Causal Factors of Enhancing Employee Loyalty towards Organization

Abstract

The objectives of the study were 1) to study “casual” factors enhancing employee loyalty towards organization, and 2) to develop a structural equation model of factors enhancing employee loyalty towards organization. The quantitative and qualitative research methods were implemented in this study. The quantitative data were collected from the interviews of 500 industrial business executives. The findings indicated that the significance levels of employee loyalty towards organization were high in all aspects. The highest significance level of leadership was that the executives provided a work manual describing the structure of work. The highest significance level of labor union was that the organizations provided proper cost-of-living and fringe benefits for employees. The highest significance level of organizational commitment was that the employees always maintained their organizational values. The hypothesis testing revealed that the small, medium, and large enterprises differently focused on the enhancement of employee loyalty towards organization at statistical significance level of .05. The results of structural equation model analysis showed that it passed the evaluation criteria with empirical data congruence including Chi-square probability of 0.699, relative Chi-square of 0.940, index of item objective congruence of 0.970, and root mean square error of approximation of 0.000.