Does motivation matter? The influence of the agency perspective on temporary agency workers
| Date | 05 June 2017 |
| Pages | 561-581 |
| Published date | 05 June 2017 |
| DOI | https://doi.org/10.1108/ER-06-2016-0124 |
| Author | Pei-Chen Chen,Ming-Chao Wang,Shih-Chieh Fang |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Does motivation matter?
The influence of the
agency perspective on
temporary agency workers
Pei-Chen Chen
Department of Business Administration,
National Cheng Kung University, Tainan, Taiwan
Ming-Chao Wang
College of Management, Yuan Ze University, Taoyuan, Taiwan, and
Shih-Chieh Fang
Department of Business Administration,
National Cheng Kung University, Tainan, Taiwan
Abstract
Purpose –Based on agency perspective on temporary agency workers, the purpose of this paper is to explore
the relationship between firms’agency problems and agency cost on agency workers; moreover, intrinsic
motivation and extrinsic motivation are considered in seeking to understand how they moderate this relationship.
Design/methodology/approach –Using the Hsinchu Science Park directory of corporate affiliations as a
sample frame, the authors adopted a paired questionnaire which included two parts in order to consider the
possible problem of common method variances. The first part is completed by the manager of the firms and
the second part is completed by his/her temporary agency workers. Finally, 94 firms completed
questionnaires, providing a total sample of 94 R&D managers and 458 temporary agency workers. The rate of
participation was 31.65 percent.
Findings –Using a questionnaire survey of 94 high-tech firms, from which a total of 94 R&D managers and
458 temporary agency workers participated, the results show that firms’agency problems have a positive
influence on the agency cost of monitoring temporary agency workers. In addition, while this relationship is
negatively moderated by extrinsic motivation, intrinsic motivation has a non-significant moderating effect.
Originality/value –The managers of firms should consider not only the short-term flexibility of employing
temporary agency workers, but also the long-term cultivation of promoting great agency workers. This could
maximize the efficiency of the interaction between intrinsic motivation and extrinsic motivation. Of course,
the firms should think about how to reduce the agency problems created by goal conflict, information
asymmetry and risk sharing with temporary agency workers, because this could also provide a chance for the
firms to decrease agency costs spent on monitoring.
Keywords Agency problems, Agency theory, Agency cost, Intrinsic and extrinsic motivation,
Temporary agency workers
Paper type Research paper
1. Introduction
Employing temporary agency workers is a critical strategy for firms to increase numerical
flexibility in terms of reducing operational costs and improving economic efficiency
(Houseman etal., 2003; Koene et al., 2004, 2014; Ward etal., 2001). Temporary agency workers
are contingent on firms’employee needs, and predominantly cover productive labor, official
dispatch or othertasks in a limited-duration contract (Hakansson and Isidorsson,2012; Koene
et al., 2004). Firmsare thereby able to quickly control and adjust theirlabor forces to respond
to a dynamic and unpredictable market environment (Galais and Moser, 2009; Wilkin, 2012).
Temporary agency workers reflect the benefits and elasticity of firms to facilitate their
competitive advantage in terms of cost control and resource arrangement. However,
respective concerns of the firms in adopting temporary agency workers are raised regarding
Employee Relations
Vol. 39 No. 4, 2017
pp. 561-581
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-06-2016-0124
Received 22 June 2016
Revised 8 December 2016
Accepted 22 December 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
561
Agency
perspective on
temporary
agency workers
the consequences and administration of firms’strategic goals and managerial manners in
competing with rivals, as well as increasing its performance relative to how managers
flexibly employ and utilize the human force of temporary agency workers (Chambel, 2014;
Galais and Moser, 2009).
Previously, scholars have put more effort into discussing the interactions between firms and
employment agencies; including how the employment agencies provide temporary agency
workers to thefirms and how the firms negotiate the rules of hiring agency workers with the
employment agency (Goudswaard and de Leede, 2014; Houseman et al.,2003).Inaddition,
scholars engage in more explorations on the effectiveness of employing agency workers in
reducing costs and increasing flexibility for the firms ( Koene et al., 2014; Galais and Moser,
2009; Zhang et al., 2015; Wilkin, 2012). Few studies consider firms’administrative regulations
aiming to motivate temporary agency workers to meet firms’goals, in recognition that
temporary agency workers’work performance influences firms’results (Bonet et al., 2013;
Chambel et al., 2015; Viitala and Kantola, 2016). This view implies that effective managerial
rules from the firms and the decision-makers who offer stable (albeit temporary) jobs to
temporary agency workers for reducing market uncertainty and benefiting from economic
efficiency; these are critical issue. Increasing the sense of agency workers’belonging and
exhibiting loyalty for the firms by providing the motivation to exert their effort might also
indirectly produce a positive influence on the cohesiveness of the permanent workers in the
firm (Mitlacher, 2005). Therefore, managing temporary agency workers for firms should
not only ensure that agency workers can achieve firms’objectives, but also consider that there
are systems and mechanisms of evaluation, supervision, control and incentives to directly
inspire their successful job performance (Koene et al., 2014; Mitlacher, 2008; Ward et al., 2001).
When firms exploit the benefits of temporary agency workers in the pursuit of their own
interests, they should consider what administrative measures could benefit agency workers
and affect their job quality and performance in the workplace (Botvinick and Braver, 2015;
Greenberg and Baron, 2000). Firms might carefully consider appropriate employment
solutions in the workplace in facing the dilemma under which they need to keep human
resources flexible and retain excellent staff, albeit agency workers, to improve their overall
performance (Moorman and Harland, 2002). Barkema and Gomez-Mejia (1998) advocate a
salary-based incentive by linking agency workers’interests to reduce monitoring costs in a
low proceduralized and asymmetrical working environment. Moreover, worker psychology
should be considered in the workplace because it can lead to a significant increase in worker
motivation and in the amount of effort exerted on behalf of the firms (Lent and Brown, 2006;
O’Neill and Adya, 2007). Therefore, we adopt agency theory and incentive systems as the
theoretical perspectives in this research, in order to solve the problem of how firms
promote agency relations when managing temporary agency workers, through the use of
incentive mechanisms, thereby improving agency workers’performance in the workplace.
Agency theory explains how contractual arrangements can be structured with respect to
asymmetrical information and risk allocation (Wiseman et al., 2012; Jensen and Meckling,
1976). The risk-reward trade-off is crucial to agency theory as it is applied extensively in
relation to the prevalence of temporary agency workers (Mitlacher, 2005). Given this
relationship, it is generally conceptualized as a contract that is meant to align the goals of
the principals (the firms) and agents (temporary agency workers) (Kalleberg et al., 2000) to
solve the labor gap. Moreover, the incentive system rewards the activities of workers that
satisfy and commit to the firm (Amabile, 1993; Vallerand, 1997). Considering incentive
mechanisms in terms of intrinsic and extrinsic motivations, they provide motivations, in
terms of work psychology, that promote job satisfaction and efficiency in the workplace.
Dermer (1975) suggests that firms not only consider the use of extrinsic rewards to motivate
employees to perform well in the work context, but also adopt intrinsic rewards to satisfy
employees with personal growth and development even in temporary employment.
562
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