CHAPTER 1: INTRODUCTION
1.1 RESEARCH BACKGROUND
Employee benefits were initially enjoyed in the Western Countries such as those in Europe in the19thcentury during the Industrial Revolution as means of social protection to workers at the time(Klonoski, 2016); however, the application of benefits as compensation dates way before thistime. Employee benefits saw a rise after the 2ndWorld War and the highest amount of benefitsimplemented by employers was enjoyed around the 1980s. Through this, it is derived that theimplementation and study of employee benefits in the Eastern countries such as China is not asadvanced as compared to that in the West and thus the need for further exploration in this field(Klonoski, 2016).
The process in which employee benefits are structured in present times is different from theearlier stages of implementation in that; decades ago, employers or organizations bore much ifnot all of the cost of the benefit; this eventually led to unprecedented financial burdens duringyears of financial hardships experienced by such organizations. This is not particularly the case inrecent times as the cost of employee benefits has become a responsibility of both the employerand the employee. This is as a result of reforms in industrial, political and economic zones. Suchchanges and reforms in turn are also implemented on organizations or companies within therespective boundaries.
According to Heneman and Schawb (1985)[4], it is argued that compensation is multidimensionaland should be viewed in five dimensions such as pay level, pay increase, pay structure, employeebenefits and administration. In this paper, the main focus is on employee benefits and itsimplications.
...........................
1.2 RESEARCH OBJECTIVE
The topic of employee benefits is a major one among human resource management experts. Therole of employee benefits in the labor market has never been more significant than it presently is.The research in this paper helps to provide answers to some of the questions that have been underobservation by human resource management practitioners.
In this paper, effects of implementation of non-mandatory employee benefits are assessed. It isargued in the study of employee benefits that the non-mandatory employee benefits have impacton employee work attitudes and organizational outcomes in terms of turnover intentions, hencethe focus in this paper.
It is paramount to recognize that different employee benefits have different levels of influencetowards employee attitudes. This is sometimes because the importance of benefits varies amonginpiduals or different employee benefits are rated differently based on importance by employee.Previous literature shows that benefits such as health care benefits are rated as very significantand important by employees than benefits such as entertainment accessories[2][3]. Therefore,employees will pay extra attention to such benefits as these that are seen somewhat moreimportant than those with less value in their lives. It is therefore important to note that generalemployee job satisfaction will be attained once these “important” benefits are received withsatisfaction.
..............................
CHAPTER 2: THEORY & LITERATURE REVIEW
2.1 DEFINITION OF CONCEPTS
The study and research of employee benefits is far more important than perceived by manyhuman resource management specialists. This is because employee benefits can assist in elevatingjob satisfaction levels and can help to improve organizational commitment (Klonoski, 2016).Employee benefits can also take away some of the financial burden in employee compensationpackage by driving compensation away from cash. Due to the persity of researchers, in additionto other demographic and academic factors in which the previous research on employee benefitshas been carried out, varying definitions and concepts of employee benefits have been raised.
In order to fulfill the goals and purpose of this paper, it is important to define the concepts ofwhich will be referenced to in this paper. Dulebohn et al., (2009) points out the lack of literaturein the study of employee benefits which serves as a surprise to most considering the fact that therole of employee benefits is seen as crucial for both organization managers and stake-owners interms as recruitment of talented employment, as well as cost structure. The cost structure ofemployee benefits remains a key issue in human resource management as employee benefit costsaccount for about one-third of the total (whole) labor costs within an organization, and as it seems,the rise in the cost portion out of total labor cost will not be going away, on the contrary, it willcontinue to rise[11].
Through the following sections, definitions are raised concerning every major concept included inthis research paper as follows:
...........................
2.2 PURPOSE OF NON-MANDATORY EMPLOYEE BENEFIT
The main purposes of implementation of non-mandatory employee benefits are as follows: toattract employees (talented employees); to retain employees; and to motivate employees.[21]
In this paper, effects of implementation of employee benefits are assessed. The three commonlyrecognized purposes for implementation of employee benefits by the organization are: firstly, toattract talented employees in a labor market where demand for such talent comes at a high price;secondly, employee retaining stands as a major key in success of a business because if it is notable to keep its talented employees, success for such a business is not guarantee. The cost ofhiring new employment is considerably higher to that of retaining them, benefits play a role inthis; thirdly, employee benefits are seen as a means of employee motivation when employeesexhibit levels of job satisfaction which can lead to enhancement of employee’s organizationcommitment. These all stand as major purposes or outcomes of employee benefit implementation.
It is however very important to recognize that different employee benefits have different levels ofinfluence towards employee attitudes. This is sometimes because the importance of benefits isvaried among inpiduals or different employee benefits are rated differently based on importanceby employee. This is supported by the study made by De Gieter & Hofmans (2015). Pastliterature shows that benefits such as health care benefits are rated as very significant andimportant by employees than benefits such as entertainment accessories. Therefore, employeeswill pay extra attention to such benefits as these that are seen more somewhat important thanthose with less value in their lives. It is therefore important to note that general employee jobsatisfaction will be attained once these “important” benefits are received with satisfaction.
............................
CHAPTER 3: RESEARCH THEORETICAL APPROACH & MODEL DESIGN ......................24
3.1 Construction Of Employee Benefit Theoretical Model............................. 24
3.2 Research Hypothesis ........................ 26
CHAPTER 4: DATA ANALYSIS & HYPOTHESIS TESTING..........................35
4.1 Data Collection And Description ........................ 35
4.1.1 Data Collection................................ 35
4.1.2 Descriptive Statistical Analysis............................... 36
CHAPTER 5: CONCLUSION AND COUNTERMEASURES ............................52
5.1 Conclusion................................... 52
5.2 Theoretical & Practical Implications........................ 52
CHAPTER 4: DATA ANALYSIS & HYPOTHESIS TESTING
4.1 DATA COLLECTION AND DESCRIPTION
The data collection phase of the research was carried out in a period of two months in two distinctlocations. The first location is Malawi, Africa and the second location is China, Asia.
4.1.1 DATA COLLECTION
Collection of data in Malawi was done from late July 2019 to early September 2019 by the author(researcher). During this time, at least 15 “well-setup” organizations in Malawi were contactedand visited for data collection. By “well-setup”, it is an indication that these organizations weremarked to practice implementation of national labor policies and had a well-functioning humanresource management system that made it possible to acquire the information required for thisresearch. The main channel of data collection during the time in Malawi was printedquestionnaire and involved direct contact with the organization via the organization’s humanresource management branch for authorization to distribute questionnaires to the employees. Inthis way, a number of organizations turned away the researcher’s request to carry out research attheir organizations. A sample of the permission to conduct research in one of the mainorganizations in Malawi is in the Appendix of the research paper.
A total of 205 questionnaires out of 350 distributed questionnaires were collected from bothpublic and private organizations in Malawi in various sectors such as banking, insurance, micro-finance and other finance industrial organizations which were selected from a random sample;providing a response rate of 59%. Participants were full-time professional level employees fittedin both managerial and non-managerial positions within the organizations. The organizations andparticipants were assured of response confidentiality that the data would not be used for any otherpurpose other than academic purpose. This was an important factor to in the process of collectingdata from the Malawian organizations as some organizations are not willing to let their employeesfill in the questionnaires for fear of various ethical or unethical suspicions.
..........................
CHAPTER 5: CONCLUSION AND COUNTERMEASURES
5.1 CONCLUSION
The purpose of this particular study was to study the role of non-mandatory employee benefits onemployee turnover intentions mediated by work attitude organizational commitment in Chineseand Malawian context. The study also sought to find out the effect of organizational justice in thisrelationship and to assess whether organizational justice played a moderating role in the overallmodel. This is one of few studies in the human resource management that has defined the scopeof the employee benefits and focused on non-mandatory employee benefits impact which arebenefits that are believed to possess real impact on work attitudes. As far as the literature goes,this is one of the first studies on employee benefits on Malawian context.
The analysis reveals that non-mandatory employee benefits play a significant role in enhancing orimproving employee’s organizational commitment levels. The study suggests that non-mandatoryemployee benefits play a role in improving the three varied dimensions of organizationalcommitment namely; affective, continuance and normative commitment. The study suggests thatsatisfaction with non-mandatory employee benefits or employee’s attitude towards non-mandatory employee benefits is negatively associated with turnover intention in both Malawianand Chinese public and private sector organizations.
reference(omitted)