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Work values, job satisfaction and


organizational commitment in China
a b
Fabian Jintae Froese & Shufeng Xiao
a
Korea University Business School, International Business , Seoul ,
Republic of Korea
b
Namseoul University, Seonghwan-eup , Cheonan , Republic of
Korea
Published online: 15 Sep 2011.

To cite this article: Fabian Jintae Froese & Shufeng Xiao (2012) Work values, job satisfaction and
organizational commitment in China, The International Journal of Human Resource Management,
23:10, 2144-2162, DOI: 10.1080/09585192.2011.610342

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The International Journal of Human Resource Management,
Vol. 23, No. 10, May 2012, 2144–2162

Work values, job satisfaction and organizational commitment in China


Fabian Jintae Froesea* and Shufeng Xiaob
a
Korea University Business School, International Business, Seoul, Republic of Korea;
b
Namseoul University, Seonghwan-eup, Cheonan, Republic of Korea
This study examined the relationships between work values, job satisfaction, and
organizational commitment of white-collar workers who are employed by foreign-
invested companies in China. Results of structural equation modeling show that various
facets of job satisfaction mediated the relationships between work values and
organizational commitment. Employees’ individualism and their willingness to take
risks were related to various facets of job satisfaction. In turn, job satisfaction influenced
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their organizational commitment. The effects of various job satisfaction facets varied,
with job autonomy satisfaction being a stronger predictor of organizational
commitment than pay satisfaction. Theoretical and managerial implications are
discussed.
Keywords: China; foreign-invested companies; job satisfaction; organizational
commitment; structural equation modeling; work values

Introduction
Among developing countries, China is the largest recipient of foreign direct investment
(FDI) and has the largest number of employees who work for foreign companies
(UNCTAD 2010). In 2004, approximately 24 million employees (3% of China’s total
employment) were employed by foreign companies in China (UNCTAD 2004). However,
foreign companies in China face a major problem: They must determine how to manage
and retain the local employees (e.g. Han and Froese 2010; Zhu, Thomson and De Cieri
2008). Chinese workers appear to have a low commitment to their employers, as
evidenced by their high turnover rates. Prior research estimates that employee turnover in
China ranges from 10% to 40% depending on the industry, region, and profession (Han and
Froese 2010; Leininger 2007). Managers and professionals experience particularly high
turnover rates (Leininger 2007).
The goal of this study is to determine how foreign companies can reduce their
employee turnover rates in China. This study analyzes organizational commitment and
its antecedents among white-collar workers who are employed by foreign firms.
Organizational commitment and job satisfaction are considered to be the strongest
predictors of employee turnover (Griffeth, Hom and Gaertner 2000). Despite tremendous
research on organizational commitment (for a review, see Meyer, Stanley, Herscovitch and
Topolnytsky 2002), there is little research on organizational commitment and its
antecedents in non-Western countries and China in particular (Chen and Francesco 2000;
Wong, Ngo and Wong 2002).

*Corresponding author. Email: fabian.froese@gmail.com

ISSN 0958-5192 print/ISSN 1466-4399 online


q 2012 Taylor & Francis
http://dx.doi.org/10.1080/09585192.2011.610342
http://www.tandfonline.com
The International Journal of Human Resource Management 2145

China is culturally very different from Western countries (e.g. Hofstede 2001).
The Chinese culture has generally been characterized by traditional values such as
collectivism and Confucianism with an emphasis on harmony, respect for hierarchy,
reciprocity, loyalty, and the importance of ‘face’ and ‘guanxi’ (Lockett 1988; Earley 1989;
Warner 1993). For example, while Western employees view themselves primarily as
individuals independent of organizations and place priority on their individual interests and
satisfaction, Chinese workers view themselves as organizational members and place
priority on Confucian values such as duties, obligations, and loyalty (Earley 1989; Chen and
Lee 2008). In Chinese society, Guanxi, which is the importance of interpersonal
relationships and the reciprocity between subordinates and their superiors, is widely
reported to be a pervasive feature (Warner 2008). Hence, China may potentially challenge
paradigms that have been developed in the West because of China’s numerous cultural
value differences from Western countries.
Indeed, prior research indicates that the antecedents of organizational commitment
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may be different in China than in Western countries (Chen and Francesco 2000;
Wong, Wong, Hui and Law 2001; Gamble and Huang 2008). Some researchers have
speculated that Chinese employees’ underlying values can explain their different job
attitudes (Ralston, Holt, Terpstra and Yu 1997; Chen and Francesco 2000). To shed further
light on this topic, this study focuses on the relevant work values that affect employees’
organizational commitment and job satisfaction.
Prior research has found that there is a significant and direct relationship between
values and organizational commitment, as well as between values and job satisfaction
(Fischer and Mansell 2009; Palich, Hom and Griffeth 1995). However, the same authors
admit that the explanatory power of such direct relationships is very weak. These studies
suggest that the relationships between work values and job attitudes might be more
complex. Thus, we propose an integrated theoretical framework concerning the role of
work values, job satisfaction, and organizational commitment. In this study, we will
demonstrate how different job satisfaction facets mediate the relationships between work
values and organizational commitment.
The remainder of this study is organized in the following manner. In the next section,
we present a review of literature on organizational commitment research. Then we
present the conceptual framework, and we develop several hypotheses to reflect how
different factors influence organizational commitment. Before presenting the empirical
results, we describe the data and the measures. In the final section, we discuss our
findings, their managerial implications, the study limitations, and suggestions for future
research.

Organizational commitment
Organizational commitment is a psychological state that characterizes the employee’s
relationship with their employer and has implications for the employee’s decision to
continue or discontinue working within the company (Meyer and Allen 1991). Meyer and
Allen (1991) devised a three-component model that consists of affective (identification
and involvement), normative (feelings of an obligation to remain with the company), and
continuance commitment (the cost of leaving). Of these three components, the most
widely recognized conceptualization is affective commitment, because it has the stronger
impact on turnover and performance (Meyer et al. 2002). Accordingly, this study focuses
on affective commitment.
2146 F.J. Froese and S. Xiao

Numerous antecedents of affective commitment have been identified; these include


demographic variables, individual attitudes, work values, and various facets of job
satisfaction (Meyer et al. 2002). Although demographic characteristics such as sex, age,
education, and tenure seem to be linked to organizational commitment, the correlations are
neither strong nor consistent (Mathieu and Zajac 1990; Meyer et al. 2002). Work values
and individual attitudes (e.g. individualism, work ethics, and locus of control) have been
shown to be correlated with affective commitment (Meyer and Allen 1991; Fischer and
Mansell 2009). Prior studies have shown how job satisfaction and its various facets impact
organizational commitment (Lawler 1971; Whitener 2001; Meyer et al. 2002).
While the majority of previous studies have been limited to Western contexts, scholars
are beginning to investigate organizational commitment in non-Western countries such as
China. For instance, Chen and Francesco (2003) explore how the components of
organizational commitment influence organizational performance. In another study,
Cheng and Stockdale (2003) test the construct validity of Meyer and Allen’s (1991) three-
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component model of organizational commitment in China; they found that the model
generally fit their Chinese data well. Furthermore, Chen and Francesco (2000) find that
cultural differences play a significant role in influencing the Chinese employees’
organizational commitment and behaviors. In a more recent study, Gamble and Huang
(2008) show that organizational commitment predicts the job switching intentions of
Chinese employees working for a British retailer. Zhu et al.’s (2008) review of HRM
research in China suggests that China is an important context for studying HRM; by
studying China, Zhu et al. believe that researchers can provide empirical testing of the
transfer of Western concepts and practices to a transitional economy. In terms of the
Chinese culture, Zhu et al. also note that researchers should further study the effect of
employees’ values on HRM practices.
However, despite the rise of organizational commitment studies in China, the
phenomenon is relatively recent and limited to a relative paucity of such studies.
Moreover, the few studies that address the subject are limited to the examination of the
cross-cultural construct validity of Meyer and Allen’s (1991) three-component model, or
they have only investigated a few, select antecedents of organizational commitment. This
makes it difficult to develop theory and management practices to use in the HRM field.

Conceptual framework and hypotheses


Drawing upon previous studies of job satisfaction, organizational commitment, and cross-
cultural research, we have developed and tested an integrated model for our research.
We propose that the extent of the employees’ job satisfaction and organizational
commitment in China is influenced by a set of work values. Our theoretical model is based
on the person-job-organization (PJO) fit theory (Chatman 1989; Kristof 1996; Kristof-
Brown, Zimmerman and Johnson 2005), which has been found to be relevant in the
context of job satisfaction and organizational commitment (Kristof-Brown et al. 2005;
O’Reilly, Chatman and Caldwell 1991). Based on needs-supplies (or values) perspective,
Kristof-Brown et al. (2005) argued that person-job (PJ) fit occurs when employees’ needs,
desires, or preferences are met by the jobs that they perform. Thus, employees would be
satisfied with the job if the organization policies or structure met their needs, values or
preferences. According to Chatman’s (1989) seminal work, person-organization (PO) fit
was defined as ‘the congruence between the norms and values of organizations and the
values of persons’ (p. 339). The PO fit exists when the values employees perceive are
consistent with their organization. Thus, if employees’ values are in line with corporate
The International Journal of Human Resource Management 2147

policies, then employees may show higher job satisfaction and organizational
commitment. On the contrary, a ‘misfit’ between employees’ values and their current
specific job features or organization may result in low job satisfaction and organizational
commitment.
Building upon the aforementioned PJO fit theory, our integrated model includes three
work values of Chinese white-collar workers: individualism (e.g. Ralston et al. 1997;
Triandis 1995), willingness to take risks (e.g. Turban, Lau, Ngo, Chow and Si 2001), and
money orientation (e.g. Tang and Chiu 2003; Turban et al. 2001). We focus on these three
dimensions because they are well-known and widely used and all three values are
conceptually related to the commitment process (Smith, Bond and Kagitcibasi 2006).
Three facets of job satisfaction (e.g. job autonomy, performance appraisals, and pay
satisfaction) are important consequences of work values and antecedents of organizational
commitment. Job autonomy refers to the extent to which the job provides discretion,
freedom, and independence to employees in performing their tasks (Hackman and Oldham
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1976). Performance appraisals have received significant attention since they have been
considered to be an important criterion in evaluating employee effectiveness
(Kuvaas 2006). Pay satisfaction describes the employees’ satisfaction with their
compensation package, which includes their pay level, pay raises, and benefits, as well as
the compensation system. These facets of job satisfaction have been found to be related to
organizational commitment (Kinnie, Hutchinson, Purcell, Rayton and Swart 2005; Yu and
Egri 2005).
We include these variables during our study of China because these variables are
consistent with prior work in the literature on cross-cultural research and HRM; these
variables are expected to show significant relationships to organizational commitment.
Thus, we have developed the conceptual framework as depicted in Figure 1. We will

H3
Individualism

H1

H2 Job
autonomy
H9
H4

Organizational
Appraisal H10
Willingness H5 commitment
to task risks satisfaction
H11
H6

Pay
satisfaction
H7

Money H8
orientation

Figure 1. Conceptual framework.


2148 F.J. Froese and S. Xiao

explain the various variables and links depicted in the model in more detail in the
following sections.

Work values
Work values, i.e. evaluative standards and goals in a work context, have been viewed as
the key determinant in a wide range of individual work-related attitudes and behaviors
(Gahan and Abeysekera 2009; Kirkman and Shapiro 2001). The increasingly diverse
workforce within and across countries creates an urgent need for systematic research to
determine how work values affect job satisfaction and organizational commitment within
organizations.

Individualism
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People with individualistic traits tend to take care of themselves, do their own thing
without bothering others, and believe that they can stand or fall on their own; however,
people with collectivistic traits emphasize a social framework and interdependence, and
they interpret themselves as a member of a group (Robertson 2000). Individualism has
been suggested to promote a greater sense of autonomy than collectivism (Kanungo and
Jaeger 1990). Employees with a high level of individualism tend to adhere to the
correctness of their own views and have greater reliance on these views. They emphasize
independence and liberty from others by giving priority to their own thoughts, feelings,
and expressions; subsequently, they tend to request more power and autonomy from their
supervisors. One the other hand, less individualistic employees are expected to feel more
comfortable in accepting organizational views or suggestions.
Performance appraisals have been widely used in Western organizations to give
employees performance feedback and determine pay and promotion opportunities
(Cleveland, Murphy and Williams 1989). On the contrary, during the planned economy in
China, few performance appraisals have been used. The traditional evaluation system
focuses on the so-called ‘iron rice bowl’ (called tie fan wan in Chinese) which ensures
‘job for life’ at any cost (Ding, Goodall and Warner 2000). However, this traditional
system has been increasingly replaced with performance-reward linked appraisal systems
(Yu and Egri 2005). Since employees with a higher level of individualism stress their
independence and the importance of their individual self-reliance, we predict that they will
be highly satisfied with individual performance appraisal systems. Conversely,
collectivistic employees might feel too challenged and thus dissatisfied with the
performance appraisal systems that exist in foreign companies.
Individualism has been found to be negatively associated with organizational
commitment (e.g. Fischer and Mansell 2009; Randall 1993). Individualistic employees
consider independence and pursuing their own goals to be more important than
organizational goals and organizational commitment. In contrast, collectivistic employees
emphasize group/organization goals and thus show higher organizational commitment.
Thus, we make the following hypotheses:
Hypothesis 1: There is a positive relationship between the employees’ individualism
and their satisfaction with job autonomy.
Hypothesis 2: There is a positive relationship between the employees’ individualism
and their satisfaction with performance appraisals.
Hypothesis 3: There is a negative relationship between the employees’ individualism
and their organizational commitment.
The International Journal of Human Resource Management 2149

Willingness to take risks


The willingness to take risks (vs. risk averse) describes the extent to which employees in
organizations feel threatened by uncertain and ambiguous situations and thus seek to avoid
such situations. People with a low willingness to take risks prefer to be taught explicitly by
their superiors, and they prefer to follow company rules, so that they bear no
responsibilities and associated risks. Conversely, people with a high willingness to take
risks tend to prefer more autonomy and control over their own behavior rather than simply
following orders from their superiors; thus, tend to be less satisfied with limited autonomy.
Therefore, if employees have a high willingness to take risks, we expect that they will be
more satisfied with the job autonomy provided in the organizations.
Turban et al. (2001) find that Chinese students who are more risk seeking are more
interested in working for foreign companies; they may believe that foreign companies
provide more challenging work and more career development opportunities based on
individual performance. Risk-seeking employees are confident in their skills and willing to
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take challenges; thus, they are expected to be more satisfied with the performance appraisal
systems. In contrast, individuals who are less willing to take risks may prefer formal rules,
stable jobs, and established career paths over performance-based appraisal systems.
Furthermore, several studies imply that an employee’s willingness to take risks is
related to organizational commitment (e.g. Randall 1993). Employees who have a lower
willingness to take risks typically stay with the same employer and view loyalty to the
employer as a virtue (Hofstede 2001). Employees who have high willingness to take risks
are less likely to want rules and regulations, and they are more likely to take a risk and
switch employers. Thus, we expect that employees with a higher willingness to take risks
will be associated with lower levels of organizational commitment. To summarize, we
make the following hypotheses:
Hypothesis 4: There is a positive relationship between the employees’ willingness to
take risks and their satisfaction with job autonomy.
Hypothesis 5: There is a positive relationship between the employees’ willingness to
take risks and their satisfaction with performance appraisals.
Hypothesis 6: There is a negative relationship between the employees’ willingness to
take risks and their organizational commitment.

Money orientation
Money orientation refers to the employee’s attitudes toward money (Tang and Chiu 2003).
Numerous studies have found that money plays a significant role in affecting people’s
behavior, job performance, and organizational effectiveness (Lawler 1971). Thus, it has
been used by managers to attract, retain, and motivate employees in organizations
(Tang, Luna-Arocas, Sutarso and Tang 2004).
Previous findings suggest that an employee’s money attitude significantly moderates
and mediates self-reported income and pay satisfaction relationship (Tang et al. 2004).
According to the equity theory, employees may experience pay dissatisfaction if their
relative rewards are smaller than those of others (Tang and Chiu 2003). Employees with a
high degree of money orientation have high expectations of pay and low pay satisfaction.
Similarly, Lawler (1971) finds that people with a high level of money orientation have a
high pay expectation; thus, these employees report a large discrepancy between their
current compensation and the compensation which they expect to receive. This
discrepancy leads to pay dissatisfaction. Drawing on a large-scale survey spanning several
2150 F.J. Froese and S. Xiao

decades and countries, Inglehart (1998) finds that materialistic values are particularly
important in developing countries. As we consider China’s current level of development
level, it could be assumed that money will play even a more important role. Indeed,
Chiu, Luk and Tang (2001) find that money is an important incentive for Chinese
employees; they further argue that money plays a key role in attracting job seekers. Thus,
if money is the main motivation factor, organizational commitment may become a minor
concern. In particular, in a tight labor market, employees who have a higher need for
money will frequently switch to another company if they are offered higher salaries.
To summarize, we make the following hypothesis:
Hypothesis 7: There is a negative relationship between the employees’ money
orientation and their pay satisfaction.
Hypothesis 8: There is a negative relationship between the employees’ money
orientation and their organizational commitment.
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Job satisfaction and organizational commitment


Prior research indicates that job autonomy, performance appraisals, and pay satisfaction
influence organizational commitment (Lawler 1971; Whitener 2001; Wong et al. 2002).
Several studies show that job autonomy is significantly correlated to pay satisfaction and
organizational commitment (e.g. Williams, McDaniel and Nguyen 2006). Haar and Spell
(2009) argue that, when employees are given more control over their own jobs, the
employees will feel as if the company treats them more fairly. Furthermore, Lawler (1971)
notes that job autonomy can be considered to be a non-monetary reward. Thus, job
autonomy may help satisfy the employees’ needs, since it will make employees feel that
they are trusted by the organization; this subsequently makes the employees more
committed to the organization.
Since performance appraisals can be used to communicate both individual and
corporate goals, employees will be more committed to their organizations (Kuvaas 2006).
Performance appraisals also add to the employees’ perceptions of being valued, and they
may help the employees to perceive themselves as a part of an organizational team
(Levy and Williams 2004). Both perceptions are central to affective commitment.
In addition, performance appraisals have been found to be a useful strategy to determine
high-commitment levels. Since companies can determine the employees’ need for career
advancement, they can satisfy a central concern for these employees (Gong and Chang
2008). Consequently, if employees are satisfied with their performance appraisals, they
may perceive a higher level of career advancement opportunity for themselves; thus,
they may feel more attached to their company.
Affective commitment has been shown to be related to pay satisfaction (Tang and Chiu
2003; Vandenberghe and Tremblay 2008), since it helps employees identify with their
company and become more involved with the organization (Meyer and Allen 1991).
By contrast, pay dissatisfaction may lead to low organizational commitment. Moreover, if
pay satisfaction reflects the fact that the individual feels valued, trusted, recognized, and
fairly treated by the organization (Tekleab, Bartol and Liu 2005), it may increase affective
commitment. To summarize, we make the following hypotheses:
Hypothesis 9: There is a positive relationship between the employees’ satisfaction with
job autonomy and their organizational commitment.
Hypothesis 10: There is a positive relationship between the employees’ satisfaction with
performance appraisals and their organizational commitment.
The International Journal of Human Resource Management 2151

Hypothesis 11: There is a positive relationship between the employees’ pay satisfaction
and their organizational commitment.

Method
Research design and sample
We collected survey data from white-collar workers who are employed by seven
different German automotive companies in Shanghai. All of these companies can be
described as multinational enterprises (MNEs), and all of them have had a presence
in China for more than 10 years. Each company employs more than 500 employees in
China.
Because the companies were very supportive and allowed employees to complete the
survey during company time, 197 of 200 possible respondents participated. Six
questionnaires needed to be excluded due to missing information, resulting in a final
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sample of 191 (95.5% response rate). Among the respondents, 57% were male, 57% were
married, around 50% were under 30 years old, and 85% had received a university degree
(Table 1). Furthermore, 35% occupied managerial positions and 78% had less than four
years experience in their present job.
Overall, the sample can be described as employees who are relatively young, highly
educated, and have a relatively short tenure at their current job. While these characteristics
are not typical for established companies in Europe, these are not uncommon for China
(Han and Froese 2010). MNEs usually require a workforce that is highly educated and can
speak English; most senior Chinese managers cannot offer these skills. The relatively
young age and high turnover rate in the industry explain the short tenure that is reported by
the respondents.

Table 1. Sample characteristics.


Number Percentage (%)
Gender (¼ Female) 83 43.46
Marital status (¼Married) 108 56.54
Age
Below 30 years old 96 50.26
30 – 40 years old 87 45.55
Over 40 years old 8 4.19
Education
High school or less 5 2.62
Applied university 24 12.57
Undergraduate 130 68.06
Graduate 32 16.75
Position
Clerical/administration 63 32.98
Sales/technical 61 31.94
Managerial 67 35.08
Years employed
Below 2 years 105 54.97
2 – 3 years 44 23.04
4 – 5 years 19 9.95
6 – 7 years 12 6.28
Over 7 years 11 5.76
Note: N ¼ 191.
2152 F.J. Froese and S. Xiao

Measures
The original questionnaire was developed in English and then translated into Chinese.
To ensure the accuracy of the translation, the questionnaire was then translated back.
We captured organizational commitment through five items taken from Meyer, Allen and
Smith (1993). A sample item is ‘I feel a strong sense of belonging to my company’.
We used Earley’s (1989) four-item scale to measure individualism. A sample item is
‘Working alone is better than working with a group’. We used four items to measure
money orientation (Tang and Chiu 2003). A sample item is ‘I am motivated to work hard
for money’. To measure the employees’ level of willingness to take risks, we adapted three
items from Gomez-Mejia and Balkin (1989). A sample item is ‘I view risk on a job as a
situation to be avoided at all costs’. The various facets of job satisfaction were captured as
follows: two-item measures for job autonomy, three-item measures for performance
appraisal, and four-item measures for pay satisfaction. These measures were taken from
Kinnie et al. (2005), Yu and Egri (2005), and Rayton (2006), respectively, and amended to
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fit the specific needs of this study. Sample items for these scales respectively include
‘I am satisfied with the amount of influence I have over my job’, ‘My work performance
goals and standards are challenging’, and ‘Compared with the pay of other people that
work at my company I am satisfied with my pay’. All items were measured on a five-point
Likert scale from ‘strongly disagree’ (1) to ‘strongly agree’ (5); higher values indicate
higher degrees of organizational commitment, individualism, etc.

Results
The means, standard deviations, Cronbach’s alphas, composite reliabilities, and
correlations among the variables are presented in Table 2. As expected, all independent
variables were correlated to their corresponding dependent variables. In particular,
organizational commitment was significantly correlated to job autonomy, performance
appraisal, and pay satisfaction.

Test of measurement model


Consistent with the two-step modeling approach advocated by Anderson and Gerbing
(1988), we estimated a measurement model using a confirmatory factor analysis (CFA)
prior to examining the structural model relationships. Initial CFA revealed that two items
of the individualism scale loaded poorly on their scale and were thus discarded.
The measurement model that included all of the remaining items showed a good fit:
x2 (209) ¼ 267.96, p , 0.01, Goodness of Fit Index (GFI) ¼ 0.90, Comparative Fit Index
(CFI) ¼ 0.95, Non-normed Fix Index (NNFI) ¼ 0.94, and Root Mean Square Error of
Approximation (RMSEA) ¼ 0.039.
We conducted several tests to assess the measurement model’s reliability and validity.
The composite reliability and the Cronbach’s alpha in Table 2 provide evidence of internal
consistency. All indicators loaded strongly and significantly on their respective factors,
and the standardized loadings ranged from 0.414 to 0.825, indicating convergent validity
(Anderson and Gerbing 1988). To investigate the discriminant validity between the
constructs, we performed chi-square difference tests between a model in which a factor
correlation parameter was fixed at 1.0 and the original (unrestricted) confirmatory
factor analysis model. Our findings indicate that every restricted model had a significantly
inferior fit than the unrestricted model, indicating discriminant validity. Taken together,
these findings support the reliability and validity of the constructs and their items.
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Table 2. Means, standard deviations, Cronbach’s alphas, composite reliabilities, and correlations among variables of interest.
Cronbach’s Composite
Variable Mean STD alpha reliability 1 2 3 4 5 6
1. Individualism 4.076 0.583 0.610 0.617
2. Willingness to take risks 2.821 0.657 0.651 0.679 0.160*
3. Money orientation 3.741 0.551 0.720 0.735 2 0.210** 2 0.232**
4. Job autonomy 3.282 0.671 0.690 0.690 0.138 2 0.105 0.016
5. Appraisal satisfaction 3.914 0.417 0.575 0.590 0.448** 0.175** 2 0.049 0.238**
6. Pay satisfaction 2.803 0.620 0.744 0.770 0.121 2 0.010 2 0.095 0.379** 0.276**
7. Organizational commitment 3.700 0.580 0.795 0.803 0.242** 2 0.034 0.073 0.543** 0.360** 0.438**
**
Notes: * p , 0.05, p , 0.01.
The International Journal of Human Resource Management
2153
2154 F.J. Froese and S. Xiao

Structural equation model results


The structural model that we tested in the present study is identical to the structural model
in Figure 1. The chi-square value for the initial structural model including all possible
paths was statistically significant (x2 (215) ¼ 301.50, p , 0.001); and the GFI, CFI, NNFI
and RMSEA values were 0.88, 0.92, 0.91, and 0.046, respectively. These indices suggest
that the structural model had a satisfactory fit, even though the chi-square index was
significant.
However, this initial structural model was significant inferior to the measurement
model (Dx2 (6) ¼ 33.54, p , 0.001), which indicates that the theoretical model (Mt)
could not account for the relationships between the latent constructs (Kline 1998).
In other words, these findings indicate that the initial theoretical model did not provide an
acceptable fit to the data. Thus, we conducted a specification search to arrive at a
better-fitting, acceptable model. Table 3 summarizes the various models.
While investigating the relationships between work value variables and organizational
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commitment, we found that these work value variables have no direct effect on
organizational commitment. In addition, the path coefficients between (1) willingness to
take risks and performance appraisal satisfaction, and (2) money orientation and pay
satisfaction were statistically nonsignificant. The modification indices showed that
removing the statistically nonsignificant paths created a better-fitting model. Accordingly,
we revised our initial theoretical model by removing all nonsignificant paths. There was no
statistical difference between the revised structural model (Mr) and the initial structural
model (Mt) (Dx2 (3) ¼ 0.31, p . 0.05). However, the chi-square difference between the
revised structural model (Mr) and the measurement model (Mm) was still statistically
significant (Dx2 (9) ¼ 33.23, p , 0.001), indicating that the fit of the revised structural
model was still insufficient.
The next step was to review the modification indices of the revised structural model
(Mr) to identify new paths that should be added to the model. In fact, we found that we
could create a better fitting model by adding a new path from job autonomy to pay
satisfaction. A significant relationship between job autonomy and pay satisfaction has
been found in previous studies (e.g. Williams et al. 2006). By adding this new path, we
created the final structural model (Mf), which significantly outperformed the initial and
revised models and showed a good fit to the data (x2 (220) ¼ 282.72, p , 0.01,
GFI ¼ 0.89, CFI ¼ 0.94, NNFI ¼ 0.93, and RMSEA ¼ 0.039). As a verification,
we compared the final model (Mf) and the measurement model (Mm) (Dx2
(11) ¼ 14.76, p . 0.10). The insignificant differences indicate that the final model
successfully accounted for the observed relationships between the latent constructs.
Figure 2 presents the results of the final structural equation model. The results showed
that there was a significant positive relationship between individualism, job autonomy

Table 3. Goodness of fit indices for the organizational commitment study.

Goodness of fit indices


2
Model x (df) x2/df GFI CFI NNFI RMSEA
Mm Measurement model 267.96(209) 1.28 0.90 0.95 0.94 0.039
Mt Theoretical model 301.50(215) 1.40 0.88 0.92 0.91 0.046
Mr Revised structural model 301.19(218) 1.39 0.89 0.92 0.91 0.045
Mf Final structural model 282.72(220) 1.29 0.89 0.94 0.93 0.039
The International Journal of Human Resource Management 2155

n.s.
Individualism

0.343**

0.772*** Job 0.487***


autonomy
0.588***
0.271*

Organizational
Appraisal 0.242**
Willingness n.s. commitment
satisfaction
to take risks
0.194*
n.s.
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Pay
satisfaction
n.s.

Money n.s.
orientation

Figure 2. Estimated results of a structural equation analysis. (Note: All values are standardized
coefficients. Non-significant paths were shown by a dotted line; n.s. ¼ not significant.
x2 (220) ¼ 282.72, p , 0.01; GFI ¼ 0.89; CFI ¼ 0.94; NNFI ¼ 0.93; RMSEA ¼ 0.039.
*
p , 0.05, **p , 0.01, ***p , 0.001).

satisfaction, and performance appraisal satisfaction; there was also a significant positive
relationship between the employees’ willingness to take risks and job autonomy
satisfaction. In other words, the findings indicate that employees with a higher degree of
individualism will be more satisfied with their job autonomy and performance appraisals.
In addition, employees who have a higher degree of willingness to take risks will be more
satisfied with job autonomy. These results support hypotheses 1, 2, and 4 of the study.
However, when we examine the links between the employees’ willingness to take risks
and their performance appraisal satisfaction, we did not find any statistically significant
relationship. An examination of the relationship between money orientation and pay
satisfaction showed similar results. These results lead us to reject hypotheses 5 and 7.
In addition, the results demonstrate that all of the direct effects of work values on
organizational commitment were not statistically significant; thus, we reject hypothesis 3,
6, and 8.
Furthermore, we examined each element of job satisfaction on organizational
commitment. As shown in Figure 2, all of their coefficients are significant and in the
predicted direction, providing support for Hypothesis 9, 10, and 11. This implies that
employees with higher levels of job satisfaction (regarding job autonomy, performance
appraisals, and pay) are more committed to their organizations. Interestingly, we found
that job autonomy satisfaction had a much stronger impact on organizational commitment
than that of pay satisfaction (Dx2 (1) ¼ 5.64, p , 0.05).
Overall, the results in this study show that employees’ work values are important
predictors of various facets of job satisfaction. In turn, these facets significantly influence
the employees’ organizational commitment. R 2 shows that the employees’ job satisfaction
2156 F.J. Froese and S. Xiao

variables accounted for 62.33% of the variance in organizational commitment, while


employees’ individualism and willingness to take risks accounted for 14.72% of the
variance in job autonomy, and individualism accounted for 59.66% of the variance in
performance appraisals, respectively. Furthermore, with respect to pay satisfaction, job
autonomy accounted for 23.74%.
Following the methodology behind testing mediating effects in structural equation
models (Kline 1998), we decomposed the effect of each parameter into direct and indirect
effects. This task helped us identify any mediating effects of job satisfaction. As shown in
Table 4, there is evidence that various facets of job satisfaction mediate between work
values and organizational commitment. More specifically, we found that individualism
influenced an employees’ organizational commitment via job autonomy and performance
appraisals. With respect to willingness to take risks, its effect on organizational
commitment was mediated by job autonomy. Finally, we also found that the effect of job
autonomy on organizational commitment was partially mediated by pay satisfaction.
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In summary, our results, which are focused on Chinese employees, generally support the
mediating role of job satisfaction. However, there were some variations of the mediation
effects across the three job satisfaction dimensions. As shown, we see strong support for
the mediation role of job autonomy and some support for performance appraisals.

Discussion
This study examined the relationships between work values, job satisfaction, and
organizational commitment of Chinese white-collar workers who are employed by foreign
MNEs. While our theoretical model has been largely confirmed, several hypotheses were
not supported. In the following discussion, we put the results into perspective.
First, while Ralston et al. (1997) argue that foreign firms in China must better
understand the work values of their Chinese employees, this study provides empirical

Table 4. Decomposition of effects.

Endogenous variable
Job Appraisal Pay Organizational
Causal variable autonomy satisfaction satisfaction commitment
Individualism
Direct effect 0.343** 0.772*** – –
Indirect via job autonomy – – – 0.202*
Indirect via appraisal – – – 0.187*
Willingness to take risks
Direct effect 0.271* – – –
Indirect via job autonomy – – – 0.159*
Money orientation – – – –
Job autonomy
Direct effect – – 0.487*** 0.588***
Indirect via pay satisfaction – – – 0.095†
Appraisal satisfaction
Direct effect – – – 0.242**
Pay satisfaction
Direct effect – – – 0.194*
Notes: † p , 0.10, * p , 0.05, ** p , 0.01, *** p , 0.001.
The International Journal of Human Resource Management 2157

evidence that links work values with job satisfaction and organizational commitment.
The results confirm prior studies that have been conducted in Western countries (Meyer and
Allen 1991); those studies have found that work values, especially individualism and
willingness to take risks, have statistically significant impacts on job satisfaction. However,
we did not find any evidence that employees’ willingness to take risks and money
orientation could influence their performance appraisals and pay satisfaction, respectively.
One plausible explanation could be related to social desirability, i.e. employees do not
provide honest responses regarding the sensitive issue of money because they wish to save
face. The Chinese custom of face-saving (called mianzi in Chinese) influences many facets
of Chinese life; the Chinese people believe that they will lose face when their values or
behaviors fall below the minimum level that is generally considered acceptable. Another
reason could be that we have surveyed highly educated and (probably) ambitious white-
collar workers. For such a group of people, in contrast to blue-collar workers, money
orientation and pay satisfaction may be less urgent matters (Han and Froese 2010).
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Second, consistent with prior research, our findings demonstrate the employees’
commitment to their organizations can be significantly affected by the extent of their
various facets of job satisfaction (Whitener 2001; Wong et al. 2002). The empirical results
indicate that, in China, there is a significant positive relationship between the individual
elements of job satisfaction (e.g. job autonomy satisfaction, performance appraisal
satisfaction, and pay satisfaction) and employees’ organizational commitment. Thus, these
findings confirm prior studies, which find that a greater degree of job satisfaction
facilitates affective organizational commitment.
Third, in this study, we do not find that work values have any direct effect on
organizational commitment. This is partly surprising, since some prior studies have found
significant relationships between work values such as individualism and organizational
commitment (Fischer and Mansell 2009; Kirkman and Shapiro 2001; Palich et al. 1995).
However, the same authors acknowledge that these relationships are, at best, very weak;
in fact, they have speculated that some explanatory variables are missing in the equation.
Our findings contribute to a better understanding of the relationship between work values
and organizational commitment. Our findings reveal that job satisfaction mediates the
relationship between work values and organizational commitment. In other words, work
values have an important influence on organizational commitment; however, their
influence may be indirect, as work values may influence various job satisfaction facets
which, in turn, affect organizational commitment. In particular, the effects of individualism
and the willingness to take risks on organizational commitment are mediated by job
autonomy and performance appraisals.
Lastly, our study provides some evidence regarding the relative importance of the
various determinants of organizational commitment in China. Since the reform and
open-door policy in 1978, there have been extensive changes in both economic and work
values in China (Egri and Ralston 2004). For example, Ralston, Egri, Stewart, Terpstra and
Yu (1999) demonstrate that the new generation of Chinese managers is very different from
managers of the past in terms of work values. The new generation of managers are more
individualistic, more likely to act independently, and more likely to take risks.
Consequently, Chinese workers may become less traditional and place priority on
Western-developed HRM practices. In contrast to the traditional stereotype, which depicts
the Chinese people as very group oriented (e.g. Hofstede 2001), the findings show that job
autonomy and performance appraisal satisfaction, which are predicated by individualism,
have stronger influences on organizational commitment than pay satisfaction. This
2158 F.J. Froese and S. Xiao

suggests that Chinese white-collar workers in the new era emphasize performance and
personal influence on their job more highly than pay.

Managerial implications
Our results raise interesting policy issues related to employees’ job satisfaction and
commitment to their organizations. Although pay satisfaction is positively related to
organizational commitment, we have found that autonomy and performance appraisal
satisfaction are more strongly related to organizational commitment among Chinese
white-collar workers. Thus, organizations that only use money to attract and motivate their
employees might not have an effective strategy in today’s China. Instead, foreign firms in
China should give employees more autonomy and provide better performance appraisals
to enhance their job satisfaction, enhance their organizational commitment, and ultimately
reduce employee turnover.
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It is vital for companies to have a better understanding of their employees’ work


values. This will enable the organizations to design an HRM system that is better able to
attract, motivate, and retain its workforce (Ralston et al. 1997). Our findings demonstrate
that individual work values are important predictors of job satisfaction and organizational
commitment. As shown in a study of Chinese university students (Turban et al. 2001), our
findings suggest that Chinese white-collar workers who are employed by foreign firms are
risk seekers with a high level of individualism. Perhaps these are individuals who are more
likely to change jobs frequently. Foreign companies in China should investigate the work
values of their applicants and current employees to develop managerial practices,
including practices such as providing more autonomy and performance appraisals.
Alternatively, foreign firms may select employees more carefully depending on whether
their work values match the firm’s HRM system. A good fit between employees’ work
values and a company’s HRM system should result in higher levels of job satisfaction and
organizational commitment.

Limitations and future research directions


The limitations of this study point to a need for future research. First, the sample in this
study consists of white-collar workers who work at foreign companies in Shanghai within
a single industry; the workers are relatively young, well-educated, and have relatively
short work histories. Thus, the sample is not representative of the whole population of
Chinese employees. Nevertheless, we believe this is the target group of employees that
MNEs are most likely to hire. Future research could examine different employee types
(e.g. white-collar vs. blue-collar), and review workers across different regions and
industries.
Second, this study has not investigated the complete set of work values and job
satisfaction facets, or their relationships with organizational commitment. We have only
focused on those facets that we consider to be the most relevant. Future studies could
explore additional variables. They could also review how these variables affect other
organizational outcomes, such as turnover intention, actual turnover, and performance.
Third, we have found that the reliability of some measures is only marginally acceptable
even though most of the measures have been previously used in Asia. It seems that some
constructs have slightly different meanings in China and other non-Western countries.
We recommend future studies to consider developing indigenous measures. To improve
the measurements, we suggest that future studies consider social desirability issues.
These issues seem particularly relevant in China, where saving face is an important issue.
The International Journal of Human Resource Management 2159

Lastly, this study is limited to a single Chinese context. Every country is unique in
terms of environmental characteristics and culture. To better understand our integrated
work value-job satisfaction-organizational commitment model, the degree of general-
izability and boundary conditions should be extended into other contexts.

Conclusions
China has been one of the most attractive markets to foreign companies who wish to
produce and sell their products. However, one of the central problems for foreign firms is
the difficulty in retaining qualified talent to continue their success in China. This study
increases our understanding of the work values of Chinese white-collar employees. Our
findings show how the different facets of job satisfaction can mediate the relationships
between the employees’ work values and organizational commitment. Based on our
findings, we have provided practical recommendations to help foreign firms better retain
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their local talent in China. Even though we provided reasoning that is culture specific,
we believe that our general framework might also apply in other contexts.

Acknowledgement
Funding for this paper was provided by Namseoul University.

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