Lounge
The Sonnet
Inner Circle Road, 4 Star
5500-10500 Wi fi connectivity, 24 Hr. Coffee Shop.
Jamshedpur
Bistpur
69
Hotel Yuvraj Palace, Doranda, Ranchi
4 Star
25
1700-3400
2
Banquet
halls
& 4
Ranchi
Suites along with 24 Hrs coffee shop.
Hotel Golden Tulip,
Near Morabadi
4 Star
58
6470- 21000
Loyalty programs, Online booking
Ranchi
Ground, Ranchi
facility, conference Hall, Restaurant
Hotel Kwality Inn,
Station
3 Star
34
750-1800
2 Banquet
halls
& 2 Suites
Ranchi
Road, Ranchi
are available along with Bar &
Restaurant
Hotel Arya, Ranchi
H.B. Road
3 Star
30
800-2500
2
Banquet
halls
& 4
Suites along with24 Hrs coffee shop.
Hotel Ranchi Ashok,
Doranda
3 Star
28
1900-3900
ITDC Approved, 2 Banquet halls & 2
Ranchi
Suites are available.
Hotel
Main Road
3 Star
41
660-1800
2
Banquet
Hall
& 1
Chinar, Ranchi
Bar/Restaurant
Hotel
Doranda
3 Star
33
700-1600
2 Banquet halls, 1 Suite
Yuvraj, Ranchi
& Local Guide support.
Hotel Capitol
Station Road
3 Star
85
2500 – 4500
In room dining, conference room,
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Residency, Ranchi
Hotel Green Horizon,
Ranchi
Hotel Chanakya,
Ranchi
Hotel Skylark,
Dhanbad
Hotel Canary Inn
Station Road
Near Railway
Station
Bank Morh
Dhanbad
NH 33, Ranchi
Patna Road,
Hazaribagh
Hotel Blue Diamond Western Avenue,
Bokaro
Bokaro
Hotel Cocoon
Beside Pooja
Dhanbad
Talkies, Near
Railway Station
The Seventeen
Sriram Mall,
Degree Hotel
Ashok Nagar
Hotel Madhulika,
Shanti Bhavan,
Dhanbad
Bank More
Hotel Classic, Bokaro Sector – 4, City
center
restaurant
Banquet Halls, Conference Hall,
Restaurant, Bar
3000 – 12500
Gym, Spa, Swimming Pool, Multi
cuisine Restaurant, Oriental Restaurant
1500-6900
TV in dining hall, Room Service.
3 Star
48
2400- 12000
3 Star
83
3 star
37
3 Star
28
2000 - 6300
Pick up Drop, Doctor on call, Money
Changing
Luxury
50
1200 – 5500
Luxury
37
2750-8600
In Room Electronic safe, Banka and
ATM in Hotel Premises
Car Rental, Wi Fi Enabled
Luxury
25
1590 – 6200
24 Hr. Room Service, Wi Fi
Luxury
20
1800- 5000
Luxury
66
1200- 2800
Shopping complex in Premises,
Business center, Doctor on call
Multi cuisine Restaurant
Source: Compiled for present study
Employees of hotels are providing their service in hotels of the state and the present study has
focused in finding the satisfaction level of these employees.
Methodology
In order to collect data, questionnaire was circulated among 100 hotel employees who are working
in various hotels of Jharkhand. A hard copy (where sample were accessible) and a web link of
questionnaire form was used to collect the data from hotel staff. However, the total number of
correctly filled in data received was 75. The questionnaire contained two broad section, one seeking
demographical information and other having five set of question (as per diner et. al model) in seven
point scale ranging from strongly disagree to strongly agree.
The employees were asked to give points to each statement by giving appropriate no. to each
statement. The 1-7 scale was used for the same, where 1 states strongly disagree and 7 denotes
strongly agree and 4 being neutral (Neither agree, nor disagree). The scores were then summed up.
The score can range from a low of 5 to a high of 35 for each employee. Higher scores indicate higher
levels of life satisfaction. Scores are interpreted according to following rubric.
30 – 35
25-29
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extremely satisfied; much above average
Very satisfied, above average
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20-24
15-19
10-14
5-9
somewhat satisfied, Average
slightly dissatisfied, a bit below average
Dissatisfied, clearly below average
Very dissatisfied, much below average
In order to find the average of satisfaction with life, the sum of all the score was divided with the
number of respondent. This gave us the average of satisfaction with life of hotel employees.
Frequency analyses were done on question under demographic section. Factor analysis using
principal component method was also used to find single variable. The correlation test of variable
with gender, age, marital status and children has also been done in order to find its relationship with
satisfaction. At last mean was found for those sub categories of factors which showed significant
difference in correlation test. Data has been analyzed using SPSS 20.
Major Result
In order to check the reliability Cronbach’s alpha was used and it was found that Cronbach’s alpha
reliability coefficient for the present sample was 0.846, which indicates higher reliability. The same is
depicted in table 3 below.
Table 2. Case Processing Summary
N
Valid
75
Excluded
0
Total
75
a. List wise deletion based on all variables in the procedure.
Cases
%
100.0
.0
100.0
Table 3. Reliability Statistics
Cronbach's Alpha
.846
N of Items
5
An important part of questionnaire included demographic questionnaire. This section contained
information regarding the age, gender, marital status and children of the employee. Frequency
analysis was done to find the frequency of respondents in this section. The result is being depicted
below.
Valid
Male
Frequency
66
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Table 4. Male or Female
Percent
Valid Percent
88.0
88.0
Cumulative Percent
88.0
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Female
Total
Valid
9
75
12.0
100.0
Frequency
9
38
19
9
75
21-30
31-40
41-50
51 and above
Total
Valid
Valid
Single
Married
Total
Frequency
7
68
75
Yes
No
Not Applicable
Total
12.0
100.0
100.0
Table 5. Age
Percent
Valid Percent
12.0
12.0
50.7
50.7
25.3
25.3
12.0
12.0
100.0
100.0
Table 6. Marital Status
Percent
Valid Percent
9.3
9.3
90.7
90.7
100.0
100.0
Table 7. Children
Frequency
Percent
59
78.7
12
16.0
4
5.3
75
100.0
Valid Percent
78.7
16.0
5.3
100.0
Cumulative Percent
12.0
62.7
88.0
100.0
Cumulative Percent
9.3
100.0
Cumulative Percent
78.7
94.7
100.0
The above tables give us the information regarding the frequency of demographic and other
question included under fist segment. The result indicates that among the respondent 88% are male
and 12% female. Most of the respondent belong to the age group of 31-40 (50.7%), followed by age
group of 41-50 (25.3%) among which 91% are married and 9% single. Also, 79% participants are
having responsibilities of children.
Satisfaction with Life Scale:
In order to find the sum of total score given on the five statement covered under diner et al model,
the score of all the respondent was added and it came to be 1375. Next, to find the average score of
satisfaction with life the total was divided with number of respondent. The total no. of respondent in
our study is 75. Hence, dividing 1375 by 75, we get an average score of 18.33. As per satisfaction
with life model, this score indicates that the hotel employees are “Slightly dissatisfied, a bit below
average” and not even average satisfied or highly satisfied.
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Since we found that satisfaction level of hotel employees belong to fourth category i.e. slightly
dissatisfied, we shall now check whether this level has any relation with age, gender, marital status
or children. In order to do this, firstly factor analysis has been used to reduce the five factor to one.
After that a test of correlation was performed with all the demographic factors to analyse the
relation of these factors with satisfaction.
Factor Analysis
Principal Component matrix was used to reduce the number of factor from 5 to 1. The result is as
under:Table 8. Component Matrix
Component
1
In most way, my life is close to my ideal
.861
The conditions of my life are excellent
.830
I am completely satisfied with my life
.858
So far, I have achieved the important things in my life
.626
If I could live my life over, I would have change nothing
.784
Extraction Method: Principal Component Analysis.
a. 1 components extracted.
As per the table above, we conclude that third variable (with loading of 0.858) is having highest
loading and hence, it will be extracted and used for correlation test:Variable 1: - I am completely satisfied with my life. .
Hence, taking this variable we shall use correlation test to find that whether there exist any
significant correlation between the variable and other factor.
Applying correlation test in SPSS 20 for the above variable, we find the following result:
I am
completely
satisfied with
my life
Male or
Female
-.472**
Table 9. Correlations
Age
Marital Status
Children
Pearson
.448**
.347**
-.202
Correlation
Sig. (2-tailed)
.000
.000
.002
.082
N
75
75
75
75
**. Correlation is significant at the 0.01 level (2-tailed).
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I am completely satisfied with
my life
1
75
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From the above table we can conclude that Correlation is significant in three variable namely
gender, age and marital status and insignificant in one i.e. children. This result indicates that relation
exist for satisfaction level with gender, age and marital status but having children or not does not
influence the satisfaction of hotel employees.
In order to check the variability we shall analyse the mean score of the variable in each sub
categories in these group. The result for these factors are as depicted below:Table 10. I am completely satisfied with my life * Male or Female
I am completely satisfied with my life
Male or Female
Mean
N
Std. Deviation
Male
5.1061
66
1.19136
Female
3.0000
9
1.93649
Total
4.8533
75
1.45837
Age
21-30
31-40
41-50
51 and above
Total
Table 11. I am completely satisfied with my life * Age
I am completely satisfied with my life
Mean
N
4.0000
9
4.3947
38
5.7368
19
5.7778
9
4.8533
75
Std. Deviation
2.29129
1.19773
1.14708
.44096
1.45837
Table 12. I am completely satisfied with my life * Marital Status
I am completely satisfied with my life
Marital Status
Mean
N
Std. Deviation
Single
3.2857
7
2.13809
Married
5.0147
68
1.28705
Total
4.8533
75
1.45837
From the above table 10, 11 and 12, an effort has been made to find varied level of satisfaction in
satisfaction with life model in those attributes which showed significant difference in correlation test
with extracted variable. The 1-7 scale was used for the same, where 1 states strongly disagree and 7
denotes strongly agree and 4 being neutral. The result can be interpreted as under:In Gender variable we interpret that male (Mean – 5.10) are more satisfied then female (Mean – 3.00).
Similarly, satisfaction with those who belong to age group of 51 and above is maximum (mean –
5.78) and those under age group of 21 -30 is minimum (4.00). Lastly, those who are married are more
satisfied (Mean – 5.01) then those who are not married (3.28)
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Conclusion
Hence, the above study reveals that hotel employees are not satisfied with their life. This
dissatisfaction has many reason associated with it. Female employees have shown more
dissatisfaction compared to their male counterpart. Similarly those who are not married have higher
dissatisfaction, compared to those who are married. However, overall every employee has shown
below average satisfaction. This is because the industry is labour intensive and demand more time
from the employees. This hampers their social obligations. They get very little time for their family
and friends and hence remain dissatisfied. Hotel Management should make an effort to provide
more time to the staff by making flexible working hour, giving them ample time for themselves,
planning duty schedules keeping the festivals in mind, getting family get together in the hotel,
recognizing the staff and motivating them and other such activity. This kind of effort will ensure
that the satisfaction level of their internal customer increase which will increase the satisfaction of
their external customer and hence will result in overall growth of their business as these satisfied
customer will come back again to the property and will spread positive word of mouth for the hotel.
Reference
1. Bhatnagar,S K, (2006) Front office Management , Frank Bros & Co. Ltd. p 42 .
2. Dahiya Ashish and Sharma Sonia (2008), Chapter – Hospitality Industry: Nature and Status,
Introduction to Hospitality Industry: A Text Book, IHC Publication, pp. 9-10.
3. Francis Buttle (2004), Customer Relationship Management – Concept and tool, Elsevier
Butterworth – Heinemann, Ch 03, pg 56
4. Mohanty, Pragrati, (2008) Hotel Industry and Tourism in India, APH Publishing
Corporation, p. 31.
5. Patel, B.K. (2010) Fundamental of Customer focused management, Global media p 15.
6. Payal and Jyoti (2008), Introduction to Hotel Industry: A Textbook, Aman Publication. Ch 02, p 17.
7. Srivastava P. and Jyoti (2008), Introduction to Hotel Industry: A Textbook, Aman
Publication. Ch -04, pp 46 – 47.
8. Tewari Jatashankar R, (2011) Hotel Front office Operation and Management, Oxford
University Press, p 25.
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Chapter 26
Organizational Citizenship Behaviour: A
Road Ahead
Snigdha Dash
ABSTRACT
Organizational citizenship behaviour promotes the effective functioning of the organization (Robbins, 1996).
These behaviours coordinate with organizational efficiency in legal and fair organizations (Padsakoff & et. al
2000; Padsakoff & Mackenzie 1994). Padsakoff and Mackenzie (1997) say: “OCB oils organizational and
social machineries”. It is useful for organizations and includes constructive and positive behaviours.
Organizations striving for success need employees who will do more than their usual job duties and provide
performance that is beyond expectations.
In the present scenario, identification of employee organizational citizenship behaviour has become a crucial
element. The present paper is an attempt to derive a better understanding about the construct, its dimensions,
antecedents and its consequences.
Keywords- Organizational Citizenship Behaviour, Dimensions, Antecedents, Consequences
Introduction
The hypercompetitive business environment is persuading the organizations to look for every
possible creative and innovative practice that can help them to achieve sustainable competitive
advantage. Organizational citizenship Behaviour (OCB) may act as one of the important practices.
OCB as a concept is now almost 30 years old. OCB referred as set of discretionary workplace
behaviours that exceed one’s basic job requirements. They are often described as behaviours that go
beyond the call of duty (Bateman & Organ, 1983). Changes in organizational environments calls for
voluntary behaviour from employees of an organization. Accordingly, an organization should also
be able of moulding its employees’ attitudes and behaviour from personal gain towards
organizational development. There is consensus in this particular field that OCB addresses silent
behaviours for organizational enterprises (Barbuto, Brown, Wilhite, & Wheeler, 2001).
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Organization striving for success needs a set of citizens who have positive behaviour, who feel
responsible, put extra effort, and have a sense of belongingness towards the organisation.
Citizenship behaviour talks about the extra role behaviour exhibited by the employee voluntarily.
Organizations could not survive or prosper without their employees behaving as good citizens by
engaging in all sorts of positive behaviours. Because of the importance of good citizenship for
organizations, understanding the nature and sources of OCB has long been a high priority for
organizational scholars (Organ, 1988) and remains so. Organizational Citizenship Behaviour
contributes in maximizing the efficiency and productivity of the employee and the organization
(Organ, 1988) as well that ultimately contribute to the effective functioning of an organization.
Contemporary organizational behaviour theorists accept that organizational citizenship behaviours
have an accumulative positive effect on organizational functioning (Wagner & Rush, 2000).
Moreover recent studies demonstrate that OCBs have a positive effect upon customers perceived
service quality (Bell & Menguc, 2002; Hee Yoon & Suh, 2003).
Loyalty, helping others and organizational compliance (Podsakoff et al. 2000) are different forms of
organizational citizenship behaviour shown by the employees who are willing to contribute their
efforts and abilities to the organizations even though that is not officially required of them, are also
benefited by the organization. This contribution of organizational citizenship behaviour to
organizations has received much attention in the business arena(Todd, 2003).With regard to this
issue, many researchers have paid attention to organizational citizenship behaviour (OCB).
Origin
Organizational citizenship behaviour (OCB), an interesting concept for today’s researchers, came
into existence way back in 1964. Katz laid the foundation of the concept. He extended the work of
Barnard on cooperative action to achieve the organizational goals, and came with the concept of
extra role cooperative behaviour. He explained the requirement of three basic activities to generate
organizational effectiveness: i) Employees must be hired and retained, ii) work role must be
accomplished in a dependable manner, and iii) employees must exceed formal job requirements. The
third activity coincides with organizational citizenship behaviour.
The work of Katz was taken further by Organ who first coined the term and also known as the father
of OCB. The concept can be traced in the research paper published by Dennis W. Organ titled ‘A
Reappraisal and Reinterpretation of the Satisfaction-Causes-Performance Hypothesis’ in 1977. The
paper looked at the causal and subtle contributions of employees, which cannot be captured by
quantitative hard measures of output. This paper was an attempt to understand as- yet unnamed
behaviours as a better representation of “performance” in the “satisfaction-causes-performance”
controversy (Organ, 1977). He argued that some aspects of employee performance engender by job
satisfaction might not be acknowledged in existing literature. Smith, Organ & Near, (1983) move
further and expand the work and denotes OCB as behaviour not formally requested or directly
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rewarded but can be functional to the operations of an organization. Organ (1988, p.4) later defined
OCB as ‘individual behaviour that is discretionary, not directly or explicitly recognized by the
formal reward system, and that in the aggregate promotes the effective functioning of the
organization’.
The concept of OCB was initially projected and studied in the US (Organ, 1988; Podsakoff,
MacKenzie, Moorman, & Fetter, 1990; Smith et al., 1983) and is considered as “good soldier
syndrome” (Organ, 1988) which refers to the behaviour exhibited by the committed employees in
the organization. Punctuality, helping others, innovating, volunteering (Organ, 1988), are the main
ingredients of this behaviour. As well as the tendency to refrain from undesirable actions such as
complaining, arguing and finding fault with others, using time efficiently, conserving resource,
sharing ideas and positively representing the organization are also form the part of these behaviours
(Turnipseed and Rassauli, 2005).Though according to Organ’s definition there are three critical
aspects, First, OCB is not enforceable Second these are discretionary behaviours not part of job
description but Finally help in smooth functioning of organization (Organ, 1988) and their absence
cannot be penalized (Van Dyne et al., 1995)
The conceptualization of OCB made by (Organ 1988) as was unable to satisfy researchers and
invited criticism as its placement beyond job description fails to set the boundary that differentiates
in role from extra role behaviours. They argue that this may vary across job incumbents and change
of time. The second argumentation was the non-recognition of OCB under formal reward system.
Organ (1997) clarify to the critics that jobs have evolved into many ambiguous roles from a set of
clearly defined tasks and responsibilities since the inception of the construct. Without a set role, it
becomes difficult to define what is outside of that role. What might be said as extra role behaviour to
one manager or subordinate might be considered in-role to the other.
The other area of debate is the idea that OCBs are not formally rewarded. Organ (1997) explains that
OCBs may at some point encourage some sort of reward, but that these rewards would be indirect,
uncertain, and not within the contractually guarantied formal rewards system. However, Organ
admits that there has been some research that proves OCBs are just as likely to lead to monetary
reward as in-role performance. Thus, Organ considers OCB as “performance that supports the social
and psychological environment in which task performance takes place” (Organ, 1997,).
Van Dyne et al. (1995)[4], proposed a second definition of OCB as the broader construct of "extrarole behavior" (ERB), defined as "behaviour which benefits the organization and/or is intended to
benefit the organization, which is discretionary and which goes beyond existing role expectations"
(p. 218). Organ (1997)[29] suggested that this definition does not provide any clarification noting that
one's "job role" is dependent on the expectations of and communication from the role sender. The
"sent role" could thus be less than or greater than the actual job requirements. Therefore role theory
definition places OCB or ERB in the realm of phenomenology, unobservable and completely
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subjective in nature. Distinctions between antecedents and behaviors become blurred, completely
dependent on the "eyes of the beholder."
This definition also presumes that the actor's intentions are "to benefit the organization." Once again,
the behavior should be defined independent of its presumed antecedents.
In one more definition, Hunt (1999) defines OCB as favourable, natural and voluntary, no obligatory
behaviours of the workmen of an organization who have open general intentions. All of the
definitions indicate the fact that OCB contains favourable behaviours which can be beneficial to the
organization, administration, groups and the individuals.
The most extensively researched topics in organizational behaviour in recent years is Organizational
Citizenship Behavior (OCB) (Podsakoff et al. 1993; Hannam and Jimmieson, 2002; Zeuars et al. 2000;
Ensher et al. 2001; Jahangir et al. 2004; Lievens and Anseel, 2004; Emmerik et al., 2005; Khalid and Ali,
2005). The concept was introduced by Bateman & Organ in 1980s and latter refined and
strengthened by number of researchers such as Podsakoff and Mackenzie (1993), Jahangir et al.,
(2004); Khalid and Ali (2005). Organizational Citizenship Behaviours are a special type of work
behaviour that are defined as individual behaviours that are beneficial to the organization
discretionary, not directly or explicitly recognized by the formal reward system (Organ, 1995).
A precise operational definition of Organizational citizenship behaviour continues to be in a
debatable position. The number of researches that has been done to find out the relationship
between other constructs and OCB is much more as compared to the emphasis given to define and
find out the construct itself.
Over the past three decades, interest in behaviors that fit into the definition of OCB has increased
dramatically. Several scholars have described many domains that possess similarity with the
construct. This includes contextual performance (Borman & Motowidlo, 1993,1997; Borman, White &
Dorsey 1995; Motowidlo & Van Scotter, 1994; Van Scotter & Motowidlo, 1996), Prosocial
Organizational Behavior (Brief & Motowidlo, 1986; George, 1990, 1991; George & Bettenhausen,
1990; O’Reilly & Chatman, 1986), Extra Role Behavior (Van Dyne, Cummings, & Mc Lean Parks,
1995, Organ et. al 2006) and Organizational spontaneity (George & Brief,1992; George & Jones 1997).
The construct that is most relevant to HR practitioners, industrial and organizational psychologists
is contextual performance. This concept is similar to OCB in the sense that the employees have to
move beyond the formal requirements of job description to make their organization effective. Both
these behaviors are the outcome of the employee’s personal choice. Borman & Motowidlo (1993)
define it as non-task related work behaviors and activities that contribute to the social and
psychological aspects of the organization. Persistence of enthusiasm, assistance to others, rule and
prescribed procedure following, and openly defending the organizational objectives are different
dimensions of it.
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OCB describes the extra role behavior instead of non-task behavior as in case of contextual
performance. Brief & Motowidlo (1986) offered another construct i.e. Prosocial organizational
behavior, that establishes its resemblance with OCB. It is defined as the behavior within an
organization that is aimed at improving welfare of another person. The line of difference is that
Prosocial organizational behavior does not confine itself to organizational work only, thus helping a
colleague in personal matters can also be prosocial. Van Dyne, Cummings, & McLean Parks (1995)
proposed extra role behavior (ERB) that overlaps OCB as it elucidates the behavior shown by
employees to benefit their organization, which exceeds their role requirements. Organ et al. (2006)
elaborated ERB as “behavior that attempts to benefit the organization that goes beyond the existing
role expectations”. ERB is different from OCB as it incorporates two concepts which are not part of
OCB: Whistle Blowing – Involves rating out of one employee by another so that unethical and illegal
practices are brought to the attention of authorities (Near & Miceli, 1987) Principled organizational
dissent – Is when people show behavior against organizational injustice (Graham,1986). ). Two more
similar concepts emerged in early nineties. Graham 1991 as quoted in( podsakoff Mckenzie , Paine
and Bachrach, 2000) proposed the concept civic organizational behaviour.” George and Brief (1992)
proposed yet another concept “organizational spontaneity”. These new concepts did differ slightly
from similar previous concepts (podsakoff et al., 2000:515), however they subsequently did not
receive much attention from researchers.
Certain degree of subjectivity lies with the definition of constructs OCB and their look alike. So to
provide solution for the differentiation in role / extra role desired discretionary behaviour should be
taken along with contextual performance, which will make these constructs virtually identical.
Organ (1997) also has proposed for the same in a different definition, he describes organizational
citizenship behaviour as the cooperation in maintaining and an increasing social and psychological
background which supports the responsibilities function.
This is not possible to provide perfect definition of any concept. The definition of OCB is based on
the transitory needs of the workplace and thus will most likely continue to evolve.
Podsakoff, Mackenzie, Paine and Bacharch (2000) identified weaknesses in research on OCB.
Researchers focused that the literature of OCB emphasizes more on the relationship between OCB
and other constructs. Podsakoff et al. (2000) warned that more research should direct towards
understanding different nature and dimensions of citizenship behavior otherwise we will develop
literature of lesser value for long run.
Thus, the conceptualization of OCB could be manifested in a better way by discussing the
dimensions of OCB in the following section.
Dimensions of OCB
Researchers have always conceived OCB comprising of different behavioural dimensions.
Oganizational Citizenship Behavior is a multidimensional concept Van Dyne et al. (1994). He defined
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it as positive organizational behaviors related to the role of the organizations’ members including
recognized behaviours in the role, the behaviours beyond the organizational role and political
behaviours such as complete participation in responsibilities. Though most scholars agree on the
multidimensionality of the OCB construct, a review of the literature reveals a lack of consensus
about its dimensionality (Somech & Ron, 2007).
When OCB was introduced by Smith et al. (1983) and Bateman and Organ (1983) a distinction was
made between two dimensions of employee behaviour. Smith, Organ and Near (1983) conducted a
structured interview to predict behavioral dimensions of OCB and proposed a two dimensional
model. The first dimension is Altruism, which represents helping behaviors towards coworkers and
intended for both within and outside the organization (e.g. willingness to assist new colleagues to
adjust to the work environment, willingness to communicate and coordinate with colleagues, etc.)
but there is no evidence that confirms its direct relationship with organizational gain. (Organ et al.,
2006) proposed that altruistic behavior in due course would be of great benefit towards the
organization. The second dimension is Generalized Compliance, which represents impersonal
behavior reflecting compliance with general rules, norms and expectations, (e.g. being punctual, not
taking undeserved breaks, not spending time in idle conversation, etc.).
After its introduction, the content of the concept underwent a number of transformations. Five years
later, Organ (1988) proposed a five-dimension model of Organizational citizenship behavior, which
includes Altruism (taken in a narrow perspective as compared to Smith et al., 1983) and Generalized
Compliance is broken into four other dimensions such as Courtesy, Conscientiousness, Civic Virtue,
and Sportsmanship. Judgemental behaviours that employees demonstrate at their workplace, which
aim to reduce the work conflicts were called Courtesy. This can be marked as helping behaviour that
prevents problems from arising. It also exhibits consideration and politeness towards others.
Conscientiousness consists of behaviours that go beyond the minimum role requirements.
Employees abide by the rules, regulations and procedures of the organization. Civic Virtue is when
an employee is deeply concerned and demonstrates active interest in the life of the organization.
This talks about the positive involvement of the person with the organization. Sportsmanship is the
willingness on the part of the employee that signifies the employee’s tolerance of less than ideal
organizational circumstances without complaining and blowing problems out of proportion.
This classification of OCB, have been extensively used by many researchers across the world in
diverse perspective and found it a valid tool for measuring OCB. Several other taxonomies of OCB
have been proposed and operationalized (e.g., Borman &Motowidlo, 1993; Morrison,1994; Van Dyne
et al., 1994) but more or less they overlap with Organ’s taxonomy.
Williams and Anderson (1991) proposed another two dimensional model for OCB and categorized
the dimensions according to the focal point of the behaviour. OCB Individual (OCB I) is the
behaviour directed towards the individuals in the organisation which overlaps with two elements
from Organ’s (1988) five dimension model, namely altruism and courtesy. ii) OCB Organization
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(OCBO) is the behaviour directed towards the organization. This includes the remaining dimensions
like conscientiousness, civic virtue and sportsmanship from Organ’s (1988) five dimensional model.
The last couple of years there have been a change in the dimensions again. According to Organ
(1997), OCB consists of three dimensions: helping, courtesy, and conscientiousness. Other OCB
researchers have also struggled with defining its dimensions. This has resulted in a proliferation of
OCB dimensions, causing difficulty in finding the exact items comprising the different dimensions
of OCB (Podsakoff et al., 2000).
Podsakoff and Mackenzie (1994) modified the categorizations of Organ(1988), merged altruism and
courtesy and termed it “helping.”
Podsakoff et al. (2000) indicated that almost 30 potentially different forms of citizenship behavior
have been identified. OCB has seven common themes or dimensions: (1) Helping Behavior, (2)
Sportsmanship, (3) Organizational Loyalty, (4) Organizational Compliance, (5) Individual Initiative,
(6) Civic Virtue, and (7) Self Development.
Farh, Zhong, Organ (2004) have discussed five extended dimensions of OCB viz. Self-training, social
welfare participation, protecting and saving company resources, keeping the workplace clean and
interpersonal harmony.
Bateman and Organ’s (1983) study was one of the first to undertake the measurement of OCB. Many
OCB researchers have proposed different forms or measures of OCB (LePine, Erez, & Johnson 2002;
Organ et al. 2006; Podsakoff, MacKenzie, Paine, & Bachrach 2000). Organ (1988) proposed the most
basic and popular five forms, for which scales were later developed by Podsakoff, MacKenzie,
Moorman, and Fetter (1990). Subsequently, when Organ (1990) expanded the domain of OCB by
adding Cheerleading and Peacemaking to his original five forms, Podsakoff and MacKenzie (1994)
combined these original seven dimensions into three dimensions of Helping Behavior, Civic Virtue,
and Sportsmanship, based on the results of their confirmatory analysis.
The review shows Organ (1988) five dimensionality structure of OCB is the most researched.
Discussion on dimensions of OCB is carried further for a through conceptualization of OCB by
investigating the various antecedents of OCB. For this purpose the researchers attempted to examine
various antecedents of OCB pronounced by different scholars of this field. Finally, a revised set of
antecedents triggering OCB is presented.
Antecedents of OCB
In last three decades, researchers tried to outline various enabling factors of OCB, with varying
degrees of predictive merit: personality (Organ, 1990; Organ, 1994; Organ & Lingl, 1995; Penner, et
al., 1997), procedural justice (Moorman, 1991; Aquino, 1995; Skarlicki & Latham, 1995; Farh, Earley,
& Lin, 1997; Schappe, 1998), leadership characteristics (Deluga, 1995;Podsakoff, Mackenzie, &
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Bommer, 1996), motivational theories (Kemery, Bedeian, & Zacur, 1996[49]; Tang & Ibrahim,
1998[50]), and interview styles (Skarlicki &, Latham 1995[37]). Most of these studies provided more
questions than answers, with low correlations and little variance accounted for in the data (Barbuto
et. al., 2001)
Some more studies has also been conducted to examine different predictors of OCB which include
job satisfaction, organizational commitment, and perceptions of justice (e.g., Bateman & Organ, 1983;
Moorman, 1991; Moorman, Niehoff, & Organ, 1993; O'Reilly & Chatman, 1986; Organ & Konovsky,
1989; Organ & Ryan, 1995; Puffer, 1987; Robinson & Morrison, 1995; Smith, Organ,& Near, 1983; Van
Dyne et al., 1994; Williams & Anderson, 1991), state or trait personality characteristics (George, 1991;
Moorman & Blakely, 1995; Puffer, 1987), and leadership behaviors (Farh, Podsakoff, & Organ, 1990;
Niehoff & Moorman, 1993; Podsakoff, MacKenzie, Moorman, & Fetter, 1990). In their meta-analysis,
Organ and Ryan (1995) found that the attitudinal variables (e.g., satisfaction, fairness, and
commitment) showed the strongest relationships with OCB (Organ & Ryan, 1995). Support for
personality predictors of OCB has been inconsistent, as studies have failed to replicate findings
across samples (Organ, 1994; Organ & Ryan, 1995).
Based on the literature reviewed some significant predictors are identified:
The first research to find the antecedent of organisational citizenship behaviour was conducted by
Smith et, al. (1983) and Bateman and Organ (1983) and they revealed that job satisfaction is the best
predictor of OCB. Thereafter, Organ & Ryan (1995) have proved that job satisfaction holds its
position as the leading predictor for organisational citizenship behaviour. Workers with high level of
job satisfaction are more likely to engage in OCB (Brown, 1993).
Affective organizational commitment is frequently cited antecedent of OCB that is conceptualized
as a strong belief in, and acceptance of, an organization’s goals and a strong desire to maintain
membership in the organization (Van Dyne et al., 1995). Because affective commitment maintains
behavioral direction when there is little expectation of formal rewards (Allen & Meyer, 1996), and
act as driver for behaviors (i.e. discretionary behaviors) that do not depend primarily on
reinforcement or formal rewards.
Many researchers of this area believe that there are many other individual and organisational factors
that influence Organisational citizenship behaviour and job satisfaction is not the stand alone factor
(Deluga, 1995; Penner, Midili & Kegelmeyer, 1997). Role Perception also acts as the influencing
factor for organisational citizenship behaviour. Podsakoff et. al. (1997) found that role conflict and
role ambiguity are negatively related and role clarity and role facilitation are positively related to
organizational citizenship behaviour
Moorman (1991) also found the correlation between perception of fairness and OCB. It activates
itself through procedural justice i.e. equitable decisions are made through inputs from employees,
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and distributive justice i.e. they are fairly rewarded with adequate amount of responsibilities and
work load. Perceptions of fairness are positively related to OCB.
Podsakoff, Mackenzie and Bommer (1996) found that task characteristics had strong relationship
with altruism, courtesy, conscientiousness, sportsmanship and civic virtue. Task feedback and
intrinsic satisfaction show a positive relationship while task routinization establishes a negative
relationship with OCB. Podsakoff, Mackenzie, Paine & Bachrach (2000) uncovered personality
variables including conscientiousness, agreeableness, positive and negative affectivity as predictors
of OCB. However, many studies analysed that personality variables fall into weaker sections as
compared to attitudinal measures for predicting OCB (Organ & Ryan, 1995)
Motivation becomes an important agent for organisational citizenship behaviour because an
individual is always driven by his motives. According to different research carried out so far, there
are generally three types of motives that propel any individual: affiliation motive, achievement
motive and the darker side is the power motive. Altruism, an important dimension in organisational
citizenship behaviour, takes care of affiliation and some portion of achievement motive. A new
typology of motivation sources was proposed by Leonard, Beauvais, and Scholl (1999) five sources
of motivation measured include intrinsic process, instrumental, self-concept-external, self-concept
internal, and goal internalization. Barbuto et al. (2001) argued that though the motivational theories
work as antecedents for OCB, but the researchers cautioned that an individual’s sources of
motivation could have an impact on his or her level of OCB. As individual progress upward in an
organization, motivational theories tend to be less applicable as antecedent.
Podsakoff et al. (2000) explained that leaders strongly influence the behaviour of employees towards
other individuals and organizations and the relationship between the leader and followers mainly
counts. The leader member exchange was positively related to altruism and an overall composite
measure of OCB. Praising good performance and expressing satisfaction will also help to develop
OCB.
There is a positive relationship exist between employee engagement and OCB (Saks et al. 2006)
Engaged employees appears to show more discretionary behaviours to improve the organization as
well as fulfil their role more effectively (Bakker, Demerouti & Verbeke, 2004). Highly engaged
employees are not only expected to deliver superior performance but also to involve in behavior that
goes beyond job requirements. Based on the above discussion, it is expected that highly engaged
employees are more likely to engage in OCB.
Organizational citizenship is discretionary behavior that is not part of an employee’s formal job
requirements, but that promotes the effective functioning of the organization (Robbins, 1996) OCB
helps organizations evaluate and increase efficiency because employee’s experiences develop
organizations (Kemery, Bedeian & Zacur 1996; Organ 1988). The literature review will not tend to
complete without reviewing the outcomes of OCB.
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Consequences
The consequences of Organisational citizenship behaviour are also examined by scholars. It plays its
role in mainly two areas: organizational performance and success, and managerial evaluations of
performance and reward allocation. In recent times Podsakoff, Blume, Whiting (2009) had stated
that OCB was positively related to unit level performance and customer satisfaction. Some
researchers had also succeeded in establishing a positive relationship between overall OCB and
performance at group level. OCBs exclusively accounted for 42.9% of the variance in managerial
performance evaluations (Podsakoff and colleagues 2000). Organizational citizenship behaviour is
positively influenced by contingent reward behaviour (Asagari et, al. 2008).
Walz & Niehoff (1996) illustrate that OCB demonstrate a set of behaviours which pose a
multidimensional relationship with positive organizational consequences. OCB is an important
antecedent to the overall success of organizations and projects (Sobel lojeski, Reilly et al. 2006;
Podsakoff, Ahearne, MacKenzie, 1997).
OCB can be considered as performance that supports the social and psychological environment in
which task performance takes place (Organ, 1997) Organizational citizenship behaviour also
establishes its linkage with customer satisfaction (Morrison,1997) and financial performance
(Walz,1996). Some studies have pointed that OCB are positively related to indicators of individual,
unit, and organizational performance (Werner, 1994; Podsakoff & Mackenzie 1994; Podsakoff,
Ahearne & MacKenzie, 1997; Walz & Niehoff, 2000).
Organizational citizenship behaviours also play a major role in information sharing, improving
coordination and goal accomplishment at group levels (Podskaoff and MacKenzie, 1997). Broad
research done in this area had supported the theory and it is widely accepted by existing scholars
that organisational citizenship behaviours have an accumulative positive effect on overall
organizational functioning (Wagner & Rush, 2000). Koys (2001) has found that interpersonal OCB
motivates employees to work together.
Podsakoff et al, (2000) suggested that OCBs may contribute to organizational success by:
 Enhancing co-worker and managerial productivity

Freeing up resources so they can be used for more productive purposes

Reducing the need to devote scarce resources to purely maintenance functions

Helping to coordinate activities both within and across work groups

Strengthening the organisation’s ability to attract and retain the best employees

Increasing the stability of the organisation’s performance

Enabling the organisation to adapt more effectively to environmental changes.
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The practical importance of OCBs is that they can improve organizational efficiency and
effectiveness by contributing to resource transformation, innovation and adaptability (Organ,1988;
Williams & Anderson, 1991; Podsakoff, MacKenzie, Paine & Bacharach, 2000
Various studies such as Chughtai and Zafar(2006); Khalid and Ali (2005) found that dimensions of
OCB vis-à-vis altruism and conscientiousness may improve satisfaction of employees working in an
organization.
Chughtai and Zafar (2006);Khalid and Ali (2005); Meyer et.al. (1997); Podsakoff and Mackenzie
(1997) found that organization with higher degree of OCB leads to reduced absenteeism and also
helps to lessen the turnover intention.
Theoretical framework –
Based on the preceding discussion a conceptual framework is proposed as depicted in figure 1 to
conceptualize the relationship between antecedents, dimensions and consequences of OCB
Antecedents
Consequences
Job Satisfaction
Organizational
Commitment
OCB
Employee
Engagement
Altruism
Leadership
Courtesy
Role
Perception
Motivation
Civic Virtue
Perception of
Fairness
Organizational Performance
&
Success
Organizational Efficiency
&
Effectiveness
Conscientiousn
ess
Reduced Absenteeism
Sportsmanship
Reduced Turnover
Task
Characteristics
Figure 1: Relationship between OCB, antecedents and its consequences.
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Conclusion
Organizational citizenship behavior is an important precursor to the overall success of organizations
and projects (Sobel Lojeski, Reilly et al. 2006; Podsakoff, Ahearne, MacKenzie, 1997). This review
exhibits better understanding about the concept. Citizenship behaviors correlated with job
satisfaction, perceived fairness, organizational commitment, and leader supportiveness (Organ &
Ryan, 1995). OCB can also contribute to customer satisfaction (Morrison, 1995). Given this emerging
importance, it becomes imperative to study the predictors of OCB in an organization.
Many studies tried to examine the predictors of OCB (Bateman & Organ, 1983; Lambert, 2000; Smith,
Organ, & Near, 1983). This review talks about the construct, its nature and features and different
other similar construct like contextual performance, extra role behaviour. This also discusses various
types of dimensions and different antecedents which help to predict OCB. Paper also explore about
different consequences of OCB. It is revealed from the various empirical studies that there is a
positive relationship between OCB and the performance of the organization (Cardona, Lawrence, &
Bentler,2004; Hodson, 2002)
This paper is based on existing literature of OCB. Some research gaps have been pinned after
reviewing which can act as scope for future research with demographic variables like Age, Gender,
Income are not much studied as the antecedents and their relationship with different dimensions
and consequences can be taken further.
It is suggested that more empirical research may also be conducted in other functional areas of
management like marketing, production, IT and software to further exploration of OCB construct.
This paper will support researchers and scholars for better understanding of the concept and carry
on their empirical work.
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Chapter 27
Are You Employable?
Supriya Jha
ABSTRACT
We need to appreciate that imparting skills is an altogether different task than providing knowledge.
Swimming is a skill, and no amount of bookish knowledge can make you a swimmer unless you jump in the
water and experience the entire activity under expert supervision. The same is the case with employability.
Employability skills can be best learned through interactive and experiential learning curriculum where a
person first experiences something and then derives the learning from that activity. This way the learning
becomes permanent and more effective. This article has tried to explore the skill set which makes you more
employable.]
Key words: Employability, Attitude, Team-work, Communication-skill, Soft skill
Introduction
Employability skills are a relatively new and often talked about term these days. Everyone is
stressing on the need for employability skills in young graduates -- be it the academicians, the
industry or the government. The often-quoted NASSCOM-McKinsey report which says that
approximately 75 per cent of fresh engineering graduates from India are not directly employable
gave the entire idea of employability an identity of its own. If that was not enough, a recent survey
conducted by FICCI and the World Bank revealed that 64 per cent of the surveyed employers were
not satisfied with the quality of engineering graduates' skills.
Review of Literature
In the paper, “A research‐based approach to generic graduate attributes policy” Simon C. Barrie in
the journal, Higher Education Research & Development Volume 23, Issue 3, 2004, presented a
research-based academic development initiative. The findings of the research described in this paper
have provided a helpful framework for making sense of the diversity of graduate attribute
initiatives in place at the University of Sydney. In particular the research provided a different way of
approaching the task of developing a policy statement of graduate attributes, as a hierarchy of
increasingly complex outcomes ranging from precursor and generic foundation skills to
contextualized disciplinary abilities and complex human capabilities and aptitudes. In doing so the
research framework provides a way for different disciplines to interpret graduate attributes in the
context of their own epistemologies and discipline knowledge. At the same time it also highlights
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how these disciplinary interpretations might build on institution-wide foundation skills programs
and still relate to the overall picture of the truly `generic' outcomes of a university education.
In the paper, “Employability, Skills Mismatch and Spatial Mismatch in Metropolitan Labour
Markets” written by Donald Houston, published in the journal Urban Studies, February 2005 vol.
42 no. 2 page no. 221-243, it has been argued that the spatial mismatch hypothesis addresses some of
the shortcomings of the skills mismatch perspective, while not denying the importance of skills
mismatch. The development of the spatial mismatch hypothesis in the US is traced, before
considering its relevance in the British context. A framework in which to conceptualize and reconcile
skills mismatch and spatial mismatch within metropolitan areas is developed, incorporating the
operation of local housing and labour markets as well as the role of commuting. The paper
concludes by arguing that skills and spatial mismatches reinforce each other and that the concept of
employability offers some potential to help understand how job searchers and employers make
decisions in situations of skills and/or spatial mismatch. The implications for future research are
also highlighted.
In the paper, “Developing employability skills: peer assessment in higher education” written by
Simon Cassidy in the journal Education + Training, Vol. 48 Iss: 7, pp.508 – 517, 2006, the focus of the
study was on the assessment of students' attitudes towards both being assessed by and assessing
other students' work. Data were gathered from a sample of undergraduate students following a
structured peer assessment exercise. The study found that students expressed a positive attitude
towards peer assessment but had concerns relating to their capability to assess peers and to the
responsibility associated with assessing peers. The paper provides useful information on developing
employability skills among students in higher education through peer assessment.
In the paper, “ The Key to employability: developing a practical model on graduate
employability” written by Lorraine Dacre Pool, Peter Sewell, published in the journal , Education +
Training, ISSN: 0040-0912, in the year 2007, the model sets out exactly what is meant by
employability, in clear and simple terms, and the model suggests directions for interaction between
various elements.
The research paper “Employability skills initiatives in higher education: what effects do they
have on graduate labor market outcomes?” written by Geoff Mason, Gareth Williams & Sue
Cranmer published in Education economics, Volume 17, issue 1, 2009, makes use of detailed
information gathered at university department level, combined with graduate survey data, to assess
the impact of different kinds of employability skills initiative on graduate labor market performance.
Defining employability
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The Higher Education Academy (2014) points to a ‘widely accepted definition of employability’ as
cited in their Pedagogy for employability publication: a set of achievements, - skills, understandings
and personal attributes – that make graduates more likely to gain employment and be successful in
their chosen occupations, which benefits themselves, the workforce, the community and the
economy (Higher Education Academy, 2012, p.4).
This suggests that such ‘achievements’ may be quantifiable, yet the definition provided immediately
after this in the same report (Higher Education Academy, 2012) hints at complexity in its
acknowledgement that “the emphasis is on developing critical, reflective abilities, with a view to
empowering and enhancing the learner” (Harvey, 2003, p.3). In other words, it is difficult (and
perhaps not desirable) to reduce employability skills to a checklist of attributes. This shift to viewing
employability less as a set of clear-cut attributes and more as a complex form of learning
development is summarized by Hinchcliffe and Jolly (2011). They argue for a “four-stranded
concept of identity that comprises value, intellect, social engagement and performance”, in
preference to the “traditional model” (Hinchcliffe and Jolly, 2011, p.1). This is supported by
Snowden (2013) in his address to the Members' Annual Conference as president of Universities UK:
Employability is in the end a complex blend of skill, attitude, experience, motivation and interest,
underpinned by the ability to learn and to apply that learning to the challenges that work presents.
The general consensus appears to be that employability, whilst encompassing more than an
academic degree alone, is not just skills-based either. For libraries and librarians it is important to
remember that the definition is not standardized and remains contentious. Any attempt to
demonstrate their contribution to the development of employability skills or ‘graduate attributes’
must keep in this mind.
What are Employability Skills: Missing Elements which limits the candidate’s employability:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Attitude (Sincerity, Can-Do, Ownership/Motivation)
Business Ethics/Honesty
Grooming/Confidence
Communication Skills
General Awareness
Basic Managerial Skills (Leadership, Teamwork, Time Management etc.)
Basic Sales and Customer Service (most entry level jobs require one of these)
Domain Knowledge
Work Experience
A survey report says that Indian student lack industrial experience, and hence they are not able to
survive in the fast world or the pressure of the organization. Once they join an organization, marks
and certificates do not matter and the work environment is much different from the academic
environment. A student should have a combination of academic and social capabilities. She/he
should have both qualitative and quantitative analysis capabilities, and be able to make informed
decisions. Since she/he is heading for a position in management, leadership potential and some
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persuasive ability is important. She/he should be able to work well with others (teamwork) and
should have strong oral and written communication skills. She/he should be organized and
responsible. This requires substantial intervention on the part of higher education institutions.
The exposure to the industry as the best way to impart the skills needed on the job. The faculty at
colleges has limited quality industry experience. The best practice may be to get significant bits of
training, at least 25%, to be delivered by actual industry experts. The industry-academia partnership
can also be the way out of this fix. Innovative mechanisms could be imported from proven overseas
experiments that deliver and monitor quality education.
Over the last few decades, many companies have stopped their own training and relied almost
exclusive on hiring MBA graduates. Organizations need more than smart people with credentials
and employability can be developed by mentoring and training because the current class of college
graduates is most educated, technologically advanced, and technically skilled group to ever enter
the workforce.
Here are some skills to acquire and refine that will increase your professional confidence level and
make you more employable:
Constantly adapt to technology. Dependency on technology in the future will increase, not
decrease. Spend time learning new computer programs but more importantly, make applications to
your daily routine and strive to use technology as an enabler of productivity.
Embrace diversity. Get comfortable with other ethnic cultures, religions and customs. Be curious
about what makes people from other cultures tick. Learn a little about the customs and attitudes that
belong to workers from other countries
Be a life-long learner. Be prepared to reinvent yourself, the pool of information in your brain and
your work-related skills every 4-5 years.
Practice impeccable integrity. Employers need to feel your spirit and have the quiet assurance that
you are honest.
Be a self-starter. Those who learn to work on the optimistic side of life not the pessimistic side of
life, are more valuable to the organization as they create a positive work environment that produces
higher productivity.
Demonstrate personal discipline. Employers want to hire people who have disciplined work habits
and disciplined thinking. The more disciplined the worker, the less time managers must spend
rethinking, retracing and reworking…basically worrying if you will be reliable.
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Be adaptable. To stave off obsolescence, organizations must constantly change and regularly
introduce change initiatives. Often employee resistance derails plans for updating processes and
procedures and stalls company progress.
Think creatively and innovatively. When a challenge presents itself, be the first to offer a new
viewpoint, discover an alternative or recommend another course of action. Your ideas combined
with the creative ideas from other employees will help your organization renew itself as necessary to
be competitive in the 21st Century.
Have the Can-Do attitude. Immerse yourself in all the available positive mental attitude material
you can find because negatives can be thrown at you the entire day from the news, next door
neighbors and the nerd in the next cubicle.
Communication skills: Good team work usually means being effective at communication too. One
must be able to produce clear, structured written work such as reports and presentations.
Problem solving: Organizations are constantly faced with challenges: Where is the best place to
source or spend their money? Which customers, products or services will be most profitable? How
will new legislation, supplies of resources, climate change, competitors or Governments affect their
ability to survive and prosper? Recruiters need to identify those candidates who can help their
organizations solve their problems, not create or ignore them.
Self-management: Management structures in most organizations are pretty lean these days employers are looking for people who can manage their time and priorities effectively, who can take
as well as give direction and feedback and who don't need micro-managing.
Team- Work. The team work has more to do with your nature and attitudes than formal training.
Yes, formal training is needed. But the training will be fruitful if you have the positive frame of
mind.
Multi-Tasking. It means relearning and reinforcement of what you already know. You may have
passed with 50 percent marks; but in a job your output must be 100 per cent perfect to retain the job.
And 110 percent perfect if you want a promotion. Yes, the extra 10 percent is called value addition
that you have done. It needs imagination, trial and error, discussion with colleagues and many other
things. If you do it, you show that you can go beyond the pale of your job chart.
“The ability to do business depends on having a repertoire of social skills,” Robert Hogan said. “If
candidates have good attitudes, most companies can teach them what they need to know.”
Managerial sciences provide the context to the student. Hardcore skills are needed for the student to
perform as a professional. Soft skills show the way as to how to go about it. The employer needs the
entire package ready to undertake challenge of the job! Employability is essentially the combination
of skills, qualifications, knowledge, experience, contacts and personal characteristics that make you
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attractive enough to organizations for them to want to hire and pay you! Simply having a good
degree isn't enough.
Conclusion
Employability, In a nutshell, means that you contribute more value than it costs for you to deliver it.
If what you deliver is equal to what it costs to have your there, then you’re probably not
employable, because if anything happened, then you could become a liability. If what you deliver is
less than what it costs to have you there, then you cease to be an asset altogether. Many
organizations recognize that it can take a few months for people to get up to speed; but the grace
period for getting there is becoming shorter by the day.
References
1. http://www.impacthrconsulting.com/wp-content/uploads/2011/10/Are-You
Employable.pdf
2. http://www.careerbuilder.com/Article/CB-1193-Job-Search-Are-You-Employable/
3. http://www.itsmyascent.com/web/itsmyascent/career
advice/asset_publisher/W3x7/content/are-you-employable
4. http://www.p-advantage.com/Are%20you%20employable.html
5. http://changingminds.org/articles/articles/ten_career_skills.htm
6. http://www.huffingtonpost.com/shelly-palmer/are-you-employable-in
201_b_1171244.html
7. http://getahead.rediff.com/report/2009/nov/24/career-fresh-graduates-are-youemployable.htm
8. http://www.expresspharmaonline.com/pharmabiocareerguide2009/pharmabiocareerguide
19.shtml
9. http://lite.epaper.timesofindia.com/getpage.aspx?articles=yes&pageid=39&max=true&arti
cleid=Ar03900&sectid=18edid=&edlabel=CAP&mydateHid=11-042012&pubname=Times+of+India+-+Delhi+
Times+Ascent&title=ARE+YOU+EMPLOYABLE%3F&edname=&publabel=TOI
10. http://www.mygraduatecareer.com/how-employable-are-you-c117.html
11. http://www.southern.edu.bd/repository/career4.pdf
12. http://www.sconul.ac.uk/sites/default/files/documents/Employability%20Literature%20
Review%20June%202014_0.pdf
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Chapter 28
A New Beginning at the Spark Golf Resort
Priyanka Dubey, Madhavi Mishra and Rahul Pratap Singh Kaurav
Case
A Spark Golf Resort, situated near (5 KMS) to Gwalior. Mr. Purav has recently bought the new
Spark Golf Resort. Purav’s marriage anniversary was in the February, 2014 and he wanted to
celebrate his marriage anniversary as a big event at his Resort in Gwalior. In October, 2013 he came
to Gwalior and stayed for two days. He found everything was very good and operations were
smooth. When he was returning back to Bombay (his usual residence), he revised the happenings at
the resort and thought something was fishy there.
One fine evening, he was sitting alone in his routine members only club with drinks, suddenly, he
noticed Ajay (Mr. Ajay is an old friend of Purav, and working as HR consultant with many sport
and hospitality organizations) entering from the gate.
[Purav and Ajay greeted each other and sat to continue drinking]
Purav has discussed the issues with Ajay and asked some advices to continue further. Ajay has
suggested Purav that he is visiting Gwalior next month for some other assignment and would stay
at the resort and will look into the issues.
Then Mr. Ajay decided to come to Gwalior and stayed as a customer for a week. He planned to
conduct a mystery customer shopping (a method to apply when investigator wants to hide himself
for getting in deep facts). He utilized all the services provided by the resort; then he realized the
problems. On November, 2013 Ajay handed over the report on the resort. Following is the report
given by Ajay:

The management does not work together and there is no team work only moving for power. This
attitude is distorting the image of the resort.

There is no ostensible overall direction for the resort. If there is, it is not being communicated
throughout the organizations.

There is no general manager or controller or overall supervisor available on site.
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
Sufficient training was not given to maximum departments. Employees are thrown into their jobs
without being ready to perform them properly.

Some departments are terribly understaffed. This causes service problem as well as high staff
turnover.

No interdepartmental coordination. There is little or no awareness of how other departments
operate. This knowledge is necessary to help us understand how we impact each other.

There should be some designated as resort manager so that employees have someone to
communicate with should the need to do so arise.
Purva was in a dilemma and has collected his team to map out strategies to address the operational
challenges and employees' concerns professionally.
Questions to handle
1. What human resources and training initiatives should Purav implement at the Spark Golf Resort?
2. Which form of top-down communication would be most suitable for the Spark Golf Resort to
achieve its objectives?
Teaching Notes
Abstract
This case is a very brief case and can be used as a teaching case. The case has discussed the critical
issues related to human resource management in hospitality and tourism industry. The case is
actually a fictitious story about getting a real life exposure to the students. The case deals with
various issues related to human resource practices, i.e. Coordination, motivation, leadership,
organization culture, lack of directions or supervisions, and few others also.
Teaching objective and target audience: The purpose of this case is to teach the basic concepts of
HRM, changing trends and preferences of employees and the importance of HRM for making the
effective business in the settings of services and especially in hospitality.
Teaching approach and strategy:

The participants should have a clear understanding of the HRM and their practices in the hospitality
industry.

The case can be discussed with the graduate and post graduate classes of tourism, hospitality and
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services management.

The case should be given after giving an assignment on HR practices, issues and challenges for
managers.
Analysis: the case should be first analyzed individually and then can be discussed in the groups of 2
to 4 students. Presentations can also be made by small groups. The case can be discussed in a week
long class also.
Suggested Readings

Boella, M. & Turner, S. G. (2013). Human Resource Management in the Hospitality Industry (9 th Ed).
New York: Routledge.

Hayes, D. & Ninemeier, J. D. (2009). Human Resource Management in the Hospitality Industry. New
Jersey: John Wiley & Sons, Inc.

Kouzes, J. & Posner, B. (1993). The Leadership Challenge. San Fransisco: Jossey-Bass.

Kusluvan, S. (2003). Managing Employees Attitudes and Behaviors in the Tourism and Hospitality
Industry. Hauppauge, NY: Nova Science Publishers, Inc.

Nickson, D. (2014). Human Resource Management for Hospitality and Tourism Industry (2nd Ed).
Burlington, MA: Elsevier.
Feedback
The case was tested in the BTM, MTM and MBA classes. Most of the master’s degree students
identified the problems correctly and were able to develop alternatives that the organization could
follow in a scenario depicted in the case. The case was also able to generate lots of arguments in
favor and against the alternatives suggested by individual participants. In all, the case was found to
be suitable for individual write up and small group discussion.
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Chapter 29
Human Resource Planning and Success of an
Organization
Anita Sharma
ABSTRACT
This paper introduces Human Resource Planning, and showed that the success of a business is directly linked
to the performance of those who work for that business. Underachievement can be a result of workplace
failures. Because hiring the wrong people or failing to anticipate fluctuations in hiring needs can be costly, it is
important that you put effort into human resource planning. The present paper will help to understand how
HR Planning affects the future of an organization. HR Planning is every manager’s job, both the general
manger and the human resource professional.
Key Words: Human Resource Planning, workplace failures, Performance
Introduction
HR Planning is an essential tool for anticipating possible future development and maintaining a well
– structured workforce of an appropriate size, which is able to meet the changing needs of an
organization. HR planning is a process to measure and compare your current HR supply with your
future HR demand relative to your organization’s strategy and business planning process. An
organization operates most effectively when the right people with the right knowledge, skills and
competencies are developed appropriately.
Definition of Human Resource Planning
In the words of Steiner (1971) “Manpower planning is the strategy for the acquisition, utilization,
improvement and preservation of an organization’s human resources. It is aimed at coordinating the
requirements for and the availability of different types of employees.”
According to Beach (1985) “Human resource planning is a process of determining and assuming
that the organization will have an adequate number of qualified persons, available at the proper
times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the
individuals involved”
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The Impact of Effective Human Resources Planning on the Utilization of Workers
HR planning should focus on the size and composition of your human resource, its deployment
across your organization, and the knowledge, skills and competencies necessary to pursue your
business objectives. It includes all managed movement into around and out of your organization
including recruitment, promotion, retirement, transfer, redeployment, attrition and retention. Many
business owners prepare a business plan before starting their business. However, small business
owners often do not include human resource planning as part of their over-all business plan. They
may start out with only a few employees or none at all. Over time, it is important to properly
forecast employment needs. Just as failing to address potential threats in the marketplace can
jeopardize the viability of your business, failing to anticipate personnel needs can impact overall
business success.
HR Planning involves gathering of information, making objectives, and making decisions to enable
the organization achieve its objectives. Surprisingly, this aspect of HR is one of the most neglected in
the HR field. When HR Planning is applied properly in the field of HR Management, it would assist
to address the following questions:
1.
How many staff does the Organization have?
2.
What type of employees as far as skills and abilities does the Company have?
3.
How should the Organization best utilize the available resources?
4.
How can the Company keep its employees?
HR planning makes the organization move and succeed in the 21st Century that we are in Human
Resources Practitioners who prepare the HR Planning programme would assist the Organization to
manage its staff strategically. The program assists to direct the actions of HR department.
The programme does not assist the Organization only, but it will also facilitate the career planning
of the employees and assist them to achieve the objectives as well. This augment motivation and the
Organization would become a good place to work. HR Planning forms an important part of
Management information system.
HR have an enormous task keeping pace with the all the changes and ensuring that the right people
are available to the Organization at the right time. It is changes to the composition of the workforce
that force managers to pay attention to HR planning.
The changes in composition of workforce not only influence the appointment of staff, but also the
methods of selection, training, compensation and motivation. It becomes very critical when
Organizations merge, plants are relocated, and activities are scaled down due to financial problems.
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The Effect of Human Resources Planning on Organizational Productivity
Properly managing your employees not only helps you get the best out of your workers, but it also
helps prevent problems that can seriously damage or even close your business. Lack of
communication can lead to loss of revenue, decreased morale or breaking federal and state laws.
Understanding the consequences of poor workforce management will help you determine whether
you need to hire an HR manager or consultant and what you can do to minimize problems.
The most important reason why HR Planning should be managed and implemented is the costs
involved. Because costs forms an important part of the Organizations budget, workforce planning
enable the Organization to provide HR provision costs. When there is staff shortage, the
organization should not just appoint discriminately, because of the costs implications of the other
options, such as training and transferring of staff, have to be considered.
Effective Manpower Planning gives the company a clear idea of what its talent needs
actually is and what they will be in the future.
Human resource planning aims at fulfilling the objectives of manpower requirement. It helps to
mobilize the recruited resources for the productive activities. The human resource planning is and
important process aiming to link business strategy and its operation. The importance of human
resource planning is as follows:
1. Future Manpower Needs
Human resource planning ensures that people are available to provide the continued smooth
operation of an organization. It means, human resource planning is regarded as a tool to assure the
future availability of manpower to carry on the organizational activities. It determines the future
needs of manpower in terms of number and kind.
2. Coping with Change
Human resource planning is important to cope with the change associated with the external
environmental factors. It helps assess the current human resources through HR inventory and
adapts it to changing technological, political, socio-cultural, and economic forces.
3. Recruitment of Talented Personnel
Another purpose of HR planning is to recruit and select the most capable personnel to fill job
vacancies. It determines human resource needs, assesses the available HR inventory level and finally
recruits the personnel needed to perform the job.
4. Development of Human Resources
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Human resource planning identifies the skill requirements for various levels of jobs. Then it
organizes various training and development campaigns to impart the required skill and ability in
employees to perform the task efficiently and effectively.
5. Proper Utilization of Human Resources
Human resource planning measures that the organization acquires and utilizes the manpower
effectively to achieve objectives. Human resource planning helps in assessing and recruiting
skilled human resource. It focuses on the optimum utilization of human resource to minimize the
overall cost of production.
6. Uncertainty Reduction
This is associated with reducing the impact of uncertainty which are brought by sudden changes in
processes and procedures of human resource management in the organization.
7. Legislative Controls
Law with regard to working conditions, working hours, weaker sections, women and child labor,
casual and contract, etc. does not permit management to hire and fire will. Therefore, managers
must look ahead and foresee manpower problems with the help of systematic human resource
planning.
Developing an HR Plan
1. Forecasting Hiring Needs
The daily demands and hectic lifestyle of business owners and managers often has an unfortunate
by-product: human resource planning gets placed on the bottom of the list of things to get done.
Failure to anticipate potential changes in your workforce often leads to last minute or “crisis mode”
decision-making. Needless to say, quick fixes are no solution to long-term issues. Taking the time
to forecast future hiring needs today will save you time and money in the long-run.
HR planning must be tied to the overall business plan. You can start the process by assessing the
current conditions and future goals of your company. Perform these assessments regularly.
Consider some of the following questions:

What are the company’s goals and objectives?

Do these goals call for expansion into new markets? Are new product lines planned?

Are changes in technology necessary to stay competitive?
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
Will new skills and/or training be required to meet the company’s goals and objectives?
The following three-step method is designed to help you determine whether or not you are ready to
hire:
1. Identify Business Strategy and Needs
2. Conduct a Job Analysis and Write a Job Description
3. Determine the Feasibility of Hiring
Step 1: Identify Business Strategy and Needs
I.
Identify Pressures and Opportunities
Consider the following internal and external opportunities and record how they may impact your
business: 2





II.
Competition: Often businesses will feel pressure to expand and hire more workers in order
to remain competitive in a particular market.
Technology: Technological advancements may increase the demand for employees in certain
industries or professions.
Increased customer demand: An increased demand for products or services may require
more resources to help produce or deliver services.
Economics: Growth of the economy or lower interest rates cause increased spending, and
often increased business opportunities. Changes in the labor market impact your ability to
find and keep employees.
Workforce changes: These include resignations, terminations, leave of absences, death,
change in employment status, and retirement.
Clarify your business strategy and direction
Describe what your business does in terms of key functions and tasks and then describe the changes
that will come into play and the direction that the business will likely take in the next few years.3 If
you expect to increase sales by 50% over the next five years, consider what impact that will have on
your hiring needs. If you are a start-up company, consider the different sorts of employees you will
need at each stage of development.
Step 2: Conduct a Job Analysis
If you decide that you need additional employees to fulfill your business strategy, it is
recommended that you conduct a four-step job analysis:
I.
Review your current workforce
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Describe the employees you now have in terms of their knowledge, skills, and experience
and describe how they function together to get work done. Map these onto your strategic
plan and describe the skills and knowledge that you will need for the anticipated new work
or function. At the same time, consider how the current work could be reorganized to make
the best use of current and future employees.6
II.
Identify any skills and knowledge gaps
Note any gaps between the skills and abilities your current employees have and the skills
and abilities that your workforce needs to meet your business objectives in the future. To
ensure that you have considered the full scope of the new position from all different
perspectives, ask your current employees what they think this position would involve. The
checklist below might help you identify the desired attributes of potential employees.
III.
Write a Job Description
After completing steps one and two, you can begin to draft a job description. Although
many small businesses do not take the time to draft job descriptions, it is a worthwhile
exercise.
Set an Appropriate Salary
Start by adopting a general salary range to help you determine what you will need to budget
and whether potential candidates are within your budget. You may want to complete a job
evaluation, whereby you rank jobs and their corresponding salaries. Weigh the importance
of critical skills and knowledge for each position, compare positions, and rank the new
position on the pay scale accordingly.
Step 3: Determine the Feasibility of Hiring
Before you hire, you must understand (1) the costs of hiring, (2) the benefits of hiring, and (3) the
risks of not hiring.
When calculating the full cost of hiring a new employee you must consider:



Labour costs, such as salary and benefits
Recruiting costs, which may include advertising in addition to time spent on recruiting
activities, orientation and training.
Some of the potential risks associated with choosing not to hire despite the need for
additional staff include
Result of a Successful HR Plan
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To gauge how successful the HR plan is, you should be able to measure and prove that as a direct
result of your HR plans and interventions you have:
1.
2.
3.
4.
Increased service quality and client satisfaction.
Hired more competent persons.
Addressed retention issues effectively.
Reduced costs.
Summary & Conclusion
In summary, practices in human resource planning must change to be responsive to the needs of
today, in order to improve & enhance the effectiveness of organizations for success. The present
article has spelt out how success is linked with human resource planning. Underlying the specific
points must be the realization that it is planning ahead which is vital for firms to survive and
prosper.
In this paper we have discovered Human resource planning is probably one of the most critical
elements in linking the work of the human resources function to the success of business goals of the
company. It is very important to recognize that certain aspects of human resource management
tend to have potentially high strategic consequences.
It is evident that human resources planning is becoming more and more important in business
circles. Because business profits are squeezed by inflation and a weakened economy, management is
also concerned with personnel costs and is seeking to achieve increased output with the same or
fewer staff and the primary assets of an organization are the talents of its people, not the tangible
and financial assets that only make balance sheets. The cost of finding key talent and replacing key
staff that leave is expensive and time consuming
As we came to know employees play a vital role in success of business, it is important to put thought
very carefully for human resource practices with respect of business plans whether its short run or
long run. It is a continuous process which needs to forecast and monitor on regular bases.
REFERENCES
1. Burack, Elmer H. “Linking Corporate Business and Human Resource Planning: Strategic Issues
and Concerns,” Human Resource Planning, (June 1985). PP.135-136
2. Biles, George E. and Holmberg, Steven R, “Strategic Human Resource Planning.” (Glenn
Ridge, New Jersey: Thomas Horton and Daughters, 1980). P85 23
3. Dale S. Beach, “Personnel- Management of people at work,” p. 411
4. Dessler, Gary, “Personnel Management.”(Reston, Va: Reston Publishing Co., 1984). P257
5. G. Stainer, “Manpower Planning”, 1971, p. 3
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6. Margaret Butteriss, Help Wanted: The Complete Guide to Human Resources for Canadian
Entrepreneurs, (Toronto: John Wiley & Sons Canada, 1999), 36.
7. Lift S (2000), “Man power or HR Planning what’s in a name?” in S Bach and Kission (eds)
personnel Management 3rd Edn, Blachwell, Oxford
8. Gupta C.B., “Human Resource Management”, Sultan Chand & Sons (1996). P. 5.3
9. http://accountlearning.blogspot.in/2013/01/significance-or-importance-of-human.html
10. http://accountlearning.blogspot.in/2013/01/significance-or-importance-of-human.html
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Chapter 30
Enhancing the Livelihood of Rural People
through Sustainable Development: A Study of
IWMP Of Shimla District
Promila Raita, Sandeep Paatlan and Jayati
ABSTRACT
Integrated Watershed management programme is a national flagship programme aimed at inclusive
development. It has evolved itself as a movement for sustainable development and its underlying principal is
its multi-dimensional approach i.e. land and soil conservation, income enhancement, employment generating
skill formation and allied activities that infuses a high degree of solidarity by empowering villagers in
contributing ecological and economic development. The special focus of the study is to get a deeper
understanding of micro-watershed projects towards the promotion of rural development and manifestation of
various lacunae’s in the implementation of these projects at the grass root level.
Introduction
The watershed approach is a system-based approach that facilitates the holistic development of
vibrant activities i.e. community organization for watershed management, soil and water
conservation, land use management, gully control, water harvesting, water management, social and
community forestry, afforestation, income generation activities (P.N Sharma, 1997). IWMP has
emerged as a new paradigm for planning, development and management of land, water and
biomass. Watershed protection and development Programmes have gained tremendous importance
and relevance in India over the past few years. The concept has gone beyond conservation
technologies and emphasizes the importance of the human dimension tools with broad-ranging
social, political and economic changes with the concept of promoting livelihood and production
system by incorporating the concept of convergence and inclusiveness towards income
enhancement and employment (National Conference of the State Ministers of the Nodal Department
for IWMP Scheduled to be held on 8th june 2012 at Vijay Bhawan, New Delhi, 2012)
______________________________________________________________________________________1
Today watershed projects do not focus on water conservation solely; integrated watershed
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management plays an important role in ensuring food security, reducing poverty, protecting the
environment and addressing issues such as equity. Under its purview includes almost every activity
which concerns land, water and biomass production. (Department, 2010)
Present Position of Integrated Watershed Management Programme (Iwmp)
The Ministry has been implementing three area development schemes viz., Drought Prone Areas
Programme (DPAP), Desert Development Programme (DDP) and Integrated Wastelands
Development Programme (IWDP) on watershed basis since 1995-96.The DPAP, DDP and IWDP of
the Department of Land Resources have been integrated and consolidated into a single modified
programme called Integrated Watershed Management Programme (IWMP) w.e.f. 26.02.2009.
INCOME
GENERATION
RURAL
DEVELOPMENT/
INCLUSIVE
GROWTH
Objectives
CONVERGENCE
Increase in
Production
Soil
conservation
EMPLOYMENT
GENERATION (SHG)
Irrigation/Rain
water harvesting
Sustainable
Development
The objectives of IWMP are harnessing, conserving and developing degraded natural resources such
as soil, vegetative cover and ground water table; prevention of soil run-off; rain water harvesting
and recharging of ground water table; increasing the productivity of crops; introduction of multicropping and diverse agro-based activities; promoting sustainable livelihoods and increasing the
household incomes; etc.(Final Report of Minor Irrigation and Watershed Management for the
Twelfth five year Plan , 2012 - 2017)
Milieu of The Present Study
The present study is conducted in Shimla district of Himachal Pradesh. Theog block is selected for
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the study from Shimla district on the basis of Integrated Watershed Management Programme
launched in the block. Theog block is situated between 310 7 min N latitude and 770 21 E longitude
and elevated at 1965 meters. As of 2011 Census, population of Theog is 7714 out of which 57%
constitutes male population and 43% constitutes female population. Theog has an average literacy
rate of 80% out of which male literacy is 83% and female literacy is 77%. (hpplanning.nic.in)Overall
there are seven micro integrated watershed management projects launched in the Theog block in
2009-2010. Under these seven integrated watershed management projects, 42 panchayats will be
covered. Total geographical area covered under integrated watershed management programme in
Theog block is 34,890 hectares.(Agency, 2012)
Review of Literature
There is plethora of literature available on watershed management programme covering wide range
of issues and this will help in designing the present study in consonance with the objectives of the
study. In order to formulate the present study and to adopt the befitting methodology for this
purpose, some of the important research works have been thoroughly scrutinized.
A study conducted by(Dixit AK, 2002)and (Wani, 2011) have acknowledged that the watershed
development programmes are potential to augment income and employment generation and reduce
poverty among the watershed communities whereas (D Kumar, 2009) lays emphasis on the range
and depth of trainings that is required to meet the challenges of developing watersheds in an
institutionally and environmentally sustainable fashion. On the other hand studies conducted by
(Badatya, 2011) shows remarkable improvement in the irrigation facilities after the implementation
of watershed programme. All these studies have focused that there has been a positive change
through th adoption of IWMP programmes despite some odds.
Rationale and Justification
The present study has been persuaded with a view to increase the awareness and deeper
understanding of Watershed management development programmes as a strategy for socioeconomic development of rural areas and also to acknowledge manifold problems relating to the
management of watershed programmes.
Objectives of the Study
The present study is based on the following objectives:
1. To study the various components and progress of IWMP programme.
2. To identify the problems pertaining to the watershed development programmes and to give
suggestions accordingly
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Research Methodology
Nature of the Data Used
The necessary information required in order to achieve the objectives of the study both primary as
well as secondary data have been used. Secondary data is used for research analysis and the
required data and information have been gathered through various sources like P.I.As, B.D.O,
District watershed development agency, Panchayat office and other such watershed running
agencies and others scanning sources e.g. books and journals, Government reports, published and
unpublished reports etc. whereas primary data was collected with the help of schedule from the
sampled area.
Sampling Procedure
The present study is conducted in Shimla district of Himachal Pradesh. One block i.e. Theog block
has been selected purposively on the basis of Integrated Watershed Management Programme
launched in the blocks. Theog block is situated between 310 7 min N latitude and 770 21 E longitude
and elevated at 1965 meters. The total population of Theog block is 7714. Three panchayats has been
selected each covering nine villages, three villages from each panchayats through the process of
multistage random sampling method.
Type of Data Collected
The information pertaining to the various activities undertaken by the IWMP VII in the Theog block
has been thoroughly examined through primary and secondary source.
Statistical Tools and Techniques Applied
In order to draw the inferences a detailed SWOT analysis has been carried out based on Primary and
Secondary data as it provides valuable insights on potentials, constraints, opportunities and threats
in order to evaluate the watershed development programme in the sampled area.
Interpretations
The adoption of watershed approach in the study area by and large has improved the said condition
& specifically water status various tanks and dams has been constructed under the watershed area.
The main focus of the watershed programme is on marginal and landless farmers with special
reference to women participation, creation of self help groups. One of the problems that have been
witnessed is even in cases where progress has been satisfactory, development has not been
sustainable because of inadequate participation by the village community and user groups. There
are no direct benefits in the short run in the study area through the intervention of watershed
programme but indefinitely indirect benefits has been observed in the study area in the forms of
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various capacity building programmes such as trainings provided to the farmers, construction of
tanks, construction of vegetable collection centers under entry point activities has been done by
watershed programme under the study area.
Strengths







Area based planning approach is one of the striking feature of the programme.
Farmers are innovative and ready to adopt new technologies.
Community based approach.
Inclusive development of the area by providing livelihood and employment
opportunities to the people for which various trainings are given to the farmers on
various activities such as horticulture, floriculture, mushroom, bee-keeping, vermicompost etc.
Promotes environmental and ecological balance
Adoption of organic farming and roof water harvesting.
Introduction of polyhouse, vegetable collection center and creation of self-help groups at
Panchayat level.
Problems




Mismanagement of funds provided by government for watershed development works is
possibly one of the biggest threats observed in the study area.
Lack of transparency and accountability can hamper the progress of the watershed
management programme.
Lack of awareness among the people for such programmes.
Potential threat of favoritisms and biasness due to petty local politics and thus influential
farmers getting the benefits at the cost of actual beneficiaries.
Suggestions







The awareness camps should be organized.
Active participation of the people.
Social audit must be set up so that there can be self-correcting mechanism within the system
which will eventually promotes transparency and accountability.
Regular monitoring of watershed management programmes evaluated periodically.
Implementation of Watershed development programmes through involvement of
corporate/industrial/business sector/ voluntary organizations under corporate social
responsibility.
CSR initiatives are a way to add values towards watershed plus approach through
administrative, financial, and other kind of support and assistance.
PPP’s: Partnership between private & government sector for watershed development works.
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Conclusion
Integrated Watershed management programme is a multi-spectral and multidimensional approach
started by the government which aims at inclusive growth. Area based planning approach is one of
the striking feature of the programme. There is no dearth of funds provided by the government but
it requires regular monitoring and expertise of the PIA’S in an effective and efficient manner which
will eventually propagate accountability and transparency within the system towards successful
implementation and execution of
the programme. IWMP should prioritize on people’s
participation, partnership between government and private sectors through CSR initiatives thus
creating synergy towards the success of the programme.
References
1. Agency, D. W. (2012). DPR of IWMP VII. New Shimla.
2. Badatya, K. (2011). Adaptability to Climate Change : An Impact Analysis of Nabard
Watershed and Micro irrigation .Initiatives for Sustainable Agricultural development. Indian
Journal of Agricultural Economics, 66 (3), 415-416.
3. D Kumar, K. P. (2009). An Enquiry into Collective Action and Household Behaviour in
Watershed Management. Indian Journal of Agricultural Economics, 64, 108-120.
4. Department, R. D. (2010). Perspective Plan on Watershed Management in H.P, Government of
Himachal Pradesh. H.P.
5. Dixit AK, D. R. (2002). Watershed Programmes in India:Inter- disciplinary and institutional
Development for livelihood Security. Indian Journal of Agricultural Economics, 57, 591.
6. (2012 - 2017). Final Report of Minor Irrigation and Watershed Management for the Twelfth five year
Plan . Planning Commission, Government of India .
7. hpplanning.nic.in.
(n.d.).
Retrieved
dec
2013,
from
www.hpplanning.nic.in:
http://hpplanning.nic.in/statistics&data.html
8. National Conference of the State Ministers of the Nodal Department for IWMP Scheduled to
be held on 8th june 2012 at Vijay Bhawan, New Delhi. (2012). NODAL DEPARTMENT FOR
IWMP. NEW DELHI.
9. (1997). The Status of Watershed Mangement in Asia. In M. W. P.N Sharma. PWMTA-FARM
Field Document No.1.
10. Wani, M. (2011). Hill Agriculture of India :Problems and Prospects of Mountain Agriculture.
Indian Journal Agricultural Economics, Vol.66, 64-66.
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