Research Paper on Employee Loyalty

Employee loyalty is defined as an affective commitment of the employee towards the firm. When the employee possesses this affective commitment it gives him/her the devotion to sustain his/her association with the certain firm. The amount of devotion and loyalty of a simple employee can be a great advantage of the company. When an employee is loyal, he/she will have a greater ability to properly do his/her job as well as reduce the probability of the company to fail. Hence the employees of a business are critical components for a certain business to properly progress.
A business may possess inferior employees but the huge amount of loyalty would have can send a very insignificant business to amazing heights. Likewise, those employees with unsubstantial amount of loyalty may cause tremendous business to collapse. DuPont being one of the largest chemical company in the world, it is a necessity for them to continue to work as effective and efficient as possible. To help them with such we have conducted a study on employee loyalty. With this study, we aim to come with an output that will be able to assist DuPont to design different programs to help improve the employee organizational loyalty. Through this we as well want to prove that the amount of loyalty of the employees of a business plays a significant role in the success of the corporations.
Theoretical Framework

John Meyer and Natalie Allen proposed the Three Components of Commitment model, which explains how organizational commitment is a psychological-related idea. They suggested three factors that affect how an employee sees his/her organization. With this knowledge and better understanding, one can increase not only the engagement of the employees, but their well-being and job satisfaction as well. By using these components together with various appropriate approaches, a manager now has the ability to effectively motivate and work with his/her team. The first type is the Affective Commitment. This type of loyalty occurs when one is emotionally attached to one’s organization or when one genuinely identifies with the goals and values of the organization he/she works for.
Unlike any other types of commitment, an affectively committed employee actually enjoys and is satisfied with his/her work. The second type of commitment is Normative. This component deals with people who stay in the organization because they have this feeling of obligation that they need to stay for whatever reason – external or internal – even if they are not happy nor satisfied with their jobs. Normative Commitment may hinder one from seeking greater opportunities, but still remains in the organization because “it is the right thing to do.” The last component or type is the Continuance Commitment. This type of commitment happens when a person always weighs the pros and cons, both of leaving the organization and of staying.
The only reason behind why people who belong to this category stay is because there is a higher risk, cost, or more losses when they leave the organization compared to when they stay. Another theory supports the Continuance Commitment – Becker’s Side-Bet Theory. Becker (1960) as cited in Cohen and Lowenberg (1990) suggests that the longer an individual stays with his/her organization, the greater number of losses he/she will have when he/she leaves the organization, which in return makes it hard for the individual to leave in the first place – this then becomes the reason for an employee’s commitment to the organization. Becker used the term “side-bets” to refer to the investments, usually material things, which one will lose when he/she decides to leave the organization.
Statement of the Problem
Are there a correlation and a significant difference between the employees’ monthly salary and organizational commitment?
The factors affecting an employee’s commitment to an organization, specifically the effect of an employee’s monthly salary to organizational commitment.
Hypothesis
Null Hypothesis: There is no correlation and significant difference between the employees’ monthly salary and organizational commitment?
Researcher’s/Alternative Hypothesis: There is a correlation and significant difference between the employees’ monthly salary and organizational commitment.
Significance of the Study
In an organization, there are many different factors that may affect an individual’s loyalty to his/her company. With this, the study aims to establish the relationship between organizational loyalty and the employees’ monthly salary. This proposed study will help the managers, if not the owners, to be aware of what motivates their employees to be loyal to them. Furthermore, it will help the managers to know what they can do to help their employees. On the other hand, employees can use the results of this study to work more efficiently and effectively.
METHODOLOGY
Research Design
The research design that the researchers used can be classified as Descriptive. Descriptive research is used to show correlation, associations, or relationship between or among things. By using Descriptive research, the researchers can demonstrate the relationship between organizational commitment and the employees’ salary, since this study aims to find out if there is a relationship or correlation between the two.
By knowing and understanding the relationship between the two, it will be easier for the researchers as well as the managers and employees to make an effective approach that may benefit everyone. Given this, it was the most appropriate method to be used by the researchers in conducting their study on the loyalty of the employees in an organization, specifically in Du Pont.
Participants
The study focused on the employees of Du Pont. Out of (total population), 73 were randomly chosen by the researchers based on their availability, since the survey was conducted during work hours. The respondents are (part) of the total population of the organization.
Instrument
For this study, the Survey technique was used and the instrument utilized was the questionnaire. This instrument was used because it is the fastest way to collect data from a number of respondents. Furthermore, it was more convenient for both the researchers and the respondents.
Data Gathering Procedure
The questionnaire was given to 73 Du Pont employees for them to fill up. The survey questionnaire was composed of 35 questions which revolved around the attitudes and loyalty of the respondents to the organization. A scale from 1 to 5 was used in each question to see if the respondents agree or disagree with the statement/s. A number of copies of the questionnaires were distributed to some respondents through electronic mail (e-mail) by the researchers due to time constraint. After receiving only half of the responses (through e-mail), the other copies were distributed personally by the researchers to the respondents (employees). The researchers collected the copies personally as well after two working days.
Statistical Treatment
The responses made by the respondents describing their gender, civil status, age, monthly salary, religious affiliation, educational background, work designation, work status, and length of service were presented. For easier analysis, the researchers used the following representations:
Gender
1 – Male
2 – Female
Civil Status
1 – Single
2 – Married
Monthly Salary
1 – Below 15,000.00
2 – 15, 000.00 – 19, 999.00
3 – 20, 000.00 – 24, 999.00
4 – 25, 000.00 – 29, 999.00
5 – 30, 000.00 – 34, 999.00
6 – 35, 000.00 – 39, 999.00
7 – 40, 000.00 – 44,999.00
8 – 45, 000.00 – 49, 999.00
9 – 50 , 000.00 – Above
Religious Affiliation
1 – Roman Catholic
2 – Non-Roman Catholic
Educational Background
1 – Non-BS Degree Holder
2 – Bachelor’s Degree Holder
3 – Master’s Degree with Doctoral Units
4 – Full-Fledged Master’s Degree Holder
5 – Bachelor’s Degree with Master’s Units
6 – Full-Fledged Doctoral Degree
Work Designation
1 – Top Management
2 – Middle Management
3 – Rank and File
4 – Others
Work Status
1 – Permanent
2 – Probationary
Length of Service
1 – Below 3 years
2 – 3-5 years
3 – 6-8 years
4 – 9-11 years
5 – 12-14 years
6 – 15-17 years
7 – 18-20 years
8 – 21-23 years
9 – 24-26 years
10 – 27-29 years
11 – 30 years or more
Responses by the employees were statistically analyzed through the use of descriptive statistics such as the mean. Furthermore, Pearson R and T-Test for Significance were utilized to know if there is a correlation and significant difference between the independent and dependent variables.
Analysis of Data
Statistical Tools
The factors affecting employees’ commitment to an organization, more specifically the effect of the employees’ monthly salary Mean
Pearson R
t-test for significance
RESULTS AND DISCUSSION
The table below represents the summary of the data, where in x is the employee’s corresponding monthly salary and y is the mean of the employees’ answer to the 35 questions that relate to organizational loyalty. Answers are rounded off to the nearest hundredths.

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Given this data, the Pearson product-moment correlation can be used. It was developed by Karl Pearson and is considered to be the most robust method in measuring the correlation and regression. The formula for rxy is as follows:
Using this formula, the rxy can be derived, which results to -0.27; this can be interpreted that employees’ monthly salary and organizational commitment has a low correlation as shown in the table below:
Parameters
Interpretation
(+,-) 1.00
Perfect Correlation
(+,-) 0.81-0.99
Very High Correlation
(+,-) 0.61-0.80
High Correlation
(+,-) 0.41 – 0.60
Moderate/Fair Correlation
(+,-) 0.21 – 0.40
Low Correlation
(+,-) 0.01 – 0.20
Very Low Correlation
(+,-) 0.00
No Correlation
Furthermore, the amount of contribution or variances explained by the employees’ monthly salary about the employees’ commitment can be derived; this is called the coefficient of determination (COD). Also, given this data, the amount of variance left unexplained and is attributed to other factors or to the sampling error can be computed – this is named as coefficient of alienation (COA).
COD= (r)2 = 0.0729 or 7.29%
COA= 1.00 –(r)2 = 0.9271 or 92.71%
Lastly, the significance can be tested using Dimaano’s (2001) formula:
with degrees of freedom: N-2
This formula is used to determine whether the two factors (employees’ monthly salary and organization loyalty) have a significant relationship. Having computed the following, the group has arrived to a value of a t-computed of 2.136, and t-critical value of 2.002; hence, it can be inferred that the decision is to reject the null hypothesis and the conclusion is to accept the researcher’s hypothesis.
CONCLUSION
That being said, the group has been able to establish a low correlation between the two given factors, which are the employees’ monthly salary and the organizational commitment. Moreover, 7.29% is the amount of contribution or variances explained by the former factor about the latter, and 92.71% is the amount left unexplained by the former. Lastly, based on the computations showed, there is a significant relationship between the two factors.

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