Performance and Guanxi Effect on Job Security to Reduce Turnover Intention in Saudi Arabia - Research Proposal Example

Organisations are often created with the aim of achieving its intended goals and objectives in the most effective and efficient manner. In order to do this, it has to ensure that it develops strategies and approaches that can motivate workers and ensure that it achieves its goals and objectives under minimum costs. Different places have various cultures that greatly influence an organization’s practices and other important management functions. Employee performance practices are important in the process of ensuring that all its workers effectively discharge their duties and responsibilities for the success of the organisation. Every organisations wants to achieve maximum results from its processes, to do this it has to ensure that its workers are effectively motivated and the resources needed for the organisations practices and work functions are availed. The aim of this paper is to examine effects of performance and Guanxi effect on job security to reduce turnover intention in Saudi Arabia. The research tries to show the relationship between Guanxi and turnover intentions of the workers in the Saudi Arabian private employment sector that has been controversial for a long time. A writing audit of hierarchical duty and worker turnover gives the premise to the exploration model and speculations. A self-directed survey was utilized, including 350 respondents from heading private associations of Saudi Arabia to gather information and testing the current hypothesis. The research was constrained to private association in Saudi Arabia. It may not be suitable to sum up the discoveries crosswise over different population samples or settings. In any case, the specimen can be seen as a representative case common in different associations in the same business. The results give understanding into the effect of performance and Guanxi effect in the on the job security of the Saudi and foreign workers in a particular private part of Saudi Arabia, which may benefit directors and strategy implementers of the concerned associations and mostly for the entire segment. CHAPTER ONE 1.0 Background of the Study Saudi Arabia is over-reliant on migrant and expatriate labor, while their citizens are unemployed. The education system is undergoing fundamental development, with a very much imbalance in hiring women. The most unfortunate sector suffering from lack of Saudi nationals is the private sector as highlighted by Looney (2004) and Rice (2004). The businesses in the private segment have been experiencing difficulties in retaining their national Saudi once they are trained. The non-governmental organizations have been giving low wages than the public organizations and despite the employees working for a longer time, not forgetting the benefits reaped from the public firms where above 60 percent of the work force is hired. Private sector companies are forced to hire Saudi employees to meet Saudization quota (Charles, 2005). Private sectors prefer to higher expatriate workers to the native citizens because the expatriates will demand less wages since the main objective of these firms is to maximize their profit margins. However, the nationals, although well educated, they are not well trained. The country is in great need to Saudize their workforce because of the social drawback that exist because of diverse cultural heritages shared between the foreigners and the native citizens and above all thefright of the rapidimmigration of foreigners (Hay Group Research, 2010). When the Saudi government enacts the laws enforcing the firms to employ the native citizens, the country will stop relying on the expatriates to work in these firms (Adel & Syed, 2005; Al-Kahtani, 2002). Since the country is developing economically, the need for experienced workforce is rising and this calls for the native citizens to embrace the situation. The government is providing jobs, without building on the local employee skills through training. Regrettably, Pew Research Center (2011) highlighted that the native citizens find themselves in hard circumstances where they have to compete for the limited employment opportunities with the foreigners. The fundamental educational system of Whabbi schools where the curriculum is strictly delivering the fundamentalist view of Islam and far away from involving their generations in creating their own thoughts about competition in a global marketplace enhances the economy away from dependence on the oil industry. Saudi students are notencouraged to join classes and courses that develop technical competencies (Khan, 1990; Glazer, Daniel, & Short, 2004) since they rely a lot on religious education.The most prosperous firms in the private sector have to hire native citizens meaning that they have to sacrificein terms of profitability due to the cost of training and high wages. However, the owners of the firms alleged that they lose a lot in terms of efficiency, performance,and competition in the market when training the new employees.The private firms also argue that not only do the expatriates costless;they also bring quality to their work (Fakeeh, 2009; Smith, 1996). The paper seeks to answer the research questions trying to focus the impacts of Guanxi inside the LMX approach on workers turnover. The paper will proceed onward to inspect the joint effect of performance and Guanxi on representative turnover while mulling over the basic achievement elements of representatives conclusion and their turnover plans inside the more extensive schema of Guanxi based LMX approach. In addition, this study looks to focus the impact of performance on LMX methodology and worker turnover. LMX accents the separated relationship that exists between a pioneer and his subsidiaryworkers (Martin et al., 1999). 1.1 Statement of the Problem Saudi Arabia mines and supplies a significant share of oil in the market since it has the biggest oil fields on the planet. The Saudi government assumes a role in the nations financial advancement, but its role will be restricted in the wake of joining the World Trade Organization. This is the reason the part of Saudi associations in financialsectorare developing every year with the backing of a legislature that needs to expand its national revenues by swaying the private segment to invest vigorously in the Saudi economy. Additionally, Saudi Arabia is rebuilding its economy to adjust to new patterns in the worldwide commercial center. Associations that contend all around intend to increase an expansive piece of the pie. However, it relies on upon less worker turnover and more dedication, which is connected with diligent work and profitability (Al-Kahtani, 2002). In Saudi associations, it is exceptionally noteworthy to keep an eye on representative turnover for both public and private divisions. In the private sector, compensation and benefits are high yet the security of occupation is less. Regardless of the expanded determination of the Saudi Arabian government to submit the private part to Saudization, holders and supervisors of some Saudi organizations hold negative demeanor against the recruitment of Saudi nationals who are hunting down occupations. They accept that Saudis are not serious or are not dedicated to Saudi organizations (Al-Kahtani, 2002; Noe, 2002). Saudization plans obliges that the legislature and private organizations enlist Saudi nationals set up of remote laborers through quantity framework and force limitations on the recruitment of outside specialists (Looney, 2004). Achoui and Mansour (2007) directed a study on worker turnover in Saudi organizations affirmed that the turnover rate in the Saudi business sector is high particularly in the private segment. The approach of Saudization or "restriction" drives numerous organizations to attain the obliged rate of Saudization by the Saudi government. Hence, privately owned businesses contend on a set number of Saudi qualified workers in the business sector. Besides, the financial/market improvement in the private segment drive privately owned businesses to draw in more qualified Saudis on the cost of other organizations. These components had helped fundamentally to overcome the turnover issue in the Kingdom. Pakkiasamy (2004) notes that little and medium-sized entrepreneurs, for whom authorization of Saudization was not strictly connected.Because of these reasons rate of workerturnover in private areas are higher than in the public sector of the country. A few analysts investigated Saudi associations, but little research exists in the idea of worker turnover and its causes. Turnover rate likewise changes from assembling to administration sections (Gopalakrishnan, 2002; Bhuian, & Al-Jabri, 1996). Literary research on the representative turnover in Saudi association is restricted so far. The bosses and entrepreneurs do not concentrate on this basic issue. They have little thought regarding how damaging the impact of turnover is in the progress of their associations. 1.2 Justification The research explores the significance of performance and Guanxi as a vital catalyst of low rates of turnover of employees among the private organizations in Saudi Arabia. Therefore, the studyresult wouldturn to beexceedinglyrelevant in analyzing the diverseinterrelating aspects of cultural exchange that could be applied LMX technique of companies’ leadership for controllingworkers’ turnover intentions. The research findings would also push future investigations on the diverse significance of Guanxi and multi-dimensional aspects of LMX strategy in the Saudi Arabian private firms that are focused on retaining their workers. 1.3 Research Questions 1.3.1 Main Research Question Does Guanxi and performance have an effect on job security to reduce turnover intentions of Saudi and foreign employees? 1.3.2 Further research questions a. Does Saudi employees’ performance have a negative effect on turnover intention based on the LMX approach? b. Does the job security reduce the employees’ intention to resign based on LMX approach? c. What is the effect of the Guanxi on the sense of job security based on the LMX approach? d. In which way Guanxi can play a role to increase performance of Saudi employeebased on the LMX approach? e. How the job security can affect the turnover intention of Saudi workersbased on the LMX approach? f. Does Guanxi and performance affect the Saudi employees more than the foreignersbased on the LMX approach? Hypotheses: a. H1-Saudi employees performance has negative effect on turnover intention b. H2- Guanxi has negative effect on turnover intention c. H3- Guanxi has positive effect on job security d. H4- Job security has negative effect on turnover intention e. H5- The relationship between Guanxi and job security will be strengthener when employee is Saudis rather than foreigners.(P+JC+F)VS(P+JC+S) f. H6-The relationship between performance and job security will be strengthener when employee is foreigner rather than Saudis.(G+JC+F)VS(G+JC+S)P=Performance, JC= Job Security, F= Foreigner, S= Saudi, G= Guanxi CHAPTER TWO 2.0 LITERATURE REVIEW Workers who leave on the associations solicitation and additionally the individuals who leave jobs on their own wills can lead to interruptions in operations, work group elements and unit execution. Both sorts of the turnover are not good because they make the associations to incur costs. If an association has made critical interest in nurturing its workers, that venture is lost when a worker leaves (Mello, 2011). Notwithstanding over the top representative turnover can harm the general benefit of a firm and is regularly an indication of different troubles. Each association tries hard to gainsuperior benefits, lesser levels of turnovers, and greatest output. Overseeing turnover effectively is important to attain the above objectives. Abassi and Hollman (2000) focused on that the chiefs must perceive workers as significant contributors to the productive accomplishment of the associations prosperity. Moreover, exceptionally energetic and performing people are the urgent elements of the hierarchical benefit. In this manner, it is necessary to create a careful understanding of the worker turnover from the viewpoint of reasons, impact and systems to minimize turnover (Humphrey, Nahrgang & Morgeson, 2007). To a degree, employment fulfillment is an impression of how well a workers’ desires of an occupation are adjusted to the truth of their work (Lund, 2003). Workers evaluate work fulfillment focused around inborn employment components, for example, sentiments of reason at work, and outward occupation components, for example, payment. The level of workers occupation fulfillment reflects the combined level of satisfied employment desires. That is, representatives anticipate that their employment will give a mix of these components, for which every worker has different particular qualities. While the reach and imperativeness of these inclinations fluctuate crosswise over employees, when the collection of unsatisfied desires achieves a basic edge there is less employment fulfillment and more noteworthy probability of disappointed workers, which brings about more prominent worker turnover. Performance and Guanxi have been distinguished imperative parts of authoritative employer stability and it is helpful in clarifying the ways associations work (Silverthorne, 2004; Bian, 1994). There exists an accord with respect to the presence of "Guanxi" in every association, despite the fact that, the idea of Guanxi hints a certain level of imprecision and it is hard to discover a measure of understanding (Schrodt, 2002; Schein, 1990). Authoritative therapist, Edgar Schein (1996); Ping and Xi(2014)stated that a Guanxi is an element of essential implicit suspicions about how the world is and should be that a gathering of individuals offer and that decides their observations, musings, sentiments, and to some degree, their obvious conduct. Organizational Guanxi is the qualities, convictions and standards underpinning an associations administration structure, and additionally the traditions, and behaviors that demonstrate and fortify those fundamental standards (Adkins & Caldwell, 2004; Lee & Yu, 2004). Guanxi and performance are demonstrated through an associations inward and outside correspondence, method, choice making, and day-by-day activities.On the other hand, the LMX hypothesis is utilized to demonstrate relationship quality in between of bosses and subordinate staff. A unique gimmick of this methodology to authority is its aim on the dyadic level of administration. As opposed to considering a pioneer as having one set style, LMX hypothesis recommends that pioneer structure-interesting associations with each of their subordinates, thus high LMX workers get more prominent development opportunities (Graen & Scandura, 1987; Cropanzano & Mitchell, 2005) and larger amounts of backing. 2.1 Conceptual Framework A conceptual framework is an expository apparatus with a few varieties and settings. It is utilized to make reasonable refinements and arrange thoughts. Solid calculated systems catch something true and do this in a manner that is not difficult to recollect and apply. The framework shows the effect of performance and Guanxi on the job security of the Saudi nationals versus the foreigners, and shows that the job security affects the turnover intention. CHAPTER THREE STUDY METHODOLOGY 3.0 Research Locale The research will be carried out in Saudi Arabia, among the private group organizations, especially in the financial sector, food processing, healthcare, and communication, which were affected by high rates of turnover in the country. 3.1 Research Approach and Design The research will use the data from the analysis of industriesin the chosen firms in Saudi Arabia.Quantitative method will be appropriate to apply since it will enable observation and collection of data significant to the study in depth. The quantitative technique will depend on the hypotheses and both random sampling and structured techniques of data collection will be applicable in this study. To give out good results the respondents will be subject to various aspects of treatments based on the research questions and the formulated hypotheses. A qualitative technique will be applied to gather primary information for illustrating sample population that would be analyzed physically.The qualitative techniques that will be applicable are open-ended questionnaires, in-depth inter views and direct observations. Through close contact with the exploration field being referred to for a delayed period, the analyst will create a significant comprehension and (as asserted for grounded hypothesis studies) gets to be ready to plan a theoretically rich hypothesis clarifying the wonder under scrutiny. 3.2 Population Target The target population from which the study will be conducted is private sector and specifically in the private hospitals, banks, nongovernmental insurance companies, and telecommunication companies. The firms were selected because they form a considerable share of private sectors in Saudi Arabia. 3.3 Sample size Organizations’ representatives to be used as respondents willbe picked randomly from the companies of choice.A purposive method of samplingwill be applied to give the appropriate size of the sample population of the respondents to be used in the study, as is it deemed to be the most appropriate technique. Three hundred and fifty respondents will be chosen at random from five different firms,namely; private hospitals, banks, nongovernmental insurance companies,and telecommunication companies all from the private segmentin Saudi Arabia. 3.4 Instruments of data collection The data will be collected using questionnaires and private interviews. The questionnaireswill be issued to different private sectors from different regions in Saudi Arabia, depending on the accessibility and the convenience of accessing the information from these firms. The data will be collected from private the selected private firms such as the banking sector, healthcare and manufacturing industries. Questionnaires will be distributed randomly to the respondents in the various selected companies. On the other hand, structured and unstructured interviews will be conductedin all the companies that were selected and both the employers and the employees participated in the interviews. Additionally, the researcher will do direct observation of the workers performance and figure out the effects of Guanxi on their performance. In the rigid questionnaires and interviews the answers will be yes or no or the level of agreement and disagreement on a certain opinion. For the open ended questionnaires respondents will be allowed to give their own opinions and comments. 3.5 Data analysis and presentation After collecting the quantitative data, it is stored in the spreadsheets ready for the analysis. Some of the techniques that will be used to analyze the quantitative data are SPSS, MANOVA, and ANOVA among other techniques that will be applied in the analysis of the collected information. The methods applied in analyzing the qualitative data will be the programs such as Nvivo, comments of the respondents, and assumptions among others. The analysis method will be significant in evaluating the influence of continuous dependent variables of the collected data and demonstrate its degree of correctness. Additionally, the modes of presentation of the analyzed data that will be deemed reliable are application of graph, pie charts and tables. Moreover, qualitative data will be represented in form of photographs and videos. 3.6 Significance of the study The study would be exceptionally noteworthy for private area in Saudi Arabia, as it would address the high turnover of workers in the distinctive associations of the private segment. The nation needs to include its citizens in the improvement forms to eliminate the cases of unemployment. Saudi Arabia is experiencing quick change in most noteworthy ranges of the economy and service deliverysectors like healthcare, education, transport, environment, and base improvement. The low rate of indigenousworkforce in the private segment is of concern to the Saudi Arabia government. Notwithstanding the Saudi government plan, which has guaranteed vocation for Saudi nationals, there has been developing issues in workers turnover ascribed to absence of responsibility, lack of competencies and skills (Witt, Kacmar,& Andrews, 2001). Associations are looking for approaches to improve worker potential and thus reduce the rate of workers turnover. This study is intent on helping associations understand their workers maximum capacity and reduce their turnover for the benefit of the associations. Lee (2008) attests that the LMX theory is a basic component that has a considerable effect on the worker duty and their turnover. The study takes a gander at the different combos of variables went for enhancing the pioneers and laborers effectiveness and adequacy thus specifically affecting representative turnover. Through the result of this exploration, the Saudi Arabia government and private associations will have activities to execute with a specific end goal to guarantee that Saudi nationals are positively included in the economic progress of their nation. 3.7 Theoretical Framework This study utilizes social trade hypothesis to examine the association between nature of LMX, execution, and Guanxi. Social exchange hypothesis (LMX) has been the essential skeleton for comprehension execution of an association (Konovsky& Pugh, 1994; Organ, 1988; Smith et al., 1983). Individuals dependably look to respond the individuals who profit them (Adams, 1965; Blau, 1964) to respond the backing from the association; the worker may do so through employment execution. However, such execution may be constrained up to a certain degree since associations have strict contracts. In this way, the exchange that happens will be a greater amount of vagueness along these lines permitting optional acts to be done by the workers. Additionally, Guanxi, from a social exchange hypothesis viewpoint, turns into an outlet for these positive sentiments. At the point when a director participates in helping a worker, the worker reimburses the manager with high performance. Social exchange connections have a verifiable comprehension that a history of additional role endeavors will gradually be perceived, acknowledged, and compensated. Besides, Guanxi has an immediate impact on the LMX inside an association in authoritative relations as mentioned by Andrew et al. (2006). Nonetheless, not at all like the conventional Guanxi, modernized Guanxi, in sync with the contemporary patterns in industrialization and modernization has been emphasizing the imperativeness of interpersonal organizations created from the expatriate group and the social contraction in Saudi Arabia as stated by Fock and Woo (1998). 3.8 Limitations of the study In view of the qualitative strategy for study, the specialist discovered that there is deficient study done on the research subject. Overall, the study will depend on the little data that is accessible and the research cases to be conducted. In addition, some data needed for this study is classified and paramount in the business plans of associations. Thus, it may be difficult to get to such data for the apprehension of exposure to contenders. 3.9 Reliability and validity 3.9.1 Reliability Polit et al. (2001) highlighted that information dependability alludes to the level of consistency of an instrument in measuring the credit it was intended to measure. The survey replied by the respondents in the recognized firms, uncovered consistency in the reactions. Unwavering quality will be guaranteed through minimizing conceivable wellsprings of estimation mistake, for example, information gathered predisposition. Information collector predisposition can be minimized by having one analyst distributing the questionnaires and through institutionalizing conditions like guaranteeing unprejudiced individual characteristics to all respondents such as kind disposition and protection. The psychological and physical surroundings where information will be gathered ought to be made private, ensure privacy and general physical solace. Subjects will be asked not to reveal their names or any ID on the polls to ensure secrecy. Extra data for utilization in the exploration will be acquired from semi-organized interviews of the selected population of workers and administrators from the chosen firms in the chosen commercial ventures. 3.9.2 Validity To attain the legitimacy of the data collected, the inquiries pollswill be inferred from data accumulated in the writing audit to guarantee they are right illustrative of what private associations thought about with respect to representative turnover. The quantity of respondents who declined to take part after being approached will be accounted for to empower a judgment of dangers to outside legitimacy. 3.10. Ethical consideration When conducting research in a certain society, ethical consideration is very important because the research has to assure the respondents privacy and trust. Saudi Arabian people to a high degree respect their cultural heritages, with the largest population being Muslims and the state has a monarchical government. Therefore, the necessity to support the freedom of privacy of the research participants, promote discretion, and trust development is vital to acquire data that has a high standard of accuracy. The participants of the research will be allowed to know how the details collected from the field will be used in the study. A form that has been approved by the authority will be applied to provide security to the respondents and the privacy of the information acquired from them. 5.0 References Abassi, S. M., & Hollman, K.W. (2000). Turnover: The real bottom line. Public Personnel Management, 2(3), Pp. 333-342. Achoui, M., & Mansour, M. (2007).Employee Turnover and Retention Strategies: Evidence from Saudi Companies. International Review of Business Research Papers, 3(3), 1-16. Adams, J.S. (1965). Inequity in social exchange.In L. Berkowitz (Eds).Advances in Experimental Social Psychology, 2(pp. 267-299). New York: Academic Press. Adel, S. Al. D.,& Syed, M. R. (2005). 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