THE RELATIONSHIP BETWEEN EMPLOYEE COMMITMENT AND ORGANIZATIONAL PERFORMANCE: A MODERATED MEDIATION ANALYSIS OF EMPLOYEE EXPERIENCE AND INNOVATIVE BEHAVIOR

Abstract

In the modern competitive and dynamic business world, the role of employee commitment as a source of performance and innovation is becoming a significant element of organizations. Nevertheless, previous studies have tended to consider commitment as a single construct and have not addressed the processes by which it affects the outcome. This research fills this gap by discussing the connection between employee commitment and organizational performance in terms of moderated mediation model where innovative behavior of employees is a mediator and employee experience is a moderator. Based on Allen and Meyer’s (1990) Three-Component Model, commitment is conceptualized as affective, continuance, and normative. Other theories that support the study include the Social Exchange Theory, the Resource-Based View and the AMO framework. A quantitative, cross-sectional design was used to collect data on 421 employees in the consumer goods industry of Sindh, Pakistan, and analyze with PLS-SEM. The results indicate that affective and normative commitment have a strong positive impact on innovative behavior, whereas continuance commitment has a lesser impact. Innovative behavior, in its turn, has a positive impact on organizational performance, and mediates the relation between commitment and performance. In addition, the influence of affective and normative commitment on innovation is enhanced by the employee experience, whereas continuance commitment is not. The research has a theoretical contribution in the form of the indirect and conditional character of the commitment-performance relationships. In practical terms, it implies that the organizations ought to encourage emotional and value-based commitment and use the experienced employees to facilitate innovation and attain sustainable performance.