Understanding Affective Commitment through High

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Understanding Affective Commitment through High-

Performance Work Systems of Line Managers in Garment Retail Industry, China

Hu Shi^1*

1 School of Management, Universiti Sains Malaysia, Penang, Malaysia

*Corresponding Author: [email protected] Accepted: 1 April 2020 | Published: 30 April 2020

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Abstract: Chinese retail industry is one of the vital industries, which is related with consumption, employment and GDP growth. However, Chinese retail industry also faces a big challenge-high turnover rate. High turnover rate in Chinese retail industry has a bad effect on the industry development and profits. By adopting Social Exchange Theory (SET), this study plans to test the effect of three dimensions of high-performance work systems (HPWS) on the affective commitment of line managers mediated by perceived organizational support (POS) in Chinese garment retail industry. The targeted respondents are line managers in O2O garment retail industry in China. Three dimensions of high-performance work systems (HPWS) are identified which are training and development, performance management and reward and communication and involvement to predict affective commitment mediated by perceived organizational support. 131 line managers answered the questionnaires. Moreover, PLS-SEM model by Smart PLS 3.20 version is applied for hypothesis test. At last communication and involvement is the most important factor to help line managers to gain perceived organizational support in Chinese O2O garment industry.

Moreover, perceived organizational support is positively significantly related with affective commitment of line managers in Chinese O2O garment industry. This study gives new insights for building line managers affective commitment in garment retail industry.

Keywords: High-performance Work Systems (HPWS), Perceived Organizational Support (POS), Affective Commitment, Social Exchange Theory (SET), Line Managers, O2O Garment Retail Industry

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1. Introduction

With the growth of Chinese middle class, the domestic demand is increasing year by year and retail industry as one of the most promising industries in China plays an important role in the Chinese economic. Chinese retail industry has made a great commitment to the contribution of GDP with the growth of consumption. It is said that the domestic retail sales of clothes has reached 2.1 trillion yuan in 2018, which is equivalent to 1.56 times of the total retail sales of consumer goods in China in 2015. The growth rate of garment retail was higher than the overall growth rate of retail industry. In the first quarter of 2018 the cumulative retail sales of domestic clothing, shoes, hats and textiles reached 0.45 trillion yuan with 9.7% year-on-year increase. In addition, retail sales of the apparel industry performed better than the overall retail sales and have a promising future (Analysis of Retail Status, Export Status, Business Status and Future Development Trend of China’s Apparel Industry in 2018, 2018). Moreover, the online retailers have increased such as Alibaba, Jingdong Mall and Pinduoduo but offline retailers still play a large part in people’s daily life in China. However retail industry in China

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often faces high turnover rate, which influences the performance and profits of retail industry in China. Line managers are responsible for recruiting and monitoring the performance of employees within a store, which is also called direct manager. Line managers in retail industry play an important role in the insurance of daily operation and act as coordinator between employees and the upper managers (Sanders, Dorenbosch & Reuver, 2006). Chinese retail industry faces fierce and diverse competition. The population of China is nearly 1.4 billion, which contains the huge demands for domestic consumption.

O2O means the combination of both online sales and offline sales together which contains customers, physical store and website. By this way the value of the customers, business and platforms could all be satisfied together. O2O has two channels. The first channel is from offline to online. During this process, physical stores could order goods from website and website makes distribution then customers purchase goods in the physical stores later online purchase website prefers to provide the customers by the physical retailers to encourage customers purchase goods in its website. While online to offline channel means the process that customers purchase goods from the website and the website delivers the goods to the customers at the same time the customers could get the coupons from the online retailers to purchase in the same brand physical retailers. O2O will be a future trend and long-term competition for Chinese retail industry and the cash flow insurance (Ji, Sun & Liu, 2014). In this study O2O garment retail industry is focused as O2O will be the future trend in Chinese retail industry. Many Chinese clothes retailers combine online and offline together and at the same time brand clothing public advertise through WeChat, Weibo or other social media platforms in order to increase the brand influence and appetency. The interactions between the clothes retailers and customers increase such as brand coupons, brand vouchers and discounted coupons (zhihu, 2018).

High-performance work systems (HPWS) involves a set of separate and correlational HR management practices which are comprehensive recruitment, selective procedures, incentive compensation, performance management systems, extensive employee involvement and training which points to a system of HR practices in order to improve employees’

commitments and job performance (Fu, Ma, Bosak & Flood, 2015). High-perform work systems (HPWS) have a considerable impact on employees’ attitude and perception, which induce the increasing motivation of employees and organizational goal achievement. In HPWS contest employees are gained more opportunities in decision-making and self- development which help employees gain a positive perception and attitudes towards organizations (Wu & Chaturvedi, 2009).

Affective commitment is defined as an emotional attachment to a firm, which motivates the employees to put high efforts and hold positive beliefs about corporate value to remain within a company. The desire of retaining in a company is highly related with absenteeism and turnover intention (Mercurio, 2015). Affective commitment brings emotional bond from employees to organization which means employees have a high level of belongs and loyalty to the organizations (Rhoades & Eisenberger & Armeli, 2001). High-performance work systems (HPWS) contributes to generate dedicated and motivated employees as autonomy, recognition, support and trust could be got by employees from the organization under this system (Cafferkey & Dundon, 2014).

Perceived organizational support (POS) refers to the beliefs of employees on the degree of organization values their contribution and care about their well-being. Employees who have POS gain an obligation to make commitments to organizational goals and satisfy needs for

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self-esteem, recognition and support, which could motivate employees, have an emotional bond with organization (Rhoades & Eisenberger & Armeli, 2001).

Line managers in Chinese retail industry are the direct person who receive, interpret and implement the HPWS in a retail store. Line managers as a tie between common employees and upper management play a significant role in managing the daily operation and financial performance. In order to reduce the turnover rate of line managers in retail industry HPWS is identified as independent variable to predict affective commitment.

In this study high-performance work systems (HPWS) are associated with perceived organizational support (POS) and affective commitment which prompt to gain an insight on how this system influences the affective commitment in garment retail industry in China through perceived organizational support (POS). By reciprocity norm under SET perceived organizational support (POS) as a perception of organization, which could help employees, induce a potential obligation then conduct affective commitment as reciprocity. In this study high-performance work systems (HPWS) is mediated by POS to predict the affective commitment under SET theory in Chinese garment retail industry. Moreover, the dimensions of high-performance work systems (HPWS) are examined separately to understand which dimension play the most important influence on affective commitment. Previous scholars regard high-performance work systems (HPWS) as a whole variable in this study we explore dimensions of high-performance work systems (HPWS) to predict affective commitment in Chinese apparel retail industry. Furthermore this study is conducted in O2O garment retail industry which is a new trend of retail industry development and distinguish from traditional retail industries.

2. Literature Review

Affective Commitment

Affective commitment is regarded as considerable determinants of employee commitment and loyalty to the organization, which means employees are more willing to put extra efforts and remain within in the organization to help achieve organizational goals. Employees with affective commitment to the organization tends to have a high sense of belonging and identification to the organization with low absenteeism and turnover rate. Rhoades and Eisenberger and Armeli (2001) found that POS is positively related with affective commitment in retail employees. According to Vandenberghe and Bentein and Stinglhamber (2004) POS has a positive relationship with affective organizational commitment.

Wickramasinghe and Wickramasinghe (2010) prompted that participation in decision making (PDM) is significantly positively related with affective commitments. Gong and Law and Chang and Xin (2009) argued that performance-oriented HR is positively related with affective commitment.

High-performance Work Systems (HPWS)

HPWS is related with firm performance as a system of HR practices for the development of employees’ skills, commitments and productivity, which becomes a competitive advantage for the organizations to develop and retain employees. HPWS integrates the areas of recruitment, training, compensation, appraisal, participation to help gain a comprehensive picture of HR management practices in an organization. HPWS help employees build skills and competencies in the workplace through extensive training and gain trust through employee involvement, which creates a supportive atmosphere in the workplace, and offer more opportunities to employees to induce them to put more and extra efforts to achieve the goals of organization(Fu, Ma, Bosak & Flood, 2015). Cafferkey and Dundon (2014)

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concluded that HPWS is positively related with employee outcomes mediated by organizational climate. Fu and Ma and Bosak and Flood (2015) stated that HPWS has a positive link with ambidexterity. Messersmith and Patel and Lepak and Gould-Williams (2011) found that HPWS is positively associated with affective commitment. It is said that HPWS has a positive relationship with organizational citizenship behaviour (OCB) mediated by affective commitment (Gong, Chang & Cheung, 2010). Wu and Chaturvedi (2009) argued that HPWS is positively related with affective commitment mediated by procedural justice.

Takeuchi and Chen and Lepak (2009) claimed that HPWS is positively associated with affective commitment mediated by concern for employee climate. According to Zhang and Fan and Zhu (2014) HPWS has a positive relationship with affective commitment mediated by HPWS satisfaction. High-performance Work Systems (HPWS) items are adopted from Cafferkey and Dundon (2014) and adopted from Zhang and Fan and Zhu (2014) which contains three dimensions such as training and development, performance management and reward and communication and involvement in order to gain a complete picture of HPWS. In this study we would like to test the relationship of three dimensions of HPWS with affective commitment. Hence, we hypothesize the following:

H1: Training and Development is positively related with affective commitment in O2O garment retail industry, China.

H2: Performance management and reward is positively related with affective commitment in O2O garment retail industry, China.

H3: Communication and involvement is positively related with affective commitment in O2O garment retail industry, China.

Perceived Organizational Support (POS)

Perceived Organizational Support (POS) is identified as an antecedent of affective commitment of employees, which reflects the beliefs on the extent to how much organization value their contribution and care about their well-being. Through Social Exchange Theory (SET) employee who have a positive perception of organization tend to conduct affective commitment as a reciprocity (Vandenberghe , Bentein & Stinglhamber,2004). Rhoades and Eisenberger and Armeli (2001) stated that POS positively mediate the relationship between organizational rewards, procedural justice, supervisor support and affective commitment.

Moreover, Kuvaas and Dysvik (2009) found that perceived supervisor support (PSS) is positively related with affective commitment. Wickramasinghe and Wickramasinghe (2010) found that POS moderates the relationship between participation in decision-making (PDM) and affective commitment. Hence, we hypothesize the following:

H4: Perceived Organizational Support (POS) as a mediator is positively related with affective commitments.

Theory

Social exchange theory (SET) is adopted to give a theoretical framework to understand the HPWS and affective commitment. This theoretical model that best explains how the employees occur reciprocity to organization. Social exchange theory (SET) stated that if one party acts in ways that could benefit another party then an implicit obligation generates which causes further reciprocity to initial party by the beneficial party (Blau, 1964). Social Exchange Theory (SET) is appropriate for this study as it allows the researchers to understand how the commitment from organization could generate a positive belief of employees, which lead to come out affective commitment to the organization as reciprocity.

Several scholars have used SET as the theory in the context of affective commitment such as Gong and Law and Chang and Xin (2009); Rhoades and Eisenberger and Armeli (2001); and

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Vandenberghe and Bentein and Stinglhamber (2004). Social exchange theory (SET) is identified to build the theoretical framework in this study to help researchers understand the reciprocity norm between organizational commitment, employee belief of organization and affective commitment to provide theoretical support for this study.

Figure 1: Proposed Conceptual Framework

3. Research Methodology Population

The population of this study is targeted at line managers in clothes retailers in Beijing, China.

As is well known that China is a super country with the territory area of 9,600,000 square meters, which ranks the third position in the world. It is impossible to access to all clothes retailers in China. Herby Beijing is selected as this is the capital with the combination of both tradition and modern elements, which attract the tourists from all over the world. The main clothes retailers are mainly focused on commercial streets which have fashionable clothes such as Wangfujing Commercial Street, Xiushui Street, Qianmen Commercial Street and Xidan Commercial District. The respondents of this study will be the line managers in Beijing clothes retailers. The most popular clothes type is leisure brand, which concerns the clothes taste of 90 and 95 generation and accounts for the most consumption.

Sample Size

To calculate the sample size G*power 3.1 software was utilized with the settings as follows:

f²=0.15(medium),ɑ=0.05 and number of predictors with 4 and the power was set at 0.80 level.

The minimum sample size required in this model by G*power was 129. Researchers got the data through researcher network in order to generate the largest number of respondents. Top leisure clothes brands in China has an excellent financial performance and are likely to integrate high performance work systems. Then snowball-sampling approach is followed for respondents to distribute the questionnaires to their colleagues and friends. In total, there are 131 questionnaires are returned back.

Data Collection Method

First of all telephone interviews, face-to-face interviews and e-mail communications were conducted with HR managers and line managers in each clothes retailer to explain the purpose of this study and try to convince them to participate in. A cover letter, which states the research purpose only and confidentiality insurance for all respondents was sent to HR managers and Line managers in leisure clothes retailers in Beijing. After approval on-line questionnaire will be sent to targeted respondents and follow-up calls were made by researchers in order to ensure the smooth process of data collection.

The questionnaire in this study originated from English version. For the understanding of the targeted respondents back-to-back translation is adopted which invited two bilingual experts

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to translate English version to Chinese version to make questions as simple as possible. In addition, bilingual experts also helped translate Chinese version to English version then we make a comparison to make sure there is no ambiguity. Pre-test is conducted which distributed 10 questionnaires to line managers to ensure the appropriation of questionnaire translation and the fitness of questionnaires.

Measurement of variables

Affective commitment items were adopted from Rhoades and Eisenberger and Armeli (2001) which includes six items (Cronbach Alpha=0.83). For example ‘I feel a strong sense of belonging to my organization’; ‘I feel personally attached to my work organization’; ‘I am proud to tell others I work at my organization’ and so on. High-performance Work Systems (HPWS) items were adopted from Cafferkey and Dundon (2014) which have three dimensions. They are training and development (Cronbach Alpha=0.72), performance management and reward (Cronbach Alpha=0.72) and communication and involvement (Cronbach Alpha=0.80). Moreover, items from Zhang and Fan and Zhu (2014) on training and development (Cronbach Alpha=0.92), performance management and reward (Cronbach Alpha=0.92) and communication and involvement (Cronbach Alpha=0.92) are also adopted.

Training and development have eight items such as ‘I have received the necessary training to do my job effectively’; ‘I have opportunities at work to learn and grow’; ‘My job makes good use of my skills and abilities’; ‘Our company provides employees with training assistance enabling them to upgrade their qualifications’ and ‘Employees have clear career paths within the company’. Moreover, items under performance management and reward that are adopted from Cafferkey and Dundon (2014) and Zhang & Fan & Zhu (2014). For example, ‘My pay and benefits package is as good as in most organizations in this region’ and ‘My achievements and efforts are properly recognized and rewarded’. Furthermore, there are 9 items for communication and involvement such as ‘I generally feel informed about matters that affect me’; ‘Adequate communications to employees take place prior to implementing new programs imitative’; ‘Employees are often asked by their supervisors to participate in decisions’; ‘Supervisors keep open communications with employees’ and so on. The items of perceived Organizational Support (POS) are also adopted from Rhoades & Eisenberger &

Armeli (2001) with high internal reliability. There are 8 items such as ‘My organization really cares about my well-being’; ‘My organization strongly considers my goals and values’;

‘My organization cares about my opinion’ and so on. All the answers are given on a 5-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree) in order to ensure the consistency of the whole questionnaire.

Data analysis

In order to examine the hypothesis PLS-SEM model by Smart PLS 3.20 version was adopted to analyse the data, which contains two parts. One is measurement model analysis and the other is structural model analysis. Figure 2 shows the proposed model and hypothesis in PLS- SEM model.

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Figure 2: Proposed model and hypothesis

4. Results Respondent Profiles

Table 1: Characteristics of the respondents

Characteristic Frequency Percentage

Gender

Male 64 48.9

Female 67 51.1

Job Experience

0-5 Years 13 9.9

6-10 Years 34 26

11-15 Years 42 32.1

16-20 Years 26 19.8

>20 Years 16 12.2

Education Level

High school 8 6.1

Diploma 46 35.1

Degree 74 56.5

Master 3 2.3

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In table 1, the characteristic of respondents on gender, job experience and education level is shown. 64 respondents are male (48.9 percent) and 67 respondents are female (51.1 percent).

Majority of respondents have 16-20 years (32.1 percent) and 26 percent of respondents have more than 6-10 years job experience. Moreover, 26 respondents (19.8 percent) have 16-20 years of job experience (19.8 percent) and 16 respondents have more than 20 years with the percent of 12.2. Only 9.9 percent of respondents have less than 5 years job experience. Most of the respondents have degree education level with the percent of 56.5 followed by diploma with the percent of 35.1.

Measurement Model

The first stage in PLS-SEM is evaluating the measurement model and the second stage is performing the analysis for structural model. It includes item loading, internal consistency reliability, convergent validity and discriminant validity. Table 2 demonstrated the results of measurement model. The first step is examining the item loading where the value of item loading is more than 0.5 should be accepted (Memon & Rahman, 2014). The second step is assessing the internal consistency reliability by using composite reliability and Cronbach Alpha. The results of composite reliability reported in Table 2 indicates that the values are within the suggested value of ‘satisfactory to good’ which is more than 0.7 (Hair et al.,2019).

The third step is examining the convergent validity by conducting the average variance extracted (AVE) which should be more than 0.5 (Hair et al., 2019). As shown in Table 2 the item loading, reliability, convergent validity are suitable in this study.

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Table 2: Measurement Model Assessment

Items Loading Composite Cronbach Alpha Average Variance

Reliability Extracted (AVE)

AC1 0.746 0.940 0.923 0.724

AC2 0.888

AC3 0.883

AC4 0.820

AC5 0.892

AC6 0.867

TD1 0.643 0.908 0.883 0.554

TD2 0.664

TD3 0.821

TD4 0.805

TD5 0.652

TD6 0.762

TD7 0.743

TD8 0.836

CI1 0.775 0.937 0.924 0.624

CI2 0.827

CI3 0.824

CI4 0.847

CI5 0.750

CI6 0.818

CI7 0.771

CI8 0.710

CI9 0.779

PMR1 0.807 0.926 0.905 0.678

PMR2 0.766

PMR3 0.891

PMR4 0.833

PMR5 0.835

PMR6 0.802

POS1 0.805 0.954 0.944 0.720

POS2 0.849

POS3 0.835

POS4 0.805

POS5 0.880

POS6 0.849

POS7 0.874

POS8 0.886

Note: AC= affective commitment, TD= training and development, CI= communication and involvement, PMR=

performance management and reward, POS= perceived organizational support.

The final step in measurement model is to ensure that heterotrait–monotrait (HTMT) is less than 0.85 to establish the discriminant validity (Henseler, et.al, 2015). The findings of HTMT presented in Table 3 shows that the discriminate validity is suitable in this study.

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Table 3: Results for discriminant validity

Performance affective communication perceived training and Management commitment and organizational development

and Reward involvement support

Performance Management and Reward

affective 0.374 commitment

communication 0.460 0.546

and involvement

perceived 0.543 0.784 0.752

organizational support

training and 0.755 0.411 0.683 0.601

development

Structural Model

After the measurement model was analyzed structural model is adopted to examine the five hypothesis for path analysis. R² is tested to determine the level of explanatory power. The R² in this study are 0.550 and 0.564 respectively, which means the explanatory power of endogenous constructs is moderate. Q² was tested for understanding the predictive relevance, which means if Q² is more than 0 the exogenous constructs have predictive relevance for the endogenous construct (Hair et al.,2019). In this study Q² s more than 0.35 that indicates that the predictive relevance is large.

Table 4: Blindfolding result

Construct Q²

Perceived organizational support 0.368

Affective commitment 0.363

The hypothesis were tested by bootstrapping as shown in Table 5. From the results two hypothesis are supported. Communication and involvement under high-performance system is positively related with perceived organizational support with the significant level .01.Moreover perceived organizational support is significantly positively related with affective commitment for line managers in Chinese garment retail Industry.

Table 5: Structural model

Hypothesis Relationship Path T value P value Decision

coefficient

H2 Performance Management and 0.225 1.933 0.053 Rejected Reward -> perceived organizational

support

H3 communication and involvement -> 0.597 8.139 0.000** Supported perceived organizational support

H4 perceived organizational support -> 0.742 14.425 0.000** Supported affective commitment

H1 training and development -> 0.039 0.346 0.729 Rejected perceived organizational support

Note：**p<0.01

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5. Conclusion

This study provides new insights for garment retail industry for line managers retention. Line managers in retail industry play an important role in coordinating with customers and upper management. When employees gain a sense of affective commitment the turnover intension is ignored and more commitment will be made by the employees. O2O business model is the future trend for retail industry. In this study, three dimensions of HPWS are identified.

However, only communication and involvement is positively related with employee perceived organizational support as a line manager in the store the efficient communication with upper management and more authority to make a decision seem to be more positive for their perception from organization. Moreover, performance management and reward which are the traditional reward methods to encourage employees in this context has no impact on perceived organizational support, which give further researchers to consider if the traditional rewards could really attract employees and motive employees. In addition, training and development also has no impact on perceived organizational support. The reason may lay on as a line manager they are very familiar and competitive for the business daily operation and lose the attraction for perceived organizational support. Perceived organizational support could help employee gain affective commitment as the positive conception of organization and support could give them a sense of security and concern, which encourage to have a phycology belongings and emotional attachment to the organization. Line managers in retail industry plays a very important role and their experience accumulate with certain time. Once the turnover rate is too high sometimes it will be tough for the store to recruit a competitive candidate on time. So the affective commitment of line managers is very vital for the benefits of garment retail industry.

Limitation and Recommendation

It is recommended that in the future research more retail industry could be focused on. This study understands the affective commitment of employees through high performance system and in the future researchers should think what other factors could also induce the employee affective commitment. In this study, only Beijing garment retail industry is selected later research could take into consideration to cover more areas of China.

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