Effects of Person Organization Fit on Satisfaction, Commitment, and Turnover

This literature review analyzed studies on Person Organization (P-O) fit and outcome variables (satisfaction, commitment, and turnover) conducted in the past 12 years. The aim of this study was to answer questions regarding the relationship of P-O fit with satisfaction, commitment and turnover. PsychInfo and PsychArticle were used to locate studies in the past 12 years that included P-O fit and at least one outcome variable (satisfaction, commitment, or turnover). Results show that P-O fit does predict satisfaction, commitment, and turnover.

Introduction

Organizations today face a competitive global environment: the economy is now recovering from the worst recession since the Great Depression. As such it is vital for companies to cut costs where possible. One major expense for organizations is the cost of labor. In many companies, including the Fortune 500 companies, the total cost of the workforce averages 70 percent of operating expenses (Human Capital Institute). Hence, one way to cut costs is by reducing employee turnover (Silverthorne, 2004) and thus reducing the overhead costs of having to constantly hire and train new employees.

Much research has looked at the cost of turnover to companies; the Society for Human Resource Management estimated that it cost $3,500 to replace one $8.00/hour employee when all costs such as recruiting, hiring, and training were considered. One may argue that companies ought to simply lay off workers instead of improving retention rates to cut costs. However, this is not a viable solution in the short or long term. In the short term, cutting off too many employees results in the remaining employees taking on additional work and may require that some employees go through additional training, which is an added expense. In the long term, cutting too many people could cause issues when business picks up again. The company may then need to replace the laid off workers, and this would eventually result in additional recruiting costs (Human Capital Institute, n.d.), not to mention the numerous other costs related to training new hires. Losing experienced workers who have gained skills through various situations over time could take years to replace.

The role of organizational culture in retention is one that has been examined by several scholars. There is no single accepted definition of organizational culture, but one prominent definition is that a culture is something an organization has as a result of the group's problems of survival and internal integration (Schein, 1985). Research indicated that an organization that emphasizes teamwork, security, and respect for individuals foster long-term commitment to the organization (Sheridan, 1992). A study that looked at 904 college graduates in a public accounting firm found that culture effects were stronger predictors of retention than influences of the labor market and employee demographic characteristics combined (Sheridan, 1992).

One aspect of culture that has created much interest recently is the concept of person organization (P-O) fit, which has been described in a variety of ways; perhaps the simplest definition is that it is the degree of similarity between a person's values and the organization's values (Ulutas, Kalkan, & Bozkurt, 2011). Individuals are known to differentiate themselves through underlying values and to identify with others who share these values (O'Reilly, Chatman, & Caldwell, 1991). Personal values, according to Rue (2001), are inherent in everything we do, including selecting our work, and are apparent in the way one leads an organization or group. Organizations, then, have their own values that are formed through shared experiences, ideas, and situations of its members (O'Reilly, Chatman, & Caldwell, 1991). Some organizations articulate these core values to employees via human resources, flyers, signs in buildings, and training. Individuals and organizations then may be attracted to one another on the basis of these values; individuals may seek organizations that have values similar to their own, and organizations may seek employees who share the values of the organization.

The degree to which people share the values of their organization may result in the degree of their satisfaction with that organization. Social psychology suggests that people tend to look for work environments that match their personalities. Hence a good fit between work environment and personality ought to result in higher satisfaction because people are then able to work with those who possess similar values as themselves (Furnham & Schaffer, 1984). Previous research suggested that P-O fit affects turnover intention through the mediator of job satisfaction (Liu, Liu, & Hu, 2010). Another important aspect, which relates to turnover, is commitment. Commitment has been defined as the work attitude that is directly related to employee participation and intention to remain with the organization (Matthieu & Zajac, 1990). However, it is possible that sharing similar values to the company could lead to higher levels of loyalty and commitment.

The relationship between P-O fit and turnover has generated a large amount of interest and led to several different studies. In 2002 a meta-analysis was conducted to examine the various studies related to P-O fit and its effects on satisfaction, commitment, and turnover intent (Verquer, Beehr, & Wagner, 2002). The main purpose of the current paper is to analyze the new research over the past decade and examine whether the results still hold and what additional factors ought to be taken into consideration when analyzing P-O fit and retention. There is reason to believe that the results of previous research may not be as applicable today as in the past due to the changing economic conditions and lack of available jobs. Due to difficult market conditions, employee satisfaction levels may be less affected by fit because most may be satisfied simply as a result of retained employment in turbulent economic circumstances. The youngest generation entering the workforce has been described as being less committed to staying with the same company, having high expectations, and possessing a sense of entitlement (Burgess, 2008). If these statements are valid it would mean that it is likely that over the past 12 years new employees have experienced lower commitment, low satisfaction (as a result of high expectations that may not be met), and high turnover intention. Additionally, Generation Y individuals are noted as having different values than their older counterparts (Generation X) in terms of need for work life balance and need for achievement. One potential reason that the younger generation is described as having lower commitment and satisfaction may be because organizations are not meeting the needs of the younger generation, creating lower overall P-O fit (Kenexa, 2013). This low P-O fit then may explain why outcome variables such as commitment, and satisfaction are considered to be lower in this generation.

Although there are a number of financial benefits justifying the study of the relationship between P-O fit, there is also a rationale for studying effects of P-O fit on satisfaction and commitment. Previous studies have found a relationship between job performance and job satisfaction (Ziegler, Hagen, & Diehl, 2012). Commitment, while similar to measures of turnover, is also a factor that can be examined on its own. Past research indicated that work commitment was related to aspects of work ethic such as hard work, non-leisure, and independence (Blau & Ryan, 1997). Overall, it is important to study the link between P-O fit and outcome variables of commitment and satisfaction because those variables affect other key worker characteristics, which can also attribute to the success of organizations.

The goal of this paper was to examine the various studies conducted from 2000-2012 on P-O fit and turnover for the purpose of building on a previous meta-analysis (Verqueer et al., 2002) and observing additional factors from the latest research that may be noteworthy in the study of P-O fit and turnover. There are three central research questions this paper aimed to answer. First, does P-O fit continue to predict satisfaction, commitment, and turnover. Second, because previous research found satisfaction to mediate the relationship between P-O fit and turnover (McCulloch & Turban, 2007), is the relationship between P-O fit and satisfaction stronger than the relationship between P-O fit and turnover or P-O fit and commitment. Third, does the type of P-O fit affect the ability to predict those outcome variables, or are some measures of P-O fit stronger predictors of outcome variables.

Method

Sample and Sampling Criteria

A total of eight case studies were analyzed for the purpose of this meta-analysis. Studies had to be P-O fit and turnover, P-O fit and commitment, or P-O fit and satisfaction but could include other factors such as well-being and mental health.

Procedure

After defining the central research questions a search was conducted on PsycInfo and PsycArticles with a combination of the following words: retention, turnover, satisfaction, commitment, person-organization fit, and person-environment fit. From the results, those studies that were not directly related to the central researches questions or were dissertations were omitted. The eight studies that were left were then examined indepth and information was organized in two tables. One table compared dimensions of fit, measures of fit, and how satisfaction, commitment and turnover were measured (Table 1). The second table listed correlation coefficients for the relationship between the type of P-O fit and outcome measures of satisfaction, turnover, and commitment (Table 2).

Measures

Specific information regarding P-O fit and outcome measures can be found in Table 1 (Appendix 1).

P-O fit. Although all of the studies measured person organization fit, there were differences in definitions of P-O fit and measures of P-O fit. Most of the studies measured P-O fit through the comparison of an individual's values preferences and the organization's values. Other studies looked at the role of organization type in determining both fit and satisfaction. Three of the studies (Greguras & Diefendorff, 2009; Liu, Liu, & Hu, 2010; Rehfuss, Gambrell, & Meyer, 2012) defined P-O fit using Cable and DeRue's 2002 definition of fit in which fit was broken into multiple categories: one category was person organization (P-O) fit which was defined as the "congruence between employees' personal values and an organizations culture." Another category was demands-abilities (D-A) fit and referred to the "correspondence between employee skills and demands of the job;" this category was also referred to as person-job fit. The third category was Needs-Supplies (N-S) fit that measured the "extent to which employees' needs and tangible rewards match"—rewards were factors such as pay, benefits, and training (Rehfuss, Gambrell, & Meyer, 2012).

In a similar, though not identical fashion, Greguras and Diefendorff (2009) examined fit between a university and students, broken into three categories: social environment fit, academic environment fit, and physical-environment fit. Social environment fit included measures that addressed the importance of enjoyable social life and diversity. Physical environment included aspects such as the campus layout and safety of the campus. The academic environment included such measures as scholarly, intellectual climate, and academic reputation. All of these fits were determined by comparing the students' need for the item with the supply of the item.

By contrast, Ambrose, Arnaud, and Schminke (2007) examined ethical fit. Ethical fit was described as a measure of the degree to which a person's ethical values we in line with the organization's ethical climate. This particular study assessed ethical P-O fit by first having individuals define their own ethical views via the Defining Issues Test (Rest, 1979) and then taking an aggregate of all participants' scores on a separate Ethical Climate Questionnaire (Victor & Cullen, 1988). These two scores were then compared for each participant and evaluated for degree of ethical P-O fit.

Taking a somewhat different approach, of the studies that looked at the role of organizational type in determining fit and satisfaction, one study looked at the role of individualism (I) versus collectivism (C) and national culture in determining fit and satisfaction. This study (Parkes, Bochner, & Scneider, 2001) looked at hospitals and management consultancies in Australia and South East Asia. The way individualism and collectivism were evaluated varied greatly. On a personal level I-C was measured as an individual's own personal values, which were determined using a four-factor measure of I-C (Singelis et. al, 1955). On a national level, the Hofstede cultural dimensions measurement scale (1980), a system that organizes international culture dimensions taking into account individualism and collectivism, was used to note where each country scored in terms of individualism and collectivism. According to this measure Australia scored high on individualism and South East Asia scored high on collectivism. On an organizational level, companies were expected to match their nations' score on the Hofstede measurement scale. However, in order to ensure that organizations were indeed matching to their Hofstede score, the aggregate of individuals score on the four-factor measure of I-C (Singelis et al, 1955) was used to determine an organizations actual I-C score.

Another study (Silverthorne, 2004), looked at the fit and satisfaction of employees in Bureaucratic, Supportive or Innovative environments. Although these measures looked specifically at a particular type of organization and satisfaction levels of those employees in each organization, the study still measured individual values and company values and compared these scores to one another in order to determine fit. Hence P-O fit was measured and used in determining satisfaction, turnover, and commitment scores for all three types of organizations.

Satisfaction. General measures of satisfaction included summary judgments (McCulloch & Turban, 2007), Faces Scale (Kunin, 1955; Parkes, Bochner, & Schneider, 2001), Adult Career Concerns Inventory (Super, Thompson, Lindeman, Myers, & Jordan, 1988; Rehfuss, Gambrell, & Meyer, 2012), the Chinese OSI (Yang, Che, & Spector, 2008), and a measure of current satisfaction on the Brayfield & Rothe Scale (1951) (Ambrose, Arnaud, & Schminke, 2008). These general measures looked at current satisfaction, future satisfaction, and opportunities for growth and development.

More specific measures of satisfaction looked at satisfaction with respect to autonomy, social atmosphere, and moral values. All three of these measures were included in a study by Silverthorne (2004). Likewise, a need satisfaction questionnaire used by Greguras and Diefendorff (2009) looked at autonomy, competence, and relatedness satisfaction. On a similar level the study that focused on university fit measured student satisfaction in terms of social academic and physical environment satisfaction (Glibreath, Kim, & Nichols, 2010)

Commitment. Four of the eight studies examined P-O fit in relation to its effect on commitment. Two of the studies (Ambrose, Arnaud & Schminke, 2008; Greguras & Diefendorff, 2009) utilized the Allen and Meyer (1990) Affective Commitment Measure. Other measures included the OCQ and individual identification questionnaire. All measures were alike in that they asked broad general questions to measure feelings of loyalty towards the organization.

Turnover. Turnover was examined by four of the eight studies. These measures were brief and straightforward; studies either used actual turnover information or measured turnover intention via item measures on a Likert scale.

Results

The results as depicted in Table 2 (Appendix 2) support our first hypothesis that P-O fit is significantly associated with satisfaction, turnover and commitment. All of the studies found significant relationships between P-O fit and satisfaction, r=.09 to .565. Four studies found significant relationships between P-O fit and turnover r=-.14 to -.44. Also, four studies found significant relationships between P-O fit and commitment, r=.17 to .58.

Trends in the data partially support the second hypothesis that the relationship between P-O fit and satisfaction would be stronger than the relationship between P-O fit and turnover. The relationship between P-O fit and commitment is similar to the relationship between P-O fit and satisfaction. Stronger relationships between both P-O fit and satisfaction and commitment may be a result of satisfaction and commitment being attitudes whereas turnover is a behavior. This trend of P-O fit being more strongly related with commitment and satisfaction in the context of our literature review is simply an observation; it has not been tested for statistical significance.

Finally, there did not appear to be a distinct aspect of P-O fit that significantly affected outcome variables. Ethical fit scored low across the board, but the research on the topic is limited to one study. Person-group fit was also low in the Greguras and Diefendorff (2009) study, but again we only have one study that looked specifically at person-group fit.

Discussion

The previous meta-analysis (Verqueer et. al, 2002) found similar results as the current research. In the previous meta-analysis the relationship between P-O fit and satisfaction ranged from r=.02 to .68, the relationship between P-O fit and turnover ranged from r=-.12 to -.63, and the relationship between P-O fit and commitment ranged from r=.03 to .72. However the meta-analysis did have higher ranges of r scores, which fell into the high .6 to low .7, values while this literature review examined studies whose high r-values were closer to the .5 mark. A closer inspection of the meta-analysis (Verqueer et al., 2002) revealed that the higher r-values were a result of two studies, one being Cable and Judge (1996) and, the other Lovelace and Rosen (1996). The Cable and Judge (1996) study looked at 65 newly hired industrial relations graduates and the Lovelace and Rosen study (1996) looked at 366 MBA graduates who were managers in the field. Both Cable and Judge (1996) and the Lovelace and Rosen (1996) studies were conducted in same year and looked at graduates; however, the way they measured P-O fit and outcome variables of satisfaction, commitment, and turnover was not the same. Although no conclusive statements can be made as to why these two studies had higher correlations, it may be possible that this variation in ranges between the meta-analysis and the current research is partially related to such factors as the economic downtown and influx of a younger generation. The economic downturn may have influenced workers today to be somewhat less dependent on P-O fit for their satisfaction, commitment, and turnover intent; workers today may be more concerned with just having a job. Additionally, perhaps as Burgess (2008) suggested, the new generation that has entered the workforce is in general less satisfied as a result of high expectations and is also less committed than the generations before them. These lower means may be independent of P-O fit in that the younger generation is simply less committed and less satisfied due to generational attitudes. This shift in work attitude then would lessen the importance of P-O fit in determining commitment, satisfaction, and turnover in members of Generation Y. Overall, despite the somewhat lower range of correlations between P-O fit and outcome variables of satisfaction, commitment, and turnover, the results of the current research still suggest that P-O fit is a relevant factor when determining these outcome variables.

One concern that arose in light of the current research examined in this paper is the degree of variation between the ways that P-O fit has been measured. Researchers have chosen to look at P-O fit in various ways; some have used the Cable and DeRue (2002) version, some have looked at university fit, and others at ethical fit or the type of company (bureaucratic, supportive, innovative) fit. The lack of unity in the way P-O fit was measured has resulted in a lack of clear conclusions. Several studies have found a correlation between P-O fit and the outcome variables of satisfaction, commitment, and turnover, yet the specifics of what exactly, in the way P-O fit, it measures is most influential to this correlation is still unclear. Is it most important for one's ethical values to match that of the company? One's personal values? Or is the social atmosphere the most important aspect in determining satisfaction, turnover, and commitment? Moreover, it may be that certain types of fit matter to a greater extent in certain fields than in others. For example, nursing is a field with universally high turnover, but it may be that hospitals with a supportive environment tend to promote lower turnover rates. Or, in a law firm or in a bank it may be vital that an employees' ethical values match that of the company, and this may not be as important in other fields.

Further research ought to examine all the relevant research on P-O fit and outcome variables of satisfaction, commitment, and turnover for the purpose of determining which aspects of P-O fit are most accurate in determining levels of satisfaction. Not only would such future research help establish uniformity to the study of P-O fit but it may also contribute to several recommendations that could be applied with greater specificity in the field. If future research could determine specifically what measures of P-O fit are vital to the prediction of such factors as satisfaction, commitment, turnover, human resources departments could design tests to screen potential hires. Such tests could, in turn, improve retention rates in the industry setting.

In summary, the current literature review suggests that P-O fit remains a strong factor in determining satisfaction, commitment, and turnover. Moreover, the result of this analysis suggest that further research should hone in on the specific measures of P-O fit that most affect outcome variables so that this future research can be applicable to the industry. Overall, despite the ever-changing work place and shifts in generational work attitudes, person-organization fit remains a significant influence in determining satisfaction, commitment, and turnover.

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Appendix 1

Table 1. Dimensions of fit, measures of fit, and how satisfaction, commitment, and turnover were measured

Effects of Person Organization Fit on Satisfaction, Commitment, and Turnover

Vishakha Gupta
University of Puget Sound

Abstract

Introduction

Method

Sample and Sampling Criteria

Procedure

Measures

Results

Discussion

References

Appendix 1

Authors

Appendix 2

Effects of Person Organization Fit on Satisfaction, Commitment, and Turnover

Vishakha Gupta University of Puget Sound

Abstract

Introduction

Method

Sample and Sampling Criteria

Procedure

Measures

Results

Discussion

References

Appendix 1

Authors

Appendix 2

Vishakha Gupta
University of Puget Sound