Newcomer psychological contracts and employee socialization activities: Does perceived balance in obligations matter?

Newcomer psychological contracts and employee socialization activities: Does perceived balance in obligations matter?

Journal of Vocational Behavior 73 (2008) 465–472 Contents lists available at ScienceDirect Journal of Vocational Behavior journal homepage: www.else...

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Journal of Vocational Behavior 73 (2008) 465–472

Contents lists available at ScienceDirect

Journal of Vocational Behavior journal homepage: www.elsevier.com/locate/jvb

Newcomer psychological contracts and employee socialization activities: Does perceived balance in obligations matter? q Stephanie C. Payne a,*, Satoris S. Culbertson b, Wendy R. Boswell c, Eric J. Barger d a

Texas A&M University, Department of Psychology, 4235 TAMU, College Station, TX 77843-4235, USA Kansas State University, Department of Psychology, 492 Bluemont Hall, 1100 Mid-Campus Drive, Manhattan, KS 66506-5302, USA Texas A&M University, Department of Management, Mays Business School, College Station, TX 77843-4221, USA d Financial Industry Regulatory Authority, 9509 Key West Avenue, Rockville, MD 20850, USA b c

a r t i c l e

i n f o

Article history: Received 20 June 2008 Available online 13 September 2008

Keywords: Psychological contracts Newcomers Socialization activities Obligations Balance

a b s t r a c t We sought to determine the extent to which one’s beliefs about the relationship between an employee and an organization at the start of employment influence subsequent socialization activities. The balance of employee exchange relationships, employee perceptions of both their own obligations and the employers’ obligations, were collected from 120 newcomers in a public sector organization on the first day of employment and again three months later. We found the relationship between employee obligations and two socialization activities (time with mentor and time spent in training) depended on the employee’s perceptions of what the employer owed the employee, such that employees in unbalanced relationships tended to engage in more socialization activities than employees in balanced relationships. Ó 2008 Elsevier Inc. All rights reserved.

1. Introduction In an effort to understand changing relationships between employees and their employers (Roehling, Cavanaugh, Moynihan, & Boswell, 2000), researchers have studied employees’ perceptions of the nature of that relationship. This body of research has referred to the employment relationship as a psychological contract (e.g., Rousseau, 1989), an exchange relationship (Shore & Barksdale, 1998), and/or an employee–organization relationship (Tsui, Pearce, Porter, & Tripoli, 1997). Central to psychological contract theory is the existence of a link, in the mind of the employee, between the provision of certain levels of effort to the organization in exchange for particular rewards or considerations (Rousseau, 1995). Every employee holds a highly subjective view of reality regarding the terms of an exchange agreement between him or herself and the organization (Rousseau, 1995). The terms of the psychological contract are thus formed from a combination of individual and organizational influences and serve to direct an individual’s activities and behaviors within the organization (Rousseau, 1989). The degree of balance that is perceived between the employee’s obligations and employer’s obligations has important implications for both the employee and the organization (Shore & Barksdale, 1998). In this study, we extend research on the balance within psychological contracts to employee socialization.

q An earlier version of this paper was presented at the annual meeting of the Society for Industrial and Organizational Psychology, New York, NY, April 2007. The authors wish to express their appreciation to Brian Payne and Matthew Pariyothorn for their assistance with data collection and to Michael Wesson for his comments on an earlier draft of this paper. * Corresponding author. Fax: +1 979 845 4727. E-mail addresses: [email protected] (S.C. Payne), [email protected] (S.S. Culbertson), [email protected] (W.R. Boswell), Eric.Barger@finra.org (E.J. Barger).

0001-8791/$ - see front matter Ó 2008 Elsevier Inc. All rights reserved. doi:10.1016/j.jvb.2008.09.003

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We chose to examine socialization activities in relationship to perceived obligations because of the crucial role such activities play in an employee’s adjustment to a new organization (e.g., Haueter, Macan, & Winter, 2003) as well as the relationships such activities have with key outcomes, including person-job fit, job satisfaction, intentions to remain with the organization, and overall job performance (e.g., Bauer, Bodner, Erdogan, Truxillo, & Tucker, 2007; Saks, Uggerslev, & Fassina, 2007). 2. Psychological contracts Researchers have attempted to operationalize expectations in employment relationships by examining the employees’ psychological contract, or their beliefs about the terms and conditions of the exchange relationship between themselves and the organization (Rousseau, 1989). Most of this research has focused on the employee’s perception of the employer’s obligations (Rousseau, 1995, 2001). However, more recent research has incorporated the employee’s perception of both the employer and the employee’s obligations (e.g., Shore, Tetrick, Lynch, & Barksdale, 2006). The interaction between the employer’s obligations and the employee’s obligations captures the degree of balance or mutuality between these obligations. Thus in a balanced relationship, both the employer and the employee are perceived to have similar levels of obligation (i.e., both high or both low). In an unbalanced relationship, one party is perceived to be more obligated than the other. Social exchange theory and equity theory also offer some insight on the issue of balance and unbalance. Social exchange theory (Blau, 1964) posits that employees seek balance in social exchanges and avoid states of indebtedness. According to Adam’s (1963) equity theory, individuals seek equity, and thus balance in their relationships. Based on these theories, balance in exchange relationships is expected and preferred (cf. Dabos & Rousseau, 2004); therefore, most relationships are likely to be balanced, and unbalanced relationships are likely to be temporary (Shore & Barksdale, 1998). Certain unbalanced relationships, however, are likely to occur. For example, employees are likely to seek to maximize profit from the exchange (Homans, 1958) such that they receive more than they contribute; that is, employer obligations are higher than employee obligations. Nevertheless, Adams (1963) argued that individuals have a basic desire to reduce feelings of inequity when they occur, and therefore these unbalanced relationships are likely to be short-lived. Since balanced relationships are preferred and most desirable (Blau, 1964), employees in balanced relationships are more likely to report positive organizational attitudes than employees in unbalanced relationships. Using a typology approach in which employee and employer obligations were each dichotomized into high and low obligations creating a 2  2 framework, Shore and Barksdale (1998) found some support for this in that mutual high obligation relationships associated with the highest levels of affective commitment and lowest level of turnover intentions compared to the three other combinations of employee and employer obligations. Similarly and consistent with the idea of seeking balance or profit, Tsui et al. (1997) found that mutual high obligation relationships (balanced) and employee under-obligation relationships (i.e., the employer is perceived to be more obligated than the employee) related to higher levels of task and contextual performance and affective commitment than the two other exchange relationships. Thus, a balanced relationship of mutual high obligations has been consistently associated with the most favorable levels of attitudes and behaviors. Tsui et al.’s findings that employee under-obligation relationships were also associated with favorable outcomes suggest that perceptions of high levels of employer obligations may contribute to these positive responses. We seek to extend these findings to the socialization context and specifically, how perceptions of obligations influence an employee’s socialization activities. It is important to note that the balance in psychological contracts can concern a balance in the expected obligations employees and employers have for one another or in the actual fulfillment of those obligations. As discussed thus far, the balance has been in regards to how expectations of obligations. Alternatively, considerable research has examined the role of violations in the development and maintenance of psychological contracts (e.g., De Vos, Buyens, & Schalk, 2003; Robinson, Kraatz, & Rousseau, 1994; Sutton & Griffin, 2004), highlighting the point that balance can also exist in terms of actual fulfillment of obligations, with balanced relationships being those in which the employee and the employer equally fulfill their obligations with one another. In this study, we examine newcomer perceptions on the first day of employment; therefore, we focus on balance of expected obligations rather than fulfillment. It is this balance (or unbalance) in perceived obligations that we posit will drive the engagement of socialization activities. We elaborate on the link between balance and socialization in the following section. 3. Balanced exchanges and socialization The process of adjusting to a new organization is one of uncertainty reduction (e.g., Berger, 1979) and an effort to increase predictability about interactions that newcomers will have with others in the organization (Berger & Calabrese, 1975). The adjustment process is believed to be influenced by both the newcomer and the organization (Reichers, 1987); thus socialization is the result of the interaction of formal organizational tactics and individual employee proactive behavior (e.g., information seeking). Employees can take a proactive role in the socialization process or passively let information come to them. Socialization research has shown that proactive employees socialize more quickly and reap more benefits than reactive employees do (Finkelstein, Kulas, & Dages, 2003; Kammeyer-Mueller & Wanberg, 2003. Early socialization activities (e.g., information seeking) are believed to shape the psychological contract (Nelson, Quick, & Joplin, 1991; Rousseau, 2001),

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and empirical research supports the influence of knowledge acquired during socialization on changes in newcomers psychological contracts (Thomas & Anderson, 1998). Although these early experiences may help shape psychological contracts, employees also bring with them expectations for the employment relationship (Rousseau, 1995) that help to direct their initial reactions and behaviors. In this study, we examine how newcomers’ perceptions of employment relationships (in some ways preconceived notions and ideas) impact the socialization process. In particular, we examine socialization activities including attendance at social events, time with mentors, and time in training (see Chatman, 1991) during the first three months of employment. Whereas some of these activities are more formally encouraged for employees (e.g., training), other activities are more discretionary (e.g., social events). Engaging in socialization activities may be a means for employees to fulfill some obligations to an employer. Therefore, employees in relationships in which they feel highly obligated to the organization are likely to seek to fulfill these obligations by engaging in more socialization activities than employees who perceive low levels of employee obligations. This assertion is supported to some extent by prior research (e.g., Robinson & Morrison, 1995) that found psychological contract obligations to relate positively to organizational citizenship behavior (OCB) (Organ, 1988; Organ, 1997). Hypothesis 1: Employees who perceive high rather than low levels of employee obligations are more likely to (a) attend social events, (b) spend time with a mentor, and (c) spend time in training. Whereas employee perceptions of employee obligations are expected to have a direct effect on socialization activities, the perceived level of employer obligations relative to the perceived level of employee obligations (degree of balance) is also likely to play a role in this relationship. When employees perceive an imbalance in the form of the employer owing them more than they owe the employer, they may be less proactive about engaging in socialization activities in order to equalize perceived obligations. In other words, engaging in such activities when the employer owes the employee more would actually exacerbate the imbalance. Rather than restoring balance, these actions would increase the employer’s debt to the employee. Thus, in line with the notion that individuals seek balance in their relationships, as supported by social exchange theory (Blau, 1964) and equity theory (Adams, 1963), individuals would be less likely to engage in socialization activities when they have a high perception of employer obligations relative to their own obligations. This reduction in proactive socialization activities when the imbalance is in the form of the employer’s obligations being greater than the employee’s obligations is not unlike the findings reported by Shore and Barksdale (1998). In particular, these researchers found that in situations in which employers’ obligations exceeded employees’ obligations, there were more negative employee outcomes (e.g., higher turnover intentions, lower affective commitment). Accordingly, we expect employee perceptions of employee and employer obligations to interact when predicting socialization activities, such that when the employers’ obligations are perceived to be stronger than the employee’s, the employee is less likely to engage in socialization activities. Hypothesis 2: Employer obligations moderate the positive relationship between employee obligations and (a) attendance at social events, (b) time with a mentor, and (c) time in training.

4. Method 4.1. Procedure and participants This study was comprised of two time periods, with two 15–20 min online surveys administered during the employee’s first day of employment and after three months of employment. Three months were chosen as the time period because the majority of newcomer adjustment and socialization occurs in the first few months of employment (Ashforth & Saks, 1996; Morrison, 1993a; Morrison, 1993b), and because the first three months has been identified by some as a critical time period for transitioning into a new role (e.g., Watkins, 2003). New employees to a public sector organization located in the Southwestern United States completed the initial survey on the first day of employment during their newcomer orientation at the organization. Participation in the study was voluntary. To increase participation, the researchers were given time alone with employees during the orientation where they explained the general purpose of the study and ensured the responses would remain confidential. Follow-up surveys were administered on the employees’ three-month anniversary dates. To increase response rates, employees were sent an email from a member of the organization’s human resources department reminding them that the researchers would be contacting them. Then, on their three-month anniversary date, employees were sent a link to the follow-up survey. A reminder email was sent two weeks later to participants who did not complete the follow-up survey. Study participants represented an array of jobs at this organization (e.g., 30% administrative, 28% professional trainers, 17% clerical, 11% technical). The number of participants who responded in Time 1 (T1) was 132 out of 141 available newcomers (94% response rate) and the number participating in Time 2 (T2) was 120 (out of 128—four people were no longer employed; 94% response rate). Thus, the final sample consisted of 120 newcomers; 60% were male and approximately 88%

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were Caucasian, 3% were African American, and 8% were Hispanic. Participants’ ages ranged from 20 to 63, with an average age of 39 years (SD = 10.39). The average starting salary for our sample was $41,451 (SD = $15,800). This demographic makeup was representative of the organization as a whole. 4.2. Measures 4.2.1. Psychological contracts We assessed employee perceptions of the employer’s and the employee’s obligations at T1 using Rousseau’s, 1998 Psychological Contracts Inventory. It consists of 18 items measuring employees view of the extent that the organization has obligated itself to provide to them such things as job security, stable pay, career development, and support and 17 items assessing the extent that they are obligated to provide things like hard work, loyalty, and continued employment with the organization. Response choices ranged from 1 (not at all) to 5 (great extent). 4.2.2. Socialization activities At T2, we used three items from Chatman (1991) to measure how much time in the first three months the employee spent engaging in activities aimed at newcomer socialization. These socialization activities included company-sponsored social and recreational events, mentoring, and training. The three open-ended items were, ‘‘Approximately how many companysponsored social or recreational events did you attend in the past three months?”, ‘‘Approximately how much time (number of hours) did you spend with a mentor in the past three months? and ‘‘Approximately how many hours did you spend in formal training over the past three months?” The organization did not have a formal mentoring program, thus mentoring relationships were voluntary and informal. Respondents were not asked to differentiate between required and voluntary training in their response to the training question, however, our human resource contact informed us that the majority of training classes were optional. 4.2.3. Control variables We examined demographic variables (sex, age, and ethnicity) and the Big Five personality variables as potential covariates. Respondents self-reported the demographic variables on the T1 survey. We measured the Big Five at T1 with Saucier’s (2002) mini-modular markers. 5. Results Table 1 depicts descriptive statistics, correlations, and coefficient alphas for the variables. The number of socialization events participants reported engaging in ranged from 0 to 5 (M = 1.30, SD = 1.19). The reported total time spent with one’s mentor ranged from 0 to 500 h (M = 63.55, SD = 105.61). The total time that participants reported they spent in training ranged from 0 to 400 h (M = 37.21, SD = 58.35). Consistent with Becker’s (2005) recommendations, we controlled for any demographic and personality variables that were significantly related to the dependent variables. The only significant relationship that emerged was between extraversion and time with mentor. Hypothesis 1: proposed a main effect for employee obligations on socialization activities. Contrary to expectation, employee obligations did not have a significant effect on any of the socialization activities, failing to support Hypothesis 1. Hypothesis 2: proposed a significant interaction between employee and employer obligations on socialization activities and outcomes such that imbalanced relationships in which the employer was perceived to owe more than the employee would yield the least socialization activities. Significant interactions emerged for two of the socialization activities: time with mentor (b = 2.27, p < 0.05) and time in training (b = 1.95, p < 0.05). The interaction between employer and

Table 1 Descriptive statistics, correlations, and reliability estimates

1. 2. 3. 4. 5. 6. 7. 8.

Sex (1 = female) Age Extraversion Employer obligations Employee obligations Social events Time with mentor Time in training

M

SD

0.40 39.41 3.70 3.82 4.18 1.30 63.55 37.21

0.49 10.39 .52 0.65 0.56 1.19 105.61 58.35

Note. Reliabilities (coefficient alphas) are on the diagonal. * p < .05. ** p < .01.

1

2 0.02 0.03 0.14 0.05 0.02 0.13 0.12

0.12 0.19* 0.09 0.11 0.07 0.05

3

4

0.21* 0.18 0.05 0.20* 0.07

(0.96) 0.54** 0.07 0.10 0.07

5

(0.92) 0.04 0.06 0.11

6

7

.02 .07

0.46**

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employee obligations on time with mentor revealed significant disparities in socialization between employees who perceive low levels of employee obligations but medium or high obligations for the employer as compared to low employer obligations (see Table 2, Fig. 1). Contrary to predictions, however, employees with higher employer obligations than employee obligations (low employee and high employer) reported spending the most time with their mentor. Interestingly, when employee obligations are high, the level of the employer obligations did not seem to matter for spending time with a mentor. When employer obligations were low, the level of employee obligations did not seem to matter as they tend to spend relatively few hours with a mentor. The interaction for time in training was a bit different, although the slope of the line for high employer obligations was quite similar to the one predicting time with mentor (see Fig. 2). Contrary to expectations, employees who perceived the employer owed them more than they owed reported the most time in training. The influence of employee obligations tended to reverse the effects of employer obligations on training time, such that the more employee obligations the more time spent in training unless employer obligations were high, in which case the more employee obligations the less time spent in training. Thus, although there were significant interactions between employee and employer obligations on the amount of time spent with a mentor and the amount of time spent in training, they were not in the expected direction. 6. Discussion Although neither of the hypotheses in this study was supported, some interesting and theoretically and practically useful findings emerged. Specifically, our results provided evidence for an interaction effect, revealing that the relationship between employee obligations and two socialization activities (time with mentor and time in training) depended on the perceived level of employer obligations. Employees reported spending more time with an informal mentor when they perceived

Table 2 Employee and employer obligations predicting socialization activities Social events B 1. Extraversion 2. Employer obligations Employee Obligations 3. Employer  employee obligations

0.13 0.00 0.31

0.20 0.23 0.28

Time with mentor

DR2

b 0.07 0.00 1.12

0.01 0.01

R2 0.01 0.02

B

SE

39.60* 23.64 -33.26 55.82*

18.53 17.56 20.68 23.82

Time in training b 0.20 0.15 0.17 2.27

DR2

R2

0.04* 0.02

0.04 0.06

*

0.04

0.11

B

SE 1.47 10.31 26.70*

9.89 11.61 13.64

p < .05.

Hours with Mentor

*

SE

160

Low Employer Obligations (-1SD)

140

Mean Employer Obligations

120

High Employer Obligations (+1SD)

100 80 60 40 20 0 Low (-1SD)

Mean

High (+1SD)

Employee Obligations Fig. 1. Interaction between employee obligations and employer obligations on time with mentor.

DR2

b 0.02 0.10 1.95

R2

0.01 0.03

0.01 *

0.04

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60 55 50

Hours in Training

45 40 35 Low Employer Obligations (-1SD) Mean Employer Obligations High Employer Obligations (+1SD)

30 25 20 15 10 5 0 Low (-1SD)

Mean

High (+1SD)

Employee Obligations Fig. 2. Interaction between employee obligations and employer obligations on time in training.

an imbalance between employee and employer obligations, specifically when they perceived the employer had a higher level of obligations than they did. Similarly, employees in unbalanced exchanges yielded the most time in training. However, contrary to time spent with a mentor, both imbalanced relationships (low employee and high employer as well as high employee and low employer obligations) yielded high levels of training. There are several explanations for the interactions counter to our hypotheses. First, although we posited that proactive socialization would be less likely for individuals who perceived their employer as owing them more because it would exacerbate the already unbalanced relationship, it appears that individuals may have actually been attempting to rectify that imbalance by equalizing the obligations. It could be that rather than viewing this behavior as something that increased the employer’s debt to the employee, the action may have been seen as one that either lowered the employer’s obligations or raised the employee’s obligations. That is, it could be that obligations for one (e.g., the employer) do not increase when the other (e.g., the employee) does something additional Thus, the degree of imbalance may be seen as decreasing, rather than increasing. An additional explanation concerns the balance of obligations versus fulfillments. As noted earlier, because organizational newcomers have not had a chance to fulfill (or violate) their obligations, nor has the organization had a chance to fulfill (or violate) its obligations, we posited that it is the balance (or imbalance) in perceived obligations that influences the extent to which employees engage in proactive socialization. Our results, however, suggest that this may not be the case. Rather, employees may have started off by engaging in a certain amount of socialization activities based on their perceived obligations (as reported at T1). Over the course of the three months between the initial assessment of contracts and report of socialization activities, however, the employees (and employer) may have had the opportunity to fulfill (or violate) the terms of that contract. These fulfillments (or violations) may have influenced the psychological contract and thus the continued engagement in socialization activities. A third explanation for the counterintuitive interactions, particularly in the case of the time in training, concerns the issue of the extent to which the socialization activities were mandatory or voluntary. For example, the fact that both imbalanced relationships (low employee and high employer as well as high employee and low employer obligations) yielded high levels of training might reflect the point that the time spent in training is not entirely discretionary. This finding may suggest that training and the resultant skill acquisition is viewed by employees as something beneficial for them personally, as well as for the organization. Thus employees may view training as an opportunity to reciprocate to the organization (in the case when the employee was under-obligated) and gain from the organization (in the case when the employee was over-obligated). This explanation, however, does not explain why less time was spent in training when the perceived employer and employee obligations were both high. More research is clearly needed in order to better understand these effects. One contribution of this study is measuring the employee’s perceptions of both his or her own obligations and the employers’ obligations. This approach allowed us to examine the nature of the exchange relationship more completely and better understand the extent to which the employee’s perceived balance between the two parties’ obligations plays a role in employee socialization. Our findings revealed that indeed it is the interactive effect of a newcomer’s perception of the employer’s as well as his or her own obligations that is likely to influence an employee’s engagement in socialization activities (i.e., time with mentor and training). Also, by keeping the measures of employee and employer obligations

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continuous, we avoided some of the limitations (e.g., sample-specific results) associated with categorical data based on cluster analysis (cf., Tetrick, 2004). Although our data were collected at two points in time, assessing psychological contracts separately from socialization activities, we only measured psychological contracts at T1. It is unlikely that the employees’ perceptions are completely stable. Thus, future research should measure psychological contracts at multiple time intervals to reveal if, when, and how these relationships may be changing. Social exchange theory suggests that people seek balanced relationships (Blau, 1964), thus unbalanced relationships should become balanced over time. Further, our measure of psychological contracts focused more on the content of employee and employer obligations (i.e., specific expectations) rather than the processes (i.e., mechanisms by which the relationship is developed and maintained; Tetrick, 2004), which some researcher are beginning to more directly assess (e.g., Shore et al., 2006). Our study is also limited by a relatively small sample size that may have limited our power to detect significant relationships. On the other hand, despite a small sample, we obtained several significant results, including interaction effects. We also found these relationships after controlling for significantly related individual differences. Though we included extraversion as a control variable, future research could more directly examine the role of proactive personality, which has been shown to relate to newcomer adjustment (e.g., Kammeyer-Mueller & Wanberg, 2003), as well as other individual differences (cf. Saks et al., 2007). There are many tactics that individuals can use to help them socialize into their new surroundings. The current study focused on three activities in particular: attendance at social events, time with mentors, and time in training (see Chatman, 1991). Future researchers may consider examining alternate socialization activities (e.g., information seeking from peers and coworkers) to determine the extent balanced (vs. unbalanced) psychological contracts (whether obligations or actual fulfillments) influence engagement in various socialization activities. Finally, we assessed our follow-up measures of socialization activities with single items after only three months. Although, as we noted, the majority of newcomer adjustment and socialization occurs in the first few months of employment (Ashforth & Saks, 1996; Morrison, 1993a; Morrison, 1993b), and the first three months has been identified as a critical time period for determining success or failure in a new role (Watkins, 2003), future research should examine additional measures of socialization activity as employees become more comfortable within the organization, more opportunities for socialization arise, and/or perceptions of obligations change. Using single-item measures of the socialization activities prevented us from being able to assess the reliability of these measures, and although similar measures have been used in past research (e.g., Thomas & Anderson, 1998), objective measures of time with a mentor as well as time in training would have been superior to our self-report measures, In summary, we sought to answer the question: To what extent do newcomer psychological contracts predict employee socialization activities? Our results showed that the relationship between employee obligations and two socialization activities (time with mentor and time in training) depended on the employee’s perceptions of what the employer owed the employee, and specifically, that employees engaged in the most activities when they perceived an imbalance in these perceptions. 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