When perceived welfare practices leads to organizational citizenship behavior

Asia Pacific Management Review xxx (2016) 1e9

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When perceived welfare practices leads to organizational citizenship behavior Szu-Yin Lin*, Hsien-Chun Chen, I-Heng Chen Institute of Human Resource Management, National Sun Yat-Sen University, Kaohsiung, Taiwan

a r t i c l e i n f o

a b s t r a c t

Article history: Received 25 May 2015 Accepted 15 April 2016 Available online xxx

Due to institutional requirements, organizations in Taiwan adopt Employee Welfare Committee (EWC) to implement employee welfare planning and execution in the organization. However, little is known about how EWC practices influence employees' perceptions and behaviors in the organization in Taiwan. The current study aims to explore whether organizations can benefit from providing EWC practices, and among the first to provide a snapshot of EWC implementation and usage in Taiwanese organizations. Grounded in signaling theory and social exchange theory, we posit that EWC practices can serve as signals for showing concern and support for employees from the organization, if these practices were perceived by the employee, they may exhibit extra-role behavior in return. Questionnaire results from 216 employees in 15 organizations showed that there is a positive relationship between perceived EWC practices and organizational citizenship behavior (OCB). Results also suggest that there is a significant mediating effect for perceived organizational support (POS) between perceived EWC practices and OCB. EWC practices utilize as support from the organization, and employees reciprocate in beneficial ways in return to the organization. Implications and limitations of the current study are then discussed. © 2016 College of Management, National Cheng Kung University. Production and hosting by Elsevier Taiwan LLC. All rights reserved.

Keywords: Employee welfare committee Perceived organizational support Organizational citizenship behavior

1. Introduction Facing competitive challenges, human resource is increasingly seen as an important asset in organizations, as it is the key for organizations to gain and sustainable competitive advantage in a knowledge-based economy (Rowley & Redding, 2012). Accordingly, human resources management (HRM) and its practices have gained considerable attention from practitioners and researchers (Choi, 2014; Mohrman, Gibson, & Mohrman, 2001; Rowley & Redding, 2012). In general, HRM practices are commonly designed to enhance organizational performance and build positive relationship with employees (Hsu, Lin, Lawler, & Wu, 2007; Sun, Aryee, & Law, 2007; Tsui, Pearce, Porter, & Tripoli, 1997). Previous research has successfully demonstrated that implementing human resources practices such as labor-friendly policies and schemes, links positively to performance (Faleye & Trahan, 2011), and employee relations (Bae, Kang, & Wang, 2011; Faleye & Trahan, 2011; Verwijmeren & Derwall, 2010). For instance,

* Corresponding author. Institute of HRM, NSYSU, No. 70 Lien-Hai road, Gushan District, Kaohsiung City, 80424, Taiwan. E-mail address: [email protected] (S.-Y. Lin). Peer review under responsibility of College of Management, National Cheng Kung University.

employee welfare and benefits are recognized as means to simultaneously increase employee performance and enhance relationships with employees (Muse, Harris, Giles, & Feild, 2008). Shen (2010) indicated that HRM practices are implemented in organizations by taking both internal and external factors into consideration. In particular, many scholars have noted that a firm's decisions on welfare and benefit practices are usually influenced not only by concern for employees but also by institutional pressures (Baeten & Verwaeren, 2012; Barringer & Milkovich, 1998). From an institutional perspective, Lee, Hsu, and Lien (2006) further indicated that the popularity of welfare and benefit practices in modern organizations is as a result of coercive and normative isomorphism. To illustrate, according to the Employee Welfare Funds Law in Taiwan by the Ministry of Labor (2013), organizations with more than 50 employees are required to establish Employee Welfare Committee (EWC), and appropriate employee welfare funds for handling welfare businesses for employees. While establishing EWC as such is a practice that facilitates in promoting employee welfare and benefits, the existence of EWC in organizations in effect is also largely due to legal compliance. Nevertheless, a review of literature suggests that although many Western studies have researched on various aspects of employee welfare and benefit practices (Muse et al., 2008), and its links with positive work attitude and behaviors (Gunsch, 1993;

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S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9

Tremblay, Sire, & Pelchat, 1998; Williams, 1995), Asia research with regard to topics and countries covered in this area remains sparse (Wei & Rowley, 2009). Therefore, this research is conducted to take a step toward responding to Wei and Rowley’s (2009) call to improve the balance of research achievement in this field in Asia. To this end, this study firstly, from an institutional perspective, provides a snapshot of EWC practices implementation and usage in Taiwanese organizations. Also, due to the institutional pressures noted above, much of the limited research mainly focused on the availability and choice of EWC practices (e.g. Huang, 2003; Wu, 1983), the relationships between these practices and important work outcomes have been relatively neglected. However, given the necessity of adopting EWC practices in organizations, we believe, instead of only for the purpose of obeying rules and regulations, understanding how EWC practices may affect employees' perceptions and behaviors would greatly help practitioners optimize these practices. Specifically, based on signaling theory, we posit that EWC practices can serve as signals for showing concern and support for employees from the organization. Employees are likely to have the perception of organizational support when they perceive EWC practices provided by organizations. Also from the perspective of social exchange theory, employees, as reciprocation, are more apt to perform extra-role work behaviors, which in turn will enhance organizational performance. Thus, grounded theories we mentioned above, we secondly present a model that explains the nature of the relationships between EWC practices and important employee perceptual and behavioral outcomes, namely employees' perception of organizational support (POS) and organizational citizenship behavior (OCB). In doing so, the critical value of EWC practices is more likely to be better recognized by practitioners and consequently will be more adequately designed and implemented. In the following sections, we will begin with providing a critical review of the EWC practices in Taiwan organizations. Then, we propose that POS is an important mechanism that links EWC practices with OCB. We test our hypotheses using a sample of employees in manufacturing, high-tech, finance and communication organizations in Taiwan. By doing so, this study is among the first to contribute to the literature on employee welfare and benefits in the Asian context, and bring significant practical implications for practitioners. We also note limitations of the study and provide suggestions for further research. 2. Theories and hypothesis 2.1. Employee Welfare Committee in Taiwan As stated by the Employee Welfare Funds Law in Taiwan by the Ministry of Labor (2013), organizations with more than 50 employees are required to appropriate employee welfare funds for handling welfare businesses for employees. The funds came from 1% to 5% of the initial paid-in capital upon establishment of the organization; .05%e.15% of the monthly revenues; and 20%e40% of proceeds from the sales of discarded materials from the employer. The employees contribute .5% from their monthly wage. And under the Employee Welfare Funds Law, the funds shall be utilized by an EWC. According to statistics, until mid-2013 there are a total of 14,631 EWC established in Taiwan (Ministry of Labor, 2013). From an institutional perspective, organizations in Taiwan set up employee welfare funds and EWC can be seen as a result of coercive pressure, as organizations in Taiwan need to comply with legal mandates, this is referred to as coercive isomorphism (DiMaggio & Powell, 1983). The International Labor Organization at its Asian Regional Conference, defined labor welfare as “a term which is understood to include such services, facilities and amenities as may be established

in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and high morale” (Aswathappa, 2005, p.446). Welfare practices in Taiwan conform to this description. In general, EWCs in organizations in Taiwan are in charge of welfare planning and execution, such as organizing annual dinner events, employee tours, discount cards, family day, sports meeting or open house events. While currently, most of the company organize and design their welfare practices differently, Huang (2003) reviewed the general principles of EWC in Taiwan in his book, and classified EWC practices that were often adopted in Taiwan organizations into 3 categories, namely economic welfare (additional reward other than employees' base salary and mandatory benefits), recreational welfare (activities and social events that enhance interaction between employees) and facilitative welfare (some measures to better suit employees everyday needs) (see Appendix A for details). Based on institutional theory, the isomorphism of these EWC practices implemented in Taiwan organizations could be ascribed to normative or mimetic pressure. As some organizations may adopt these practices to meet accepted norms, and others might adopt to follow the best practices in the industry to fulfill requirements and expectations of stakeholders. This is referred to as normative or mimetic isomorphism (DiMaggio & Powell, 1983). In sum, although there is limited research on EWC and its practices in Taiwan, from an institutional perspective, our review of related reports and studies suggests that coercive pressure from regulations can explain the existence of EWC in Taiwan organizations. Also the common adoption of EWC practices noted above by Taiwan organizations can be as a result of the normative or mimetic pressure. 2.2. Perceived EWC practices and organizational citizenship behavior In order to keep up with effective outcomes, Katz and Kahn (1978) pointed that organizations should elicit 3 different behavioral patterns from its members: (1) organizations must attract and hold people; (2) insure that members exhibit “dependable” levels of performance; and (3) evoke innovative and spontaneous behavior beyond role requirements for accomplishing organizational functions. The third sets of behaviors are extra-role behavior that is not directly related to one's job description (in-role behavior). This behavior is then identified as organizational citizenship behavior (OCB) (Bateman & Organ, 1983; Organ, 1997). These behaviors include, for example, helping others with their tasks (Anderson & Williams, 1996); offering extra help and support to co-workers (Dutton, Worline, Frost, & Lilius, 2006) and being cooperative with other members (Dukerich, Golden, & Shortell, 2002). According to Organ (1988), OCBs can be defined by being altruism, courtesy, sportsmanship, civic virtue, and conscientiousness, and can be beneficial to the organization and other members within. To illustrate, the Meta-analysis conducted by Podsakoff, Whiting, Podsakoff and Blume (2009) has found that OCBs are positively associated with organization effectiveness measures, such as productivity and efficiency. Organizations implement various HRM practices in order to increase employee positive work attitudes and behaviors (Delery, 1998; Whitener, 2001). Researchers have suggested that high performance work practices enhance OCB (e.g. Becker & Huselid, 1998; Gong, Chang, & Cheung, 2010); employee perceived HRM practices are positively related to engagement of OCB (Lam, Chen, & Takeuchi, 2009). Similarly, while one important reason for implementing EWC practices is to fulfill institutional requirements, it can also generate positive work outcomes according to the following reasons.

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S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9

First, EWC practices provide activities and programs that aim to enrich employees' work life; employees may perceive these practices as valued resources offered by the organization (Muse et al., 2008). Based on social exchange theory, which views “exchange” as the core of all social behaviors (Blau, 1964), two actors contribute resource valued by each other in a direct exchange relationship. When employees are favorably treated by organizations, as reciprocation, they are likely to have positive behavioral responses and attitude toward their organizations. Further, EWC practices functions as benefits that impacts employee attitudes and behaviors in various aspects. Previous studies have examined benefit implementation (Allen, 2001; Behson, 2005; Lambert, 2000; Muse et al., 2008), perception towards benefit (Haar & Spell, 2004; Muse et al., 2008; Williams, Malos, & Palmer, 2002), and perceived usefulness and presence of HRM practices (Choi, 2014), and found that they are all positively connected with employee performances. Third, organizational practices signal organization's intent for building long-term relationship with employees, in return employees with discretionary role behavior and contributions (Gong et al., 2010; Shaw, Dineen, Fang, & Vellella, 2009; Sun et al., 2007). Prior research suggests that HRM investment in employees were negatively related to turnover intentions (Kuvaas & Dysvik, 2010; Kuvaas, 2008; Shaw, Delery, Jenkins, & Gupta, 1998); employee perceived work-life balance support reduces work pressure and relates to retention and job satisfaction (Forsyth & Polzer-Debruyne, 2007); employees who have positive perceptions of their HRM practices exhibit affective commitment and desirable performance (Kuvaas & Dysvik, 2010; Nishii, Lepak, & Schneider, 2008), satisfaction and commitment serve as strong predictors of OCB (Organ, Podsakoff, & MacKenzie, 2006). In sum, based on all of the above, we propose that organizations provide various EWC practices to provide extra benefits to their employees; employees will reciprocate with extra-role behavior if these benefits were perceived. Therefore, we hypothesize that: Hypothesis 1. Employee perceived EWC practices will positively predicts OCB. 2.3. Perceived EWC practices and perceived organizational support Perceived organizational support (POS) is the employees' general belief that their work organization values their contribution and cares about their wellbeing (Eisenberger, Huntington, & Sowa, 1986; Mowday, Porter, & Steers, 1982; Schein, 1980; Wayne, Shore, & Liden, 1997). HRM practices are important in developing employee POS (Allen, Shore, & Griffeth, 2003; Rhoades, Eisenberger, & Armeli, 2001). For example, Wayne et al. (1997) found significant positive relationship between employee's promotional and developmental practices and POS. Fasolo (1995) indicated that being recognized and rewarded fairly implies that an organization cares about the wellbeing of the employee and is willing to invest in them. This premise is supported by signaling theory, which involve the behaviors of reducing information asymmetry between two parties (Spence, 2002), employees signal their organizations by showing their ability for getting a higher wage (Weiss, 1995); in project teams, leaders' work-related competencies are signals that influence subordinates' perception towards the leader (Amabile, Schatzel, Moneta, & Kramer, 2004). Signaling theory has been applied in various management studies (see Connelly, Certo, Ireland, & Reutzel, 2011 for a review), such as the mechanism in hiring processes (Ehrhart & Ziegert, 2005; Highhouse, Thornbury, & Little, 2007; Ryan, Sacco, McFarland, & Kriska, 2000), and organizations can implement various practices as

3

signals to strengthen employee psychological contract (Suazo, Martínez, & Sandoval, 2009). In the current context, information are sent between the organization and employees, EWC practices can serve as signals from an organization to employees, that indicate organization's investments in employees and signals their recognition in employee contribution. Previous studies that examine flexible benefit plans indicated that these plans can serve as educational purposes (Baeten & Verwaeren, 2012). Research on flexible benefit plans found that when employees have to make conscious choices on which reward/benefit elements to include in their package, they will learn and appreciate the content and the value of their benefits better (Baeten & Verwaeren, 2012; Perkins & White, 2011). Shaw et al. (1998) also suggests that organizational investments in benefit plans can function as monetary incentives that increase employees' psychological attachment to the organization. Other research also supports the view that benefits can enhance employees' POS (Grover & Crooker, 1995; Kossek, 1989), and employees perceived organizational actions such as HR practices and investment in employee development affects POS (Kuvaas & Dysvik, 2010; Settoon, Bennett, & Liden, 1996; Wayne et al., 1997). Similarly, we reason that POS reflects the extent to which organizations values the contribution of their employees and their wellbeing. The general perception and awareness to benefit practices by their organization will affect employee POS. Therefore: Hypothesis 2. Employee perceived EWC practices will be positively related to employee POS.

2.4. The mediating role of POS on perceived EWC practices and OCB Besides creating a psychological attachment to the organization, organizational practices can also foster positive employee attitudes and behaviors (Muse et al., 2008). Employees' perception on benefit practices affects their affective commitment towards the organization (Ahmad & Omar, 2010; Dulebohn, Murray, & Sun, 2000), employees then feel more obligated to “repay” the organization when they perceive high level of supportive practices from the organization (Allen, 2001). Further, based on the norm of reciprocity and performance-reward expectancy, employees will increase their effort and dedication to their organizations as a return to the tangible and socio-emotional rewards they receive (Blau, 1964; Eisenberger et al., 1986; Eisenberger & Stinglhamber, 2011; Gouldner, 1960). Exhibiting OCB to their organization is an approach to showing employees' feedback (Lester, Meglino, & Korsgaard, 2008). Previous studies have supported the relationship between POS and forms of OCB (Eisenberger, Fasolo, & Davis-LaMastro, 1990), and suggested that perceived organizational support mediates the relationship between a variety of attitudes and attributions and OCB. For example, the relationship between procedural justice and OCB (Moorman, Blakely, & Niehoff, 1998). Consistent with this view, in the current study, we see POS as a mediator on the link between perceived EWC practices and OCB. Therefore: Hypothesis 3. POS will mediate the relationship between employee perceived EWC practices and employee OCB.

3. Methods 3.1. Procedures and participants The data from this study were collected from 15 companies in Taiwan. To ensure the sample is representative, a purposeful

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S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9

sampling method was administered. First we approached HR personnel or EWC staffs in 25 different companies in main Taiwanese industries, including manufacturing, high-tech and service industry from the authors' personal contact, 15 agreed for our initial interview for obtaining background information about the company and general EWC practices. Through interviews, we ascertained that these 15 companies have all adopted economic welfare, facilitative welfare or, recreational welfare in their EWC programs. Employees in these companies are thus appropriate participants for filling out our questionnaires to investigate the relationships between employees' perceptions of the existence of EWC practices, organization support and OCBs in the organizations. The number of questionnaires with return envelopes suggested by the interviewees were then sent and distributed by the interviewees. Two types of questionnaires i.e. Paper and on-line survey, were provided for the participants' convenience. The confidentiality of responses and the rights of participants to choose either to participate or not were stated in the cover page. Finally, a total of 268 questionnaires (234 printed and 34 online version) were distributed to 15 companies, and 229 questionnaires were returned, yielding an 85.4% response rate. 13 copies were deleted because of incomplete responses, as a result, 216 valid responses were used for further analysis for this study. 3.2. Measures 3.2.1. Perceived EWC practices In the first part of the questionnaire, we asked participants to indicate the EWC practices provided by their company. Previous research showed that certain practices in an organization may be presented and perceived differently by different employees (Forsyth & Polzer-Debruyne, 2007), we find it suitable to measure perceived EWC practices at the individual level. Measures were developed based on a review of EWC practices in Taiwan organizations reported in earlier literature (e.g. Huang, 2003; Lee et al., 2006), and information obtained from our interview with HR practitioners. Participants were asked to select from a list of EWC practices in four welfare categories: economic, recreational, facilitative, and others to investigate the extent that EWC practices were perceived by them. Participants will rate “yes” or “no” for each category, and we add up the “yes” responses into a final score. This approach is similar to that of Parboteeah et al. (2010), who measured employees' perceived existence of communication and empowerment practices in the organizations via “yes” responses, and subsequently added them up as the perceived communication and empowerment practices score. Given that internal consistency analysis is not appropriate for examining the reliability of dichotomous measure (Strickland, 1999), the content validity was employed to assess the precision and clarity of the items, which reflected the reliability of a measure (Steinberg, 2004). We invited professionals from human resource domain and field experts in Taiwan organizations to evaluate the appropriateness and clarity of the items. Measurement was then modified and refined based on the obtained feedback to ensure it can reflect the content of the domain measured. 3.2.2. Perceived organizational support We used the perceived organizational scale short version to measure POS (Eisenberger et al., 1986). The scale contains 8 items and is an uni-dimensional construct. The 8 items were selected from the original scale which contains 36 items, previous studies have shown reliability and validity for the short version (e.g. Rhoades & Eisenberger, 2002, p. 699; Wang, Lawler, & Shi, 2011; Zumrah, Boyle, & Fein, 2012). Sample items include “My organization really cares about my well-being” and “Help is available from

my organization when I have a problem”. Participants evaluate these items on a 5-point Likert-type scale. The results indicate the extant to which employees the organization is committed to their well-being. The Cronbach's alpha coefficient for this scale was .89. 3.2.3. Organizational citizenship behavior To fit the Taiwan context of measuring OCB, we adopt the indigenous OCB scales developed by Farh, Earley, and Lin (1997), which has been widely adopted in earlier studies and have shown good reliability and validity evidences in the Chinese context (e.g. Harris, Li, & Kirkman, 2014 and Yang, Mossholder, &Peng, 2007). The scale is consisting of 20 items belonging to 5 dimensions: 1. Identification with the company; 2. Altruism toward colleagues; 3. Conscientiousness; 4. Interpersonal harmony, and 5. Protecting company resources. Items are measured through 5-point Likerttype scale. Our CFA results shown that the measurement model fit the data well (CFI ¼ .946; TLI ¼ .936; RMSEA<.05; SRMR ¼ .039). Consistent with Harris et al.'s (2014) approach, five dimensions are combined and computed an overall score to represent the variable of OCB for subsequent hypotheses analysis. The Cronbach's alpha coefficient for this scale was .95. 3.2.4. Control variables Following previous research on OCB (Harris et al, 2014), we asked each participant to provide information about gender, educational background and tenure and included these variables as controls in the analyses. 4. Results We show means, standard deviations and correlations between each variable in Table 1. Because gender was uncorrelated with the research variables, the following analysis omitted gender as a control variable. The companies from our study were mainly manufacturing companies (5), and followed by high-tech companies (3) and companies in the finance sector (3). In terms of sociodemographic profile, 63.4% were women, 62.5% of the participants hold a university degree, and 58.4% has less than 5 years working experience. A detailed description of the sample can be found in Table 2, and the company profiles from our initial interviews are listed in Table 3. To test Hypothesis 1 and Hypothesis 2, we regressed perceived EWC practices on OCB and POS respectively, controlling for educational background and tenure. To test mediation effects, the SPSS INDIRECT macros by Preacher and Hayes (2008) was employed, it enables bootstrapping which is more suitable for small sample research. Regression results are shown in Table 4. The main effect for perceived EWC practices on overall OCB is significant, F(3,212) ¼ 7.541, p < .001***, supporting Hypothesis 1. There is also a significant main effect for perceived EWC practices on POS, F(3,212) ¼ 14.403, p < .001***, being more aware of the welfares provided by the company increases POS scores, Hypothesis 2 is therefore supported. The mediating effect of POS between awareness to employee welfares and OCB was significant as shown in Table 5. The significance of mediation effect was examined by a simple mediation procedure with 1000 bootstrap resampling (Preacher & Hayes, 2004), the results suggests that POS fully mediates the relationship between perceive EWC practices and OCB (Z’ ¼ 5.20, p < .01***), Hypothesis 3 is supported. 5. Discussion A review of extant literature suggests that it is of great importance to improve the balance of research achievement in the field

Please cite this article in press as: Lin, S.-Y., et al., When perceived welfare practices leads to organizational citizenship behavior, Asia Pacific Management Review (2016), http://dx.doi.org/10.1016/j.apmrv.2016.04.001

S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9 Table 1 Correlation matrix.

Table 4 Regression results.

Variables

Mean SD

1

1. 2. 3. 4.

.63 3.01 2.27 2.06

e .328** e .033 .141* e .066 .165* .110

Gender Education Tenure Perceived Welfare Practices 5. POS 6. OCB

5

.48 .61 1.22 .93

27.32 4.86 .044 73.28 11.56 .075

2

3

4

5

6

e

.097 .160* .394** e .151* .080 .290** .588** e

**

Correlation is significant at the .01 level (2-tailed). Correlation is significant at the .05 level (2-tailed). - Total numbers of samples (N) ¼ 216. - Gender: 0 ¼ male, 1 ¼ female. - Education: 1 ¼ Secondary school or under, 2 ¼ high school, 3 ¼ college or university, 4 ¼ master degree and above. - Tenure: 1 ¼ 3 years and under, 2 ¼ 3e5 years, 3 ¼ 5e10 years, 4 ¼ 10e15 years, 5 ¼ 15 years and above.

Variables

Education Tenure Perceived EWC Practices POS R2 Adjusted R2 F

Model 1

Model 2

POS

OCB

.14 .46 1.98***

.19 .34 3.36***

.169 .158 14.403***

Model 3

Model 4

1.86 .26

1.73 .27 .71 1.34*** .358 .346 29.379***

1.39*** .355 .346 38.896***

.096 .084 7.541***

*

Table 2 Descriptive statistics: participants. Items

Category

Numbers

Percentage

Gender

Male Female High school University Graduate degree and above 3 years and below 3e5 years 5e10 years 10e15 years 15 years and above

79 137 39 135 42 79 47 57 19 14

36.6% 63.4% 18.1% 62.5% 19.4% 36.6% 21.8% 26.4% 8.8% 6.5%

Educational Background

Tenure

of employee welfare practices in Asia. This study sheds light on the current implementation and usage of EWC practices in Taiwanese organizations and presents a model of how EWC practices may affect employees' perceptions and behaviors. Our research findings support the premise of social exchange theory, which employees tend to reciprocate in beneficial ways, such as OCB, when they perceive support from their organization. The results of our study offer some useful insight. Firstly, providing benefits and welfare to employees are intended to increase efficiency, employee satisfaction and gain employer attractiveness (Baeten & Verwaeren, 2012; Faleye & Trahan, 2011). Although previous research has liked company

- Note: Unstandardized Beta-coefficients are reported. - (N) ¼ 216. - ***p < .001.

welfares to employee perceptions and performances (Huang, Jin, & Yang, 2004; Tremblay et al., 1998; Williams, 1995), to date little interest is paid upon EWC practices and examines their effectiveness in Asia context. The current research is among the first to provide a picture of EWC and its practices in Taiwan from an institutional perspective, and explore its benefits based on social exchange theory and signaling theory. Generally, our review suggests that the main reason to form a EWC and adopt EWC practices in Taiwan organizations is due to institutional pressures. This finding is in line with previous research, which indicated that human resource practices in effect are influenced and driven by not only internal but also external factors such as political, legal, social factors (Shen, 2010). As Lee et al. (2006) noted that the core reason for organizations to carry out benefit plans is to legitimize. Nevertheless, we argue that organizations should not see EWC practices as extra cost, but as an investment to both employees and the organization itself. Based on social exchange and signaling theory, we proposed that perceived EWC practices have a positive effect on employees' work outcomes. As predicted, our findings illustrated that employees who have a higher-level perception of EWC practices are more likely to perform OCBs. This result is not only consistent with western studies which reported that worklife package can positively enhance employees' OCBs in the workplace (Lambert, 2000), but also provides further evidence that employees' OCBs can be enhanced by the implementation of EWC practices in Asia context. As noted above, under the norm of reciprocity (Blau, 1964), employees who perceived EWC practices are likely to feel obligated to perform OCBs in return.

Table 3 Company profiles. No

Industry

Size

EWC size

A B C D E

High Tech High Tech Finance Finance IT Services

Over 10,000 Over 10,000 501e1000 1001e2000 101e500

26e31 11e15 6e10 11e15 6e10

F

High Tech

101e500

11e15

G H I J K L M N O

Manufacturing High Tech Communications Manufacturing Manufacturing Manufacturing Circulation Finance Manufacturing

1001e2000 101e500 501e1000 501e1000 101e500 101e500 101e500 2001e10,000 501e1000

11e15 6e10 11e15 11e15 6e10 6e10 11e15 26e31 11e15

Member selection

Selected by each department Assigned by each department Assigned by each department Departmental head Departmental head or assigned by departmental head Selected by each department or volunteer Selected by each department Selected by each department Selected by each department Selected by each department Selected by employees Selected by each department Selected by each department Selected by each department Assigned by department head

Inclusion of HR personnel

Welfares provided Economic

Recreational

Facilitative

No Yes No Yes Yes

✔ ✔ ✔

✔ ✔ ✔

✔ ✔

✔

✔

No

✔

✔

Yes No Yes No No No Yes No Yes

✔ ✔ ✔ ✔ ✔ ✔ ✔

✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

✔

✔

✔

✔ ✔ ✔

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Table 5 OCB EFA results. Items

1

Identification with the company 1. Eager to tell outsiders good news about the company and clarify their misunderstandings. 2. Willing to stand up to protect the reputation of the company. 3. Makes constructive suggestions that can improve the operation of the company. 4. Actively attends company meetings. Altruism toward colleagues 1. Willing to assist new colleagues to adjust to the work environment. 2. Willing to help colleagues solve work-related problems. 3. Willing to cover work assignments for colleagues when needed. 4. Willing to coordinate and communicate with colleagues. Conscientiousness 1. Often arrives early and starts to work immediately. 2. Takes one's job seriously and rarely makes mistakes. 3. Complies with company rules and procedures even when nobody watches and no evidence can be traced. 4. Does not mind taking on new or challenging assignments 5. Tries hard to self-study to increase the quality of work outputs. Interpersonal harmony 1. Often speaks ill of the supervisor or colleagues behind their backs. (R) 2. Uses illicit tactics to seek personal influence and gain with harmful effect on interpersonal harmony in the organization. (R) 3. Uses position power to pursue selfish personal gain. (R) 4. Takes credits, avoids blames, and fights fiercely for personal gain. (R) Protecting company resources 1. Conducts personal business on company time (e.g., trading stocks, shopping, going to barber shops). (R) 2. Uses company resources to do personal business (e.g., company phones, copy machines, computers, and cars). (R) 3. Views sick leave as benefit and makes excuse for taking sick leave. (R)

2

3

4

5

.797 .808 .828 .723 .828 .857 .798 .826 .746 .663 .649 .715 .613 .774 .855 .864 .837 .841 .863 .775

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalizationa. a. Rotation converged in 6 iterations.

Third, our hypothesis that employees' perception of organization support can be elicited by EWC practices is also supported by our results. This link is consistent with Muse et al.'s (2008) view that employees may interpret work-life benefits as a signal of care and concerns from their organizations. Thus, employees who perceived EWC practices are likely to have a higher-level perception of organizational support. Finally, we also found that perceived organization support mediate the relation between perceived EWC practices and employees' OCBs. This result supports the theoretical assumption of social exchange and signaling theories noted earlier. Following signaling and social exchange theories, this finding suggests that employees' OCBs can be elicited as a result of information and social exchange process in which employees perceived organizations' care and concern for their well-being from the EWC practices provided by organizations, and reciprocate these supports with a higher levels of extra role behaviors in the organizations. 5.1. Theoretical and managerial implications This study makes a number of potentially valuable implications for extant literature and general management practices. First, while western research acknowledge the influence of employee welfare and benefit practices on positive work attitude and behaviors, only limited related studies have been conducted in Asia. This apparent imbalance of research achievement has been urged to improve by researchers (Wei & Rowley, 2009). Thus, the primary purpose of current study was to address this call. This research provides a picture of current implementation and usage of EWC and its practices in Taiwan, and investigates the effects of EWC practices on employees' perceptions and behaviors. Importantly, our results indicate that there are benefits for organizations to implement employee welfares, other than mandatory benefits required by employment regulations. Specifically, EWC practices are positively related to employees' POS and OCBs. This study excels extant studies in Asia by showing that EWC practices are not only meaningful in terms of legal compliance and legitimacy, but also have a strong influence on employees' POS and OCBs. This study suggests a

new perspective for organizations in Taiwan to view EWC and its related practices. We propose that much closer attention should be paid to EWC practices design and implementation in Taiwan organization due to its influential role in affecting employees' perceptions and behaviors. Also, given the salient mediating effect of perceived organizational support shown in our results, this study provide a more comprehensive model depicting how EWC practices influence employees' OCBs. Our results suggest that employees' OCBs can be elicited and encouraged by EWC practices through the mechanism of POS. By identifying this relationship, our findings suggest that it is of practical importance for organizations to develop EWC practices to create a sense of organizational support, which conceivably leads to the positive work behaviors performed by employees as a result of reciprocation. Understanding employees' satisfaction with specific EWC practices may greatly help HR practitioners optimize investment in EWC programs. Last but also important, since we have demonstrated that employees' perceived EWC practices can contribute to POS and OCBs, managers in effect should develop a better communication and implementation process for EWC practices to ensure that these practices are perceived and valued by employees to elicit desired outcomes. For instance, managers or HR practitioners can communicate with employees, through newsletter or memos, about the value and usefulness of EWC practices to make sure that these practices are well aware by employees (Muse et al., 2008). 5.2. Limitations and future directions The present research has a few limitations that should be noted. First, since the data collected from the current study was self-report in nature, we are aware that concern over common method variance may arise. Thus, we followed Podsakoff, MacKenzie, Lee, and Podsakoff's (2003) suggestion and performed a Harman's onefactor test. By entering all variables into an exploratory factor analysis, using unrotated principal components factor analysis; the results returned that the first factor extracted explains 37.83% of

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S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9

variance. This result indicates that severe common method bias was not detected and common method variance was not a problem in this study. . Nevertheless, replication studies with multiple sources design are needed to validate the causal relationships. For instance, further research can be done using coworker and supervisor ratings. Second, the samples are limited to the context in Taiwan and based on a relatively small sample size (with 15 companies in total), future research should aim for larger sample in order to test the robustness of our findings. And finally, crosssectional data collection can be problematic for making causal inferences and also vulnerable to common method variance. We hope future research will replicate our research by adopting a longitudinal design. 6. Conclusions Despite the limitations discussed, this study contributes to the literature on EWC practices and OCBs. It provides a picture of current implementation and usage of EWC and its practices in Taiwan, which responds to Wei and Rowley (2009) call for more research on welfare and benefit issues in the Asian context. This study also extends both the theoretical and empirical literature on EWC practices and OCBs by proposing and testing a model which integrates signaling and social exchange theories, and demonstrating the salient mediating role of POS on the relations between EWC practices and employee OCBs within a Chinese context. Results from the current study suggest that EWC as well as its practices can serve its reciprocal purposes between the organization and employees. Our findings encourage organizational scholars and managers to view EWC and its practices from a functional perspective. Understanding the added values of EWC is especially important today as organizations struggle to utilize human resource strategically and manage employment relationship at the same time. It is beneficial and important for organizations to optimize the potential benefits of their EWC programs. Appendix. Welfare Categories provided by the EWC in Taiwan Economic Welfares include: 1. 2. 3. 4. 5. 6. 7.

Pensions paid by the company. Group insurance, including life insurance and sick insurance. Employee sickness and accident benefits. Mutual funds donated by the employer and employees. Bonus shares and product promotion deals. Preferential loans and deposit programs. Allowances and scholarships provided to employee family members.

Recreational welfares include activities and social events that enhance interaction between employees, which aims at increasing employee satisfaction and job involvement. 1. Organizing spots activities and providing equipments. 2. Organizing social activities and associations. 3. Special events, such as birthday celebrations.

venues

and

Facilitative welfares are some measures to better suit employees everyday needs, these welfare includes: 1. Healthcare services, such as clinics and doctors.

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2. 3. 4. 5.

Accommodation. Canteen and food service. Special contracted shops. Educational services, such as employee library, child care centers. 6. Transportation services. 7. Law and financial advisory services.

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S.-Y. Lin et al. / Asia Pacific Management Review xxx (2016) 1e9 Zumrah, A. R., Boyle, S., & Fein, E. (2012). The moderating effect of perceived organizational support on the relationship between learning and transfer of training. Paper presented at the Asia Pacific Business Research Conference, Kuala Lumpur, Malaysia.

Szu-Yin Lin is a PhD candidate in Institute of Human Resource Management, NSYSU. Her research interests include organizational behavior, innovation, entrepreneurship and creative work environments.

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Hsien Chun Chen is a PhD candidate in Institute of Human Resource Management, NSYSU. Her research interests include pro-social motivation, innovation and HRM Practices.

I-Heng Chen is a professor in Institute of Human Resource Management, NSYSU. He received his PhD in Administration Leadership and Technology, New York University. His research interests include non-profit organization, creativity and innovation.

Please cite this article in press as: Lin, S.-Y., et al., When perceived welfare practices leads to organizational citizenship behavior, Asia Pacific Management Review (2016), http://dx.doi.org/10.1016/j.apmrv.2016.04.001