CHAPTER V SUMMARY, CONCLUSION, AND RECOMMENDATION

5.1

Summary Based on the negative phenomena that occurs, which is the high rate of

employee turnover in Indonesia encourage the company to actively reduce the employee turnover. One of them is Toko Emas Harapan which tries to implement the POS. With the gap between the phenomena and fact, this research is expected to verify that POS and affective commitment is making a positive effect and reduces employee turnover intention at Toko Emas Harapan. This study used descriptive analysis with SPSS 16 and Structural Equation Model (SEM) with Lisrel 8.8 to test the relationship between variables simultaneously. SEM also tested mediation effect of affective commitment. Based on the data analysis process that has been discussed in previous chapters, the results of testing and analysis of the model can be summarized as follows: The model was tested based on questionnaire data collected. The data used in this test amounted to 128 respondents. Based on the results of descriptive statistical processing, it is known that the average value for POS is equal to 3.6675, the affective commitment has an average value of 3.845, and turnover intention has an average value of 2.70667. It described that respondents generally feel the implementation of POS at Toko Emas Harapan is good enough. Prior to hypothesis testing, this study followed the seven steps of SEM. first performed the evaluations of the data used in research, whether the data meet the assumptions of SEM which consists of the assumption of normality, and multicollinearity. From these evaluations, it is known that the data used in this study meets all of these assumptions. Then, this study used two step approaches such as Confirmatory Factor Analysis and Structural Model. Confirmatory Factor Analysis had test the validity

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among exogenous and endogenous variables. From the Goodness of Fit Index include Chi Square, Cmin / DF, CFI, and RMSEA tests conducted in this analysis, the result indices that both exogenous and endogenous constructs overall are qualified and acceptable. Furthermore, through loading factor and t-value analysis, it was obtained that all the observed variables on the exogenous and endogenous constructs have values that meet the requirements as variables. Meanwhile, from the full structural equation model analysis, the result of Goodness of Fit indices (absolute, incremental and parsimony) showed overall model is qualified and acceptable. From the causality test results, it was obtained that all causal relationships are presented in the research model can be accepted. The studies about Perceived Organizational Support (POS) and its influence have been studied previously. For example, Eisenberger & Rhoades (2002) has reviewed more than 70 studies concerning employees general belief that the organization value and care about their well-being. POS is derives from organizational support theory, which encouraged by employees tendency to assign the organization human-like characteristics (Eisenberger, Huntington, Hutchinson, & Sowa, 1986). Furthermore, Currie & Dollery (2006) found that POS was significant in predicting affective commitment; higher scores on POS were associated with higher commitment scores. In addition, Tumwesigye (2010) mentioned POS will trigger a desire to repay benefits offered by the organization by greater identification with the organization (affective commitment). Lastly, POS should also increase affective commitment by fulfilling such socio-emotional needs as affiliation and emotional support (Armeli, Eisenberger, Fasolo, & Lynch, 1998; Eisenberger, Huntington, Hutchinson, & Sowa, 1986). Several previous studies proved that POS affects affective commitment because it is in accordance with the norm of reciprocity and socio-emotional needs as affiliation and emotional support. POS variables that affect Affective Commitment is formed by the indicators in which Toko Emas Harapan; shows its concern about employee well-being, takes into account employees value and goal, cares about its employee, concerns about employees opinions, ready to help employee if they need a special favor, willing to help employee when they faced a

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problem, willing to forgive an honest mistake on employees part and not take advantage of employee even though it is possible. The research indicated that POS theory is not only applied to a large industrial sector, but can also be applied to SMEs, especially gold store in Indonesia. However, from the research result, the researcher found that the indicator the organization cares about employees opinions has the highest loading factor (0.89). Meaning that indicator plays a big role in determining POS from employees perspective. POS also could explain affective commitment by 52.4 %. It concluded 47.6% is explained by other factors for instance job satisfaction, motivation and felt obligation. POS and affective commitment explained turnover intention by 58.8%, and 41.2% is explained by other factor such as trust in organization, job characteristics, and job satisfaction. Furthermore, research on affective commitment can be conducted in various sectors as well. Rhoades, Eisenberger, & Armeli (2001) stated that affective commitment refers to the sense of belonging and identification that increases the involvement in organizations activities, the desire to remain in the organization and also the willingness to pursue organizations goals. The extent to which an employee is committed to the organization is often based on an exchange relationship between employer and employee. The social exchange process generally involves a series of interdependent and contingent interactions between two parties resulting in certain types of obligations that may lead to a high-quality relationship (Cropanzano & Mitchell, 2005). Affective commitment derives from organizational commitment. Research has suggested that organizational commitment is one of the major predictors of turnover intentions (Clegg, 1983; Meyer, Stanley, Herscovitch, Topolyntsky, 2002).Meyer, Stanley, Herscovitch, Topolyntsky (2002) confirms that affective commitment is negatively related to withdrawal behaviors. Those studies revealed that organizational commitment in which there is affective commitment as part of it to reduce turnover intention. The results support previous studies and also proves that affective commitment also happening in Indonesia especially Surabaya for SME sector, which is gold store. Hence, if the employee feels a

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strong sense of belonging to the organization, feels personally attached to the organization, proud to tell others he or she works at the organization, working at the organization has a great deal of personal meaning to the employee, employee would be happy to work at the organization until he or she retire, and employee really feels that problems faced by the organization are also his or her problems, then the desire of employees to seek other employment tend to be lower. From the research result, it was obtained that the indicator working at the organization has a great deal of personal meaning to the employee has the highest value among other affective commitment indicator (0.935). Thus, it may be concluded that from the employees perspective, working at Toko Emas Harapan has a great deal of personal meaning. Furthermore, several previous studies revealed the direct influence of POS on turnover intention (Allen, Shore, & Griffeth, 2003; Eisenberger, Huntington, Hutchinson, & Sowa; Eisenberger, Fasolo, & Davis-LaMastro; Okello-Ouni, 2004). However, Tumwesigye (2010) revealed that there is indirect influence (through affective commitment, normative commitment, and continuence) greater than the direct effect of POS on turnover intention. These results confirm that both of these effects are direct and indirect influence of POS on turnover intention. However, in this study, the indirect effects proved to be stronger than its direct effect. It is then proved that the SME sector in Indonesia, especially in the gold stores, turnover intention will be reduced if through affective commitment rather than through its direct effect. In general, it can be concluded that both employees in foreign countries either on a large industrial sector and SMEs in particular the gold stores in Indonesia, tend to have low turnover intention when employees have positive perceptions about an organizations support and a strong emotional attachment against an institution. Furthermore, it can be concluded that both in large industrial sector and SMEs, particularly gold shops in Indonesia, employees tend to have lower intention to leave when they have positive perceptions of organizational support and a strong emotional attachment to an organization.

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5.2

Conclusions The findings in this study were supportive to the previous studies

explained before. All the hypotheses in this research were accepted. 1. Perceived Organizational Support (POS) has valid and reliable eight indicators in the form of statements such as the organization cares about employees well-being, the organization strongly considers employees goal and values, the organization concern about its employee, the organization cares about employees opinions, the organization is willing to help employee if they need a special favor, help is available from the organization when employee has a problem, the organization would forgive an honest mistake on employees part, and if given the opportunity, the organization would not take advantage of employee. 2. Affective commitment has valid and reliable six indicators in the form of statements such as employee feels a strong sense of belonging to the organization, employee feels personally attached to the organization, employee is proud to tell others he or she works at the organization, working at the organization has a great deal of personal meaning to the employee, s employee would be happy to work at the organization until he or she retire, and employee really feels that problems faced by the organization are also his or her problems. 3. Turnover intention has valid and reliable three indicators in the form of statements such as employee thinks a lot about leaving the organization, employee actively searching for an alternative to the organization, and as soon as it is possible, employee will leave the organization. 4. Perceived Organizational Support (POS) has a significant effect toward affective commitment. Thus the relationships or the effect of POS toward affective commitment is positive. Or in other words, the higher the POS, the higher the affective commitment of employees in Toko Emas Harapan Surabaya.

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5. Affective commitment has a significant effect toward turnover intention. Thus the relationships or the effect of affective commitment toward turnover intention is negative. Or in other words, the higher the affective commitment, the lower the turnover intention of employees in Toko Emas Harapan Surabaya. 6. Perceived Organizational Support (POS) has a significant effect toward turnover intention. Thus the relationships or the effect of POS toward turnover intention is negative. Or in other words, the higher the POS, the lower the turnover intention of employees in Toko Emas Harapan Surabaya. 7. The mediating effect of affective commitment in this study can be done by confirming four conditions of mediation analysis are met. This study confirmed that affective commitment mediates the relationships between POS toward turnover intention of employees in Toko Emas Harapan Surabaya.

5.3

Recommendation The researcher realized that there are several limitations of this study.

However, further research can be done by looking at the limitations of this study are: Limitations of the study objects using only respondents of employees in Toko Emas Harapan, further research can be implemented using a broader research object. To better get a more general result of the factors that affect turnover intention. Limitations of the research object is also associated with the research object, which only focused on the gold store. In fact, there are many types of traditional stores in Surabaya. Future studies should several traditional stores such as stationery, grocery stores, etc. to more accurately represent the SME sector.

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This study is also limited to affective commitment and eliminated two other dimensions of organizational commitment: normative commitment and continuance. Therefore, future studies should add these two dimensions of commitment and apply it in the same sector or trying on other sectors, so as to know which of the three organizational commitment (affective, normative and continuance), mediate the relationship between POS and turnover intention . In addition, this study also did not include several variables that might appear to create organizational commitment and turnover intention as job satisfaction, transformational leader and corporate culture. Therefore, future studies should include such things to be clearer about the concept of turnover intention in the scope of the SME Indonesia. Based on this study limitations and results, the researcher identified managerial implications especially for SMEs sector to better understanding about the influence of perceived organizational support (POS) to turnover intention throughout affective commitment as the intervening variable. Owners of small and medium enterprises especially gold store must give support to the employees in terms of appreciation, values, care, special assistances, fairness, supervisor support, and organizational rewards and job conditions that are called organizational supports. If the store is willing to give those supports to the employees, it is believed, the perception toward the support is quite high. In other words, the employees will have a positive perception toward the organization. The study results showed the statement of the organization cares about employees opinions has the highest loading factor so it can conclude the store owner has already appreciated employees opinion. The store owner must maintain these actions. In addition, from the researcher, the store owner could improve it by providing suggestion box in every branch, so that the employees can give objective opinions about the store. However, this study also showed the statement of if given the opportunity, the organization would not take advantage of employee has the lowest loading factor in measuring POS. It means the

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employee feels that the owner took some advantage from them or in the other word the owner utilize them. As the suggestion, the store owner can improve the perception of employees by giving them salaries according to their work, improve review the regulation about reward (salary and bonus), give them a bonus if their work exceeds specified targets and check if the regulation harms the equal employee opportunity (EEO) to achieve fairness in the store. In general, the researcher also gives the suggestion to the store owner to increase POS. The gold store should concern about the employees feelings by giving appreciation toward their works. When the employee feels appreciated, for sure they will try to give more for the sake of the organization. Moreover, the owner should give the compliments if the employee gave a good performance fairly. Another example, the gold store should have a supervisor who can support the employees routine activity and who is concern about employees personal matter. The gold store should also give fair rewards (salary, bonus, punishment) to all of the employees so that it would beneficial to achieve employees affective commitment. For most companies, higher turnover rate will be worse for companies sustainability. The small medium enterprises especially gold store should consider about turnover intention or intention to leave the organization. The result of the study confirmed that affective commitment will lower the turnover intention in gold store Surabaya. As pointed before, affectively committed employees are seen as having a sense of belonging and identification that increase their involvement in organizations activities, their willingness to pursue the organizations goals and their desire to remain with the organization (Rhoades, Eisenberger, & Armeli, 2001). This study results showed the statement of working at the organization as the great deal of personal meaning to the employee this means that the store owner has already created a good working environment for the employees. In addition to improve those actions, the owner should maintain the psychological safety for employees. Meaning the employee who is working at Toko Emas Harapan felt they were working in the right place. However, this study conclude the lowest factor as the statement of employee really feels that problems faced by

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the organization are also his or her problems. As the suggestion, the owner should define the clear visions and misions so that espoused beliefs and values that perceived by the employees could be improved. For example, if there is any problem faced by the store the owner must socialize through the meeting and asked the employees to contribute in finding the solution. In general, the researcher gives the overall suggestions for the store to improve affective commitment so that it would lower the turnover intention. The gold store should attain the affective commitment within the companies to lower employees intention to leave by loyalty program. For example, the owner periodically invites the employees into informal meeting outside the store. Through that informal meeting, the owner can easily find out the existing problems within the employees. If it happened, the employees will have an emotional bond to the store and have low tendency to quit. As POS increasing affective commitment, but POS should decreasing turnover intention. The result of the study confirmed the significant and negative effect of POS toward turnover intention. Similarly, to lower the turnover intention, the small medium enterprises especially gold store should give the support to the employees. For example for woman, the compliments are significantly important to make them stay in the company. So, the owner should give the compliment, fairly rewards, supervising wisely to all of the employees. If it is happened, the employees tendency to quit will quite low. This study also confirmed the mediating effect of affective commitment in a relationship between POS toward turnover intention. It means that compared to the indirect effect through affective commitment would be higher than the direct effect of POS to lower turnover intention. Or in other words, the small medium enterprises especially gold store should attain and consider about affective commitment. As stated before, this explanation concludes, the gold store should give informal training periodically; give the compliment for employees who achieve good performances, fairly rewards, and supervising wisely to all of the employees.