Employee perceptions of HRM practices and their turnover intentions: evidence from South Korea

Publication Date23 Mar 2020
Pages145-160
DOIhttps://doi.org/10.1108/EBHRM-04-2019-0037
AuthorJinuk Oh
Employee perceptions of HRM
practices and their turnover
intentions: evidence from
South Korea
Jinuk Oh
Department of Management, University of Guelph, Guelph, Canada
Abstract
Purpose The study sought to provide insight into the affective mechanisms that underlie the relationship
between HRM practices and employee turnover intentions from the perspective of Korean employees. The
study drew on social exchange theory and used compensation satisfaction, perceived job security and job
autonomy to explain how perceptions of HRM practices affect employee turnover intentions.
Design/methodology/approach The data were generated from a survey questionnaire administered to
both white-collar and knowledge workers in different organizations in the Seoul Capital Area. The final sample
consisted of 310 full-time employees.
Findings The results show that compensation satisfaction and perceived job security have significant
indirect negative effects on employeesintentions to leave their organization in the Korean context, which
supports previous studies in Western contexts. However, the indirect effects of job autonomy on employee
turnover intention were not significant in the current study.
Originality/value This study continues the conversation about the important role HRM practices play in
retaining valuable employees. This study offers a nuanced view of the relationship between HRM practices and
employee turnover in a distinctive research setting. This study also provides realistic and practical suggestions
on HRM so that organizations in Korea are able to implement HRM practices that help them retain competent
employees.
Keywords HRM practices, compensation satisfaction, job security, job autonomy, affective commitment,
turnover intentions, South Korea
Paper type Research paper
Researchers have questioned the assumption that human resources management (HRM)
practices will be implemented as intended and will have the same effect on all the employees
within an organization. HRM practices are subject to each employees unique interpretations
of an employers underlying motivations, which are based on the employeesindividual
values, experiences and expectations (Kinnie et al., 2005;Nishii and Wright, 2008;Wright and
Boswell, 2002). It is debatable whether HRM practices measured by people in managerial
positions can accurately capture employee attitudes and behaviors (Lam et al., 2009). Even if
an organization introduces innovative HRM practices to increase organizational
effectiveness, it will not achieve its goal unless the employees are satisfied with such
practices or perceive them as an effective way to increase their commitment to the
organization (Choi, 2019;Kinnie et al., 2005). Thus, to maximize the effect of HRM practices on
employee attitudes, the focus should be placed on employee perceptions rather than on
managerial reports of such practices.
HRM practices
and turnover
intentions
145
An earlier version of this article was presented at the International Labour and Employment Relations
Association World Congress in Seoul, South Korea on July 26, 2018. The author would like to thank
Junsu Park, two anonymous reviewers, and Editor Fabian Homberg for their comments and
suggestions. The author also thanks Cheon-Hoon Kim and Chang-Soo Woo for their assistance with data
collection.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2049-3983.htm
Received 9 April 2019
Revised 4 September 2019
28 December 2019
9 February 2020
Accepted 16 February 2020
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 8 No. 2, 2020
pp. 145-160
© Emerald Publishing Limited
2049-3983
DOI10.1108/EBHRM-04-2019-0037
Although promising findings from employee perspectives have been accumulating, most
studies that examined the link between employee perceptions of HRM practices and work-
related outcomes focused on a global perspective (Choi, 2019;Fabi et al., 2015;Mostafa, 2017).
HRM practices have multiple dimensions that are likely to have different effects on work-
related outcomes as different cognitive processes are used to evaluate the different
components of HRM practices (Kinnie et al., 2005;Wright and Boswell, 2002). Despite the need
for additional studies that seek to identify how multiple HRM practices impact individuals
(Wright and Boswell, 2002), few studies have considered the possibility that each facet of
HRM practices may have a different effect on work-related outcomes (Kinnie et al., 2005;Kooij
et al., 2010;Sanders et al., 2010).
Previous studies have suggested further investigation to produce generalizable results
because their research contexts were limited to Western countries (Fabi et al., 2015;Luna-
Arocas and Camps, 2008;Mostafa, 2017). South Korea (hereafter, Korea) may be fertile
ground for testing the effectiveness of HRM practices from the perspective of employees
outside of a Western context due to the countrys unique approach to implementing Western
HRM practices (Allen and Vardaman, 2017;Oh, 2016).
Koreas unique corporate cultures, dynamic collectivism and progressivism produced
strong cohesiveness among employees, compelling Korean firms to rely on internal labor
markets to acquire valuable human resources (Cho and Yoon, 2001). These organizations
maintained long-term employment principles and seniority-based appraisal and reward
systems regardless of differences in job performance (Kim and Bae, 2004). In addition,
employees usually spent their entire careers within the same company (Yang and Rowley,
2008).Therefore, traditionalKorean HRM practices createdan inflexible labor market,resulting
in unnecessary labor costs.However, during the financial crises of 1997, Koreawas forced to
accept a bailout fromthe International Monetary Fund (IMF) conditional upon improving the
countrys corporatefinances. The IMF and other foreign investorsalso required Korean firms
to change their HRM practices in accordance with the American style HRM model, which
emphasizes flexibility and performance (Alakent and Lee, 2010;Kim and Kim, 2003).
Although the collectivist, seniority-oriented culture remains uncomfortable with
individualistic meritocracy, Korean firms have increasingly adopted American HRM
practices to boost their employeescontributions and performance, even when they do not
need such practices (Bae and Rowley, 2001;Yang, 2011). Due to this unique
institutionalization of HRM practices, Korea is an appropriate research context to re-
examine the universal effects of the well-established HRM model (Oh, 2016). While some
findings on the relationship between HRM practices and organizational effectiveness at the
organizational level have been generated (e.g. Bae and Lawler, 2000;Jeong and Choi, 2016), a
consideration of employeesperceptions of HRM practices in the context of Korean
businesses is lacking.
This study examined the relationship between employeesperceptions of HRM practices
and employee turnover intentions from the employeesperspectives in the context of Korean
business. It focused on three psychological variables that may serve as proxies for employees
perceptions of HRM practices as follows: compensation satisfaction, perceived job security
and job autonomy. These factors have been accepted as constructs of HRM practices in the
literature (Boon et al., 2019;Lam et al., 2009;Luna-Arocas and Camps, 2008). This study also
included affective commitment as a mediator because it is strongly related to both
perceptions of employeesHRM practices and turnover intentions (Meyer and Smith, 2000;
Meyer et al., 2002). Therefore, this research will contribute to the literature on the role HRM
practices play in retaining valuable employees in two ways as follows: first, by addressing the
importance of employeesperceptions of multiple HRM practices. Second, by providing
additional evidence in a distinctive research setting to replicate existing findings from the
Western context.
EBHRM
8,2
146

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