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  • Faculty & Research

    Knowledge creation on China, from proven China experts.

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  • Faculty & Research

    Knowledge creation on China, from proven China experts.

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Tuesday, April 9, 2019

Need to Boost Employee Commitment? Try Fostering the Right Organizational Culture

We have all been there: sitting in the office, staring at the screen, with our minds elsewhere waiting for 5 p.m. so we can exit the building. In an age of knowledge workers, keeping employees sitting comfortably and ergonomically at their desks isn’t the challenge, instead it is keeping them actively engaged, motivated, and committed to their roles. Talent is often a company’s biggest asset, yet it also remains the most difficult and elusive to develop and retain.

A recent study by CEIBS researchers sheds some light on what HR managers can do to boost the commitment of their knowledge workforce. These are not simply office perks or flexible work hours, but rather related to something more elusive — an organization’s culture.  

As Professor of Management, Flora Chiang, who conducted the study points out, in many cases knowledge workers are not solely financially-driven. They also seek to belong and desire a sense of bonding with their company.

“It is related to a social exchange and has to be mutual. Simply put, when we are nice to someone, we expect them to be nice in return. So in the case of a company, when employees contribute to the company they expect the company to reciprocate,” she explained, making it important for HR managers to understand the expectations or psychological contract employees have with their organization. A company that fulfils this psychological contract will be reciprocally rewarded with the employees’ commitment to the organization.

But how can an organization fulfil this type of unspoken contract? Or even, how can it establish the right psychological contract? The key lies in the values, beliefs and norms, which are embedded in a company’s organizational culture.

A company’s organizational culture — which reflects its collective values, beliefs and assumptions — offers the foundation to the underlying psychological contract the employee develops internally, and thus drives his or her behaviours and attitudes. It is especially true for Chinese employees, given the Chinese culture’s emphasis on collectivism and reciprocity, which both enhance the role of social exchange in this context. The study, which surveyed 640 Chinese employees from technology companies, used four aspects of culture as guideposts: involvement and consistency which promote internal integration, and adaptability and mission which promote external adaptation.

Communicating the company’s culture and ensuring that employees’ values align with it are two leverage points that HR managers can make use of, according to Professor Chiang.

Importantly, managers should be mindful that an organization’s culture should be considered before someone is employed, not after. Ensuring cultural fit or alignment should begin early in the recruitment process. Rather than selecting candidates solely based on their qualifications and experience as they appear on their CV, hiring managers should also look at the person-organization fit of the candidate in terms of personal values and company culture. Recruiting candidates with interests and values that align with the organization will make fulfilling the psychological contract easier, and will ensure more effective communication and promotion of the organization’s culture going forward. In the long run, HR managers should also consider keeping an inventory of employees’ profiles that includes data relating to their value characteristics.

HR managers should also manage employees’ expectations and ensure that they are in line with those of the organization by effectively communicating and conveying the organization’s culture. Open communication with employees about the organization’s culture enhances understanding of the company’s goals and mission. This is especially important for junior-level employees and new recruits, who may be less familiar with the company’s values and corporate objectives.

“Such interventions will also help reduce turnover,” Chiang added. 

A further interesting finding of the study is that a company’s mission is likely to have a greater impact on fulfilling the psychological contract among longer-tenured employees than shorter-tenured ones. This is because longer-tenured employees were found to perceive a stronger psychological investment that had developed through prior commitments and experiences with the organization’s mission and long-term goals.

For employees who have been with an organization for longer periods and understand its culture well, it is also crucial to sustaining their affective commitment by continuously involving them in internal policies and guidelines.

“Participation is key, and it is important to note that any policies should be consistent with the culture an organization is attempting to promote,” she said.

On the other hand, shorter-tenured employees appear to respond better to adaptability as a way to frame and fulfil their psychological contract and build affective commitment. HR managers can draw on this idea to focus on career training. For example, a focus on the development of skills and capabilities to help employees cope with new challenges and changes is essential. This is especially true for employees in fast-paced and highly competitive industries, such as the high-tech industry.

Finally, HR managers should also be aware that fulfilling the psychological contract is an on-going process that requires constant nurturing. It is not an external, visible performance indicator that has to be matched against, but rather an internal process that requires careful monitoring and interpretation and can derail if not maintained well.

“HR needs to monitor the expectations of employees and it is not always something that you can get right the first time. It is a bit vague and takes time and effort to understand. The danger is that any violations of the contract will reduce employee commitment,” Chiang said.

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