Testing mediation effects of social and economic exchange in linking organizational training investment to employee outcomes
Published date | 04 March 2019 |
Date | 04 March 2019 |
Pages | 306-323 |
DOI | https://doi.org/10.1108/PR-06-2017-0174 |
Author | Yuhee Jung,Norihiko Takeuchi |
Subject Matter | HR & organizational behaviour,Global HRM |
Testing mediation effects of social
and economic exchange in linking
organizational training investment
to employee outcomes
Yuhee Jung
Faculty of International Social Science, Gakushuin University, Tokyo, Japan, and
Norihiko Takeuchi
Graduate School of Business and Finance, Waseda University, Tokyo, Japan
Abstract
Purpose –Althoughsocial exchange theory has longbeen used to explain employees’positive work attitudes
in responseto perceived investmentin employee development(PIED), few studieshave examined this theoretical
mechanism by introducing a direct measure of social exchange between employees and their personified
organization.Furthermore, most studieshave focused solely on onetype of exchange (i.e. socialexchange) and
have ignored another type of exchange characterized as economic exchange. The purpose of this paper is
thereforeto uncover the process by whichPIED affects employees’attitudes, includingaffective organizational
commitment andjob satisfaction, by examiningthe mediating roles of both social and economic exchanges.
Design/methodology/approach –To test the hypothesized mediating model, this study conducted a
three-phase, time-lagged questionnaire survey and collected data from 545 full-time employees. The model
was tested based on structural equation modeling with a bootstrap test of indirect effects.
Findings –In line with social exchange theory, the findings showed that social exchange perceptions
positively mediated the relationships between PIED and affective commitment/job satisfaction, whereas
economic exchange perceptions negatively mediated them. Additionally, social and economic exchange
perceptions were found to partially mediate the relationship between PIED and affective commitment but
fully mediate the relationship between PIED and job satisfaction.
Practical implications –These results suggestthat employers would benefit from investing in employee
development,provided workers see the traininginvestment as the employer’ssideofsocialexchange,whichin
turn leadsto increased affective commitmentand job satisfaction.When employers do not achievethe expected
returns fromthe training investment, theyshould check not only hard data(e.g. training attendance rate,hours
of training, etc.)but also soft data (e.g. employees’perceptionsof training investment, social exchange, etc.) by
conducting employee surveys and communicating with line managers.
Originality/value –The main contribution of this study is that it provides important empirical support for
socialexchange theory in the contextof organizational traininginvestment and employees’attitudinaloutcomes,
by directly testingthe positive mediating role ofsocial exchange and the negative roleof economic exchange.
Keywords Quantitative, HRM practices, Affective commitment,
Perceived investment in employee development, Social exchange, Economic exchange
Paper type Research paper
Introduction
In an era of fierce global competition, organizations are increasingly relying on their human
resources (HR) to become competition in the global market. Adopting successful HR practices
has become increasingly important in enabling firms to maintain competitive advantages,
particularly through accumulating valuable, rare, inimitable and non-substitutable employees
(Barney, 2001). Currently, many organizations around the world find themselves in a turbulent
environment; therefore, what firms require of each individual is constantly changing. Both
researchers and practitioners are dedicating greater attention to employee training and
Personnel Review
Vol. 48 No. 2, 2019
pp. 306-323
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-06-2017-0174
Received 10 June 2017
Revised 10 February 2018
31 July 2018
Accepted 23 August 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
This study was supported by funding from JSPS Grants-in-Aid for Scientific Research (Grant Nos
17H02564, 16KT0124 and 26285091).
306
PR
48,2
development activities that enable firms to increase HR flexibility in terms of employees’skills
and behaviors( Bhattacharyaet al., 2005; Beltrán-Martín and Roca-Puig, 2013). As Bowen and
Ostroff (2004) emphasize, a firm’s actual investment in HR can be effective onl y when
employeesunderstand thattheir company is investingin them. This paper therefore highlights
the concept of perceived investment in employee development (PIED), which refers to
“employees’beliefs about the organization’s commitment to improving their competence and
enhancing their marketability, bothinternally and externally”(Lee and Bruvold, 2003, p. 983).
For the last decade, researchers have attempted to analyze the inner mechanisms by
which PIED influences employee attitudes and behaviors (Koster et al., 2011; Kuvaas and
Dysvik, 2009). Most of these studies have discussed these mechanisms from the
perspective of the norm of reciprocity (Gouldner, 1960), which is the essence of social
exchange theory, suggesting that PIED causes employees to feel greater sense of
obligation towar d their organization, which in turn elicits enhanced employee attitudes
and behaviors. Indeed, prior studies have generally demonstrate d positive relationship s
between PIED and job satisfaction (Koster et al., 2011), affective commitment (Kuvaas and
Dysvik, 2010), intention to stay (Koster et al., 2011) and in- and extra-role behaviors
(Kuvaas and Dysvik, 2009).
However, the process by which employees respond to their organization’s investment in
employee development is unclear (Song et al., 2009). In particular, although studies based on
social exchange theory presume that organizational training investment will influence
employee outcomes through employees’social exchange perceptions, they have not directly
tested the mediating role of social exchange (Hom et al., 2009). Furthermore, most studies
have focused only on one type of exchange (i.e. social exchange) and have not considered
another type of exchange characterized as economic exchange (Shore et al., 2006, 2009).
Economic exchange is a state in which “transactions between parties are not long term or
ongoing, but represent discrete, financially oriented interactions”(Shore et al., 2006, p. 839).
Unlike social exchange, which incorporates a long-term, trust-based and reciprocal
relationship between employees and organizations, economic exchange invo lves a
relationship that is characterized by “a set of financial and material organizational
obligations in exchange for employee fulfillment of job duties”(Shore et al., 2009, p. 702).
Prior studies have demonstrated both the conceptual and empirical distinctiveness of social
and economic exchanges (e.g. Shore et al., 2006) and have argued that these exchange
processes in the employee–organization relationship should not be identical (e.g. Shore et al.,
2009; Song et al., 2009; Tsui et al., 1997). Thus, extending this notion explored in the
exchange literature to employee development and training settings, we intend to offer
insights regarding the role of both social and economic exchanges in the relationship
between PIED and employees’work attitudes, by directly and simultaneously assessing the
functioning of these exchanges.
The main objective of this study, therefore, is to uncover the exchange process by
examining whether or not and how organizational training investment relates to employees’
social and economic exchange perceptions and how these perceptions relate to employee
outcomes. Specifically, we proposeand test the mediating mechanismsof social and economic
exchanges in the relationship between PIED and employees’work attitudes, including
affectivecommitment and job satisfaction( Figure1). This model was tested usingthree-phase
time-lagged data derived from Japanese employees of privately owned firms.
A potential contribution of this study is to provide the PIED literature with empirical
evidence on employee–organization exchange mechanisms, by directly and
simultaneously examining the mediating roles of social and economic exchanges in the
link between organizational training investment and employee outcomes. According to
social exchange theory, the basis of any exchange relationship can be described in terms
of either social or economic principles (Blau, 1964). Specifically, Shore et al. (2009) argue
307
Social and
economic
exchange
To continue reading
Request your trial