Impact of psychological capital on organizational ...

Journal of Management Development Impact of psychological capital on organizational citizenship behavior: Mediation by work engagement Manish Gupta, Musarrat Shaheen, Prathap K. Reddy,

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Impact of psychological capital on organizational citizenship behavior Mediation by work engagement Manish Gupta, Musarrat Shaheen and Prathap K. Reddy Department of HR, IBS Hyderabad, IFHE University, Hyderabad, India

Impact of PsyCap on OCB

973 Received 8 June 2016 Revised 25 October 2016 Accepted 17 April 2017

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Abstract Purpose – The purpose of this paper is to examine the mediating role of work engagement (WE) between psychological capital (PsyCap) and the two facets of organizational citizenship behavior (OCB) which involves both individual and organization. It also examines the moderating role of perceived organizational support (POS) between PsyCap and WE, and WE and the two facets of OCB. Design/methodology/approach – A total of 293 responses gathered from employees working in diverse service sector industries in India were assessed using structural equation modeling. Findings – Overall, the results support the mediating role of WE in the PsyCap-OCB relationship, and the moderation of POS between WE and the two facets of OCB. Research limitations/implications – This study helps in understanding how WE-OCB relationship can be negatively affected in the presence of high POS. Practical implications – The results encourage organizations to establish systems for enhancing the engagement levels of their employees, which according to this study may be achieved by creating and maintaining vibrant work environment. Originality/value – This study helps in understanding the role of POS among PsyCap, WE, \and the two factors of OCB. Keywords India, Organizational citizenship behaviour, Work engagement, Perceived organizational support, PsyCap Paper type Research paper

Introduction In the era of globalization and utmost competition, organizations survive and thrive on optimal utilization of their human resources (Seval and Caner, 2015). Therefore, it is important for the organizations to identify the factors encouraging employees to volunteer for activities beyond the call of their duties. Such discretionary extra-role behavior of employees is called organizational citizenship behavior (OCB) which is of paramount importance for organizational productivity and efficiency. Occupational psychologists believe that OCB is exhibited more by highly engaged employees because the engaged employees simultaneously invest their cognitive, physical, and emotional energies in their work. Similarly, psychological capital (PsyCap) is considered as a critical personal resource which facilitates employees in the completion and achievement of official targets. This accomplishment of task leads to a feeling of fulfillment and generate positivity among employees which motivates them to engage in extra-role behaviors. Though scholars in the past have suggested linkage among PsyCap, work engagement (WE), and OCB, little attention has been paid to examine the mediating role of WE between PsyCap and OCB. Furthermore, there is a paucity of research about the effect of WE on the two-factor model of OCB, which consisted of OCB toward individual (OCBI) and toward organization (OCBO). Such studies are particularly important for the developing economies like India, where skilled workers are merely 2 percent and the market is highly competitive (Borpuzari, 2015). Several studies on India have recently

Journal of Management Development Vol. 36 No. 7, 2017 pp. 973-983 © Emerald Publishing Limited 0262-1711 DOI 10.1108/JMD-06-2016-0084

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observed justice, trust, social responsibility, supervisory support, and employee-company identification as antecedents and organizational commitment as a consequence of engagement at work (Gupta, 2015; Gupta and Kumar, 2015; Gupta, Acharya and Gupta, 2015; Gupta, Ganguli and Ponnam, 2015). Several extrinsic motivational factors that affect engagement at work have also been explored in these studies (see Gupta, Acharya and Gupta, 2015; Gupta, Ganguli and Ponnam, 2015, for details). However, studies on the relationship among WE, PsyCap, and OCB are sparse in the Indian context, hence, the objective of this study is to investigate the mediating role of WE between PsyCap and the two facets of OCB and the impact of POS on these relationships. Theory and hypotheses Organ (1988) defined OCB as an individual’s voluntary behavior which cumulatively helps in the organizational functioning, but is not explicitly or directly acknowledged by the formal reward system. OCB has been classified in several ways. Some scholars have classified it based on the nature of these behaviors such as altruism – helping behaviors and compliance behavior – sportsmanship and conscientiousness (Shaheen et al., 2016), whereas others have classified it based on the recipient of these behaviors. In addition, Williams and Anderson (1991) classified OCB into OCBI and OCBO based on the intended beneficiary. The voluntary behaviors directed toward colleagues are called OCBI, and the behaviors directed toward organization – punctuality and working overtime – are called OCB-O (Shaheen et al., 2016). Former includes behaviors that have an immediate benefit specifically on individuals, thus indirectly contributing to the organization, whereas the latter includes behaviors that are directly beneficial for the organization instead of an individual. OCB and PsyCap Luthans (2002) studied about positive psychology, which advocated that positive strengths and virtues of individuals have long term benefits. PsyCap is suggested to be a composite construct of employees’ positive strengths and virtues (Luthans et al., 2007). On examining the impact of frontline employees’ PsyCap in hospitality industry, Karatepe and Karadas (2015) found that employees having high PsyCap are more satisfied with their job, career, and life, because they are more optimistic, hopeful, resilient, and confident. PsyCap in today’s dynamic workplace is suggested to be beyond human and social capital, as employees with high PsyCap can perceive what they are now by understanding their potentials and strengths; these employees can also foresee what they are capable of becoming (Luthans et al., 2015). They are full of positivity which encourages them to exhibit extra-role behavior (Avey et al., 2008). Furthermore, Fredrickson (2001) posited that positive emotions broaden individuals’ “momentary thought – action repertoires and build their enduring personal resources, ranging from physical and intellectual resources to social and psychological resources” (p. 219). Fredrickson (2013) employed broaden and build theory to suggest that individuals reap benefits from these repositories and display positive behaviors. A meta-analytic study conducted by Avey et al. (2011) empirically reaffirmed the prior findings about the positive impact of PsyCap on OCB. Avey et al. (2008) examined the relationship between PsyCap and OCB, but they explored only OCBI and not OCBO, which is another important dimension as per Williams and Anderson (1991). Scholars have argued that PsyCap generates positive emotions and individuals utilize these positive emotions “for proactive extra-role behaviors such as sharing creative ideas or making suggestions for improvement” (Avey et al., 2011, p. 133). Thus, employees high in PsyCap are expected to not only display extra-role behavior

toward their colleagues but also to engage in proactive extra-role behaviors toward their organization. Therefore, the following hypotheses can be stated: H1. PsyCap is positively related to OCBI.

Impact of PsyCap on OCB

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H2. PsyCap is positively related to OCBO. Mediating role of WE According to Schaufeli et al. (2002), WE is the extent to which employees show enthusiasm, vigor, and dedication toward their work by finding meaning in their work role and being immersed in their work. Through dynamism, commitment, and absorption, the employees physically, emotionally, and cognitively involve themselves in their work roles. Conservation of resource theory postulates that individuals who possess resources are capable of gaining more resources because of “gain spiral” effect (Hobfoll and Wells, 1998). The loss of resources leads to low morale and lack of motivation, whereas the gain of resources leads to more absorption and immersion in task. While explaining the causal relationship between PsyCap and WE, Sweetman and Luthans (2010) also suggested that employees having more resources are more capable and engaged in their work. Similarly, Xanthopoulou et al. (2007) illustrated that personal resource partially mediates the relationship between job resource and WE. PsyCap makes an individual more persistent and committed toward the goal. Persistence and commitment means dedication and engagement in task. WE is absorption in the task, and PsyCap provides necessary strengths and abilities to remain engaged in task (Sweetman and Luthans, 2010). The reason behind postulating that the engaged employees’ extra-role behavior is based on social exchange theory which states that people tend to reciprocate the benefits that they receive (Blau, 1964). Engaged employees based on their suitable work role attach themselves to their organization which makes them feel happy. Moreover, these employees like to reciprocate the benefits they receive from their organization in terms of facilitation of identical values and supportive environment. It is the feeling of gratitude that drives the engaged employees to go extra-mile and help their organization to grow. Since, their reason for engagement is their work role, it is expected that they would demonstrate extra-role behavior more toward the organization than to their co-workers. Chiu and Tsai (2006) used 296 pairs of hotel staffs and found that burnout is negatively related to OCB. Babcock-Roberson and Strickland (2010) conducted a study on the undergraduate students and found positive influence of higher WE on OCB, though OCB was not conceptualized as intended beneficiary. Furthermore, Alfes et al. (2013) conducted a study on service sector employees based on the hypothesis that OCBO is positively predicted by WE. Very few studies demonstrate the presence of a positive relationship between OCBI and WE (Tims et al., 2014) and found that WE positively influences task performance and OCBI. However, in their model, they considered only OCBI and not OCBO because their objective was to capture vocational behavior which is represented by OCBI. In addition, Bakker et al. (2012) conducted a study on 144 employees to find that WE positively predicts both task performance and OCB. Following the above discussion, there is a possibility of WE acting as a mediator between PsyCap and the two factors of OCB. So, the following hypotheses can be stated: H3. WE mediates the relationship between PsyCap and OCBI. H4. WE mediates the relationship between PsyCap and OCBO. Moderating role of perceived organizational support (POS) On the basis of social exchange theory, Eisenberger et al. (1986) defined POS as employees’ relationship with their organization in terms of the support employees perceive to have from

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their organization. This image in the mind of employees is in the form of “organization’s legal, moral, and financial responsibility for the actions of its agents; by organizational policies, norms, and culture that provide continuity and prescribe role behaviors; and by the power the organization’s agents exert over individual employees” (Rhoades and Eisenberger, 2002, p. 698). POS affects employees’ intention to put forth their efforts. The desired behavioral outcomes are easy to achieve if employees perceive that their organization would recognize their efforts and reciprocate the same (Eisenberger et al., 1990). They argued that individuals with higher POS would attach themselves with their work to exhibit OCBO. According to Shukla and Rai (2014), positive self-belief would lead to less reaction toward the reduction of organizational support and acknowledgment. But social exchange theory suggests that employees maintain an exchange relationship with their organization. Employees have the tendency to withhold their efforts, if they perceive that their contribution is not appreciated or acknowledged by the organization. Kurtessis et al. (2015) argued that the discrepancy in this exchange relationship may prevent employees with high PsyCap from investing their personal resources to get engaged in work and display proactive extra-role behaviors. The perception about support and fair treatment from the organization has been suggested to be closely related to employees’ cognition and disposition at the workplace. Employees evaluate their current situation and create a self-perception about the support from the organization. If the evaluation is positive, they immerse and engage themselves in the work, and if it is not positive then they withdraw their involvement (Cohen-Charash and Spector, 2001). Following the aforesaid arguments, POS fulfills Baron and Kenny’s (1986) moderation criterion, according to which the moderator affects both the independent and the dependent variables of the relationship. So, POS can be a possible moderator between WE and the two facets of OCB as well as PsyCap and WE. Refer to Figure 1 for the hypothesized model: H5. POS moderates the relationship between PsyCap and WE. H6. POS moderates the relationship between WE and OCBI. H7. POS moderates the relationship between WE and OCBO. Method Sample and data collection Employees can rate their feelings better at the workplace, if they are familiar with their organization and role. Therefore, only the employees who had been working for at least one year with their present organization (required for completion of at least one appraisal cycle) POS

OCBI

PsyCap

Figure 1. The proposed PsyCap-OCB model

Work engagement

OCBO

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in India were selected for the study. All the government bodies were excluded from the study sample because we excluded the benefits received by employees in government departments based on their performance. Human resources being the key competency for any service industry, the data collection were restricted to the service sector companies only. On one hand, restriction to services sector helped in defining the sampling frame well, but on the other hand, no restriction on the types of industries within the services sector would help in improving the external validity of the results. We maintained anonymity of the respondents to obtain genuine responses and assured them about keeping their identity confidential. It was also made explicit that their responses will be used solely for the purpose of research. Out of the 600 respondents to whom either a paper and pencil or an online questionnaire was initially administered, 350 were returned. However, few of them were incomplete or did not meet the requisite criteria, hence, the final sample size was 293 of which 37 responses were collected online and others were collected offline. The mean age was 34.91 years, mean experience with current organization (CE) was 6.89 years, and mean total experience was 8.19 years. The sample comprised of 62 female respondents. As per industry, majority of them were from information technology enabled services because in such settings social interactions are high and thus PsyCap is of paramount importance (Avey et al., 2008, 2011) (refer Table I).

Impact of PsyCap on OCB

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Measures All the scales used in this study are well-established and reliable. All the items were measured on a seven-point Likert type scale (1 ¼ strongly disagree to 7 ¼ strongly agree). PsyCap was measured on a 12-item scale (Cronbach’s αW0.70) of Luthans et al.’s (2007) (sample item: I feel confident presenting information to a group of colleagues). WE was measured using a nine-item scale by Schaufeli et al.’s (2006) (Cronbach’s αW0.70; sample item: at work I feel bursting with energy). OCBI was measured on a seven-item Williams and Anderson’s (1991) scale (Cronbach’s αW0.88; sample item: I help others who are absent). OCBO was measured on a six-item Williams and Anderson’s (1991) scale (Cronbach’s αW0.75) (sample item: my attendance at work is above the norm). POS was measured on an eight-item Rhoades et al.’s (2001) scale (Cronbach’s αW0.90; sample item: my organization really cares about my well-being). Age, gender, experience with the CE, and total experience were used as control variables. Data analyses Data were first subjected to exploratory factor analysis (EFA) with varimax rotation to check if the same sets of constructs emerge in the present context. Subsequently, average variance extracted (AVE), Cronbach’s α, and composite reliability values were calculated to α Age Experience (current organization) Total experience WE PsyCap OCBI OCBO POS Note: n ¼ 293

0.93 0.93 0.88 0.91 0.92

Composite reliability

0.93 0.93 0.89 0.91 0.92

AVE

Mean

SD

0.61 0.54 0.51 0.57 0.70

34.91 6.89 8.19 5.13 5.38 5.10 5.23 4.62

7.90 6.56 6.07 1.16 1.05 1.02 1.14 0.80

Table I. Particulars of the participants and variables

establish reliability and validity of the scale. It was followed by estimation of Pearson correlation coefficients. For mediation and moderation tests, different models were tested and the differences in terms of change in variance were calculated. After testing measurement model fitness, the hypotheses were tested.

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Results EFA results largely indicated clear loadings except for two POS items that were removed in the subsequent analyses. These items were: “My organization is willing to help me when I need a special favor and My organization shows very little concern for me.” AVE values were found to be more than 0.5 for each construct, thereby indicating validity of the scale. Furthermore, all the constructs were reliable as α values exceeded the minimum criterion of 0.70 (refer Table I). As shown in Table II, the correlation coefficients between main variables showed positive significance and ranged from 0.52 to 0.76. Initially, the measurement model comprising of constructs under investigation was tested. The results indicated a good fit (CFI ¼ 0.90; RMSEA ¼ 0.07; χ2/df ¼ 2.60).

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Test for mediation The first model was tested without the mediator and the direct relationships between PsyCap and OCBI ( β ¼ 0.54, SE ¼ 0.07; p o0.001) as well as PsyCap and OCBO ( β ¼ 0.88, SE ¼ 0.08; p o0.001) were found significant. These results supported H1 and H2. Considering WE as a mediator, the direct relationship between PsyCap and OCBO became insignificant ( β ¼ 0.20, SE ¼ 0.11, ns) but supported H4. Contrary to this, the direct relationship between PsyCap and OCBI showed significance ( β ¼ 0.35, SE ¼ 0.11, p o0.001). Also, Sobel, Aroian, and Goodman estimates were found insignificant by considering WE as a mediator between PsyCap and OCBI, thereby indicating the absence of partial mediation, thus, disapproving H3. Test for moderation The relationship between WE and the two facets of OCB was tested by introducing the interaction term POS × WE into the structural model. It was found that this made the relationships between WE and OCBI ( β ¼ −0. 22, SE ¼ 0.14, ns) as well as between WE and OCBO ( β ¼ 0.27, SE ¼ 0.19, ns) insignificant. The interaction term was significantly related with OCBI ( β ¼ 0.04, SE ¼ 0.01; p ¼ 0.002) and OCBO ( β ¼ 0.07, SE ¼ 0.01; p o0.001). These results supported H6 and H7. However, moderation by POS between PsyCap and 1

Table II. Correlation coefficients

1. Age 2. Gender 3. Experience with the current organization 4. Total experience 5. WE 6. PsyCap 7. OCBI 8. OCBO 9. POS Notes: n ¼ 293. *p o 0.05; **po 0.01

2

3

4

5

–0.02 0.39** 0.35** 0.06 0.17** 0.11 –0.04 0.14*

6 0.07 –0.02

7 0.03 0.04

8 –0.01 0.1

9 0.04 0.06

0.20** 0.19** 0.07 0.15** 0.19** –0.12* –0.11 –0.13* –0.06 –0.14* 0.76** 0.52** 0.69** 0.71** 0.54** 0.64** 0.69** 0.62** 0.55** 0.72**

WE was found to be insignificant, thus disapproving H5. The final model indicated a moderate fit (CFI ¼ 0.87; RMSEA ¼ 0.08; χ2/df ¼ 2.89). To interpret the moderation results in a better manner, the interaction curves were drawn. As shown in Figure 2, the steepest line indicates that WE will have less impact on OCBI for employees who perceive that their organization is highly supportive than those who perceive that their organization is less supportive. Likewise, as shown in Figure 3,

Impact of PsyCap on OCB

979 6.00 5.50

5.55 5.19

5.02 5.00

4.83

5.60 5.36 5.12

4.54

OCBI

3.00

2.00

1.00

POS high med low

0.00 low

med

high

Figure 2. Interaction effect of POS and WE on OCBI

Work Engagement

7.00

6.00

5.07 5.02

5.00

5.84

6.02

5.33

5.64 5.26

4.82

4.38 4.00 OCBO

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4.00

3.00

2.00

1.00

POS high med low

0.00 low

med Work Engagement

high

Figure 3. Interaction effect of POS and WE on OCBO

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WE will have less impact on OCBO for employees who perceive that their organization is highly supportive than those who perceive that their organization is less supportive. The buffering effect of POS was such that high POS abates the relationship between WE and OCBI as well as between WE and OCBO. It is possibly that engaged employees who perceive their organization to be highly supportive feel that others also get similar support from their organization, so, they tend to avoid OCB toward other employees. Another explanation could be that on receiving (perceived) support from their organizations, employees tend to care more about their specified role, as they are formally rewarded against OCB, which is not explicitly or directly rewarded by the formal reward system. Discussion The results of the present study are largely as per the expectations. A significant and positive relationship between PsyCap and the two facets of OCB reaffirms the findings of the previous studies, according to which, employees with high PsyCap are more efficacious and positive and this leads to the exhibition of extra-role work behavior (Avey et al., 2011). The positive relationship between PsyCap and WE confirms the earlier finding because employees with high PsyCap are highly efficacious and resilient to the work challenges. They are confident and optimistic about the work outcomes. The mediation of WE between PsyCap and OCBO is one of the major contributions of this paper, which confirms that employees display voluntary work behaviors toward organization only when they are committed and engaged in their work. A committed and engaged employee will find the work interesting and will have onus toward it (Sweetman and Luthans, 2010). Furthermore, POS is found to be a significant moderator between WE and the two facets of OCB, which is another major contribution of this paper. It explains when and how an engaged employee will be more helpful and generous. Dedicated employees may find the extra-role behavior as deviation from their work, but if they perceive that they are valued and cared by their organization, they will be more supportive and helpful to their colleagues and organization and will display more altruistic and sportsmanship spirit. Moreover, according to the theory of positive emotions, individuals reciprocate positive behaviors when they feel good and positive about something (Fredrickson, 2001). Few of the results are interesting. For example, there exists a significant positive correlation of CE with WE, OCBO, and POS, whereas there exists a significant negative correlation of TE with WE, OCBI, and POS. It could probably mean that engagement of employees in their work is dependent on their experience with the CE and not on their prior work experience. It could also mean that CE helps employees in perceiving organizational support, whereas, an employee with prior work experience perceives otherwise. Most interestingly, CE is positively related to OCBO, whereas, TE is negatively related to OCBI, thereby, indicating that prior experience might actually create trouble in exhibiting OCB toward the CE. The results augment the positive aspect of the self- and role theory in many ways. First, the findings provide empirical evidence about Sweetman and Luthans’s (2010) conceptualization of the relationship between PsyCap and WE. Second, these results give insight about the dimensions of OCB and augment the work of Avey et al. (2008) by suggesting that PsyCap affects both the dimensions of OCB. Third, the results suggest that WE mediates the relationship between PsyCap and OCBO but not the relationship between PsyCap and OCBI, thereby suggesting that individuals with high PsyCap will display OCBO and not OCBI when they are attached to their work. Fourth, the insignificant moderation of POS between PsyCap and WE suggests that employees high in PsyCap are self-sufficient, as they have both proactive (self-efficacy, hope, optimism) and reactive resources (resilience), and the perception of support from their organization will not affect their current engagement level (Shukla and Rai, 2014).

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Practical implications Owing to the popularity of WE amid practitioners due to its positive consequences on performance, the results of the present study offer several implications for managers. First, the positive association between PsyCap and WE may encourage managers to devise ways of engaging their employees by setting reasonably challenging goals for them. Second, the negative buffering of POS between WE and the two facets of OCB may encourage organizations to establish systems for ensuring that organizational support does not make employees feel that they need not help their colleagues or work voluntarily for the benefit of their organization. Third, the finding that WE has a mediating role between PsyCap and OCBO but not between PsyCap and OCBI is of particular interest for practitioners because OCBI refers to more attachment toward individuals who may leave the organization one day. Managers would obviously like to see attachment of engaged employees more to the organization instead of their colleagues. Therefore, to make employees work voluntarily for the organization without any reward motif, managers may like to take steps to enhance engagement levels in the company. Limitations and direction for future research The results of this study are subjected to certain limitations. First, the sample excludes employees having less than one year experience with their CE. However, for the purpose of measurement, the constructs under investigation require employees to sufficiently familiarize themselves with their work and organization. Second, the cross-sectional nature of study limits any true causal inferences. Scholars in the future may like to capture the dynamism of this model by taking time lag as a key moderator. References Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C. (2013), “The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model”, The International Journal of Human Resource Management, Vol. 24 No. 2, pp. 330-351. Avey, J.B., Wernsing, T.S. and Luthans, F. (2008), “Can positive employees help positive organizational change? Impact of psychological capital and emotions on relevant attitudes and behaviors”, The Journal of Applied Behavioral Science, Vol. 44 No. 1, pp. 48-70. Avey, J.B., Reichard, R.J., Luthans, F. and Mhatre, K.H. (2011), “Meta‐analysis of the impact of positive psychological capital on employee attitudes, behaviors, and performance”, Human Resource Development Quarterly, Vol. 22 No. 2, pp. 127-152. Babcock-Roberson, M.E. and Strickland, O.J. (2010), “The relationship between charismatic leadership, work engagement, and organizational citizenship behaviors”, The Journal of Psychology, Vol. 144 No. 3, pp. 313-326. Bakker, A.B., Demerouti, E. and Lieke, L. (2012), “Work engagement, performance, and active learning: the role of conscientiousness”, Journal of Vocational Behavior, Vol. 80 No. 2, pp. 555-564. Baron, R.M. and Kenny, D.A. (1986), “The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations”, Journal of Personality and Social Psychology, Vol. 51 No. 6, pp. 1173-1182. Blau, P.M. (1964), Exchange and Power in Social Life, John Wiley & Sons, Inc., New York, NY. Borpuzari, P. (2015), “Economic survey 2015: only 2% skilled work force in the country”, The Economic Times, February 7, p. 1, available at: http://economictimes.indiatimes.com/jobs/economic-survey2015-only-2-skilled-work-force-in-the-country/articleshow/46394308.cms (accessed June 21, 2016). Chiu, S.F. and Tsai, M.C. (2006), “Relationships among burnout, job involvement, and organizational citizenship behavior”, The Journal of Psychology, Vol. 140 No. 6, pp. 517-530. Cohen-Charash, Y. and Spector, P.E. (2001), “The role of justice in organizations: a meta-analysis”, Organizational Behavior and Human Decision Processes, Vol. 86 No. 2, pp. 278-321.

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Eisenberger, R., Fasolo, P. and Davis–LaMastro, V. (1990), “Perceived organizational support and employee diligence, commitment, and innovation”, Journal of Applied Psychology, Vol. 75 No. 1, pp. 51-59. Eisenberger, R., Huntington, R., Hutchison, S. and Sowa, D. (1986), “Perceived organisational support”, Journal of Applied Psychology, Vol. 71 No. 3, pp. 500-507.

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Corresponding author Manish Gupta can be contacted at: [email protected]

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Impact of PsyCap on OCB

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