ABSTRACT This study empirically evaluates the theoretical impact of a telecommuting or online work environment on employee loyalty. While the concept of employee loyalty has been extensively researched, the concept of the impact of the work environment on employee loyalty is fairly new. Specifically, this study operationally defines the work environment characteristics that contribute to employee loyalty and examines the impact of the online or telecommuting work environment on employee loyalty. A survey instrument is utilized to collect perceptual data about the psychological components of the work environment and their impact on employee loyalty from the employee's perspective. Multiple linear regression analysis is used to analyze the data from one hundred and three respondents to determine correlation between the work environment characteristics and employee loyalty. Additional statistics utilized in the analysis of the data include: factor analysis, t-test, K-S test, and Cronbach's Alpha. While the study's findings confirm that the three work environment factors (job satisfaction, social interaction, and trust) contribute to employee loyalty as represented by the surrogate, intent to turnover, the dynamics underlying the perceptions of telecommuting and traditional collocated employees is complex. Telecommuting employees, as hypothesized, demonstrate higher levels of intention to turnover, the key construct in the study, than do traditional onsite employees. Similarly, job satisfaction is much lower for telecommuters. No statistically significant differences were found in trust or social interaction. When exploring casual impacts of satisfaction, social interaction and trust on intention to turnover, very different dynamics emerged between the telecommuting and traditional. In particular, job satisfaction, while very important to the traditional workers, was insignificant to intention to turnover to telecommuter employees. In addition, telecommuters apparently had derived alternative mechanisms to allow for social interactions, other than face-to-face ones. Trust, in both groups, is an overriding factor in ameliorating intention to turnover. This research adds to current perspectives on the effects of the work environment on employee loyalty. This research will enhance insights into this increasingly prevalent work environment, and organization researchers and managers will be able to use these results to enhance understanding of the impact on work environment. These contributions may help to decrease turnover and enhance the satisfaction derived in telecommuting work environments. The study ends with a discussion of limitations and suggestions for future research.

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