THE IMPACT OF ORGANIZATIONAL CULTURE AND ...

THE IMPACT OF ORGANIZATIONAL CULTURE AND JOB PERFORMANCE TO ORGANIZATIONAL COMMITMENT AND EMPLOYEES JOB PERFORMANCE (An Empirical Study at A University in Tangerang) Fredy ([email protected]) Post Graduate Studies Program Indonesia Open University ABSTRACT This study aims to analyze: 1) the impact of organization culture and job satisfaction to organizational comitment, 2) the impact of organizational culture and job satisfaction to job performance, and 3) the impact of organizational commitment to job performance of employees at one of university in Tangerang. This empirical study uses 118 employees as a sample based on group rank. The sampling method that is used in this research is non probability sampling with judgemental (purposive) techniques. Based on the total amount of population which is eligible to be sampled is 118 respondents. Examined from the problems which has been researched, this research is the causality type of research which is intended to to analyze the relationship and the impacts (cause – effect) of two or more problems by conducting Hypothesis examination. This analysis research method is performed by using The Structural Equation Modelling (SEM). The software used for performing this structural analysis is AMOS for Windows version 22.0 and SPSS for Windows version 22.0 for performing the descriptive analysis. The result of this analysis shows that the good model is finally obtained after having extensive modification twice. That is to corellate some indikator errors which have Modification Index (M.I) > 10.000 and not to engage the indicators which have loading factor (λi) < 0.600. The structural equation models modified otherwise good since it has met three criteria of eight cut off values, that is the Relative Chi-Square, RMSEA and CFI. Keywords: Organization Performance

Culture,

Job

Satifaction,

Organizational

Commitment,

Job

Introduction Organization needs to be alert and ready to many changes that take place. Organizations have to rearrange their policies and strategies aligned with the business environment changes. This will very much depended on the organizations’ ability of adjusting to this environment changing situations. Meaning that an organization will have to be able to create an arrange policies and strategies that could cope it. The success of creating and arranging these policies and strategies will be very much and supported by many managerial functions, Human Resource Management is the most concerned one (Pfeiffer,2007). Employees contribution to the organization will be very important should it be conducted in the most appropriate and effective ways. This is not merely focused on its quantity but also on the goals and directions of the organizations’ efforts to be taken. The employees’ personal traits, willingness and efforts to work hard and also other matters in the forms of organizational enormous supports will affect greatly to the employees achievement (Sigit, 2001). Every individual needs to know exactly of what becomes his/her main responsibilities, goals and targets

of performance to be achieved and how to self-asses their key performance indicators individually. Job performance is the employee’s level of success in executing individual tasks and responsibilities. Several indicators used for evaluating employee’s job performance are quantity, quality, efficiency, efforts, professionalism, and capability in executing primary job, ability to use common sense, employee knowledge and creativity (Tsui et al. (1997) in Mas’ud (2004)). In general employee job performance is influenced by internal and external factors. Internal factors is the ones coming from within individual self-such as motivation, job satisfaction and organizational commitment. Whereas external factor is the ones coming from outside individual self-consisting of leadership, job security and organization culture (Ismail, 2005). Organizational Culture is one of the external factors that influence employee job performance. This factor consists of values evolving within a particular organization which can be used to direct the behavior of organization members (Soedjono, 2005).Not only organizational culture influences the job performance, but also it has a massive connection with the job satisfaction. As Job satisfaction can be defines as a certain pleasurable emotional condition in which employees feel towards their job tasks and responsibilities (Widodo, 2006). The employees job satisfaction will be high should they perceived well towards the organizational culture and vice versa (Robin and Judge, 2008). An employee who are satisfied with his job role and consider his job as something fun to do will tend to have a good job performance. There is another variable that influence the employee job performance besides organizational culture and job satisfaction which is Organizational Commitment. Organizational Commitment is defined as a certain particular state of condition of which the employee will take side on the organization’s purposes and goals also his/her intention to keep his/her membership within that particular organization (Robbins and judge, 2008). The employee commitment toward his organization can become a very significant instrument to enhance his performance (Khan et al., 2010). Organizational culture also has connection with organizational commitment. One of the specific results from strong organizational culture is the decrease of employees turnover. The coherence state between the goals of the employees and the goals of the organization through cultural perspective will build a strong organizational commitment within the inside of the employee (Robbins and Judge, 2008). Job satisfaction also has a strong relation and significant influence toward the organizational commitment. Job satisfaction is the initial phase prior to the state of employee’s organizational commitment (Gunlu et al., 2010). Therefore, we may conclude that organization culture and job satisfaction have a strong relation and significant influence towards the organizational commitment. Moreover, theoretically variables such as organization culture, job satisfaction and organizational commitment have a strong relation and influence to the employee job performance. Theoretically, these relations are supported by several empirical studies that also find that organization culture, job satisfaction and organizational commitment has positive and significant influence toward the job performance. Research conducted by Yousef (2002); McKinnon et al. (2003); Koesmono (2005); Samad (2005); Manetje and Martins (2009); Ojo (2009); Rose et al. (2009); Gunlu et al. (2010); Sunarsih (2011); Kristianto and Suharnomo (2011) and Taurisa and Ratnawati (2012). These studies are taken from various industrial sectors for instance: the

research of Taurisa and Ratnawati (2012) took employees from pharmaceutical industries as their respondents, Kristianto and Suharnomo (2011) took hospital staffs, Sunarsih (2010) on higher educational institution and Koesmono (2005) on wood manufacturer industry. However, there are also several other empirical studies that found the organizational culture job satisfaction and organizational commitment do not have significant influence on job performance (Crossman and Zaki (2003); Muthuveelo and Rose (2005); Chang and lee (2007); Chen et al. (2007) and Yiing and Ahmad (2009). The fact that there is results difference among these studies (research gap), this study aims to attest and confirm of whether these relations among these variables: organization culture, job satisfaction, organizational commitment and job performance are exist and significant also of whether the relations among these variables will also be applied on various kind of job sectors. Purposes of This Study This study aims to collect data and information related to the analysis of relationships among organizational culture, job satisfaction, organizational commitment and job performance on the administrative employees of a university in Tangerang: 1. The influence of organization Culture to Organizational Commitment 2. The Influence of Job satisfaction to organizational Commitment 3. The influence of organization culture to job performance 4. The influence of job satisfaction to job performance 5. The influence of organization culture to job performance through organizational commitment as the mediating/intervening variable 6. The influence of job satisfaction to job performance through organizational commitment as the mediating/intervening variable. 7. the influence of organizational commitment to job performance. THEORETICAL REVIEW AND HYPOTHESIS Job performance Job performance or Actual Performance is the working results achieved by employee both qualitively and quantitatively in performing the tasks that have been assigned accordingly to the standards and criteria been set priorly set. Job performance is stated as achievement record of certain job functions/activities within certain period in which consists of 6 (six) categories as its indicators that is quality, quantity, time concise, effectiveness, independence and working commitment Bernardin and Russel, 1993). It can also be defined as measurable tasks performing (Seymour, 1991); level of task accomplishment of how well an individual can achieve as ordered (Byers and Rue, 1998), and it can also be defined as the actual level of tasks accomplished by employees (Shore, Newton and Thornton, 1990). Referring to the indicators been mentioned earlier, job performance variable in this study will use 7 (seven) indicators: (a) work quantity, (b) work quality, (c) efficiency, (d) ability on performing main tasks, (e) accuracy and precision, (f) knowledge, and (g) creativity. Organization Culture Organization culture is a system set of meaning, values and believe within a certain organization which become as a reference for its members to act and differentiate a certain organization with the others (Mas’ud, 2004) that can be in forms of set of values, beliefs and

customs adopted, internalized and kept by everyone who build the organization (George and Gareth, 2001). In order that organization culture to function optimally, first it has to be created, maintained and strengthened then introduced to the employees through socialization (Nurtjahjani and Mesreviastuti, 2007). Employees will be exposed to goals, strategies, values and behavior standard of organization that related with the main jobs they perform. Organization culture has 5 (five) main characteristics which is: (1) organization culture is an integrated and holistic system that is interconnected, (2) organization culture reflects the history of particular organization, (3) organization culture is related with rituals, symbols, stories and figures, (4) organization culture is socially created, built and comprehended by group of people who build the organization, (5) organization culture is hardly to be changed. Indicators of organization culture used in this study is developed from the research of Hofstede, Geert, Bond and Chung (1993), “Individual Perception on Organizational Culture: A Methodological Treaties on Level of Analysis”, Organizational Studies. They are: (a) professionalism, (b) distance from Management (c) trust between colleagues, (d) regularity (e) hostility and (f) integration. Job Satisfaction By definition, job satisfaction is the positive attitude of employees towards their jobs which is revealed based from their evaluation of working situation (Robbins and Judge, 2008 in Umam, 2010). Pleasant and conducive working condition can be formed should the types and characteristics of the job to be performed match with the employees’ needs and values. Therefore, satisfied employees tend to adapt with their working condition better than the unsatisfied ones. Employees’ job satisfaction is affected by two factors; intrinsic and extrinsic factor (Johan, 2002). Intrinsic factor is the ones originated from each employee inside brought to their working environment while extrinsic factors is the ones coming from outside of each employee such as working environment physical condition, employees interaction among colleagues, compensation and benefit scheme system and etc. Job satisfaction is a collective result from various kinds of employees’ personality traits and attitude (Church, 2011). In this case, attitude here refers to employees’ responds towards job and related to the special factors of the job itself covering supervisory, compensation and benefit, promotion opportunities, working condition, fairness in job performance evaluation, social relationship, and immediate responds to complaints. Moreover, indicators used in this study for job satisfaction variable refer to De Vries (1978) in Mas’ud (2004) which conclude job satisfaction in 5 (five) indicators: (a) satisfaction with salary, (b) satisfaction with promotion, (c) satisfaction with colleagues, (d) satisfaction with supervisor, and (e) satisfaction with the job itself. Organizational Commitment Organizational commitment is the personal value commonly refers to the organization loyalty or commitment to organization (Cherrington, 1994). Porter et al. (in Meyer, 1989) defined commitment as the strength of an individual identification and involvement with a particular organization. Whereas Becker 9in Meyer, 1989) defined commitment as tendency of an individual to consistently bond himself with the

organizational policies and activities. Organizational Commitment refers to when an employee accepts the organization and wants to remain with it (Robbins, 1998). In their review on literature related to organizational commitment, Meyer and Allen (1997) identified 3 (three) different types of commitment as following: (a) Affective Commitment, is defined as the employee's positive emotional attachment to the organization. (b) Continuance Commitment is the “need” component or the gains verses losses of working in an organization. “Side bets,” or investments, are the gains and losses that may occur should an individual stay or leave an organization. (c) Normative Commitment; The individual commits to and remains with an organization because of feelings of obligation, the last component of organizational commitment. These feelings may derive from a strain on an individual before and after joining an organization. Moreover, indicators used for organizational commitment in this study refers to the theory of Meyer and Allen (1997) who categorized organizational commitment into (a) Afferctive commitment, (b) Continuance Commitment and (c) Normative Commitment. THEORITICAL REVIEW AND HYPOTHESIS Herewith is the theoretical frame of review based upon all theoretical review mentioned above, in order to have a comprehensive understanding over the relations among variables involved in this study.

Image 1. Theoretical Review Framework

Hypothesis proposed on this study are as the following: Hypothesis 1: Hypothesis 2: Hypothesis 3: Hypothesis 4: Hypothesis 5:

Hypothesis 6:

Hypothesis 7:

Organization Culture has positive and significant influence on Organizational Commitment. Job Satisfaction has positive and significant influence on Organizational Commitment. Organization Culture has positive and significant influence on Job Performance. Job Satisfaction has positive and significant influence on Job Performance Commitment. Organization Culture has positive and significant indirect influence on Job Performance through Organizational Commitment as intervening variable. Job Satisfaction has positive and significant indirect influence on Job Performance through Organizational Commitment as intervening variable. Organizational Commitment has positive and significant influence on Job performance.

RESEARCH METHODOLOGY The method used in this study is by collecting research data through questionnaire, data collecting technique by setting a set of written affirmation sentences given to respondents to be answered (Sugiyono, 2010). The scale used as the measurement tools is Likert scale of 1 – 7. The respondents collected data is then processed by Structural Equation Modeling (SEM). Research Population and Sample The population in this research is 183 administrative employees of a private university in Tangerang. Sample is part of the population to be studied that has similar characteristics with the population. The appropriate number of minimum sample to be taken is 5 to 10 times of the estimated number of research parameters. There are 21 parameters to be used in this research; therefore the minimum number of sample to be taken for this research is 5 times 21 equals to 105 samples. However since the number of population available is relatively small and to meet the minimum requirement of sample required in SEM analysis techniques, hence the method used for this research is by conducting census that is by involving all population elements as the sample of this research (Cooper and Emory, 1996). Therefore, the number of sample used for this research is 118 respondents. Operational Definition of Research Variables Herewith are the indicators of these research variables. Table 1. Research variables and indicators. Variabel Indikator

Organizational Culture (X1)

Job Satisfaction (X2)

Organizational Commitment (Y)

Job Performance (Z)

Professionalism (BO_A); Distance from Management (BO_B); Trust between Colleagues (BO_C); Regularity (BO_D); Hostility (BO_E) and Integration (BO_F) reference: Hofstede, Geert, Bond and Chung (1993) in Mas’ud (2004) Satisfaction with Salary (KK_A); Satisfaction with Promotion (KK_B); Satisfaction with Colleagues, (KK_C); Satisfaction with Supervisor (KK_D); and Satisfaction with The Job Itself (KK_E) reference: De Vries (1978) in Mas’ud (2004) Affective Commitment (KO_A); Continuance Commitment (KO_B) and Normative Commitment (KO_C). reference: Allen dan Meyer (1997) dalam Mas’ud (2004) Work Quantity (Kin_1); Work Quality (Kin_2); Efficiency (Kin_3); Ability on Performing Main Tasks (Kin_4); Accuracy and Precision (Kin_5); Employees’ Knowledge (Kin_6) dan Employees’ Creativity (Kin_7) reference: Tsui et al.. (1997) dalam Fuad Mas’ud (2004)

Respondents Characteristics There are 118 out of 183 administrative employees of University XYZ Tangerang participated in this research. Table 2 summarized demographic characteristics of respondents’ profiles. Based on the sex gender, most respondents participated in this research are males (61.02%) and most of them aged in between 21 – 30 (55.93%). Most respondents have 0 -5 years of working period (64.41%) showing that most of them are in the phase of starting their professional career but they already have sufficient working experience. Based on the marital status, the composition between single and married respondents is slightly equal (49.15% and 50.85%). The majority of these respondents are bachelor graduate (37.29%) while most of them are staff accordingly to the position level (74.58%). As a record, cleaning service, office boy/girls, security officers are categorized into the staff level as well. Analysis Tools This research use path analysis method using SPSS (Statistical Package for Social science for Windows version 22.0 and SEM (Structural Equation Modeling) method using AMOS for Windows version 22.0. RESEARCH ANALYSIS AND RESULT Set of questionnaire and data used for this research will have to undergo the validity and reliability testing for the entire research variables. There is an indicator of Organization Culture (Hostility BO_E) that needs to be dropped since it didn’t pass the validity test. For other data that have passed the validity and reliability test will have to undergo the normality, outliers’ evaluation (univariate and multivariate outliers), multicolinierity, singularity and residual values evaluation.

Based on the Confirmatory Factor Analysis on these four research variables (organization culture, job analysis, organizational commitment and job performance), the full model analysis can be displayed as the following:

Image

2.

Full

Model

of

Structural

Equation

Modeling

(SEM).

The test result against the primary model goodness of fit test as shown in the graphic shows. By comparing the cut off values and Goodness of Fit Indices turns out that this model has only 1 (one) criteria out of 8 (eight) criteria set that meet the requirement, that is Relative Chi-Square with marginal condition of 3.244. Since there is only 1 (one) criteria fulfilled therefore this model is considered not to be a good model (Solimun, 2002), therefore the model is needed to be modified to increase its level of goodness of fit (Solimun, 2004). Table 3. Goodness of Fit Evaluation Goodness of Fit Index Cut-Of Value Chi-Square (X2) expected to be low Relatif Chi-Square (X2/df) ≤ 3.00 Probability > 0.05 RMSEA ≤0.08 GFI ≥0.90 AGFI ≥0.90 TLI ≥0.95 CFI ≥0.95

Hasil Model 532.098 3.244 0.000 0.139 0.665 0.571 0.769 0.801

Remarks less fit marginal less fit less fit less fit less fit less fit less fit

Model Modification - Phase I The first phase of this model modification is conducted by not including the indicator with memiliki loading factor (λ) < 0,600. These indicators are BO_B and KK_D as shown in the graphic below.

Image 3. Model Modification- Phase I This initial model modification has improved the level og goodness of Fit, yet the improvement is considered not to be significant enough. Therefore, it is necessary to conduct the second phase of model modification. Model Modification Phase II In the second phase of model modification, errors with modification index (M.I) > 10.00 are correlated in order to increase the model’s goodness of fit level. The correlated errors are : e9 e10, e5 e6, e4 e6, e4 e5, d10 e5, d9 z2, d9 e8, d9 d10, d8 d6, d7 d8, d2 d8 dan d2 d7.

Image 4. Model Modification Phase II Tabel 4. comparison between Goodness of Fit Indices Level of The Primary Model, Phase I Modification Model and phase II Modification Model Phase I Phase II Goodness of Fit Cut-Of Primary Modification Modification Remarks Index Value Model Model Model Chi-Square expected to 532.098 385.927 199.326 better fit (X2) be low Relatif Chi≤ 3,00 3.244*) 2.991*) 1.647*) better fit Square (X2/df) Probability > 0.05 0.000 0.000 0.000 less fit RMSEA ≤0.08 0.139 0.130 0.074*) better fit +) GFI ≥0,90 0.749 0.721 0.843 better fit AGFI ≥0,90 0.693 0.631 0.778+) better fit +) TLI ≥0,95 0.769 0.820 0.941 better fit *) CFI better fit ≥0,95 0.801 0.848 0.954 ++) --) --) KOBO (ᵞyx1) 0.311 0.138 -0.513 worse fit KOKK (ᵞyx2) 0.599++) 0.770++) 1.435++) better fit --) --) --) KinBO (ᵞzx1) -0.431 -0.387 -0.474 worse fit ++) ++) ++) KinKK (ᵞzx2) 0.686 0.581 0.643 better fit ++) ++) ++) KinKO (ᵞzy) 0.472 0.518 0.518 remain ++) ++) ++) Squared Multiple Correlation KO 0.802 0.813 0.903 better fit ++) ++) ++) Squared Multiple Correlation Kin 0.550 0.525 0.517 worse fit *) Goodness of Fit compliance +) Marginal ++) Significant --) Not Significant

Table 5. Standardized regression weights

organizational commitment organizational commitment job performance job performance job performance

KO KO Kin Kin Kin