Psychological Contract Breach, Actual and Perceived Dissimilarity and Employee Outcomes - Case Study Example

Perceptions of Psychological Contract Breach, Actual and Perceived Dissimilarity and Employee Outcomes in the UK Hospitality Industry Part One Introduction The rapid diversification of the global population has significantly affected organizations of today (Kirkman, Tesluk, & Rosen, 2004). The growing workforce diversity within organizations has compelled them to address the uniqueness of each individual and hone this distinctiveness towards organizationally desired outcomes (Vecchio & Bullis, 2001). One of the key factors in tackling this challenge lies in the foundation of the employee-employer relationship. This factor has given rise to the study of dissimilarity, its various forms, and how these differences affect the supervisor-subordinate relationship and eventually employee outcomes. Jackson, May, and Whitney (1995, as cited in Hobman, Bordia, & Gallois, 2003) defined dissimilarity as the amount of relative difference between two individuals in terms of values and characteristics. These differences may be in terms of actual dissimilarity (e.g., age and gender) and perceived dissimilarity (e.g., visible, value, and informational) (Hobman et al., 2003). Perceived visible dissimilarity refers to differences in age and gender; perceived value dissimilarity refers to differences in work values; and perceived informational dissimilarity refers to differences in educational background and work experience (Hobman, Bordia, & Gallois, 2004). Most studies in dissimilarity deals with the effects of dissimilarity to group attitudes and behaviors and supervisor-subordinate dyads (Hobman et al., 2003; Pelled & Xin, 2000; Turban, Dougherty, & Lee, 2001). Previous researches have investigated the impact of dissimilarity to employee outcomes such as organizational citizenship behavior (OCBs: Van Der Vegt, Van De Vliert, & Oosterhof, 2003), leader-member exchange (LMX: Epitropaki & Martin, 1999), work group involvement (Hobman et al., 2004), and job satisfaction (Lyons & Oppler, 2004). A significant amount of research on the effects of psychological contract breach to employee outcomes have been done, yet none have dealt with the mediating role of psychological contract breach on the relationship of the various types of dissimilarity on employee outcomes (Kickul & Lester, 2001; Hobman et al., 2004). Most studies with regard to dissimilarity have involved the direct effects of dissimilarity on various employee outcomes (Hobman et al., 2004). This brought about the idea of using psychological contract breach as a mediator on the relationship of dissimilarity to employee outcomes. Moreover, this study extended the applicability of psychological contract theory in the context of the supervisor-subordinate relationship. This study also addressed the call for empirical-based examinations investigating the antecedents of psychological contract breach. Specifically, this study examined the role of dissimilarity as a potential precursor of contract breach perceptions. This study intended to examine how psychological contract breach perceptions would mediate the process on how dissimilarity affects employee outcomes. Due to the fact that researches on dissimilarity are relatively new (Hobman et al., 2004), a deeper and more comprehensive study on the outcomes of the various types of dissimilarity is needed. This can be done by researching on how various variables such as psychological contract breach mediates the relationship of dissimilarity to employee outcomes, such as this study. Furthermore, most studies done in dissimilarity have been done in the western context (Pelled & Xin, 2001). Purpose This study aims to use supervisor-subordinate dyads within the US hospitality industry to see how dissimilarities in the UK hospitality industry context affect employee outcomes. The concept of dissimilarity facilitates better understanding on how the extent of the individuality of each person affects his/her relationship with his/her coworkers. The heterogeneity of the workforce is something that is inevitable and can be found in all organizations worldwide. This study will help companies address and respect each individual’s uniqueness towards the facilitation of better supervisor-subordinate relationships that will eventually lead to organizationally desired outcomes. The relationship between a supervisor and a subordinate is something that is unavoidable. This can be considered as one of the most basic relationships in an organization. The quality of this relationship clearly has significant effects on employee outcomes. This gives rise to studying the mediating role of psychological contract breach in the relationship of actual and perceived dissimilarity to employee outcomes. Statement of the Problem This study intended to determine whether psychological contract breach mediates the relationship between superior-subordinate actual and perceived dissimilarity on leader-member exchange and organizational citizenship behavior. Statement of Objectives The following questions / objectives were addressed in the study in lieu of the problem presented above: 1. What is the composition of supervisor-subordinate dyads within the UK hospitality industry in terms of: a. Actual age dissimilarity b. Actual gender dissimilarity 2. What is the perception of subordinates towards dissimilarity with their supervisors in terms of: a. Perceived visible dissimilarity b. Perceived value dissimilarity 3. What is the perception of subordinates on the level of: a. Psychological contract breach b. Leader-member exchange 4. What is the level of organizational citizenship behavior manifested by subordinates as noted by supervisors? 5. Is there a significant relationship between actual dissimilarity (age and gender) and the following: a. Psychological contract breach b. Leader-member exchange c. Organizational citizenship behavior Definition of Terms This section provides an overview of the definitions of the variables used in this study. These summaries are presented to provide a clearer understanding of the study as a whole. Actual Age and Gender Dissimilarity. Actual age and gender dissimilarity refers to the objective measurement of the difference between two individuals in terms of age and gender (Hobman et al., 2004). It is an objective measurement in such a way that it measures almost immediately observable physical features in simple ways (Harrison et al., 1998). Actual dissimilarity research assumes that differences are recognized by team members and that these actual differences affect team processes (Harrison et al., 1998). Perceived Visible and Value Dissimilarity. Perceived visible dissimilarity refers to differences in visible characteristics such as age, gender, and ethnicity; while perceived value dissimilarity refers to differences in work ethic, work values, and motivations when approaching tasks (Hobman et al., 2004). Perceived dissimilarity is a subjective measurement of how different individuals perceive themselves from other individuals or groups (Hobman et al., 2004). Being a subjective measurement, perceived dissimilarity ensures that salient differences are measured (Hobman et al., 2004). Previous empirical studies have shown that dissimilarity is negatively related to work group involvement (Hobman et al., 2004), OCBs (Van Der Vegt et al., 2003), LMX (Epitropaki & Martin, 1999), communication (Turban, Dougherty, & Lee, 2001), and conflict (Hobman et al., 2004). Theoretical Concepts in Studying Dissimilarity. The social identity theory (Turner, 1982), self-categorization theory (Tajfel & Turner, 1986), and similarity-attraction paradigm (Byrne, 1997) have been used to further understand the concept of dissimilarity. The social identity theory states that individuals cognitively form self-categories of organizational membership and one’s similarities with members within the organization as well as dissimilarities with those outside the organization to which they belong (Hogg & Terry, 2000). To further expand the social identity theory, the self categorization theory was developed. The self-categorization theory is the operation of the social categorization process as the cognitive basis of group behavior (Hogg & Terry, 2000). Moreover, the similarity-attraction paradigm posits that individuals who possess similar characteristics, attitudes, and values perceive one another as similar and are attracted to each other (Byrne, 1997). Psychological Contract Breach. Psychological contracts are individual beliefs in a mutual obligation between the individual and the organization (Rousseau, 1989). It can be conceptualized as relational and transactional contracts (MacNeil, 1985). Psychological contract breach occurs when an unfulfilled promise or obligation is perceived. Psychological contract breach is caused by reneging, incongruence, and vigilance (Robinson & Morrison, 2000). Also, certain antecedents that lead individuals to perceive a breach in the psychological contract are exchange ideology (Coyle-Shapiro & Neuman, 2003) and personality (Raja et al., 2004). Some consequences of psychological contract breach are decrease in job satisfaction (Cavanaugh & Noe, 1999), OCBs (Robinson & Morrison, 1995), LMX (Restubog et al., 2005), trust (Robinson, 1996), and increase in turnover (Turnley & Feldman, 1999). Theories in Understanding Psychological Contracts. The social exchange theory (Blau, 1964), norm of reciprocity (Gouldner, 1960), cognitive dissonance (Festinger, 1958), and equity theory (Adams, 1965) have been used in explaining psychological contracts. The social exchange theory states that a person’s voluntary actions are motivated by payback from others (Blau, 1964). Following this exchange where an expectation of a mutual obligation is established, the norm of reciprocity suggests returning equally what was previously given (Gouldner, 1960). Moreover, cognitive dissonance (Festinger, 1958) and equity theory (Adams, 1965) posits that individuals will be motivated to adjust their behavior or attitudes to resolve the inequity between two or more cognitions. Leader-Member Exchange. LMX is defined as the quality of the exchange relationship between an employee and his/her supervisor (Dienesch & Liden, 1986; as cited in Gerstner & Day, 1997). Supervisors assign their subordinates with different tasks in a series of role making episodes to determine their subordinate’s capabilities in performing tasks (Liden & Maslyn, 1998). It is through these tasks where the supervisors are able to see the extent to which their subordinates are able to comply and perform the tasks which in turn, dictates the quality of LMX relationship to be formed (Liden & Maslyn, 1998). Much of the research on LMX divides the subordinates roles and the quality of the LMX into two basic categories based on the leaders and subordinates perceptions of the negotiating latitude: the in-group and the out-group (Dansereau et al., 1975). LMX suggested that employees who are part of the supervisor’s in-group experience a higher quality exchange which characterized by mutual trust, support, and interpersonal interaction (Deluga, 1994). These members make contributions that go beyond their formal job duties. On the other hand, LMX theory stated that people in the out group experience a low quality of exchange which is characterized by having limited reciprocal trust and support and few rewards from their supervisor (Deluga, 1988). They are given less job latitude, influence in decision making, support and attention since they are perceived to be incapable of performing up to the standards of their supervisor (Truckenbrodt, 2000). Previous research suggests that the relationships subordinates have with their supervisors is a key determinant of subordinates’ behaviors and attitudes, which in turn lead to a number of individual and organizational outcomes such as job satisfaction (Liden & Graen,1980), OCBs (Graen, Liden, & Hoel, 1982 as cited in Graen & Uhl-Bien, 1995) and is negatively related to turnover. Organizational Citizenship Behavior. OCBs are behaviors that are discretionary and not recognized by the formal reward system of the organization (Organ, 1988). It is manifested when employees perform behaviors such as helping in order to promote the organizations’ effective functioning (Organ, 1988). There are two broad categories of organizational citizenship behavior: OCBO and OCBI (Williams & Anderson, 1991). Dimensions of organizational citizenship behavior such as altruism and courtesy are agreed to be directed at individuals, while conscientiousness, civic virtue and sportsmanship are agreed to be directed at the organization (Rioux & Penner, 2001). Certain precursors that lead to the performance of extra-role behaviors are job satisfaction (Williams & Anderson, 1991), organizational commitment (Williams & Anderson, 1991), group cohesiveness (MacKenzie et al., 1998) and spatial distance (MacKenzie et al., 1998). On the other hand, extra role-behaviors may result to turnover (MacKenzie et al., 1998) and organizational effectiveness (Schnake & Dumler, 2003). This study aims to use supervisor-subordinate dyads within the UK hospitality industry to decipher how individual differences within this niche affect various employee outcomes. Part Two Introduction While Part One has briefly presented the statement of the problem and the definitions of the variables involved in the study, the following section discusses these in greater detail, including past literature on the topic. Review of Related Literature The ubiquitous cultural and demographic diversities within organizations have initiated a new and deeper research towards dissimilarity and its effects on individuals and teams. The detrimental effects that are tied to dissimilarity have compelled the researcher to study not only surface-level dissimilarity such as age and gender but rather deep-level dissimilarity such as values and characteristics as well (Harrison et al., 1998). Previous research on dissimilarity have concentrated more on examining the possible effects of group composition on employee outcomes rather than examining the effects of supervisor-subordinate dissimilarities on employee outcomes (Vecchio & Bullis, 2001). This study examined dissimilarity, both actual and perceived, in dyad research rather than at a group level of analysis. The dissimilarities between supervisors and their subordinates and how these differences affect employee outcomes such as LMX and OCBs will be examined. Moreover, previous researches on dissimilarity placed greater emphasis on the objective measurement of dissimilarity rather than the subjective measurement (Hobman et al., 2004). Thus, past studies may have failed to capture all components of difference and may have overlooked certain characteristics that may be more or less salient to an individual. This study also focused on the subjective measurement of dissimilarity to ensure that these salient differences are measured. Furthermore, past studies on dissimilarity focused more on the demographic and openness to diversity aspects of dissimilarity towards employee outcomes. It is suggested that psychological contracts are an especially important lens through which to view organizational citizenship behavior (Robinson & Morrison, 1995). Given this fact, it is evident that psychological contract breach has an important role with regard to its effect on employee outcomes. Figure 1 presents the conceptual framework of the study. Figure 1 Full Model Dissimilarity Jackson, May, and Whitney (1995, as cited in Hobman et al., 2004) defined dissimilarity as the degree to which two or more individuals differ in terms of various characteristics. There are two types of dissimilarity: actual dissimilarity and perceived dissimilarity. Actual dissimilarity is an objective measurement of the differences between individuals or groups in terms of demographic characteristics such as age and gender (Hobman et al., 2004). Harrison, Price, Gavin, and Florey (2000, as cited in Hobman et al., 2004) stated that objective measures of dissimilarity assumes that differences are recognized by team members, and that these objective differences affect team processes. Perceived dissimilarity is a subjective measure of the perceived difference between two or more individuals (Hobman et al., 2004). Subjective measures of dissimilarity ensure that salient differences are measured, unlike the objective measurement which overlooks these saliencies. Perceived dissimilarity is categorized into two dimensions: visible and work value dissimilarity (Hobman et al., 2004). Visible dissimilarity refers to the differences in visible attributes such as age, gender, and ethnicity while work value dissimilarity, on the other hand, refers to differences in work ethic, work values, and motivations when approaching tasks (Hobman et al., 2004). This study intended to examine actual dissimilarity in terms of age and gender while perceived dissimilarity will be examined in terms of visible dissimilarity and value dissimilarity. This study hypothesized that actual and perceived dissimilarity leads to lower employee outcomes such as leader-member exchange and organizational citizenship behavior and that psychological contract breach has a mediating role on the relationship of dissimilarity and employee outcomes. Previous studies on dissimilarity have shown that dissimilarity has numerous detrimental effects on the organization and the individuals therein (Hobman et al., 2003). These studies have shown that dissimilarity is negatively related to OCBs (Van Der Vegt et al., 2003), LMX (Epitropaki & Martin, 1999), work group involvement (Hobman et al., 2004), communication (Turban et al., 2001), and conflict (Hobman et al., 2003). Organizational Citizenship Behavior OCBs are individual behaviors that are discretionary, not directly recognized by the formal reward system and promotes the effective functioning of the organization (Organ, 1988). By discretionary, the behavior is not an enforceable requirement of the role or the job description, that is, the clearly specifiable terms of the person’s employment contract with the organization; the behavior is rather a matter of personal choice, such that its omission is not generally understood as punishable (Organ, 1988). OCBs are discretionary and not directly rewarded, this means that this behavior consists of specific actions that in and of themselves do not often invite public scrutiny or official documentation (Organ, 1988). Williams and Anderson (1991) suggested that there are two broad categories of organizational citizenship behavior: OCBI and OCBO. OCBI refers to behaviors that immediately benefit specific individuals and indirectly through this means contribute to the organization (Williams & Anderson, 1991). OCBO pertains to behaviors that benefit the organization in general (Williams & Anderson, 1991). In terms of the five dimensions: altruism, conscientiousness, courtesy, civic virtue and sportsmanship, Rioux and Penner (2001) stated that altruism and courtesy can be categorized as extra-role behaviors that are OCBI while conscientiousness, civic virtue, and sportsmanship can be categorized as OCBO. Dissimilarity is likely to be negatively related to OCBs (Tsui, Porter, & Egan, 2002). Mackenzie, Podsakoff, and Bommer (1996, as cited in Mackenzie et al., 1998) posited that group cohesiveness and spatial distance are two antecedents of OCB. Group cohesiveness implies that extra role performance is important in team settings and that the effectiveness of the team will be dictated by the extent to which they engage in helping, sportsmanship, and civic virtue (MacKenzie et al., 1998). Harrison, Price, and Bell (1998, as cited in Hobman et al., 2003) stated that value differences are associated with lower group cohesiveness. According to the self-categorization theory, dissimilar individuals would be classified into out-groups and they may experience negative social interaction such as exclusion from team interactions and discussions (Chattopadhyay, 1999). Furthermore, according to the similarity-attraction paradigm, if there is an existing dissimilarity between a supervisor and his subordinate then they will perceive each other as less attractive (Byrne, 1997). Thus, no cohesion would exist between them and extra-role behavior would not be manifested. The second cause of OCBs is spatial distance. Spatial distance suggested that employees who are not close in proximity to their manager and co-workers are less likely to exhibit extra-role behavior (MacKenzie et al., 1998). Dissimilar individuals may share different backgrounds; hence, poor communication may exist between two parties (Pelled & Xin, 2000). To bridge the gap between organizational members, a high level of attraction between the parties involved must exist (Byrne, 1997). Similarity in terms of demographic characteristics (i.e. age and gender) and values (i.e. work values) increases the attraction between individuals which then brings them closer to one another (Byrne, 1997). Group cohesiveness cannot exist when the members of a group are not close in proximity with one another. Individuals find social interaction less stressful and more positively reinforcing when they perceive that they have common personal characteristics and values (Vecchio & Bullis, 2001). Dissimilarity is likely to lead to a low quality of communication which in turn brings about greater spatial distance between the organization’s members. Dissimilar individuals are also likely to experience negative social interactions such as being excluded from team discussions and decisions, thus, fostering conflict within the team (Hobman et al., 2004). Moreover, if individuals differ on values there is a high potential for conflict to arise (Dose, 1999). Highly diverse employees and work groups have a high potential to experience conflict with one another as they are likely to have fewer shared experiences and more difference in opinions (Chatman et al.,, 1998). The ease of social interaction paves the way for individuals to bond with one another and bridge the gap between them. The presence of cohesion and bond within groups are brought about by the perception of similarity and high attraction between individuals therein (Hobman et al., 2004; Vecchio & Bullis, 2001). Based on the self-categorization theory and the similarity-attraction paradigm, individuals need to perceive each other as similar in order for them to identify with one another and for attraction to exist between them. The presence of attraction and identification will create cohesion and bridge the spatial distance among organizational members which will eventually lead to their performance of extra-role behaviors. Leader-Member Exchange LMX is the quality of the exchange relationship between an employee and his/her supervisor (Dienesch & Liden, 1986). Supervisors assign their subordinates with different tasks in a series of role making episodes to determine their subordinate’s capabilities in performing tasks (Liden & Maslyn, 1998). It is through these tasks where the supervisors are able to see the extent to which their subordinates are able to comply and perform the tasks which in turn, dictates the type of LMX relationship to be formed (Liden & Maslyn, 1998). Much of the research on LMX divided the subordinates roles and the quality of the LMX into two basic categories based on the leaders and subordinates perceptions of the negotiating latitude: the in-group and the out-group (Dansereau et al., 1975). Leaders test subordinates in a series of work assignments through various role making situations (Liden & Maslyn, 1998). The degree to which subordinates perform the tasks would dictate the quality of LMX to be formed. In turn, the type of LMX relationship will determine the extent to which information shall be relayed, task assignments, and job latitude. Members who are able to impress their supervisor through the series of work assignments would experience a high quality of LMX and be part of the supervisors in-group that promotes a culture of mutual trust and support, interpersonal attraction, loyalty, and bidirectional influence (Liden & Maslyn, 1998). On the other hand, the supervisors’ out-group experiences a lower quality LMX relationship wherein the exercise of formal organizational authority is present in which low trust, less task performance is manifested (Deluga, 1994). Previous empirical studies have shown the negative influence of dissimilarity to LMX (Pelled & Xin, 2000). For example, age and gender dissimilarity between the supervisor and subordinate have been found to decrease the perception of competence of the subordinate (Epitropaki & Martin, 1999). Moreover, demographic similarity has been found to increase the quality of the exchange relationships of supervisors and subordinates (Pelled & Xin, 2000). LMX theory suggested that supervisors categorize their subordinates into in-groups and out-groups (Deluga, 1994). Supervisors who perceive their subordinates as trustworthy, competent, and motivated to assume responsibility classify them into their in-group (Liden & Graen, 1980). Subordinates who belong to their supervisors’ in-group experience mutual trust, support, interpersonal interaction, and experience a higher quality of exchange relationship (Deluga, 1994). Subordinates belonging to their supervisors’ out-group, on the other hand, experience a low quality of exchange relationship with their supervisor (Deluga, 1988). Their relationship with their supervisor is characterized by limited trust, support, and rewards from their supervisors (Deluga, 1988). These individuals are given less control over their jobs and little authority because they are perceived as incapable of performing at par with the standards of their supervisors (Truckenbrodt, 2000). According to the similarity-attraction paradigm, supervisors and subordinates who perceive that they think alike are more likely to feel more comfortable with each other and have more confidence on one another (Byrne, 1997). The similarity-attraction paradigm posited that similarity increases attraction while dissimilarity brings about repulsion (Allinson, Armstrong, & Hayes, 2001). In line with this theory, the LMX theory suggested that the low compatibility of the supervisor and subordinate engenders the inaccurate perception of the subordinate’s competence; thus, lowering the quality of the exchange relationship (Deluga, 1998). According to the self-categorization theory, individuals classify those who are dissimilar from them into out-groups and those similar to them into in-groups (Hogg & Terry, 2000). Thus, in line with the conceptualization of LMX, it is evident that dissimilar others experience a lower quality of exchange relationships than similar others. Psychological Contract Breach Psychological contract breach refers to one’s perception that another has failed to fulfill adequately the promised inducements of the psychological contract (Rousseau, 1989). It is an employee’s belief that a breach has occurred that affects his or her behavior or attitudes, regardless of whether that belief is valid or whether breach actually happened (Robinson, 1996). Employees may perceive that their organization has failed to fulfill the said obligations in their psychological contract (Robinson, 1996; Rousseau, 1989). Thus, psychological contract breach is defined as the perception of employees that his or her organization has failed to fulfill one or more of the obligations comprising the psychological contract (Morrison & Robinson, 1997; Robinson, 1996). Previous research suggests that psychological contract breach is likely to lead to a negative impact on employees’ work attitudes and behaviors (Lester, Turnley, Bloodgood, & Bolino, 2002). Psychological contract breach adversely influences employees’ attitudes toward their employers and toward their jobs (Robinson, 1996). The social exchange theory (Blau, 1964) will be used in explaining the relationship. The theory suggested that employees are motivated a fair exchange with their organization (Lester et al., 2002). According to Rousseau (1995), employees who perceive that their psychological contracts have been violated are likely to believe that their organization cannot be trusted in fulfilling their obligations and don’t care about the welfare and well-being of their employees (as cited in Lester et al., 2002). From an employee’s perspective, psychological contract breach would be tantamount to an unfair exchange relationship (Lester et al., 2002). Accordingly, in order to restore parity to the exchange relationship, employees may decrease their contributions to the organization (Lester et al., 2002). Psychological contract breach is negatively related to leader member exchange. The social support theory provided for the framework in explaining the relationship between psychological contract breach and LMX. One of the sources of support is the support given from the supervisor in the form of LMX (Erdogan et al., 2004). Gomez and Rosen (2001, as cited in Restubog et al., 2005) state that employee-employer relationships are grounded upon trust, respect, and obligations. It can be argued that psychological contract breach will lead to lower quality exchange between the supervisor and subordinate since the breach negatively affects trust. High quality exchange is characterized by mutual trust between the parties involved (Erdogan et al., 2004.). In view of this, it can be proposed that psychological contract breach negatively affects the quality of LMX. Psychological contract breach is likely to be negatively related to OCBs. Social exchange and the norm of reciprocity are used in explaining the relationship between psychological contract breach and OCBs. Social exchange theory proposes that relationships providing more rewards than costs will result in enduring mutual trust and attraction (Blau, 1964). Moreover, this theory provides a general approach for understanding how employees are likely to respond when they perceive that their psychological contracts have not been fulfilled (Turnley et al., 2003). Breach of the psychological contract occurs when employees perceive an inconsistency between what they were promised and what they actually receive. From the employees’ perspective, such inconsistencies create a breach in the psychological contract of employee-employer relationship. Thus, as long as employees perceive that they have adequately performed their obligations to the organization, they are likely to feel shortchanged by the organization’s failure to live up to its obligations and will have a tendency to take actions in the form of withholding their extra-role behavior (Robinson, 1996; Rousseau, 1995). Organ (1988) stated that in the context of the norm of reciprocity, employees engage in OCBs to reciprocate their organization for equitable treatment, withholding OCBs as an output when their employer provides inadequate input. Dissimilarity is likely to be positively related to psychological contract breach. The forming of psychological contracts relies on two sets of factors: external messages and social cues from the organization and the individual’s internal interpretations, predispositions, and constructions (Rousseau, 1995). The forming of psychological contracts is a sense making process that relies on mental models or schemas (Rousseau, 1995). The contracts that individuals create are influenced more by how they interpret these messages rather than the actual messages that were sent and received (Rousseau, 1995). Psychological contract breach is most likely to occur when social distance exists between the parties such that one does not understand the perspective of the other (Rousseau, 1995). This social distance then eventually leads to lower trust among the parties involved. The presence of trust between supervisors and their subordinates would limit the possibility for the psychological contract to be breached (Robinson, 1996). According to the self-categorization theory, individuals belonging to the out-group are not fully trusted by those belonging to the in-group (Hogg & Terry, 2000). As a result, the dissimilarity between the supervisors and their subordinates may limit the amount of trust in their relationship which may then lead to the breach of the psychological contract. Psychological contracts are characterized as patterns of interaction between parties in a relationship (Rousseau, 1989). According to the similarity-attraction paradigm, individuals who perceive each other as dissimilar would tend to refrain from close interaction with one another (Byrne, 1997). Thus, a breach of the psychological contract may occur due to the lack of trust and social distance that exists among the parties bound by the contract. The mediating role of psychological contract breach between dissimilarity and employee outcomes is, according to Rousseau (1995, as cited in Restubog at al., 2005), grounded on the belief that the fulfillment of the psychological contract emerges from trust, respect, and obligations. These factors emerged from the individuals’ perception that they are similar to the other party involved (Turban at al., 2002). Based on the self-categorization theory, Tajfel and Turner (1986) stated that individuals will see in-group members as more trustworthy, honest, attractive, and competent. Furthermore, the similarity-attraction paradigm stated that dissimilarity will result in the lack of trust towards the dissimilar individual (Byrne, 1997). Trusting one’s employer at the time of hire may influence psychological contract breach by reducing the likelihood that a breach would be perceived (Robinson, 1996). This study intended to determine the mediating role of psychological contract breach on the relationship of actual and perceived dissimilarity to employee outcomes (i.e. LMX and OCBs). Methodology This chapter discussed the methodology that will be used by the researcher. This chapter is divided into four sections. These sections include the research design, participants, materials, procedures in data gathering, and data analysis. Research Design This study used a path analytical research design. Path analysis aims to determine how a set of variables are causally connected (Cohen, 2001). This paper used actual and perceived dissimilarity as its exogenous variables. Psychological contract breach is identified as the mediating variable with LMX and OCBs as its endogenous variables. The researcher will utilize path analysis since this study is focused on the relationship of actual and perceived dissimilarity to LMX and OCBs. The researcher hypothesized that actual and perceived dissimilarity leads to lower quality LMX and OCBs. Furthermore, an indirect path was hypothesized through a mediating variable which is psychological contract breach. This indirect path implied that actual and perceived dissimilarity contributes to psychological contract breach, thus resulting in lower LMX and OCBs. Participants This section presented the sample, sample size, and sampling plan of this study. The target participants are comprised of supervisor-subordinate dyads within the hospitality industry in UK. Supervisor-subordinate dyads were used as a sample in this study to determine the mediating role of psychological contract breach between actual and perceived dissimilarity and leader-member exchange and organizational citizenship behavior. Dyads were used in this study in order for the researcher to have a full grasp of the specific dissimilarities that exist within various supervisor-subordinate relationships and their specific effects on employee outcomes. By using dyads as samples, the researcher was able to isolate the various forms of dissimilarity and its effects on employee outcomes. Furthermore, using samples within the hospitality industry can give the study may allow the conclusions about this field, making it more focused. For this study, the sampling plan to be used is the convenience sampling technique. Convenience sampling is defined as a non-probability sampling wherein the researcher would sample individuals by mere accident without attempting to control bias (Furlong, Lovelace, & Lovelace, 2000). The convenience sampling technique was used to target 120 dyads with a minimum sample size of 110 dyads based on the guideline identified by Green (1991) for medium size effects in regression analysis. Materials In conducting this study, the researcher used primary and secondary sources as materials. The primary sources are the adopted instruments of perceived dissimilarity, psychological contract breach, leader-member exchange, and organizational citizenship behavior. The researcher will also utilize secondary sources to establish the theoretical basis of this study. The secondary sources consisted of books, journal articles, undergraduate theses, empirical studies, and on-line resources on actual and perceived dissimilarity, psychological contract breach, leader-member exchange, and organizational citizenship behavior. Actual Dissimilarity. Actual gender dissimilarity was coded as zero (0) if similar and one (1) if dissimilar. Actual age dissimilarity, on the other hand, was determined using a median split. Categories for age will be young and old. Those that will fall in the same category will be coded as zero (0) and those not in the same category will be coded as one (1). Perceived Dissimilarity. Perceived dissimilarity was measured using an instrument developed by Hobman, Bordia, and Gallois (2004). It consisted of 4-items using a 7-point Likert type scale. Hobman and associates (2004) reported an alpha coefficient for visible and value dissimilarity of 0.67 and 0.79, respectively and factor loading between 0.62 to 0.83. Sample item for perceived visible dissimilarity is as follows: “In terms of visible characteristics (e.g., age, gender, ethnicity), I think I am similar to my supervisor.”. Sample item for perceived value dissimilarity is as follows: “My supervisor and I have similar work values and/or motivations.” Psychological Contract Breach. Psychological contract breach was measured using an instrument developed by Robinson and Morrison (2000). It consisted of 5-items using a 7-point Likert type scale. Item numbers 1, 2, and 3 are reverse coded. Robinson and Morrison (2000) reported factor loads between 0.70 to 0.87 and an alpha coefficient of 0.92. Sample item for psychological contract breach is as follows: “I have not received everything promised to me in exchange for my contributions.” Leader-Member Exchange. LMX was measured using LMX 7 developed by Graen and Uhl-Bien (1995). It consisted of 7-items using a 7-point Likert type scale. Gerstner and Day (1997) reported an alpha coefficient of 0.89. Sample item for LMX 7 is as follows: “I usually know how satisfied my supervisor is with what I do.” Organizational Citizenship Behavior. OCBs was measured using an instrument developed by Podsakoff and MacKenzie (1989). It consisted of 20-items using a 7-point Likert type scale. Altruism and courtesy will be collapsed to measure OCBI, while conscientiousness, civic virtue, and sportsmanship to measure OCBO. Podsakoff, MacKenzie, Moorman, and Fetter (1990) reported an alpha coefficient of 0.81 for altruism, 0.87 for courtesy, 0.73 for civic virtue, 0.81 for conscientiousness, and 0.89 for sportsmanship. Sample items for OCB are as follows: “Attends and participates in meetings regarding the organization” (civic virtue); “I help orient new people even though it is not required.” (altruism); “ Does not abuse the rights of others” (courtesy); “ Constantly talks about wanting to quit his/her job” (sportsmanship); “Is always punctual” (conscientiousness). Procedures This section focused on the procedures that the researcher will follow in gathering and analyzing data to accomplish this study. Data Gathering This section discussed the procedures on how the researcher will gather data to accomplish this study. First, the researcher gathered data from secondary sources to develop the review of related literature to establish a theoretical foundation for the study. The researcher then analyzed the review of related literature to develop a conceptual framework to assist the researcher in accomplishing the study. Survey instruments will be adopted to measure perceived dissimilarity, psychological contract breach, leader-member exchange, and organizational citizenship behavior. Various hotel companies within the UK area will be contacted to participate in this study. Upon approval of the organization, the researcher will distribute and administer the survey questionnaires to target participants. After administering the survey questionnaires, the data was gathered, tallied, and statistically analyzed. The researcher will draw their conclusion based on the results of the data gathered. Data Analysis This section of the chapter discussed the procedure of data analysis. The data analysis is concerned with the collection of descriptive data from the respondents. The descriptive data to be gathered is the perception of supervisor-subordinates dyads with regard to actual dissimilarity, perceived dissimilarity, psychological contract breach, leader-member exchange, and organizational citizenship behavior. Means and standard deviations will be computed to determine the perception of the respondents on actual dissimilarity, perceived dissimilarity, psychological contract breach, leader-member exchange, and organizational citizenship behavior. Table 1 Perceived dissimilarity, psychological contract breach, LMX, and OCBs Descriptive Interpretation Numerical Range Very High High Slightly High Neutral Slightly Low Low Very Low 6.50 – 7.00 5.50 – 6.49 4.50 – 5.49 3.50 – 4.49 2.50 – 3.49 1.50 – 2.49 1.00– 1.49 Table 2 Pearson’s Strength Index Descriptive Interpretation Numerical Range Very High, Dependable Correlation High or Marked Correlation Moderate or Substantial Correlation Low Correlation Negligible or Weak 0.90– 1.00 0.70 – 0.89 0.50 – 0.69 0.30 – 0.49 Below 0.30 References Adams, J.S. (1965). Inequity in Social Exchange. In L. Berkowitz (ed.), Advances in Experimental Social Psychology (pp. 267-299). NY: Academic Press. Allinson, C.W., Armstrong, S.J., & Hayes, J. (2001). The effects of cognitive style on leader-member exchange: a study of manager-subordinate dyads. Journal of Occupational and Organizational Psychology, 74, 201-220. Antonioni, D., & Park, H. (2001). 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Almost all the promises made by my employer during recruitment have been kept so far (reversed) 2. I feel that my employer has come through in fulfilling the promises made to me when I was hired (reversed) 3. So far my employer has done excellent job fulfilling its promise to me (reversed) 4. I have not received everything promised to me in exchange for my contributions 5. My employer has broken many of its promises to me even though I’ve upheld my side of the deal Organizational Citizenship Behavior (Podsakoff and MacKenzie 1989) Altruism: Helps others who have heavy work loads Helps others who have been absent Willingly gives of his/her time to help others who have work related problems Helps orient new people even though it is not required Courtesy: Consults with me or other individuals who might be affected by his/her actions or decisions Does not abuse the rights of others Takes steps to prevent problems with other workers Informs me before taking any important actions Sportsmanship: Consumes a lot of time complaining about trivial matters (R) Tends to make “mountains out of molehills” (makes problems bigger than they are) (R) Constantly talks about wanting to quit his/her job (R) Always focuses on what’s wrong with his/her situation, rather than the positive side of it (R) Conscientiousness: Is always punctual Never takes long lunches or breaks Does not take extra breaks Obeys company rules, regulations and procedures even when no one is watching. Civic Virtue Keeps abreast of changes in the organization Attends functions that are not required, but that help the company image. Attends and participates in meetings regarding the organization “Keeps up” with developments in the company Leader Member Exchange- LMX7 ( Graen and Uhl- Bien 1995) 1. I usually know how satisfied my supervisor is with what I do. 2. My supervisor understands my job problems and needs? 3. My supervisor recognizes my potential. 4. Regardless of how much formal authority he/she has built into his/her position, he/she would use his/her power to help me solve problems in work. 5. Regardless of how much formal authority my supervisor has, my supervisor will bail me out at his/her expense. 6. I would defend and justify my supervisor’s decision if he/she were not present to do so. 7. I have an effective working relationship with my supervisor. Read More