IDEAS home Printed from https://ideas.repec.org/a/ibn/ibrjnl/v18y2025i1p80.html
   My bibliography  Save this article

Material and Immaterial Compensation as a Determinant of Employee Organizational Commitment

Author

Listed:
  • Isada Mahmutovic
  • Selma Smajlovic
  • Adisa Delic

Abstract

The success and failure of any organization largely depend on talented and competent employees. Through human resource management (HRM) practices and policies, organizations strive to ensure committed employees. One of the fundamental practices they use is undoubtedly material and immaterial compensation. Adequate management of such compensation may contribute to greater employee engagement in achieving the set goals, realizing the mission, and fulfilling the vision of the organization. In such ways employees confirm their affiliation with the organization, which classifies them as committed employees. The paper assumes that the adequate application of material and immaterial compensation in organizations in Bosnia and Herzegovina (BiH) may improve employee organizational commitment. This ultimately has a positive impact on the effectiveness and efficiency of organizations. The research was conducted in 128 BiH organizations with more than 50 employees across four sectors. The hypotheses were tested applying the Principal Components Analysis (PCA) through the Kaiser-Meyer-Olkin (KMO) values and Bartlett's test of sphericity and the regression analysis. The results show a statistically significant positive impact of material and immaterial compensation on employee organizational commitment. Creating more agile policies and practices of human resource management, especially those related to material and immaterial compensation, can significantly improve employee commitment as well as the entire organizational effectiveness.

Suggested Citation

  • Isada Mahmutovic & Selma Smajlovic & Adisa Delic, 2025. "Material and Immaterial Compensation as a Determinant of Employee Organizational Commitment," International Business Research, Canadian Center of Science and Education, vol. 18(1), pages 1-80, February.
    • Handle: RePEc:ibn:ibrjnl:v:18:y:2025:i:1:p:80
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ibr/article/download/0/0/51230/55613
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/ibr/article/view/0/51230
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Janet Chew & Christopher C.A. Chan, 2008. "Human resource practices, organizational commitment and intention to stay," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(6), pages 503-522, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdul Kadar Muhammad Masum & Md Abul Kalam Azad & Loo-See Beh, 2015. "Determinants of Academics' Job Satisfaction: Empirical Evidence from Private Universities in Bangladesh," PLOS ONE, Public Library of Science, vol. 10(2), pages 1-15, February.
    2. Naveed R Khan & Marinah Awang & Che Mohd Zulkifli, 2013. "Enhancing HR Outcomes through Best HR Practices and Organisational Commitment: A Conceptual Schema for SMEs," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 4(1), pages 24-32, January.
    3. Harjit Sekhon & Andrews Agya Yalley & Sanjit Kumar Roy & Gurvinder Singh Shergill, 2016. "A cross-country study of service productivity," The Service Industries Journal, Taylor & Francis Journals, vol. 36(5-6), pages 223-238, April.
    4. Smart A. Sarpong & Mary Safowah Akom & Emelia Kusi-Owusu & Irene Ofosua-Adjei & Youngjo Lee, 2021. "The Role of Commitment in the Relationship between Components of Organizational Culture and Intention to Stay," Sustainability, MDPI, vol. 13(9), pages 1-15, May.
    5. Tadesse Beyene Okbagaber, 2019. "The Effect of Human Resources Management on Employees Retention in IBM Corporation," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 9(2), pages 158-173, December.
    6. Olawumi Dele Awolusi & Shirley Shamen Jayakody, 2022. "Exploring the Impact of Human Resource Management Practices on Employee's Retention: Evidence from the Food and Beverage Industry in the State of Qatar," Journal of Social and Development Sciences, AMH International, vol. 12(4), pages 39-58.
    7. Siti Zubaidah Othman & Syahrulniza Anak Lembang, 2017. "What Attract Gen Y to Stay in Organization? HR Practices, Organizational Support or Leadership Style," International Review of Management and Marketing, Econjournals, vol. 7(2), pages 1-9.
    8. Zubair Nawaz & Jing Zhang & Rafiq Mansoor & Aboobucker Ilmudeen, 2019. "Gig workers in sharing economy: Conceptualizing Freelancer Value Proposition (FVP) in e-lancing platforms," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 9(6), pages 1-5.
    9. Hamed Al-sharafi* & Mohd Ezani Mat Hassan & Syed Shah Alam, 2018. "The Effect of Training and Career Development on Employees Retention –A Study on the Telecommunication Organizations in Yemen," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 420-430:2.
    10. Daniel RUSU, 2021. "STRATEGIES, ORGANIZATIONAL COMMITMENT AND LEADERSHIP STYLES IN SMEs," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(4), pages 31-49, December.
    11. Molefe Jonathan Maleka & Mphoreng Magdeline Mmako & Ilze Swarts, 2017. "Antecedents of Affective Commitment of Human Resource Management Practitioners Attending a Professional Body Convention," Journal of Economics and Behavioral Studies, AMH International, vol. 9(3), pages 121-132.
    12. Frank Nana Kweku Otoo, 2022. "Human resource development and employee turnover intentions: The mediating role of employee engagement," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 4(4), pages 01-12, October.
    13. Eckhaus, Eyal & Iholkina, Vasylyna & Shkolnik, Eleonora, 2022. "The impact of healthcare executive seniority on implementation of innovative methods of diagnosis and prevention," Health Policy, Elsevier, vol. 126(10), pages 996-1001.
    14. Thanigaivel R Krishnan & Su Ann Liew & Vui-Yee Koon, 2017. "The Effect of Human Resource Management (HRM) Practices in Service-Oriented Organizational Citizenship Behaviour (OCB): Case of Telecommunications and Internet Service Providers in Malaysia," Asian Social Science, Canadian Center of Science and Education, vol. 13(1), pages 1-67, January.
    15. Domingo C. Edano & Edna Marie D. Punzalan & Natty L. Tumutod, 2017. "Transformational Leadership Styles Of Public Elementary School Principals In Relation To School Social Organizational Factors In Region Iii, Philippines," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 3(3), pages 113-121.
    16. Haromszeki Łukasz, 2023. "The Effects of TM and CM on Organizational Leadership in Foreign Entities of MNCs," International Journal of Contemporary Management, Sciendo, vol. 59(3), pages 1-14, September.
    17. Peter Ekabu, 2020. "Professional Development Opportunities as a determinant of Turnover Intention: A case of teachers in Public Secondary Schools in Meru County, Kenya," Technium Social Sciences Journal, Technium Science, vol. 11(1), pages 36-45, September.
    18. Hanan S. AlEssa & Christopher M. Durugbo, 2024. "Linking Innovative Work Behaviour to Career Satisfaction: Engagement, Flexibility, and Perspectives from Male and Female Service Employees," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 25(4), pages 895-916, December.
    19. Amal Benkarim & Daniel Imbeau, 2021. "Organizational Commitment and Lean Sustainability: Literature Review and Directions for Future Research," Sustainability, MDPI, vol. 13(6), pages 1-24, March.
    20. Amal Benkarim & Daniel Imbeau, 2022. "Exploring Lean HRM Practices in the Aerospace Industry," Sustainability, MDPI, vol. 14(9), pages 1-16, April.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ibrjnl:v:18:y:2025:i:1:p:80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.