Abstract
A family business is usually managed and run by family members to form and pursue a business vision that will ensure continuity across generations. Subsequently, this study aims to scrutinize and inspect the effect of Islamic work ethics on affective commitment and employee performance. Out of 273 questionnaires that were disseminated to employees of family businesses in Pati, Batang, and Demak districts of Central Java, Indonesia, 147 were filled out and completed questionnaires, reflecting a response rate of 53.8%. Based on the results from the structural equation modeling from AMOS 21, Islamic work ethics were confirmed to be positively and significantly associated with affective commitment and employee performance. The affective commitment was also positively and significantly related to employee performance. Consequently, this study will contribute to expanding the literature on the association between Islamic work ethics, affective commitment, and employee performance in Indonesian family businesses.
Introduction
A family business, which is run and controlled by family members, has the primary aim of forming and pursuing a sustainable business vision (Chua et al., 1999). According to Wong et al. (1992), family businesses are more closely related, create a harmonious business environment, maintain and expand preferences in recruiting family members and their relatives, alongside desire the continuity of the business passed down to their descendants. The major aspects for the success of family businesses are sincerity, persistence, honesty (Nam & Herbert, 1999), communication, trust, commitment, and loyalty (Mokhber et al., 2017). They are also linked by strong familial connections (Castillo & Wakefield, 2006), fairness, monetary compensation (Samara & Arenas, 2017; Samara et al., 2021), and Islamic values, such as honesty, good intentions, charity, and positive thinking during conflicts (Dewi & Dhewanto, 2012).
Family members play a significant role in creating and continuing new businesses (Aldrich & Cliff, 2003; Astrachan et al., 2003; Chirico & Nordqvist, 2010; Konopaski et al., 2015). The combination of financial and human capital, alongside social networks owned by the members involved, could create new businesses and promote sustainability during times of poor economy (Meier & Schier, 2014; Sirmon & Hitt, 2003; Stewart, 2003). However, family members generally possess different qualifications in providing a positive contribution to their company (Sharma & Irving, 2005), and their lack of competence, dedication, and commitment (Aldrich & Langton, 1998) may slow down the business.
Meanwhile, Eze et al. (2020) and Samara (2021) highlighted religion, particularly Islam, as an essential factor to increase the commitment to the family business. In Indonesia, the most popular religion is Islam, which is adhered to by 86.7% of the population. The strong culture of kinship and closeness motivates their involvement in boosting family businesses (Ramadani et al., 2017), signifying that these enterprises impact economic growth (Anggadwita et al., 2020). Therefore, the commitment of family members to commit to their business is essential (Basly & Saunier, 2020; Deloitte & Touche, 1999; Sharma & Srinivas Rao, 2000). This will increase their interest in seeking careers in the business and promote high satisfaction and cooperation in performing their tasks throughout the leadership transfer (Dyck et al., 2002; Meier & Schier, 2014; Sharma et al., 2003).
Although family businesses experience many internal conflicts between relatives (Buang & Sidek, 2013), managing the effectiveness and sustainability of the organization requires motivated, professional, and high-performing employees (Jayaram et al., 2014). These skilled employees are formed through education and the acquisition of certain skills, knowledge, attitudes, and values as the main capital to support their existence in the organization. Such businesses that have creative, diligent, and skilled employees would be able to achieve their goals properly.
According to Farid et al. (2019), Hayati and Caniago (2012), Gheitani et al. (2019), and Javed et al. (2017), producing quality and reliable employee performance needs the instilling of strong Islamic work ethics in employees. This will promote enhanced employee performance and also stimulate increased dedication to the company (Husin & Kernain, 2019; Mohammad, Quoquab, and Omar, 2016; Salahudin et al., 2016; Soleman et al., 2020).
Islamic work ethics positively and significantly influence employees’ heightened performance. Hence, employees embracing these ethics exhibit more productive work behavior than those with low ethics (Ali & Al-Owaihan, 2008; Murtaza et al., 2016). The ethics were also shown to stimulate, trigger, and encourage employees to demonstrate innovative and adaptive work behavior (Javed et al., 2017; Kumar & Rose, 2010). However, the study by Khan and Rasheed (2015), as well as the recent findings of Aflah et al. (2021) and Elahi et al. (2020), revealed the absence of significant impacts on employee performance.
Wahyudi et al. (2013) and Yousef (2000) also proved that affective commitment is the main mediator in the relationship between Islamic work ethics and employee performance. Mohammad et al. (2018) recommended the inclusion of organizational commitment as a mediator of these variables. Islamic work ethics tend to be perceived as a value of sacrifice to accomplish higher performance levels in an organization, alongside building creativity and the desire for career advancement by more committed employees.
According to the enlightenment of the theory of social exchange by Blau (1968), Emerson (1976), and Cropanzano and Mitchell (2005), employees become more productive and perform meaningfully when they feel emotional closeness to the organization. Therefore, this study aims to fill the gaps in the literature by scrutinizing the association between Islamic work ethics, affective commitment, and employee performance in family businesses in Indonesia. A detailed literature review on the association between these phenomena was provided, and the method, result, and discussion were sufficiently outlined and delineated. Finally, a conclusion was made for significant stakeholders, and the focus for future investigations was presented.
Literature Review
Social Exchange Theory
A family business is possessed, controlled, and run by family members. The majority of workers possess very high loyalty and dedication due to their kinship relations with other employees (Castillo & Wakefield, 2006; Mokhber et al., 2017). This strong association formed between the employees and the organization, which is very important for business survival (Chua et al., 1999), is often described as an exchange relationship. It may be classified into the economic and social exchange (Cropanzano & Mitchell, 2005), where the latter emphasizes a high trust level and the socio-emotional relationship between the organization and the employees (Song et al., 2009).
The Social Exchange Theory (SET) has its roots in sociology and anthropology (Cook et al., 2013) and has been widely applied in business contexts (Coulson et al., 2014). It emphasizes that individuals tend to develop social identifications, such as nationality, membership in professional groups, and political affiliation, to differentiate themselves from others (Ahmad et al., 2020). Also, it seeks to explain the behavior of individuals involved in the resource exchange process (Emerson, 1976). This theory states that resources are exchanged with others because of the desire to receive something through existing relationships, and the principle of individual behavior is to maximize benefits while minimizing harm and risks (Yan et al., 2016).
Although SET was initially very relationship-oriented to maximize personal gain, it has recently received much criticism because of its disregard for the importance of interpersonal relationships. In certain situations, inter-dependent relationships have the potential to produce high-quality associations between the individuals involved (Cropanzano & Mitchell, 2005; Waldkirch et al., 2018).
Blau (1968) described the social exchange as a voluntary act driven by the level of return that is expected from others. The theory of social exchange, which raises the expectation of returns and contributions from others in the future, is almost similar to economic exchange but differs by the inclusion of a predetermined reply. Furthermore, social exchange is founded on an individual’s conviction that the other parties involved in the transaction would fulfill their commitments equitably in the long term, rather than on a quid pro quo or calculating basis (Ma & Qu, 2011).
SET explains the development of relationships based on (1) the equilibrium between the entities that enter into and come out of an association, (2) the deserved association type, and (3) promoting better relationships with others (Ma & Qu, 2011). Generally, it applies an economic approach to social relationships. The main principle is that the people involved in a social relationship determine the continuation or termination of an existing relationship based on the proportion of the cost and effort incurred. In social exchanges, these rewards and costs, directly and indirectly, entail economic and social outcomes, such as comfort, friendship, support, and dependence (Jeong & Oh, 2017). Consequently, individuals would remain involved and maintain existing relationships, providing they obtain the same or greater benefits for the effort and costs incurred (Kankanhalli et al., 2005).
Employee Performance
Dessler (2006) described the performance as comparing the results of a real job to the set standards. According to Bernardin and Russel (2013), a record of the outcomes gained from a certain job function or activity over a period is known as performance. Wexley and Yukl (2005) also described performance as the manner in which a member of staff regards his/her work, which denotes the way an employee feels about himself or his job. Subsequently, Robins and Judge (2007) stated that performance is created when a person’s necessities have been fulfilled. It is related to the level of the employees’ satisfaction as a common attitude, which is firmly associated with the prizes they expect to receive, considering the sacrifice made.
McCormick and Tiffin (1974), as well as Steers and Porter (1983), suggested that the variables affecting employees’ performance include (1) the individual, influenced by gender, age, motivation, education, experience, personality, physical condition, and attitudes. (2) The situational environment, including the physical elements at work, such as the systems, equipment, conditions, workplace layouts, lighting, temperature, and noise level, as well as the social elements, namely organizational policies, social environment, types of training, and reward systems.
Islamic Work Ethics
Beekun and Badawi (2005) termed Islamic work ethics as the emission of values that help shape the worker’s character. As a segment of morals, it should include the relationship between humans and Allah the Creator
Islamic work ethics refer to the collection of moral principles that governs and directs the behaviors and attitudes of employees in their place of work based on the teachings of the Qur’an teachings and Prophet Muhammad’s words (Ali, 1992; Mohammad, Quoquab, and Omar, 2016).
The concept originates from Al-Qur’an (Ali & Weir, 2005; Kumar & Rose, 2010) and Prophet Muhammad’s words that the uphill struggle causes sins to be forgiven and not a single person eats better food than that produced from work.
Generally, Islam views working as an obligation of religion for the realization of obedience to Allah (Kamaluddin & Manan, 2010) and as a highly dedicated and sincere endeavor that encourages people to pursue benefits for society and themselves (Gibbs et al., 2007). It places great emphasis on hard work (Islam et al., 2020; Khan et al., 2015) and hinders unproductive behaviors and the squandering of various resources (Ali & Gibbs, 1998). Islamic work ethics are based on four primary concepts, namely effort, responsible behavior, competition, and transparency (Ali & Al-Owaihan, 2008). These concepts signify that a business must be developed and applied based on the principles of ethics. As stated by Josephson (2013), ten ethical values need to be realized in work, namely honesty, promise-keeping, fairness, integrity, fidelity, accountability, respect for others, care for others, the pursuit of excellence, and responsible citizenship.
Islamic work ethics also impact a person’s behavior at work (Abbasi & Rana, 2012; Alhyasat, 2012; Murtaza et al., 2016). It stimulates positive work attitudes, which provide more favorable results, such as hard work, dedication, commitment, and etcetera (Ahmad et al., 2019; Khan Marri et al., 2013; Rokhman, 2010). This is demonstrated by the display of trustworthy and honest attitudes in performing duties, work mandates, as well as working smartly to achieve effectiveness and efficiency.
In addition, Kumar and Rose (2010) emphasized that work ethics is a means to sufficiently explore a business. Ethics are the totality of acceptable and unacceptable actions and employees who possess work ethics continuously attempt at a task, do not despair easily when a breakdown is experienced, and constantly strive to benefit from each available time to accomplish a purpose (Ahmed Iqbal et al., 2020). Ali and Al-Owaihan (2008) also revealed that business and employee performance improves due to Islamic work ethics (Hakim et al., 2019; Mohammad et al., 2018; Raja et al., 2020; Saban et al., 2020). Therefore, the hypothesis proposed is:
Islamic work ethics reflect a series of practices (Haroon et al., 2012), virtues, and moral standards that help to discern between work-related right and wrong (Beekun, 1997), as well as embrace a spiritual mindset (Rizk, 2008) for doing better work (Haroon et al., 2012). Meglino et al. (1989) found that employees are more committed when their values match organizational values. Furthermore, Oliver (1990) uncovered that work ethic has a significant relationship with organizational commitment. According to this study, employees who show a strong value of participation have a relatively high dedication. This investigation also determined that those with a high Islamic work ethic would offer high personal sacrifices to maintain a strong attachment and loyalty to the organization by identifying, engaging, and enjoying membership.
Hayati and Caniago (2012) showed that Islamic work ethics are more successful than employee performance in terms of establishing organizational commitment. Previous research has revealed that it contributes positively to organizational commitment (Abbas & Kowang, 2020; Ansari & Ardakani, 2013; bin Khalid, 2019; Nasution & Rafiki, 2019; Rusman & Suyono, 2020). The study by Yousef (2000, 2001) and Abu-Saad (2003) found that the Islamic work ethics of Arab teachers instill the importance of duty and care among employees. Ali and Al-Kazemi (2007) revealed a link between loyalty and this phenomenon, while Marri et al. (2012) confirmed its positive impact on commitment in the organization. Also, the findings of Caniago and Mustoko (2020), Salem and Agil (2012), alongside Salahudin et al. (2016), showed a positive association between personal Islamic work ethics and three commitment dimensions, namely continuance, affective, and normative commitment. Hence, the hypothesis proposed is:
Affective Commitment
Commitment is a strong psychological connection between individuals and their firms (Islam et al., 2013, 2018). The deep links that an employee has with his or her company are referred to as organizational commitment (Apriani & Qamari, 2016; Indriani et al., 2019; Mowday et al., 1979; Porter et al., 1974). Previously, Mowday et al. (1979) and Mottaz (1989) divided organizational commitment into two types, namely attitudinal and behavioral commitment. However, Meyer and Allen (1991), Meyer et al. (1993), as well as Meyer and Herscovitch (2001) recently mentioned three dimensions, namely affective, continuance, and normative commitment. Affective commitment is defined as an emotional tie of the employee to the company, continuance is an employee’s connection to the business based on the fulfillment of needs, while the normative division refers to a worker’s moral responsibility to the organization.
The main foundation of the affective commitment concept lies in SET, where its strength is based on the employees’ reciprocal relationship with their companies (Cropanzano & Mitchell, 2005; Mitchell et al., 2012). It is an attitude and feeling toward the organization that is associated with the identity of employees (Akbar et al., 2018; Krajcsák,2019; Nisar et al., 2020). According to Steers (1977), it is an individual’s ability to identify with and participate in a group or organization. As stated by Meyer and Allen (1991), workers have an emotional link to an organization, and their engagement is due to their desire.
Meanwhile, commitment is the willingness of employees to be loyal to their responsibilities (Djastuti et al., 2019; Krajcsák, 2019). Affective commitment promotes changes in employees’ attitudes and behavior to improve performance (Kharismasyah, 2019; Kundi et al., 2020; Pahlawi & Fatonah, 2020; Tahar & Sofyani, 2020). Employees who are affectively committed are highly and intrinsically motivated to achieve organizational goals. Such employees exhibit loyalty (Harrison-Walker, 2001) and a strong willingness to stay in the company (Lee et al., 2008; Meyer & Allen, 1991). Affective commitment motivates employees to direct all knowledge, skills, and competencies to demonstrate better performance.
A study by Asif et al. (2019) and Budihardjo (2013) proved that affective commitment significantly impacted employees’ creativity and performance. Similarly, the investigations by Swalhi et al. (2017), Sharma and Dhar (2016), Na-Nan et al. (2020), alongside Pahlawi and Fatonah (2020), indicated its effect and ability to improve employee’s performance. Therefore, the hypothesis proposed is:
Methodology
This study was an explanatory type that emphasized the relationship between the variables by testing the hypothesis. Islam et al. (2019), Ahmad et al. (2021), and Ahmed et al. (2021) recommended that the population in a study should fit the variables analyzed. Therefore, 273 Islamic employees working in family businesses in Pati, Batang, and Demak districts of Central Java, Indonesia, were employed as the population. The study used a non-random or purposive sampling technique, which is a method of deciding the research sample by considering the categories or elements present in the population (Sugiyono, 2010). Consequently, 147 employees were obtained, reflecting a response rate of 53.8%, where the primary data collection method involved disseminating relevant questionnaires to the participants. The questionnaire was spread by employing a Likert scale ranging from 1 to 5, where 1 = strongly disagree and 5 = strongly agree.
The demographic description in Table 1 shows that the majority of respondents, at 86%, were male. Approximately 24%, 67%, and 9% were up to 30, between 31 and 50, and above 50 years old, respectively. Also, 51%, 27%, and 22% had work experience of above 10, between 5 and 10, and below 5 years, respectively.
Demographic Profile of Participants.
This study employed three main variables, namely Islamic work ethics, affective commitment, and employee performance. Islamic work ethics were measured using six indicators adapted from Ali (1992), Ali and Al-Kazemi (2007), and Murtaza et al. (2016). These six indicators were also developed and modified according to the concept by Aldulaimi (2020), Gustiawan (2017), Ibrahim and Kamri (2013), and Wahab et al. (2016). Meanwhile, the affective commitment was measured by five indicators modified from Rhoades et al. (2001), while employee performance was gauged by five indicators from Williams and Anderson (1991).
Subsequently, the quantitative data obtained were statistically analyzed utilizing the AMOS 21 software package and Structural Equation Modeling (SEM), which is a circuit or network model that enables more complicated testing (Ghozali, 2013; Moss et al., 2015). SEM with unobservable variables has become a powerful research model in the management community (Davcik, 2014). Therefore, this study used SEM and AMOS 21, which can test complex and multi-level hypotheses simultaneously (Byrne, 2010; Islam et al., 2019), alongside enabling the modification of compiled models to increase the statistical feasibility.
Results
The findings of the data normality test with AMOS 21 showed that the CR (critical ratio) skewness value had a normal distribution below 2.58 (Ghozali, 2013). Also, the loading factor calculation results in Table 2 indicate that all the indicators of the variables were above 0.5, signifying the validity of all the indicators.
Loading Factors.
The residual value determined in this study was +2.58 at a significance level of 5% (Anderson et al., 1992), and the data processing results showed that no residual value exceeded 2.58. Also, the model test results indicated a fit with the data used. This was demonstrated by the probability, the Error of Root Mean Square of Approximation (RMSEA), chi-square, the Goodness of Fit Index (GFI), minimum discrepancy per degree of freedom (CMIN/DF), Adjusted Goodness of Fit Index (AGFI), Comparative Fit Index (CFI), and Tucker-Lewis Index (TLI), which were within the expected value ranges. This can be seen in Table 3.
Good Fit Index Model.
Table 4 shows the value of the
Hypotheses Testing.
Table 4 shows that positive and significant findings were obtained from the estimation of the effect of Islamic work ethics on employee performance. This was based on the determined critical ratio (CR) value = 15.38 and ρ = .000 at a 5% significance level, which showed that H1 was supported. Similar results were achieved from estimating the effect of Islamic work ethics on affective commitment, with the critical ratio (CR) value = 14.77 and ρ = .00 at the significance level of 5%, indicating that H2 was supported. This indicates that the trustworthiness and honesty of employees could be realized by their support and acceptance of the goals and common values agreed upon in the company. Finally, the affective commitment was determined to exert a significant and positive effect on employee performance, with a critical ratio (CR) value = 12.45 and ρ = .00 at the significance level of 5%, denoting that H3 was supported.
Discussion
The findings of this study proved that Islamic work ethics significantly and positively impacted employee performance. This may be due to the characteristics of respondents, such as their collectivist community, harmonization among employees, cooperation, and mutual help. Also, Islamic work ethics was positively related to helping behavior and the motivation of employees to assist their colleagues to boost work productivity in the organization (Ali & Al-Owaihan, 2008; De Clercq et al., 2018). The application of Islamic work ethics, such as tawhid,
Islamic work ethics also acknowledges job dedication as a major virtue (Imam et al., 2013). Skilled and professional employees are obligated to put forth significant effort into completing their work. Hence, ethics focus on the results as well as the intention to work and necessitates justice and generosity at work to realize the well-being and welfare of organizational members. It shows that there is no meaning in life without the manifestation of quality performance as part of worship to Allah (Ahmad, 2011; Aldulaimi, 2016) and benefits to others (Islam et al., 2021; Khalid et al., 2018). It aligns with Prophet Muhammad’s words (PBUH) that the main purpose of applying Islamic work ethics is to sow goodness and virtue in all people.
Consequently, the results of this study corroborate the necessity to build emotional attachment and employee loyalty to promote employee survival and performance. Meyer and Herscovitch (2001) differentiated two types of employee behavior, namely focal and discretionary, to enhance the understanding of the association between job performance of employees and affective commitment. Generally, employees’ ideas are clear on the accomplishments that would be achieved through devotion to their company. However, discretionary behavior is defined as going above and beyond the requirements of one’s official duties. Individuals who commit to the company will have a better grasp of the achievements that will realize organizational success.
Conversely, affective commitment concerns the level individuals emotionally attach to, identify, and engage in the company. Individuals with high affective commitment are more likely to act ethically in the organization’s best interests since they have personally experienced the advantages of such acts. They will also familiarize themselves and have favorable attitudes toward the organization’s aims. However, those with poor affective commitment will concentrate on achieving their objectives and desires (De Baerdemaeker & Bruggeman, 2015).
Meyer et al. (2006) also found that employees with affective commitment are more likely to have autonomy at work due to their strong motivation based on a genuine love for the business rather than merely cost avoidance. They tend to perceive their job as intrinsically motivating and are ready to consider other approaches to enhance their performance (Itri et al., 2019; Kimura et al., 2019; Zapata-Phelan et al., 2009). The findings of this study findings align with investigations by Semedo et al. (2016), Lam and Liu (2014), Udin et al. (2017), Astuty and Udin (2020), Khalid (2020), Koo et al. (2020), alongside Yuniawan and Udin (2020). This proves that affective commitment exhibits a positive and significant impact on employee performance. Subsequently, the results confirmed the SET that affective commitment increases the attachment to a company and the willingness to exert additional efforts to achieve the organizational goals. It also promotes a positive and supportive attitude in building relationships with other employees and leads to a very high presence in the company.
Conclusion
This study showed that Islamic work ethics positively and significantly increase affective commitment and employee performance. The affective commitment was also shown to produce a similar influence on employee performance. Therefore, these results significantly contribute to developing the body of knowledge by being a new pioneer study that linked Islamic work ethics, affective commitment, and employee performance in family businesses. This study also revealed that religious beliefs and ethical business practices, such as trust, justice, accountability, responsibility, and care for others, are very important in a family business. Furthermore, the findings proposed practical implications for managerial policies. First, the love and loyalty of employees for the organization must be encouraged to stimulate their willingness to settle and realize the goals and values of the company. This can be realized by proactively helping and supporting co-workers as well as completing tasks effectively and efficiently. The lack of loyalty also declines employees’ psychological and emotional bonds to the company. Second, the organization must promote continuous improvement of employees’ competencies to ensure their acquisition of new knowledge and skills. This is conducted to maintain and increase their sensitivity in respecting and utilizing the available time appropriately.
However, this study possessed several limitations, including, first, the variables of construct in this study were measured only based on the same responses, which was capable of causing bias. Second, the sample comprising 147 respondents was too small, leading to difficulty generalizing the findings. Third, the sampling technique did not differentiate between family and non-family employees.
Therefore, future studies in a broader scope are required, mainly by comparing the performance of employees in government organizations, hospitals, educational, and other institutions, as well as considering demographic factors, such as gender, age, education level, and income. Other variables that are assumed to increase employees can also be included, for example, work passion, meaningful work, and perceived organizational support.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
