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Lucia B. Oliveira, IBMEC, Rio de Janeiro, [email protected] Flavia Cavazotte, Pontificial Catholic U. of Rio de Janeiro, [email protected] Rodrigo A. Dunzer, IBMEC, Rio de Janeiro, [email protected]

11920 Organizational Career Management, Leadership Support and Employee Attitudes: Evidence from Brazil

ABSTRACT This study explores the influence of organizational career management initiatives (OCMIs) on perceptions of subjective career success, job satisfaction, affective commitment, and turnover intention, as well as the role of leaders as additional source of career management support for employees in organizations, which we argue can also promote job satisfaction, increase organizational commitment and reduce turnover intention. The proposed model is tested with a sample of 321 employees that work for a large Brazilian company, applying covariancebased SEM techniques. Our results suggest that all OCMIs – in the form of career planning activities, internal organizational mobility, and training and skill development opportunities – have a positive and significant effect on perceptions of subjective career success. As for leadership career management support (LCMS), it positively affects job satisfaction, above and beyond the effects promoted by career success. We also found evidence that job satisfaction has an effect on both affective commitment and turnover intention, and that subjective career success negatively impacts affective commitment. Theoretical and practical implications are discussed. Keywords: Organizational career management; career success; leadership support.

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11920 Organizational Career Management, Leadership Support and Employee Attitudes: Evidence from Brazil Given the importance of people as a source of competitive advantage and the shortage of qualified human resources presently observed in job markets, companies are facing new challenges to attract, develop and retain valuable employees (Burke, 2006; Ulrich, 1997). Their ability to answer to internal needs and contextual complexities depends on the efficiency of systems and programs that are put in place, bringing into light the role of the human resources (HR) function for the survival, growth and competitiveness of organizations. Several authors have suggested that career management has received relatively little attention both in theory and in practice (Baruch & Peiperl, 2000; Eby, Allen, & Brinley, 2005). Although access to career growth and development opportunities seem to be highly valued by employees (Economist Intelligence Unit, 2010; Towers Watson, 2012), it appears to be one of the areas where largest misfit between employee expectations and organizational conditions is observed (Baruch, 1999; Dutra, 2010). Since most studies have thus far focused on individual career management (Baruch, 2006, Lips-Wiersma & Hall, 2007), we hope to offer new insight and advance the field by looking at organizational career management policies and practices and their connections with employee attitudes. In this study, we investigate the influence of three organizational career management initiatives (OCMIs) on perceptions of subjective career success: career planning activities, internal organizational mobility, and training and skill development opportunities. In addition, our model also highlights the role of leaders as additional source of career management support for employees in organizations, which we argue can also promote job satisfaction, increase organizational commitment and reduce turnover intention.

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11920 Besides offering these theoretical contributions, we test our model with a sample of 321 employees that work for a large Brazilian company that operates in the energy sector, applying robust analytical techniques. Therefore, we hope to contribute to the international human resources and career development literature by building knowledge based on empirical research beyond the US-EU settings. Since our study explores the effects of organizational practices on organizational commitment and turnover intention, the results may offer insight on career management policies and practices that are likely to contribute to employee retention.

THEORETICAL BACKGROUND AND HYPOTHESES Career and Career Management Etymologically, the word career derives from the Latin term via carraria, which means path, trail or road for carriages. In the nineteenth century, the concept of career was first used to define a professional life trajectory and, more recently, it has been defined as the sequence of work experiences of a person throughout life (Arthur, Hall & Lawrence, 1989). According to this perspective, “careers reflect the relationships between people and the providers of official position, namely, institutions and organizations, and how these relationships fluctuate over time” (Arthur et al., 1989, p.8). Theoretical developments in this field can be analyzed from two perspectives. The first involves the contrast between traditional and new career models, while the second deals with the roles played by individuals and organizations in the career management process (Baruch, 2006). In the traditional model, based on security and a long-term perspective, the career develops in one or a few companies throughout life. Progress is measured by promotions and salary increases, and the individual’s status is associated with his/her position in the 3

11920 organizational hierarchy (Cappelli, 1999). This career pattern flourished in a stable environment, in which organizations grew in size and complexity, and needed to rely on a skilled workforce, knowledgeable of their internal dynamics (Sullivan & Baruch, 2009). The employee-employer psychological contract (Rousseau, 1995) was based on hard work and loyalty in exchange for job security and career advancement prospects (Cappelli, 1999). Under this model, career management was primarily controlled by the organization, and workers essentially accepted the paths defined by their employer. Significant changes in the nature of the employment relationship (Cappelli, 1999) and in the way individuals act out their careers (Arthur & Rousseau, 1996; Sullivan & Baruch, 2009) have stimulated the development of new career theories, with emphasis to the work of Hall (2002) and Arthur and Rousseau (1996). The concept of “protean career” points to the emergence of a new career pattern, under responsibility of the individual and guided by his or her personal values (Hall, 2002). Arthur and Rousseau (1996) coined the expression “boundaryless career” to describe a career model associated with greater instability and no longer limited to one or a few employers. It is mostly managed by the worker, and demands versatility, flexibility, selfknowledge, and investments in skills and network development (Defillipi & Arthur, 1994). According to these new models, people would be asked to take charge of their professional lives, exempting companies from any responsibilities. The previous analysis of the career management literature points to a profound transformation, from a condition in which organizations take full responsibility for their employees’ career, to a new context in which that responsibility is entirely transferred to individuals. Baruch (2006, p. 125), however, argues that “both depictions of the past and the current state represent extreme scenarios” and do not express the reality of most organizations 4

11920 and workers, a criticism that has found echo in the career literature (e.g. Rodrigues & Guest, 2010). Studies have shown that self-management is now widely accepted, particularly among skilled workers. However, they emphasize that organizations also have an important role to fulfill (Baruch, 2006; De Vos, Dewettinck, & Buyens, 2009; Sturges, Conway, Guest, & Liefooghe, 2005; Sturges, Guest, Conway, & Davey, 2002), considering that some employees may struggle to adjust to the demands of self-development (Sturges et al., 2005) and that organizations are still the main arena where careers unfold (Lips-Wiersma & Hall, 2007). In other words, career management would depend on the initiative of the worker, who may also rely on the organizations to provide the necessary resources for career development (Baruch, 2006; Sturges et al., 2002; Waterman, Waterman, & Collard, 1994). In a context of skilled labor shortages, the so-called “war for talent” (Chambers, Foulon, Handfield-Jones, Hankin, & Michaels, 1998), and given the importance employees tend to attach to career progress opportunities (Economist Intelligence Unit, 2010; Towers Watson, 2012), organizations may need to rethink their career management policies and practices. This seems to be especially important in light of evidence showing that these initiatives may encourage individuals to self-manage their careers (Sturges et al., 2002) and that career self-management and organizational career management are complementary (De Vos et al., 2009). As Sturges et al. (2002, p. 744) argue, career management may be a “reciprocal partnership between individual and organization”, creating a “virtuous circle” that benefits both parties. It is important to note, however, that restructuring, downsizing, and the “elimination of managerial layers” have had an impact on all HR management systems, and career management is no exception (Baruch, 1999, p. 432). The process has become more complex, depending on 5

11920 both line managers and HR systems, as well as on the individuals themselves (De Vos et al., 2009). With respect to the employee’s leader, he/she should encourage individuals to take responsibility for their own careers by providing continuous feedback on performance and making available information about the company, job and career opportunities that may be of interest (Ulrich, Smallwood, & Sweetman, 2008). Costa (2010), however, points out difficulties in this process, since managers might resist taking the role of mediators between organization’s needs and subordinates’ expectations. OCM policies and practices, also called organizational support for career development (OSCD), typically include a variety of programs and activities. Given the lack of theoretical approaches (Baruch & Peiperl, 2000), previous research has tried to create groups or clusters, although there is no consensus on how such practices should be organized (Baruch & Peiperl, 2000, Eby et al., 2005; Sturges et al., 2002). Some of the contributions in this area are shown in Table 1. -----------------------------------------Insert Table 1 about here -------------------------------------------

For the purpose of this study, and following De Vos et al. (2009), we treated line management and human resources OCM policies and practices as two different constructs. Furthermore, we organized the HR OCMIs into three groups, taking into consideration the aspects thus far discussed in the literature: (a) career planning activities, (b) internal organizational mobility, and (c) training and skill development opportunities. The importance of OCM policies and practices to employees – provided by the 6

11920 organization, as well as from the immediate superior – has been verified by a number of studies. These activities have been found to positively influence objective (De Vos et al., 2009; Ng, Eby, Sorensen, & Feldman, 2005) and subjective career success (Ng et al., 2005), organizational commitment (De Vos et al., 2009, Sturges et al., 2005), as well as other constructive employee attitudes and behaviors (Eby et al., 2005; Sturges et al., 2005). Further evidence suggests that career management support from the employee’s leader might be related to job satisfaction and affective commitment (Baranik, Rolling, & Eby, 2010). In this study, we investigate these two paths through which career management factors can contribute to strengthen employee attachment to organizations and improve their retention: through career success and through job satisfaction. Career Success Career success has received considerable attention in the career literature (Heslin, 2005). Such interest is due to its importance to both individuals and organizations, as there is evidence linking career satisfaction with important employee attitudes, such as organizational commitment and turnover intention (Martins, Eddleston, & Veiga, 2002). Objective and subjective career success are considered two different concepts, due to the distinction between objective and subjective career, originally proposed by Everett Hughes in the 1930s (Barley, 1989). While objective career success is typically measured by earnings, number or speed of promotions and occupational status (Hall & Chandler, 2005; Heslin, 2005), subjective career success represents the interpretation that the person makes of her/his own career accomplishments (Heslin, 2005; Ng et al., 2005). The growing interest on subjective factors, relative to objective measures, is linked to the

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11920 emergence of new career models in which vertical progression and status are no longer relevant indicators of success. Job satisfaction or career satisfaction have typically been used as indicator of subjective career success (Heslin, 2005; Judge, Cable, Boudreau, & Bretz, 1995). Heslin (2005), however, argues that job satisfaction is not necessarily related to career success. For example, a person may have a gratifying job with limited career opportunities and therefore feel like having a frustrating career. On the other hand, a person may dislike his/her work, but feel happy with the career perspectives it offers. The author also adds that different people may use different criteria to evaluate their own success, such as sense of purpose, contribution to a greater good, or work-life balance (Heslin, 2005). In the present study, we use career satisfaction as indicator of subjective career success. Studies have shown that both human resources organizational career management initiatives (OCMIs) and leadership career management support (LCMS) may have a positive effect on objective and subjective career success. De Vos et al. (2009) found these practices to be positively related to objective career success, whereas Ng et al. (2005) results suggest a positive relationship between organizational sponsorship – in the form of career sponsorship, supervisor support, and training and skill development opportunities – and subjective career success. Considering these results, we propose the following hypothesis: H1: The higher the perceived effectiveness of OCMIs intended to foster (a) career planning activities, (b) internal organizational mobility, and (c) training and skill development opportunities, the higher the perception of subjective career success. Job satisfaction Job satisfaction can be defined as a set of feelings that an individual nurtures in relation to

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11920 her/his work. This attitudinal variable typically reflects how one feels at work in general and in relation to its different dimensions (Tett & Meyer, 1993). Rewards (salary, benefits and promotion opportunities), relationships with others at work (supervisor and colleagues), working conditions, communication, and the nature of work itself have been widely studied work dimensions (Spector, 2000). Research has shed light on the different factors that may trigger feelings of job satisfaction or dissatisfaction. There is an intense debate as to whether personal characteristics (dispositional variables) or situational/organizational variables are better predictors of job satisfaction. Notwithstanding this dispute, there are solid evidence that various work situations and organizational factors may be important antecedents of job satisfaction (Gerhart, 2005). The outcomes of job satisfaction have also been extensively studied (Saari & Judge, 2004). There is evidence of a positive relationship between job satisfaction and subjective wellbeing (Bowling, Eschleman, & Wang, 2010; Saari & Judge, 2004). Organizational effectiveness is another possible outcome of job satisfaction, although the results have been inconclusive. Ostroff (1992), for example, showed that schools with more satisfied employees were found to be more effective than those with less satisfied employees. In a meta-analysis, Judge, Thoresen, Bono, & Patton (2001) reported overall job satisfaction and overall job performance to be moderately related. The literature also reports findings of a positive relationship between job satisfaction and organizational commitment, and of a negative link between job satisfaction and turnover intention (e.g. Clugston, 2000; Meyer, Stanley, Herscovitch, &Topolnytsky, 2002; Tett & Meyer, 1993). Research on leader-member exchange (LMX) theory has shown that the quality of the leader-member relationship is positively related to job performance and job attitudes, including 9

11920 job satisfaction (e.g. Lapierre & Hackett, 2007). Research on mentoring relationships has shown similar results in regards to leader’s influence on job satisfaction (Baranik et al., 2010; Ensher, Thomas, & Murphy, 2001). It is important to note that three forms of mentorship have been described in the literature: (1) the traditional mentor, a senior person with more experience and well-above the protégé in the organization’s hierarchy, (2) the step-ahead mentor, also called supervisory mentor (Baranik et al., 2010), who is one hierarchical level above the protégé, and the (3) peer mentor, “an individual who holds a comparable position in terms of status and experience” (Ensher et al., 2001, p. 421). In the present study, we focus on supervisory mentorship. Considering the evidence found in the LMX, mentoring, and career management literatures, and in line with Baranik et al. (2010), leadership career management support is here hypothesized to impact job satisfaction. In addition, we predict that perception of subjective career success will also have a positive impact on job satisfaction. H2: Perceived leadership career management support (LCMS) has a positive effect on job satisfaction. H3: Perceived subjective career success has a positive effect on job satisfaction. Organizational Commitment Organizational commitment is defined as an employee’s psychological attachment to an organization, which has implications on his/her decision to stay or to leave it (Tett & Meyer, 1993). The concept has been widely studied and its importance increasingly discussed, particularly in light of the new employment contract, in which loyalty and commitment to the organization have been put to challenge (Cappelli, 1999; Zaleska & Menezes, 2007).

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11920 There is consensus around the multidimensionality of the construct, although different models have tried to capture its nature (Meyer, Allen, & Smith, 1993). The three-component model developed by Meyer and Allen (1991) defines commitment as a strong emotional attachment to the organization (affective), a perceived cost associated with the departure from the organization (continuance), and a felt obligation to continue working for the organization (normative). As stated by Meyer, Allen, & Smith (1993, p. 539), “employees with a strong affective commitment remain with the organization because they want to, those with a strong continuance commitment remain because they need to, and those with a strong normative commitment remain because they feel they ought to do so”. Several antecedents of commitment have been identified in the literature. In general, work experience variables seem to be stronger predictors of commitment than those involving personal characteristics (Meyer et al., 2002). Allen and Meyer (1990), for example, tested a range of work experiences and found personal comfort and perceived competence to be the best predictors of affective commitment. Regarding the consequences of commitment, there is consistent evidence showing that all three forms are negatively associated to turnover (Meyer et al., 2002). Research has also suggested that organizational commitment can be an important outcome of OCM initiatives (e.g. De Vos et al., 2009; Sturges et al., 2005; Zaleska & Menezes, 2007), especially in its affective dimension. Social exchange theory (Blau, 1964 apud De Vos et al., 2009), which is based on norms of reciprocity, is a conceptual framework that offers grounds for this relationship. Employees may feel grateful for the career support received and reciprocate with higher levels of commitment, although this relationship may be mediated by job satisfaction (Koster, de Grip, & Fouarge, 2011; Zaleska & Menezes, 2007). Given the foregoing discussion, we propose that: 11

11920 H4: Job satisfaction is positively related to affective commitment. Turnover and Turnover Intention Voluntary turnover is usually seen as an outcome to avoid, since it may imply in significant costs to organizations (Steel, Griffeth, & Hom, 2002). Such costs stem from recruitment and selection expenses, training costs, and loss of human capital, which is typically hard to measure but may be quite substantive (Grissom, Nicholson-Crotty, & Keiser, 2012). The subject has attracted increased attention from both researchers and human resource professionals, due to the growing difficulty to retain skilled employees (Cappelli, 2008; Towers Watson, 2012). Job satisfaction and organizational commitment were found to be strong predictors of turnover intention and actual voluntary turnover (Tett & Meyer, 1993). The relationship between OCM initiatives and turnover intention, however, is not straightforward, and can be analyzed from two opposite perspectives (Ito & Brotheridge, 2005; Koster et al., 2011). On the one hand, OCMIs can be interpreted as an investment received by the employee, which may strengthen his/her commitment, leading to lower intention to leave the organization. This line of thought is consistent with social exchange theory, discussed earlier. On the other hand, some OCMIs, such as training and skill development opportunities, and internal mobility (e.g. job rotation), may increase the individual’s employability and, therefore, lead to greater turnover intention, especially under favorable market conditions (Steel et al., 2002). Considering the evidence found in the literature, we propose the following hypothesis: H5: Higher levels of affective commitment lead to lower turnover intention.

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11920 METHOD Sample and Procedures The survey was conducted in the engineering department of a large Brazilian company that operates in the energy sector. Careers are organized into three categories with different wage levels. The first category has four wage levels, the second has seventeen, and the third has eight. All new employees join the company in the first level of the first category, regardless of their experience prior to admission. Career progress occurs through an advancement and promotion process, which takes place annually. The process takes into consideration the employee’s performance appraisal, his/her competencies and degrees, and assessments made by his/her team members and the immediate leader. Based on these results and the available budget, managers may choose to promote some of their employees. The company has also a mechanism for automatic advancement, which means that employees are promoted, regardless of their performance, whenever they stay for 18 months in the same wage level. The engineering department is responsible for virtually every major engineering project and counts with 3,140 employees. Invitations to take the survey were sent via email to all of them. A total 389 workers accessed our electronic questionnaire, but 68 of them were left incomplete and were therefore discarded, leaving us with a final sample of 321participants. The majority of the participants has a college degree or more (89%), 81% are men, with ages between 23 and 74 years-old (40 years-old on average). They have been with the company for 10.6 years on average, and 36% are in a managerial position.

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11920 Measures OCMIs and LCMS. Seventeen items were included in the questionnaire, based on previous research on the topic (Baruch & Peiperl, 2000; De Vos et al., 2009; Sturges et al., 2002) and also on the particular characteristics of the organization under study. Five were related to LCMS, and four related to each of the OCMIs: career planning activities, internal organizational mobility, and training and skill development opportunities. Respondents were asked to point out to what extent they had experienced these practices and support on a five-point Likert scale ranging from strongly disagree (1) to strongly agree (5). Career success. Perceived subjective career success was measured using the career satisfaction scale developed by Greenhaus, Parasuaman, and Wormley (1990), translated to Portuguese by Costa (2011). Participants were asked to indicate their level of agreement, on a five-point Likert scale. Job satisfaction. Three items, based on the Michigan Organizational Assessment Questionnaire, measured job satisfaction. According to Spector (1997), they are simple, straightforward and parsimonious in measuring the overall satisfaction of the worker with his job. A five-point Likert scale were also used. Affective organizational commitment. Meyer, Allen, and Smith (1993) six-item measure was used to assess participants’ affective commitment, with responses expressed on a five-point Likert scale. Turnover intention. Intention to leave the organization was measured through a single item “I definitely intend to leave [organization’s name] in the next 12 months”. Responses were on a five-point Likert scale ranging from strongly disagree (1) to strongly agree (5).

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11920 DATA ANALYSIS We applied covariance-based SEM techniques to test the hypotheses proposed in our model, thus explicitly modeling measurement error. Turnover intention was the only substantive variable measured with a single indicator, however, since measurement error in the criteria is orthogonal to the parameter estimates and does not bias them, measurement error in our dependent variable should not be a concern (see Antonakis, Bendahan, Jacquart, & Lalive, 2010; Ree & Carretta, 2006). In our analyses, the error variance of turnover intention and all control variables were modeled by constraining the variance of the error term to (1-ri)*vi, where ri is an estimate of the reliability of the indicator and vi, the observed variance (Bollen, 1989). We used LISREL 8.80 to analyze the proposed model and hypotheses, as well as three distinct competing models. Before that, we evaluated the measurement model. Table 2 presents the results of these analyses. The values of Cronbach’s alpha for the scales used to measure the latent variables were between 0.79 and 0.95; the related composite reliabilities (CR) ranged from 0.74 to 0.90; and the AVE varied between 0.50 and 0.64. All results were adequate given conventional thresholds observed in the literature (e.g. Geffen, Straub, & Boudreau, 2000; Hair, Black, Babin, Anderson, & Tatham, 2006), thus suggesting adequate validity of our measurement model. -----------------------------------------Insert Table 2 about here -------------------------------------------

The proposed model included paths from OCMIs to career success, from career success and LCMS to job satisfaction, from job satisfaction to affective commitment, and from affective commitment to turnover intention. The first alternative model (from now on referred to as model

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11920 1), was nested in the proposed model, but did not include the path from LCMS to job satisfaction. Testing differences between these two models allowed us to further verify if leadership careerrelated support did contribute to increase model fit. The proposed model was nested in the second alternative model (from now on referred to as model 2), which included a direct path from career success to affective commitment. In this way, model 2 allowed only for partial mediation between these two endogenous variables via job satisfaction. Alternative model 2 was also nested in the third competing model (from now on referred to as model 3), which included a direct path from job satisfaction to turnover intention, allowing only for partial mediation between these two endogenous latent variables via affective commitment. Table 3 contains the main goodness-of-fit observed for the four competing structural models, which indicate that all seemed to reasonably reproduce the original covariance matrix. The Chi-square values of all models were significant and the fit indexes within the limits usually suggested in the literature (e.g. Geffen et al., 2000; Hair et al., 2006). Given that the alternative models and proposed model were nested, difference Chi-square tests were performed to compare their relative explanatory power. As reported in Table 3, the calculated Chi-square differences between model 1 and the proposed model was significant (∆χ2model 1/proposed model = 7.98, p > 0.01). These results suggest that the proposed model provided a better fit to the data by adding a path from LCMS to job satisfaction. -----------------------------------------Insert Table 3 about here -------------------------------------------

As shown in table 3, the structural path coefficients estimated by LISREL for the proposed model were all in agreement with the relationships hypothesized in this study. All

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11920 OCMIs (career planning activities, internal organizational mobility, and training and skill development opportunities) had statistically significant, positive effects on career success (respectively γCP,CS = 0.24, p < 0.001, γIM,CS = 0.34, p < 0.001, γOD,CS = 0.36, p < 0.001), which, in its turn, had a significant, positive effect on job satisfaction (βCS,JS = 0.66, p < 0.001). The effect of the latter on affective commitment was also statistically significant and positive (βJB,AC = 0.79, p < 0.001), while the effect of organizational commitment on turnover intention was significant and negative (βAC,TI = -0.50, p < 0.001). We conclude then that our results provide empirical support to hypotheses H1a, H1b and H1c, as well as H3, H4 and H5). In addition, LCMS also had statistically significant, positive effects on job satisfaction (γLCMS,JS = 0.33, p < 0.01), thus providing empirical support to H2. -----------------------------------------Insert Table 4 about here -------------------------------------------

As mentioned above, in order to further evaluate the proposed model it was also compared with alternative model 2, which allowed for direct effects of career success on affective commitment. The results can be seen in table 3 as well. Model 2 did improve the fit to the data (∆χ2proposed model/model 2 = 25.14, p > 0.001). In addition, although the direct path added between career success and affective commitment was significant (βCS,AC = -0.37, p < 0.001), it was negative, suggesting that the effects of success not channeled through job satisfaction are associated with reduced commitment. Then, we compared model 2 with model 3, which also allowed for a direct effect of job satisfaction on turnover intention. Model 3 further improved fit to the data (∆χ2model 2/model = 14.44, p > 0.001). In model 3, most effects observed thus far remained the same, while the additional path between job satisfaction and turnover intention was also significant (βJS,TI = - 0.40, p < 0.001), suggesting that increased job satisfaction was 17

11920 associated with reduced turnover intention. However, in model 3 the path from affective commitment to turnover intention also became non-significant (βAC,TI = -0.12, n.s.). It is worth noting that all but one path predicted in the proposed model remained significant in the alternative models throughout the analyses. These results indicate that while most relationships predicted in the proposed model were endorsed, some adjustments would improve its fit. The few changes observed in model 3 should nevertheless be carefully considered. In order to assess the mediating effects implicit in our model, we estimated the unstandardized indirect effects of all exogenous variables and career predictors on our criteria of interest. Lisrel applies the delta method (MacKinnon, Lockwood, Hoffman, West, & Sheets, 2002; Sobel, 1982) to calculate indirect effects. As far as effects on turnover intention, the values obtained for tenure (-0.06; p