Impact of Organizational

Culture on Employee
Commitment and Mediating
role of Employee Benefit

Supervised By:
Dr. Munir Ahmed
Presented By:
Mohammad Ishaq
 Introduction
• The study aimed to explore the impact of
organizational culture on employee
commitment with the mediating role of
employee benefit
• Literature provides us sufficient evidence
that superior performance of firms
commonly depends on organizational
culture and employee commitment
 Organizational Culture
• According to (Gjuraj 2013):
“culture has been known as a product of a
group of people living in same environment
and having shared values, attitudes,
assumptions, beliefs, and behavior”.
• Kotter and Heskett (1992) recognized
culture as a source to maintain the extensive
economic performance of the organization.
 Employee Commitment
• Steer (1977) defined employee commitment
as:
“An employee attitude and as a set of behavioral
intentions”
• Northcraft and Neale (1996) defined it as:
“An attitude reflecting an employee’s loyalty to
the organization, an ongoing process of
expression for the organization and its continued
success and well-being”
 Employee Benefit
• Koubek (2007) and Milkovich (2004) argued that:
“Employee benefits are such procedures of plunders
that the organization delivers to employees from the
motive that they are their employees”
• According to Robbins & Decenzo (1999) “employee
benefits are also a necessary part of the effective
functioning of the employer incentive program; they
can have a significant impact on whether the
employee will remain in the company or whether
the candidate accepts an offer of employment”
 Research Gap
• Organizational culture and employee commitment
are viewed as emerging fields in research
• Mostly conducted in western context
• Still there are number of insights which need to
scrutinize the magnitude of organizational culture
affiliations with employer commitment and
employer incentives
• Literature demonstrates that none of the study
provides the results showing the correlation between
organizational culture and employees’ commitment
with mediating role of employee benefits
 Problem Statement
• There is scarcity of systematic research in
the relationship between two factors that
how culture increase the efficiency of the
employers when they are pampered with
attractive incentives.
 Background Theory
• Social exchange theory (SET) is amongst
the utmost persuasive theoretical models for
understanding workplace conduct.
 Utility Stores Corporation of
Pakistan
• The Utility Stores Corporation of Pakistan
(USC or USCP) is a Pakistani Public-sector
initiative that controls sequence of stores
throughout the state that offer basic
merchandises at the broader level to public at
prices which are lesser than the private bazaar
because the government subsidizes them.
• Number of employees working in this sector
almost 14,500 and it is operating in 63
different regions of Pakistan.
 Research Questions
1. Is there any relationship between
organizational culture and employee
commitment?
2. Is there any relationship between
organizational culture and employee benefits?
3. Is there any relationship between employee
benefits and employee commitment?
4. Is there any mediating role of employee
benefits in relationship between organizational
culture and employee commitment?
 Research Objectives
1. To find out the relationship between
organizational culture and employee
commitment.
2. To find out the relationship between
organizational culture and employee benefits.
3. To find out the relationship between employee
benefits and employee commitment.
4. To find out the mediating role of employee
benefits in relationship between organizational
culture and employee commitment
 Literature Review
Schein (1990) describes organizational culture as:
• Invented, developed or discovered specified group
• A functional pattern of basic assumptions
• It acquires to manage with the glitches of exterior
alteration and core amalgamation
• It has functioned sound and sufficiently to be
measured valid and hence
• It is to be trained to new associates as the precise
method to observe, contemplate, and feel in relative
to those difficulties
 Literature Review
Mowday (1979); Steers and Porters (1982);
Beckeri, Randal and Riegel (1995) viewed employee
commitment as:
a) A strong belief in, and acceptance of the
organization’s goals
and values
b) A willingness to exert considerable effort on behalf
of the
organization
c) A strong desire to remain in the organization
 Literature Review
• Allen and Meyer (1991) discussed employee
commitment as:
• Affective Commitment:
Psychological attachment to organization
• Continuance Commitment :
Costs associated with leaving the organization
• Normative Commitment :
Perceived obligation to remain with the
organization
 Literature Review
• Employee benefits are fragment of the entire
payment and mean operative speculation in
workers. Kleibl (2001) Decenzo (1999); and
Dvořáková (2007) attract consideration to the
element that with the help of benefits delivered
by a company to its employee’s significant
monetary benefit and the opportunity of its
safety and to safeguard that the worker himself
could barely have enough money otherwise.
 Hypotheses
H1. There is positive relationship between
organizational culture and employee
commitment.
H2. There is positive relationship between
organizational culture and employee benefits.
H3. There is positive relationship between
employee benefits and employee commitment.
H4. Employee benefits act as mediator in
relationship between organizational culture and
employee commitment.
 Methodology
Research Philosophy
 A mode of viewing and interpreting the
facts and realities (Saunders et al. 2009).
Quantitative paradigm
Positivism as a philosophical position
 Target population is utility stores
corporation employees
 Methodology
• Pilot tested
• Random sampling
• Sample size 249
• Self administered questionnaire
Data Analysis Technique
• Univariate Analysis
• Multivariate Analysis
• PLS-SEM
 Results
• Descriptive Statistics
Variable Category Count Percentage
Gender Male 202 18.9

Female 47 81.1
Age 18-30 151 60.6

31-40 55 22.1

41-50 28 11.2

Above 50 15 6.0
Education MS 50 20.1

Masters 92 36.9

Bachelors 65 26.1

Inter 42 16.9
 Descriptive Statistics
Marital Status Single 131 52.6

Married 118 47.1

Years in Service 5 Years 121 48.6

10 Years 71 28.5

15 Years 39 15.7

20 Years 18 7.2
 Data Distribution

N Mean SD Skewness Kurtosis

Stats Stats Stats Stats Std. Error Stats Std. Error

0.81124 0.3921 -1.6004 0.15431 0.56584 0.30741

Gender 249

1.62651 0.90755 1.29885 0.15431 0.61711 0.30741

Age 249

2.39759 0.99117 0.18679 0.15431 -0.9884 0.30741

Education 249

0.4739 0.50032 0.1052 0.15431 -2.0051 0.30741

MS 249

1.81526 0.94932 0.89056 0.15431 -0.2878 0.30741

YS 249
Structure Equation Modeling
Technique
Factor Analysis
 Reliability Stats
Cronbach's rho_A Composite Average Variance Extracted
Alpha Reliability (AVE)

Employee Benefit 0.854 0.857 0.854 0.556

Employee 0.796 0.806 0.796 0.533

Commitment

Organizational 0.741 0.761 0.745 0.574

Culture
 Path Coefficients

Standard
Original Sample Deviation T Statistics
Sample (O) Mean (M) (STDEV) (|O/STDEV|) P Values

Employee Benefit -> Employee

Commitment 0.416 0.409 0.08 5.17 0

Organizational Culture ->

Employee Benefit 0.573 0.584 0.063 9.053 0

Organizational Culture ->

Employee Commitment 0.616 0.623 0.07 8.815 0
Coefficients of Determination R2
R Square R Square Adjusted

Employee Benefit 0.328 0.326

Employee Commitment 0.844 0.843

 Hypothesis Testing
Original Sample Sample Standard T Statistics P Values
(O) Mean (M) Deviation (|O/STDE)
(STDEV)

Employee Benefit -> 0.416 0.406 0.077 5.388 0

Employee Commitment

Organizational Culture -> 0.573 0.579 0.063 9.076 0

Employee Benefit

Organizational Culture -> 0.616 0.626 0.068 9.065 0

Employee Commitment
Direct Impact
 Results Discussion
• H1: There is positive relationship between
organizational culture and employee
commitment.
• The SEM results provided the support to the
argument that organizational culture has a
positive relationship with the employee
commitment.
 Results Discussion
• H2: There is positive relationship between
organizational culture and employee
benefits.
• The hypothesis is accepted on the basis of
results. So a statement can be derived that if
organizational culture is competitive as
discussed previously, do have performance
based benefits and other incentives.
 Results Discussion
• H3: There is positive relationship between
employee benefits and employee commitment.
• The research findings gave us the empirical
evidence that there’s a positive relationship
between the two variables. So third research
objective is also achieved that was to find out
the relationship between employee benefits
and employee commitment is achieved.
 Results Discussion
• H4: Employee benefits act as mediator in
relationship between organizational culture and
employee commitment.
• Though the literature doesn’t have any strong
background research but this research finding can be
used in further and upcoming studies. So the fourth
objective is also achieved that was: To find out the
mediating role of employee benefits in relationship
between organizational culture and employee
commitment.
 Theoretical Contribution
• This study is going to give a theoretical base
for the future researchers. While previous
researches were conducted in other parts of the
world but not in Pakistan.
• The empirical results for the mediating role of
employee benefit between employee
commitment and organizational culture is also
going to give a strong theoretical background
for the researchers not only in Pakistan but
everywhere in the world.
 Research Implications
• This study explains that how managers will
seek ways to improve the organization’s
performance. People that will hunt for
benefits from the study comprise of
managers from USCP sector, Government
of Pakistan and ministry of industries in
Pakistan.
 Managerial Implications
• Managers in the USCP sector should
understand that employee benefits do
contribute positively in the employee
commitment and organizational culture.
• The managers can tie the bond to fill the gap
between what is and what it should be through
their commitment, strategic attention and
motivational tactics to bring deviations in the
organization as this sector is already facing
some crisis.
 Research Limitations
• These limitations resemble to measurement,
conceptual, methodological, and causality levels.
The research, in the dainty of these limitations,
recommended instructions to lead future research.
• The unit of analysis was Utility Stores Cooperation
of Pakistan; the data was gathered from the
employees of south Punjab Pakistan because of the
travelling and time limitations. Out of 14,500
employees only 249 could be contacted.
 Future Directions
• Upcoming research is recommended to
imitate the research in altered food
industries of comparable other emerging
countries
• Significant future course the research study
gives is the mediating role of employee
benefit with organizational culture and
employee commitment.
Thank you