Increasing Employee Commitment: the Adoption of Good Corporate Governance Principles

Nyo, Jia Qi (2022) Increasing Employee Commitment: the Adoption of Good Corporate Governance Principles. Final Year Project (Masters), Tunku Abdul Rahman University College.

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Abstract

Employee turnover has been a prolonged issue confronting many businesses of various industries and countries. Employee commitment is the major factor that determine employee turnover. Despite extensive studies has been conducted to explore the idea of organisational commitment, employee commitment is still the most complex and researchable idea in the fields of organisational management. In this regard, this study intends to conceptualise employee commitment from a governance perspective. This study examines the impact of corporate governance principles adoption, corporate reputation and organisational trust on employee commitment. In order to achieve the research objective, a quantitative, cross-sectional research study has been conducted via online survey questionnaires with 230 Malaysian employees. The data obtained are then analysed using Statistical Package for Social Sciences (SPSS) and Partial Least Square – Structural Equation Modelling (PLS-SEM). This research findings reveal that adoption of good corporate governance principles can help to foster organisational trust of employee, leading to employee commitment. This research also reveal that the adoption of good corporate governance principles is critical for reputation development. This study has made significant contributions to the literature of employee commitment by confirming that corporate governance is also one of the antecedents which can help to foster employee commitment. Moreover, this research has contributed by providing initial evidence that the effect of corporate governance may partially operate through a path connecting organisational trust to employee commitment. In term of practical implications, the research findings have highlighted the importance of corporate governance, specifically accountability, fairness, responsibility, transparency in workplace that are critical to develop and enhance employee commitment.