A Conceptual Framework on Organizational Commitment and Compensation

Abstract

This research paper attempts to provide an exploration of the conceptual literature as regards to Organizational Commitment. The relationship between human assets and organizational dedication plays an important function in the growth of any organization. A primary objective of this research is to research theoretical perspectives to find a way to clarify organizational dedication with explicit reference to telecommunication sector. The paper suggests that organizations want to pay attention to the connection that prevails within the organizational tradition. Previous literature has shown the framework of organizational factors and organizational commitment but this paper goals to narrate the various factors of compensation and their impact on organizational dedication.

This examine additionally provides a highway map to guide the long run research students.

Introduction

The dedication of the entire workforce is significantly extra essential in today’s period than past. Organizations give consideration to sustained aggressive advantage by way of continuous enchancment in order to increase market and retain buyer satisfaction. To retain better prospects requires having better workforce.

The concept of organizational dedication has also been used as a forecaster of employee retention. It has additionally become the prime point of managers in many organizations in order to maintain aggressive advantage as far as manpower is anxious. Employers wish to have contributions from workers to find a way to target new markets and distinguish their services and products from the competitors. However many instances staff feel insecurity and insecurity relating to their job as a outcome of which they’re much less loyal to the organization. If staff are paid properly and supplied with the better incentive schemes they are likely to be retained by the organizations.

Concept of Organizational Commitment

Organizational Commitment (OC) is referred as, “the relative power of an individual’s identification with and involvement in a particular organization” (Mowday et.al., 1979). OC also states to an identification of an worker working in a corporation as a human capital. OC has been distinguished by the three types of dedication: affective, continuance and normative.

Affective dedication means emotional attachment of workers in the course of the group. Continuance dedication is said to the intention to remain with the organization as a end result of the value of leaving might be excessive or sometimes the rewards and recognition helps staff to stay in the organization. The third dedication is the normative that displays an obligation or sense of belongingness among the employees to remain as a member of a corporation (Allen and Meyers 1991). John (2011) said in his analysis paper, as in the case of BSNL, trustworthiness, image and relationship are the primary elements which affect the loyalty of the employees. From the factor evaluation, it was found that trustworthiness was the important thing issue that motivated the workers to stay loyal with their organization.

Concept of Compensation

(DeNisi and Griffin, 2001) reviewed compensation as a reward system that a corporation present to its staff in return for their willingness to carry out various tasks and jobs within the organization. Compensation is related to the efficiency measures. An employer should design compensation in such a way so as to induce employees with necessary info to remain with the firm for long term (Greg Clinch 2015). In this examine key variables are taken from the prevailing literature. They are:

Basic Pay

It is a vital useful resource to fulfill employees’ wants. Therefore, it is doubtless one of the hygienic factors related to the behaviour of employee at office (Spring et.al., 1997). Organizational efficiency gets induced by the committed staff and dedication of employees come when they’re paid nicely. Pay packages are one of the major elements to stimulate staff and retain them in the group (Terera, et.al., 2014)

Flexible pay

Flexible pay consists of bonuses, which assist a firm to align wage bill with fluctuations in business cycle. Bonuses are more variable than fixed pay (Nakamura 1998). A bonus system is defined as a reward scheme given to staff along with fastened compensation ( Llanos et.al., 2016).

Merit-Based Pay

Merit-based pay is a mechanism for staff to obtain further pay, based mostly on their performance. It consists of three vital dimensions: performance evaluation, communication and participation ( Llanos et.al, 2016). Merit based pay system help the workers to give consideration to their work so as to improve their effectiveness of their efficiency.

Framework

The framework focuses on organizational commitment via the various elements of compensation such as fundamental pay, merit-based pay and versatile pay.

Statement of the Problem: A number of research have been conducted by a number of authors regarding the organizational dedication in various sectors to highlight the importance of loyal workforce for organizational progress. However, the literature on organizational commitment has gone through various insights by different studies. Through this study researcher intends to put in an honest effort to provide a honest contribution on this regard. Compensation (basic pay, versatile pay and merit-based pay) enables to organizational dedication which to find a way to have qualitative workforce. The variables chosen for this paper after the examine of previous literature sheds mild on different compensation variables with reference to organizational dedication. This gap has not been undertaken by anybody till date.

Proposition

Proposition 1:

Basic pay is positively related to organizational dedication.

(Clare L. 2003) instructed that staff were satisfied with their wage. In this paper it is proposed that primary pay is related to organizational dedication. As the workers received happy with the salary, they’re prone to remain within the organization for the longer period.

Basic Pay

Merit-Based Pay

FLEXIBLE PAY

COMPENSATION

Organizational Commitment

Proposition 2:

Merit based mostly pay is positively associated to organizational Commitment.

It involves the incentives schemes. It affects the design structure of accountability accounting framework… Incentives assist to build staff work and co-operative habits (Indjejikian 1999). Co-operative conduct helps to build higher working surroundings which induces staff to remain with the group. Therefore, helps to build dedication amongst workers in path of the group.

Proposition three:

Flexible pay is related to organizational commitment

Flexible pays are related to bonus and all other perks and benefits that a corporation provides to an employee. This permits an worker to really feel satiation which enables to stay dedicated with the group. Nakamura (1991) recognized that bonus are related to a person worker. It is described as a profit-sharing scheme between staff and employers by which both absorb some of the enterprise revenue in the type of flexible payments in return for long-term employment. It additionally encompasses risk-sharing scheme.

Conclusion

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