Littlewood, H., Institiuto Tecnologico y de Estudios Superiores de Monterrey, Mexico
The purpose of this paper is to present the results of a research conducted in a Mexican financial institution that offers micro loans, averaging $500 U.S. dollars, to individuals that have a low income and that are currently employed for at least one year. This financial institution has successfully conducted business since 1993, has 33 branches in different main cities along the country, and despite difficult economical crisis, such as the one suffered in 1994 and named the "tequila effect", is planning to grow up to 100 branches in the next three years. This organization has two main ways of contacting customers. First, it relies on door to door visits carried out by sales representatives that are paid a minimum wage and sales commissions, and second through branch clerks that offer credit to customers that show up at the branch facility. Nevertheless, the success of this company, it has been suffering, for the last five years, a steady 100% yearly turnover average, and in the case of sales reps., a 200% yearly turnover rate. Half of turnover is due to voluntary resignations and the other half due to firing. The cost of turnover has been estimated to be around $2,000,000 per year, and company managers are highly concerned with this problem. An original hypothesis held by company managers is that recently hired sales reps. initially sell loans to close friends and relatives, then to acquaintances, and once all these potential customers are visited, sales drop dramatically. Therefore sales reps. with a "short" tenure have a higher performance than sales reps. with a "long" tenure, and leave the company once sales possibilities are low. An initial study shows that the best 45 sales reps., in terms of loans sold, sell three times more than the average sales rep. and have a significantly longer tenure with more than two years in the company. This research examines the relationship of Organizational Commitment (Arias, 2000, Mercado 2000, Meyer and Allen, 1991), Organizational Perceived Support (Arias, 2000, Mercado, 2000 and Eisenberger 1986, 1990 and 1997) and Turnover. It was hypothesized that personnel that voluntarily quit have a low Organizational Commitment due to climate and Perceived low Organizational Support, and that personnel that has been fired, does so due to Organizational Climate; defficient recruitment, selection and training practices; Perceived low Organizational Support; and sales representatives working conditions. The Organizational Commitment construct has been developed to describe three characteristics of attitudes of employees, such as the intention to remain as a company employee, the will to exert high levels of effort in favor of the organization, and the belief and acceptance of organizational goals and beliefs. Regarding the Perceived Organizational Support construct, it is stated that the perception the individual holds about support received from the organization, creates an obligation towards the organization. References: Arias Galicia, F. Organizational Commitment within a private health organization. In press, 2000. Eisenberger, R., Cummings, J., Armeli, S. & Lynch, P. (1997). Perceived organizational support, discretionary treatment, and job satisfaction. Journal of Applied Psychology, 82, 812- 820. Eisenberger, R., Fasolo, P. & Davis-LaMastro, V. (1990). Perceived organizational support and employee diligence, commitment, and innovation. Journal of Applied Psychology, 75, 51-59. Eisenberger, R., Huntington, R., Hutchinson, S. & Sowa, D. (1986). Perceived organizational support. Journal of Applied Psychology, 71, 500-507. Meyer, J.P. & Allen, N.J. A three component conceptualization of organizational commitment. Human Resource Management Review, 1, 61-89, 1991. Mercado, P. Organizational Commitment within a public health system. In press, 2000.