DISSERTATIONDISSERTATIONDEFENSEDEFENSE

Edward R. Haberek, Jr.Edward R. Haberek, Jr.June, 2010June, 2010

AcknowledgmentsAcknowledgments

• I would like to express my most sincere appreciation to:

– Dr. Emmanuel T. Santos– Dr. Nerza A. Rebustes– Dr. Dante Sy– Dr. Pedrito Salvador– My Family, especially:

• My Parents, Edward Sr. and Patricia• My Wife, Maureen• My Daughters, Nicole and Olivia

Acknowledgments Acknowledgments (cont’d.)(cont’d.)• I/AME Administration, including:

– Primavera S. Donohue, Vice President– Faculty and Staff

• My Friends, including:– Dr. Donna Maria Blancero, TUI Advisor– M’Liss Rinaldi

• I/AME Colleagues, including:– Sonny Cualteros– Chris Perez– Atty. Elba Cruz– Jiggs Gegajo– Arnold Guarin– Alex Zapata– Ricky Tolentino

• National Society of Hispanic MBAs (NSHMBA)

DISSERTATION TITLE:

AN EVALUATION OF THE FACTORS AFFECTING CONTRACTS, JUSTICE, AND

SUPPORT IN THE WORKPLACE 

RESEARCHER : Mr. Edward R. Haberek, Jr.

SCHOOL : International Academy of Management and Economics (I/AME)

DEGREE : Doctor of Philosophy (Management)

ADVISOR : Dr. Nerza A. Rebustes

YEAR : 2010

The Problem and its The Problem and its BackgroundBackground

Scope of the StudyScope of the Study

• Cross-sectional study using web-based survey

• Respondents included 1,236 Hispanic business professionals

• Study designed to examine the relationship of Trust, Fairness, Justice, and Support in the workplace

• Outcomes and recommendations to provide insight to a healthy work environment.

Scope of the Study Scope of the Study (cont’d.)(cont’d.)

• The study examines the effects of employers’ decisions on employees, including:– Perceived Organizational Support– Psychological Contract Fairness– Leader-Member Exchange

Background of the StudyBackground of the Study

• Trust, Fairness, and Justice - important fundamentals for satisfied, content, and productive employees.

• An employer’s decisions affect individual employees on a more or less daily basis.

• Outcomes of decisions often form the motivation to work for the organization.

Purpose of the StudyPurpose of the Study

• The study was conducted to evaluate the factors of Trust, Fairness, and Justice in today’s workplace environment.

• The study was to identify correlations of Perceived Organizational Support, Psychological Contract Fairness, and Leader-Member Exchange in Trust.

• The study provides outcomes and recommendations to help provide insight to a conducive work environment with trusting relationships.

Significance of the StudySignificance of the Study

• This study concentrates on various issues relating to Hispanic business professionals.

• This study is distinctive because it serves as a component of a larger research project (Blancero and DelCampo, 2003).

• Research will add to Psychological Contract Fairness literature with constructs of the assessments not previously studied.

Theoretical FrameworkTheoretical Framework

• Information gained from this study will yield substantial benefits for scholars, practitioners, future Hispanic generations and corporate America. (Blancero and Blancero, 2001)

• Lessons learned from this research may be applied by management in addressing the unique issues Hispanic employees face, including: identity, fairness, support, and leadership.

Conceptual FrameworkConceptual Framework• Organizational management literature

severely neglects the role that ethnicity and culture have played in influencing work experiences for Hispanic personnel. (Romero, 2004)

• This research focuses on various issues as they relate to Hispanic business professionals and various forms of Trust, Justice, Organizational Support, Psychological Contract Fairness, and Leader-Member Exchange.

Statement of the ProblemStatement of the Problem

• The study was conducted to evaluate factors affecting contracts, Justice and Support in today’s workplace environment.

• The study identifies correlations of Perceived Organizational Support, Psychological Contract Fairness, Justice, and Leader-Member Exchange in Trust and examines the relation of each factor in the workplace.

Research QuestionsResearch Questions• Does Psychological Contract Fairness have a direct

effect on Trust when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

• Does Leader-Member Exchange Theory have a direct effect on Trust when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

• Does Organizational Support have a direct effect on Trust when controlling for age, gender, total work experience, tenure with supervisor, and tenure with organization?

• Is the relationship between Organizational Support and Trust mediated by Leader-Member Exchange Theory when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

Research Questions Research Questions (cont’d.)(cont’d.)

• Is the relationship between Organizational Support and Trust mediated by Psychological Contract Fairness when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

• Is the relationship between Organizational Support and Trust moderated by Perceived Discrimination when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

• Is the relationship between Organizational Support and Trust moderated by Procedural Justice when controlling for age, gender, total work experience, tenure with supervisor, and tenure with the organization?

Study ObjectivesStudy Objectives• To analyze Psychological Contracts Fairness and

Justice and their application to the workplace.

• To investigate correlations between Perceived Organizational Support and Psychological Contracts Fairness as important influences on Trust and feelings of Fairness and Justice in the workplace.

• To examine the effects of the constructs of Perceived Discrimination and Leader-Member Exchange Theory.

Review of Related Review of Related LiteratureLiterature

Review of Related LiteratureReview of Related Literature

• Trust

• Fairness

• Justice

• Perceived Organizational Support

• Psychological Contract

• Leader-Member Exchange Theory

• Perceived Discrimination

Elements of TrustElements of Trust• Mayer, Davis, and Schoorman (1995) defined Trust as “the

willingness of a party, the Trustor, to allow him or herself to be vulnerable to the actions of another party, the Trustee”.

• Trust involves associated Risk. This is because the Trustor is willing to be vulnerable to the Trustee.

• Trust relies upon the Trustee to perform certain desired behaviors. For this reason, the Trustor must believe both that the Trustee wants to engage in the desired behavior and has the ability and capacity to do so.

• The actions that the Trustor anticipates that the Trustee will perform may be important to the Trustor for several reasons.

• Included in the definition of Trust is the Trustor's perception of the motivation that brings about the behavior of the Trustee.

Elements of Trust Elements of Trust (cont’d.)(cont’d.)

• Lewicki & Bunker (1996) applied model to intra-organizational relations.

• Typical Management Mechanisms involved are:

- Calculus-Based Trust : Contracts and Controls

- Knowledge-Based Trust: Communication and Courtship

- Identification-Based Trust: Proxy representation along with social bonding

Types of TrustTypes of Trust

• Familiarization is the process that leads to the formation of Trust.

• Traditional Trust – Past experience and Self-control

• Institutional Trust- Outside controls• Active Trust- Based on “Good Faith” and

Individuals

FairnessFairness

• Cropanzano and Schminke (2001) pointed out that individuals are the subjects of decisions almost every day in an organization.

• Decisions often form the foundation of the motivation for individuals to work for this organization.

• Individuals often judge the “fairness” of the decisions affecting them (Colquitt, 2001).

Types of JusticeTypes of Justice

• Distributive Justice – Justice of Decision Outcomes

• Procedural Justice- Processes that result in decision outcomes

• Organizational Justice- Justice on the effectiveness of the way in which organizations function

Organizational Justice

• Conceptualizations in research Distributive Justice- Fairness of the ends achieved

Procedural Justice – Fairness of policies and procedures used to make the decisions

Interactional Justice- The basis of expectations for interpersonal treatment (concept first introduced by Bies and Moag; 1986)

Perceived Organizational Perceived Organizational SupportSupport

• Defined: Whether organizations support and care of well-being. (Rhoades & Eisenberger; 2002)

Three Categories:- Supervisor Support

- Fairness

- Organizational Rewards

Results in: - Positive Mood /Job satisfaction (Employee)

- Good Performance/Commitment (Organization)

Psychological Contract Psychological Contract TheoryTheory

• Basis: The difference between that which is promised and that which is delivered from the perspective of the employee, and hence his or her reciprocation. (Coyle-Shapiro & Conway, 2005)

• Breach of the Psychological Contract may result in erosion of the relationship. (Robinson, 1996)

• According to Psychological Contract theory, POS will affect the fulfillment of Psychological Contracts and a reciprocal relationship will exist. (Morrison & Robinson, 1997)

• Psychological Contracts are become increasingly important in today's employment relationships.

Psychological Contract Psychological Contract FairnessFairness

• Defined: Individual's belief to the conditions and terms of an Exchange Relationship that exists with another party (Rousseau, 1989)

• Concerned with the mutual obligations that are perceived as well as the degree to which they are fulfilled in the Exchange Relationship between the employee and the employer.

• Includes both the employer's and the employee's perspectives

Leader-Member Exchange Leader-Member Exchange TheoryTheory

• Premise: role development results in differentiated role exchanges between the leader and subordinates within an organization (Case, 1998)

- “In group”: members benefit from an increase leadership support for their actions and increased consideration and confidence by the leader.

- “Out group”: low levels of mutual influence exist in leader relationships

• Competency, compatibility, and dependability of the group members are significant determinants of whether the member will become a member of the "in" group or the "out" group (Graen & Cashman, 1975)

Effects of Perceived Effects of Perceived DiscriminationDiscrimination

• “Racial discrimination” refers to a range of practices encompassing discrimination based on ethnic group classification. (Bhui, 2005)

• Racial discrimination found to be an important risk factor among the US workforce, leading to problems such as mental illness. (Darity, 2003)

• Mental disorders resulting from racial discrimination affect the amount of productive work produced by various ethnic groups. (Bhui, 2005)

Research MethodologyResearch Methodology

Methods and ProceduresMethods and Procedures

•The study employed a cross-sectional, quantitative, observational research design.

•The study examined and utilized 1,236 viable survey responses.

•Each Respondent was a member of the National Society of Hispanic MBAs.

•The goal of the collected data was to expand the research findings established by Blancero and DelCampo (2003).

Research InstrumentResearch Instrument• The study employed the use of a survey to

gather data about Perceived Organizational Support and Psychological Contract Fairness perception in a sample of Hispanic business professionals.

• Respondents accessed the survey at www.surveymonkey.com.

• Restricted access to the survey was utilized to maintain integrity and anonymity.

Statistical MethodologyStatistical Methodology

• Trust– Primary Dependent Variable in the study– Measured with three survey items taken from

a study conducted by Brockner, Siegel, Daly, and Tyler (1997)

– Items are rated on a five point Likert Scale.– The average of the three items represents the

total Trust composite score.

Statistical Methodology Statistical Methodology (cont’d.)(cont’d.)

• Psychological Contract Fairness– Mediator in the study.– Measured with five survey items selected

from Robinson and Rousseau’s (1994) study.– Items are rated on a seven point Likert Scale.– Items are worded so that higher level of

agreement indicates stronger composites.

Statistical Methodology Statistical Methodology (cont’d.)(cont’d.)

• Organizational Support– Independent Variable in the study.– Measured with nine survey items from

the study by Hutchinson, Sowa, Eisenberger, and Huntington (1986)

– Items are rated on a seven point Likert Scale.

– The composite score consists of the mean item score for these nine items.

Statistical Methodology Statistical Methodology (cont’d.)(cont’d.)

• Perceived Discrimination– Moderator in the study.– Measured with six survey items taken from a

study conducted by Sanchez and Brock (1996).

– Items are rated on a seven point Likert Scale.– The mean item score for each of the six items

constitutes the composite score for Perceived Discrimination.

Statistical Methodology Statistical Methodology (cont’d.)(cont’d.)

• Leader-Member Exchange– Mediator in the study.– Measured with five survey items taken from a

study conducted by Dunegan, Duchon and Uhl-Bien (1992).

– Items are rated on a seven point Likert Scale.– The Leader-Member Exchange score in this

study reflects the mean item score of these five items.

Statistical Methodology Statistical Methodology (cont’d.)(cont’d.)

• Procedural Justice– Moderator in the study.– Measured with seven survey items taken from

a study conducted by Colquitt (2001).– Items are rated on a seven point Likert Scale.– The mean item score for each of the seven

items constitutes the composite score for Procedural Justice.

Demographic and Demographic and Background VariablesBackground Variables

• Five demographic and background variables utilized in the study: – Age– Gender– Total work experience– Tenure with current supervisor– Tenure with organization.

PATH ANALYSIS INPUT MODEL

E3

Leader-Member Exchange

TRUST

Psychological Contract Fairness

OrganizationalSupport

E1

E2

AgeGender

Total Work Experience Tenure

with Supervisor Tenure with

Organization

1

1

1

Research Results and Research Results and Survey FindingsSurvey Findings

Research Results and Survey Research Results and Survey FindingsFindings

• Descriptive Statistics for the demographic and background characteristics of the Respondents include:– Majority of the Respondents (59.6%) were male.– Average Age: 36.12 years. (SD = 7.67 years)

– Average total work experience: 10.09 years (SD = 7.73 years)

– Average tenure with organization: 4.46 years (SD = 5.21 years)

– Average tenure with current supervisor: 1.87 years (SD = 2.47 years)

Research Results and Survey Research Results and Survey Findings Findings (cont’d.)(cont’d.)

• Reliability Coefficients (Cronbach’s α) for the six composite scores were all adequate:– Organizational Support .93– Leader-Member Exchange .89– Psychological Contract Fairness .81– Perceived Discrimination .91– Procedural Justice .94– Trust .90(Adequate reliability = .70, scores sufficiently reliable)

Research Results and Survey Research Results and Survey Findings Findings (cont’d.)(cont’d.)

• All correlations were statistically significant. (all ps < .001)– Org. Support positively correlated with LMX (r = .58)

– Psych. Contract Fairness (r = .54), Procedural Justice (r = .57), and Trust (r = .70) negatively correlated with Perceived Discrimination (r = -.35)

– LMX positively correlated with Psych. Contract Fairness (r = .47), Procedural Justice (r = .68), and Trust (r = .74), and negatively correlated with Perceived Discrimination (r = -.43)

Research Results and Survey Research Results and Survey Findings Findings (cont’d.)(cont’d.)

– Psych. Contract Fairness was positively correlated with Procedural Justice (r = .44) and Trust (r = .56), and negatively correlated with Perceived Discrimination (r = -.27)

– Perceived Discrimination was negatively correlated with Procedural Justice (r = -.41) and Trust (r = -.45), while Procedural Justice and Trust were positively correlated (r = .65)

PATH ANALYSIS OUTPUT MODEL FOR DIRECT EFFECTS

E3

Leader-Member Exchange

TRUST

Psychological Contract Fairness

OrganizationalSupport

E1

E2

AgeGender

Total Work Experience Tenure

with Supervisor Tenure with

Organization

.33

.58

.54 .29

.47

.15

.67

.35

-.01

-.02

.01

-.01 -.01

-.06

.71

.40

.23

-.04

-.08

-.03

.40

.23 .40

Summary, Conclusions Summary, Conclusions and Recommendationsand Recommendations

Summary of FindingsSummary of Findings

1. Participants who had higher scores on the Psychological Contract Fairness scale also tended to have higher scores on the Trust scale, and this trend was statistically significant.

Participants who felt a stronger sense of agreement between themselves and their organization had higher levels of Trust.

Summary of Findings Summary of Findings (cont’d.)(cont’d.)

2. The participants who had higher scores on the Leader-Member Exchange scale also tended to have higher scores on the Trust scale.

Thus when the level of exchange between the leader and the member was higher, the participants had higher levels of Trust.

Summary of Findings Summary of Findings (cont’d.)(cont’d.)

3. Those participants with the perception that they were supported more by the organization tended to have higher levels of Trust.

Conversely, those participants with a perception that they were supported less by the organization tended to have lower levels of Trust in the organization.

Summary of Findings (cont’d.)Summary of Findings (cont’d.)

4. The results from the mediation tests in the path model indicated that Leader-Member Exchange was a mediator of the relationship between Organizational Support and Trust.

Participants who perceived a high level of support from the organization also tended to feel there existed a higher level of exchange between their leader and them.

Summary of Findings Summary of Findings (cont’d.)(cont’d.)

5. The mediation test results indicated that individuals who perceived a high level of support from their organization tended to perceive a stronger Psychological Contract Fairness between the organization and them,

again, leading to higher levels of Trust.

Summary of Findings Summary of Findings (cont’d.)(cont’d.)

6. The moderation tests indicated that Perceived Discrimination scores did not moderate relationship between level of support from the organization and the degree of Trust.

Participants who felt a high level of support from the organization trusted the organization more, regardless of whether or not they Perceived Discrimination from the organization.

Summary of Findings Summary of Findings (cont’d.)(cont’d.)7. The results from the moderation tests indicated that perceptions of Procedural Justice did not affect the positive relationship between the perceived level of support from the organization and the level of Trust in the organization.

Regardless of whether an individual felt that there was a high level of Procedural Justice or a low level of Procedural Justice, if the individual perceived a high level of support from the organization, he or she tended to have more Trust in the organization, and vice versa.

Conclusions Conclusions • Trust

– The level of an employee’s Trust in the Organization directly relates to the level of Organizational Support perceived by the employee

– Higher levels of Trust resulted from employee perceptions of • Positive working relationship with management• Existence of Psychological Contract Fairness• Adequate levels of Organizational Support

– Consistent with Brockner et al. (1997) • Trust dependent on Trustee engaging in desired behaviors• Desired behavior is Organizational Support provided to the

employee.

– Consistent with Rhoades and Eisenberger (2002) and Coyle-Shapiro and Conway (2005)

• Higher levels of Organizational Support result in positive employee mood, job satisfaction, decreased withdrawal behavior, better job performance, and affective commitment to the organization

Conclusions Conclusions (cont’d.)(cont’d.)

• Psychological Contract Fairness and Leader-Member Exchange– Partially mediated the relationship between Organizational

Support and Trust– Portion of the relationship between Organizational Support and

Trust depends on • The extent of the employee’s perception of valid Psychological

Contract Fairness with his or her manager and the organization; and• The existence of employee’s perception of a positive working

relationship with his or her manager.

– Mediation deemed “partial” as the relationship between Organizational Support and Trust remained even after accounting for the effects of the mediators.

– Findings lead to conclusion of an intricate interaction among Organizational Support, Leader-Member Exchange, and Psychological Contract Fairness.

Conclusions Conclusions (cont’d.)(cont’d.)• Procedural Justice and Perceived Discrimination

– Neither Procedural Justice nor Perceived Discrimination moderated the relationship between Organizational Support and Trust. Neither construct interfered with the positive effect of Organizational Support on Trust.

– Perception of the existence of Procedural Justice within the organization resulted in higher levels of Trust in the organization by the employee. (r = .65)

– Employees’ perception of a lack of discrimination within the organization tended to result in higher levels of Trust in the organization by the employees. (r = -.45)

– Consistent with Liebkind and Jasinkkaja-Lahti (2000), Bhui (2005), and Darity (2003)

• Perceived Discrimination negatively related to Trust. (Liebkind and Jasinkkaja-Lahti, 2000)

• Perceived Discrimination resulted in lower levels of organizational commitment. (Bhui, 2005)

• Broader effects of Perceived Discrimination include stress and mental illness. (Darity, 2003)

Conclusions Conclusions (cont’d.)(cont’d.)

• Procedural Justice and Perceived Discrimination– Lack of moderation on Trust by Procedural Justice and

Perceived Discrimination inconsistent with Mayer et al. (1995).

• Relationship between Organizational Support and Trust should be moderated by

– Economic factors– Psychological factors

• Current study utilized Procedural Justice as economic factor and Perceived Discrimination as psychological factor

• Pursuant to Mayer et al. (1995), Procedural Justice and Perceived Discrimination should have moderated relationship between Organizational Support and Trust, but they did not.

RecommendationsRecommendations• Organizational Practice

– Organizations and managers must:• attend to the mechanisms by which Trust can be

increased• consider the effects of Organizational Support on

the perceived quality of the Leader-Member Exchange, and the perceived strength of Psychological Contract Fairness

• consider the effects of Organizational Support, the quality of the Leader-Member Exchange, and the validity of Psychological Contract Fairness regardless of the existence of Procedural Justice and/or lack of discrimination.

• Future ResearchFuture Research– Exploration of the absence of moderation by

Procedural Justice and Perceived Discrimination on Organizational Support and Trust.

• Mayer et. al (1995) model suggests that moderation should exist.

• Examine economic and psychological factors in addition to Procedural Justice and Perceived Discrimination.

– Utilization of longitudinal studies to capture the complexity of the relationships among the study variables.

• Present study examined the employment relationship at a single point in time.

• Future studies should explore the development of the employment relationship over a number of years.

Thank You Thank You and and

Good DayGood Day