Effect of Organizational Climate on Employees’ Affective, Continuance and Normative Commitment in Oromia Bank Nekemte District

Abstract

Goal: This study aims to investigate effect of organizational climate on employees’ organizational commitment in Oromia Bank Nekemte District.

Design/Methodology/Approach: A mixed research approach and explanatory research design were used to analyze the relationship between variables. With census method, 250 questionnaires were distributed. The study employed exploratory and confirmatory factor analyses using principal component analysis using structural equation modeling that fulfills measurement construct validity and reliability to investigate the effect of organizational climate by AMOS version 23 software.

Result: The findings supported that employees’ perceived autonomy has a positive and direct effect on affective and normative commitment but it doesn’t have an effect on continuance commitment. Besides, cohesion of teamwork has a negative and direct effect on affective and normative commitment and has no effect on continuance commitment. Moreover, the study has found that reward and recognition has a positive and direct effect on affective commitment but it doesn’t have an effect on continuance and normative commitment.  In addition, fairness has a positive and direct effect on continuance commitment but doesn’t have an effect on affective and continuance commitment. Lastly but not the least, supervisors’ support has a positive and direct effect on normative commitment but it has no effect on affective and continuance commitment.

Limitation: The planned model may not be generalized due to a one time data collection. Thus it ought to be applied in other organization. The study is also limited privately owned banking industry, .i.e. Oromia Bank. Hence, further studies can encompass any other privately owned and publicly owned banking industries in Ethiopia.

Practical Implications: Therefore, it is advisable to consider when enhancing the climate of the organization so as to make employees’ motivated, committed, productive and well performer for the benefit of the company.

Originality/Value: The study adds value to the existing body of knowledge by addressing the relationship between organizational climate and employees’ organizational commitment.

Keywords: Organizational Climate; organizational commitment; autonomy; teamwork; reward and recognition; supervisors’ support

DOI: 10.7176/PPAR/15-1-03

Publication date: January 30^th 2025