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Major Project Report ON


Submitted in the Partial Fulfillment for the Requirement of Bachelors Business Administration (BBA)

Guru Gobind Singh Indraprastha University (GGSIPU)

SUBMITED TO: Ms. Gauri Dhingra (Faculty Guide)

SUBMITED BY: Ashish Singh Aswal 06121401710



This is to certify Ashisl Singh Aswal, a bonafide student of Bachelor of Business Administration, Jagannath International Management School, Vasant Kunj Affiliated with Guru Gobind Singh Indraprastha University, enrolled for the batch 2010-2013, enrollment number 06121501710 has done the project specializing in the field of Employee Commitment under my Supervision.


I wish to acknowledge the generous support provided by Ms.Gauri Dhingra, Faculty Guide, who guided , supervised our project & providing us an opportunity for practical training. She is very kind, helpful and ready to remove the constraints all the time. I also express my sincere gratitude towards all the employees of the company for providing us a chance to do our survey. They fully co-operate which helped me to complete my project work.


The main objective of this project is to analysis the type of employee commitment, factor affecting employee commitment, its benefit to organization and ways of enhancing employee commitment.

Table of contents
1. Introduction07 2. Review Literature..08 3. Models of commitment10 4. Factors affecting employee commitment.....16 5. Benefits of employee commitment..............................22 6. Negative effects of low commitment.....24

7. Measuring employee commitment..................................25 8. Ways of enhancing employee commitment..26 9. Developing an Engagement strategy..........................................35 10. Recommendations......36 11. Questionnaire...37 12. Survey.42 13. Summary & conclusion.48 14. Bibliography.50

CHAPTER-1 Introduction
The effective functioning of an organization highly depends on the commitment of its employees. In fact, the commitment of employees may be a key factor that determines the success of a company in the modern world since, in the situation of the growing competition and the constant implementation of new technologies a company needs to have well-qualified and reliable personnel to maintain its position in the market. At the same time, the effectiveness and productivity of work of employees still remain the major factors that can contribute to the progress of the company. On the other hand, nowadays it is obvious that financial stimuli solely can hardly motivate employees to work more effectively and productively. In such a situation, employees commitment turns to be of a paramount importance since it is due to the high commitment of employees they can perform positive results of their work, increase its effectiveness and productivity, while low commitment leads, as a rule, to poor results of the functioning of the entire organization.

Employee commitment

Employee commitment in the fields of Organizational Behavior and Industrial/Organizational Psychology is, in a general sense, the employee's psychological attachment to the organization. It can be contrasted with other work-related attitudes, such as job satisfaction, defined as an employee's feelings about their job, and organizational identification, defined as the degree to which an employee experiences a 'sense of oneness' with their organization. Beyond this general sense, organizational scientists have developed many nuanced definitions of organizational commitment, and numerous scales to measure them. Exemplary of this work is Meyer & Allen's model of commitment, which was developed to integrate numerous definitions of commitment that had proliferated in the literature.

It is the psychological bond of an employee to an organization, the strength of which depends on the degree of employee involvement, employee loyalty and belief in the values of the organization. As defined by Poter (1974) Employee commitment is the relative strength of the individual's identification with and involvement in a particular organization. It consists of three factors: A strong desire to remain a member of the organization A strong belief in, and acceptance of, the values and goals of the organization. A readiness to exert considerable effort on behalf of the organization.

This model of organizational commitment model was developed by Meyer and Allen. According to the model, organizational commitment reflects at least three general themes. 1. Affective commitment to the organization 2. Continuance Commitment The perceived cost associated with leaving it 3. Normative Commitment- The obligation to remain with it.

Affective Commitment
Its the employees emotional attachment to, identification with and involvement in the organization. Employees with a strong affective commitment continue employment with the organization because they want to.

Continuance Commitment
I t refers to an awareness of the costs associated with leaving the organization. The potential cost of leaving an organization include the threat of The individual

commits to the organization because he/she perceives high costs of losing 9

organizational membership including economic costs (such as pension accruals) and social costs (friendship ties with co-workers) that could be incurred. The

employee remains with the organization because he/she has to.

Refers to a feeling of obligation to continue employment . Employees in this category remain in the organization because they feel they ought to. Organization can develop normative commitment by providing reward in advance e.g. paying college tuition. Normative pressures may also make an individual feel that they ought to remain within the organization. Acknowledging these investments makes employees feel a sense of obligation to reciprocate by committing themselves to the organization until the debt has been paid. One important point is that not all forms of employee commitment are positively associated with superior performance (Meyer & Allen, 1997). For example, an employee who has low affective and normative commitment, but who has high continuance commitment is unlikely to yield performance benefits. The main reason such an employee remains with an organisation is for the negative reason that the costs associated with leaving are too great.


This model embraces workforce commitment and identification with the organizations values and goals. The main features of high commitment model are: 1. Development of career ladders and emphasis on trainability and commitment as highly characteristic of employees at all levels in the organization. 10

2. A high level of functional flexibility with the abandonment of potentially rigid job descriptions. 3. The reduction of hierarchies and the ending of status differentials. 4. Heavy reliance on the team structure for dissemination of information (team building) structure work and problem solving.

OMalley (2000) contends that a review of the commitment literature produces five general factors which relate to the development of employee commitment:

Affiliative Commitment:
An organizations interests and values are compatible with those of the employee, and the employee feels accepted by the social environment of the organization.

Associative Commitment:
Organizational membership increases employees self-esteem and status. The employee feels privileged to be associated with the organisation .

Moral Commitment:
Employees perceive the organization to be on their side and the organization evokes a sense of mutual obligation in which both the organization and the employee feel a sense of responsibility to each other. This type of commitment is also frequently referred to in the literature as Normative Commitment .

Affective commitment:
Employees derive satisfaction from their work and their colleagues, and their work environment is supportive of that satisfaction. Some researchers (eg Allen & Meyer, 1991) suggest that this is the most important form of commitment as it has the most 11

potential benefits for organizations. Employees who have high affective commitment are those who will go beyond the call of duty for the good of the organization. In recent literature this form of commitment has also been referred to as engagement and is the form of commitment that is most usually measured by organizations.

Structural commitment:
Employees believe they are involved in a fair economic exchange in which they benefit from the relationship in material ways. There are enticements to enter and remain in the organization and there are barriers to leaving. This type of commitment is also frequently referred to in the literature as Continuance Commitment.


The workplace is a dynamic field and to remain competitive, employee

commitment is important..The following factors affect employee comittemnt:

Workplace values.
If employees believe that their organization values quality products they will

engage in behaviors that will contribute to high quality. If employees are convinced that their organization values participation they will be more likely to feel as though their participation will make a difference. They will thus be motivated and be more willing to seek solutions and make suggestions to contribute to the organization success. 12

Subordinate supervisor interpersonal relationship.

Supervisors behavior include sharing appropriate information, allowing mutuality of influence, recognizing and rewarding good performance and not abusing the vulnerability of others . The extent to which the supervisor displays these behaviors will thus largely determine subordinate commitment level

Job characteristics.
The extent that a job is structured to provide regular feedback and autonomy as well as a sense of task completion.An increase in perceived control strengthens emotional bonds with an organization. A heightened sense of personal control has a positive consequence for employees attitudes and behaviors at work.When tasks are Intrinsically satisfying, employees tend to be more

committed.Commitment is low when employees are given repetitive routine tasks to complete.A job that allows a high degree of autonomy and the absence of close supervision increases commitment.

Demographics 1.AGE.



As Troy points out, increasingly organizations are attempting to communicate with prospective employees in a coherent manner by developing an employer brand. The brand should condense the basic nature of the organization, what its values are and what it would be like to work there. The principal purpose of the brand is to efficiently bring employers and employees together in order to establish a relationship. Thus, a good brand should convey both the unique benefits of the organizational environment and the type of person who is likely to do well in that setting. The organization must then ensure that it delivers these promises to its employees, or its efforts will have been wasted. Employers should, therefore, devote a portion of the selection process to assessing cultural fit.

Met Expectations
Employees will be more committed if there is a good match between what the person is looking for in a job, and what the job provides . Commitment will be greater when employees experiences on the job match their expectations. Unmet expectations are a source of low morale and dissatisfaction. Such expectations usually relate to the type of work employees are given to do and the opportunities they receive for Training and Development.

Factors affecting commitment.

1. Strategic level -supportive business strategies 14

-Top management value of commitment -Effective voice of HR in strategy making 2. HR policy level -staffing based on employment stabilization - investing on training and development -continent compensation that reinforces cooperation 3. Workplace level - Selection based on high standards -Job design and team work -employee involvement in problem solving

Benefits of employee commitment

High level of employee commitments means that employees are really enthusiastic about their job and, their performance will be better as well as the effectiveness and productivity of their work higher.Employee commitment also evokes a profound interest of an employee to his/her work. This means that he/she enjoys the job he/she does. Consequently, the level of employees satisfaction will be high if they are really committed to their work. Employee commitment may be also cost saving since committed employees are highly motivated that means that they do not need increasing financial rewards for their work, though it does not necessarily mean that employees should not receive financial rewards at all, but the expenses of the organization at this point may decrease.The performance benefits accrued from increased employee commitment have been widely demonstrated in the literature. To list but a few, these include: i. increased job satisfaction 15

ii. iii. iv. v. vi.

increased job performance increased total return to shareholders . increased sales decreased employee turnover decreased absenteeism

Employee commitment should be viewed as a business necessity. Organizations who have difficulty in retaining and replacing competent employees will find it hard to optimize performance. There are not only the immediate expenses of the recruitment process, but other hidden costs such as management time and lost productivity as new employees take time to become effective in their roles.


Low commitment of employees may lead to negative results and undermine the normal functioning of an organization or, at any rate, decrease the effectiveness of work of employees considerably. The low employee commitment has a number of disadvantages which deteriorate the work of each employee and the entire organization Low commitment leads to the low level of interest of employees in their work. Consequently, if employees are not sufficiently interested in their work they will naturally work worse than they can. In other words, the low commitment decreases the effectiveness and productivity of work for employees are not really interested in their work and its outcomes. Naturally, in such a situation, they can hardly be interested in a positive performance of the organization they work for.



This can be done through an attitude survey, employee satisfaction survey, employee commitment survey and performance appraisals. Questioners are usually administered to collect relevant data that management later uses when deciding ways of increasing employee commitment.


Organizations can use various strategies to increase employee commitment. This strategies include:

Induction and Training

The induction programme should be the final step of the recruitment and selection process. A good induction programme will make new employees more familiar with and more at ease within the organization. Employees enter the organization with an assumption of compatibility and should be welcomed.


Relationships with Managers

This refers to how the quality of the relationship between managers and their employees relates to the development of commitment. Employees commitment reflects their day to day contacts with their line managers about their job, and the way in which objective targets are set. Effective communication on job-related issues is a key ingredient in securing individual performance.

Relationships with Colleagues

Emotional attachment to colleagues in the workplace is an important element of commitment, though It is not enough on its own. Organizations that want to build high levels of commitment should look for ways to build this through group activities both in and out of work

Group Membership
To build commitment, being a member of a particular organization must not only satisfy employees social need to affiliate and belong, but must also create a sense of collective identity that differentiates the group from other organizations.. The more exposure that employees have to these features, the more likely they will be to feel like a part of the group and to incorporate that membership into their concept of who they are.


Organizational Justice and Trust

It is also argued that employees evaluate their experiences at work in terms of whether they are fair and reflect a concern on the part of the organization for the well-being of the employees . Treating employees fairly, communicates the message that management is commitment to the employees. This suggests that organizations wanting to foster greater commitment from their employees must first provide evidence of their commitment to their employees.

Other Tools for Enhancing Employee commitment are: Promotion Work-Life Balance Job Satisfaction Pay and Rewards. DEVELOPING HR PRACTICES THAT ENHANCE

According to Armstrong 2005 the following practices contribute to increase of employee commitment. 19

1. Advise in methods of communicating the values and aims of management and achievements of the organization, so that employees are more likely to identify with it as one they are proud to work for. 2. Emphasize to management that commitment is a two way process employees cannot be expected to be committed to the organization unless management demonstrates that it is committed to them. 3. Impress on the management the need to develop a climate of trust by being honest with people, treating them fairly justly and consistently, keeping its word and showing willingness to listen to the comments and suggestions made by employees


An Engagement strategy is based on the high commitment.It aims to develop commitment using the following approaches.

1. Developing ownership.
I t involves involving employees in those decisions that affect them so that they feel they own, i.e. Create a feeling of ownership among employees, listening to their ideas. Employees should feel they are genuinely accepted by the management.

2. Communication programmes
Commitment can only be gained if people understand what they are expected to commit to. Thus in sufficient attention should be paid when delivering messages so 20

that right information is passed. Proper use of newsletters, briefing groups videos and notice boards should be emphasized.

3. Leadership development.
Commitment is enhanced if managers can gain the confidence and respect of their teams. Management training should therefore be used to increase the competence of managers thus making them efficient enough to cultivate a sense of commitment in their teams.


Developing a sense of excitement.

Concentrating on the intrinsic motivating factors e.g. achievement, responsibility and recognition creates job excitement, which leads to commitment. Management should thus give their staff the scope to use their skills and abilities and design jobs which encourage creativity and innovativeness, avoid monotony

Having examined the concept of employee commitment our group gave the following recommendations that would enhance the commitment of employee in the workplace. Fair profit sharing based on an established policy that seeks to make employees feel that the management is commited to them, regular team building activities and designing jobs so that there is flexi time for those employees who may not be in a position to work between 8am 5pm. Providing such incentives e.g. Medical scheme, housing scheme, car loans, furniture loans, pension scheme and increasing the number of years employees


can work in an organization even after reaching the retirement age sends the message that the organization is committed to its employees and so the employees in turn will seek to be committed to the organization. Another way of enhancing employee commitment is by conducting exit interviews, since the interviewee will be leaving the organization it is believed that they will reveal loopholes in the management or job design that contribute to low morale among employees. The management can then use the information to put necessary measures in place to enable employees develop commitment in their work. Management should also ensure that confidentially is practiced especially where there is sensitive information concerning employees. Such information may include health status, marital issues,financial position of employees among many others. The following values should also be practiced.

1. 2. 3.

Fairness Trust Concern for employees.

Different definitions by different people: 1. Almost 20 years ago, ethnographic researcher W. A. Kahn (1990) in his book first conceptualized EMPLOYEE ENGAGEMENT as the harnessing of organizational members selves to their work roles. In engagement, people employ and express themselves physically, cognitively, and emotionally during role performances.



Put simply, Employee Engagement exists when the employee feels: Physically Intellectually Emotionally

3.Employee engagement is the involvement with and enthusiasm for work According to Nelson & Simmons: , Employee engagement has been defined more completely when employees feel positive emotions toward their work, find their work to be personally meaningful, consider their workload to be manageable, and have hope about the future of their work. Stay They have an intense desire to be a part of the organization and they stay with that organization; Say They advocate for the organization by referring potential employees and customers, are positive with co-workers and are constructive in their criticism; Strive They exert extra effort and engage in behaviors that contribute to business success

Researchers from the Institute of Employment Studies, Robinson, Perryman & Hayday (2004) define employee engagement as a positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation. The organisation must work to develop and nurture engagement, which requires a two-way relationship between employer and employee . This definition emphasises a positive attitude towards the organisation and highlights an important aspect of engagement in that it is a two way process. Hewitt Associates definition of employee engagement, the state of emotional and intellectual commitment to the organisation or group producing behaviour that will help fulfil an organisations promise to customers-and in so doing, improve business results also refers to a connection to the organisation rather than ones work. This definition also uses a related concept, commitment, which could further confuse engagement with other well-validated constructs. Other authors 23

also use the term commitment when referring to employee engagement. For example: Flemming, Coffman & Harter (2005) as cited in (Little & Little, 2006) used the term committed employees as a synonym for engaged employees.



The problem formulation is the first step to a successful research process. The project undertakes the problem of analyzing the factor affecting the employee 24

commitment in TGK INDIA and to identify the different ways and strategies to enhance the commitment of employees.


To identify the effect of Vikram 750D on various automotive range. Customers preferences, buying attitude and the product image of Vikram 750 D in loader segment. To identify the competitors in the loader segment of three wheelers in CNG and the loader segment where a company need to change or add something. To study customers post purchase behavior for the product ,brand and the company. To study the customer perception about Vikram 750 D in loader segment.


The research design used in the project is Descriptive Design. The investigation is carried upon the employees of the TGK INDIA. The reason for choosing this design is to identify and analysis the factor affecting the employee commitment.


Available with me was the employees database which was a reliable and authentic source and from those documents maintained by HR department I used to distribute the questionnaire to the employees. It consisted of the first hand source of data collected through the questionnaires from the respondents. .


The data collection method used is primary data source. It was done by collection of information from the respondents by me. The method of gathering information is 25

Survey Method i.e. through structured questionnaire observation


The analytical tools used are mostly graphical ; in nature which include Pie Chart Table


The sample size consists of 25 units which are the most logical and unbiased response.



1. AGE OF THE RESPONDENT a. Below 25 b. 25-35 c. 35-45 d. Above 45


The table represents the number of respondents and their Age Below 25 8 25-35 12 35-45 2 Above 45 3

Below 25 25-35 35-45 above 45

2. Gender of the Respondent a. Male b. Female



Gender Male 16 Female 9

Ma le F em a le

3. How far you satisfied with the working hours? a. Highly satisfied b. Satisfied c. Dissatisfied d. Highly Dissatisfied



Highly Satisfied 2

Satisfied 8

Dissatisfied 10

Highly Dissatisfied 5

hig hly s atis fied s atis fied H ig hly dis s atis fied dis s atis fied

4. Does the organization polices are clearly communicated? a. Yes b. No



YES 21

NO 4


5. Have you been provided with proper skill and training


a. Agree b. Disagree


Agree 20

Disagree 5

Ag ree Dis a g ree

6. Does the company provide attractive opportunities for your career?


a. Strongly agree b. Agree c. Strongly Disagree d. Disagree


Strongly agree Agree 5 4

Disagree 10

Strongly disagree 6

S trong ly Ag ree Ag ree D is ag ree S trong ly D is ag ree

7. Does your superior clearly explains about your tasks and responsibilities assign to you?

a. Strongly agree b. Agree c. Strongly Disagree d. Disagree TABLE-7

Strongly agree Agree 4 15

Disagree 3

Strongly disagree 3

S trong ly ag ree A g ree Disag ree S trong ly Disag ree


8. Does workload have been distributed equally throughout unit? a. Yes b. No


YES 16

No 9

Yes No


9. Have you been satisfied with the level of pay do you receive? a. Highly satisfied b. Satisfied c. Dissatisfied d. Highly Dissatisfied


Highly Satisfied 2

Satisfied 6

Dissatisfied 12

Highly Dissatisfied 5

hig hlysa tisfied sa tisfied H ig hlysa tisfied dissa tisfied


10. Your job is made to have participative decision making? a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree

TABLE-10 Strongly agree Agree 4 15 Disagree 2 Strongly disagree 4

S trong lya g ree Ag ree Dis a g ree S trong lydis a g ree


11. Your good performance is reinforced by a reward system. a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree


Strongly agree Agree 14 6

Disagree 3

Strongly disagree 2


S trong lya g ree Ag ree Dis a g ree S trong lydis a g ree

12. Your idea is considered by your superior a. Always b. Rarely c. Sometimes d. Never


Always 4

Rarely 5

Sometimes 10

Never 6


S trong lya g ree Ag ree Dis a g ree S trong lydis a g ree

13. Do the company have enough career development opportunities? a. Yes b. No


YES 16

No 9


Yes No

14. Does your work has been monitored by your supervisor ? a. Regular basis b. Very Often c. Sometimes d. Rarely e. Never


Regular Basis 17

Very Often 4

Sometimes Rarely 2 2

Never 0


R eg ula rB a s is VeryO ften S om etim es R a rely Nev er

15. My superior has a friendly working relationship with all the team members a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree



Strongly agree Agree 7 13

Disagree 3

Strongly disagree 2

S trong lya g ree Ag ree Dis a g ree S trong lydis a g ree

This project has presented a review of the current thinking about defining and creating employee commitment, which is an evolving topic currently receiving considerable attention. It has been identified as a multi-dimensional concept which has important impacts on an organization through its effects on employee


performance, turnover and absence, and via its influence on customer attitudes to the bottom line. Commitment can be divided into five components, each of which are created by different factors. These are defined as follows:

Affiliative: The compatibility of the employees and the organizations interests

and values.

Associative: The employees perception of belonging to the organization. Moral: The sense of mutual obligation between the employee and the

Affective: The feeling of job satisfaction experienced by the employee. Structural: The belief that the employee is engaged in a fair economic exchange.
Job satisfaction is an important component of commitment, but should not be perceived as equivalent to it. Commitment has more positive outcomes for the organization in terms of employee performance. Job satisfaction can be promoted by making work as enjoyable as possible, providing growth and development opportunities and making provisions for staff to assist them in balancing their work and personal lives.Once established, commitment has to be maintained by ensuring staff have clear roles and responsibilities, and an understanding of what is required of them in their jobs. Good communication and openness throughout the organization is vital, especially in times of change.

It is possible to conclude that employee commitment is a very significant factor contributing to the positive organizational outcomes. It may increase productivity, effectiveness of work and motivation of employees, while low commitment leads to 43

the opposite outcomes. At the same time it is necessary to maintain high level of employee commitment through leadership, development, empowerment, and supervision.

Radical organizational changes often lead to reduced commitment caused by increased job insecurity, increased stress, decreased trust and job redesign. Since organizational commitment has strong correlation with job performances it is very important to reinforce it by applying the right human resources polices. An employee commitment doesnt comes from P.S.U or Private sector organization .It matters how the company takes care of its employee, attract and retain them in an organization. It matters how the company provides them an opportunity to grow and develop to give better results.

1.Allen, N.J., & Meyer, J.P. 1990. (The measurement and antecedents of affective, continuance, and normative commitment to the organization). 44

2.Caldwell, D.F. & OReilly, C.A. 1990. (Measuring person-job fit within a profile comparison process.) 3.Cohen A 1993 ( Age and tenure in relation to organizational commitment: A meta-analysis) 4.Dunham, R.B., Grube, J.A. & Castenada, M.B. 1994. ( Organizational commitment: The utility of an integrative definition.) 5.Gary,d (2005) Human resource management 1. 2. 3. 4. 5. 6. www.hrzone.com www.aon.com www.expressitpeople.com www.watsonwyatt.com www.merceric.com www.emgcorp.com

1. Age of the respondent a. Below 25 b. 25-35 c. 35-45 d. Above 45 45

2.Gender of the Respondent



3. How far you satisfied with the working hours? a. Highly satisfied b. Satisfied c. Dissatisfied. d. Highly Dissatisfied 4. Does the organization polices are clearly communicated? a. Yes b. No 5. Have you been provided with proper skill and training a. Agree b. Disagree 6. Does the company provide attractive opportunities for your career? a. Strongly agree b. Agree c. Strongly Disagree d. Disagree 7. Does your superior clearly explains about your tasks and responsibilities assign to you? a. Strongly agree b. Agree c. Strongly Disagree d. Disagree 8. Does workload have been distributed equally throughout unit? a. Yes b. No 9. Have you been satisfied with the level of pay do you receive? a. Highly satisfied b. Satisfied c. Dissatisfied d. Highly Dissatisfied

10. Your job is made to have participative decision making? a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree 11. Your good performance is reinforced by a reward system. 46

a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree 12. Your idea is considered by your superior a. Always b. Rarely c. Sometimes d. Never 13. Do the company have enough career development opportunities? a. Yes b. No 14. Does your work has been monitored by your supervisor ? a. Regular basis b. Very Often c. Sometimes d. Rarely e. Never 15. My superior has a friendly working relationship with all the team members a. Strongly Agree b. Agree c. Disagree d. Strongly Disagree