Influence of organisational citizenship behaviour on organisational effectiveness

Experiences from Indian banks

Sudhir Chandra Das, Faculty of Commerce, Banaras Hindu University, India

» Full paper: ilera-2019-paper-76-Das.pdf

Motivation and Objectives: Although the banking sector in India is on the growth trajectory and providing vast opportunities of employment, however, many types of psychological problems i.e. stress, strain, anxiety, have not been looked upon. The empirical observation reveals that overloading and extreme burden of work, strict time pressure of completion of tasks, more than 12 hours of work duration, long travel, fear of termination of job contract etc. are very common problems among banking sector employees (Kishori  &  Vinothini , 2016; Ementa & Ngozi, 2015; Ali et al ,2013; Katyal et al., 2011). As a result, the bank employees suffer from extremely high level of stress, frustration, disappointment, depression and many types of other psychological problems which are decreasing the employee efficiency on work and also resulting in dissatisfaction with their work as well as imbalance in their family matter also (Kumar & Sundar, 2012). In this context sustainable bank profitability or organizational effectiveness is the major concern of research nowadays. The scholar feels that through organizational citizenship behaviour, organizational effectiveness can be achieved. The main focus of the study is to identify the influences of organizational citizenship behaviours on internal and external measures of organizational effectiveness.

Participants: Researcher has used two sets of questionnaire i.e., one set (Organizational citizenship behaviour) prepared  for bank employees and second set (service quality) for the select bank customers. A total of 350 bank employees (respondents) located at Varanasi district of Uttar Pradesh province from 117 bank branches were selected through stratified random sampling technique in the proportion of 4:1 between public and private bank employees and 1:1 ratio of managerial and non-managerial (Assistant) employees. Second category of respondents comprise 400 customers for assessing service quality of organizational effectiveness which have been selected in the ratio of 4:1 from public and private banks by stratified random sampling technique. For determining the sample size for the study different formulas and published table have been consulted (e.g., Sampling and Surveying handbook, 2002; DeVaus, 2002; Krejcie and Morgan, 1970).

Measures: The study adopts eastern scale of Farh et al (1997) consisting seven items categorised into two parts namely protecting company resources (3 items) and Interpersonal harmony (4 items). The western 24 item OCB scale developed by Podsakoff et al (1990) using recommendations postulated by Schwab (1980) and Churchill (1979) consists of five subscales, namely: altruism, conscientiousness, sportsmanship, courtesy and civic virtue have been adopted in the study. It has demonstrated acceptable psychometric properties in previous studies (Hui, Law & Chen, 1999; Moorman, 1991; Niehoff & Moorman, 1993). The reliability coefficients for the subscales ranged from 0.70 to 0.85.   The study has used service quality measures with four components (26 items) namely customer perceptions of service reliability (Parasuram et al., 1985), perceived expertise of employees (Crosby et al., 1990), customer’s trust in the company (Crosby, Evans & Cowles, 1990), and customer willingness to cooperate (Kelley, Skinner & Donnelly 1992) as external organizational effectiveness. For measuring internal effectiveness, the study identifies two important scales (objective measures), namely-net profit per employee (Adopted from Orlando & Nancy, 2001) and HR cost per employee (adopted from Yen & Niehoff, 2004) based on extensive literature survey (e.g., Friedlander & Pickle, 1968; Price, 1968; Campbell, 1977; Walz & Niehoff, 2000; Rego & Cunha, 2008; Podsakoff, Whiting, Podsakoff & Blume, 2009).

Construct Validation: Prior to establish relationship between organizational citizenship behaviour and organizational effectiveness, the study adopted the scientific validation process. Initially, all of measures of OCB and OE subjected to reliability coefficient as per standard of Nunnally (1978), secondly, common method variance have been checked (Organ et al., 2006) using Harman’s one factor test. Finally, construct were established through convergent validity (Campbell & Fiske, 1959) and discriminant validity (Campbell & Fiske, 1959). That means the study has adopted western and eastern scale after following reliability and validation process.

Data Analytic: For examining the influences of organizational citizenship behaviours on organizational effectiveness, Ordinal Logistic Regression (PLUM) model have been applied. The Ordinal Regression procedure (referred to as PLUM) allows building models, generating predictions, and evaluating the importance of various predictor variables in cases where the dependent (target) variable is ordinal in nature. The design of Ordinal Regression is based on the methodology of McCullagh (1980). It can be considered as either a generalisation of multiple linear regressions or as a generalisation of binomial logistic regression.

Results and Discussions: Initially, thirty indicators of six dimensional OCB were taken as predictors for assessing their effects on eight dimensional aggregated score of organizational effectiveness. It is interesting to note that out of thirty indicators, only seventeen variables were found significant and create 55.8% variation on organizational effectiveness.  It is known fact that organizational citizenship behaviour (OCB) has generally been associated with organizational effectiveness. However,  research of  Borman (2004); Vigoda-Gadot (2007); Sevi (2010) has shown that this may not always be the case and that certain types of organizational citizenship behaviour may be inimical to organizational effectiveness by uncomfortable the fulfilment of specific formal goals. Finally, the hypothesis formed that OCB creates significant variation on OE was partially supported. These findings support prior research linking OCB to various indicators of organizational effectiveness (e.g., George & Bettenhausen, 1990; Karambayya, 1990; MacKenzie et al., 1991, 1993; Podsakoff et al., 1997; Podsakoff & MacKenzie, 1994; Turnipseed & Murkison, 2000; Walz & Niehoff, 2000; Werner, 1994; Organ’s; 1988; MacKenzie et al., 1991, 1993; Organ, 1988; Posdakoff et al., 1997; Appelbaum et al., 2004; Bienstock et al., 2003; Bolino & Turnley, 2003; Bambale, 2011; Tai et al. 2012; Magliocca & Christakis ,2001; Kark ,2004; Walz & Niehoff, 1996; Yoon & Suh, 2003; Kataria et al., 2013; Podsakoff et al., 2009). The positive impact of organization citizenship behavior on organizational effectiveness also has been supported by different studies (Castro, 2004; Turnipseed & Rassuli, 2005; Organ, Podsakoff & MacKenzie 2006; Kumari & Thapliyal, 2013). Dimensions of OCB predict profitability of the bank branches positively and significantly confirmed by Nawaser (2015).

Conclusive Remarks: Influence of OCB not found much influential as only 17 variables out of 30 observed significant variation. Although there are sufficient number of antecedents of OCB namely Personality, Attitude, Leader characteristics, Job satisfaction, Role perception, Organisational commitment, Job embeddedness, Organisational justice, HR practices, Person organisation fit, Job characteristics, Empowerment, Competency, Feedback, Employee engagement, Perceived organizational support, Organizational climate, Materialistic attitude, Organizational silence and Psychological capital . But human resource (HR) practice influences more OCB through job embeddedness, POS, and trust (Fatima et al 2015). Further, the literature indicates that all activities which make up the human resources management, i.e., recruitment and selection, motivation and reward, evaluation and development, may contribute to the emergence of citizenship behaviours (Organ, Podsakoff & MacKenzie, 2006; Sun, Arya & Law, 2007; Snape & Redman, 2010; Husin, Chelladurai & Musa, 2012; Fu, 2013). Several other authors in cross cultural researchers stated that HR practices play an important role in motivating employees’ OCB and firm’s performance (e.g., Snape and Redman 2010; Takeuchi et al 2009; Zacharatos et al 2005; Omari et al 2012; Mukhtar et al 2012; Babaei et al 2012).

Key Words: Human resources, organizational citizenship behaviour, organizational effectiveness, banking industry, service quality, internal and external effectiveness.