THE IMPACT OF EMPLOYMENT CLASSIFICATION ON ORGANISATIONAL COMMITMENT: A COMPARATIVE ANALYSIS OF PERMANENT AND OUTSOURCED SOFTWARE ENGINEERS USING MEYER AND ALLEN’S THREE-COMPONENT MODEL

Abstract

The study examines the impact of permanent employment versus outsourcing on organisational commitment, focusing on three key dimensions: affective, continuance, and normative commitment. The research utilises descriptive statistics and an independent samples t-test to analyse data from 200 employees (100 permanent, 100 outsourced) in a multinational information technology organisation. The results reveal significant differences in commitment levels between permanent and outsourced employees, with permanent employees demonstrating higher levels across all three dimensions. For affective commitment, permanent employees reported a mean score of 4.70, significantly higher than the 2.40 reported by outsourced employees. Similarly, permanent employees exhibited more significant continuance commitment (3.75) and normative commitment (4.59) compared to outsourced employees (2.95 and 2.72, respectively). Low standard errors, high t-values, and significant p-values in hypothesis testing confirm these differences. The effect size analysis further highlights the magnitude of these differences, with Cohen’s d values of 8.356 for affective commitment, 3.652 for continuance commitment, and 9.067 for normative commitment, indicating significant and moderate effects across all dimensions. These findings suggest that permanent employment fosters stronger emotional attachment, a greater sense of obligation, and higher perceived costs of leaving the organisation. In contrast, outsourced employment is associated with lower levels of commitment. The study contributes to understanding how employment type influences employee engagement and loyalty, offering insights for organisational policies to improve retention and foster stronger connections with employees.