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The International Journal of Human

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Work values, job satisfaction and

organizational commitment in ChinaFabian Jintae Froese

a& Shufeng Xiao

b

a

Korea University Business School, International Business, Seoul,Republic of Koreab

Namseoul University, Seonghwan-eup, Cheonan, Republic of

Korea

Available online: 15 Sep 2011

To cite this article: Fabian Jintae Froese & Shufeng Xiao (2011): Work values, job satisfactionand organizational commitment in China, The International Journal of Human Resource

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The International Journal of Human Resource Management,

2011, 1–19, iFirst

Work values, job satisfaction and organizational commitment in China

Fabian Jintae Froesea* and Shufeng Xiao

b

aKorea University Business School, International Business, Seoul, Republic of Korea;

b Namseoul University, Seonghwan-eup, Cheonan, Republic of Korea

This study examined the relationships between work values, job satisfaction, andorganizational commitment of white-collar workers who are employed by foreign-invested companies in China. Results of structural equation modeling show thatvarious facets of job satisfaction mediated the relationships between work values andorganizational commitment. Employees’ individualism and their willingness to takerisks were related to various facets of job satisfaction. In turn, job satisfactioninfluenced their organizational commitment. The effects of various job satisfaction

facets varied, with job autonomy satisfaction being a stronger predictor of organizational commitment than pay satisfaction. Theoretical and managerialimplications are discussed.

Keywords: China; foreign-invested companies; job satisfaction; organizationalcommitment; structural equation modeling; work values

Introduction

Among developing countries, China is the largest recipient of foreign direct investment

(FDI) and has the largest number of employees who work for foreign companies

(UNCTAD 2010). In 2004, approximately 24 million employees (3% of China’s total

employment) were employed by foreign companies in China (UNCTAD 2004).However, foreign companies in China face a major problem: They must determine how

to manage and retain the local employees (e.g. Han and Froese 2010; Zhu, Thomson

and De Cier i

2008). Chinese workers appear to have a low commitment to their employers, as

evidenced by their high turnover rates. Prior research estimates that employee turnover in

China ranges from 10% to 40% depending on the industry, region, and profession (Han

and Froese 2010; Leininger 2007). Managers and professionals experience particularly

high turnover rates (Leininger 2007).

The goal of this study is to determine how foreign companies can reduce their

employee turnover rates in China. This study analyzes organizational commitment and

its antecedents among white-collar workers who are employed by foreign firms.

Organizational commitment and job satisfaction are considered to be the strongest

predictors of employee turnover (Griffeth, Hom and Gaertner 2000). Despite tremendous

research on organizational commitment (for a review, see Meyer, Stanley, Herscovitch

and Topolnytsky 2002), there is little research on organizational commitment and its

antecedents in non-Western countries and China in particular (Chen and Francesco 2000;

Wong, Ngo and Wong 2002).

*Corresponding author. Email: [email protected]

ISSN 0958-5192 print/ISSN 1466-4399 online

q 2011 Taylor & Francis

DOI: 10.1080/09585192.2011.610342

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2 F.J. Froese and S. Xiao

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China is culturally very different from Western countries (e.g. Hofstede 2001).

The Chinese culture has generally been characterized by traditional values such as

collectivism and Confucianism with an emphasis on harmony, respect for hierarchy,

reciprocity, loyalty, and the importance of ‘face’ and ‘guanxi’ (Lockett 1988; Earley

1989; Warner 1993). For example, while Western employees view themselves primarilyas individuals independent of organizations and place priority on their individual interests

and satisfaction, Chinese workers view themselves as organizational members and place

priority on Confucian values such as duties, obligations, and loyalty (Earley 1989; Chen

and Lee 2008). In Chinese society, Guanxi, which is the importance of interpersonal

relationships and the reciprocity between subordinates and their superiors, is widely

reported to be a pervasive feature (Warner 2008). Hence, China may potentially

challenge paradigms that have been developed in the West because of China’s numerous

cultural value differences from Western countries.

Indeed, prior research indicates that the antecedents of organizational commitment

may be different in China than in Western countries (Chen and Francesco 2000;

Wong, Wong, Hui and Law 2001; Gamble and Huang 2008). Some researchers havespeculated that Chinese employees’ underlying values can explain their different job

attitudes (Ralston, Holt, Terpstra and Yu 1997; Chen and Francesco 2000). To shed

further light on this topic, this study focuses on the relevant work values that affect

employees’ organizational commitment and job satisfaction.

Prior research has found that there is a significant and direct relationship between

values and organizational commitment, as well as between values and job satisfaction

(Fischer and Mansell 2009; Palich, Hom and Griffeth 1995). However, the same authors

admit that the explanatory power of such direct relationships is very weak. These studies

suggest that the relationships between work values and job attitudes might be more

complex. Thus, we propose an integrated theoretical framework concerning the role of work values, job satisfaction, and organizational commitment. In this study, we will

demonstrate how different job satisfaction facets mediate the relationships between work

values and organizational commitment.

The remainder of this study is organized in the following manner. In the next section,

we present a review of literature on organizational commitment research. Then we

present the conceptual framework, and we develop several hypotheses to reflect how

different factors influence organizational commitment. Before presenting the empirical

results, we describe the data and the measures. In the final section, we discuss our

findings, their managerial implications, the study limitations, and suggestions for future

research.

Organizational commitment

Organizational commitment is a psychological state that characterizes the employee’s

relationship with their employer and has implications for the employee’s decision to

continue or discontinue working within the company (Meyer and Allen 1991). Meyer and

Allen (1991) devised a three-component model that consists of affective (identification

and involvement), normative (feelings of an obligation to remain with the company), and

continuance commitment (the cost of leaving). Of these three components, the most

widely recognized conceptualization is affective commitment, because it has the stronger

impact on turnover and performance (Meyer et al. 2002). Accordingly, this study focuseson affective commitment.

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The International Journal of Human Resource Management 3

Numerous antecedents of affective commitment have been identified; these include

demographic variables, individual attitudes, work values, and various facets of job

satisfaction (Meyer et al. 2002). Although demographic characteristics such as sex, age,

education, and tenure seem to be linked to organizational commitment, the correlations

are neither strong nor consistent (Mathieu and Zajac 1990; Meyer et al. 2002). Work values and individual attitudes (e.g. individualism, work ethics, and locus of control)

have been shown to be correlated with affective commitment (Meyer and Allen 1991;

Fischer and Mansell 2009). Prior studies have shown how job satisfaction and its various

facets impact organizational commitment (Lawler 1971; Whitener 2001; Meyer et al.

2002).

While the majority of previous studies have been limited to Western contexts,

scholars are beginning to investigate organizational commitment in non-Western

countries such as China. For instance, Chen and Francesco (2003) explore how the

components of organizational commitment influence organizational performance. In

another study, Cheng and Stockdale (2003) test the construct validity of Meyer and

Allen’s (1991) three- component model of organizational commitment in China; theyfound that the model generally fit their Chinese data well. Furthermore, Chen and

Francesco (2000) find that cultural differences play a significant role in influencing the

Chinese employees’ organizational commitment and behaviors. In a more recent study,

Gamble and Huang (2008) show that organizational commitment predicts the job

switching intentions of Chinese employees working for a British retailer. Zhu et al.’s

(2008) review of HRM research in China suggests that China is an important context for

studying HRM; by studying China, Zhu et al. believe that researchers can provide

empirical testing of the transfer of Western concepts and practices to a transitional

economy. In terms of the Chinese culture, Zhu et al. also note that researchers should

further study the effect of employees’ values on HRM practices.However, despite the rise of organizational commitment studies in China, the

phenomenon is relatively recent and limited to a relative paucity of such studies.

Moreover, the few studies that address the subject are limited to the examination of the

cross-cultural construct validity of Meyer and Allen’s (1991) three-component model, or

they have only investigated a few, select antecedents of organizational commitment. This

makes it difficult to develop theory and management practices to use in the HRM field.

Conceptual framework and hy potheses

Drawing upon previous studies of job satisfaction, organizational commitment, and

cross- cultural research, we have developed and tested an integrated model for our

research. We propose that the extent of the employees’ job satisfaction and

organizational commitment in China is influenced by a set of work values. Our

theoretical model is based on the person-job-organization (PJO) fit theory (Chatman

1989; Kristof 1996; Kristof- Brown, Zimmerman and Johnson 2005), which has been

found to be relevant in the context of job satisfaction and organizational commitment

(Kristof-Brown et al. 2005; O’Reilly, Chatman and Caldwell 1991). Based on needs-

supplies (or values) perspective, Kristof-Brown et al. (2005) argued that person-job (PJ)

fit occurs when employees’ needs, desires, or preferences are met by the jobs that they

perform. Thus, employees would be satisfied with the job if the organization policies or

structure met their needs, values or preferences. According to Chatman’s (1989)seminal work, person-organization (PO) fit was defined as ‘the congruence between the

norms and values of organizations and the values of persons’ (p. 339). The PO fit exists

when the values employees perceive are consistent with their organization. Thus, if

employees’ values are in line with corporate

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4 F.J. Froese and S. Xiao

policies, then employees may show higher job satisfaction and organizational

commitment. On the contrary, a ‘misfit’ between employees’ values and their current

specific job features or organization may result in low job satisfaction and organizational

commitment.

Building upon the aforementioned PJO fit theory, our integrated model includes threework values of Chinese white-collar workers: individualism (e.g. Ralston et al. 1997;

Triandis 1995), willingness to take risks (e.g. Turban, Lau, Ngo, Chow and Si 2001), and

money orientation (e.g. Tang and Chiu 2003; Turban et al. 2001). We focus on these

three dimensions because they are well-known and widely used and all three

values are conceptually related to the commitment process (Smith, Bond and

Kagitcibasi 2006).

Three facets of job satisfaction (e.g. job autonomy, performance appraisals, and pay

satisfaction) are important consequences of work values and antecedents of

organizational commitment. Job autonomy refers to the extent to which the job provides

discretion, freedom, and independence to employees in performing their tasks (Hackman

and Oldham1976). Performance appraisals have received significant attention since they have been

considered to be an important criterion in evaluating employee effectiveness

(Kuvaas 2006). Pay satisfaction describes the employees’ satisfaction with their

compensation package, which includes their pay level, pay raises, and benefits, as well as

the compensation system. These facets of job satisfaction have been found to be related

to organizational commitment (Kinnie, Hutchinson, Purcell, Rayton and Swart 2005; Yu

and Egri 2005).

We include these variables during our study of China because these variables are

consistent with prior work in the literature on cross-cultural research and HRM; these

variables are expected to show significant relationships to organizational commitment.Thus, we have developed the conceptual framework as depicted in Figure 1. We will

H3Individualism

H1

H2 Job

autonomyH9

H4

Willingness H5

to task risks

H6

H7

Appraisal

satisfaction

Pay

satisfaction

H10

H11

Organizational

commitment

Money H8orientation

Figure 1. Conceptual framework.

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explain the various variables and links depicted in the model in more detail in the

following sections.

Work values

Work values, i.e. evaluative standards and goals in a work context, have been viewed as

the key determinant in a wide range of individual work-related attitudes and behaviors

(Gahan and Abeysekera 2009; Kirkman and Shapiro 2001). The increasingly diverse

workforce within and across countries creates an urgent need for systematic research to

determine how work values affect job satisfaction and organizational commitment within

organizations.

Individualism

People with individualistic traits tend to take care of themselves, do their own thing

without bothering others, and believe that they can stand or fall on their own; however, people with collectivistic traits emphasize a social framework and interdependence, and

they interpret themselves as a member of a group (Robertson 2000). Individualism has

been suggested to promote a greater sense of autonomy than collectivism (Kanungo and

Jaeger 1990). Employees with a high level of individualism tend to adhere to the

correctness of their own views and have greater reliance on these views. They emphasize

independence and liberty from others by giving priority to their own thoughts, feelings,

and expressions; subsequently, they tend to request more power and autonomy from their

supervisors. One the other hand, less individualistic employees are expected to feel more

comfortable in accepting organizational views or suggestions.

Performance appraisals have been widely used in Western organizations to giveemployees performance feedback and determine pay and promotion opportunities

(Cleveland, Murphy and Williams 1989). On the contrary, during the planned economy

in China, few performance appraisals have been used. The traditional evaluation system

focuses on the so-called ‘iron rice bowl’ (called tie fan wan in Chinese) which ensures

‘job for life’ at any cost (Ding, Goodall and Warner 2000). However, this traditional

system has been increasingly replaced with performance-reward linked appraisal systems

(Yu and Egri 2005). Since employees with a higher level of individualism stress their

independence and the importance of their individual self-reliance, we predict that they

will be highly satisfied with individual performance appraisal systems. Conversely,

collectivistic employees might feel too challenged and thus dissatisfied with the

performance appraisal systems that exist in foreign companies.Individualism has been found to be negatively associated with organizational

commitment (e.g. Fischer and Mansell 2009; Randall 1993). Individualistic employees

consider independence and pursuing their own goals to be more important than

organizational goals and organizational commitment. In contrast, collectivistic employees

emphasize group/organization goals and thus show higher organizational commitment.

Thus, we make the following hypotheses:

Hypothesis 1: There is a positive relationship between the employees’ individualism

and their satisfaction with job autonomy.

Hypothesis 2: There is a positive relationship between the employees’ individualism

and their satisfaction with performance appraisals.Hypothesis 3: There is a negative relationship between the employees’ individualism

and their organizational commitment.

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Willingness to take risks

The willingness to take risks (vs. risk averse) describes the extent to which employees in

organizations feel threatened by uncertain and ambiguous situations and thus seek to

avoid such situations. People with a low willingness to take risks prefer to be taught

explicitly by their superiors, and they prefer to follow company rules, so that they bear no responsibilities and associated risks. Conversely, people with a high willingness to

take risks tend to prefer more autonomy and control over their own behavior rather than

simply following orders from their superiors; thus, tend to be less satisfied with limited

autonomy. Therefore, if employees have a high willingness to take risks, we expect that

they will be more satisfied with the job autonomy provided in the organizations.

Turban et al. (2001) find that Chinese students who are more risk seeking are more

interested in working for foreign companies; they may believe that foreign companies

provide more challenging work and more career development opportunities based on

individual performance. Risk-seeking employees are confident in their skills and willing

to take challenges; thus, they are expected to be more satisfied with the performanceappraisal systems. In contrast, individuals who are less willing to take risks may prefer

formal rules, stable jobs, and established career paths over performance-based appraisal

systems.

Furthermore, several studies imply that an employee’s willingness to take risks is

related to organizational commitment (e.g. Randall 1993). Employees who have a lower

willingness to take risks typically stay with the same employer and view loyalty to the

employer as a virtue (Hofstede 2001). Employees who have high willingness to take risks

are less likely to want rules and regulations, and they are more likely to take a risk and

switch employers. Thus, we expect that employees with a higher willingness to take risks

will be associated with lower levels of organizational commitment. To summarize, we

make the following hypotheses:

Hypothesis 4: There is a positive relationship between the employees’ willingness to

take risks and their satisfaction with job autonomy.

Hypothesis 5: There is a positive relationship between the employees’ willingness to

take risks and their satisfaction with performance appraisals.

Hypothesis 6: There is a negative relationship between the employees’ willingness to

take risks and their organizational commitment.

Money orientation

Money orientation refers to the employee’s attitudes toward money (Tang and Chiu

2003). Numerous studies have found that money plays a significant role in affecting

people’s behavior, job performance, and organizational effectiveness (Lawler 1971).

Thus, it has been used by managers to attract, retain, and motivate employees in

organizations (Tang, Luna-Arocas, Sutarso and Tang 2004).

Previous findings suggest that an employee’s money attitude significantly moderates

and mediates self-reported income and pay satisfaction relationship (Tang et al. 2004).

According to the equity theory, employees may experience pay dissatisfaction if their

relative rewards are smaller than those of others (Tang and Chiu 2003). Employees with a

high degree of money orientation have high expectations of pay and low pay satisfaction.

Similarly, Lawler (1971) finds that people with a high level of money orientation have ahigh pay expectation; thus, these employees report a large discrepancy between their

current compensation and the compensation which they expect to receive. This

discrepancy leads to pay dissatisfaction. Drawing on a large-scale survey spanning

several

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decades and countries, Inglehart (1998) finds that materialistic values are particularly

important in developing countries. As we consider China’s current level of development

level, it could be assumed that money will play even a more important role. Indeed,

Chiu, Luk and Tang (2001) find that money is an important incentive for Chinese

employees; they further argue that money plays a key role in attracting job seekers. Thus,if money is the main motivation factor, organizational commitment may become a minor

concern. In particular, in a tight labor market, employees who have a higher need for

money will frequently switch to another company if they are offered higher salaries.

To summarize, we make the following hypothesis:

Hypothesis 7: There is a negative relationship between the employees’ money

orientation and their pay satisfaction.

Hypothesis 8: There is a negative relationship between the employees’ money

orientation and their organizational commitment.

Job satisfaction and organizational commitment

Prior research indicates that job autonomy, performance appraisals, and pay satisfaction

influence organizational commitment (Lawler 1971; Whitener 2001; Wong et al. 2002).

Several studies show that job autonomy is significantly correlated to pay satisfaction and

organizational commitment (e.g. Williams, McDaniel and Nguyen 2006). Haar and Spell

(2009) argue that, when employees are given more control over their own jobs, the

employees will feel as if the company treats them more fairly. Furthermore, Lawler

(1971) notes that job autonomy can be considered to be a non-monetary reward. Thus,

job autonomy may help satisfy the employees’ needs, since it will make employees feel

that they are trusted by the organization; this subsequently makes the employees more

committed to the organization.

Since performance appraisals can be used to communicate both individual and

corporate goals, employees will be more committed to their organizations (Kuvaas 2006).

Performance appraisals also add to the employees’ perceptions of being valued, and they

may help the employees to perceive themselves as a part of an organizational team

(Levy and Williams 2004). Both perceptions are central to affective commitment.

In addition, performance appraisals have been found to be a useful strategy to determine

high-commitment levels. Since companies can determine the employees’ need for career

advancement, they can satisfy a central concern for these employees (Gong and Chang

2008). Consequently, if employees are satisfied with their performance appraisals, they

may perceive a higher level of career advancement opportunity for themselves; thus,they may feel more attached to their company.

Affective commitment has been shown to be related to pay satisfaction (Tang and

Chiu

2003; Vandenberghe and Tremblay 2008), since it helps employees identify with their

company and become more involved with the organization (Meyer and Allen 1991).

By contrast, pay dissatisfaction may lead to low organizational commitment. Moreover,

if pay satisfaction reflects the fact that the individual feels valued, trusted, recognized,

and fairly treated by the organization (Tekleab, Bartol and Liu 2005), it may increase

affective commitment. To summarize, we make the following hypotheses:

Hypothesis 9: There is a positive relationship between the employees’ satisfactionwith job autonomy and their organizational commitment.

Hypothesis 10: There is a positive relationship between the employees’ satisfaction

with performance appraisals and their organizational commitment.

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Hypothesis 11: There is a positive relationship between the employees’ pay satisfaction

and their organizational commitment.

Method

Research design and sample

We collected survey data from white-collar workers who are employed by seven

different German automotive companies in Shanghai. All of these companies can be

described as multinational enterprises (MNEs), and all of them have had a presence

in China for more than 10 years. Each company employs more than 500 employees in

China.

Because the companies were very supportive and allowed employees to complete the

survey during company time, 197 of 200 possible respondents participated. Six

questionnaires needed to be excluded due to missing information, resulting in a final

sample of 191 (95.5% response rate). Among the respondents, 57% were male, 57% were

married, around 50% were under 30 years old, and 85% had received a university degree

(Table 1). Furthermore, 35% occupied managerial positions and 78% had less than four

years experience in their present job.

Overall, the sample can be described as employees who are relatively young, highly

educated, and have a relatively short tenure at their current job. While these

characteristics are not typical for established companies in Europe, these are not

uncommon for China (Han and Froese 2010). MNEs usually require a workforce that is

highly educated and can speak English; most senior Chinese managers cannot offer these

skills. The relatively young age and high turnover rate in the industry explain the short

tenure that is reported by the respondents.

Table 1. Sample characteristics.

Number Percentage (%)

Gender (¼ Female) 83 43.46Marital status (¼ Married) 108 56.54Age

Below 30 years old 96 50.2630 – 40 years old 87 45.55Over 40 years old 8 4.19

EducationHigh school or less 5 2.62Applied university 24 12.57Undergraduate 130 68.06Graduate 32 16.75

PositionClerical/administration 63 32.98Sales/technical 61 31.94Managerial 67 35.08

Years employedBelow 2 years 105 54.972 – 3 years 44 23.044 – 5 years 19 9.95

6 – 7 years 12 6.28Over 7 years 11 5.76

Note: N ¼ 191.

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Measures

The original questionnaire was developed in English and then translated into Chinese.

To ensure the accuracy of the translation, the questionnaire was then translated back.

We captured organizational commitment through five items taken from Meyer, Allen and

Smith (1993). A sample item is ‘I feel a strong sense of belonging to my company’.We used Earley’s (1989) four-item scale to measure individualism. A sample item is

‘Working alone is better than working with a group’. We used four items to measure

money orientation (Tang and Chiu 2003). A sample item is ‘I am motivated to work hard

for money’. To measure the employees’ level of willingness to take risks, we adapted

three items from Gomez-Mejia and Balkin (1989). A sample item is ‘I view risk on a job

as a situation to be avoided at all costs’. The various facets of job satisfaction were

captured as follows: two-item measures for job autonomy, three-item measures for

performance appraisal, and four-item measures for pay satisfaction. These measures

were taken from Kinnie et al. (2005), Yu and Egri (2005), and Rayton (2006),

respectively, and amended to fit the specific needs of this study. Sample items for these scales respectively include

‘I am satisfied with the amount of influence I have over my job’, ‘My work performance

goals and standards are challenging’, and ‘Compared with the pay of other people that

work at my company I am satisfied with my pay’. All items were measured on a five-

point Likert scale from ‘strongly disagree’ (1) to ‘strongly agree’ (5); higher values

indicate higher degrees of organizational commitment, individualism, etc.

Results

The means, standard deviations, Cronbach’s alphas, composite reliabilities, and

correlations among the variables are presented in Table 2. As expected, all independentvariables were correlated to their corresponding dependent variables. In particular,

organizational commitment was significantly correlated to job autonomy, performance

appraisal, and pay satisfaction.

Test of measurement model

Consistent with the two-step modeling approach advocated by Anderson and Gerbing

(1988), we estimated a measurement model using a confirmatory factor analysis (CFA)

prior to examining the structural model relationships. Initial CFA revealed that two items

of the individualism scale loaded poorly on their scale and were thus discarded.The measurement model that included all of the remaining items showed a good fit:

x2

(209) ¼ 267.96, p , 0.01, Goodness of Fit Index (GFI) ¼ 0.90, Comparative Fit

Index (CFI) ¼ 0.95, Non-normed Fix Index (NNFI) ¼ 0.94, and Root Mean Square

Error of Approximation (RMSEA) ¼ 0.039.

We conducted several tests to assess the measurement model’s reliability and

validity. The composite reliability and the Cronbach’s alpha in Table 2 provide evidence

of internal consistency. All indicators loaded strongly and significantly on their

respective factors, and the standardized loadings ranged from 0.414 to 0.825, indicating

convergent validity (Anderson and Gerbing 1988). To investigate the discriminant

validity between the constructs, we performed chi-square difference tests between a

model in which a factor correlation parameter was fixed at 1.0 and the original

(unrestricted) confirmatory factor analysis model. Our findings indicate that every

restricted model had a significantly inferior fit than the unrestricted model, indicating

discriminant validity. Taken together, these findings support the reliability and validity

of the constructs and their items.

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Table 2. Means, standard deviations, Cronbach’s alphas, composite reliabilities, and correlations among variables of interest.

Variable Mean STDCronbach’s

alphaCompositereliability 1 2 3 4 5 6

1. Individualism 4.076 0.583 0.610 0.6172. Willingness to take risks 2.821 0.657 0.651 0.679 0.160*3. Money orientation 3.741 0.551 0.720 0.735 2 0.210**

2 0.232**

4. Job autonomy 3.282 0.671 0.690 0.690 0.138 2 0.105 0.0165. Appraisal satisfaction 3.914 0.417 0.575 0.590 0.448** 0.175**

2 0.049 0.238**

6. Pay satisfaction 2.803 0.620 0.744 0.770 0.121 2 0.010 2 0.095 0.379** 0.276**

7. Organizational commitment 3.700 0.580 0.795 0.803 0.242**2 0.034 0.073 0.543** 0.360** 0.438**

Notes: * p , 0.05, ** p , 0.01.

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Structural equation model results

The structural model that we tested in the present study is identical to the structural

model in Figure 1. The chi-square value for the initial structural model including all

possible paths was statistically significant (x2

(215) ¼ 301.50, p , 0.001); and the GFI,

CFI, NNFI and RMSEA values were 0.88, 0.92, 0.91, and 0.046, respectively. Theseindices suggest that the structural model had a satisfactory fit, even though the chi-

square index was significant.

However, this initial structural model was significant inferior to the measurement

model (Dx2

(6) ¼ 33.54, p , 0.001), which indicates that the theoretical model

(Mt) could not account for the relationships between the latent constructs (Kline

1998). In other words, these findings indicate that the initial theoretical model did not

provide an acceptable fit to the data. Thus, we conducted a specification search to

arrive at a better-fitting, acceptable model. Table 3 summarizes the various models.

While investigating the relationships between work value variables and

organizational commitment, we found that these work value variables have no directeffect on organizational commitment. In addition, the path coefficients between (1)

willingness to take risks and performance appraisal satisfaction, and (2) money

orientation and pay satisfaction were statistically nonsignificant. The modification

indices showed that removing the statistically nonsignificant paths created a better-

fitting model. Accordingly, we revised our initial theoretical model by removing all

nonsignificant paths. There was no statistical difference between the revised structural

model (Mr ) and the initial structural

model (Mt) (Dx2

(3) ¼ 0.31, p . 0.05). However, the chi-square difference between

the

revised structural model (Mr ) and the measurement model (Mm) was still statistically

significant (Dx2 (9) ¼ 33.23, p

,

0.001), indicating that the fit of the revisedstructural model was still insufficient.

The next step was to review the modification indices of the revised structural model

(Mr ) to identify new paths that should be added to the model. In fact, we found that we

could create a better fitting model by adding a new path from job autonomy to pay

satisfaction. A significant relationship between job autonomy and pay satisfaction has

been found in previous studies (e.g. Williams et al. 2006). By adding this new path, we

created the final structural model (Mf ), which significantly outperformed the initial and

revised models and showed a good fit to the data (x2

(220) ¼ 282.72, p ,0.01,

GFI ¼ 0.89, CFI ¼ 0.94, NNFI ¼ 0.93, and RMSEA ¼ 0.039). As a verification,we compared the final model (M f ) and the measurement model (Mm) (Dx

2

(11) ¼ 14.76, p . 0.10). The insignificant differences indicate that the finalmodel successfully accounted for the observed relationships between the latentconstructs.

Figure 2 presents the results of the final structural equation model. The results

showed that there was a significant positive relationship between individualism, job

autonomy

Table 3. Goodness of fit indices for the organizational commitment study.

Goodness of fit indices

Model x2(df) x

2/df GFI CFI NNFI RMSEA

Mm Measurement model 267.96(209) 1.28 0.90 0.95 0.94 0.039Mt Theoretical model 301.50(215) 1.40 0.88 0.92 0.91 0.046Mr Revised structural model 301.19(218) 1.39 0.89 0.92 0.91 0.045

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12 F.J. Froese and S. XiaoMf Final structural model 282.72(220) 1.29 0.89 0.94 0.93 0.039

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Individualism

0.343**

n.s.

0.772***

0.271*

Willingness

to take risksn.s.

n.s.

Job

autonomy

Appraisal

satisfaction

0.487***

0.588***

0.242**

0.194*

Organizational

commitment

Money

orientation

n.s.

Pay

satisfaction

n.s.

Figure 2. Estimated results of a structural equation analysis. (Note: All values are standardizedcoefficients. Non-significant paths were shown by a dotted line; n.s. ¼ not significant.x

2(220) ¼ 282.72, p , 0.01; GFI ¼ 0.89; CFI ¼ 0.94; NNFI ¼ 0.93; RMSEA ¼

0.039.*

p,

0.05,

**

p,

0.01,

***

p,

0.001).

satisfaction, and performance appraisal satisfaction; there was also a significant positive

relationship between the employees’ willingness to take risks and job autonomy

satisfaction. In other words, the findings indicate that employees with a higher degree of

individualism will be more satisfied with their job autonomy and performance appraisals.

In addition, employees who have a higher degree of willingness to take risks will be more

satisfied with job autonomy. These results support hypotheses 1, 2, and 4 of the study.

However, when we examine the links between the employees’ willingness to take

risks and their performance appraisal satisfaction, we did not find any statistically

significant relationship. An examination of the relationship between money orientationand pay satisfaction showed similar results. These results lead us to reject hypotheses

5 and 7. In addition, the results demonstrate that all of the direct effects of work values

on organizational commitment were not statistically significant; thus, we reject

hypothesis 3,

6, and 8.

Furthermore, we examined each element of job satisfaction on organizational

commitment. As shown in Figure 2, all of their coefficients are significant and in the

predicted direction, providing support for Hypothesis 9, 10, and 11. This implies that

employees with higher levels of job satisfaction (regarding job autonomy, performance

appraisals, and pay) are more committed to their organizations. Interestingly, we foundthat job autonomy satisfaction had a much stronger impact on organizational commitment

than that of pay satisfaction (Dx2

(1) ¼ 5.64, p , 0.05).

Overall, the results in this study show that employees’ work values are important predictors of various facets of job satisfaction. In turn, these facets significantly influence

the employees’ organizational commitment. R 2

shows that the employees’ jobsatisfaction

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variables accounted for 62.33% of the variance in organizational commitment, while

employees’ individualism and willingness to take risks accounted for 14.72% of the

variance in job autonomy, and individualism accounted for 59.66% of the variance in

performance appraisals, respectively. Furthermore, with respect to pay satisfaction, job

autonomy accounted for 23.74%.Following the methodology behind testing mediating effects in structural equation

models (Kline 1998), we decomposed the effect of each parameter into direct and indirect

effects. This task helped us identify any mediating effects of job satisfaction. As shown

in Table 4, there is evidence that various facets of job satisfaction mediate between work

values and organizational commitment. More specifically, we found that individualism

influenced an employees’ organizational commitment via job autonomy and performance

appraisals. With respect to willingness to take risks, its effect on organizational

commitment was mediated by job autonomy. Finally, we also found that the effect of job

autonomy on organizational commitment was partially mediated by pay satisfaction.

In summary, our results, which are focused on Chinese employees, generally support the

mediating role of job satisfaction. However, there were some variations of the mediation

effects across the three job satisfaction dimensions. As shown, we see strong support for

the mediation role of job autonomy and some support for performance appraisals.

Discussion

This study examined the relationships between work values, job satisfaction, and

organizational commitment of Chinese white-collar workers who are employed by

foreign MNEs. While our theoretical model has been largely confirmed, several

hypotheses were not supported. In the following discussion, we put the results into

perspective.First, while Ralston et al. (1997) argue that foreign firms in China must better

understand the work values of their Chinese employees, this study provides empirical

Table 4. Decomposition of effects.

Endogenous variable

Causal variable

Individualism

Jobautonomy

Appraisalsatisfaction

Paysatisfaction

Organizationalcommitment

Direct effect 0.343** 0.772*** – – Indirect via job autonomy – – – 0.202*

Indirect via appraisal – – – 0.187*

Willingness to take risksDirect effect 0.271* – – – Indirect via job autonomy – – – 0.159*

Money orientation – – – – Job autonomy

Direct effect – – 0.487*** 0.588***

Indirect via pay satisfaction – – – 0.095†

Appraisal satisfaction

Direct effect – – – 0.242**

Pay satisfactionDirect effect – – – 0.194*

Notes:† p , 0.10, * p , 0.05, ** p , 0.01, *** p , 0.001.

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evidence that links work values with job satisfaction and organizational commitment.

The results confirm prior studies that have been conducted in Western countries (Meyer

and Allen 1991); those studies have found that work values, especially individualism and

willingness to take risks, have statistically significant impacts on job satisfaction.

However, we did not find any evidence that employees’ willingness to take risksand money orientation could influence their performance appraisals and pay satisfaction,

respectively. One plausible explanation could be related to social desirability, i.e.

employees do not provide honest responses regarding the sensitive issue of money

because they wish to save face. The Chinese custom of face-saving (called mianzi in

Chinese) influences many facets of Chinese life; the Chinese people believe that they will

lose face when their values or behaviors fall below the minimum level that is generally

considered acceptable. Another reason could be that we have surveyed highly educated

and (probably) ambitious white- collar workers. For such a group of people, in contrast

to blue-collar workers, money orientation and pay satisfaction may be less urgent matters

(Han and Froese 2010).Second, consistent with prior research, our findings demonstrate the employees’

commitment to their organizations can be significantly affected by the extent of their

various facets of job satisfaction (Whitener 2001; Wong et al. 2002). The empirical

results indicate that, in China, there is a significant positive relationship between the

individual elements of job satisfaction (e.g. job autonomy satisfaction, performance

appraisal satisfaction, and pay satisfaction) and employees’ organizational commitment.

Thus, these findings confirm prior studies, which find that a greater degree of job

satisfaction facilitates affective organizational commitment.

Third, in this study, we do not find that work values have any direct effect on

organizational commitment. This is partly surprising, since some prior studies have foundsignificant relationships between work values such as individualism and organizational

commitment (Fischer and Mansell 2009; Kirkman and Shapiro 2001; Palich et al. 1995).

However, the same authors acknowledge that these relationships are, at best, very weak;

in fact, they have speculated that some explanatory variables are missing in the equation.

Our findings contribute to a better understanding of the relationship between work values

and organizational commitment. Our findings reveal that job satisfaction mediates the

relationship between work values and organizational commitment. In other words, work

values have an important influence on organizational commitment; however, their

influence may be indirect, as work values may influence various job satisfaction facets

which, in turn, affect organizational commitment. In particular, the effects of

individualism and the willingness to take risks on organizational commitment are

mediated by job autonomy and performance appraisals.

Lastly, our study provides some evidence regarding the relative importance of the

various determinants of organizational commitment in China. Since the reform and

open-door policy in 1978, there have been extensive changes in both economic and work

values in China (Egri and Ralston 2004). For example, Ralston, Egri, Stewart, Terpstra

and Yu (1999) demonstrate that the new generation of Chinese managers is very different

from managers of the past in terms of work values. The new generation of managers are

more individualistic, more likely to act independently, and more likely to take risks.

Consequently, Chinese workers may become less traditional and place priority on

Western-developed HRM practices. In contrast to the traditional stereotype, which

depicts the Chinese people as very group oriented (e.g. Hofstede 2001), the findings show

that job autonomy and performance appraisal satisfaction, which are predicated by

individualism, have stronger influences on organizational commitment than pay

satisfaction. This

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suggests that Chinese white-collar workers in the new era emphasize performance and

personal influence on their job more highly than pay.

Manag erial implica tions

Our results raise interesting policy issues related to employees’ job satisfaction and

commitment to their organizations. Although pay satisfaction is positively related to

organizational commitment, we have found that autonomy and performance appraisal

satisfaction are more strongly related to organizational commitment among Chinese

white-collar workers. Thus, organizations that only use money to attract and motivate

their employees might not have an effective strategy in today’s China. Instead, foreign

firms in China should give employees more autonomy and provide better performance

appraisals to enhance their job satisfaction, enhance their organizational commitment,

and ultimately reduce employee turnover.

It is vital for companies to have a better understanding of their employees’ work

values. This will enable the organizations to design an HRM system that is better able toattract, motivate, and retain its workforce (Ralston et al. 1997). Our findings demonstrate

that individual work values are important predictors of job satisfaction and organizational

commitment. As shown in a study of Chinese university students (Turban et al. 2001),

our findings suggest that Chinese white-collar workers who are employed by foreign

firms are risk seekers with a high level of individualism. Perhaps these are individuals

who are more likely to change jobs frequently. Foreign companies in China should

investigate the work values of their applicants and current employees to develop

managerial practices, including practices such as providing more autonomy and

performance appraisals. Alternatively, foreign firms may select employees more

carefully depending on whether their work values match the firm’s HRM system. A

good fit between employees’ work values and a company’s HRM system should result in

higher levels of job satisfaction and organizational commitment.

Limitations and future research directions

The limitations of this study point to a need for future research. First, the sample in this

study consists of white-collar workers who work at foreign companies in Shanghai within

a single industry; the workers are relatively young, well-educated, and have relatively

short work histories. Thus, the sample is not representative of the whole population of

Chinese employees. Nevertheless, we believe this is the target group of employees that

MNEs are most likely to hire. Future research could examine different employee types(e.g. white-collar vs. blue-collar), and review workers across different regions and

industries.

Second, this study has not investigated the complete set of work values and job

satisfaction facets, or their relationships with organizational commitment. We have only

focused on those facets that we consider to be the most relevant. Future studies could

explore additional variables. They could also review how these variables affect other

organizational outcomes, such as turnover intention, actual turnover, and performance.

Third, we have found that the reliability of some measures is only marginally

acceptable even though most of the measures have been previously used in Asia. It

seems that some constructs have slightly different meanings in China and other non-

Western countries. We recommend future studies to consider developing indigenousmeasures. To improve the measurements, we suggest that future studies consider

social desirability issues. These issues seem particularly relevant in China, where saving

face is an important issue.

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Lastly, this study is limited to a single Chinese context. Every country is unique in

terms of environmental characteristics and culture. To better understand our integrated

work value-job satisfaction-organizational commitment model, the degree of general-

izability and boundary conditions should be extended into other contexts.

Conclusions

China has been one of the most attractive markets to foreign companies who wish to

produce and sell their products. However, one of the central problems for foreign firms is

the difficulty in retaining qualified talent to continue their success in China. This study

increases our understanding of the work values of Chinese white-collar employees. Our

findings show how the different facets of job satisfaction can mediate the relationships

between the employees’ work values and organizational commitment. Based on our

findings, we have provided practical recommendations to help foreign firms better retain

their local talent in China. Even though we provided reasoning that is culture specific,

we believe that our general framework might also apply in other contexts.

Acknowledgement

Funding for this paper was provided by Namseoul University.

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