The Impact of Generational Differences on Organizational Commitment and Turnover Intention

Research Paper on The Impact of Generational Differences on Organizational Commitment and Turnover Intention

Le, H. Quynh; Wong, Filbert; Liu, Ina; Dinh, V. Truong

Abstracts

This paper investigates on the factors that make each generation from veterans, baby boomer, generation X and Millennium stay committed to an organization. The researcher has conducted an interview on one people from each generation. To generation X, job freedom is more critical factor in term of organization commitment. For generation Millennium, motivation is the main cause that leads to job satisfaction and organizational commitment. Moreover, the researchers also brought out solutions to prevent turn-over for each generation, especially in generation Y, as many companies have witnessed a remarkable turn-over rate in the past decade. The research found out that job involvement is the key factor that effects organization commitment for generation veterans and baby boomers.

Literature Review: Organizational Commitment

Organizational commitment may be viewed as an organizational member's psychological attachment to the organization. Organizational commitment plays a very large role in determining whether a member will stay with the organization and zealously work towards organizational goals. A prominent theory in organizational commitment is the 3-component model (or TCM). The model argues that organizational commitment has three distinctive components.

Affective commitment is your emotional attachment to an organization. If you have a high level of affective commitment, you enjoy your relationship with the organization and are likely to stay. You stay because you want to stay. Continuance commitment is the degree with which you believe that leaving the organization would be costly. If you have a high level of continuance commitment, you will stay with an organization because you feel that you must stay. For example, you may feel quitting your job may lead to an unacceptable length of unemployment. On the other hand, you may feel you will lose a certain degree of status if you leave a well-respected organization such as a top law firm or research company. Normative commitment is the degree you feel obligated to the organization or believe that staying is the right thing to do. Here, you believe you ought to stay. (Grimsley, S, (2017))

How can organizations prevent high turn-over?

Trust is the essence to keep employees from exiting their organization. When trust is established between workers, a positive working atmosphere will exist more likely. A good working environment leads to higher level of staffs’ happiness, which eventually contributes to higher level of organizational commitment. Company that promotes team spirit is expected to have better results than company which focuses on individual achievements. (Kashefi, M, Adel, R, Abad, H, Aliklayeh, M, Moghaddam, H and Nadimi, G, 2013)

What causes Job satisfaction?

Job satisfaction comes from feedback, social support, and interaction with co-workers outside the workplace can also make workers more satisfied with their jobs. Job pay has a correlation with job satisfaction, especially for people who are poor or who live in poor regions, because they need money to sustain their livings. But once an individual reaches a level of comfortable living, the relationship between job satisfaction virtually disappears. A satisfied employee is more likely to stay committed in an organization (Robbins, S and Judge, T, 2013).

What is motivation?

According to WebFinance (2017), motivation are internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role or subject, or to make an effort to attain a goal.

Examples of Research Results on Organisational Commitment

Some studies tried to relate Organisational commitment with other variables. An example can be taken from a research by Bilgin et al (2017), where it was demonstrated that organizational affective commitment and job satisfaction has an impact on the Organizational citizenship behaviour (OCB) in the Turkish hospitality industry. Employees that are guided by a charismatic leader has a higher level of Organizational commitment. Employees work better due to clear instructions given by their leaders, also receiving sufficient feedback and emotional support when needed. (Bilgin, N, Kuzey, C, Torlak, G and Uyar, A, 2017)

Definition of job involvement stated by Mangunsong, R. (2012): “Job involvement is the degree to which a person identifies with his or her job, actively participates in it, and considers his or her performance important to self-worth. High levels of job involvement are positively related to organizational citizenship and job performance.” She also argued that: “This involvement increases ownership and commitment, retains your best employees, and fosters an environment in which people choose to be motivated and contributing”. It has been argued by Cruz, (2007) that Generation Y will change their workplace if there is a better working environment and higher appreciation for contribution at the new workplace. However, he also stated that: “This does not mean they do not have high level of organization commitment. Moreover, “Organizational commitment is the bond employees experience with their organization. Broadly speaking, employees who are committed to their organization generally feel a connection with their organization, feel that they fit in and, feel they understand the goals of the organization” stated by Werf, R. (2014).

Another point that Yi, M (2014) brought out in his study that: “In order to enhance the job satisfaction of Generation Y workforce, organizations should take care of their needs by making sure that they are satisfied with their jobs, and various aspects of their jobs such as pay, promotion, operating procedures.” It’s reveal that there is a link between organization commitment with job satisfaction and motivation in generation Y.

Brown, M and Benson, J., (2011), argued that that the Boomers do have higher job satisfaction and a lower willingness to quit than their Generation X colleagues. Tanner, R. (2016) commented about generation veterans that they are the generation that rewards, status, respect, and authority must be given to them in order to keep their commitment to the organization. The definition of job involvement is also linked with the “reward”, “status”, “respect” and “authority” to generation veterans. The key value of veteran is stated by Telberg, R. (2010) is self-sacrifice and dedication.

Tanner, R. (2016) also gave the link between job involvement and organizational commitment of generation Y that this generation values personal growth and tend to be more involved in teamwork. He also stated a critical thing is that this generation are loyal to their career first and to their employer second. Which also means that in order to keep their commitment to the organization, the employer must be able to deeply understand their wish and motivation and give them what they want.

Examples of Research Results on the Generational effect on Organizational Commitment and Other Connected Variables

This journal has classified generation into four different groups for better understanding of the content: Veterans, Baby boomer; Generation X Generation Y. (According to Gupta, A.(2015), Veterans: (Born between 1920 and 1940 which is in difficult times such as the stock market crash and the depression after 1929 in North America and lived with rationing and hardship), “Veterans are ideal employees because they basically manage themselves and prefer on a need- to-know basis and gain satisfaction from performing their job well”. Baby boomers are born between 1947 and 1967 - the period of post-second world war; and experience cultural and technological shift during their life. They value success, teamwork, inclusion, and rule challenging. Generation X are born between 1970 and 1980, they are the first generation to use technology and experience significant changes within the family because of the advancement in technology. They believe there are no mutual commitments between them and the organization. They can be motivated by emphasizing the significance of their work and by creating a fun working environment. Generation Y (also called Millennials are born between 1980 and 1999. They are reported to be the most educated, well-travelled and lived the world of technology with internet, DVDs, and cell phone. They work better in groups as they were cultivated to be able to social when they were young. They seek attention and feedback more than the boomers and Gen X, who prefer to work without restriction and aims to reach to the highest point. They view “family-work balance” higher than the boomers and Gen X.

To summarize, Boomers are likely to remain committed if the organizations reward them based on their abilities and accomplishment. This is due to their seniority in the organization and they believe they deserve better than the young generations. Gen X remains committed when they feel that they are important to the organization and their work shows significance. Gen Y remains committed when they can find a balance between family and work. To be more clear, our group will divide the four generations above into two main categories: The old generation which include Veterans and Baby Boomers, who are more likely to stay loyalty to the organization and believe that hard work can be rewarded with job promotion and pay-check increase, and the young generation which includes Generation X and Y, who are more likely to leave the organization when they have better opportunity and the current job cannot fulfil their need.

There are a few articles that support this theory. According to Ben Casselman in “Enough Already About The Job-Hopping Millennials”, young workers tend to jump job more often than they used to before. One of the reasons is because the millennial is the largest generation currently in the workforce or soon will be. The fact that they own much more occupation opportunities than older generations decrease their worries of not getting a job and be more proactive to seek for new chances to prove themselves. Moreover, young people have high desire to prove and show their abilities in different fields as well as enjoy being awarded. Researches show that majority of young workers tend to move jobs to have experiments on different subjects and types of working environment. Older generation such as baby boomers and Veterans, on the other hand, seems to be more stable. They are trying to be stable with one job so that they can take care of their family.

Getting older makes them seeks for secured feeling so they do not want to take risks of losing their job. Overall, the thesis that young generation tends to hop job more than older one is proved and supported by several researches. Our team’s research will provide the dilemma between the dissatisfaction and satisfaction of the interviewees in their workplace and the reasons behind their commitment to the working place. This can clarify once again the difference between the generations’ commitment to the organization and can provide the future leader information or solution to prevent high turn-over of employees in each generation. Question: “If you can change anything at your working place then what would it be and why can’t you change it?” compare with “What keep you working at this organization until now?”. The 2 questions will be asked separately so as not to confuse the interviewees because when asking the first question the interviewee will think about themselves at work only but when concern about the second question there are many things involved in their decision.

Detailed description of interview participants

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There are many reasons for a person to stay in an organization. It can be either because of the character of the jobs or the situation a person is facing. There are various reasons for people to stay committed in the working place, such as salary, environment, relationship with colleges and personal interest. However different people have different reasons for them to stay committed. The researchers have decided to investigate the generational effect on organizational commitment and turnover intention in relation to job involvement.

For Generation Y the researchers want to investigate more about this generation due to a remarkable turn-over rate. The previous studies have shown that: “70% of Generation Y employees are leaving job positions within the first two years of their onboarding programs” conducted by Salerno, J (2017). Therefore, the researcher came up with two hypothesis.

Hypothesis 1a: “Higher level of motivation in generation Y is related with higher level of job satisfaction which will lead to a higher level of organizational commitment”

Hypothesis 1b: Higher level of motivation lead to higher level of organization commitment in generation Y

Generation Y, can be considered as the youngest and most active labor source. This generation includes potential workers full of new technologies and knowledge, however, is also a problem to consider since they tend to jump job far more often than other generations.

The researchers had a chance to talk with Uyen Pham, a teaching assistant at one of the most famous English center in Vietnam. Although the job fits her abilities and skills, it can hardly be her dream job since she doesn’t truly have connection to the job’s character as well as its identity. She finds it is an interesting experiment to have to be a teaching assistant and spend time with junior students at the center, however her passion for the job is not enough to be considered as Affective Commitment. She has been working there for almost half a year, and the main reason for that is because of the reasonable salary she receives. Moreover, she wants to seek for more experience in different field. The environment and relationship at workplace is good but also doesn’t contribute much to her commitment. The major in this generation also share the same character. Since they are young and own plenty of time, there are many things they want to try.

Young people always seeks for inspired positions where they can show off and prove their abilities. Boredom and uninspired task are main factors can make them leave an organization. In conclusion, the researchers found that motivation is the main factor of her commitment to the current organization. The motivation behind her intention for her commitment are the learning purpose for long term goal and gaining money for short term goal.

For a period of time, if the generation Y is not able to obtain any new things or knowledge from the organization, or in others words, their motivation is not fulfilled they will decide to jump the job to seek for new opportunities of learning. “In terms of workplace goals, many Millennials desire their work to be a continuous learning experience” argued by Tschantz, C. (2016). They also stated that by adjusting the working environment, job design and applying promotional training program according to Millennials’ needs and expectations could increase Millennial satisfaction and commitment. Then both of the hypothesis is proved. Moreover, it has been concluded by Yi, M (2014): “in order to enhance the job satisfaction of Generation Y workforce, organizations should take care of their needs by making sure that they are satisfied with their jobs, and various aspects of their jobs such as pay,promotion, operating procedures.”. Both of the sources have supported the researchers’ hypothesis.

In the second part the researcher want to suggest the solution in order to prevent high turn-over rate of generation Y in the workforce. In individual level, the manager or supervisor of a generation Y employee should reveal the motivation why he/she is working here, and what motivate to go to work every day by having more conversation with them. In group level, the manager should assign group assignment to generation Y employees and give continuous feedback on their work since they are more effective in group work and their need of socialization is stronger than other generation Gupta, A. (2015). In organization level, the researcher want to focus on the personal-fit of generation Y to culture of the organization when they apply for a position. A solution to this can be taking the results of the personality test such as the Big Five and MBTI into consideration in the recruiting process. In this way, the company can lower the risk of turn-over right in the recruiting stage by taking the right person for the right jobs and giving them the opportunity to develop themselves in the organization.

Hypothesis 2: Job freedom is one of the key motivators for Generation X to stay committed within an organization

In Serene Chen’s case, who is an employee from generation X has stayed in an airline company for 3 years. Low job involvement is stated in her answer to the question if she has the ability to change anything is that she wants to have a flexible working time. She couldn’t arrange the schedule by herself. However, the reason keep her here is mainly because it’s her dream and a “comfortable” working environment.”. The researchers are able to see her cognitive dissonance: she feels that being a flight attendant is her dream, but she thinks that the working schedule must be more flexible and she solved the problem by thinking that it’s a part of her job and she is willing to be comfortable with it and keep the commitment with the company. Moreover, she also stated that her value to the company is quite low and “can easily be replaced by others”. Serene Chen is an exception case when she chose to deal with the situation by changing her mind instead of the situation she is facing with. Gupta, A. (2015) stated that: “X remains committed when they feel that they are important to the organization and their work shows significance.” In order to have Generation X’s commitment, the manager should give them more space to act on their task and evaluate the final result later.

Hypothesis 3: Baby boomer stays committed to the organization mainly because of job involvement

Regarding to baby boomer generation, they are also known of “Workaholic”. The name can somehow give us an overall image of how determined they are with their job. We interviewed a teacher with more than 30 years of tenure. She has a great willing to contribute her teaching method to students. This is what comes from her heart that makes she decided to take this job. In another word, she likes the character of the job itself. The working environment and relationships with other colleges are also supported factor to her long working period, but they are not the main reason to keep her stay committed to that position.

According to Claudia Chu, her freedom at work is one of the most important factors to consider whenever she wants to leave. In term of freedom, she means she has influences on several decisions on the school’s process and she is free to make some decisions herself. She has control over her job and for her that is crucial. Perhaps it is nature requirement of people in this generation that once they contribute their life working hard, they deserve recognition and ability to decide or at least to have control to the work at some level, and the longer they contribute, the more potential it is to be a part of the head department.

Job involvement relates to actively participates in the job and finds the job important to self- worth. Claudia, as an English teacher with 32 years of teaching experience, finds it important to be a teacher because she believes that she is capable of educating the new generations with correct teaching methods. Boomers are also found to be loyal and committed to their organizations, and expect a corresponding reward from their organizations compared to younger generations because they believe hard work pays off (Gursoy, Maier, & Chi, 2008; Smola & Sutton, 2002). Similarly, Boomers are more driven by goals and results in the workplace, showing a higher desire to land positions with greater responsibility than younger generations (Families and Work Institute, 2006). It has been shown that the motives for Baby Boomers to stay committed within an organization are money, title and recognition. (Goldbeck, H, 2017).

Our findings in the literature also support this hypothesis. Baby boomers are likely to stay committed to an organization once they receive the reward value to them, and they want the organization to admit their importance to the company. Knowing this character, some solutions may come up in term of preventing turnover level. Firstly, give the employee their “private freedom” at work, give them space for their own decisions. Instead of sending direct orders, give them supportive introductions. Develop horizontal communication is also a good method to improve working attitude among groups or teams.

Hypothesis 4: Veterans stays committed to the organization mainly because of job involvement

According to the answer of Duong Duc Vi, he stays committed to the company, even when he had come to the retirement age, because he knew that he is an important part of the company, he knew that he could contribute his best and participate lifting the company up during the hard economy time. He is given authority to make change and contribute and respect from all his colleague, from the top positions to the lowest ones or in the others words he has high level of job involvement. This point has matched with opinion of Tanner, R. (2016) stated in the literature review. In Vi’s case, the company performed excellent in order to give the highest job involvement to him to such a level that only thing make him dissatisfied is “the coffee machine “in his office, but it seems to be a sense of humor more than a serious complain”. The reason why he has no complain or dissatisfaction could be his ability to make significant change in the company whenever he feels something need to be change.

In short, Veterans once is considered as the most valued generation in the company, “Veterans are ideal employees because they basically manage themselves and prefer on a need-to-know basis and gain satisfaction from performing their job well” - Gupta, A. (2015) commented on generation veterans. They are the one who have the knowledge, experience and high level of management skills. Therefore, in order to prevent turn-over in this generation, high authority, status and respect must be given by all colleague. One solution to this could be give them extra responsibilities or authority beside their work such as solving confliction among employees in their department. Even if they are not the chief manager, but they are usually the oldest one and have more life experience than other, which is useful for solving personal problem among employees. This solution is not only the way of giving them more authority but also the ways that can make them earned more respect from others.

Conclusion

The older generations: Baby boomers and Veterans stay committed within an organization due to job involvement. They find their job important to self-worth and believe that it has a significance on others. However, each generation has a different perception on job involvement. They are more committed when the deserved reward is given based on their performance. In general, given the “workaholic” characteristic, Baby Boomers and Veterans are more likely to strive for excellence and accomplishment in the workplace. It is concluded that there’s a higher tendency for them to stay in an organization when they have high recognition and authority at the working place. To prevent turnover, job freedom has to be given to these generations because they appreciate autonomy and when they have some control on their work, such as being able to make some decisions within the process. Another suggestion would be.

. For generation X, the belief of “work hard pays off” is not as strong as the older generations. From the interview, the circumstance of cognitive dissonance appears. The interviewee is a flight attendant, she thinks the working schedule is unfavorable for her due to the lack of flexibility, however she feels that being a flight attendant is her dream, therefore she decided to stay in the organization. It can be concluded generation X stays committed to an organization when they receive job freedom and feel that their job is important and has a significance. To prevent turnover for this generation, managers has to build a sense of belonging for the employees and accept the fact that everyone has their strengths and weaknesses. They also need to be understandable and provide guidance and interact with their teammates so they would feel that they are being accepted and treated as a part of the family. The second solution is to create a forum for the employees to discuss about what they don’t like about the work anonymously. This way the managers would know that what could be worked on to increase organizational commitment. This solution can apply to all generations and this is a good way of communicating between employees of the company and the managers and by applying this, it can create a better working environment

Millennials is the most complicated generation.They lived the world of endless possibilities and are willing to change to experience. The solution to prevent high turn-over rate for this generation must be considered into 3 levels of organization to be the most effective. In organization level, the company should consider whether the person really fit in with the job or not, since personal-fit lead to high level of motivation and lead to job satisfaction, and finally increase their commitment to the organization. At group level, the manager or supervisor of generation Y employees should assign group project instead of individual project and constantly giving feedback during the process as well as the results of the project. Finally, at individual level, the manager should have more conversation with the employee and asking directly about their motivation or the reasons they work here in order to satisfy their need, and reward them for good result.

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