Commitment, trust, communication, employee and organizational performance- Evaluating the pentagonal relationship


Eugene Saltson
(Independent researcher, Ghana)

Abstract
The research assesses key elements that organizations incorporate in their strategic planning to achieve maximum profit. These elements are closely related and as literature reveals, they are sometimes associated with each other. Hence the decision to investigate possible relationships amongst them is not farfetched. The research measured twenty four hypotheses: ten sub hypothesis for hypothesis1, ten sub hypotheses for hypothesis 3 and three sub hypotheses for hypothesis4. The first set of hypotheses predicted statistical positive relationships amongst the variables of which Communication was associated with Commitment, Employee Performance and Organizational Performance. Furthermore, Commitment was associated with Employee Performance and Organizational Performance, while Employee Performance was associated with Organizational Performance. Hypothesis2 supported the idea that the interaction of Communication, Trust, Commitment and Employee Performance lead to positive Organizational Performance.  Hypothesis3 tested a series of regression sub hypotheses that showed that Communication impacts positively on Organizational Performance and Commitment. Employee performance impacted positively on Communication, Commitment and Organizational performance. Commitment impacted Organizational Performance. The final hypothesis measured mediating effects of Communication, Trust and Commitment in the relationship between Employee and Organizational Performance. The result showed successful mediation by Communication and Commitment in their respective tests.
Keywords: Communication, Trust, Commitment, Employee performance, Organizational Performance.
Introduction
Increased productivity is the end result of a mixture of different strategies and it does not come without careful planning by organizations. Organizations seeking to enhance or sustain productivity need to combine proactivity and reactivity to achieve that result. The input of employees are the underlining factor for productivity and thus the quality of input by employees is paramount. Hence it would be in the interest of the organization to evoke a feeling of trust among the employees, lay foundation for effective communication and unearth feelings of commitment towards its goals. Conceptually this analogy would be best fit for any organization seeking enhanced and sustainable growth. But this requires scientific measures to explore all the possible relationships amongst the variables to validate such assumption. Therefore the study seeks to achieve that by building on existing researches coupled with channelling new courses for future investigations with the findings.
Literature review
Communication
Communication involves the exchange of ideas, opinions and emotions by means of words, symbols and letters among people (Ince & Gül, 2001). Employee communication however involves information dissemination with regards to daily employee job performance (Buchanan & Doyle, 1999). Organizational communication is a unifying force that allows coordination among employees and hence facilitates organized behaviour (Myers & Myers, 1982). Rogers and Rogers (1976) link organizational behaviour and communication with their assertion that organizational behaviour is best understood from the communication point of view. Effective communication between employees and organizations is prudent for the potential growth of the organization. Growth of organization hinges on this factor as well and would be in the interest of the organization to improve communication (Gray & Laidlaw, 2002).
Trust
Trust can be defined as ‘firm belief in the reliability, truth, or ability of someone or something’ (Oxford English Dictionary, 2013). Studies from researchers such as Kurtulus et al (2011) reveal that the level of trust that employees have towards their employers and organization will determine how best they will perform with a given task. Trust as a concept is rapidly gaining grounds in economics even at the macroeconomic level, with the notable debate of its relationship with economic growth (see Algan and Cahuc, 2010). At the microeconomic level, there is evidence of its rapid grounds gaining trait, within the financial decision-making sector (for example, Guiso et al., 2008, investigate trust’s relationship with stock market participation).
Commitment
Organization commitment is “the aggregate internalized normative demands to perform in a manner which meets organizational objectives and interests” (Wiener, 1982). It refers to an affiliation with an organization (Ahmed etal, 2014). It is the desire to be a member or an associate of an organization and not pursue actions that would affect its success (Luthans, 2006). Organizational commitment deals with the extent to which employees agree to abide by the visions or aspirations of organizations and their desires to remain with the organization in question Porter (1974). Ongori (2007) reveals that the level of employees’ commitment or loyalty to their respective organizations basically depend on employee empowerment, compensation and job enrichment.
Employee Performance
Asamu (2014) defines employee performance as the ability of an employee to fulfil a given task by a specific organization. It reflects performance of organizations as a whole (Gomez-Mejia et al, 2007) and it’s currently one of the significant determining factors of organizational performance (Wall et al., 2004). According to Schmitt and Chan (cited in Motowildo, 2013) employee job performance is divided into two segments of ‘will-do’ and ‘can-do’. The first deals with the individual’s abilities, skills, knowledge, and other traits needed to perform certain tasks whiles the latter refers to the magnitude of motivation that the employee may receive in order to fulfil an assigned. Employee performance is determined by these three factors; Work environment- information, materials and tools needed to do the task; Motivation- desire to do the task; and Ability- how capable an employee is, to do the task (Davidoff, 1987).
Organizational Performance
Organizations should factor in both financial and non-financial perspectives for the purposes of financial assessment. Choi and Mueller (1992) proposed a similar suggestion to that effect highlighting the relevance of combining the two fields to achieve broader organizational assessment. This study tries to harness these aspects to encompass the variable of organizational performance. Thus the study relied on Venkatraman and Ramanujam (1986)’s study that focused on business performance, organizational effectiveness and financial performance as key elements in defining organizational performance.
Relationships among variables
Existing literature reveals the diverse relationships that exist among these variables through their researches. The following are examples:
Goris (2007) postulates that there is evidence that communication improves job performance of employees. Literature presents a strong evidence that different perspectives of communication such as; feedback from performance, high frequency, openness and accuracy, and information adequacy about organizational policies, relate positively to employees’ performance (Kacmar et al 2003; Snyder & Morris, 1984). On the other hand, poor communication translates in low employee commitment towards the organization (Kramer, 1999). Ooi et al. (2006) concluded that organizational communication has a positive association with commitment. Ruppel and Harrington (2000) researched on the relationship between communication and trust, and concluded that there was a significant positive correlation between the two. A trust-commitment model proposed by Hess and Story (2005)’s trust-commitment model revealed that trust significantly impacts commitment. Other studies such as that of Wong and Sohal (2002), and Kwon and Suh (2006) also recorded similar results. With regards to relationship between organizational communication and organizational commitment, Varona (1996) found that they were positively correlated. Van Vuuren et al (2007) chose to examine the effect communication has on employee organizational commitment and concluded that there exists significant effect of communication on commitment. Brown et al (2014) found a positive relationship between trust and organizational performance.  Using these relationships as foundation blocks, this study investigates the other possible relationships that exist among the five variables.
Methodology
The research used 130 participants to conduct this research and the sampling was done carefully to ensure that they knew their organization very well. In this case, the research used a hospitality firm in Ghana to conduct the study and participants were told a week ahead to get a fair idea of the performance of their organization including the general financial aspect. This was evident in the participants’ responses because an initial number of 160 questionnaire forms were distributed, but 130 were fully completed and retrieved.
Measuring instruments
Communication, Trust and commitment were measured with 16 items sourced from Zeffane et al (2011); 6 for Communication, 4 for Commitment and 6 for Trust. Whereas Employee Performance’s 9 items were sourced from Saltson and Nsiah (2015) and the ten Organizational Performance items were sourced from Wang et al (2010). The reliabilities recorded for Communication, Commitment and Trust in that research are 0.904, 0.752 and 0.883 respectively. Also, Organizational Performance recorded sub-measures of 0.855 for financial aspect, 0.683 for business and 0.716 for organizational effectiveness from the source of items (Wang et al, 2010). Additionally, the reliability for employee performance items was 0.888. These items were however assessed with a four point Likert scale to indirectly compel respondents to answer with a definite choice and not hide behind a neutral answer. This is a modern scientific strategy carved to eliminate a neutral level and to showcase the intensity of the respondents’ answers or choices (Zeffane et al, 2011).
Figure 1: Research framework
Hypotheses 1:
  1. There is a statistically significant positive relationship between Communication and Trust.
  2. There is a statistically significant positive relationship between Communication and Commitment.
  3. There is a statistically significant positive relationship between Communication and Employee Performance.
  4. There is a statistically significant positive relationship between Communication and Organizational Performance.
  5. There is a statistically significant positive relationship between Trust and Commitment.
  6. There is a statistically significant positive relationship between Trust and Employee Performance.
  7. There is a statistically significant positive relationship between Trust and Organizational Performance.
  8. There is a statistically significant positive relationship between Commitment and Employee Performance.
  9. There is a statistically significant positive relationship between Commitment and Organizational Performance.
  10. There is a statistically significant positive relationship between Employee Performance and Organizational Performance.
Figure 2 Research framework 2
Hypothesis 2
The model of communication, trust, commitment and employee performance have an impact on organizational performance.
Hypothesis 3
  1. Employee performance has positive impact on organizational performance.
  2. Communication has positive impact on organizational performance.
  3. Trust has positive impact on organizational performance.
  4. Commitment has positive impact on organizational performance.
  5. Employee performance has positive impact on communication.
  6. Employee performance has positive impact on trust.
  7. Employee performance has positive impact on commitment.
  8. Communication has positive impact on trust.
  9. Trust has positive impact on commitment.
  10. Communication has positive impact on commitment.
Hypothesis 4
  1. Communication mediates the relationship between employee performance and organizational performance.
  2. Trust mediates the relationship between employee performance and organizational performance.
  3. Commitment mediates the relationship between employee performance and organizational performance.
Findings
The analysis is summarised up in the following table:
Although the first set of hypotheses had some sub hypotheses recording positive relationships among the variables, the focus of the hypotheses was on the statistical significance of the relationship. In that perspective, the findings showed that more Communication between the employees and the employers is associated with more Commitment towards the organization. Also, more Communication corresponds with more Employee Performance and ultimately more Organizational Performance. Furthermore, more Commitment towards the organization is associated with more Employee Performance and eventually, more Organizational Performance. Additionally more Employee Performance is associated with more Organizational Performance results.
Hypothesis2 buttresses the notion that the interaction of Communication, Trust, Commitment and Employee Performance leads to organizational performance. Thus organizations seeking to maximize productivity should create an enabling environment to facilitate maximum employee performance, trust, effective communication and commitment towards the organization.
Hypotheses3 is made up of 10 hypotheses that sought to measure the direct impacts of the variables amongst each other. The results indicate that Employee Performance, Communication and Commitment significantly impact Organizational Performance. Consequently, it epitomises the relevance of enhancing effective communication, providing employees with all the necessary resources to perform adequately and establishing a credible organization that evokes employees’ desires to commit whole heartedly to the organization’s objectives. Commitment and Communication were also impacted by Employee Performance. This shows that how an employee performs can help them develop inner sense of commitment towards the organization without consciously making the effort to attain that. Additionally, the communication techniques are sharpened as the employee explores avenues to get work done. Finally, Communication recorded a successful impact on commitment. Communication process as illustrated by the measuring instrument and literature review is a two way affair between the employers and employees. Successful communication between the latter and the former eventually invokes a sense of commitment towards the organization.
To conclude the pentagonal analyses of the variables, the final hypothesis made up of three sub hypotheses sought to find out if Communication, Trust and Commitment explained the main relationship between Employee performance and Organizational Performance individually. Results show that Communication and Commitment successfully mediated (explained) the relationship between Employee and Organization Performance in separate mediation tests. This in effect, contributes to the few available researches investigating the elements that could explain the direct relationship between employees and organization performance outcomes. Even though Trust failed to account for the relationship, some of the sub tests that resulted in the final rejected conclusion revealed that trust has a contributing effect if not a mediating contribution.
Limitation and directions for future researchers
The study combines a lot of tests to measure each possible relationship that could exist between the variables. There are however other possible analyses that could be carried out as well such as moderation tests amongst the variables to enrich literature.
The nature of the research eliminated spontaneity in selection of the participants and made the selection more restrictive because of the requirement that participants knew the details of their financial performance as well. This made some participants who readily agreed to carry out the tests uneasy and eventually backed out.
Also, a case study coupled with a qualitative approach would have given the research another perspective of testing the hypotheses.
Additionally the voluminous nature of tests in this study gives room for more tests because the study did not focus on one area, but to unravel different aspects of the relationships. It therefore leaves more room for explicit and rigorous introspections to any aspect it touched on in the future.
Nevertheless, the above limitations do not render the findings null but they should be considered as starting points for future researchers to enrich the literature.
Conclusion
The significant relationship recorded amongst the variables in the diverse correlational analyses show how interrelated these variables are. It is thus not surprising that some recorded successful direct and mediational impacts as well. The findings of the research show that an organization that facilitates effective communication, encourages trust and evokes commitment towards the organization, ends up contributing significantly to employee performance and eventually improve organizational performance. There are different researches that touch on bits of the issues researched in this study but there is little or negligible research that examines their relationships in a single research. Thus this study fills that vacuum and opens the field to more studies.
Acknowledgement
Capt rtd and Mrs Saltson, Sharon Nsiah, Saltson, Aiduonu and Nsiah families, Kelvin Blankson, T.A. Coleman and Ark of Rest Chapel International, Ghana.
References
Ahmad, N., Iqbal, N., Javed, K., & Hamad, N., (2014). Impact of Organizational Commitment and Employee Performance on the Employee Satisfaction, International Journal of Learning, Teaching and Educational Research, 1 (1) 84-92.
Algan, Y. and Cahuc, P. (2013) ‘Trust, Growth and Well-being: New Evidence and Policy Implications’, in the Handbook of Economic Growth edited by P. Aghion and S. Durlauf, Elsevier.
Asamu, F.F. (2014). The Impact of Communication on Workers’ Performance in Selected Organisations in Lagos State, Nigeria, 19(8), 75-82.
Brown, S., Gray, D., McHardy, J., & Taylor, K., (2014). Employee Trust and Workplace Performance, Discussion Paper, 8284.
Choi F. D, & Mueller, S. (1992). What is Coefficient Alpha? An Examination of Theory and Application. J. Appl. Psychol., 78(2): 98-104.
Davidoff, L. L. (1987). Introduction to psychology (3rd Ed). New York: McGraw-Hill
Goris, J. R. (2007). Effects of satisfaction with communication on the relationship between individual-job congruence and job performance/satisfaction. Journal of Management Development, 26(28), 737- 752
Gray, J. & Laidlaw, H. (2002). Part-time employment and communication satisfaction in an Australian retail organization. Employee Relations. 24 (2), 211-228.
Hess, J., and Story, J. (2005). Trust-based commitment: multidimensional consumer-based relationships. Journal of Consumer Marketing, 22 (6), 313–322.
Ince, M., Gül, H. (2011). The Role of the Organizational Communication on Employees‟ Perception of Justice: A Sample of Public Institution from Turkey. European Journal of Social Sciences. Vol. 21 (1).
Kacmar, K. M., Witt, L. A., Zivnuska, S., & Gully, S. M. (2003). The interactive effect of leader–member exchange and communication frequency on performance ratings. Journal of Applied Psychology, 88, 764–772.
Kramer, M. W. (1999). Motivation to reduce uncertainty: are conceptualization of uncertainty reduction theory. Management Communication Quarterly, 13(2), 305- 316.
Kurtulus, F.A., Kruse, D. and Blasi, J. (2011) ‘Worker Attitudes towards Employee Ownership, Profit Sharing and Variable Pay’, Department of Economics, University of Massachusetts-Amherst working paper, 2011-15.
Kwon, I., and Suh, T. (2006). Factors affecting the level of trust and commitment in supply chain relationships. Journal of Supply Chain Management, 40 (2), 4-14.
Luthans, & Fred. (2006). Organizational Behavior (Indonesian Edition ed.): Andi Publisher.
Myers, M.T., and G.E. Myers. (1982). Managing by Communication – An Organizational Approach. New York: McGraw-Hill Book Company.
Ongori H. (2007). A Review of the Literature on Employee Turnover. African Journal of Business Management. PP. 49-54.
Ooi, K. B, Safa, M. S and Arumugam, V. (2006) „TQM Practices and Affective Commitment: A Case of Malaysian Semiconductor Packaging Organizations‟, International Journal of Management and Entrepreneurship, 2(1), 37-55.
Pallant, J. F. (2005). SPSS survival manual: A step by step guide to data analysis using SPSS for windows (Version 12), Auatralia: Allen & Unwin.
Porter, L. W., Steers, R. M., Mowday, R. T., & Boulian, P. V. (1974). Organizational commitment, job satisfaction, and turnover among psychiatric technicians. Journal of applied psychology, 59(5), 603.
Rogers, Everett M., and Rekha Agarwala Rogers. (1976). Communication in Organizations.  New York: Free Press.
Ruppel, C., and Harrington, S. (2000). The Relationship of Communication, Ethical Work Climate, and Trust to Commitment and Innovation. Journal of Business Ethics, 25(4), 313-328.
Snyder, R. A., & Morris, J. H. (1984). Organizational communication and performance. Journal of Applied Psychology, 69, 461–465.
Van Vuuren, M., de Jong, M., and Seydel, E. (2007). Direct and indirect effects of supervisor communication on organizational commitment. Corporate Communications: An International Journal, 12 (2), 116-128.
Varona, F. (1996). Relationship between communication satisfaction and organisational commitment in three Guatemalan organizations. The Journal of Business Communication, 33 (2), 111-140.
Venkatraman N, Ramanujam V (1986). Measurement of business performance in Strategy research: a Comparison of approaches. Acad. Manage. Rev., 11: 801-814.
Wiener, Y. (1982). Commitment in organizations: A normative view. Academy of management review, 7(3), 418-428.
Wong, A., and Sohal, A. (2002). An examination of the relationship between trust, commitment and relationship quality. International Journal of Retail & Distribution Management, 30 (1), 34-50.
Zeffane, R., Tipu, S.A., & Ryan, J.C. (2011). Communication, Commitment & Trust: Exploring the Triad. International Journal of Business and Management, 6 (6), 77-87.
Appendix 1- Measuring items
Communication’
  1. Area managers and supervisors communicate well with us
  2. Rating of Communication between you and your Supervisor
  3. Rating of Communication with Area Managers
  4. Rating of Communication with Area Supervisors
  5. Rating of Communication between my Area and the other Areas/Departments
  6. Rating of Communication with Senior Management
‘Commitment’
  1. I am proud to tell others that I am part of this organization
  2. I really care about the fate of this organization
  3. This organization really inspires the very best in me in the way of job performance
  4. I am extremely glad that I chose this organization to work for
‘Trust'  
  1. I believe that most people in this workplace have good intention
  2. I have faith/trust in the promises or statements of Colleagues (co-workers)
  3. I have faith/trust in the promises or statements of Line Supervisors here
  4. I have faith/trust in the promises or statements of Area Supervisors here
  5. I have faith/trust in the promises or statements of Area managers here
  6. I have faith/trust in the promises or statements of Senior managers here
‘Employee performance’
How would you rate your performance on the following items?
 (1)  Planning for my area of responsibility
(2) Coordinating my area’s activities
(3) Evaluating subordinates’ activities
(4) Investigating issues in my area
(5) Supervising staff
(6) Obtaining and maintaining suitable staff
(7) Negotiating
(8) Representing the interests of my area
(9) Overall performance
‘Organizational Performance’
Financial performance
  1. The company’s sales growth rate was higher than that of the competitors last year.
  2. The company’s after-tax net income growth rate was higher than that of the competitors last year.
  3. The company's return on investment was higher than that of the competitors last year.
  4. The company's employee productivity was higher than that of the competitors last year. Business performance
  5. The company's image is better than that of the competitors
  6. The company’s attraction to professionals was higher than that of the competitors.
  7. The company's employee morale is higher than that of the competitors.
Organizational effectiveness
  1. The company's innovative degree is higher than that of the competitors.
  2. The company's market share is higher than that of the competitors.
  3. The company's staff turnover was lower than that of the competitors.
Commitment, trust, communication, employee and organizational performance: Evaluating the pentagonal relationship by Eugene Saltson.
Share on Google Plus