THE IMPACT OF INDUSTRIAL RELATIONS CLIMATE, ORGANIZATIONALCOMMITMENT, AND UNION LOYALTY ON ORGANIZATIONAL PERFORMANCE: A LONGITUDINAL STUDY.

Abstract

This paper utilizes the theoretical framework of Gordon and Ladd (1990) to examine the relationship between industrial relations climate, organizational commitment and union loyalty and bank branch performance. Specifically, we investigate the factors that influence the development of a co-operative industrial relations climate, the impact of that climate on both organizational commitment and union loyalty, and how these and other variables (i.e., demographic, job related, organizational, union related, environmental and technological) affect branch level productivity, quality of service, absenteeism, and customer attrition. This research is undertaken in a large Australian based multinational banking organization. The data are drawn from 460 bank branches of unionized non-managerial employees across three time periods. The LISREL results indicate that a cooperative industrial relations climate was associated with significantly higher productivity and significantly lower absenteeism. In addition, both organizational commitment and union loyalty had positive impacts on productivity, with union loyalty also having a negative impact on absenteeism. Other explanatory variables that had significant total causal effects on productivity were job opportunity, union instrumentality (intrinsic), job satisfaction, procedural justice, union satisfaction, collectivist work orientation, gender (%female), openness, branch size, and branch transfer. Furthermore, we found that union instrumentality (intrinsic), collectivist work orientation, union satisfaction, and job opportunity had significant total effects on absenteeism. Finally, branch size displayed a direct negative effect on quality, while ATM transactions had a direct positive impact on customer attrition. The theoretical and practical implications of these findings for unions and organizations are discussed.