Team level engagement as a mediator for the relation between perceived supervisor support and organizational performance.

Transcription

1 Team level engagement as a mediator for the relation between perceived supervisor support and organizational performance. Anne van den Berg Tilburg, the Netherlands February, 2013

2 Team level engagement as a mediator for the relation between perceived supervisor support and organizational performance. Master Thesis Social and behavioural sciences Faculty of Social Science, Tilburg University Name: Anne van den Berg ANR: First reader: Second reader: Dr. Kerstin Alfes Dr. Brigitte Kroon 1

3 Abstract Teams are becoming more embedded in organizational structures nowadays and therefore, research on team levels is becoming of increasingly interest recent years. Research showed that many benefits can be derived from the use of teams. Therefore this research investigated the relationship between perceived supervisor support (PSS) and organizational performance mediated by team level engagement. It is expected that there is a positive relationship between PSS and team level engagement, and a positive relationship between team level engagement and organizational performance. It is also expected that team level engagement fully mediates this relationship. All hypotheses were accepted, only with one performance outcome, labour quality. Data of UK s Workplace Employment Relations Suvey of 2004 were used for this study. The data used was aggregated within establishment, because within establishments people work together as they do in teams. So perceived supervisor support will be the same for all members. Results show that team level engagement fully mediates the relationship with labour quality, one of the four performance outcomes. Key words: perceived supervisor support, teams, engagement, organizational performance, labour quality, social exchange theory, human capital theory. 2

4 Table of content Table of content... 3 Introduction... 4 Theoretical framework... 6 Perceived supervisor support and engagement within establishments... 6 Engagement within teams and organizational performance... 7 Engagement as mediator of PSS and organizational performance... 8 Conceptual model... 9 Methods Research design Population and sample Procedure Instruments Perceived supervisor support Team level engagement Organizational performance Statistical analysis Correlations Regression analyses Discussion Limitations & recommendations Implications References Appendix Appendix

5 Introduction Engagement has been of considerably interest in recent years (Saks, 2006). Many studies investigated the antecedents and consequences of engagement (Saks, 2006; Wollard & Shuck, 2011; Slatten & Mehmetoglu, 2011). Engagement can be defined as a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption (Schaufeli, Salanova, Gonzalez-Roma & Bakker, 2002). Vigor refers to level of the energy and mental resilience while working, the willingness to invest effort in one s work, and persistence in the face of difficulties. Dedication refers to a sense of significance, enthusiasm, inspiration, pride, and challenge. Absorption captures the state of being fully concentrated and deeply engrossed in one s work, whereby one perceives time to pass quickly and has difficulties detaching oneself from work (Schaufeli, et al., 2002). Engaged employees usually are less stressed, more productive, take fewer sick days (Gallup Organization, 2003; Harter, Schmidt & Hayes, 2002), have a higher quality of work (Kahn, 1992) than their less engaged counterparts and they can create revenue growth for their organizations (Gibbons, 2006). Engaged employees also have higher productivity and performance levels on individual, team, as well as on organizational levels (Gibbons, 2006). Most research to date, has been carried out on the individual level of analysis. However, we know relatively little about engagement at any unit above the individual level, such as work group, store, department or establishment (Pugh & Dietz, 2008). This is an important omission as these are levels at which employee survey data are typically reported to client organizations (Harter, et al., 2002). Moreover, work teams are nowadays becoming more and more embedded within organizational structures (West, Patera & Carsten, 2009) and research has shown that many benefits can be derived from the use of these teams, such as increased individual performance, better quality, less absenteeism, and reduced employee turnover (Harris, 1992). Individuals performing as teams often show regular patterns of behaviors that are evident to other team members (Stewart, 2003). Thus, when team members have high levels of engagement, it is likely that this will influence the other members of the team. Displayed emotions of one group member are able to influence other members within the group until all group members are experiencing a similar emotional state (Pescosolido, 2002). Therefore, it seems relevant to investigate engagement within teams and explore whether engagement levels within a team are related to increased organizational performance. Performance at team levels is more a barometer of success than performance of individuals. Managers frequently use language and metrics at group or organization levels, so the focus is more on unit characteristics and outcomes (Pugh & Dietz,2008). Team performance effectiveness and the factors that lead to it are tied to the nature and effectiveness of organizations. Thus, performance of a team or set of teams in organizations is believed to be more profitable for a business (Guzzo & Dickson, 1996). According to Macy and Izumi (1993) improved organizational performance can be achieved through team-based work arrangement. Moreover, in order to gain insight into engagement in teams, it is of interest to investigate factors that might have an influence on engagement at the team 4

6 level. Leaders have been found to have an important role in fostering engagement among their followers. Research suggests that leaders are key social resources for the development of employee engagement (Tims, Bakker & Xanthopoulou, 2011). Also, perceived supervisor support has been found to be an important predictor of engagement (Bakker, Hakanen, Demerouti, & Xanthopoulou, 2007; Saks, 2006). So, the leader of a group can be seen as one important factor for team engagement. Levels of engagement are positively related to business-unit performance (Harter, et al., 2002). Therefore, it seems relevant to investigate the impact of perceived supervisor support (PSS) on engagement levels of teams and further on organizational performance. In short, the aim of this study is to examine whether perceived supervisor support is positively associated with performance and if this relationship is mediated by engagement at the team level of analysis. The following research question is formulated: To what extent does engagement within establishments mediates the relationship between perceived supervisor support and performance? Since, perceived supervisor support and engagement are predictors of performance (Gibbons, 2006), it is important for organizations to understand these influences. The relationship between manager and employees is an essential driving force for engagement in organizations, employees will not engage without support of their supervisors (Rutledge, 2006). Teams are seen as an important factor of organizational success (Cohen & Bailey, 1997) and according to Applebaum and Blatt (1994), teambased work arrangements show improved organizational performance. Also, literature has shown that both, PSS and engagement at an individual level are predictors of performance, but their relation in explaining and predicting performance are not evident within teams. That is why it is relevant to investigate the relationship. If this relationship becomes evident, organizations can try to improve performance, by monitoring the sources of PSS and engagement within their teams or establishment. In the following paragraph, the central concepts of the relationship between PSS, engagement within teams, and performance will be discussed. 5

7 Theoretical framework This study investigates whether the relationship between perceived supervisor support and performance can be explained by engagement within teams and thus establishments. In the following sections the relation of perceived supervisor support with engagement will be explained, the relationship of engagement within teams and performance and, subsequently the relationship between PSS and organizational performance mediated by engagement. Finally, the conceptual model of this study will be presented. Perceived supervisor support and engagement within establishments In this section the relationship between perceived supervisor support and engagement in teams will be discussed. Perceived supervisor support is defined as the degree to which employees develop general views concerning the degree to which supervisors value their contributions and care about their wellbeing (Kottke & Sharafinski, 1988). The relationship between supervisors and their employees are fundamental forces for improved engagement. It is doubtful that employees engage without support from their supervisors (Rutledge, 2006). According to Hogg, Martin, Epitropaki, Mankad, Svensson, and Weeden (2005) leadership is a social psychological phenomenon that is firmly grounded in social relations and psychology of its membership. Individuals in a group may perceive leadership behaviors from their supervisor differently and also react differently on them but Walumbwa, Wang, Wang, Schaubroeck, and Avolio (2010) state that leadership behaviors can be assumed to be the same for all followers. The followers might evolve a collective mental model about the supervisor (Kozlowski & Klein, 2000), so the perceptions about the supervisor are equal. That is why PSS on team level engagement is an important concept to investigate. In line with the original definition of engagement by Schaufeli, et al. (2002), team work engagement is conceptualized as a positive, fulfilling, work-related shared-state that is characterized by team work vigor, dedication, and absorption, which emerges from the interaction and shared experiences of the members of a work team. Two reasons are essential for these collective phenomena namely, team members can affect each other s moods and they are likely to experiences (Ilies, Wagner, & Morgeson, 2007).This principle can also be applied to engagement by considering emotional contagion as the main potential mechanism. This means that positive emotions can crossover from one person to another (Bakker, Demerouti, & Schaufeli, 2005). Thus, team work engagement occurs from agreement on the perceptions of team members who are able to share common ideas on how the team expresses vigor, dedication and absorption. It is important for leaders of a group to optimize the emotional climate in their team. A good leader is able to enhance motivation and engagement (Avolio, Gardner, Walumbwa, Luthans & May, 2004). Research suggests that engagement is contagious, it passes over not only from leader to follower, but also from one team member to another (Bakker, Van Emmerik, & Euwema, 2006). Engagement also appears to be a collective phenomenon, aiming that teams feel engaged when group members closely collaborate to 6

8 accomplish particular tasks (Salanova, Llorens, Cifre, Martinez, & Schaufeli, 2003), the leader can have an important influence in this process. Therefore, the relationship between PSS and engagement can be explained using social exchange theory (SET) (Saks, 2006; Cropanzano & Mitchell, 2005). SET states that obligations are generated through interactions between parties who are in a state of reciprocal interdependence. A basic principle of SET is that relationships develop over time into loyal, trusting, and shared commitments as long as the parties continue by certain rules of exchange (Cropanzano and Mictchell, 2005). Rules of exchange normally involve reciprocity or repayment rules specified that the actions of one party lead to responses or actions by the other. When focusing on the relationship between supervisor and followers, employees see the relationship with their leader as beyond the standard economic contract such that both operate on the basis of trust, goodwill, and the perception of mutual obligations (Blau, 1964). The exchange indicates a high-quality relationship, and issues of care and consideration in the relationship are of main importance (Dirks & Ferrin, 2002). PSS can produce a felt obligation to help supervisors reach their goals (Eisenberger, Stinglhamber, VandenBerghe, Sucharski, & Rhoades, 2002; Stinglhamber & Vandenberghe, 2003). The quality of the relationship that develops between a leader and followers is predictive of outcomes at the individual, group, and organizational level of analysis. One manner for individuals to repay their organization is through their level of engagement. That is, employees will choose to engage themselves to varying degrees and in response to the resources they receive from their supervisor (Saks, 2006). Leaders who are able to openly share information and build trusting relationships with their followers in their group, department, or within the entire organization are very important (Avolio, et al., 2004; Ilies, Morgeson, & Nahrgang, 2005). Thus, subordinates PSS should raise subordinates engagement. Employees who have shared perceptions regarding high levels of supervisor support must lead to higher felt obligations to reciprocate by collectively, so within the establishments, helping their supervisor to attain their business-unit goals (Dysvik & Kuvaas, 2012). According to the theory and literature, it is expected that support of the supervisor can help enhance engagement. Therefore the following hypothesis is formulated: Hypothesis 1: Perceived supervisor support will positively influence team level engagement. Engagement within teams and organizational performance Engaged employees within teams may perform better than their less engaged counterparts (Bakker, Demerouti, & Verbeke, 2004) and are therefore able to create positive business-unit outcomes (Harter et al., 2002). A highly engaged workforce is decisive to high performance (Craig & Silverstone, 2009) and performance is essential for organizational survival and effectiveness (Swanson, 1994). The relationship between team level engagement and organizational performance can be explained using human capital theory. Human capital theory upholds that knowledge provides individuals with increases in their cognitive abilities, which leads to more productive and efficient 7

9 potential activity (Schultz, 1959; Becker, 1964; Mincer, 1974). Therefore, if profitable opportunities for new economic activity exist, individuals with more or higher quality human capital should be better at perceiving them. Once engaged in the entrepreneurial process, such individuals also have superior ability in successfully exploiting opportunities (Davidsson & Honig, 2003). The human capital of organizations thus, has a positive impact on employee performance (Bosma, Van Praag, Thurik & De Wit, 2002). Traits employees bring to the job are also aspects of human capital, these are intelligence, fulfilling work energy, commitment, a generally positive attitude, reliability, motivation to share information and knowledge (Fitz-Enz, 2000). Engaged employees have high levels of energy, which corresponds with traits of human capital. Also, employees engaged within teams are able to share motivation, information and knowledge. Therefore, engagement can be seen as an important indicator of human capital in an organization. Human capital in organizations can, thus create more individual performance, and employees in teams influence each other by their interactions. This can lead to an increase of cognitive abilities and these, in turn, could result in more productive activities and higher performance levels. Higher performance levels of individual employees and teams within organizations can alternately lead to more organizational performance. When mutually engaged employees are dedicated to cultivating the supportive workplace relationships that sustain people s efforts over time and are also focused on the organization s goals, the group s energy, enthusiasm and focus are multiplied and superior efforts and performance are the end result (Craig & Silverstone, 2009). Consequently, team level engagement can increase organizational performance. Also, organizations with a higher quality of work environment, thus better human capital, incline higher profits and business success (Lau & May, 1998). Previous research has demonstrated that organizations with a highly engaged workforce have a much higher success rate in terms of profits, productivity, customer satisfaction, and employee retention than organizations with less engaged employees (Harter, et al., 2002). Engaged employees are very energetic, self-efficacious, and have the believe they are able to influence events that occur (Bakker, 2009; Schaufeli, Taris, Le Blanc, Peeters, Bakker, & De Jonge, 2001). Due to their positive attitude and activity level, employees with high engaged levels can create positive feedback in terms of appreciation, recognition, and success (Bakker, Albrecht & Leiter, 2010). So, when individuals have abilities to successfully exploit opportunities for their organization, they are able to share these within their team. This can result in a more productive team and in the end to higher organizational performance. It is therefore expected that engaged teams contribute to organizational performance. So, the following hypothesis is formulated: Hypothesis 2: Team level engagement will positively influence organizational performance. Engagement as mediator of PSS and organizational performance Research indicates that when supervisors are supportive of subordinates, it leads to advantageous outcomes for employees and organizations. Team leaders have a positive impact on levels of 8

10 individual as well as on collective engagement (Schaufeli & Salanova, 2010). Leadership behaviors can stimulate a favorable group climate that is characterized by fairness, trust, openness and constructive problem solving and thus, perceived supervisor support is of great importance to get teams engaged. Organizations focusing only on improving individual engagement miss an important opportunity for identifying and nurture collective engagement, as collective engagement is an important factor for high performance (Craig & Silverstone, 2009). So, team level engagement is an important predictor of organizational performance. Engagement can be seen as a force that motivates employees to perform higher levels of performance (Wellins & Concelman, 2005). Supervisors have great influence on levels of engagement in teams and employees working in teams also have an influence on each other. When teams within organizations feel engaged, a much higher level of engagement in the organization can be reached. This is a favorable outcome as it suggests that a high level of collective engagement leads to more organizational performance. Perceived supervisor support predicts team level engagement, because it can motivate and stimulate groups of people. Engagement within teams appears to be a predictor of performance, and when teams within organizations have high levels of performance this will lead to more organizational performance. Thus, in line with hypothesis 1 and 2, as PSS has a positive effect on team level engagement and team level engagement on organizational performance, it is expected that team level engagement fully mediates the relationship between PSS and organizational performance. Therefore, the following hypothesis is formulated: Hypothesis 3: Team level engagement mediates the relationship between PSS and organizational performance. Conceptual model In conclusion, as the relation between PSS and organizational performance is positive, and PSS ensures higher levels of team level engagement, it can be expected that employees who receive support from their supervisors feel more engaged with their team and consequently their organization and can therefore have a positive influence on organizational performance (figure 1). To determine to what extent team level engagement has a mediating effect on the relationship between PSS and organizational performance, it is relevant to formulate the following research question: To what extent does engagement within establishments mediates the relationship between perceived supervisor support and performance? + Team level Engagement + Team perceptions of supervisor support + Organizational performance Figure 1: Conceptual model of the expected relationships in this study 9

11 Methods In this section the method for answering the research question is described. A distinction is made between research design, population and sample, procedure, instruments, and statistical analysis. Research design For answering the research question and test the conceptual model of this study a quantitative research design is conducted. Data of the Workplace Employee Relations Survey (WERS), 2004 will be used to measure the different concepts. The data is collected by the National Centre for Social Research. The data includes both cross-section and panel surveys. The management data were collected by interviews with a senior person in the establishment with responsibility for industrial relations, employee relations or personnel matters, most of them were not personnel specialists. The employee data were collected through a survey of employees in the establishments and were collected by self-completion questionnaires randomly distributed within the establishments. The repeated cross-sectional data used in this research are part of a larger dataset that investigated industrial relations and employment practices across almost every sector of the economy in Great Britain. The employee questionnaire will be used to measure perceived supervisor support, and engagement within teams. Only the establishments with 100 or less employees are used in this study because these establishments can act as if they are teams. So, team level outcomes can be measured. The study is explanatory, because the hypotheses are based on existing theories. Population and sample The focus of the study is establishments in Great Britain. The data of the management questionnaire consist of 2295 cases, so that is the number of total establishments. Only 1297 management questionnaires will be used because that are the establishments with 100 employees or less. At each establishment taking part in the survey a sample of 25 employees (or all employees at establishments found to have between 5-24 employees) was selected to take part in the Survey of Employees. In total questionnaires were gathered. The sample assures both private and public sector, and all industries engaged in primary industries and private households with domestic staff. Establishments with less than five employees were excluded, this was one of the requirements for them to participate in the research. Procedure The sampling procedure used conducting the data is based on a stratified random sample of establishments and a sample of employees at those establishments. The panel sample was selected from the WERS 98 achieved sample of 2191 productive cross-section interviews using a straightforward stratified sample. So, the same cases as the data of WERS 98 was approached for the WERS 2004 study. The strata were defined by establishment size at the time of the 1998 interview, and the same sampling fraction was used per strate. The data has been aggregated within establishments with employees because this gives insight at a team level. The employees 10

12 working in establishments cooperate with each other as in teams and therefore PSS and engagement can be measured at the team level. Instruments Perceived supervisor support PSS will be measured using the WERS 2004 questionnaire, part C Your views on working here, question C2. PSS is measured on a 6-point Likert scale, ranging from (1) strongly agree to (5) strongly disagree, with the 6 th point reserved for the don t know response, coded as a missing value. It consists of six items. The items are: Managers here can be relied upon to keep their promises, Managers here are sincere in attempting to understand employees views, Managers here deal with employees honestly, Managers here understand about employees having to meet responsibilities outside work, Managers here encourage people to develop their skills, and Managers here treat employees fairly. Most previous research measured PSS with the Survey of Perceived Organizational Support (SPOS) scale. Three items from the SPOS were adapted to assess employees perceptions that their supervisor cares for their well-being and supports them at work (Eisenberger, et al., 2002; Kottke & Sharafinski, 1988; Rhoades, Eisenberger, & Armeli, 2001). An example of an item is: My supervisor is willing to listen to my job related problems. The WERS 2004 seems to be a good measure for PSS as the items are conceptually very similar. For example, one item from the WERS 2004 questionnaire is: Managers here are sincere in attempting to understand employees views. A factor-analysis was conducted, in order to check whether the items for perceived supervisor support load on the same construct. The factors were chosen based upon the content of the questions used to measure the variable and the scree-plot criterion. A reliability analysis was carried out to check the scales reliability. The factor analysis on PSS showed no violation of the simple structure (appendix 1). The KMO-index showed a value of.917 and the scale for PSS has a cronbach s alpha of.931 and all the items of cronbach s alpha if item deleted were lower. So, this is a very reliable scale. Team level engagement Also, for team level engagement the WERS 2004 questionnaire is used, and also part C is used, question C1. Team level engagement will be measured on a 6-point Likert scale as well. It consists of three items, with answers ranging from (1) strongly agree to (5) strongly disagree, with the 6 th point reserved for the don t know response, which was coded as a missing value. The items are: I share many of the values of my organization, I feel loyal to my organization, and I am proud to tell people who I work for. Most research on engagement used the Utrecht Work Engagement Scale (UWES) for measuring engagement (Schaufeli, Bakker & Salanova, 2006; Schaufeli, et al., 2002). An example of an item in the UWES is I am proud of the work that I do. This item is similar to the item of the WERS questionnaire. Therefore the WERS questionnaire is a good way to measure team level engagement. When examining the construct validity of the scale for engagement, the factor analysis demonstrated a violation of the simple structure (appendix 2). Normally the questions that are 11

13 violating the simple structure can be removed. This appears to be a problem because item removal would lead to a model with insufficient items to explain the factors. The KMO-index showed a value of.721 and scale reliability was good with a cronbach s alpha of.850. Organizational performance Organizational performance will be measured using the WERS 2004 survey of managers. Organizational performance will be measured using financial performance, labour productivity, labour quality and absenteeism. Each measure is based on a rating made by the managerial respondent during the interview according to a five-point scale that ranged from a lot below average to a lot better than average for our branch of industry. For absenteeism the percentage of work days lost through employee sickness or absence is available for every workplace. Since the distribution of this measure is skewed and long tailed, its logarithm will be used and the few workplaces that had zero percentage will be adjusted. Several control variables will be taken into account when measuring the relationships. That will be activity of the establishment, part of a larger organization and size of the organization. Size of the organization will be measured as size of the establishment (Wood, Van Veldhoven, Croon & De Menezes, 2012). A distinction is made between four kind of activities. The first one, activity 1, is: We provide goods or services to the general public, the second one, activity 2, is We provide goods or services to other organizations, the third one, activity 3, is We provide goods or services to other parts of our organization and the last one, activity 4, is: This is an administrative office only for our organization. The control variable part of a larger organization is divided into three different options. The first option is: Is this establishment one of a number of different workplaces in the UK belonging to the same organization, the second option is: Is this establishment a single independent establishment, and the last options is: Is this establishment the sole UK establishment of a foreign organization. Statistical analysis The data used in this study is aggregated within establishments. Although the variables are measured at the individual level it makes sense to explain them at the team level, because it is expected that within establishments the people work together as in a team. So, support perceived from supervisors will be the same for all members of teams, and the establishments cooperate and share behaviors. Therefore, also engagement can be measured as a team level variable. Organizational performance will be measured at the organizational level. Four performance outcomes will be used to measure organizational performance. The variables financial performance, labour productivity, labour quality and absenteeism will be used to measure it, therefore four measures must be done. It is possible to measure at organizational levels, because of the control variables that are included, activity of the establishment, part of a larger organization and size of the organization. 12

14 Results This section provides the findings from the study that are found by using statistical software. This section also contains multiple tables that visualize the results. Correlations The means, standard deviations, and correlations of all variables are presented in table 1. Preliminary analyses were done to ensure no violation of the assumptions of normality and linearity. The missing values were deleted pairwise, the cases are excluded only if they are missing the data required for the specific analysis. The sample has not much reduced by the missing values. Only for absenteeism the missing value rate was quite high but still 379 values could be used so it was possible to use absenteeism in the analyses. All main and control variables were included. Table 1 shows the teamlevels on perceived supervisor support (M = 2.39) and on team level engagement (M = 2.26). Both team-level engagement and PSS are measured on a six point likert scale, ranging from (1) strongly agree to (5) strongly disagree, with the 6th point reserved for the don t know response. The don t know response was part of the missing values and thus not included in the analysis. Financial performance (M = 2.78), labour productivity (M = 2.85) and labour quality (M = 2.17) score a little below the average. These scores were measured on a five-point scale ranged from (1) a lot better than average to (5) a lot below average for our branch of industry. The scores on absenteeism (M =.278) are very low, which is a good thing because absenteeism is used as a performance outcome, so the lower the absenteeism rate the better. Looking at the correlations in table 1, team-level engagement and PSS are highly significant correlated (.680). This means that high levels of PSS are associated with higher levels of team level engagement. Team level engagement is only significantly correlated with labour quality (.117), as performance outcome. PSS is significantly correlated with absenteeism(.171) and also labour quality(.102). 13

15 Regression analyses A hierarchical multiple regression analysis is done to analyze the effects between the variables and to check the hypotheses. The hierarchical regression analysis is used to specify a fixed order of entry for variables in order to test the effects of certain predictors, independent of the influence of others (Pallant, 2010). Before starting the analyses the assumptions for hierarchical regression analyses were checked. The sample size was large enough to do the analyses and the normal probability plots and scatter plot suggested normality, linearity, independence of residuals and homoscedasticity. Since there were no correlations higher than.70 between the variables, and tolerance and VIF values were not too high, multicollinearity was not assumed and all variables could be retained. The control variables were added in these analyses. Four steps of Baron and Kenny (1986) needed to be taken to find out whether team level engagement mediates the relationship between PSS and organizational performance. The first step is to show that there is a significant relation between the predictor and the outcome, so a regression analysis has been done for the effect of PSS on organizational performance. The second step is to show that the predictor is related to the mediator, thus an analysis was done to find the effect of PSS on team level engagment. The third step is to show that the mediator is related to the outcome variable, so a regression is done to see the effect of team level engagement on organizational performance. The last step involves a complete mediation across the variables, thus the effect of the initial variable over the outcome variable, while controlling for the mediator, is insignificant. So, checking the strength of the relation between the predictor and outcome to see whether it significantly reduces when the mediator is added to the model (Baron & Kenny, 1986). In the hierarchical regression analyses size of the establishment, activity of the establishment and number of employees were entered as control variables in the first step. If team level engagement is a partial mediator, the relation between PSS and organizational performance will be significantly smaller when team level engagement is included, by a full mediation the effect becomes non-significant (Baron & Kenny, 1986). Hence, a regression analysis was done for all performance outcomes separately. The first hierarchical regression analysis conducted tested the relationships with financial performance. As can be seen in table 2, the relationship between PSS and financial performance is not significant. Model 2a explains a little bit more than model 1a (R² =.022) and there is an F change (2.373). However, the F change of model 1a is significant and higher than in model 2a, besides no significant beta is found. This suggest no significant relationship between PSS and financial performance. Model 3a does not change compared with model 1a (R² =.019), only the F change in model 1a is significant and no significant beta for engagement was found. That means no relation between engagement and financial performance. Model 4a explains a bit more than the first model (R² =.023), the F change is not significant, no significant beta is found for PSS and engagement. Taken together, the results show no significant relations between PSS and team level engagement with financial performance. 14

16 Table 3 presents the relationships with labour productivity, no significant results are shown for the relationship between PSS and labour productivity. The R² of model 2b is higher, but very small (R²=.009) and no significant F change was found. The relationship between engagement and labour productivity shows no significant results as well. The R² in model 3b is higher than model 1b (R²=.008) but also very small. No significant F change is found. The relationship between engagement and PSS on labour productivity also shows no significant results. Hence, no significant relation is found between engagement, PSS and labour productivity. 15

17 For absenteeism, the relationship between PSS and absenteeism has a R² of.179, a little higher than model 1c, a significant beta (.069) and a significant F change (10.280). However, the F change of model 2c is lower than the one of model 1c. So, there is a very small relationship between PSS and absenteeism. The β of model 2c is positive, which means more absenteeism when there is more PSS. The R² for team level engagement with absenteeism is higher in model 3c (.167) but there is no significant beta variable and the F change is not significant. This means a non-significant relation between team level engagement and absenteeism. The relation of PSS and engagement with absenteeism, presents a difference with model 1c (R² =.186), there is a smaller but significant F change. Only a significant beta (.119) for PSS is found, not for engagement, therefore this study has not taken absenteeism into account, as it is only related to PSS and not team level engagement. The regression analysis between PSS, engagement and labour quality, shown in table 5, presents a better second model 2d for the relation between PSS and labour quality (R²=.022), a significant beta variable (=1.79) and a significant F change (9.742). Model 3d, the relation between engagement and labour quality shows a better relation (R²=.024, a significant beta variable (=.1.69) and a significant F change (11.739). Model 4d shows the regression of PSS and engagement on labour quality and is better than model 1d (R²=.026), a significant beta variable (=1.637) and a significant F change (6.472). Also, the relationship between PSS and engagement is significant, as can be seen in model 1e. There also a significant R squared is found (R²=.477), a significant beta variable (=1.79) and a significant F change (= 9.742). Overall, the analyses showed no significant relationships of PSS and team level engagement with financial performance, labour productivity and absenteeism. There are significant relationships with labour quality as a performance outcome, thus this research continues with the analyses focusing on labour quality only. Therefore, a mediation effect could be possible with labour quality as 16

18 performance outcome, as higher levels of PSS, and team level engagement, assume higher levels of labour quality. As a result, labour quality is chosen as organizational performance outcome, to find out whether team level engagement mediates the relationship between PSS and organizational performance. For testing hypothesis 1, which assumes a positive influence of PSS on team level engagement, the control variables were entered in first, which presents to what extend the control variables influence engagement, and PSS was entered in the second model. Hypothesis 1 is confirmed, this suggest that higher levels of PSS will lead to higher levels of team level engagement. To find out whether team level engagement mediates the relationship between PSS and organizational performance, there must be a relation between the initial variable and the outcome variable. Thus, a hierarchical regression analysis between PSS and labour quality. The control variables were taken into account and entered first and PSS is entered secondly. To test the second hypothesis, a positive influence of team level engagement on organizational performance. First the control variables were entered and second team level engagement was entered. Hypothesis 2 is confirmed. This indicates that higher levels of team level engagement will lead to more labour quality, so, organizational performance.the last step in the mediation analysis is an hierarchical regression analysis of PSS and team level engagement on labour quality. If PSS drops from significance there is a full mediaton effect of team level engagement. This corresponds with hypothesis 3, which states that team level engagement mediates the relationship between PSS and organizational performance. Also, in this analysis the control variables entered first and PSS and team level engagement secondly.the direct effect between PSS and organizational performance, when controlling for team level engagement drops in significance and the beta dropped as well. Thus PSS has a significant effect in both models, so team level engagement mediates the relationship between PSS and labour quality as an organization performance outcome. Hypothesis 3 is accepted because there is a full mediation of team level engagement on the relationship between PSS and organizational performance. Thus, all hypotheses are accepted. Although only with labour quality as a organizational performance outcome. This means that team level engagement fully mediates the relationship between PSS and labour quality. 17

19 Discussion The aim of this study was to clarify the relationship between perceived supervisor support and organizational performance with a mediating role of team level engagement. The research question stated: To what extent does engagement within establishments mediates the relationship between perceived supervisor support and performance? Results represent that perceived supervisor support leads to higher levels of team level engagement and labour quality, and so organizational performance. According to the literature and theory used in this study, it was expected that the relationship between PSS and organizational performance could be explained by team level engagement. Evidence was found for all the relationships with labour quality as an organizational performance outcome. For the three other performance outcomes no evidence is found in this research. This study supports that when teams get supported by their supervisor in their team there is more collective engagement and this will lead to higher labour quality. The results show that labour quality is the most important performance outcome from a PSS and team level engagement perspective. The four organizational performance measure seemed good measures for organizational performance, however it appeared that PSS and team level engagement both lead to more quality of the teams but not more financial performance, labour productivity or less absenteeism. Financial performance, labour productivity and labour quality are all measured with a five-point scale that ranged from a lot below average to a lot better than average for our branch of industry. Consequently, PSS is able to influence team level engagement which can lead to more quality of the teams and as a result to higher labour quality of an organization. Engagement, in general, can lead to individual outcomes such as quality of people s work and their own experiences doing that work (Kahn, 1992). As a result, people who are more engaged are likely to be in more trusting and high-quality relationships with their colleagues and employer, they will therefore be more likely to report positive attitudes (Saks, 2006). Also, highly engaged people believe that they can positively affect the quality of their company (Attridge, 2009). Employees engaged in teams are able to share motivation, information and knowledge and therefore, team level engagement can lead to more individual performance. As employees in teams can influence each other and share their qualities, this can lead to more labour quality. Therefore, employees engaged in teams have a higher quality of work, so labour quality of the organization will in turn be higher. PSS and team level engagement are both not able to influence the financial performance of an organization, probably no financial results can be found directly relating to more PSS or team level engagement. So, a possibility is that the effects of PSS and team level engagement cannot be linked to the financial perspective of the organization. Financial performance is mainly influenced by situational factors, like the kind of branch. Also, the effect of branch on financial returns suggest that branches that are located in busier areas generally have more profit (Xanthopoulou, Bakker, Demerouti, Schaufeli, 2009). This study is done across almost every sector of the economy in Great Britain, so in 18

20 a lot different branches, therefore it might be the case that it is not possible to measure the effect of financial performance. Probably the managers have no understanding of the effect of the behaviour of their teams on the financial outcomes of the organizations. Also, they apparently cannot influence their team s productivity. Labour productivity depends on an organizations strategy. An effective strategy can lead to more good people in the firm and the more certainty an organization creates the more labour productivity it will enjoy (Koch & McGrath, 1996). So, it seems that other factors also have an influence on the productivity of the labour. It seems that those factors are more important than the effect of PSS and team level engagement for labour productivity. There is also no influence on absenteeism, it turns out that the absenteeism does not change by PSS and team level engagement. According to Schaufeli, Bakker and Van Rhenen (2009), more engagement leads to less absenteeism. Also, Hoxsey (2010) showed in his study that employees who are more engaged are more likely to stay within their organization, as engagement increases, sick time decreases. So, it could be that absenteeism is not related to team level engagement. Besides it might depends on other factors like, work pressure, overtime and distance to their work (Cohen and Bailey, 1997). This study looked at the effect of PSS and team level engagement on absenteeism, probably other factors need to be taken into account to find reasons for absenteeism. For these reasons the mediation relationship is checked with labour quality as a organizational performance outcome, because it has been found that employees can see the quality of themselves compared to other organizations. The other three organizational performance outcomes were disregarded. Limitations & recommendations This research has some limitations that should be addressed. Although the data consists of repeated cross-section and panel surveys, a longitudinal design would be even better to demonstrate causal relationships. This would be interesting for the interrelationship between PSS and organizational performance. This makes the data more reliable and it makes the possibility of generalizing the results bigger because the study involves almost all Britain. Also, by using a questionnaire, it might be the case that questions are understood differently by the respondents, this could have affected the outcomes of the study. If engagement, for example, is understood differently in all organizations, it would be hard to explain the concept, therefore another method might be used so everyone knows exactly what is meant. Behaviour in organizations can be shaped by organizational characteristics such as organizational culture, structure, demography, and the corporate mission and vision propagated by the organizational board (van Engen, van der Leeden & Willemsen, 2001), so support can be perceived differently by the different organizations. Due to the fact that organizations might perceive support differently it is harder to generalize the results. Also, those organizational characteristics might influence teams within the organization in general, so those differences are important for future 19

21 research to take into account. Only the establishments with 100 or less employees are used in this study because these establishments can act as if they are teams. Due to the fact that some establishments are still very large, it is hard to say if they really feel like they are a team, this might have affected the results, because it is not sure whether or not the establishments really act as teams do. Also, differences in teams are not taken into account in this study, this is something future research should look at, because differences in teams can have an influence in the way teams behave. The data used in this study was all collected in Great Britain. This could have an effect on the results, because there are a lot of differences between countries, like cultural differences, the results might have been different if the study was done in another country. The scales for team level engagement and PSS used in this study are new and used for the first time for this concept, although they seem good measures for team level engagement and PSS, there is a possibility that this has an effect on the results. The research approach also has several limitations. First of all the data conducted didn t have the purpose to measure variables at the team level. The data was collected to provide large-scale, statistically reliable evidence about a broad range of industrial relations and employment practices. Secondly, the scales used for measuring the variables are not used before for measuring these variables. The scales match with items from scales that are used before to measure PSS and engagement, but no study researched the variables in this way before. In addition, it is a crosssectional research design so the data is aggregated at one point in time. This does not allow drawing reliable causal conclusions. If there was done a longitudinal study it would be easier to demonstrate causal relationships. These are interesting for the interrelationship between PSS and team level engagement. Lastly, the data of PSS and team level engagement is aggregated so it could be measured from a team level perspective. The correlation between PSS and team level engagement became very high, namely.680. This could mean multicollinearity, so aggregating the data has had an influence on the findings. Besides the limitations, some recommendations should be mentioned as well. It is important for future research to keep investigating the relation between PSS, labour quality and team level engagement, because significant results have been shown. Very little research investigated this relationship at a team level perspective, hence significant relationships are shown on a team level it is an important contribution for future research to invest not only individual levels. Teams nowadays play crucial roles in organizations (Torrente, Salanova, Llorens, & Schaufeli, 2012), but research has not yet researched team levels a lot, so this is an important contribution. This research is a step forward in team level research, it shows the relevance of investigating at higher levels than the individual level. Implications This can also have implications for organizations. When organizations focus more on teams within their organization, it results in higher performance outcomes. As employees in teams really influence 20