Understanding the Interrelationships Among Cultural Orientation

UNDERSTANDING THE INTERRELTIONSHIPS AMONG CULTURAL
ORIENTATION, PSYCHOLOGICAL CONTRACT, AND JOB ATTITUDES
Rawan G. Sawalha
[August 2011]
*Rawan G. Sawalha is an undergraduate student in the College of Business Administration
Honors Program at California State University, Long Beach, CA 90840. This manuscript serves
to fulfill her Honors Thesis requirement. Address correspondence to Rawan Sawalha:
[email protected].
Psychological Contract & Job Attitudes
i
ACKNOWLEDGEMENTS
First and foremost, I would like to dedicate this thesis to my grandfather, Sami Sawalha. He
taught me that excelling academically is extremely important which is why I joined the honors
program and chose to write a thesis. Even though he was not able to see the completed thesis, I
would like to acknowledge his support and the encouragement he gave me.
Second, I would like to thank Dr. Vicki Scherwin and Dr. Pamela Miles Homer. I am grateful
for Dr. Scherwin for advising me on my thesis. She was able to turn my ideas into a thesis topic.
I appreciate her support, expertise, encouragement, and knowledge. The many hours we have
spent together working greatly improved the quality of my thesis. I am thankful that Dr. Pamela
Miles Homer for accepting me into the honors program, introducing me to social research and
statistics, and guiding me through this process.
Third, I would like to thank Maira Gomez and Jade Kramer; we have exchanged many
laughs and advise during the three semesters together in the program. I extend special thanks to
Justin Teplinski - he has given me instrumental support through this process.
Last, but not least, I would like to thank my family and friends who have also supported me.
I also appreciate the students who took the time to participate in the study.
1 Psychological Contract & Job Attitudes
Understanding the Interrelationships among Cultural Orientation,
Psychological Contract, and Job Attitudes
ABSTRACT
This study examines the effects of cultural orientation on the development of psychological
contract and job-related attitudes. Interest in psychological contracts has grown in the scientific
literature, but knowledge of its relationship with cultural orientation is limited. Specifically, this
study investigates whether individualists and collectivists develop different psychological
contracts that affect their job attitudes. Although the results provide limited support for the
research hypotheses, this study supports past evidence that individual differences do influence
job attitudes. Results show that collectivists value group-level benefits more than individualists,
cultural orientation influences the image of the company, and the interaction between job
security and cultural orientation affects the reputation of the job. Theoretical and managerial
implications are offered.
2 Psychological Contract & Job Attitudes
INTRODUCTION
Utilizing high-performance work practices (e.g., employee participation and empowerment,
self-managed teams, generous pay and benefits, and incentive compensation) to invest in
employees, may lead to improved organizational performance (Combs, Liu, Hall and Ketchen
2006). A number of successful companies use these practices to attract and retain talented
employees, which translates to profits during times of economic growth and recession (Heymann
and Barrera 2010). For example, when Autoliv Australia implemented leave and flexibility
policies for all employees, turnover decreased from 15-20 percent to approximately three percent,
saving the company money and increasing profits (Heymann and Barrera 2010). As a result,
companies may see returns on their investment in these types of practices for employees at all
organizational levels.
When employers invest in their employees, employees are more likely to feel that they “fit”
with the organization (Kristoff 1996). Individuals who feel a “fit” with a specific organization
are in turn more likely to apply to work for that organization (Careless 2005), to believe that the
employer is fulfilling it’s psychological contracts (Rousseau 1989), and to commit to the
organization’s goals (Coyle-Shapiro 2002; Silva, Hutcheson, and Wahl 2010). Consequently, it
is critical that organizations focus their investments on what their employees value (Vroom
1964) in order to insure that their investments are appropriate and beneficial. Yet, given the wide
range of employees’ interests and the increased level of workforce diversity (Powell 1988;
Gomez 2003), how does an organization know what employee programs and practices to invest
in? In other words, which of these practices do employees value in their jobs? This study
addresses this question by examining cultural orientation as a predictor of entry-level employees’
work-related interests in step one and by specifically investigating one employee interest, job
security in step two.
Psychological Contract & Job Attitudes
3 In this research, cultural orientation is defined as an individual’s knowledge and outlook on
the world and his or her personal environment. National culture, heritage, upbringing, and
socialization all influence an individual’s cultural orientation, and in turn, individuals can
influence the cultural orientation of others. In this study, cultural orientation is operationalized as
individualism/collectivism, an individual difference factor first developed by Hofstede (1980).
Individualists expect to look after themselves and their immediate family members only; the ties
between individuals are loose (Sharma 2010). Thus, individualistic employees are more likely to
seek independence and economic return in the workplace (Hartung, Fouad, Leong, and Hardin
2010). Collectivists, on the other hand, have integrated ties with others and form cohesive ingroups where people look out for one another (Sharma 2010). As a result, collectivists are likely
to place more value on altruism during the job search process (Hartung, Fouad, Leong, and
Hardin 2010).
The primary research question investigated here is whether individual or communal-oriented
individuals develop different values and attitudes towards specific job elements during the job
search process. The literature on the impact of cultural orientation on such attitudes is limited
and inconclusive (Ramesh and Gelfand 2010; Mueller, Hattrup, and Hausmann 2009). Thus, this
research seeks to enhance the understanding of the work elements most critical to different
groups of employees, thereby serving as a tool for organizational human resources investment
decisions.
This study is presented and conducted in two stages. In the first stage, the relationship
between work interests and individualism/collectivism is examined. Stage two uses an
experimental design that focuses on one aspect of psychological contract: job security.
Specifically, in that stage, I examine how cultural orientation and job security interact to
Psychological Contract & Job Attitudes
4 determine potential employees’ work attitudes representing person-organization fit and
psychological contract fulfillment.
BACKGROUND AND HYPOTHESES
Human Resources Practices
Across organizations, a major function of the human resources department is to maximize
performance while controlling costs (Combs, Liu, Hall, Ketchen 2006). An effective way to cut
costs is to determine the appropriate rewards based on employees’ interests. If employees are not
interested in specific rewards, then the expense of designing and implementing the reward
program is wasted. A number of companies have instituted high-performance work practices
(HPWPs) as rewards to improve organizational performance. HPWPs include, for example,
incentive compensation, training, employee participation, selectivity, and flexible work
arrangements (Combs, Liu, Hall, Ketchen 2006). An underlying assumption is that employees
regard HPWPs as rewards for their performance and thus, organizations must provide rewards
that employees deem valuable. If employees do not value the rewards, then employees may
decrease their motivation to complete job-related tasks (Vroom 1964). Thus a critical human
resources function is to determine what benefits or high-performance work practices will
motivate employees to improve performance. Given the diversity of the workplace (Powell 1998;
Gomez 2003), the HPWP of different organizations contribute to certain individuals
experiencing fit with certain organizations and not others (Kristoff 1996).
Person-Organization Fit
Person-organization fit is broadly defined as “the compatibility between individuals and
organizations” (Kristof 1996). When individuals perceive a positive fit with their organizations,
the outcomes include increased job satisfaction, higher levels of organizational commitment, and
greater intention to stay (Silva, Hutcheson, and Wahl 2010). Job seekers are attracted to jobs
Psychological Contract & Job Attitudes
5 when the position and the organizational attributes “match” their personalities (Cable and Judge
1996), suggesting that job seekers assess their fit with an organization early in the job search
process. According to Van Vianen (2000), this job selection “fit” assessment process includes
two basic steps. First, job seekers determine whether a company is attractive based on its match
with their own characteristics. Second, they determine whether the current employees in the
organization are similar to themselves. Once employed, if a person determines there is no ‘fit’,
he/she may leave the organization. Since the applicant has such a central role in determining fit,
it is important to identify what applicants desire in an organization.
Determining the fit between an employee and the organization prior to selection is also cost
effective: “achieving high levels of P-O fit through hiring and socialization is often touted as the
key to retaining a workforce with the flexibility and organizational commitment necessary to
meet these competitive challenges” (Kristof 1996, p. 1). Limited research has investigated the
relationship between cultural orientation and person-organization fit. To date, to my knowledge
only one empirical study has examined the effects of culture and person-organization fit. This
study supports that different dimensions of job embeddedness predict turnover in the United
States and India: job fit was more important to turnover in the United States and personorganization fit was more important to turnover in India (Ramesh and Gelfand 2010). In
response, the present research more broadly investigates the interrelationship between culture
and fit by investigating cultural orientation and a wide range of work-based interests.
The Importance of Employer’s Obligations to Employees: Psychological Contract
Once “fit” is established, and an employee accepts a job with a particular organization, the
employee contrives their perceived psychological contract with that employer. A psychological
contract is defined as the “individual’s belief in a reciprocal obligation between the individual
and the organization” (Rousseau 1989, p. 121). Thus, employees have certain expectations of
Psychological Contract & Job Attitudes
6 their employers that influence their work-related attitudes and behaviors. However,
psychological contracts are not simply general expectations. Rather, they are reciprocal
obligations (Rousseau 1990), meaning that when an employer does not fulfill their obligations to
an employee, the employee may react by decreasing some of their obligations—effort,
commitment, or productivity (Robinson, Kraatz, and Rousseau 1994).
The concept of psychological contract therefore exemplifies the employee’s “acceptance of
the organizational values, willingness to exert effort on behalf of the organization, and desire to
remain an employee” (Rousseau 1989, p. 125). Fulfilling the psychological contract often begins
prior to employment. For example, addressing applicants with a positive tone in rejection letters
results in a greater likelihood of applying again, recommending the company to a friend, and a
better image of the company (Waung and Brice 2000). When an employer breaches the
psychological contract at any point in the employment relationship, the employee’s
organizational commitment and work satisfaction decrease (Conway, Guest, and Trenberth 2011).
The psychological contract is especially important in today’s global economy where
employees have increased mobility (Hytrek and Zentgraf 2008). Employees, on average, no
longer stay with one organization for their entire career. In January 2010, the time an employee
remained in the same organization averaged between four and five years (Bureau of Labor
Statistics). One reason why an employee may voluntarily leave an organization is because his or
her psychological contract has been violated (Stone and Gallagher 2010; Rousseau 1989;
Robinson and Rousseau 1994). To increase intention to stay, job satisfaction, and job
involvement, it is the responsibility of the organization to fulfill the psychological contracts of
their employees (Stone and Gallagher 2010).
This study clarifies these psychological contract expectations by investigating the
relationship between an individual’s cultural orientation and his/her attitudes toward potential
7 Psychological Contract & Job Attitudes
job positions in an employment search context. The model in Figure 1 is a visual representation
of these relationships.
[Insert Figure 1 about here.]
Cultural Orientation and HPWP
The discussion of cultural orientation (INCOL) is limited as it relates to work-related
attitudes in the Human Resources and Management literatures. Existing research has (Gardner,
Reither, Foley, Cogliser, and Walumbwa 2009) examined vertical and horizontal collectivism
and vertical and horizontal individualism as individual personality categories. The authors
conclude that depending upon which of the four personality categories individuals they fall into,
they are attracted to certain organizations, due to the organization’s HPWPs. Other studies focus
on specific cultures: e.g., Van Hooft, Born, Taris and Van der Flier (2006a) studied the
differences between individuals of the majority culture, Dutch, in the Netherlands and one of the
largest minorities, the Turkish. Overall, they find that job search intentions differ between the
two groups. However, there is no strong body of literature that explores the relationship between
cultural orientation and a wide range of work interests and attitudes in a U.S. context.
Individualists tend to be guided more by personal attitudes than social norms and they
prioritize their personal goals (Van Hooft and De Jong 2009). Since individual level benefits can
help enhance one’s personal goals, such as personal training enhancing one’s skill set, I expect
that individualistic members value HPWPs that are related to enhancing their personal goals
more than collectivistic individuals. On the other hand, collectivists tend to prioritize in-group
goals over personal goals (Van Hooft and De Jong 2009; Earley 1993). They view their
individual actions as an important contribution to the in-group’s well being and will gain
satisfaction from the group’s outcomes (Earley 1993). Group level benefits should be of greater
Psychological Contract & Job Attitudes
8 value for the in-group goals, thus I expect that collectivistic members value benefits that support
the group more than individualistic members. In summary, I test the following hypotheses:
H1A: Individualists value individual level benefits such as health and benefits plan and
personal training more than collectivists.
H1B: Collectivists value group level benefits such as commitment to social responsibility and
strong commitment to employee diversity more than individualists.
Cultural Orientation and Psychological Contract
Another work-related value studied is an element of the psychological contract: i.e.,
careerism. Careerism is defined as a personal characteristic or attitude “where the new hire views
employment with the organization as a stepping stone to other firms” (Rousseau 1990). Careerist
individuals place a lesser value on the relationship between his/herself and the organization; they
see their relationship with their employer as a short term means to an end (Robinson and
Rousseau 1994). In contrast, those who score low on careerism are more relationship and longterm focused (Robinson and Rousseau 1994). Since individualists tend to look out for themselves
and their immediate families only (Hofstede 1985), they should score high on careerism. In
contrast, collectivists have a “preference for a tightly knit social framework in which individuals
can expect their relatives, clan, or other in-group to look after them, in exchange for
unquestioning loyalty” (Hofstede 1985, p. 348). This rationale suggests that collectivists regard
the organization or their employer as another “in-group,” and thus should score low on careerism.
Therefore:
H2: Individualists have higher levels of careerism than collectivists.
Job Security, Birth Cohorts, and Fit
As globalization increases in the marketplace, organizations provide less job security–the
“perceived stability and continuance of one’s job” (Stander and Rothmann 2010, p. 3) —
compared to the 1950s (Hytrek and Zentgraf 2008). Organizations also make more use of
Psychological Contract & Job Attitudes
9 temporary worker positions since the 1970s (Van Hooft and De Jong 2009), which provide less
job security than permanent-full time positions. Both of these factors contribute to a growing
sense of competition among employees to attain a full-time position that offers high job security.
In response, employees are concerned specifically with one critical element of their
psychological contract, job security: i.e., security acts as a “deficit” value (e.g., Kahle 1983).
This competition is demonstrated by the findings that many prospective employees attain higher
levels of education and fabricate their resumes (Smith and Clark 2010) to ensure a job position.
When employees sense job insecurity, they are more likely to turnover and their productivity,
commitment, and satisfaction decreases (Stander and Rothmann 2010). Given the extended effort
to secure a job and negative attitudes towards job insecurity, employees should therefore regard a
position with high job security more positively than with a low job security.
Distinctive birth cohorts have different career-related goals and job expectations, and vary in
terms of how they make career-related choices (Ng, Schweitzer, and Lynons 2010). Specifically
millennials (those born after 1980) possess different work attitudes than previous generations
regarding job satisfaction, job security, and turnover intentions (Kowske, Rasch, and Wiley
2010). One reason why the millennial generation shows differing job expectations and attitudes
is due to the increased competition associated with globalization and increased participation in
the workforce amongst minorities and women (Powell 1998). Yet, even with these changes, I
still expect millennials to have greater positive attitudes towards secure jobs compared to less
secure jobs due to the effects of globalization and changes in workplace stability. Since this
study focuses on entry-level employees, many of whom are millennials, their attitudes are very
important. In this research, I assume that individuals value secure jobs more highly than jobs
with less security and use this in developing the guiding hypotheses.
Psychological Contract & Job Attitudes
10 Cultural Orientation, Job Security, and Company Attitudes
Collectivists value strong and stable relationships within their in-groups (Gomez 2003). The
in-group for collectivists is the most basic unit of social perception (Probst and Lawler 2006).
The in-group is so critical to collectivists that they perform higher within their in-group than they
do individually (Earley 2003). Since co-workers are a part of the in-group, collectivists can also
develop strong bonds with the organization in which they work (Probst and Lawler 2006). For
example, the Japanese (a traditionally collectivistic society) have strong ties with their
organizations and have stable, long-term employment (Saito and Vuszkun 2010; Kalleberg and
Reve 1993).
Given collectivists’ possible attachment to their organizations, they are likely to value job
security more highly than individualists (Probst and Lawler 2006). Having a highly secure job
can give the impression of a long-term employment and increase the employee’s bond and
commitment to the organization. This may explain why collectivists react more negatively to an
announcement of organizational transition, exhibit more negative job attitudes, and report higher
job-related stress levels when they perceive job insecurity compared to individualists (Probst and
Lawler 2006). For example, in Weaver’s (2000a) sample of Mexican-Americans and EuroAmericans, Mexican-Americans believed that they “were significantly more likely to say that it
is likely that they would lose their jobs or be laid off in the next 12 months” compared to EuroAmericans (p. 283). Similarly, Kim (1993) demonstrates that Korean-Americans prefer to run
their own small businesses. It can be inferred that Korean-Americans, who are generally
collectivists, are also concerned with job security. Running their own business gives them the
sense of security that they may not receive from an outside organization.
Psychological Contract & Job Attitudes
11 Since collectivists value job security more highly, they should view a company that provides
security more positively than companies that do not. Therefore, the third set of hypotheses
propose that:
H3A: High job security has a more positive impact on the image of the company for
collectivists versus individualists.
H3B: Low job security has a more negative impact on the image of the company for
collectivists versus individualists.
Cultural Orientation, Job Security, and Job Reputation
The same organization can develop a different reputation with different individuals based on
their specific needs and interests (Langee, Lee, and Dai 2011). When Johnson and Johnson
recently experienced various product recalls, the organization’s reputation was affected
differently, depending on the interested party. For example, The Food and Drug Administration
questioned if the company followed compliance regulations and monitored clinical investigations
(Ball 2009). Consumers, such as parents, questioned if their products were safe to consume.
Johnson and Johnson managers were concerned about the company image during the crisis,
whereas employees were concerned with their job insecurity and whether or not there would be
layoffs due to the crisis.
Similarly, applying Langee, Lee, and Dai’s (2011) definition of organizational reputation to
conceptualize job reputation as an overall generalized favorable judgment of the job as good,
attractive and appropriate, suggests that the same job may develop different reputations for
different people. As discussed earlier, collectivists may place significant value on the
organization’s image (Schweizer and Wijnberg 1999) because they are likely to include the
organization in which they work as part of their in-group. However, for individuals who identify
more with their personal goals, the organization’s reputation would be less important for them.
Individualism stresses self-reliance, independence, (Triandis and Gelfand 1998), challenging,
12 Psychological Contract & Job Attitudes
meaningful work, and sense of accomplishment (Gomez 2003; Kalleberg and Reve 1993). For
individualists, being proud of “their place of work” may actually translate to being proud of their
job. For example, job satisfaction for individualists is derived from the work itself (Hui 1990).
Since a specific individual completes a specific job, individualists may gain a sense of pride
more from the job’s reputation than the organization’s reputation. Accordingly, having a secure
job would provide the stability that enables the employee to gain pride and a sense of
accomplishment from the job. Thus:
H4: Job security has a greater impact on job reputation for individualists compared to
collectivists.
METHODOLOGY
Sample and Procedure
The participants in this study consisted of 303 undergraduate students from California State
University, Long Beach (41.7% male, 58.3% female, .3% unknown). The students were drawn
from a subject pool of the Marketing Department in the College of Business Administration who
participated for course credit. Participants classified themselves as Asian (34%), Hispanic/Latino
(26%), White/Caucasian (29%), Black/African-American (5%), or Other (6%). The average age
for participants is 23.54 years old, ranging from 18-48 years old. Participants, on average have
worked 5.00 years, with an average 2.35 years of full-time work.
Participants completed all aspects of the study online, in a closed computer classroom setting.
Participants were told that the study examines the impact of job characteristics on applicants’
work-related attitudes. Each participant read the general instructions, timed to ensure maximum
retention, and then continued onto stage one and stage two. In stage one of the study, students
completed a variety of batteries measuring their cultural orientation, psychological contract, and
other job-related preferences. In stage two, students were randomly assigned to read either a high
Psychological Contract & Job Attitudes
13 job security description or a low job security description. After reading the job description
assigned, subjects completed the remaining dependent measures, including attitudes towards the
job presented. The questionnaire concluded with demographic questions. Analyses revealed that
no participants knew the true nature and purpose of the study.
Design and Manipulations
In the first step of the study, all participants completed the same stage 1 measures designed to
assess whether the participant was collectivistic or individualistic, his or her work attitudes, and
aspects of his or her psychological contract. In Stage 2, job security was manipulated within a
job description (low versus high security). Each subject reviewed one version for at least 60
seconds. Since the study is concerned with the job-seeking population, the job description was
designed to emulate an entry-level job that college graduates would be qualified for and seek to
apply. The position description is for an “Administrative Assistant” at a fictional company
named “Nawar Inc.,” a management-consulting firm. The job advertisement includes a brief
statement about Nawar Inc. (company history and objectives), a position description (which
includes the job manipulation), a job description (tasks done on the job), required skills (general
skills such as communication skills), and additional requirements (bachelor’s degree and ability
to work in the United States). The description is modeled after job descriptions found on a
university job search website.
Participants read either a high job security or a low job security job description (see
Appendix A). For low job security, the position description reads, “Nawar Inc. is looking for
recent graduates to hire as temporary full-time employees. These are temporary positions, but
may transition into regular full-time positions.” Also, the last sentence in the brief description of
the company reads, “We are proud that even during recessions, we have sustained the company
with minimal lay offs.”
Psychological Contract & Job Attitudes
14 For high job security, the position description reads, “Nawar Inc. is looking for recent
graduates to hire as permanent full-time employees. These are full-time positions; the positions
are established within the organization.” In addition, the last sentence in the brief description of
the company reads, “We are proud that even during recessions, we have never needed to lay off
any of our employees.” After reading the job description, participants completed the remaining
portions of the questionnaire.
The experiment uses a 2 (job security: high/low) x 2 (cultural orientation:
Individualism/Collectivism) between-subjects factorial design. Job security is the only
manipulated factor. Individualism and collectivism were grouped based on the INDCOL
(Individualism/Collectivism) instrument in Stage one.
Measures
Unless otherwise indicated, all items are assessed using a 9-point scale in this study. Stage
one determines the relationship among cultural orientation (measured as individualism/
collectivism) and elements of the psychological contract. Individualism—referring to selfreliance, competition, emotional distance from in-groups, and hedonism— and collectivism—
referring to interdependence, family integrity, and sociability—were measured using Triandis
and Gelfand’s (1988) 16-item INDCOL scale. Only one measure was adjusted “It is important to
me that I respect the decisions made by my groups” in the Vertical Collectivism factor” was
changed to “is important to me that I respect the decisions made by groups that I am a part of.” I
adapted their scale, by combining their horizontal and vertical individualism dimensions to
create one individualism scale (α=.69) and the horizontal and vertical collectivism dimensions to
create one collectivism scale (α=.72).
The following three sets of questions measure general attitudes towards a job and
psychological contract. First, subjects were asked about general job attributes that would help
Psychological Contract & Job Attitudes
15 them in deciding whether or not to accept a job, such as good health and benefits plans and a
strong commitment to employee diversity. This 16-item measure is taken from Ng, Schweitzer,
and Lynons (2010; α =.87). The second set of measures assess general evaluations that could be
made of any potential job (“challenging”, “fun”, “rewarding”, “self-fulfilling”, “demanding”,
“highly skilled”, “highly respected,” “educational,” “secure”, and “job-person fit”; α=.82). Third,
the study examines respondents’ general psychological contract, adopted from Rousseau’s
(1990) scale. I include the following subscales “careerism” (α =.71) and “specific company” (this
scale measures the extent to which the applicant wanted a position with a specific organization;
α =.68).
After completing these four measure batteries, participants began stage two that consisted of
reading the job description that included the job security manipulation. Respondents than listed
the job tasks and requirements that they remembered from the description (unaided recall to
check for participant attention and engagement), and then answered questions about the job
description. Questions covered the likelihood that they would apply for the job (“If you were
looking for a job after graduation, how likely would you apply for this job?”; α=.93), their
overall impressions of the job (α=.94) and impression of the company (α =.91) as
“Negative/Positive,” “Unfavorable/Favorable,” and “Dislike a lot/Like a lot” and their job
application decisions. Participants’ job application decisions were assessed with 14 items
adapted from Van Hooft, Born, Taris, and Van der Flier (2006), consisting of five subscales.
Perceived P-O fit (e.g., “I feel that my personal values match the organization”; α=.84) and job
attractiveness (e.g., “I would like to work in this job”; α=.92) were used without adjustments. For
job reputation, three of the five items were used, “Employees are probably proud to say that they
work in this job,” “Jobs like this have a good reputation among people I know,” and “I think that
many people I know will have a positive view of this job” (α=.85). For job application intention,
Psychological Contract & Job Attitudes
16 three items are used, “I would try to get this job,” “I would prefer other jobs over this job,” and
“I would apply for this job” (α=.41). For subjective norm, the two items were adjusted from
indicating the extent to which their significant other and people who are most important to them
would think they should apply for this job to “my significant other and/or best friend would think
I should apply for this job,” and “I think most people important to me think I should apply for
this job,” respectively (α=.84). In stage two, participants also answered the job decision attributes
again (α=.93), this time the items were adjusted to reflect the specific job description.
A final set of questions served as manipulation and believability checks. The first
manipulation check asks participants to rate their level of agreement with the following
statement: “This position would give me job security.” A second manipulation check assessed if
they correctly marked the correct position assigned to them using, “permanent full-time,”
“temporarily full-time,” and an added fictional position, “part-time” position. The last
manipulation check assessed the level of job security that they perceived in the position: “The
position detailed in the above job description has” on a 9-point scale “low job security/high job
security.” Two questions asked participants to rate their level of agreement in terms of how
believable they thought the described position was; “I think the above job description describes a
real position.”, and “I think this is a reasonable job for a college graduate.” (SBRC=.55). Finally
there was an open-ended question to assess what participants thought the research study was
about. Lastly participant answered demographic questions.
Pilot and Manipulation Check
A pilot study was completed by 30 students from the same student population as the main
experiment. Students in an undergraduate HRM course volunteered to participate. The job
security manipulation worked as intended. As desired, the participants exposed to a highly secure
job description believed the job was more secure (M= 7.64) than participants exposed to a low
17 Psychological Contract & Job Attitudes
secure job description (M= 4.50; SDhigh=1.99, SDlow= 2.68; t=3.60; p<.001). Finally, participants
were asked to record their thoughts on their perceived purpose of the study (analyses find no
evidence that participants were aware of the study purpose), and to provide basic demographic
information such as gender, age, and ethnicity. Participant feedback was solicited based on item
wording. Using this information, minor changes were made for the final version of the
questionnaire.
RESULTS
Manipulation Checks
Participants who did not answer the manipulation checks correctly were removed. Six
participants incorrectly checked the wrong job security according to the job description that they
read. As a result, the remaining participants, a total of 303 participants were analyzed. All
analysis discussed in this study refers to the 303 participants. As desired, the remaining
participants exposed to a high secure job description believed the job was more secure (M= 6.74)
than participants exposed to a low secure job description (M= 4.96; SDhigh=2.03, SDlow= 2.40;
t=6.95; p<.001).
Both job descriptions were judged to be equally realistic and reasonable for a college
graduate. There were also no significant differences between participant groups for attentiveness
and involvement. These variables did not impact the ANOVA analyses reported below and thus,
they are not discussed further.
Hypotheses Tests
Simple t-tests are used to test H1A, H1B, and H2. Two-way INDCOL (individualism/
collectivism) x job security (high/low) ANOVAs are used to test H3A, H3B, and H4. A dummy
variable (median split of the 16-item summated scale described above) was created for cultural
orientation for all hypothesis tests (where individualism is coded as “0,” and collectivism as “1”).
Psychological Contract & Job Attitudes
18 Benefits and Cultural Orientation. The first hypothesis (H1A and H1B) tests the impact of
cultural orientation on the value placed on benefits. Hypothesis H1A is tested using the cultural
orientation dummy variable as the grouping (independent) variable and individual level benefits
as the dependent variable. The data does not support that Individualists place a higher value on
individual level benefits (e.g., those encompassed by in a psychological contract including a
good health and benefits plan and personal training) more than collectivists. The cultural
orientation group means behave similarly: Mind = 7.64, Mcol=7.68; SDind=.84, SDcol=.78; t=0.42;
ns). Thus, H1A is not supported.
H1B predicts that collectivist value group level benefits such commitment to social
responsibility and strong commitment to employee diversity more than individualists. The data
shows support for H1B: collectivists value group-level benefits more than individualists
(Mcol=7.71, Mind =7.42, SDcol=.86, SDind=.99, t=2.64, p<.05).
Careerism and Cultural Orientation. H2 proposes that individualists have higher levels of
careerism than collectivists. Contrary to the hypothesis, the results do not support that different
cultural orientations affect careerism attitudes (Mind = 5.47, Mcol=5.55, SDind=.66, SDcol=.69,
t=1.03, ns). Both cultural orientations show similar low to medium levels of careerism attitudes,
thus H2 is not supported.
Job Security, Image of the Company, and Cultural Orientation. ANOVA was used to test
the impact of job security and cultural orientation on the image of the company (H3A/3B). The
model includes job security, INDCOL, and the interaction between the two predicting the
impression of the company. Cell means are summarized in Table 1.
[Insert Table 1 about here.]
H3A predicts that high job security has a more positive impact on the image of the company
for collectivists versus individualists. The data do not support H3A as individualists (MIND=7.06)
Psychological Contract & Job Attitudes
19 have a similar positive image of the company as collectivists (MCOL=7.35, F(1,299)=.36, ns)
when job security is high. H3B predicts that low job security will have a more negative impact
on the image of the company for collectivists versus individualists. The means do not behave as
predicted: collectivists are less negatively impacted by low job security (MCOL=7.15) than
individualists (MIND=6.66; F(1,299)=.36, ns). Thus, H3B is not supported.
The only significant effect in the model is the INDCOL main effect (F(1,299)=5.51, p<.05),
indicating that the more collectivistic an individual is, the more positive his or her impression of
the company is (MCOL=7.25 and MIND=6.86).
Job Security, Job Reputation, and Cultural Orientation. H4 predicts that job security has a
greater impact on job reputation for individualists versus collectivists. The interaction between
job security and INDCOL for job reputation is marginally significant (F(1,299)=3.01, p<.10) and
supportive of H4. The data shows that high job security was preferred by individualists: (1)
individualists who read the high job security position rated the job reputation higher (M= 6.80)
compared to individualists who read the low job security description (M=6.20), but job security
had no impact on collectivist reputation-related ratings (MLOW=6.71 and MHIGH=6.69). Thus, as
predicted by H4, job security is more important to individualists when judging job reputation.
Results Summary
In summary, there is no support that individualists value individual level benefits more than
collectivists (H1A). However, collectivists value group level benefits more than individualists
(H1B). Results do not support the prediction in H2 that individualists have higher levels of
careerism than collectivists. The data does not statistically support H3A and H3B that cultural
orientation affects the image of the company, although collectivists report more overall positive
ratings of the image of the company. H4 shows support: individualists value high job security
20 Psychological Contract & Job Attitudes
over low job security, but job security has less importance for collectivists. In summary, the data
shows limited support for the initial hypotheses.
DISCUSSION
In a diverse business and economic environment, it is crucial to examine individual
differences as they can affect the relationship between the employee and the employer. Broadly
speaking, the intent of this study is to examine whether a person’s cultural orientation affects
their psychological contract and fit with their employer. Specifically, this research explores
whether individualists and collectivists develop different employee/employer obligations and the
effect of cultural orientation on job security.
The study begins by examining how cultural orientation affects preference for certain types
of job-related benefits. H1A investigates whether individualists favor individual level benefits
(measured via good health and benefits plan, good variety of work, good initial salary,
opportunities to travel, good training opportunities, opportunities to have a personal impact, the
job is demanding, and the job is self-fulfilling) more than collectivists. Contrary to predictions,
individualists and collectivists show a similar preference for individual-level benefits. Ng,
Schweitzer, and Lyons (2010) note that individuals who belong to the millennial generation
(born after 1980) place the greatest importance on individualistic aspects of the job. Since most
of the sampled individualists and collectivists fall in this generation, perhaps they both regard
individual benefits of the job highly. For example, a good salary was found to be the single most
important motivational factor for Millennials and thus, they might prefer a 1% raise three times a
year instead of a 3.5% raise year-end (Ng et al. 2010). I attempted to study these factors as
employer obligations to an employee, but perhaps participants viewed these variables as
motivational factors as opposed to obligations. Another reason why both individualist and
collectivist participants exhibited similar preferences for individual-level benefits may be that
Psychological Contract & Job Attitudes
21 they live in an individualistic nation, and that their work attitudes and behaviors mirror (or
“match”) the nation’s work attitudes. A third explanation for this unexpected finding may be
grounded in educational background. Aycan, Al-Hamadi, Davis and Budhwar (2007) found that
the higher the education, the more likely that an employee would value individual-level benefits.
Perhaps education overpowered any cultural effect.
Post-hoc examination of the cultural orientation scale indicates that it may lack sufficient
variance to detect differences between individualists and collectivists. One study noted this lack
of deviation for some individual differences in student samples. Sears (1986) finds that college
students share common characteristics, such as strong need for peer approval, quite unstable
group relationship and incompletely formulated sense of self, which in turn can make it difficult
to study certain individual difference constructs (e.g., cultural orientation). Similarly, participants
in this study do not yield sufficient variance for cultural orientation (IND variance=.716 and
COL variance=.079). Future research might include a range of cultural orientation measures in
an attempt to obtain a measure with larger variance.
As hypothesized in H1B, collectivists value group-level benefits (measured via commitment
to social responsibility, job security, good people to work with, commitment to employee
diversity, opportunities for social impact, good people to report to, and that the organization is a
leader in its field) more than individualists. This is consistent with past research that grouporiented human resources practices are preferred by collectivists (Aycan, Al-Hamadi, Davis and
Budhwar 2007). The collectivists in this study valued both individual level and group level
benefits. To value one type of benefit does not mean to oppose valuing another type of benefit: it
is possible to value both types of benefits concurrently. Future research might explore the
relative impact of individual versus group-oriented benefits as predictors of job attitudes.
Psychological Contract & Job Attitudes
22 The data also supports past research that suggests that individualism and collectivism are
multi-dimensional and not uni-dimensional constructs (Ramamoorthy and Carroll 1998; Triandis,
McCusky, and Hui 1990). Triandis et al. (1990) classify people by means of multidimensional
schemes that are based on similarities in patterns of displaying or not displaying particular
behaviors. Ramamoorthy and Carroll (1998) conceptualize INDCOL as a multidimensional
construct and examine the specific INDCOL dimensions that impact the effectiveness of HPWPs.
They treated INDCOL as an individual difference variable, while acknowledging that INDCOL
is generally used as a variable that distinguishes between national cultures. Collectivists in the
current study displayed attributes consistent with both the national culture and their personal
cultural orientations.
H2 predicts that individualists exhibit higher levels of careerism than collectivists. However,
results show that individualists and collectivists both exhibited low to medium levels of
careerism. The current economic recession might offer a plausible explanation. Since there are
fewer jobs, employees are less willing to leave their current organization. However, Hauw and
DeVos (2010) find that levels of careerism reported by graduating Millennials during a recession
did not differ significantly from the levels of careerism reported during a healthy economy.
Therefore, the answer is more complex that a mere “recession effect”. Regardless, Millennials
might still understand that organizations cannot meet all aspects of their psychological contract
during a recession (Hauw and DeVos 2010) and might be more willing to stay.
Nevertheless, the structure of the employee market has changed. There is a trend in which
corporations have focused on reorganizing and restricting their workforce, potentially
downsizing their number of employees (Probst and Lawler 2006). It may be possible that
Individualists and Collectivists in this study are aware of and impacted by this reality (Probst and
Psychological Contract & Job Attitudes
23 Lawler 2006). Thus, it may be possible that potential employees like those sampled here are less
willing to create long-term employment psychological contracts with their future employers.
H3A and H3B examine how high and low job security impact the company’s image for
collectivists. Results indicate that job security does not impact the company’s image for
collectivists. Following from the logic above, collectivists in the U.S. may no longer believe that
employers are obligated to provide high job security due to the recent trend of corporate
restructuring. High job security may now be considered a scarce benefit from employers. Since
many companies no longer provide the same job security they did decades ago (Hytrek and
Zentgraf 2008), applicants’ may adapt their own expectations regarding such job security during
the job search process. Results are consistent with past research that the higher expectations an
applicant has from a company, the better they regard the organization (Langee, Lee, and Dai
2011).
In spite of the lack of support for H3A and H3B, it is interesting to note that the data shows
that cultural orientation alone influences the impression of the company: i.e., overall,
collectivists’ attitudes were more favorable. This study complements past research that
individual differences can affect that applicant’s impression of the company (Van Hooft, Born,
Taris, and Van der Flier 2006a). The collectivists in this study may have perceived a stronger
person-organization fit between themselves and Nawar (the employer in the experiment). Certain
job attributes mentioned in the job description may have highly resonated with collectivists (i.e.,
‘work with various business departments in managing projects,’ and ‘effectively communicate
and develop relationships with clients and within all fields of the business’) due to their
team/group-orientated nature. Or, sampled collectivists may have positively linked future job
satisfaction with positive job reputation. Since the job description matches the skill set of recent
Psychological Contract & Job Attitudes
24 college graduates and the participants thought that they would enjoy their time at work, it would
be logical that they to viewed the job positively.
Findings show that job security is more important to individualists when judging job
reputation. The results support H4 – that job security impacts perceived job reputation more for
individualists than collectivists. Personal goals are more important to individualists (Triandis,
McCusker, and Hui 1990) and therefore, having a more secure job will help fulfill those personal
goals. Individualists need to feel that they can “do their own thing” (Triandis, et al. 1990), and
having job security can ensure career stability and personal stability. Being constantly mobile
due to lack of job security would make it difficult to sustain personal hobbies, family
commitments, etc. and may thwart career advancement.
Job reputation may serve as a decision tool during the job search process, acting as a “brand
signal” for individualists. During recruitment, job seekers may use the job’s reputation as a
determinant if the job is value added to their resume in the future. For example, the job
reputation for a broker in a Fortune 500 company may yield more value added compared to an
unknown company. Cable and Turban (2003) note that reputation affects the pride that
individuals expect from organizational membership. Since personal achievement is more
important to individualists (Triandis, McCusker, and Hui 1990), a more positive job reputation
would give individualists a greater sense of pride and expectations from their organizational
membership.
Although the results show limited significance, the study does offer managerial implications.
The data confirms that cultural orientation can affect the value placed on group-level benefits.
Collectivists place a higher value on these types of benefits because they are consistent with their
value orientation that people should take care of each other. If a company stresses collectivisticoriented benefits (i.e., “good people to report to” and “commitment to social responsibility”),
Psychological Contract & Job Attitudes
25 then they are more likely to attract and retain collectivists (Ramamoorthy and Carroll 1998).
Conversely, if a company stresses individualistic-based benefits (i.e. “opportunities to have a
personal impact” and “good variety of work”), then they are more likely to attract and retain
individualists. Thus, human resources managers in diverse and multi-national firms should
consider how cultural orientation affects the relative importance of various types of benefits. A
successful benefits program in an individualistic nation does not necessarily translate to success
in a collectivistic nation. Creating a successful benefits program can avoid employee
dissatisfaction, decrease high turnover rates, and create and maintain a sense of corporate culture
(Oliver and Cravens 2001).
This study also sheds light on the notion that cultural orientation influences employees’
impressions of a company. Many organizational problems, such as lower employee morale,
lower levels of motivation, lower job performance, are due to the lack of congruence between
HPWPs and employees’ cultural orientations (Ramamoorthy and Carroll 1998). Thus, companies
need to consider if the organizational culture “fits” with the persons they are recruiting. Also, in
order not to breach the prospective employees’ psychological contract, managers must be careful
about what they ‘promise’ in their job postings (Coyle-Shapiro 2002). Balancing the types of
benefits and the cultural diversity in the workplace may maintain a positive corporate image.
Since a company’s brand can be worth millions, understanding the different impressions of
the company can be used to the company’s advantage to sustain or improve the company’s
image. Cable and Turban (2003) found that some jobseekers’ reputation perceptions were
indirectly related to the corporate’s reputation through an effect on corporate familiarity:
potential job seekers remembered more information from job postings of familiar firms. Once
companies establish a strong, positive reputation, it can be used as a marketing tool.
Psychological Contract & Job Attitudes
26 In addition, employees in different levels of the corporate hierarchy may apply different
criteria when evaluating organizational reputation. It is interesting to note job security mattered
more for individualists: i.e., high job security yielded the highest positive attitude. Managers
should tailor the job attributes stressed during recruitment, providing specific and detailed
information about the organizational culture so that applicants may accurately judge their personorganization fit. For example, when a company is recruiting internationally to collectivists, job
postings should emphasize how upper leadership focuses on fostering trust and collaboration
within all corporate hierarchy. On the other hand, when recruiting individualists, job postings
should emphasize competitive initial salaries and good training opportunities.
Limitations and Future Research
There are a few limitations regarding the procedure and sample used in the study. First, it
focused on the development of the psychological contract prior to employment in a fictitious
organization. Future research should investigate the participants’ psychological contract prior to
and after employment in an actual organization, in combination with cultural orientation.
Focusing on the psychological contract prior to employment and after employment would further
highlight the difference between psychological contract fulfillments and violations.
Even though the sample included a culturally diverse student population, generalizability of
the findings is limited. Since the participants were college students, the study dealt with entrylevel positions only. Future research might broaden the scope to various levels such as mid-level
and management positions. It is likely that the higher an employee goes up the corporate ladder,
a different psychological contract be contrived, and may be influenced by cultural orientation
differently. Another limitation of only using college students is that education level may affect
psychological contract development. Since more education is correlated with certain behaviors
(e.g., higher education is correlated with healthier eating habits (Hupkens, Knibbe, Van Otterloo,
Psychological Contract & Job Attitudes
27 and Drop 1998)), it may also affect job expectations and work attitudes. Future research can test
various levels of education. Also, the sample mainly included only business majors who may
have different attitudes from students in other colleges (Liberal Arts, Engineering, Education,
etc.) and the rest of the population as a whole. Studying business during the current economic
recession, business students may be more aware of the recession’s outcomes in the job market. In
summary, a more ethnically, educationally, and academically diverse population is preferable.
This study can be expanded in many ways. Future studies could broaden the scope by
including variables other than job security of the psychological contract (e.g., commitment to
social responsibility, benefits plan, and opportunities for advancement). The measure of cultural
orientation can be modified making the variables multi-dimensional instead of uni-dimensional.
Various cultural dimensions may be added (cf. Hofstede (1980), such as power distance and
uncertainty avoidance to expand on cultural orientation.
Originally, I aimed to include the effects of immigrant generation on the development of
psychological contract and person-organization fit. There were not enough students in the final
sample born in foreign countries to study this effect. Participants born in foreign countries,
international or naturalized citizens may have assimilated to American work attitudes too fully to
analyze if their cultural orientation had an effect on their work attitudes. Replicating this study
cross-culturally or in a much larger culturally diverse sample in the U.S is warranted.
This study could also be expanded to different industries. Do employees who are in more
fluid jobs in nature have cultural orientations, different psychological contracts, perceived fit,
and work attitudes? Lastly, future research might investigate the relationship between cultural
orientation and the different types of fit, such as person-organization fit and person-job fit.
Psychological Contract & Job Attitudes
28 Conclusion
This study provides insight on how individualists and collectivists hold different work
attitudes and develop different psychological contracts. Specifically, this study demonstrates that
individualists value high job security over low job security such that they regard high secure jobs
with a more positive job reputation, while job security had no impact on collectivists’ view of the
job’s reputation. By understanding the differences between the two cultural orientations,
companies can institute HRM practices that reflect each cultural orientation’s preferences. When
companies’ practices and employees’ attitudes mirror one another, there is a better “fit” and both
parties enjoy increased tenure and job satisfaction.
29 Psychological Contract & Job Attitudes
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34 Psychological Contract & Job Attitudes
FIGURE 1
THE RELATIONSHIP AMONG CULTURAL ORIENTATION, JOB EXPECTATIONS,
AND WORK OUTCOMES
Individualism
vs.
collectivism Job
Expectations
Person Organization Fit and Psychological Contract Work
Outcomes
-­‐Job Security -­‐Preference for types of benefits -­‐levels of careerism -­‐Image of the company -­‐Reputation of the Job 35 Psychological Contract & Job Attitudes
TABLE 1
Summary of Treatment Means
Cultural Orientation
Individualists
Collectivists
7.64
7.43
7.68
7.71
5.48
5.56
High Job Security
7.06
7.35
Low Job Security
6.67
7.15
Reputation of the Job
6.80
6.69
High Job Security
6.80
6.69
Low Job Security
6.20
6.71
Benefits
Individual Level
Group Level
Careerism
Impression of the Company
36 Psychological Contract & Job Attitudes
APPENDIX A:
High Job Security Job Description
Psychological Contract & Job Attitudes
Low Job Security Position
37