Employee Value Added: Measuring Discretionary Effort and Its Value
to the Organization
Ray Aldag, UW – Madison Wayne Reschke, Center for
School of Business Organization Effectiveness, In.
The intent of this paper is to suggest a method for answering this question: Can
we measure the value employees add to the organization? We know they add value-
they make the work of the organization happen. But can we determine that value
beyond the simple exchange of pay for work? Productivity measures are not sufficient
for this purpose because they are so greatly influenced by systems, technology,
procedures and other factors beyond the individual employee’s control. What we are
after is the “voluntary” or “discretionary” effort made by employees. If this can be
captured, it would be one measure of employees’ added value to the work of the
organization. In addition, such a measure would enable businesses to assess the
effectiveness of the human resource and management policies and practices which are
intended to produce such effort from employees. We are building upon traditional
measures of satisfaction in an attempt to assess behavior that can readily translate into
“value” for the organization.
As long as there have been organizations, there have been efforts to measure
the human dimension of organizational performance. The need for such measures is
perhaps greater today. In the past, technology created competitive advantage. Now,
due to ease of access, technology is having an equalizing effect, leaving employees as
the key to competitive advantage. Most organizations will say “people are our greatest
asset.” Yet, as Peter Drucker observes, “few practice what they preach, let alone truly
believe it. Most still believe, though perhaps not consciously, what nineteenth-century
employers believed: people need us more than we need them.” (Drucker, 1995). In The
Loyalty Effect, Frederick Reichheld points out that companies know “what [their]
employees cost but not what they’re worth.” (Reichheld, 1996)
The notion of employee value added is intended to provide a richer and more
useful measure of the human side of a business than traditional measures, in order to
enable organizations to focus on employee worth. The concept parallels customer
satisfaction measurement in the following way:
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• Customer satisfaction is an important, but not sufficient, tool for
assessing customer perceived value and the factors influencing the
“buy” decision. Satisfaction is transitory and represents only one
factor in a customer decision. (Gale, 1994)
• Employee satisfaction is also important, but does not evaluate “value-
added” behaviors nor the “effort” decision – the choice employees
make to expend discretionary effort for the benefit of the company.
Measures are needed that go beyond employee feelings to employee
actions.
In order to assess such value-added behaviors, we draw from recent research in the
areas of organizational commitment and organizational citizenship behavior.
Organizational Commitment
Organizational commitment is defined as the strength of an individual’s
identification with, involvement in, and attachment to the organization. There appear to
be three primary dimensions or commitment, as follows:
Affective commitment: commitment due to positive emotions about the
organization.
Continuance commitment: commitment to the organization because of the
high perceived cost of leaving it.
Normative commitment: commitment because of an employee’s internalization
of organizational values and goals, and the associated sense of
obligation.
Key Findings: Commitment is strongly linked (in a mutually-reinforcing cycle) to
satisfaction with the organization. It is a predictor of the intent to leave the organization
and actual turnover. In addition, commitment and satisfaction each increase the
organizational citizenship behaviors described below. The three dimensions of
commitment, in turn, are influenced in different ways by many factors. For example,
affective commitment depends on job challenge, role clarity, management
receptiveness, peer cohesion, equity perceptions, feedback on performance, and
opportunities for participation (among many other things). Continuance commitment
depends primarily on skills, education, self-investment in the organization, vesting of
pension and other benefits, perceived alternatives, and costs of leaving (including
relocation costs). Normative commitment is influenced by socialization experiences at
work and by the organization’s norms related to commitment.
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Organizational Commitment Items: Much early work on commitment used the
Organizational Commitment Questionnaire (OCQ) (Mowday, Porter, & Steers, 1982).
The measure has acceptable psychometric properties but focuses almost exclusively on
just one dimension of commitment- affective commitment. The newer Allen & Meyer
measure, which has gained widespread acceptance, and use, taps all three of the key
dimensions as shown below (where (R) represents a reverse-scored item):
Affective Commitment
I would be very happy to spend the rest of my career with this organization.
I would enjoy discussing my organization with people outside it.
I really feel as if this organization’s problems are my own.
I think I could easily become as attached to another organization as I am to this
one (R).
I do not feel like ‘part of the family’ at my organization. (R)
I do not feel ‘emotionally attached’ to this organization. (R)
This organization has a great deal of personal meaning to me.
I do not feel a strong sense of belonging to my organization. (R)
Continuance Commitment
I’m not afraid of what might happen if I quit my job without having another one
lined up. (R)
It would be very hard for me to leave my organization right now, even if I wanted
to.
Too much in my life would be disrupted if I decided I wanted to leave my
organization now.
It wouldn’t be too costly for me to leave my organization now. (R)
Right now, staying with my organization is a matter of necessity as much as
desire.
I feel that I have too few options to consider leaving this organization.
One of the few serious consequences of leaving this organization would be the
scarcity of available alternatives.
One of the major reasons I continue to work for this organization is that leaving
would require considerable personal sacrifice – another organization may not
match the overall benefits I have here.
Normative Commitment
I think that people these days more from company to company too often.
I do not believe that a person must always be loyal to his or her organization (R)
Jumping from organization to organization does not seem at all unethical to me.
(R)
One of the major reasons I continue to work for this organization is that I believe
that loyalty is important and therefore feel a sense of moral obligation to
remain.
If I got another offer for a better job elsewhere I would not feel it was right to
leave my organization.
I was taught to believe in the value of remaining loyal to one organization.
Things were better in the days when people stayed with one organization for
most of their careers.
I do not think that wanting to be a ‘company many or woman’ is sensible
anymore. (R)
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A full understanding of employee commitment to the organization requires
assessment of each of the three primary dimensions or commitment. It is also
important, in order to demonstrate linkages with other variables such as organizational
citizenship behaviors (OCBs), to ensure that commitment items do not overlap with other
constructs.
Organizational Citizenship Behaviors
Organizational citizenship behaviors (OCBs) are individual contributions in the
workplace that go beyond role requirements and contractually rewarded job
achievements. This would include such behaviors as helping others, volunteering for
extra-job activities, and upholding workplace rules and procedures regardless of
personal inconvenience. These behaviors represent “employee value added” which is
not reflected in traditional, narrower performance measures. Also known as “good
citizenship behavior” and “good soldier syndrome,” organizational citizenship behavior is
one form of prosocial behavior (that is, social behavior that is positive, constructive, and
helpful).
Key Findings: While such traditional (or “in-role”) measures of performance as
productivity show very weak links to satisfaction and commitment, OCBs show
substantial relationships with (and appear to be caused by) satisfaction, commitment,
leader supportiveness, and perceived fairness (cf. Organ & Ryan, 1995). This may be
due in part to the fact that OCBs are less constrained by either individual ability or work-
process technology than are in-role performance indices. As such, satisfied, committed
employees may provide “value added” in the form of OCBs.
Organizational Citizenship Behavior Items. Several measures of OCBs have
been developed. The Morrison (1994) scale is a refinement of earlier measures and has
good psychometric properties. It assesses five sets of OCBs as follows:
Factor 1: Altruism – behaviors that help a specific other person.
Covering for co-workers who are absent or on break.
Helping others who have heavy workloads.
Helping orient new people even when not asked.
Helping others with work when they have been absent.
Giving time to help others with work-related problems.
Volunteering to do things without being asked.
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Factor 1: Altruism – behaviors that help a specific other person. Cont.
Helping people outside the department when they have problems.
Helping customers and visitors if they need assistance.
Factor 2: Conscientiousness – behaviors that go well beyond minimum
requirements in such areas as attendance, obeying rules, taking
breaks, and so forth.
Arriving early so you are ready to work when the shift begins.
Being punctual every day regardless of weather, traffic, etc.
Not spending time on personal telephone conversations.
Not spending time in non-work-related conversation.
Coming to work early if needed.
Not taking excess time off, even if you have extra sick days.
Factor 3: Sportsmanship – willingness to tolerate less-than-ideal
circumstances without complaining; refraining from activities such
as complaining and petty grievances.
Not finding fault with the organization.
Not complaining about things.
Not blowing problems out of proportion.
Factor 4: Involvement in organizational functions.
Attending voluntary functions that help the organization’s image.
Attending voluntary meetings considered important.
Helping organize departmental get-togethers.
Factor 5: Keeping informed about organizational events and changes.
Keeping up with changes and developments in the organization.
Reading and keeping up with organizational announcements.
Using judgment to assess what is best for the organization.
These measures provide a tool for assessing the employee “effort” decision
described earlier. They can be used as self-ratings as well as in ratings of others (e.g.,
managers rating their staff.)
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Recommendations
In order to assess employee value added, we suggest a combination of the following
tools:
1. Integration of commitment and citizenship questions into employee
surveys.
Enhance or implement employee surveys by including new, more focused
organizational commitment and organizational citizenship behavior questions.
From the items listed above, we have identified eleven that would provide
appropriate measures.
• Organizational commitment
- I do not feel ‘emotionally attached’ to this organization. (R)
- This organization has a great deal of personal meaning to me
- It would be very hard for me to leave my organization right
now, even if I wanted to.
- One of the major reasons I continue to work for this
organization is that leaving would require considerable
personal sacrifice – another organization may not match the
overall benefits I have here.
- I think that people these days move from company to company
too often.
- One of the major reasons I continue to work for this
organization is that I believe that loyalty is important and
therefore feel a sense of moral obligation to remain.
• Organizational citizenship behavior (OCBs)
- Helping others who have heavy workloads.
- Volunteering to do things without being asked.
- Coming to work early if needed.
- Not complaining about things.
- Keeping up with changes and developments in the
organization.
2. Periodic surveys of managers’ perceptions. On these same measures,
have managers rate their employees. This will provide a useful point of
comparison and an additional measure for tracking relationships between
data.
3. Turnover and absenteeism rates. These reflect specific behaviors that are
related to organizational commitment and OCBs. They can be compared
with industry norms and translated into costs/savings. In addition, these data
can be correlated to the opinion data to determine the relationships between
the softer measures and these hard measures.
4. Connections with other organizational productivity measures. Data from
past surveys and productivity records may show correlations between
measures that would further enhance the employee value added measure. If
relevant data are not available, the measures listed above can be compared
with productivity data over a few years to determine whether there are other
internal indicators of employee value added.
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Key References – Organizational Citizenship Behaviors
Bateman, T. S., & Organ, Dennis W. (1983). Job satisfaction and the good
soldier: The relationship between affect and employee “citizenship.”
Academy of Management Journal, 26, 587-595.
Brief, Arthur P., & Motowidlo, Steven J. (1986). Prosocial organizational
behavior. Academy of Management Review, 10, 710-725.
Dyne, Lynn V., Graham, Jill W., & Dienesch, R. M. (1994). Organizational
citizenship behavior: Construct redefinition, measurement, and
validation. Academy of Management Journal, 37, 765-802.
Moorman, Robert H. (1994). Relationship between organizational justice and
organizational citizenship behaviors: Do fairness perceptions influence
employee citizenship? Journal of Applied Psychology, 76, 845-855.
Morrison, Elizabeth Wolfe (1994). Role definitions and organizational citizenship
behavior: The importance of the employee’s perspective. Academy of
Management Journal, 37, 1543-1567.
Organ, Dennis W. (1977). A reappraisal and reinterpretation of the satisfaction
causes performance hypothesis. Academy of Management Review, 2,
46-53.
Organ, Dennis W. (1988). Organizational citizenship behavior: The good soldier
syndrome. Lexington, MA: Lexington Books.
Organ, Dennis W., & Konovsky M. (1989). Cognitive versus affective
determinants of organizational citizenship behavior. Journal of Applied
Psychology, 74, 157-164.
Organ, Dennis W., & Ryan, Katherine (1995). A meta-analytical review of
attitudinal and dispositional predictors of organizational citizenship
behavior. Personnel Psychology, 48, 775-802.
Podsakoff, Phillip M., & Mackenzie, Scott B. (1994). Organizational citizenship
behaviors and sales unit effectiveness. Journal of Marketing Research,
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Schanke, mel (1991). Organizational citizenship: A review, proposed model,
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Smith, C. A., Organ, Dennis W., & near, Janet P. (1983). Organizational
citizenship behavior: Its nature and antecedents. Journal of Applied
Psychology, 68, 653-663.
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Center for Organization Effectiveness, Inc. 1997
608/833-3332
Key References – Organizational Commitment
Allen, N. J. & Meyer, J. P. (1990). The measurement and antecedents of affective,
continuance, and normative commitment to the organization. Journal of
Occupational Psychology, 63, 1-18.
Brett, Joan F., Cron, William L., & Slocum, John W. (1995). Economic dependency on
work: A moderator of the relationship between organizational commitment and
performance. Academy of management Journal, 38, 262-271.
Cohen, Aaron (1993). Organizational commitment and turnover: A meta-analysis.
Academy of Management Journal, 38, 11470-1157.
Lahiry, Sugato (1994). Building commitment through organizational culture. Training
and Development, 48, 50-52.
Lee, Thomas W., Ashford, Susan J., & Walsh, James P. (1992). Commitment
propensity, organizational commitment, and voluntary turnover: A longitudinal
study of organizational entry processes. Journal of Management, 18, 15-32.
Leong, Stew M., & Randall, Donna M. & Cote, Joseph A. (1994). Exploring the
organizational commitment-performance linkage in marketing: A study of life
insurance salespeople. Journal of Business Research, 29, 57-63.
O’Reilly, Charles, & Chatman, Jennifer (1986). Organizational commitment and
psychological attachment: The effects of compliance, identification, and
internalization on prosocial behavior. Journal of Applied Psychology, 71, 492-
499.
Tett, Robert P., & Meyer, John P. (1993). Job satisfaction, organizational commitment,
turnover intention, and turnover: Path analyses based on meta-analytic findings.
Personnel Psychology, 46, 259-293.
Ward, Edward A., & Davis, Elaine (1995). The effect of benefit satisfaction on
organizational commitment. Compensation & Benefits Management, 11, 35-40.
Williams, Larry J., & Anderson, Stella E. (1991). Job satisfaction and organizational
commitment as predictors of organizational citizenship and in-role behaviors.
Journal of Management, 17, 601-617.
General References
Drucker, Peter, Managing in a Time of Great Change, Truman Talley books/Dutton,
1995, p. 86
Gale, Bradley T., Managing Customer Value, The Free Press, 1994.
Reichheld, Frederick F., The Loyalty Effect, Harvard Business School Press, 1996, p. 92
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