Employee loyalty represents one of the key issues in human resource management. While there are many reasons for employees to remain loyal to the company employing them, two general categories of sources of loyalty stand out. First, employee propensity to stay in an organization is often related satisfaction of their material needs (Ralytė, 2010, Žaptorius, 2007). On the other hand, importance of non-material needs is also often emphasized (e.g. Bakanauskienė, Ubartas, 2009; Lakacauskaitė, 2012). In times of economic crisis, when organizations are not always capable of meeting material aspirations of the employees, the question about other sources of loyalty comes to the forefront. Among such other sources are quality of interpersonal relationships, organizational identity and perceived prestige of an organization. Addressing this practical challenge requires careful examination of theoretical aspects of the issue. The variables of employee loyalty, organizational identity and interpersonal relationship quality have been studied quite extensively. For example, the issue of employee loyalty has been examined by D. Savareikienė, L. Daugirdas (2009), V. Legkauskas (2000) provided in depth-analysis of identity, J. Vveinhardt (2009) conducted revealing research on importance of interpersonal relationships between employees. Also, J. Almonaitienė (2007) studied relationship between organizational identity and employee loyalty. However, there is a lack of research aimed at empirical determination of relationship between various “soft” factors affecting employee loyalty. Thus, the purpose of the present study was to examine the importance of interpersonal relationship quality, perceived prestige of an organization, and strength of organizational identity for employee loyalty. Subjects in the study were 139 employees working for various organizations in Lithuania. Organizational identity was measured using Organizational Identification Scale (Mael, Tetrick, 1992), interpersonal relationship quality was assessed by means of the High-Quality Connections Questionnaire developed by J. E. Dutton, E. D. Heaphy (2003) and perceived organizational prestige was measured by the questionnaire of F. A. Mael and B. E. Ashforth (1992). In order to assess employee loyalty, a scale was developed for the present study on the basis of various larger questionnaires (Victor, Cullen 1988, cit. from Maesschalck, 2005; Konowsky, Organ, 1996; Lin et al., 2010; Homburg, Stock, 2000, cit. from Matzler, Renzl, 2006; Jun, Cai, Shin, 2006). Results of the study revealed statistically significant relationships between all variables studied. Better interpersonal relationship quality was linked to stronger organizational identification and more perceived organizational prestige. The study also revealed that the “soft” factors – interpersonal relationship quality, organizational identification and perceived organizational prestige – explained 88.7 % of employee loyalty. These finding points out to a very important fact in human resource management – while employees may often cite the “hard” factor of wages as the key source of their loyalty, the “soft” factors examined in the present study in fact exert stronger, albeit unconscious influence. It should be noted, that the cross-sectional nature of the present study does not allow for a definite conclusion about cause and effect relationships between the variables studied. In order to prove existence of such relationship, longitudinal studies conducted in various types of organizations are necessary.
Read full abstract