“Human Capital”
Organizational Commitment in Times of Uncertainty
The theory of organizational commitment has increasingly drawn attention from academics, managers, and professionals over time. But why such interest? Is it a decisive factor for my organization, even at a time when my main concern is short-term solvability?
With an imprecise origin, but estimated to have emerged in the 1960s through the work of researcher H. S. Becker, the concept of commitment between a professional and the organization in which they are embedded, has undergone rapid evolution, generating a wide range of definitions and perspectives. The business challenge, at its core, revolves around finding the perfect balance between the expected contributions from the employee and the resulting benefits they are entitled to in the context of the company.
If the “salary-productivity” equation alone were the solution to this problem, most organizations would have overcome the challenge long ago, with minimal turnover rates and high productivity indices. However, we know that’s not the case. For example, a high average length of service does not prove, in any way, the existence of committed professionals. In most cases, it presupposes productivity levels that are limited to the bare minimum, with teams becoming complacent and deeply rooted in their comfort zones.
Thus, it was soon realized that, in addition to salary, other dimensions are essential to have motivated, productive employees aligned with the organization’s objectives.
According to the analysis models of leading international institutions specialized in monitoring organizational commitment indicators—such as Kenexa (IBM), AON Hewitt, and Gallup—the most consensual dimensions include identification with the organization’s vision, growth opportunities within the company, good physical working conditions, effective communication, teamwork, quality leadership, and objective recognition of merit based on performance.
There seems to be a commonly accepted formula for enhancing alignment between employees and the company, expressed in indicators that can be monitored with the same commitment as any other strategic KPI for your business.
However, in a context of economic downturn, where companies’ liquidity is the main challenge, does it make sense to dedicate time to such factors? Furthermore, in a market characterized by the increasing supply of professionals due to skyrocketing unemployment rates, is organizational commitment still a highly valued element? Legitimate questions from managers focused on reducing staff numbers or managing layoff processes, with a single priority in mind: the viability of their business.
The truth is that, contrary to what may seem, it has never made more sense to look at organizational commitment as a competitive advantage. Assuming opportunistically that in turbulent times, characterized by the fear of job loss, decreasing reference remuneration, and the increasing ease of worker replacement, it is possible to relegate dimensions underlying employee organizational commitment carries serious risks for the organization.
Firstly, if the relationship between the employee and the company is exclusively based on the monetary factor, it is inevitable that the employee’s contribution will also be limited to what is required by their job description. In other words, all discretionary efforts normally made by motivated employees in their zeal to fight for the organization’s goals are nullified, possibly compromising the quality of the product or service.
Secondly, if the employee ends up leaving the company, even if easily replaced by another, they will be offering to the competition the investment made so far, in addition to the usually high financial costs of turnover, which do not help the company’s cash flow.
Finally, it should be noted that less qualified workers tend to be the first to populate the available labor market. This means that, even in a growing labor market, recruiting and selecting qualified profiles does not necessarily become faster or more effective.
In summary, it is not only relevant for organizations to continue to emphasize this topic, but they may also find the organizational commitment of their team to be a decisive competitive factor for their survival in a phase of enormous challenge and economic uncertainty.
Written by João Silva Santos
September, 2020
This article was published in Ambitur as part of the “Human Capital” series. You can access the online version here.
