The purpose of this paper is to investigate the mediating effect of organizational identification in the relationship between person-organization fit and intention to stay as well as word-of-mouth referrals. The study also examines the role of perceived external prestige as a moderator of the relationship between organizational identification and intention to stay and word-of-mouth referrals.
Data were collected from 2,649 millennial employees working in various companies located within the Central Thailand Industrial Estates. The hypothesized relationships were tested and analyzed by means of a confirmatory factor analysis, structural equation modeling, hierarchical regression and a bootstrapping procedure.
The results revealed that the direct relationships between person-organization fit and intention to stay as well as word-of-mouth referrals were found to be partially mediated by organizational identification. In addition, perceived external prestige was found to have a moderating effect on the relationship between organizational identification and word-of-mouth referrals, but found no effect on employee retention.
The current research took place among the millennial workers in Thai organizations, which needs to be extended to other generational cohorts or different culture settings for more generalization.
The results imply that managers should routinely assess and monitor person-organization compatibility, and ensure that corporate cultures, values and norms are properly communicated and mutually shared among the millennial workers. The aim is to inspire them to perceive better fits and proudly identify with their workplace. Such efforts are likely to induce not only retention, but also should encourage word-of-mouth referrals.
This study extends existing knowledge by assessing the relationships among person-organization fit, organizational identification and perceived external prestige as well as their impacts on intention to stay and word-of-mouth referrals by millennial employees, which has not been extensively investigated in the literature.
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