Chin-Chih Wang (Michael)

1. Lynn UniversityDoctoral Dissertation Defense Hearing PAY SATISFACTION, JOB SATISFACTION, ORGANIZATIONAL COMMITMENT, AND TURNOVER INTENTION WITHIN THE BANKING INDUSTRY IN TAIWAN: A STRUCTURAL EQUATION MODELING APPROACH Chin-Chih Wang (Michael)

2. Introduction to the Problem • High turnover rate • Cost • Knowledge • Customers • Taiwanese banking industry

3. Gaps • Conflicts between different theories and empirical studies • Different countries & cultures • 21st century

4. Purpose of the Study • To explore the relationship and degrees among those factors • Pay satisfaction’s role • To discover the accurate ratio between pay raise and turnover intention • The conflicts between different theories and results of empirical studies

5. Definition of Terms • Pay Satisfaction • Job SatisfactionPromotion Supervision Fringe Benefits Contingent Rewards Operating Procedures Coworkers Nature of Work Communication

6. Definition of Terms (cont.) • Organizational CommitmentAffective Commitment Continuance Commitment Normative Commitment • Turnover Intention • Domestic Private Bank • Entry-Level Employee • Mid-Management

7. Justification • Global interest • Taiwanese banking industry • Different from previous studies • Researchable • Feasible

8. Delimitations and Scope • The relationship between turnover intention and actual departure • Entry-level employees and mid-management • Private banks • May not be applicable to other countries and industries

9. Delimitations and Scope (cont.) • The study did not take into account any unpredictable internal and external factors

10. Literature Review • Theoretical Framework & 2 Research Questions • Hypothesized Models & 24 Hypotheses

11. Theoretical Framework • Turnover theory (Steers & Mowday, 1981) • Model of Pay Satisfaction (Lum, Kervin, Clark, Reid, and Sirola, 1998) • Job satisfaction theory (Spector, 1997) • The three-component model of organizational commitment (Allen & Meyer, 1991)

12. Organizational Commitment Job Satisfaction Pay Satisfaction Promotion TurnoverIntention Supervision Fringe Benefits Affective commitment Contingent Rewards Continuance commitment Operating Procedures Normative commitment Coworkers Nature of work Communication Theoretical Framework

13. Research Questions • What are the socio-demographic characteristics of a sample of employees in the Taiwanese banking industry? • What are the degrees of pay satisfaction, job satisfaction, organizational commitment, and turnover intention of a sample of employees in the Taiwanese banking industry?

14. Hypothesized Models • Pay satisfaction, job satisfaction, organizational commitment, and turnover intention model • Pay satisfaction’s sub-variables and turnover intention model • Organizational commitment’s sub-variables and turnover intention model

15. Operating Procedures Coworkers Supervision Fringe Benefits Nature of work Promotion Contingent Rewards Communication H2b H2a H2c H2d H2e H2g H2f H2h Job Satisfaction H2 Employee Turnover Pay Satisfaction Organizational Commitment H3 H3b H3c Affective commitment Continuance commitment Normative commitment • H6, H6a, H6b • H5, H5a, H5b • H4, H4a, H4b H3a H1, H1a Hypothesized pay satisfaction, job satisfaction, organizational commitment, and turnover model

16. Organizational Commitment • H6, H6a, H6b Job Satisfaction • H5, H5a, H5b • H4, H4a, H4b H3 H2 Pay Satisfaction • H1, H1a Turnover Intention Hypothesized pay satisfaction, job satisfaction, organizational commitment, and turnover intention model

17. Hypotheses • H1: Pay satisfaction has a negative relationship with employee turnover. • H1a: The amount of extra money given to employees can change specific levels of employees’ turnover intention. • H2: Job satisfaction has a negative relationship with employee turnover.

18. Hypotheses (cont.) • H3: Organizational commitment has a negative relationship with employee turnover. • H4: Pay satisfaction has a positive relationship with job satisfaction. • H4a: Pay satisfaction is a mediator between job satisfaction and employee turnover.

19. Hypotheses (cont.) • H4b: Job satisfaction is a mediator between pay satisfaction and employee turnover. • H5: Pay satisfaction has a positive relationship with organizational commitment. • H5a: Pay satisfaction is a mediator between organizational commitment and employee turnover.

20. Hypotheses (cont.) • H5b: Organizational commitment is a mediator between pay satisfaction and employee turnover. • H6: Job satisfaction has a positive relationship with organizational commitment. • H6a: Job satisfaction is a mediator between organizational commitment and employee turnover.

21. Hypotheses (cont.) • H6b: Organizational commitment is a mediator between job satisfaction and employee turnover.

22. Operating Procedures Contingent Rewards H2d H2e Fringe Benefits Coworkers H2c H2f Turnover Intention Supervision H2g Nature of work H2b H2a H2h Promotion Communication Hypothesized pay satisfaction’s sub-variables and turnover intention model

23. Hypotheses (cont.) • H2a: Promotion has a significant relationship with employee turnover. • H2b: Supervision has a significant relationship with employee turnover. • H2c: Fringe benefits have a significant relationship with employee turnover. • H2d: Contingent rewards have a significant relationship with employee turnover.

24. Hypotheses (cont.) • H2e: Operating procedures have a significant relationship with employee turnover. • H2f: Coworkers have a significant relationship with employee turnover. • H2g: The nature of work has a significant relationship with employee turnover. • H2h: Communication has a significant relationship with employee turnover.

25. Affective Commitment Continuance Commitment Normative Commitment H3b H3a H3c Turnover Intention Normative Commitment Hypothesized organizational commitment’s sub-variables and turnover intention model

26. Hypotheses (cont.) • H3a: Affective commitment has a significant relationship with employee turnover. • H3b: Continuance commitment has a significant relationship with employee turnover. • H3c: Normative commitment has a significant relationship with employee turnover.

27. MethodologyResearch Design • Quantitative, Non-experimental study • Explanatoryand Correlational survey

28. MethodologySampling Plan • Target Population (78,336) • Accessible Population (46,157) • Probability and Two-stage Total Accessible Sampling Plan • Questionnaire: 68 questions in 5 sections

29. MethodologyInstrumentation Pay Satisfaction • Pay satisfaction measured by modified “pay” sub-dimension of Job Satisfaction Scale (Spector, 1985) • 4 items

30. MethodologyInstrumentation (cont.) Job Satisfaction • Job satisfaction measured by modified Job Satisfaction Scale (Spector, 1985) • 32 items

31. MethodologyInstrumentation (cont.) Organizational Commitment • Organizational commitment measured by modified Three-Component Model (TCM) Employee Commitment Survey(Meyer, Allen, & Smith, 1993) • 18 items

32. MethodologyInstrumentation (cont.) Turnover Intention • Turnover intention measured by modified Turnover Questionnaire(Kim, Price, Mueller, & Watson, 1996) • 4 items

33. MethodologyData Collection Procedures and Ethical Aspects • Permissions to use and translate scales • Institutional Review Board of Lynn University • Translation • Listed all 1,503 branch offices • Randomly selected 80 branches

34. MethodologyData Collection Procedures and Ethical Aspects (cont.) • Total accessible • Participants contacted outside the bank in a public area • Package with a consent form, survey questionnaire and grip-seal envelope

35. MethodologyData Collection Procedures and Ethical Aspects (cont.) • No personal identifiers • Each survey coded with a number • Participants completed the survey voluntarily and anonymously

36. MethodologyData Collection Procedures and Ethical Aspects (cont.) • The IRB has been notified at the end of the study • Data stored in a locked depository box for a period of five years • Destroy

37. MethodologyMethods of Data Analysis • EXCEL, SPSS 14.0, and AMOS 6.0 • Descriptive statistics, Confirmatory Factor Analysis, and Structural Equation Modeling (SEM)

38. MethodologyMethods of Data Analysis (cont.) • Descriptive statistics and reliability scores calculated by SPSS 14.0, and structural equation modeling (SEM) analysis used AMOS 6.0.

39. MethodologyMethods of Data Analysis (cont.) • Confirmatory Factor Analysis • Goodness-of-Fit Criteria • Absolute Fit Measures • Incremental Fit Measures • Parsimonious Fit Measures

40. MethodologyGoodness-of-Fit Example

41. MethodologyGoodness-of-Fit Example (cont.)

42. MethodologyGoodness-of-Fit Example

43. MethodologyGoodness-of-Fit Example (cont.)

44. Results • 1,704 surveys were distributed • 392 responses were received • Response rate was 23% • 37 responses were invalid • N = 355

45. Results Research Question 1 What are the socio-demographic characteristics of a sample of employees in the Taiwanese banking industry?

46. N = 355 1=Male 2=Female 1 2 Frequency and Percentage of Gender 98 (27.6%) 257 (72.4%)

47. 154 (43.4%) 150 N = 355 98 (27.6%) 100 44 (12.4%) 50 27 (7.6%) 13 (3.7%) 10 (2.8%) 8 (2.3%) 1 (0.2%) 0 20~24 25~29 30~34 35~39 40~44 45~49 50~54 55~59 Age Frequency and Percentage of Age

48. N = 355 327 (92.1%) 300 200 Count 100 17 (4.8%) 10 (2.8%) 1 (0.3%) 0 Lower than High School High School College Graduate School Education Frequency and Percentage of Education Level

49. Frequency and Percentage of Working Years

50. Frequency and Percentage of Working Years (cont.)