Master thesis, MSc Human Resource Management
University of Groningen, Faculty of Management and Organization
January 29, 2009
ERIC NEUVEL Student number: 1258001 Pieter de Raadtstraat 37b
3033 VC Rotterdam Phone: +31 (0)6-22544435 E-mail: eric.neuvel@gmail.com
First supervisor/university:
Mrs. A. J. E. Schilder
Second supervisor/university:
Dr. C. Reezigt
Supervisor/field of study:
Mrs. O. Shiamrai Adecco
Business Line Manager Adecco Finance the Netherlands
ACKNOWLEDGEMENTS
This master thesis wouldn’t have been possible without the help of several people. I would therefore like to take this opportunity to thank these people.
First of all, I would like to thank everybody at Adecco Finance, Orlanda, Allison, Iwan, and all of the respondents that filled out the questionnaire. Orlanda, without your help, support, and advice it wouldn’t have been possible to conduct this research and finish my master thesis. Iwan and Allison, for the possibility to reflect on my work and your support. Above all, I want to thank the three of you for the time I spent at Adecco Finance; I enjoyed every minute of it. Finally, I would like to thank all the respondents that filled out the questionnaire, without your time and effort to fill out the questionnaire I couldn’t have done it.
I would also like to thank my supervisors at the university, Agnes and Cees.
Agnes, my first supervisor, I would like to thank you for the always available option to reflect on my work, ask questions, and receive your helpful advice. Cees, my second supervisor, I would like to thank you for your reflection on my master thesis.
- Eric Neuvel, Rotterdam, January 2009
ABSTRACT
In order to remain competitive contracting agencies need to develop strategies that foster contract workers’ commitment. This thesis investigates the importance of social exchange theory in explaining contract workers’ affective organizational commitment towards their contracting agency and whether organizational loyalty and turnover intentions are among its outcomes.
Data analysis, of questionnaires completed by respondents from a contracting agency, found contract workers’ levels of affective organizational commitment towards their contracting agency to be comparable to traditional workers’ levels of affective organizational commitment, found in organizational literature, towards their employing organization. With regard to the selected demographic variables, age was significantly related to affective organizational commitment.
Outcomes of correlational analysis of data from questionnaires confirmed the positive relationship of several social exchange constructs (perceived organizational support, psychological contract, procedural justice and informational justice) with affective organizational commitment, thus providing evidence of the importance of social exchange theory in explaining contract workers’ affective organizational commitment. Analysis also confirmed the importance of affective organizational commitment in relation to the expected outcomes, providing evidence of the importance of commitment for the contracting agency.
It is advised, to the organization where research was conducted, to especially recruit among younger prospective contract workers; manage the psychological contract during recruitment; use fair procedures during the assignment of contract workers to an organization which are communicated to the contract workers in advance; make use of personal development plans, feedback conversations, job evaluation conversations, and appraisal conversations; and to create favourable opportunities for rewards linked to the appraisal conversations.
INTRODUCTION
The “normal” or “standard” work arrangement for most workers during the twentieth century was performed at the employer’s place of business under the employer’s supervision (Kalleberg, 2000). There has been a gradual but accelerating growth of “alternative” or “non-standard” arrangements in Canada, the United States, Europe, and many parts of Asia (Quinlan, & Bohle, 2004). The most visible form of these arrangements, also labelled as contingent work, can be found in the case of agencies by which workers are seconded to client organizations. There can be substantial variation in the way these agencies operate but one of the most common methods is for them to provide client organizations with suitable contractors from their register of individuals available for contract work. Among these constituencies there is an almost explicit understanding that the assignment is of a fixed duration (McKeown, 2003). These agencies are evolving from providers of basic on-call services into human resource developers.
In order to remain competitive, especially in countries where competition amongst agencies is fierce and usable contract workers are scarce, it is argued that agencies need to develop strategies that foster employee commitment (Breugel, Olffen, & Olie, 2005). To date the majority of research available has focused on organizational commitment in the context of a “normal” or “standard” work arrangement. Organizational commitment of employees in “alternative” or “non- standard” work arrangements, such as contract work through a contracting agency, has not been subject to much theoretical or empirical investigation (Gallagher, &
McLean Parks, 2001). The organization, for which this research paper is written, Adecco Finance, also acknowledges the importance of commitment and wants to gain insights into the antecedents and outcomes of organizational commitment among their registry of contract workers. The focus of this research paper will be on affective organizational commitment since this refers to the employee’s emotional attachment to, identification with, and involvement in the organization (Meyer, & Allen, 1997).
Employees with a strong affective commitment continue employment with the organization because they want to do so.
An interesting field of research in the antecedent literature for contingent workers is social exchange theory (Coyle-Shapiro, & Morrow, 2006; Liden, Wayne,
Kraimer, & Sparrowe, 2003). According to Coyle-Shapiro and Morrow (2006) fair treatment, organizational supportiveness, and fulfilled promises are thought to create an obligation that contract workers seek to reciprocate to the agency through the forming of organizational commitment. This research paper aims to provide an answer whether these social exchange constructs are related to affective organizational commitment.
Two outcomes seem to be of particular importance for the agency where research was conducted, and their relevance and importance is also supported by examples found in literature. The first is that committed workers are likely to display organizational citizenship behaviour; which includes work-related behaviour that goes above and beyond that dictated by organizational policy and one’s job description (Breugel et al., 2005; Liden et al., 2003). Organizational loyalty, which is a facet of organizational citizenship behaviour, is of particular importance to the contracting agency because of its representative behaviours. The second possible outcome is that committed workers might stay longer with the contracting agency, thus decreasing turnover intentions (Breugel et al., 2005; Gallagher, & McLean Parks, 2001;
McKeown, 2003).
This results in the following research question which will be addressed in this research paper: “Is social exchange theory useful in explaining affective organizational commitment, among contract workers towards their contracting agency, and are organizational loyalty and turnover intentions among its outcomes?”
THEORY
Contract Workers And The Contracting Agency
Many new employee-employment relationships, which fall under the domain of contingent working arrangements, are presently evolving and one of the newest and fastest growing forms involves the use of third parties who place employees with client organizations on a long-term basis (Connelly, & Gallagher, 2004). These contract arrangements are themselves highly variable. Contingent contract arrangements may entail, for example, self-employed individuals who sell their services to a client organization for a specified time or project, seasonal employment arrangements, or temporary employment through in-house or intermediate agencies where hours may be non-systematic (Coyle-Shapiro, Morrow, & Kessler, 2006). Less contingent, more permanent contract arrangements are rapidly evolving where a third- party body (e.g., a contracting agency or professional employer organization) agrees to handle a set of work responsibilities for a client organization at their work location(s) or as assigned (Connelly & Gallagher, 2004; Kalleberg, 2000). The contracting agency supplies the employees and is the legal employer of record. The client organization has, in effect, outsourced some operations to the contractor. Stated differently, contracting agency and the client organization have negotiated a shared employer relationship vis-à-vis the contracted employee, creating a triangular system of employment relations (McKeown, 2003). This study focuses on the less contingent, more permanent contract arrangements, where a contracting agency assigns contract workers to a client organization.
A number of authors have argued that today’s companies need to develop strategies that foster employee commitment in order to remain competitive (Breugel et al., 2005; Guest, 1987). It is likely, therefore, that the competitive advantage of contracting agencies will be increasingly determined by their capacity to attract and retain a capable and committed workforce. The importance of organizational commitment is also stressed by Coyle-Shapiro and Kessler (2002) because the contingent worker is likely to be a familiar presence in the future it therefore becomes important to explore the consequences of contingent working arrangements on the attitudes and behaviour of employees.
Affective Organizational Commitment
Meyer and Allen (1997) note that common to the various definitions of organizational commitment is the view that commitment is a psychological state that characterizes the employee’s relationship with the organization and has implications for the decision to continue membership in the organization. To acknowledge the differences Meyer and Allen (1990) applied different labels to what they described as three components of commitment: affective, continuance, and normative. Affective commitment refers to the employee’s emotional attachment to, identification with, and involvement in the organization. Employees with a strong affective commitment continue employment with the organization because they want to do so. Continuance commitment refers to an awareness of the costs associated with leaving the organization. Employees whose primary link to the organization is based on continuance commitment remain because they need to do so. Finally, normative commitment reflects a feeling of obligation to continue employment. Employees with a high level of normative commitment feel that they ought to remain with the organization. Commitment research also recognizes that commitment can be directed toward different targets or foci such as organizations, occupations, unions and supervisors (Meyer, & Herscovitch, 2001). Contract workers who formally work for a contracting agency but are assigned to a client organization similarly ought to be able to recognize and differentiate, their commitment levels to their two distinct organizational targets (Coyle-Shapiro, & Morrow, 2006).
This study will focus on affective organizational commitment towards the contracting agency, and it will do so for several reasons. The first reason is that affective commitment is the most researched form of commitment and a lot of studies are available about its antecedents and outcomes (Breugel et al., 2005; Meyer, &
Allen, 1997). The second reason is that one may expect that the commitment of contingent workers, and thus contract workers, is based on feelings of identification and involvement rather then on feelings of being locked in place because of the high cost of leaving (Breugel et al., 2005). Finally it is argued by Solinger, van Olffen, &
Roe (2007) that general organizational commitment can best be conceived of as affective commitment only, being a genuine attitude towards an object: the organization. Normative and continuance commitment, in contrast, appear to be
attitudes regarding specific forms of behaviour that may or may not follow from the affective bond with the organization.
It is intuitively interesting to inquire as to whether or not contract workers are more or less committed compared to traditional workers (Connelly, & Gallagher, 2004). Studies of organizational commitment involving more traditional work settings typically report commitment scores slightly above the midpoint of the scale (Meyer,
& Allen, 1990). According to Felfe, Schmook, Schyns & Six (2008) and Rousseau (1995) the conditions of new forms of employment probably make it difficult for people to develop high levels of commitment to their organization. This study will make a comparison between contract workers’ levels of affective organizational commitment found in this study and traditional workers’ levels of affective organizational commitment found in other studies of organizational commitment.
Hypothesis 1. Contract workers will show lower levels of affective organizational commitment towards their contracting agency compared to traditional workers towards their employing organization.
Although the contracting agency can be legally defined as the employer organization many of the variables, which the literature finds related to commitment, are outside of the direct control of the agency (Gallagher, & McLean-Parks, 2001). It is, therefore, important to look at variables, which are under the direct control of the contracting agency, and show strong and consistent correlations with affective organizational commitment across studies. Concerning antecedents of affective commitment, Meyer and Allen (1997: 45) noted that work experiences have demonstrated stronger associations with affective commitment than have structural features of the organization or person characteristics of employees. The main focus of this study will therefore be on work experiences, person characteristics of contract workers will also be examined.
Research on person characteristics has focused on two types of variables:
demographic variables and dispositional variables (Meyer, & Allen, 1997). This study focuses on demographic variables as control variables for affective organizational commitment. Meyer and Allen (1997) argue that relations between demographic variables and affective commitment are neither strong nor consistent. Because these
results were obtained from studies among traditional workers and Gallagher and McLean Parks (2001) suggest the importance of several demographic variables, their relationship with affective organizational commitment needs to be tested among contract workers as well. The first variable is gender; results of meta-analyses have shown that gender and affective commitment are unrelated (Mathieu, & Zajac, 1990).
The second variable is age; meta-analytic evidence suggests that age and affective commitment are significantly, albeit weakly, related (Mathieu, & Zajac, 1990). The third variable is organizational tenure; meta-analytic reviews have also reported positive relations between organizational tenure and affective commitment (Mathieu,
& Zajac, 1990). The fourth variable is education; evidence suggests that educational level is not consistently related to affective organizational commitment (Meyer, &
Allen, 1997). The final variable is length of assignment, it is expected that as length of assignment increases affective commitment shifts from the agency to the organization in which the assignment is performed (Gallagher, & McLean Parks, 2001). As was mentioned above, despite these findings and expectation, Meyer and Allen (1997) relations between demographic variables and affective commitment are neither strong nor consistent.
Hypothesis 2. Gender, age, organizational tenure, education, and length of assignment are not significantly related to affective organizational commitment.
Social Exchange Theory
Building from the form of Blau (1964), many scholars have argued that employees form relationships at work, and these relationships can be categorized into two broad classes: economic and social (Rupp, & Cropanzano, 2002). Economic exchange relationships are generally short-term, quid pro quo arrangements. They usually involve the exchange of concrete and often pecuniary resources. Of particular relevance for this study are social exchange relationships. Social exchange relationships tend to be longer-term. They are more likely to involve less tangible and perhaps more symbolic or socio-emotional resources. Social exchange theory provides a useful basis for understanding contract worker’s affective organizational commitment towards their agencies when considering the requirements of the
variables (Coyle-Shapiro, & Morrow, 2006; Liden et al., 2003). Social exchange theory views the content of exchange relationships as encompassing the exchange of resources. The process of the exchange is governed by the norm of reciprocity (Gouldner, 1960), where an individual is obligated to return favourable treatment received from a donor – there is an expectation that in providing an other with benefits, an obligation has been created that the recipient will reciprocate the benefits received. This initiates an exchange process between employee and employer that is continually re-balancing through the ongoing conferring of benefits and discharging of obligations (Coyle-Shapiro, & Morrow, 2006).
According to Coyle-Shapiro and Morrow (2006) the social exchange constructs of fair treatment (organizational justice), organizational supportiveness (perceived organizational support) and fulfilled promises (psychological contract) are thought to create an obligation that contract workers seek to reciprocate towards their contracting agency, through the forming of affective organizational commitment.
These social exchange constructs show consistent and high correlations with affective organizational commitment, also for contingent working arrangements, and are under the direct control of the contracting agency (Connelly, & Gallagher, 2004; Coyle- Shapiro, & Kessler, 2002; Coyle-Shapiro, Morrow, & Kessler, 2006; Liden et al., 2003; Meyer, & Allen, 1997).
Hypothesis 3. Social exchange theory provides a useful basis for explaining affective organizational commitment.
Perceived Organizational Support
The notion of perceived organizational support argues that ‘employees develop global beliefs concerning the extent to which the organization values their contribution and cares about their well-being’ (Eisenberger, Huntington, Hutchison,
& Sowa, 1986). Perceived organizational support is assumed to be based on the favourableness of employees’ history of treatment by the organization. Organizational support theory holds that the formation of perceived organizational support is encouraged by employees’ tendency to assign the organization humanlike characteristics. Levinson (1965) noted that actions taken by agents of the organization
are often viewed as indications of the organization’s intent, rather than being attributed solely to agents’ personal motives. Based on their personification of the organization, employees would feel favourable or unfavourable treatment received from the organization as indicative of the extent to which the organization values their contributions and cares about their well-being.
Perceived organizational support would be valued by employees for meeting socio-emotional needs, providing an indication of the organization’s readiness to reward increased work effort, and indicating the organization’s inclination to provide aid when needed to carry out one’s job effectively (Eisenberger et al., 1986). The perception that the organization values one’s contribution and cares about one’s well- being also meets needs for esteem, affiliation, emotional support, and approval (Armeli, Eisenberger, Fasolo, & Lynch, 1998).
Concerning perceived organizational support, a meta-analysis by Rhoades and Eisenberger (2002) suggests three major work-experience antecedents. The first is organizational rewards and working conditions. Organizational rewards (recognition, pay, promotions), job security, and role stressors were found to be of particular importance to perceived organizational support. Support received from supervisor was also found to be an important antecedent. Just as employees develop global perceptions concerning their valuation by the organization, they develop general views concerning the degree to which supervisors value their contributions and care about their well-being. The final, and most important, antecedent that was found is procedural justice.
Organizational support theory holds that perceived organizational support produces a generalized felt obligation to help the organization achieve its goals, an affective commitment to the organization, and an enhanced expectancy that superior performance will be noticed and rewarded (Eisenberger et al., 1986; Rhoades, &
Eisenberger, 2002). Perceived organizational support would enhance affective commitment by producing a felt obligation to care about the organization’s welfare and by the incorporation of organizational membership and role status into social identity (Eisenberger, Armeli, Rexwinkel, Lynch, & Rhoades, 2001). Supportive of the underlying norm of reciprocity, meta-analysis indicates that there is a strong positive relationship between perceived organizational support and affective organizational commitment (Rhoades, & Eisenberger, 2002). The importance of
perceived organizational support in explaining affective organizational commitment among contingent workers is stressed by several studies (Breugel et al., 2005;
Connelly, & Gallagher, 2004; Liden et al., 2003). The obligation to exchange caring for caring should, thus, enhance contract workers’ affective organizational commitment towards their contracting agency.
Hypothesis 4. Perceived organizational support is positively related to affective organizational commitment.
The Psychological Contract
The conceptual development of the psychological contract culminates in the work of Rousseau (1989) who defines the psychological contract as ‘an individual’s beliefs regarding the terms of conditions of a reciprocal exchange agreement between the focal person and another party.’ Broadly spoken there exist two schools in psychological contract theory (Casteren, 2004). On the one hand the ‘Rousseau- school’, which mainly focuses on the employee and on the other hand the ‘traditional school’ that focuses on both sides, the employer and the employee. This study focuses on the employee, the contract worker, and uses the definition for psychological contracts proposed by Rousseau (1995) “individual beliefs, shaped by the organization, regarding the terms of an exchange agreement between individuals and their organization.” Psychological contract breach is defined as the employee’s perception regarding the extent to which the organization has failed to fulfil its promises or obligations (Robinson, & Rousseau, 1994).
Rousseau (1990, 1995) maintains that psychological contracts vary in strength and generality. Transactional obligations are characterized by a close-ended time frame and the exchange of economic resources, whereas relational obligations involve an open-ended time frame and the exchange of socio-emotional resources. Rousseau (1995) argues that employees in non-permanent work settings, such as contract workers, have a predominantly transactional rather than relational contract with their organizations.
Rousseau (1995) also suggests that employees, and thus contract workers, derive the terms of their psychological contract in three main ways. First, individuals
may receive persuasive communications from others. When being recruited, prospective employees may receive implicit or explicit promises from recruiters.
Once hired, co-workers and supervisors may describe their view of the obligations that exist between employees and the employer. Second, employees’ observations about how their co-workers and supervisors behave and are treated by the organization act as social cues that inform employees of their contractual obligations.
Third, the organization provides structural signals such as formal compensation systems and benefits, performance reviews, and organizational literature, including handbooks and mission statements that all play a role in the creation of the psychological contract. Morrison and Robinson (1997) note that contract breaches might occur due either to deliberate violations of the contract’s terms by the employee or organization or to a misunderstanding between the employee and organizational representatives concerning the nature of the other’s mutual obligations. Rousseau (1995) suggests that contract breaches might occur because of circumstances outside the organization’s control prevent employees or organizations from fulfilling their obligations.
Meta-analysis indicates that there is a strong positive relationship between psychological contract breach and affective organizational commitment (Zhao, Wayne, Glibkowski, Bravo, 2007). Several sources suggest the importance of the psychological contract in explaining contingent workers affective organizational commitment towards their agencies (Connelly, & Gallagher, 2004; Coyle-Shapiro, &
Morrow, 2006).
According to Rousseau and Tijoriwala (1998) to understand the variety of issues associated with the psychological contract assessment, it can be helpful to think of measurement as taking three forms:
1. Content-oriented, examining the content of the contract including its terms and the interrelations among terms.
2. Feature-oriented, comparing the contract to some attribute or dimension, such as the degree to which the contract is implicit/explicit or stable/unstable over time.
3. Evaluation-oriented, assessing the degree of fulfilment, breach, or violation experienced within the context of the contract.
This study will use a content-oriented approach for psychological contract assessment (Rousseau, 1990); several relational obligations were selected to examine their importance in explaining affective organizational commitment among contract workers. Traditional approaches for assessing breach and fulfilment combine the comparison of perceived obligations and delivered inducements into a single score.
As such, these methods suffer from the conceptual and methodological problems associated with difference scores (Edwards, 1994; Johns, 1981). Because of these problems this study will not combine the comparison of perceived obligations and delivered inducements into a single score.
Perceived obligations may exert an important influence on contract workers’
behaviour. Promises made represent potential future inducements that may or may not be received in the course of their relationship with the employer. Whether these potential inducements are realized is contingent upon behaviour in that relationship (Lambert, Edwards, & Cable, 2003). Consequently, contract workers should be motivated to behave in a manner that increases the likelihood of those promises being fulfilled, resulting in an increase of affective organizational commitment (Coyle- Shapiro, & Kessler, 2002).
Hypothesis 5a: Psychological contract obligations are positively related to affective organizational commitment.
According to Lambert, Edwards, and Cable (2003) affective organizational commitment will exhibit a stronger relationship with delivered inducements than with perceived obligations for several reasons. First delivered elements contribute directly to outcomes because what is delivered constitutes the resources available for satisfying needs. Second delivered inducements are concurrent with affective organizational commitment, both of which are experienced after employment.
Consequently, delivered inducements should be important in explaining affective organizational commitment among contract workers and display a stronger relationship with affective organizational commitment compared to perceived obligations.
Hypothesis 5b: Psychological contract inducements are positively related to affective organizational commitment.
Hypothesis 5c: Psychological contract inducements will exhibit a stronger relationship with affective organizational commitment than will psychological contract obligations.
An evaluation-oriented approach was selected as well for this study, assessing the degree of psychological contract breach to analyze the importance of the selected inducements (Robinson, & Morrison, 1997). It is expected that since delivered inducements are experienced after employment, as is the case for an evaluation- oriented approach, psychological contract breach is negatively related to delivered inducements.
Hypothesis 5d: Psychological contract breach is negatively related to psychological contract inducements.
Organizational Justice
Organizational justice is concerned with people’s fairness perceptions in organizations (Fortin, 2008). The organizational justice framework helps to investigate individual’s experience of different aspects of their employment. The current work in this area suggests that employees face at least two sources of justice (Rupp, & Cropanzano, 2002). The supervisor has a direct line of authority over the employee. He or she can influence important outcomes, such as pay raises or promotional opportunities. Secondly, employees might also attribute unfairness to the organization as a whole. Individuals often think of their employing organization as independent social actors capable of justice or injustice. The construct of organizational justice focuses on different aspects of employment (Fortin, 2008).
There has been debate surrounding how this construct should be conceptualized, but according to Colquitt (2001) organizational justice is best conceptualized as four distinct dimensions. The first dimension is distributive justice, which is the perceived fairness of decision outcomes. The second dimension is procedural justice, which
refers to the fairness of the processes that lead to decision outcomes. The third dimension is that of interpersonal justice which regards the quality of personal treatment respect and sensitivity. The final dimension is informational justice, which focuses on the amount and quality of information provided concerning procedures and outcomes. Interpersonal and informational justice used to be conceptualized as interactional justice, defined as the interpersonal treatment people receive as procedures are enacted (Bies, & Moag, 1986). Greenberg (1993) suggested that the respect and sensitivity aspects of interactional justice might best be viewed as interpersonal facets of distributive justice because they alter reactions to decision outcomes (interpersonal justice). He further suggested that the explanation aspect of interactional justice might best be viewed as an interpersonal facet of procedural justice because explanations often provide the information needed to evaluate structural aspects of the procedure (informational justice).
Concerning procedural justice, Leventhal (1980) identified six criteria of perceived procedural fairness. Typically, procedures are perceived to be ‘fair’ when they are consistent across people and over time, free of bias, accurate (relying on good information), contain mechanisms for correcting wrong decisions, adhere to prevalent conceptions of morality and are ‘representative’ (i.e. take into account opinions of all groups affected, which implies process control and decision control. Regarding informational justice, clarity, adequacy and sincerity of communications regarding a decision are important antecedents.
The notion that employees’ fairness perceptions have implications for organizational commitment is not a new one (Cohen-Charash, & Spector, 2001;
Meyer, & Allen, 1997). Research suggests that distributive justice and interpersonal justice affects attitudes about specific events, whereas procedural justice and informational justice affect attitudes about the system, such as affective organizational commitment (Ambrose, Hess, & Ganesan, 2007; Greenberg, 1993). Greenberg (1993) argues that interpersonal justice, because it reflects issues such as sensitivity, politeness, dignified behaviour, and respect, can ease an individual’s response to decision outcomes, especially if these outcomes are unfavourable. In contrast, he suggests that informational justice should affect long-term or organizational-centered outcomes because explanations and open communications provide individuals with information necessary to assess the systemic bases of existing procedures; this
perspective is also reflected by Tyler and Bies (1990). According to several sources the organizational justice theory is important in explaining contingent workers affective organizational commitment (Benson, 1998; Connelly, & Gallagher, 2004;
Coyle-Shapiro, & Morrow, 2006; Liden et al., 2003).
Hypothesis 6a: Procedural justice is positively related to affective organizational commitment.
Hypothesis 6b: Informational justice is positively related to affective organizational commitment.
Organizational Citizenship Behaviour
The first way in which contracting agencies may benefit is that committed workers are likely to display organizational citizenship behaviour (Breugel et al., 2005; Meyer, & Allen, 1997; Organ, & Ryan, 1995). Organizational citizenship behaviour has been defined as ‘behaviour that is discretionary, not directly or explicitly recognized by the formal reward system, and that in aggregate promotes the effective functioning of the organization, the behaviour is not an enforceable requirement of the role or the job description, and the behaviour is a matter of personal choice’ (Organ, & Paine, 1999). Multidimensional delineations have identified organizational citizenship behaviour facets such as conscientiousness, sportsmanship, civic virtue, courtesy, and altruism. Other researchers have divided organizational citizenship behaviour into two types: behaviour that is directed mainly at individuals in the organization, and behaviour that is concerned with helping the organization as a whole (Kidwell, Mossholder, & Bennett, 1997).
Van Dyne, Graham, & Dienesch (1994) followed a conceptualization based on an application of political philosophy to organizational settings. Graham (1991) has extended the political philosophy perspective on civic citizenship and applied the political categories of obedience, loyalty, and participation to citizenship in organizational settings. Organizational obedience reflects acceptance of the necessity and desirability of rational rules and regulations governing organizational structure, job descriptions, and personnel policies. Obedience can be demonstrated by respect
for rules and instructions, punctuality in attendance and task completion, and stewardship of organizational resources. Organizational loyalty is identification with and allegiance to an organization’s leaders and the organization as a whole, transcending the parochial interests of individuals, work groups, and departments.
Representative behaviours include defending the organization against threats, contributing to its good reputation, and cooperating with others to serve the interests of the whole. Organizational participation is interest in organizational affairs guided by ideal standards of virtue, validated by an individual’s keeping informed, and expressed through full and responsible involvement in organizational governance.
Representative activities include attending non-required meetings, sharing informed opinions and new ideas with others, and being willing to deliver bad news or support an unpopular view to combat “groupthink”.
This study will focus on organizational loyalty, behaviour that is concerned with helping the organization as a whole, because of its representative behaviours, which are of particular importance to the contracting agency.
Hypothesis 7: Affective organizational commitment is positively related to organizational loyalty.
Turnover Intentions
Another way in which contracting agencies may benefit from high organizational commitment is that committed workers stay longer with the agency (Breugel et al., 2005; Gallagher, & McLean-Parks, 2001; McKeown, 2003). Turnover intentions have been shown to be among the best predictors of actual turnover (Hom, Caranikas-Walker, Prussia, & Griffith, 1992; Mobley, 1977). Organizational commitment has been significantly and consistently related to turnover intentions (Meyer, & Allen, 1997).
For the contracting agency this is likely to result in a larger registry of contract workers, which means more revenues for the agency. Further through retention of contract workers it might be possible to build a high quality contract worker registry, through which the demands of client organizations can be better served and higher profit margins might be obtained. Retaining staff is usually a far better investment
than the cost of recruiting replacements (Farrel, 2001). An important distinction should be made between functional and dysfunctional turnover (Dalton, Krackhardt,
& Porter, 1981). Turnover is dysfunctional when an individual wants to leave the organization but the organization prefers to retain the individual. Turnover is functional when an individual wants to leave the organization, but the organization is unconcerned because the organization has a negative evaluation of the individual.
Hypothesis 8: Affective Organizational Commitment is negatively related to turnover intentions.
METHODS
Sample and Procedure
Data was obtained through a questionnaire because of several reasons. The most important reason is that a questionnaire is suitable to get a general idea of people’s perception. Another reason to select a questionnaire was because of its possibility to reach a high number of respondents in a short amount of time. A final reason was that an interview could possibly have created high expectations among the respondents about possible improvements.
The respondents used in this study are all active contract workers of Adecco Finance. Adecco Finance is a contracting agency in the Netherlands, located in Amsterdam and Rotterdam. The contract worker registry for this organization is made up of financial professionals with a secondary vocational education or higher education levels (MBO+).
Since the population was small it was necessary to use a procedure that results in high response rates. Dillman (2000) has developed such a procedure which is called the Tailored Design Method, this method was used is this study. According to Dillman (2000) there are five needed elements for achieving high response rates.
These elements were largely adopted in this study but were slightly modified because of several reasons. With regard to the design principles of a respondent-friendly questionnaire the recommended format was not used, instead the questionnaire was printed on an A4-format. The second element, which consists of the five compatible contacts, was also modified. Because the response rate after the third contact was relatively low, it was decided to replace the fourth contact with the fifth contact.
Accordingly, the fourth contact consisted of a telephone contact as to why the questionnaire wasn’t returned. The fifth contact consisted of sending a replacement questionnaire to the respondents when needed. With regard to the third and the fifth element, because of cost reducements, first-class stamps weren’t used and a material incentive was included instead of a financial incentive.
The two business locations contained 24 respondents of which 17 respondents completed and returned the questionnaire, a percentage of 70.8. Of these 17 respondents ten are male (58,8%) and seven are female (41,2%). Their age is between 20 and 45 with a mean age of 28,47 years. Their average tenure is 8,35 months and
the average length of their assignment is 7,12 months. The largest part of the respondents has finished their secondary vocational education (MBO) (47,1%), followed by higher vocational education (HBO) (35,3%) and a university education (WO) (17,6%).
Questionnaire
The questionnaire (appendix 1) consisted of 54 questions and was constructed according to the Tailored Design Method (Dillman, 2000). Because the population was Dutch and the questionnaire items were originally in English, the questionnaire was translated according to the back translation technique (Brislin, Lonner, &
Thorndike, 1973). The questionnaire made use of a five-point Likert scale because of the recommendations made by Dawes (2007).
Perceived organizational support. Prior studies surveying many occupations and organizations provided evidence for the high internal reliability and unidimensionality of the Survey of Perceived Organizational Support (Eisenberger et al., 1986; Shore, &
Wayne, 1993). Only nine items, from the short version of the original scale, with high factor items (e.g. “The organization really cares about my well-being”) were used to measure this construct due to the limitations on the length of the survey. Employees were provided with a five-point Likert scale (1 = strongly agree, 5 = strongly disagree) to indicate their extent of agreement with each item. The statements used, referring to evaluative judgments attributed to the organization, included satisfaction with the employees performance (two items), consideration of the employee’s goals and opinions (two items), the employee’s well-being (two items), requested special favour, responses to the employee’s possible complaints, and willingness to help with problems. Internal consistency for this scale was .95.
Measures of the psychological contract: Breach, obligations, and inducements.
The questionnaire made use of a content-oriented and an evaluation-oriented approach to increase reliability and validity (Zhao et al., 2007).
Breach was measured with 2 items with the highest factor loadings from Robinson (1996): “Almost all the promises made by my employer during recruitment
have been kept so far,” and “I feel that my employer has come through in fulfilling the promises made to me when I was hired.” It is not uncommon to use two items to assess overall contract breach (Rousseau, & Tijoriwala, 1998). Employees used a five-point Likert scale (1 = strongly agree, 5 = strongly disagree) to indicate their extent of agreement with each item. Cronbach’s alpha for this scale was .95.
Respondents indicated the extent to which they believed their employer was obliged to provide a list of six items. The original list from Rousseau (1990) contained 14 items but due to limitations on the length of survey only six relational items were used. These items captured the following aspects of the employment relationship: long-term job security, good career prospects, support with any personal problems, the opportunity to do interesting work, up-to-date training and development, and support when I want to learn new skills. Participants were provided with a five-point Likert scale ranging from 1 (a very great extent) to 5 (not at all).
Cronbach’s alpha for this scale was .96.
Inducements were measured along the same six items and requested that the respondent indicated the extent to which the item had actually been provided (along a five-point Likert scale ranging from 1 (a very great extent) to 5 (not at all).
Cronbach’s alpha for this scale was .93.
Procedural justice. The scale assessing procedural justice contained seven items adopted from Colquitt’s (2001) justice measure items. Colquitt (2001) also provides evidence of high internal reliability and construct validity for the justice dimensions and their predictive validity on commitment. Response choices are on a five-point Likert scale ranging from 1 (strongly agree) to 5 (strongly disagree). For the procedural justice items, the instructional statement asked contract workers to think about the decisions/procedures that are used to assign them to particular assignments, which is a context specific approach to justice measurement. This study made use of a context specific examination of justice because it is the most common approach to examine justice in organizational literature (Colquitt, & Shaw, 2005). The importance of the decisions/procedures in the assignment of contract workers to particular assignments has been demonstrated by Liden et al. (2003) and also because of discussions with managers and employees in the relevant organization. An example of
the scale items is the following: “The procedures have been applied consistently.”
Internal consistency for this scale was .71.
Informational justice. To measure informational justice, Colquitt’s (2001) five-item scale was used. Colquitt (2001) provides the same evidence concerning reliability and validity for this justice dimension. The contract workers used a five- point Likert scale (1 = strongly agree, 5 = strongly disagree) to indicate their extent of agreement with each item. Again the instructional statement asked contract workers to think about the decisions/procedures used to assign them to particular assignments.
An example of the scale items is the following: “He/she was candid in his/her communications with me.” Internal consistency for this scale was .88.
Affective organizational commitment. Affective organizational commitment was measured with six items from the Affective Commitment Scale, developed by Allen and Meyer (1990). Researchers using the Affective Commitment Scale have reported that is forms a single factor with high reliability (Allen, & Meyer, 1990;
Hackett, Bycio, & Hausdorf, 1994). The responses to each item are recorded on five- point Likert scales ranging from strongly agree (1) to strongly disagree (5). An example of scale items is the following: “This organization has a great deal of personal meaning to me”. Scale items “I would be very happy to spend the rest of my career with this organization,” and “I enjoy discussing my organization with people outside it” were not used because of predicted low item-total correlation (Van Breugel et al., 2005), overlap with the loyalty scale items and limitations on the length of survey. Cronbach’s alpha for this scale was .81.
Organizational loyalty. To measure organizational loyalty five items were used from Van Dyne, Graham, and Dienesch (1994) loyalty scale. The reliability and validity of the original scale has been confirmed by their research. A sample item is:
“I actively promote the organization’s products and services.” Scale items “I would not urge co-workers to invest money in the organization,” and “I don’t defend my organization when employees criticize it” were not used because of limitations on the length of survey and because of limited relevance to the organization. The contract workers used a five-point Likert scale (1 = strongly agree, 5 = strongly disagree) to
indicate their extent of agreement with each item. The item: “ I do not go out of way to defend my organization against outside threats,” was removed from analysis because of low-item total correlation. This resulted in an internal consistency for this scale of .71.
Turnover intentions. To measure turnover intentions two items were used from Boroff and Lewin (1997): “I am seriously considering quitting this firm for an alternative employer,” and “During the next year, I will probably look for a new job outside this firm” are the two items used. The responses to each item are recorded on five-point Likert scales ranging from strongly agree (1) to strongly disagree (5).
Internal consistency for this scale was .90.
Demographic variables. Gender was coded “1” for men and “2” for women. Age was measured in years. Organizational tenure was measured in months. Education was coded “1” for secondary vocational education (MBO), “2” for higher vocational education (HBO), and “3” for university education. Length of assignment was also measured in months.
Data Analysis
The main descriptive statistics for each variable (means, standard deviations, and coefficients of correlation among variables) were calculated. The internal consistency of each variable was evaluated by means of Cronbach’s alpha.
The mean score of 3.0 is the scale midpoint and can be seen as being neutral.
To analyze the means for each variable Fuhr and van den Berg’s (2004) scale interpretation was used. According to their scale interpretation the mean for a variable can be seen as being positive (2.5 and higher), moderately positive (2.5 to 2.9), neutral (2.9 to 3.1), somewhat negative (3.1 to 3.5), or negative (3.5 and lower). This scale interpretation was reverse-coded for the variables psychological contract breach and turnover intentions. Psychological contract obligations and psychological contract inducements were not analyzed according to this scale interpretation because of the use of another scale for these variables.
According to Cascio (1998), there is no fixed value below which Cronbach’s alpha is unacceptable and above which it is satisfactory, however he argues that if a procedure is to be used for comparing one individual with another, Cronbach’s alpha should be above .90. In practice, however, a Cronbach’s alpha as low as .70 proves to be very useful. Cronbach’s Alpha for this study can be seen as being satisfactory if it isn’t lower then .70.
Hypothesis 1 was analyzed by comparing the mean of affective organizational commitment in this study to the mean of affective organizational commitment for traditional workers found in other studies. Independent-samples T test was used for analysis of hypothesis 2. Cut-off points were used for age (cut point = 26), education (cut point = 2), organizational tenure (cut point = 6), and length of assignment (cut point = 6). These cut-off points were used to make sure sample sizes did not differ hugely between groups, for age and education there were additional considerations to take these cut-off points. The cut-off point for age reflects the distinction made by Howe and Strauss (1992) between generation X and Generation Y. The cut-off point for education reflects the difference between vocational (MBO) and higher education (HBO, WO). Pearson correlation coefficients were calculated to test hypothesis 4, 5a, 5b, 5c, 5d, 6a, 6b, 7, and 8.
RESULTS
Means, standard deviations, internal consistencies (Cronbach’s alpha), and Pearson’s correlation coefficients of all variables are presented in table 1. According to the scale interpretation, all variables can be seen as being positive except for affective organizational commitment, which according to the scale interpretation is neutral. Internal consistency for all variables can be seen as being satisfactory.
Hypothesis 1, which says that contract workers will show lower levels of affective organizational commitment towards their agency compared to traditional workers towards their employing organization, is not supported by my results. The mean for affective organizational commitment (M = 2.97) is slightly above the midpoint of the scale.
Hypothesis 2, which states that gender, age, organizational tenure, education, and length of assignment are not significantly related to affective organizational commitment, is not completely supported by the results.
Independent-samples T test of gender on affective organizational commitment is presented in table 2. Gender did not show a significant relation on affective organizational commitment (t (15) = 1.18, p = .26).
TABLE 2
Independent-samples T test of gender on affective organizational commitment
N = 17
Independent-samples T test of age on affective organizational commitment is presented in table 3. Age did show a significant relation on affective organizational commitment (t (15) = 2.34, p = .03), the older workers showed significant lower levels of affective organizational commitment (M = 3.38, SD = 0.67) compared to the younger contract workers (M = 2.61, SD = 0.68).
TABLE 3
Independent-samples T test of age on affective organizational commitment
N = 17
Independent-samples T test of organizational tenure on affective organizational commitment is presented in table 4. Organizational tenure did not show a significant relation on affective organizational commitment (t (15) = 1.75, p = .10).
TABLE 4
Independent-samples T test of organizational tenure on affective organizational commitment
N = 17
Independent-samples T test of education on affective organizational commitment is presented in table 5. Education did not show a significant relation on affective organizational commitment (t (15) = 0.58, p = .57).
TABLE 5
Independent-samples T test of education on affective organizational commitment
N = 17
The independent-samples T test of length of assignment on affective organizational commitment is presented in table 6. Length of assignment did not show a significant relation of affective organizational commitment (t (15) = 1.61, p = .13).
TABLE 6
Independent-samples T test of length of assignment on affective organizational commitment
N = 17
Hypothesis 3, stating that social exchange theory provides a useful basis for explaining affective organizational commitment among contract workers towards their agency, is neither supported nor rejected by the results. Because statistical analysis of this hypothesis could not be performed due to limitations on the sample size, the proportion of explained variation was not found. However, the separate social exchange constructs (hypothesis 4, 5a, 5b, 6a, and 6b) are positively related to affective organizational commitment.
Hypothesis 4, stating that perceived organizational support is positively and significantly related to affective organizational commitment, is supported by the results (r = .81, p < .01).
Hypothesis 5a, stating that psychological contract obligations are positively and significantly related to affective organizational commitment, is supported by my results (r = .57, p < .05). Hypothesis 5b, stating that psychological contract inducements are positively and significantly related to affective organizational commitment, is also supported by my results (R = .73, p < .01). Hypothesis 5c, which states that psychological contract inducements will exhibit a stronger relationship to affective organizational commitment then will psychological contract obligations, is also supported by the results (r = .73 > r = .57). Finally, hypothesis 5d, which states that psychological contract breach is negatively and significantly related to psychological contract inducements, is also supported by the results (r = -.66, p < .01).
Table 7 shows the means and standard deviations of the individual items that were used to measure psychological contract obligations. Perceived obligations are highest on support when I want to learn new skills (M = 2.24), followed by good career prospects (M = 2.29), up-to-date training and development (M = 2.30), long-term job security (M = 2.41), the opportunity to do interesting work (M = 2.53), and support with any personal problems (M = 3.00).
TABLE 7
Psychological contract obligations means and standard deviations
N = 17
Table 8 shows the means and standard deviations of the individual items that were used to measure psychological contract inducements. Perceived obligations exceed delivered inducements on support when i want to learn new skills (M = 2.24 >
M = 2.76), good career prospects (M = 2.29 > M = 2.82), up-to-date training and development (M = 2.30 > M = 2.94), and long-term job security (M = 2.41 > M = 2.71). Delivered inducements exceed perceived obligations on the opportunity to do interesting work (M = 2.47 > M = 2.53), and support with any personal problems (M
= 2.76 > M = 3.00).
