Research Article

International Journal of Engineering

Business Management
Volume 9: 1–9
Determining relationship between ª The Author(s) 2017
DOI: 10.1177/1847979017731669
strategic human resource management journals.sagepub.com/home/enb

practices and organizational commitment

Alaeldeen Al Adresi and Mohd Ridzuan Darun

Abstract
Due to high involvement of human resource management (HRM), it has been a challenge for the organization to manage
the external turbulence like war or government policy changes. This makes the HRM department play a crucial role to
manage their employees together with the welfare of the organization. The main purpose of the article is to investigate the
relationship between strategic HRM (SHRM) practices and organizational commitment (OC). Hypothesis was developed
considering seven key SHRM practices and OC and subsequently testing based on data from 52 oil and gas companies in
Libya. The findings using structural equation modeling revealed that employees are more committed to the organization
when they get best SHRM. Internal career ladders on job training and pay for performance were the key SHRM practices
identified that influence employee’s commitment toward the organization. Further, it was shown that the employees are
more concerned of their job security and dynamic working environment. Employees with the help of organizational
support will be able to contribute to enhance OC.

Keywords
Strategic human resource management, employee commitment, oil and gas industry, Libya

Date received: 23 January 2017; accepted: 27 July 2017

Introduction economic fall. Since, after the revolution, the Libyan oil
industry along with the other industries had a massive fall
In today’s competitive market, high involvement of human
economically; therefore, this research wants to identify
resource management (HRM) has been increased. It is the
the strategic management policies of the Libyan Oil com-
challenge for the organization to deal with the internal
panies that survived during the war and have flourished
capabilities to cope up with the external turbulence like
after the war. Many of the previous researches focused on
war or change in government policies. Nowadays, organi- the relationship between HRM practices and organiza-
zations are prioritizing on good HRM practices as a
tional performance, but very few studies focused on the
planned approach in order to establish open, flexible, and
effect of strategic HRM (SHRM) practices on increasing
caring management style. Managers from all levels are
organizational commitment (OC) and trust of employees.4
involved in such HRM practices for scanning of internal
and external environment, staffing and recruitment, strat-
egy formulation, strategy implementation, and evaluation
and control.1–3 Despite the importance of HRM practices in Faculty of Industrial Management, University Malaysia Pahang, Kuantan,
the organization addressed by many researchers and acade- Pahang, Malaysia
micians like in the past decades, the country like Libya is
Corresponding author:
still experiencing HRM issues. Due to lack of staffing and Alaeldeen Al Adresi, Faculty of Industrial Management, University Malaysia
recruitment policies occurred during the war, many oil Pahang, Kuantan, Pahang 26300, Malaysia.
companies in Libya, after the revolution, had a massive Email: [email protected]

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open-access-at-sage).
2 International Journal of Engineering Business Management

OC is considered as an indicator to testify that the employ- perceptions of what the organization is like and mirror their
ees are able to meet organizational goals as per organiza- treatment toward the organization.
tional tasks. The employee–organization connection can be taken as
OC is very important in order to achieve organizational a social exchange relationship between the employee and
tasks. OC maintains the relationship between organization the organization and organizational commitment as the
and employees. Thus, it is very crucial to investigate the employee’s psychological attributes and feelings after the
ways to foster OC among employees effectively. Morrow5 establishment of such relationship. Any risk perceived by
mentioned that there is a need for the researchers and aca- employees in the organization will affect their trust in the
demicians to focus on the subject of factors influencing OC organization. This phenomenon can be explained using the
thoroughly. Thus, this research takes into account SHRM SET. The organization invests in employees who then
practices in order to investigate its effect on OC. return something to the organization. However, Liu and
Managers who fail to recognize the negative impact of Deng12 attempted to develop organizational commitment
revolution and the risk exposure of their companies and do through SET and found that there is a need that the orga-
no crisis planning find them in very bad situation. It was nization provides a good working environment for its
during Libya revolution that the oil companies were in employees, who in turn show commitment to the organiza-
conflicts and were paused due to huge safety concern. Most tion. Based on this concept, researchers have put forward
of the oil companies closed their operations during the various models such as the employee–organization fitness,
revolution and leave behind gathered dust. After the revo- expectation-met, organizational justice, organizational sup-
lution, many oil companies went through a major reorga- port, and retrospective models. Therefore, this research
nization that was intended to centralize strategic focuses on SET as a single theory that voluntarily engage
management of oil companies in Libya. treatment of employee perceptions toward the organization.
This research highlights on the need to use strategic
human resource practices that can improve OC. The present
research has organizational inputs toward performance SHRM practices
measures. The first goal of the study is to evidence regard-
SHRM was defined as “the pattern planned human
ing the role of SHRM practices in Libya. The second goal is
resource deployment and activities intended to enable
to identify the SHRM practices that improve organizational
organization to achieve its goals.”13 SHRM practices refer
commitment. The third goal is to explore the relationship
to the deployment and activities to achieve organizational
between SHRM practices, perceived organizational support
success through a pattern of planned behaviors.3 In this
(POS), and OC in the context of Libyan oil and gas
study, the field of SHRM research is discussed critically
companies.
for the improvement and advancement of literature on
HRM systems. HRM increases the quality of HR which
Literature review consumes a source of sustainable competitive advantage
according to resource-based view. In order to link organi-
The exchange of quality is influenced by perceived contri-
zational and employee goals, OC is considered as the main
bution to the exchange; loyalty or public support; positive
factor.14 SHRM practices play a crucial role in enhancing
effect for one another; and quality based on trust, commit-
productivity and efficiency of organization by employing
ment, and respect.6 Thus, social exchange theory (SET) is
practices like internal career ladders (ICLs), formal train-
used as a theoretical underpinning for the study predicting
ing (TR) systems, result-oriented performance appraisals
organizational support for the employee based on the quality
(PAs), employment security (ES), employee voice and
of relationship exchange between managers and employees
participation, and performance-based compensation.15
of oil and gas companies in Libya. SET is a concept of
developing interaction skills among people during their
lifetime with the rapid development of communication and
performance.7 A theoretical alignment between organiza-
Internal career ladders
tional support and OC can be determined by SET. Accord- Internal career opportunities are defined as “the extent to
ing to SET, employee’ commitment to their organization is which an organization has an ICL or provides internal career
performed with the beliefs that organization appreciates the opportunities for its employees.”15 It has been shown that
contribution of the employees.8 Gillis9 acknowledged that policies of internal career opportunities are related to higher
the interpersonal relations and social interaction are employees’ pay satisfaction and job satisfaction.16 Employ-
described through SET. According to the SET, an individual ees who are not satisfied are likely to seek career opportu-
does not use same style or behavior at the same time. nities outside the organization and are less willing to put in
Furthermore, Baker10 mentioned that SET is derived from extra effort to comply with the organization policy. Specif-
the interaction between two entities. Ostroff and Bowen11 ically, having a policy of internal career opportunities
relied on social exchange to propose that human resource reflects an organization’s commitment to its employees.
practices shape work force attitudes by molding employee As such employees who believe their organizations are
Adresi and Darun 3

committed will be more secured and are more willing to put difference of job security. Private jobs have less security
in more effort than what are required of them. as compared to the government jobs due to long procedure
The wide range of HRM practices employed in past for the termination of employees.
empirical studies includes providing TR programs, incen- Employment market in the organization due to its
tive systems, employee participation, clearly defined jobs, flexibility through national policies with existing high
internal career opportunities, and selectivity practices.17,18 standards and policies of income and ES has become key
Thus, for the employees in the initial stage of career, path component.23 Bashir and Ramay24 studied various factors
for the bright long-term future is very important. Thus, the like work environment, job security, pay satisfaction, and
organization providing such career ladders has high level of participation in decision-making affecting employee’s
belief of organizational support. commitment toward organization and found that work
environment and job security have high commitment
toward organization, whereas pay satisfaction and partici-
Formal TR system pation were having low correlation with commitment.
Organization always expects employees to come with the
requisite skills that can enhance and achieve organizational
goals. TR is still important for the employees fully versed
Employee participation
with skills and knowledge in order to fit in the organization Employee participation is in response to the movement of
and to be a valuable asset for the team. quality in the organization where an individual is encouraged
Work-related education and TR is very important for the to accept responsibility for quality performance. Traditional
employee development including interaction with supervi- SHRM with an efficient-oriented model is based on skills and
sors and coworkers. Armstrong19 mentioned that employees abilities of employees within the organization. With tradi-
with high level of education are most likely to get opportuni- tional SHRM practices including selection, compensation,
ties for the TR to improve their skills. Thus, PA system is very incentives, continuous employee development and employee
important in order to identify the TR needs for the employees. engagement led to discretionary SHRM practices relate to
Bakan20 mentioned that during the working life, the education team effectiveness.25
and TR performed by the employees are still redundant in the Khatoon et al.26 presented the SHRM practices in rela-
same working lifetime. The need of TR obtains new knowl- tion to performance using dimensions like HR strategy
edge with new skills and new attitude is very important for the and organization, strategic recruitment, selection of HR,
employees in their everyday aspect working life. strategic TR and development, strategic performance, and
employee participation in management. The study found
that employee participation management and strategic
Performance appraisals performance management must be coped up with the
PA is the part of performance management that is based on modern business development.
organizational and employee goals together. PAs are con-
ducted once in a year without any surprises and help the
employees to focus on the formal goals and performance
Clearly identified jobs
expectations that influence employee’s pay and rewards or Targeting jobs involves identifying employee’s personal
promotions. According to Jordan,21 PA is the process that is values, skills, and goals that will increase employee satis-
used to evaluate and support employees for the job perfor- faction. Defining jobs clearly and precisely is very crucial
mance. PA is very important for the management of organi- for the organizations in order to increase ambiguity and
zational performance and also to identify the ability of increase efficiency and well-documented employees that
employees toward the tasks associated. PA helps to enable can facilitate organization’s operational activities. Daley
the challenge of communication; increase productivity by and Vasu15 clearly defined jobs enable employees to under-
providing timely feedback to employees; and make effective stand their job responsibilities. Such understanding will
organizational decisions on the pay, professional develop- facilitate the use of facilities to help them to accomplish
ment, and promotion.22 their tasks efficiently and successfully. Clearly identified
According to Daley and Vasu,15 PA is used for making jobs help the employees to locate and make necessary
judgment decisions pertaining to promotion, pay, reten- contacts along with increase in focus and sense of purpose
tion, and transfer of employees. PA also helps organiza- necessary for sustainable job performance.
tions for the validation of selection and hiring procedures
and understanding organization’s culture.
Pay for performance
Pay for performance (PP) is measured as total income and
Employee job security additional benefits in the form of wages and salaries during
Job security is considered as an important factor for the job. an accounting period are considered as compensation. In
The job in government and private consists of huge the HR activity, compensation is very crucial to provide
4 International Journal of Engineering Business Management

comprehensive and consistent measures for the employ- Table 1. Demographic characteristics of respondents.
ees. Compensation system enables the employees to
Demographic Profile Frequency Percentage
improve their knowledge, skills, and abilities increasing
their motivation and enhance in quality of employees Age
along with their retention. Under 20 5 1.5
However, Colvin and Boswell27 introduced the concept 20–29 28 8.5
30–39 81 24.5
of action and interest alignment linking behavior and orga-
40–49 162 48.9
nizational strategy for developing employee’s ability and 50 or above 55 16.6
identify behavior of the employees effectively. Further- Qualification
more, Harris28 examined the impact of SHRM practices Diploma 6 1.8
on organizational performance and found that TR, compen- Bachelor 32 9.7
sation, and performance management is positively able to Masters 200 60.4
influence organizational performance. Doctorate 69 20.8
Professional or others 24 7.3
Manager position
Low level 79 23.9
Research method Middle level 62 18.7
General 90 27.2
This study uses probability sampling technique with simple
Supervisor 100 30.2
random sampling approach for the data collection. In Experience
Libya, there is only one government owned company, 1 to less than 5 years 51 15.4
National Oil Corporation of Libya, that has been awarded 5 to less than 10 years 159 48
projects to explore oil. A survey was undertaken to gather Above 10 years 121 36.6
all the appropriate data by the use of a structured ques-
Note: N ¼ 331.
tionnaire. In order to achieve sufficient sample size and
generalizability of the result, the sample frame for this
study consisted of all 52 oil and gas companies in Libya compare how well the proposed model fits the data in rela-
that employed at least 50 employees. Unlike most previous tion to a baseline model that assumes independence among
studies of HRM, the data on SHRM implementation have all the variables.30 Lastly, parsimonious fit indices can be
been gathered from low- or middle-level managers within measured by normed chi-square (χ 2/df).
the oil and gas industries of Libya. The population
was drawn from a telephonic conversation with the HR
department. After the telephonic conversation with the oil
Results
companies, it was found that there are approximately 1906 Demographic profile of respondents
low- and middle-level managers. Thus, 1906 managers are
The demographic characteristics of the respondents are
considered as a total population for the study.
shown in Table 1. According to Table 1, most of the
The hypotheses derived from the review of literature are
respondents hold a bachelor’s degree. In addition, 48.9%
as follows:
are in the age range of 40–49 years. Furthermore, about
H1: ICLs are positively correlated with employee 48% of the employees have at least 5 years of experience
commitment (EC). in the work field. This indicates that the respondents are
H2: TR is positively correlated with EC. familiar with company practices and policies.
H3: Appraisals are positively correlated with EC. Table 2 shows the descriptive statistics of the data and
H4: Employee job security is positively correlated the bivariate correlations are presented. The present study
with EC. contributes to the understanding of the best SHRM prac-
H5: Employee participation is positively correlated tices on employee trust among low or middle level manag-
with EC. ers. However, this study finds that SHRM practices (ICLs,
H6: Clearly identified jobs are positively correlated PAs, TR, employee security, employee participation, PP,
with EC. and job description (JD)) have a positive relationship with
H7: PP is positively correlated with EC. employee trust (see Table 2).
Although, according to the previous studies, HRM prac-
In order to determine the model fit, various goodness of tices are key elements for successful innovation and per-
fit indices (GFIs) were considered for the study. An abso- formance in the organization, not many empirical
lute fit index includes χ 2, GFI, and root mean square error investigations have supported the SHRM practice–trust
of approximation (RMSEA). Absolute fit indices measure relationship. On the one hand, there is agreement on the
how well the model accounts for observed covariance in the relationship between HRM practices and performance,
data.29 The incremental fit indices include comparative fit while on the other hand, there are inconsistencies in the
index (CFI) and normed fit index. Incremental fit indices literature about the contents of these practices.
Adresi and Darun 5

Table 2. Mean, SD, and bivariate correlations of the variables.

Variables Mean SD OC ICL PA POS JD TR ES PP PR

OC 5.35 1.21 1
ICL 5.08 1.29 0.663 1
PA 4.85 1.27 0.533 0.615 1
POS 4.98 1.36 0.742 0.689 0.619 1
JD 4.95 1.38 0.501 0.668 0.708 0.565 1
TR 5.02 1.09 0.634 0.578 0.478 0.610 0.469 1
ES 4.91 1.22 0.545 0.562 0.626 0.591 0.637 0.482 1
PP 5.00 1.13 0.437 0.367 0.361 0.436 0.310 0.379 0.302 1
PR 4.04 1.77 0.211 0.349 0.298 0.269 0.281 0.149 0.234 0.212 1
ICL: internal career ladder; PA: performance appraisal; TR: training; ES: employment security; PP: pay for performance; JD: job description; OC:
organizational commitment; POS: perceived organizational support; PR: Employee participation; M: mean; SD: standard deviation.
**Correlation is significant at the 0.01 level (2-tailed).38

Figure 1. Final model.

Confirmatory factor analysis of SHRM practices on POS and OC in the Libyan oil and
We conducted confirmatory factor analysis in order to gas companies. The hypothesized model was evaluated
ensure that the convergent and discriminant validity is using GFIs in order to confirm the structural model fit that
achieved. The study hypothesized a significant influence was further also accepted by Cunningham31 who mentioned
6 International Journal of Engineering Business Management

Table 3. Standardized regression weights for the final model. et al.34 and Lamba and Choudhary.35 At the organizational
level, Nishii and Wright36 examined the outcomes of HRM
Standardized regression weights Estimate CR p
and argued that most of the research has focused on the job
POS ICL 0.407 5.107 *** group level, that is, different jobs have different practices
POS TR 0.209 3.129 0.00 with a different business unit. This research also found
POS PA 0.154 2.226 0.03 similar findings to the studies by Nishii and Wright36 and
POS PP 0.171 3.175 0.00
Paul and Anantharaman37 having a positive relationship
POS ES 0.122 1.918 0.06
EC ICL 0.221 3.084 0.00 between SHRM practices and organizational commitment.
EC TR 0.18 3.181 0.00 The results confirmed that the SHRM practices have sig-
EC PA -0.119 2.047 0.04 nificant positive effect on OC. With the significant standar-
EC ES 0.075 1.418 0.16 dized regression weights of all the constructs and items, the
EC PP 0.101 2.202 0.03 overall square multiple correlation was found to be 0.69
EC POS 0.37 5.516 *** (69%), which is considered a very active and important
CR: critical value; POS: perceived organizational support; EC: employee finding of the study.
commitment; ICL: internal career ladder; TR: training; PA: performance
appraisal; PP: pay for performance; ES: employee security.
***Path coefficient is significant at the 0.001 level.38 Conclusions and implications
Employees with the help of organizational support will be
that support for the hypothesized model can be achieved able to contribute to enhance organizational commitment.
with an effective and acceptable goodness fit criteria. Libyan oil and gas companies must be able to motivate
Structural equation modeling was used to confirm the their employees by compensating based on their perfor-
hypothesized model in the form of structural model. The mance. Superiors must be supportive to the employees and
standardized regression coefficient for the model is pro- work together to meet organizational goals and objectives.
vided in Table 3. Employees and managers must have good cooperative
In the measurement model, it was noticed that the aver- skills and work in the field as a team in order to overcome
age variance extracted (AVE) for all the variables was the problems and increase commitment. Compatibility
above the required level of 0.50. Thus, it is confirmed that between SHRM practices is very important in order to
the criteria of AVE was satisfied. The result on AVE also increase commitment of employees. Managers must
provided an additional support for convergent validity. It understand the internal requirements for successful stra-
was also possible to provide the discriminant validity tegic implementation and they must insist that careful
between the factors due to positive definite issue of the attention is paid to the requirements of first-rate execution
matrix. Construct validity is confirmed based on GFIs of the chosen strategy. They personally must be able to
Hsieh and Hiang32 reported in the earlier section. Evi- lead the process of strategic implementation and execu-
dence of convergent validity is found based on high factor tion of SHRM practices. Developing strategic objectives,
loadings (greater than 0.50) of all factors.33 linking the motivation and reward structure directly to
Coefficients’ values are derived by dividing the variance achieve result, and initializing policies and procedures for
estimate by its standard error. When the critical value or proper implementation of strategies are crucial for the
z-value is greater than 1.96 for a regression weight (standar- organization.
dized estimates), the parameter is statistically significant at Findings indicated that since employee motivation and
the 0.05 levels. The significance level was achieved after the JD are a strong factor for trust and commitment of employ-
modification indices and removal of few redundant mea- ees, there is a need to give attention to benefits and compen-
sured items. sation, employee motivation, and evaluation and satisfaction
As shown in Figure 1, the overall re-specified model of employees in the organization. Since the research was
was within the acceptance levels. The four major fitness analyzed based on the perception of low- or middle-level
indices like GFI, TLI, RMSEA, or CFI were used for eval- managers who are also part of employees in the organiza-
uating the model fit. The absolute values like GFI and tion, top management must share experience and knowledge
RMSEA, incremental values including CFI and TLI, and with its subordinates to improve commitment and trust of
parsimonious values like χ 2/df were used to confirm the their employees along with increased motivation.
model fit. The main implication for managers is that the strategic
An examination of the GFIs showed that the model role must be in line to increase commitment of employees.
fitted the data effectively (χ 2 ¼ 1099.766, df ¼ 798, p ¼ From the validation of the framework, it is obvious to make
0.000). The GFI ¼ 0.866, AGFI ¼ 0.848, CFI ¼ 0.968, TLI sure that all the HRM functions are in accordance with
¼ 0.966, RMSEA ¼ 0.034, and χ 2/df ¼ 1.378. These find- increasing productivity along with the organizational
ings provide support for the role of TR and appraisals as a objectives. Thus, operating in a stable and dynamic envi-
determinant of the impact of SHRM practices on organiza- ronment, managers and employees need to work as a team
tional commitment consistent with the findings of Bal in order to develop new knowledge and complete tasks for
Adresi and Darun 7

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respect to the research, authorship, and/or publication of this Manage J 1996; 39(4): 802–835.
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Appendix 1 Employee participation15,41

Employees are asked to participate in decisions.
Survey questionnaire Managers keep open communication with employees.
Internal career ladders15,41 Employees are allowed to make decisions.
I can have clear career paths within the organization. Employees are provided opportunities to suggest
I have bright future within this organization. improvements.
I can see career aspirations within this organization.
Employees have desired promotion in this organization. Job description41
All the duties are described to the employees.
Training15,41 Jobs for the employees are shaped appropriately.
Employee get extensive training throughout the year. Job descriptions are normally up to date.
Professional training programs are provided to the employees. The duties of the jobs are clearly defined.
Employees are allowed to make many decisions.
Formal training programs are offered to employees. Pay for performance42
Formal training programs are offered to new hired employ- Incentive is received based on performance.
ees to work their jobs. I feel I am being paid a fair amount for the work I do.
Appraisals15,41 I think that salary raise are frequently enough.
Each employee has performance objectives. I feel satisfied with what the organization pay me.
Employees are appraised based on their performance. I am satisfied with the benefits I receive.
My manager discusses plans to improve my performance.
My manager considers my views regarding my performance. Perceived organizational support39,40
Organization would help me if I need special favor.
Employee security15 Organizational cares about my well-being.
Employee can expect to stay in the firm as long as they wish. Organization takes pride in my accomplishment.
It is difficult to dismiss the employee. Organization strongly considers my goals and values.
Job security is almost guaranteed to employees in the Organization shows high concerns for me.
company. Organization cares about my opinion.
Employees would be last to downsized during economic Organization appreciates any extra efforts from me.
crisis in the company. When I have problem organization is available for help.
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Organizational commitment43 Staying with this organization is a matter of necessity as

Affective commitment much as desire.
I do not feel like part of the family at the organization. My life would be disrupted if I leave this organization.
I feel happy to spend my career with this organization. If I leave this job I can easily find a job as good as this one.
This organization has a strong deal of personal meaning
for me. Normative commitment
This organization has a strong deal of personal meaning I feel that I would receive a lot of benefits from this
for me. company.
I have always obtained everything valuable from this
Continuance commitment organization.
Leaving this organization would require considerable I would be always loyal to the company I belong to.
personal sacrifice that makes me to continue to work. People in the company expect me to be loyal.