The role of psychological contracts in the relation between job characteristics and attitudinal employee outcomes.

Transcription

1 The role of psychological contracts in the relation between job characteristics and attitudinal employee outcomes. - An examination of possible adjustments to job characteristics middle managers can make to enhance satisfaction, commitment, and motivation amongst employees. Vanessa Dahlke St.nr.: Open Universiteit Nederland Faculty: Course: Assessor: Co-assessor: Management, Science and Technology Master of Science in Management Albert Kampermann Jeroen de Jong December 10th, 2017

2 Table of content List of abbreviations List of tables List of figures Summary 4 1. Introduction Motive and problem posing Scientific relevance Problem posing Method of analysis Reader s guide 9 2. Literature review The psychological contract Middle managers The link between job characteristics and psychological contracts The link between psychological contracts and employee outcomes Other influencing factors Conceptual model including hypotheses and definitions Methodology Method of analysis Data collection Questionnaire design Data analysis and dealing with methodological issues Results Reliability analysis and descriptive statistics Testing the hypotheses Answer to research question Conclusion, discussion and recommendations for future research Conclusion and discussion Restrictions and constrains Recommendations for business Recommendations for future research References Attachments Questionnaire Code book Translation tables responses 51 III III III Page!II

3 List of abbreviations MBNL - Mercedes-Benz Nederland B.V. SD - Standaard deviation List of tables Table 1: Job characteristics - motivational, social, and work context 13 Table 2: Hypotheses and references to earlier research 19 Table 3: Reliability analysis scales 25 Table 4: Descriptive statistics 25 Table 5: Correlation table 26 Table 6: Coefficients of dependent variable psychological contract fulfilment 27 Table 7: Coefficients of independent variable psychological contract fulfilment 28 Table 8: Results of mediation model 29 Table 9: Moderated mediation with task variety as x 30 Table 10: Conditional indirect effects of task variety on the three different attitudinal employee outcomes at different values of the moderator 31 Table 11: Moderated mediation with feedback from others as x 32 Table 12: Conditional indirect effects of feedback from others on the three different attitudinal employee outcomes at different values of the moderator 32 List of figures Figure 1: The conceptual model 5 Figure 2: The conceptual model 19 Figure 3: Final research model including results 33 Page!III

4 Summary The aim of this research paper has been to investigate the role of psychological contracts in the relation between job characteristics and attitudinal employee outcomes. Possible adjustments middle managers can make to enhance satisfaction, commitment, and motivation amongst employees have been examined. Which job characteristics do eventually have an effect on those employee outcomes? And what might the role of psychological contract fulfillment and employee s perceptions on the obligations of the organization be? The research has been conducted at Mercedes-Benz Nederland B.V. (MBNL) which is the Dutch import trader for the automotive brands Mercedes-Benz and smart. Just like many other companies in today s competitive and changing environment (Haffar, Al-Karaghouli, Ghoneim, 2013), MBNL has to adapt to external influences and new circumstances with internal changes, and in this case specifically with a reorganisation that has to bring the organization closer to the respective customer by creating dedicated branches for each customer group across three different countries. In times of change, the expectations and obligations employees and employers have toward each other might also be subject to amendments. The old expectations might be replaced by new ones as at least one party is not willing or not able anymore to fulfill these expectations (Robinson, 1996). The theoretical concept underlying the just described principle of expectations between employees and organizations is the psychological contract (Coyle- Shapiro & Kessler, 2000). A psychological contract develops between two parties when they believe that next to economical hard facts there are more aspects to their relation like implicit and mostly unspoken rules about e.g. personal growth and development. Mostly employees believe that when they act and work in a certain way and deliver certain results the organisation needs to fulfill their agreement with amends (Rousseau, 1989). The role of middle managers within this concept of psychological contracts is quite a distinct one as they act as agents of the organization (Lee & Taylor, 2014). Middle managers are capable and also instructed to implement the organization s strategy by doing changes on organizational practices, structures, and systems (Floyd & Wooldridge, 1992). The aim of changing elements of work is vastly a desired positive effect on certain employee outcomes. Past research has already proven that indeed changes in job characteristics are positively associated with greater psychological contract fulfilment and enhanced attitudinal employee outcomes (Coyle-Shapiro & Kessler, 2000; Holman & Axtell, 2016). Page!4

5 Moreover, research has established a theory that those positive relations between job characteristics and employee outcomes are influenced by the personal needs, feelings, emotions and perceptions of employees towards the organization and the underlying expectation of their mutual agreement (Hackman & Lawler, 1971; Robinson, Kraatz & Rousseau, 1994). This paper s research is going to piece together all those theories and is going to add to it by analysing whether psychological contracts might be the emotional and personal aspect playing a role in the relation between job characteristics and employee outcomes. Therefor this article makes a novel contribution by including and analysing the influencing effects of two aspects of the psychological contract: the mediating role of psychological contract fulfillment in the relation of job characteristics and attitudinal employee outcomes, and the moderating role of employee s perceptions of organisation s obligations on this first mediation effect. The conceptual model looks as follows: task variety job complexity interdependence feedback from others h1 (+) h2 (+) h3 (+) h4 (+) psychological contract fulfillment h8 (+) h9 (+) expected level of obligations h5 (+) h6 (+) h7 (+) satisfaction commitment and involvement motivation Figure 1: The conceptual model The form of the survey has been a quantitive research, in particular an online questionnaire which has been build around the nine different variables of the research model. The respondents were able to react to the questions and statements on either five- or sevenpoint scales. The questionnaire has been distributed to the just a little more than 200 employees of MBNL. There have been 64 responses in total, giving a response rate of 31,53%. The main research question whether psychological contracts do play a role in the relation between job characteristics and attitudinal employee outcomes has been answered: yes, they do play a role in this relation. However, not all underlying assumptions have been confirmed as well. Although the mediating role of psychological contract fulfilment could be Page!5

6 attested for the job characteristics task variety and feedback from others, this positive association could not be validated with the other two analyzed job characteristics job complexity and interdependence. Furthermore, the moderation role of perceived obligations could also just be proven to be true for the outcome variable satisfaction and not for the other analyzed attitudinal employee outcomes commitment & involvement and motivation. Those results confirmed the theory of Holman and Axtell (2016) that job characteristics are positively associated with psychological contract fulfilment. The results further underlined the research of Coyle-Shapiro & Kessler (2000) as it also found the relation between psychological contract fulfilment and the attitudinal employee outcomes to be statistically relevant. With the research findings that psychological contract fulfilment mediates the relation between certain job characteristics and attitudinal employee outcomes and that this mediation is further moderated by the perceived obligations for certain employee outcomes, the theories of Hackman and Lawler (1971) and among others Robinson, Kraatz and Rousseau (1994) have been confirmed and further extended. The reliability of this paper s research unfortunately has been lowered due to several aspects. First and foremost the response rates is disappointingly low with a little more than 31% and in total just 64 responses. Lastly the influence of the brand Mercedes-Benz on the results should not be underestimated. The recommendations for business deal with the fact that on the side of the job characteristics as well as on the side of the attitudinal employee outcomes there seem to be significant differences between the variables for whether or not psychological contracts have an influencing effect. However, middle managers need to be aware that those differences exist and need to act accordingly. In addition, the results have shown that the employee s perceived obligation play a huge role in the enhancement of the desired outcomes. For businesses this gives a clear direction to make sure that they perform any kind of expectation management so that the employee s expectations are realistic and aligned with the companies strategy. The recommendations for future research come down to two suggestions. Firstly, the lack of information of why there are such significant differences in the behaviour of the different job characteristics and attitudinal employee outcomes in the model should be further analyzed. Secondly, future research should add more aspects into the model explaining the effects on attitudinal employee outcomes to further increase the reliability and significance of the research model. Page!6

7 1. Introduction 1.1. Motive and problem posing Since the 21st century the most valuable asset of a company has become its workforce, whereas just a few decades ago it has been its production facilities (Abu-Doleh & Daddi Hammou, 2015). Among others, a company s key to success has thus become a healthy relationship between the organization and its employees. The basis for any relationship between employees and employers is a contract. A contract is a promise between two parties to deliver work in exchange of a compensation (Rousseau, 1989). On the one side there are the written labor contracts which form the fundament for employment. Labor contracts contain specifications for the wage to be paid, the hours to be worked and other economical agreements. Next to those formal agreements there are unwritten contracts which are equally as important, e.g. the psychological contract. Psychological contracts form relationships greatly and consist of implicit and probably unspoken rules (Rousseau, 1989). Those contracts arise when people believe that there is more to their agreement with an employer than just the economical hard facts: the relationship. People believe that because they are involved and deliver a certain effort the other party, mostly the organisation has to fulfil the agreement with amends (Rousseau, 1989). The psychological contract is viewed and judged by two perspectives, the employer s and the employee s. Whereas it seems quite logical who represents the employee s perspective, the embodiment of the employer s side is more debatable (Alcover et. al., 2017; Coyle-Shapiro & Kessler, 2000). Although the organization in general is the actual counterpart in the psychological contract, they are represented by agents which are dealing with employee s expectations (Coyle-Shapiro & Kessler, 2000). The one group which is constantly engaging with employees are the middle managers. They see themselves in a position being able to interfere in daily business and shape en fulfill expectations of employees. The role of middle managers within an organisation in general is quite difficult as they are sandwiched between the employees on one side and senior management on the other. This position makes them however a great mediator of those parties and enables them to channel emotions towards a desired outcome by gaining the necessary trust of all stakeholders involved (Davis & Fisher, 2002; Giauque, 2015; Rouleau & Balogun, 2011, Wooldridge, 2008). This puts them in the perfect position to to execute their strategic involvement through the implementation of changes on organizational practices, structures, and systems (Floyd & Wooldridge, 1992). Page!7

8 Past research has proven that the revision of work and more specifically changes to job characteristics effect employee outcomes (Holman & Axtell, 2016). On the one side it has been proven that there is a positive association of job characteristics with the outcome psychological contract fulfilment (Holman & Axtell, 2016). On the other side research has let us suggest that there is a connection between psychological contract fulfilment and attitudinal employee outcomes such as job satisfaction, performance and commitment of employees (Coyle-Shapiro & Kessler, 2000) Scientific relevance Most of the former studies agree that there are other influencing factors in the relation between job characteristics and employee outcomes. Whereas Hackman and Oldham (1975) claim that this relation is mediated by certain critical psychological states, other studies suggest that one of the greatest mediators is the satisfaction of higher order needs (Hackman and Lawler, 1971). Those needs, which are aiming at personal growth, development, and accomplishment, are elements of which psychological contracts are build on in general (Robinson, Kraatz & Rousseau, 1994; Coyle-Shapiro & Kessler, 2000). Hackman and Lawler (1971) further claim that other personal emotions and feelings might be influential in the described relation. Their theory is underlined by the research of Robinson, Kraatz, and Rousseau (1994) saying that certain employee outcomes are for sure effected by the employee's perception on the obligations organisations have. The research at hand is going to build upon those theories and studies and is going to analyze whether indeed psychological contracts play a role in the relation between job characteristics and employee outcomes. It will add to existing research by focusing on job characteristics which haven t been investigated to a great extend yet and which actually can be influenced by middle managers. It will moreover combine two existing theories: the first being of Holman and Axtell (2016) who claim that indeed certain job characteristics are having a positive relation with psychological contract fulfilment. The second theory backed by Coyle-Shapiro and Kessler (2000) is saying that psychological contract fulfilment has an impact on employee outcomes and behaviours Problem posing The main question of this research is: Do psychological contracts play a role in the relation between job characteristics and attitudinal employee outcomes? Page!8

9 There are two important aspects which need clarification in order to thoroughly analyse the just mentioned problem statement. First of all one needs to find out whether psychological contract fulfilment mediates the relation between job characteristics and attitudinal employee outcomes. And secondly, this study has to examine the question whether this mediation by the psychological contract fulfilment is further moderated by the employee s personal perceptions on the organisation s obligations towards him/her Method of analysis In order to test the hypotheses of this study, a survey will be conducted in collaboration with Mercedes-Benz Nederland B.V. (MBNL). Since 2016 MBNL is exposed to organizational change which has to lead to dedicated business lines of the different customer types (passenger cars, trucks, and vans) and clustered organizations between the Netherlands, Belgium, and Luxembourg. The overall goal of this vast change initiative is to make the workforce ready for future challenges in order to maintain and excel the companies performance and to create efficiencies amongst the three countries. The MBNL organization in the Netherlands at the time of the research has three different directors for each business unit, a small management team underneath and in total 203 employees. The design of the analysis is a quantitative research and the method is predominantly questionnaires. The questionnaires will be distributed to all employees, managers and board members. They will be build upon the main research question and are designed to test the nine hypotheses of this paper s analysis. There will be interviews conducted with two selected employees after the results have been analyzed but the results of these interviews will only be used to enrich the conclusions and recommendations for business. They may lead to interesting reflections and valuable considerations for the future Reader s guide The following chapter is going to give more insight into the existing research with regards to the various topics at hand such as the concept of the psychological contract and the role of middle managers in them, the links between job characteristic, psychological contract fulfilment and employee outcomes, and other influencing factors such as employee s expectations towards the organization. The methodology of the research will be covered in the third chapter and will then be followed up by the presentation of the research results and the analysis of the hypotheses testing. The fifth chapter is consequently outlining the conclusions, restrictions, and recommendations for business and future research. Page!9

10 2. Literature review To start off with, this paper is going to have a detailed look at the main problem definition at hand: Do psychological contracts have a role in the relation between job characteristics and attitudinal outcomes. In order to find answers to this research question, this literature review is firstly going to focus on the concept of psychological contracts and will then examine the role middle managers have with the fulfillment or breach of psychological contracts within organisations. Going further, this review is going to examine the existing research on the relation between job characteristics and attitudinal employee outcomes. Therefor the relations between job characteristics and psychological contracts on the one side, and psychological contracts and attitudinal employee outcomes on the other side are analyzed. Consequently a conceptual model for this research is designed and outlined with hypothesis to be tested The psychological contract Since the 21st century the most valuable asset of a company has become its workforce, whereas just a few decades ago it has been its production facilities. Because of employees being the most important asset of any organisation, the long-term competitiveness of a company can be greatly determined by the relationship between employer and employee. Among others, a company s key to success has thus become a healthy relationship between the organization and its staff. Employees make, consciously and unconsciously, decisions about their level of commitment to the company on the basis of the way they are treated by their managers. The better they are treated the more they are committed (Abu-Doleh & Daddi Hammou, 2015). The underlying construct of these relationships and interdependencies are psychological contracts. But what defines a psychological contract and what are its functions? A contract is a promise between two parties (employee and organization) to deliver something in exchange of a compensation (Rousseau, 1989; Abu-Doleh & Daddi Hammou, 2015). It is the description of the exchange relationship between an individual and the organisation (Shore & Tetrick, 1994; Abu-Doleh & Daddi Hammou, 2015). In general, contracts are recognised by law. They are the cornerstones of working relations between organizations and their employees (Rousseau, 1989). According to Shore & Tetrick (1994) there are different kinds of contracts. First of all there are formal working agreement which are written contracts defining the basics of employment and name wages, hours, etc. Those contracts settle obligations between both parties involved. On the contrary however, there are contracts which are formed through mutual expectations between the employer and the Page!10

11 employee. Those contracts are called psychological contracts and they arise when people believe that there is more to their agreement with an employer than just the economical hard facts, that there is a deeper relationship (Rousseau, 1989). The psychological contract is a very specific type of contract due to its subjectivity, meaning that different parties involved have different perceptions on the content of those psychological contracts (Rousseau, 1989). A psychological contract is an exchange agreement, comprises subjective believes, and is promised based. One major feature is that individuals belief in a common understanding which binds both parties involved to a certain course of action (Shore & Tetrick, 1994; Coyle-Shapiro & Kessler, 2000; Rousseau, 2001). The psychological contract has several functions, all having the underlying theme of eliminating ambiguity. The first function is all about the reduction of uncertainty employees feel in regards to their relationship with the organization. As much as people would like to, in order to reduce the amount of uncertainty, it is impossible to write down all aspects of a work relationship. The psychological contract helps to fill this gap so with a psychological contract the security feeling is increased (Shore & Tetrick, 1994). Second of all, through having a psychological contract employees get the feeling that they themselves can influence the future in the organisation as they are also part of the contract, participated in the formation process, and can choose freely whether or not to stick to its terms (Shore & Tetrick, 1994). Past research has shown that the elements predictability and control within a working environment have a positive effect on motivation and can prevent stress. A psychological contract is a sort of scheme or concept and thus provides the employee with a certain order and continuity in a otherwise complex employment relationship (Shore & Tetrick, 1994). There are two perspectives on the psychological contract: employer and employee perspective. The definition of the employee perspective and the representation of the employee perception is rather clear. The question at hand however is, who represents the employer? (Coyle-Shapiro & Kessler, 2000) 2.2. Middle managers There are various different answers to the question above as one could mention the direct managers as agents of organisation (they on their side can also have a psychological contract), or departmental heads, or one could go a lever higher and name directors or even the government (Coyle-Shapiro & Kessler, 2000). Alcover et. al. (2017) call those possibly involved parties multiple organisational agents and claim that especially in todays rapidly Page!11

12 changing organisations, there is not one form of employee - employer relation but that several agents are involved. The outcome is thus more vary as we talk about the perceived employer and not necessarily the overall organisation. Looking at the psychological contract, the employer side is represented by the one that can treat you well and has the possibility to fulfill the expectations of employees. This role is often represented by middle managers (Coyle-Shapiro & Kessler, 2000). In this case the middle manager is the agent of the organization and acts upon the delegated work (Lee & Taylor, 2014). Although past research is quite aligned in the fact that middle managers play a key role in important organizational processes and thus dominate the organizational outcomes, there is no unanimous definition for the concept of a middle manager (Wooldridge, 2008). Some say that a middle manager is any manager two levels below the CEO and one level above line workers and professionals. (Huy, 2001, p. 73). Wooldridge (2008) argues going forward, that one can better define a middle manager by the following feature: they have access to senior management information in combination with knowledge of general daily operations. Middle managers have quite a complex task at hand, dealing on the one side with the general workforce and on the other side with the top management. Middle managers thus have a sandwich-position, sitting in-between the senior managers and the general staff (Davis & Fisher, 2002; Wooldridge, 2008). This makes them a critical mediator between those parties. Middle managers constantly need to interpret and implement rules and guidelines from senior management which results in a complex position because they are controlling people on the one side but are also controlled themselves (Giauque, 2015). One of the most important roles of a middle manager is the one of issue-selling: they need to bring their change requests under the attention of the senior management in order to make it a strategic goal, therefore the better they sell their issue, the more influence they have on senior management (Rouleau & Balogun, 2011; Giauque, 2015). Middle managers need this influence for strategy making, meaning that they need to get the attention of senior managements so that resources are allocated according to the desired issue at hand (Dutton et. al., 2004). On the other side, issue-selling of course also works downwards towards the staff: in order to do so, middle managers need to use a more transformational leadership style, where the focus with organizational issues lies with people and possibilities and are thus more successful with managing emotions and channel desired outcomes. Their tools of selling the organizational issues are translating the goal, explaining why certain aspects are necessary and keeping employees in check (Huy, 2001; Dutton et. al., 2004; Wooldridge, 2008). Page!12

13 According to Floyd and Wooldridge (1992) the strategic involvement of middle managers can be clustered into several themes. One of them being implementing deliberate strategy, which is also often claimed to be the most important strategic role of middle managers. The key to this role is to adapt and change certain organizational structures, characteristics, and systems in order to achieve certain ends. Those changes to organizational practices are defined as managerial interventions (Floyd & Wooldridge, 1992) The link between job characteristics and psychological contracts When focusing on possibilities to revise elements of work, past research has been based on the concept of job redesign interventions which are planned change initiatives with the goal to modify employee outcomes by revising certain job characteristics. Back in 1975, Hackman and Oldham (1975) already summarized a theory about the positive relation between job characteristics and work outcomes. They argued in this regard, that there are five important core job characteristics influencing employee outcomes: skill variety, task identity, task significance, autonomy and feedback from the job. As this theory has a limited set of standard motivational job characteristics, other research has later introduced the idea that social environment characteristics might also be a driving force for employee s outcomes (Grant, 2007), as well as work context job characteristics (Campion & Thayer, 1985). Humphrey et. al. (2007) have summarized the traditional five characteristics and the added social and work context characteristics (see table 1) and have conducted a meta-analytic summary with regards to the influence of those job characteristics on various types of employee outcomes. motivational characteristics social characteristics work context characteristics skill variety interdependencies physical demands task identity feedback from others work conditions task significance social support ergonomics autonomy interaction outside the feedback from the job task variety information processing job complexity specialization problem solving organization Table 1: Job characteristics - motivational, social, and work context Page!13

14 The results of the meta-analytic summary of Humphrey et. al. from 2007 have shown that there definitely is a positive relation between the five original motivational job characteristics from Hackman and Oldham (1975) and employee outcomes. The results however also show that that the research for a connection between the added motivational, social and work context job characteristics is lacking. This gap in research is addressed by this research at hand as it leaves out the five original motivational job characteristics but rather focusses on the newly added characteristics. Looking further, for this research it is especially important to focus on job characteristics which can be influenced by middle managers. The influence is for example based on their ability to shift tasks and responsibilities within their team and with consultation even in-between teams. Moreover one of course has to think about their influence through direct communication and working by example. Combining those two focal points the following list of four job characteristics is composed being part in this research analysis: Task variety, Job complexity, Interdependence, and Feedback from others. The following definitions apply: task variety the extent to which an individual performs different tasks at his or her job (Humphrey et. al., 2007) job complexity the extent to which a job is multifaceted and difficult to perform (Humphrey et. al., 2007) interdependence the extent to which a job is contingent on others work and other jobs are dependent on the work of the focal job (Humphrey et. al., 2007) feedback from others "the extent to which other organisational members provide performance information (Humphrey et. al., 2007) More recent research has come up with an underlying model for this theory: the multiple mediator - multiple outcome model where various different employee outcomes are changed via various different altered job characteristics (Holman & Axtell, 2016). Holman and Axtell (2016) also show that indeed there is a positive relation between certain job characteristics and employee outcomes. In particular, they were able to proof a positive association between two job characteristics (job control and feedback from the job) and at least two employee outcomes, under which well-being and psychological contract fulfillment. The latter is defined as follows: psychological contract fulfillment When an organization rewards employees in a manner consistent with the perceived promises underlying the psychological contract, this constitutes fulfilment of organisational obligations. (Shore & Tetrick, 1994) Page!14

15 Based on these results of the Humphrey et. al. (2007) meta-analytic summary and more importantly on the conclusion of Holman and Axtell (2016) that indeed certain job characteristics have an influence of psychological contract fulfillment the first four hypotheses of this research are set. Hypothesis 1: The job characteristic task variety' will be positively related to psychological contract fulfillment. Hypothesis 2: The job characteristic job complexity' will be positively related to psychological contract fulfillment. Hypothesis 3: The job characteristic interdependence' will be positively related to psychological contract fulfillment. Hypothesis 4: The job characteristic feedback from others will be positively related to psychological contract fulfillment The link between psychological contracts and employee outcomes The psychological contract has an effect on the attitude and behaviour of employees. When an organisation deals with change (e.g. downsizing, outsourcing, etc.) the old psychological contract often needs to be replaced by new ones to form the basis of the new employer-employee relationship. That means that due to the change, organisations are unwilling or unable to stick to the old psychological contract. As a result the changes have an effect on the expectations and obligations as they become less clear and distinctive (Robinson, 1996). In today s global competitive environment the pace of change within businesses is increasing. Successful organizations need to find a way to continuously adapt to those external changes and thus create a competitive advantage which is why many of internal changes are aimed at the improvement of the organizational effectiveness (Haffar, Al- Karaghouli, Ghoneim, 2013). Organizational change has become an integral part in our global work life and has positive as well as negative effects: on the one side change offers the opportunity to grow and develop but on the other side change makes demands on everybody, management as well as employees (Tvedt & Saksvik & Nytro, 2009). Dutton et. al. (2004) claim that change is not a separated event but happens all the time on various aspects of an organization. Burnes (2011) states that although constant internal change is essential to the survival of businesses, two thirds of all change initiatives fail. According to literature and research the Page!15

16 failure rate is even anything between 60% and 90% (Choi & Ruona, 2010). Past research has greatly investigated the question of why the failure rate is so high. Tvedt, Saksvik and Nytro (2009) say that first and foremost the psychological work environment is often negatively affected by change. This means that there is an increased job demand, more insecurity, less clarity and lower individual control. This may lead to stress and negative health effects. Second of all Tvedt, Saksvik and Nytro (2009) believe that one needs to make a distinction between the content and the process of change in order to be able to answer the question at hand. The content is the 'what' when it comes to the change initiative, the purpose and mission. The process is the how' when it comes to change initiatives, the implementation and adoption. According to Tvedt, Saksvik and Nytro (2009) change initiatives fail due to an underestimation of the process. This view is greatly supported by a.o. Choi & Ruona (2010). They say that change initiatives do not succeed due to implementation failures and not due to the aim of a change initiative. The first step leaders should take within a change initiative is to make everybody aware of the necessity of change. The key here is to create readiness and a common ground as everybody reacts differently to change. Traditionally a psychological contract contains the factors of long-term job security, loyalty and promotion in exchange for hard work, but given the ever changing circumstances, those promises might not be valid anymore. There is the likelihood that those changes lead to the unwanted situation of a contract breach. Psychological contract breach is associated with various different negative outcomes such as reduced motivation and satisfaction or lowered citizenship behaviour, meaning lowered commitment to organisation. The more detailed definitions of those employee outcomes are as follows: satisfaction An overall measure of the degree to which the employee is satisfied and happy with the job. (Hackman & Oldham, 1975) commitment & involvement "The relative strength of an individual s identification with and involvement in a particular organization. (Mowday, Steers & Porter, 1979) motivation The degree to which the employee is self-motivated to perform effectively on the job. (Hackman & Oldham, 1975) In order to prevent this from happening, organizations need to constantly work on and renegotiate the terms of the psychological contract. Trust has a central and fundamental role in psychological contract fulfillment. The difficult part of undergoing change is how to develop and maintain this psychological contract while taking into account all the various Page!16

17 needs of the effected stakeholders. In times of change the relation between a company and employees can become stressed (Robinson, 1996; Coyle-Shapiro & Kessler, 2000; Zhao, 2007; Abu-Doleh & Daddi Hammou, 2015). Consequently, previous research has shown that there is a connection between employer contract behaviour and job satisfaction, performance and commitment of employees (Coyle-Shapiro & Kessler, 2000, Zhao, 2007). According to Holman and Axtell (2016) those employee outcomes can be clustered to attitudinal employee outcomes which consist of a.o. satisfaction, commitment and involvement as well as motivation. Hypothesis 5: Psychological contract fulfillment will be positively related to satisfaction. Hypothesis 6: Psychological contract fulfillment will be positively related to commitment and involvement. Hypothesis 7: Psychological contract fulfillment will be positively related to motivation Other influencing factors Next to the fact that past research proofs dependencies between job characteristics and employee outcomes, most articles also state that there is some kind of mediating variable involved. According to Hackman and Oldham (1975) the job characteristics influence the employee outcomes through certain critical psychological states. Those stated are experienced meaningfulness of work, experienced responsibility for outcome, and knowledge of the actual result of activities. Those states summarized give a picture of the degree to which the employee actually feels informed about his or her performance, feels personally responsible for these outcomes, and believes the efforts taken are worthwhile. Hackman and Lawler (1971) state that the relationship between job characteristics and certain employee outcomes is mediated by two aspects. First of all they name a sociologicallevel variable with which they define whether an employee has an urban or a rural background. Second of all, Hackman and Lawler (1971) name higher order need satisfaction as another mediating variable. Here they aim to touch on the need of an employee for personal growth, development, and accomplishment, all related to being efficient, effective and performing a meaningful job. Given the fact those aspects like personal growth and need for development are elements of psychological contracts in general (Robinson, Kraatz & Rousseau, 1994; Coyle-Shapiro & Kessler, 2000) one could argue that the variable psychological contract fulfillment might be interchangeable with the aspect of higher order needs satisfaction and could thus mediate the relation between job characteristics and Page!17

18 employee outcomes. This is of importance as it proves that the indirect mediating effect of the psychological contract fulfillment is greater that the pure sum of the two direct dependences between job characteristics and psychological contract fulfillment and psychological contract fulfillment and attitudinal employee outcomes. Hypothesis 8: The relation between job characteristics and attitudinal employee outcomes will be positively mediated by psychological contract fulfillment. Looking further into the framework of Hackman and Lawler (1971) one learns about even more factors influencing the effects of job characteristics on employee outcomes. It is suggested that the mediation effect by the just described variables might be further dependent on personal preferences and desires of an individual. The personal characteristics and perceptions of each and every individual employee thus do play an important role in achieving the desired employee outcomes. This theory is further backed by the meta-analytical study of Zhao (2007) which analyses the moderating effect of personal emotions and beliefs on employee outcomes. It is argued that in a negative perspective, a psychological contract breach influences employee outcomes through having an emotional impact on the employee which then changes the individual and personal attitude effecting the outcomes. Also Robinson, Kraatz and Rousseau (1994) underline the fact the employee outcomes such as citizenship behaviour are effected by the employee s perceived obligations to organizations and of course how they are replied. Those perceived obligations can be defined as follows: perceived obligations "Beliefs, held by an employee or employer, that each is bound by promise or debt to an action or course of action in relation to the other party. (Robinson, Kraatz & Rousseau, 1994) Going back to the basics of how a psychological contract is formed, personal goals and expectations towards the organization play an important role in the development of the psychological contract alongside other interactions between the employee and the employer (Shore & Tetrick, 1994), meaning that the level of expectations of employees towards the organization in regards to the organizations obligations has an effect on the development of the underlying psychological contract. The previous mentioned mediation effect of psychological contract fulfillment on the relation between job characteristics and attitudinal Page!18

19 employee outcome might thus be further moderated by personal preferences and desires of employees being expressed by their perceived obligations of the organization. Hypothesis 9: The mediation effect from psychological contract fulfillment between job characteristics and attitudinal employee outcomes will be positively moderated by expected obligations within the psychological contract Conceptual model including hypotheses and definitions The main research question for this paper is whether or not psychological contracts do play a role in the relation between job characteristics and attitudinal employee outcomes. In line with the just conducted literature review, nine hypotheses have been established. Those hypotheses are depicted in figure 1 and further outlined in table 2 below: task variety job complexity interdependence feedback from others h1 (+) h2 (+) h3 (+) h4 (+) psychological contract fulfillment h8 (+) h9 (+) expected level of obligations h5 (+) h6 (+) h7 (+) satisfaction commitment and involvement motivation Figure 2: The conceptual model Hypothesis Job characteristics will be positively related to psychological h1-4 contract fulfillment. Psychological contract fulfillment will be positively related to h5-7 attitudinal employee outcomes. The relation between job characteristics and attitudinal employee h8 outcomes will be positively mediated by psychological contract fulfillment. The mediation effect from psychological contract fulfillment between job characteristics and attitudinal employee outcomes h9 will be positively moderated by expected obligations within the psychological contract. Table 2: Hypotheses and references to earlier research Reference Holman & Axtell (2016) Coyle-Shapiro & Kessler (2000) Hackman & Lawler (1971) Hackman & Lawler (1971), Robinson, Kraatz and Rousseau (1994) Page!19

20 3. Methodology The main goal of this paper is to evaluate the role of psychological contracts in the relation between job characteristics and attitudinal employee outcomes. Previous chapters have given an indication of how this question might be answered referring to secondary data from past research, resulting in nine hypothesis to be tested. The following chapter is going to give an insight in the chosen methodology for a further data analysis, why certain choices in regards to the research have been made, the implementation and the execution of the method Method of analysis The nine hypothesis will be analyzed and tested with the help of a quantitative research. The main method applied will be an extended questionnaire based on the conceptual model creating primary data. There are several reasons why the methodology of a questionnaire as a quantitive research has been chosen. First of all the usage of questionnaires enables the collection of large amounts of information from a wide group of people in a relatively short timeframe. Furthermore, the results of a well designed questionnaire can give a more scientific insight into the analysis compared to e.g. a transcript from a long interview. Finally the results of a questionnaire can be collected without a great interference from the researcher and thus maintain a level of objectivity. On the downside one can not guarantee that the respondents understood the questions correctly so there is always a chance that the results are twisted. Based on that, one can also never guarantee that the respondents have filled in the questionnaire truthfully and with utmost care. Besides that, respondents do not have the possibility to explain their choices, not unless there is a possibility for an open comment. In order to tackle some of the shortcomings and to evaluate the results, two interviews with two staff members from MBNL will be conducted. The results of those interviews will however not be included in the main questionnaire analysis but will retrospectively aim at enriching the conclusion, discussion and recommendations. The people which will be interviewed have already been chosen on the grounds of two criteria: having a strong opinion about the internal issues and willing to give a positive contribution to the research at hand. Page!20

21 3.2. Data collection The questionnaire is designed and applied with the help of the free online tool Google Forms. The reasons for choosing this provider range from the fact that it is a free service, that one can choose as many questions and as many respondents as needed and that the questionnaire can be individualised by choosing the required type of question, the desired way respondents can give their answers, and even an appropriate theme. The questionnaire will be handed out to all employees, managers and board members of MBNL via the online tool. In order to ensure a high response rate, as many respondents as possible will additionally be asked on a personal level to participate in the survey. The respondents will get a timeframe of two weeks for concluding the questionnaire. This will give sufficient time for everybody to not be hindered from answering the questionnaire due to other reasons (holiday, meetings, etc.). On the other hand is this a timeframe which is readily comprehensible and thus still creating a sense of urgency Questionnaire design The individual questions are designed around the nine hypothesis stated above. More specifically, there will be groups of questions for the four independent, the three dependent variables, and for the psychological contract itself. There are four independent variables: task variety, job complexity, interdependence, and feedback from others. And there are three dependent variables: satisfaction, commitment and involvement, and motivation. In addition there will be questions with regards to gender, age, seniority, and job level - purely for control purposes if needed. The questions for the first seven parts for job characteristics and attitudinal employee outcomes are designed in such a way that a respondents can answer on a seven point Likert scale ranging from Strongly disagree, Disagree, Somewhat disagree, Neither agree nor disagree, Somewhat agree, Agree to Strongly agree. The Likert scale is widely known and one can thus assume that the respondents will quickly understand the questionnaire. Using a seven point scale still gives enough room to not force the respondents to give a definite answer and will also provide a neutral option for an indecisive answer. Furthermore it gives enough options in between the two extreme options on either side of the scale to see a difference in the provided answers as people normally do not opt for the extreme option that easily. Due to the fixed choices the respondents are forced to give, the results will be easy to measure and Page!21

22 analyze. As the points of the scale are assumed to have the same distance to one another, the Likert scale is an ordinal scale enabling a wide range of possible statistical analysis. The part of the questionnaire dealing with psychological contracts has two different response scales as it actually measures two different aspects: On the one hand the respondents are asked to comment on their expectations in regards to certain obligations the organization might have. Here the response scale is a five point scale ranging from Not at all, Slightly, Somewhat, Moderately, To a great extent. On parallel the respondents are asked to evaluate to what extend the organisation has fulfilled those obligations. Again a five point response scale is used ranging from Much less than expected, Less than expected, As expected, More than expected, and Much more than expected. The following scales will be used: Task variety The four-item scale from the Work Design Questionnaire from Morgeson & Humphrey (2006) is used in order to measure the extent to which an employee performs different tasks at the job. - Example item: My job involves doing a number of different things Job complexity For measuring the extent to which a job is difficult to perform, the four-item scale from the Work Design Questionnaire from Morgeson & Humphrey (2006) is used. - Example item: My job requires that I only do one task or activity at a time. Interdependence Also for measuring the extend to which a job and its tasks are interlinked with other jobs, the the Work Design Questionnaire (Morgeson & Humphrey, 2006) is consulted and here the three-item scale for initiated interdependence and the threeitem scale for Received Interdependence are used. - Example item: My job activities are greatly affected by the work of other people. Feedback from others In order to measure the extend to which performance information is provided by colleagues and supervisors, the Work Design Questionnaire from Morgeson & Humphrey (2006) is enquired one last time and therefor the inherent three-item scale is used. Page!22