This chapter explains the background of this study, statement of the problem, the purpose of this study, research questions, significance of the study and lastly presents the delimitation of the study. Also, this section presents the definitions of key terms which are a comprehensive understanding of this study to readers and provides researchers with a diversity of ideas for their future research studies.
Background of the Study
Mongolia is a country with steady growth in the recent years, which has a population approximately 3.2 million. The Gross Domestic Product (GDP) per capita in Mongolia was around 4.026 USD 2018 (Asian Development Bank, 2018). Mongolia is landlocked country in East Asia and to the north border with Russian Federation and to the south border with People’s Republic of China. After the democratic elections were held in 1992, Mongolia has been making the transition to a full market economy. The Mongolian private sector has grown considerably since 1991, now generally more than 90% of all enterprises are privately owned (Asian Development Bank, 2018).
Especially, most of the companies in Mongolia are private service company which is playing as a main role in Mongolian’s economy and impacts local people’s life. Those Mongolian private service companies and businesses need to continue to explore the sets of services and human resource practices which constitute of a basic support package for company sales and customer support. Therefore, nowadays Mongolia’s private service companies focus on company’s development and trying to understand the perception of human resource management practices.
According to Arthur Jr, Bennett Jr, Edens, and Bell (2003), they mentioned that multitudinous factors impact individuals and organizational development, these are a competitive advantage in the markets, to adapt to change the situations, to improve employees’ skills and knowledge, to increase employee’s communication skills and organizations productivity. For example, the success of an organization largely relies on its training and development (T&D) and organizational commitment. Thus, Mongolian private service companies and organizations need to provide their employees perception of organizational development within training activities, better job satisfaction, promote organizational commitment, those impacts can help improve organizational development and increase their competitive advantage in the market. Also, in the organization and company, human resource development is one of the important roles of training development and
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organizational commitment. According to Dias and Silva (2016), the competitive advantage can lead to the commitment, loyalty of the employees and it even to its organizational success. In the workplace, internal and external factors influence job satisfaction as well as employee’s commitment. Thus, it is very important for the organization and human resource professionals to be aware of these factors.
This study focused on T&D and organizational commitment as well as influence of each variables. Many researchers have found that T&D and organizational commitment has a positive correlation with job satisfaction and organizational commitment. This field has not been studied extensively in Mongolia. Gamble and Huang (2008) explained that, most of the studies in this field come from Western researchers and researches from Asia. In Mongolia not many researchers are focused on this field or important branches of local research. Moreover, the Mongolian private companies and organizations need to consider their T&D and organizational human resource development. Tannenbaum, Mathieu, Salas, and Cannon-Bowers (1991) mentioned that
“employees may view an effective training experience as an indication that the enterprise is willing to invest in them and cares about their career development; thus, training may enhance their commitment.” Especially, since these are the important factors that strongly impact organization success and process. Regarding to Ndulue (2012), training is considered as an indispensable human resource function as well as to impact the organizational objectives. Moreover, nowadays Mongolian organizations and companies are investing more in human resource development and human resource management. As Gammie (1996) stated that organizations, which have properly selected their employees and provided effective training for them and better training methods to improve employee’s a competitive advantage. Therefore, T&D has strongly affected employees and organizational performance and it also important role in the organization (Gavino, Wayne, &
Erdogan, 2012). Additionally, this research firstly explores the companies’ training motivation, benefits from training, perceived support of training from co-workers and how those factors influence employee’s commitment private companies in Mongolia. Secondly, what is the influences of T&D that has the impact on the satisfaction of employee in the private companies in Mongolia. Thirdly, what influences of job satisfaction has on T&D of organization and its commitment to Mongolian private companies. Mongolian economy still needs to be improved because of the fact that most of the companies in Mongolia are small and they are lacking of investment and do not have a human resource department especially human development.
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Statement of the Problem
In recent years, Mongolia’s economic growth slowed down to 2.4% in 2015. The crisis continued in 2016 as economic growth dropped to -1.6% in the third quarter (National Statistical Office of Mongolia, 2016). This situation has created pressure on many Mongolian private companies and organizations to come with proactive measures to face these challenges, through the human resource development. The Mongolian private companies’ basic problem is human resource management and their T&D activities, which may have an impact on the employee's satisfaction and their commitment. In addition, job satisfaction and employees commitment are the impact factor in the organization. Bhatti, Shar, Shaikh, and Nazar (2010) divided it into 2 factors, which are external and internal. External factors are climate, economy, and family and internal factors are organizational policy, organizational strategy, Leadership competencies and workplace condition. As stated by Allen, Shore, and Griffeth (2003) described the human resource management practices were strongly correlated with job satisfaction and organizational commitment.
Although Human Resource Development practices have been established to be correlated to organizational commitment (Conway & Monks, 2009), some studies have recommended that the association is indirect. Ahmad and Bakar (2003) claimed that T&D impact on organizational commitment has been studied in some industries in recent years and the outcomes of the researches have provided some indication suggesting that T&D have effects on organizational commitment.
In addition, research conducted by Meyer and Smith (2000) found that employee job satisfaction played an important role in among the T&D and organizational commitment. Also, T&D and organizational commitment strongly impact in private companies’ financial condition. Moreover, they need to understanding the perception of the T&D, job satisfaction and commitment of employees as well as relationship of those variables. In order to fill these issues, this research of the aims to investigate the relationship between T&D and organizational commitment and examine the mediator role of job satisfaction in private companies in Mongolia.
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Purpose of the Study
In recent years, T&D and organizational commitment as well as job satisfaction are significant within every companies and private sector in Mongolia. Firstly, this study’s purposes to explore the relationship between T&D and organizational commitment, and secondly, explore the mediator effect of job satisfaction between T&D and organizational commitment in private companies in Mongolia. Thus, the study results might provide the perception of those variables influence and also deliver the practical implementation of T&D in private companies in Mongolia.
Additionally, findings will reveal the influence of T&D within organizational commitment and mediating effect of job satisfaction between T&D and organizational commitment also relationship of these independent, dependent, mediating variables within private companies in Mongolia.
Research Questions
According to the research purpose, the following research questions are formulated:
1. Do T&D have a significant relationship with organizational commitment in the Mongolian private service companies?
2. Do T&D have a significant relationship with job satisfaction in the Mongolian private service companies?
3. Job satisfaction have a significant relationship with organizational commitment in the Mongolian private service companies?
4. Whether the job satisfaction play a role as mediator in the T&D and organizational commitment in the Mongolian private service companies?
Significances of the Study
This research will contribute to a better understanding private sectors perception of T&D and organizational commitment also their job satisfaction in the company. According to Swerdlow and Cummings (2000), T&D and organizational commitment have been conducted in organizations and private corporations. Hence, the objectives of this study are providing the details about the real situation of the Mongolian private companies T&D, job satisfaction, organizational commitment and also, to provide them with some weaknesses among their practices. Generally, this research will give them perception of the influence of T&D with organizational commitment
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and influence of job satisfaction within that two relationship. Lastly, this study can be one of the primary studies designed for the offering to the HR fields in Mongolia.
Delimitation of the Study
Firstly, this study focused on the investigation the relationship of training and development, organizational commitment and job satisfaction private service companies in Mongolia only.
Secondly, this study focused on private service companies in Mongolia, therefore the results may not be generalized to other private service companies and other countries sector. Additionally, this study used the survey for collecting the data from private service companies’ full-time employees in Mongolia.
Definition of the Key Terms
In this section, the research provides the definitions of the key terms and items of this research. The operational definitions outline how the variables are measured and theoretical definition outline the concept of the constructs. The three main constructs investigated in this study include T&D job satisfaction and organizational commitment as described below:
Training and Development
T&D is the plan and systematic approach to employee improving and learning to the acquisition of new specific knowledge or skills for the purposes of personal growths (Aguinis &
Kraiger, 2009). This research focuses at T&D as support and benefits employee received to developed their knowledge, skills and ability that leads to job satisfaction, and organizational commitment. This independent variable measured by adopting Bartlett (2001). This independent variable includes three dimensions there are training motivation, perceived support of training from co-workers, and benefits of training by adopted (Noe & Schmitt, 1986; Noe & Wilk, 1993;
Tharenou & Conroy, 1994).
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Organizational Commitment
“Organizational commitment can be defined generally as a psychological link between the employee and his or her organization that makes it less likely that the employee will voluntarily leave the organizationǁ” (Allen & Meyer, 1996, p. 252). This dependent variable measured using by Meyer and Allen (1990). This measure includes three dimensions there are affective, normative and continuance commitment.
Job Satisfaction
Employee Job Satisfaction refers to the “positive feelings employees have for their work in relation to previous, current experiences or available alternatives (Stanton et al., 2002). The researcher measured employee job satisfaction as a mediating variable. This Job Satisfaction variable measured by adopting 15 items of Job Diagnostic Survey (JDS) developed by Hackman and Oldham (1976).
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