THE INFLUENCE OF ORGANIZATIONAL COMMITMENT, TEAM COMMITMENT, AND THE FINANCIAL SITUATION ON THE RETIREMENT
DECISION: AN EMPIRICAL STUDY ON CIVIL SERVANTS IN THE NETHERLANDS
Master thesis, MscBA, specialization Human Resource Management University of Groningen, Faculty of Management and Organization
March 7, 2011 EDDY WICHEMS Studentnumber: 1480790
Berkelstraat 2 9725 GX Groningen Tel: +31 (0)6 25 01 51 45 Email: eddy_wichems@hotmail.com
Supervisor/ university:
N. Manheim L.B. Mulder Supervisor/ field of study
W. Schans
Local government of Emmen
Acknowledgement: I would like to thank Nele Manheim for helping me start up this thesis. I thank Laetitia Mulder for her help while writing the results section and
discussion.
ABSTRACT
This study investigated the relationship between organizational (affective and normative) commitment, team commitment and the early retirement decision. Also the financial situation was examined for its role as an independent variable, as well as a moderator on the relationships between the three kinds of commitment and the decision whether to retire early or not. A sample of 131 54- to 62-year-old Dutch civil servants working at the local government of Emmen were used. Linear regression indicated that team commitment, normative organizational commitment and the expected financial resources were good predictors of early retirement. Only for normative commitment there was a surprising positive relationship to be found, where a negative one was expected. A marginal relationship surfaced for the moderating role of the expected financial resources on the relationship between normative commitment and the retirement decision. Implications of these findings and directions for future research are discussed.
INTRODUCTION
The employees’ decision whether to retire early or not, and why they decide so, is a question that has become an enduring topic of interest in the last decades. This is because the number of people that decide to retire early has been increasing (Beehr, 1986). Moreover, the CBS Statline (2007) provided evidence that, since 1996, the people who were actively employed between 55 and 64 almost doubled, up to 47%.
So, more people in eligible ages for retirement are actively employed, and consequentially, more employees are reaching their retirement age in the near future.
For employers, it is important to know more about the reasons of why people retire early, or decide to work until retiring age. Firstly, this is because during the last decades it has been quite common that employees leave the labour force before the mandatory retirement age of 65 (Henkens & Tazelaar, 1997). Secondly, for personnel planning it is important to gain insight into the extent to which the intentions of employees are regarding retirement (Henkens & Tazelaar, 1997). Thirdly, employers can develop more effective retirement-planning programs due to an understanding of the factors that concern retirees (Taylor & Shore, 1995).
The existing literature about what reasons significantly influence an employee to come to his or her retirement decision is, traditionally, examining the impact of individual-difference variables like demographic status, socio-economic status, and health status on a person’s decision to retire (Beehr, 1986; Pollman & Johnson, 1979;
Schmitt & McCune, 1981). The personal characteristics such as gender, age, and education have been argued to influence the decision to retire. Reasons for older workers to continue to work instead of early retirement are, according to Higgs, Mein, Ferrie, Hyde, & Nazroo (2003), financial reasons, the work itself, or their traditional work ethic. Some research studied factors including the influence of financial- economic context, health, perceived social network support, and social-normative context (Henkens & Tazelaar, 1997; Talaga & Beehr, 1989). A huge body of studies, traditionally, focus mostly on the financial situation and health as the two important determinants to influence the retirement decision. Wealth and health show the most consistent relationships with the decision to retire (Barnes-Farrell, 2003; Beehr, 1986;
Schultz & Taylor, 2001). More specific, people with insufficient health and sufficient wealth are more likely to retire early.
It appears that early retirement often not occurs for one reason solely. Usually, several variables interact to influence the decision to retire early. This suggests a need for more comprehensive models of the retirement process that examine a larger set of variables and their interactions (Henretta, 1997; Henretta, Chan, & O’Rand, 1992).
Also there is not much existing literature that examines the moderating role of the financial situation on other determinants, let alone on the organizational and team commitment. Finally, most studies examining the determinants for the retirement decision were conducted in the United States, only a few in the Netherlands (Henkens
& Tazelaar, 1997).
With all the focus on health, wealth and demographic factors, other determinants received much less attention. Two of these are organizational commitment and team commitment. The influence of team commitment on the retirement decision has not been discussed in the existing literature. However, people with high team commitment have a tendency to put in just that little bit extra for the good of the team (Van der Vegt, Van de Vliert & Oosterhof, 2003), and being part of good working team could mean that they do not want to retire early. Organizational commitment on the other hand has been discussed, and there is little evidence that organizational commitment is negatively related to retirement intentions (Adams &
Beehr, 1998; Adams, Prescher, Beehr & Lespito, 2002). Organizational commitment is added here, because a high organizational commitment makes an employee work longer for the same organization than someone who has a low organizational commitment (Hom, Katerberg, & Hulin, 1979; Rusbult & Farrell, 1983; Werbel &
Gould, 1984). Also ones loyalty increases with a high organizational commitment (Kanter, 1972; O’reilly & Caldwell, 1980) and it is therefore assumed that loyalty could decrease early exit.
The financial situation is traditionally a very important and influential determinant for employees to consider early retirement or working until the mandatory retirement age of 65, and therefore included in this paper. It is interesting to see if the same results will be concluded from this study. More importantly, because of the abovementioned importance of interaction in the model examining the retirement decision, the financial situation is also included in this paper to examine the moderating role on the relationships between organizational and team commitment on the decision whether to retire early or not.
CONCEPTUAL BACKGROUND AND HYPOTHESES
Retirement is defined as the exit from an organizational position or career path of considerable duration, taken by individuals after middle age, and taken with the intention of reduced psychological commitment to work thereafter (Feldman, 1994).
Retirement in the Netherlands almost always means the end of paid employment, and the popularity for early retirement is high (Henkens & Tazelaar, 1997). This paper uses the retirement intention as the dependent variable, instead of actual retirement.
According to Barness-Farrell (2003) and Beehr (1986) it is justified to focus on the retirement decision as a process at a theoretical level, instead of on the actual act of retirement. Moreover studies have demonstrated a strong consistency between retirement intentions and actual retirement behavior one and two years later (Henkens
& Tazelaar, 1994; Prothero & Beach, 1984) contributes to this method.
Commitment
Commitment in this paper is divided between organizational commitment and team commitment. First, to begin with organizational commitment, this study will use the definition of Meyer and Allen (1987). Their model has arguably received the greatest support, and it was subjected to the greatest empirical scrutiny (Meyer & Allen, 1997;
Meyer Stanley, Herscovitch & Topolnytsky, 2002). Allen and Meyer divide the organizational commitment concept into three distinct levels: affective commitment, continuance commitment, and normative commitment. A high affective commitment means that employees remain working at their organization because they want to.
Such a person feels comfortable in the organization, and has intrinsic incentives to continue to work. It is the emotional attachment to the organization, as well as the identification, and the involvement with the organization (Allen & Meyer, 1990).
Someone with high affective commitment has the desire to stay caused by, for example, personal characteristics, job characteristics, work experiences and structural characteristics (Mowday, Porter & Steers, 1982). Employees with high continuance commitment stay because they need to. A person with high continuance commitment has, for example, invested considerable time and energy mastering a job skill that cannot be transferred easily to other organizations. It is the perception of costs which are associated with leaving the company for another job. Finally, employees with
strong normative commitment stay, because they feel they ought to do so. Someone would have a strong normative commitment if significant others have been long-term employees of an organization and/or have stressed the importance of organizational loyalty.
Continuance commitment is left aside from now on in this paper, because retiring does not involve considering another job. Moreover, in their study Allen &
Meyer (1990) found that affective and normative commitment showed some overlap, but both were independent of continuance commitment. Therefore, only the concepts of affective and normative commitment are used to measure organizational commitment in relation to the retirement decision.
Consequences of organizational commitment are proximity seeking and long tenure (Hom, Katerberg, & Hulin, 1979; Rusbult & Farrell, 1983; Werbel & Gould, 1984), loyalty and expressions of affect (Kanter, 1972; O’reilly & Caldwell, 1980), motivation and involvement (Mowday et al., 1982; Scholl, 1981) and behaviors such as obedience and performance to policies of organizations (Angle & Perry, 1981;
Galanter, 1980). Felfe & Yan (2009) mention that organizational commitment causes employees to have more positive attitudes towards their jobs and are more likely to strengthen their effort to improve their performance for the organization, when compared to other employees showing less organizational commitment. They also mention consequences such as less turnover intentions and lower rates in absenteeism.
It has been argued, that over time, less committed employees tended to leave the organizations (Allen, Meyer & Smith, 1990). According to Meyer & Allen (1990), the belief in commitment will bind individuals to an organization, and therefore, will reduce the likelihood of turnover. Firstly, huge body of studies did found that affective organizational commitment was the best predictor of turnover intentions (Wasti, 2003; Meyer et al., 2002). Moreover, Meyer, Stanley, Herscovitch, &
Topolnytsky (2002) found that affective commitment has a very strong relation with turnover intentions and actual turnover. Recently, meta-analyses have confirmed earlier empirical research and their results in the field of commitment (Meyer et al., 2002; Cooper-Hakim & Viswesvaran 2005). Secondly, for the relationship between normative organizational commitment and the turnover intention, Snape and Redman (2003) found an inverse relationship between normative organizational commitment and thoughts of leaving an organization. Therefore, and assuming that retirement intentions could be compared with turnover intentions, this study hypothesizes that
the two mentioned forms of organizational commitment will reduce early retirement.
H1:
Both affective and normative organizational commitment are negatively related to early retirement.
Another form of commitment that may influence retirement is team commitment. Team commitment is defined as a personal, cognitive, emotional and behavioral bond between an individual and a team (Henry, Arrow & Carini, 1999). It is a type of social identification, which represents the ‘’ oneness’’ that a team member feels toward the whole team (Gundlach, Zivnuska & Stoner, 2006), and to which he or she identifies with the team (Lembke & Wilson, 1998).
A consequence of team commitment is the extent to which employees go above and beyond the call of duty to aid fellow workers and contribute to collective success, which is important for the functioning of work teams (Van der Vegt, Van de Vliert & Oosterhof, 2003). Another consequence of team commitment is that it determines whether people will be inclined to follow team norms and exert themselves on behalf of the team (Barreto & Ellemers, 2000; Haslam, 2001; Wegge &
Haslam, 2003). The higher the team commitment, the higher the extent to which employees are willing to aid their colleagues in the team. Important for team commitment is the success of the group, while members get more committed and identified on behalf of the success of the group, and also will contribute to the success of the group by providing extra effort. One can expect closer relationships with respect to group-related outcomes in comparison to criteria for the organizational level. The strived for behavior of going above and beyond the call of duty enhances team effectiveness, firstly, because it frees up resources so they can be used for more productive purposes, secondly, because it helps to coordinate activities within a team, and thirdly, it helps individuals to adapt more effectively to environmental changes (MacKenzie, Podsakoff, & Fetter, 1991; Podsakoff, MacKenzie, Paine, & Bacarach, 2000).
The commitment to the team can induce the willingness to not want to retire early and work until mandatory retirement age. People who are highly committed obviously feel at home and could feel the desire of not ‘deserting’ the team before the mandatory retirement age. Therefore, it is here hypothesized that members of a team
with high team commitment will have a higher probability to remain working until the mandatory retirement age, than workers with a lack of team commitment.
H 2:
Team commitment is negatively related with early retirement
Financial situation
Financial situation is about the financial resources that a person possesses on the moment he or she intends to retire. When people in the Netherlands choose to retire early, there are financial consequences. The received allowance after retirement will, on the one hand, increase when an employee has reached the age of 63 and, on the other hand, decrease when an employee decides to retire before that age. More specifically, the earlier the decision to retire, the lower the allowance received from the pension fund. It is important to not only look at the salary of the person, but also at other aspects of the financial situation of a person intending to retire in the near future. As is seen in the United States, more than half of the households are two wage earners, and the decision to retire is quite often made collaboratively (Clark, 1988;
Gratton & Haug, 1983). The salary of the spouse is also a factor that could take its part in the financial context of a person, and therefore in the decision making process (Henkens & Tazelaar, 1997).
The consequences of the financial situation are that people are more likely to retire when they expect to have sufficient financial resources when retired. In other words, older workers are less inclined to retire, when it means they face a major decline in their financial well-being (Feldman, 1988; Taylor & Shore, 1995). Kim &
Feldman (1998) confirm this finding, because they argue that the salary of employees is negatively related with the decision to retire early. Reviews of the literature on the predictors of retirement preferences, intentions, and behaviours conclude that wealth shows a consistent relationship with the decision to retire (Barnes-Farrell, 2003;
Beehr, 1986; Shultz & Taylor, 2001). This is mainly because employees who are high wage earners are more able to sustain their current standard of living, even after the decision to retire (Clark & McDermed, 1986; Fillenbaum, George & Balmore, 1985;
Ruhm, 1990a,b). So, assumed here is that only the people with enough financial resources can permit themselves to retire early.
H 3:
With a less restrictive financial situation, older employees will retire earlier than when the financial situation is difficult.
Financial situation as a moderator
The above reasoning suggests a negative relationship between both the organizational commitment and team commitment concepts on the retirement decision. However, because of the importance of the financial situation on the decision whether or not to retire early (Feldman, 1988, 1994; Higgs et al., 2003; Kim & Feldman, 1998) it is very possible that the financial situation moderates the influence of a low organizational and low team commitment on the decision to retire early. It is said that high organizational commitment causes people to work longer for the same organization and, therefore, people with low organizational commitment tend not to work longer (Hom, Katerberg & Hulin, 1979; Rusbult & Farrell, 1983; Werbel &
Gould, 1984). This paper assumes that high commitment causes people to work longer instead of retiring early. However, the financial situation may moderate this relationship, because a person who has low commitment to the organization and their team could have a restrictive financial situation. This would mean that this person is forced to work until mandatory retirement age, when he or she desires to retire early.
As mentioned, older workers are less inclined to retire, when it means they face a decline in their financial well-being (Feldman, 1988). Most people face a major declining financial well-being and therefore are forced to work until the mandatory retirement age to ensure as long as possible a salary instead of a much lower pension.
On the other hand, people with no restrictive financial situation have the choice to retire whenever they please. Those employees have the possibility, financially, to stop early if their commitment to the organization is very low. Therefore, it is assumed that commitment has an influence on the retirement decision, only when the financial situation is not restrictive. When the financial situation is restrictive, I expect the financial situation to be decisive. In this situation employees have no option other than to work until their mandatory retirement age.
H4:
When the financial situation is not restrictive, commitment will have a greater
negative relation with early retirement, than when the financial situation is restrictive
Figure 1 Conceptual model
Retirement decision
Financial- situation Normative
organizational commitment Team
commitment Affective organizational commitment
METHOD
Sample and Procedures
The sample in this empirical study represented 297 workers from the local government in Emmen (the Netherlands), ageing between 54 and 62. Questionnaires were sent, by mail, to these employees, with a letter explaining the reasons for this study, that participation was voluntary, and guaranteeing confidentiality of the procedure. Also a stamped envelope, preaddressed to the author, was attached, hoping to induce the participation of the potential respondents. One hundred and thirty one employees decided to return the questionnaire, so the response rate was 44,1%. Forty of the respondents were female (30,5%), and 91 respondents were male (69,5%).
There was one missing value in gender (0,7%). As of the 297 employees, 68,7% are male and 30,6% female, we can conclude that our sample is representative of the workforce in items of gender. In average, the mean age for the sample was 58,0 years (SD=2,5), and the mean tenure was 24,2 years (SD = 11,6).
Measures
The original questionnaire was prepared in English. However, a translation into Dutch was necessary, because the conventional language of residents in the Netherlands is Dutch. For the questionnaire I used several existing scales, all using a 7-point Likert scale (ranging from strongly disagree to strongly agree).
Intention to retire. The intention for early retirement was measured by one item developed by Gaillard & Desmette (2008) which reflect the intention to retire early or to reduce working hours. This item was ‘’ I expect to retire early or to reduce my working hours in the near future’’.
Financial situation. The financial situation was measured by asking the participants firstly, their monthly salary, and adding this figure with the salary that a possible spouse earns monthly. This part of the financial situation is defined as the ‘income’
part. Secondly, the ‘expected financial resources’ were measured using a four item scale by Gaillard & Desmette (2008) with items like ‘’Financially, I can afford to retire early’’ and ‘’ If I were to retire, I would have enough income’’ (α = 0.93).
Organizational commitment. Commitment was measured by using the eight item affective commitment scale by Allen & Meyer (1990) (α = 0.74), as well as their eight item normative commitment scale (α = 0.69). Example items for affective
commitment were ‘’ I would be very happy to spend the rest of my career with this organization’’ and ‘’ I do not feel like ‘part of the family’ at my organization’’.
Example items for normative organizational commitment were ‘’ I think that people these days move from company to company too often’’ and ‘’ I was taught to believe in the value of remaining loyal to one organization’’.
Team commitment. To measure team commitment I used a four item scale from Van der Vegt, Van der Vliert & Oosterhof (2003) who reformulated items from a previous study by Allen & Meyer (1990) about organizational commitment. The reformulation was from affective organizational commitment to affective team identification. The items I used were “I strongly identify with the other members of my work team,” “I would like to continue working with my team,” “I dislike being a member of this work team” (reversed), and “I feel emotionally attached to this work team” (α = 0.90).
Control variables. Because the spouses’ monthly salary was used in this paper I controlled for marital status in the tests. In addition, respondents were asked about their age, because age is correlated with the retirement decision, and also their gender was controlled for in this paper.
RESULTS
The purpose of this paper was to test the relationship between organizational commitment, team commitment, the financial situation and the early retirement intention of employees. Also the moderating role of the financial situation on the relationship between the forms of commitment and the retirement decision was tested.
The means, the standard deviations, and the Pearson correlations between the variables are presented in Table 1. In order to find out the relationships hypothesized in this study, I used the linear regression method. In this first step, I entered the control variables ‘Civil status, gender and age’. All variables had a nonsignificant relationship with the decision whether to retire early or not. Data shows that for civil status there was no relationship (B = .14, p = .71), for gender the relationship was moderately significant (B = .43, p = .08) and for age a nonsignificant relationship of B
= .05, p = .84 surfaced. The R2 for the control variables was .04.
In the second step the main effects of all predictors were examined and all together, including the control variables, they explained 49 % of the variance (R2 = .
49, ∆R2 = .046). Significant predictors for the intention to retire were team commitment (B = -.52, p < .01) and expected financial resources (B = 1.55, p < .01).
So, when a person is highly committed to his or her team, this person would be less likely to retire early. Also the expectation of having enough financial resources after retiring increases the intention to retire early. For affective organizational commitment there was no significant relationship (B = -.25, p = .20). For normative commitment a positive significant relationship was found (B = -.41, p = .04). Opposite to what was expected, this shows that high normative commitment increased people’s inclination to retire early. Income was not a significant predictor of early retirement (B = .07, p = .75). The expected financial resources on the other hand, did predict early retirement significantly: people who expected to have enough financial resources when they would retire, had the intention of retiring early.
In step three, the interactions between income and the three kinds of commitment were entered, along with the interactions between expected financial resources and the three kinds of commitment. This last block of predictors explained for 53% of the variance (R2 = . 53, ∆R2 = .03). The interactions between income and affective organizational commitment (B = .03, p = .93), normative commitment (B = - .15, p = .53), and team commitment (B = -.04, p = 0.88) were all nonsignificant.
The interactions between expected financial resources with affective commitment (B
= -.14, p = .49), and for team commitment (B = -.32, p = .16) were nonsignificant as well. However there was a marginal significant interaction between normative commitment and expected financial resources (B = .37, p = .09), and this relationship is visualized in Figure 2. It shows that people highly normative committed tend to be more likely to retire early than people with low normative commitment, but especially when expected financial resources are high rather than low.
DISCUSSION
In the past there has been considerable discussion about which factors do and which factors do not have a significant impact on the retirement decision. Most studies agree that the financial situation and the health of people have the biggest influence (Barnes-Farrell, 2003; Beehr, 1986; Schultz & Taylor, 2001). This study contributed to the existing literature, considering the role of several forms of commitment combined with the financial situation (both as an independent and a moderating role) as determinants for the retirement decision.
I first hypothesized that there would be a negative relationship between affective and normative organizational commitment on the one hand, and early retirement on the other hand. The results showed that there was no relationship between affective organizational commitment and early retirement, but that normative organizational commitment was positively related to early retirement. The positive relationship between normative commitment and the retirement decision was a surprising one, as a negative relation was hypothesized. Instead it was found that people with high normative commitment have a tendency to retire early. A possible explanation may be found in the Self-Determination Theory (SDT). The SDT holds the idea that an understanding of human motivation requires a consideration of innate psychological needs for autonomy, relatedness, and competence (Deci & Ryan, 2000). There is a distinction in this theory between autonomous and controlled motivation. Autonomous motivation involves behaving while experiencing full sense of volition of their actions, which means that people actually do what they want themselves. Controlled motivation, on the other hand, involves behaving in a way that is pressured or demanded by others towards a specific outcome, and therefore, perceived to be external to the self (Deci & Ryan, 2008). Controlled people experience the pressure to feel, think, or behave in a certain way (Deci & Ryan, 2008), and it is this pressure that could create the need to do just the opposite of what is expected. One could regard normative organizational commitment as a form of external regulation, because high normative committed people could feel they have to behave towards an outcome that is not entirely their own decision. Deci and Ryan (2000) concluded that all humans need to feel competent, autonomous, and related to others, and in the situation where people are stressed by significant others to work until mandatory retirement age they may feel that they have lost their autonomy to
decide whether or not to retire early. Thus, when people are extrinsically motivated in the abovementioned way, they have a tendency to do just the opposite of what they think is expected, which is retiring early.
The findings with regard to normative commitment are not in line with a study by Yao and Wang (2006) as their results did show people who were highly normative committed had weaker turnover intentions. They concluded that low normative commitment predicts ‘job hopping’ behavior. The difference between their results and the one in this thesis may be due to cultural differences. In China, a collectivistic culture exists in which group norms and teamwork are important. More importantly, this kind of culture emphasizes that the good of the group is more important than the individual advancement. In an individualistic culture like in the Netherlands, however, personal rights and freedoms are higher valued (Yao & Wang, 2006). In such cultures, the self is the ultimate purpose, and the individual’s own thoughts, rather than by reference to others, organizes behavior (Markus & Kitayama, 1991).
The opinion of others has therefore much more significance in collectivistic cultures, as opposed to individualistic ones. Therefore, it could explain why in China people who are normative committed will remain at the company and in the Netherlands normative commitment would feel as a burden. Further research on this matter could give more clarity in this.
Secondly, I hypothesized that people with high team commitment would have a tendency to stay until mandatory retirement age. For this hypothesis significant support was found. So, people highly committed to their teams have a tendency to work until retirement age. A possible explanation is that when people have a good bond with their teams they are more satisfied with their job. As it has been suggested that the strongest predictor of intention to leave the organization is job satisfaction (Anton, 2009), high team commitment may affect the intention to work until mandatory retirement age through job satisfaction. However, another effective predictor of job satisfaction is affective organizational commitment (Mathieu & Zajac, 1990). Nevertheless, affective organizational commitment did not predict the intention of a person to retire early or not. It is possible that job satisfaction is more determined by team commitment, than by affective commitment. Employees often have more heart for their teams than for the organization as a whole. Team commitment is likely to be more related with the actual daily work, and therefore probably, will have a
more significant influence on the early retirement intention than organizational commitment. This may be an interesting topic for further research.
With regard to hypothesis three, that stated that a less restrictive financial situation will make older employees want to retire earlier than employees who do have a restrictive financial situation, I found mixed support. The income (the monthly salary added to the possible monthly wage of the spouse/ partner) was nonsignificant as a predictor of early retirement. However, the expected financial resources did predict the retirement decision. With regard to the finding on income this was consistent with the findings by Henkens & Tazelaar (1997) whose results showed only weak support for the financial-economic context as a predictor for early retirement. However, these conclusions are contrary to earlier work by Clark &
McDermed (1986), Feldman (1994), Fillenbaum et al. (1985), and Ruhm (1990a,b), as they argue that the height of salary does play a role in the decision. They argued that individuals with a higher wage are more likely to retire early than people with a lower wage. They explain that people with a higher wage are more capable to sustain the current standard of living after retiring early. An explanation for the different findings may be that the financial situation of a person depends on many more factors than just the salary, for example savings and pensions. It is very likely that these more factors also determine the expected financial resources. In the Netherlands, for example the amount of savings and the build up pension are also important. As mentioned in the introduction, most previous studies were conducted in the United States and the reason that these studies argue that wages play a significant role in the retirement decision could be due to the fact that some U.S. citizens receive a lower retirement pension. Citizens from the United States often save too little for their pension and also they often make bad decisions regarding their investment plans for their pension (Robeco, 2010). This means that salary plays a greater role in the United States than in the Netherlands, where pensions are arranged properly and people who had a ‘low’ salary all their lives can enjoy a proper retirement. So, in the Netherlands the financial situation after retirement depends less on the current salary a person receives, and therefore, it is logical that the expected financial resources was a reliable predictor of early retirement, and the current salary of a person was not.
Finally, the last hypothesis, where I reasoned that the financial situation moderates the hypothesized negative relationships between the two kinds of organizational commitment, and team commitment on the retirement decision,
showed on all occasions no significant relationships. So, you could say that the role of commitment did not depend on the financial situation, and that the expected financial situation and team commitment are two independent predictors. Thus, people with a restrictive financial situation are not constrained to work until mandatory retirement age when they have low commitment with the organization or the team. For these people being not committed to their work is still a reason to retire early, despite their non-optimal financial situation. However, it could be possible that in the used sample the deviation of salaries was not high enough, meaning that no respondent had such a
‘worse’ financial situation that he or she feels that there is no other option than to work until mandatory retirement age. Further research should use a data sample where the difference in financial situations is much higher.
However, the influence of normative commitment, although marginally significant, seemed to be moderated by the expected financial resources. So, the motivation to retire early as a result of higher normative commitment may to a lesser extent lead to actual intentions to retire early when people think they will have not enough financial resources. So, normative committed people expecting not to have enough financial resources will in fact stay until mandatory retirement age. Further research on the interaction between these variables could result in final conclusions, because in this study the interaction between normative commitment and expected financial resources is only marginal.
This study does have some limitations. Firstly, the expected financial resources’ scale was a measure composed by Gaillard and Desmette (2008) from other well-established studies. Secondly, the one-item scale that was used to measure the intention to retire early was originally a five-item scale from Gaillard & Desmette (2008). The reason to use only one item was that most other items in that scale had already the implication of the financial situation in them. Examples of the non used items were ‘I would like to retire early if I can afford to’, and, ‘I would like to reduce my working hours if I can afford to’. These items were unsuitable for this study, because in this study the financial situation had to be measured separately from the intention to retire early. Thirdly, early exit intention was measured rather than actual retirement behavior. This was justified because of the fact that existing research showed consistency between the intentional retirement age and the actual retirement age (Henkens & Tazelaar, 1994; Prothero & Beach, 1984).
Organizations in countries where people receive a decent pension, and where wage levels are comparable to the Netherlands should be aware of the fact that people with low team commitment will retire early, even when they expect to have little financial resources. In this situation a restrictive financial situation will not withhold people from retiring early. Organizations that have the desire to extend the working lives of their older personnel should pay attention to the levels of team and normative commitment in their organization, as these are both important determinants of the retirement decision. First, they should try to enhance the level of team commitment their employees experience, and second, they should try to decrease the level of normative commitment of their employees.
For organizations trying to hold their staff until the mandatory retirement age it is not useful to examine or enhance affective organizational commitment, because there was no relationship between affective commitment and the retirement decision.
This outcome was rather surprising, because historically, affective commitment was considered a strong predictor of turnover intentions. However, this study concludes that, although affective commitment is a useful predictor for withdrawal behaviour (Anton, 2009), it is not a predictor for early retirement. People should really feel committed for intrinsic reasons, and commitment in the direct working environment is, as is seen in this study, more relevant than the organization as a whole.
These conclusions are also relevant for governments, because of the ageing workforce and the governments’ intentions of extending the mandatory retirement age in to order to keep the pension funds financially viable. Currently, there’s a debate in the Netherlands about whether to extend the mandatory retirement age from 65 to 66 or even 67, in order to maintain the financial viability of the social security system in the future. The newest government has recently outlined their plan to extend the mandatory retirement age with one year up to 66 in 2020. The government is trying to reduce early exit to keep this age group in the labour force. The ‘problem’ with this policy is the law forcing some of the people who want to retire early, to continue to work until the (extended) legal retirement age. This could be detrimental for organizations, because the employees’ motivation and, causally, efficiency could decrease significantly (Gaillard & Desmette, 2008). After all, people who are forced into doing something they rather do not are not motivated, and if a person is not motivated, his or her labor productivity shall decrease. Future research should
examine the impact of extending the mandatory retirement age on employees’
behavior.
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Table 1
Group Construct Means, Standard Deviations, and Correlations Among Study Variables in Combined (Civil servants from the local government of Emmen) Sample= 131
Variable M SD 1 2 3 4 5 6 7 8 9 10
1. Age 57.83 2.34 —
2. Civil status 2.76 0.58 .13 —
3. Affective org. commitment 4.10 0.48 -.04 -.12 —
4. Normative org. commitment 3.41 0.93 -.01 .04 .20* —
5. Team commitment 5.30 0.77 .04 -.04 -.10 .19* —
6. Function pay 3026.95 842.98 .16 -.03 -.07 .32** -.06 —
7. Expected financial resources 3.50 1.84 .06 -.01 .43 .47 .13 .29** — 8. Income 4940.31 1687.10 .02 .11 -.15 .36** -.10 .57** .23* — 9. Retirement intention 4.32 1.60 .08 -.11 .04 .03 -.17 .04 .38** .06 —
10. Gender 1.7 .46 .11 .17 .00 .04 -.07 .34** .02 -.05 .10 —
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-taile
Table 2
Results of moderated linear Regression Analyses
The early retirement decision Variable
Step 1 Step 2 Step 3
Βeta Significance (p) Β. S. (p) Β. S. (p)
Step one: control
Age .05 .84 -.03 .86 -.05 .79
Civil statusa .14 .71 .58 .06 .53 .10
Genderb .43 .08 .38 .09 .42 .06
Step two: independent
Affective org. commitment -.25 .20 -.25 .23
Normative org. commitment .27 .16 .43 .04
Team commitment -.52 .00 -.57 .00
Expected financial resources 1.55 .00 1.60 .00
Income .07 .75 .13 .59
Step three: interaction terms
Income X Affective organizational commitment .03 .93
Income X Normative organizational commitment -.15 .53
Income X Team commitment -.03 .88
Expected financial resources X affective organizational commitment -.14 .49
Expected financial resources X normative organizational commitment .15 .09
Expected financial resources X team commitment -.32 .16
Note. Values are standardized regression coefficients. N =131 a1,15= married or living together with a spouse, 2= single b1= female, 2 = male
Figure 2
MANAGEMENT SAMENVATTING
De keuze van personeel om wel of niet vervroegd met pensioen te gaan is van alle tijden, maar omdat de babyboom generatie langzamerhand de pensioensgerechtigde leeftijd bereikt is het een zeer actueel en belangrijk onderwerp geworden. De overheid probeert het pensioenssysteem betaalbaar te houden door de AOW leeftijd te verhogen en het is daarom van belang om te zorgen dat mensen gemotiveerd blijven als ze langer moeten doorwerken. Bedrijven willen belangrijk personeel juist zo lang mogelijk aan het werk houden om de arbeidsproductiviteit op peil te houden. Maar hoe doe je dat? Er is veel onderzoek gedaan naar de redenen van mensen om wel of niet vervroegd met pensioen te gaan en traditioneel gezien spelen factoren als de financiële situatie en gezondheid de grootste rol in het besluit om wel of niet vervroegd uit te treden.
Er is echter nog maar weinig onderzoek gedaan naar de invloed van organisatie commitment (normatief en affectief) en team commitment, laat staan naar de invloed van de financiëlesituatie op de relatie tussen de vormen van commitment en de beslissing om wel of niet met vervroegd pensioen te gaan.
Affectieve organisatie commitment betekent dat een persoon bij de organisatie blijft werken, omdat hij of zij dat zelf graag wil en intrinsieke redenen heeft om dat te doen. Het is de emotionele gehechtheid aan de organisatie, alsmede de identificatie en de betrokkenheid met het bedrijf. Iemand met een hoge normatieve commitment blijft werken bij de organisatie, omdat hij of zij denkt dat het zo hoort. Belangrijke personen in het leven van deze personen hebben hetzelfde gedaan, of hebben het belang van loyaliteit naar het bedrijf onderstreept. Team commitment is gedefinieerd als een persoonlijke-, cognitieve-, emotionele- en gedragsconnectie tussen een persoon en een team. Het zorgt ervoor dat iemand net iets harder wil lopen en zodoende meer wil bijdragen aan het collectieve succes van het team.
In een studie bij een gemeentelijke organisatie is onderzoek gedaan om te kijken of deze vormen van commitment een significante rol spelen bij de beslissing om wel of niet vervroegd uit te treden. Bovendien is er gekeken naar de financiële situatie. De definitie van de financiële situatie in dit onderzoek is tweeledig. Ten eerste is er gekeken naar het huidige inkomen, opgeteld met het salaris van een eventuele partner. Ten tweede is de huidige perceptie van de verwachte financiële middelen ten tijde van uittreding gemeten.
Uit het onderzoek blijkt dat normatieve commitment, samen met team commitment en de verwachte financiële middelen, de meest geschikte factoren zijn om na te gaan of iemand wel of niet met vervroegd pensioen zal gaan. Personeel met een hoge team commitment zal langer doorwerken, maar ook de mensen die te weinig financiële middelen verwachten zullen niet vervroegd uittreden. Verrassend genoeg is het gebleken dat mensen met een hoge vorm van normatieve commitment de neiging hebben juist vervroegd met pensioen te gaan en bovendien is gebleken dat het huidige inkomen geen goede graadmeter is om erachter te komen of die persoon wel of niet vervroegd zal uittreden. De ‘Self-determination theory’ kan een verklaring zijn voor het feit dat mensen met een hoge normatieve commitment juist vervroegd met pensioen schijnen te gaan.
Mensen willen zelf bepalen hoe hun leven eruit ziet.
Voor organisaties die het belangrijk vinden om het personeel zo lang mogelijk te behouden is het van belang om de hoogte van team commitment te vergroten en juist de normatieve organisatiecommitment bij mensen te verlagen. Bedrijfsonderzoek naar de verwachte financiële situatie van mensen kan verder uitsluitsel verstrekken, betreffende de keuze van het personeel om vervroegd uit te treden of juist langer door te werken.
