International Journal of Management Sciences Vol. 1, No. 5, 2013, 178-192

The Factors Affecting Organizational Citizenship Behavior in Banking Industry Teoh Wee Jim1, Bernard Hi1, Lee Kah Shing1, Ong Siew Lin1, Siti Yasmin1, Sofiah Kadar Khan1 Abstract Organ (1988) defined organization citizenship behavior (OCB) as the individual’s behavior that is discretionary not directly or explicitly recognized by the formal reward system and that in the aggregate promotes the effective functioning of the organization. There has been numerous studies performed on organization citizenship behavior and antecedents of this behavior were explored since this behavior contributes to the effective functioning of an organization. The positive contribution of OCB to organizational performance is widely accepted by literature(Podsakoff and MacKenzie,1994,1997;Podsakoff et al.,2000). This behavior have been described by the service literature as being essential; for achieving superior returns.The service industry has been a major contributor to the growth and development of the Malaysian economy (Central Bank of Malaysia, 2007;Deparment of Statistics Malaysia,2010; Malaysian Industrial Development Authority,2010). According to Warrier(2010), the services sector is estimated to contribute 70 percent of GDP to Malaysia’s economy by 2020.There has been a significant correlation in literature between the relationships of competency, quality of work life, leader member exchange(LMX) and organization citizenship behavior. The research intends to explore on how this variables encourage the exhibition of OCB among the service personnel in the banking industry. The relevant hypotheses have been developed and further testing on its relationship will be conducted in order to investigate its impact on organizational citizenship behavior. Keywords: Organization Citizenship Behaviour, Competency, Quality of Work Life, Leader Member Exchange 1. Introduction Organizational behavior provides knowledge to managers on the understanding or employees behavior for the purpose of eliciting cooperation from them in order to achieve organization’s objective. One of the contributing behavior which is rather discretionary but proven empirically to increase organizational functioning is organization citizenship behavior (OCB). It refers to various forms of cooperation and helpfulness to others that support the organization’s social and psychological context.OCB’s importance is getting widespread attention from organizations in various industries. The services sector has been a major contributor to the growth and development of the Malaysian economy (Central Bank of Malaysia, 2007; Department of Statistics Malaysia, 2010; Malaysian Industrial Development Authority, 2010). According to Warrier (2010), the services sector is estimated to contribute 70 percent of GDP to Malaysia’s economy by 2020. The development of the services sector had contributed greatly to the diversification of the economy of Malaysia (Public Bank Berhad, 2005).Malaysia’s banking sector is expected to remain robust with a competitive and challenging environment. Hence, they need to compete among the local and international banks in Malaysia. According to Mavridis (2004), the banking industry sector which is often being characterized as a highly knowledge based industry has been given less attention by researchers and this is the gap this research would like to address.The banking industry is a service industry where the performance 1

Universiti Tunku Abdul Rahman, Malaysia

© 2013 Research Academy of Social Sciences http://www.rassweb.com

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International Journal of Management Sciences is evaluated based on the number of customers it’s able to retain. This can be achieved by providing superior customer service. Hence, the front service employees play a major role in achieving this. Begum (2005) highlighted that people are employees who represent a key facilitator in implementation of relationship banking strategy.According to Organ (1988), organization citizenship behavior (OCB) has a variety of forms including altruism, courtesy, sportsmanship, civic virtue and conscientiousness. Since organization citizenship behaviors are less likely to be formally rewarded than are required job behaviors, they are presumably performed by intrinsic motivation mechanism according to Chompokum (2004). The purpose of this study is to provide a better understanding of the importance of OCB and the factors that affect OCB in the organization. This study intends to explore what could elicit OCB among the banking employees in order to improve organization functioning. There are three variables in this study which has been identified and explored further to investigate its effect on organization citizenship behavior. The variables identified are leader-member exchange (LMX), empowerment and competency. There will be further empirical test conducted in future to find the correlation between this variables and organization citizenship behavior. 2. Literature Review Organization Citizenship Behavior Organ (1988) defined organization citizenship behavior (OCB) as non-mandatory behavior of an individual, which the formal reward systems do not directly or clearly recognize and that in sum contributes to the organization’s effective functioning. Organ explained what he meant by non-mandatory, as the behavior that is not the written requirement of the role or the job description, that is, the specified terms of the individual’s employment contract with the individual. Organ (1998) further elaborated that OCBs exist in various forms, including altruism, courtesy, sportsmanship, civic virtue and conscientiousness. The positive contribution of OCB to organizational performance is widely accepted by literature (Podsakoff and MacKenzie, 1994, 1997; Podsakoff et al., 2000). Indeed these behaviors have been described by the service literature as being essential to obtain superior returns. MacKensie, Podsakoff, and Praine (1999) stated several dimensions of OCB such as, ‘helping’ behaviors by employees (e.g. supportive actions to assist others and going beyond the requirements of the job); ‘sportsmanship’ (tolerating the work environment without excessive complaining); and ‘civic duty’ (constructive involvement in the processes of the organization beyond the requirement of the job). 6The vast majority of OCB research has focused on the effects of OCB on individual and organizational performance. Many researchers focused on the effects of OCB on individual and organizational performance and found that OCB leads an organization to positive consequences (Waltz & Niehoff, 1996; Podsakoff & Mackenzie, 1997; Barbuto, Brown, Wilhite, & Wheeler, 2001; Hodson, 2002; Cardona, Lawrence, & Bentler, 2004; Appelbaum, Asmar, Chehayeb, Konidas, Duszara, &Duminica, 2003). Brief has supported Organ’s position regarding the importance for effectiveness of those behaviors, which he labeled as organizational citizenship behavior (George & Brief, 1992). 9OCB is desirable from the organizational point of view because such behavior is thought to increase the available resources and decrease the need for costly mechanism of control (Organ, 1988; Podsakoff& Mackenzie, 1997). Leader- Member Exchange (LMX) Leader-member exchange (LMX) theory made significant contributions to leadership theory because of its unique characteristic of exploring different levels of relationships between a leader and his or her immediate subordinates (Yukl& Van Fleet, 1992). LMX represents the quality of the relationship between leader and subordinate (Schriesheim, Castro, &Cogliser, 1999), as operationalized by a supervisorsubordinate working relationship scale that assessed the overall working relationship between employees and their immediate supervisor (Graen&Uhl- Bien, 1995); recently, social exchange theory has been explored to investigate the role of LMX in organizational citizenship behaviour (OCB). This involves extra-role behaviours that are not typically described by employees’ job descriptions or are not formally rewarded (Liden&Maslyn, 1998; Setton, Bennett, &Liden, 1996; Wayne, Shore, &Liden, 1997).Despite some findings that LMX is positively related to OCB from the social exchange perspective, there is still the argument that 179

T. W. Jim et al. such findings are overstated (House &Aditya, 1997). Researchers have tried to examine a theoretical linkage between LMX and OCB, because LMX has been considered as one of the relational motives of OCB (Hui et al., 1999). Employees select and then engage in different organizational citizenship behaviours (Van Dyne et al., 1995). Social exchange theory suggests that employees are motivated to engage in extra-role behaviours when they perceive that their employment relationship is based upon a fair social exchange (Tumley et al., 2003).The influence of LMX on employees’ emotions such as envy although several researchers have argued that there might be possible negative emotions such as workplace envy resulting from differentiated treatment in LMX (Deluga, 1994; McClane, 1991; Vecchio, 1995; Yukl& Van Fleet, 1992). Whereas interest in negative discrete emotions such as anger, anxiety, depression or shame has been growing, the study of such emotions is still in the premature stage in organizational behavior (Ashforth& Lee, 1990; Barsade, Brief, &Spataro, 2003; George, 1990). This begins to satisfy this void. Research has found an approximately 20% increase in performance and a 50% increase in satisfaction for high LMX subordinates over their low LMX counterparts (Mayfield & Mayfield, 1998 Empowerment David Clutterbuck (1995) defines empowerment in terms of encouraging and allowing individuals to take personal responsibility to improve the way they do their jobs and contribute to the organizational goals. The creation of a culture encourages people at all levels to help them gain confidence and skills so that they can make a difference. John Newstrom & Keith Davis (2002) defined empowerment as any process that provides greater autonomy to the employees by sharing of relevant information and the provision of control over factors affecting job. Organization empowerment creates structures and opportunities for people to take more control over their tasks in the employing institution. While, the individual empowerment forms to relates to an increased sense of self-efficacy (Conger &Kanugo, 1988 as cited in Kiberu, 2009).Many studies (Morrison, 1996; Nihoff& Moorman, 1993; Bearn, 2000) have concluded different outcomes to relate empowerment with organizational citizenship behaviour (OCB). Leadership empowerment has showed positive relationship between organizational citizenship behaviour and team performance based on study in India (Bearn, 2000). The research studies on the impacts of leadership empowerment behaviours and organizational citizenship behaviour on sale team performance in India. Cardona, Lawrence and Bentler (2004), found that, social exchange relationship influence OCB. It based on the criteria that involve them in the organizational decision making process and empowering the staff. According to Somech and Bogler, employees are likely to feel like part of the organization and show greater responsibilities on their roles at work (OCBs) when they have empowered and participate in the process of decision making or setting ideas in the organization. The study found a positive relationship between employee OCB and participation (empowering and involving employees in decision making). According to Greasley et al, (2004), it is inevitable for employees to exhibit extra role behaviour once the organization goes out of its way and involves employees in decision making and increases on their participation. Competency Competency refer to the skills and knowledge that needed by the employees to perform a job (Beardwell & Holden, 2001). Competency consists of customer awareness, team work, commitment and contribution, productivity and so on. According to Boyatzis in 1982 (as cited in Kagaari & Munene, 2007) defines that competency as a characteristic of a person which results in their effective or superior performance. In a study conducted by McClelland (1973) it highlighted that competency as an element of performance which is linked with life outcomes. Competencies can be used as different approaches to forecasting human performance compared to traditional trait and intelligence techniques. Competencies through this may associate to broad psychological or behavioral attributes which are linked to extraordinary job and life success.In Podasoff (2000) (as cited in Katarangi, 2010) claimed that the failure for the managers to reward employees’ behaviors by showing their satisfaction or appreciation to their employee who has perform well will affect the decreasing of effectiveness of organization performance and OCBs in the workplace.Besides that, Lock wood et al in 2000 (as cited in Katarangi, 2010) claimed that competencies help to facilitate 180

International Journal of Management Sciences employees to complete the tasks that are assigned by managerThe concept of competency is defined as utilized knowledge and skills, performance and Another study by Tremblay (2000) indicated that there are a strong positive impact on the mobilization of discretionary behaviors which is influenced by the perception of a high level of autonomy, influence on the work and the possibility of using competencies. 3. Methodology Conceptual Model and Propositions The focus of the present paper is to build a proposition to investigate the impact of leader member exchange (LMX), empowerment, competency towards organization citizenship behavior (OCB). According to Livingstone (2007), there is a relationship between competence, commitment, empowerment and organization citizenship behavior (OCB). The available findings suggest that there could be a relationship between leader member exchange (LMX), empowerment, competency towards organization citizenship behavior so the following proposition is made. Propositions Development (The propositions developed below are summarized and illustrated in Figure 1) Leader Member Exchange

OCB Empowerment

Competency

Figure 1: Factors affecting the exhibition of organization citizenship behavior The focus of this paper is to build a researchable proposition investigating the effect of leader-member exchange, empowerment and competency on organization citizenship behavior. According to Schriesheim, Castro and Cogliser (1999), leader-member exchange represents the quality of the relationship between leader and subordinate. A study conducted by House & Aditya (1997) reported that leader-member exchange is positively related to organization citizenship behavior from the social exchange perspective.Lord and Brown( 2001) revealed that leadership works best when there is a match between the identity level of followers and the focus of leaders, as people of similar behavior tend to be attracted to each other A study conducted by Lo,Ramayah & Jerome ( 2006) reported that more conscientiousness employees are more likely to display OCB as a output from job satisfaction that they gained. Since employees are motivated as a result of high quality LMX they gain more job satisfaction. This study further explored due to the high quality of social exchange developed between superiors and subordinates it has motivated employees to exhibit OCB. 181

T. W. Jim et al. H1o

:

There is no significant relationship between Leader-Member exchange and Organization Citizenship Behavior

H1a

:

There is a significant relationship between Leader-Member exchange and Organization Citizenship Behavior

Tremblay (2000) reported that perception of a high level of autonomy and influence on the work and the possibility of using competencies has a strong significant positive influence on organization citizenship behavior. Garavan and McGuire (2001) stated that competencies can be liberating and empowering, arguing that if employees are provided with a broad degree of self-control and self-regulation, they will work towards higher organizational behavior. H2o

:

There is no significant relationship between competency and Organization

H2a

:

Citizenship Behavior

There is a significant relationship between competency and Organization

Citizenship Behavior

David Clutterbuck(1995) defines empowerment in terms of encouraging and allowing individuals to take personal responsibility to improve the way they do their jobs and contribute to the organizational goals. According to Somech and Bogler (2004), there is a positive relationship between employee OCB and participation. Another study conducted by Thayer (2008) reported that a positive psychological climate is able to cultivate a positive emotional response from employees and further elaborated that when a positive psychological climate is present it is able to increase employee’s engagement and also citizenship behavior among its employees. H3o

:

There is no significant relationship between empowerment and Organization

H3a

:

Citizenship Behavior

There is a significant relationship between empowerment and Organization

Citizenship Behavior

Proposed Framework Figure 1 Leader Member Exchange

OCB Empowerment

Competency

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International Journal of Management Sciences Sampling and Data Collection The study was done only in Ipoh, Malaysia There were 170 questionnaires which were distributed and 150 questionnaires were returned, for a response rate of 88.2%. Measures In Section A of the questionnaire is about respondent’s demographic information (gender, age, education level, length of service and position) whereby, Section B the independent variables leader-member exchange, empowerment , competency and the dependent variable organization citizenship behavior were tested respectively. In Table 3.3, it summarizes the origin source of measurement for this study, where it was adopted from and the number of items constructed for the purpose of this research. Table 3.3: The Origin Source of Measurement Constructs Adopted From Leader-Member Exchange Soldner, 2009 Empowerment Katarangi,2008 Competency Abdel Khalek, 2007 Organization Citizenship Behavior Soldner,2009

No. of Items 10 22 35 16

4. Results and Discussion In this research, the data are to be coded and analyzed using SPSS (Statistical Package for Social Science). The result of this data analysis will then be interpreted. There are three types of analysis in this study which is descriptive, reliability and inferential analysis Demographic Analysis Table 4:1Demographic Characteristics of Respondents Gender Frequency Percentage Male 64 42.7 Female 86 57.3 Total 150 Age 21 - 30 31- 40 41-50 Above 50 Total

41 58 45 6 150

27.3 38.7 30 4

Education Level SPM Diploma Degree Masters Others Total

49 52 23 11 15 150

32.7 34.7 15.3 7.3 10

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T. W. Jim et al. Length of Service Less than 1 year 1 - 3 years 4-5 years 6- 10 years 10 years and above Total

20 38

13.3 25.3

7 28 57 150

4.7 18.7 38

Position Management Level Supervisory Level Staff Total

34 43 73 150

22.7 28.7 48.7

Table 4.1 above provides the demographic summary of the respondents. In terms of gender the respondents were mainly female which consists of 86(57.3%) females and 64(42.7%) males. The age between 31 – 40 is the highest which is 58(38.7%) followed by 41-50 which is 45(30.0%) then 21-30 which is 41(27.3%) and above 50 is 6(4.0%). The education level among the respondents indicate that there are 49(32.7%) SPM holders, Diploma is 52( 34.7%), Degree is 23 (15.3%), Masters is 11 (7.3%) and others 15( 10.0%). The length of service among the respondents highlighted that most of them have worked 10 years and above which is 57(38.0%), less than one year is 20( 13.3%),1 to 3 years is 38 (25.3%), between 4 to 5 years 7(4.7%), 6 to 10 years is 28(18.7%). Finally the position of the respondents indicated that most of them were staff level which 73(48.7%), supervisory level is 43(28.7%) and management level is 34(22.7%). Reliability Analysis Table 4.2 Internal Reliability Test Constructs Leader Member Exchange Empowerment Competency Organization Citizenship Behavior

Cronbach’s Alpha Coefficient 0.931 0.875 0.951 0.937

Number of Items 10 22 35 16

In Table 4.2 ten items were chosen to test the reliability of Leader-Member Exchange and the Cronbach’s Alpha is 0.931 and respectively for empowerment 22 items were chosen and the Cronbach’s Alpha is 0.875 , Competency has 35 items and Cronbach’s Alpha is 0.951 and finally Cronbach’s Alpha for Organization Citizenship Behavior with 16 items is 0.937. As a conclusion, the internal reliabilities of all the three measures were above 0.8, meeting the minimum threshold recommended by Nunally et al.,(1978) which indicated that all the items in each measure were internally consistent and are considered acceptable and reliable. As a results, we conclude that all if the constructs are reliable for further analysis.

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International Journal of Management Sciences Inferential Analysis Pearson Correlation Analysis Table 4.3: Pearson Correlation Analysis LMX LMX

Pearson Correlation

1

.746

Sig. (2-tailed) N EMP

COMP

150

Pearson Correlation

**

Sig. (2-tailed)

.000

N

150

Pearson Correlation Sig. (2-tailed) N

OCB

.746

Pearson Correlation Sig. (2-tailed)

.809

**

.000 150 .713

EMP

**

.000

**

COMP .809

**

OCB .713**

.000

.000

.000

150

150

150

1

.769

150 .769

.782

**

.782**

.000

.000

150

150

1

.819**

150

.000 150

.819**

1

**

.000 150

**

.000

.000

N 150 150 **. Correlation is significant at the 0.01 level (2-tailed).

150

150

Table 4.3 shows the correlations between the variables are significant at p