Employee Loyalty: Intercultural Comparison of European and East Asian Approaches 3030684245, 9783030684242

Citation preview

Stephan Meschke

Employee Loyalty

Intercultural Comparison of European and East Asian Approaches

Employee Loyalty

Stephan Meschke

Employee Loyalty Intercultural Comparison of European and East Asian Approaches

Stephan Meschke Akademiestraße 6 Technische Universität Bergakademie Freiberg Freiberg, Germany

ISBN 978-3-030-68424-2    ISBN 978-3-030-68425-9 (eBook) https://doi.org/10.1007/978-3-030-68425-9 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

In loyalty to my beloved family.

Abbreviations

AOM Academy of Management ANOVA Analysis of Variance BEL Bipartite Employee Loyalty CFA Confirmatory Factor Analysis CWB Counter-productive Work Behavior df Degrees of Freedom EFA Exploratory Factor Analysis ERI Effort–Reward Imbalance EVLN Exit, Voice, Loyalty, Neglect HRM Human Resources Management IT Information Technology KMO Kaiser-Meyer-Olkin Loy to Org; LtO Loyalty to Organization Loy to Sup; LtS Loyalty to Supervisor Loy to WorGr; LtG Loyalty to Working Group OB Organizational Behavior OCB Organizational Citizenship Behavior Org Comm Organizational Commitment R&D Research and Development S-O-R Stimulus-Organism-Response Sec. Analysis Secondary Analysis TEL Tripartite Employee Loyalty

vii

Contents

1 Introduction����������������������������������������������������������������������������������������������    1 References��������������������������������������������������������������������������������������������������    5 2 Employees in Organizations��������������������������������������������������������������������    7 2.1 Organizational Behavior as a Research Field ����������������������������������    8 2.2 Theoretical Foundation of Organizational Behavior������������������������   12 2.3 Employees in the Service Industry ��������������������������������������������������   17 References��������������������������������������������������������������������������������������������������   21 3 The Concept of Employee Loyalty ��������������������������������������������������������   27 3.1 Employee Loyalty as a Research Subject ����������������������������������������   29 3.2 Theoretical Foundation of Employee Loyalty����������������������������������   33 3.3 Components of Employee Loyalty ��������������������������������������������������   42 3.3.1 Reference Objects – Multiple Loyalties ������������������������������   43 3.3.2 Characteristic – Attitude or Behavior ����������������������������������   46 3.3.3 Elements – Core of Employee Loyalty��������������������������������   48 3.3.4 Nature – Voluntarily Engage or Suffer in Silence����������������   50 3.3.5 Continuum – Levels of Employee Loyalty ��������������������������   53 3.4 Distinction of Employee Loyalty������������������������������������������������������   56 3.4.1 Related Concepts������������������������������������������������������������������   56 3.4.2 Organizational Commitment������������������������������������������������   59 References��������������������������������������������������������������������������������������������������   61 4 Outcomes of Employee Loyalty��������������������������������������������������������������   73 4.1 Positive and Desired Outcomes��������������������������������������������������������   73 4.2 Negative and Undesired Outcomes��������������������������������������������������   76 References��������������������������������������������������������������������������������������������������   83 5 Intercultural Comparison of Employee Loyalty ����������������������������������   89 5.1 Culture as a Research Field��������������������������������������������������������������   89 5.2 Theoretical Foundation of Culture����������������������������������������������������   90 5.2.1 Cultural Dimensions ������������������������������������������������������������   90

ix

x

Contents

5.2.2 Cultural Standards����������������������������������������������������������������   95 5.3 Employee Loyalty in European Cultures������������������������������������������   98 5.4 Employee Loyalty in East Asian Cultures����������������������������������������  100 References��������������������������������������������������������������������������������������������������  101 6 Empirical Investigation of Employee Loyalty ��������������������������������������  105 6.1 Qualitative Preliminary Investigations����������������������������������������������  105 6.2 Hypotheses Formulation ������������������������������������������������������������������  107 6.2.1 Employee Loyalty Concept Hypotheses������������������������������  108 6.2.2 Employee Loyalty Negative Outcome Hypotheses��������������  108 6.2.3 Employee Loyalty Intercultural Comparison Hypothesis����������������������������������������������������������������������������  109 6.3 Measurement Review of Employee Loyalty������������������������������������  109 6.4 Methodology ������������������������������������������������������������������������������������  114 6.4.1 Questionnaires����������������������������������������������������������������������  114 6.4.2 Data Collection and Samples������������������������������������������������  116 6.4.3 Measures ������������������������������������������������������������������������������  119 6.4.4 Analyses��������������������������������������������������������������������������������  123 References��������������������������������������������������������������������������������������������������  125 7 Results ������������������������������������������������������������������������������������������������������  131 7.1 The Employee Loyalty Concept ������������������������������������������������������  132 7.1.1 Item Reduction and Factor Identification ����������������������������  132 7.1.2 Construct Validity ����������������������������������������������������������������  135 7.1.3 Construct Finalization����������������������������������������������������������  137 7.2 Negative Outcomes Across Employee Loyalty Levels ��������������������  140 7.2.1 Loyalty to Organization and Negative Outcomes ����������������  141 7.2.2 Loyalty to Working Group and Negative Outcomes������������  145 7.2.3 Loyalty to Supervisor and Negative Outcomes��������������������  147 7.2.4 “Tripartite Employee Loyalty” and Negative Outcomes������������������������������������������������������������������������������  151 7.2.5 Groupthink Tendencies Across Levels of Employee Loyalty������������������������������������������������������������  159 7.3 Intercultural Employee Loyalty��������������������������������������������������������  160 7.4 Summary of Hypothesis Support������������������������������������������������������  164 References��������������������������������������������������������������������������������������������������  165 8 Discussion�������������������������������������������������������������������������������������������������  167 8.1 Validation of the “Tripartite Employee Loyalty” Concept ��������������  170 8.2 Analysis of Negative Outcomes of “Tripartite Employee Loyalty” ��������������������������������������������������������������������������  173 8.3 Assessment of Intercultural Employee Loyalty��������������������������������  176 References��������������������������������������������������������������������������������������������������  180

Contents

xi

9 Conclusion������������������������������������������������������������������������������������������������  185 9.1 Limitations����������������������������������������������������������������������������������������  186 9.2 Theoretical Implications ������������������������������������������������������������������  187 9.3 Practical Implications������������������������������������������������������������������������  188 References��������������������������������������������������������������������������������������������������  189 Appendices��������������������������������������������������������������������������������������������������������  191 Index������������������������������������������������������������������������������������������������������������������  207

List of Figures

Fig. 2.1 The Organizational Behavior research model����������������������������������    9 Fig. 2.2 Employment in Germany by industry from 1991 to 2017����������������   18 Fig. 2.3 Typology of services based on the provider–customer relationship����������������������������������������������������������������������������������������   19 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 3.4

The employee loyalty research model����������������������������������������������   28 Number of publications on employee loyalty ����������������������������������   30 Levels on the continuum of employee loyalty����������������������������������   55 Number of publications on employee loyalty and related concepts��������������������������������������������������������������������������   58

Fig. 5.1 Comparison of German and Chinese cultural dimensions according to Hofstede ����������������������������������������������������������������������   93 Fig. 7.1 Scree plot for nine-item approach. (EFA, German sample)��������������  134 Fig. 7.2 Model for CFA����������������������������������������������������������������������������������  137 Fig. 7.3 Employee loyalty concept with final items (CFA, German sample) ��������������������������������������������������������������������  139 Fig. 7.4 Resistance to change across levels of loyalty to organization (box plot)������������������������������������������������������������������������������������������  143 Fig. 7.5 Willingness to leave across levels of loyalty to organization (box plot)������������������������������������������������������������������������������������������  144 Fig. 7.6 CWB across levels of loyalty to organization (box plot)������������������  145 Fig. 7.7 Resistance to change across levels of loyalty to working group (box plot)������������������������������������������������������������������������������������������  147 Fig. 7.8 Willingness to leave across levels of loyalty to working group (box plot)������������������������������������������������������������������������������������������  148 Fig. 7.9 Resistance to change across levels of loyalty to supervisor (box plot)������������������������������������������������������������������������������������������  150 Fig. 7.10 Work overload across levels of loyalty to supervisor (box plot)������  151 Fig. 7.11 Resistance to change across levels of “Tripartite Employee Loyalty” (box plot) ��������������������������������������������������������������������������  153 xiii

xiv

List of Figures

Fig. 7.12 Willingness to leave across levels of “Tripartite Employee Loyalty” (box plot) ��������������������������������������������������������������������������  154 Fig. 7.13 CWB across levels of “Tripartite Employee Loyalty” (box plot)������������������������������������������������������������������������������������������  155 Fig. 7.14 Groupthink tendencies across levels of loyalty to organization (bar chart)����������������������������������������������������������������  159 Fig. 7.15 Groupthink tendencies across levels of loyalty to supervisor (bar chart)��������������������������������������������������������������������  160 Fig. 7.16 Scree plot for four-item approach. (EFA, Chinese sample)��������������  162 Fig. A.1 Employee loyalty questionnaire – German version in 2014 ������������  192 Fig. A.2 Employee loyalty questionnaire – Chinese version in 2016 ������������  200 Fig. A.3 Items derived from EFA (CFA, German sample) ����������������������������  205

List of Tables

Table 3.1 Comparison of employee loyalty and organizational commitment������������������������������������������������������������������������������������   60 Table 4.1 Overview of empirically proven positive outcomes of employee loyalty������������������������������������������������������������������������   74 Table 4.2 Potentially negative outcomes of employee loyalty on respective levels������������������������������������������������������������������������   77 Table 5.1 Comparison of selected cultural dimensions����������������������������������   91 Table 5.2 Comparison of German and Chinese cultural standards����������������   96 Table 6.1 Review of employee loyalty measurements in chronological order��������������������������������������������������������������������  110 Table 6.2 German sample������������������������������������������������������������������������������  117 Table 6.3 Chinese sample������������������������������������������������������������������������������  119 Table 6.4 Employee loyalty items������������������������������������������������������������������  120 Table 6.5 Organizational commitment items ������������������������������������������������  121 Table 6.6 Negative outcome items ����������������������������������������������������������������  122 Table 7.1 Item difficulty indices after balancing��������������������������������������������  132 Table 7.2 Employee loyalty concept (EFA, German sample)������������������������  134 Table 7.3 Employee loyalty concept and organizational commitment (EFA, German sample)������������������������������������������������������������������  136 Table 7.4 Test statistics across levels of loyalty to organization (Kruskal–Wallis test)����������������������������������������������������������������������  141 Table 7.5 Ranks across levels of loyalty to organization (Kruskal–Wallis test)����������������������������������������������������������������������  142 Table 7.6 Pairwise comparison of resistance to change across levels of loyalty to organization ����������������������������������������������������  143 Table 7.7 Pairwise comparison of willingness to leave across levels of loyalty to organization ����������������������������������������������������  144 Table 7.8 Pairwise comparison of CWB across levels of loyalty to organization��������������������������������������������������������������������������������  145 xv

xvi

List of Tables

Table 7.9 Test statistics across levels of loyalty to working group (Kruskal–Wallis test)����������������������������������������������������������������������  146 Table 7.10 Ranks across levels of loyalty to working group (Kruskal–Wallis test)����������������������������������������������������������������������  146 Table 7.11 Pairwise comparison of resistance to change across levels of loyalty to working group������������������������������������������������������������  148 Table 7.12 Pairwise comparison of willingness to leave across levels of loyalty to working group������������������������������������������������������������  149 Table 7.13 Test statistics across levels of loyalty to supervisor (Kruskal–Wallis test)����������������������������������������������������������������������  149 Table 7.14 Ranks across levels of loyalty to supervisor (Kruskal–Wallis test)����������������������������������������������������������������������  150 Table 7.15 Pairwise comparison of resistance to change across levels of loyalty to supervisor��������������������������������������������������������  151 Table 7.16 Pairwise comparison of work overload across levels of loyalty to supervisor������������������������������������������������������������������  152 Table 7.17 Test statistics across levels of “Tripartite Employee Loyalty” (Kruskal–Wallis test)������������������������������������������������������  152 Table 7.18 Ranks across levels of “Tripartite Employee Loyalty” (Kruskal–Wallis test)����������������������������������������������������������������������  153 Table 7.19 Pairwise comparison of resistance to change across levels of “Tripartite Employee Loyalty”��������������������������������������������������  154 Table 7.20 Pairwise comparison of willingness to leave across levels of “Tripartite Employee Loyalty”��������������������������������������������������  155 Table 7.21 Pairwise comparison of CWB across levels of “Tripartite Employee Loyalty”������������������������������������������������������������������������  156 Table 7.22 Employee loyalty concept with negative outcomes (correlations)����������������������������������������������������������������������������������  157 Table 7.23 Employee loyalty concept with negative outcomes (linear regression)��������������������������������������������������������������������������  158 Table 7.24 Initial approach of employee loyalty concept for East Asian cultures (EFA, Chinese sample)������������������������������  162 Table 7.25 Employee loyalty concept with negative outcomes (correlations, Chinese sample) ������������������������������������������������������  163 Table 7.26 Employee loyalty concept with negative outcomes (linear regression, Chinese sample)������������������������������������������������  163 Table 7.27 Summary of hypotheses support����������������������������������������������������  164 Table 8.1 CFA model fit indicators from selected employee loyalty studies��������������������������������������������������������������������������������  171 Table A.1 Origin of employee loyalty items ��������������������������������������������������  203 Table A.2 Employee loyalty concept including two improper items (EFA, German sample)������������������������������������������������������������������  204 Table A.3 Improper employee loyalty concept (EFA, Chinese sample) ��������  206

Chapter 1

Introduction

In today’s media landscape, there is hardly a series which does not appeal to the loyalty of the characters. That can be positive, if a fictitious star lawyer feels loyal to his former social group and fights for disadvantaged humans without remuneration or if enemy warriors overcome their tribe loyalties and ally against an overly powerful opponent. Likewise, loyalty is also often related to moral conflicts and the negative effects of crossing borders and behaving unethically. Now, series are often a reflection of the social zeitgeist, in which “loyalty” more than ever seems to have its firmly established place. If loyalty is broken down to a corporate context, employee loyalty occasionally gives the impression of a dusty and outdated concept. This changes quickly when looking around in the reality of many industries. Psychological contracts with implicit expectations between employer and employee, which have a direct influence on the employee loyalty level, are becoming more and more important in our fast-moving times. Global uncertainties with direct local effects, for example, as recently triggered by the Covid-19 pandemic, are a major challenge for the employer–employee relationship. On the one hand, the business models of entire industries are faltering, and on the other hand, an unprecedented number of employees find themselves at home office. The relationship of trust in the working environment is heavily tested, and many employers appeal to the loyalty of their employees. The problem is a traditional and in many cases outdated understanding of employee loyalty: the employer pays the employees, so they must oblige to the company, quietly trust in good management, and make their contribution to the company’s success. However, such an understanding no longer meets to the reality of work in 2020 and beyond. The shortage of qualified employees increases, labor markets develop from employer to employee markets, the importance of services is constantly increasing and with it the necessity of project work. For this, employee loyalty urgently needs to be revised, whereby the conceptualization and m ­ easurement remain major challenges (Loveman 1998).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_1

1

2

1 Introduction

The aim of this work is the scientific and contemporary examination of the employee loyalty concept. The intention is to illustrate the continuing importance of employee loyalty, to initiate the scientific discourse, and to place practical implications on solid theoretical ground. The basis is formed by a novel definition of this psychological concept: “Employee loyalty as derived from cognitive and affective processes is reflected in an active, deliberate, voluntary, and reciprocal behavior which is characterized as the relative strength of an employees’ identification with, attachment, and dedication to the organization, working group, and supervisor.” The theoretical groundwork for the employee loyalty concept stems from the Organizational Behavior (OB) research field. OB enables to study employee loyalty on the three levels: individual (dyadic), group, and organizational, as well as to emphasize on the applicability of the results. OB is known as a multidisciplinary field with influences, for example, from psychology, economics, sociology, and business ethics. These multidisciplinary facets are also reflected in the employee loyalty research. Whereas most empirical studies are found from management researchers, psychologists, and sociologists, ethicists also contribute to the emergence of the concept. Particularly, they add to the theoretical development and thereby deal with underrepresented concept parts such as potential negative outcomes or different loyalty levels. On the basis of OB, three theories specifically substantiate the employee loyalty concept: social and organizational identity theory, social exchange theory, and theory of psychological contract. Those theories frame the theoretical considerations and help to derive reference objects, characteristic, elements, nature, and continuum of the employee loyalty concept. Based on a strong theoretical foundation of the concept, the outcomes of employee loyalty are addressed. The positive outcomes of loyal employees are empirically proven and frequently shown. They are found, for example, to exercise positive voice (Luchak 2003), are less likely to intend to leave their employer (Lee and Whitford 2008), continuously improve service quality (Yee et al. 2010), give exert extra effort for the company (James and Cropanzano 1994), and are more satisfied with their jobs (Chen 2001). However, potentially negative outcomes may result from employee loyalty as well (Holloman 1991; Ewin 1993; Schrag 2001; Elegido 2013), for example, counterproductive work behavior, work overload, or groupthink. Those negative outcomes are empirically rarely or not at all represented and therefore form an important body of this work. It can be shown that the different levels of employee loyalty and reference objects influence negative outcomes of employee loyalty. The scientific consideration is concluded by an intercultural comparison of employee loyalty. With the use of cultural dimensions and cultural standards, German and Chinese results for the employee loyalty concept are evaluated. It is thereby suggested that employee loyalty in Europe significantly differs from employee loyalty in the East Asian culture. Thus, from the German study results, the “Tripartite Employee Loyalty” concept is created and validated, whereas for the Chinese study results, the “Bipartite Employee Loyalty” concept is initially ­suggested and discussed.

1 Introduction

3

All the scientific considerations: the concept of employee loyalty, negative behaviors, and intercultural differences have a high significance for scientific education and show manifold future research needs. Furthermore, they also have an immense influence on the industry. Managers, for example, should better understand that there is no one best way of employee loyalty. The levels: disloyal, nonloyal, loyal, and hyper-loyal are fluid and can differ between reference objects. Undesired behaviors, such as resistance to change, willingness to leave, counterproductive work behavior, or groupthink, are related to the loyalty levels and vary in heterogeneous cultural backgrounds. In brief, the concept of employee loyalty must be understood first, before one can have a positive influence on it. Employee loyalty is one of the most important loyalties, alongside, for example, self-loyalty or loyalty to family. Those loyalties compete with each other and must be balanced: People who decide for a stronger work involvement have less time in private life – and vice versa. Employees who strongly identify with their company are more likely to get into conflict with colleagues and supervisors if they deviate from company guidelines – and vice versa. However, in a time where employees more than ever strive for fulfillment in various areas of life and where the line between work and leisure time is becoming increasingly blurred, it seems most important not to subject employee loyalty to a black-and-white view. Only managers and companies that understand the importance of employee loyalty in the zeitgeist and that strive for an open discourse will be able to name the advantages of this complex psychological construct and to minimize potential dangers. The book is intended to provide an impulse for this. This book is subdivided into three main parts. Chapters 2, 3, 4, and 5 represent the theoretical body of the work, Chaps. 6 and 7 constitute the empirical part, and Chaps. 8 and 9 combine both and provide an outlook for the future. Organizations as structured social systems are represented by individuals and groups that aim to meet common objectives. Before getting into the concept of employee loyalty, the significance of employees in organizations will be highlighted in Chap. 2. This means that OB as a multidisciplinary research field with foci on individuals, groups, and the organization will be illustrated together with the theoretical foundation of OB. The close contact to the customer bears the potential of making employees key success factors for organizations where the provider and the customers of a service are persons and not objects. Thus, particular attention is laid on employees in the service industry to close the chapter. A main part of this work is shown in Chap. 3 by introducing the employee loyalty concept. Employee loyalty is praised by some authors and criticized by others. It is portrayed as a research field with ever-increasing research interest and a strong theoretical structure. For the first time, selected components of employee loyalty will be composed. Reference objects, characteristic, elements, nature, and the continuum of employee loyalty are classified and form the heart of this book’s concept. As a psychological construct, employee loyalty is not always clearly distinguished from related concepts such as job satisfaction, employee involvement, or employee engagement. Especially organizational commitment is often even used redundantly and must be highlighted for this reason.

4

1 Introduction

Conflict solution, employee retention, service mentality, favorable work effort, and mindset are known positive outcomes of employee loyalty that will be presented in Chap. 4. However, potentially negative outcomes of the concept remain concealed so far. The focus of this chapter is, thus, more intensely on negative and undesired outcomes, which seems more rewarding for the scientific discourse. In order to assure an intercultural comparison of employee loyalty, culture as a research field will be clarified within Chap. 5. The theoretical foundation of culture will be represented by an overview of cultural dimensions and cultural standards. Following, pioneering research that already focused on employee loyalty in European and other “Western” cultures or in East Asian cultures will end the theoretical part of this book and ensure the intercultural comparison for the remaining work. The understanding for the empirical investigation of this work will be provided in Chap. 6. Qualitative preliminary investigations prelude the empirical part and complement the theoretical insights to form the research hypotheses. The hypotheses are broken down into: the employee loyalty concept, negative outcomes of employee loyalty, and an intercultural comparison hypothesis of the concept. Due to the fact that the measurement of employee loyalty remains challenging, a measurement review will be provided in the next section. Classical sections for an empirical investigation are as follows: presentation of the methodology, composition of the German and Chinese questionnaire, data collection and samples, measures, and applied analyses. The presentation of the results in Chap. 7 follows the logic of the preceding work. This means that results for the employee loyalty concept concentrate on the item reduction and factor identification, construct validity considerations, and construct finalization. On this basis, negative outcomes across employee loyalty levels can be investigated in consideration of the three reference objects and a combined employee loyalty scale. The section closes with a short description of groupthink tendencies. Subsequently, an intercultural comparison of employee loyalty between European and East Asian cultures takes place. The chapter is finalized by a summary of the hypothesis support. In order to set the theoretical part and the empirical part in relation with each other, Chap. 8 outlines the discussion. The attempt is made to discuss the significance of the derived employee loyalty concept for European cultures. The resulting negative outcomes of different reference objects are questioned, and finally, intercultural characteristics can be analyzed by contrasting an early approach of employee loyalty in East Asian cultures. Concluding remarks complement the present work. Chapter 9 points out limitations of the study as well as theoretical and practical implications.

References

5

References Chen, Z.  X. (2001). Further investigation of the outcomes of loyalty to supervisor  – Job satisfaction and intention to stay. Journal of Managerial Psychology, 16(8), 650–660. https://doi. org/10.1108/EUM0000000006305. Elegido, J. M. (2013). Does it make sense to be a loyal employee? Journal of Business Ethics, 116(3), 495–511. https://doi.org/10.1007/s10551-012-1482-4. Ewin, R.  E. (1993). Corporate loyalty: Its objects and its grounds. Journal of Business Ethics, 12(5), 387–396. https://doi.org/10.1007/BF00882029. Holloman, R. (1991). Loyalty: How much? To whom? Industrial Management, 33(3), 1–2. James, K., & Cropanzano, R. (1994). Dispositional group loyalty and individual action for the benefit of an ingroup: Experimental and correlational evidence. Organizational Behavior and Human Decision Processes, 60(2), 179–205. https://doi.org/10.1006/obhd.1994.1080. Lee, S.  Y., & Whitford, A.  B. (2008). Exit, voice, loyalty, and pay: Evidence from the public workforce. Journal of Public Administration Research and Theory, 18(4), 647–671. https://doi. org/10.1093/jopart/mum029. Loveman, G. W. (1998). Employee satisfaction, customer loyalty, and financial performance. An empirical examination of the service profit chain in retail banking. Journal of Service Research, 1(1), 18–31. https://doi.org/10.1177/109467059800100103. Luchak, A. A. (2003). What kind of voice do loyal employees use? British Journal of Industrial Relations, 41(1), 115–134. https://doi.org/10.1111/1467-8543.00264. Schrag, B. (2001). The moral significance of employee loyalty. Business Ethics Quarterly, 11(1), 41–66. https://doi.org/10.2307/3857868. Yee, R. W. Y., Yeung, A. C. L., & Cheng, T. C. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 24(1), 109–120. https://doi.org/10.1016/j.ijpe.2009.10.015.

Chapter 2

Employees in Organizations

Organizations depend on employees in order to be successful. The success of an organization mainly results from its ability to identify and manage technological, economical, ecological, and social challenges in the present and the future. Human resources play a decisive role in this regard, as they create and implement company-­ specific success factors such as knowledge, product quality, or customer orientation. Employees constitute the most fundamental resource for organizations in the long term as well as a competitive advantage in dynamic and complex business environments (Staehle et al. 1999; Holtbrügge 2004; Petkovic 2008). By definition, organizations consist of people. “An organization is a structured social system consisting of groups and individuals working together to meet some agreed-upon objectives” (Greenberg and Baron 2003, p. 3). Therefore, the main organizational objective is to find ways to deal with the employees as human individuals. Instead of treating them solely as production factors and only monitoring their work, every single employee must be perceived. The employees’ individual needs and goals need to be considered and brought into accordance with the companies’ vision. Only on this condition, employees will actively engage in addressing the challenges of the organization and contributing to its success (Jost 2000; Kirchler et al. 2005). Selected results exemplify the companies’ advantage to manage the behavior of employees actively and to acknowledge their efforts. First, employees’ job satisfaction and perception of service quality are related in a positive manner (Schlesinger and Zornitsky 1991). Second, employees’ tenure is negatively related to voluntary turnover and positively related to financial performance (Ulrich et al. 1991). Third, the attitudes of employees are positively related to organizational performance (Tornow and Wiley 1991). Furthermore, examples exist that link mismanagement to respective negative outcomes, for example, employees that perceive unfair treatment are more likely to steal at work Greenberg (2005). These few examples already explain that most behaviors of employees affect organizations, which make them a promising research object.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_2

7

8

2  Employees in Organizations

Organizational Behavior (OB) represents a research field that investigates b­ ehaviors in organizations and applies this knowledge to improve the effectiveness of organizations (Robbins 2001). OB is considered an applied science. Albeit it shows strong application for managers and practitioners, it is based on profound theories (Georg and Jones 2008). Especially in the service industry, where the product is created simultaneously in contact with the customer, the behavior of the employees decides upon success or failure of the service company (Bruhn 2011). Due to the high relevance of the three topics, OB as a research field, its theoretical foundation, and employees in the service industry are going to be presented in the following sections.

2.1  Organizational Behavior as a Research Field OB is an important research field, since employees not only have a monetary value but also desire to be perceived as individual human beings. OB and Human Resources Management (HRM) are closely related but differ from each other. The HR process consists of resourcing, development, pay, employee relations, and performance (Torrington et al. 2005). HRM focuses on the process of how employees are managed in accordance with the company’s strategy and how employees contribute to organizational performance (Schuler 1992; Huselid et al. 1997; Wright and Nishii 2007). OB is more generally oriented on the behavior of humans in organization. Even though overlaps exist, the following investigations focus on the behavior of individuals and, thus, refer to OB. A presentation of a definition and a research model of OB ease the systematic understanding of the research field. “Organizational Behavior is the multidisciplinary field that seeks knowledge of behavior in organizational settings by systematically studying individual, group, and organizational processes. This knowledge is used (… for) enhancing organizational effectiveness and individual well-being” (Greenberg 2005, p.  4). Single aspects of this definition are reflected in the OB research model (see Fig. 2.1) and will be explained subsequently. OB is a multidisciplinary research field. On the individual level, psychology captures and explains the behavior of humans. On the group level, sociology and economy investigate how humans interact and cover topics such as organizational culture, communication, conflict, or organizational power. On the organizational level, anthropology investigates societies and political science regards the political environment. Both seek to understand human behavior and contribute to theory in leadership and differences between national and organizational cultures. This variety of disciplines allows for studying topics within OB from different perspectives and with diverse quantitative and qualitative approaches (Mowday and Sutton 1993; Robbins 2001; Greenberg 2005; Olguín et al. 2009) as will be shown on the example of employee loyalty (see Chap. 3). OB is considered an applied research field (Greenberg and Baron 2003) even if a theory-practice gap exists in OB as well as in other subdisciplines of management

2.1 Organizational Behavior as a Research Field

9

Human output

• Political science

Organizational level

• Anthropology

• Economics

Group level

• Sociology

Individual level Human input

Multidisciplinary research influence:

• Psychology Situational influence

Fig. 2.1 The Organizational Behavior research model. (Source: Adapted from Robbins (2001), p. 44)

(Aguinis and Pierce 2008). OB tries to answer managerial questions by observing and measuring behavior by means of empirical research. How people behave in organizations is thereby not easy to predict. The situation and contingency circumstances always have an influence. For instance, it is difficult to distinguish whether employees with a long company affiliation are truly loyal or if they simply lack other working opportunities. A perception of a certain work situation or a context (Johns 2006) is not necessarily identical with an objective assessment of the same situation (Brief and Weiss 2002). Tversky and Kahneman (1981) refer to the effect of framing in this regard. They showed that preferences of decisions shift when identical problems are framed in different ways. Thus, allegedly rational behavior is very hard to observe in OB research. The process of OB, which will be transferred to employee loyalty in the next chapter, is shown in Fig. 2.1 and starts with the human input. Robbins (2001) does not particularly explain this input variable, but it can be inferred that the variable refers to the presence of a human in an organization. After employees and organizations have overcome conflicting goals in the run-up to the employment (von Rosenstiel 2007), the presence of employees in the organizations constitutes the beginning of the OB research. In strong conjunction with the human input are three following levels: individual, group, and organization, which also play an important role for the employee loyalty concept (see Sect. 3.3.1). At the individual level, personality and attitudes affect motivation, and motivation and abilities affect decision-making, which is influenced by the perception of the employee (Robbins 2001). This extremely

10

2  Employees in Organizations

simplified and reduced sequence lists the main traits of individuals that help to analyze employee behavior in the organization. Personality is the unique and relatively stable pattern of behavioral styles, thinking processes, and emotions of a person (Weinert 2004) and often covered by the “Big-Five” model (Barrick and Mount 1991; John and Srivastava 1999). Attitudes denote the valuations of a person toward objects, people, and events and include cognitive, affective, and behavioral components (Jost 2000). Motivation, as intrinsic and extrinsic incentives (Bruhn 2011), results from personality and attitudes. Together with the individual’s abilities, that is, “what a person is capable of doing” (Lubinski and Dawis 1992, p. 3), individuals make decisions. These decisions influence and in turn are influenced by perception. Perceptions might be best defined as the process by which individuals sort and interpret sensory impressions in a way that their environment makes sense for them (Robbins 2001). The individual perceptions sometimes differ considerably from the objective reality, as they might be subject to distortions (Strecher et al. 1995; Tang and Harvey 2004; Coulter and Coulter 2007). Accordingly, decisions of employees must be evaluated at least in the light of their personality, attitudes, motivations, abilities, and (distorted) perceptions. At the group level, more than two members of the organization recognize themselves and are recognized by other parties as a group that interacts with each other in order to accomplish particular tasks (Jehn 1995). Group structure is the focal point of interest and has an influence on and is influenced by conflict, power, leadership, and group decisions (Robbins 2001). Group structure is understood as the quality and design of the relationships among group members (Rulke and Galaskiewicz 2000). If the interests between these group members or with members of other groups collide, conflicts can arise. These conflicts have the ability to inhibit or promote the effectiveness of the involved parties, depending on whether an optimal conflict level is exceeded or not (Perl 2003; Jones and Bouncken 2008). Power and leadership are closely associated. It is stated that the leader should represent a mouthpiece of the organization with a focus on promoting the organizational norms. Through the resulting “useful members of the organization,” the leader is controlled in return (Braynion 2004, p. 460). Group decisions, at the end of the process, do not just result from leadership, but from communication as well. Communication acts as the glue that binds all three levels of OB together, hence, also the group and the organizational level. At the organizational level, organizational structure formally defines the allocation, aggregation, and coordination of job tasks and thereby influences organizational culture and HRM (Robbins 2001). The culture of an organization integrates beliefs, knowledge, and a set of attitudes that differentiates an organization from others and at the same time connects its members (Barney 1986; O’Reilly III et al. 1991; Hall 1992). The concept of organizational culture is described in detail in a later Sect. 5.1, whereas HRM has already been mentioned. Nevertheless, the fact that HRM can be understood as a part of the organizational level of OB and also has its impact on the human output is once more highlighted. After the human input passed one or all three stages of the OB research model in random order, the human output becomes visible. On the contrary to the

2.1 Organizational Behavior as a Research Field

11

aforementioned independent variables, the output variables are considered dependent variables in OB research most often. Four variables are generally recognized as output in OB: performance or productivity, absenteeism, turnover, and job satisfaction. Depending on the researcher, variables such as job stress, dissent and whistleblowing, creativity and innovation (Staw 1984), and organizational citizenship behavior (OCB) (Robbins 2001) are supplemented. All these output variables are associated with employee loyalty and will be shown particularly in Chap. 4. On the one side, performance, absenteeism, and turnover represent “hard factors,” which are directly related to costs, and especially absenteeism and turnover are objectively measurable (Argyle et al. 1958). On the other side, the “soft factors” are part of the employee psyche, and therefore, more sophisticated measurements are necessary. Whistleblowing, for example, that is disclosing unethical acts of colleagues, supervisors, or the company, cannot be measured as a mental state but only as a general willingness (Mansbach and Bachner 2010). Job satisfaction, job stress, and creativity are often found to be affiliated with each other (Davis and Wilson 2000; Shalley et al. 2000; Asad and Khan 2003). They can be measured as actual mental states (Blau 1981; Shalley et al. 2000), but the criteria to cover these variables are as much discussed as all other “soft” output factors (Spielberg and Reheiser 1994; van Saane et  al. 2003). For example, Vey and Campbell (2004) report on OCB as a behavior that goes beyond the formal tasks of employees and discuss varying measurement approaches. For their study, they did not measured actual OCB, but focused on how participants perceive the OCB items. All in all, especially soft output factors afford a high effort to be measured as will be shown on the example of employee loyalty (see Sect. 6.3). In summary, OB research constitutes multidisciplinary and applied research that can be understood as a process. Whereby, the human behavior has an input and an output and is affected on three different levels within organizations. Thus, organizational human behavior is a challenging research field that can be addressed with a variety of approaches. All approaches within OB have two basic assumptions in common that will be presented briefly. Further, challenges and opportunities will conclude the section. Two basic assumptions underlie the field of OB (Greenberg and Baron 2003). First, OB emphasizes the dynamic in organizations. Often referred to the work by Katz and Kahn (1978), organizations constitute “open systems of roles” (p. 187). Human organizations are not simply structured as static physical components, but rather as a pattern of acts. After employees have been formally selected and trained, dynamic processes including role sender, receiver, and feedback loops take place. All employees in the organization are linked to a set of other employees. Through interaction, input is converted into output in an ever-changing fashion. Second, OB postulates a contingency approach. That is to say that additional to the personal characteristics of the employees, situational factors must be considered (see Fig.  2.1). The interplay of personality and situation (Johns 2006) as well as of communication (Hinner 2002) influence human behavior. These two assumptions of OB describe the behavior of employees in organizations as complex, dynamic, and depending.

12

2  Employees in Organizations

OB as a research field has to deal with several challenges and opportunities (Robbins 2001; Georg and Jones 2008), namely, facing globalization, adapting works and employments, stimulating innovation, and emphasizing ethical behaviors. Facing globalization refers to the fact that an increasing number of companies extend their business to international markets. On the one hand, organizations therefore send expatriates to manage their work abroad. On the other hand, more employees with foreign roots, including refugees (Rinne and Zimmermann 2015), need to be integrated into domestic enterprises. Worldwide, foreign workers maintain a significant share of the workforce (Werner 2002). They all bring their culturally shaped qualifications and motivations with them, which need to be considered by mangers and OB research. Even without emigration, international business and trade already demand the understanding and appreciation of intercultural differences (Nowak and Dong 1997). This might be illustrated more easily for the employee loyalty case. A certain concept of employee loyalty from a European cultural context such as Germany (see Sect. 5.3) might not correspond with a concept from an “opposing” East Asian cultural context (see Sect. 5.4). If those fundamental intercultural differences are neglected, recommendations for theory and practice (see Sects. 9.2 and 9.3) would come to nothing. The challenges and opportunities of OB, the two basic assumptions, and the OB research model as a whole are founded on solid theories. The presentation of this theoretical foundation will be addressed in the next section.

2.2  Theoretical Foundation of Organizational Behavior OB is considered an applied science that is built on a solid theoretical foundation or in Lewin’s words, “nothing is as practical as a good theory” (Lewin 1945, p. 129). Economic organization theory pioneered the theory development of OB in a sense that both, neoclassical and neoinstitutional theory, originate from analyzing the individual. Organizations are understood as the result of the behavior and the decisions of their members. Economic theories are also based on the assumptions that members of an organization strive to maximize their individual benefit. OB can be assigned to the economic organization theory in the wider sense, but evaluates individuals more from a behavioral than from an economical perspective (Picot et al. 2015). Scientific investigations of the behavior of individuals in organizations started at the end of the nineteenth century at the time of the industrial revolution. Small crafts productions were replaced by large manufactories, which raised the issue of how manifold and diverse people can work together (Georg and Jones 2008). The resulting theoretical works until the mid-1950s established the field of OB and covered more general topics. Therefore, they can be termed as “preorganizational behavior theories.” The following OB theory can be subdivided into “first-generation theories,” between the mid-1950s to the early 1970s, and “second-generation theories,” between the mid-1970s to the 1990s (Miner 2003).

2.2 Theoretical Foundation of Organizational Behavior

13

The investigations of Taylor, which led to the field of scientific management (Taylor and Roesler 1919) or Taylorism, respectively (Meister and Meister 2011), can be understood as the foundation of preorganizational behavior theories. As an engineer, Taylor applied scientific methods to economic thinking and a moral concept of hard work (Reimer 2005). The resulting high degree of division of labor, separation of managers and workers, and strict control of the workers have been criticized on the one hand (Bokranz and Landau 1991; Meister and Meister 2011), but influenced the organizational structures in most companies on the other hand (Bullinger 1995). The hard working employees should decisively benefit from increases in productivity and profit (Taylor and Wallichs 1920). Taylor polarized, but shaped modern work and time studies (Bokranz and Landau 1991) and set the starting point for all subsequent scientific investigations of human behavior in organizations. Opposite to the assumptions of Taylor, the human relations movement hypothesized that the work performance of employees not solely results from object working conditions, but even stronger from the social conditions at the workplace (Holtbrügge 2004). The human relation movement started from experiments of the psychologists’ group around Mayo and Roethlisberger and conducted studies at the Western Electric’s Hawthorne Plant between 1924 and 1932. Beyond doubt, the experiments heralded a new era of combining theory and practice in management (Walter-Busch 1989). Yet, criticism ranges from weak experimental design and mixed results (Levitt and List 2011) to misleading conclusions of the Hawthorne experiments (Yorks and Whitsett 1985). However, Mayo and colleagues called a new of thinking into preorganizational research, namely, that the attitude and communication processes of employees need to be understand in order to decipher their behavior (Greenberg 2005). The studies of Taylor and Mayo can be considered as fundamental for the theoretical development of the OB field. In comparison with five other preorganizational behavior studies, contemporary OB experts rated the theory of bureaucracy by Weber as even more significant (Miner 2003). The experts scored the value of each theory on three categories: if the theory (1) predicted the behavior of humans well, (2) generated significant research, and (3) had viable implications for practice. Hence, Weber’s work cannot be neglected in connection with the OB theory development. Weber, as sociologist, investigated the influence of culture on human behavior (Swidler 1986) and the phenomena of sovereignty in an organizational context. He assumed that the purest form of rational sovereignty is found in the bureaucracy model (Reimer 2005). The bureaucracy model thereby is characterized by clear regulations of hierarchies, resource allocation, and actions. Beyond that, the organization is based on written documents, only qualifications are crucial for the recruitment and promotion of the employees, spans of control are narrow, and compensation is fixed. The conceptual similarity of the bureaucracy model to Taylorism brings along some critique. At the core of the critique, employees become interchangeable, and strict rules, structures, and processes restrict change and innovation (Kirchler et  al. 2005). Nevertheless, the relevance of the bureaucracy

14

2  Employees in Organizations

model is subject of discussion to date (Olsen 2005). Even though the word “bureaucracy” is weighed down with negative connotations, its functional necessity remains valid (Olsen 2008). The scientific management, the human relations movement, and the bureaucracy model are at the core of the preorganizational behavior theories. According to Miner (2003), at least 66 noteworthy theories followed that in sum represent the theoretical foundation of OB.  These 66 first- and second-generation theories of OB can be grouped into the four categories: motivation and perception, leadership, organizational decision-making, and organizationwide concepts. As the OB experts in Miner’s study assessed every of the 66 theories, the most influential theory for every category can be ascertained. In the following, each category and the respectively highest scored theory will be presented in an overview. For the first category, motivation and perception, perception has already been presented in the previous section. In short, sensory organs are permanently flooded with stimuli. Accordingly, not all stimuli are processed by a person, but rather are selected and structured in vivo. The stimuli is then interpreted and might be reflected as a certain behavior (Staehle et  al. 1999). In many cases, the perception is incongruent with the objective reality as perceptions are often subject to distortions (Strecher et al. 1995; Tang and Harvey 2004; Coulter and Coulter 2007). Motivation, the other part of the first category, is described in various forms (Weiner et al. 1994) and can be understood as a process as well. This process starts with a particular impulse, which is led into the direction of a certain objective, and that maintains until this objective is finally reached. Within motivation, intrinsic and extrinsic motivation can be distinguished. For the intrinsic motivation, the final aim or experience constitutes the reason for the internal motivation. Extrinsic motivation, on the contrary, takes place when the final aim is accompanied by additional external rewards (Kirchler and Walenta 2005). One of the most influential theories of motivation is represented by the expectancy theory of Vroom. This theory tries to explain the behavioral intentions of individuals when they have to choose between alternative behaviors (Snead Jr. and Harrell 1994). Its premise is that people only make great efforts if a desired objective can be achieved. Performance motivation is, thus, predicted not only by a person’s predisposition and socialization but also by the perceived likeability to reach a certain achievement with an effort and the relative benefit of the achievement. The working motivation of an employee is the product of valence, instrumentality, and expectations of the employee (Holtbrügge 2004). Valence is embodied as the subjective preference of certain circumstances for an individual. Instrumentality means the expectation that the benefits of the achievement meet considerable needs and expectancy represents the subjectively perceived probability of occurrence of an action result (Sheridan et al. 1973; Picot et al. 2015). Although the expectancy theory by Vroom can be criticized to the end that the rationality of humans is bounded, action alternatives of employees are limited, the independency of the theories’ variables is not always proven, as well as that definitions and distinctions of variables remain partly imprecise. It still essentially contributes to an improved understanding of working motivation (Lawler III and Suttle 1973; DeSanctis 1983; Holtbrügge 2004; Parijat and Bagga 2014).

2.2 Theoretical Foundation of Organizational Behavior

15

The second category of OB theories is leadership. First of all, leadership is closely related to management, but has to be separated (Reimer 2005). Management focusses on control processes and systems of organizations, whereas leadership intends to influence the people in organizations. Leadership activities therefore include planning, conducting, and controlling the human potential with the leadership aim to harmonize human resources with internal and external stakeholders of the company (Link 1996). Leaders can apply different leadership styles, meaning the relatively stable and consistent behavior patterns of a leader in exchange with the employee. There seems to be consensus that an optimal leadership style is not exciting (Staehle et  al. 1999). However, the transformational and transactional leadership theory by Bass (1990) is widely acknowledged in the scientific community. At the core of the transformational and transactional leadership theory is the postulated superiority of the first leadership concept over the latter (Bass 1990). For the transformational leader, the focus is on the role model effect of the leader, and for the transactional leader, an exchange of contributions between leader and member is assumed (Walenta and Kirchler 2005). Charisma, inspiration, intellectual stimulation, and consideration of the individual are elements of transformational leadership behavior. Conversely, contingent rewards, active and passive management by exceptions, and laissez-faire style are assigned to the transactional leadership behavior. As inherent for complexity-reducing theory, also Bass’s theory is subject to criticism. The theory does not (1) particularly explain how personality of the leader gives rise to one of the two leadership concepts, (2) address circumstances under which transformational leadership might be ineffective, and (3) present a satisfying operationalization with the “Multifactor Leadership Questionnaire (MLQ)” (Kuhnert and Lewis 1987; Sarros and Santora 2001; Gebert 2002; Yukl 2013). However, data analyses confirmed the great importance of transformational leadership as it is positively related to performance parameters, including innovative capability of research and development (R&D) teams and financial goal achievement in strategic business units (Bass et al. 2003). Decision-making is considered the third category of OB theories. In decision-­ making theory, decisions are generally understood as the more or less deliberate selection of one of many action alternatives (Laux 1995). Decisions, also in the organizational context, depend on the number of accessible alternatives and decision steps, the consequences, the routine of the decision makers, as well as on the decision makers’ knowledge, motivation, and emotions. With regard to the decision-­making risk, reliable and risky decisions are differentiated. Both types have an impact on the goodness of decisions, whereas the goodness of decisions is further influenced by the quality of the decision, acceptance of the result, time target achievement, and ethical standards (Bamberg and Coenenberg 2004; Kirchler and Schrott 2005). Decision-making theory is strongly characterized by the theory of administrative behavior (Simon 1997). The value of the theory of administrative behavior is that it does not emphasize on the actual “doing” in organizations, but on “deciding” what to do. Simon explains that “… decision-making processes hold the key to understanding organizations” (1997, pp. ix–x). Thereby, Simon understands

16

2  Employees in Organizations

decision-making processes not simply as decision logic, but merely stresses the human side of decision-making. Two premises provide the foundation of the theory. First, humans’ rationality is bounded, because their information processing capacities are limited. Second, the humans’ willingness to become involved in a company is restricted. The behavioral theory of administrative behavior is related to the economic neoclassical theory, where rational selections constitute decisions. The difference is that decisions from the theory of administrative behavior are analyzed from an organizational perspective, take the influence of the decisions characteristics into account, and are based on limited information and bounded rationality (Berger and Bernhard-Mehlich 2006). As limitations of the model, it has been mentioned that rational decision-making might occur in a fashion that is not yet considered and that unethical decision-making processes might not be detected (Brady and Woller 1996). However, March and Simon (1958) are said to be pioneers of decision-making theory and research (Weinert 2004). The fourth and last category of OB theories encloses organizationwide concepts, which subsumes, by and large, system concepts and bureaucracy-related concepts. The most influential theory in this category is the open system model by Thompson as set forth in the next paragraph. The theory belongs to the system concepts that received higher appreciation from the OB experts than bureaucracy-related concepts (Miner 2003). The category of organizationwide concepts is even more diverse than the before mentioned. Therefore, only the two aspects, contingency and culture, will be highlighted. Contingency in this context means that different types of organizations are the result of different environmental conditions (Staehle et  al. 1999). Organizational culture refers to the fact that organizations distinct from each other due to shared meanings of the members (Robbins 2001). It is shown that the contingency approach and the cultural approach supplement each other and that a simultaneous application by the management can lead to higher performance (Chu 2001). As they deny the postulate of a “one best way” (Kirchler et al. 2005), both aspects once again enrich OB theory. The open system model suggests that organizations form subsystems. These subsystems receive, for example, inputs from the environment, which they transform into outputs. The outputs, for their parts, contribute to goal attainment in a sense that they are functional for other subsystems or environmental systems (Staehle et al. 1999). In his model, Thompson also focusses on how interdependences between tasks affect the organizational structure and technologies within a company. Low task interdependences, that is, humans, machines, and tasks work independently, plead for standardization and mediating technologies. High task interdependences, that is, the output of one process represents input for another, plead for reciprocal coordination and intensive technologies (Jones and Bouncken 2008). Critics of this approach say that the assertions raised by Thompson are difficult to understand (Takahashi 2016) and that the open system model “… does not really satisfy the conditions of an open system” (Pondy and Mitroff 1979, p.  3). Even if much of Thompson’s work was theoretical in nature, his propositions and strategies made an important contribution to OB theory, for example, on the reduction of technological and environmental dependence (Tushman 1977).

2.3 Employees in the Service Industry

17

In summary, preorganizational behavior theories, such as scientific management, human relations movement, and the bureaucracy model, paved the way for a solid theory development in OB and for models like the OB research model (see Fig. 2.1). The four categories of OB theory, motivation and perception, leadership, organizational decision-making, and organizationwide concepts, demonstrate its impact on the input level and output process of the OB research model and that OB has been increasingly developed as a mature science. This becomes visible not only through the high quantity of OB theory but also through their increasing quality in the sense of validity. However, it is important to emphasize that OB is defined as an interface between theory and practice. A stronger focus on theory brings along the threat to neglect practical relevance. In this respect, Miner reminds, “yet we have to a degree lost sight of the usefulness criterion, and the matter of practical application…” (2003, p. 262). Thus, more recent theories and concepts in OB, such as in conjunction with the concept of employee loyalty, have to build on the tradition of high theoretical validity and at the same time determine their practical necessity.

2.3  Employees in the Service Industry In the OB research model (see Fig. 2.1), it was shown that the behavior of employees is influenced by the situation and contingency circumstances. In this respect, the industry to a large extend affects the required skill set, the organizational culture, and therefore the behavior of employees (Kong and Jogaratnam 2007; Nagashekhara and Agil 2012). This section sets out to describe how the characteristics of the service industry affect the employees. Services show special characteristics, such as immateriality, non-suitability for storage, location binding, and direct customer exchange (Peters 1992; Schmidt 2000). These require corresponding capabilities from the company (Noch 1995; Scholl 2012) and especially from the employees (Berry and Parasuraman 1992; Payne 1993; Illeris 2002). Therefore, the importance of the service industry, the specific nature of services, the importance of employees in this particular industry, and the resulting corporate tasks will be described. In Europe, nearly 74% of the gross value added belonged to the service industry in 2015. Nineteen percent of value added came from the production industry and only 7% were assigned to agriculture industry (European Union 2018). For Germany, the service industry is similarly important. About 68% of the value added resulted from services in 2016. Therefore, nearly four of five employees were employed in the service industry in the same time (Statistisches Bundesamt 2018). Compared to the constantly rising employments in the service industry between 1991 and 2017, employments in the production industry and in agriculture, forestry, and fishing mainly decreased or stagnated (see Fig. 2.2). The definition of services reflects their specific nature, as services are potential-, process-, and result-oriented. Potential orientation means that services constitute the potential to be provided and used as independent and marketable expertise.

18

2  Employees in Organizations 35

Employees (Mio.)

30 25 20 15 10 5 0

1991

1995

Service industry

2000

2005

Year Production industry

2010

2015

2017

Agriculture, forestry, and fishing

Fig. 2.2  Employment in Germany by industry from 1991 to 2017. (Source: Statistisches Bundesamt (2018), p. 359)

Process orientation refers to the fact that services are created by combining ­internal factors, for example, premises and employees, with external factors that cannot be affected by the service provider, for example, customers. Result orientation makes clear that the service provider benefits to customers and their objects (Meffert and Bruhn 2012). The three dimensions of services derive from their distinctive properties. Services are intangible goods that make it difficult to evaluate their quality a priori. Services cannot be stored, because consumption and production take place simultaneously. Further, they are created in direct contact with the customer, are often tied to a specific location, and are irretrievably lost after their consumption (Peters 1992). The broad consensus regarding the properties of services is in sharp contrast to the heterogeneous typologies of services. Manifold typologies of services can be found (Bieberstein 1995; Schmidt 2000; Corsten and Gössinger 2007). Bruhn and Meffert (2012), for example, refer to the type of service creation and the relation between service provider and customer. The service can be created either continuously or discreetly. The relationship between service provider and customer can be either similar to a membership or informal. Another typology of the authors renounces blending the time and relationship dimension and, hence, might be more suitable. Also applying two dimensions, this typology visualizes whether the receiver of the service is a human or an object and whether the service process is tangible or intangible. This typology is already close to the provider–customer typology (Haller 2005), which is shown in Fig. 2.3. Particularly, the provider–customer typology by Haller (2005) attempts to systemize the service itself. If the service is carried out for an object of the customer,

2.3 Employees in the Service Industry

19

Fig. 2.3  Typology of services based on the provider–customer relationship. (Source: Translated and adapted from Haller (2005), p. 16)

the focus is mainly on the outcome (e.g., repair or laundry). If the service for the customer as person is carried out by an object of the provider, the focus is mainly on the process (e.g., hotel and rental car). The most complex services arise if the service is both, provided by and directed for a person. In this case, the outcome and the process define the perceived service quality (e.g., healthcare and consulting), what must be considered for the service development. The definition, dimensions, and typologies of services all emphasize the importance of the employee for the service creation. Contrary to critics (Corsten and Gössinger 2007), some authors plead for adding personnel policy as a “fifth P” to the “traditional 4 P’s of operational marketing,” namely product, promotion, place, and price policy (Bieberstein 1995; Schmidt 2000; Bruhn and Meffert 2012). Thereby, four external policies are combined with one internal policy. In the same vein, other authors highlight the importance of employees for services and refer to the concept of “internal marketing” (Grönroos 2015). This means that services of the organization must be market to the internal group of employees first, before services can be valuable for the external customers. In brief, the concept of internal marketing and the 5 P’s approach appreciate employees in service industry specifically. An investigation of the reasons for customer losses in the service industry strengthens the employees’ importance. Only less than one third of customer losses can be explained by insufficient quality of supply, exorbitant prices, and other causes together. Significantly, 68% of the customers are lost due to the behavior of employees (Scheuer 2011). The relevance of employees can also be shown in a more positive light. Customers show trust in employees first and, only then, in the service and the organization (Grund 1998). Employees act as brand ambassadors and trigger customer satisfaction (Fichtel and Specht 2008; Kilian 2012). They communicate the service potential and act as quality indicators of an organization (Bruhn and Meffert 2012). Beyond, the creativity of employees is the starting point for service innovation (Biermann 1999; Coelho and Augusto 2010) and satisfied employees engage with an entrepreneurial spirit (Noch 1995; Haller 2005). Bearing

20

2  Employees in Organizations

all this mind, the know-how of service employees represents a market entry barrier for competitors (Corsten and Gössinger 2007) and a competitive advantage for companies (Boxall 2003). Similar to the internal marketing concept, the “service-profit chain” is likewise centered around the interdependency of employees, customers, and organizational profit (Gardini 2014). The entire chain as described by Heskett and colleagues (1994) derives from internal service quality that drives employee satisfaction. Satisfaction, in turn, positively influences employee retention and productivity, the driving forces of external service quality. In course of the chain, service value leads to customer satisfaction and loyalty. Finally, loyal customers repeat business and refer the company, which increases revenue growth and profitability. Most of the chain links directly influence internal service quality and employee satisfaction in return to close the chain loop. On the one hand, critics claim that not all chain links can be proven empirically (Schwetje 1999; Schwetje 2000) or that several links are nonlinear and reciprocity between some variables can be found (Dean 2004). On the other hand, the service-profit chain is widely applied and the model is empirically supported in general (Loveman 1998). Some research groups established their own model, close to the service-profit chain. The “employee-customer-profit model” is such an example (Rucci et  al. 1998). In order to lead 300,000 employees best possible, the model’s core is comparable with the one of Heskett et al. (1994). The behavior of the employees gives customers an impression of the service company, which then account for return, margins, and revenues. The authors claim that through the implementation of the model, employee satisfaction and customer satisfaction rose by 4% in each case within 12 months. This should at least translate into $200 million in extra revenues. Silvestro (2002), conversely, denies that employee satisfaction and loyalty automatically account for an increase in productivity, efficiency, and profit. He even shows evidence that the relationship between these variables in some cases is inverse. In these cases, the least satisfied employees accounted for the most profitable stores. He concludes that the typology of the service is key. Services with much customer contact, low volumes, and varying services, “… would appear to be those where employee satisfaction and loyalty can be expected to drive service profitability” (p. 46). In the typology of services based on the provider–customer relationship (see Fig. 2.3), these would be represented as services in the “person-to-­ person field” (top left). The internal marketing concept and models that link employees, customer, and the company postulate that either the employee’s satisfaction, behavior, or both must be managed by the organization in order to be successful (Haller 2005). Organizations and particularly the HR departments have a variety of activities to do so (Biermann 1999; Bruhn and Meffert 2012). Beginning with the recruitment of the right employees (Bieger 2007), the embedding in a service culture, and subsequent qualification and training (Grönroos 2015). Afterward, an appropriate compensation system and non-monetary motivation are needed (Biermann 1999). Over and above, the leaders should understand how different variables or chain links are connected, how service culture can be shaped, and how they can get to know the needs of the employees (Heskett et al. 1994).

References

21

The great significance of leadership also becomes visible in the fact that leaders can influence and build up employee loyalty (Meschke 2015). A leaving service employee entails massive decreases in customer satisfaction and high replacement costs (Heskett et al. 1994; Ramanathan and Senthil 2013). Even though employee loyalty is crucial for service companies (Chang et al. 2010), employee loyalty is a complex construct that is not well understood (Withey and Cooper 1992; Coughlan 2005). The following chapters aim at closing this research gap at least to some extent. A new concept for employee loyalty, its outcomes, and an intercultural comparison will be presented and validated empirically.

References Aguinis, H., & Pierce, C.  A. (2008). Enhancing the relevance of organizational behavior by embracing performance management research. Journal of Organizational Behavior, 29(1), 139–145. https://doi.org/10.1002/job.493. Argyle, M., Gardner, G., & Cioffi, F. (1958). Supervisory methods related to productivity, absenteeism, and labour turnover. Human Relations, 11(1), 23–40. https://doi. org/10.1177/001872675801100102. Asad, N., & Khan, S. (2003). Relationship between job-stress and burnout: Organizational support and creativity as predictor variables. Pakistan Journal of Psychological Research, 18(3–4), 139–149. Bamberg, G., & Coenenberg, A. G. (2004). Betriebswirtschaftliche Entscheidungslehre (12th ed.). Munich: Franz Vahlen Verlag. Barney, J.  B. (1986). Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review, 11(3), 656–665. https://doi.org/10.5465/ AMR.1986.4306261. Barrick, M.  B., & Mount, M.  K. (1991). The big five personality dimensions and job performance: A meta-analysis. Personnel Psychology, 44(1), 1–26. https://doi.org/10.1111/j.1744­6570.1991.tb00688.x. Bass, B. M. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational Dynamics, 18(3), 19–31. https://doi.org/10.1016/0090-­2616(90)90061-­S. Bass, B. M., Avolio, B. J., Jung, D. I., & Berson, Y. (2003). Predicting unit performance by assessing transformational and transactional leadership. Journal of Applied Psychology, 88(2), 207–218. https://doi.org/10.1037/0021-­9010.88.2.207. Berger, U., & Bernhard-Mehlich, I. (2006). Die verhaltenswissenschaftliche Entscheidungstheorie. In A.  Kieser & M.  Ebers (Eds.), Organisationstheorien (6th ed., pp.  169–206). Stuttgart: W. Kohlhammer Verlag. Berry, L. L., & Parasuraman, A. (1992). Service-marketing. Frankfurt: Campus Verlag. Bieberstein, I. (1995). Dienstleistungs-Marketing. In H. C. Weis (Ed.), Modernes Marketing für Studium und Praxis (pp. 1–414). Ludwigshafen (Rhein): Friedrich Kiehl Verlag. Bieger, T. (2007). Dienstleistungs-Management (4th ed.). Bern: Haupt Verlag. Biermann, T. (1999). Dienstleistungs-Management. Reihe Management Praxis. Munich: Carl Hanser Verlag. Blau, G. (1981). An empirical investigation of job stress, social support, service length, and job strain. Organizational Behavior and Human Performance, 27(2), 279–302. https://doi. org/10.1016/0030-­5073(81)90050-­7. Bokranz, R., & Landau, K. (1991). Einführung in die Arbeitswissenschaft. Stuttgart: Eugen Ulmer Verlag. Boxall, P. (2003). HR strategy and competitive advantage in the service sector. Human Resource Management Journal, 13(3), 5–20. https://doi.org/10.1111/j.1748-­8583.2003.tb00095.x.

22

2  Employees in Organizations

Brady, F. N., & Woller, G. M. (1996). Administration ethics and judgments of utility: Reconciling the competing theories. The American Review of Public Administration, 26(3), 309–326. https://doi.org/10.1177/027507409602600304. Braynion, P. (2004). Power and leadership. Journal of Health Organization and Management, 18(6), 447–463. https://doi.org/10.1108/14777260410570009. Brief, A. P., & Weiss, H. M. (2002). Organizational behavior: Affect in workplace. Annual Review of Psychology, 53(1), 279–307. https://doi.org/10.1146/annurev.psych.53.100901.135156. Bruhn, M. (2011). Qualitätsmanagement für Dienstleistungen. Grundlagen, Konzepte, Methoden (8th ed.). Berlin & Heidelberg: Springer Verlag. Bruhn, M., & Meffert, H. (2012). Handbuch Dienstleistungsmarketing. Planung, Umsetzung, Kontrolle. Wiesbaden: Springer Gabler Verlag. Bullinger, H.-J. (1995). Arbeitsgestaltung. Personalorientierte Gestaltung marktgerechter Arbeitssysteme. Stuttgart: Teubner Verlag. Chang, C.  C., Chiu, C.  M., & Chen, C.  A. (2010). The effect of TQM practices on employee satisfaction and loyalty in government. Total Quality Management and Business Excellence, 21(12), 1299–1314. https://doi.org/10.1080/14783363.2010.530796. Chu, W. (2001). Contingency organizations and shared values: Multiple logics in managing diversification. Asia Pacific Journal of Management, 18(1), 83–99. https://doi.org/10.102 3/A:1010617323691. Coelho, F., & Augusto, M. (2010). Job characteristics and the creativity of frontline service employees. Journal of Service Research, 13(4), 426–438. https://doi. org/10.1177/1094670510369379. Corsten, H., & Gössinger, R. (2007). Dienstleistungsmanagement (5th ed.). Munich: R. Oldenbourg Verlag. Coughlan, R. (2005). Employee loyalty as adherence to shared moral values. Journal of Managerial Issues, 17(1), 43–57. Coulter, K. S., & Coulter, R. A. (2007). Distortion of price discount perceptions: The right digit effect. Journal of Consumer Research, 34(2), 162–173. https://doi.org/10.1086/518526. Davis, J., & Wilson, S.  M. (2000). Principals’ efforts to empower teachers: Effects on teacher motivation and job satisfaction and stress. The Clearing House: A Journal of Educational Strategies, Issues and Ideas, 73(6), 349–353. https://doi.org/10.1080/00098650009599442. Dean, A.  M. (2004). Links between organisational and customer variables in service delivery. Evidence, contradictions and challenges. International Journal of Service Industry Management, 15(4), 332–350. https://doi.org/10.1108/09564230410552031. DeSanctis, G. (1983). Expectancy theory as an explanation of voluntary use of a decision-support system. Psychological Reports, 52(1), 247–260. https://doi.org/10.2466/pr0.1983.52.1.247. European Union (2018). Eurostat regional yearbook (2018th ed.). Luxembourg: Publications Office of the European Union. https://doi.org/10.2785/231975. Fichtel, S., & Specht, N. (2008). “What is beautiful is good”: Zum Einfluss der Mitarbeiterattraktivität auf die pre-encounter Erwartungsbildung von Dienstleistungskunden. In M.  Benkenstein (Ed.), Neue Herausforderungen an das Dienstleistungsmarketing (pp. 79–96). Wiesbaden: Gabler Verlag. Gardini, M.  A. (2014). Personalmanagement im Tourismus zwischen theoretischen Anforderungen und betrieblicher Realität: Eine kritische Bestandsaufnahme. Zeitschrift für Tourismuswissenschaft, 6(1), 57–73. https://doi.org/10.1515/tw-­2014-­0106. Gebert, D. (2002). Führung und Innovation. Stuttgart: W. Kohlhammer Verlag. Georg, J. M., & Jones, G. R. (2008). Understanding and managing organizational behavior (5th ed.). Upper Saddle River: Pearson Education International. Greenberg, J. (2005). Managing behavior in organizations (4th ed.). Upper Saddle River: Pearson Education International. Greenberg, J., & Baron, R. A. (2003). Behavior in organizations. Understanding and managing the human side of work (8th ed.). Upper Saddle River: Pearson Education International. Grönroos, C. (2015). Service management and marketing. Managing the service profit logic (4th ed.). Chichester: Wiley. Grund, M.  A. (1998). Interaktionsbeziehungen im Dienstleistungsmarketing. Zusammenhänge zwischen Zufriedenheit und Bindung von Kunden und Mitarbeitern. In M. Bruhn (Ed.), Basler Schriften zum Marketing (Vol. 4, pp. 1–402). Wiesbaden: Gabler Verlag.

References

23

Hall, R. (1992). The strategic analysis of intangible resources. Strategic Management Journal, 13(2), 135–144. https://doi.org/10.1002/smj.4250130205. Haller, S. (2005). Dienstleistungsmanagement. Grundlagen, Konzepte, Instrumente (3rd ed.). Wiesbaden: Gabler Verlag. Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr., & Schlesinger, L. A. (1994). Putting the service-profit chain to work. Harvard Business Review, 72(2), 164–174. Hinner, M. B. (2002). Communication science: An integral part of business and business studies? Freiberger Arbeitspapiere, No. 2002/13, Technische Universität Bergakademie Freiberg, 1–42. Holtbrügge, D. (2004). Personalmanagement. Berlin & Heidelberg: Springer Verlag. Huselid, M. A., Jackson, S. E., & Schuler, R. S. (1997). Technical and strategic human resource management effectiveness as determinants of firm performance. Academy of Management Journal, 40(1), 171–188. https://doi.org/10.2307/257025. Illeris, S. (2002). Are service jobs as bad as theory says? Some empirical findings from Denmark. The Service Industries Journal, 22(4), 1–18. https://doi.org/10.1080/714005095. Jehn, K. A. (1995). A multimethod examination of the benefits and detriments of intragroup conflict. Administrative Science Quarterly, 40(2), 256–282. https://doi.org/10.2307/2393638. John, O. P., & Srivastava, S. (1999). The big five trait taxonomy: History, measurement, and theoretical perspectives. In L. A. Pervin & O. P. John (Eds.), Handbook of personality: Theory and research (pp. 102–138). New York: Guilford Press. Johns, G. (2006). The essential impact of context on organizational behavior. Academy of Management Review, 31(2), 386–408. https://doi.org/10.5465/AMR.2006.20208687. Jones, G.  R., & Bouncken, R.  B. (2008). Organisation. Theorie, Design und Wandel (5th ed.). Munich: Pearson Studium. Jost, P.-J. (2000). Organisation und Motivation. Eine ökonomisch-psychologische Einführung. Wiesbaden: Gabler Verlag. Katz, D., & Kahn, R. L. (1978). The social psychology of organizations (2nd ed.). New York: Wiley. Kilian, K. (2012). Mitarbeiter als Markenbotschafter. Absatzwirtschaft, 1–2, 44–46. Kirchler, E., & Schrott, A. (2005). Kapitel V: Entscheidungen. In E. Kirchler (Ed.), Arbeits- und Organisationspsychologie (pp. 487–581). Vienna: Wiener Universitätsverlag (WUV). Kirchler, E., & Walenta, C. (2005). Kapitel III: Motivation. In E.  Kirchler (Ed.), Arbeits- und Organisationspsychologie (pp. 319–408). Vienna: Wiener Universitätsverlag (WUV). Kirchler, E., Meier-Pesti, K., & Hofmann, E. (2005). Kapitel I: Menschenbilder. In E.  Kirchler (Ed.), Arbeits- und Organisationspsychologie (pp.  17–195). Vienna: Wiener Universitätsverlag (WUV). Kong, M., & Jogaratnam, G. (2007). The influence of culture on perceptions of service employee behavior. Managing Service Quality, 17(3), 275–297. https://doi. org/10.1108/09604520710744308. Kuhnert, K. W., & Lewis, P. (1987). Transactional and transformational leadership: A constructive/ developmental analysis. Academy of Management Review, 12(4), 648–657. Laux, H. (1995). Entscheidungstheorie (3rd ed.). Berlin & Heidelberg: Springer Verlag. Lawler, E.  E., III, & Suttle, J.  L. (1973). Expectancy theory and job behavior. Organizational Behavior and Human Performance, 9(3), 482–503. https://doi. org/10.1016/0030-­5073(73)90066-­4. Levitt, S. D., & List, J. A. (2011). Was there really a Hawthorne effect at the Hawthorne plant? An analysis of the original illumination experiments. American Economic Journal: Applied Economics, 3(1), 224–238. https://doi.org/10.1257/app.3.1.224. Lewin, K. (1945). The Research Center for Group Dynamics at Massachusetts Institute of Technology. Sociometry, 8(2), 126–136. https://doi.org/10.2307/2785233. Link, J. (1996). Führungssysteme. Strategische Herausforderung für Organisation, Controlling und Personalwesen. Munich: Franz Vahlen Verlag. Loveman, G. W. (1998). Employee satisfaction, customer loyalty, and financial performance. An empirical examination of the service profit chain in retail banking. Journal of Service Research, 1(1), 18–31. https://doi.org/10.1177/109467059800100103. Lubinski, D., & Dawis, R.  V. (1992). Aptitudes, skills and proficiencies. In M.  D. Dunnette & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (Vol. 3, 2nd ed., pp. 1–59). Palo Alto: Consulting Psychologists Press.

24

2  Employees in Organizations

Mansbach, A., & Bachner, Y.  G. (2010). Internal or external whistleblowing: Nurses’ willingness to report wrongdoing. Nursing Ethics, 17(4), 483–490. https://doi. org/10.1177/0969733010364898. March, J. G., & Simon, H. A. (1958). Organizations. New York: Wiley. Meffert, H., & Bruhn, M. (2012). Dienstleistungsmarketing. Grundlagen, Konzepte, Methoden (7th ed.). Wiesbaden: Springer Gabler Verlag. Meister, H., & Meister, U. (2011). Renaissance des Taylorismus. Warum stärkere Arbeitsteilung nicht zum Wohle älterer Mitarbeiter ist. Zeitschrift Führung + Organisation, 4(80), 260–264. Meschke, S. (2015). Führung und Motivation von Wissenschaftlern. In A. Hanebuth, R. P. Lee, S.  Meschke, & M.  Nicklas (Eds.), Forschungskooperationen zwischen Wissenschaft und Praxis: Erkenntnisse und Tipps für das Management (pp.  101–132). https://doi. org/10.1007/978-­3-­658-­08495-­0_5. Miner, J.  B. (2003). The rated importance, scientific validity, and practical usefulness of organizational behavior theories: A quantitative review. Academy of Management Learning & Education, 2(3), 250–268. https://doi.org/10.5465/AMLE.2003.10932132. Mowday, R. T., & Sutton, R. I. (1993). Organizational behavior: Linking individuals and groups to organizational contexts. Annual Review of Psychology, 44(1), 195–229. https://doi.org/10.1146/ annurev.ps.44.020193.001211. Nagashekhara, M., & Agil, S. O. S. (2012). Does organizational culture influence the ethical behavior in the pharmaceutical industry? Journal of Basic and Clinical Pharmacy, 3(1), 219–223. https://doi.org/10.4103/0976-­0105.103828. Noch, R. (1995). Dienstleistungen im Investitionsgüter-Marketing. Strategien und Umsetzung. In P. W. Meyer & A. Meyer (Eds.), Schriftenreihe Schwerpunkt Marketing (Vol. 36, pp. 1–253). Munich: Verlag der Fördergesellschaft Marketing (FGM). Nowak, L., & Dong, D. (1997). Intercultural differences between Chinese and Americans in business. Business Communication Quarterly, 60(1), 115–123. https://doi. org/10.1177/108056999706000109. O’Reilly, A. O., III, Chatman, J., & Caldwell, D. F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34(3), 487–516. https://doi.org/10.2307/256404. Olguín, D. O., Waber, B. N., Kim, T., Mohan, A., Ara, K., & Pentland, A. (2009). Sensible organizations: Technology and methodology for automatically measuring organizational behavior. IEEE Transactions on Systems, Man, and Cybernetics, Part B (Cybernetics), 39(1), 43–55. https://doi.org/10.1109/TSMCB.2008.2006638. Olsen, J. P. (2005). Maybe it is time to rediscover bureaucracy. Journal of Public Administration Research and Theory, 16(1), 1–24. https://doi.org/10.1093/jopart/mui027. Olsen, J. P. (2008). The ups and downs of bureaucratic organization. Annual Review of Political Science, 11(1), 13–37. https://doi.org/10.1146/annurev.polisci.11.060106.101806. Parijat, P., & Bagga, S. (2014). Victor Vroom’s expectancy theory of motivation – An evaluation. International Research Journal of Business and Management, 7(9), 1–8. Payne, A. (1993). The essence of services marketing. Hemel Hempstead: Prentice Hall Europe. Perl, E. (2003). Grundlagen des Innovations- und Technologiemanagements. In H. Strebel (Ed.), Innovations- und Technologiemanagement (pp. 15–48). Vienna: WUV Universitätsverlag. Peters, M. (1992). Dienstleistungsmarketing in der Praxis. Am Beispiel eines Messeunternehmens. Wiesbaden: DeutscherUniversitätsVerlag (DUV). Petkovic, M. (2008). Employer Branding. Ein markenpolitischer Ansatz zur Schaffung von Präferenzen bei der Arbeitgeberwahl. Munich & Mehring: Rainer Hampp Verlag. Picot, A., Dietl, H., Franck, E., Fiedler, M., & Royer, S. (2015). Organisation. Theorie und Praxis aus ökonomischer Sicht (7th ed.). Stuttgart: Schäffer-Poeschel Verlag. Pondy, L. R., & Mitroff, I. I. (1979). Beyond open system models of organizations. In B. M. Staw (Ed.), Research in organizational behavior (pp. 3–39). Greenwich: JAI Press. Ramanathan, K., & Senthil, S. S. (2013). A study on role of employee loyalty in quality service of equipment rental business. Life Science Journal, 10(9), 221–229. Reimer, J.-M. (2005). Verhaltenswissenschaftliche Managementlehre. Bern, Swiss: Haupt Verlag.

References

25

Rinne, U., & Zimmermann, K. F. (2015). Zutritt zur Festung Europa? Anforderungen an eine moderne Asyl- und Flüchtlingspolitik. Wirtschaftsdienst, 95(2), 114–120. https://doi.org/10.1007/ s10273-­015-­1787-­x. Robbins, S. P. (2001). Organisation der Unternehmung (9th ed.). Munich: Pearson Studium. Rucci, A.  J., Kirn, S.  P., & Quinn, R.  T. (1998). The employee-customer-profit chain at Sears. Harvard Business Review, 76(1), 82–97. Rulke, D.  L., & Galaskiewicz, J. (2000). Distribution of knowledge, group network structure, and group performance. Management Science, 46(5), 612–625. https://doi.org/10.1287/ mnsc.46.5.612.12052. Sarros, J.  C., & Santora, J.  C. (2001). The transformational-transactional leadership model in practice. Leadership & Organization Development Journal, 22(8), 383–394. https://doi. org/10.1108/01437730110410107. Scheuer, T. (2011). Marketing für Dienstleister. Wie Sie unsichtbare Leistungen erfolgreich vermarkten (2nd ed.). Wiesbaden: Gabler Verlag. Schlesinger, L. A., & Zornitsky, J. (1991). Job satisfaction, service capability, and customer satisfaction: An examination of linkages and management implications. Human Resource Planning, 14(2), 141–149. Schmidt, H. (2000). Marketingkonzeptionen in Unternehmen sicherheitstechnischer Dienstleistungen. Aachen: Shaker Verlag. Scholl, W. (2012). Bedingungen der Innovationsfähigkeit kleiner professioneller Dienstleistungsunternehmen. Arbeit, 21(2–3), 118–131. Schuler, R.  S. (1992). Strategic human resources management: Linking the people with the strategic needs of the business. Organizational Dynamics, 21(1), 18–32. https://doi. org/10.1016/0090-­2616(92)90083-­Y. Schwetje, T. (1999). Kundenzufriedenheit und Arbeitszufriedenheit bei Dienstleistungen. Operationalisierung und Erklärung der Beziehungen am Beispiel des Handels. In H. Meffert, H. Steffenhagen, & H. Freter (Eds.), Unternehmensführung und Marketing (Vol. 37, pp. 1–299). Wiesbaden: Gabler Verlag. Schwetje, T. (2000). Zum Einfluss der Mitarbeiterzufriedenheit auf die Kundenzufriedenheit im Handel. In H.  Woratschek (Ed.), Neue Aspekte des Dienstleistungsmarketing. Konzepte für Forschung und Praxis (pp. 173–200). Wiesbaden: Deutscher Universitäts-Verlag. Shalley, C. E., Gilson, L. L., & Blum, T. C. (2000). Matching creativity requirements and the work environment: Effects on satisfaction and intentions to leave. Academy of Management Journal, 43(2), 215–223. https://doi.org/10.2307/1556378. Sheridan, J.  E., Richards, M.  D., & Slocum, J.  W., Jr. (1973). The descriptive power of Vroom’s expectancy model of motivation. In Academy of management proceedings (pp. 414–421). Boston. Silvestro, R. (2002). Dispelling the modern myth. Employee satisfaction and loyalty drive service profitability. International Journal of Operations & Production Management, 22(1), 30–49. https://doi.org/10.1108/01443570210412060. Simon, H. A. (1997). Administrative behavior. A study of decision-making processes in administrative organizations (4th ed.). New York: The Free Press. Snead, K. C., Jr., & Harrell, A. M. (1994). An application of expectancy theory to explain a manager’s intention to use a decision support system. Decision Sciences, 25(4), 499–513. Spielberg, C. D., & Reheiser, E. C. (1994). The job stress survey: Measuring gender differences in occupational stress. Journal of Social Behavior and Personality, 9(2), 199–218. Staehle, W. H., Conrad, P., & Sydow, J. (1999). Management. Eine verhaltenswissenschaftliche Perspektive. Munich: Franz Vahlen Verlag. Statistisches Bundesamt. (2018). Statistisches Jahrbuch. Deutschland und Internationales. Retrieved on January 25, 2018 from: https://www.destatis.de/DE/Publikationen/ StatistischesJahrbuch/StatistischesJahrbuch2018.pdf?__blob=publicationFile Staw, B. M. (1984). Organizational behavior: A review and reformulation of the field’s outcome variables. Annual Review of Psychology, 35(1), 627–666. https://doi.org/10.1146/annurev. ps.35.020184.003211.

26

2  Employees in Organizations

Strecher, V. J., Kreuter, M. W., & Kobrin, S. C. (1995). Do cigarette smokers have unrealistic perceptions of their heart attack, cancer, and stroke risks? Journal of Behavioral Medicine, 18(1), 45–54. https://doi.org/10.1007/BF01857704. Swidler, A. (1986). Culture in action: Symbols and strategies. American Sociological Review, 51(2), 273–286. https://doi.org/10.2307/2095521. Takahashi, N. (2016). Strategy and structure follow technology: A spinout proposition of J. D. Thompson’s organizations in action. Annals of Business Administrative Science, 15(1), 15–27. https://doi.org/10.7880/abas.0150810a. Tang, N. K. Y., & Harvey, A. G. (2004). Correcting distorted perception of sleep in insomnia: A novel behavioural experiment? Behaviour Research and Therapy, 42(1), 27–39. https://doi. org/10.1016/S0005-­7967(03)00068-­8. Taylor, F. W., & Roesler, R. (1919). Die Grundsätze wissenschaftlicher Betriebsführung. Munich & Berlin: R. Oldenbourg Verlag. Taylor, F. W., & Wallichs, A. (1920). Die Betriebsleitung insbesondere der Werkstätten (3rd ed.). Berlin: Julius Springer Verlag. Tornow, W.  W., & Wiley, J.  W. (1991). Service quality and management practices: A look at employee attitudes, customer satisfaction, and bottom-line consequences. Human Resource Planning, 14(2), 105–115. Torrington, D., Hall, L., & Taylor, S. (2005). Human resource management (6th ed.). Harlow: Pearson Education Limited. Tushman, M. L. (1977). A political approach to organizations: A review and rationale. Academy of Management Review, 2(2), 206–216. https://doi.org/10.5465/AMR.1977.4409042. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458. https://doi.org/10.1126/science.7455683. Ulrich, D., Halbrook, R., Meder, D., Stuchlik, M., & Thorpe, S. (1991). Employee and customer attachment: Synergies for competitive advantage. Human Resource Planning, 14(2), 89–103. van Saane, N., Sluiter, J. K., Verbeek, J. H. A. M., & Frings-Dresden, M. H. W. (2003). Reliability and validity of instruments measuring job satisfaction  – A systematic review. Occupational Medicine, 53(3), 191–200. https://doi.org/10.1093/occmed/kqg038. Vey, M.  A., & Campbell, J.  P. (2004). In-role or extra-role organizational citizenship behavior: Which are we measuring? Human Performance, 17(1), 119–135. https://doi.org/10.1207/ S15327043HUP1701_6. von Rosenstiel, L. (2007). Grundlagen der Organisationspsychologie (6th ed.). Stuttgart: Schäffer-­ Poeschel Verlag. Walenta, C., & Kirchler, E. (2005). Kapitel IV: Führung. In E.  Kirchler (Ed.), Arbeits- und Organisationspsychologie (pp. 411–484). Vienna: Wiener Universitätsverlag (WUV). Walter-Busch, E. (1989). Das Auge der Firma. Mayos Hawthorne-Experimente und die Harvard Business School, 1900–1960. In H. Baier, B. Schäfers, & F. H. Tenbruck (Eds.), Soziologische Gegenwartsfragen (Vol. 48, pp. 1–239). Stuttgart: Ferdinand Enke Verlag. Weiner, B., Reisenzein, R., & Pranter, W. (1994). Motivationspsychologie (3rd ed.). Weinheim: Beltz Verlag. Weinert, A. B. (2004). Organisations- und Personalpsychologie (5th ed.). Weinheim: Beltz Verlag. Werner, H. (2002). Die Zuwanderung unter Arbeitsmarktgesichtspunkten in Australien, Kanada, USA, Schweiz. Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, 35(4), 645–662. Withey, M.  J., & Cooper, W.  H. (1992). What’s loyalty. Employee Responsibilities and Rights Journal, 5(3), 231–240. https://doi.org/10.1007/BF01385050. Wright, P. M., & Nishii, L. H. (2007). Strategic HRM and organizational behavior: Integrating multiple levels of analysis (CAHRS Working Paper #07-03). Ithaca: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies. Retrieved on August 16, 2016 from: http://digitalcommons.ilr.cornell.edu/cahrswp/468 Yorks, L., & Whitsett, D.  A. (1985). Hawthorne, Topeka, and the issue of science advocacy in organizational behavior. Academy of Management Review, 10(1), 21–30. https://doi. org/10.2307/258208. Yukl, G. (2013). Leadership in organizations (8th ed.). Harlow: Pearson Education Limited.

Chapter 3

The Concept of Employee Loyalty

Leaving employees, including former supervisors, often represent a risk to the company. When managers and employees without managerial responsibility quit their job, they do not just take their industry knowledge with them. Customer and clients might be poached. Thus, especially in the service industry, where high customer contact is standard, a sense of loyalty needs to be established within a company (Reichheld 1993; Ramanathan and Senthil 2013). In knowledge-intensive industries, employees often represent the most important and sometimes the deciding resource of an organization (Alvesson 2000). It can be considered as common knowledge that satisfied employees become loyal employees over time, which attribute to the best of the company. Nevertheless, the concept of employee loyalty still remains differently understood and loosely defined (Chang et al. 2010). In order to contribute to a more holistic understanding of employee loyalty, the concept of employee loyalty will be derived and explained in the following sections. To begin with, the employee loyalty research model is presented (see Fig. 3.1). With only minor adjustments, it follows the OB research model (see Fig. 2.1). However, Robbins (2001) does not particularly distinguish between the human input and the individual level in the OB research model. As the employee loyalty model builds on the OB model, this issue is going to be addressed and resolved. The OB and the employee loyalty research model are likewise based on the logic of the stimulus–organism–response (S-O-R) paradigm. The paradigm postulates that the processing of a certain stimulus depends on the particular organism, which leads to an individual response (Staehle et  al. 1999). In the employee loyalty research model, selected human antecedents show an impact on the employee’s loyalty on three different levels. These three different levels, in turn, influence positive and desired, as well as negative and less desired human outcomes. Minor adjustments between the employee loyalty and the OB research model are evident. First, in the context of a psychological construct, the terms antecedents and outcomes seem to be more appropriate than input and output. Second, the dyadic level replaces the individual level and characterizes the relationship between employee and

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_3

27

28

3  The Concept of Employee Loyalty

Fig. 3.1  The employee loyalty research model

s­upervisor. Third, outcomes (or outputs) of employee loyalty are separated into positive and negative outcomes. Thus, the basic framework of the OB research model is still reflected in the employee loyalty research model. Many antecedents have been found to influence employee loyalty, for example, rewards and recognition, teamwork, and work environment (Abdullah et al. 2009); structure, culture, and leadership (Cunha 2002); social interaction and trust (Wech 2002; Pereira 2009); confidence in high performance, autonomy, and goal accomplishment (Lee 2008); as well as challenge and hindrance stressors (Haar 2006; Hollebeek and Haar 2012). More frequently and in concentrated form, different authors mention employee satisfaction, perception of psychological contract, and organizational commitment. Therefore, they are highlighted as selected human antecedents. Various authors show that employee satisfaction can be treated as an antecedent of employee loyalty (Loveman 1998; Kantsperger and Kunz 2005; Borzaga and Tortia 2006; Jun et al. 2006; Matzler and Renzl 2006; Abdullah et al. 2009; Chang et al. 2010; Arsić et al. 2012). The common result is that satisfaction and loyalty belong together and that employees have to be satisfied before they start to show loyalty. Besides satisfaction, the perception of the psychological contract is ahead of the employee loyalty development (Turnley and Feldman 1999; Hart and Thompson 2007; De Vos and Meganck 2009). The psychological contract contains implicit mutual promises of employer and employee that exceed the content of the working contract. If the promises are matched, employee loyalty can arise, if the promises are violated, employee loyalty disappears. Outsourcing, for example, might represent a violation of the psychological contract, which is shown to have a negative impact on the loyalty of the employees (Douglas 2008). Finally, ­commitment can be understood as an antecedent of employee loyalty (Whiting et al.

3.1 Employee Loyalty as a Research Subject

29

2008; Kumar and Shekhar 2012; Lee et al. 2012). The more employees are committed to their jobs, the higher the employee loyalty level can be expected. The second part of the employee loyalty research model, employee loyalty levels, and the third part, positive and negative outcomes, are central concerns of the present work. Hence, they will be elaborated in the upcoming chapters. In a nutshell, the loyalty of employees breaks down into loyalty toward the supervisor, working group, and organization (Graham 1991; Provis 2005). These loyalties and further multiple loyalties of a person might compete with each other and are contingent on the situation (Graham and Keeley 1992; Pfeiffer 1992; Hart and Thompson 2007; Elegido 2013). As a result, positive (e.g., Ali et al. 1997; Leck and Saunders 1992) and negative (Hildreth et al. 2016) human outcomes become visible. Before these two parts of the employee loyalty research model are investigated in more detail, the evolvement of employee loyalty as a research subject will be shown.

3.1  Employee Loyalty as a Research Subject In Germany, “employee loyalty” is often used in a semi-scientific appearance in order to inform or advice practitioners. Employee loyalty is thereby assessed, for example, by means of: (1) the willingness to leave the company (Steven 2009; WirtschaftsWoche 2012), (2) self-evaluations of loyalty in the job (Amerland 2013), and (3) models and indices (Henneberg 2012; Schüller 2012). Although these practitioner-­oriented publications contain a considerable element of truth, they are lacking scientific rigor, which might result in misleading recommendations. This becomes particularly visible in the fact that managers seem to have very little idea about which loyalty drivers their employees appreciate (De Vos and Meganck 2009). So the question remains open, how the scientific community examines employee loyalty. Some authors praise employee loyalty and others criticize it (Mele 2001), but it seems that an objective evaluation on the importance of the concept in research is missing. A closer look at the quantity of publications that deal with employee loyalty might be a good indicator. Thus, the Google Scholar database was selected since it enables worldwide access to scholarly publishers, digital facilitators, scholarly and government agencies, as well as reprint servers (Jacsó 2005). Publications that contain the exact phrase “employee loyalty” have been considered. Besides the phrase, the search criteria also involved a dimension of time. Publications have been assigned to their decade of publication, so that the trend of the research interest on employee loyalty can be retraced. Results until December 2016 could be included and are visualized in Fig. 3.2. Considering Fig. 3.2, it has to be critically noted that scientific publishing became easier in the same pace as technology developed. More publications are digitized nowadays. However, the concern is not to absolutely compare the publication outlet in the twentieth against the twenty-first century, but to catch a glimpse on the ­development of the research interest on employee loyalty. This trend is positive.

30

3  The Concept of Employee Loyalty

Fig. 3.2  Number of publications on employee loyalty. (Date retrieved: January 2017 from Google Scholar database)

Until the 1980s, less than 500 publications can be found on the database per century. Already in the 1990s nearly 2000 publications are available. Moreover, 6000 publications between 2000 and 2009 are already surpassed in the recent decade, with 3 years more to come. So in no way it can be agreed that “… the concept of employee loyalty is dead” (Fram 1995, p. 54). It just seems that the concept evolved over time and that it is more than ever subject to intensive research. The “traditional” view on employee loyalty was shaped by job security and lifetime employments (Kumar and Shekhar 2012). Workers in companies were seen and treated as family. This implies the devotion and compliance of the employees with the instructions from the supervisor and the organization (Coughlan 2005). Loyalty was understood as blind obedience. Rational thinking, independent problem-­solving, or collective decision-making did not fit within the scope of the concept (DeMars 2014). Rather, clear chains of command must be followed in exchange for organizational family protection. But the business environment progressed and could be described as ever-changing hereafter. Mergers and acquisitions, restructuring, outsourcing, and buyouts are just a few examples of what became economic reality (Grosman 1989; Powers 2000). Hence, the traditional view on employee loyalty could no longer be applied (Kumar and Shekhar 2012). A new era for employee loyalty research started with the work of Hirschman’s (1970) Exit, voice, and loyalty: responses to decline in firms, organizations, and states. In his groundbreaking work, Hirschman focuses on how people respond to dissatisfaction. Translated in an organizational context, employees explicitly have

3.1 Employee Loyalty as a Research Subject

31

three options to respond on decline, namely exit, voice, and loyalty. Implicitly, the fourth category of neglect is complemented (Rusbult et al. 1982; Farrell 1983). Exit is an active and destructive behavior and is signified by leaving the firm and ending the relationship. “Voice is (…) defined as any attempt at all to change, rather than to escape from, an objectionable state of affairs, whether (…) to the management directly in charge, through (…) forcing a change in management, or through various types of actions and protests” (Hirschman 1970, p. 30). Voice represents active and constructive behavior. Loyalty and neglect, in contrast, are seen as passive and partially destructive (Farrell 1983). “Loyalty means passively but optimistically waiting for conditions to improve – giving public and private support to the organization, waiting and hoping for improvement, or practicing good citizenship” (Rusbult et al. 1988, p. 601). Hence, loyalty in this sense is not truly active and somewhat destructive. Neglect is described as disregardful while reducing the interest in the company, coming late, being absent, and showing higher error rates (Farrell 1983). The four variables in the exit, voice, loyalty, neglect (EVLN) framework distinguish from each other what is shown theoretically and empirically. Hence, EVLN provides a powerful tool in predicting how employees respond to dissatisfaction in their organizations (Withey and Cooper 1989). However, loyalty as described by Hirschman (1970) is less clear and leaves plenty of room for interpretations (Barry 1974; Birch 1975; Withey and Cooper 1989; Graham and Keeley 1992; Leck and Saunders 1992; Withey and Cooper 1992). As previously quoted, Rusbult et al. (1988) apply a passive view on loyalty that includes waiting and hope but at the same time, support and good citizenship are included. Graham and Keeley (1992) note that Hirschman described three different loyalties. “Unconscious loyal behavior” depicts that disagreements are still too little to be perceived. “Passive loyalty” refers to how the employees have to wait until an improvement becomes visible. “Reformist loyalty,” which is supposed to be preferred by Hirschman, contains a higher level of tolerance for divergent opinions and the activation of the company to cause change. Leck and Saunders (1992) conclude from Hirschman’s work, that loyalty is an attitude as well as a behavior. Altogether, the understanding of Hirschman’s loyalty can be described as heterogeneous. In a critical analysis, Barry (1974) points out several aspects for discussion on EVLN. The framework as constructed by Hirschman is said to be simple and combines actual different phenomena. Exit and voice, stimulated by non-loyalty or loyalty, are shown as alternatives, which is doubted. Rather, both are dichotomous which leaves the option of remaining silent and not exiting in case that there is no better alternative. Further, voice represents a natural part of loyalty in terms of fighting for the company. Leaving employees only indicate disloyalty, if they reveal secretive information to outsiders. Birch (1975) notes that Barry criticizes loyalty as a nonsignificant filler concept. He disagrees with Hirschman and Barry, in that loyalty and voice seem to be positively correlated. In troubled times, loyalists will rather tend to accept than to criticize, which pleads for an inverse correlation of loyalty and voice. In summary, the EVLN framework, and especially the concept of loyalty, is frequently discussed and its different interpretations cause criticism.

32

3  The Concept of Employee Loyalty

Besides theoretical work, loyalty within the EVLN framework has been tested empirically. By way of example, it is shown that performance appraisals that help employees to develop are positively related to employee loyalty and negatively related to neglect (Si and Li 2012). If more loyal employees are treated unfairly, voice and intentions to quit are less likely. Less loyal employees are more likely to complain and to leave the company (Boroff and Lewin 1997). Similarly, loyal employees show lower intentions to quit (Olson-Buchanan and Boswell 2002; Hoffmann 2006; Lee and Whitford 2008), use less formal voice and rarer search for new jobs (Olson-Buchanan and Boswell 2002). However, Hoffmann showed that loyal employees use both more formal and informal voice to communicate problems (Hoffmann 2006). Albeit significant overlaps in the empirical works on loyalty within EVLN, the conceptual differences are partially reflected in the empirical findings. A more comprehensive résumé on the outcomes of employee loyalty, also outside the EVLN framework, is presented in Chap. 4. In conclusion, the EVLN framework provides a valuable impulse for the research on employee loyalty that should be seen as tentative, and results from EVLN should not be over-interpreted (Farrell 1983). Withey and Cooper (1989, 1992) also contribute noteworthy remarks. Initially, they tried to operationalize employee loyalty according to Hirschman as an attitude and passive behavior, which led to unsatisfying results. As such, the authors found that an essential part of employee loyalty was not covered in their first study and that happens to be constructive and active behavior. In their subsequent study, they were able to show that the top ten prototypical loyalty behaviors are all active in nature, for example, give something extra, resolve problems, or work hard. Thus, employee loyalty from the EVLN framework leaves space for refinements. Another stream in employee loyalty research came from the “service-profit chain” (see also Sect. 2.3). As previously mentioned, employee loyalty is influenced by different variables, such as employee satisfaction (Jun et al. 2006; Chang et al. 2010). In return, employee loyalty is shown to affect different variables, such as intention to quit (Olson-Buchanan and Boswell 2002; Hoffmann 2006; Lee and Whitford 2008). This relationship of influence, effect, and outcome was further developed in the theoretical work of Heskett et al. (1994). Therein, employee loyalty is an essential part the service–profit chain, which proposes an interdependent relationship between service quality, employee and customer variables, and company key data. The chain is based on empirical findings. For instance, (1) increasing customer loyalty by 5% leads to increasing profits of about 25–85% in some cases, (2) meeting customer needs in comparison to not meeting customer needs increases job satisfaction of the employees by two times, (3) when service employees leave the company, the satisfaction of their former customers drops by 20%. These findings on the several links sum up to the service–profit chain. Some studies largely show evidence for the service–profit chain (Loveman 1998; Yee et al. 2010). At the core, employee loyalty increases organizational profit over the links service quality, customer satisfaction, and customer loyalty. Other studies criticize the nonlinearity of some links (Dean 2004) and that empirical evidence is limited (Schwetje 1999, 2000). One of the most challenging tasks remains

3.2 Theoretical Foundation of Employee Loyalty

33

the measurement of employee loyalty within the chain (Loveman 1998). If it is measured as pure tenure, employee loyalty is even found to be negatively correlated with productivity and profitability (Silvestro 2002). However, putting employee loyalty on a same level with organizational tenure should be challenged. More sophisticated studies, such as the one be Yee et al. (2010), attempt to capture employee loyalty as a psychological construct. Different indicators are queried from the participants, which in sum represent the construct. These indicators also include “willingness to stay” as an ambivalent to tenure. Additionally, “willingness to perform extra work,” “willingness to take up more responsibility,” and “sense of belonging” are considered. This measurement effort must be highlighted, but the question of how employee loyalty can be covered appropriately remains. As shown in Fig. 3.2, the research interest in employee is increasing. Partly, the integration in frameworks like EVLN or service–profit chain contributes to this trend. Nonetheless, more and more studies solely focus on the concept of employee loyalty (e.g., Schrag 2001; Coughlan 2005; Hoffmann 2006; Ramanathan and Senthil 2013; Linz et al. 2015). Most of the studies do not share a common understanding of employee loyalty and, hence, measurements differ. But operationalization that belongs to observational meaning is already the second step toward construct validity. Before that, the systematic meaning must be ensured (Peter 1981). It must be clarified on which theory a construct is grounded. In order to contribute toward a unified investigation, the theoretical foundation of employee loyalty must be set. This is done in the following section, before the concept of employee loyalty is derived from the employee loyalty research model (see Fig. 3.1).

3.2  Theoretical Foundation of Employee Loyalty Extensive studies, more or less intentional, lay the theoretical foundation for the concept of employee loyalty. In the first instance, classical economic theory is applied. Principal agent theory states that loyal employees have aligned interests with their employer, which reduces agency costs (Brown et al. 2011). The resource-­ based view provides the justification to focus on employees as the company’s most important resource. The binding of this resource is often related with employee loyalty (Smith and Rupp 2002; Si and Li 2012; Guillon and Cezanne 2014). The theory of interpersonal trust touches on employee loyalty as an important influencer of trust (Hosmer 1995; Dooley and Fryxell 1999). Social information processing theory and expectation theory show more straightforward ties to employee loyalty. The first proposes that loyal employees will develop attitudes that are consistent with their loyalty (Chen 2001). The latter hypothesizes a positive relationship between expected as well as desired rewards and employee loyalty (Linz et  al. 2015). The theory of social justice predicts that employee loyalty can only be built if justice in organizations is perceived. Beyond that, role theory postulates that ­different roles of employees may compete with each other for their loyalty (Roehling et al. 2001). All indicated theories make a valuable contribution to the theoretical

34

3  The Concept of Employee Loyalty

foundation of employee loyalty. However, they are not as intensively applied as social and organizational identity theory, social exchange theory, and theory of psychological contract within the loyalty context. Therefore, the focus is set on these three theories. Social and Organizational Identity Theory To start with, social and organizational identity theory are reviewed and connected to the concept of employee loyalty. Individuals frequently ask themselves about their identities in the manner of “who am I?” Primarily, they have two options for responding. They refer to their personal identity, including their character, personality, and skill, or they refer to their social identity, which traces back to their membership in groups (Greenberg and Baron 2003; Greenberg 2005). One specific form of the social identity is embodied by the individual’s organizational identity, their belonging to certain organizations (Ashforth and Mael 1989). Hence, personal, social, and organizational identity are directly linked together. The link from personal identity to social and organizational identification can be illustrated with a scheme. At the beginning, people receive self-confidence from their personal identity and subsequently they form their social identity. This means that individuals self-categorize themselves and others into social categories like gender, age, religion, or organizational membership. From their personal identity and self-categorization, the self-concept is developed. Depending on the reputation of different social groups, individuals want to become and see themselves as members of social groups. One can speak of social identification, when the self-concept and the social groups of a person correspond symbolically or actually with each other (Ashforth and Mael 1989; Backhaus and Tikoo 2004; Martin and Hetrick 2006). This scheme is helpful for a first understanding of the social as well as the organizational theory. Historically, “social identity” was first explained by Tajfel and Turner (1979) that dealt with conflicts between groups. Therein, they define a group as “… a collection of individuals who perceive themselves to be members of the same social category, share some emotional involvement in this common definition of themselves, and achieve some degree of social consensus about the evaluation of their group and of their membership of it” (ibid., p. 40). If individuals perceive themselves as members of a certain group, the term in-group is used which is in contrast to the out-groups. Based on the differentiation of these two group types, the so-called in-group bias can be explained. It describes the tendency of individuals to evaluate and treat members of an in-group better than members of relevant out-groups. Competitive behaviors can be easily triggered and result in favoritism of in-group members and discrimination of out-group members. The individual’s social identity helps to explain this biased behavior. First of all, individuals strive for an increased self-­esteem and for a positive self-concept. Second, social identity originates from memberships of social groups. The evaluation of those memberships decides whether the social identity is seen as positive or negative. Third, the comparison of one’s i­n-­group with relevant out-groups affects the social identity (Tajfel and Turner 1979; van Dick et  al. 2004). Thus, the

3.2 Theoretical Foundation of Employee Loyalty

35

advantageous treatment of in-group members and the discrimination of outgroup members functions to preserve the individual’s own superior identity. According to the social theory, people are likely to categorize themselves into social categories, such as groups, religion, or organizations (Georg and Jones 2008). The self-concept is formed by different identities, which stem from memberships of different social groups. “The organization” is one of these possible social groups, which in return shapes the self-concept of their members (Ashforth and Mael 1989; Dutton et al. 1994). If individuals identify and define themselves as members of an organization, they can see their destiny in this membership (Georg and Jones 2008). The higher this organizational identity gets, the stronger the organization will be perceived as an actual part of the individual’s self (Dutton et al. 1994). People strive for a separation of their own groups (Tajfel 1982). “The social group is seen to function as a provider of positive social identity for its members through comparing itself and distinguishing itself, from other comparison groups, along salient dimensions which have a clear value differential” (Commins and Lockwood 1979, p. 282). Organizational identity might occur, when the identity as a member of the organization is more important than alternative identities and when the self-concept matches with the attributes of the organization (Dutton et al. 1994). Thus, organizational identity is likely to increase with higher tenure (Hall et  al. 1970) and can result in positive and negative effects. Positive and strong organizational identity may translate into cooperation and OCB (Dutton et al. 1994) as well as goal commitment and achievement, high quality of performance, and job satisfaction (Rotondi 1975). Negative and weak perception of organizational identity, however, can cause stress and depression (Dutton et al. 1994). Social and organizational identity theory provides a valuable foundation for a first derivation of the employee loyalty concept. Strong organizational identity is shown to evoke strong organizational commitment (Puusa and Tolvanen 2006), which is an antecedent of employee loyalty, and strong employee loyalty directly (Martin and Hetrick 2006). Besides, employee loyalty might be regarded as a part of organizational identification. Identification implies a sense of belongingness, shared characteristics, and loyalty (Lee 1971; Rotondi 1975). Although employee loyalty and identification are not the same, they are closely related: “… social identification enables the individual to conceive of, and feel loyal to, an organization or corporate culture” (Ashforth and Mael 1989, p. 26). Thus, employee loyalty cannot exist without some degree of identification. During the course of research, the characteristics of identification enlarged. In earlier stages, identification was merely described as cognitive (Ashforth and Mael 1989). Later, affective (Tajfel 1982) and even behavioral characteristics (van Dick et al. 2004) were included. It may be argued that this evolution of identification had an impact on the evolution of the employee loyalty concept. In the 1970s, loyalty was only seen as attachment to an organization. In more recent research, moral characteristics and a focus on behavior are being added (Coughlan 2005). As employee loyalty is related to identification, both should be viewed in a more comprehensive fashion.

36

3  The Concept of Employee Loyalty

The same applies when different foci of identity and loyalty are compared. Group loyalty results from the extent to which the identity of individuals depends on their group memberships. Hence, group membership persons and more individualistic persons can be distinguished. The stronger group loyalty of individuals is pronounced, the stronger they identify with their group (Van Vugt and Hart 2004) and the stronger they are motivated to enhance group standing and prestige (James and Cropanzano 1994). However, the group is only one reference object. Puusa and Tolvanen (2006) see identity on three levels: the individual, the group, and the organizational level. Similarly, van Dick et al. (2004) refer to career, team, and organization as different foci of identity. Identity is said to be robust, constituted in social interaction and through comparisons with others, as well as multiple and contextual (Alvesson 2000). Hence, multiple social identities are present in certain contexts and in others not (Ashforth and Mael 1989; Dutton et  al. 1994). Depending on which reference object individuals identify with, also different reference objects of loyalty exist, for example, loyalty to client, loyalty to company, or loyalty to working group. This seems to impact organizations heavily. Loyalty to the working group, for example, is the most likely reference object for an exit. If working colleagues strongly identify with each other, they might leave together and start their own company. Even if they stay, a “we” versus “them” mentality might develop (Alvesson 2000), which can extend to negative groupthink. Further loyalty problems that might arise from identity are presented as “extreme loyalty” or “blind loyalty.” Identity theory states that the working environment shapes our identity. Once our organizational identification completely conforms to our personal identity, extreme loyalty can derive. If the self-esteem only stems from the work, then the perception is distorted, other interests are replaced, and the moral ability to judge may suspend (Schrag 2001). On the contrary, positive organizational identity attracts employee loyalty. This distinctive identity might be shown by wearing the name or the logo of the company during leisure time. Furthermore, due to identification, employees keep on believing in management, even if they act wrong (Ashforth and Mael 1989). However, if decisions and behaviors are not questioned anymore, the danger arises that employees become blindly loyal (Ewin 1993). To summarize, social and organizational identity theory contributes to a large extent on the employee loyalty concept. First of all, it was shown that employee loyalty cannot exist without some degree of identification. Moreover, employee loyalty was found to have different characteristics and reference objects as a result of manifold identifications. This, however, may cause some problems. Excessive loyalty to single reference object as well as extreme and blind loyalty might develop. Under considerations of social and organizational identity theory, employee loyalty has the potential as vice and virtue at the same time. Social Exchange Theory Another theory that serves to derive the concept of employee loyalty is the social exchange theory. In the proper sense, it can be argued that the social exchange ­theory does not represent an actual theory. Rather, it might represent on overarching frame that bundles a variety of theories (Emerson 1976). Cropanzano and Mitchell

3.2 Theoretical Foundation of Employee Loyalty

37

(2005), however, argue that the social exchange theory acts as one of the most important theories for explaining workplace behaviors with roots at least in the 1920s. At the core of social exchange are a number of interactions that result in obligations (Cropanzano and Mitchell 2005). Individuals tend to seek balanced exchange relationships. When employees receive beneficial treatments, they create feelings of obligation and are willing to positively respond on this treatments (Roehling et al. 2001). Through repeated exchanges of benefits, trust arises between the exchange partners (Wech 2002). In this sense, Blau defines social exchange as “… voluntary actions of individuals that are motivated by the returns they are expected to bring and typically do in fact bring from others” (1964, p. 91). As many other behaviors at the workplace, social behavior is contingent on the context and the situation. No set of rules can predict the exchange relationship of two partners under all circumstances (Bateman and Organ 1983; Kidder 2005). Thus, social exchange can only provide the basics for predicting social exchange-related behaviors. After an extensive review of social exchange theory by Cropanzano and Mitchell (2005), three components can be considered as most important for explaining the theory: (1) rules of reciprocity, (2) resources of exchange, and (3) exchange relationships. Most often, rules of reciprocity are applied as interdependent exchanges in the context of social exchange theory, although negotiated and other rules are known too. Exchange relationships are interdependent and never fully dependent or independent of the other party. If one partner makes a move, then the other responds with positive behavior. These “rounds of exchange” do not need explicit negotiations and through reciprocity risk can be reduced and cooperation can be encouraged. Money, goods and services, information, status, and love thereby represent the resources of the exchange. These resources can also be presented as dichotomous. On the one hand, tangible economic outcomes refer to financial needs and, on the other hand, intangible socio-emotional outcomes refer to social needs. The exchange relationships are characterized by a constant give-and-take process. No exchange partner is willing to take more costs than the other and both are motivated to make profit out of that relationship (Staehle et al. 1999). At the other end of the scale, the social exchange relationship even has the potential to explain collaboration within groups (D’Amour et al. 2005). However, two types of social exchanges are predominant in the organizational setting. First, the leader–member exchange focuses on the exchange relationship between an employee and a supervisor (Maurer et  al. 2002). It is postulated that every leader and follower forms a unique leader–follower dyad that stems from the interactions of those two (Georg and Jones 2008). Due to resource restrictions, leaders form strong relationships with a small number of followers, the so-called in-group. Members of the in-group receive more attention and advantages than the remaining members of the out-­ group. By virtue of reciprocity and feelings of obligation, the leader–member exchange is positively related to performance and job attitudes, such as OCB (Dienesch and Liden 1986; Wayne et al. 1997). Second, perceived organizational support embodies the employees’ perception and belief that the company values contributions and takes care of its members. Employees grasp at a balanced

38

3  The Concept of Employee Loyalty

exchange relationship with their company. Hence, perceived organizational support again leads to feelings of obligation (Eisenberger et al. 1986), which are translated into high job responsibility, involvement, innovation (Eisenberger et al. 1990), commitment, and less intention to quit (Wayne et al. 1997). In sum, the social exchange theory provides valuable insights in explaining the two exchange relationships of leader–member and organization–employee. It has been shown that the theory of social exchange assumes repeated exchanges between two partners and a norm of reciprocity. This can be transferred directly to the concept of employee loyalty. Employee loyalty requires time and repeated interactions in order to emerge (Cropanzano and Mitchell 2005). Perceived reciprocity by the employee is a prerequisite of employee loyalty (Wayne et al. 1997), whereas reciprocity cannot be unilateral. In the case of high leader–member exchange, employees also receive loyalty from their supervisor (Wech 2002). Hence, social exchange theory supports the understanding for the build-up of employee loyalty over time and the reciprocity condition. Social exchange theory especially describes the exchanges between leader– member and organization–employee and their impact on employee loyalty. At the relationship between leader and member, members of the in-group are said to develop loyalty to the supervisor more likely than members of the out-group (Georg and Jones 2008). A long-term relationship with the employees is thereby an advantage for the supervisor. The supervisor can ensure more interesting and important tasks for employees with higher loyalty. As a consequence, these employees can yield higher contributions for the team (Dienesch and Liden 1986). In the same vein, perceived organizational support is shown to have a positive impact on the employee’s loyalty to the organization (Eisenberger et  al. 1990). Employees exchange their work force for expected rewards in the future and reciprocate the perception of trust through acts of loyalty. If hindrance stressors in the sense of frustration and unclear performance expectations are shaped, no or little support by the supervisor and the company is perceived, which causes non-loyalty. However, if challenge stressors in the sense of feelings of accomplishment are shaped, support by the supervisor and the company is perceived, which causes loyalty (Haar 2006; Hollebeek and Haar 2012). Thus, the perception of the exchange quality toward the supervisor and the organization strongly affects employee loyalty. More ties between social exchange theory and employee loyalty are described. First, loyalty as an attachment to a person impacts the ethical work climate (Leung 2008). Second, good working conditions foster employee loyalty that is reflected in high service quality due to the reciprocity norm (Yee et al. 2010). Third, it is shown that the leader–member exchange includes reciprocal protections to outsider as a constituent of loyalty (Dienesch and Liden 1986; Jen et  al. 2012). In return, the loyalty of the employees provides the supervisor with power (Yukl 2013). In sum, social exchange theory provides specific contributions for the employee loyalty concept. First of all, employee loyalty needs time to develop and must be reciprocated. Strong relationships between the employees and the supervisor as well as the organization lead to mutually perceived obligations, which can culminate as loyalty. Furthermore, by means of social exchange, employee loyalty is

3.2 Theoretical Foundation of Employee Loyalty

39

associated with ethical work climate, high service quality, reciprocal protections of the partners, and power for the supervisor. Theory of Psychological Contract The psychological contract provides the final constructive theoretical foundation of employee loyalty and has already been mentioned as an antecedent of employee loyalty (see Fig. 3.1). The psychological contract contains unwritten expectations and obligations of the individual employee and the organization (Rousseau 1990; Rousseau and Tijoriwala 1998; De Vos and Meganck 2009). Its perception has a strong impact on the employee’s work attitude and behavior (Rousseau 1989; Robinson and Morrison 1995; Parzefall and Hakanen 2010). The theoretical foundation of the psychological contract is manifold and includes, for example, social exchange theory (Turnley and Feldman 1999; Kidder 2005; Hart and Thompson 2007; De Vos and Meganck 2009), equity theory (Reilly et al. 1993), socialization theory, social information processing theory, control theory, and cognitive dissonance theory (Turnley and Feldman 1999). Against its strong theoretical foundations and the fact that it was first mentioned already in the 1960s (Argyris 1960), the psychological contract theory only received larger attention in research after the 1990s (Turnley and Feldman 1999). The psychological contract has been increasingly accepted as a theory (Roehling 1997) and can be described through four criteria. First, it is an implicit, not a written agreement and therefore informal (Thompson and Bunderson 2003). The more implicit and informal the contracts get, the more gray area might be filled with divergent expectations of the employee and employer (Raeder and Grote 2001). Second, it is founded on reciprocity (Coyle-Shapiro and Kessler 2002). This means, that especially employees form expectations of what they are willing to bring into the relationship and what they expect to receive in return (De Vos et al. 2003). Third, the psychological contract is subject to the perception of the single employee and, hence, the contracts differ individually (De Vos and Meganck 2009). Fourth, the contract is dynamic in nature and can be renegotiated or exited over time (Herriot and Pemberton 1997; Morrison and Robinson 1997). These four criteria offer a solid basis for a deeper insight into the theory of the psychological contract. The implicit and informal nature might be expressed best when considering the formation of the psychological contract. According to Rousseau (1989), the employee and representatives of the organization interact and form reciprocal obligations. If these obligations are consistently met over time, trust results from the relationship, which in turn creates an informal belief of reciprocal obligations. Herriot and Pemberton (1997) add that the resulting psychological contract is monitored and, if necessary, renegotiated or exited. The informal agreements of the psychological contract affect the attitudes and behaviors of an employee, which emphasizes their importance (Robinson and Morrison 1995). Reciprocity of the psychological contract is based on the employee’s wants and obligations. Wants include training and advancement opportunities, fair payment, job security, flexible and challenging work, and problem support (Robinson et al. 1994; Freese and Schalk 2008). Obligations include confidentiality, service quality, extra effort, notice prior to job change, and loyalty (Robinson et al. 1994; Freese and

40

3  The Concept of Employee Loyalty

Schalk 2008). It should be highlighted that the reciprocity is mainly focused on the employee’s side. Organizations themselves do not form psychological contracts, at best their representatives, for example, managers and supervisors, do (Rousseau 1989). Perceptions of employees about their psychological contracts have often been investigated scientifically (Tekleab and Taylor 2003). The result is not only that contracts vary individually, but also that beliefs of the employee’s expectations and obligations might not necessarily match those of their colleagues or supervisors (Morrison and Robinson 1997). Perceptions are also responsible for the dynamic in psychological contracts. If employees perceive that promises by the organization are not met, contract breaches and violations can be reported (Morrison and Robinson 1997; Raja et al. 2004). At first, the perceived breach cognitively indicates a misbehavior of the company. Afterward, the perceived violation is more emotional and starting point for a deterioration in trust. The violation of the psychological contract has negative consequences for the organization, such as declining satisfaction of the job and with the organization, intentions to leave the company (Robinson and Rousseau 1994; Raja et al. 2004), less innovative work behavior (Ramamoorthy et al. 2005), as well as declining commitment (Raja et al. 2004) and loyalty (Turnley and Feldman 1998). This provides evidence that the perception and dynamic, respectively the violation of psychological contracts are of high importance for the theoretical foundation of employee loyalty. Additional links between the theory of the psychological contract and employee loyalty can be found. Raeder and Grote (2001) predicted a more contemporary psychological contract, including high self-responsibility and skills enhancement, in place of an obsolete traditional form of the psychological contract, including lifetime employment and job security. Yet, they found stronger evidence for a continuum between the more contemporary and the traditional psychological contract. The continuum ranges from pure economic motives and no loyalty to high identification and loyalty. Similarly, Reilly et al. (1993) speak of career loyalty as the counterpart of organizational loyalty. Hart and Thompson (2007) put the idea of gradual psychological contracts and employee loyalty further. They postulate three different levels of employee loyalty that result from the currencies of the employee’s psychological contract. At the lowest level, loyalty is only transactional. Good work will be provided in exchange for fair payment. The self-interest of the employee and the organization is high and their relationship can be finished without inducing disloyalty. At the next level, loyalty is shown relational. This loyalty is based on socio-emotional aspects, like trust, between employer and employee. It requires that employees stay within the organization, even if more attractive jobs are offered. Critique on the employer is never expressed publically and as the stable relationship involves a feeling of identity and membership, it is very similar to group loyalty. On the highest level, loyalty is presented ideological. Ideological loyalty refers to a mutual obligation with regard to a joint principle. It strives for a social responsibility and additional value for the society that goes beyond the employer–employee relationship. Most often, this type of loyalty is found in nonprofit organizations. In sum, the concept of Hart

3.2 Theoretical Foundation of Employee Loyalty

41

and Thompson (2007) shows parallels with the one by Raeder and Grote (2001). It can be concluded that multiple intensities and loyalties result from different levels of the psychological contract. Multiple and in part competing loyalty thereby secure that a single loyalty does not get excessive on the continuum of employee loyalty. Another link between the psychological contract and employee loyalty is provided when considering subjectivity and reciprocity. The fulfillment of the psychological contract depends on the subjective interpretation of the employees. Employees must perceive that the reciprocity norm is met before they will develop loyalty. Thus, organizations do not have to install manifold retention practices. Rather, it is much more important that through the psychological contract promised inducements should be of subjective and reciprocal relevance for the employees (De Vos and Meganck 2009). Furthermore, the psychological contract is able to explain how turbulences in organizations affect employee loyalty (Reilly et al. 1993). Most often, the psychological contract is breached when turbulences occur. In return, loyalty to the organization declines, whereas career loyalty increases, which might culminate in intentions to quit (Turnley and Feldman 1998). Another possibility might be that only loyal employees survive the turbulences and that their employee loyalty remains stable (Reilly et  al. 1993). If loyalty declines in turbulences or, if not, depends on the fair treatment of the employees as well as on situational factors, as for instance procedural justice, positive relationships with coworkers, and low expectations of future violations (Reilly et al. 1993; Turnley and Feldman 1998). A final link between psychological contracts and employee loyalty is shown when psychological contracts are not just breached, but violated. Turnley and Feldman (1999) show in their study that violations of psychological contracts are related to increased behaviors of job search, voice, and counterproductive work behaviors, including late arrivals, wasted working time, and conduction of personal business at work. Besides, declining loyalty in terms of defending the organization resulted from the violations. After violations of the psychological contract, employee loyalty was negatively influenced the most, probably because it is the least obvious behavior employees can utilize. As violations of psychological contracts seem to be the rule rather than the exception (Robinson and Rousseau 1994; Turnley and Feldman 1998; De Vos and Meganck 2009), it might be concluded that the same applies for employee loyalty destructions. In summary, the psychological contract provides another helpful theoretical foundation of employee loyalty. It explains that a continuum of loyalty from non-­ loyalty to high loyalty exists, whereas excessive loyalty also seems to be possible. Furthermore, employee loyalty might consist of multiple loyalties, which partially compete with each other. Like the psychological contract, employee loyalty can be considered as reciprocal, but from the perspective of the employees. Their perception is highly subjectively and decides whether they perceive a fulfilled psychological contract as the basis to form loyalty. If employees perceive the psychological contract as breached or violated, which seems to happen relatively frequently, then employee loyalty is negatively affected.

42

3  The Concept of Employee Loyalty

The social and organizational identity theory, the social exchange theory, and the theory of psychological contract built the theoretical basis for the subsequent components of employee loyalty (see Sect. 3.3). Previously, however, strongly overlapping content should be mentioned. First, all three theories emphasize the importance of perception for individuals. Transferred to employee loyalty, this means that loyalty to the supervisor, the working group, or the organization is always distorted by the perception of the loyalty partners. For example, if groups or supervisors categorize employees as members of an in-group or out-group and if this estimation is in accordance with the employees’ perception, it is highly subjective. Second, trust plays a decisive role especially within social exchange and psychological contract theory. Only if organizational partners perceive reciprocated trust over time, loyalty can emerge. Third, satisfaction is frequently mentioned within social and organizational identity as well as in psychological contract theory. Whereas strong organizational identity may translate into job satisfaction, the violation of the psychological contract will lead to declining satisfaction. Thus, even though all three theories contribute to different aspects of the employee loyalty concept, synergies can be found particularly for the antecedents and outcomes of the employee loyalty research model (compare with Fig. 3.1).

3.3  Components of Employee Loyalty Underpinned by the social and organizational identity theory, the social exchange theory, and theory of psychological contract, employee loyalty as a psychological construct can be framed by different components. First, as already shown in the employee loyalty research model (Fig.  3.1), employee loyalty cannot simply be assumed as a consistent and holistic loyalty. Instead, it covers multiple loyalties depending on the reference object (Haughey 1993). Hereinafter, it will be shown that the organization, the working group, and the supervisor represent the most important reference objects of employee loyalty. Second, researchers apply employee loyalty as an implicitly remaining attitude (Matzler and Renzl 2006) or as an explicitly visible behavior (Niehoff et al. 2001). Subsequently, it will be argued that when the behavioral characteristic is applied in a broader sense, cognitive and affective attitudes are covered as well. Third, there is no univocal understanding of what is at the core of employee loyalty. Whereas some conceptualize loyalty as a single element, for example, identification (Boroff and Lewin 1997), others tend toward integrating multiple elements into the employee loyalty concept (Chen et al. 2002). In the following, the elements, namely, identification, attachment, and dedication, are selected to form the core of the employee loyalty concept. Fourth, employee loyalty was previously described as suffering in silence (Farrell 1983) or voluntary engaging (Coughlan 2005). In the sense of the present conceptualization, the nature of employee loyalty is shown to be active, voluntary, deliberate, and reciprocal. Fifth, the net benefit or profit of employee loyalty is described as positive in most studies (Yee et al. 2010), while only a few point out its potential dangers

3.3 Components of Employee Loyalty

43

(Ewin 1993). Therefore, it seems indispensable to exemplify employee loyalty as a continuum that covers the different levels disloyalty and non-loyalty, loyalty, as well as hyper-loyalty. All things considered, employee loyalty is best described through the five mentioned components: reference objects, characteristic, elements, nature, and continuum.

3.3.1  Reference Objects – Multiple Loyalties Employee loyalty covers a variety of different loyalties that depend on the reference the individuals take. “Loyalties, in other words, always have objects” (Haughey 1993, p. 5). As multiple social identities are present in certain contexts and in others not (Ashforth and Mael 1989; Dutton et al. 1994), the reference objects of employee loyalty vary as well. Loyalty thereby can be more “concrete,” to single or few persons as the family, or more “abstract,” for example, to a certain community (Aksoy et al. 2015). As consumer loyalty to a company is not abstract but concrete, employee loyalty to the organization, the working group, and the supervisor seems to represent concrete loyalties as well. Irrespectively of the context, individuals can be loyal to manifold reference objects, for example, to friends, the family and its members, or organizations (Niehoff et al. 2001), their profession or religious ideas (Alvesson 2000). By this means, multiple and often conflicting loyalties (Holloman 1991; Ewin 1993; Schrag 2001; Hart and Thompson 2007; Elegido 2013) result from different roles and identities of a person (Tabarsa et al. 2013). If employees identify with the client, that is, the customer, they might reduce costs they bring to account for the client, even if this is not in the sense of their employer (Alvesson 2000). However, for multiple loyalties, the question is not which loyalty is chosen, but how the loyalties are balanced (Randels 2001). Showing loyalty toward the employer does not necessarily mean that other loyalties in private life must suffer. On the contrary, loyalty toward family and friends can benefit from a general positive loyalty propensity (Elegido 2013). As a first reference object in the organizational context, employees are loyal to their own career, which is also presented as loyalty to self. Reilly et al. (1993) suggest two kind of loyalties that are said to be opposed, organizational loyalty on the one side, and career loyalty, on the other. The authors found that restructuring was positively related to career loyalty. Besides this intuitive finding, however, loyalty was shown to be more complex. Unlike the expectations, organizational loyalty did not decrease in times of corporate turbulences. For that reason, career loyalty cannot be understood simply as the opposite of organizational loyalty. In another study, Stroh and Reilly (1997) again defined career loyalty as the willingness to change the company in favor of the career and as the primary loyalty pursuit. Employees with higher career loyalty left companies faster. Nevertheless, those employees showed higher organizational loyalty to their new employer, and employees who stayed in their former organization showed less organizational loyalty. Leaving employees in

44

3  The Concept of Employee Loyalty

turbulent times should therefore not only be considered as disloyal. They merely have other career opportunities and express higher organizational loyalty once they arrive in a company that fit better to their needs. This leads to the conclusion, that career loyalty is neither the mere opposite of organizational loyalty, nor is it an immediate part of employee loyalty, as it does not include a counterpart to “the self.” In a work-related context, employees can be loyal to their job, that is, their profession. Jauch et al. (1978) called that professional commitment and separated it from organizational loyalty. Albeit unconscious, Jauch and colleagues already applied different terms and used “professional commitment” in lieu of “professional loyalty.” They found that loyalty to the organization and commitment to the profession are independent from each other and could not show an interaction effect of the two that would lead to higher productivity. Furthermore, commitment or loyalty to the profession seems similar to career loyalty. Especially, knowledge-based workers who are loyal to their profession focus on their career development (Xinqing et al. 2010). Like career loyalty, job, that is, professional loyalty, does not represent an immediate part of employee loyalty. Besides loyalty to the career or the job, work-related loyalty of an employee is determined mainly by the loyalty to the company, the coworkers, and the supervisor (Powers 2000). The same is shown in Fig. 3.1, where employee loyalty as an OB research object is shown on an organizational level, toward the organization, on a group level, toward the working group, and on a dyadic level, toward the supervisor. These three different reference objects directly represent employee loyalty, but also have to be investigated independently, in order to reveal potential differences and conflicts between them. Loyalty to the Organization All three main theories that lay the theoretical foundation of the employee loyalty concept assist to explain why employees show loyalty toward their organization or company. First, the employee’s organizational identity, as a specific form of their social identity, derives from their belonging to certain organizations (Ashforth and Mael 1989). The stronger employees perceive an organization as an actual part of their individual self, the higher is their organizational identity pronounced (Dutton et al. 1994). This can become evident when employees wear the name or the logo of the company on their clothes. Second, social exchange theory contributes to the understanding how employee loyalty results from exchanges between the organization and its employees. Employees exchange their work force for expected rewards in the future and reciprocate these rewards through exhibiting higher loyalty to the organization (Hollebeek and Haar 2012). Third, the psychological contract contains unwritten expectations and obligations between employee and organization (Rousseau 1990; Rousseau and Tijoriwala 1998; De Vos and Meganck 2009). These mutual obligations can be represented by loyalty in the sense that the employees work hard for the organization and that the organization supports and retains the employee whenever possible (Rousseau 1989). Organizational identity theory, social exchange theory, and theory of psychological contract equally clarify employee loyalty to the organization.

3.3 Components of Employee Loyalty

45

Loyalty depends on identification and in return, identities are created by the developed loyalties. Loyalty in the sense of well-wishing, identification, sacrifice, and reciprocity does not necessarily belong to persons. It also belongs to organizations and loyalty to the organization goes beyond the formal working contract (Schrag 2001). Regarding the definition of loyalty to the organization, Stroh and Reilly (1997) state that employees identify with and involve in their organization. Graham (1991, p. 255) names representative behaviors that “…include defending the organization against threats; contributing to its good reputation; and cooperating with others to serve the interests of the whole.” Employees who are loyal to the organization act more strongly in the sense of the company than in their one. Thus, this kind of employee loyalty is indicated by staying in the organization even in case of lower payments, bringing sacrifices for the organization, and recommending it to others as a good place to work (Lee et al. 2012). Loyalty to the organization might be the most intuitive reference object of employee loyalty. However, in order to fully cover the concept of employee loyalty, it should be supplemented by loyalty to the working group and loyalty to the supervisor. Loyalty to the Working Group Loyalty to the working group can be understood best when referring to social and organizational identity theory as well as to social exchange theory. First, whether employees are group membership persons or more individualistic persons traces back to the extent to which the identity of the employees depends on their group memberships. If they strongly identify with their working group (Van Vugt and Hart 2004) and are motivated to enhance the standing and prestige of the working group (James and Cropanzano 1994), then group loyalty of those employees is strongly pronounced. Second, social exchange relationships can contribute to an understanding of collaboration within groups (D’Amour et al. 2005). If working groups provide a benefit for employees, employees will support the groups to attain their objectives in return. Employees that identify with their working groups and that expect high benefits from them will show high levels of employee loyalty to the working group. Members show loyalty to a group because they expect security, safety, status, and prestige in return (Druckman 1994), which is of particular importance in the work setting. Working groups last over a longer period to accomplish routine and sectoral tasks. They usually have larger independence and command decision and control responsibilities (Krüger 2005). The identification and exchange processes with the working group are therefore a long-term development. Once the individual egoism is replaced with group egoism, social values are acquired from group loyalty (Oldenquist 1982). Group loyalty means that members of the group are devoted, do not publically criticize the group, and work hard to separate it from other groups. Employees with a high group loyalty tendency perform better, especially when their own group is compared with others (James and Cropanzano 1994). Lee and Whitford (2008) postulate that employee loyalty first refers to groups and extends to the ­organization only subsequently. Chang et al. (2010) found that satisfaction is built through teamwork first and then employee loyalty arises. The same applies on a

46

3  The Concept of Employee Loyalty

leadership level. Through leadership, satisfaction can lead to employee loyalty, which brings loyalty to the supervisor into focus. Loyalty to the Supervisor Social exchange theory and the theory of psychological contract theoretically underpin the loyalty of employees to their supervisor. First, like the exchange between the organization and its employees, leaders and members exchange as well. In case of high exchanges between an employee and the supervisor, the employee is likely to belong to the in-group. Members of the in-group are said to develop loyalty to the supervisor more likely than members of the out-group (Georg and Jones 2008). Second, representatives of the company, such as the supervisor, are responsible for the formation of the psychological contract (Rousseau 1989). Even though the perception of expectations and obligations between employee and supervisor can differ (Morrison and Robinson 1997), the perceived fulfillment of the psychological contract holds motivational and even health-enhancing potential for the employee (Parzefall and Hakanen 2010). An in-group social exchange as well the perception of a fair psychological contract will foster employee loyalty to the supervisor. Loyalty to the supervisor is driven by a bilateral relationship. This “one-on-one” relationship is temporary and lasts as long as both individuals stay in the same unit or organization (Souryal and McKay 1996). Loyalty to the supervisor depends on trust (Wong et al. 2002) and positively correlates with job satisfaction and intention to stay (Chen 2001). Some authors postulate that loyalty to the supervisor is stronger than loyalty to the organization (Chen et al. 2002). Especially in Asia, supervisor loyalty is of highest importance and understood as the willingness to dedicate to and follow the supervisor as well as to provide information and extra effort for the supervisor (Chen 2001; Jen et al. 2012). In sum, the reference objects that characterize employee loyalty are the organization, the working group, and the supervisor.

3.3.2  Characteristic – Attitude or Behavior Within the reference objects section (Sect. 3.3.1), it was already referred to employee loyalty as a behavior. However, it is also known as an attitude (Hollebeek and Haar 2012). Traditionally, attitudes are compiled of a cognitive, affective, and conative part (Georg and Jones 2008). Cognitive relates to information and rational content, affective is associated with feelings, and conative refers to behavioral predispositions (Dick and Basu 1994; Staehle et al. 1999). As there is no consensus about the characteristic of employee loyalty, the attitudinal as well as the behavioral possibility must both be investigated and carefully considered. Before returning to employee loyalty, an insight into the marketing literature will provide complementary information. First of all, it cannot clearly be told if c­ ognition or affect is more important for the consumers’ buying behavior (Shiv and Fedorikhin 1999). Second and more important, the discussion concerning attitude or behavior can also be found in examples of brand loyalty and consumer loyalty. For the case

3.3 Components of Employee Loyalty

47

of brand loyalty, there is confusion whether it should be understood and measured as an attitudinal process, as a behavioral process, or as both (Amine 1998; Fullerton 2005). If the researchers concentrate on measuring the attitude toward a brand, they have to rely on customer statements. If they focus on the buying process, meaning the desired behavior resulting from brand loyalty, the true reason for the purchase will not be detected (Odin et al. 2001). The option to interpose the behavior intention variable, as can be seen at consumer loyalty research, may appear as an advantage. Consumer loyalty can be described as a process, whereas cognition results in affection, which leads to conation. Conation as the behavior intention finally has an influence on buying behavior (Oliver 1999). Through figuring out the consumers’ behavior intentions, a best possible conclusion on the consumer loyalty can be prospected. In the style of consumer loyalty, employee loyalty has cognitive, affective, and conative components as well. Some studies characterize employee loyalty as cognitive and rational (Allen and Meyer 1990; Vandekerckhove and Commers 2004; Varelius 2008). Moral considerations take place before any action and are reflected in the loyalty behavior (Coughlan 2005; Leung 2008). Mele (2001) argues that if a rational or ethical component is not included, one can only speak of “pseudo-loyalty.” The affective component is always considered if employee loyalty is outlined as a feeling of something, for example, a feeling of attachment (Davis-Blake et  al. 2003; Chang et al. 2010; Yee et al. 2010). In exceptional cases, employee loyalty is exclusively measured as a feeling, for example, with the item “I feel loyal to my organization” (Brown et al. 2011). For the most part, affection is more or less intentionally considered as one of many items, for example, “I feel a sense of loyalty to my coworkers” (Coughlan 2005) or “I would feel satisfied as long as I can work under my supervisor” (Chen et al. 2002). The cognitive and the affective components form the core of an attitude and, thus, employee loyalty can be captured as the attitude toward one or more loyalty objects. Conversely, employee loyalty represents a behavior as much as it represents an attitude (Leck and Saunders 1992; Powers 2000; Hollebeek and Haar 2012; Wan 2012; Guillon and Cezanne 2014). The moral (cognitive) and the emotional (affective) parts of employee loyalty (Luchak 2003) are difficult to capture and compare, whereas the behavioral part is easier to capture, but difficult to interpret (Guillon and Cezanne 2014). It is argued that employee loyalty is a behavior to the most extent and that other concepts, such as organizational commitment, are determined as attitudes and antecedents of employee loyalty (Lee et al. 2012). In sum, it seems that employee loyalty is also an attitude but that the behavioral component, which goes beyond the behavior as described in the employment contract, is dominant (Kumar and Shekhar 2012). The direct influence of attitudes on behavior is called into question anyhow. Not more than 10% of common variance is found between measurements of attitudes and behaviors (Ajzen and Fishbein 1977; Mummendey 1988). Whether the behavioral predisposition (conative) refers to the attitude or whether it is more of a moderating variable is still under discussion (Barghorn 2010). Hence, the behavioral

48

3  The Concept of Employee Loyalty

predisposition is separated from the actual attitude and ordered in between attitude and behavior (Ajzen and Madden 1986; Ajzen 1991) – as shown in consumer loyalty before (Oliver 1999). Advantageous to this variant is that the behavioral predisposition is found to correlate highly with the actual behavior (Mummendey 1988). In order to estimate the employee loyalty levels in the best possible way, it seems most reasonable to focus on the loyalty behavior in terms of a behavioral predisposition stated by the employees.

3.3.3  Elements – Core of Employee Loyalty Reviewing the literature of the employee loyalty concept makes clear that the consensus about its components and the resulting definition is limited (Guillon and Cezanne 2014). For example, Ali et al. (1993, 1997) present that loyal employees stay attached to their company, exert extra effort when necessary, show positive attitudes to colleagues, remain open regarding organizational change, and are less absent than less loyal employees. Other authors focus on the support that loyal employees should show for their organization as well as on good citizenship (Rusbult et al. 1988; Haar 2006). Then, the question what it is that lies at the core of the employee loyalty concept arises. Chen et al. (1998, as cited in Chen 2001, p. 650 and in Wong et al. 2002, p. 885) propose the definition of loyalty to the supervisor “… as the relative strength of a subordinate’s identification with, attachment, and dedication to a particular supervisor.” As these elements can be applied in a broader and reference object-free sense, the core of employee loyalty might be understood as the relative strength of an employee’s identification with attachment and dedication to a particular employer. Even though it is not always possible to present a clear-cut distinction, the three elements, identification, attachment, and dedication, will be addressed in the following. Identification Identification is mentioned most often in association with employee loyalty. Alvesson (2000) points out that identification-based loyalty, in contrast to instrumental loyalty, represents true loyalty. Social groups and even the company itself might be an origin of social identification based on feelings of pride and belonging. On the one side, loyalty is defined as “… the degree to which a person identifies with an organization” (Boroff and Lewin 1997, p. 53) or as “… a measure of one’s identification with, and involvement in, their organization” (Stroh and Reilly 1997, p.  39). On the other side, loyalty means “… identification with the supervisor’s character and accomplishments” (Chen et al. 2002, p. 342). Thus, and as already derived from social and organizational identity theory, employee loyalty can span from identification with the organization as a whole to the people which belong to it (Graham 1991). Identification as a part of employee loyalty can be referred to relational connections. Loyalty does not exist instantly but develops over time through shared experiences. Although other organizations, working groups, or supervisors might have

3.3 Components of Employee Loyalty

49

similar characteristics, employees only express loyalty toward those reference objects with whom they have a relation. As a result, employees are devoted and care for the interests of their loyalty objects. To a certain degree and at least for some time, they even put the welfare of their loyalty objects above their own. These well-­ wishing and sacrifice are shown to reference objects with which the employee identifies rather than with others. In this regard, identification in employee loyalty also serves to separate loyalty groups from other groups (Schrag 2001). Various behaviors can be observed that stem from loyal and identifying employees. Those employees support the organization in private and in public, say good things about their jobs, and speak highly of them to friends (Rusbult et al. 1988). Furthermore, they correspond to the supervisors’ opinions, values, and decisions (Cheng et al. 2004; Jen et al. 2012), contribute to the prestige, status, and reputation of the organization and the working group (Graham 1991; James and Cropanzano 1994), and wear or generally would wear clothes with the symbol or insignia of the company (Rusbult et  al. 1988). Therefore, identification, as the first element of employee loyalty, has a great impact on attitudes and behaviors that benefit the organization and its members (Lee 1971). Attachment As one of the first depictions that found its way to employee loyalty research, loyalty was presented as a special attachment that keeps employees from letting the organization move into the “wrong direction” (Hirschman 1970; Lee and Whitford 2008). In other words, loyal employees adhere to beliefs and goals, people, groups, and organizations (James and Cropanzano 1994). Attachment is being described as a feeling (Chang et al. 2010; Yee et al. 2010) or as a behavior (Boroff and Lewin 1997). Especially the visible behaviors that result from attachment can be understood as good indicators of employee loyalty. Being a good corporate citizen is such a behavior that magnifies the intangible feeling of attachment into a more specific behavior (Coughlan 2005). More recently, Lee et al. (2012) established a connection between the attachment and the identification element. Based on other studies, they defined loyalty “…as employees’ behaviors with regard to attachment to and identification with an organization” (p. 671). Representative behaviors of the loyalty defined thus included to make sacrifices for and to stay in the organization. Making sacrifices does not only refer to working conscientiously and giving the best to get tasks done (Chen et al. 2002). In fact, it involves to actively engage (James and Cropanzano 1994), to give something extra when needed, and to do things above the call (Withey and Cooper 1992). Staying in the organization refers to the willingness to remain with the company and to turn down other jobs with higher payment (Powers 2000; Davis-Blake et al. 2003). As the second part of employee loyalty, attachment also contributes to positive organizational outcomes. Dedication Besides identification and attachment, one additional element is often mentioned in conjunction with employee loyalty. Here, it is called dedication, but other studies refer to the same element with other words, such as loyal boosterism (Niehoff et al.

50

3  The Concept of Employee Loyalty

2001) or devotion (Spalding 2007). It means an attitude and above all a behavior to demonstrate pride and support for the organization and its members (Niehoff et al. 2001). As pride and support are intuitively regarded as loyalty, dedication and employee loyalty are sometimes understood and used nearly synonymously (Lee and Miller 1999). Humans have a need to direct their dedication toward individuals, groups, or organizations and therefore loyalty can be considered as a raw expression of social nature. The need for dedication and employee loyalty forms groups from individuals (Hart and Thompson 2007). Employee loyalty cannot work without dedication. As an example, many Japanese companies do not just understand employee loyalty as an esoteric catchword. Those responsible in Japanese companies are often convinced that the organization will only be successful if all employees are truly dedicated to the organizations’ purpose. Hard work, personal sacrifice, dedication, and loyalty are gratifying for the employees and can be reached by managers when they show interest in the life of the employees (Logan 1984). Thus, neither dedication nor employee loyalty can be bought (Bolino and Turnley 2003). Several behaviors are associated with dedication in employee loyalty. First of all, dedicated employees will support their loyalty objects (Chen et al. 2002) and take responsibility if those have done something wrong (Cheng et al. 2004; Jen et al. 2012). Besides, dedicated employees defend the organization as well as its members and turn against criticism (James and Cropanzano 1994; Niehoff et al. 2001; Chen et al. 2002). They proudly promote the company and its products in public (Moorman and Blakely 1995; Podsakoff et al. 2000) and do not complain about detrimental changes (Niehoff et  al. 2001). In the same vein as identification and attachment, dedication completes the elements of the employee loyalty concept.

3.3.4  Nature – Voluntarily Engage or Suffer in Silence After confirming the reference objects, characteristic, and elements of employee loyalty, the nature of employee loyalty needs to be clarified next. In some studies, employee loyalty is used in a rather passive way in the sense of “suffering in silence” when problems occur (Farrell 1983). This view, however, contrasts with more recent studies, as the following two citations show. “Loyalty is reflected in behavior that can be tied to an implicit promise, voluntarily made by an individual in a community of interdependent others …” (Coughlan 2005, p. 46). Whereby “… one might expect that organizations that are able to deliver promised inducements throughout their retention management will receive loyalty from their employees in return” (De Vos and Meganck 2009, p. 48). It becomes clear that the loyalty of employees represents an active behavior that is deliberately chosen through an implicit promise. The loyalty decision of the employees is voluntarily made and therefore they expect reciprocal loyalty in return from the employer. In the following, the four parts of the nature of employee loyalty are discussed further.

3.3 Components of Employee Loyalty

51

Active Although Graham and Keeley (1992) note that Hirschman (1970) described three different and heterogeneous loyalties, his passive view on loyalty was often applied in the following decades. Passive loyalists are described as to “… suffer in silence, confident that things will soon get better” (Hirschman 1970, p. 38). This definition found its way into different studies that contain examinations of employee loyalty (Farrell 1983; Ping 1993; Lee and Whitford 2008). Loyalty was understood as a passive reaction to problems (Farrell and Rusbult 1992; Naus et al. 2007). Within this conceptualization, passive behaviors like waiting and hoping, saying nothing and assuming the best, abiding problems in silence, not worrying about and ignoring problems are comprised. It remains questionable that Hirschman is not clearly identifying what he means by loyalty, which may have resulted in this misleading passive view (Withey and Cooper 1989). Other conceptualizations of loyalty are also known and according to Graham and Keeley (1992), the more active “reformist loyalty” was preferred by Hirschman (1970). In Hirschman’s view (1970, p. 38), “… ‘loyalists’ will actively participate in actions designed to change (…) policies and practices.” Thus, studies that also considered active loyalty, applied a mix of passive and active loyalty behaviors (Rusbult et al. 1988; Si and Li 2012). Additional active and constructive loyalty behaviors are, for example, supporting the organization in private and public, as well as practicing good citizenship. This development seems promising. As Withey and Cooper (1989) self-critically expressed doubt about applying a passive and destructive conceptualization of employee loyalty, they carried out a special examination in this regard (Withey and Cooper 1992). In their study, they found that the top ten prototypical loyalty behaviors are all active in nature, for example, give something extra, resolve problems, or work hard. Hence, employee loyalty should be conceptualized best as an active and constructive behavior in the most part. The more recent view on understanding employee loyalty, almost exclusively, as an active behavior is demonstrated in numerous studies. Ali et al. (1993, 1997) surveyed managers about their employees’ loyalty behaviors and applied for instance items as defending and warning the supervisor or observing norms and values. The researchers entirely focused on the loyalty issue, resulting in a solid conceptualization. Similarly, following researchers paid attention to the conceptualization with the sole difference that employees self-rated their loyalty. Active behaviors of employee loyalty included saying good things about the company and defending it (Boroff and Lewin 1997; Niehoff et al. 2001; Haar 2006; Lee et al. 2012), wearing the logo or symbol of the company and showing pride in representing the company (Boroff and Lewin 1997; Niehoff et al. 2001; Haar 2006), not publicly complaining about changes (Niehoff et al. 2001), behaving morally and resolving ethical dilemmas (Coughlan 2005), as well as recommending and not leaving the company even if higher incomes and positions would be available (Lee et al. 2012). As the trend toward conceptualizing loyalty as active behavior is well grounded, it will also find application in this work.

52

3  The Concept of Employee Loyalty

Deliberate A consideration, which is not frequently conducted, is whether employee loyalty arises deliberately or unconsciously. It has been mentioned beforehand that Japanese companies and managers deliberately encourage their employees to be loyal (Logan 1984). The same applies for organizations in other cultures; however, it does not allow a statement of how aware employees themselves are of their different loyalties. However, it is said that loyal employees can deal with situations which are not considered ideal (Graham and Keeley 1992). The question concerning awareness of the employees’ of their own loyalty remains unanswered. There is some evidence that employee loyalty is deliberately chosen. Loyalty includes a positive affection for an object. As reasoning and conscious choosing follow this affection, no deliberate loyalty decision is needed so far. But loyalty is not solely affective. It includes moral which must be chosen intentionally (Haughey 1993). Hence, loyal behavior includes a high degree of reasoned calculation (Hirschman 1970; Farrell 1983). Values that provide the basis for a loyalty decision are selected deliberately (Allport 1933 as cited in Coughlan 2005) and those, furthermore, lead to a specific behavior (Coughlan 2005). Elegido (2013) already describes employee loyalty as deliberate and refers to other “well-respected authors.” Only when the employees are aware of their loyalty, they are able to identify with their respective loyalty objects. Hajdin (2005) presents the most striking explanation that clarifies why loyalty must be perceived deliberately. Customers are sometimes regarded as loyal by marketers and researchers, just because they buy the same product or brand repeatedly. However, if this happens only because of sheer habit or lack of alternatives, it would be wrong to declare this customer loyalty. This example can also be transferred to employee loyalty. Employees without other job alternatives cannot be declared loyal solely because of high tenure in their employing organization. Only if employees are deliberately aware to whom and for what reason they are loyal, one can speak from true employee loyalty. Voluntary There is broad agreement in research on the point that employee loyalty is voluntary in nature (Coughlan 2005). Loyalty cannot be bought and there is no obligation for it. The employees themselves give loyalty, for example, when they work longer as stated in the employment contract (Holloman 1991). This voluntary nature also becomes visible in many definitions of employee loyalty, which refer to the willingness to do something in conjunction with altruistic behaviors (Kumar and Shekhar 2012). Anyway, it should be mentioned that many managers do not recognize the point of voluntary nature in employee loyalty, which gives rise to tensions with ­employees. Managers are strongly bound to their work and may have an inappropriate standard of loyalty. They consider loyalty as tremendously important for the success of the company and feel an obligation of loyalty. Yet, this is a distorted perception. If one speaks about employee loyalty, the voluntary intent is meant, which cannot be subject to any obligation (Pfeiffer 1992). True loyalty is always voluntary, reasonable, active, constructive, and directed toward the good of the reference object (Mele 2001).

3.3 Components of Employee Loyalty

53

Reciprocal Unlike the above-mentioned voluntary nature, it is up for discussion if employee loyalty is unidirectional, that is one-sided by the employees, or bilateral, that is reciprocated by the employer. Advocates of the unidirectional approach claim that loyalty is only, if at all, reciprocated in an ideal case. In some cases, however, loyalty can operate one-sidedly and without reward expectations. Such examples would be the loyalty between parents and child (Larmer 1992), in marriage or friendship (Corvino 2002), in patriotism, religion, or toward pet animals (Hajdin 2005). The authors argue that in such relationships reciprocity is not a requirement of loyalty and that other moral philosophers “… have adopted definitions of loyalty which do not require an element of reciprocity” as well (Elegido 2013, p. 498). For the unidirectional approach, only verbose examples are mentioned, but a theoretical foundation is missing. Advocates of the bilateral approach claim that the company must reflect the loyalty of the employees (Powers 2000; Fischer 2004; Kumar and Shekhar 2012; DeMars 2014). When employees fully identify with, attach to, and engage in the organization, they expect something in return. Especially feedback, acknowledgment, or expression of appreciation show that the efforts of the employees are perceived. Without reciprocity, loyalty will not sustain (Schrag 2001). It might be argued that loyalty itself is not expecting a direct return (Holloman 1991). However, loyalty is built on trust and trust is mutual. The company shows trust in the employee and the employee returns trust into the company, respectively, the manager. For that reason, employee loyalty can sustain only in case of feedback and further mutuality from the loyalty objects (Haughey 1993). The bilateral approach seems to comply with a novel understanding of employee loyalty (Vandekerckhove and Commers 2004). The theoretical foundation is based on the psychological contract, which is subjective and mutual. Both parties constantly square their promises with the actual status and loyalty can result from a long-term fulfillment (De Vos and Meganck 2009). One component of the psychological contract and employee loyalty is there with the perceived mutual obligations. The more intense the exchange between employer and employee is, the stronger employee loyalty can evolve (Hart and Thompson 2007). Based on the theoretical groundwork, employee loyalty should be considered as mutual.

3.3.5  Continuum – Levels of Employee Loyalty Within the last component of the employee loyalty concept, the fluid transitions of different loyalty levels will be highlighted. At least, employee loyalty means to mutually meet the employment contract (Schrag 2001), which is a matter of perspective. From the perspective of employees, the minimum requirements on loyalty include the chance for promotion, a proper salary level among all employees, and no arbitrary job rotations. From the perspective of the organization, minimum loyalty means that employees work professionally, point out mistakes,

54

3  The Concept of Employee Loyalty

keep organizational secrets, do not badmouth, or leave the company in the middle of a project (Strange 1973). These mutual minimum requirements do not outline employee loyalty as dichotomous in the sense of either – or, or rather, on or off. Employee loyalty is complex and its levels are fluid (Hart and Thompson 2007; Elegido 2013). “Most of our loyalties are not one or the other but are somewhere on a continuum between self-interest and altruism toward the object of loyalty in question” (Haughey 1993, p.  5). Therefore, disloyalty to one reference object may represent loyalty to another at the same time (Schrag 2001). A glance at conflict research helps to understand the unapparent complexity of employee loyalty. A conflict is most often considered disturbing, since it disturbs organizational processes. However, positive aspects such as the stimulation of organizational change can result from conflicts alike. The perspective that an “optimal conflict level” must exist in order to run organizations as efficiently as possible, has become established. If the conflict level is too low, ideas and innovative strength are lacking. If it is too high, stress and decreasing rationality occur. A moderate conflict level, thus, seems to be optimal for the company efficiency (Staehle et al. 1999). Transferred, this means that loyalty is not necessarily positive and non-loyalty is not necessarily negative under all circumstances, as will be shown subsequently. Employee loyalty is referred to as a relative strength (Chen 2001; Wong et al. 2002), which indicates a continuum. Schrag (2001) paves the way to indicate four levels of employee loyalty: disloyalty, non-loyalty, loyalty, and hyper-loyalty. These levels should not be seen as highly selective, but rather as fluid boundaries on the loyalty continuum (see Fig. 3.3). Disloyalty occurs when an employee acts against the interests of the collective. Employees leaving an organization are considered as disloyal, if they reveal secretive information about their former employer (Barry 1974; Grosman 1989; Ewin 1993). Moreover, employees show disloyalty if they suggest certain behaviors and expectations, but intend to violate those. The intention to break promises and to cheat is always to the disadvantage of the company (Pfeiffer 1992; Schrag 2001). Unlike disloyalty and the understanding of laypersons, non-loyalty does not absolutely imply a negative value for the corporation. In the case of very low loyalty or non-loyalty, employees feel a certain responsibility. At the same time, however, they face a conflict of interest and a low willingness to make sacrifices for the organization. As the behavior is not (intentionally) harmful, those employees are not disloyal, nor are they loyal (Alvesson 2000). To exemplify, non-loyal employees can do a good job and might be respected by colleagues and supervisors, though they do not dedicate to the employer and search for other jobs (Elegido 2013). That is why non-loyalty stands for complying with the employment contract without being loyal or disloyal (Schrag 2001). As this whole work is addressed to employee loyalty, loyalty as a level represents the “golden mean” between disloyalty and hyper-loyalty (Mele 2001). Within a working group, for example, disagreement can be helpful to prevent groupthink, if consensus prevails again after a decision is made. Group loyalty therefore is contingent on open communication, shared information, and work directed toward group goals (Dooley and Fryxell 1999). Whatever applies for loyal groups also applies for

3.3 Components of Employee Loyalty

55

Fig. 3.3  Levels on the continuum of employee loyalty

loyal employees, and the organizational culture must be healthy (Duboff and Heaton 1999). In addition, employees may leave an organization and still show post-exit loyalty. Especially important for knowledge-intensive industries, if loyal employees leave amicably, trade secrets will remain secretive (Alvesson 2000). Loyalty is generated over time and in a healthy expression most beneficial for the organization. The last and very interesting level is stated as hyper-loyalty, but it is also known as excessive loyalty, bad loyalty, blind loyalty (Ewin 1993), or over-loyalty. Employees who show wholehearted devotion and dedication for their employer do not automatically equal hyper-loyal employees (Schrag 2001). In most cases, hyper-­ loyalty evolves if one specific loyalty has no counterpart (Haughey 1993). Then, loyalty meant well has a strong potential to hurt the organization. For example, (1) excessive loyalty of an individual may end up in counterproductive behaviors. Leaders who conduct “organizational terrorism” (Caldwell and Canuto-Carranco 2010) to increase their power and accomplish their objectives might represent such negative behavior. (2) Excessive loyalty to a group may end up in nationalism or racism (Oldenquist 1982). The danger exists that loyalty to a working group becomes too prominent and results in groupthink and unethical behavior (Strange 1973). (3) Excessive loyalty toward the organization may turn loyalists into “organizational men,” who only live for their work and suppress rational criticism (Haughey 1993; Elegido 2013). In prevention of overly unilateral loyalty, diversity,

56

3  The Concept of Employee Loyalty

calculated risk tolerance, and freedom of decision-making can be provided (Kumar and Shekhar 2012). If one is not supporting a colleague or supervisor with unethical behavior, this employee is not disloyal or non-loyal – as loyalty implies a potential danger and should not always be expected (Ewin 1993). After presenting the final component of the employee loyalty concept, a condensed definition will be presented. It should be highlighted that this definition does not claim to present the only truth, rather, it should clarify the concept under investigation. Definitions can be modified in the progress of academic discussion (Reimer 2005). For the present work, employee loyalty is understood as follows: Employee loyalty as derived from cognitive and affective processes is reflected in an active, deliberate, voluntary, and reciprocal behavior which is characterized as the relative strength of an employees’ identification with, attachment, and dedication to the organization, working group, and supervisor.

3.4  Distinction of Employee Loyalty As a psychological construct, employee loyalty is related to other psychological constructs to a greater or lesser extent. For example, loyalty is presented as an element of organizational identification in the way that organizational identity is defined as shared characteristic, solidarity, and loyalty (Patchen 1970 as cited in Ashforth and Mael 1989). The connection between employee loyalty and organizational identification has already been shown as well as the derivation of employee loyalty from identity, social exchange, and psychological contract theory. It was further shown that identity, attachment, and dedication might be understood as integral parts of the employee loyalty concept and their meaning in this regard. Besides, employee loyalty is repeatedly equated with further related psychological constructs. For instance, employee loyalty is measured as job satisfaction (Chun 2009; Belás 2012) and employee involvement and employee engagement show content-related proximity. Thus, satisfaction, involvement, and engagement will be differentiated subsequently. Additional attention is paid to the concept of organizational commitment. Some authors erroneously use employee loyalty and organizational commitment as synonyms (Atwater et al. 2000; Chen et al. 2002; Bloemer and Odekerken-Schröder 2006; Hijazi 2013). It will be shown that a distinction of those two concepts is mandatory and which characteristics aid to achieve the distinction.

3.4.1  Related Concepts In order to compare the research relevance of employee loyalty-related concepts, the exact number of publications was determined as shown in Fig. 3.2. With the aid of the Google Scholar database, the exact phrases of the concepts were applied and

3.4 Distinction of Employee Loyalty

57

divided into decades. The trend of the research interest for the four related concepts and employee loyalty is shown in Fig.  3.4. Results until December 2016 are included. As in Fig. 3.2, the line charts in Fig. 3.4 focus on the overall trend of research interest in the concepts and not on the absolute publication numbers. In general, job satisfaction and organizational commitment raised stronger research interest than employee involvement, employee engagement, and employee loyalty. Job satisfaction in particular was mentioned in 236,000 publications between 2000 and 2009. However, besides employee loyalty, only employee engagement is also set on a publication peak in the recent, yet incomplete decade. So in comparing the five concepts, one should keep in mind that employee loyalty is one of the few with a positive publication trend. However, job satisfaction, employee involvement, employee engagement, and organizational commitment are more intensively investigated to date. Job Satisfaction Job satisfaction is known as the attitude of an employee toward their work place. High job satisfaction represents a positive attitude toward the working place and job dissatisfaction represents a negative attitude toward the working place (Robbins 2001). Furthermore, job satisfaction can be defined in accordance with expectations and actual rewards as well as the result of conditioning processes. In other words, employees can be satisfied if good work is followed by rewards through the company or the supervisor and positive experiences during work correlate positively with the employees’ satisfaction (Kirchler and Hölzl 2005). The widespread understanding that satisfied employees yield a better performance is very simplified. First, performance depends also on other factors. Second, behavior cannot be explained by affect only. Third, different forms of satisfaction exist and resignation-induced satisfaction, for example, is not likely to boost performance (Reimer 2005). Therefore, high job satisfaction is not automatically a prerequisite for high performance and no causal relationship can be concluded (March and Simon 1958). Rather, job satisfaction explains the relationship with absenteeism and turnover in a modest form. Dissatisfied employees withdraw from work and show high absenteeism and turnover rates (Greenberg and Baron 2003). Job satisfaction is therefore of high relevance for practice and research, as reflected in Fig. 3.4. Job satisfaction can be understood as an antecedent of organizational commitment (Kirchler and Hölzl 2005) and employee loyalty (Loveman 1998; Kantsperger and Kunz 2005; Borzaga and Tortia 2006; Jun et al. 2006; Matzler and Renzl 2006; Abdullah et al. 2009; Chang et al. 2010; Arsić et al. 2012). It seems, thus, that job satisfaction has a direct influence on employee loyalty as well as an indirect one – while it affects organizational commitment. Altogether, the construct of job satisfaction is much more limited than employee loyalty. Job satisfaction is the attitude toward the employee’s work, whereas employee loyalty is aligned with the whole company (Boroff and Lewin 1997). Job satisfaction and employee loyalty describe varying constructs in this regard.

58

3  The Concept of Employee Loyalty

Fig. 3.4  Number of publications on employee loyalty and related concepts. (Data retrieved: January 2017 from Google Scholar database)

Employee Involvement Employee involvement is defined as the extent to which employees psychologically identify with their work and performance contributes to their self-esteem. Employees with high involvement identify strongly with their work and engage accordingly strongly (Robbins 2001; Bloemer 2010). Besides, employee involvement might be understood as an activation status, which exhibits cognitive and emotional characteristics. Person-specific involvement remains stable over time and results from different values, goals, and interests of the individual (Petkovic 2008). In sum, employee involvement is important for the individuals themselves and for the organization. Employee involvement differentiates from employee loyalty and from organizational commitment. Involvement refers rather to work and commitment rather to the whole organization (Weinert 2004), which applies for loyalty in the same way. It has been stated that greater employee involvement results in greater employee loyalty (Harris et  al. 2004). Employee loyalty can, thus, be seen as one objective of the attitudinal employee involvement (Ramsey 1991), which renders them distinct concepts. Employee Engagement In some definitions of employee engagement, satisfaction and involvement are integrated, which encourages the confusion between the concepts. Gill (2011), for example, defines employee engagement as the employee’s involvement in and satisfaction with work, whereas staff is said to be more engaging in case of healthy

3.4 Distinction of Employee Loyalty

59

relations with the employer and an interactive culture. In similarity with employee loyalty, employee engagement is characterized by the employee’s willingness to perform work above their duty. Besides the cognitive and the affective characteristic, the behavioral characteristic of engagement is strongly pronounced (Minchington 2006). Additionally, employee engagement seems to depend on reciprocity (Martin and Hetrick 2006) in a similar fashion as employee loyalty. Differences between employee engagement and employee loyalty exist as well. First, employee engagement can be understood as a rather immediate state. Organizational commitment and employee loyalty, however, are more enduring (Barrow and Mosley 2005; Guillon and Cezanne 2014). Engaged employees might lack loyalty in the long run and loyal employees might feel intermediately disengaged. Second, employee engagement is not just positively related to employee loyalty, but it can be understood as an antecedent of it (Ghafoor et al. 2011). Engagement of the employees affects their loyalty both directly and as a mediator of organizational culture and leadership style (Suharti and Suliyanto 2012). To conclude with the related concepts mentioned so far, job satisfaction and employee involvement rather represent work-related attitudes (Robbins 2001) and employee loyalty is more strongly oriented toward behavior. This evidence suggests that job satisfaction and employee involvement are more likely to constitute antecedents of employee loyalty than synonymous concepts. Although employee engagement shows a strong behavioral characteristic, it likewise might be regarded as an antecedent of employee loyalty (Ghafoor et al. 2011). Thus, job satisfaction, employee involvement, and employee engagement precede employee loyalty.

3.4.2  Organizational Commitment The concept with closest proximity to employee loyalty is most likely organizational commitment. Coughlan (2005) states that both concepts are erroneously used as synonyms by some authors and that definitions and measurements sometimes cannot by distinguished. Hence, Table 3.1 shows a comparison of the defining components of employee loyalty and organizational commitment. Multiple conceptualizations and definitions of organizational commitment exist (Wagner 2007). Cohen (2007), for example, suggests a two-dimensional approach, dividing between an instrumental and an affective dimension. Klein et al. (2012) offer a target-free approach, which would be applicable to all workplace targets and present a respective measure (Klein et  al. 2014). However, the most widespread approach is still presented by Allen and Meyer (1990, 1996), which is three-­ dimensional and applied in large parts of the current comparison of employee loyalty. When comparing the reference objects, two primary similarities between employee loyalty and organizational commitment may be detected. The commitment of Meyer and Allen (1991) focused solely on the organization, but other researchers opened the approach to multiple foci (Reichers 1985; Gregersen 1993;

60

3  The Concept of Employee Loyalty

Table 3.1  Comparison of employee loyalty and organizational commitment Employee loyalty Reference objects:  Organization, working group, supervisor Characteristic:  Behavior included  Moral stronger pronounced Elements:  Identification  Attachment  Dedication

Nature:  Active  Deliberate  Voluntary  Reciprocal Continuum:  Four levels: disloyal, non-loyal, loyal, hyper-loyal

Key references Stroh and Reilly (1997); James and Cropanzano (1994); Chen et al. (2002) Kumar and Shekhar (2012) Hart and Thompson (2007) Alvesson (2000) Hirschman (1970) Niehoff et al. (2001)

Ali et al. (1997) Hajdin (2005) Coughlan (2005) Schrag (2001) Schrag (2001)

Organizational commitment Reference objects:  Organization only vs. multiple foci Characteristic:  Behavior missing  Affect stronger pronounced Elements:  Identification  Attachment  Involvement  Dependence  Obligation Nature:  Cost-benefit consideration  Unidirectional Continuum:  Three levels: low, moderate, high

Key references Meyer and Allen (1991) vs. Reichers (1985) Allen and Meyer (1990, 1996) González and Guillén (2008) Allen and Meyer (1990, 1996)

Allen and Meyer (1990, 1996) Hart and Thompson (2007) Randall (1987)

Klein et al. 2012). Beside others, career commitment (Darden et al. 1989; Ballout 2009) is known as commitment to the supervisor (Becker and Kernan 2003; Gumusluoglu et al. 2013), team commitment (Kirkman and Rosen 1999; Seong and Hong 2013), or workgroup commitment (Clugston et al. 2000; Cohen and Veled-­ Hecht 2010). Hence, loyalty and commitment depend on their reference objects. The same applies for continuums, where low and high forms seem to exist. Even though “discommitment” is not conceivable, overcommitment is already described (Randall 1987). Loyalty and commitment are therefore located on a continuum and integrate multiple reference objects. The characteristic, the elements, and the nature of employee loyalty and organizational commitment, however, show significant differences. First, in most conceptualizations of commitment, the behavioral characteristic is missing and the affective characteristic is stronger pronounced. On the one hand, González and Guillén (2008) found that affective commitment correlates stronger with outcome measures. On the other, Hart and Thompson (2007) show that the moral or normative characteristic is more dominant in employee loyalty. This leads to the conclusion that the two concepts can be separated through their cognitive, affective, and behavioral characteristics.

References

61

Second, varieties in the elements are obvious. Both concepts share identification and attachment, but instead of dedication, organizational commitment integrates involvement. More striking are the additional elements of commitment: dependence and obligation. It is said that employees consider the costs of leaving an organization, which is termed dependence here, and that they feel a sense of obligation toward the company (Allen and Meyer 1996). Both elements cannot be found in employee loyalty and significantly distinguish the concepts. Third, the most remarkable difference between employee loyalty and organizational commitment stems from their nature. Employee loyalty was shown as active, deliberate, voluntary, and reciprocal. All those elements are not reflected in organizational commitment. Instead, it is described as unidirectional (Hart and Thompson 2007) and as including cost–benefit considerations (Allen and Meyer 1990, 1996). The last point in particular needs to be explained in greater detail. Continuance of commitment means that employees cannot afford to leave a company because the costs of leaving are considered too high. Thus, employees have no other choice than to remain with the organization. Items of this scale include “I feel that I have too few options to consider leaving the organization” or “too much in my life would be disrupted if I decided I wanted to leave my organization now” (Allen and Meyer 1990). Therefore, one part of organizational commitment is the complete opposite of voluntariness, which is the most striking difference to employee loyalty. To conclude this section as well as this chapter, one final analogy to marketing is found. Commitment in marketing is rather measured as an attitude and loyalty as an attitudinal-based behavior (Pritchard et al. 1999). Consequently, the related concept of commitment can be seen as an antecedent of loyalty (Traylor 1981), which can be transferred to OB as well. All the related concepts, job satisfaction, employee involvement, employee engagement, and organizational commitment are therefore treated as antecedents of employee loyalty and not as replacing constructs. The outcome part of the employee loyalty research model will be discussed in the subsequent chapter.

References Abdullah, R. B., Karim, N. B. A., Patah, M. O. R. B. A., Zahari, H., Nair, G. K. S., & Jusoff, K. (2009). The linkage of employee satisfaction and loyalty in hotel industry in Klang Valley, Malaysia. International Journal of Business and Management, 4(10), 152–160. https://doi. org/10.5539/ijbm.v4n10p152. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-­5978(91)90020-­T. Ajzen, I., & Fishbein, M. (1977). Attitude-behavior relations: A theoretical analysis and review of empirical research. Psychological Bulletin, 84(5), 888–918. https://doi. org/10.1037/0033-­2909.84.5.888. Ajzen, I., & Madden, T. J. (1986). Prediction of goal-directed behavior: Attitudes, intentions, and perceived behavioral control. Journal of Experimental Social Psychology, 22(5), 453–474. https://doi.org/10.1016/0022-­1031(86)90045-­4.

62

3  The Concept of Employee Loyalty

Aksoy, L., Keiningham, T. L., Buoye, A., Larivière, B., Williams, L., & Wilson, I. (2015). Does loyalty span domains? Examining the relationship between consumer loyalty, other loyalties and happiness. Journal of Business Ethics, 68(12), 2464–2476. https://doi.org/10.1016/j. jbusres.2015.06.033. Ali, A.  J., Azim, A., & Falcone, T.  W. (1993). Work loyalty and individualism in the United States and Canada. International Journal of Manpower, 14(6), 58–66. https://doi. org/10.1108/01437729310043114. Ali, A.  J., Krishnan, K., & Azim, A. (1997). Expatriate and indigenous managers’ work loyalty and attitude toward risk. The Journal of Psychology, 131(3), 260–270. https://doi. org/10.1080/00223989709603513. Allen, N. J., & Meyer, J. P. (1990). The measurement and antecedents of affective, continuance and normative commitment to the organization. Journal of Occupational Psychology, 63(1), 1–18. https://doi.org/10.1111/j.2044-­8325.1990.tb00506.x. Allen, N.  J., & Meyer, J.  P. (1996). Affective, continuance, and normative commitment to the organization: An examination of construct validity. Journal of Vocational Behavior, 49(3), 252–276. https://doi.org/10.1006/jvbe.1996.0043. Alvesson, M. (2000). Social identity and the problem of loyalty in knowledge-intensive companies. Journal of Management Studies, 37(8), 1101–1123. https://doi.org/10.1111/1467-­6486.00218. Amerland, A. (2013). Arbeitsklima entscheidet über Mitarbeiterloyalität. Retrieved on September 28, 2016 from: https://www.springerprofessional.de/public-­relations/interne-­kommunikation/ arbeitsklima-­entscheidet-­ueber-­mitarbeiterloyalitaet/6602560?redirect=1 Amine, A. (1998). Consumers’ true brand loyalty: The central role of commitment. Journal of Strategic Marketing, 6(4), 305–319. https://doi.org/10.1080/096525498346577. Argyris, C. (1960). Understanding organizational behavior. Homewood: The Dorsey Press. Arsić, M., Nikolić, D., Živković, Ž., Urošević, S., & Mihajlović, I. (2012). The effect of TQM on employee loyalty in transition economy, Serbia. Total Quality Management, 23(6), 719–729. https://doi.org/10.1080/14783363.2012.669930. Ashforth, B.  E., & Mael, F. (1989). Social identity theory and the organization. Academy of Management Review, 14(1), 20–39. https://doi.org/10.5465/AMR.1989.4278999. Atwater, L.  E., Waldman, D.  A., Atwater, D., & Cartier, P. (2000). An upward feedback field experiment: Supervisors’ cynicism, reactions, and commitment to subordinates. Personnel Psychology, 53(2), 275–297. https://doi.org/10.1111/j.1744-­6570.2000.tb00202.x. Backhaus, K., & Tikoo, S. (2004). Conceptualizing and researching employer branding. Career Development International, 9(5), 501–517. https://doi.org/10.1108/13620430410550754. Ballout, H.  I. (2009). Career commitment and career success: Moderating role of self-efficacy. Career Development International, 14(7), 655–670. https://doi. org/10.1108/13620430911005708. Barghorn, K. (2010). Einstellungen und Verhalten von Mitarbeitern in betrieblichen Veränderungsprozessen (Doctoral dissertation). Retrieved on January 2, 2017 from: https:// repositorium.uni-­osnabrueck.de/bitstream/urn:nbn:de:gbv:700-­201103088005/1/thesis_barghorn.pdf Barrow, S., & Mosley, R. (2005). The employer brand. Bringing the best of brand management to people at work. West Sussex: Wiley. Barry, B. (1974). Review article: Exit, voice, and loyalty. British Journal of Political Science, 4(1), 79–107. https://doi.org/10.1017/S0007123400009376. Bateman, T. S., & Organ, D. W. (1983). Job satisfaction and the good soldier: The relationship between affect and employee “citizenship”. Academy of Management Journal, 26(4), 587–595. https://doi.org/10.2307/255908. Becker, T. E., & Kernan, M. C. (2003). Matching commitment to supervisors and organizations to in-role and extra-role performance. Human Performance, 16(4), 327–348. https://doi. org/10.1207/S15327043HUP1604_1. Belás, J. (2012). Social responsibility and ethics in the banking business: Myth or reality? A case study from the Slovak Republic. Economic Annals, 57(195), 115–137. https://doi.org/10.2298/ EKA1295115.

References

63

Birch, A. H. (1975). Economic models in political science: The case of exit, voice, and loyalty. British Journal of Political Science, 5(1), 69–82. https://doi.org/10.1017/S0007123400008048. Blau, P. M. (1964). Exchange and power in social life. New York: Wiley. Bloemer, J. (2010). The psychological antecedents of employee referrals. The International Journal of Human Resource Management, 21(10), 1769–1791. https://doi.org/10.1080/0958 5192.2010.500494. Bloemer, J., & Odekerken-Schröder, G. (2006). The role of employee relationship proneness in creating employee loyalty. International Journal of Bank Marketing, 24(4), 252–264. https:// doi.org/10.1108/02652320610671342. Bolino, M.  C., & Turnley, W.  H. (2003). Going the extra mile: Cultivating and managing employee citizenship behavior. Academy of Management Executive, 17(3), 60–73. https://doi. org/10.5465/AME.2003.10954754. Boroff, K.  E., & Lewin, D. (1997). Loyalty, voice, and intent to exit a union firm: A conceptual and empirical analysis. Industrial and Labor Relations Review, 51(1), 50–63. https://doi. org/10.2307/2525034. Borzaga, C., & Tortia, E. (2006). Worker motivations, job satisfaction, and loyalty in public and nonprofit social services. Nonprofit and Voluntary Sector Quarterly, 35(2), 225–248. https:// doi.org/10.1177/0899764006287207. Brown, S., McHardy, J., McNabb, R., & Taylor, K. (2011). Workplace performance, worker commitment, and loyalty. Journal of Economics and Management Strategy, 20(3), 925–955. https:// doi.org/10.1111/j.1530-­9134.2011.00306.x. Caldwell, C., & Canuto-Carranco, M. (2010). “Organizational terrorism” and moral choices  – Exercising voice when the leader is the problem. Journal of Business Ethics, 97(1), 159–171. https://doi.org/10.1007/s10551-­010-­0502-­5. Chang, C.  C., Chiu, C.  M., & Chen, C.  A. (2010). The effect of TQM practices on employee satisfaction and loyalty in government. Total Quality Management and Business Excellence, 21(12), 1299–1314. https://doi.org/10.1080/14783363.2010.530796. Chen, Z.  X., Farh, J.  L., & Tsui, A.  S. (1998). Loyalty to supervisor, organizational commitment, and employee performance: The Chinese case. Academy of Management Best Paper Proceedings (pp. 1–9). San Diego, CA. Chen, Z. X. (2001). Further investigation of the outcomes of loyalty to supervisor – Job satisfaction and intention to stay. Journal of Managerial Psychology, 16(8), 650–660. https://doi. org/10.1108/EUM0000000006305. Chen, Z. X., Tsui, A. S., & Farh, J. L. (2002). Loyalty to supervisor vs. organizational commitment: Relationships to employee performance in China. Journal of Occupational and Organizational Psychology, 75(3), 339–356. https://doi.org/10.1348/096317902320369749. Cheng, B.-S., Chou, L.-F., Wu, T.-Y., Huang, M.-P., & Farh, J.-L. (2004). Paternalistic leadership and subordinate responses: Establishing a leadership model in Chinese organizations. Asian Journal of Social Psychology, 7(1), 89–117. https://doi.org/10.1111/j.1467-­839X.2004.00137.x. Chun, R. (2009). A corporate’s responsibility to employees during a merger: Organizational virtue and employee loyalty. Corporate Governance, 9(4), 473–483. https://doi. org/10.1108/14720700910985016. Clugston, M., Howell, J. P., & Dorfman, P. W. (2000). Does cultural socialization predict multiple bases and foci of commitment? Journal of Management, 26(1), 5–30. https://doi. org/10.1177/014920630002600106. Cohen, A. (2007). Commitment before and after: An evaluation and reconceptualization of organizational commitment. Human Resource Management Review, 17(3), 336–354. https://doi. org/10.1016/j.hrmr.2007.05.001. Cohen, A., & Veled-Hecht, A. (2010). The relationship between organizational socialization and commitment in the workplace among employees in long-term nursing care facilities. Personnel Review, 39(5), 537–556. https://doi.org/10.1108/00483481011064136. Commins, B., & Lockwood, J. (1979). The effects of status differences, favoured treatment and equity on intergroup comparisons. European Journal of Social Psychology, 9(3), 281–289. https://doi.org/10.1002/ejsp.2420090306.

64

3  The Concept of Employee Loyalty

Corvino, J. (2002). Loyalty in business? Journal of Business Ethics, 41(2), 179–185. https://doi. org/10.1023/A:1021370727220. Coughlan, R. (2005). Employee loyalty as adherence to shared moral values. Journal of Managerial Issues, 17(1), 43–57. Coyle-Shapiro, J. A.-M., & Kessler, I. (2002). Exploring reciprocity through the lens of the psychological contract: Employee and employer perspectives. European Journal of Work and Organizational Psychology, 11(1), 1–18. https://doi.org/10.1080/13594320143000852. Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874–900. https://doi.org/10.1177/0149206305279602. Cunha, M.  P. (2002). “The best place to be”. Managing control and employee loyalty in a knowledge-­intensive company. The Journal of Applied Behavioral Science, 38(4), 481–495. https://doi.org/10.1177/002188602237793. D’Amour, D., Ferrada-Videla, M., Rodriguez, L.  S. M., & Beaulieu, M.-D. (2005). The conceptual basis for interprofessional collaboration: Core concepts and theoretical frameworks. Journal of Interprofessional Care, 19(Supplement 1), 116–131. https://doi. org/10.1080/13561820500082529. Darden, W. R., Hampton, R., & Howell, R. D. (1989). Career versus organizational commitment: Antecedents and consequences of retail salespeople’s commitment. Journal of Retailing, 65(1), 80–106. Davis-Blake, A., Broschak, J. P., & George, E. (2003). Happy together? How using nonstandard workers affects exit, voice, and loyalty among standard employees. Academy of Management Journal, 46(4), 475–485. https://doi.org/10.2307/30040639. De Vos, A., & Meganck, A. (2009). What HR managers do versus what employees value  – Exploring both parties’ views on retention management from a psychological contract perspective. Personnel Review, 38(1), 45–60. https://doi.org/10.1108/00483480910920705. De Vos, A., Buyens, D., & Schalk, R. (2003). Psychological contract development during organizational socialization: Adaptation to reality and the role of reciprocity. Journal of Organizational Behavior, 24(5), 537–559. https://doi.org/10.1002/job.205. Dean, A.  M. (2004). Links between organisational and customer variables in service delivery. Evidence, contradictions and challenges. International Journal of Service Industry Management, 15(4), 332–350. https://doi.org/10.1108/09564230410552031. DeMars, N. (2014). Loyalty now. A wake-up call. CPA Practice Management Forum. Retrieved on May 27, 2015 from: http://www.office-­ethics.com/press/CPFM-­Apr14-­DeMars Dick, A.  S., & Basu, K. (1994). Customer loyalty: Toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(2), 99–113. https://doi. org/10.1177/0092070394222001. Dienesch, R. M., & Liden, R. C. (1986). Leader-member exchange model of leadership: A critique and further development. Academy of Management Review, 11(3), 618–634. https://doi. org/10.5465/AMR.1986.4306242. Dooley, R.  S., & Fryxell, G.  E. (1999). Attaining decision quality and commitment from dissent: The moderating effects of loyalty and competence in strategic decision-making teams. Academy of Management Journal, 42(4), 389–402. https://doi.org/10.2307/257010. Douglas, R. J. (2008). The influence of outsourcing on organizational loyalty: A phenomenological study in the aerospace industry (Doctoral dissertation). Retrieved on September 9, 2016 from: http://media.proquest.com/media/pq/classic/doc/1633785751/fmt/ai/rep/NPDF?_s=EbpBb6h HS%2Fb3eny8lU3tdbeEz3w%3D Druckman, D. (1994). Nationalism, patriotism, and group loyalty: A social psychological perspective. Mershon International Studies Review, 38(1), 43–68. https://doi.org/10.2307/222610. Duboff, R., & Heaton, C. (1999). Employee loyalty: A key link to value growth. Strategy & Leadership, 27(1), 8–13. https://doi.org/10.1108/eb054624. Dutton, J. E., Dukerich, J. M., & Harquail, C. V. (1994). Organizational images and member identification. Administrative Science Quarterly, 39(2), 239–263. https://doi.org/10.2307/23 93235.

References

65

Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational support. Journal of Applied Psychology, 71(3), 500–507. https://doi.org/10.1037/0021-­9010.71. 3.500. Eisenberger, R., Fasolo, P., & Davis-LaMastro, V. (1990). Perceived organizational support and employee diligence, commitment, and innovation. Journal of Applied Psychology, 75(1), 51–59. https://doi.org/10.1037/0021-­9010.75.1.51. Elegido, J. M. (2013). Does it make sense to be a loyal employee? Journal of Business Ethics, 116(3), 495–511. https://doi.org/10.1007/s10551-­012-­1482-­4. Emerson, R.  M. (1976). Social exchange theory. Annual Review of Sociology, 2(1), 335–362. https://doi.org/10.1146/annurev.so.02.080176.002003. Ewin, R.  E. (1993). Corporate loyalty: Its objects and its grounds. Journal of Business Ethics, 12(5), 387–396. https://doi.org/10.1007/BF00882029. Farrell, D. (1983). Exit, voice, loyalty, and leglect as responses to job dissatisfaction: A multidimensional scaling study. Academy of Management Journal, 26(4), 596–607. https://doi. org/10.2307/255909. Farrell, D., & Rusbult, C.  E. (1992). Exploring the exit, voice, loyalty, and neglect typology: The influence of job satisfaction, quality of alternatives, and investment size. Employee Responsibilities and Rights Journal, 5(3), 201–218. https://doi.org/10.1007/BF01385048. Fischer, R. (2004). Rewarding employee loyalty: An organizational justice approach. International Journal of Organisational Behaviour, 8(3), 486–503. Fram, E. H. (1995). Not so strange bedfellows: Marketing and total quality management. Managing Service Quality, 5(1), 50–56. https://doi.org/10.1108/09604529510081811. Freese, C., & Schalk, R. (2008). How to measure the psychological contract? A critical criteria-­ based review of measures. South Africa Journal of Psychology, 38(2), 269–286. https://doi. org/10.1177/008124630803800202. Fullerton, G. (2005). The impact of brand commitment on loyalty to retail service brands. Canadian Journal of Administrative Sciences, 22(2), 97–110. https://doi.org/10.1111/j.1936­4490.2005.tb00712.x. Georg, J. M., & Jones, G. R. (2008). Understanding and managing organizational behavior (5th ed.). Upper Saddle River: Pearson Education International. Ghafoor, A., Qureshi, T. M., Khan, M. A., & Hijazi, S. T. (2011). Transformational leadership, employee engagement and performance: Mediating effect of psychological ownership. African Journal of Business Management, 5(17), 7391–7403. https://doi.org/10.5897/AJBM11.126. Gill, R. (2011). Using storytelling to maintain employee loyalty during change. International Journal of Business and Social Science, 2(15), 23–32. González, T. F., & Guillén, M. (2008). Organizational commitment: A proposal for a wider ethical conceptualization of “normative commitment”. Journal of Business Ethics, 78(3), 401–414. https://doi.org/10.1007/s10551-­006-­9333-­9. Graham, J. W. (1991). An essay on organizational citizenship behavior. Employee Responsibilities and Rights Journal, 4(4), 249–270. https://doi.org/10.1007/BF0138503. Graham, J. W., & Keeley, M. (1992). Hirschman’s loyalty concept. Employee Responsibilities and Rights Journal, 5(3), 191–200. https://doi.org/10.1007/bf01385047. Greenberg, J. (2005). Managing behavior in organizations (4th ed.). Upper Saddle River: Pearson Education International. Greenberg, J., & Baron, R. A. (2003). Behavior in organizations. Understanding and managing the human side of work (8th ed.). Upper Saddle River: Pearson Education International. Gregersen, H.  B. (1993). Multiple commitments at work and extrarole behavior during three stages of organizational tenure. Journal of Business Research, 26(1), 31–47. https://doi. org/10.1016/0148-­2963(93)90041-­M. Grosman, B. A. (1989). Corporate loyalty, does it have a future? Journal of Business Ethics, 8(7), 565–568. https://doi.org/10.1007/BF00382933. Guillon, O., & Cezanne, C. (2014). Employee loyalty and organizational performance: A critical survey. Journal of Organizational Change Management, 27(5), 839–850. https://doi. org/10.1108/JOCM-­02-­2014-­0025.

66

3  The Concept of Employee Loyalty

Gumusluoglu, L., Karakitapoğlu-Aygün, Z., & Hirst, G. (2013). Transformational leadership and R&D workers’ multiple commitments: Do justice and span of control matter? Journal of Business Research, 66(11), 2269–2278. https://doi.org/10.1016/j.jbusres.2012.02.039. Haar, J. M. (2006). Challenge and hindrance stressors in New Zealand: Exploring social exchange theory outcomes. The International Journal of Human Resource Management, 17(11), 1942– 1950. https://doi.org/10.1080/09585190601000147. Hajdin, M. (2005). Employee loyalty: An examination. Journal of Business Ethics, 59(3), 259– 280. https://doi.org/10.1007/s10551-­005-­3438-­4. Hall, D. T., Schneider, B., & Nygren, H. T. (1970). Personal factors in organizational identification. Administrative Science Quarterly, 15(2), 176–190. https://doi.org/10.2307/2391488. Harris, R.  I. D., Reid, R.  S., & McAdam, R. (2004). Employee involvement in family and nonfamily-­ owned businesses in Great Britain. International Journal of Entrepreneurial Behavior & Research, 10(1/2), 49–58. https://doi.org/10.1108/13552550410521371. Hart, D. W., & Thompson, J. A. (2007). Untangling employee loyalty: A psychological contract perspective. Business Ethics Quarterly, 17(2), 297–323. https://doi.org/10.5840/beq200717233. Haughey, J. C. (1993). Does loyalty in the workplace have a future? Business Ethics Quarterly, 3(1), 1–16. https://doi.org/10.2307/3857378. Henneberg, C.  U. (2012). Mit begeisterten Kunden und motivierten Mitarbeitern zum Erfolg. Retrieved on September 28, 2016 from: https://www.selfmedic.de/archiv/2012/team/ vision-­und-­strategie/mit-­begeisterte-­kunden-­und-­motivierten-­mitarbeitern-­zum-­erfolg Herriot, P., & Pemberton, C. (1997). Facilitating new deals. Human Resource Management Journal, 7(1), 45–56. https://doi.org/10.1111/j.1748-­8583.1997.tb00273.x. Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr., & Schlesinger, L. A. (1994). Putting the service-profit chain to work. Harvard Business Review, 72(2), 164–174. Hijazi, H.  A. (2013). Management ethics impact on organizational loyalty. A case study of the senate employees in Jordan. European Journal of Business and Management, 5(16), 80–90. Hildreth, J. A. D., Gino, F., & Bazerman, M. (2016). Blind loyalty? When group loyalty makes us see evil or engage in it. Organizational Behavior and Human Decision Processes, 132(1), 16–36. https://doi.org/10.1016/j.obhdp.2015.10.001. Hirschman, A. O. (1970). Exit, voice, and loyalty: Responses to decline in firms, organizations, and states. Cambridge, MA: Harvard University Press. Hoffmann, E. A. (2006). The ironic value of loyalty dispute resolution strategies in worker cooperatives and conventional organizations. Nonprofit Management and Leadership, 17(2), 163– 177. https://doi.org/10.1002/nml.141. Hollebeek, L. D., & Haar, J. M. (2012). Direct and interaction effects of challenge and hindrance stressors towards job outcomes. New Zealand Journal of Employment Relations, 37(2), 58–76. Holloman, R. (1991). Loyalty: How much? To whom? Industrial Management, 33(3), 1–2. Hosmer, L. T. (1995). Trust: The connecting link between organizational theory and philosophical ethics. The Academy of Management Review, 20(2), 379–403. https://doi.org/10.2307/ 258851. Jacsó, P. (2005). Google scholar: The pros and the cons. Online Information Review, 29(2), 208– 214. https://doi.org/10.1108/14684520510598066. James, K., & Cropanzano, R. (1994). Dispositional group loyalty and individual action for the benefit of an ingroup: Experimental and correlational evidence. Organizational Behavior and Human Decision Processes, 60(2), 179–205. https://doi.org/10.1006/obhd.1994.1080. Jauch, L. R., Glueck, W. F., & Osborn, R. N. (1978). Organizational loyalty, professional commitment, and academic research productivity. Academy of Management Journal, 21(1), 84–92. https://doi.org/10.2307/255664. Jen, C. K., Chou, L. F., Lin, C. Y., & Tsai, M. C. (2012). The influence of the perception of a familial climate on job performance: Mediation of loyalty to supervisors and moderation of filial behaviour. International Journal of Psychology, 47(3), 169–178. https://doi.org/10.1080 /00207594.2011.626045.

References

67

Jun, M., Cai, S., & Shin, H. (2006). TQM practice in maquiladora: Antecedents of employee satisfaction and loyalty. Journal of Operations Management, 24(6), 791–812. https://doi. org/10.1016/j.jom.2005.09.006. Kantsperger, R., & Kunz, W. H. (2005). Managing overall service quality in customer care centers  – Empirical findings of a multi-perspective approach. International Journal of Service, 16(2), 135–151. https://doi.org/10.1108/09564230510592270. Kidder, D.  L. (2005). Is it “who I am”, “what I can get away with”, or “what you’ve done to me”? A multi-theory examination of employee misconduct. Journal of Business Ethics, 57(4), 389–398. https://doi.org/10.1007/s10551-­004-­6713-­x. Kirchler, E., & Hölzl, E. (2005). Kapitel II: Arbeitsgestaltung. In E. Kirchler (Ed.), Arbeits- und Organisationspsychologie (pp. 199–316). Vienna, Austria: Wiener Universitätsverlag (WUV). Kirkman, B.  L., & Rosen, B. (1999). Beyond self-management: Antecedents and consequences of team empowerment. Academy of Management Journal, 41(1), 58–74. https://doi. org/10.2307/256874. Klein, H. J., Molloy, J. C., & Brinsfield, C. B. (2012). Reconceptualizing workplace commitment to redress a stretched construct: Revisiting assumptions and removing confounds. Academy of Management Review, 37(1), 130–151. https://doi.org/10.5465/amr.2010.0018. Klein, H. J., Cooper, J. T., Molloy, J. C., & Swanson, J. A. (2014). The assessment of commitment: Advantages of a unidimensional, target-free approach. Journal of Applied Psychology, 99(2), 222–238. https://doi.org/10.1037/a0034751. Krüger, W. (2005). 2. Kapitel: Organisation. In F.  X. Bea, B.  Friedl, & M.  Schweitzer (Eds.), Allgemeine Betriebswirtschaftslehre, Bd. 2: Führung (9th ed., pp.  140–234). Stuttgart, Germany: Lucius & Lucius Verlagsgesellschaft. Kumar, D.  N. S., & Shekhar, N. (2012). Perspectives envisaging employee loyalty. Journal of Management Research, 12(2), 100–112. Larmer, R. A. (1992). Whistleblowing and employee loyalty. Journal of Business Ethics, 11(2), 125–128. https://doi.org/10.1007/BF00872319. Leck, J.  D., & Saunders, D.  M. (1992). Hirschman’s loyalty: Attitude or behavior? Employee Responsibilities and Rights Journal, 5(3), 219–230. https://doi.org/10.1007/BF01385049. Lee, S. M. (1971). An empirical analysis of organizational identification. Academy of Management Journal, 14(2), 213–226. https://doi.org/10.2307/255308. Lee, S. S. (2008). Relationships among leadership empowerment, job satisfaction, and employee loyalty in university dining student workers (Doctoral dissertation). Retrieved on September 9, 2016 from: http://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=16664&context=rtd Lee, J., & Miller, D. (1999). People matter: Commitment to employees, strategy and performance in Korean firms. Strategic Management Journal, 20(6), 579–593. https://doi.org/10.1002/ (SICI)1097-­0266(199906)20:63.0.CO;2-­C. Lee, S.  Y., & Whitford, A.  B. (2008). Exit, voice, loyalty, and pay: Evidence from the public workforce. Journal of Public Administration Research and Theory, 18(4), 647–671. https://doi. org/10.1093/jopart/mum029. Lee, J. H., Kim, M. S., & Jeon, A. (2012). The effects of emotional intelligence on service recovery and organizational loyalty: A case of flight attendants of South Korean airlines. Service Business, 7(4), 665–686. https://doi.org/10.1007/s11628-­012-­0181-­7. Leung, A. S. M. (2008). Matching ethical work climate to in-role and extra-role behaviors in a collectivist work setting. Journal of Business Ethics, 79(1), 43–55. https://doi.org/10.1007/ s10551-­007-­9392-­6. Linz, S., Good, L.  K., & Busch, M. (2015). Promoting worker loyalty: An empirical analysis. International Journal of Manpower, 36(2), 169–191. https://doi.org/10.1108/ IJM-­06-­2013-­0129. Logan, G.  M. (1984). Loyalty and a sense of purpose. California Management Review, 27(1), 149–156. https://doi.org/10.2307/41165119.

68

3  The Concept of Employee Loyalty

Loveman, G. W. (1998). Employee satisfaction, customer loyalty, and financial performance. An empirical examination of the service profit chain in retail banking. Journal of Service Research, 1(1), 18–31. https://doi.org/10.1177/109467059800100103. Luchak, A. A. (2003). What kind of voice do loyal employees use? British Journal of Industrial Relations, 41(1), 115–134. https://doi.org/10.1111/1467-­8543.00264. March, J. G., & Simon, H. A. (1958). Organizations. New York: Wiley. Martin, G., & Hetrick, S. (2006). Corporate reputations, branding and people management. A strategic approach to HR. Oxford: Butterworth-Heinemann. Matzler, K., & Renzl, B. (2006). The relationship between interpersonal trust, employee satisfaction, and employee loyalty. Total Quality Management, 17(10), 1261–1271. https://doi. org/10.1080/14783360600753653. Maurer, T. J., Pierce, H. R., & Shore, L. M. (2002). Perceived beneficiary of employee development activity: A three-dimensional social exchange model. Academy of Management Review, 27(3), 432–444. https://doi.org/10.5465/AMR.2002.7389930. Mele, D. (2001). Loyalty in business: Subversive doctrine or real need? Business Ethics Quarterly, 11(1), 11–26. https://doi.org/10.2307/3857866. Meyer, J.  P., & Allen, N.  J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), 61–89. https://doi. org/10.1016/1053-­4822(91)90011-­Z. Minchington, B. (2006). Your employer brand. Attract, engage, retain. Torrensville: Collective Learning Australia. Moorman, R. H., & Blakely, G. L. (1995). Individualism – Collectivism as an individual difference predictor of organizational citizenship behavior. Journal of Organizational Behavior, 16(2), 127–142. https://doi.org/10.1002/job.4030160204. Morrison, E.  W., & Robinson, S.  L. (1997). When employees feel betrayed: A model of how psychological contract violation develops. Academy of Management Review, 22(1), 226–256. https://doi.org/10.5465/AMR.1997.9707180265. Mummendey, H.  D. (1988). Die Beziehung zwischen Verhalten und Einstellung. In H.  D. Mummendy (Ed.), Verhalten und Einstellung: Untersuchung der Einstellungs- und Selbstkonzeptänderung nach Änderung des alltäglichen Verhaltens (pp.  1–26). Berlin, Germany: Springer Verlag. Naus, F., Van Iterson, A., & Roe, R. (2007). Organizational cynicism: Extending the exit, voice, loyalty, and neglect model of employees’ responses to adverse conditions in the workplace. Human Relations, 60(5), 683–718. https://doi.org/10.1177/0018726707079198. Niehoff, B. P., Moorman, R. H., Blakely, G., & Fuller, J. (2001). The influence of empowerment and job enrichment on employee loyalty in a downsizing environment. Group and Organization Management, 26(1), 93–113. https://doi.org/10.1177/1059601101261006. Odin, Y., Odin, N., & Valette-Florence, P. (2001). Conceptual and operational aspects of brand loyalty: An empirical investigation. Journal of Business Research, 53(2), 75–84. https://doi. org/10.1016/S0148-­2963(99)00076-­4. Oldenquist, A. (1982). Loyalties. The Journal of Philosophy, 79(4), 173–193. https://doi. org/10.2307/2026219. Oliver, R. (1999). Whence consumer loyalty? Journal of Marketing, 63(Special Issue), 33–44. https://doi.org/10.2307/1252099. Olson-Buchanan, J.  B., & Boswell, W.  R. (2002). The role of employee loyalty and formality in voicing discontent. Journal of Applied Psychology, 87(6), 1167–1174. https://doi. org/10.1037//0021-­9010.87.6.1167. Parzefall, M.-R., & Hakanen, J. (2010). Psychological contract and its motivational and health-enhancing properties. Journal of Managerial Psychology, 25(1), 4–21. https://doi. org/10.1108/02683941011013849. Pereira, K.  N. (2009). Loyalty of online faculty: A work design perspective of the impact of a telecommuting work environment on employee loyalty (Doctoral dissertation). Retrieved on September 9, 2016 from: http://search.proquest.com/docview/749793440

References

69

Peter, J. P. (1981). Construct validity: A review of basic issues and marketing practices. Journal of Marketing Research, 18(2), 133–145. https://doi.org/10.2307/3150948. Petkovic, M. (2008). Employer Branding. Ein markenpolitischer Ansatz zur Schaffung von Präferenzen bei der Arbeitgeberwahl. Munich & Mehring, Germany: Rainer Hampp Verlag. Pfeiffer, R.  S. (1992). Owing loyalty to one’s employer. Journal of Business Ethics, 11(1), 535–543. Ping, R.  A., Jr. (1993). The effects of satisfaction and structural constraints on retailer exiting, voice, loyalty, opportunism, and neglect. Journal of Retailing, 69(3), 320–352. https://doi. org/10.1016/0022-­4359(93)90010-­G. Podsakoff, P. M., MacKenzie, S. B., Paine, J. B., & Bachrach, D. G. (2000). Organizational citizenship behaviors: A critical review of the theoretical and empirical literature and suggestions for future research. Journal of Management, 26(3), 513–563. https://doi.org/10.1016/ S0149-­2063(00)00047-­7. Powers, E.  L. (2000). Employee loyalty in the new millennium. SAM Advanced Management Journal, 65(3), 4–8. Pritchard, M. P., Havitz, M. E., & Howard, D. R. (1999). Analyzing the commitment-loyalty link in service contexts. Journal of the Academy of Marketing Science, 27(3), 333–348. https://doi. org/10.1177/0092070399273004. Provis, C. (2005). Dirty hands on loyalty in organisational politics. Business Ethics Quarterly, 15(2), 283–298. https://doi.org/10.5840/beq200515215. Puusa, A., & Tolvanen, U. (2006). Organizational identity and trust. Electronic Journal of Business Ethics and Organization Studies, 11(2), 29–33. Raeder, S., & Grote, G. (2001). Flexibilität ersetzt Kontinuität. Veränderte psychologische Kontrakte und neue Formen persönlicher Identität. Arbeit, 10(3), 352–364. Raja, U., Johns, G., & Ntalianis, F. (2004). The impact of personality on psychological contracts. Academy of Management Journal, 47(3), 350–367. https://doi.org/10.2307/20159586. Ramamoorthy, N., Flood, P. C., Slattery, T., & Sardessai, R. (2005). Determinants of innovative work behaviour: Development and test of an integrated model. Creativity and Innovation Management, 14(2), 142–150. https://doi.org/10.1111/j.1467-­8691.2005.00334.x. Ramanathan, K., & Senthil, S. S. (2013). A study on role of employee loyalty in quality service of equipment rental business. Life Science Journal, 10(9), 221–229. Ramsey, H. (1991). Reinventing the wheel? A review of the development and performance of employee involvement. Human Resource Management Journal, 1(4), 1–22. https://doi. org/10.1111/j.1748-­8583.1991.tb00234.x. Randall, D.  M. (1987). Commitment and the organization: The organization man revisited. Academy of Management Review, 12(3), 460–471. https://doi.org/10.2307/258513. Randels, G.  D., Jr. (2001). Loyalty, corporations, and community. Business Ethics Quarterly, 11(1), 27–39. https://doi.org/10.2307/3857867. Reichers, A. E. (1985). A review and reconceptualization of organizational commitment. Academy of Management Review, 10(3), 465–476. https://doi.org/10.2307/258128. Reichheld, F.  F. (1993). Loyalty-based management. Harvard Business Review, 71(2), 64–73. https://doi.org/10.1225/93210. Reilly, A. H., Brett, J. M., & Stroh, L. K. (1993). The impact of corporate turbulence on managers “attitudes”. Strategic Management Journal, 14(1), 167–179. https://doi.org/10.1002/ smj.4250140913. Reimer, J.-M. (2005). Verhaltenswissenschaftliche Managementlehre. Bern, Switzerland: Haupt Verlag. Robbins, S.  P. (2001). Organisation der Unternehmung (9th ed.). Munich, Germany: Pearson Studium. Robinson, S.  L., & Morrison, E.  W. (1995). Psychological contracts and OCB: The effect of unfulfilled obligations on civic virtue behavior. Journal of Organizational Behavior, 16(3), 289–298. https://doi.org/10.1002/job.4030160309.

70

3  The Concept of Employee Loyalty

Robinson, S. L., & Rousseau, D. M. (1994). Violating the psychological contract: Not the exception but the norm. Journal of Organizational Behavior, 15(3), 245–259. https://doi.org/10.1002/ job.4030150306. Robinson, S.  L., Kraatz, M.  S., & Rousseau, D.  M. (1994). Changing obligations and the psychological contract: A longitudinal study. Academy of Management Journal, 37(1), 137–152. https://doi.org/10.2307/256773. Roehling, M. V. (1997). The origins and early development of the psychological contract construct. Journal of Management History, 3(2), 204–217. https://doi.org/10.1108/13552529710171993. Roehling, P. V., Roehling, M. V., & Moen, P. (2001). The relationship between work-life policies and practices and employee loyalty: A life course perspective. Journal of Family and Economic Issues, 22(2), 141–170. https://doi.org/10.1023/A:1016630229628. Rotondi,T., Jr. (1975). Organizational identification: Issues and implications. Organizational Behavior and Human Performance, 13(1), 95–109. https://doi.org/10.1016/0030-­5073(75)90007-­0. Rousseau, D.  M. (1989). Psychological and implied contracts in organizations. Employee Responsibilities and Rights Journal, 2(2), 121–139. https://doi.org/10.1007/BF01384942. Rousseau, D. M. (1990). New hire perceptions of their own and their employer’s obligations: A study of psychological contracts. Journal of Organizational Behavior, 11(5), 389–400. https:// doi.org/10.1002/job.4030110506. Rousseau, D.  M., & Tijoriwala, S.  A. (1998). Assessing psychological contracts: Issues, alternatives and measures. Journal of Organizational Behavior, 19(S1), 679–695. https://doi. org/10.1002/(SICI)1099-­1379(1998)19:1+3.0.CO;2-­N. Rusbult, C. E., Zembrodt, I. M., & Gunn, L. K. (1982). Exit, voice, loyalty and neglect: Responses to dissatisfaction in romantic involvements. Journal of Personality and Social Psychology, 43(6), 1230–1242. https://doi.org/10.1037/0022-­3514.43.6.1230. Rusbult, C. E., Farrell, D., Rogers, G., & Mainous, A. G., III. (1988). Impact of exchange variables on exit, voice, loyalty, and neglect: An integrative model of responses to declining job satisfaction. Academy of Management Journal, 31(3), 599–627. https://doi.org/10.2307/256461. Schrag, B. (2001). The moral significance of employee loyalty. Business Ethics Quarterly, 11(1), 41–66. https://doi.org/10.2307/3857868. Schüller, A. M. (2012). Mitarbeiterloyalität: Wie man sie erhält und wie sie Unternehmen erfolgreich macht. Innovation und Technik, 8(1), 8–10. Schwetje, T. (1999). Kundenzufriedenheit und Arbeitszufriedenheit bei Dienstleistungen. Operationalisierung und Erklärung der Beziehungen am Beispiel des Handels. In H. Meffert, H. Steffenhagen, & H. Freter (Eds.), Unternehmensführung und Marketing (Vol. 37, pp. 1–299). Wiesbaden, Germany: Gabler Verlag. Schwetje, T. (2000). Zum Einfluss der Mitarbeiterzufriedenheit auf die Kundenzufriedenheit im Handel. In H.  Woratschek (Ed.), Neue Aspekte des Dienstleistungsmarketing. Konzepte für Forschung und Praxis (pp. 173–200). Wiesbaden, Germany: Deutscher Universitäts-Verlag. Seong, J. Y., & Hong, D.-S. (2013). Gender diversity: How can we facilitate its positive effects on teams? Social Behavior and Personality, 41(3), 497–508. https://doi.org/10.2224/ sbp.2013.41.3.497. Shiv, B., & Fedorikhin, A. (1999). Heart and mind in conflict: The interplay of affect and cognition in consumer decision making. Journal of Consumer Research, 26(3), 278–292. https://doi. org/10.1086/209563. Si, S., & Li, Y. (2012). Human resource management practices on exit, voice, loyalty, and neglect: Organizational commitment as a mediator. The International Journal of Human Resource Management, 23(8), 1705–1716. https://doi.org/10.1080/09585192.2011.580099. Silvestro, R. (2002). Dispelling the modern myth. Employee satisfaction and loyalty drive service profitability. International Journal of Operations & Production Management, 22(1), 30–49. https://doi.org/10.1108/01443570210412060. Smith, A. D., & Rupp, W. T. (2002). Communication and loyalty among knowledge workers: A resource of the firm theory view. Journal of Knowledge Management, 6(3), 250–261. https:// doi.org/10.1108/13673270210434359.

References

71

Souryal, S. S., & McKay, B. W. (1996). Personal loyalty to superiors in public service. Criminal Justice Ethics, 15(2), 44–62. https://doi.org/10.1080/0731129X.1996.9992018. Spalding, A. (2007). Loyalty in the workplace: To what end? Philosophy in the Contemporary World, 14(1), 50–59. https://doi.org/10.5840/pcw200714118. Staehle, W. H., Conrad, P., & Sydow, J. (1999). Management. Eine verhaltenswissenschaftliche Perspektive. Munich, Germany: Franz Vahlen Verlag. Steven, K. (2009). Ohne loyale Mitarbeiter kein Unternehmenserfolg. Wissensmanagement, 4(1), 42–44. Strange, C. A. (1973). Loyalty: What’s it worth? Management Review, 62(6), 54–56. Stroh, L. K., & Reilly, A. H. (1997). Rekindling organizational loyalty: The role of career mobility. Journal of Career Development, 24(1), 39–54. https://doi.org/10.1023/A:1025034504937. Suharti, L., & Suliyanto, D. (2012). The effects of organizational culture and leadership style toward employee engagement and their impacts toward employee loyalty. World Review of Business Research, 2(5), 128–139. Tabarsa, G. A., Tehrani, M., Lotfi, N., Ahadian, M., Baniasadi, A., & Tabarsa, E. (2013). Leisure time management: A new approach toward employees loyalty. Journal of Management and Strategy, 4(3), 65–80. https://doi.org/10.5430/jms.v4n3p65. Tajfel, H. (1982). Social psychology of intergroup relations. Annual Review of Psychology, 33(1), 1–39. https://doi.org/10.1146/annurev.ps.33.020182.000245. Tajfel, H., & Turner, J. C. (1979). An integrative theory of intergroup conflict. In W. G. Austin & S.  Worchel (Eds.), The social psychology of intergroup relations (pp.  33–47). Monterey: Brooks-Cole Publishing. Tekleab, A. G., & Taylor, M. S. (2003). Aren’t there two parties in an employment relationship? Antecedents and consequences of organization-employee agreement on contract obligations and violations. Journal of Organizational Behavior, 24(5), 585–608. https://doi.org/10.1002/ job.204. Thompson, J.  A., & Bunderson, J.  S. (2003). Violations of principle: Ideological currency in the psychological contract. Academy of Management Review, 28(4), 571–586. https://doi. org/10.5465/AMR.2003.10899381. Traylor, M.  B. (1981). Product involvement and brand commitment. Journal of Advertising Research, 21(6), 51–56. Turnley, W.  H., & Feldman, D.  C. (1998). Psychological contract violations during corporate restructuring. Human Resource Management, 37(1), 71–83. https://doi.org/10.1002/ (SICI)1099-­050X(199821)37:13.0.CO;2-­S. Turnley, W.  H., & Feldman, D.  C. (1999). The impact of psychological contract violations on exit, voice, loyalty, and neglect. Human Relations, 52(7), 895–922. https://doi. org/10.1177/001872679905200703. van Dick, R., Wagner, U., Stellmacher, J., & Christ, O. (2004). The utility of a broader conceptualization of organizational identification: Which aspects really matter? Journal of Occupational and Organizational Psychology, 77(2), 171–191. https://doi.org/10.1348/096317904774202135. Van Vugt, M., & Hart, C.  M. (2004). Social identity as social glue: The origins of group loyalty. Journal of Personality and Social Psychology, 86(4), 585–598. https://doi. org/10.1037/0022-­3514.86.4.585. Vandekerckhove, W., & Commers, M.  S. R. (2004). Whistle blowing and rational loyalty. Journal of Business Ethics, 53(1–2), 225–233. https://doi.org/10.1023/B:BUSI.0000039411. 11986.6b. Varelius, J. (2008). Is whistle-blowing compatible with employee loyalty? Journal of Business Ethics, 85(2), 263–275. https://doi.org/10.1007/s10551-­008-­9769-­1. Wagner, C.  M. (2007). Organizational commitment as a predictor variable in nursing turnover research: Literature review. Journal of Advanced Nursing, 60(3), 235–247. https://doi. org/10.1111/j.1365-­2648.2007.04421.x. Wan, H. L. (2012). Employee loyalty at the workplace: The impact of Japanese style of human resource management. International Management Journals, 3(1), 1–17.

72

3  The Concept of Employee Loyalty

Wayne, S. J., Shore, L. M., & Liden, R. C. (1997). Perceived organizational support and leader-­ member exchange: A social exchange perspective. Academy of Management Journal, 40(1), 82–111. https://doi.org/10.2307/257021. Wech, B.  A. (2002). Trust context. Effect on organizational citizenship behavior, supervisory fairness, and job satisfaction beyond the influence of leader-member exchange. Business & Society, 41(3), 353–360. https://doi.org/10.1177/0007650302041003006. Weinert, A. B. (2004). Organisations- und Personalpsychologie (5th ed.). Weinheim, Germany: Beltz Verlag. Whiting, S.  W., Podsakoff, P.  M., & Pierce, J.  R. (2008). Effects of task performance, helping, voice, and organizational loyalty on performance appraisal ratings. Journal of Applied Psychology, 93(1), 125–139. https://doi.org/10.1037/0021-­9010.93.1.125. WirtschaftsWoche. (2012). Deutsche Angestellte sind relativ treu. Retrieved on September 28, 2016 from: http://www.wiwo.de/erfolg/beruf/mitarbeiterloyalitaet-­deutsche-­angestellte-­sind-­ relativ-­treu/7027632.html Withey, M. J., & Cooper, W. H. (1989). Predicting exit, voice, loyalty, and neglect. Administrative Science Quarterly, 34(4), 521–539. https://doi.org/10.2307/2393565. Withey, M.  J., & Cooper, W.  H. (1992). What’s loyalty. Employee Responsibilities and Rights Journal, 5(3), 231–240. https://doi.org/10.1007/BF01385050. Wong, Y. T., Wong, C. S., & Ngo, H. Y. (2002). Loyalty to supervisor and trust in supervisor of workers in Chinese joint ventures: A test of two competing models. The International Journal of Human Resource Management, 13(6), 883–900. https://doi.org/10.1080/09585 190210134264. Xinqing, S., Pengju, W., & Xiaohua, M. (2010). Research on the competitiveness of knowledge-­ based workers in knowledge-based organization. Proceedings of the 7th International Conference on Innovation and Management (pp. 1409–1413). Wuhan, China. Yee, R. W. Y., Yeung, A. C. L., & Cheng, T. C. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 24(1), 109–120. https://doi.org/10.1016/j.ijpe.2009.10.015. Yukl, G. (2013). Leadership in organizations (8th ed.). Harlow: Pearson Education Limited.

Chapter 4

Outcomes of Employee Loyalty

As the Organizational Behavior research model (Fig. 2.1) states, through the individual, the group, and the organizational level, human input leads to human output. More precisely, the employee loyalty research model (Fig. 3.1) predicts that employee loyalty is likely to provoke positive human outputs as well as negative ones. Some of the manifold positive outcomes of employee loyalty have already been mentioned. For instance, loyal employees are said to stick with an organization through good and bad times (Ewin 1993), represent valuable members of the working group (James and Cropanzano 1994), and are subordinate to the supervisor (Chen et  al. 2002). However, employee loyalty is likewise found to be inversely correlated with profitability and productivity (Silvestro 2002). It seems that there is a good and a bad side to employee loyalty. This perception is highly influenced by the measurement applied. Therefore, a review on the measurements of employee loyalty is vital and will be conducted in Sect. 6.3. Prior to that, the focus is set on publications of positive and desired as well as negative and undesired outcomes of employee loyalty without taking the employee loyalty measurement into account.

4.1  Positive and Desired Outcomes Most of the time, employee loyalty is shown in a positive and desired fashion. The problem is, though, that many studies claim a potential positive outcome of employee loyalty, without presenting empirical investigations. Table 4.1 only considers empirically proven, positive outcomes of employee loyalty and the associated key references. The main positive outcomes are thereby divided into how loyal employees solute conflicts, how they affect employee retention, in what way they influence the service mentality, how much work effort they put in, and what kind of work mindset they portray.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_4

73

74

4  Outcomes of Employee Loyalty

Table 4.1  Overview of empirically proven positive outcomes of employee loyalty Positive outcomes Conflict solution  Voice – are less likely to exercise voice  Voice – are more likely to exercise voice  Voice – are more likely to exercise “positive” voice and less likely to exercise “negative” voice  Voice – are more likely to exercise “less formal” voice Employee retention  Intention to leave – are less likely to intend to leave the organization and search for other jobs, even after unfair treatment  Intention to stay – are more likely to intend to stay Service mentality  Customer loyalty – build trust and foster customer loyalty  Service quality – are committed to continuously improve service quality  Service recovery – repair service failures Work effort  Extra effort – show willingness to exert extra effort and go beyond the norm to achieve group goals  OCB – are willing to show organizational citizenship behavior  Performance improvement – are interested in improving their performance and show higher levels of productivity  Company and work unit success – improve corporate and work unit performance Work mindset  Job satisfaction – are more satisfied with their jobs

Key references Boroff and Lewin (1997) Leck and Saunders (1992) and Hoffmann (2006) Luchak (2003)

Olson-Buchanan and Boswell (2002)

Boroff and Lewin (1997), Olson-Buchanan and Boswell (2002), Hoffmann (2006), and Lee and Whitford (2008) Chen (2001)

Drizin and Schneider (2004) and Peloso (2004) Yee et al. (2010) Lee et al. (2012) James and Cropanzano (1994)

Wong et al. (2002) Wong et al. (2002), Brown et al. (2011), and Linz et al. (2013) Chen et al. (2002), Martensen and Grønholdt (2006), and Eskildsen and Nüssler (2000) Chen (2001)

First, apparently divergent findings on the complaints behavior of loyal e­ mployees are presented. Employee loyalty was likewise found to inhibit (Boroff and Lewin 1997) or stimulate (Leck and Saunders 1992; Hoffmann 2006) voice. However, this divergence might be explained by the varying understandings of voice. Luchak (2003) reasonably raised the question, “what kind of voice do loyal employee use?” (p. 115). On the one hand, “direct voice” is more preventative to disputes with a greater potential to satisfy each of the conflicting parties  – and can therefore be considered as more positive. On the other hand, “representative voice” is more reactive with an intention to win the conflict. It was found that emotionally loyal

4.1  Positive and Desired Outcomes

75

employees tend to use direct voice instead of representative voice. Furthermore, Olson-Buchanan and Boswell (2002) added that loyal employees are more likely to exercise “less formal” voice. Thus, employee loyalty is shown to contribute to conflict solution by triggering more positive and less formal voice. Second, employee loyalty was shown to have a positive impact on employee retention. Loyal employees are less likely to intend to leave the organization and search for other jobs (Boroff and Lewin 1997; Olson-Buchanan and Boswell 2002) and employee loyalty to the supervisor is positively related to intention to stay (Chen 2001). Lee and Whitford (2008) showed, for regular employees as well as for those with managerial responsibility, that the intention to leave declined with increasing loyalty. This effect is strengthened by the satisfaction of payment. Hoffmann (2006) adds more differentiated insights as she states that ideological loyalty and organizational loyalty of employees can be in conflict with each other. Under these circumstances, ideological loyalists might be even more likely to leave. This again indicates the complexity of the employee loyalty concept and that high levels of employee loyalty alone cannot prevent turnover. Third, researchers were able to prove a positive effect of employee loyalty on the employee’s service mentality. This comprises a positive correlation between employee loyalty and customer loyalty in a sense that loyal employees build trust and foster customer loyalty (Drizin and Schneider 2004; Peloso 2004). Apart from that, loyal employees are committed to continuously improve service quality, which leads to higher firm performance over several stages (Yee et  al. 2010). Loyal employees are shown to repair service failures more effectively (Lee et al. 2012). From these results, employee loyalty must be regarded as a crucial element of the service–profit chain. Fourth, employee loyalty has a significant impact on the work effort, which subsumes extra effort, OCB, performance improvement, as well as company and work unit success. Extra effort states that employees loyal to their group show willingness to exert extra effort and go beyond the norm to achieve group goals. This effect is amplified in case of the loyalty group being compared to another group (James and Cropanzano 1994). OCB can be defined as “…contributions to the maintenance and enhancement of the social and psychological context that supports task performance” (Organ 1997, p. 91). It is shown to be positively influenced by positive job attitudes, personality, workplace values, motivating job characteristics, supportive leadership, tenure, and job level (Van Dyne et  al. 1994; Organ and Ryan 1995; Bolino and Turnley 2003). Nonetheless, Wong et al. (2002) demonstrated that loyalty to the supervisor affects OCB as well. Furthermore, the research group found that supervisor loyalty has an impact on job performance. In the same vein, loyal employees strive to improve their performance (Linz et al. 2013) and show higher levels of productivity (Brown et al. 2011). Finally, the improvement of corporate and work unit performance can be encouraged by loyal employees (Chen et  al. 2002; Eskildsen and Nüssler 2000). Performance is thereby not just understood as financial results but as creating value within the structure of the company and to its stakeholders (Martensen and Grønholdt 2006). Similar to the service mentality ­outcome, the work effort of loyal employees also creates external value.

76

4  Outcomes of Employee Loyalty

Fifth, loyal employees are shown to be more satisfied with their jobs. This work mindset should be regarded carefully, as it has an influence on the intent to stay (Chen 2001). In summary, it is not just stated that employee loyalty can function as catalyst for positive and desired outcomes. Many research groups have proven this cause-and-effect relationship and shown that loyal employees directly add value. Internally, the organization, the working group, and the supervisor benefit from their behavior and externally, the customers experience a difference of being served by more or less loyal employees. Hence, the level “loyal” is shown to generate a positive contribution to the success of the company (see Fig. 3.3). However, employee loyalty is set on a continuum, which should give rise to negative and undesired outcomes as well. It needs to be answered how far research has come already in detecting and proving those negative behaviors, as it was possible with positive and desired outcomes.

4.2  Negative and Undesired Outcomes According to the continuum of employee loyalty, individuals representing the levels “non-loyal” and “hyper-loyal” do not only contribute positively to the organizational success but might show negative and undesired effects as well. Individuals on the level “disloyal” will even exclusively result in negative outcomes and hurt an organization more than contribute to its success (see Fig. 3.3). Unlike the positive and desired outcomes of employee loyalty, to the best knowledge, no empirical results can be found that could supply profound evidence for negative and undesired outcomes of employee loyalty. At the most, negative effects of a certain reference object loyalties, for example, group loyalty (Hildreth et al. 2016), provide empirical insights. However, various authors dun the potentially negative side of employee loyalty (Strange 1973; Holloman 1991; Ewin 1993; Schrag 2001; Elegido 2013). Consequently, potentially negative and undesired effects of employee loyalty are derived from the literature and assigned to the three remaining levels: disloyal, non-loyal, and hyper-loyal. Within each level, the outcomes are ordered from less harmful to more harmful. Across the levels, overlaps can occur as, for example, disloyal and non-loyal employees might be equally willing to leave the company. Table 4.2 should not be considered as exhaustive; it rather provides a first indication of negative and undesired outcomes of employee loyalty along the three mentioned levels. The potentially negative outcomes presented will be explained in the aftermath. Resistance to Change In order to achieve a competitive advantage, changes in organizations due to technology advancement, law changes, internationalization, and complexity ­ increase are indispensable. Organizational change can thereby be seen as the attempt to modify structure, technologies, or working tasks. This includes stimulation of innovations, acceptance, and implementation of changes (Iverson 1996). Change

4.2  Negative and Undesired Outcomes

77

Table 4.2  Potentially negative outcomes of employee loyalty on respective levels Employee loyalty level Disloyal

Non-loyal

Hyper-loyal

Potentially negative outcome Resistance to change  Disloyal employees resist changing in order to protect the status quo Willingness to leave  Disloyal employees search for other jobs and are willing to leave the current employer CWB  Disloyal employees voluntarily and destructively hurt the organization and colleagues Resistance to change  Non-loyal employees resist changing in order to protect the status quo Willingness to leave  Non-loyal employees search for other jobs and are willing to leave the current employer CWB  Hyper-loyal employees issue themselves a moral license and accept to hurt the organization and colleagues Work overload  Hyper-loyal employees cannot withdraw from work obligations and face work overloads, which results in work–life conflicts and health problems Groupthink  Hyper-loyal employees adjust to internal group norms, stop critical thinking, and do not perceive unethical behavior anymore

perception is influenced by many factors and, for example, readiness for change (Armenakis et  al. 1993) or commitment to change (Parish et  al. 2008) can be ­understood as such predictors. Change management success rates range between 20% and 50% only. The reason for this can be found in different perceptions of change between management and employees. On the one hand, managers primarily see the advantages and possibilities to restructure their businesses. Employees, on the other hand, perceive the potential threat of the status quo getting off balance and therefore deny change frequently (Strebel 1996). This results in resistance to change, which manifests in withdrawal, sabotage, whistle-blowing, strike, or simply as work to rule (Pieterse et al. 2012). However, resistance to change is difficult to understand. As an example, employees do not always perceive change in the sense of downsizing and outsourcing as a breach of the psychological contract (Chaudhry et al. 2009). Fundamental psychological concepts, such as employee loyalty, must be carefully considered and their impact on change support and change resistance should be explored. Resistance to change is embedded in corporate cultures. When employees deny change as such, the consequences can extend to existential threat of the company. Change acceptance, thus, is essential and depends also on the loyalty to the supervisor (Strebel 1996). It was found that organizational change is more accepted when employees are loyal (Iverson 1996). Thus, resistance to change is to be expected from disloyal and non-loyal employees.

78

4  Outcomes of Employee Loyalty

Willingness to Leave Organizational commitment was already mentioned as an antecedent of employee loyalty (see Sect. 3.4.2) and therefore it provides a first indication on the willingness to leave outcome. Randall (1987) presents a table with possible consequences of low, moderate, and high levels of commitment (p. 462). At a low level of commitment, which might be transferred to disloyalty and non-loyalty, exit or a lack of intention to stay is stated as potential negative outcomes. Thus, disloyal and non-­ loyal employees might be characterized by a willingness to leave. Supporting evidence for the willingness to leave outcome can be derived from Boroff and Lewin (1997). They showed that loyal employees, which experienced unfair treatment, correlate negatively with the intention to leave the firm. By implication, disloyal and non-loyal employees might be characterized by a stronger willingness to leave. Other authors have also described the fact that the intention to leave decreases with rising loyalty (Niehoff et  al. 2001; Olson-Buchanan and Boswell 2002; Lee and Whitford 2008). Although employees leaving an organization for a better job cannot be seen as disloyal (Ewin 1993), this behavior is still negative and undesired for the current employer. In contrast to loyal employees, willingness to leave is a likely outcome especially for disloyal and non-loyal employees. Counter-Productive Work Behavior Counter-productive work behavior (CWB) is directed against the company or working colleagues (Fox et al. 2001) and denotes behaviors, such as work avoidance, aggression, hostility, sabotage, or theft. Various terms have been used instead of CWB, for example, aggression, antisocial behavior, delinquency, deviance, retaliation, incivility, or revenge (Pearson et al. 2001; Spector and Fox 2002). It is said that as soon as many employees commit CWB, social norms are not violated. Thus, one could conclude that CWB distinguishes from deviant behavior – as this includes a violation of social norms (Sackett and DeVore 2001). Even if many employees commit CWB, organizational norms are broken nevertheless. Apart from that, both negative behaviors overlap and are therefore used synonymously hereinafter. Thus, it is striking that the investigation into CWB should go beyond the “CWB” terminology. Negative workplace behaviors are of major relevance for organizations. In the UK, sometimes more than 50% of the employees indicate to have experienced such behaviors (Burnes and Pope 2007). In the USA, three out of four employees state that they have already stolen from their employer. This accounts for a damage between $6 and $200 billion annually for the US economy (Appelbaum et al. 2007). Employee theft is responsible for business failures between 5% and 30% every year (Dickens et al. 1989). CWB will therefore receive close attention. According to a survey of Burnes and Pope (2007), the most common negative behaviors at work are wrongly claiming work credit, denouncing colleagues and criticizing them repeatedly, withholding information, as well as isolating co-­workers from activities. Robinson and Bennett (1995) segmented negative deviant behavior at work along two dimensions. On the organizational level, serious deviant

4.2  Negative and Undesired Outcomes

79

behaviors were termed “property deviance” and included lying about working hours, sabotaging equipment, and stealing from the company. Minor deviant behaviors were termed “production deviance” and included leaving early, slowing down work, and wasting resources. Similarly, de Carvalho Wilks (2012) found out minor deviant behaviors that included, for example, reading private mails, making personal copies, browsing the internet, taking home office supplies, or making excuses for coming late and leaving early. It must be highlighted that tenure and organizational commitment played the key role for the acceptance of those undesirable behaviors. This provides evidence for the impact of loyalty-related concepts on negative and undesired outcomes. Further exemplary CWB are free riding (Leibowitz and Tollison 1980) and cyberloafing (Liberman et  al. 2011). Free riding means that employees do not engage in the work of a group but benefit from the rewards. Cyberloafing is a downside of the rapid internet spreading and means the private internet use at work. In extreme cases, 90% of the employees admitted to privately surf the web at work and that 90% of all websites entered were not related to work (Liberman et al. 2011). These behaviors are obviously negative and undesired for organizations; however, more subtle forms of counter-productive behaviors are known. OCB was already shown as a positive outcome of employee loyalty. It becomes obvious in dependable task accomplishment, work group collaboration, and constructive participation in the governance of the company (Graham 1995). However, OCB does not solely incorporate unselfish motives. Rather, OCB is sometimes utilized to increase the own image of the individual employee. Especially career-­ oriented employees, which are willing to push their own objectives, might engage in highly visible OCB (Bolino et al. 2013). This instrumental and potentially negative way of OCB is called impression management in the sense that the own image of the individual is enhanced in the eyes of the co-workers (Rioux and Penner 2001; Bowler and Brass 2006; Grant and Mayer 2009). Several studies show diverse results of the link between OCB and CWB. They might be understood as independent from each other (Dalal et al. 2009) or, in dependence of the situation, they can occur together (Spector and Fox 2010). Klotz and Bolino (2013) present another particularly interesting approach with the moral licensing view. Employees, who behave morally, for example, though OCB, issue themselves a moral license and behave immorally subsequently, for example, through CWB. The triggers of OCB and CWB are similar here, but they are negatively correlated and directed in different directions. In many cases, they occur in parallel and depend on the reference object. It is possible that employees exhibit OCB to the working group and CWB to the company. In the corporate context, the moral licensing theory states that certain OCB give license for CWB. Moral licensing is, thus, of major relevance for the understanding of the mutual requirement between OCB and CWB. Moral licensing was proven in manifold studies (Polman et al. 2013; Tiefenbeck et al. 2013; Greene and Low 2014), also in the organizational environment (Ormiston and Wong 2013). For instance, customers at a restaurant order more unhealthy dishes when healthy dishes are offered in the menu. The customers issue a license

80

4  Outcomes of Employee Loyalty

for the restaurant, which offers healthy meals and in turn order unhealthy meals (Jamal 2012). It was even shown that the anticipation of future moral behaviors provides the license for people to behave immorally at the present time (Cascio and Plant 2015). For that reason, CWB is not merely conceivable for disloyal employees, which want to harm the organization, but especially for hyper-loyal employees. Hyper-loyalists are likely to perceive themselves as the highest moral standard in the company and are therefore holding an implicit license, allowing them to behave negatively, even they actually refuse this kind of behavior actually. In this context, unethical pro-organizational behavior needs to be mentioned as well. Employees commit unethical behavior not for their own benefit or in order to injure organizational members, but in favor of the company. The behavior is often intended positively; however, damage is unmindfully accepted. Similar to the moral license, employee loyalty can serve as justification for unethical pro-organizational behavior. Employees believe to meet the expectations of the company (Umphress et al. 2010). To subsume, negative behaviors at the workplace in the sense of CWB have different origins, are shown in a variety of behaviors, and might affect disloyal and hyper-loyal employees. Work Overload In some cases, employees, above all managers, gain their identity from work and this becomes their sole identity. In the case of hyper-loyalty, employees can draw their whole self-esteem from what they contribute to the company. The moral competence to judge becomes suspended and employees serve their organization even if this requires immoral behavior (Schrag 2001). These individuals are known as “organization men” (Elegido 2013). People which dedicate their entire life to the company often get into work–family conflict, resulting in life stress, strain, and burnout (Tabarsa et al. 2013). Employees become vulnerable and suppress rationale criticism, when no other loyalties, such as the loyalty to the family, exist (Elegido 2013). An individual, which is unable to cooperate with colleagues, is described more susceptible to excessive loyalty to the organization and likely to engage in dubious working practices, which undermine the system (Marcus 1985). As social exchange theory predicts, employees expect a fair return for their working efforts. The effort–reward imbalance (ERI) model represents an acknowledged model that highlights problems of imbalances between effort and reward. Following van Vegchel et al. (2005), the ERI model was first introduced by Siegrist et al. (1986). The job is of importance for the socio-economic status of an employee and defined via social exchange. Employees bring in their work performance (effort) and receive a career opportunity, money, and esteem (reward) in return. ERI starts from a lack of social exchange (imbalance) in which employees invest more than they receive from their working relationship. The resulting negative emotions, for example, stress, can cause physical and mental diseases. Several circumstances are described, which might cause ERI and from which employees cannot withstand. These include, for example, missing work alternatives, expectation of future rewards, or overcommitment. Overcommitment disturbs the perception of efforts and rewards and has therefore an indirectly and directly negative impact on the health of employees (Siegrist et al. 2004; van Vegchel et al. 2005).

4.2  Negative and Undesired Outcomes

81

Overcommitment is defined as “… a set of attitudes, behaviors and emotions reflecting excessive striving in combination with a strong desire of being approved and esteemed. People characterized by overcommitment are exaggerating their efforts beyond levels usually considered appropriate” (Siegrist 2001, p.  55). Overcommitment was found to strengthen the imbalance between efforts and rewards and strongly predicted work–life conflict (Kinman and Jones 2008). As “… highly overcommitted employees underestimate challenging situations and overestimate their own capability, they tend to invest (too) many efforts” (van Vegchel et  al. 2005, p.  1119). Additionally, it was shown that overcommitment increases anxiety and depression levels (Mark and Smith 2012). Overcommitment assembles from items of the subscale “personal inability to withdraw from work obligations” to the largest part (Siegrist et al. 2004). High averages on the scale indicate a clear tendency toward work overload, including the already described negative impacts on the employees’ health. Consequently, work overload, that is, overcommitment, should be expected a negative and undesired outcome of hyper-loyalty. Groupthink Members of a group form their own rules and norms to a greater or lesser extent. A problem occurs when rather small groups start to adjust to these internal norms only, shut off externals, and fail to perceive mistakes as such (Greenwood 2005). In extreme cases, realistic alternatives are not taken into consideration anymore for not threatening the harmony within the group. In this case, cohesive group members show the tendency to adapt to the group pressure during group decisions. If critical thinking and corrective external inputs are rejected, this negative and undesired behavior is called groupthink (Weinert 2004). Symptoms of groupthink include, for example, illusion of invulnerability, belief in the moral integrity of the group, stereotyping, group pressure against dissenters, and illusion of unanimity (Staehle et al. 1999). Groupthink can cause serious harm to organizations and its members and should therefore be considered in conjunction with misdirected employee loyalty. Loyalty to the group occurs when members share a common identity with the group. If group members find common ground after decisions are made, disagreement, to some degree, is helpful to prevent groupthink (Dooley and Fryxell 1999). However, prudence is advisable once the majority opinion is uncritically accepted (Graham 1995). This kind of agreement is likely to end up in problematic groupthink (Hart and Thompson 2007). High loyalty to the group stimulates the members to self-censor their norms and to refrain from articulating concerns. This decreasing sense of individuality leads group loyalists to order directives without questioning those (Tangirala and Ramanujam 2009) and in turn to behave unethically (Strange 1973). Employee loyalty in connection with groupthink makes crimes in companies difficult to detect. On the basis of inaccurate norms, employees consider their negative behaviors as lawful and not as criminal (Moohr 2007). As excessive and blind loyalty to the group has been mentioned as an indicator of groupthink and resulting unethical decisions (Sims 1992), hyper-loyalty should be considered as resulting in this kind of negative and undesired behavior.

82

4  Outcomes of Employee Loyalty

Hildreth et al. (2016) provide an outstanding empirical example posing the risks of excessive group loyalty. As a first step, the researchers have worked out that loyal members of a student fraternity cheat less than non-loyal members. The reason is found in the fact that loyal members are stronger affected by ethical considerations. However, after a competition was introduced as a moderator, the results reversed and loyal group members cheated more. Moral persons act unethically often in favor of third parties and they do not consider their behavior as immoral. Hildreth and colleagues state that unethical behavior takes place where people highly identify with a group, show a need for affiliation and fear exclusion, or where the values of the unethically acting parties are shared. These promoting factors seem to count for groupthink especially. When group loyalty culminates in groupthink, the main desire of the members is to remain as a part of the group and they will not recognize the potential threats of suspended critical thinking and unethical behavior. Digression: Whistle-Blowing Whistle-blowing can be understood as some sort of voice and as the opposite of employee silence (Pinder and Harlos 2001). While employee silence takes place from fear of negative feedback or injustice (Duan et  al. 2010), whistle-blowing results out of a sense of duty to disclose grievances and crimes (Duska 2009). On the one hand, whistle-blowing might represent negative and undesired behavior resulting from employee loyalty or even a breach of employee loyalty (Elliston 1982). On the other hand, obligations from employee loyalty might not collide with obligations to blow the whistle (Corvino 2002). Two kinds of voice exist: direct and representative voice. Direct voice might be considered more positive since it is more flexible, it addresses the problem prior to escalation, and it is more of a consensus-style solution. Advantages of representative voice exist as well, for example, it can stimulate managers for discussion. However, representative voice is more reactive, problem-oriented, and designed with an intention to win the conflict. Whistle-blowing should be understood as a mixture of direct and representative voice (Luchak 2003). Hence, from this point of view, whistleblowing is also a mixture of rather positive and rather negative components. Usually, whistle-blowing is only applied when supervisors did not react to voice before (Hoffmann 2006). The more loyal a team member is characterized, the higher is the willingness to blow the whistle on unethical behavior (Hildreth et al. 2016). Whistle-blowing means internally or publically complaining about unethical practices of a company. Similar to employee loyalty, the core of whistle-blowing is the moral welfare of the organization and, hence, whistle-blowing is often viewed as a loyal behavior (Larmer 1992; Varelius 2008; Vandekerckhove and Commers 2004). The debates on whistle-blowing often lack a profound theoretical foundation (Near and Miceli 1985). Notwithstanding, whistle-blowing is subject to strong discussions. There is reasonable ground for the assumption that whistle-blowing neither represents negative and undesired nor disloyal behavior (Lewis 2011). Consequently, whistle-blowing in the context of employee loyalty was only presented as digression at this point and will not be highlighted in the course of this book.

References

83

Summarizing this chapter, the employee loyalty research model (Fig. 3.1) p­ redicts that employee loyalty is likely to provoke positive as well as negative human outputs. Positive behaviors that result from employee loyalty are well known and can be bundled to conflict solution, employee retention, service mentality, favorable work effort, and mindset (Table 4.1). Potentially negative behaviors from employee loyalty, however, are so far not at the core of the research. It is indicated that resistance to change, willingness to leave, CWB, work overload, and groupthink constitute potentially negative behaviors. Before the empirical test of this indication, the subsequent chapter is devoted to an intercultural comparison of employee loyalty, especially between European (Germany) and East Asian (China) cultures.

References Appelbaum, S. H., Iaconi, G. D., & Matousek, A. (2007). Positive and negative deviant workplace behaviors: Causes, impacts, and solutions. Corporate Governance, 7(5), 586–598. https://doi. org/10.1108/14720700710827176. Armenakis, A. A., Harris, S. G., & Mossholder, K. W. (1993). Creating readiness for organizational change. Human Relations, 46(6), 681–703. https://doi.org/10.1177/001872679304600601. Bolino, M.  C., & Turnley, W.  H. (2003). Going the extra mile: Cultivating and managing employee citizenship behavior. Academy of Management Executive, 17(3), 60–73. https://doi. org/10.5465/AME.2003.10954754. Bolino, M. C., Klotz, A. C., Turnley, W. H., & Harvey, J. (2013). Exploring the dark side of organizational citizenship behavior. Journal of Organizational Behavior, 34(4), 542–559. https:// doi.org/10.1002/job.1847. Boroff, K.  E., & Lewin, D. (1997). Loyalty, voice, and intent to exit a union firm: A conceptual and empirical analysis. Industrial and Labor Relations Review, 51(1), 50–63. https://doi. org/10.2307/2525034. Bowler, W.  M., & Brass, D.  J. (2006). Relational correlates of interpersonal citizenship behavior: A social network perspective. Journal of Applied Psychology, 91(1), 70–82. https://doi. org/10.1037/0021-9010.91.1.70. Brown, S., McHardy, J., McNabb, R., & Taylor, K. (2011). Workplace performance, worker commitment, and loyalty. Journal of Economics and Management Strategy, 20(3), 925–955. https:// doi.org/10.1111/j.1530-9134.2011.00306.x. Burnes, B., & Pope, R. (2007). Negative behaviours in the workplace. A study of two primary care trust in the NHS. International Journal of Public Sector Management, 20(4), 285–303. https:// doi.org/10.1108/09513550710750011. Cascio, J., & Plant, E. A. (2015). Prospective moral licensing: Does anticipating doing good later allow you to be bad now? Journal of Experimental Social Psychology, 56(1), 110–116. https:// doi.org/10.1016/j.jesp.2014.09.009. Chaudhry, A., Wayne, S. J., & Schalk, R. (2009). A sensemaking model of employee evaluation of psychological contract fulfillment. The Journal of Applied Behavioral Science, 45(4), 498–520. https://doi.org/10.1177/0021886309341739. Chen, Z.  X. (2001). Further investigation of the outcomes of loyalty to supervisor  – Job satisfaction and intention to stay. Journal of Managerial Psychology, 16(8), 650–660. https://doi. org/10.1108/EUM0000000006305. Chen, Z. X., Tsui, A. S., & Farh, J. L. (2002). Loyalty to supervisor vs. organizational commitment: Relationships to employee performance in China. Journal of Occupational and Organizational Psychology, 75(3), 339–356. https://doi.org/10.1348/096317902320369749.

84

4  Outcomes of Employee Loyalty

Corvino, J. (2002). Loyalty in business? Journal of Business Ethics, 41(2), 179–185. https://doi. org/10.1023/A:1021370727220. Dalal, R. S., Lam, H., Weiss, H. M., Welch, E. R., & Hulin, C. L. (2009). A within-person approach to work behavior and performance: Concurrent and lagged citizenship-counterproductivity associations, and dynamic relationships with affect and overall job performance. Academy of Management Journal, 52(5), 1051–1066. https://doi.org/10.5465/AMJ.2009.44636148. de Carvalho Wilks, D. (2012). Perceptions of deviant behavior in the workplace. International Journal of Management, 1(2), 217–230. Dickens, W. T., Katz, L. F., Lang, K., & Summers, L. H. (1989). Employee crime and the monitoring puzzle. Journal of Labor Economics, 7(3), 331–347. https://doi.org/10.1086/298211. Dooley, R.  S., & Fryxell, G.  E. (1999). Attaining decision quality and commitment from dissent: The moderating effects of loyalty and competence in strategic decision-making teams. Academy of Management Journal, 42(4), 389–402. https://doi.org/10.2307/257010. Drizin, M., & Schneider, A. J. (2004). Understanding the connection between loyalty and profit. Employment Relations Today, 30(4), 43–54. https://doi.org/10.1002/ert.10107. Duan, J., Lam, W., Chen, Z., & Zhong, J. A. (2010). Leadership justice, negative organizational behaviors, and the mediating effect of affective commitment. Social Behavior and Personality, 38(9), 1287–1296. https://doi.org/10.2224/sbp.2010.38.9.1287. Duska, R. (2009). Whistle-blowing and employee loyalty. In T. L. Beauchamp, N. E. Bowie, & D. G. Arnold (Eds.), Ethical theory and business (8th ed., pp. 155–159). Upper Saddle River: Pearson Education International. Elegido, J. M. (2013). Does it make sense to be a loyal employee? Journal of Business Ethics, 116(3), 495–511. https://doi.org/10.1007/s10551-012-1482-4. Elliston, F.  A. (1982). Civil disobedience and whistleblowing: A comparative appraisal of two forms of dissent. Journal of Business Ethics, 1(1), 23–28. https://doi.org/10.1007/BF00382803. Eskildsen, J.  K., & Nüssler, M.  L. (2000). The managerial drivers of employee satisfaction and loyalty. Total Quality Management, 11(4–6), 581–588. https://doi. org/10.1080/09544120050007913. Ewin, R.  E. (1993). Corporate loyalty: Its objects and its grounds. Journal of Business Ethics, 12(5), 387–396. https://doi.org/10.1007/BF00882029. Fox, S., Spector, P. E., & Miles, D. (2001). Counterproductive work behavior (CWB) in response to job stressors and organizational justice: Some mediator and moderator tests for autonomy and emotions. Journal of Vocational Behavior, 59(1), 291–309. https://doi.org/10.1006/ jvbe.2001.1803. Graham, J. W. (1995). Leadership, moral development, and citizenship behavior. Business Ethics Quarterly, 5(1), 43–54. https://doi.org/10.2307/3857271. Grant, A. M., & Mayer, D. M. (2009). Good soldiers and good actors: Prosocial and impression management motives as interactive predictors of affiliative citizenship behaviors. Journal of Applied Psychology, 94(4), 900–912. https://doi.org/10.1037/a0013770. Greene, M., & Low, K. (2014). Public integrity, private hypocrisy, and the moral licensing effect. Social Behavior and Personality, 42(3), 391–400. https://doi.org/10.2224/sbp.2014.42.3.391. Greenwood, D. J. H. (2005). Discussion corporate misbehavior: The conflicting norms of market, agency, profit, and loyalty. Brooklyn Law Review, 70(4), 1213–1237. Hart, D. W., & Thompson, J. A. (2007). Untangling employee loyalty: A psychological contract perspective. Business Ethics Quarterly, 17(2), 297–323. https://doi.org/10.5840/beq200717233. Hildreth, J. A. D., Gino, F., & Bazerman, M. (2016). Blind loyalty? When group loyalty makes us see evil or engage in it. Organizational Behavior and Human Decision Processes, 132(1), 16–36. https://doi.org/10.1016/j.obhdp.2015.10.001. Hoffmann, E.  A. (2006). The ironic value of loyalty dispute resolution strategies in worker cooperatives and conventional organizations. Nonprofit Management and Leadership, 17(2), 163–177. https://doi.org/10.1002/nml.141. Holloman, R. (1991). Loyalty: How much? To whom? Industrial Management, 33(3), 1–2. Iverson, R. D. (1996). Employee acceptance of organizational change: The role of organizational commitment. The International Journal of Human Resource Management, 7(1), 122–149.

References

85

Jamal, K. (2012). Dysfunctional consequences of disclosure. Accounting Horizons, 26(2), 381–383. https://doi.org/10.2308/acch-10262. James, K., & Cropanzano, R. (1994). Dispositional group loyalty and individual action for the benefit of an ingroup: Experimental and correlational evidence. Organizational Behavior and Human Decision Processes, 60(2), 179–205. https://doi.org/10.1006/obhd.1994.1080. Kinman, G., & Jones, F. (2008). Effort-reward imbalance, over-commitment and work-life conflict: Testing an expanded model. Journal of Managerial Psychology, 23(3), 236–251. https:// doi.org/10.1108/02683940810861365. Klotz, A. C., & Bolino, M. C. (2013). Citizenship and counterproductive work behavior: A moral licensing view. Academy of Management Review, 38(2), 292–306. https://doi.org/10.5465/ amr.2011.0109. Larmer, R. A. (1992). Whistleblowing and employee loyalty. Journal of Business Ethics, 11(2), 125–128. https://doi.org/10.1007/BF00872319. Leck, J.  D., & Saunders, D.  M. (1992). Hirschman’s loyalty: Attitude or behavior? Employee Responsibilities and Rights Journal, 5(3), 219–230. https://doi.org/10.1007/BF01385049. Lee, S.  Y., & Whitford, A.  B. (2008). Exit, voice, loyalty, and pay: Evidence from the public workforce. Journal of Public Administration Research and Theory, 18(4), 647–671. https://doi. org/10.1093/jopart/mum029. Lee, J. H., Kim, M. S., & Jeon, A. (2012). The effects of emotional intelligence on service recovery and organizational loyalty: A case of flight attendants of South Korean airlines. Service Business, 7(4), 665–686. https://doi.org/10.1007/s11628-012-0181-7. Leibowitz, A., & Tollison, R. (1980). Free riding, shirking, and team production in legal partnerships. Economic Inquiry, 18(3), 380–394. https://doi.org/10.1111/j.1465-7295.1980.tb00585.x. Lewis, D. (2011). Whistleblowing in a changing legal climate: Is it time to revisit our approach to trust and loyalty at the workplace? Business Ethics: A European Review, 20(1), 71–87. https:// doi.org/10.1111/j.1467-8608.2010.01609.x. Liberman, B., Seidman, G., McKenna, K.  Y. A., & Buffardi, L.  E. (2011). Employee job attitudes and organizational characteristics as predictors of cyberloafing. Computers in Human Behavior, 27(6), 2192–2199. https://doi.org/10.1016/j.chb.2011.06.015. Linz, S., Good, L. K., & Busch, M. (2013). Does worker loyalty pay? Evidence from transition economies. Evidence-Based HRM: A Global Forum for Empirical Scholarship, 1(1), 16–40. https://doi.org/10.1108/20493981311318593. Luchak, A. A. (2003). What kind of voice do loyal employees use? British Journal of Industrial Relations, 41(1), 115–134. https://doi.org/10.1111/1467-8543.00264. Marcus, A.  A. (1985). Professional autonomy as a basis of conflict in organization. Human Resource Management, 24(3), 311–328. https://doi.org/10.1002/hrm.3930240306. Mark, G., & Smith, A. P. (2012). Occupational stress, job characteristics, coping, and the mental health of nurses. British Journal of Health Psychology, 17(3), 505–521. https://doi. org/10.1111/j.2044-8287.2011.02051.x. Martensen, A., & Grønholdt, L. (2006). Internal marketing: A study of employee loyalty, its determinants and consequences. Innovative Marketing, 2(4), 92–116. Moohr, G.  S. (2007). On the prospect of deterring corporate crime. Journal of Business & Technology Law, 2(1), 25–41. Near, J.  P., & Miceli, M.  P. (1985). Organizational dissidence: The case of whistle-blowing. Journal of Business Ethics, 4(1), 1–16. https://doi.org/10.1007/BF00382668. Niehoff, B. P., Moorman, R. H., Blakely, G., & Fuller, J. (2001). The influence of empowerment and job enrichment on employee loyalty in a downsizing environment. Group and Organization Management, 26(1), 93–113. https://doi.org/10.1177/1059601101261006. Olson-Buchanan, J.  B., & Boswell, W.  R. (2002). The role of employee loyalty and formality in voicing discontent. Journal of Applied Psychology, 87(6), 1167–1174. https://doi. org/10.1037//0021-9010.87.6.1167. Organ, D.  W. (1997). Organizational citizenship behavior: It’s construct clean-up time. Human Performance, 10(2), 85–97. https://doi.org/10.1207/s15327043hup1002_2.

86

4  Outcomes of Employee Loyalty

Organ, D. W., & Ryan, K. (1995). A meta-analytic review of attitudinal and dispositional predictors of organizational citizenship behavior. Personnel Psychology, 48(4), 775–802. https://doi. org/10.1111/j.1744-6570.1995.tb01781.x. Ormiston, M. E., & Wong, E. M. (2013). License to ill: The effects of corporate social responsibility and CEO moral identity on corporate social irresponsibility. Personnel Psychology, 66(4), 861–893. https://doi.org/10.1111/peps.12029. Parish, J. T., Cadwallader, S., & Busch, P. (2008). Want to, need to, ought to: Employee commitment to organizational change. Journal of Organizational Change Management, 21(1), 32–52. https://doi.org/10.1108/09534810810847020. Pearson, C.  M., Andersson, L.  M., & Wegner, J.  W. (2001). When workers flout convention: A study of workplace incivility. Human Relations, 54(11), 1387–1419. https://doi. org/10.1177/00187267015411001. Peloso, A.  F. (2004). The antecedents of the employee loyalty  – customer loyalty relationship (Doctoral dissertation). Retrieved on January 2, 2017 from: http://eprints.qut.edu.au/16028 Pieterse, J.  H., Caniëls, M.  C. J., & Homan, T. (2012). Professional discourses and resistance to change. Journal of Organizational Change Management, 25(6), 798–818. https://doi. org/10.1108/09534811211280573. Pinder, C. C., & Harlos, K. P. (2001). Employee silence: Quiescence and acquiescence as response to perceived injustice. Research in Personnel and Human Resources Management, 20(1), 331–369. https://doi.org/10.1016/S0742-7301(01)20007-3. Polman, E., Pettit, N. C., & Wiesenfeld, B. M. (2013). Effects of wrongdoer status on moral licensing. Journal of Experimental Social Psychology, 49(4), 614–623. https://doi.org/10.1016/j. jesp.2013.03.012. Randall, D.  M. (1987). Commitment and the organization: The organization man revisited. Academy of Management Review, 12(3), 460–471. https://doi.org/10.2307/258513. Rioux, S.  M., & Penner, L.  A. (2001). The causes of organizational citizenship behavior: A motivational analysis. Journal of Applied Psychology, 86(6), 1306–1314. https://doi. org/10.1037/0021-9010.86.6.1306. Robinson, S.  L., & Bennett, R.  J. (1995). A typology of deviant workplace behaviors: A multidimensional scaling study. Academy of Management Journal, 38(2), 555–572. https://doi. org/10.2307/256693. Sackett, P.  R., & DeVore, C.  J. (2001). Counterproductive behaviors at work. In N.  Anderson, D. S. Ones, H. K. Sinangil, & C. Viswesvaran (Eds.), Handbook of industrial work and organizational psychology (Vol. 1, pp. 145–164). London: Sage Publications. Schrag, B. (2001). The moral significance of employee loyalty. Business Ethics Quarterly, 11(1), 41–66. https://doi.org/10.2307/3857868. Siegrist, J. (2001). A theory of occupational stress. In J. Dunham (Ed.), Stress in workplace. Past, present and future (pp. 52–66). London: Whurr Publishers. Siegrist, J., Siegrist, K., & Weber, I. (1986). Sociological concepts in the etiology of chronic disease: The case of ischemic heart disease. Social Science & Medicine, 22(2), 247–253. https:// doi.org/10.1016/0277-9536(86)90073-0. Siegrist, J., Starke, D., Chandola, T., Godin, I., Marmot, M., Niedhammer, I., & Peter, R. (2004). The measurement of effort-reward imbalance at work: European comparisons. Social Science & Medicine, 58(8), 1483–1499. https://doi.org/10.1016/S0277-9536(03)00351-4. Silvestro, R. (2002). Dispelling the modern myth. Employee satisfaction and loyalty drive service profitability. International Journal of Operations & Production Management, 22(1), 30–49. https://doi.org/10.1108/01443570210412060. Sims, R. R. (1992). Linking groupthink to unethical behavior in organizations. Journal of Business Ethics, 11(9), 651–662. https://doi.org/10.1007/BF01686345. Spector, P.  E., & Fox, S. (2002). An emotion-centered model of voluntary work behavior: Some parallels between counterproductive work behavior and organizational citizenship behavior. Human Resource Management Review, 12(2), 269–292. https://doi.org/10.1016/ S1053-4822(02)00049-9.

References

87

Spector, P.  E., & Fox, S. (2010). Counterproductive work behavior and organisational citizenship behavior: Are they opposite forms of active behavior? Applied Psychology, 59(1), 21–39. https://doi.org/10.1111/j.1464-0597.2009.00414.x. Staehle, W. H., Conrad, P., & Sydow, J. (1999). Management. Eine verhaltenswissenschaftliche Perspektive. Munich: Franz Vahlen Verlag. Strange, C. A. (1973). Loyalty: What’s it worth? Management Review, 62(6), 54–56. Strebel, P. (1996). Why do employees resist change? Harvard Business Review, 74(3), 86–92. Tabarsa, G. A., Tehrani, M., Lotfi, N., Ahadian, M., Baniasadi, A., & Tabarsa, E. (2013). Leisure time management: A new approach toward employees loyalty. Journal of Management and Strategy, 4(3), 65–80. https://doi.org/10.5430/jms.v4n3p65. Tangirala, S., & Ramanujam, R. (2009). The sound of loyalty: Voice or silence? In J. Greenberg & M. S. Edwards (Eds.), Voice and silence in organizations (pp. 203–224). Bingley: Emerald Group Publishing Limited. Tiefenbeck, V., Staake, T., Roth, K., & Sachs, O. (2013). For better or for worse? Empirical evidence of moral licensing in a behavioral energy conservation campaign. Energy Policy, 57(1), 160–171. https://doi.org/10.1016/j.enpol.2013.01.021. Umphress, E. E., Bingham, J. B., & Mitchell, M. S. (2010). Unethical behavior in the name of the company: The moderating effect of organizational identification and positive reciprocity beliefs on unethical pro-organizational behavior. Journal of Applied Psychology, 95(4), 769–780. https://doi.org/10.1037/a0019214. Van Dyne, L., Graham, J.  W., & Dienesch, R.  M. (1994). Organizational citizenship behevior: Construct redefinition, measurement, and validation. Academy of Management Journal, 37(4), 765–802. https://doi.org/10.2307/256600. van Vegchel, N., de Jong, J., Bosma, H., & Schaufeli, W. (2005). Reviewing the effort-reward imbalance model: Drawing up the balance of 45 empirical studies. Social Science & Medicine, 60(5), 1117–1131. https://doi.org/10.1016/j.socscimed.2004.06.043. Vandekerckhove, W., & Commers, M. S. R. (2004). Whistle blowing and rational loyalty. Journal of Business Ethics, 53(1–2), 225–233. https://doi.org/10.1023/B:BUSI.0000039411.11986.6b. Varelius, J. (2008). Is whistle-blowing compatible with employee loyalty? Journal of Business Ethics, 85(2), 263–275. https://doi.org/10.1007/s10551-008-9769-1. Weinert, A. B. (2004). Organisations- und Personalpsychologie (5th ed.). Weinheim: Beltz Verlag. Wong, Y. T., Wong, C. S., & Ngo, H. Y. (2002). Loyalty to supervisor and trust in supervisor of workers in Chinese joint ventures: A test of two competing models. The International Journal of Human Resource Management, 13(6), 883–900. https://doi.org/10.1080/09585190210134264. Yee, R. W. Y., Yeung, A. C. L., & Cheng, T. C. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 24(1), 109–120. https://doi.org/10.1016/j.ijpe.2009.10.015.

Chapter 5

Intercultural Comparison of Employee Loyalty

Literature reviews reveal that culture has a substantial, non-negligible impact on work behavior, company structures, and economic success (Gibson et  al. 2009). However, models applied for research on culture are shown not to converge and in fact are contradictory to some extent (Nardon and Steers 2009). Thus, it is essential to briefly present culture as a research field as well as its theoretical foundations of cultural dimensions and cultural standards. In this chapter, employee loyalty in German as well as in Chinese cultural context is highlighted.

5.1  Culture as a Research Field Culture cannot be ultimately defined either in general or within a specific research stream. Consequently, all researchers are forced to consider the complex term of culture in a way that is supportive of their research aims (Hasenstab 1999). Even within a single country, culture is not necessarily identical. For example, China is shaped by socialist political standards on the one side, but the economy orientates toward capitalism on the other side. In this way, traditional incentive models, in which gender, age, and loyalty are emphasized, exist as well as reformed incentive models, in which achievement and reward are considered important (Sanchez-­ Runde et al. 2009). Also, in Germany, differences are considered in some instances. As Germany was divided until 1989, even following studies sometimes subdivide into East and West Germany for investigations into culture and intercultural comparisons (Rauch et al. 2000). It seems that a myriad of definition approaches for culture exist, whereby one of the most prominent is known as “collective programming of the mind” (Hofstede 2004). Undoubtedly, culture is universal and all humans live within and develop a specific culture. Culture serves as orientation system, which includes symbols, such as language, gestures, facial expression, or clothes, and culture is passed on to future

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_5

89

90

5  Intercultural Comparison of Employee Loyalty

generations (Thomas 2005). Holistically speaking, one would agree that “culture is the configuration of basic assumptions about humans and their relationship to each other and to the world around them, shared by an identifiable group of people. Culture is manifested in individuals’ values and beliefs, in expected norms of social behavior, and in artifacts such as social institutions and physical items” (Gibson et al. 2009, pp. 47-48). Therefore, culture represents a “program for behavior” (Hall and Hall 1990). When culture consists of symbols, heroes, rituals, and values, organizational cultures differ stronger within the first mentioned elements and national cultures differ stronger within their values (Hofstede 2004). National results of employee surveys, thus, often conclude in varying results. Especially national values of “Western” cultures, like European countries and the USA, and national values of “Eastern” cultures, like East Asian countries, differ significantly. This might be illustrated by job attitudes of German and Chinese employees. Whatever is of importance to Germans at work does not necessarily matters for Chinese people. For instance, German employees consider job interest importantly, whereas Chinese employees appreciate job achievement first of all. However, nearly every second German employee states high job satisfaction, while only every tenth Chinese employee is reporting this (Sanchez-Runde et al. 2009). Differences in national values and cultures therefore become evident in the working environment. When investigating cultural differences, it is challenging to explain constructs on an individual level, like employee loyalty, with the phenomenon of culture, which reflects on a group or social level. Explaining major parts of the variance remains complicated, even when significant results are present. Thus, the fragmentation of individual, group, and situational levels, also in moderators, is essential (Gibson et al. 2009). With such a procedure and a solid theoretical foundation of culture, valid results of the influence of culture are to be expected.

5.2  Theoretical Foundation of Culture Theory on culture is manifold, but two principal streams stand out: cultural dimension and cultural standards. Cultural dimensions aim at identifying universal criteria that can be applied across different cultures. The extracted dimensions are often quantifiable by scores. In contrast, cultural standards waive quantitative statements and aim at identifying qualitative parameters to clarify guiding principles of certain cultures (Kühnel 2014).

5.2.1  Cultural Dimensions Prominent approaches of culture exceed pure definitions with the objective to make different national cultures comparable. The probably most-known authors of cultural dimensions are described subsequently. Hall (1959; Hall and Hall 1990)

5.2  Theoretical Foundation of Culture

91

attempted to identify basic dimensions of human cohabitation and follows an anthropologic approach. Hofstede (1983, 2011) gained empirical insights for 116,000 IBM employees by means of an international questionnaire and categorized them. Trompenaars (1993) developed his model based on his experiences as manager and consultant and built upon the models of Hall and Hofstede (Layes 2005). An overview of the cultural dimensions of the three authors can be seen in Table 5.1. Hall (1959; Hall and Hall 1990) assumes that culture is reflected in communication, whereby communication contains words, materials, and behavior. Cultural communication is more complex than what is just said or written. Three dimensions are distinguished, which can be referred to as communication style, space extent, and time perspective. The communication style dimension integrates highcontext vs. low-context communication and shows how strong the nonverbal context is integrated into a conversation. High-context means that humans attribute as much importance to the nonverbal context of a conversation, that is, for example, atmosphere, body language, and status of the person, as to the actual content of the communication. At low-context communication cultures, individuals strive to transport all information through language (Layes 2005). The space extent

Table 5.1  Comparison of selected cultural dimensions Author Dimension Communication style Space extent Time perspective Power acceptance Uncertainty tolerance Social assertiveness Human desires Individual autonomy Performance importance Emotion expression Control orientation Rule importance

Hall High-context vs. low-context Proxemics Monochronic vs. polychronic

Hofstede

Trompenaars

Long-term vs. short-term Power distance Uncertainty avoidance Masculinity vs. femininity Indulgence vs. restraint Individualism vs. collectivism

Sequential vs. synchronic

Role integration Sources: Hasenstab (1999); Nardon and Steers (2009)

Individualism vs. communitarianism Achievement vs. ascription Neutral vs. emotional Internal vs. external Universalism vs. particularism Specific vs. diffuse

92

5  Intercultural Comparison of Employee Loyalty

dimension claims that all individuals have invisible boundaries that define their personal space, that is, their territory. On the one side, this space represents power; for example, more powerful managers often work on top floors or in corner offices. On the other side, personal space in the sense of proxemics represents the distance individuals keep between each other while interacting. This distance depends on the relationship, activity, emotional states, and cultural background of the interacting people. If strangers get too close to others, they unconsciously react by backing up and feeling uncomfortable (Hall and Hall 1990). Within the time perspective dimension, monochronic cultures are separated from polychronic cultures. In monochronic cultures, people focus on one thing at a time only. Representatives work on tasks one after the other, plan their activities carefully, and dislike interruptions. In polychronic cultures, people deal with different tasks at once. Their representatives, on the contrary, change plans easily and show flexibility in terms of time and distractions (Hall 1959; Hall and Hall 1990). Hofstede, as the second author considered, initially extracted four dimensions (Hofstede 1983), which he extended to five dimensions later (Hofstede and Hofstede 2005) and finally to six dimensions (Hofstede 2011). He rates every dimension with scores between 0 and 100. The dimensions can be termed as time perspective, power acceptance, uncertainty tolerance, social assertiveness, human desires, and individual autonomy. Within the time perspective dimension, that is, likewise found by Hall and Hall (1990) and Trompenaars (1993), long-term oriented cultures are delimited from short-term oriented cultures. A high score represents long-term orientation, which focuses on future rewards and is characterized by perseverance and thrift. Short-term orientation is associated with the past and the present. It appears visible by appreciating traditional values and fulfilling social obligations (Hofstede and Hofstede 2005). The next four dimensions, which can be called power acceptance, uncertainty tolerance, social assertiveness, and human desires, are distinct from those of Hall (1959; Hall and Hall 1990) and Trompenaars (1993). The power acceptance dimension embodies the acceptance of power distance between members of a culture. High scores are seen in cultures where high power gaps are considered unproblematic, whereas low scores in power distance rather show acceptance of flat and open hierarchies. The uncertainty tolerance dimension illustrates how strong cultures emphasize uncertainty avoidance. A high score is likely in cultures that established many regulations and rules in order to avoid unclear circumstances and disorientation. A smaller liability of rules, flexible regulation systems, and easy adaption to diffuse conditions, however, is more likely to be found at a small score. The social assertiveness dimension is represented by masculinity vs. femininity. High scores indicate masculine cultures, where the roles of women and men are clearly distinct. The masculine role includes dominance, assertiveness, and performance striving. The feminine role includes subordination, solicitude, and affection. Low scores indicate feminine cultures, in which roles are gender independent. The human desires dimension integrates the two poles indulgence vs. restraint. High scores

5.2  Theoretical Foundation of Culture

93

indicate indulgence cultures, which are characterized by people that perceive themselves as happy, appreciate leisure, and remember positive emotions more easily. Low scores indicate restrained cultures, where fewer people would consider themselves happy, value leisure less important, and are less likely to remember positive emotions (Layes 2005; Hofstede 2011). On the contrary to the aforementioned, the individual autonomy dimension of Hofstede (1983) occurs in the concept of Trompenaars (1993) as well. It entails the degree to which individual autonomy is favored or refused by a culture. High scores reflect individualism and loose relationships, whereas individuals pursue their own interests. Low scores reflect collectivism, respectively communitarianism, where strong social ties and group memberships are esteemed (Hasenstab 1999). The six dimensions of the Hofstede model are often stated as most common (Nardon and Steers 2009). Hofstede compares the scores of many countries in his publications, while the scores can be derived online as well. This is advisable so that preferably recent scores can be applied. For example, large differences occur within the long-term orientation dimension between older publications and recent online data. For a comparison of Germany and China, the score for Germany is still stated very low (31) at Hofstede and Hofstede (2005) and the score for China (118) is not adapted to the 0-to-100 scale yet. The research team around Hofstede (2015) released the most recent scores online and those scores were used for a comparison of Germany and China (see Fig.  5.1). This shows that, on the one hand, both

Fig. 5.1  Comparison of German and Chinese cultural dimensions according to Hofstede. (Data retrieved: February 2017 from www.geerthofstede.com)

94

5  Intercultural Comparison of Employee Loyalty

cultures are similarly masculine and long-term oriented. On the other hand, Germany is characterized by lower power distance, higher individualism, uncertainty avoidance, and indulgence in contrast to China. The model of Trompenaars (1993) shows, besides the individual autonomy dimension, also an overlap in the time perspective dimension with the other mentioned authors. Trompenaars’ sequential vs. synchronic is thereby very similar to Hall’s monochronic vs. polychronic, even though Trompenaars focuses on overall tasks and subtasks (Hasenstab 1999). Thus, two dimensions of Trompenaars’ model overlap with Hall or Hofstede while only one is found in all three models (see Table 5.1). The unique dimensions of Trompenaars (1993) can be labeled performance importance, emotion expression, control orientation, rule importance, and role integration. Within the performance importance dimension, achievement means that individuals are judged based on their accomplishments and records. Ascription, however, represents that a certain status is attributed to individuals by birth or according to their age, gender, or connections. The emotion expression dimension covers the two poles neutral vs. emotional. In neutral cultures, people strongly control and hide their emotions. In emotional cultures, the opposite is the case and people express their emotions freely. The control orientation dimension considers how far a culture estimates the environment as controllable. Internal control cultures are convinced to be in full control of the environment and external control cultures regard themselves as subjects of external factors, which cannot be influenced. The rule importance dimension is marked by universalism, that is, the high appreciation of rules and values, and particularism, that is, the high appreciation of social relationships. Finally, the role integration dimension is embodied by the extent of specific vs. diffuse. Specific means that members are more straightforward and pay attention to the separation of work and leisure. Diffuse cultures, however, are more relationship oriented and work and leisure may coincide with each other (Trompenaars 1993). In summary, most of the dimensions of Hall, Hofstede, and Trompenaars are likely to represent unique dimensions, with only two overlaps. Besides unique approaches, such as Hall, Hofstede, and Trompenaars, consolidating approaches exist as well. Nardon and Steers (2009) evaluated six theories of cultural dimensions and considered five topics as reiterating: distribution of power and authority, emphasis on groups or individuals, relationship with environment, use of time, as well as personal and social control. They pursue a rather qualitative approach and applied clusters for countries. Germany, for example, pertains to the Germanic countries and China to the East/Southeast Asian countries. The newly identified cultural dimensions exhibit a close similarity to the ones of Hofstede. However, they should not be seen as identical but as supplements. The five consolidated dimensions are designated as hierarchy–equality, individualism–collectivism, mastery–harmony, monochronism–polychronism, and universalism–particularism. These five consolidated dimensions allow another comparison between the German and Chinese cultures. The major difference between Germany and China is seen in the universalism–particularism dimension. Germany is classified as strongly universalistic and China as strongly particularistic. Further, clear differences are

5.2  Theoretical Foundation of Culture

95

found within the dimensions of hierarchy–equality, individualism–collectivism, and mastery–harmony. Germany is considered as moderately egalitarian, individualistic, and mastery oriented; while China is considered as strongly hierarchical, collectivistic, and harmony oriented. Only in the monochronism–polychronism dimension, Germany and China are rated as moderately monochronic (Nardon and Steers 2009). Thus, the German and the Chinese culture differ significantly from one another, with only one overlap. When comparing the Nardon and Steers’ (2009) assessment of Germany and China with the one by Hofstede (2015), two major differences become evident. First, only one of five dimensions (monochronism–polychronism) reveals similarity between Germany and China in the Nardon and Steers’ assessment, whereas in Hofstede’s assessment (see Fig. 5.1) three of six dimensions show similar values (social assertiveness, time perspective, human desires). Second and more striking, the similar dimension of mastery–harmony or social assertiveness concludes in different results. Nardon and Steers rate China strongly harmony oriented, which can be put on a level with femininity, and Hofstede rates China rather masculine (66 of 100). Thus, even in similar cultural dimensions, consensus does not necessarily exist, which highlights the difficulty of this research stream and substantiates the prerequisite to consider the research stream of cultural standards.

5.2.2  Cultural Standards In contrast to cultural dimensions, cultural standards waive quantitative statements and aim at identifying qualitative parameters to clarify guiding principles of certain cultures (Kühnel 2014). Thus, the concept of cultural standards might be regarded as relatively soft. It is important to point out that a premature application of cultural standards might result in stereotyping (Kühnel 2014). Nevertheless, the cultural standards approach connects exact empirical research with a realistic structuring, easy comprehensibility, good clarity, and simple internalization (Kammhuber and Schroll-Machl 2007). Cultural standards can be defined through five traits: First, cultural standards represent forms of perceiving, thinking, valuing, and behaving that most members of a specific culture claim as normal, typical, and binding for them and for others. Second, own and foreign behavior is navigated, controlled, and judged based on these cultural standards. Third, cultural standards regulate how individuals of a culture deal with situations and persons. Fourth, the individual and group-specific handling of cultural standards to regulate one’s behavior may vary within a tolerance range. Fifth, behaviors outside of that tolerance range are rejected and sanctioned by the social environment (Thomas 2005). Members of a culture are usually unaware of their cultural standards and the resulting behavior regulation function. Only when dealing with foreign cultures, cultural standards and their effects might be detected. Hence, cultural standards can only be applied between a culture of origin and a target culture (Holzmüller 1997).

96 Table 5.2  Comparison of German and Chinese cultural standards

5  Intercultural Comparison of Employee Loyalty German cultural standards Facts-orientation Rule-orientation Directness and low context Interpersonal distance distinction Time management Internalized control Separation of areas of personality and areas of life

Chinese cultural standards Social harmony Rule relativism Face approach Modesty and politeness guanxi Group-orientation Hierarchy-orientation

Sources: Thomas (1997), Liang and Kammhuber (2007), Schroll-­ Machl (2007), and Kühnel (2014)

Although the approach of cultural dimensions is relatively novel, various authors already conducted a comparison of German and Chinese cultural standards. Table 5.2 combines four different works and contrasts German and Chinese cultural standards. Germany is considered a facts-oriented culture, in which facts, roles, and expertise are decisive. Emotions are controlled as far as possible. Issues and facts also determine the communication style. The status of conversation partners might be ignored in favor of the discussion outcome and supervisor and follower often argue on an equal footing (Schroll-Machl 2007). China on the other hand is characterized by social harmony as the highest principle of interpersonal relationships. Harmony does not mean social equality in this regard, but rather “equality in inequality.” The individual integrates within the social structure and a social order emerges. Humans behave according to their social roles and hierarchies, which result from age, social status, level of knowledge, and group membership. According to harmony, the avoidance of conflicts is essential for the Chinese culture and differences of opinion are prevented or only expressed indirectly (Chen 2000; Liang and Kammhuber 2007). The German culture is shaped by innumerable regulations, policies, rules, and laws. Those are narrowly interpreted and strictly complied. Otherwise, rigid penalties follow rule transgressions. Rules thereby do not necessarily have to be explicit as the case of high appreciation of punctuality shows. Regulations, policies, rules, and laws ensure that structures are adhered to, which in return provides orientation and minimizes risk for the members of the culture (Schroll-Machl 2007). In the Chinese culture, rules and laws do not receive such an absolute status, but rather they must be interpreted within their context. Morality and the character of the ruler, shown by self-discipline, unselfishness, and virtues of the leader (Cheng et  al. 2004), are considered more important. Too many differentiated rules are perceived as impeding and conflict-promoting (Liang and Kammhuber 2007). Germans emphasize a direct and explicit communication style where important parts of a conversation are put into words. Content is more important than the manner in which it is transferred and only what is explicitly said will be included in the decoding of a message. So, on the one side, Germans are often perceived as very direct and undiplomatic, but on the other side as honest and sincere. The German

5.2  Theoretical Foundation of Culture

97

culture leaves no space for interpretations of the (low) context, nor does it particularly consider sensitivities of foreign cultures (Fink et al. 2000). For Chinese people, however, the face approach is deeply embedded in their culture. Others’ mistakes are not criticized directly or in public so that they do not lose their social face. “Take care of face” and “give face” are applied in in-group relationships on a vertical and horizontal level and “strive for face” is applied in out-group relationships on a horizontal level. The face approach is set higher than direct and honest communication and constitutes an important social resource for the Chinese culture (Chen 2004). The German culture is found to emphasize interpersonal distance distinction. This means that most members of the German culture expect from others not to intervene in their affairs. Instead, unfamiliar persons are expected to keep distance and restraint (Thomas 2005; Kühnel 2014). Modesty and politeness, which are emphasized in the Chinese culture, contrast with the distance distinction. In China, modesty means to establish familiarity and a warm relation, which results in getting related to others’ affairs. Problems, however, are omitted as politeness includes to not confront others directly with problems (Sheer and Chen 2003; Liang and Kammhuber 2007). Time management is of high importance for Germans. Time is regarded as a valuable good, which should not be wasted. Ideally, German people would organize their life consecutively and (1) plan their actions, (2) implement them without disturbances and interruptions, and (3) achieve their goals. As most people try to manage their time efficiently, members of the culture have to coordinate for cooperations and arrange appointments. Reliability is imperative for trust building and unpunctuality is understood as an insult (Schroll-Machl 2007). Chinese would very likely perceive such a planning behavior as excessive as they invest a large share of their time in creating and maintaining interpersonal relationships. These relationships, known as guanxi, are based on commonalities between individuals, such as common descent, university, or acquaintances. They include friends and family relationships as well as dyadic relationships, for example, between supervisor and subordinate. Specific communication rules apply for the clearly distinct in-groups and out-groups, aiming at avoiding embarrassments or conflicts (Chen and Starosta 1997; Liang and Kammhuber 2007). Within the German culture, individuals recognize the necessity for certain rules or procedures and thereby start to self-control. Internalized control results from prescribed norms or self-created plan. Violations therefore do not just result in punishments but in internal moral conflict. The internalized control implies the feeling of an individual to comply with roles, promises, and provisions (Schroll-Machl 2007). Members of the Chinese culture, however, emphasize group-orientation. Individuals strongly orient on groups and their respective values and give priority to group goals. Privacy is deemphasized and the boundary between public and private is fluent. Self-control therefore is not as important as the control by the group and the behavior in accordance with collective norms (Reck 2004). Germans strictly separate their areas of personality and areas of life depending on how close they are to others. Hence, the areas of profession–privacy, role–person, and rationality–emotionality vary. Germans usually work at their job and enjoy

98

5  Intercultural Comparison of Employee Loyalty

life in their privacy. At work, people behave in conformity with their job role, mostly show formal behavior, and remain rational to attain their goals. At home, people behave less in conformity with a certain role, do not focus on formality, show emotions and maintain their social relationships and focus on family (Fink et al. 2000). For Chinese, such a strong separation of areas of personality and areas of life cannot be found, although a separation is indicated to a certain extent (Thomas 1997). Paternalistic leadership, for example, makes it difficult for employees to separate their professional life from their personal life (Chen and Chung 1993). The more prominent cultural standard of the Chinese culture is the hierarchy-orientation. The hierarchical relationships can be distinct between the reference objects: supervisor, colleagues, and subordinates as well as between the two poles: friends and strangers (or enemies). Friends will be treated with respect, care, and harmony, but strangers (or enemies) will face problems, retaliations, and conflicts (Huang et  al. 2012). According to the Confucian teaching, respect for the older person and for persons on a higher hierarchical level shapes the character and hierarchical relationships are unequal and complementary (Chen and Chung 1993). In summary, cultural standards can be used appropriately when they are compared between two cultures. This qualitative comparison, here between Germany and China, is always impacted by the subjectivity of the researcher. However, the cultural standards as shown in Table 5.2 emphasize even stronger than the cultural dimensions that the German and the Chinese cultures differ in large parts. This needs to be considered for the comparison of employee loyalty in Germany as a European culture and in China as an East Asian culture. It results in the question if one concept of employee loyalty can be applied for both cultures.

5.3  Employee Loyalty in European Cultures Only very limited studies are known, which measure employee loyalty in the German culture and often the focus is not set on employee loyalty. Fischer (2004), for example, does not directly address employee loyalty, but rather how strong it is honored by the employer and calls this rewarding employee loyalty. Other authors that theoretically contribute to employee loyalty in the German culture frequently mention employee loyalty, but fail to provide an in-depth explanation (Rohrschneider et al. 2010). In one of the rare examples, Kantsperger and Kunz (2005) survey employees from German and Austrian customer care centers. They were able to show that increases in employee loyalty result from management efforts that promote employee orientation and job facilitation. However, the concept of employee loyalty is once again not presented in more detail and its measurement focusses on the satisfaction and recommendation of the respective employer. Matzler and Renzl (2006) investigate an Austrian energy company, which is very close to the German culture.

5.3  Employee Loyalty in European Cultures

99

The authors are able to show that trust in peers leads to employee satisfaction and finally to employee loyalty. This result can be considered as an indication of the employee loyalty concept. However, to the best knowledge, further robust results from the German culture are lacking. For want of German studies on employee loyalty, other “Western” studies may help to dedicate employee loyalty in this cultural area. Along the six cultural dimensions of Hofstede (2015), the USA and Canada are found to significantly distinguish between Germany within the time perspective and human desires dimensions. Germany is very long-term oriented (83 of 100) and rather restrained (40 of 100), whereas the USA and Canada are very short-term oriented (26 and 36 of 100) and rather indulgent (both 68 of 100). Apart from the aforementioned, the three cultures show the same tendency on the remaining four dimensions, making it reasonable to consider Germany, the USA, and Canada as culturally similar. Most studies of employee loyalty have been conducted within the North American region. Withey and Cooper (1992) used a Canadian sample and as mentioned before, they found employee loyalty to represent an active behavior. However, as redundancy should be avoided, this section will integrate only two more “Western” studies that especially mention cultural differences related to employee loyalty in particular. Ali et al. (1993) state that cultural differences are of particular interest on the individual autonomy dimension (individualism vs. collectivism). Employee loyalty is most likely to be found in collectivistic cultures as their members might receive long-term protection in return. In individualistic cultures, employee loyalty is stronger associated with the fulfillment of the psychological contract. In these cultures, employee loyalty is less natural and job security is not enough to build it. Payment, promotion opportunities, and self-respect carry greater weight. Yet, the authors could not find evidence to support this consideration in the samples of the culturally close countries, Canada and the USA. The higher expression of employee loyalty in collectivistic cultures therefore remains hypothetical. Another intercultural consideration of employee loyalty is contributed by James and Cropanzano (1994). They explain that cultural collectivism is different from group loyalty. Cultural collectivism works on a higher level and influences, for example, a greater appreciation of status as well as nonverbal communication. Group loyalty, on the other hand, is more specific and indicates how strongly members engage for the goals and defense of their groups. The differences between cultural collectivism and group loyalty are evident. The present employee loyalty concept, as derived in Chap. 3, corresponds to a “Western” perspective. It was shown to be reflected in an active, voluntary, deliberate, and reciprocal behavior toward the reference objects: organization, working group, and supervisor. Besides, it is hypothesized that collectivistic cultures might express stronger employee loyalty than individualistic cultures and that group loyalty is on a lower level than and distinct from cultural collectivism. However, robust empirical results from Germany are largely missing.

100

5  Intercultural Comparison of Employee Loyalty

5.4  Employee Loyalty in East Asian Cultures In individualistic cultures, members take responsibility for their own actions, stay independent, and strive for self-fulfillment. Thus, showing loyalty remains a deliberate and voluntary decision. East Asian cultures, however, are represented by collectivism. Individual interests recede into the background and group decision is preferred in order to maintain social harmony. As people can exploit their full potential only within strong groups, unquestioned loyalty is expected in exchange (Nardon and Steers 2009). It is therefore indispensable to consider whether the employee loyalty concept derived from a European cultural perspective would apply for an East Asian culture perspective as well. Employee loyalty studies that highlight East Asian culture differences represent a valuable source for indicating potential differences between employee loyalty in Germany and China. China, unlike the USA, Canada, or Germany, represents a collectivistic culture. Reciprocity, group harmony, and role obligations are important and rooted in the Confucian social order (Chen et  al. 2002; Wong et  al. 2002). Subordinates are already obliged to show obedience and loyalty by means of their cultural background. Supervisors are expected to reply with kindness and goodwill. Even in the modern area, employee loyalty is used to distinguish employees into in-groups and out-groups (Chen et  al. 2002). Thus, employee loyalty is mainly understood as loyalty to the supervisor, including dedication, effort, following, identification, and value internalization. Here, again, the question is whether such loyalty to the supervisor and the respective measurements are culturally specific (Chen 2001). Within Asian cultures, the positive effect of loyalty to the supervisor on higher job performance is shown (Wong et al. 2002; Jen et al. 2012) as well as that employee loyalty is affected by satisfaction with the group and the supervisor (Chang et al. 2010). Once more, the explanation is found in the collectivism of the culture. Self-­ interest is deferred in favor of harmony and the supervisor assumes a parental role in the sense of protection and advice (Jen et al. 2012). Thus, East Asian cultures differ from European cultures in so far as they emphasize the role of the supervisor and the working group. In her study, Leung (2008) surveyed employees from Hong Kong. She shows that low levels of ethical climate embody weak relationships between employer and employee, which are negatively correlated with extra-role behavior. High levels of ethical climate embody a strong employer–employee relationship, which are positively correlated with extra-role behavior. Leung explains her findings through the negative or positive perception of the psychological contract. Employee loyalty is conceptualized as attitudinal loyalty with a strong accentuation on morale and correlates positively with altruism and identification. Interestingly, the measurement of employee loyalty includes three items, all relating to the reference object working group. Leung’s conceptualization of attitudinal loyalty stands out from the Asian culture; however, the cultural context must be considered. As a former British colony,

References

101

Hong Kong has long been influenced by European values and has become a special administrative zone of China only in 1997. Thus, the culture of the people from Hong Kong is dissimilar from central Chinese citizens. Hong Kong might be understood as a hybrid of European and East Asian cultural values (Ralston et al. 1992), in which employee loyalty is collectively expressed and the organization fades into the background. In summary, the focus on the supervisor and working group in the East Asian culture is striking. For the European as well as for the East Asian culture, employee loyalty is found to play a decisive role. Positive impacts of employee loyalty on the working behavior are seen in both cultures. However, German and Chinese cultures differ significantly from one another (see, e.g., Fig. 5.1). Previous research already indicates that the three different reference objects might not have the same importance for both cultures and that one shared concept of employee loyalty is questionable. It is therefore of interest to compare particularly the concept of employee loyalty from a European cultural perspective with that of the East Asian cultural perspective. The subsequent chapter and the empirical investigations will provide evidence.

References Ali, A.  J., Azim, A., & Falcone, T.  W. (1993). Work loyalty and individualism in the United States and Canada. International Journal of Manpower, 14(6), 58–66. https://doi. org/10.1108/01437729310043114. Chang, C.  C., Chiu, C.  M., & Chen, C.  A. (2010). The effect of TQM practices on employee satisfaction and loyalty in government. Total Quality Management and Business Excellence, 21(12), 1299–1314. https://doi.org/10.1080/14783363.2010.530796. Chen, G.-M. (2000, Nov). The impact of harmony on Chinese conflict management. Paper presented at the 86th annual meeting of the National Communication Association, Seattle, WA. Chen, Z.  X. (2001). Further investigation of the outcomes of loyalty to supervisor  – Job satisfaction and intention to stay. Journal of Managerial Psychology, 16(8), 650–660. https://doi. org/10.1108/EUM0000000006305. Chen, G.-M. (2004). The two faces of Chinese communication. Human Communication, 7(1), 25–36. Chen, G.-M., & Chung, J. (1993, Nov). The impact of Confucianism and on organizational communication. Paper presented at the 79th annual meeting of the Speech Communication Association, Miami Beach, FL. Chen, G.-M., & Starosta, W. J. (1997). Chinese conflict management and resolution: Overview and implications. Intercultural Communication Studies, 7(1), 1–16. Chen, Z. X., Tsui, A. S., & Farh, J. L. (2002). Loyalty to supervisor vs. organizational commitment: Relationships to employee performance in China. Journal of Occupational and Organizational Psychology, 75(3), 339–356. https://doi.org/10.1348/096317902320369749. Cheng, B.-S., Chou, L.-F., Wu, T.-Y., Huang, M.-P., & Farh, J.-L. (2004). Paternalistic leadership and subordinate responses: Establishing a leadership model in Chinese organizations. Asian Journal of Social Psychology, 7(1), 89–117. https://doi.org/10.1111/j.1467-­839X.2004.0013 7.x.

102

5  Intercultural Comparison of Employee Loyalty

Fink, G., Nový, I., & Schroll-Machl, S. (2000). Tschechische, österreichische und deutsche Kulturstandards in der Wirtschaftskooperation. Journal for East European Management Studies, 5(4), 361–377. Fischer, R. (2004). Rewarding employee loyalty: An organizational justice approach. International Journal of Organisational Behavior, 8(3), 486–503. Gibson, C.  B., Maznevski, M.  L., & Kirkman, B.  L. (2009). When does culture matter? In R. S. Bhagat & R. M. Steers (Eds.), Cambridge handbook of culture, organizations, and work (pp. 46–68). Cambridge, UK: Cambridge University Press. Hall, E. T. (1959). The silent language. Garden City: Doubleday & Company. Hall, E.  T., & Hall, M.  R. (1990). Understanding cultural differences. Germans, French, and Americans. Yarmouth: Intercultural Press. Hasenstab, M. (1999). Interkulturelles Management. Bestandsaufnahme und Perspektiven. In J. Bolten & P. Oberender (Eds.), Schriftenreihe Interkulturelle Wirtschaftskommunikation (Vol. 5, pp. 1–255). Berlin: Verlag Wissenschaft & Praxis. Hofstede, G. (1983). The cultural relativity of organizational practices and theories. Journal of International Business Studies, 14(2), 75–89. https://doi.org/10.1057/palgrave.jibs.8490867. Hofstede, G. (2004). Business cultures. In F. E. Jandt (Ed.), Intercultural communication. A global reader (pp. 8–12). Thousand Oaks: Sage Publications. Hofstede, G. (2011). Dimensionalizing cultures: The Hofstede model in context. Online Readings in Psychology and Culture, 2(1), 1–26. https://doi.org/10.9707/2307-­0919.1014. Hofstede, G. (2015). 6 dimensions for website. Retrieved on February 26, 2017 from: http://geerthofstede.com/research-­and-­vsm/dimension-­data-­matrix/ Hofstede, G., & Hofstede, G. J. (2005). Cultures and organizations: Software of the mind (2nd ed.). New York: McGraw-Hill. Holzmüller, H. H. (1997). Kulturstandards – ein operationales Konzept zur Entwicklung kultursensitiven Managements. In J.  Engelhard (Ed.), Interkulturelles Management. Theoretische Fundierung und funktionsbereichsspezifische Konzepte (pp. 55–74). Wiesbaden: Gabler Verlag. Huang, N., Retzbach, R., & Kühlmann, K. (2012). China-Knigge. Chinakompetenz in Kultur und Business. Munich: Oldenbourg Wissenschaftsverlag. James, K., & Cropanzano, R. (1994). Dispositional group loyalty and individual action for the benefit of an ingroup: Experimental and correlational evidence. Organizational Behavior and Human Decision Processes, 60(2), 179–205. https://doi.org/10.1006/obhd.1994.1080. Jen, C. K., Chou, L. F., Lin, C. Y., & Tsai, M. C. (2012). The influence of the perception of a familial climate on job performance: Mediation of loyalty to supervisors and moderation of filial behaviour. International Journal of Psychology, 47(3), 169–178. https://doi.org/10.108 0/00207594.2011.626045. Kammhuber, S., & Schroll-Machl, S. (2007). Möglichkeiten und Grenzen der Kulturstandardmethode. In A. Thomas, S. Kammhuber, & S. Schroll-Machl (Eds.), Handbuch Interkulturelle Kommunikation und Kooperation, Bd. 2: Länder, Kulturen und interkulturelle Berufstätigkeit (2nd ed., pp. 19–23). Göttingen: Vandenhoeck & Ruprecht. Kantsperger, R., & Kunz, W. H. (2005). Managing overall service quality in customer care centers  - empirical findings of a multi-perspective approach. International Journal of Service, 16(2), 135–151. https://doi.org/10.1108/09564230510592270. Kühnel, P. (2014). Kulturstandards – woher sie kommen und wie sie wirken. Interculture Journal, 13(22), 57–78. Layes, G. (2005). Kulturdimensionen. In A.  Thomas, E.-U.  Kinast, & S.  Schroll-Machl (Eds.), Handbuch Interkulturelle Kommunikation und Kooperation, Bd. 1: Grundlagen und Praxisfelder (2nd ed., pp. 60–73). Göttingen: Vandenhoeck & Ruprecht. Leung, A. S. M. (2008). Matching ethical work climate to in-role and extra-role behaviors in a collectivist work setting. Journal of Business Ethics, 79(1), 43–55. https://doi.org/10.1007/ s10551-­007-­9392-­6. Liang, Y., & Kammhuber, S. (2007). Ostasien: China. In A. Thomas, S. Kammhuber, & S. Schroll-­ Machl (Eds.), Handbuch Interkulturelle Kommunikation und Kooperation, Bd. 2: Länder,

References

103

Kulturen und interkulturelle Berufstätigkeit (2nd ed., pp. 171–185). Göttingen: Vandenhoeck & Ruprecht. Matzler, K., & Renzl, B. (2006). The relationship between interpersonal trust, employee satisfaction, and employee loyalty. Total Quality Management, 17(10), 1261–1271. https://doi. org/10.1080/14783360600753653. Nardon, L., & Steers, R. M. (2009). The culture theory jungle: Divergence and convergence in models of national culture. In R. S. Bhagat & R. M. Steers (Eds.), Cambridge handbook of culture, organizations, and work (pp. 3–22). Cambridge, UK: Cambridge University Press. Ralston, D. A., Gustafson, D. J., Elsass, P. M., Cheung, F., & Terpstra, R. H. (1992). Eastern values: A comparison of managers in the United States, Hong Kong, and the People’s Republic of China. Journal of Applied Psychology, 77(5), 644–671. https://doi.org/10.1037/0021-­9010.77.5.664. Rauch, A., Frese, M., & Sonnentag, S. (2000). Cultural differences in planning/success relationships: A comparison of small enterprises in Ireland, West Germany, and East Germany. Journal of Small Business Management, 38(4), 28–41. Reck, H.  V. (2004). Chinesische Kulturstandards und ihre Konsequenzen für eine erfolgreiche deutsch-chinesische wirtschaftliche Zusammenarbeit. Wirtschaftspsychologie, 4(1), 21–30. Rohrschneider, U., Friedrichs, S., & Lorenz, M. (2010). Erfolgsfaktor Potenzialanalyse. Aktuelles Praxiswissen zu Methoden und Umsetzung in der modernen Personalentwicklung. Wiesbaden: Gabler Verlag. Sanchez-Runde, C., Lee, S. M., & Steers, R. M. (2009). Cultural drivers of work behavior: Personal values, motivation, and job attitudes. In R.  S. Bhagat & R.  M. Steers (Eds.), Cambridge handbook of culture, organizations, and work (pp.  305–333). Cambridge, UK: Cambridge University Press. Schroll-Machl, S. (2007). Deutschland. In A. Thomas, S. Kammhuber, & S. Schroll-Machl (Eds.), Handbuch Interkulturelle Kommunikation und Kooperation, Bd. 2: Länder, Kulturen und interkulturelle Berufstätigkeit (2nd ed., pp. 72–89). Göttingen: Vandenhoeck & Ruprecht. Sheer, V.  C., & Chen, L. (2003). Successful Sino-Western business negotiation: Participants’ accounts of national and professional cultures. Journal of Business Communication, 40(1), 50–85. https://doi.org/10.1177/002194360304000104. Thomas, A. (1997). Psychologische Bedingungen und Wirkungen internationalen Management – analysiert am Beispiel deutsch-chinesischer Zusammenarbeit. In J.  Engelhard (Ed.), Interkulturelles Management. Theoretische Fundierung und funktionsbereichsspezifische Konzepte (pp. 111–134). Wiesbaden: Gabler Verlag. Thomas, A. (2005). Kultur und Kulturstandards. In A. Thomas, E.-U. Kinast, & S. Schroll-Machl (Eds.), Handbuch Interkulturelle Kommunikation und Kooperation, Bd. 1: Grundlagen und Praxisfelder (2nd ed., pp. 19–31). Göttingen: Vandenhoeck & Ruprecht. Trompenaars, F. (1993). Riding the waves of culture: Understanding cultural diversity in business. London: Economist Books. Withey, M.  J., & Cooper, W.  H. (1992). What’s loyalty. Employee Responsibilities and Rights Journal, 5(3), 231–240. https://doi.org/10.1007/BF01385050. Wong, Y. T., Wong, C. S., & Ngo, H. Y. (2002). Loyalty to supervisor and trust in supervisor of workers in Chinese joint ventures: A test of two competing models. The International Journal of Human Resource Management, 13(6), 883–900. https://doi.org/10.1080/09585190210134264.

Chapter 6

Empirical Investigation of Employee Loyalty

So far, the concept of employee loyalty is derived from the OB field and possible negative outcomes of employee loyalty as well as indications for intercultural differences between Germany and China were identified. Next, an empirical investigation of those theoretical assumptions follows. As empirical research is not capable of interpreting concepts (Graham and Keeley 1992), the structure of the empirical investigation is particularly relevant. In the first part, qualitative preliminary investigations are shown, which, in combination with the presented theoretical assumptions, lead to related hypotheses. In the second part, a measurement review of former employee loyalty studies will result in the quantitative methodology applied here, which is described comprehensively at the end of this chapter.

6.1  Qualitative Preliminary Investigations The aforementioned theoretical considerations on the concept of employee loyalty have been subject to qualitative preliminary considerations, first, at the Academy of Management (AOM) in the USA and second, at a symposium on employee loyalty in Germany. Both occasions served as indicators to receive feedback from experienced colleagues and practitioners on the derived employee loyalty concept, its operationalization, and planned measurements. The conferences provided the opportunity to meet and discuss with many internationals on the intercultural aspects of employee loyalty and, further, this qualitative work supported the formulation of the research hypotheses. The 74th Annual Meeting of the AOM took place in Philadelphia, Pennsylvania in August 2014. One of the nearly 2000 scientific events was a professional development workshop of the OB, HR, and management consulting division entitled “Employee loyalty and organizational commitment revisited  – exploring future research opportunities” (Nippa et  al. 2014). The workshop was hosted by

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_6

105

106

6  Empirical Investigation of Employee Loyalty

researchers and practitioners from Germany and the USA and attended by roughly 20 international researchers. The workshop was designed as a mixture between providing recent research impulses and stimulating a discussion of the scientific experts. Therefore, prior to the workshop attendees were provided with some basic literature from the field of employee loyalty as well as with a suggestion of discussion topics and related research questions. Opening the workshop, key presentations allowed for an insight regarding the practical relevance of employee loyalty, its distinction from organizational commitment, current measurements, and possible outcomes. In the following hour, four groups of about five people from academia and industry were formed. The attendees voted for the topics: (1) construct development, measurements and methodology; (2) outcomes; (3) antecedents; and (4) need for and contextual factors of employee loyalty. Finally, each group presented their flip chart results of the discussion and the workshop ended with a wrap-up after 3 hours. In the aftermath of the meeting at the AOM, each participant was provided with a summary of the workshop. Although not all participants are classified as employee loyalty specialists, the workshop provided valuable and partially repetitive insights. The meaningfulness of integrating the reference objects: organization, working group, and supervisor was widely confirmed. The differentiation between employee loyalty and organizational commitment was considered important as there is a strong impact on the measurement. From a practical angle, the questions were raised “whether employees actually differentiate between loyalty and commitment. Are they using different words to describe loyalty and commitment, for example, pride?” It was concluded that these questions can only be answered on a strong constructional basis. Also, positive and potentially negative outcomes of employee loyalty were highlighted. Researcher and practitioner agreed upon the neglect of potential dangers from loyalty and the respective research demand. No significant intercultural difference in the employee loyalty concept in Germany and the USA was found. However, the discussions revealed challenges concerning the measurement of the psychological concept. This impulse resulted in a review of previous employee loyalty measurements (see Sect. 6.3). Finally, in particular, the Asian participants confirmed the higher relevance of person-related loyalty (supervisor or working group) in comparison to object-related loyalty (organization). The ideas and hints of the discussion by peers at the AOM were integrated into the employee loyalty conceptualization and contributed strongly to the formulation of the research hypotheses, which will follow in the next section. In November 2014, a symposium on employee loyalty was held in Freiberg, Germany (Meschke and Hornung 2014). After a short introduction to the topic from a scientific point of view, two heads of HR departments presented their practical view on the topic. At the final panel discussion, practitioners and master students took the opportunity to exchange ideas and expectations connected with employee loyalty. The symposium constituted another good occasion to qualitatively compare the employee loyalty concept with the perceptions in practice.

6.2  Hypotheses Formulation

107

The first presentation was given by a female head of HR from an engineering company with production facilities in Germany and abroad. The HR professional showed what companies expect from employee loyalty, which came close to a definition. The presented expectations can be assigned to the three elements of employee loyalty: identification, attachment, and dedication. Identification with the organization is expected as well as with job assignments. Emotional attachment was related to joy at work and dedication included positive word-of-mouth and entrepreneurial actions. However, the practitioner also saw the mutual nature of loyalty. Organizations must invest in employees in order to receive their loyalty. Breaches of loyalty might derive from shifts in organizational culture or economic crises. The second presentation of a male head of HR complemented the talk with insights from different engineering-related industries. He understood employee loyalty as shared value identification and highlighted the importance for traditional industries, for example, resources, and for emerging industries, for example, renewable energies. Despite all the benefits of employee loyalty, disadvantages such as impeded innovation capability, slower reactions on market changes, and deterrence of carrier-oriented employees were mentioned as well. Upon request, the presenter also confirmed the possible link between high employee loyalty and groupthink tendencies and warned for this as a serious thread. The final panel discussion provided the additional understanding that disloyalty represents conscious harm to the company, for example, through theft. Additionally, it was assumed that loyalty to the supervisor is more fragile than manifest loyalty to the organization. The other points added to but did not differentiate from insights already mentioned. Overall, the symposium showed a great proximity of the praxis with the derived employee loyalty concept and resulting effects. Even potential negative effects were present in part. However, the qualitative investigation showed once more that practitioners most often do not question measurements from the science world and rely on their qualitative impressions. This highlights a direct research responsibility. In addition, the insights from this symposium also directly influenced the formulation of the research hypotheses that will follow next.

6.2  Hypotheses Formulation The theoretical assumptions and insights from qualitative preliminary investigations culminate in hypotheses regarding the concept of employee loyalty, negative outcomes of employee loyalty, and intercultural comparison of employee loyalty. The ambition hereby is not an exhaustive study, but rather to hypothesize major and novel aspects relating to the understanding of employee loyalty.

108

6  Empirical Investigation of Employee Loyalty

6.2.1  Employee Loyalty Concept Hypotheses The characteristics, elements, and nature of employee loyalty (see Sect. 3.3) constitute fundamental components, which are based on the understanding of the concept and are therefore not going to be investigated empirically. However, the differentiation of the three reference objects, the continuum, as well as the distinction from organizational commitment are reflected in the following hypotheses. H1 Reference objects hypothesis: Employee loyalty can be segmented by the reference objects: loyalty to the organization, loyalty to the working group, and loyalty to the supervisor. H2 Continuum hypothesis: The relative strength of employee loyalty is reflected by the four levels: disloyalty, non-loyalty, loyalty, and hyper-loyalty. H3 Distinction hypothesis: Employee loyalty and organizational commitment constitute separate and different concepts.

6.2.2  Employee Loyalty Negative Outcome Hypotheses The outcomes of employee loyalty are directly related to the employee loyalty levels (see Chap. 4). Positive outcomes on the level “loyal” have been investigated exhaustively, whereas negative outcomes on the levels “disloyal,” “non-loyal,” and “hyper-loyal” have been widely neglected. Thus, the negative outcome hypotheses are derived from the already presented sources on the one hand (see Table 4.2). On the other hand, these hypotheses should reflect a balanced portrayal of negative behaviors along all employee loyalty levels. H4 Negative outcome hypotheses: H4.1 Resistance to change hypothesis: Disloyal and non-loyal employees stronger resist to change than loyal and hyper-loyal employees. H4.2 Willingness to leave hypothesis: Disloyal and non-loyal employees are more willing to leave than loyal and hyper-loyal employees. H4.3 CWB hypothesis: Disloyal and hyper-loyal employees are more likely to show counterproductive work behaviors than non-loyal and loyal employees. H4.4 Work overload hypothesis: Hyper-loyal employees are more likely to face work overloads than disloyal, non-loyal, and loyal employees.

6.3  Measurement Review of Employee Loyalty

109

H4.5 Groupthink hypothesis: Hyper-loyal employees are more likely to engage in groupthink than disloyal, non-loyal, and loyal employees.

6.2.3  Employee Loyalty Intercultural Comparison Hypothesis The derived concept of employee loyalty is inspired from a European culture perspective, which is distinct from an East Asian understanding of employee loyalty (see Sect. 5.3 and 5.4). This insight is reflected in the final hypothesis. H5. Intercultural hypothesis:

The concept of employee loyalty from a European culture perspective (e.g., Germany) cannot be applied to employee loyalty from an East Asian culture perspective (e.g., China).

6.3  Measurement Review of Employee Loyalty “Measurement is the process of systematically assigning numbers to objects and their projects, to facilitate the use of mathematics in studying and describing objects and their relationships” (Boslaugh and Watters 2008, p.  2). The measurement of employee loyalty and the applied indicators are decisive factors for the results. However, a holistic and unitary measurement approach of employee loyalty is missing (Guillon and Cezanne 2014). Some studies even fail to provide clarification of their applied measurements or items (Omar et al. 2010). Thus, only a systematic review (Levy and Ellis 2006) of important empirical employee loyalty studies can provide insights into previous measurements. Construct validity constitutes the degree to which the selected instrument actually measures the targeted construct (Haynes et al. 1995). To assure construct validity, Clark and Watson (1995) recommend reviewing the relevant literature in order to know how the same problem was approached before. To identify studies, which exclusively focus on measurement methods of employee loyalty, several complementary literature retrieval procedures and international databases, such as Google Scholar, EBSCO, and emerald insight, were deployed. Different combinations of search terms, such as “employee loyalty,” “measures,” “measurement,” “outcomes,” and “effects” were combined. The thereby derived 219 potentially relevant studies until 2012 were analyzed in-depth and then selected. Studies have been integrated when they were written in the English language, represent empirical research, truly apply employee loyalty measures, and examine employee loyalty to one of three reference objects: organization, working group, or supervisor. The resulting forty studies are presented in Table 6.1.

110

6  Empirical Investigation of Employee Loyalty

Table 6.1  Review of employee loyalty measurements in chronological order Year Authors 1978 Jauch et al.

Research Sample method size (N) Questionnaire 84

1983 Farrell

Experiment

1988 Rusbult et al.

1989 Withey and Cooper 1992 Farrell and Rusbult

7 185 31 128 Experiment Questionnaire 473 80 Experiment Questionnaire 460 303 Experiment 128 Questionnaire 473 Experiment

Withey and Cooper

1993 Ali et al.

Reilly et al. 1994 James and Cropanzano

1997 Ali et al. Boroff and Lewin Stroh and Reilly 1999 Dooley and Fryxell Turnley and Feldman

80

Questionnaire 162 Sec. Analysis 13,862 Questionnaire 210

30 Questionnaire 119 115 Questionnaire 679 Experiment

55

Experiment Experiment Questionnaire Questionnaire

85 97 131 201

Questionnaire 3160 Questionnaire 1029 686 Questionnaire 86 365 Questionnaire 804

Loyalty measurement scale Organizational loyalty scale Loyalty scale

Loyalty scale 1 Loyalty scale 2 Loyalty scale 3 Loyalty scale by Farrell (1983) Loyalty scale 1 by Rusbult et al. (1988) Loyalty scale 2 by Rusbult et al. (1988) Loyalty scale 3 by Rusbult et al. (1988) n. s. n. s. Passive loyalty scale by Farrell (1983) Active loyalty scale by Cooper et al. (1990) Loyalty acts Work loyalty scales by Ali (1988) & Webber (1982) Organizational loyalty scale by Patchen (1965) Collective self-esteem scale by Luhtanen and Crooker (1992) Group loyalty scale by Scott (1965) Work loyalty scale by Ali (1988) Loyalty scale 2 by Rusbult et al. (1988) Organizational loyalty scale by Patchen (1965) Conditions of trust inventory by Butler (1991) Loyalty scale by Van Dyne et al. (1994)

Items Cronbach’s (N) α 5 n. s. 3

n. s.

4 5 6 3

.75 .56 .70 .71

4

(.45–.89)

5

(.56–.78)

6

(.70–.97)

n. s. (2–7) 3 3

(.47–.80) (.58–.80) .59 .53

105 9

n. s. .74

4

.89

4

.62

20

.89

9

.80

3

.70

4 4 4

.89 .88 .93

4

.87 (continued)

6.3  Measurement Review of Employee Loyalty

111

Table 6.1 (continued) Year Authors 2001 Chen

Niehoff et al.

2002 Chen et al.

Research Sample method size (N) Questionnaire 333

Questionnaire 145

Interview Questionnaire Questionnaire Questionnaire

20 253 333 452

Olson-­ Buchanan and Boswell Wong et al. Questionnaire 295

2003 Davis-Blake et al. 2005 Coughlan

Kantsperger and Kunz 2006 Borzaga and Tortia Haar

Hoffmann Jun et al. Matzler and Renzl 2007 Naus et al. 2008 Lee and Whitford Leung

2009 Chun

Questionnaire 252

Loyalty measurement scale Loyalty to supervisor scale by Chen et al. (1998) Organizational citizenship behavior scale by Moorman and Blakely (1992, 1995) Loyalty to supervisor scale

Items Cronbach’s (N) α 17 (.70) – (.83) 5

.87

17

(.67) – (.79)

Loyalty scale by Boroff and Lewin (1997)

3

.65

Loyalty to supervisor scale by Chen et al. (1998) Loyalty scale

17

.84

5

.77

6

.92

Questionnaire 1580

Commitment scale by Meyer and Allen (1997) Attitudinal loyalty scale Applied loyalty scale Loyalty scale

3 3 3

.80 .56 .87

Sec. Analysis

Turnover intention scale

5

n. s.

Loyalty scale 2 & loyalty scale 3 by Rusbult et al. (1988) – Employee loyalty scale Employee loyalty scale by Homburg and Stock (2000) Employee loyalty scale Loyalty items from Federal Human Capital Survey (2002) Normative commitment scale by Meyer and Allen (1997) Attitudinal loyalty scale by Coughlan (2005) Loyalty scale by Goffee and Jones (1998)

10

.76

– 4 5

– .79 .84

4 3

.87 .85

6

.92

3

.80

1

(>.70)

Questionnaire 36

2066

Questionnaire 203

Interviews 128 Questionnaire 407 Questionnaire 131

Questionnaire 159 Sec. Analysis 106,742

Questionnaire 109

Questionnaire 128

(continued)

112

6  Empirical Investigation of Employee Loyalty

Table 6.1 (continued) Year Authors De Vos and Meganck 2010 Chang et al. Yee et al.

Research Sample method size (N) Questionnaire 5286 Questionnaire 167 Questionnaire 210

2011 Brown et al.

Sec. Analysis

1432

2012 Arsić et al.

Questionnaire 261

Hollebeek and Questionnaire 100 Haar 275 Jen et al.

Questionnaire 247

Lee et al.

Questionnaire 237

Si and Li

Questionnaire 281

Loyalty measurement scale Loyalty scale by Boroff and Lewin (1997) Loyalty scale by Davis-Blake et al. (2003) Loyalty scale by McCarthy (1997) Loyalty item from Workplace and Employee Relations Survey (2004) Employee loyalty scale by Jun et al. (2006) Loyalty scale 2–3 by Rusbult et al. (1988) Loyalty scale 1 by Rusbult et al. (1988) Subordinate response scale by Cheng et al. (2004) Organizational loyalty scale Loyalty scale 1 by Rusbult et al. (1988)

Items Cronbach’s (N) α 3 .81 4

.84

6

.91

1

(>.70)

4

.82

10

.91

4

.70

10

.90

5

.88

4

.83

Abbreviation: Sec. Analysis Secondary Analysis, n. s. not specified

Quantitative research plays a crucial role in the field. Considering that a few authors utilized multiple methods for their study, most often questionnaires are applied (72.5%), followed by experiments (15.7%), secondary analyses (7.8%), and qualitative interviews (3.9%). When questionnaires are applied, researchers have the opportunity to examine their constructs at a large sample of participants. The largest samples of the identified employee loyalty studies can be found by De Vos and Meganck (2009): N = 5286, Boroff and Lewin (1997): N = 3160, and Kantsperger and Kunz (2005): N = 1580. In some cases, the large sample sizes from questionnaires even exceed those from secondary analyses, such as the one by Brown et al. (2011): N = 1432. Considering the high popularity of questionnaires in employee loyalty research, experiments were applied frequently as well, especially in older studies. Three different types of experiments were applied in employee loyalty research. In laboratory experiments, participants were asked to fulfill a task within a synthetic laboratory environment and with third parties, which play a certain role (Rusbult et al. 1988; Farrell and Rusbult 1992; James and Cropanzano 1994). In simulation experiments, participants are provided with a text at the beginning, which describes a special situation and persons. The participants are encouraged to put themselves into one of the described characters and following, to answer questions from this

6.3  Measurement Review of Employee Loyalty

113

third-person perspective (Rusbult et al. 1988; Farrell and Rusbult 1992). In a card-­ sorting task, participants should sort pictures on cards to categories that they perceive as similar (Farrell 1983). Experiments therefore provide a beneficial research method to outline the employee loyalty concept initially. In secondary analyses, widely distributed and often public questionnaires are used. The questionnaires measure, for example, general job attitudes and the employee loyalty researchers pick items that fit their research interest in the best possible way (Farrell and Rusbult 1992; Borzaga and Tortia 2006; Lee and Whitford 2008; Brown et al. 2011). The enormous sample sizes of up to N = 106,742 (Lee and Whitford 2008), thus, must be balanced against imprecise and sometimes inadequate items. In interviews, open and personal conversations are conducted with employees. These qualitative analyses are often enriched with behavioral studies and company documents that enable a high validity of the research method. However, sample sizes are rather limited and usually smaller than the N = 128 by Hoffmann (2006). Besides the method applied, survey target groups vary and depend on the research aim as well, as the following examples show. If researchers want to avoid distortion from employee’s self-assessment, they may ask the respective supervisors about how loyal they perceive their employees (Ali et al. 1993, 1997). Adversely, employee loyalty is thereby limited to loyalty to the supervisor, where the supervisor is subject to selective perception as well. Another possibility is to link the answers from supervisors and subordinates (Niehoff et al. 2001; Chen et al. 2002), for example, that supervisors rate the company’s performance and the employees indicate their loyalty (Wong et al. 2002). This can even be extended to a 360° approach. Here, supervisors provide information about their intended leadership style and performance data, employees state their loyalty and further work attitudes, and customers provide information regarding their satisfaction. This research design allows to get information from different stakeholders and to draw solid empirical conclusions. However, it should be considered that such a design is often limited to specific survey target groups and bounded by the participation willingness of all parties (Kantsperger and Kunz 2005). The empirical research aim of the present study is to validate the already derived concept of employee loyalty, its outcomes, and intercultural differences. Therefore, a quantitative research method seems most promising. A secondary analysis is withdrawn, as fixed items cannot reflect the complex conceptualization. As for most studies on employee loyalty, a quantitative questionnaire will be applied. There is no indication that answers of the supervisors on employee loyalty are less distorted than direct answers of the followers, if anonymity (Chang et al. 2010) of the participants is guaranteed. Thus, the research method of self-assessment questionnaire will be applied for the empirical part. The sample sizes for questionnaire research on employee loyalty (see Table 6.1) range between N = 36, a pilot study conducted by Coughlan (2005), and N = 5286, a cross-industry investigation by De Vos and Meganck (2009). In 29 cases, an external loyalty measurement scale was applied, in nine cases a novel scale was derived, and in two cases (Withey and Cooper 1992; Coughlan 2005) a mix between external

114

6  Empirical Investigation of Employee Loyalty

and novel scales was used. Between one (Chun 2009) and 105 items (Withey and Cooper 1992) came into effect, whereby the last mentioned study aimed at extracting loyalty behaviors and items for future studies. As a measure of reliability (Schmid 1992), Cronbach’s alpha varied between .53 for subscales (Withey and Cooper 1992) and .93 for the total loyalty scale (Dooley and Fryxell 1999). The sample size, measurements scale, number of items, and Cronbach’s alpha represent fundamental factors for the further design of this study and the respective discussion of the results.

6.4  Methodology Derived from the above measurement review of former empirical employee loyalty studies, the methodology of self-assessment questionnaires will be described in the following. Subsequently, data collection and samples, measures, and analyses are explained.

6.4.1  Questionnaires It is important to note that the level of employee loyalty may be derived simultaneously with corresponding outcomes and effects, such as service recovery (Lee et al. 2012), by the means of one questionnaire only. Thus, the German and Chinese questionnaire both contain a loyalty and an outcome part in addition to demographics. 6.4.1.1  German Questionnaire The German questionnaire was created as a product of a research group at the former Chair of Management, Leadership, and Human Resources at Technische Universität Bergakademie Freiberg in 2014. The researchers aimed at determining a level of employee loyalty as well as at identifying possible antecedents, negative outcomes, and relationships between organization, working group, and supervisor. The respective questionnaire in the German language with combined items is shown in the appendix section in Fig. A.1. Following, only aspects and items of relevance for the present study are mentioned. For the subject of the questionnaire, participants were not directly told to contribute to employee loyalty research in order to avoid concerns with the topic and socially desired replies. As in the study of Leck and Saunders (1992), where “participants were asked to complete an ‘Employee Survey’…” (p. 223), employees in this study were told to contribute to a questionnaire on the employee–employer relationship. In that way, employees were not overly sensitive regarding their loyalty relationship but the issue is still covered by the topic.

6.4 Methodology

115

The questionnaire started with a general introduction of the research aim and incentives to participate, followed by instructions, the demographic part, the employee loyalty part, filler questions, the outcomes part, and closing remarks. Within the introduction (cover sheet), it was said that researchers have long wondered how employees judge their working situation and relationship with the organization, working group, and supervisor in order to find ways for improvement and develop best practice guidelines. The employees were kindly invited to participate in this research by answering the questionnaire. The highest possible confidentially was attested while the participation is entirely anonymous, no inference to the individual person would be possible, no information of single participants would be disclosed, and the information serves purely scientific purposes. The introduction finished with the indication that answering the full questionnaire should take about 15–20 minutes, contact information in case of questions, and expression of thanks. The contribution to the study was entirely voluntary, however, participants were provided with incentives to participate. Intrinsically, participants would help improve the working situation and relationship toward their employer. Further, all employees got the possibility of receiving a summary of the study results. Extrinsically, it was shown that monetary rewards for study participation enhance the response rate and the quality of responses (Yee et al. 2010). When answering the complete questionnaire, participants had the chance to take part in a raffle with three Amazon vouchers at the value of 50 €, 30 €, and 15 € as prices. In order to take part in the raffle, employees separately provided their email addresses, which were deleted right after the winners were contacted. In the next section of the questionnaire, general instructions for answering were given (p.  1). Participants were told to read the questions thoroughly and answer every question. It was stated that there are no right or wrong answers and corrections would be possible. Besides, explanations for the understanding of the terms organization, working group, and supervisor (p. 3) were given as follows: “Please think of your current organization when the question applies to an organization.” “When asked about the working group, please think about the group in which you currently spend the most time working (e.g., project team, group as a part of department). This group has to have been constructed formally and consist of at least three people.” “Questions concerning the supervisor attain to the supervisor who is currently authorized to give instructions to you.” In the main part of the questionnaire, employees should answer demographic questions first (p. 2). Next, employee loyalty items and organizational commitment items were randomly selected (pp. 3–4). To avoid participants connecting employee loyalty to different outcomes, filler questions (p. 5) were applied prior to the outcomes part (p. 6). The respective measures and items will be shown in Sect. 6.4.3. Within the closing remarks (p.  7), participants were encouraged to leave general comments related to their answers and the support of the study was appreciated. Although the questionnaire can be considered extensive, very little negative comments indicated an understandable questionnaire design and item presentation.

116

6  Empirical Investigation of Employee Loyalty

6.4.1.2  Chinese Questionnaire The Chinese questionnaire was translated into Mandarin Chinese in 2016. This time, the study was created at the Chair of Intercultural Communication at Technische Universität Bergakademie Freiberg. Due to the requirements of the interviewed company in China, this questionnaire was kept much shorter and could be answered in less than 10  minutes. However, the questions were exclusively designed for this research and the major parts corresponded to the German version. The Chinese questionnaire is shown in the appendix section in Fig. A.2. Within the introduction (cover sheet), a reference to the Saxony governmental funding, the expression of thanks, and general instructions for answering were given. The topic of the questionnaire was entitled “employee-employer relationship” again, but no further written information was provided for the participating employees. The instructions for answering as well as for understanding the terms organization, working group, and supervisor (p.  1) corresponded to the German version. After consultation with the interviewed company, a monetary incentive was renounced. The Chinese employees feel a strong obligation toward the employing organization, which supported the completion of the questionnaire during their working time. The confidentiality was assured by the supervisors in charge in which the Chinese employees placed higher trust than in external researchers. Thus, the framework conditions for the completion mainly coincided between the German and Chinese version. At the main part of the questionnaire, employees faced randomly selected employee loyalty items and organizational commitment items first (p.  1). As the analysis of the Germany sample was already finished at this time, the employee loyalty part of the Chinese version was reduced to the most relevant items. Second, the negative outcome items were presented (p. 2) without filler questions in between. This shortcoming of the Chinese questionnaire was balanced in large parts with the reduced number of items. The questionnaire closed with five demographic questions and the appreciation of support.

6.4.2  Data Collection and Samples Care was taken to assure comparability between the German and Chinese sample. As a first shared commonality, both samples belong to the healthcare field. Besides, both survey units stem from parent companies with over 10,000 employees. Considering the industry, the German organization belongs to the service industry only and can be classified as a person to person service (see Fig. 2.3). The Chinese organization, however, operates in the consumer goods and the service industry. To assure comparability of the results it was therefore important to filter out departments with a product reference, namely production, consulting and R&D, as well as finance and accounting. In the Chinese sample, only the service-oriented

117

6.4 Methodology

departments such as sales, consulting, and general management were considered for further investigations. In this way, both samples clearly correspond in the operating field, company size, and industry. 6.4.2.1  German Sample An online version of the questionnaire was programmed with the software Qualtrics for the German sample. The online version was verified and pre-tested in a small pilot study by eight experts from the field. The pilot study provided information regarding the required time to complete the questionnaire, the clarity of instructions and definitions, the adequacy and ease of questions, as well as the analyzability of the answers. Adaptations, for example, in the introduction text of the survey and in the general instructions for answering, were undertaken and the questionnaire was launched between August and September 2014. In total, 381 employees were reached and 199 questionnaires were returned and checked for completeness and plausibility. The final sample of 148 participants represents a 38.85% return rate. 61.90% of the sample is female with an average age of 41.88 years (SD = 11.74). The participants represent an average professional experience of 21.99 years (SD = 11.85) and an average organizational tenure of 17.57 years (SD = 11.66). A more detailed distinction based on gender in the German sample structure is shown in Table 6.2. Because of the workers’ council, the discrimination of the occupation and the educational level were subject to restrictions. With regard to the occupation, only the breakdown in management and non-management employees was allowed. Table 6.2  German sample

Age Prof. experience Organ. tenure Occupation  Management  Non-Man. Educational level  Acad. degree  Upper sec. ed.  Lower sec. ed.

Men Na 47 53 52 Na

Meanb 41.81 22.75 18.19 %

34 20

22.97 13.51

13 76

8.78 51.35

8 16 29

5.41 10.81 19.59

11 15 64

7.43 10.14 43.24

SDb 10.64 11.46 11.71

Women Na Meanb 77 41.92 89 21.75 90 17.37 Na %

SDb 12.43 12.02 11.64

Abbreviations: Prof. experience professional experience, Organ. tenure organizational tenure, Non-Man. non-management, Acad. degree academic degree, Upper sec. ed. upper secondary education, Lower sec. ed. lower secondary education Note: aNumbers do not necessarily add up to full sample as demographic questions were voluntary b Information in years. N (final sample) = 148

118

6  Empirical Investigation of Employee Loyalty

Management positions were mainly represented by men (22.97%) and non-­ management positions mainly by women (51.35%). On the educational level, academic degree and upper secondary education, participants were almost evenly distributed. Lower secondary education was stated by 43.24% of the women and only by 19.59% of the men. 6.4.2.2  Chinese Sample The Chinese sample was more challenging to obtain. A native research assistant was hired in order to support the contact of Chinese organizations, the marketing of the study on-site, the translation of the questionnaire from English into Mandarin Chinese, and the monitoring of data collection and transfer. In August 2016, a Chinese company, which showed similarities with the German company, declared its willingness to participate in the study. The personal network (guanxi) of the Chinese teaching assistant in combination with his credibility were most important in convincing the study participants. For this short questionnaire no extra pilot study was conducted as the questions were based on the German version. Only a small pre-test with three experts resulting in formulation adaptions was conducted to assure the accuracy of the translation and the understanding of the questions. The final Chinese questionnaire was provided as a reduced paper and pencil version to the Chinese employees and distributed by the respective supervisors between September and October 2016. After completion, 197 questionnaires were packed and shipped to Germany. Initially, the questionnaires were checked for completeness and plausibility. This means that obvious response pattern and illogical responses, for example, longer organizational tenure than professional experience, would have been excluded. The full sample of 196 participants represents a 99.49% return rate. 34.69% of the sample is female with an average age of 32.37 years (SD = 6.82). The participants represent an average professional experience of 9.27 years (SD = 6.92) and an average organizational tenure of 7.59  years (SD  =  5.85). A more detailed distinction on gender basis in the Chinese sample structure is shown in Table 6.3. For the final Chinese sample, in contrast to the German sample procedure, departments which sparsely relate to services were excluded. Thus, the final sample excluded the occupations production, R&D, finance and accounting, and other (such as HR or purchasing). Management, sales, and consulting were included in the final sample of 116 participants. In summary, the German and Chinese samples allow for further quantitative comparisons as both show adequate similarities and exceed 100 participants each.

119

6.4 Methodology Table 6.3  Chinese sample

Age Prof. experience Organ. tenure Occupation  Management  Sales  Consulting   Productionc   R&Dc   Finance + acc.c   Otherc

Men Na 127 127 128 N

Meanb 32.67 9.57 7.74 %

11 63 12 15 10 6 11

5.61 32.14 6.12 7.65 5.10 3.06 5.61

SDb 6.43 6.60 5.66

Women Na 65 66 66 N

Meanb 31.75 8.64 7.21 %

8 22 0 19 8 6 5

4.08 11.22 0.00 9.69 4.08 3.06 2.55

SDb 7.59 7.54 6.22

Abbreviations: Prof. experience professional experience, Organ. tenure organizational tenure, R&D research and development, Finance + acc. finance and accounting Note: aNumbers do not necessarily add up to full sample as demographic questions were voluntary b Information in years. N (full sample) = 196 c Excluded from further investigations. N (final sample) = 116

6.4.3  Measures With only a few exceptions, the employee loyalty, organizational commitment, and negative outcomes items are derived from the literature (Churchill 1979) in the English language. Within the questionnaires, however, the items have been translated to German and Mandarin Chinese. For this purpose, the translation and back-­ translation procedure was already applied in the field (Chen et  al. 2002). For example, the native Chinese research assistant translated an English version of the questionnaire into Mandarin. Following, the Mandarin version was back-translated into English by a native Singaporean, who speaks both languages as mother tongue, and differences in the translation were discussed. This procedure, which was applied for the German version likewise, was repeated until all misunderstandings were eliminated. Besides the demographical and the filler part, all questions employed the 7-point Likert scale, anchored at 1 = strongly disagree (−−−), 4 = neutral, and 7 = strongly agree (+++). The number of signs (− /+) depend on the scores (e.g., 5 = +, 6 = ++, 7 = +++) and serve as advanced illustration of steady distances between the answers. The participants’ perception of steady distances in the scale is of vital importance for the analyses. It allows utilizing the Likert scale as a quasi-metric interval scale (Kreinest et al. 2016).

120

6  Empirical Investigation of Employee Loyalty

6.4.3.1  Employee Loyalty Stemming from the review of employee loyalty measures presented already (see Table 6.1), items have been taken and adjusted in order to fit the employee loyalty concept (see Table 6.4). To assure construct validity, Clark and Watson (1995) recommend to finish the theory development and literature review and, then, to keep the initial item pool broader than finally necessary. Subsequent analyses are able to identify inappropriate items that need to be dropped but content with additional value cannot be added in the aftermath. Hence, for each of the elements: identification, attachment, and dedication, two items per reference object have been assigned (see Table 6.4). The items were derived mainly from seven studies, which are documented in the appendix section (see Table A.1). Existing items comprise the benefit of a comprehensibility that has already been tested empirically. Thus, in most cases the wording of Table 6.4  Employee loyalty items Loyalty to organization (Loy to Org) subscale   Item 1: I defend my organization when other employees criticize it. (Dedication)   Item 2: In my company I do things above and beyond the call without being asked. (Attachment)   Item 3: Also in my spare time I wear clothing (base caps, jackets, lanyards, etc.) that bears the company’s symbol or insignia (or I would do so if my company had such clothing). (Identification)   Item 4: I speak highly of the company to friends. (Identification)   Item 5: I generally do not complain to my organization about changes that negatively affect me. (Dedication)   Item 6: I turned down other jobs with more pay in order to stay with my company (or I would do so if I would receive such offer). (Attachment) Loyalty to working group (Loy to WorGr) subscale   Item 1: I defend the honor of my working group whenever it is unfairly criticized. (Dedication)   Item 2: I do more than one’s share of the working group task. (Attachment)   Item 3: I take an active part in my working group’s affairs. (Attachment)   Item 4: I agree upon the working group’s decisions. (Identification)   Item 5: I do not accept criticism of my working group. (Dedication)   Item 6: I work hard to improve the prestige and status of my working group. (Identification) Loyalty to supervisor (Loy to Sup) subscale   Item 1: I also take responsibility when my supervisor has done something wrong. (Dedication)   Item 2: I tell my colleagues or friends about my supervisor’s merits. (Identification)   Item 3: I will do my tasks conscientiously so that my supervisor will not worry about it. (Attachment)   Item 4: I will do my best to accomplish the job assigned by my supervisor. (Attachment)   Item 5: When somebody speaks ill of my supervisor, I will defend him/her immediately. (Dedication)   Item 6: I agree with my supervisor’s opinions. (Identification)

6.4 Methodology

121

the employee loyalty items, in the respective target language, was entirely transferred. In some cases, adaptations were conducted to ensure that: (1) all items have a similar wording, (2) items could be deployed for other reference objects, or (3) negatively coded items were formulated positively. 6.4.3.2  Organizational Commitment Within the Allen and Meyer (1996) three-component view of organizational commitment, continuance commitment refers to the associated costs for an employee to leave the company. As employee loyalty does not include cost–benefit considerations and is voluntary in nature (Coughlan 2005), the continuance commitment scale (see Table 6.5) was implemented into the questionnaire to test for the independence of the two concepts. Allen and Meyer (1990) report that the first item of the continuance scale has a factor loading less than 0.4. Consequently, this item has not been integrated. Item 6 was reverse codded and is called “sufficient” instead of “too few” options. The last item has been shortened in order to render a better understanding with the German language possible. 6.4.3.3  Negative Outcomes In contrast to the employee loyalty level, the negative outcomes and their measures should be captured by indications rather than by full scales. It was not possible to include negative outcomes with full scales within a single questionnaire. Therefore, only selected items or even an indirect assessment of the negative outcomes (for groupthink) were chosen for the measurement (see Table 6.6).

Table 6.5  Organizational commitment items Continuance commitment (Org Comm) subscale   Item 1: –a   Item 2: It would be very hard for me to leave my organization right now, even if I wanted to.   Item 3: Too much in my life would be disrupted if I decided I wanted to leave my organization now.   Item 4: It wouldn’t be too costly for me to leave my organization now. (R)   Item 5: Right now, staying with my organization is a matter of necessity as much as desire.   Item 6: I feel that I have sufficient options to consider leaving this organization. (R)   Item 7: One of the few serious consequences of leaving this organization would be the scarcity of available alternatives.   Item 8: One of the major reasons I continue to work for this organization is that (…) another organization may not match the overall benefits (e.g., pension rights, hours of labor) I have here. Not included as factor loading was described less than 0.4

a

122

6  Empirical Investigation of Employee Loyalty

Table 6.6  Negative outcome items Resistance to change   Item 1: Generally, I am favorable to changes at work. (R) Willingness to leave   Item 1: I would not sacrifice a lot if I left this job.   Item 2: I would apply again with this company. (R) CWB (production deviance)   Item 1: I would never use company resources, such as the copy machine or office supplies, for personal business. (R)   Item 2: I understand a colleague taking sick leave during the day and attending a private family celebration in the evening. Work overload   Item 1: I get easily overwhelmed by time pressures at work.   Item 2: As soon as I get up in the morning I start thinking about work problems.   Item 3: When I get home, I can easily relax and “switch off” work. (R)   Item 4: People close to me say I sacrifice too much for my job.   Item 5: Work rarely lets me go, it is still on my mind when I go to bed.   Item 6: If I postpone something that I was supposed to do today I’ll have trouble sleeping at night. Groupthink   No unique item (indirect assessment)  Symptoms of groupthink are indicated by high work overload and loyalty to working group values above average.

The reverse-coded resistance to change item has been created following Miller et al. (1994) and was adapted to the study context. For the willingness to leave, a two item-measure was used. If employees leave, they might sacrifice valued things and the item taken from Lee et al. (2004) provides a tendency for the opposite case. Besides, it can be expected that employees willing to leave would not reapply again with their current organization. The respective item (reverse-coded) is presented by Konradt et  al. (2013). To assess a part of CWB, two minor deviant (“production deviance”) behaviors to the detriment of the company were selected: using company resources (reverse-coded) and indicating to use working time for private benefit (reverse-coded). The items are derived from Hui et al. (1999) and Wilks (2012). Work overload was assessed by the overcommitment scale established by Siegrist et al. (2004). Six items point out work overload, for example, time pressure adaptation, switching off work and sleeping behavior, as well as negative feedback by friends. As groupthink is difficult to measure directly, it is the only negative work outcome without unique measurement items. “Groupthink occurs when arrogance, overcommitment and loyalty help a group to shine above the ethical interests of an organization” (Sims 1992, p. 658). Thus, symptoms of groupthink are indicated if high work overload, whose measure is explained next, combines with loyalty to working group values above average.

6.4 Methodology

123

6.4.4  Analyses For the following explorative and confirmative analyses, Kruskal–Wallis H tests, correlation and regression analyses, two statistical tools were applied. Most of the analyses, including the descriptive statistics, were conducted with IBM SPSS Statistics 22 and 25. For the confirmatory factor analysis, IBM SPSS Amos 22 was utilized. 6.4.4.1  Exploratory Factor Analysis and Item Analysis The exploratory factor analysis (EFA) is of great importance for social sciences and psychology as traits are investigated that are often not observable. For EFA, a smaller number of unobservable, hypothetical, and independent factors is extracted from a larger number of observable variables, for example, items. In order to validate the resulting factor scales, the combination with an item analysis adds value. Therewith it should be assured that the classification into different factors is subject to statistical soundness (Kockläuner 2000; Zöfel 2003; Bortz and Döring 2006). Two characteristics are at the core of EFA. First, the analysis is a data-reducing procedure. It aims at explaining the relationship between a multitude of variables, respectively, items, by as few factors as possible. Second, the EFA is an explorative procedure. It is supposed to extract factors from a correlation matrix in a way that preferably little information about the relationship between the variables is lost. In addition, the factors ought to be structured in a straightforward and interpretable structure. These two characteristics enable statements about the dimensionality of complex concepts, such as intelligence or personality traits (Rudolf and Müller 2004). Not surprisingly, EFA is frequently applied for analysis within the employee loyalty concept as well. To exemplify, of the 40 studies from the review of employee loyalty measurements (see Table 6.1), 13 applied an exploratory factor analysis. In studies as the one of Chen et al. (2002), relevant employee loyalty items have been extracted from a broader item pool and categorized into factors. The same concern is pursued in this book. For the conduction of the EFA, the procedure as described in Backhaus et  al. (2011) was applied and supplemented by the item analysis as shown in Bortz and Döring (2006). The results are presented in the following chapter. 6.4.4.2  Confirmatory Factor Analysis EFA and confirmatory factor analysis (CFA) share some similarities but at the same time show major differences as well. Both analyses are based on the fundamental proposition of factor analysis. It states that every observed value of an output variable can be described as a linear combination of a number of hypothetical factors. Thus, the correlation matrix may be reproduced by the factor loadings and the

124

6  Empirical Investigation of Employee Loyalty

correlations between the factors. As with EFA, the CFA likewise aims at reducing multiple observable items to a few underlying unobservable factors (Backhaus et al. 2015). The major difference of the CFA in contrast to EFA is, first, the a priori fixation of the exact items and factors. Hence, the connections between the variables and the consequent loadings are determined in advance. The aim of CFA is therefore the confirmation of the accuracy of the prescribed connections and loadings. As a result, CFA is considered a “structure-examining” procedure whereas EFA is considered a “structure-detecting” procedure. Second, the CFA requires reflective measurement models. This means that changes in the measurement values of the items are caused by the hypothetical factor. If the hypothetical factor changes, then the observable items have to change as well. For conducting a CFA, the a priori fixation as well as the existence of reflective measurement model must be given (Backhaus et al. 2015; Werner et al. 2016). Both requirements of CFA seem to count for employee loyalty research. Of the 40 studies from the review of employee loyalty measurements (see Table 6.1), CFA was applied in nine studies and three studies (Chen et al. 2002; Kantsperger and Kunz 2005; Lee et  al. 2012) benefited from both analyses. Dooley and Fryxell (1999), as an example, applied the CFA to test the fixed items and factors against the data. As this concern is shared in this work, the CFA was conducted applying the procedure as described in Backhaus et al. (2015). The results are presented in the following chapter. 6.4.4.3  Kruskal–Wallis (H) Test The Kruskal–Wallis (H) test identifies whether central tendencies of more than two independent samples or groups differ. It is used as an alternative for the analysis of variance (ANOVA) in case that the ANOVA requirements are not met. The Kruskal– Wallis test demands low requirements, namely: non-normal distribution of the data, one ordinally scaled dependent variable, as well as one or more independent and at least ordinally scaled variable. As the test creates rank sums based on the median, it is robust for small sample sizes and outliers, respectively extreme values (Kruskal and Wallis 1952; Zöfel 2003; Rudolf and Müller 2004). The Kruskal–Wallis test is not characteristic for employee loyalty research. For example, the test is not applied within one of the 40 studies from the review of employee loyalty measurements (see Table 6.1). This is hardly surprising, considering that employee loyalty is described as an unambiguous or complete concept so far. 6.4.4.4  Correlation and Linear Regression Analysis Correlation analysis allows for detecting the existence and intensity between different variables. Regression analysis, in addition, reveals the nature of those relationships by differentiating between dependent and independent variables (Zöfel 2003).

References

125

Both analyses represent core analyses for employee loyalty research since most of the 40 studies from the review of employee loyalty measurements (see Table 6.1) applied at least one. It should be pointed out that analyses such as the structural equation modeling (SEM) have an integrated regression analysis. For data with non-­ normal distribution, Kendall’s rank correlation was applied in case of at least ordinally scaled variables (Zöfel 2003). The results are presented in the following chapter.

References Ali, A. J. (1988). Scaling an Islamic work ethic. Journal of Social Psychology, 128(5), 575–583. https://doi.org/10.1080/00224545.1988.9922911. Ali, A.  J., Azim, A., & Falcone, T.  W. (1993). Work loyalty and individualism in the United States and Canada. International Journal of Manpower, 14(6), 58–66. https://doi. org/10.1108/01437729310043114. Ali, A.  J., Krishnan, K., & Azim, A. (1997). Expatriate and indigenous managers' work loyalty and attitude toward risk. The Journal of Psychology, 131(3), 260–270. https://doi. org/10.1080/00223989709603513. Allen, N. J., & Meyer, J. P. (1990). The measurement and antecedents of affective, continuance and normative commitment to the organization. Journal of Occupational Psychology, 63(1), 1–18. https://doi.org/10.1111/j.2044-­8325.1990.tb00506.x. Allen, N.  J., & Meyer, J.  P. (1996). Affective, continuance, and normative commitment to the organization: An examination of construct validity. Journal of Vocational Behavior, 49(3), 252–276. https://doi.org/10.1006/jvbe.1996.0043. Arsić, M., Nikolić, D., Živković, Ž., Urošević, S., & Mihajlović, I. (2012). The effect of TQM on employee loyalty in transition economy, Serbia. Total Quality Management, 23(6), 719–729. https://doi.org/10.1080/14783363.2012.669930. Backhaus, K., Erichson, B., Plinke, W., & Weiber, R. (2011). Multivariate Analysemethoden. Eine anwendungsorientierte Einführung (13th ed.). Berlin & Heidelberg: Springer Verlag. Backhaus, K., Erichson, B., & Weiber, R. (2015). Fortgeschrittene multivariate Analysemethoden. Eine anwendungsorientierte Einführung (3rd ed.). Berlin & Heidelberg: Springer Verlag. Boroff, K.  E., & Lewin, D. (1997). Loyalty, voice, and intent to exit a union firm: A conceptual and empirical analysis. Industrial and Labor Relations Review, 51(1), 50–63. https://doi. org/10.2307/2525034. Bortz, J., & Döring, N. (2006). Forschungsmethoden und Evaluation für Human- und Sozialwissenschaftler (4th ed.). Heidelberg: Springer Medizin Verlag. Borzaga, C., & Tortia, E. (2006). Worker motivations, job satisfaction, and loyalty in public and nonprofit social services. Nonprofit and Voluntary Sector Quarterly, 35(2), 225–248. https:// doi.org/10.1177/0899764006287207. Boslaugh, S., & Watters, P. A. (2008). Statistics in a nutshell. A desktop quick reference. Sebastopol: O'Reilly Media. Brown, S., McHardy, J., McNabb, R., & Taylor, K. (2011). Workplace performance, worker commitment, and loyalty. Journal of Economics and Management Strategy, 20(3), 925–955. https:// doi.org/10.1111/j.1530-­9134.2011.00306.x. Butler, J.  K. (1991). Toward understanding and measuring conditions of trust: Evolution of a conditions of trust inventory. Journal of Management, 17(3), 643–663. https://doi. org/10.1177/014920639101700307.

126

6  Empirical Investigation of Employee Loyalty

Chang, C.  C., Chiu, C.  M., & Chen, C.  A. (2010). The effect of TQM practices on employee satisfaction and loyalty in government. Total Quality Management and Business Excellence, 21(12), 1299–1314. https://doi.org/10.1080/14783363.2010.530796. Chen, Z.  X. (2001). Further investigation of the outcomes of loyalty to supervisor  – Job satisfaction and intention to stay. Journal of Managerial Psychology, 16(8), 650–660. https://doi. org/10.1108/EUM0000000006305. Chen, Z.  X., Farh, J.  L., & Tsui, A.  S. (1998). Loyalty to supervisor, organizational commitment, and employee performance: The Chinese case. Academy of Management Best Paper Proceedings (pp. 1–9). San Diego, CA. Chen, Z. X., Tsui, A. S., & Farh, J. L. (2002). Loyalty to supervisor vs. organizational commitment: Relationships to employee performance in China. Journal of Occupational and Organizational Psychology, 75(3), 339–356. https://doi.org/10.1348/096317902320369749. Cheng, B.-S., Chou, L.-F., Wu, T.-Y., Huang, M.-P., & Farh, J.-L. (2004). Paternalistic leadership and subordinate responses: Establishing a leadership model in Chinese organizations. Asian Journal of Social Psychology, 7(1), 89–117. https://doi.org/10.1111/j.1467-­839X.2004.0013 7.x. Chun, R. (2009). A corporate's responsibility to employees during a merger: Organizational virtue and employee loyalty. Corporate Governance, 9(4), 473–483. https://doi. org/10.1108/14720700910985016. Churchill, G. A., Jr. (1979). A paradigm for developing better measures of marketing constructs. Journal of Marketing Research, 16(1), 64–73. https://doi.org/10.2307/3150876. Clark, L. A., & Watson, D. (1995). Constructing validity: Basic issues in objective scale development. Psychological Assessment, 7(3), 309–319. https://doi.org/10.1037/1040-­3590.7.3.309. Cooper, W. H., Dyke, L., & Kay, P. (1990). Developing act frequency measures of organizational behaviors. Academy of Management Best Paper Proceedings (pp. 396–399). San Francisco, CA. Coughlan, R. (2005). Employee loyalty as adherence to shared moral values. Journal of Managerial Issues, 17(1), 43–57. Davis-Blake, A., Broschak, J. P., & George, E. (2003). Happy together? How using nonstandard workers affects exit, voice, and loyalty among standard employees. Academy of Management Journal, 46(4), 475–485. https://doi.org/10.2307/30040639. De Vos, A., & Meganck, A. (2009). What HR managers do versus what employees value  Exploring both parties’ views on retention management from a psychological contract perspective. Personnel Review, 38(1), 45–60. https://doi.org/10.1108/00483480910920705. Dooley, R.  S., & Fryxell, G.  E. (1999). Attaining decision quality and commitment from dissent: The moderating effects of loyalty and competence in strategic decision-making teams. Academy of Management Journal, 42(4), 389–402. https://doi.org/10.2307/257010. Farrell, D. (1983). Exit, voice, loyalty, and leglect as responses to job dissatisfaction: A multidimensional scaling study. Academy of Management Journal, 26(4), 596–607. https://doi. org/10.2307/255909. Farrell, D., & Rusbult, C.  E. (1992). Exploring the exit, voice, loyalty, and neglect typology: The influence of job satisfaction, quality of alternatives, and investment size. Employee Responsibilities and Rights Journal, 5(3), 201–218. https://doi.org/10.1007/BF01385048. Goffee, R., & Jones, G. (1998). The character of a corporation. London, UK: HarperCollins Publishers. Graham, J. W., & Keeley, M. (1992). Hirschman's loyalty concept. Employee Responsibilities and Rights Journal, 5(3), 191–200. https://doi.org/10.1007/bf01385047. Guillon, O., & Cezanne, C. (2014). Employee loyalty and organizational performance: A critical survey. Journal of Organizational Change Management, 27(5), 839–850. https://doi. org/10.1108/JOCM-­02-­2014-­0025. Haar, J. M. (2006). Challenge and hindrance stressors in New Zealand: Exploring social exchange theory outcomes. The International Journal of Human Resource Management, 17(11), 1942–1950. https://doi.org/10.1080/09585190601000147.

References

127

Haynes, S.  N., Richard, D.  C. S., & Kubany, E.  S. (1995). Content validity in psychological assessment: A functional approach to concepts and methods. Psychological Assessment, 7(3), 238–247. https://doi.org/10.1037/1040-­3590.7.3.238. Hoffmann, E.  A. (2006). The ironic value of loyalty dispute resolution strategies in worker cooperatives and conventional organizations. Nonprofit Management and Leadership, 17(2), 163–177. https://doi.org/10.1002/nml.141. Hollebeek, L. D., & Haar, J. M. (2012). Direct and interaction effects of challenge and hindrance stressors towards job outcomes. New Zealand Journal of Employment Relations, 37(2), 58–76. Homburg, C., & Stock, R. (2000). Der kundenorientierte Mitarbeiter. Wiesbaden: Gabler Verlag. Hui, C., Law, K. S., & Chen, Z. X. (1999). A structural equation model of the effects of negative affectivity, leader-member exchange, and perceived job mobility on in-role and extra-role performance: A Chinese case. Organizational Behavior and Human Decision Processes, 77(1), 3–21. https://doi.org/10.1006/obhd.1998.2812. James, K., & Cropanzano, R. (1994). Dispositional group loyalty and individual action for the benefit of an ingroup: Experimental and correlational evidence. Organizational Behavior and Human Decision Processes, 60(2), 179–205. https://doi.org/10.1006/obhd.1994.1080. Jauch, L. R., Glueck, W. F., & Osborn, R. N. (1978). Organizational loyalty, professional commitment, and academic research productivity. Academy of Management Journal, 21(1), 84–92. https://doi.org/10.2307/255664. Jen, C. K., Chou, L. F., Lin, C. Y., & Tsai, M. C. (2012). The influence of the perception of a familial climate on job performance: Mediation of loyalty to supervisors and moderation of filial behaviour. International Journal of Psychology, 47(3), 169–178. https://doi.org/10.108 0/00207594.2011.626045. Jun, M., Cai, S., & Shin, H. (2006). TQM practice in maquiladora: Antecedents of employee satisfaction and loyalty. Journal of Operations Management, 24(6), 791–812. https://doi. org/10.1016/j.jom.2005.09.006. Kantsperger, R., & Kunz, W. H. (2005). Managing overall service quality in customer care centers  - Empirical findings of a multi-perspective approach. International Journal of Service, 16(2), 135–151. https://doi.org/10.1108/09564230510592270. Kockläuner, G. (2000). Multivariate Datenanalyse. Am Beispiel des statistischen Programmpakets SPSS. Braunschweig/Wiesbaden: Friedrich Vieweg & Sohn. Konradt, U., Warszta, T., & Ellwart, T. (2013). Fairness perceptions in web-based selection: Impact on applicants' pursuit intensions, recommendation intentions, and intensions to reapply. International Journal of Selection and Assessment, 21(2), 155–169. https://doi.org/10.1111/ ijsa.12026. Kreinest, M., Goller, S., Gliwitzky, B., Grützner, P. A., Küffer, M., Häske, D., Papathanassiou, V., & Münzberg, M. (2016). Expertise of German paramedics concerning the prehospital treatment of patients with spinal trauma. European Journal of Trauma and Emergency Surgery . (Ahead of print). https://doi.org/10.1007/s00068-­016-­0682-­5. Kruskal, W. H., & Wallis, W. A. (1952). Use of ranks in one-criterion variance analysis. Journal of the American Statistical Association, 47(260), 583–621. https://doi.org/10.2307/2280779. Leck, J.  D., & Saunders, D.  M. (1992). Hirschman's loyalty: Attitude or behavior? Employee Responsibilities and Rights Journal, 5(3), 219–230. https://doi.org/10.1007/BF01385049. Lee, S.  Y., & Whitford, A.  B. (2008). Exit, voice, loyalty, and pay: Evidence from the public workforce. Journal of Public Administration Research and Theory, 18(4), 647–671. https://doi. org/10.1093/jopart/mum029. Lee, T. W., Mitchell, T. R., Sablynski, C. J., Burton, J. P., & Holtom, B. C. (2004). The effects of job embeddedness on organizational citizenship, job performance, volitional absences, and voluntary turnover. Academy of Management Journal, 47(5), 711–722. https://doi. org/10.2307/20159613. Lee, J. H., Kim, M. S., & Jeon, A. (2012). The effects of emotional intelligence on service recovery and organizational loyalty: A case of flight attendants of South Korean airlines. Service Business, 7(4), 665–686. https://doi.org/10.1007/s11628-­012-­0181-­7.

128

6  Empirical Investigation of Employee Loyalty

Leung, A. S. M. (2008). Matching ethical work climate to in-role and extra-role behaviors in a collectivist work setting. Journal of Business Ethics, 79(1), 43–55. https://doi.org/10.1007/ s10551-­007-­9392-­6. Levy, Y., & Ellis, T. J. (2006). A systems approach to conduct an effective literature review in support of information systems research. Informing Science Journal, 9(1), 181–212. Luhtanen, R., & Crocker, J. (1992). A collective self-esteem scale: Self-evaluation of one’s social identity. Personality and Social Psychology Bulletin, 18(3), 302–318. https://doi. org/10.1177/0146167292183006. Matzler, K., & Renzl, B. (2006). The relationship between interpersonal trust, employee satisfaction, and employee loyalty. Total Quality Management, 17(10), 1261–1271. https://doi. org/10.1080/14783360600753653. McCarthy, D.  G. (1997). The loyalty link. How loyal employees create loyal customers. New York: Wiley. Meschke, S., & Hornung, T. (2014, Nov). Eine wissenschaftliche Betrachtung des Konzepts Mitarbeiterloyalität: Definition, Messung und Relevanz. Mitarbeiterloyalität  - Schlüssel zur Fachkräftesicherung oder Auslaufmodell? Symposium conducted at the chair for International Management and Corporate Strategy, Freiberg, Germany. Meyer, J.  P., & Allen, N.  J. (1997). Commitment in the workplace. Thousand Oaks: Sage Publication. Miller, V.  D., Johnson, J.  R., & Grau, J. (1994). Antecedents to willingness to participate in a planned organizational change. Journal of Applied Communication Research, 22(1), 59–80. https://doi.org/10.1080/00909889409365387. Moorman, R. H., & Blakely, G. L. (1992). A preliminary report on a new measure of organizational citizenship behavior. Proceedings of the Southern Management Association (pp.  185–187). Valdosta, GA. Moorman, R. H., & Blakely, G. L. (1995). Individualism – collectivism as an individual difference predictor of organizational citizenship behavior. Journal of Organizational Behavior, 16(2), 127–142. https://doi.org/10.1002/job.4030160204. Naus, F., Van Iterson, A., & Roe, R. (2007). Organizational cynicism: Extending the exit, voice, loyalty, and neglect model of employees’ responses to adverse conditions in the workplace. Human Relations, 60(5), 683–718. https://doi.org/10.1177/0018726707079198. Niehoff, B. P., Moorman, R. H., Blakely, G., & Fuller, J. (2001). The influence of empowerment and job enrichment on employee loyalty in a downsizing environment. Group and Organization Management, 26(1), 93–113. https://doi.org/10.1177/1059601101261006. Nippa, M., Beechler, S., Hornung, T., Meschke, S., & Coughlan, R. (2014). Employee loyalty and organizational commitment revisited – Exploring future research opportunities. PDW at the 74th Annual Meeting of the Academy of Management. Abstract available in proceedings (p. 223). Philadelphia, PA. Olson-Buchanan, J.  B., & Boswell, W.  R. (2002). The role of employee loyalty and formality in voicing discontent. Journal of Applied Psychology, 87(6), 1167–1174. https://doi. org/10.1037//0021-­9010.87.6.1167. Omar, M. W., Jusoff, K., & Hussin, H. (2010). Employee motivation and its impact on employee loyalty. World Applied Sciences Journal, 8(7), 871–873. Patchen, M. (1965). Some questionnaire measures of employee morale: A report on their reliability and validity. (Monograph No. 41). Ann Arbor: Institute for Social Research. Reilly, A. H., Brett, J. M., & Stroh, L. K. (1993). The impact of corporate turbulence on managers ‘attitudes. Strategic Management Journal, 14(1), 167–179. https://doi.org/10.1002/ smj.4250140913. Rudolf, M., & Müller, J. (2004). Multivariate Verfahren. Eine praxisorientierte Einführung mit Anwendungsbeispielen in SPSS. Göttingen: Hogrefe. Rusbult, C. E., Farrell, D., Rogers, G., & Mainous, A. G., III. (1988). Impact of exchange variables on exit, voice, loyalty, and neglect: An integrative model of responses to declining job satisfaction. Academy of Management Journal, 31(3), 599–627. https://doi.org/10.2307/256461.

References

129

Schmid, H. (1992). Psychologische tests: Theorie und Konstruktion. Fribourg, Switzerland: Academic Press Fribourg. Scott, W. (1965). Values and organizations: A study of fraternities and sororities. Chicago: Rand McNally. Si, S., & Li, Y. (2012). Human resource management practices on exit, voice, loyalty, and neglect: Organizational commitment as a mediator. The International Journal of Human Resource Management, 23(8), 1705–1716. https://doi.org/10.1080/09585192.2011.580099. Siegrist, J., Starke, D., Chandola, T., Godin, I., Marmot, M., Niedhammer, I., & Peter, R. (2004). The measurement of effort-reward imbalance at work: European comparisons. Social Science & Medicine, 58(8), 1483–1499. https://doi.org/10.1016/S0277-­9536(03)00351-­4. Sims, R. R. (1992). Linking groupthink to unethical behavior in organizations. Journal of Business Ethics, 11(9), 651–662. https://doi.org/10.1007/BF01686345. Stroh, L. K., & Reilly, A. H. (1997). Rekindling organizational loyalty: The role of career mobility. Journal of Career Development, 24(1), 39–54. https://doi.org/10.1023/A:1025034504937. Turnley, W.  H., & Feldman, D.  C. (1999). The impact of psychological contract violations on exit, voice, loyalty, and neglect. Human Relations, 52(7), 895–922. https://doi. org/10.1177/001872679905200703. Van Dyne, L., Graham, J.  W., & Dienesch, R.  M. (1994). Organizational citizenship behavior: Construct redefinition, measurement, and validation. Academy of Management Journal, 37(4), 765–802. https://doi.org/10.2307/256600. Webber, R. (1982). Career problems of young managers. In D. Hampton, C. Summer, & R. Webber (Eds.), Organizational behaviour and the practice of management (pp. 94–110). Dallas: Scott Foresman & Company. Werner, C. S., Schermelleh-Engel, K., Gerhard, C., & Gäde, J. C. (2016). Strukturgleichungsmodelle. In N.  Döring & J.  Bortz (Eds.), Forschungsmethoden und Evaluation in den Sozial- und Humanwissenschaften (5th ed., pp. 945–973). Berlin/Heidelberg: Springer Verlag. Wilks, D. d. C. (2012). Perceptions of deviant behavior in the workplace. International Journal of Management, 1(2), 217–230. Withey, M. J., & Cooper, W. H. (1989). Predicting exit, voice, loyalty, and neglect. Administrative Science Quarterly, 34(4), 521–539. https://doi.org/10.2307/2393565. Withey, M.  J., & Cooper, W.  H. (1992). What’s loyalty. Employee Responsibilities and Rights Journal, 5(3), 231–240. https://doi.org/10.1007/BF01385050. Wong, Y. T., Wong, C. S., & Ngo, H. Y. (2002). Loyalty to supervisor and trust in supervisor of workers in Chinese joint ventures: A test of two competing models. The International Journal of Human Resource Management, 13(6), 883–900. https://doi.org/10.1080/09585190210134264. Yee, R. W. Y., Yeung, A. C. L., & Cheng, T. C. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 24(1), 109–120. https://doi.org/10.1016/j.ijpe.2009.10.015. Zöfel, P. (2003). Statistik für Psychologen im Klartext. Munich: Pearson Studium.

Chapter 7

Results

Following the theoretical foundation of the employee loyalty concept as well as the description of the empirical investigation, the results of two surveys from Germany and China are presented in this chapter. The results for the employee loyalty concept were achieved in another chronological sequence (see Sect. 6.4.2) as presented subsequently. Initially, a survey was conducted in Germany between August and September 2014. Through EFA and item analysis, nine employee loyalty items were identified, of which three items in each case were assigned to the factors organization, working group, and supervisor. Due to the limitation of length of the second survey, only those nine employee loyalty items were selected for the Chinese version conducted in August 2016. Thereby, the results of the EFA with the German sample could not be confirmed and the necessity to conduct an additional CFA with the German sample arose. Thereupon, two items for the employee loyalty concept were exchanged for the final nine-item concept of employee loyalty for European cultures. Upon theoretical considerations, the Chinese sample was subject to an alternative EFA and CFA as well. This statistical work led to impulses for an early approach to the concept of employee loyalty in East Asian cultures. In sum, the concept of employee loyalty for European cultures will be finally derived and the concept of employee loyalty for East Asian cultures will be presented as an initial approach. Within this chapter, however, the reasoning of the theoretical part of this book is followed. First, the results of different analyses for the concept of (European) employee loyalty with the German data will be shown. Following, a relation between (European) employee loyalty and negative behavioral outcomes is identified. In conclusion, the derived European concept of employee loyalty is compared with an early approach of East Asian employee loyalty through data from China.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 S. Meschke, Employee Loyalty, https://doi.org/10.1007/978-3-030-68425-9_7

131

132

7 Results

7.1  The Employee Loyalty Concept Following the construct validity recommendations of Clark and Watson (1995), a broader item pool can be reduced by item and factor analysis. In the first step, EFA and supplemented item analysis were applied to identify items and factors that represent the employee loyalty concept and are distinct from the related organizational commitment concept. In the second step, construct validity was verified and the third step aimed at identifying the final employee loyalty items by means of CFA.

7.1.1  Item Reduction and Factor Identification The item analysis is divided into five phases: value distribution, item difficulty, selectivity, homogeneity, and dimensionality. For the first phase, the value distribution of the items revealed non-normal distribution of the employee loyalty items with the Kolmogorov–Smirnov test. For further analysis, this implies that only non-parametric methods should be applied. The item difficulty was determined by recoding the answers of the items from 0 to 6 instead of 1 (strongly disagree) to 7 (strongly agree). The sum of each item was then divided by the maximal possible score, which shows the item difficulty index. With 0.70, the average item difficulty was found to be relatively easy. Two items (Loy to Sup 3 and 4) produced indices close to 0.90 or above (0.894 and 0.922) and clearly exceeded a middle difficulty range. Both items were excluded as they may be considered overly simple. To ensure the right balance of the item difficulties in both directions, more difficult items with an index of less than 0.5 were eliminated as well, which applied for Loy to Org 6 (0.427) and 7 (0.484). For the Loy to WorGr subscale, all items showed indices close to 0.7 or above and must therefore be classified as relatively easy. The item difficulty indices of the remaining 14 items are shown in Table 7.1. The three remaining phases of the item analysis: selectivity, homogeneity, and dimensionality are parts of the EFA. Selectivity is shown by the corrected item-total correlation of the subscales, homogeneity by the inter-item correlation of the

Table 7.1  Item difficulty indices after balancing Loy to Org Item 1 Item 2 Item 3 Item 4 Item 5 Item 6

Difficulty index 0.724 0.777 0.535 0.828 Excluded Excluded

Loy to WorGr Item 1 Item 2 Item 3 Item 4 Item 5 Item 6

Difficulty index 0.838 0.731 0.838 0.696 0.713 0.829

Loy to Sup Item 1 Item 2 Item 3 Item 4 Item 5 Item 6

Difficulty index 0.554 0.574 Excluded Excluded 0.689 0.600

7.1 The Employee Loyalty Concept

133

subscales, and dimensionality by factor loadings. Thus, the EFA results will provide the missing information for the final-item analysis phases. To start the EFA, the remaining 14 items were subject to a principal component analysis, which is applied in most cases (Kockläuner 2000). It assumes that the variance of a variable can be fully explained by the extraction of the factors. This theoretical assumption differentiates the principal component analysis from the principal axis method although both can be considered identical from a calculation perspective (Backhaus et  al. 2011). Further, a varimax rotation was chosen to facilitate the interpretation and loadings larger than 0.4 were reported. In the first round, the item Loy to Sup 1 showed cross-loadings on three factors and was removed consequently. In a second round, the items Loy to WorGr 5 and 6 showed cross-loadings on two factors and were removed likewise. The remaining 11 items did not show cross-loadings larger than 0.4 and were selected for additional tests. To determine the suitability of data for factor analysis, the sample was tested for the Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy. With a KMO value of 0.797 which is close to 0.8, the items indicated a “meritorious” result (Kaiser and Rice 1974). All items showed at least a value of 0.690 on the diagonal of the anti-­ image correlation matrix. Thus, factor analysis is appropriate. For clarity regarding the number of factors, the scree plot as well as the Kaiser criterion provides indications. The “elbow” of the scree plot did not indicate clear results. It could be interpreted as an own-factor or a three-factor solution. To assure unambiguousness, the Kaiser criterion was taken into consideration, which states to drop all factors with eigenvalues less than 1.0. The Kaiser criterion confirmed the extraction of three factors accounting for 64.84% of the total variance. The interpretation of the extracted factors provided evidence for a distinction between the reference objects: organization, working group, and supervisor (see Table A.2 in the appendix section) as proposed in H1. Only the two items Loy to WorGr 4 and Loy to Org 2 did not properly fit this distinction and have therefore been removed. So in this evaluation phase, the final employee loyalty concept consisted of nine items with three items for each reference object. Also, the application of nine items for the employee loyalty concept still led to three factors through EFA. On the one side, the scree plot (see Fig. 7.1) most likely indicates an “elbow” after the second factor, representing a one-factor solution. On the other side, the clearer Kaiser criterion recommends the extraction of three factors. Factor 1, 2, and 3 showed eigenvalues of 3.63, 1.52, and 1.06, and accounted for 40.38%, 57.24%, and 68.95% of the cumulated variance. The final result of the EFA for the employee loyalty concept is presented in Table  7.2. The first factor or respectively subscale, loyalty to organization, is represented by the three items: Loy to Org 3, 4, and 1 (see Table 6.4) with factor loadings of 0.88, 0.66, and 0.63. The second factor, loyalty to working group, is represented by the three items: Loy to WorGr 3, 2, and 1 with factor loadings of 0.82, 0.79, and 0.64. The third factor, loyalty to supervisor, is represented by the three items: Loy to Sup 6, 5, and 2 with factor loadings of 0.82, 0.79, and 0.64. Regarding the dimensionality of the item analysis, these loadings are sufficiently high. Additional support is gained by the reliability consideration of the factors

134

7 Results

Fig. 7.1  Scree plot for nine-item approach. (EFA, German sample) Table 7.2  Employee loyalty concept (EFA, German sample)

Items A. Loy to Org 3. Also in my spare time I wear clothing (base caps, jackets, lanyards, etc.) that bears the company’s symbol or insignia (or I would do so if my company had such clothing) 4. I speak highly of the company to friends 1. I defend my organization when other employees criticize it B. Loy to WorGr 3. I take an active part in my working group’s affairs 2. I do more than one’s share of the working group task 1. I defend the honor of my working group whenever it is unfairly criticized C. Loy to Sup 6. I agree with my supervisor’s opinions 5. When somebody speaks ill of my supervisor, I will defend him/her immediately 2. I tell my colleagues or friends about my supervisor’s merits Cronbach’s Alpha

Factors A. Loy to Org

B. Loy to C. Loy WorGr to Sup

0.88

0.66 0.63 0.82 0.79 0.64

0.89 0.85

0.65

0.68

0.81 0.84

Note. Loadings >0.4 are reported, N = 148 Abbreviations. Loy to Org loyalty to organization, Loy to WorGr loyalty to working group, Loy to Sup loyalty to supervisor

7.1 The Employee Loyalty Concept

135

through Cronbach’s Alpha. All subscales exceed a Cronbach’s Alpha value of 0.60, whereas the subscales range between 0.65 (loyalty to organization), 0.68 (loyalty to working group), and 0.84 (loyalty to organization). Cronbach’s Alpha for all nine items was found at 0.79. Regarding the elements of the items (see Sect. 3.3.3), it is found that all factors contain one dedication item and two others. Loyalty to supervisor as well as loyalty to organization contains two additional identification items and loyalty to working group contains two additional attachment items. For the finalization of the item analysis, the phase selectivity and homogeneity must be considered. Selectivity states how well a single item is able to represent the overall scale. Positive values between 0.3 and 0.5 can be understood as moderately desirable and values above 0.5 as highly desirable (Bortz and Döring 2006). The item-total correlation revealed that three items (Loy to WorGr 1 and 2, Loy to Org 3) are moderately selective with values of 0.471, 0.425, and 0.433. The other six items were found highly selective with values between 0.508 (Loy to Org 4) and 0.751 (Loy to Sup 5). As easier items may lead to declines in selectivity coefficients, these results indicate sound selectivity. Homogeneity gives evidence whether the items of a scale measure similar information. The average homogeneity of all items of a scale represents a test homogeneity, which should not fall below 0.4 (Bortz and Döring 2006). This is observed for the employee loyalty subscale with test homogeneities of 0.438, 0.419, and 0.643 for the subscales: loyalty to organization, loyalty to working group, and loyalty to supervisor. To summarize, item analysis and EFA provide results for the support of H1.

7.1.2  Construct Validity In order to assure construct validity for the concept of employee loyalty, Brahma (2009) refers to different underlying validities. Content validity is already provided by the extensive theoretical considerations of the work. Assessment of unidimensionality is assured by the factor loadings and the item-total correlations. Reliability and convergent validity were shown by the Cronbach’s Alpha measures and corrected item-scale correlations. Nomological validity will be presented in Sect. 7.2 by correlating the employee loyalty concept with other concepts. For completing the construct validity investigations, discriminant validity results must be supplemented. Discriminant validity signifies that scales of a construct differentiate from scales of closely related constructs. Thus, the derived nine items of employee loyalty should differentiate from the continuance commitment subscale of the organizational commitment (Org Comm) construct. Therefore, another EFA was conducted as a principal component analysis with varimax rotation of 16 blended items. As the aim was to investigate a potential differentiation of the items, this time a default was set on four items. To ease the explanation of the item differences, loadings larger than 0.3 were reported and the results are shown in Table 7.3.

136

7 Results

Table 7.3  Employee loyalty concept and organizational commitment (EFA, German sample)

Items A. Loy to Org 3. Also in my spare time I wear clothing (base caps, jackets, lanyards, etc.) that bears the company's symbol or insignia (or I would do so if my company had such clothing). 4. I speak highly of the company to friends 1. I defend my organization when other employees criticize it B. Loy to WorGr 3. I take an active part in my working group’s affairs 2. I do more than one’s share of the working group task 1. I defend the honor of my working group whenever it is unfairly criticized C. Loy to Sup 6. I agree with my supervisor’s opinions 5. When somebody speaks ill of my supervisor, I will defend him/her immediately 2. I tell my colleagues or friends about my supervisor’s merits D. Org Comm 2. It would be very hard for me to leave my organization right now, even if I wanted to 6. I feel that I have sufficient options to consider leaving this organization (R) a. 7. One of the few serious consequences of leaving this organization would be the scarcity of available alternatives 3. Too much in my life would be disrupted if I decided I wanted to leave my organization now 5. Right now, staying with my organization is a matter of necessity as much as desire 8. One of the major reasons I continue to work for this organization is that another organization may not match the overall benefits (e.g., pension rights, hours of labor) I have here 4. It wouldn’t be too costly for me to leave my organization now (R) a Cronbach’s alpha

Factors A. Loy to Org

B. Loy C. Loy to WorGr to Sup

D. Org Comm

0.79

0.47 0.41

0.44 0.53

0.35 0.41

0.81 0.75 0.65

0.88 0.86 0.81

0.79 0.78 0.68

0.64 0.50

0.52

−0.50

0.35

0.34 0.65

0.68

0.84

0.71

Note. Loadings >0.3 are reported, N = 148 Abbreviations. Loy to Org loyalty to organization, Loy to WorGr loyalty to working group, Loy to Sup loyalty to supervisor, Org Comm organizational commitment a Item was reverse-coded

7.1 The Employee Loyalty Concept

137

All employee loyalty items were still loaded on their three initial factors and the organizational commitment items loaded on the fourth factor. The Loy to Org items 4 and 1 showed cross-loadings on the Loy to WorGr and Loy to Sup factors. The Org Comm items 5 and 8 showed cross-loadings on the Loy to Org factor. However, support for H3 is strengthened by a Cronbach’s Alpha value of 0.71, which indicates acceptable interrelatedness for the items of the separate Org Comm subscale. Conclusively, it can be attested that the employee loyalty concept with three reference object factors is sufficiently construct validity, including the differentiation from the organizational commitment concept.

7.1.3  Construct Finalization Opposed to the “structure-detecting” EFA, CFA is known as a “structure-confirming” procedure. In order to run a CFA in Amos, the investigation model must be defined. For the employee loyalty concept, this model (see Fig. 7.2) includes the latent and co-varied factors Loy to Org, Loy to WorGr, and Loy to Sup. Each of these factors is represented by three manifest and direct observable items (x1–x9).

Fig. 7.2  Model for CFA

138

7 Results

The proportion of variance that cannot be explained by an observable item factor loading is indicated as error variance (e1–e9). Thus, three manifest variables and the respective error variances describe each of the factors (Backhaus et al. 2015). As a result of the EFA, nine manifest items were found for x1–x9: Loy to Org 1, 3, and 4; Loy to WorGr 1, 2, and 3; Loy to Sup 2, 5, and 6. The aim of the CFA is to statistically verify those items for the employee loyalty concept. In the first step, the identifiability of the model needs to be assured. With nine manifest variables (p), 45 empirical variances and co-variances were calculated (½ · p · (p + 1)). 21 model parameters might be estimated, which results in 24 degrees of freedom. Thus, the identifiability of the model is assured. In the second step, the parameters are defined. It is assumed that the variances of the latent variables are even and are therefore determined as fixed parameters. All other parameters were determined as free parameters. In the last step before the actual CFA, the estimation procedure was selected. The manifest variables showed skewness and kurtosis violations, which is why multivariate normal distribution is not given. In this case, the most commonly applied maximum likelihood procedure is not appropriate. The asymptotically distribution-free procedure is found to be relatively independent of skewness and kurtosis of the items at sample sizes over 100 and does not rely on the normal distribution of the data (Curran et al. 1996; Maydeu-Olivares et al. 2007). The sample size of 148 persons also meets the common rule of thumb (1.5 · p · (p + 1)), at which nine manifest variables (p) result in a minimum sample size of 135 persons. Thus, the asymptotically distribution-free procedure was applied as an estimation procedure. In order to verify the standardized results of the CFA (see Fig. A.3 in the appendix section), a threefold assessment is carried out for the indicator level, the construct level, and the complete model (Backhaus et al. 2015). On the indicator level, the significance test of the path coefficients showed that all standard errors of the estimations are positive and highly significant on a significance level of 0.001. However, five of nine squared multiple correlations fell short of 0.5. Only four items explained more than 50% of the variance of the initial data and, thus, the model is not acceptable at the indicator level. On the construct level, the reliability of the three factors: Loy to Org, Loy to WorGr, and Loy to Sup exceeded 0.5 with values of 0.705, 0.731, and 0.840. These factors are deemed reliable. Also, the discriminant validity between the factors is ensured as the average variances extracted for the factors was greater than the squared correlations between the latent variables (Fornell–Larcker criterion). However, the average variances extracted for the factors (0.448, 0.485, and 0.650) fell slightly below 0.5 for Loy to Org and Loy to WorGr factor. The model is, thus, only severely restricted on the construct level. For the complete model, the following model fit indicators were found: χ2/df  =  1.55, CFI = 0.85, GFI = 0.94, RMSEA = 0.06, and TLI = 0.77. Especially, the CFI and the TLI did not indicate a good fit of the model (Fischer 2004; Jun et al. 2006) on the construct level. Thus, in summary, the model must be refined so that it might be verified in another CFA. For refinement of the model, an exchange of items might lead to more suitable results. After further theoretical thinking in combination with statistical testing, the item Loy to Org 3 was exchanged for Loy to Org 2 and the item Loy to WorGr 2 was

7.1 The Employee Loyalty Concept

139

Fig. 7.3  Employee loyalty concept with final items (CFA, German sample). Note. Standardized results are reported, N = 148. Abbreviations. LtO loyalty to organization, LtG loyalty to working group, LtS loyalty to supervisor

exchanged for Loy to WorGr 6. In this way, three items still explained a factor of the same reference object. The model is still identifiable, the variances of the latent variables are determined as fixed parameters, and the asymptotically distribution-­ free procedure was again applied as an estimation procedure. The results are shown in Fig. 7.3. The standardized results of the CFA were again verified. On the indicator level, the significance test of the path coefficients showed that all standard errors of the estimations are positive and highly significant on a significance level of 0.001. The items Loy to WorGr 1 and Loy to Sup 2 were observed with squared multiple correlations at around 0.5, but the item Loy to Org 2 only showed a squared multiple correlations of only 0.24. This can be seen as an exception since seven out of nine items explain at least 50% of the variance. With items accounting for up to 84% of the variance, the refined model is acceptably suitable on the indicator level. On the construct level, the reliability of the three factors: Loy to Org, Loy to WorGr, and Loy to Sup is given with even increased values of 0.711, 0.846, and 0.852. Discriminant validity is slightly limited due to the high correlation between the factors Loy to Org and Loy to WorGr (0.75). However, the two other factors meet the Fornell–Larcker criterion as their average variances extracted were greater than the squared correlations between the latent variables. Even though the average

140

7 Results

variances extracted for all factors increased, Loy to Org still fell slightly below 0.5. In total, the model is found to be sufficiently suitable on the construct level. For the complete model, the following model fit indicators were found: χ2/df  =  1.57, CFI = 0.89, GFI = 0.92, RMSEA = 0.06, and TLI = 0.83. In this case, CFI lies in an acceptable range between 0.85 and 0.89 and TLI indicated a good fit within the range between 0.8 and 0.9. The other model fit indicators remained within an acceptable range (Fischer 2004; Jun et  al. 2006) as well. Thus, CFA shows an acceptable model with the refined items on the indicator level, the construct level, and for the complete model. After EFA and CFA, the concept of employee loyalty is finally represented by the items Loy to Org 1, 2, and 4; Loy to WorGr 1, 3, and 6; Loy to Sup 2, 5, and 6. This allows for further analyses, particularly the identification of negative outcomes of varying reference objects and levels of employee loyalty.

7.2  Negative Outcomes Across Employee Loyalty Levels After determining the employee loyalty measurement, this section aims at defining and statistically validating a continuum for the employee loyalty concept. Following, potentially negative behaviors may be investigated with the continuum of employee loyalty, with regard to the three reference objects and a combined employee loyalty scale. The section is closed with a short description of groupthink tendencies, which must be presented separately due to their indirect measurement. For the definition of levels within the continuum of employee loyalty, the distribution of answers of the final employee loyalty concept was considered. Thereby, a right-skewed distribution with a mean value of 5.5 above all reference objects was observed. This indicates a distorted answer behavior in the sense of socially desirable answers. The classification of the employee loyalty levels mirrors this skewness by defining the following levels: • • • •

Disloyal (< 4.0) Non-loyal (≥ 4.0  6.0)

This classification of the employee loyalty levels was derived from the structure of the questionnaire. Effectively, this means that participants which on average stated lower values than 4 (neutral) are classified as disloyal and higher values than 6 (++) are classified as hyper-loyal. The levels in between with average values lower than 5 (+) are classified as non-loyal and equal or higher than 5 (+) are classified as loyal. It is assumed that this classification approach enables more objectivity and comparability of the results than a pure a posteriori classifications of the answers, for example, based on percentages. The problem with a percentage-based classification might be that no indication exists of how many percent of a sample represent disloyalists, non-loyalists, loyalists, or hyper-loyalists. The interpretation

7.2 Negative Outcomes Across Employee Loyalty Levels

141

and classification of the answers to these four levels are considered a greater subjective intervention than classifying the levels according to the sense of the questionnaire. Only the a priori expected skewness was considered a posteriori. For statistical verification of employee loyalty levels, Kruskal–Wallis tests were conducted for each reference object and a combined “Tripartite Employee Loyalty (TEL)” scale. These tests provide additional information regarding the negative outcome hypotheses. Results will be presented in the following sections, along the following structure. First, the test statistics for each reference object are presented. Significant differences of the central tendencies of negative outcomes can be detected through asymptotic significance values. However, it cannot be stated which level pairs differ for the respective negative outcome. Second, the ranks for the negative outcomes across all levels are shown. Every level can be compared to the mean rank values, which allows for an analysis of the negative outcomes. Third, each negative outcome that was found statistically significant in the first step is shown as box plot and pairwise comparison. By combining graphical and statistical results, level pairs can be identified that differ significantly from each other and their respective effect size r is calculated.

7.2.1  Loyalty to Organization and Negative Outcomes The test statistics across the levels of loyalty to organization with the Kruskal– Wallis test (see Table 7.4) resulted in higher H-values for resistance to change and willingness to leave, medium H-values for CWB, and small H-values for work overload. The asymptotic significance requires rejection of the null hypothesis at p