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Perceptions of Psychological Contract

The rapid diversification of the global population has significantly affected organizations of today (Kirkman, Tesluk, & Rosen, 2004). The growing workforce diversity within organizations has compelled them to address the uniqueness of each individual and hone this distinctiveness towards organizationally desired outcomes (Vecchio & Bullis, 2001). One of the key factors in tackling this challenge lies in the foundation of the employee-employer relationship.

This factor has given rise to the study of dissimilarity, its various forms, and how these differences affect the supervisor-subordinate relationship and eventually employee outcomes. Jackson, May, and Whitney (1995, as cited in Hobman, Bordia, & Gallois, 2003) defined dissimilarity as the amount of relative difference between two individuals in terms of values and characteristics. These differences may be in terms of actual dissimilarity (e. g. , age and gender) and perceived dissimilarity (e. g. , visible, value, and informational) (Hobman et al.

, 2003). Perceived visible dissimilarity refers to differences in age and gender; perceived value dissimilarity refers to differences in work values; and perceived informational dissimilarity refers to differences in educational background and work experience (Hobman, Bordia, & Gallois, 2004). Most studies in dissimilarity deals with the effects of dissimilarity to group attitudes and behaviors and supervisor-subordinate dyads (Hobman et al. , 2003; Pelled & Xin, 2000; Turban, Dougherty, & Lee, 2001).

Previous researches have investigated the impact of dissimilarity to employee outcomes such as organizational citizenship behavior (OCBs: Van Der Vegt, Van De Vliert, & Oosterhof, 2003), leader-member exchange (LMX: Epitropaki & Martin, 1999), work group involvement (Hobman et al. , 2004), and job satisfaction (Lyons & Oppler, 2004). A significant amount of research on the effects of psychological contract breach to employee outcomes have been done, yet none have dealt with the mediating role of psychological contract breach on the relationship of the various types of dissimilarity on employee outcomes (Kickul & Lester, 2001; Hobman et al.

, 2004). Most studies with regard to dissimilarity have involved the direct effects of dissimilarity on various employee outcomes (Hobman et al. , 2004). This brought about the idea of using psychological contract breach as a mediator on the relationship of dissimilarity to employee outcomes. Moreover, this study extended the applicability of psychological contract theory in the context of the supervisor-subordinate relationship. This study also addressed the call for empirical-based examinations investigating the antecedents of psychological contract breach.

This study intended to examine how psychological contract breach perceptions would mediate the process on how dissimilarity affects employee outcomes. Due to the fact that researches on dissimilarity are relatively new (Hobman et al. , 2004), a deeper and more comprehensive study on the outcomes of the various types of dissimilarity is needed. This can be done by researching on how various variables such as psychological contract breach mediates the relationship of dissimilarity to employee outcomes, such as this study.

Furthermore, most studies done in dissimilarity have been done in the western context (Pelled & Xin, 2001). Purpose This study aims to use supervisor-subordinate dyads within the US events planning industry to see how dissimilarities in the Las Vegas events planning industry context affect employee outcomes. The concept of dissimilarity facilitates better understanding on how the extent of the individuality of each person affects his/her relationship with his/her coworkers. The heterogeneity of the workforce is something that is inevitable and can be found in all organizations worldwide.

This study will help companies address and respect each individual’s uniqueness towards the facilitation of better supervisor-subordinate relationships that will eventually lead to organizationally desired outcomes. The relationship between a supervisor and a subordinate is something that is unavoidable. This can be considered as one of the most basic relationships in an organization. The quality of this relationship clearly has significant effects on employee outcomes. This gives rise to studying the mediating role of psychological contract breach in the relationship of actual and perceived dissimilarity to employee outcomes.

Statement of the Problem This study intended to determine whether psychological contract breach mediates the relationship between superior-subordinate actual and perceived dissimilarity on leader-member exchange and organizational citizenship behavior. Statement of Objectives The following questions / objectives were addressed in the study in lieu of the problem presented above: 1. What is the composition of supervisor-subordinate dyads within the events planning industry in terms of: a. Actual age dissimilarity b. Actual gender dissimilarity 2. What is the perception of subordinates towards dissimilarity with their supervisors in terms of:

a. Perceived visible dissimilarity b. Perceived value dissimilarity 3. What is the perception of subordinates on the level of: a. Psychological contract breach b. Leader-member exchange 4. What is the level of organizational citizenship behavior manifested by subordinates as noted by supervisors? 5. Is there a significant relationship between actual dissimilarity (age and gender) and the following: a. Psychological contract breach b. Leader-member exchange c. Organizational citizenship behavior Definition of Terms This section provides an overview of the definitions of the variables used in this study.

These summaries are presented to provide a clearer understanding of the study as a whole. Actual Age and Gender Dissimilarity. Actual age and gender dissimilarity refers to the objective measurement of the difference between two individuals in terms of age and gender (Hobman et al. , 2004). It is an objective measurement in such a way that it measures almost immediately observable physical features in simple ways (Harrison et al. , 1998). Actual dissimilarity research assumes that differences are recognized by team members and that these actual differences affect team processes (Harrison et al.

, 1998). Perceived Visible and Value Dissimilarity. Perceived visible dissimilarity refers to differences in visible characteristics such as age, gender, and ethnicity; while perceived value dissimilarity refers to differences in work ethic, work values, and motivations when approaching tasks (Hobman et al. , 2004). Perceived dissimilarity is a subjective measurement of how different individuals perceive themselves from other individuals or groups (Hobman et al. , 2004). Being a subjective measurement, perceived dissimilarity ensures that salient differences are measured (Hobman et al.

, 2004). Previous empirical studies have shown that dissimilarity is negatively related to work group involvement (Hobman et al. , 2004), OCBs (Van Der Vegt et al. , 2003), LMX (Epitropaki & Martin, 1999), communication (Turban, Dougherty, & Lee, 2001), and conflict (Hobman et al. , 2004). Theoretical Concepts in Studying Dissimilarity. The social identity theory (Turner, 1982), self-categorization theory (Tajfel & Turner, 1986), and similarity-attraction paradigm (Byrne, 1997) have been used to further understand the concept of dissimilarity.

The social identity theory states that individuals cognitively form self-categories of organizational membership and one’s similarities with members within the organization as well as dissimilarities with those outside the organization to which they belong (Hogg & Terry, 2000). To further expand the social identity theory, the self categorization theory was developed. The self-categorization theory is the operation of the social categorization process as the cognitive basis of group behavior (Hogg & Terry, 2000).

Moreover, the similarity-attraction paradigm posits that individuals who possess similar characteristics, attitudes, and values perceive one another as similar and are attracted to each other (Byrne, 1997). Psychological Contract Breach. Psychological contracts are individual beliefs in a mutual obligation between the individual and the organization (Rousseau, 1989). It can be conceptualized as relational and transactional contracts (MacNeil, 1985). Psychological contract breach occurs when an unfulfilled promise or obligation is perceived.

Psychological contract breach is caused by reneging, incongruence, and vigilance (Robinson & Morrison, 2000). Also, certain antecedents that lead individuals to perceive a breach in the psychological contract are exchange ideology (Coyle-Shapiro & Neuman, 2003) and personality (Raja et al. , 2004). Some consequences of psychological contract breach are decrease in job satisfaction (Cavanaugh & Noe, 1999), OCBs (Robinson & Morrison, 1995), LMX (Restubog et al. , 2005), trust (Robinson, 1996), and increase in turnover (Turnley & Feldman, 1999).

Theories in Understanding Psychological Contracts. The social exchange theory (Blau, 1964), norm of reciprocity (Gouldner, 1960), cognitive dissonance (Festinger, 1958), and equity theory (Adams, 1965) have been used in explaining psychological contracts. The social exchange theory states that a person’s voluntary actions are motivated by payback from others (Blau, 1964). Following this exchange where an expectation of a mutual obligation is established, the norm of reciprocity suggests returning equally what was previously given (Gouldner, 1960).

Moreover, cognitive dissonance (Festinger, 1958) and equity theory (Adams, 1965) posits that individuals will be motivated to adjust their behavior or attitudes to resolve the inequity between two or more cognitions. Leader-Member Exchange. LMX is defined as the quality of the exchange relationship between an employee and his/her supervisor (Dienesch & Liden, 1986; as cited in Gerstner & Day, 1997). Supervisors assign their subordinates with different tasks in a series of role making episodes to determine their subordinate’s capabilities in performing tasks (Liden & Maslyn, 1998).

It is through these tasks where the supervisors are able to see the extent to which their subordinates are able to comply and perform the tasks which in turn, dictates the quality of LMX relationship to be formed (Liden & Maslyn, 1998). Much of the research on LMX divides the subordinate’s roles and the quality of the LMX into two basic categories based on the leaders’ and subordinates’ perceptions of the negotiating latitude: the in-group and the out-group (Dansereau et al. , 1975).

LMX suggested that employees who are part of the supervisor’s in-group experience a higher quality exchange which characterized by mutual trust, support, and interpersonal interaction (Deluga, 1994). These members make contributions that go beyond their formal job duties. On the other hand, LMX theory stated that people in the out group experience a low quality of exchange which is characterized by having limited reciprocal trust and support and few rewards from their supervisor (Deluga, 1988).

They are given less job latitude, influence in decision making, support and attention since they are perceived to be incapable of performing up to the standards of their supervisor (Truckenbrodt, 2000). Previous research suggests that the relationships subordinates have with their supervisors is a key determinant of subordinates’ behaviors and attitudes, which in turn lead to a number of individual and organizational outcomes such as job satisfaction (Liden & Graen,1980), OCBs (Graen, Liden, & Hoel, 1982 as cited in Graen & Uhl-Bien, 1995) and is negatively related to turnover. Organizational Citizenship Behavior.

OCBs are behaviors that are discretionary and not recognized by the formal reward system of the organization (Organ, 1988). It is manifested when employees perform behaviors such as helping in order to promote the organizations’ effective functioning (Organ, 1988). There are two broad categories of organizational citizenship behavior: OCBO and OCBI (Williams & Anderson, 1991). Dimensions of organizational citizenship behavior such as altruism and courtesy are agreed to be directed at individuals, while conscientiousness, civic virtue and sportsmanship are agreed to be directed at the organization (Rioux & Penner, 2001).

Certain precursors that lead to the performance of extra-role behaviors are job satisfaction (Williams & Anderson, 1991), organizational commitment (Williams & Anderson, 1991), group cohesiveness (MacKenzie et al. , 1998) and spatial distance (MacKenzie et al. , 1998). On the other hand, extra role-behaviors may result to turnover (MacKenzie et al. , 1998) and organizational effectiveness (Schnake & Dumler, 2003). This study aims to use supervisor-subordinate dyads within the events planning industry to decipher how individual differences within this niche affect various employee outcomes.

Part Two Introduction While Part One has briefly presented the statement of the problem and the definitions of the variables involved in the study, the following section discusses these in greater detail, including past literature on the topic. Review of Related Literature The ubiquitous cultural and demographic diversities within organizations have initiated a new and deeper research towards dissimilarity and its effects on individuals and teams.

The detrimental effects that are tied to dissimilarity have compelled the researcher to study not only surface-level dissimilarity such as age and gender but rather deep-level dissimilarity such as values and characteristics as well (Harrison et al. , 1998). Previous research on dissimilarity have concentrated more on examining the possible effects of group composition on employee outcomes rather than examining the effects of supervisor-subordinate dissimilarities on employee outcomes (Vecchio & Bullis, 2001).

This study examined dissimilarity, both actual and perceived, in dyad research rather than at a group level of analysis. The dissimilarities between supervisors and their subordinates and how these differences affect employee outcomes such as LMX and OCBs will be examined. Moreover, previous researches on dissimilarity placed greater emphasis on the objective measurement of dissimilarity rather than the subjective measurement (Hobman et al. , 2004). Thus, past studies may have failed to capture all components of difference and may have overlooked certain characteristics that may be more or less salient to an individual.

This study also focused on the subjective measurement of dissimilarity to ensure that these salient differences are measured. Furthermore, past studies on dissimilarity focused more on the demographic and openness to diversity aspects of dissimilarity towards employee outcomes. It is suggested that psychological contracts are an especially important lens through which to view organizational citizenship behavior (Robinson & Morrison, 1995). Given this fact, it is evident that psychological contract breach has an important role with regard to its effect on employee outcomes.

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