Surprises in Psychological Contract Research: I-deals Revealed

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Surprises in Psychological Contract Research
I-deals Revealed

• Denise M. Rousseau
• Carnegie Mellon University
• rousseau_at_andrew.cmu.edu
• 1-412-268-8470 (voice)
• 1-412-268-5338 (fax)
• www.andrew.cmu.edu/user/rousseau

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Definitions

• Psychological Contract Beliefs individual worker
  (or employer) holds regarding obligations in
  employment.
• Idiosyncratic Deal (I-Deal)specific terms of
  employment bargained for by a given worker.

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Some surprises in psychological contract research

• Seldom find significant between-unit differences
  in psychological contracts
• In contrast, related measures do yield
  between-unit differences (e.g., POS,
• Justice-PJ/DJ/IJ)
• Workers in same department, reporting to same
  boss, have different psychological contracts

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Possible Explanations for Absence of
Between-Work Unit Differences

• Measurement Error (NO. Robust pattern across
  Spanish, Chinese, and English measures.)
• Psychological contract is a highly subjective
  experience (NO. Sels et al. find position, level,
  job class effects in Belgian workforce. Dabos
  Rousseau find manager-worker agreement.)
• Individual Difference Effects (YES. Johns et al.
  find Big 5 personality effects.)

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Possible Explanations contd

• Social Influence (SOMETIMES. Ho et al. and Dabos
  and Rousseau find network position and social
  ties impact psychological contracts. Effects are
  weaker as organization becomes more structured.)
• Cohort Effects (SOMETIMES. De Vos et al. find
  effects of time of hire other studies dont.)
• Managers Manage Individuals Differently (YES. LMX
  literature, Dabos and Rousseau find
  worker-manager agreement but not within-unit
  agreement.)

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Implications

• Organization-Level Effects on Psychological
  Contract
• (Tied to HR practices, degree of systematic
  implementation.
• Organizations include formal and informal
  hierarchies and individual psychological contract
  affected by his/her relative standing.
• Accounts for Cohort and Social Network effects.)
• Individual-Level Effects on Psychological
  Contract
• (Individuals seek and are rewarded with
  different psychological contracts. Accounts for
  Individual Difference effects.)
• Interaction Effects (Worker/Organization or
  /Manager)
• (Worker and employer mutually influence the
  exchange, creating cycles of inducements and
  contributions that across workers)

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THE EMPLOYMENT ARRANGEMENT COMPENSATION BUNDLE
Idiosyncratic
Position-Based
Standardized
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THE EMPLOYMENT ARRANGEMENT BUNDLE
Down plays status difference
Idiosyncratic
Position-Based
Signals common fate and identity
Standardized
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THE EMPLOYMENT ARRANGEMENT BUNDLE
Rewards must be bargained for
Idiosyncratic
Employees have few common rewards Employer is not
generous
Position-Based
Standardized
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Studies

• Rousseau, Ho Kim 220 MBAs reporting on their
  last employer
• I-deals and their relationship to Psychological
  Contract Inventory measures
• Rousseau Kim 166 hospital workers
• I-deals and employment relationship (Social and
  Economic Exchange, LMX, POS)

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Examples of I-deals(Rousseau, Ho Kim)

• Advancement
• ? Career development Taking off work two hours
  early each Friday to attend advance degree
  program
• ? Visibility Junior employee negotiates
  contact with corporate executives
• Job Content
• ?Interesting work Working on one large
  project rather than many small ones
• ? Workload Reduced work volume to help worker
  cope with job stress
• Time
• ? Flexible work hours Shift from full to
  part-time work
• ? Leave of absence Unpaid time off to pursue
  personal hobby

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Types of I-deals
Timing

• Employee Negotiates on the Job
•  
• Basis
• 1. Relationship Quality
• 2. Employer Dependence on
• Worker
• 3. Opportunity afforded by transfer,
  promotion, etc.
•  
• Content Widely diverse--Economic,
  Socioemotional, two-sided

• Basis
• 1. Market-power of Worker
• 2. Employer Dependence on Worker
•  
•  
• Content Economic

• Worker Negotiates at Hire
•  
• Basis Market Power of Worker
•  
•  
• Content Economic (money/hours,duties).
•  

Worker Initiates
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Which I-Deals Impact Psychological Contract?
Before Hire On the Job
Visibility to senior mgt Visibility to senior mgt
Challenging project Challenging project
Promotion opportunity Promotion opportunity
(Greater) Responsibility (Greater) Responsibility
Market-based Pay Increase Market-based Pay Increase
Special equipment Special equipment
Vacation Vacation
Travel Travel
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Which I-Deals Impact Psychological Contract?
Before Hire On the Job
Visibility to senior mgt Visibility to senior mgt
Challenging project Challenging project
Promotion opportunity Promotion opportunity
(Greater) Responsibility (Greater) Responsibility
Market-based Pay Increase Market-based Pay Increase
Special equipment Special equipment
Vacation Vacation
Travel Travel
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Timing of I-deals

• Ex Ante (at Hire) Worker and employer bargain
• Attribution Market value
• Ex Post (on the job)
• Proactive Worker seeks out special arrangement
• Reactive
• Opportunity Employer creates opportunity for
  worker to request I-deal (transfer, performance
  review, job change)
• Equity Turn-taking Worker makes special
  contribution and employer now owes (work
  yourself out of a job)
• Attribution Quality relationship

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I-deals and the Employment Relationship Impact
of Timing and Content(Rousseau and Kim)

• Setting Tertiary care hospital in northeastern
  United States (beds 154)
• Method Interviews, survey, and archival data
• Survey Sample 166 employees (nurses,
  therapists, clerical, etc.)
• Response rate 45 (350 total employees)
• Demographics Ave. Age 42, Ave. LOS 7 years,
• 88 Female, 76 Fulltime

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Hypotheses

• H1Ex Ante Negotiation is positively related to
  Ex Post Negotiation
• H2 Ex Post Negotiation is positively related to
  belief that employment relationship is Social
  Exchange
• H3 Economic-content I-deals are positively
  related to belief that employment relationship is
  an Economic Exchange
• H4 Relational I-deals are positively related to
  belief that employment relationship is a Social
  Exchange.
• H5 Ex Post Negotiation is positively related to
  POS. (a) POS will mediate the relationship of Ex
  Post Negotiation with Social Exchange (b)
• H6 Ex Post Negotiation will be positively
  related to LMX.

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Final model and path coefficients
Ex Ante Negotiation
.32
Ex Post Negotiation
.21
I-Deal 6
.23
I-Deal 1
I-Deal Development
.20
I-Deal Flexibility
I-Deal 7
I-Deal 2
I-Deal 8
.21
I-Deal 3
.25
Leader Member Exchange
I-Deal 4
I-Deal Workload
.16
.14
I-Deal 5
.39
-.15
Perceived Organizational Support
Economic Exchange
Social Exchange
-.41
.81
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Structural Model Comparisons
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Person-Specific Arrangements
Worker Value to Employer
Idiosyncratic Negotiated
Unauthorized Usurped
Preferential Favored
Breaking the Rules
Relationship with Boss
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Blurry Boundaries Between Person-Specific
Employment Practices
Research Supervisor retitles his job Research
Director to elevate his standing when he
testifies as an expert witness.
A program coordinator is paid at a higher rate
than her peers after she asks a boss for a raise
but equally capable others are not offered the
same.
Idiosyncratic Negotiated
Unauthorized Usurped
Preferential Favored
Boss tells workers it is okay to help himself
to stores food when working nights.
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When are Idiosyncratic Deals Seen as Fair?

• CHOICE peers could have made the same
  choice -- Cafeteria plans
• -- I-deal acknowledged to peers
• NO COST peers experience no negative
  consequences -- Deal involves hours/activities
  others do not want
• -- Peers arent interdependent with person with
  I-Deal
• WIN-WIN BENEFITS peers benefit from anothers
  special arrangements -- Bragging rights I-Deal
  allows employer to retain a star performer. --
  Enhanced employer reputation Great Place to
  Work
• INDIFFERENCE TO TYPES OF RESOURCES
  INVOLVEDParticular resources matter less to
  peers than Universal ones -- Particular
  resources (support, mentoring) -- Universal
  resources (money, goods)
• FRAMED AS EXPERIMENT Special arrangement is
  presented as a way for employer to innovate

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Managing I-deals

• SUPPLEMENTS NOT SUBSTITUTES--Broadly available
  support signals quality of employment relations
• EXPERIMENT--Use I-Deals as source of innovation
  and flexibility
• GOOD NEIGHBORS--Require I-Dealer to maintain good
  relations with coworkers as basis for I-Deal
• DONT MAKE ME ASK--Assess and provide job-related
  supports (only special needs should require
  negotiation)
• BUILD ORGANIZATIONAL MEMORY--Keep track of
  I-Deals for future innovation, policy change, and
  equity.
• DONT REWARD DISLOYALTY--Repeat bargainers erode
  their value to the firm and antagonize coworkers.

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The Future of I-Deals

• Basis of Network Organizations
• Looser ties reduce 3rd party comparisons
• Demographic Shifts
• Need to retain older workers
• Follows the growth of the economy
• Increasing with critical workers

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Bottom Line

• Idiosyncratic arrangements
• Increasing as knowledge work expands across
  sectors
• Endemic to start-ups
• Useful as first step to identity innovations for
  broader workforce
• Can erode trust if used in place of standardized
  rewards