Person-environment fit: a luxury good for those who can afford it?
| DOI | https://doi.org/10.1108/EBHRM-04-2021-0072 |
| Published date | 19 April 2022 |
| Date | 19 April 2022 |
| Pages | 312-329 |
| Subject Matter | HR & organizational behaviour,Global HRM |
| Author | Franziska M. Renz |
Person-environment fit: a luxury
good for those who can afford it?
Franziska M. Renz
College of Business, California State University,
Sacramento, Sacramento, California, USA
Abstract
Purpose –The study integrates organizational demography theory into person-environment fit theories to
question the assumption that all employees can afford to strive for person-environment fit. The ethnic/racial
diversity in organizations is investigated as a boundary condition in order to developimplications to mitigate
the challenges of employees with precarious jobs, especially persons of color (POCs), in the society.
Design/methodology/approach –Publiclyaccessible andobjective data from organizationsin the S&P 1500
index werecollected through Compustat,ExecuComp, theBloomberg Terminal andthe websites of Fortune,the
United States Census Bureau and the U.S. Department of Labor. A path analysis of time-lagged data was
performed to support causal relationships between the examined constructs while controlling for alternative
explanations.
Findings –Unsafe workingconditions moderatethe U-shaped relationshipbetween ethnic/racialdiversity and
turnover and turn it into an inverted U-shaped relationship because employees in precarious jobs, especially
POCs,cannot afford to leave unsafeworking conditions.Organizationswith unsafe working conditionsare more
likely toinvest in sustainabilityinitiatives. However, organizations’financialperformance does not benefitfrom
this investment.
Originality/value –The circumstance that not all employees can afford person-environment fit and its
organizational outcomes are identified and empirically tested. Scholars can integrate this boundary condition
in future research. Implications for practice and policy are also derived.
Keywords Diversity, Turnover, Sustainability, Performance, Unsafe working conditions
Paper type Research paper
Person-environment fit theories explain “the compatibility between individuals and their
environment”and have earned a meaningful position in the human resource management
literature (Van Vianen, 2018, p. 76). Various typesof fit have been examined, such as person-
vocation fit, person-job fit, person-organization fit, person-team fit and person-supervisor fit.
These types of fit have beenlinked to desired outcomes, like for example jobsatisfaction and
performance, and are based on numerous theories, such as self-consistency theory (Lecky,
1968), social comparison theory (Festinger, 1954), balanced state theory (Heider, 1958), self-
affirmationtheory (Steele, 1988) and thesimilarity attraction hypothesis(Byrne et al., 1986;e.g.
Kristof-Brown et al.,2005;Van Vianen, 2018). A fundamental assumption of these theories is
that employeesselect themselves in and out of organizationsbased on the perceived fit of their
own characteristics and the characteristics of the organization (Schneider, 1987).
However, what if employees cannot afford to pursue person-environment fit? What if
employees’socio-economicstatus prevents them from leaving for a better-fitting opportunity?
What if employees can only care about making ends meet? The COVID-19 pandemicput such
struggles in a renewed spotlight.Many employees, especially POC employees, struggled and
suffered financial hardships (e.g. Kantamneni, 2020;Rattner and Franck, 2021). A major
reason is that POC employeesare overrepresented in precarious jobs (e.g. care facility workers,
grocery store workers, restaurant workers)that are low-paid and lack basic benefits such as
health insurance and job security (Benach et al., 2016;Kantamneni,2020;US Bureau of Labor
Statistics, 2021). These jobs usually provide a way to make ends meet while person-
environment fit may need to be neglected.
Therefore,this study makes fourimportant contributionsto the existing literature.First, the
study questions a fundamental assumption of fit theories and identifies a crucial boundary
EBHRM
10,3
312
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2049-3983.htm
Received 25 April 2021
Revised 20 February 2022
Accepted 27 February 2022
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 10 No. 3, 2022
pp. 312-329
© Emerald Publishing Limited
2049-3983
DOI10.1108/EBHRM-04-2021-0072
condition: the influence of employees’ethnic/racial background and related socio-economic
status. This influenceis theorized through organizational demography theory and integrated
into the literatureon person-environmentfit. Second, based on the argument of socio-economic
status, the study investigates the relationship between ethnic/racial diversity and turnover.
The results show that unsafe working conditions turn the U-shaped relationship between
diversity and turnover into an inverted U-shaped relationship. Third, the effect of this
relationship on the organization is examined. While a sustainability investment oftentimes
allows to offset a negative impact on the organization’s financial performance (B
enabou and
Tirole, 2010;Gautier and Pache, 2015), this is not the case in the presented context. Instead,
investingin the workforce through high-performance workpractices is 60 times more effective
in order to improve the financial performance of the organization. Fourth, implications and
recommendations for research, human resource practice and public policy are derived and
discussedto support financiallyand ethically responsiblebusiness conduct.Figure 1 illustrates
the examined theoretical model.
Theory and hypotheses development
The effect of ethnic/racial diversity on turnover
When employees try to identify an environment in which they fit, they need to balance their
needs for uniqueness and belongingness (Brewer, 1991;Spears, 2021). On the one hand,
employees want to differentiate themselves from others; on the other hand, they want to be
part of a group such as a work team or company (Levi and Askay, 2021;Shore et al., 2011).
Thus, when an organization has attracted an employee, a selection process starts that can
lead to attrition, in particular turnover (Nye et al., 2017;Schneider, 1987). The potential
turnover depends on the diversity in the organization. If the ethnic/racial diversity in the
organization is rather low (i.e. the percentage of POC employees in the organization is low),
the likelihood that the new employee encounters coworkers who are similar to himself/herself
is also low because the existing workforce is rather homogeneous. Employees’opportunities
to be unique can be rare. Likewise, if the ethnic/racial diversity in the organization is rather
high, the existing workforce consists of a heterogeneous group that allows uniqueness but
provides little opportunities for belongingness to a group of similar coworkers (Brewer, 1991;
Levi and Askay, 2021;Shore et al., 2011;Spears, 2021). In both cases of rather high and low
diversity, employees are likely to select themselves out of the organization, since their needs
are not satisfied so that they feel isolated in the organization and show avoidance behaviors
(Hom et al., 2020;Leonard and Levine, 2006;Pickett et al., 2002;Rios and Mackey, 2022;Song
et al., 2020;Williams and O’Reilly, 1998). Hence, turnover in such organizations is expected to
be high.
Hypothesis 4
Hypothesis 2 Hypothesis 5
Hypothesis 1 Hypothesis 3
Ethnic/Racial
Diversity
Turnover Financial
Performance
Unsafe
Working
Conditions
Sustainability
Investment
Figure 1.
Theoretical model
Affordability
of person-
environment fit
313
To continue reading
Request your trial