Moderating Effect of Self-Efficacy and Impact of Career Development Practices on Career Success Under the Mediating Role of Career Commitment in the insurance Sector of Pakistan | Open Access Journals

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Moderating Effect of Self-Efficacy and Impact of Career Development Practices on Career Success Under the Mediating Role of Career Commitment in the insurance Sector of Pakistan

Ahmad Tisman Pasha*

Ph.D. Scholar, University Utara Malaysia, Malaysia

Kamal Ab Hamid

Associate Professor, University Utara Malaysia, Malaysia

Arfan Shahzad

Senior Lecturer of Othman Yeop Abdullah Graduate School of Business, University Utara Malaysia, Malaysia

*Corresponding Author:
Ahmad Tisman Pasha
Ph.D. Scholar
University Utara Malaysia
Malaysia
Tel: +923336103101
E-mail: atisman120@hotmail.com

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Abstract

This research paper is to explore the mediating role of career commitment and moderating effect of self-efficacy between career development practices and career success of employee in insurance sector of Pakistan. Survey method was adopted to collect the data form 374 employees working in insurance sector systematic sampling. PLS-SEM technique was used using Smart PLS 2.0 to analyze data. Findings of this study suggest that employees’ career development practices have positive relationship with career commitment and career success and how self-efficacy effects the career success. Self-efficacy is the beliefs of employees about career success in insurance sector. Finally, career commitment mediates the positive role between career development practices and self-efficacy moderates the career success of insurance sector employees. The effect of career development practices on career commitment and effect of career development practices on career success has been checked in past studies but the mediating role of career commitment and moderating effect of self-efficacy particularly for the employees of insurance sector has not been checked before.

Keywords

Career Success, Career Commitment, Self-Efficacy, Job Security and Training

Introduction

A firm has been found very easy to measure the gains and losses of the firm through multiple financial tools but it rarely seen or discussed that what organization is doing for its employees or not by with the organization or with their career [1-3]. In the 21st century, career success is treated as the fundamental thought of human resource management in this competitive business world [4].

In few years, more than 90 studies have been conducted on performance and productivity measurement of insurance sector of developed countries but not on the individuals (employees) of this service sector [5]. In developing countries, insurance sector still remains low in generating the insurance premium [6] because they do not focus employees.

Insurance industry is relatively a small and highly neglected sector of Pakistan [7]. According to Year Book [8] of IAP, there are 35 insurance companies working in Pakistan and there are only 8933 employees working in all over the Pakistan. Pakistan’s insurance sector is using the conventional and long-established approaches, while developed countries are enjoying the benefits from insurance system [9].

It has been reported that there is huge number of unemployed people in Pakistan and yet the insurance sector has not been able to attract the attention of that huge number of unemployed personal. According to Malik et al. [10] people are not inclined towards insurance sector because of the poor performance of insurance sector, having no education, religious factor that insurance is considered prohibited, less understanding and lack of trust on the insurance personnel’s and companies [11].

The employees’ career improvement becomes a cause of improvement in the working of the employees also, and this helps not only the company but also in the development of professional career [12]. According to Okurame et al. [13] the employees of the insurance companies need to be motivated incessantly to achieve higher levels of outcome not for the insurance sector, but for the employees’ career.

A question of career success, career commitment, career strategies, career policies or career opportunities is answerless without the mutual interaction between employees and organization [14]. Employees want to find a path and explore career in insurance sector.

Job security and training as career development practices can build the employee’s career and it ensures the success factor in career [15]. Job security and training development programs is the indicator of career success. According to Armstrong et al. [16], employee’s career development factors are the assets of the organizations and these factors which are job security and training are considered to be the foundation of employee’s career success. Supporting career developments needs will ensure career success in any organization but particularly in insurance sector [17].

This research study suggests that job security and training development programs are key career development practices. This research study also suggests the impact of person’s belief on career success in the insurance sector. These career development practices play key role in term relationship for benefit of the employment and improving employee career commitment and career success by their stronger belief in insurance sector. The aim of this research article is to identify the relationship between job security and training on the career success with the mediation effect of career commitment and moderating effects of self-efficacy in insurance sector of Pakistan.

In the existing literature, most of the studies focused on the factors such as job security and training, career views, career, self-efficacy and work issues as predictors influencing employee career commitment, career success [16,18,19]. In the context to Pakistan, studies conducted on service sectors like bank and insurance sector but, especially none of these studies concentrated on the employees’ career commitment and career success in insurance sector. In Pakistan, the insurance sector has not been able to meet the standards and goals because it is also challenged by a number of dares, one of which is the employees and lack of skills and poor salary, no job security and lack of learning’s because of trainings. This has prohibited the growth of Pakistan insurance industry.

Employees that have high levels of job fulfilment are more committed to their careers, through training and development and job security [20]. The skills development, training and desire to stay in organization and career development opportunities are interrelated factors [21]. On the other hand, [10] strongly recommended that study should be conducted on employees’ career success in insurance companies of Pakistan. There are few reasons such as,

• Job security also effect on the career success.

• No employee development like training also effects the career success

In the latest study [21] recommended that insurance companies should design and implement career development programs such as training programs, and job security for employees to be committed to their careers and get success into the insurance sector. On the other hand, Barley et al. [22] focused on the fact that employee play key part in breaking and making of any organization. Insurance and banking sector are considered as financial and service sectors but still insurance sector is the ignored by government, policies and religious views.

Career success is defined as dependent variable in this research. The term career success means achieving the intended goals and ambitions [23]. Career success is somewhat that is developed and maintain with the passage of time, naturally influenced by many causes that are intrinsic and extrinsic to the individual as well as to the organization regardless of time [24]. According to Rasdi et al. [24] that the primary themes of profession, work, time and hierarchical structure, reflecting a person’s occupation, which predict to a person’s career success in his or her life.

Career commitment has been important due to its strong connection with work and individuals [25]. Career commitment can also be described as positively related to career involvement and its commitment [26,27]. The attitude of individual towards his profession and career involves the individual’s development, goals, identification and participation in defined objectives [26-28].

According to Janjua et al. [29] the insurance industry of Pakistan is neglected, if we compare it other regional upcoming economies but at the same time it definitely has vast potential in it to grow into a huge and big industry. In 2010 premium was 11% in developing economies, world average was 2.7% while in Pakistan it had been low than average [8]. So the real aim and goal of the research is to measure the influence of career development practices on the career success and career commitment of employees.

Employees that have high levels of job fulfillment are more committed to their careers, through training and development and job security [20,30-32]. According to Armstrong [33], Herzberg [34] that skills development, training and career development opportunities are interrelated factors [21,34].

It is very much clear that the fear of losing job or having a sense of insecurity about job is positively correlated and connected with career commitment and career success in dynamic work environments of today’s world. Hobfoll [35] states that stress is created when people experience threat or actually loses their valuable resources. The elements including job security would positively influence to sense of career success in the minds of the employees [36]. It is obvious that job security is directly connected to career success [37]. Employees need mental satisfaction to perform better and to show their performances and the feeling of job security is one of such element that provides this satisfaction [38].

It means that they must actively pursue training and development opportunities to be successful in their career. Since, training activities like on job training, providing guidance, and counseling can contribute insurance sector to generate a group of knowledgeable, motivated and dedicated employees who are capable to boost and stand career skills in the insurance sector [39].

The self-efficacy will moderate career success because of person’s belief about the insurance sector. Self-efficacy is defined as the moderating variable between career commitment and career success. According to Bandura [40] self-efficacy means a belief and course of action and it’s important to recognize the working employee self-efficacy in the insurance sector of Pakistan. Self-efficacy has a significant impact on career success [41-43]. Individuals' beliefs to execute the course of actions for occupational tasks and career success of employees [43,44] in insurance sector of Pakistan which is neglected and may influence of negative beliefs of people. Self-efficacy influence the level of career success of employees who are highly career committed [43].

Appropriate training and training strategies will ensure and guide that it would be most effective in the execution of career success and career commitment [13]. Many researchers like Ugboro et al. [45], Creed et al. [46], Wan et al. [47] confirms that the career commitment will affect the performance of both organization and employees. However, lower level of career commitment will affect the career success [48,49].

Following are the hypothesis of the study:

H1: There is a relationship between job security and career commitment.

H2: There is a relationship between training and career commitment.

H3: There is a relationship between job security and career success.

H4: There is a relationship between training and career success.

H5: Career Commitment is a mediator between job security & career success.

H6: Career Commitment is a mediator between training & career success.

H7: There is a relationship between career commitment and career success.

H8: Self efficacy will moderate the relationship between career commitment & career success.

Materials and Methods

This research framework was designed to portray the variables integrated in this study trace their relationship to detect their influences on career success (Figure 1). This model shows the mediating relationship of career commitment between CDP (job security and training) and career success moderated by self-efficacy.

internet-banking-theoretical-framework

Figure 1: Theoretical framework of employees career development practices, career commitment, self-efficacy and career success.

Instrumentation

For the present study, the variables to be measured are career success, career commitment, job security, training and self-efficacy. To measure the career development practices (job security and training) and its impact on career under the mediating role of career commitment, a total of 34 items were used, which were adopted from Rehman [50]; Subbaiah [51]; Greenhaus et al. [52]; Chen [53]; Kong [54]. A self-administered questionnaire, based on 5-point Likert scale from “1” as “strongly disagree” to “5” as “strongly agree” was employed to measure all items.

Research Design

The population for this research consists of all the employees in the insurance sector in Pakistan. According to the Insurance Book [8], there are nearly 9,000 employees in this sector. Stratified sampling techniques are followed to carry out this study. The employees working in the insurance sector of Punjab, Sindh, and KPK Pakistan will be the target population for this study.

The data have been collected using self-administered questionnaires. The respondents have been selected by using stratified sampling as stated earlier. The questionnaires (650 in number) have been distributed among the randomly selected employees. Out of 650 questionnaires, 350 were distributed in Punjab, 200 in Sindh and 100 in KPK. A total of 386 questionnaires were finally retained for analysis that was collected back from the respondents. The retained questionnaires were 182, 143 and 61 from Punjab, Sindh and KPK provinces. The usable questionnaires from Punjab were 179, 138 from Sindh and 57 from KPK. The response rate was 59.38%. The usable response rate is 57.54%.

Results

With all variables used in research, respondents were also questioned to indicate the number of aspects related to job description, individual characteristics, education and gender of the employees working in the insurance sector of Pakistan. The descriptive analysis in Table 1 revealed that 31.3% employees are working as managers in different insurance companies and 68.7% employees are working as sales and marketing executive in insurance sector of Pakistan. This also indicates that most of the employees are related to sales and marketing job in the insurance sector. This analysis revealed that 81.3% males and only 18.7% females are working in the insurance sector of Pakistan. Only 3.5% of employees have completed matric or below in education, 9.6% have completed intermediate (Figure 2). 32.6% employees are graduates and 51.1% have completed their master level. This analysis also shows that 3.2% employees in insurance sector have completed higher education which is above than master level.

Table 1: Summary of Respondents’ Demography.

Items Frequency Percentage
Job Designation    
Manager 117 31.3
SME 257 68.7
Gender    
Males 304 81.3
Females 70 18.7
Education    
Matric or below 13 3.5
Intermediate 36 9.6
Graduate 122 32.6
Master or above 191 51.1
Others 12 3.2
internet-banking-measurement-model

Figure 2: Measurement Model.

Structural Equation Modelling

The construct measures is evaluated and determined by reliability and validity. After confirmation of the construct measures, the structural models were evaluated and analyzed the relationships between the latent variables. The PLS-SEM was used to investigate the direct, mediating and moderating role between career success and career development practices. For this purpose, SmartPLS 2.0 software was used to ascertain the causal links (associations or connections) among the constructs in these theoretical models. In this study, all the indicators of latent (unobserved) variables are reflective. In terms of the sequence and relationship among the constructs, the study has exogenous variables and endogenous variables which include two independent variables namely job security (JS), and training (T), one mediating variable career commitment (CC) and one moderating variable self-efficacy (SE) and career success (CS) as dependent variable.

Content Validity

Table 2, indicates that the factor loadings exceed threshold of 0.50 or above showing acceptable involvement of the indicators. The discriminant validity can be evaluated by inspecting the outer loadings of indictors.

Table 2: Factor Loading/Cross Loading.

  Career-commitment Career-Success Job Security Self-efficacy Training
ccq1 0.841 0.394 0.403 0.383 0.439
ccq2 0.858 0.437 0.405 0.454 0.413
ccq3 0.788 0.360 0.414 0.341 0.354
ccq6 0.497 0.191 0.287 0.286 0.338
csq1 0.408 0.837 0.403 0.409 0.355
csq2 0.391 0.841 0.352 0.405 0.337
csq3 0.413 0.840 0.303 0.409 0.402
csq4 0.277 0.612 0.221 0.261 0.137
csq5 0.179 0.516 0.171 0.131 0.158
jsq3 0.318 0.299 0.693 0.332 0.294
jsq4 0.330 0.236 0.697 0.229 0.351
jsq5 0.418 0.332 0.761 0.353 0.387
seq2 0.352 0.340 0.353 0.716 0.356
seq3 0.346 0.331 0.342 0.698 0.385
seq4 0.462 0.409 0.380 0.806 0.338
seq5 0.413 0.374 0.290 0.748 0.275
seq6 0.260 0.307 0.229 0.742 0.271
seq7 0.251 0.291 0.185 0.658 0.229
seq8 0.323 0.234 0.387 0.648 0.327
tgq1 0.341 0.343 0.353 0.309 0.762
tgq2 0.345 0.305 0.366 0.326 0.748
tgq3 0.287 0.287 0.374 0.320 0.766
tgq4 0.284 0.294 0.379 0.257 0.719
tgq5 0.482 0.250 0.337 0.347 0.686
tgq6 0.426 0.266 0.294 0.309 0.673

For the first time the PLS algorism was computed, there were some items that loaded extremely poor, for example, following items are not included in the PLS algorism, CCQ4 (question sequence # 9), CCQ5 (question sequence # 10), JSQ1 (question sequence # 25), JSQ2 (question sequence # 26), TG7 (question sequence # 36), TG8 (question sequence # 37), TG9 (question sequence # 38), TG10 (question sequence # 39) and SEQ1 (question sequence # 40), because deletion of these items lead to increase in CR and AVE of all these constructs to the minimum acceptable values.

Convergent Validity

Convergent validity is the defined as a particular scale measures the same construct, and it is assessed for all the variables by investigating the composite reliability (CR), AVE, items factor loadings and outer loadings [55]. Convergent validity is shown when the value of AVE for each construct is greater than 0.5, the value of CR is greater than 0.7, the items load on their respective construct is greater than or equal to 0.7, and the value of t-statistic of the outer loading is greater than 1.96.

Table 3 depicts the dependent variable, the CR of CS is 0.856 and CR for independent variables JS and T is 0.761 and 0.870 respectively, while CR for moderating variable SE and mediating variable CC is 0.881 and 0.840 respectively [56]. The value of AVE greater than 0.5 for each construct is another evidence of convergent validity. The results in Table 3 shows strong convergent validity because altogether constructs have an AVE above 0.5. Similarly, Table 3 display convergent validity, all item loadings (outer loadings) above 0.6, suggests that more than half of the variance is netted by the constructs.

Table 3: Convergent Validity.

Construct Item Loadings Cronbach’s Alpha CR AVE
Career Success ccq1 0.841 0.793 0.856 0.577
  ccq2 0.858      
  ccq3 0.788      
  ccq6 0.497      
Career commitment csq1 0.837 0.740 0.840 0.551
  csq2 0.841      
  csq3 0.840      
  csq4 0.612      
  csq5 0.516      
Job Security jsq3 0.693 0.534 0.761 0.515
  jsq4 0.697      
  jsq5 0.761      
Self-efficacy seq2 0.716 0.843 0.881 0.516
  seq3 0.698      
  seq4 0.806      
  seq5 0.748      
  seq6 0.742      
  seq7 0.658      
  seq8 0.648      
Training tgq1 0.762 0.821 0.870 0.528
  tgq2 0.748      
  tgq3 0.766      
  tgq4 0.719      
  tgq5 0.686      
  tgq6 0.673      

Discriminant Validity

The most common approach in evaluating discriminant validity is Fornell-Larcker criterion. Discriminant validity was assessed for CS, CC, JS, T, and SE. Discriminant validity is established when the square root of AVE of each construct is higher than the correlation of the construct with any other latent construct [57]. Fornell-Larcker Criterion results are shown in Table 4. The square root of value of AVE (in bold) is greater than its highest correlation of construct. Thus, it is decided that discriminant validity on the construct has been established, therefore, it is anticipated that the results obtained relate to the hypotheses testing should be valid and reliable.

Table 4: Discriminant Validity.

  CS CC JS SE T
CS 0.742        
CC 1.000 0.759      
JS 0.430 0.483 0.717    
SE 0.392 0.478 0.594 0.718  
T 0.475 0.465 0.451 0.459 0.726

Lastly, in this study outer factor loading is considered as important criteria in order to assess contribution of indicator to assigned construct was examined. The threshold values of 0.5 or above should be used to examine the outer loadings [58]. After getting a good result of the evaluation of the measurement model (outer model) precisely, the latent variables suggest satisfactory evidence of reliability and validity, the next step was evaluation of structural model (inner model).

Direct Relationships

The evaluation of the structural model begins with an investigation of the direct relationships among the independent, mediator, moderator and the dependent variable. The path coefficients’ size was examined through PLS-SEM Algorithm, and the significance of the relationship was examined through PLS-SEM bootstrapping procedure in the SmartPLS 2.0 software [59]. The valid number of observation in data set was used as the number of cases, and 5,000 was used as number of bootstrapping samples.

In this model, first it is focused on the analysis of the direct relationship between independent and the mediator variable (H1 and H2). In second step, the relationship between independent variables and the dependent variable is analyzed (H3 and H4). In the third step, the significant relationship is examined between CC as mediator and CS as dependent variable as H5 and H6. In the fourth step, the mediation of CC analysis took place, where H7 were examined between CC as independent variable and CS as dependent variable [60-62]. Hypothesis H8 is carried out by examining the moderating relationship of SE with CC and CS.

Figure 3 shows the path coefficient of exogenous and endogenous variables. The result shows that all the exogenous variables have a positive coefficient with the dependent variable. In Figure 3, the bootstrapping result shows that the relationship between independent variables and the dependent variable is significant statistically as p<0.01; two of the independent variables are significant at p<0.05. Table 5 presents the results of the path coefficients, t-values and p-values.

internet-banking-pls-algorithm-direct

Figure 3: PLS Algorithm Direct Relationship.

Table 5: Results of Hypotheses Testing (Direct Relationships).

NO Hypothesized Path Path
coefficient
Standard
Error
t
Value
P
Value
Decision
1 Career-commitment → Career-Success 0.222 0.074 2.986 0.001 Supported
2 Job-Security → Career-Success 0.133 0.057 2.337 0.010 Supported
3 Job-Security → Career-commitment 0.332 0.052 6.390 0.000 Supported
4 Self-efficacy → Career-Success 0.246 0.057 4.306 0.000 Supported
5 Training → Career-Success 0.116 0.066 1.736 0.042 Supported
6 Training → Career-commitment 0.348 0.052 6.630 0.000 Supported

The mediator variable was presented to assess the relationship between the independent variables and the dependent variable. The moderator variable is also used between mediator and dependent variable [63].

With respect to H1, the result shows a positive impact of JS on CC (β=0.332; t=6.390; p<0.000); therefore, supported H1. However, the result shows significant influence of T on CC (β=0.348; t=6.630; p<0.000) and supporting H2. About H3, the result shows a significant positive influence of JS on CS (β=0.133; t=2.337; p<0.010); so H3 is also supported [64]. H4 results shows significant influence of T on CS (β=0.116; t=1.736; p<0.042); so H4 is supported. Additionally, H7 results shows the significant positive relation between CC and CS (β=0.222; t=2.986; p<0.001); so H7 is supported.

The bootstrapping result in Figure 3 shows that all the relationships are significant including the variable with a negative coefficient at p<0.01 and p<0.05. Table 5 also presents the path coefficients, t-values and p-values.

Mediation Test

As shown below in Figure 4 the path coefficients of the two independent variables are positive. The path coefficients have a positive sign of all independent variables. Also, the path coefficient is positive between the mediator and dependent variable. The bootstrapping result found in Figure 4 shows all the relationships are significant and positive coefficient.

internet-banking-pls-sem-bootstrapping

Figure 4: PLS-SEM Bootstrapping Indirect Relationship.

Mediation analysis assesses the indirect effect of the independent variable on the dependent variable via an intervening variable. According to Hoyle and Robinson, there are numerous techniques for assessing mediation, which include: causal steps strategy or serial approach. Baron and Kenny also referred different conditions for it.

The bootstrapping method begins with estimating the path model of a direct relationship between the independent and the dependent variable without use of the mediator. The path models of direct relationship include the path coefficients and t-values using PLSSEM algorithm and the bootstrapping procedure [65]. In the second stage, the path model is estimated with the mediator variable, where, the focus is on whether the relationship of independent variables and the mediator and also relationship of mediator and dependent variable are significant. This is necessary but not sufficient reason of mediation effect. Lastly, the product of the two significant path coefficients is divided by the standard error of the product Equation to test the significance of the indirect effect.

After including the mediator construct, CC in Figure 4, the bootstrapping result of 5,000 samples was used to multiply path a and path b. Then the product of the two significant paths was divided by the standard error of the product of the two paths Equation to get the t-value [66]. From Table 6, it is clear that CC mediates the positive relationship between JS and CS (β=0.120; t=5.198); supporting H5. T and CS (β=0.078; t=3.736) supporting H6. Results of the study shows that in the indirect effect of job security and career success is significant having values of confidence interval (LLCI=0.074, ULCI=0.165). Both lower level confidence interval (LLCI) and upper level confidence interval (ULCI) are positive. Hence we conclude that the career commitment having the mediating role in the relationship of job security and career success. In the indirect effect of training and career success, relationship is also significant because of positive values (LLCI=0.037, ULCI=0.120), so there is mediation [67]. We conclude that the career commitment having the mediating role communicated with job security and career success as well as training and career success.

Table 6: Hypothesized Path Coefficients.

Bootstrapped Confidence Interval
Hypothesized
Path
Path a Path b Indirect Effect SE t value 95% LL 95% UL Decision
JS->CC->CS 0.256 0.467 0.120 0.023 5.198 0.074 0.165 Mediation
T->CC->CS 0.168 0.467 0.078 0.021 3.736 0.037 0.120 Mediation

Moderation Test

Table 7 indicates a relationship between CC*SE and CS (β=-0.113; t=5.798; p<.05). Hence, it is concluded that SE has a negative influence on CS and the level of R2 that is accounted for the model improves from 0.26 to 0.27.

Table 7: Moderating testing (inner modelling Analysis).

NO Hypothesized Path Path coefficient Standard Error t
Value
P-Value Decision
1 CC * SE → CS -0.113 0.056 5.798 0.000 Supported

Table 7 shows, there is a significant addition of the R2 level that remains at 0.27. The interaction term found to be statistically significant as shown in Table 7. Current result indicate that the interaction term of CC*SE is significant (β=-0.113; t=5.798; p<.000); hence, H8 is supported.

Career commitment have a positive relation and impact on career success but the self-efficacy belief of individuals make it negative because of negative thinking about insurance. Most of the people think that insurance is not legal and allowed in Islam so self-efficacy belief make it negative

Conclusion

We proposed an evolving process of career success and career commitment of working employees of insurance sector of Pakistan. Up till now, we have raised several important issues to consider career development practices of working employees of insurance sector of Pakistan. It has been discussed the major factors and variables which are important and have a positive effect and relation on the employees’ career commitment and career success. The results and outcomes indicates a matter that career is a major function for employees but we have endeavoured to explore that career development practices like job security and training to build career commitment and career success of working employees of insurance sector.

There are three major distinctions in it. First these career development practices have a constructive effect on career commitment and career success. Second career commitments also have a significant and conclusive impact on career success. Third is

the self-efficacy belief of individuals which make it negative. It’s the belief of employees about insurance sector. Its results are different because of the religious concepts and misunderstandings about the insurance sector. Individuals have negative approach towards insurance sector and don’t want to join it as career because insurance is not allowed in Islam.

It will be truly very helpful for the employees of insurance sector, first focus on their career by giving them career development opportunities to develop their career and career skills. Career development practices help them to be committed with their career in insurance sector and it will lead towards career success. On the second step help employees to build their belief and change their mind about the insurance sector to work in it as career development.

For real benefits and for potential employees and for the growth of insurance sector of Pakistan it is very important to implement career development practices for employees to be committed and successful in their careers.

References

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