Human resource practices and organizational commitment: The mediating role of job satisfaction in emerging economy

Abstract

Human Resource Management (HRM) has the capacity of influencing the organizational behavior of the employees, thereby ensuring achievement of the corporate objectives. HRM positively influences firm performance which leads to Organizational Commitment. This study proposed to assess the relationship of HR practices & Organizational Commitment. It is also intended to test job satisfaction as a mediator, between HR practices and Organizational Commitment among the employees of the telecommunication sector of Pakistan. The data were gathered from 218 individuals employed at various telecommunication companies located in Lahore. PLS, SEM was performed on the data, using the SmartPLS 3 software. “Recruitment and Selection”, “Performance Appraisal Satisfaction”, “Rewards and Recognition” & “Work Environment” result in statistically significant variation in “Organizational Commitment”. Relationship of “Recruitment and Selection”, “Training” and “Work Environment” is complementarily mediated by “Job Satisfaction. Relationship of “Performance Appraisal Satisfaction” is Indirect-only mediated by “Job Satisfaction”. The relationship of “Reward and Recognition” and “Organizational Commitment” is not mediated by “Job Satisfaction”. Our findings contribute to the existing body of literature of how the different facets of Job Satisfaction can mediate the relationships among the HR practices adopted by firms & Organizational Commitment. Telecom companies should improvise extra attention over HR practices that contribute positively toward the performance of employees eventually accentuating employees’ level of satisfaction and consequently the quality of services rendered to customers.

Keywords:

• HR practices
• organizational commitment
• job satisfaction
• recruitment and selection
• training
• reward and recognition
• performance appraisal satisfaction
• work environment
• mediation

JEL classification:

• Human resource management
• business management

PUBLIC INTEREST STATEMENT

To achieve corporate objectives and stay ahead of the competition, organizations strive to ensure a high level of commitment from its employees. Human resource (HR) practices of the organization are integral in establishing and maintaining the optimum level of employee commitment toward the organization. The current research investigates and confirms the relationship of HR practices with organizational commitment. Recruitment and Selection, Reward and Recognition, Performance Appraisal Satisfaction and Work Environment positively influence the Employees’ commitment. An interesting observation is that all of these HR practices increase the levels of Job Satisfaction in employees that further manifests into increasing the organizational commitment. In service industry such as Telecomm sector, the employees especially the customer service personnel are an integral part of the entire customer experience. Therefore, the HR Managers must make every effort in optimizing organizational commitment of the employees so that the superior level of customer experience can be ensured.

1. Introduction

The multidimensionality of Human Resource (HR) practice allows organizations to accomplish the corporate and personal objectives and therefore the approach of the Human Resource Management (HRM) plays a pivotal role in the success of the company. In order to establish a competitive advantage, organizations have a paramount need to create an edge or a dominance that can be sustained over a long period of time (Noe, Hollenbeck, Gerhart, & Wright, 2007). HRM has the capacity of influencing the organizational behavior of the employees, and by the means of which, it ensures the achievement of the corporate objectives (Nishii & Wright, 2007). In line with the company objectives, HRM focuses on improving and optimizing the performance of the various strategic business units. Fundamentally, HRM not only strives to mentor the employees but also determines the need for skill acquisition; thereby empowering these individuals for a long-term organizational commitment (OC) (Storey, 2007). Diversity at work place has posited a challenge for both multinational companies (MNCs) and local large-scale firms as they strive to implement diverse administrative methodologies and systems (Dupuis, 2014; Savaneviciene & Kersiene, 2015). With the growing concerns of international business and global competition, complexities within the organization and other various malady have led the MNCs and local large-scale firms to validate HRM practices throughout the firm.

HR practices are critical in execution of effective training to the employees, enhancing their inspiration through compelling reward strategies and reinforcing the enrollment and determination process. Global competition has compelled the convincing powers behind organizations to embrace HR practices. Academic researchers have demonstrated that HRM positively influences firm performance which leads to OC (Naz, Aftab, & Awais, 2016; Stavrou & Brewster, 2005). Prior research has validated the relationship of HR practices and firm’s performance and has developed a framework for assessing the impact(Ali, Lei, & Wei, 2017). The HR practices of any organization must ensure the commissioning of productive and skilled employees that further contribute significantly toward the growth of the organization. Implementation of such practices ultimately has a significant impact upon the relationship among workers and organizations (Koster, 2011; Lambooij, Sanders, Koster, & Zwiers, 2006). HR practices aid to build viable exchange connections among firms and workers in view of shared trust and duties, which is the central underpinning theory of this study and is also known as “Social exchange theory”. Workers offer their services to the organizations in exchange of perks and other benefits which they receive from the organizations (Koster, 2011). The sense of job satisfaction depends upon the personnel’s achievements and on their working capability (Paşaoğlu & Tonus, 2014).

OC is one of the measures or a standard that affirms whether the HR practices in companies can cultivate mental connections amongst firms and the objectives of the employees (Sendogdu, Kocabacak, & Guven, 2013). The strategies of the organization should be aligned with the HR practices and are represented by strategic HRM (Tang, Wei, Snape, & Ng, 2015). Bresciani, Ferraris and Giudice (2018) proclaimed that in today’s era the organizations are being affected by the technology and “Internet of Things” in order to secure the value in businesses.

The growth of service sector in emerging markets has an essential concern these days and majority of the service companies try to achievement and sustain competitive edges by assessing the processes which lead to quality management (Shabir et al., 2016). Multiple studies have emphasized upon increased service quality that can be achieved through customer satisfaction, customer loyalty, employee satisfaction, employee loyalty by improvising efficient HRM practices (Lytras & Pablos, 2008; Pablos & Lytras, 2008). Since developing nations are in acute need of implementing and following viable HR practices to make its service industry grow and bloom, it requires committed and satisfied personnel . Moreover, high OC of an employee is an affirmative reflection of sound HRM practices employed in any working place to nurture the links between organizational and employee goals. Commitment toward organization is an intangible outcome of an HRM system and is important in retaining employees and exploiting their potential to fullest extent over time (Ahmad & Schroeder, 2003).

Therefore, this study proposes to assess and study the relationship amidst multidimensional variable of HR practices and OC. The current research adds significantly to the body of literature and investigates the mediating role of Job Satisfaction in measuring the impact of HR practices on OC particularly in a service industry of emerging economy such as Pakistan, making this study a strong contextual contribution to the literature. It intends to draw attention of both academicians and practitioners toward the importance of maintaining optimum level of job satisfaction and OC with regard to the service sector. The heightened level of customer interface in the service sector makes it pertinent for the researchers to investigate the roles of HR practices and their impact on Job Satisfaction and OC.

This paper is structured as follows. In Section 2, the literature review elucidates the theoretical basis for the HRM practices represented by recruitment and selection, training, rewards and recognition and performance appraisal satisfaction. It also discusses about the job satisfaction and its role as a mediator between HR practices and OC. Section 3 presents the research methodology. Section 4 presents the results of measurement model (CFA results). Section 5 concludes the paper. Finally, Sections 6 and 7 present the managerial and theoretical implications and future directions and limitations, respectively.

2. Literature review

2.1. Organizational commitment

The concept of OC has gathered much attention from academicians and practitioners in more recent times (Brown, 1996; Chughtai & Zafar, 2006; Mowday, Steers, & Porter, 1979; Yahaya & Ebrahim, 2016). OC has a significant presence in the organizational behavior literature, as it critically affects the relationship amidst the work environment and performance of employee in companies (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002; Mowday et al., 1979; Yahaya & Ebrahim, 2016). Employee’s commitment relates to a factor which associates employees with the organization (Yahaya & Ebrahim, 2016) and further aids in ameliorating the organization’s success (Fornes, Rocco, & Wollard, 2008; Mowday et al., 1979; Yahaya & Ebrahim, 2016). An absence of consistency in the meaning of commitment has been observed in the literature (Yahaya & Ebrahim, 2016), which led to the confusion toward the true concept of OC (Darolia, Kumari, & Darolia, 2010). Porter, Steers, Mowday, and Boulian (1974) elaborated OC as a combination of three mental variables: firstly, a commitment and acknowledgment of hierarchical objectives of the firm; secondly, a readiness to apply significant exertion toward authoritative objective achievement (contribution); and thirdly, a powerful urge to stay in an association (dependability). Solid and Zanelli (2006) identified six ways of interpreting the phenomena of OC: instrumental, standardizing, effective, sociological, conduct and affiliate. Piyasena and Kottawatta (2018) aimed to investigate the effect of the employee engagement on the OC. They took 317 non-academics from the state universities of Sri Lankan on random bases. The structured questionnaire was used as research instrument. The results of the bivariate and multivariate analyses depicted that there is a significant positive relationship and effect of employee engagement and OC. Moreover, weak or no relationship exists among employee engagement and continuance commitment. Henceforth, it was concluded that employee engagement is an important trait of human behavior.

Previous researches concentrated on the aftermath of HR practices at the firm level but the impact at the individual level was not given due attention(Guchait & Cho, 2010). The researchers have paid little attention in investigating the perception of the individual employees with respect to the viability of the HR practices of an organization (Boselie & Wiele, 2002; Guchait & Cho, 2010). There are three components of the OC are desire, need and obligation which reveals three distinct commitments, i.e. affective, continuance, normative commitment to retain employment in the organizations (Meyer & Allen, 1991). Furthermore, previous research has analyzed the impact of HRM at firm level and their results were depicted as revenue, turnover and profitability (Guchait & Cho, 2010; Huselid, 1995), while few researches have concentrated on the impact of HR practices on single employee’s state of mind such as OC (Edgar & Geare, 2005; Guchait & Cho, 2010; Hemdi & Nasurdin, 2006).

Agarwala (2003) and Rodgers (1995) proposed that organizations can utilize incentives, correspondence and motivation to boost up employee commitment. Workers morale is a crucial factor which needs to be kept in constant consideration by the management, as elevated levels of workers commitment brings out favorable organizational results (Chughtai & Zafar, 2006). Literature recommends that employee commitment leads to employee progress and advances the performance of the organization. Hilltrop (1996) suggested that best HR practices strive for directing employee’s mindset and conduct toward the attainment of the competitive advantage for the organization. Agarwala (2003), Giauque, Resenterra, and Siggen (2010) and Ghosh (2015) made a call for research in the area exploring relationship between OC and HR practices. The employees or HR managers of the organizations always play a crucial role in formulating and enacting the well-designed HR practices. The study of Oh, Blau, Han, and Kim (2017) considered the perceived organizational value as a mediating variable in their study and revealed that those employees working with chief HR officers with top levels of human capital likely to have higher levels of commitment to HR and positively impact the managers’ commitment plus behavior. Moreover, Mackay (2018) indicated that the strong significant correlation exists between employee job satisfaction with the high commitment HR practices (which includes training opportunities, feedback opportunities, etc.) and OC. In order to adapt to more holistic approach, the influence of HR practices on OC requires attention considering various components of HR practices (each distinct component of HR practice needs to be individually examined) which would give better insights about OC (Juhdi, Wan, & Hansaram, 2013).

2.2. Recruitment and selection

Ryan and Ployhart (2014) revealed that the concept of Recruitment and Selection is widely known among the HR practitioners and researchers. From the past few decades, the HR department has become the backbone of the company’s proposed plans and management systems (Derous & Fruyt, 2016). The primary aim of Recruitment and Selection technique is to hire the knowledgeable and skilled workers at the minimum cost to meet the HR demands. To achieve the business objectives, the appropriate team of employees is needed (Fong, Ooi, Tan, Lee, & Chong, 2011). One of the most crucial stages of the Recruitment and Selection is when managers need to make a decision about personnel hiring in the companies. Chapman and Webster (2003) suggested a four-stage technique of Recruitment and Selection which includes (i) advertisement approach, (ii) accepting the applications, (iii) basic screening of applications and (iv) ultimate decision of the Recruitment and Selection process. The recruitment is the act of obtaining names of the potential candidates for the job while the process of selection includes carefully appointing the right people for the job.

The policy related to the HR must be in accordance with the business strategies (Singh, 2004). Therefore, organizations are required to maintain a balance between the recruitment and selection and the HR practices. Majority of the large-scale companies are heavily dependent on formal methodology and bureaucratic techniques by the experts in HR divisions of the companies (Lockyer & Scholarios, 2004). Darrag and Mohamed (2010) suggested that successful companies adopt fundamental recruitment approaches that are required to attract the most suitable employee. Also, the detail of recruitment and selection process influences the OC of employees and signifies the recruitment and selection system in various firms (Loganathan & Dharmaraj, 2017). Various studies showed a positive relationship of recruitment and selection with the OC (Bisharat, Obeidat, Alrowwad, Tarhini, & Mukattash, 2017; Lamba & Choudhary, 2013; Obeidat, Masa’deh, & Abdallah, 2014). With consideration to the abovementioned literature, this study intends to investigate the following hypothesis:

H1a:

Recruitment and Selection has a significant positive impact on OC.

H1b:

The relationship of Recruitment and Selection and OC is mediated by Job Satisfaction.

2.3. Training

Employee training aims to escalate the proficiency and ability of the employees for completing a specific task. In light of the fact that employees are viewed as important resources of the organizations therefore, firms invest in their training programs to magnify the expertise and potential of their employees (Jimenez & Valle, 2012). The motivation behind training is to fundamentally conquer any hindrance between work prerequisites and the potentials of the workforce. The conduct and performance of the personnel can be refined or enhanced through proper training. The rationale behind having training and advancement is to streamline the understanding and expertise of the employees of the company (Fong et al., 2011). Lamba and Choudhary (2013) have concluded that the training imparted to the employees which includes training pertaining to job orientation, safety and promotional activities are aimed at amplifying the expertise of the HR in order to make them more proficient. Strengthening the capabilities via training and providing a sense of good career lead toward the feeling of safe future and assist the development of self-efficacy (Guest, 2017). The training programs are directed by qualified managers of the same companies or can be hired from external agencies with the objective of boosting the workforce efficiency toward the organization. Employing a consultant trainer can be expensive for the companies but more beneficial as compared to the existing manager which might be cost effective but may not deliver the required results(Lim & Ling, 2012). Besides, research substantiated that training programs raise the personnel’s commitment which leads to organizational performance (Bimpitsos & Petridou, 2012). It has been established that enhancement of employee’s training results in increased OC (Paşaoğlu, 2015).

Maheshwari and Vohra (2015), however, concluded that training equips the employees with the skill that enhances their understanding of the organizational processes and further elevates their OC. Various researches have depicted a significant relationship between training and OC (Bisharat et al., 2017; Obeidat et al., 2014; Paşaoğlu, 2015). Henceforth, on the basis of the discussion, the study intends to investigate the following hypotheses:

H2a:

Training has a significant positive impact on OC.

H2b:

The relationship of Training and Organizational Commitment is mediated by Job Satisfaction.

2.4. Rewards and recognition

HR managers are constantly searching for standardized solutions so that they can reward and recognize the accomplishments of their employees appropriately (Campbell-Allen, Houston, & Mann, 2008). A reward framework ought to be a bundle/structure that comprises of benefits, for example, pay, leaves, medical allowances, transport allowances, and commissions for the employees of the firms. Employees will be more attracted toward the work when they are certain about the rewards and recognition they will receive. A suitable reward system and a successful pay structure is essential as it can increase employees’ motivation to work, which further enhances productivity, efficiency and competitiveness of the company (Lawler, 1990). Malhotra, Budhwar, and Prowse (2007) have drawn inferences that rewards play a major role in developing and sustaining commitment among the workforce and makes sure that employee’s competence and commitment is maintained.

There are innumerous benefits of the company’s reward package. Performance, experience, qualification and seniority are the basis of the company’s reward system while the benefits comprise of overtime pay and allowances of transport, medical and mobile (Lim & Ling, 2012). Workforce needs to comprehend the rationale of reward allocation to accomplish their aims and objectives successfully. If workers engage in indicating their reward and recognition proposals, a strong feeling of satisfaction would lead to better commitment at work (Milne, 2007). Moreover, the reward dimension of HR practices (include benefits) have a high correlation with commitment and job satisfaction (Kooij, Jansen, Dikkers, & Lange, 2010). Meyer and Becker (2004), however, identified that employees’ commitment will escalate as HR practices implemented can infuse the personnel with recognition of accomplishment and autonomy. Numerous academicians have shown a significant relationship between Rewards and Recognition and Organizational Commitment (Chew & Chan, 2008; Obeidat et al., 2014). Therefore, this study intends to investigate the following hypotheses:

H3a:

Reward and Recognition has a significant positive impact on OC.

H3b:

The relationship of Reward and Recognition and OC is mediated by Job Satisfaction.

2.5. Performance appraisal satisfaction

A vehicle for the enhancing the OC is the effective performance appraisal framework (Behery & Paton, 2008). Chen and Eldridge (2010) suggested that companies are giving careful consideration to a particular HR practice, i.e. performance appraisal satisfaction that impacts the company’s achievements. It is an arranged process that assesses every worker’s performance in terms of their strengths and shortcoming. Whiting, Kline, and Sulsky (2008) favored the argument of the study conducted by Boice and Kleiner (1997) in which they framed a performance appraisal system depicting the worker’s performance along with the commitment. Kampkötter (2017) investigated the impact of performance appraisals (PA) on employees’ job satisfaction. His study depicted very interesting results which indicated that PA has a highly significant positive effect on job satisfaction.

Whiting et al. (2008) claimed that it is difficult to replicate and shift the appraisal systems among the companies. Sripirabaa and Krishnaveni (2009) have drawn inferences about the decisions of the organizations like pay determination and promotion with the performance appraisal system. It is evident that if the employees knew that they are fairly assessed, then high level of Job Satisfaction and OC will be achieved. Lim and Ling (2012) conducted the research on the HR practices of the contractors and revealed that the employees are convinced by the technique of the performance appraisal system, while a high correlation exists with Job Satisfaction. Therefore, on the basis of the aforementioned discussion, this study intends to investigate the following hypotheses:

H4a:

Performance Appraisal Satisfaction has a significant positive impact on OC.

H4b:

The relationship of Performance Appraisal Satisfaction and OC is mediated by Job Satisfaction.

2.6. Work environment

Danish, Ramazan, and Ahmad (2013) identified workplace as the atmosphere of the companies where the employees do their jobs. To succeed, companies should plan their workplaces in such a way that it expands the level of employee’s dedication and inspiration that eventually would result in ideal outcomes. Khuong and Vu (2014) suggested that employees who feel good about their workplace are more likely to work more passionately and appreciate the work environment when contrasted with the individuals who feel otherwise. In this manner, administrators ought to enhance the workplace to guarantee the welfare and comfort of their employees. Past literature demonstrates that workplace can be assessed regarding a few viewpoints. Hanaysha and Tahir (2016) proposed that workplace contains factors such as contribution, group union, administrator’s help, assignment introduction, work clarity, self-sufficiency, innovation, development, physical comfort and administrative control. James and James (1989) recognized a few measurements to quantify workplace which include “work challenge, work self-governance, pioneer work assistance, reasonableness and value of reward framework”. Subsequently, workplace can be estimated regarding any factor that influences a worker’s conduct in his or her association. Ferraris, Erhardt, and Bresciani (2017) research suggested that ambidextrous work raises new challenges for HRM. Their research was based on the qualitative approach in European context. Twenty-one interviews with managers were conducted in seven multinational firms. The findings revealed that different HRM systems are designed to support ambidextrous work. The interaction among the external and internal employees is very crucial.

Various investigations found that workplace had noteworthy beneficial outcome on OC. Hanaysha and Tahir (2016) and earlier Khuong and Vu (2014) claimed that better work environment conditions led to favorable effect on Job Satisfaction. It is also evident that workplace plays a critical part in affecting hierarchical responsibility. According to Hanaysha (2016), workplace is one of the key principles of OC. Therefore, on the basis of the aforementioned literature, this study intends to investigate the following hypotheses:

H5a:

Work Environment has a significant positive impact on OC.

H5b:

The relationship of Work Environment and OC is mediated by Job Satisfaction.

2.7. Mediating variable: Job satisfaction

The relationship among the job satisfaction and HR practices has been studied comprehensively in numerous places in the world. Various researchers defined job satisfaction as needs of the employees in terms of work environment and evaluations, management styles and work opportunities which lead to commitment toward the organization (Robinson & Rousseau, 1994; Zhao, Wayne, Glibkowski, & Bravo, 2007). The job satisfaction is dominated by the two phenomena: firstly, the experiences and secondly, the job belief (Weiss, 2002). Job satisfaction can also be explained as an action and reaction of the workers toward the particular task. The reactions could be positive or negative. The HR practices have a positive relationship with the job satisfaction and work fulfillment in public sector of Holland and moreover, the individual attribute like age is a significant factor in determining the Job Satisfaction (Steijn, 2004). Suma and Lesha (2013) conducted the study in the public sector in Shkoder municipality where their findings suggested that the pay satisfaction, work satisfaction and the quality of supervision satisfaction has positive impact on the OC. Various other researchers have also confirmed significant relationship amidst Job Satisfaction and OC (Chen, 2007; Liu & Norcio, 2008). Del Giudice, Carayannis, and Della Peruta (2012) stressed that the employee’s behavior and capabilities are firmly connected to the culture they belong to and moreover, it is important to have knowledge about the advantages and disadvantages every culture. The vast the cultural differences are, it becomes more challenging to attain a cultural fit.

Schalk and Roe (2007) suggested that if there is a good perception about the job and the organization then the employees will have high levels of commitment. Antonaki and Trivellas (2014) also investigated and confirmed the mediating effect of job satisfaction in psychological contract breach (PCB) and OC. The current research is unique in its nature as it investigates the mediating role of job satisfaction between the HR practices and the OC among the telecommunication sector employees in Pakistan. The framework of the study is shown below which is based on the above discussion.

3. Research methodology

Convenience sampling was adopted for the collection of the data. The questionnaire was filled through self-administered survey method. Partial least-squares structural equation modeling was conducted in order to explore the relationships among HR practices and OC by using Smart PLS 3. This study also investigated if Job satisfaction mediates the relationship among HR practices and OC by conducting mediation analysis on the basis of typology introduced by Zhao, Lynch, and Chen (2010).

3.1. Instrument construction

Table 1 reports the details of pre-established scales this study incorporated to measure each latent variable in the theoretical framework proposed (Figure 1). All items were measured on a 5-point Likert scale from “strongly disagree” (1) to “strongly agree” (5); higher values indicated higher level of agreement and lower values indicated weak level of agreement.

Table 1. Variables and their sources

Variables	No. of items	Source
Organizational commitment	6	Saks (2006)
Recruitment and selection	5	Edgar and Geare (2005)
Training	6	Karatepeand Vatankhah (2014)
Reward and recognition	6	Kinnie, Hutchinson, Purcell, Rayton and Swart (2005) and Kooij et al. (2010)
Performance appraisal satisfaction	6	Kuvaas (2006)
Work environment	10	Morgesonand Humphrey (2006) and Hanaysha (2016)
Job satisfaction	4	Hanayshaand Tahir (2016)

Figure 1. Theoretical model.

3.2. Research design

Data were gathered from white-collar, low and mid-level employees of four different telecommunication companies operating in Lahore. All of these firms have been operating in Pakistan for more than 5 years and they capture the majority market share. Each company employed approximately more than 1000 employees in Pakistan. It was verified from the website of these companies that they follow proper HR practices to select their employees, both at a managerial and customer service level. For data collection procedure each selected firm was contacted via telephone to contact the HR managers and requested their cooperation to conduct the survey in their respective firms. They were informed about the purpose and nature of the study after assuring confidentiality of the respondents and the firms. The questionnaire link was mailed to the HR managers, which was then forwarded to the managerial level employees and customer service representatives by the HR manager without any biasness to the best of our knowledge. After a week, reminder email was sent to the HR managers to ensure maximum response rate.

Before data collection, a self-administered pilot study was conducted based on 40 responses collected (10 responses from each firm) by visiting the firms’ head office by the researcher. Upon completing the pilot study, minor modifications were made to the questionnaires in order to improve its validity and readability. Data were then gathered from each firm by sending out the final version of the questionnaire.

A total of 315 employees were approached to participate in the survey. However, 250 employees actively took part in filling the questionnaire. Out of these, a total of 218 responses were screened out as complete and usable with no missing information (response rate, 87.2%). For SEM, at least 15 cases per measured variable or indicator are needed (Bentler & Chou, 1987; Siddiqui, 2013). Another rule of thumb is to have five cases per parameter estimate (Stevens, 2002). In the light of aforementioned propositions, a sample size of 218 seemed to be rationally justifiable. Details of respondent profile are reported in Table 2. Overall, the sample can be described as employees who were relatively young, highly educated, and had a relatively short tenure at their current job.

Table 2. Summary of respondent profile

		Number	Percentage (%)
Gender	Male	159	73
	Female	59	27
Marital status	Married	122	56
	Unmarried	96	44
Age	Below 30 years	94	43
	30–35 years	63	29
	36–40 years	39	18
	41 year and above	22	10
Education	Graduate	50	23
	Post graduate	129	59
	Above post graduate	39	18
Job designation	Manager	28	13
	Assistant/executive manager	35	16
	Customer service officer	155	71
Years of experience	3 and below	46	21
	4–6	122	56
	7–9	35	16
	10 and above	15	7

Note: N = 218.

4. Results

4.1. Results of measurement model (CFA results)

Table 3 reports the composite reliability, average variance extracted (AVE) and correlations of constructs with each other. Since all the latent variables were measured through pre-established scales, therefore content validity was assumed. Table 3 reports that composite reliability for all the latent variables exceeds the recommended range of 0.7 which indicates that divergent validity holds (Hair, Black, Babin, Anderson, & Tatham, 1998). Moreover, it can be assessed that AVE for all the variables is greater than the cut-off point of 0.5 indicating that the explained variance is greater than unexplained variance, thus convergent validity was also established in the study.

Table 3. Reliability and validity results

	Cronbach’s alpha	Composite reliability	Average variance extracted (AVE)	Mean (SD)
Recruitment and selection	0.881	0.881	0.597	4.20(0.321)
Organizational commitment	0.909	0.909	0.625	3.95(0.214)
Performance appraisal satisfaction	0.839	0.839	0.566	3.41(0.109)
Reward and recognition	0.851	0.852	0.534	4.65(0.301)
Training	0.929	0.928	0.720	3.45(0.051)
Work environment	0.916	0.915	0.642	4.59(0.217)
Job satisfaction	0.816	0.965	0.542	3.84(0.106)

Discriminant validity was investigated through Hetero-trait Mono-trait (HTMT) ratio which has a recommended range of being less than 0.9 (Henseler, Ringle, & Sarstedt, 2015). Results in Table 4 reveal that all the values for HTMT ratio across all latent variable are less than 0.9 indicating that correlation of indicators across the variables is less than correlations of indicators within the same latent variable, thus Discriminant validity was also established.

Table 4. HTMT ratio results: discriminant validity

	Recruitment and selection	Organizational commitment	Performance appraisal satisfaction	Reward and recognition	Training	Work environment
Recruitment and selection
Organizational commitment	0.712
Performance appraisal satisfaction	0.841	0.715
Reward and recognition	0.809	0.709	0.717
Training	0.195	0.331	0.187	0.202
Work environment	0.467	0.518	0.477	0.491	0.606

The value of SRMR (Standardized Root Mean Square Residual) was 0.076 and a value less than 0.08 is generally considered as an indication of a good model fit (Hu & Bentler, 1998). Therefore, the findings indicated that the discrepancy level amidst the observed and the implied correlation mix was insignificant. The value of NFI (Normed Fit Index) 0.92 depicted that overall the theoretical model proposed in the study holds well and the model produced an adequate fit. All the values of VIF coefficient were found to be less than 5 indicating that there was no multi-collinearity which was a positive sign to further conduct mediation analysis. The measurement model was evaluated by conducting confirmatory factor analysis (CFA) which removed all the items with loadings less than 0.7. The summary of CFA results is reported in Table 5.

Table 5. Summary of confirmatory factor analysis

	Recruitment and selection	Organizational commitment	Performance appraisal satisfaction	Reward and recognition	Training	Work environment
WE1						0.875
WE2						0.845
WE3						0.751
WE4						0.817
WE5						0.768
WE6						0.743
PAS1			0.761
PAS2			0.730
PAS4			0.755
PAS5			0.763
OC1		0.781
OC2		0.796
OC3		0.760
OC4		0.843
OC5		0.785
OC6		0.778
RR1				0.729
RR2				0.744
RR4				0.740
RR5				0.711
RR6				0.731
RS1	0.780
RS2	0.788
RS4	0.760
RS5	0.785
RS6	0.751
T1					0.822
T2					0.731
T4					0.921
T5					0.903
T6					0.853

Note: WE, work environment; PAS, performance appraisal satisfaction; RR, rewards and recognition; Training; RS, recruitment and selection; OC, organizational commitment.

4.2. Results of structural model (path analysis)

Table 6 reports the results of path analysis depicting an overall positive significant relationship between HR practices followed by a firm and OC of the employees. The findings of path analysis reveal that Reward and Recognition (β = 0.208, p < 0.05) has the strongest impact on OC followed by the Work environment (β = 0.184, p < 0.1) provided to the employee to render their services. Hence, the hypothesis H3 and H5 were accepted. Furthermore, it can be assessed from the findings in Table 5 that the Recruitment and Selection (β = 0.176, p < 0.1) and Performance Appraisal satisfaction (β = 0.173, p < 0.05) also significantly and directly impact OC. However, Training (β = 0.112, p > 0.05) does not impact OC showing a t-statistic less than 1.96 at 5% level of significance. Our results confirm the previous studies by Şendoğdu et al. (2013) and Paul and Anantharaman (2004)that HRM practices such as development oriented appraisal, and comprehensive training show a significant positive relationship with OC.

Table 6. Summary path analysis

	Path coeff.	St. dev	T-Stats	P-Values	Hypothesis result
Recruitment and selection → organizational commitment (H1a) Training →organizational commitment (H2a)	0.176 0.112	0.052 0.086	3.377 1.301	0.001** 0.194	Supported –
Rewards and recognition → organizational commitment (H3a)	0.208	0.104	1.995	0.047**	Supported
Performance appraisal satisfaction → organizational commitment (H4a)	0.173	0.069	2.496	0.013**	Supported
Work environment → organizational commitment (H5a)	0.184	0.100	1.831	0.068*	Supported

Note: * indicates significance at 0.001 level, **indicates significance at 0.05 level, *** indicates significance at 0.01 level, —indicates not supported.

Table 7 reports the results of mediation analysis. Previous literature has suggested that Job Satisfaction acts as a mediator between the relationship of HR practices and OC (Antonaki & Trivellas, 2014). However, not much research has been done on individual level in Pakistani service economy. The results reveal that Job Satisfaction complimentarily mediates the relationship between Recruitment and Selection, Training, Work Environment and OC. Interestingly we see that although Training does not directly impact OC but there is a relationship found between the two in the presence of Job Satisfaction as a mediator. Complementary Mediation means that although the mediator chosen fits in well with the theoretical model but there still exist a chance of omitted mediator which this study does not incorporates (Zhao et al., 2010). Hence, H1b, H2b and H5b are supported by the statistical results; however, H2a was statistically rejected.

Table 7. Mediation analysis

Recruitment and selection		β	STDEV	P-Values	Hypothesis result/mediation result
Specific indirect effects	Recruitment and selection → job satisfaction → organizational commitment (H1b)	0.07	0.06	0.03**	Supported
Indirect effects	Job satisfaction → organizational commitment	0.11	0.08	0.02**
	Recruitment and selection → job satisfaction	0.65	0.05	0.00***
	Recruitment and selection → organizational commitment	0.65	0.07	0.00***	Complimentary mediation
Training		β	STDEV	P-Values	Hypothesis result
Specific indirect effects	Training → job satisfaction → organizational commitment (H2b)	0.18	0.05	0.00***	Supported
Indirect effects	Job satisfaction → organizational commitment	0.48	0.08	0.00***
	Training → job satisfaction	0.39	0.09	0.00***
	Training → organizational commitment	0.15	0.08	0.07*	Complimentary mediation
Rewards and recognition		β	STDEV	P-Values	Hypothesis result
Specific indirect effects	Reward and recognition → job satisfaction → organizational (H3b)	0.06	0.06	0.27	–
Indirect effects	Job satisfaction → organizational commitment	0.10	0.09	0.26
	Reward and recognition → job satisfaction	0.66	0.05	0.00***
	Reward and recognition → organizational commitment	0.65	0.07	0.00***	No mediation
Performance appraisal satisfaction		β	STDEV	P-Values	Hypothesis result
Specific indirect effects	Performance appraisal satisfaction → job satisfaction → organizational commitment (H4b)	0.04	0.07	0.04**	Supported
Indirect effects	Job satisfaction → organizational commitment	0.06	0.10	0.04**
	Performance appraisal satisfaction → job satisfaction	0.69	0.05	0.00***
	Performance appraisal satisfaction → organizational commitment	0.67	0.08	0.60*	Indirect- only mediation
Work environment		β	STDEV	P-Values	Hypothesis result
Specific indirect effects	Work environment → job satisfaction → organizational commitment (H5b)	0.19	0.06	0.00***	Supported
Indirect effects	Job satisfaction → organizational commitment	0.34	0.09	0.00***
	Work environment → job satisfaction	0.57	0.07	0.00***
	Work environment → organizational commitment	0.33	0.10	0.00***	Complimentary mediation

Note: * indicates significance at 0.001, **indicates significance at 0.05 level, *** indicates significance at 0.01 level, —indicates not supported.

However, results also reveal that Job satisfaction only indirectly mediates between the relationship of Performance Appraisal and OC. This means that the mediator chosen is appropriate and fits into the theoretical model adequately well. Thus, H4b is supported according to the statistical results. On the contrary, the results portray that Job Satisfaction does not mediate between the relationship of Rewards and Recognition and OC. Thus, if the rewards (monetary and non-monetary) given to an employee are high, it is likely to have a stronger impact on his commitment level toward the firm irrespective of his satisfaction level. This finding convinces us to accept H3b.Overall the results depict that appropriate adoption of HR practices in a firm lead to more committed and satisfied employees. Thus, it can be concluded that Job Satisfaction and commitment to job are intangible attitudes observed by the personnel and plays a vital role in retaining them (Ahmad & Schroeder, 2003; Hashim, 2010).

5. Discussion and conclusions

In this study, we theoretically and empirically infer the association of HR practices with OC directly and indirectly via the mediating role of Job Satisfaction. To the best of the researchers’ knowledge, this is one of few studies and the first systematic large sample study that examines “HR practices- Organizational Commitment” relationship on an individual level in Telecommunication Sector of Pakistan. Furthermore, the role of Job Satisfaction as a mediator between HRM practices and OC represents a step forward in this arena. Careful evaluation of the past literature revealed that the role of HR practices and its impact on the OC has not been given due attention with regard to the service sector. Therefore, this research makes an attempt to fill the void in the current body of literature pertaining to the importance of performance and satisfaction level of a customer service provider. 10 hypotheses (H1a-H5b) were developed and tested to reveal that the HR practices positively impact OC and further, Job Satisfaction positively mediates the relationship between the two.

Under the focal lens of social exchange theory, this study hypothesized and found positive associations among the employees’ perceptions of the employment of proper HR practices and stronger OC along with high level of job satisfaction. Particularly, the high commitment HR practices related to Recruitment and Selection, Rewards and Recognition and Work Environment were found to be positively related to OC level possessed by the respondents. It can be concluded that practitioners should particularly focus upon proper implementation of HR practices, policies and procedures because such activities lead to positive work attitudes stemming out of the workforce. Our investigation reveals that Training does not impact OC directly; however, it leads to higher level of satisfaction which further leads to better organizational goals followed by the employees. Since, our sample includes majority of those employees who are young and have spent relatively less tenure in the firm, their priority for proper training is considered important for them which raises their satisfaction level. This satisfaction level further lever up their commitment level and urge them to develop long-term commitment toward the organization. Thus, confirming the inferences put forward by Absar, Azim, Balasundaram, and Akhter (2010) that proper training and development does have a positive influence upon satisfaction level of an employee.

The findings of this study also reveal that Job Satisfaction does not mediate between Rewards and OC. The potential reason for this could be that mid-level managers and officers in Asian Emerging Economies do face constraints like unavailability of suitable jobs, low job security or financial constraints, single income earner of the family due to which higher level of reward system convinces the employees to stay in the firm even if they are not satisfied with their respective jobs.

Pakistan is one of the emerging and growing economies that aspire to promote their products and excel in their services. Retaining qualified employees in such firms is one of the critical impediments which are faced by managerial and administrative staff in order to survive in competitive environment. Especially service firms strive to attain higher level of market share based on better services given by its staff.

This study increases our understanding of the work values of Pakistani white-collar employees. Our findings show how the different facets of Job Satisfaction can mediate the relationships between the HR practices adopted by firms and OC. Abbas Al-Refaie (2015) reported that the sense of belonging to the organization can only be attained by enhancing employee satisfaction; hence the employees become committed to achieve organizational goals. Based on our findings, we have provided practical recommendations to help such firms better understand the vital determinant of OC in terms of HR practices by providing a concrete theoretical framework.

6. Managerial and theoretical implications

The telecommunication industry is one of the most rapidly growing industries in Pakistan. HR managers of the service sectors must understand that the interaction of the customer with the customer service personnel is an integral part of the entire customer experience. Therefore, the job satisfaction, motivation and consequently the long-term OC of the employee should be maintained at an optimum level. Organizations therefore should make every effort in establishing a highly motivated and committed workforce so that the superior customer experience can be ensured. Such service-oriented firms also regularly pursue directions that facilitate them to withstand their competitive position. Telecom companies should improvise extra attention over directions and procedures that hinder the performance of employees eventually effecting employees’ level of satisfaction. Thus, managers should be very meticulous while implementing and improvising their HR practices which further leads to augmented OC. HR managers should concentrate on HRM practices during recruitment and selection, implementation of proper training, performance appraisal procedures and providing the employees with feasible working environment.

On the theoretical grounds this study confirms social exchange theory that when organizations convey their desire to engage in social exchange relationships by investing systems of HR practices, employees respond by becoming more empathetic toward the organization’s mission and reciprocate with behaviors of benefit to the organization.

7. Future directions and limitations

This study focused on telecommunication industry in the city of Lahore. In future, researchers can extend their studies to other contexts and economies to study similar relationships in order to investigate a more holistic approach and explore such well-integrated HR practice-commitment model so as to enhance the degree of generalizability. Furthermore, future researchers can conduct a comparative analysis to see if there is a variation of results when these relationships are investigated in the context of SMEs (Small and Medium sized Enterprises) and large-scale firms. Focus of the current research remained on investigating the telecomm sector which had not been studied before in the current context, but future research can further delve into the differences between OC of the senior managers and the customer service employees. This can further reveal the degree to which differences exist and can also help identify the reasons behind them, thereby shed some light on how to optimize the commitment level.

The data comprised of a convenience sample collected from telecommunication sector of Pakistan. Thus, a larger sample size would give a more realistic picture of impacts of HR practices on commitment level of employees. Future research can add control variables and moderators in order to examine if the relationships differ based on demographic profile of the respondent with respect to age, education, job designation, etc.

Additional information

Funding

The authors received no direct funding for this research.

Notes on contributors

Mehwish Jawaad

Mehwish Jawaad (Mphil in Business Administration Research) is a faculty member at Lahore School of Economics (Business Administration Department), with 7 years of teaching experience in Pakistan and Middle East. Her major research interests include supply chain management, organizational behavior, human resource management and sustainability.

Abeera Amir

Abeera Amir is Mphil in accounting and finance from University of Central Punjab. She has completed her bachelor degree in accounting and finance from the Lahore School of Economics. Her major research interests include finance and business management.

Aideed Bashir

Aideed Bashir is Mphil in accounting and finance from University of Central Punjab. He has served as a research assistant under the supervision of various professors at the Lahore School of Economics. His major research interests include accounting, finance and business management.

Tania Hasan

Tania Hasan (Mphil in business administration research) is a faculty member at Lahore School of Economics with 17 years of teaching experience at various business schools in Pakistan. Her major research interests include consumer behavior, marketing to children/adolescents and social network addiction.