The management paradox Self-rated employability and organizational commitment and performance

Transcription

1 The current issue and full text archive of this journal is available at PR 152 Received 17 June 2009 Revised July 2009 Accepted 27 November 2009 The management paradox Self-rated employability and organizational commitment and performance Nele De Cuyper Research Group Work, Organizational and Personnel Psychology, K.U. Leuven, Leuven, Belgium and FWO, Brussels, Belgium, and Hans De Witte Research Group Work, Organizational and Personnel Psychology, K.U. Leuven, Leuven, Belgium Abstract Purpose This paper aims to investigate associations between self-rated employability (SRE) and affective organizational commitment and performance to probe the so-called management paradox, namely the idea that SRE relates to performance, but also to reduced commitment. SRE concerns the workers perception about all available (quantitative SRE) or instead better (qualitative SRE) job opportunities on the internal (internal SRE) and/or the external (external SRE) labour market. This leads to four types of SRE: internal quantitative SRE; internal qualitative SRE; external quantitative SRE; and external qualitative SRE. Design/methodology/approach Analyses were based on a sample of 551 workers from nine organizations: a large Belgian organization providing human resource services, and eight schools. Hypotheses were tested with structural equation modeling, accounting also for sector differences. Findings Internal quantitative SRE associated positively with affective organizational commitment directly as well as indirectly through internal qualitative SRE. External quantitative SRE associated negatively with affective organizational commitment through external qualitative SRE. However, a direct and positive relationship was established between external quantitative SRE and affective organizational commitment. Finally, affective organizational commitment associated positively with performance. Originality/value This study is among the first to empirically test and prove false the management paradox. Another strength is that this study advanced SRE as a multi-dimensional construct. Keywords Organizational behaviour, Organizational performance, Human resource strategies, Skills, Competitive advantage, Belgium Paper type Research paper Personnel Review Vol. 40 No. 2, 2011 pp q Emerald Group Publishing Limited DOI / Introduction The question as to what is the best human resource policy vis-à-vis employability is hotly debated. This debate is summarized under the heading of the management paradox (Van der Heijde and Van der Heijden, 2006), which basically concerns the illogicality of asking employers to endorse employability as a human resource strategy (Baruch, 2001). On the positive side, employability is portrayed as a competitive advantage: it is an asset to boost performance and to enhance flexibility (Van der Heijde and Van der Heijden, 2006). The growing contingent of boundaryless workers provides an exemplary case: boundaryless workers are typically highly employable, high achievers

2 and they excel in flexibility (Defillipi and Arthur, 1994; Marler et al., 2002). This provides an incentive for organizations to invest in employability. On the negative side, employability may induce a sense of self-interest among the workers (Bagshaw, 1997; Garavan, 1999). Returning to our example, boundaryless workers may engage in job-hopping in search of financially lucrative or otherwise attractive jobs (Sullivan, 1999). The result is that highly employable workers are probably less committed to one organization (De Grip et al., 2004; Elman and O Rand, 2002; Pearce and Randel, 2004), which thrives turnover. Hence, employability-investments on the part of the organization may present a risk in the form of increased turnover before a return on investments in achieved, which ultimately impairs the organization s knowledge base (De Grip et al., 2004; Galunic and Anderson, 2000; Van den Berg and Van der Velde, 2005). We believe that this tension between costs and benefits associated with employability may be false. Our argument is that the management paradox is grounded in an overly too general view on employability, namely a view:. that is perhaps dominant in the boundaryless career literature;. that focuses mostly on employment opportunities on the external labour market; and. that focuses less so on the internal labour market or upon the quality of employment opportunities. The management paradox 153 A more complete account of the management paradox or employability for that matter should embrace the internal versus the external labour market and opportunities for jobs versus for desired jobs. Unlike factors associated with the external labour market, factors associated with the internal labour market moreover have the potential to tie the individual to the organization, particularly when they ultimately land the individual in jobs aligning with his or her preferences. This commitment may then boost performance. In all, the aim of the present study is to challenge the management paradox. We probe the relationship between employability, and affective organizational commitment and performance. The study has particular strengths: first, we adopt an innovative view on employability that accounts for the workers perceptions about employment opportunities on the internal versus the external labour market, and addressing also the quality of these opportunities. Second, we sampled 551 workers from two sectors, services and education, in view of demonstrating possibilities for generalization. Third, the results from this study are relevant also for practitioners in the domain of human resource management. Employability Definition The employability literature is vast, and contributions come from different disciplines, including labour economics, management science and psychology. Each discipline has brought a specific perspective to the fore, be it the perspective of the government or public policy in (re)employment programmes, the organization or human resource policies vis-à-vis flexicurity, or the individual (see, e.g. Rothwell and Arnold, 2007). Our interest is at the level of the individual, conceptually and analytically.

3 PR 154 At the conceptual level, Rothwell and Arnold (2007, p. 25) define employability as the, individual s. ability to keep the job one has, or to get the job one desires. At the analytical level, this definition has been the starting point for many self-rated employability (SRE) measures (see, e.g. Berntson and Marklund, 2007; Berntson et al., 2006; De Cuyper et al., 2008; Silla et al., 2009), as it is for ours. SRE concerns the individual s beliefs about how easy it is to find new employment (Rothwell and Arnold, 2007), or the individual s perception about possibilities to find a new job (Berntson et al., 2006). We chose to focus on SRE as opposed to other-rated employability (e.g. Hazer and Jacobson, 2003) for two distinct reasons. First, SRE has particular resonance in this study. Workers are likely to act upon their perception of available employment opportunities rather than upon any other reality (Katz and Kahn, 1978). That is to say, affective organizational commitment and performance may be conditional upon SRE. Second, SRE accommodates many of the aspects that are highlighted in the employability-debate (Wittekind et al., in press). These aspects mostly concern individual attributes: human capital (e.g. skills, knowledge, competences; Brown et al., 2003; McQuaid and Lindsay, 2005; Van Dam et al., 2006; Van der Heijde and Van der Heijden, 2006), social capital (e.g. network size and strength; Eby et al., 2003; Fugate et al., 2004), dispositions (Fugate and Kinicki, 2008), and attitudinal flexibility (e.g. willingness to change jobs or to follow training; Van Dam, 2004). Dimensions A potential criticism on early SRE measures is that they lumped all possible employment opportunities together. In response, we introduce a more complete view on SRE along two dimensions. First, there are obvious contextual influences to SRE. Such contextual influences come in two variants: factors related to the internal labour market, and factors related to the external labour market. Rothwell and Arnold (2007) give the example of current and predicted states of the internal labour market, and Forrier and Sels (2003a) highlight training opportunities in the internal labour market. External labour market factors relate to the state of the labour market in terms of economic recession versus revival, and to the structure of the labour market in terms of labour market segregation (Berntson et al., 2006). The failure to account for the distinction between the internal and the external labour market in the realm of employability research was expressed perhaps most sharply by Rothwell and Arnold (2007), but it has preoccupied other scholars as well (Forrier and Sels, 2003b; Kluytmans and Ott, 1999; Näswall et al., 2006; Sanders and De Grip, 2004; Thijssen et al., 2008; Van der Vliet and Hellgren, 2002). Second, the conceptual employability definition underlines both the ability to establish continued employment and to get a desired job; a distinction that previous SRE measures do not comply with. The critical difference in our view lies in the quality of available job opportunities. The ability to establish continued employment may be interpreted as a form of basic employment security irrespective of quality, whereas the ability to get a desired job introduces a view on preferences and the ability to match preferences with jobs. We combine the two dimensions in a SRE-quadrant (Figure 1). The first dimension concerns the contextual factors associated with the internal or the external labour market. We refer to this distinction as internal and external SRE, respectively. The

4 The management paradox 155 Figure 1. The SRE quadrant second dimension concerns a focus upon quantity or instead quality of available job opportunities. We refer to this distinction as quantitative and qualitative SRE, respectively. This leads to four SRE-types: 1. internal quantitative; 2. internal qualitative; 3. external quantitative; and 4. external qualitative. The different forms of SRE are likely related: internal and external qualitative SRE are conditional upon internal and external quantitative SRE, respectively. Indeed, workers who perceive many employment opportunities have an increased chance to see also better employment opportunities. Stated differently, internal and external quantitative SRE may predict internal and external qualitative SRE, respectively. The management paradox The relationship between SRE and affective organizational commitment and performance can be understood through social exchange mechanisms. Social exchange theories highlight the norm of reciprocity: investments from one party are returned by investments from the other party (Rousseau, 1995; Rousseau and Tijoriwala, 1998; Tekleab and Taylor, 2003). Applied to the employee-employer relationship and to this study in particular, the general idea is that employability-investments on the part of the employer induce an obligation to return in kind on the part of the employee. A critical issue is the extent to which employees attribute SRE to employer investments. This is more likely for internal compared with external SRE. Internal SRE Employees obviously have to make some investments to become employable on the internal labour market, for example in the form of participation in training programmes (Forrier and Sels, 2003a). However, most investments are made by the employer; for example, the development of training programmes, network maintenance, or personnel costs for highly tenured workers (Van Buren, 2003).

5 PR 156 Employees may interpret such investments as a signal that the employer intends to establish a long-term employment relationship. Social exchange mechanisms may then lead the employees to reciprocate. One way of doing so is to express loyalty to the organization in the form of affective organizational commitment or outstanding performance. Examples of such dynamics come from the studies by Benson (2006) and Sieben (2007): participation in training provided by the employer related positively to affective organizational commitment. A further assumption is that the relationship between internal qualitative SRE and both affective organizational commitment and performance is particularly strong. Internal quantitative SRE provides the workers with a sense of job security that is important in the traditional career but perhaps less so in the boundaryless career. Internal qualitative SRE moreover provides the workers with career prospects; career in this sense meaning a sequence of job transitions aligning with the workers occupational profiles and/or preferences, and implying gradual job enrichment. This may accommodate also the needs of workers who pursue a boundaryless career. That is to say, employer-investments are larger for internal qualitative SRE than for internal quantitative SRE, and so is the return from the employees. External SRE Conversely, employees may be less likely to attribute their feelings of being employable on the external labour market to the present employer s investments. Instead, they may feel that they themselves carry most responsibility (De Cuyper et al., 2008). As a consequence, they may not feel obligated to reciprocate in the form of organizational commitment or performance. As a further argument, external SRE prompts the idea that the deal with the present employer can be replicated elsewhere (Ng and Feldman, 2008). This gives the workers few grounds to be committed, or to invest in the current organization in the form of performance. Rather on the contrary, the relationship between external SRE and affective organizational commitment and performance may be negative: external SRE increases the permeability of organizational boundaries, and particularly boundaryless workers may engage in job search behavior. The negative relationships between external SRE and affective organizational commitment and performance may be stronger for external qualitative SRE than for external quantitative SRE. External qualitative SRE gives rise to a direct cause for dissatisfaction and withdrawal: when workers see better job opportunities elsewhere, this signals the current employer s failure to invest in the employee-employer relationship in a way that is competitive with other employers. This has implications at the level of the individual, but also at the level of the employee-employer dyad. At the level of the individual, external qualitative employability may lead the workers to develop feelings of relative deprivation, when they see that other employers invest more in workers with similar educational or occupational profiles. This, in turn, leads to strain and withdrawal. At the level of the employee-employer dyad, workers may see that the deal they have with the current employer is not only readily attainable with other employers, but also that the deal would substantially improve upon job change. This obviously decreases their commitment to the present employer, and their willingness to contribute in the form of higher performance. That is, investments from

6 other employers appear larger than investments from the present employer, so that the return from employees decreases. The present study To summarize, we first argued that internal and external quantitative SRE relate to internal and external qualitative SRE, respectively. We then continued with the idea that internal SRE relates positively and external SRE negatively to affective organizational commitment and performance, and that these relationships were stronger for the qualitative than for the quantitative types. Our hypothesis then is that the positive relationship between internal quantitative SRE and affective organizational commitment and performance is mediated by internal qualitative SRE (Hypothesis 1); and that the negative relationship between external quantitative SRE and affective organizational commitment and performance is mediated by external qualitative SRE (Hypothesis 2). While we see a test of these relationships as our core contribution, seemingly lacking so far is an account of the relationship between affective organizational commitment and performance. Following the general idea of attitude-behavior consistency and the observation that attitudes shape behaviors, a plausible assumption is that affective organizational commitment and performance are related, which was demonstrated in the meta-analysis by Riketta (2002). Accordingly, we hypothesize that affective organizational commitment associates positively with performance (Hypothesis 3). The management paradox 157 Method Data collection and procedure Respondents were 551 workers from the Dutch-speaking part of Belgium (i.e. Flanders), and from nine organizations in two sectors: one large organization providing human resource services with headquarters in Belgium (n ¼ 290) and eight organizations from the educational sector, in particular high schools from the same district (n ¼ 261). The sectors were selected based on expected differences in SRE. This expectation was supported: workers in the service sector perceived themselves as more employable than workers from the schools (Table I, top half). This provided good possibilities for generalizing findings. We contacted the human resource manager of the service organization and the principals of all eight schools with a request to participate in the study. Our study was set up broadly as a study on work-related wellbeing and motivation. Upon agreement, workers from the service organization were invited to participate in an electronic questionnaire sent to their address at work. Paper and pencil questionnaires were distributed to all employees from the schools, teachers and administrative staff alike. Upon completion of the questionnaire, employees were instructed to put the questionnaire in a sealed envelope and to drop this envelope in a post-box that could be opened by the researchers only. Data were collected in spring 2007 in the educational sector and in summer 2007 in the service organization. Anonymity and confidentiality were guaranteed to encourage the respondents candidness. Response rate in the service organization was 22.4 percent, which is within the range of response rates reported in earlier studies with organization-specific samples (Baruch and Holtom, 2008). The response rate was somewhat lower than

7 PR 158 Table I. Descriptives across sectors Total Service organization Education n ¼ 551 n ¼ 290 (53 percent) n ¼ 261 (47 percent) Differences SRE M (SD) Internal quantitative 2.54 (1.09) 3.23 (0.86) 1.79 (0.79) t (549) ¼ , p, Internal qualitative 2.19 (0.89) 2.66 (0.77) 1.67 (0.71) t (549) ¼ , p, External quantitative 3.36 (1.01) 3.54 (0.86) 3.16 (1.13) t (549) ¼ 24.59, p, External qualitative 2.77 (0.91) 2.97 (0.82) 2.55 (0.96) t (549) ¼ 25.52, p, Sample Gender n (%) Male 164 (33%) 95 (39%) 69 (27%) x 2 (1, n ¼ 502) ¼ 7.76 Female 338 (67%) 151 (61%) 187 (73%) p, 0.01 Education n (%) # High school 63 (13%) 47 (19%) 16 (6%) x 2 (1, n ¼ 500) ¼ High school 437 (87%) 199 (81%) 238 (94%) p, Working hours n (%) Part-time 137 (25%) 71 (24%) 66 (26%) x 2 (1, n ¼ 544) ¼ 0.16 Full-time 407 (75%) 219 (76%) 188 (74%) p ¼ 0.69 Age M (SD) 38 (10) 38 (9) 38 (11) t (540) ¼ 0.44, p ¼ 0.66 Tenure M (SD) 8 (9) 5 (7) 12 (10) t (541) ¼ 3.02, p, 0.01

8 expected because some workers were on summer holidays. Response rates for the educational sector were higher than 80 percent in two organizations, between 60 percent and 70 percent in four organizations, and 55 percent and 40 percent in two other organizations. Overall, the response rates were satisfactory. We did not have access to data that would permit the evaluation of a possible response bias, but we are not aware of any reasons that could contribute to lack of desire to participate among specific groups. The management paradox 159 Respondents Table I (lower half) provides a summary of the respondents characteristics for the total sample and separately for the service organization and the education sector. About two respondents out of three were female in the total sample. The percentage of females was higher in the schools than in the service organization. The large majority of respondents followed education beyond high school level, and this was even more pronounced in the schools compared to the service organization. About three respondents out of four worked full-time, in the total sample as well as in the sub-samples. Mean age was 38 in the total sample and the sub-samples, ranging from 21 to 59 years. Average tenure was eight years in the total sample, five years in the service organization (range between 0 and 38 years) and 12 years in the schools (range between 0 and 35 years). Measures Unless stated otherwise, all scales were taken from standardized instruments that were found reliable in earlier studies and in various samples. Respondents had to rate their agreement with all the items on a scale from 1 (strongly disagree) to 5 (strongly agree). SRE. Internal quantitative, internal qualitative, external quantitative and external qualitative SRE were measured with four items each. The items were adapted from De Witte (1992) to fit the purpose of this study, and they were similar to related measures proposed by Berntson and colleagues (Berntson and Marklund, 2007; Berntson et al., 2006), and Rothwell and Arnold (2007). We first presented the items for internal SRE, alternating items referring to internal quantitative and internal qualitative SRE. The items for internal quantitative SRE were as follows: I am optimistic that I would find another job with this employer, if I looked for one, I will easily find another job with this employer instead of my present job, I could easily switch to another job with this employer, if I wanted to, and I am confident that I could quickly get a similar job with this employer. Reliability (Cronbach s alpha) was The items for internal qualitative SRE were comparable. Differences with internal quantitative SRE were underlined by using italics, as follows: I am optimistic that I would find a better job with this employer, if I looked for one, I will easily find a better job with this employer instead of my present job, I could easily switch to a better job with this employer, if I wanted to, and I am confident that I could quickly get a better job with this employer. Reliability (Cronbach s alpha) was We then presented the items for external SRE, again alternating external quantitative and external qualitative SRE. The items were comparable to the items for internal SRE, except for the reference to another employer or elsewhere ; a focus that was underlined in the instruction to the respondents. A sample item was I am

9 PR 160 optimistic that I would find another job elsewhere, if I looked for one and I am optimistic that I would find a better job elsewhere, if I looked for one for external quantitative and qualitative SRE, respectively. Reliability (Cronbach s alpha) was 0.95 for external quantitative SRE, and 0.96 for external qualitative SRE. Reliability (Cronbach s alpha) for the total SRE scale was Affective organizational commitment was measured with five items from Cook and Wall (1980), for example: To know that my own work has made a contribution to the good of the organization would please me. Reliability (Cronbach s alpha) was Performance was measured with six items from Abramis (1994). Respondents were asked to rate how well they performed each of six possible actions or activities (e.g. take up responsibilities, meet deadlines) in the past working week. Responses were made on a scale from 1 (very poorly) to 5 (very well). Cronbach s alpha was Sector was coded 0 for the schools and 1 for the service organization. Analyses Hypotheses were tested with Structural Equation Modeling (SEM) using the AMOS software package (Arbuckle, 2003). In all analyses, the Maximum Likelihood Estimation Method and the covariance matrix were used. We followed a two-step procedure, in line with recommendations made by Anderson and Grebing (1988). In a first step, Confirmatory Factor Analysis (CFA) was used in view of arriving at a measurement model. Obtaining a good fit for the measurement model is critical to establish discriminant validity, and to inspect risks associated with common method variance (Podsakoff et al., 2003). The hypothesized model included six latent factors with their respective items: internal quantitative SRE, internal qualitative SRE, external quantitative SRE, external qualitative SRE, affective organizational commitment and performance. Correlations between the latent factors were allowed. Furthermore, the error terms from similarly worded items for internal quantitative and internal qualitative SRE were allowed to covary. The same procedure was followed for external quantitative and external qualitative SRE. The hypothesized six-factor model was compared with five alternative models: (1) A four-factor model with internal SRE, external SRE, affective organizational commitment and performance. Hence, we did not account for the difference between quantitative and qualitative SRE (four-factor model a). (2) A four-factor model with quantitative SRE, qualitative SRE, affective organizational commitment and performance. Hence, we did not account for the difference between internal and external SRE (four-factor model b). (3) A three-factor model with an overall index for SRE, affective organizational commitment and performance. (4) A two-factor model with SRE and the outcomes. (5) A one-factor model in which all items were lumped together. In the second step, we compared three competing structural models (Figure 2). Model 1 included structural paths from internal quantitative to internal qualitative SRE, from external quantitative to external qualitative SRE, from internal qualitative SRE to affective organizational commitment and performance, and from external qualitative SRE to affective organizational commitment and performance. In Model 2, we added a

10 The management paradox 161 Figure 2. Structural models path from affective organizational commitment to performance. In Model 3, we added paths from internal quantitative and external quantitative SRE to affective organizational commitment and performance. Note that we included sector membership as a control variable: we added paths from sector membership to all latent factors. Model fit was evaluated based on the Goodness of Fit Index (GFI), the Bentler Comparative Fit Index (CFI), and the Root Mean Square Error of Approximation (RMSEA). Values of.0.90, or, more conservatively,.0.94 for GFI and CFI, and values of,0.08 or, more conservatively,,0.06 for RMSEA are representative for a well-fitting model (Hu and Bentler, 1999). Model comparisons were based on Chi-square difference tests. Results Descriptive statistics Means, standard deviations and correlations between the scales are shown in Table II. Internal quantitative SRE correlated strongly to internal qualitative SRE, and external quantitative SRE correlated strongly to external qualitative SRE. Correlations between other forms of SRE were moderate. Internal quantitative and qualitative SRE were positively and external qualitative SRE was negatively related to affective organizational commitment. No significant correlation was found between external quantitative SRE and affective organizational commitment. The correlations between the types of SRE and performance were not significant. Affective organizational commitment was positively correlated with performance. Finally, workers from the service organization perceived themselves as more employable, but they were less committed and they reported poorer performance compared to workers from the schools. Measurement model Table III (top half) presents the fit indices for the measurement models. The hypothesized six-factor model (six-factor model a) provided an acceptable fit. However,

11 PR 162 Table II. Means, standard deviations, and correlations between scales (n ¼ 551) M SD Internal quantitative SRE (0.94) 2. Internal qualitative SRE * (0.93) 3. External quantitative SRE * 0.31 * (0.95) 4. External qualitative SRE * 0.33 * 0.68 * (0.96) 5. Affective organizational commitment * 0.16 * * (0.82) 6. Performance * (0.91) 7. Sector (0 ¼ school; 1 ¼ service) 0.66 * 0.55 * 0.19 * * * Notes: * p, Reliabilities are shown in parentheses on the diagonal; SRE ¼ Self-rated employability

12 x 2 df p GFI CFI RMSEA Comparison Dx 2 Ddf p Measurement models 1. Six-factor model a , Six-factor model b , vs , Four-factor model a 3, , vs 2 2, , Four-factor model b 4, , vs 2 4, , Three-factor model 5, , vs 3 2, , Two-factor model 6, , vs , One-factor model 7, , vs 6 1, , Structural models 1. Model , Model , vs , Model , vs , Model , vs The management paradox 163 Table III. Measurement models

13 PR 164 inspection of the modification indices revealed a significant improvement in fit when correlations between the errors of two performance items ( Take up responsibility and Take initiative ) were allowed. This model (six-factor model a) fitted the data better than the alternative models. All items loaded significantly on the respective factors. Factor loadings varied between 0.89 and 0.93 for internal quantitative SRE, between 0.86 and 0.93 for internal qualitative SRE, between 0.90 and 0.95 for external quantitative SRE, between 0.88 and 0.97 for external qualitative SRE, between 0.61 and 0.80 for affective organizational commitment, and between 0.69 and 0.81 for performance. Structural models Table III (lower half) presents the fit indices for the structural models shown in Figure 2. Model 1 was the starting model with the following structural paths: internal quantitative SRE! internal qualitative SRE, external quantitative SRE! external qualitative SRE, and internal/external qualitative SRE! affective organizational commitment/performance. This model fitted the data reasonably well. Model 2 with an additional path from affective organizational commitment to performance was significantly better than Model 1. Yet, Model 3 with additional paths from internal and external quantitative SRE to the outcomes was the best model. Inspection of this Model revealed that the paths from the four SRE types to performance were non-significant. They were removed, leading to Model 4, which was the best model in the row. Figure 3 presents the pattern of core results. Note that sector was included as a control variable (not shown in Figure 3). Employment in the service organization versus in education associated positively with internal quantitative SRE (g ¼ 0.66, p,0.001), external quantitative SRE (g ¼ 0.19, p,0.001) and external qualitative SRE (g ¼ 0.11, p,0.001). It related negatively to affective organizational commitment Figure 3. Results for model 4

14 (g ¼ 20.45, p,0.001) and performance (g ¼ 20.27, p,0.001). The relationship between sector membership and performance was not significant. Internal quantitative SRE associated positively with internal qualitative SRE. Internal qualitative SRE, in turn, associated positively with affective organizational commitment. The Sobel test suggested that internal qualitative SRE carried the relationship between internal quantitative SRE and affective organizational commitment, Sobel test ¼ 2.24, p, However, this mediation was partial: internal quantitative SRE associated positively with affective organizational commitment. Similarly, external quantitative SRE associated positively with external qualitative SRE. Qualitative SRE was negatively related to affective organizational commitment: external qualitative SRE mediated the relationship between external quantitative SRE and affective organizational commitment, Sobel test ¼ 24.23, p, This mediation was partial: external quantitative SRE was significantly associated with affective organizational commitment even when introducing the path from external qualitative SRE and affective organizational commitment. The relationship between external quantitative SRE and affective organizational commitment was positive. Affective organizational commitment was positively related to performance: affective organizational commitment mediated the relationship between internal quantitative, internal qualitative, external quantitative and external qualitative SRE on the one hand, and performance on the other hand. Explained variance owing to sector membership in internal quantitative SRE was 44 percent, and in external quantitative SRE 4 percent. Explained variance in internal qualitative and external qualitative SRE was 75 percent and 48 percent, respectively: explained variance in internal qualitative SRE was attributed to sector membership and internal quantitative SRE. Explained variance in external qualitative SRE was attributed to sector membership and external quantitative SRE. Explained variance in affective organizational commitment was 21 percent. It was attributed to:. direct relationships between internal quantitative, internal qualitative, external quantitative and external qualitative SRE on the one hand and affective organizational commitment on the other hand; and. indirect relationships from internal and external quantitative SRE over internal and external qualitative SRE to affective organizational commitment. The management paradox 165 Finally, 22 percent of the variance in performance was explained by indirect relationships from the different types of SRE over affective organizational commitment to performance. Discussion Summary of results We set off from the so-called management paradox (Van der Heijde and Van der Heijden, 2006) to introduce the topic of our study. The paradox relies on the assumption that employability has positive effects for the organization in terms of performance, but also negative effects in terms of withdrawal, for example in the form of reduced affective organizational commitment. We argued that this paradox might be false, in that it relies on a fairly general interpretation of employability that does not account for the heterogeneity of job opportunities.

15 PR 166 In response, we classified available job opportunities along two dimensions, namely, job opportunities on the internal (internal employability) versus the external (external employability) labour market (see also Rothwell and Arnold, 2007), and job opportunities in general (quantitative employability) versus better (qualitative employability) job opportunities. This led us to develop four types of SRE: internal quantitative SRE, internal qualitative SRE, external quantitative SRE, and external qualitative SRE. These were tapped with reference to the workers perceptions: the core reason is that perceptions are crucial to the workers attitudes and actions (Katz and Kahn, 1978). Confirmatory factor analysis supported the distinction between the four types: the measurement model in which we distinguished between the four SRE types fitted the data better than alternative models in which some of the SRE types or all four SRE types were lumped together. In a next step, we challenged the management paradox by probing the relationships between the four types of SRE on the one hand, and affective organizational commitment and performance on the other hand. The relationship with affective organizational commitment can be understood through the following processes: first, there was an indirect, positive relationship so that internal quantitative SRE! internal qualitative SRE! affective organizational commitment; all relationships positive. Workers who perceived many job opportunities on the internal labour market were likely to see also better job opportunities, which then associated with affective organizational commitment (i.e. mediation). This aligned with our assumption that internal SRE may develop from investment by the present employer. Employees may feel obligated to return such investments. Second, there was a path from external quantitative SRE! external qualitative SRE! affective organizational commitment. The path from external quantitative SRE to external qualitative SRE was positive, and the path from external qualitative SRE to affective organizational commitment was negative. Workers who saw employment opportunities elsewhere were likely to see also better employment opportunities elsewhere which then led them to reduce their commitment to the present organization, possibly because they interpret external SRE in terms of lack of employer investments. Third, there were direct relationships between internal quantitative and external quantitative SRE on the one hand and affective organizational commitment on the other hand, both positive. This calls for some comment and explanation: we expected that internal and external qualitative SRE would mediate the relationships between internal and external quantitative SRE and affective organizational commitment. The results instead showed that internal quantitative and external quantitative SRE associated also directly with affective organizational commitment. This pattern of results suggested that the mediation was partial. A possible explanation could be that quantitative SRE, internal and external, provides the workers with a sense of job or employment security (De Cuyper et al., 2008; Garavan, 1999). The positive effects of job and employment security have been demonstrated abundantly in the literature (for reviews, see, e.g. Chen and Chang, 2008; De Witte, 1999; Sverke et al., 2002). The relationships between the four types of SRE and performance were non-significant in the original models (Models 1 to 3). Instead, the four types of SRE associated with affective organizational commitment as summarized above, and affective organizational commitment associated with performance. That is, relationships

16 between the four types of SRE and performance were indirect through affective organizational commitment. In all, our results suggest that the management paradox is false for two reasons: first, SRE did not present a threat to affective organizational commitment to the extent that is sometimes suggested in the literature. Rather to the contrary, SRE may provide opportunities to enhance commitment among the workers. The only cause for concern arises when workers perceive employment opportunities elsewhere that are better than in the current organization. Second, affective organizational commitment and performance are linked; an issue that goes unnoticed in most speculations about the management-paradox: workers who were committed to their organization gave more positive performance ratings than those who were not or less committed to their organization. The management paradox 167 Implications for practitioners This pattern of results has implications for practitioners. It suggests that employability may lead to a win-win situation for workers and their organizations. The win for workers lies in the feelings of job or employment security and hope for the future (Ghosal et al., 1999), whereas there is a double win for organization in the form of increased commitment and through commitment, performance. Accordingly, organizations may want to increase perceptions of employability among the workers as a retention strategy that also promotes performance. Efforts on the part of the organization in this respect should be directed first to the internal labour market and to internal quantitative SRE in particular. The organization may increase internal quantitative SRE by investments in personnel staffing, for example in the form of job rotation schemes, organization-specific training or job enrichment. Other strategies are to make job opportunities in the internal labour market more visible, accessible and attractive to potential incumbents. The organization may then want to increase internal qualitative SRE, for example by investments in general training in view of developing the workers general skills such as management skills or software skills that are conditional for career progression. One drawback could be that workers with general skills are attractive also to other employers, who may reap the benefits of training. This problem is known as the cherry-picking problem (Sieben, 2007) or the free rider dilemma (Kluytmans and Ott, 1999). Our results show that such assumed dynamics are ungrounded: general training may indeed open job opportunities also on the external labour market. However, this related positively to affective organizational commitment: employers who invest in general training are probably seen as attractive to work for, which ties the worker to his or her organization. One exception is the situation where the worker perceives job opportunities that are clearly better than the present job (i.e. external qualitative SRE). Another piece of advice to practitioners then is to decrease perceptions of external qualitative employability. We believe that many of the strategies focussed upon increased internal SRE could have decreased external qualitative SRE as a side effect. Limitations and areas for future research As with all studies, the interpretation of results is conditional upon some limitations. Like the majority of studies in the area of Work and Organizational Psychology, our

17 PR 168 findings were based upon reports from a single source; namely, employees perceptions. This may lead to concerns regarding inflated correlations owing to common-method effects. In this respect, we followed many of the suggestions regarding questionnaire design to reduce the risk related to common-method effects (e.g. anonymity, encouraging participants openness; Podsakoff et al., 2003). We furthermore tested a measurement model in which all latent variables were introduced simultaneously. The model provided a satisfactory fit and a better fit compared to alternative models, including the one-factor model. Thus, we feel confident that possible common-method effects do not downplay the significance of our results to any meaningful extent. A related concern could be that particularly self-reports for performance have some confounds. Perhaps the most critical concern is that workers tend to over-rate their performance. However, we believe that self-reports of performance in this study are tenable for three distinct reasons. First, earlier research has demonstrated that particularly less skilled workers tend to over-rate their performance (David et al., 2006; Kruger and Dunning, 1999). Our sample included mostly highly educated workers, which may downplay the threat associated with biased performance judgments. Second, Kruger and Dunning (1999) argue that biased judgments occur when there is a lack of negative feedback. In the specific case of work-related performance, workers do get negative feedback in the form of yearly or bi-annual appraisal interviews; a human resource instrument that was well-implemented in the participating organization. Third, the measure of performance (Abramis, 1994) was developed with the utmost consideration of possibly ways to increase reliability. For example, respondents were instructed to consider the past working week when evaluating their performance. Furthermore, the items referred to specific situations. That is to say, they were concrete rather than abstract. Nevertheless, future research incorporating different evaluation perspectives may add incremental validity to the individual assessment, and may enable us to thoroughly investigate rating biases (Woehr et al., 2005). A further limitation concerns the use of cross-sectional data: the arguments underlying our hypotheses seem to hint at a causal relationship from employability to affective organizational commitment. Reciprocal causation may occur when affective organizational commitment predicts SRE. Such is likely in view of the social exchange dynamics that we saw as underlying our hypotheses: investment from one party lead to investments from another party, which may then again induce investments from the first party until an acceptable balance is achieved. Applied to this study, when organizations invest in employability, thus increasing SRE among the workers, the workers may respond with increased loyalty, which in turn may induce even more investments on the part of the organization. An important route for future research could be to test these underlying dynamics, preferably with a longitudinal design. Finally, we are aware that possible sample constraints may have influenced the results. Highly educated workers were over-represented in our sample compared to the working population in general, even though one should bear in mind that educational level is increasing in most developed countries. One reason for this overrepresentation is the selection of organizations, which typically employ mostly highly educated workers. Another reason is the use of electronic surveys in the service organization, which typically attracts highly educated workers. The extent to which results would be different in samples with more respondents with lower educational or occupational

18 profiles is unclear. One argument could be that SRE is particularly relevant to highly educated workers and less so to less educated workers (Marler et al., 2002), and hence, that the relationships found in this study will be less strong in other samples. Another argument could be that internal SRE and associated feelings of job security are even more important to less educated workers or workers with a lower occupational status compared with highly educated workers and workers with a higher occupational status, respectively. This would mean that relationships regarding internal SRE that were actually quite robust in this study are likely stronger in other samples. Thus, we consider the replication of our findings in other samples as yet another important route for future research. The management paradox 169 Conclusions This study contributed to the employability literature in three ways. First, we showed that SRE can meaningfully be defined along a quadrant, accounting for internal and external labour market factors and for quality of job opportunities: internal quantitative, internal qualitative, external quantitative and external qualitative SRE. Second, the results supported the idea that the management paradox was not tenable in the context of this study. Third, the results furthermore attested to the predictive validity of the four types of SRE in relation to affective organizational commitment. Future research may want to investigate the four types of SRE in relation to other outcome variables (e.g. career commitment). The message to human resource practitioners is that it is worthwhile to invest in employability and to build a strong internal labour market. Such a strategy will lead to a committed workforce with the right skills and knowledge, meaning that a return of investments made in the workers employability is likely. References Abramis, D. (1994), Relationships of job stressors to job performance: linear or an inverted-u?, Psychological Reports, Vol. 75 No. 1, pp Anderson, J.C. and Grebing, D.W. (1988), Structural equation modelling in practice: a review and recommended two-step approach, Psychological Bulletin, Vol. 103, pp Arbuckle, J.L. (2003), AMOS 5.0 User s Guide, SmallWaters Corporation, Chicago, IL. Bagshaw, M. (1997), Employability creating a contract of mutual investment, Industrial and Commercial Training, Vol. 29 No. 6, pp Baruch, Y. (2001), Employability, a substitute for loyalty?, Human Resource Development International, Vol. 4 No. 4, pp Baruch, Y. and Holtom, B.C. (2008), Survey response rate levels and trends in organizational research, Human Relations, Vol. 61 No. 8, pp Benson, G.S. (2006), Employee development, commitment and intention to turnover: a test of employability policies in action, Human Resource Management Journal, Vol. 16 No. 2, pp Berntson, E. and Marklund, S. (2007), The relationship between employability and subsequent health, Work and Stress, Vol. 21 No. 3, pp Berntson, E., Sverke, M. and Marklund, S. (2006), Predicting perceived employability: human capital or labour market opportunities?, Economic and Industrial Democracy, Vol. 27, pp

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