MINISTRY OF EDUCATION AND TRAINNING
UNIVERSITY OF ECONOMICS HCM CITY
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TRƯƠNG QUỐC CƯỜNG

IMPACTS OF HUMAN RESOURCE
PRACTICES ON ORGANIZATIONAL
ENGAGEMENT AND TURNOVER INTENTION:
CASE OF BUSINESS EMPLOYEES
IN HO CHI MINH CITY

MASTER OF BUSINESS
ADMINISTRATION THESIS

Ho Chi Minh City – 2019


MINISTRY OF EDUCATION AND TRAINNING
UNIVERSITY OF ECONOMICS HCM CITY
------ ------

TRƯƠNG QUỐC CƯỜNG

IMPACTS OF HUMAN RESOURCE
PRACTICES ON ORGANIZATIONAL
ENGAGEMENT AND TURNOVER INTENTION:
CASE OF BUSINESS EMPLOYEES
IN HO CHI MINH CITY
Major: Business administration (research)


with academic rules and ethical conduct.
I am fully charged of responsibility for all content of this research.
Hochiminh city, March 07th 2019

Truong Quoc Cuong


TABBLE OF CONTENT
COMMITMENT
LIST OF ABBREVIATION
LIST OF TABLES
LIST OF FIGURES
ABSTRACT
CHAPTER 1: INTRODUCTION .............................................................................. 1
1.1. Research background .................................................................................... 1
1.2. Objectives for study ...................................................................................... 5
1.3. Research scope and approach ....................................................................... 5
1.4. Research methodology ................................................................................. 5
1.5. Theoretical and practical significance of study ............................................ 6
1.6. Structure for this study ................................................................................. 7
CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL .................... 9
2.1. Concepts definition and concepts measurement............................................ 9
2.1.1. Organizational engagement ..................................................................... 9
2.1.2. Human resource practices (HR practices) ............................................. 15
2.1.3. Turnover and Turnover intention ........................................................... 21
2.2. Relevant researches and relationship of concepts ....................................... 25
2.2.1. Relevant researches................................................................................ 25
2.2.2. The effects of HR practices on turnover intention................................. 27
2.2.3. HR practices and engagement................................................................ 28
2.2.4. Organizational engagement and turnover intention ............................... 31

AVE

Average variance extracted

CM

Career management

CFA

Confirmatory Factor Analysis

CFI

Comparative Fit Index

Chi-sq, 𝜒2

Chi-square

CP

Compensation

CR

Construct reliability

df


SEM

Structural Equation Model

Sig. (p)

Significance of Testing (p-value)

SET

Social exchange theory

TLI

Tucker and Lewis Index

TI

Turnover intention


LIST OF TABLES
Table 2- 1: Summary researchers about engagement ............................................ 12
Table 2- 2: Components of HR practices ............................................................... 18
Table 3- 1: PA scale ............................................................................................... 40
Table 3- 2: CD scale ............................................................................................... 41
Table 3- 3: SE scale ................................................................................................ 42
Table 3- 4: CP scale ............................................................................................... 43
Table 3- 5: OE scale ............................................................................................... 44
Table 3- 6: TI scale ................................................................................................ 44

and OE on TI. And tests positive impact of HR practices to OE and the mediating
role of OE in relationship of HR practices and TI.
The survey was conducted with total 405 employees who are working as
staff in various sectors in Ho Chi Minh City and studying at UEH. The data was
collected by mainly face to face survey; then it was analyzed using SPSS and
AMOS software. The results were found that: all the adjusted, developed variables
scales used to measure HR practices, OE and TI met the criteria of liability and
fitness validity; HR practices with 4 componentes had significant effect on OE and
TI. PA had strongest effect on OE (β=0.334) while SE had weakest effect on OE
(β=0.083). Each component of HR practices had its own effect on TI. SE had
strongest negative effect on TI (β=-0.454) and CM had weakest negative effect on
TI (β=-0.017). OE had important role to predict TI (β=-0.424). The result proved
that OE played mediator in relationship between HR practices and TI.
The study also discussed and proposed about contributions, limitations and
managerial implications.
Key words: HR practices, Organizational engagement, Turnover intention,
employees.


TÓM TẮT
Mục đích của bài nghiên cứu này nhằm khảo sát sự mối quan hệ của thực tiễn
nguồn nhân lực (HR practices) (4 thành phần là tuyển chọn (SE), đánh giá thành
tích (PA), phát triển nghề nghiệp (CM) và trả công lao động (CP)) với gắn kết tổ
chức (OE) và ý định nghỉ việc (TI) của nhân viên văn phòng. Dựa vào các nghiên
cứu trước đây, bài nghiên cứu này sẽ khảo sát sự tác động âm của thực tiễn nguồn
nhân lực cùng gắn kết tổ chức đến ý định nghỉ việc. Đồng thời bài nghiên cứu cũng
kiểm tra tác động dương của thực tiễn nguồn nhân lực đến gắn kết tổ chức; và kiểm
tra sự tác động của thực tiễn nguồn nhân lực đến ý định nghỉ việc qua trung gian là
gắn kết tổ chức.
Bài nghiên cứu được thực hiện bằng phương pháp chọn mẫu thuận tiện thông

organizations always make them efforts to find, develop and retain valuable
workforce who are talent and skilled employees that are precious resources to afford
competitive advantages. Talent staff retainment has become more important than it
used to be, and it became among most concerns of organization strategies about
competitive advantages and organizational effectiveness with the best resources
(Juhdi et al, 2013).
However, organizations have suffered the problems that they loss their welldeveloped employees leaving for other organizations, especially their competitors.
Losing talent employees will lead to reduce in quality, productivity and
effectiveness of each department or all organization that affect to organization’s
competitive advantage. So, huge investment in training and developing human
resource would be in vain if the employees leave and bring along their skills and
experience for other organizations. To counter this problem, employers are trying
coming up organizational talent management programs and retaining employees by
dealing with how to engage trained and highly experienced employees and reduce
employee turnover. The broad range of employee turnover studies (Ma et al, 2016;


2

Long and Perumal, 2014; Kim et al, 2014; Juhdi et al, 2013…) have shown that
turnover is considered as the most popular researched phenomena in organizational
behavior and indicated the significance and complexity of the issue impacting by its
all dimensions (psychological, organizational significance and economic). They
indicate that there are many major variables that impact on the turnover of
employees and use turnover intention as an important predict for actual behavior of
turnover. Moreover, employee engagement is considered as a significant factors
impacting to reduce turnover intention of employees. By making employee more
engaged to organization, employers can be not only continue to get effectiveness of
developing employees programs but also to get the results of retaining skilled and
experienced staffs. So, the concerns of organization are paid more attention into

intention.
So, examining the relationship of HR practices with employee engagement
and turnover intention is necessary. By searching on Proquest, EBSCO for studies
about three concepts relationship, author just found out some results.
Results of searching on Proquest, EBSCO:
Key words for searching

Proquest

EBSCO

105 results

498 results

227 results

1,217 results

8 results

27 results

1 result

1 result

Studies with abstract of:
 Human resource practices
 Turnover intention

But employee engagement is multidimension concept. Employee engagement
is not a new concept but it is to say that engagement is also a term that is got more
attention and researches. There are many studies research about it with mixing the
meaning, dimension and facet approach. Engagement can be easy to misunderstand
by many divided concepts into engagement, work engagement, job engagement and
organizational engagement. But these are different because of dimensions of
engagement that researchers want to study employee engagement in specific
aspects. In general, these are engagement of employee and there are 4 approaches of
engagement as Saks and Gruman (2014), Shuck et al (2011) argued that they are
need-satisfying, burnout-antithesis engagement, satisfaction and mixed engagement
approach. As Saks (2008) stated about mixed engagement approach that its
components (job engagement and organizational engagement) would explain better
than other approachs. However, Saks (2006) studied about engagement’s
antecedents, HR practices weren’t addressed. As Juhdi et al (2013) agreed with
Saks (2006) about mixed engagement approach, but just organizational engagement
is used as onsequence of HR practices. And Juhdi et al (20013) suggested and
proven that HR practices have strong effect on organizational engagement.
As some studies use engagement to explain the relationship of HR practices
and turnover intention (Juhdi et al, 2013; Chughtai, 2013…) and the results


5

supported very clearly about the mediator of employee engagement. As Saks (2006)
suggest that using employee engagement with social exchange theory could help
clearly explaining the relationship of engagement with its antecedents and
consequences. So, this study also hope that using the engagement with Saks (2006)
measurement scales as a mediator will have supportive results for the impact of HR
practices on turnover intention.
From above premises, this study suggests the title research is that: “Impacts of

degree and master degree who are working for organization as officer.
1.4.

Research methodology

This study uses both 2 method of research: qualitative research and
quantitative research.
Qualitative research is conducted with 10 employees working as staff in arious
companies in order to explore, adjust and develop measurement scale of research
concepts.
Quantitative research is implimentated with questionnaire with the sample size
is 450 respondents working as employees in office departments of various
companies in HCM city. Convinience method is used. To testing measurement scale
and theorical model, data is analyzed with EFA, CFA ans SEM. This study uses
SPSS 23 and Amos 20 to analyze data.
1.5.

Theoretical and practical significance of study

About theoretical aspect, this study will examine the relationship of HR
practices, organizational engagement and turnover intention of employee in context
of Hochiminh City, Vietnam. This study also provides adjusted and developed
measurement scales of concepts (HR practices, organizational, turnover intention)
to use for employees.
About practical aspect, this study will provide more information about the
relationship of HR practices, organizational engagement and turnover intention of
employee. Basing on model research, it can help organizational managers out of
high turnover rate by using the mechanism of HR practices. Employers should pay



Chapter 5: Discussion, limitation and implementation


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In this chapter, author will summary results and give practical meanings and
advices for implement as well as theoretical attributions and limits of research and
suggestions for future research.


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CHAPTER 2: LITERATURE REVIEW AND RESEARCH MODEL

Chapter 2 consists of 4 sections. The first section presents all theoretical
concepts including of organizational engagement, human resource practices,
turnover intention and their role and measurement. The next section presents
relevant researches and theoretical concepts relationship. The last one suggests
hypotheses and research model.
2.1. Concepts definition and concepts measurement
2.1.1. Organizational engagement
2.1.1.1. Concept of organizational engagement (OE)
 Employee engagement
Employee engagement is a concept that has gained popularity for a long
period in both academic researchers and practitioners (Malash and Jackson, 1997;
Schaufeli and Bakker, 2004; May, Gilson and Harter, 2004; Saks, 2006; Macey and
Schneider, 2008; Shuck and Wollard, 2010; Chughtai, 2013; Juhdi, 2013…).
Especially in today, employee engagement is a top topic in human resource
management and it is considered with associating with positive and desirable
outcomes in organization. But with its important role, employee engagement is a

Maslach and Jackson (1997) argued that engagement is relative to energetic,
involvement and efficacy in their job. And based on the literature on burnout,
Maslach et al (2001) defined engagement by opposite of burnout. As Maslach and
Leiter (2008, 498p) defined engaged employees that is:
“An energetic state of involvement with personally fulfilling activities that
enhance one’s sense of professional efficacy”
Engaged employees will feel emotional, involved and energetic to have ability
to finish their task .Scholars study about the engagement such as Gilson and Harter
(2004), Macey and Schneider (2008), also debate that employee engaged in their
task will have a higher level of energy, enthusiasm with their work and loyalty to
their job from day to day. Schaufeli and Bakker (2004) also had definition about
engagement. It’s the psychological status which is relative with work positively and


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satisfactorily. It has characteristics with three levels: vigor, dedication and
absorption. They explained that vigor (the opposite pole of exhaustion) is a level of
high energetic status, ready for efforts in their task consistently, stably to face
difficult. Dedication (the opposite pole of cynicism) is higher level than vigor. It
present the closed relationship between private task and important emotion and
enthusiasm, feeling deserved for their position and motivation. And the highest
level is about absorption. It shows that the completely satisfaction on their work,
present their concentration to task, spare time, cognate and enjoy their feeling with
their tasks and detaching themselves from work. Robinson et al. (2004) define
engagement as “a positive attitude held by the employee towards the organization
and its values” and state that “an engaged employee is aware of business context,
and works with colleagues to improve performance within the job for the benefit of
the organization”
The third approach, it is about behavioral dimension (or the physical

toward desired organizational outcomes”.

Table 2- 1: Summary researchers about EE
No. Researchers
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Cognitive Emotional Behavior
approach approach approach
Kahn (1990)
x
May, Gilson and Harter
x
(2004)
Shuck et al (2011)
x
Maslach and Jackson (1997)
x

approach

x

x
x
x
x

(Source: Author summarizes)
 Organizational engagement


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This study agrees with the definition of Saks (2006) that employee
engagement is a multi-dimension concept. It is consider with vary roles of employee
and 2 components are concerned that job engagement and organization engagement.
As Saks (2006) defined that engagement shouldn’t consider as an one’s work
situation what encompassing aspects of one’s tasks, work/job, and organization, that
means they don’t engage not only their in-role at work but also outside at work.
Engagement is likely to change from role to role, so mentioning about engagement
should vary his/her roles that they are related organization (Saks, 2008).
In Saks (2006, 604p), he definited about organizational engagement that:
Organizational engagement reflects the extent to which an individual is
psychologically present as a member of an organization.
As Juhdi et al (2013) argued about organizational engagement that it is a
desire to become as a member of organization and willing to conform organization
values and norms. They also make their effort for organization to get good
performance.

performance and effective results.


Engagement with organizational outcomes
Engaged employees not only get the high individual performance but also

contribute to business outcomes. According to Harter, Schmidt and Hayes (2002)
engagement and business outcomes have positive relationship. These organizations
whose employees had higher engagement level were more productive, more
profitable than other organizations. Rich, Lepine and Crawford (2010) indicated
that the collective value behaviors of engaged employees would create good job
performance, then it would directly and indirectly contribute to the organizational
goals, and business outcomes. Rich et al (2010) have shown that engagement is
associated with individual employee task and extra‐role performance then it
effected to business performance.
2.1.1.3. Measurement of organizational engagement
There are various measurements of engagement, such as Kahn (1990) first
defined the engagement concept, then May, Gilson and Harter (2004) tested the 3
dimensions of need-satisfying engagement approach. Maslach et al (1997)
developed a burnout- antithesis approach of engagement scale, called the Maslach
Burnout Inventory (MBI) or Schaufeli and Bakker (2004) proposed the Utrecht
Work Engagement scale to measure engagement as vigor, dedication and