According to researchers at Baylor University, employees who work at small, locally-owned businesses have the highest level of loyalty to their employees. In addition, for rural workers, size and ownership of their company figure even more into their commitment than does job satisfaction.
According to the authors of the study, titled "Small, local and loyal: How firm attributes affect workers' organizational commitment," higher levels of commitment are associated with less absenteeism, lower turnover, and less seeking of jobs outside the company. Small companies were defined as those with 1 to 49 employees.
"It's an interesting time because of the shift toward big business and globalization, but there are still practical values of small and local businesses, including benefits to the community and to the individual, such as less income inequality, less population turnover, lower crime, and more committed workers," said Katie Halbesleben of the Department of Sociology, and lead author of the study.
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More than half (57.2 percent) of workers in small firms scored in the highest commitment category, compared to 40.5 percent working for large firms.
Ownership of the company also played a major role, with 56 percent of workers in locally-owned firms having high commitment scores, compared to 38.7 percent in non-locally-owned firms.
Commitment was strongest when individuals worked for companies that were both small AND locally-owned, with 61.4 percent of those employed in such businesses having high commitment scores, compared to 38.7 percent employed in large, local businesses.
While job satisfaction is the factor that is most likely to determine an employee's organizational commitment in general, that is not the case with rural workers. For them, simply working for a company that is small AND locally-owned is the greatest predictor of organizational commitment. "Even after accounting for the influence of job satisfaction, small and local businesses still have an independent, direct effect on organizational commitment," said Halbesleben. "However, what the model doesn't say is what comes first in creating the commitment. Is it job satisfaction or is it other factors, such as working at a small and local business? It is likely the case that both small and local businesses and job satisfaction are interrelated in leading to employee commitment, but our modeling does not infer a causal relationship."
What is it about small and local businesses that lead to employee commitment? "It is plausible that in a rural area, friends and neighbors are likely to work for each other," she said. "These close-knit networks can increase employee commitment."
In addition, according to Halbesleben, smaller firms offer more intrinsic rewards to their employees, such as greater work autonomy, while larger firms tend to provide more extrinsic rewards, such as higher earnings, more benefits, and more opportunities to advance within the workplace.
Sources: Press Release from Baylor University (November 20, 2014), and an interview with the study's lead author (November 26, 2014).
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