Perceived Overqualification and Its Outcomes: The

Journal of Applied Psychology 2009, Vol. 94, No. 2, 557–565

© 2009 American Psychological Association 0021-9010/09/$12.00 DOI: 10.1037/a0013528

Perceived Overqualification and Its Outcomes: The Moderating Role of Empowerment Berrin Erdogan and Talya N. Bauer Portland State University Research shows that perceived overqualification is related to lower job attitudes and greater withdrawal behaviors but to higher supervisor ratings of performance. Drawing upon relative deprivation theory, the authors proposed and tested empowerment as a moderator of the relationship between perceived overqualification and job satisfaction, intentions to remain, voluntary turnover, and objective sales performance to examine if negative outcomes could be lessened while stimulating even higher performance. Hierarchical linear modeling results from a sample of 244 sales associates working in 25 stores of a Turkish retail chain show that empowerment ameliorated the negative effects of perceived overqualification on job satisfaction, intentions to remain, and voluntary turnover. Empowerment did not affect the positive relationship between perceived overqualification and objective sales performance. Keywords: overqualification, person–job fit, empowerment, turnover, sales performance

overqualified candidates with the assumption that those who perceive themselves as overqualified are more likely to leave (Allan, 1990; Bills, 1992; Wells, 2004). At the same time, there is research that indicates that employees who feel overqualified perform better. For example, even though they rate themselves lower (Bolino & Feldman, 2000), overqualified employees are rated as higher performers by their supervisors (Fine & Nevo, 2008; Holtom, Lee, & Tidd, 2002). Thus, a paradox exists. Overqualified individuals may be less satisfied and more likely to leave an organization, but according to supervisors, they also perform at a higher level. An important gap in the literature is identifying theoretically derived variables that might mitigate the potentially negative effects of overqualification. This gap is problematic from both a theoretical and a practical standpoint. From a theoretical standpoint, examining moderators is an important next step in the evolution of the overqualification literature. It is important to delineate boundary conditions (Bacharach, 1989; Colquitt & Zapata-Phelan, 2007; Fry & Smith, 1987) under which perceived overqualification is related to attitudes and behaviors. In regard to practice, identifying moderators may help organizations benefit from the potentially high performance of these employees while dealing with overqualification’s harmful effects on attitudes and turnover. To date, three studies have identified variables that significantly interacted with overqualification with respect to outcomes. Specifically, marital status (Dooley, Prause, & Ham-Rowbottom, 2000), gender, prior self-esteem (Prause & Dooley, 1997), and availability of emotional support in one’s life (G. J. Johnson & Johnson, 1997) moderated the effects of overqualification on outcomes such as depression, perceived health, and future selfesteem. Although these studies represent important contributions to the literature, with the potential exception of emotional support these moderators are personal in nature and are not within an organization’s control. Moreover, the outcomes examined in these particular studies did not include employees’ work attitudes and behaviors. In other words, we know little about whether factors

Overqualification, or its flip side, underemployment, is the situation where individuals have qualifications such as education and skills that exceed job requirements (Khan & Morrow, 1991). Following the publication of Freeman’s (1976) seminal book titled The Overeducated American, overqualification became a topic of interest to both labor economists and management researchers. Overqualification has been operationalized in a number of different ways, ranging from perceptions of being overqualified (G. J. Johnson & Johnson, 1996, 1997) to actually possessing skills and education exceeding specific job requirements (Green & McIntosh, 2007; Verhaest & Omey, 2006). According to one estimate, 20%– 25% of the U.S. workforce is overqualified for their jobs (Feldman & Turnley, 1995). Concern regarding overqualification has also been reported in Canada (Sadava, O’Connor, & McCreary, 2000), Europe (Bu¨chel & Mertens, 2004), and developing countries (Go¨rg & Strobl, 2003). The literature tends to treat overqualification as a negative phenomenon. This is largely due to the body of research demonstrating that when employees perceive themselves as overqualified, they have more negative job attitudes (Burris, 1983; W. R. Johnson, Morrow, & Johnson, 2002; Maynard, Joseph, & Maynard, 2006) and are more likely to leave (Verhaest & Omey, 2006). There is also evidence that some recruiters screen out seemingly

Berrin Erdogan and Talya N. Bauer, School of Business, Portland State University. We would like to thank Fulda Erdogan for her assistance with the data collection and Greg Tensa for his help in data input. We also thank Deborah Ford and Donald Truxillo for their valuable suggestions on earlier versions of this article. An earlier version of this article was presented at the 2007 annual meeting of the Academy of Management, Philadelphia, Pennsylvania, and a brief version was published in the best papers proceedings. Correspondence concerning this article should be addressed to Berrin Erdogan, School of Business, Portland State University, P.O. Box 751, Portland, OR 97207-0751. E-mail: [email protected] 557

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within an organization’s control such as empowerment can alleviate the negative effects of perceived overqualification with respect to outcomes such as work attitudes or turnover. The present study contributes to the literature in three specific ways. First, we examine a key boundary condition or moderator of the relationship between perceived overqualification and its outcomes. By examining empowerment as a moderator, we contribute to the small but growing literature delineating and testing theoretically derived boundary conditions of overqualification and explicate how organizations can benefit from employing workers who perceive overqualification. Second, we contribute to the overqualification literature by adding objective sales performance to the outcomes of perceived overqualification. To date, research has related overqualification to either self-reported performance (Bolino & Feldman, 2000) or supervisor reports (Fine & Nevo, 2008; Holtom et al., 2002), with different patterns of results. Relating an objective performance indicator to overqualification will answer more definitively the question of whether perceived overqualification adds value to organizations in terms of performance. Finally, we chose to conduct the present study in Turkey. A majority of the research conducted on overqualification has been in Western countries including Canada (Sadava et al., 2000) and Western Europe (Verhaest & Omey, 2006). Overqualification is even more widespread in developing countries (Go¨rg & Strobl, 2003), and yet few overqualification studies have been conducted outside of the West. Sampling a Turkish organization is a natural next research step, as it is a country where “East meets West” and is an important gateway to Eastern parts of the world. Overqualification is a major concern in Turkey, as 9.5% of the unemployed are college graduates (Turkish Statistics Institute, 2007), making it possible for individuals to accept jobs that are below their expectations, which can lead to perceptions of overqualification.

Overqualification, Job Satisfaction, and Turnover Employees who perceive themselves as overqualified report lower levels of job attitudes, including job satisfaction (W. R. Johnson et al., 2002; Maynard et al., 2006; Verhaest & Omey, 2006). This relationship has been explained in the overqualification literature using a relative deprivation theory framework (Feldman, Leana, & Bolino, 2002; G. J. Johnson & Johnson, 2000; W. R. Johnson et al., 2002). Relative deprivation theory contends that the objective situation of individuals is rarely sufficient to explain how they feel and behave. Instead, individual reactions to a situation depend on subjective evaluations. More specifically, relative deprivation theory predicts that when individuals want an object and feel they deserve to get it but do not, they become frustrated (Crosby, 1984). The greater the sense of entitlement, the greater the sense of frustration will be. The theory states that the discrepancy between what one has and what one feels entitled to will cause negative reactions (Gurr, 1970). In fact, relative deprivation has been linked to lower levels of satisfaction with pay (Sweeney, McFarlin, & Inderrieden, 1990) as well as mental and physical health consequences (Buunk & Janssen, 1992). Perceived overqualification is likely to trigger feelings of relative deprivation because as individuals go through the education system, and as they build their repertoire of skills, knowledge, and abilities, they come to develop higher expectations about their

place in society and the type of job they deserve to occupy (Vaisey, 2006) and increase their desire for autonomy at work (Vecchio & Boatwright, 2002). For example, going through the higher education system creates expectations regarding the status and prestige of the job one expects to hold, the nature of social relationships, and expected treatment by the organization (Rose, 2005). Thus, when employees find themselves in a job that they see as beneath what they were expecting, they experience a sense of status deprivation, leading to low job satisfaction.

The Moderating Role of Empowerment The sense of deprivation experienced by employees who feel overqualified may be alleviated through the characteristics of the work environment that provide autonomy while communicating to employees that they are valued and respected in their work environment. Thus, we introduce empowerment as a moderator of the relationship between perceived overqualification and job satisfaction. Although no empirical work has tested this prediction before, empowerment has been shown to be related to positive attitudes and behaviors (Ahearne, Mathieu, & Rapp, 2005; Kark, Shamir, & Chen, 2003; Liden, Wayne, & Sparrowe, 2000), and concepts relating to empowerment have been proposed as moderators of perceived overqualification in the past. For example, Ritti (1970) proposed that giving engineers full responsibility for accounts they worked on and ensuring that they are directly responsible for outcomes could alleviate the consequences of feeling overqualified. Later, Khan and Morrow (1991) argued that job enrichment (or giving employees control over how they perform their jobs) could be a way to deal with perceived overqualification. Battu, Belfield, and Sloane (2000) argued that employers should offer employees greater initiative to deal with the negative effects of overqualification on employee morale. Indirectly supporting this assertion, research also shows that perceived control over the situation is an effective way to deal with feelings of relative deprivation (Abrams, Hinkle, & Tomlins, 1999). When empowered, employees feel that they have the ability to determine work outcomes, and feel competent to achieve their goals, and believe that they have an impact on the work environment (Spreitzer, 1995, 1996). Empowerment signals to employees that the organization trusts their judgment and competence (Chen & Aryee, 2007; Eisenberger, Rhoades, & Cameron, 1999; Rhoades & Eisenberger, 2002), which may convey to employees that they have high status within the organization. Thus, the negative relationship between perceived overqualification and job satisfaction should be alleviated for employees who perceive high levels of empowerment. Hypothesis 1: Empowerment will moderate the negative relationship between perceived overqualification and job satisfaction such that the relationship will be weaker when empowerment is high. We posit a similar rationale for the relationship between perceived overqualification and withdrawal behaviors. Past research has demonstrated that employees who perceive themselves as overqualified for their jobs are less likely to report intentions to remain at their jobs (Maynard et al., 2006) and are more likely to voluntarily leave their organizations (Holtom et al., 2002; Verhaest

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& Omey, 2006). Relative status deprivation can be discomforting, and leaving the situation should resolve the sense of frustration. Consistent with relative deprivation theory, such employees may want to extricate themselves from their current positions by intending to remain in the organization for a shorter period of time, as well as voluntarily leaving their organizations. However, to the extent that empowerment conveys to them that they are valued and trusted members of the organization, the sense of deprivation emanating from perceived overqualification may be alleviated. Hypothesis 2a: Empowerment will moderate the negative relationship between perceived overqualification and intentions to remain such that the relationship will be weaker when empowerment is high. Hypothesis 2b: Empowerment will moderate the positive relationship between perceived overqualification and voluntary turnover such that the relationship will be weaker when empowerment is high. Finally, we predicted that empowerment would moderate the relationship between overqualification and job performance. Past research indicates a positive relationship between perceived overqualification and job performance. For example, Fine and Nevo (2008) demonstrated in a sample of call center employees that perceived overqualification was positively related to supervisor ratings of performance. Holtom et al. (2002) also observed a positive relationship with supervisor ratings in a sample of retail employees. However, in a sample of expatriates, Bolino and Feldman (2000) found a negative relationship with self-reported performance. They noted that this observed relationship could be because employees who feel overqualified may know that they are capable of higher performance, leading to the observed negative association. Given that research to date has not examined this relationship with an objective performance indicator, focusing on this relationship is important. We expect a positive relationship between perceived overqualification and objective job performance for three specific reasons. First, to the degree to which employee perceptions of overqualification have a basis in reality, employees will be in possession of skills exceeding job requirements, which should lead to higher performance. Second, objective performance ratings are more easily tied to rewards such as bonuses, and the presence of extrinsic rewards will motivate overqualified employees to exert extra effort. Third, in a setting where objective performance feedback is available and salient, low objective performance would provide feedback that is inconsistent with the overqualified employee’s self-image, which should cause dissonance (Korman, 1971). Employees who perceive overqualification will have a self-image that holds that they have more skills than the job requires. Demonstrating low levels of performance and receiving objective negative feedback would be a challenge to their sense of self (J. W. Johnson & Ferstl, 1999), thus providing the motivation to maintain high performance. We expect the positive relationship between perceived overqualification and objective performance to be more pronounced when employees perceive empowerment. Employees who are able and motivated should have greater performance when they are empowered because, by definition, empowerment involves

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the removal of factors that prevent employees from being effective (Conger & Kanungo, 1988). Moreover, employees who perceive themselves as overqualified and empowered will find low performance to be a greater threat to their self-image. Conversely, if they perceive low levels of empowerment and instead believe that their roles are fixed and that they have little impact on shaping their environment, overqualified employees may feel constrained in their given roles, and performing at lower levels will not necessarily threaten their self-concept. Supporting this prediction, past research found that lack of choice in a matter reduced discomfort resulting from cognitive dissonance (Linder, Cooper, & Jones, 1967; Matz & Wood, 2005). In other words, those who perceive overqualification will be motivated to perform at high levels to the degree to which they feel control over their environment, or empowered. Hypothesis 3: Empowerment will moderate the positive relationship between overqualification and objective job performance such that the relationship will be stronger when empowerment is high.

Method Sample and Procedures We gathered data from a major retail clothing chain in Turkey with 135 stores that manufactures children’s and adult clothing under its own brand and markets its products in company-owned stores. Over 4 weeks, human resources (HR) specialists working at the company’s headquarters in Istanbul scheduled visits to 25 Istanbul stores, and employees were invited to attend one of these meetings. During the meetings, they explained the study objectives, its voluntary nature, and assured employees of confidentiality. HR specialists then left the room to ensure respondent privacy. Participants completed the surveys on company time. The completed surveys were placed in sealed envelopes, which were then put inside a larger sealed envelope and given to the HR specialists, who forwarded them to our Turkish research affiliate. Employees received a survey containing questions assessing perceptions of overqualification, job satisfaction, intentions to remain, and demographics. This survey was completed by 258 sales associates from 25 stores. The number of respondents from each store ranged from 3 to 24, with an average of 10, and response rates within stores ranged from 43% to 100%, with an overall response rate of 74%. All employees held the job title of “sales consultant” and did not have managerial responsibilities. We gathered objective job performance (operationalized as sales performance) and voluntary turnover information from company records. Because there were missing data in performance and demographic variables, the effective sample size used to test the hypotheses was 244. Of the 244 employees, 55.7% were female, 44.3% were male, and 86.9% were employed full-time. In terms of education levels, 37.3% were high school graduates, 26.6% were college students, and 36.1% were college graduates. The average age of employees was 22 years, with a range of 18 to 32 years. On average, participants had worked for this company for 1 year and 1.52 months.

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560 Measures

Surveys were administered in Turkish following a backtranslation procedure (Brislin, Lonner, & Thorndike, 1973). A native speaker of Turkish translated the surveys from English into Turkish, and an independent expert translated the surveys back into English to assure that the original meaning of the items was retained. For all scales, a 7-point Likert scale was used (1 ⫽ strongly disagree to 7 ⫽ strongly agree). Perceived overqualification. We used the four-item measure of mismatch by G. J. Johnson and Johnson (1996, 1997). A sample item was “My formal education overqualifies me for my present job” (␣ ⫽ .72). Objective job performance. Because employees in our sample were sales associates, sales performance is a relevant performance criterion. Sales associate commission was set at 1.2% of their sales volume in a given month. The sales commissions earned during the month the surveys were gathered were used as an indicator of job performance. This number was expressed in Turkish lira (TL). During the study month, 1 TL was the equivalent of U.S. $0.71 and €0.54 (Financial Management Service, 2007). Job satisfaction. We used a three-item measure developed by Cammann, Fichman, Jenkins, and Klesh (1983) to assess job satisfaction. A sample item was “All in all, I am satisfied with my job” (␣ ⫽ .81). Intentions to remain. We used the three-item measure by Cammann et al. (1983) to assess intentions to remain. We reworded the items so that higher scores reflected intentions to remain. A sample item was “I rarely think about quitting” (␣ ⫽ .91). Voluntary turnover. Six months after the completion of the study, we obtained information regarding whether the employee had voluntarily left the company or not (1 ⫽ voluntarily left the company, 0 ⫽ all others). Of the 244 study participants, 45 (18.4%) had left the company voluntarily by 6 months after the initial data collection. Empowerment. We measured empowerment using the 12-item scale developed by Spreitzer (1995). The scale conceptualizes empowerment as four dimensions (meaning, self-determination,

competence, and impact) combined additively to form the overall empowerment construct (Spreitzer, 1995). A sample item was “I have significant autonomy in determining how I do my job.” Consistent with prior research (Chen, Lam, & Zhong, 2007; Seibert, Silver, & Randolph, 2004; Spreitzer, 1995, 1996), we aggregated all items (␣ ⫽ .80). Control variables. We controlled for the number of hours employees worked because this variable was strongly related to their sales performance. Following past research (e.g., Dooley et al., 2000; G. J. Johnson & Johnson, 1996; Maynard et al., 2006), we controlled for age and organizational tenure. In our study, gender (coded as female ⫽ 0, male ⫽ 1) was correlated with perceived overqualification (r ⫽ .14, p ⬍ .05) but was not correlated with any of the outcome variables. Thus, we excluded gender from our analyses to preserve power (Becker, 2005). We controlled for education level of the participants, as it was correlated with perceived overqualification, job satisfaction, and intentions to remain. Because education had three categories, we included two dummy variables for education: college graduate and college student, with high school graduate serving as a comparison group. Finally, the number of sales associates working in each store did not have significant correlations with any of the study variables, and inclusion of a store size variable did not change the observed relationships. Thus, we did not control for store size in our analyses.

Results Means, standard deviations, and intercorrelations among variables are presented in Table 1. Because we measured perceived overqualification, job satisfaction, intentions to remain, and empowerment from the same source and used translated measures, we performed a confirmatory factor analysis to establish the validity of our hypothesized measurement model. We specified four firstorder factors and one second-order factor for empowerment (following Spreitzer, 1995) and separate factors for perceived overqualification, job satisfaction, and intentions to remain. We modeled each item to load on a single factor and allowed the

Table 1 Means, Standard Deviations, and Intercorrelations Among Variables Variable 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Perceived overqualification Job satisfaction Intentions to remain Voluntary turnover Objective job performance Empowerment Hours worked Age Organizational tenure College graduate College student High school graduate

M

SD

1

4.35 1.35 — 5.80 0.86 ⫺.19ⴱⴱ 4.77 1.61 ⫺.21ⴱⴱ 0.18 0.39 .09 321.98 150.61 .12 5.42 0.72 .03 192.91 55.01 ⫺.11 21.90 2.47 .22ⴱⴱ 13.52 11.69 ⫺.02 0.36 0.48 .16ⴱ 0.27 0.44 .05 0.37 0.48 ⫺.21ⴱⴱ

2

3

— .51ⴱⴱ ⫺.06 ⫺.02 .43ⴱⴱ .02 ⫺.11 .01 ⫺.16ⴱ ⫺.03 .18ⴱⴱ

— ⫺.09 ⫺.01 .29ⴱⴱ .00 ⫺.04 .05 ⫺.13ⴱ ⫺.04 .17ⴱⴱ

4

5

6

7

8

9

10

11

12

— ⫺.02 — ⫺.08 .23ⴱⴱ — .04 .42ⴱⴱ .20ⴱⴱ — ⴱⴱ .05 .22 .07 .16ⴱ — ⴱⴱ ⴱⴱ ⫺.04 .25 .28 .21ⴱⴱ .39ⴱⴱ — .04 .03 ⫺.04 ⫺.03 .08 .02 — .00 .03 ⫺.01 ⫺.01 ⫺.04 .02 ⫺.45ⴱⴱ — ⫺.04 ⫺.07 .05 .04 ⫺.05 ⫺.04 ⫺.58ⴱⴱ ⫺.47ⴱⴱ —

Note. N ⫽ 244. Voluntary turnover was measured 6 months after the completion of the study and was coded as 1 ⫽ voluntarily left the company, 0 ⫽ all others. Objective job performance refers to monthly sales commission earned during the study month, measured in Turkish lira (TL). During the study month, 1 TL was the equivalent of U.S. $0.71 and €0.54. Hours worked is the number of hours worked during the study month. Organizational tenure was measured in months. ⴱ p ⬍ .05. ⴱⴱ p ⬍ .01.

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analyses, we centered our variables by the grand mean, following the suggestion of Hofmann and Gavin (1998). Hypothesis 1 predicted that empowerment would moderate the relationship between perceived overqualification and job satisfaction. As presented in Table 2, the interaction term of empowerment with perceived overqualification was significant with respect to job satisfaction. We plotted the interaction at high and low levels of empowerment (defined as one standard deviation above and below the mean). The plot is presented in Figure 1. Simple slope analyses indicated that at low levels of empowerment, perceived overqualification was negatively related to job satisfaction (␥ ⫽ ⫺0.16, SE ⫽ 0.05; t ⫽ ⫺3.24, p ⬍ .01), whereas at high levels of empowerment, perceived overqualification was not related to job satisfaction (␥ ⫽ ⫺0.01, SE ⫽ 0.05; t ⫽ ⫺0.03, ns). These results were consistent with Hypothesis 1. Hypothesis 2a predicted that empowerment would moderate the relationship between perceived overqualification and intentions to remain. As shown in Table 2, the interaction of perceived overqualification with empowerment was significantly related to intentions to remain. The plot of this interaction is presented in Figure 2. Simple slope analyses indicated that at low levels of empowerment, perceived overqualification was negatively related to intentions to remain (␥ ⫽ ⫺0.38, SE ⫽ 0.10; t ⫽ ⫺3.78, p ⬍ .01), whereas at high levels of empowerment, perceived overqualification was not related to intentions to remain (␥ ⫽ ⫺0.10, SE ⫽ 0.07; t ⫽ ⫺1.38, ns). These results support Hypothesis 2a. Hypothesis 2b predicted that empowerment would moderate the relationship between overqualification and voluntary turnover. Be-

factors to correlate. The fit statistics indicated acceptable fit for the specified model, ␹2(199) ⫽ 327.29, p ⬍ .01; confirmatory fit index ⫽ .95; goodness-of-fit index ⫽ .90; root-mean-square error of approximation ⫽ .05. This model was superior to five alternative models in which (a) perceived overqualification – job satisfaction, ⌬␹2(1) ⫽ 74.64, p ⬍ .01, (b) perceived overqualification – intentions to remain, ⌬␹2(1) ⫽ 36.10, p ⬍ .01, (c) job satisfaction – intentions to remain, ⌬␹2(1) ⫽ 4.32, p ⬍ .05, (d) job satisfaction – empowerment, ⌬␹2(1) ⫽ 20.13, p ⬍ .01), and (e) empowerment – intentions to remain, ⌬␹2(1) ⫽ 111.29, p ⬍ .01, fell under the same factor, suggesting that participants differentiated between the study variables. Even though our hypotheses predicted relationships among individual-level variables, in our sample individuals were nested within the 25 stores studied. Cohen, Cohen, West, and Aiken (2003) cautioned that when individuals are nested within groups, ordinary least squares (OLS) regression can lead to inaccurate estimates. Thus, we used the random coefficient regression procedure in hierarchical linear modeling (HLM) to test all hypotheses. HLM partitions variance occurring at the individual and group levels and provides an estimate of the relationship between individual-level variables that is pooled across all groups. In other words, HLM estimates a separate regression equation for each store, and the final results represent an average of these separate regression equations (Bryk & Raudenbush, 1992). Thus, HLM allows us to control for variation occurring at the store level while estimating individual-level relationships, and the standard error estimates are more accurate compared to an OLS regression. In all

Table 2 Random Coefficient Regression Model Results Testing the Moderating Role of Empowerment for Job Satisfaction, Intentions to Remain, and Objective Job Performance Job satisfaction (Hypothesis 1) Variable Level 1 Intercept ␤0 Intercept ␥00 Hours worked ␤1 Intercept ␥10 Age ␤2 Intercept ␥20 Organizational tenure ␤3 Intercept ␥30 College graduate ␤4 Intercept ␥40 College student ␤5 Intercept ␥50 Perceived overqualification ␤6 Intercept ␥60 Empowerment ␤7 Intercept ␥70 Overqualification ⫻ Empowerment ␤8 Intercept ␥80 Model R2 ⌬R2

Estimate

Intentions to remain (Hypothesis 2a)

SE

t

Estimate

5.83

0.05

110.70ⴱⴱ

⫺0.00

0.00

⫺0.02

Objective job performance (Hypothesis 3)

SE

t

Estimate

SE

t

4.74

0.12

40.96ⴱⴱ

302.43

13.25

22.81ⴱⴱ

⫺1.30

⫺0.00

0.00

⫺2.73ⴱ

1.55

0.29

5.37ⴱⴱ

0.01

⫺0.17

⫺0.00

0.06

⫺0.04

2.73

3.44

0.79

⫺0.12

0.06

⫺1.82

⫺0.01

0.01

⫺0.70

0.96

0.95

1.01

⫺0.23

0.11

⫺2.01

⫺0.35

0.21

⫺1.66

19.64

17.99

1.09

⫺0.25

0.09

⫺2.85ⴱⴱ

⫺0.33

0.21

⫺1.55

⫺0.08

0.03

ⴱⴱ

⫺0.23

0.07

0.56

0.09

6.14ⴱⴱ

0.74

0.11

0.05 .47 .05

2.29ⴱ

0.20

⫺2.39

7.68

13.75

0.56

ⴱⴱ

17.02

7.60

2.24ⴱ

0.17

4.36ⴱⴱ

27.00

10.25

2.64ⴱ

0.07 .41 .03

2.66ⴱ

10.42

7.31 .51 .03

1.43

⫺3.53

Note. N ⫽ 244. Hours worked is the number of hours worked in the study month. Organizational tenure was in months. Model R2 is the proportional reduction in the Level 1 variance component (see Hofmann, 1997). ⌬R2 is the increase in R2 when the interaction term was entered in a separate step. ⴱ p ⬍ .05. ⴱⴱ p ⬍ .01.

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Figure 1. Empowerment as a moderator of the relationship between perceived overqualification and job satisfaction.

cause turnover is a binary outcome, we tested this hypothesis using multilevel logistic regression within the HLM program (Snijders & Bosker, 2003) by specifying a hierarchical generalized linear model with a Bernoulli distribution. In this model, the predicted outcome variable is the natural logarithm of the odds that turnover will take the value of 1. The results of these analyses are presented in Table 3. The interaction term of perceived overqualification with empowerment was significantly related to voluntary turnover. In order to illustrate the nature of the interaction, we plotted the equation at one standard deviation above and below the mean of both predictors. A logistic regression equation predicts logit of the probability of turnover. We transformed the predicted values of the dependent variable to the probability of turnover following the formula presented in Cohen et al. (2003, p. 491). The plot of the interaction is presented in Figure 3. Perceived overqualification was positively related to the probability of turnover only at low levels of empowerment (␥ ⫽ 0.39, SE ⫽ 0.16; t ⫽ 2.48, p ⬍ .05). For high levels of empowerment there was no relationship between perceived overqualification and the probability of turnover (␥ ⫽ ⫺0.04, SE ⫽ 0.13; t ⫽ ⫺0.33, ns), thus supporting Hypothesis 2b. Finally, Hypothesis 3 predicted that empowerment would moderate the relationship between perceived overqualification and objective job performance. The results for these analyses are

presented in Table 2. The interaction term of empowerment and overqualification was not related to either indicator of job performance, failing to provide support for this hypothesis. Instead, perceived overqualification was positively related to objective job performance at all levels of empowerment (␥ ⫽ 17.02, SE ⫽ 7.60, p ⬍ .05).

Discussion In this study, we made a contribution to the overqualification literature by identifying empowerment as a key boundary condition of the relationship between overqualification and outcomes. We found that perceptions of overqualification were negatively related to job satisfaction only when employees reported low levels of empowerment. High levels of empowerment nullified the relationships between perceived overqualification, intentions to remain, and voluntary turnover. These findings indicate that employees experience negative consequences as a result of feeling overqualified only when they do not feel empowered. Our second contribution is studying objective performance in an overqualification context. Empowerment did not emerge as a moderator of the relationship between overqualification and job performance. Instead, we found that overqualified employees demonstrated higher levels of performance regardless of their empowerment levels. Thus, our study contributes to the literature

Figure 2. Empowerment as a moderator of the relationship between perceived overqualification and intentions to remain.

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Table 3 Results of Multilevel Logistic Regression Analysis Testing the Moderating Role of Empowerment for Voluntary Turnover Voluntary turnover (Hypothesis 2b) Variable Intercept ␤0 Intercept ␥00 Hours worked ␤1 Intercept ␥10 Age ␤2 Intercept ␥20 Organizational tenure ␤3 Intercept ␥30 College graduate ␤4 Intercept ␥40 College student ␤5 Intercept ␥50 Perceived overqualification ␤6 Intercept ␥60 Empowerment ␤7 Intercept ␥70 Overqualification ⫻ Empowerment ␤8 Intercept ␥80 Model R2 ⌬R2

␥

SE

t

⫺1.47

0.11

⫺13.16ⴱⴱ

0.00

0.00

2.82ⴱ

0.03

0.04

0.85

⫺0.01

0.01

⫺1.29

0.05

0.27

0.18

0.04

0.28

0.15

0.17

0.11

1.59

⫺0.28

0.14

⫺2.03

⫺0.30

0.13 .06 .03

⫺2.35ⴱ

Note. N ⫽ 244. Hours worked is the number of hours worked in the study month. Organizational tenure was in months. Model R2 and ⌬R2 were calculated using the formula presented by Snijders and Bosker (2003, p. 226). ⴱ p ⬍ .05. ⴱⴱ p ⬍ .01.

by adding to the small number of studies on the relationship between perceived overqualification and job performance, showing that consistent with results found with supervisor ratings (Fine & Nevo, 2008; Holtom et al., 2002), perceived overqualification is positively related to objective job performance. It seems that empowerment is an effective intervention that alleviates the negative consequences of overqualification while not curbing its performance advantages. Our third contribution is focusing on Turkey as the national context, as it extends work on overqualification to a developing

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country. It has been noted that overqualification is a widespread issue in developing countries (Go¨rg & Strobl, 2003), and the overall pattern of relationships between overqualification, work attitudes, and turnover is parallel to what has been observed in Western nations. We should also note that our results may more readily generalize to countries that value empowerment. For example, Robert, Probst, Martocchio, Drasgow, and Lawler (2000) found that although Mexican employees responded positively to empowerment, employees in India showed lower coworker and work satisfaction as a result of empowerment. Even though both Mexico and India are countries that are high in power distance, Mexico is one in which empowerment may be appreciated, whereas India may be one in which people feel uncomfortable with empowerment. Similarly, Turkey is a country where empowerment is well accepted and desired (Aycan et al., 2000). Thus, our results may more readily generalize to countries where empowerment is a culturally acceptable intervention. Empowerment was not a moderator of the relationship between perceived overqualification and objective job performance. It is likely that this relationship is moderated by other variables. Characteristics of the reward system in place may weaken the relationship. For example, when pay is perceived to have a weak tie to performance, the relationship between overqualification and objective performance may be weakened. Similarly, when objective performance is visible to peers, overqualified employees may perform at a higher level because low performance would constitute a serious threat to their self-image, whereas nonvisible rewards may weaken the relationship between perceived overqualification and performance. Feldman (1996) also noted the conditional nature of the relationship and argued that the relationship between underemployment and performance may depend on how underemployment is operationalized. It seems that more research into the moderators of the overqualification–performance relationship is warranted.

Potential Limitations Like any study, our study has potential limitations. We attempted to minimize common method bias by gathering job performance and turnover data from company records. Despite these efforts, due to the nature of the variables of interest, we measured

Figure 3. Empowerment as a moderator of the relationship between perceived overqualification and voluntary turnover.

RESEARCH REPORTS

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perceived overqualification, satisfaction, intentions to remain, and empowerment from the same source in a single survey. Although we believe that this design did not overly threaten our findings because common source bias actually reduces the power to detect interactions (Evans, 1985), it would have been preferable to further reduce common method variance by introducing a time lag between the measurement of overqualification and perceptual outcomes. We encourage future studies to examine the temporal element of perceptions of overqualification. Our results are likely to generalize to younger overqualified employees, but generalizability to other employee groups should be investigated in future research. Past research has shown that younger employees and recent graduates constitute a particularly large group that is affected by overqualification (e.g., Battu et al., 2000; Di Pietro & Urwin, 2006; Feldman & Turnley, 1995). However, overqualification is also widespread among laid-off executives (Feldman et al., 2002), expatriates (Bolino & Feldman, 2000), and older employees changing careers (Allan, 1990). Our sample did not include employees who were at advanced stages in their careers and who had taken jobs that were clearly below their level of experience. Before generalizing our findings to different overqualified populations, replicating the results with a more diverse sample would be preferable.

Conclusion For individuals to work in a position where they feel overqualified is becoming increasingly widespread around the world, at least partly because of the rapid increase in service sector jobs and the rising number of college graduates entering the job market (Khan & Morrow, 1991). Our findings indicate that there are distinct advantages to hiring employees who perceive that they are overqualified. Consistent with past research, we found that these employees may make valuable contributions to the organization by performing at higher levels, so although they may stay for a shorter period, their time in the organization may be valuable. Moreover, we found that empowerment moderated the negative effects of perceived overqualification on work attitudes and turnover, but not performance. It seems that the assumption that overqualified employees will suffer from low morale and that they are a “flight risk” is true only part of the time and that empowering employees is an effective way in which organizations can benefit from the performance advantages of overqualified employees while keeping them as members of the organization longer. Our study empirically shows that the negative consequences of perceived overqualification are avoidable. Further research on the boundary conditions of overqualification will aid organizations and employees in the management of overqualified employees.

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Received December 20, 2007 Revision received June 30, 2008 Accepted July 8, 2008 䡲