Int. J.

of Human Resource Management 11:2 April 2000 366-387

The impact of the employee-organization relationship on temporary employees' performance and attitude: testing a Singaporean sample

William L Koh and Lay Keow Yer

Abstract Following the framework proposed by Tsui et al. (1997), this research paper examines the impact of the employee-organization relationship on temporary employees" job perfomiance, turnover intention, overall job satisfaction, aifective commitment, perception of faimess and perception of work options. Data were collected from 191 temporary employees from seven employment agencies in Singapore. Analyses conducted revealed that empioyee responses do vary under the four types of relationship (quasi-spot contract, under-in vestment, mutual inveslmeni and over-investment). In general, both mutual investment and over-in vestment relationships were associated with higher levels of performance and more favourable attitudes than either the under-invcstmeiit or quasi-spot contract. Specifically, temporary employee.s under the mutual investment and over-investment relationships have better job performance, a higher level of affective commitment to the agency, improved overall job satisfaction, higher perception of faimess, higher perception of work options and lower turnover intentions. Furthermore, these finding were obtained even after controlling for the effects of company tenure and job level on employee performance and attitudes. The results highlight ihe importance of employee-organization relationships in eliciting the desired temporary employee outcomes. Practical implications were drawn for hutnan resource practitioners and employment agencies on how best to manage temporary employees. Some limitations and suggestions for future research were discussed. Keywords Employment relations; temporary workers; job satisfaction; tumover; perceived faimess; Singapore. Introduction The use of temporary workers is increasingly becoming a permanent feature of the modem workplace. In America, roughly one person out of four in the workforce is employed as a temporary worker (Albrecht, 1998). In Singapore, the proportion of temporary workers in the labour-force has increased from 2.8 per cent in 1994 to 3.3 per cent in 1997 and this upward trend is expected to continue into the near future (Ministry of Labotir, 1994, 1997). As the number of temporary workers increases, a consensus is Assistant Professor William L Koh. Department of Organisational Behaviour, Faculty of Business Administration, National University of Singapore, 10 Kent Ridge Crescent. Republic of Singapore. Singapore 119260 (tel: +65 8743190; fax: +65 7755571; e-mail: tbakohlk@nus.edu.sg)
The Intemational Joumat cf Human Resource Management ISSN 0958-5192 print/ISSN 1466-4399 online 2000 Taylor & Francis Ltd

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brewing among many human resource managers that the employing organizations should not be the only ones bearing the responsibility for developing this temporary workforce (Albrecht, 1998). It is important for employment agencies to shoulder some of the burden. In fact, the faster growth of agency-hired temporary workers as compared to organization-hired temporary workers has sparked off interest in studying how employment agencies can better manage their temporary workers {IRS Employment Trends, 1998; Purceil and Purcell. 1998). There is a growing recognition of the need to show that employment agencies are not exploitative 'middle-men' but are in the business of finding work for, as well as upgrading the skills of, people who are the companies' primary asset (Kosters, 1997). As noted by Tunde Johnson, commercial director at Adecco Alfred Marks. "People are Adecco"s maiD asset and the company is very keen to look after them* {IRS Employment Trends. 1998). As such, many employment agencies are beginning to see the need to shoulder part of this developmental responsibility through the provision of skills training for their temptirary workers. When agencies improve their workers" skills, they can send them on better-paying job assignments and better service their business clients. So. training is an avenue for employment agencies to add value to their temporary employees, making them more promotable and attractive to employing organizations (Albrecht, 1998). The recent regional economic downtum also presents a real opportunity for employment agencies, since companies are beginning to outsource and employ more temporary staff (The Straits Ttmes, 1997, 1998a). To meet employing organizations' strict demands on the skill level of temporary workers, investing in training is definitely a must for employment agencies to gain a competitive edge over their competitors (Davidson, 1997). Moreover, training programmes also help to build loyalty among temporary workers so that those who prefer to remain as temps will continue to stay with the same employment agency (Albrecht, 1998). Investment in training coupled with a competitive pay and benefits package will also enhance the agency's reputation in the employment service industry as a leading staffing company which provides quality services and is concemed with its temporary workers' welfare. From the employing organizations' point of view, training provided by employment agencies would mean that they could depend on incoming temporary workers having a predetermined level of skills necessary to perform the job. With relevant training, temporary workers will be able to 'hit the floor running" when they arrive on the job (Feldman et ai. 1994). Finally, from the worker's perspective, training enables them to obtain better paying jobs and be eligible for career advancement at little or no financial cost (Albrecht, 1998). Much research has been done on the effects of company-provided training on regular employees" performance and attitudes (e.g. Bartel, 1991, 1994, 1995; Brown, 1990; Knieger and Rouse. 1998). However, there is a clear lack of research into the effects such investment has on temporary employees' performance and attitudes. Consequently, this .study aims to look into this area by building on the research done by Tsui et III. (1997) to examine the role of four types of employee-organization relationship (quasi-spot contract, under-investment, over-investment and mutual investment) as determinants of performance and attitude variables in a proposed employment relationship model, and to test this model in the employment service industry in Singapore. After reviewing the relevant literature, the research method and findings of this study will be presented. The paper then ends with a discussion of the implications of the findings.

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Literature review In today's business environment, the nature of employment relationships is changing. Employees can no longer rely on their company to provide lifetime employment even if they perfonn their job well. Increasing international competition and the rapid pace of technological change are favouring organizations that are lean, fast and flexible (Miles, 1989). To maximize organization flexibility, while maintaining or increasing employees' performance, various forms of employment relationships have evolved (Arthur. 1992; Atchison, 1991; Lawler, 1988; Osterman, 1988; Walton, 1985). Employment relationships are exchange relationships, which can be characterized as contractual (Rousseau and Parks, 1993). The term 'employment-organization strategy" is used to capture the employer's perspective on the employment reialionship (Tsui et ai, 1995). An employee-organization relationship strategy encompasses the employer's expectations about explicit contributions from employees and the inducements that it offers to its employees. Such an employee-organization relationship is different from a psychological contract (Argyris. 1960; Levinson et ai, 1962; Kotter, 1973; Schein. 1980; Robinson et ai, 1994; Parks, 1992; Rousseau. 1989, 1995; Rousseau and Parks. 1993). The psychological contract includes employees" perceptions of the reciprocal obligations existing with their employer (Rousseau. 1989; Shore and Tetrick, 1994). As such, the employee has beliefs regarding the organization's obligations to them, as well as their own obligations to the organization. The employer's perspective on the relationship is our focus in this article since it is usually the employer who specifies the contents of the employment contract and the human resource policies. However, it is important to note that the HRM practices adopted under different t^elationships may convey different tnessages to employees, thus affecting their psychological contract with the employers (Guzzo and Noonan 1994). The conceptual background for the employee-organization relationship framework resides in exchange theories. Although different exchange theories vary in tenns of their objectives and approaches, all of them share the common assutnption that individuals assess the desirability of interaction with others based on the interpersonal value of such interaction (Blau. 1964; Ekeh, 1979; Fearce and Peters. 1985). Most organizational research conducted on exchange relationships examined ihe obligations and cooperation between two parties that are concerned with their implied contractual relationships (Rousseau and Anton. 1988; Weick, 1979). For the present study, we have adopted Tsui et al.'s. (1997) definition of employeeorganization relationship which focuses on the relative balance between the inducements offered by an employer and the contributions expected of its employees, as defined from the employer's viewpoint. For the purpose of our study, the terms 'employer/organization/company' and 'employee' will refer to the employment agency and the temporary worker respectively. Tsui and colleagues (1997) utilize the idea of inducemenl-contribution (Bamard, 1938; March and Simon, 1958), and the framework of Tsui et ai (1995) to propose four types of employment relationship that an employer can adopt: quasi-spol contract, mutual investment, over-investment and under-investment. In their model, they postulated that alternative employee-organization relationships would impact upon the performance and attitudinal responses of employees. The current research attempts to extend their work by investigating how different employee-organization relationships would relate to employees' responses, such as job performance, overall job satisfaction, affective commitment, tumover intentions.

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Woik-Rcblcd Fa JobLcvd Company Tenure

Figure 1 Conceptual model perception of fairness and perception of work options. Work-related factors, such as job level and company tenure, are posited to affect certain employees' responses. As such, they are included as control variables in the model. Figure I illustrates the basic conceptual mtidel that underlies this paper. The quasi-spot contract is based on a pure economic exchange model, which aims to achieve market-like flexibility. The employer provides short term, economic inducements in exchange for narrow and well-specified contributions by the employee (Tsui el at., 1997). The employee is not expected to be concerned about the company's overall performance. Likewise, the employer offers monetary rewards to the employee with no commitment to provide any long-term investment or engage in long-term relationship with the employee. As such, the exchange is essentially short term and closed ended for both parties and the relationship Is considered "balanced". Similar conceptual equivalents of this employee-organization relationship include the industrial model (Osterman, 1988). the cost control strategy (Walton, 1985), as well as the 'control' human resource system (Arthur. 1992. 1994). The mutual investment relationship, on the other hand, resembles a combined economic and social exchange, which attempts to develop a clan-like flexibility (Tsui et al., 1997). Under such a situation, employers provide inducements that go beyond short-term monetary rewards. They offer employees open-ended and broad-ranging rewards, including a commitment to invest in the employees' training or career. In exchange, the employee's obligations and contributions to the organization include working on job assignments that fall outside prior agreement.s or expertise, assisting colleagues, accepting job transfers and willingness to regard the organization's interests as being as important as their core job duties. This is also a balanced exchange relationship since there is similar degree of openended and long-term investment by both employee and employer. Conceptual equivalents of this employee-organization relationship include the employment relationship (Ouchi. 1980) and the salaried model (Osterman, 1988). Other related work encompasses the 'commitment' human resource system (Arthur, 1992, 1994), the high

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involvement approach (Lawler, 1986, 1988), as well as the commitment strategy (Walton, 1985). Tsui et al. (1997) suggested that there are basically two types of unbalanced employee-organization relationship, which include components of both balanced relationships. One is the under-investment relationship where the employee is expected to accept broad and open-ended obligations, while the etnployer revtards with shortterm monetary rewards, with no commitment to a long-term relationship or investment in the employee's training or career. Such a situation tends to yield greater benefits for the employer than employees. The other is the over-investment relation.ship in which the employer offers employees open-ended and broad-ranging rewards including training, and a commitment to provide them with career opportunities, while the etnployee is only expected to perform narrowly specified roles. In other words, employees nuanaged under such a situation would receive considerable training investments from their employei-s without being expected to make contributions beyond their current job duties. In contrast with the under-investment situation, this relationship is more favourable to employees than employers. Examples of organizations that operate under this relationship are organizations bound by trade union contracts and certain government bureaucracies. Research hypotheses Tsui et al. (1997) found that employees' perfonnance on basic tasks differs among the four employee-organization relationships. In the quasi-spot relationship, the employee is able to focus his or her full attention on the core job since he or she is not required to engage in activities outside his or her current job duties or expertise. Therefore, it is posited that employees' job performance would be high under the quasi-spot contract type of employee-organization relationship. On the other hand, such performance will be unlikely in the over-investment type of relationship even though employees are also not expected to contribute their attention to activities outside their current job scope. Adams (1965) described such a situation as a case of an 'overpayment' circumstance. He explained that higher invesmients tnade by the organization might not necessarily lead to an exceptionally good performance by employees because they tend to rationalize the overpayment. Thus, such a relationship may not give employees an incentive to pertbrm better. Similarly, employees' job performance of core tasks is also expected to be low in the under-investment relationship. There are few benefits for employees in performing well since they have to devote attention to open-ended task activities while the organization reciprocates with low investments. Moreover, by not performing well, employees are also able to restore a certain level of psychological equity into the 'unbalanced' relationship (Adams. 1965). Last of all. employees' job performance should be lower under the mutual investment employee-organization relationship as compared to the quasi-spot relationship because of the broader involvement that employees under the former relationship must undertake. The study conducted by Tsui and colleagues (1997) reported that the three types of employee-organization relationship were indeed associated with a higher level of job performance. This leads us to tbe following hypothesis: Hypothesis 1: Temporary employees' job performance on core tasks will be highest in the quasi-spot contract relationship, second highest witb mutual investment and third highest with over-investment. It will be lowest in the under-investment relationship.

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We also predict that employees' overall job satisfaction will be lowest in the underinvestment relationship. In the under-investment arrangement, the employer expects employees to engage in activities that are outside their current job duties or expertise, as well as to be concemed with the overall well-being of the organization. However, the employer does not offer rewards and investments such as training to their employees. As such, employees tend to view the organization as substantially violating their psychological contract in this "unbalanced' relationship since the employer fails to reciprocate for what the employees have done (Shore and Tetrick. 1994). What employees perceive to be a relational psychological contract where their obligations to the organization are broad and open-ended is essentially a transactional psychological contract from their employer's viewpoint (Shore and Tetrick, 1994; Beard and Edwards. 1995). Thus, contingent workers who desire open-ended rewards and high investments from their employers are likely to experience lower job satisfaction (Beard and Edwards, 1995). Under both balanced employee-organization relationships (quasi-spot contract and mutual investment), job satisfaction is likely to be higher since employees are able to achieve psychological equity in both relationships. Employees' job satisfaction under the over-investment relationship is also posited to be higher thim the under-investment relationship because of the greater benetits employees in the former enjoy. Hence, we propose; Hypothesis 2: Temporary employees' overall job satisfaction will be lowest in the under-investment relationship as compared to the other three employee-organization relationships.

Employees are known to have different affective responses under different employee-organization relationships (Lawler, 1988; Walton, 1985; Ouchi. 1980). In particular, higher levels of affective commitment on the part of employees have been observed in both the over-investment and mutual investment relationships as compared to the other two relationships (Tsui et al.. 1997). Under the over-investment and mutual investment relationships, open-ended investments and inducements offered by employers perpetuate employees' feelings of personal obligation, gratitude and attachment to the organization (Blau, 1964; Emerson. 1981). Furthermore, employers adopting these relationships also demonstrated higher commitment to invest in training and offer more benefits to their employees. And studies have shown that the provision of training to employees is associated with high commitment to the organization (Tannenbuum et al., 1991; Feldman et al., 1994). Moreover, research by Feldman and Doerpinghaus (1992) revealed that providing fringe benefits to temporary employees enhances their loyalty and commitment to the employment agency, Accordingly, we propose: Hypothesis 3: Affective commitment by temporary employees to the employment agency will be highest under the mutual investment and overinvestment employee-organization relationships and lowest under the quasi-spot contract and under-investment relationships.

Tsui ct al. (1997) also observed that employee's intention to stay with the organization was higher in the case of the mutual investment and over-investment relationships as compared to the quasi-spot contract and under-investment relationships. Clearly, it is reasonable to expect that employees under the over-investment and mutual

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investment situations will be less likely to quit because of the higher investments in training and benefits they enjoyed. Besides, studies have .shown that the provision of training to employees is associated with higher employment duration and continuity (Gritz, 1993). In addition, turnover intentions will be lowest in the over-in vestment situation since the 'unbalanced' relationship benefits employees more than employers. In contrast, intention to quit is likely to be highest in the under-investment relationship since the exchange is less favourable to the employee than to the employer. To restore psychological equity to the relationship, the employee feels less obligated to continue employment with the employer and is most likely to leave the organization when altemative employment options become available. Hence, we propose: Hypothesis 4: Tumover intention will be highest in the under-investment relationship, next highest under the quasi-spot contract, and next highest under mutual investment. It will be lowest in the over-investment employee-organization relationship.

According to Tsui et ai {1997), employees' faimess perceptions may also be affected by the employee-organization relationship. They suggested that perception of faimess would be especially low in the under-investment relationship as compared to the rest of the relationships. Such a relationship is unbalanced since employees have to make open-ended contributions, which are not reciprocated by their employer. Thus, they are unlikely to perceive faimess in such a situation. Even though the over-investment relationship is also unbalanced, such low faimess perception is unlikely since the imbalance benefits employees. Likewise, employees will also perceive faimess in both quasi-spot and mutual investment relationships because of the balance in both exchanges. Therefore, we propose: Hypothesis 5: Temporary employees' perception of faimess will be lowest in the under-investment relationship as compared to the other three employee-organization relationships.

Finally, we predict that employees' perception of work options will differ among the four employee-organization relationships. According to Albrecht (1998), the commitment of employment agencies to provide training to their temporary employees helps to upgrade their skills level. This would in tum increase their probability of obtaining work options such as better-paying job assignments and promotions within the client organizations that they are currently working for. Furthermore, she contends that training enhances the market value of temporary workers and, thus, improves their chances of converting to being regular employees. This is possible, as temporary work is increasingly becoming an avenue for client organizations and employees to size each other up before deciding to enter into a more stable employment relationship. The proposed four types of employee-organization relationship involve different degree of investment in employees" training (Tsui et ai. 1997). In particular, employees in organizations that operate under the mutual investment and over-investment relationships receive higher training investments than those in organizations that adopt the under-investment and quasi-spot contract relationships. For all these reasons, we propose: Hypothesis 6: Temporary employees' perception of work options will be higher under the mutual investment and over-investment relationships and lower in the quasi-spot contract and under-investment relationships.

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Work-related factors such as job level and company tenure are observed to have an effect on employees' attitudes and affective outcomes. There has been consistent evidence to show thai employees' attitudes and affective outcomes vary according to their jobs (Good et ai, 1996). Stellman et ai (19B7) suggest that a possible reason for this phenomenon could be the different workload, decision latitude and variety in the tasks perlbrmed by employees at different job levels. In a study by Beehr and Drexler (1986). a ptisitive correlation between hierarchical level and job satisfaction was found, Similar results that indicated a significant positive relationship between job levels and satisfaction were also reported in other studies (Szilagyi et ai, 1976; Harber et ai. 1991). In another research conducted by Carlopio and Gardner (1995), managetial level staff rcponed significantly higher overall job satisfaction as compared to clerical workers. Furthermore, clerical workers expressed a greater intention to quit. Likewise. Igbaria and Siegal (1992) observed a negative correlation between job level and intention to leave. In a meta-analysis by Mathieu and Zajac (1990), job level was found lo be positively related to organizational commitment. Similarly, in another study by Sommer et al. (19%). hierarchical job level was e.stablished lo be positively and significantly related to organizational commitment. Last but not least, company tenure was also included as a control variable in the model. It has been found to be positively associated with employees' tumover intentions (Tsui et ai, 1997; Darden et ai, 1987) and actual tumover (Hom and Grifieth. 1995; Kilpatrick and Felmingham, 1996). Moreover, it is also reported to be positively related to job satisfaction and organizational commitment (Igharia and Greenhaus, 1992; Zeffrane, 1994). The better jobs and higher salaries enjoyed by older employees with longer company tenure may provide an explanation for the positive relationship that company tenure has with organizational commitment and overall job satisfaction. Methodology Data collection and research methods The target population for this study includes any temporary employee currently on the payroll of any employment agency operating in Singapore. The sample for the survey was randomly drawn from the Buying Guide of the Singapore Yellow Pages, July 1997 edition. A letter of invitation to participate in this study was faxed to each of the sixtyone selected employment agencies. Subsequently, the final sample consists of 191 temporary employees from seven employment agencies located there. For the purpose of the research, two sets of mailed questionnaires were u.sed. One set was given to managers to collect data regarding the human resource practices employed by their employment agencies. The other set was used to assess the psychological constructs from temporary etnployees. This avoids common method variance, which arises when data are collected from the same source, thus inflating the statistical significance of the relationships between variables. Both sets of questionnaire were administered from June to August 1998. In general, the demographic profile of the respondents was comparable to Ihat of all the temporary employees in the employment agencies. Of the 191 respondents, more than three-quarters (77.5 per cent) of them are females. The Chinese made up the largest group (67 per cent), followed by the Malays, Indian and other ethnic groups. The respondents were predominantly single (66.5 per cent) with 68.1 per cent of them below

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30 years of age. In comparison, the national sample has more married (63.4 per cent) and older (more than 50 per cent between the ages of 30 and 49) temporary workers. A possible explanation for this difference could be due to the fact that the research was conducted during the June school holidays where more students join the temporary workforce. Furthermore, 47.7 per cent of the respondents had an education level of ' O ' level or below. About half of them (49.7 per cent) had been with the employment agency for six months or less, while another 11 per cent had been there for more than two years. A majority of the sample was clerical, secretarial, entry-level or service employees (77.5 per cent) and 53.9 per cent of the respondents received a gross monthly salary between S$l.O(X) and S$ 1,999, There were a total of 63 {33 per cent) respondents who participated in training offered by their employment agency. Measures Independent variable Employee-organization relationship was a categorical variable used to represent the four employee-organization relationships, which were formed through two dimensions: (1) employer-expected employee contributions and (2) investments made by the employer in the employee (Tsui et al., 1997). Employee contribution was measured by the extent to which the employee is expected to undertake activities in addition to pertbrmance in his or her own job. Two human resource practices were developed by Tsui et ai (1997) to measure the first dimension. In the context of our research, situations where temporary employees are expected to accept job assignments outside their primary area of expertise, and give suggestions to improve the agency's overall operations were classified as contributions beyond their current job tasks. Managers were asked to indicate the extent to which their temporary employees are expected to accept job assignments outside their primary area of expertise. Response categories ranged from 1 (never) to 8 (extremely often). Managers were also asked to indicate the number of suggestions given by their temporary employees to improve the agency's overall operations. Consolidating the latter information from all agencies, the responses were collapsed into an 8-point interval scale to represent the range in the number of suggestions made by temporary employees. The mean is then calculated for this dimension with a higher score representing greater contributions to be expected from temporary employees by agencies. The second dimension (employer investment) was measured by the extent to which an employer invested in the employees. In the context of temporary employees, live items were adapted from Tsui et al. (1997) to measure this dimension. Managers were asked to indicate the number of training hours, dollar amount of training and fringe benefits spent on a typical temporary employee. Responses for each item were then collapsed Into an 8-point interval scale to denote the amount of each investment made by the agency on their temporary employees. Possible responses for the items 'Provides career counseling and planning assistance to temporary employees" and "Uses sophisticated databases to track temporary employees' skill development" ranged from 1 (none at all) to 8 (to a very large extent). Scores for the five items on this dimension were then summed and averaged to get an overall index. The higher the score, the greater the amount of investment made by the employment agency in their temporary employees. Tsui et al. (1997) used the scores on the two dimensions (employer-expected employee contributions and investments made by employer) to create the four

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Under-investment

Mutual Investmeat -1r

Median

"

Over-investment

Quasi-spot Contract

Median

Employer investments 2 Four types of employee-organization relationship

employee-organization relationships by performing a median split on each dimension (see Figure 2). According to Dubin (1978), such a method creates an approximation of a theoretically defined categorical measure. In the current research, employment agencies with scores below the median on both dimensions were defined as adopting the quasi-spot contract relationship. Agencies with scores above the median on employer-expected employee contributions but below the median on employer investment were defined as operating under the under-investment type of relationship. Agencies with scores below the median on employer-expected employee contributions but above the median on employer investment were perceived to be working under the over-investment relationship. Finally, agencies with scores above the median on both dimensions were defined as adopting the mutual investment type of relationship. Dependent variables The dependent variables are job performance, Tumover intention, overall job satisfaction, affective commitment, perception of faimess and petception of work options. Following Tsui et at. (1997), job performance and turnover intention are included as performance variables, whereas overall job satisfaction, affective commitment, perception of faimess and perception of work options are included as attitude variables. The scale measuring job perfonnance was adapted from the study by Tsui *-/ al. (1997). The first six items measure the perceived quantity, quality and efficiency of temporary employee's basic task performance. On these items, temporary employees indicated the extent to which they agti^cd that their performance on the core job was higher than that of other employees in a similar job. Tsui et al. (1997) also included five additional items adapted from Greenhaus et al. (1990) to measure core task performance, which assessed the temporary employee's perception of his or her overall ability, judgement, accuracy, job knowledge and creativity in performing his or her assigned job.

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The scale measuring employees' turnover intention was adapted from the Michigan Organisational Assessment Questionnaire (Seashore et at.. 1982; Camman et at.. 1979) and it includes three items, i.e., 'How likely is it that you will be actively looking for a new employment agency in the next year?'; 'I often think about quitting this employment agency'; and i will probably look for a new employment agency next year'. Overall job satisfaction was measured using the five-item scale developed by Hackman and Oldham (1975). The items, which have a 7-point response format, include 'Generally speaking, 1 am satisfied with this job'; '! frequently think of quitting this job'; and 'I am generally satisfied with this kind of work I do in this job". The scale dealing with etnployees" affective commitment was adapted from the study by Tsui et a!. (1997). It includes nine items taken from the affective subset of the Organizational Commitment Scale reported in Angle and Perry (1981), such as 'I am willing to put in effort beyond the normal standards for the success of the agency"; 'I tell my friends that this agency is a great place to work for'; and 'I find that my values and the agency's values are very similar'. The perception oi' fairness scale was also adapted from Tsui ei al. (1997) and it includes sixteen items, such as 'The process this agency uses to evaluate my performance is fair'; "The process this agency uses to determine my salary is fair"; and 'The process this agency uses to make decisions about my job assignments is fair'. Finally, the scale measuring employees' perception of work options was specially developed for the study and it consists of three items, i.e. 'How likely do you think you will be able to get better paying job assignments'; 'How likely do you think you will be able to convert from temporary to full-time regular employee in the current organization that you are working for"; and 'How likely do you think you will get promoted in the current organization that you are working for?'. All three items of this construct loaded highly into the hypothesized structure, thus confirming the inclusion of the construct in the analyses. Reliability analysis showed that all these six scales had Cronbach alphas ranging from .79 to .98. Principal component analysis with varimax rotation also indicated that all the items fell in line with the hypothesized factor structure with factor loadings ranging from .38 to .85. Control variables Two work-related factors were used as control variables, namely, job level and company tenure. Results Table 1 shows the means, standard deviations, correlation coefficients and the reliabilities of the research variables. Job level was significantly and positively correlated with job performance (r = .18, p < .05) and perception of work options (r = .29, p < .001). Company tentire was also observed to correlate strongly with overall job satisfaction (r = .20, p < .01). affective commitment (r = .20. p <.O1) and turnover intention (r ^ .16, p < .05). These results confirmed the validity of job level and company tenure as covariates since an effective covariate must be highly correlated with the dependent variables but not correlated with the independent variable (Hair et al., 1995). Therefore, univariate analysis of covariance (ANCOVA) and multivariate analysis of covariance (MANCOVA) can be employed in the analysis to account for the influence of the two covariates.

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The International Journal of Human Resource Management "ftble 2 Results of MANCOVA" Variables Performance variables Attitude variables Notes ** p<.01; ** p<.001. Witks' lambda .81 .83 MANOVA F 6.76*** 2.94**

Prior to testing the hypotheses, following Tsui et /.'s approach (1997), a median split was performed on the two dimensions (employer-expected employee contributions and employer investments) to create the four employee-organization relationships. This categorization produced the following distribution of employee-organization relationships across the seven employment agencies: three agencies with quasi-spot contract; two agencies with the under-investment relationship; one agency with the mutual investment relationship; and one agency with the over-investment relationship. Hence, more employment agencies operated under the two balanced employee-organization relationships. To test each hypothesis, we conducted a multivariate analysis of covariance (MANCOVA), followed by univariate analyses of covariance (ANCOVA) and a Bonferroni procedure (a multiple comparison procedure) to assess the significance of group differences on each variable. MANCOVA was used to estimate the main effect of the employee-organization relationship on all the performance variables as a set, as well as all the attitude variables as a set, after accounting for any effects due to the two covariates (job level and company tenure). From Table 2. MANCOVA results for the performance variables (Wilks* lambda = .81, F(2. 185) = 6.76. p < .(X)l) and attitude viiriables (Wilks' lambda = .83, F(2, 185) = 2.94. p < .001) are significant. Therefore, even after the consideration of company tenure and job level differences, temporary employees' performance and attitudes can still be predicted from the employee-organization relationship. In addition, as indicated in Table 3, the ANCOVA F-tests were significant for all the performance and attitude variables. Hypothesis I was only partially supported (F = 10.05. p < .001). It predicted that temporary employees' job performance on core tasks would be highest in the quasi-spot contract, followed by those in the mutual investment, over-investment and under-investment, relationships, respectively. Instead, results in Table 3 showed that job performance was highest under the mutual investment relationship, followed by over-investment, quasi-spot contract and under-investment relationships, respectively. Using the Bonferroni procedure, all the pairwise differences among the four employee-organization relationships on job pertbrmance were significant. Hypothesis 2, regarding temporary employees" overall job satisfaction, was partially supported (F = 5.45, p < .01). Temporary employees' overall job satisfaction under the under-investment relationship was indeed lower as compared to the quasi-spot contract, mutual investment and over-investment relationships. Bonferroni analyses revealed that significant differences were observed between under-investment and mutual investment relationships (t ^ -3.67. p < .001), as well as under-investment and over-investment relationships (t - -2.99, p < .01). However, the difference in employee overall job satisfaction between under-investment and quasi-spot contract relationships was not significant (t = 1.80, p > .05).

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Table 3 ANCOVA analyses of employee performance and attitudes under four employeeorganization relationships' Employee-Organization relationsips Dependent variables Job perlormancc Mean SD Overall job satisfaction Mean SD Affective commitment Mean SD Turnover intention Mean SD Perception of fairness Mean SD Perception of work options Mean SD Hypothesis I 5.22, (.90) 2 3.36, (.70) 3 4.50^ (1.36) 4 2.79, (1.63) 5 4.28, (1.07) 6 3.51^ (1.32) 3.67,, (1.58) 4.25, (1.40) 3.88,, (1.33) 3.06* 3.86, (1.62) 4.68, (1.27) 4.69, (1.29) 3.74* 3.69 (1.81) 2.12^. (1.00) 2.79,, (1.54) 6.86*** 3.82, (1.91) 5.09, (1.24) 4.74, (1.02) 7.02*** 3.08, (1.07) 3.72, (.78) 3.63, (1.00) 5.45** 4.88,, (1.30) 5.89,. (.85) 5.37, (.79) i0.05*** Quasi-spot contract Underinvestment Mutual investment Overinvestment ANCOVA F

Notes ' Means with the same subscript are not significantly different from each other at the .05 level. * p<.05: ** p<.01; *** p<.001.

Hypothesis 3 was fully supported (F = 7.02, p < .001). Affective commitment to the employment agency was Indeed higher among temporary employees in the overinvestment and mutual investment situations than among those working under the quasi-spot contract and under-investment situations. Results from the Bonferroni analyses showed that there were significant differences between the mutual investment and under-investment relationships (t = 4.41. p < .001), as well as the over-investment and under-investment relationships (t ^ 3.08, p< .01). Affective commitment under the quasi-spot contract was also significantly lower than that of the over-investmeni and mutual investment situations (t = - 1 . 8 6 . p < .05 and t = -2.32, p < .05. respectively). Hypothesis 4. relating to temporary employees' turnover intention, was also partially supported (F ^ 6.86, p < .(XJl). Results from Table 3 indicate that the underinvestmeni relationship was in fact associated with higher turnover intentions among temporary employees as compared to the quasi-spot contract, mutual investment and

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over-investment relationships. However, contrary to prediction, it was the mutual investment situation rather than the over-investment situation in which intention to quit was the lowest. Moreover, results from the Bonferroni procedure showed that tumover intentions under the over-investment circumstance was not significantly different from that of the quasi-spot contract and mutual investment circumstances (t = .02, p > .05 and t = 1.88, p > .05). But turnover intentions for the under-investment relationship were significantly higher than for the quasi-spot contract (t = 3.11, p < .05), mutual investment (t = 4.60, p < .001) and over-investment relationships (t = 2.62, p < .05). Likewise, employee tumover intentions for the quasi-spot contract and mutual investment relationship were significantly different from each other (t = - 2 . 2 1 , p < .05). Hypothesis 5 postulates that temporary employees' perception of fairness will be lowest in the under-investment type of relationship as compared to the other three employee-organization relationships. As Table 3 shows, the ordering in fact occurred. The under-investment situation was associated with lower faimess perceptions as compared to the quasi-spot contract, mutual investment and over-investment situations. Bonferroni analyses revealed that significant differences were oKserved between the under-investment and mutual investment relationships (t = - 2 . 8 3 , p < ,01), as well as the under-investment and over-investment relationships (t = -2.79, p < .01). However, faimess perceptions under the quasi-spot contract were not significantly higher than in the under-investment relationship (t = 1.64, p > 0.05). Therefore, hypothesis 5 is only panially supported (F = 3.74, p < .05). La.st but not least. Table 3 shows that the ANCOVA F for the perception of work options variable is significant (F = 3.()6, p < .05). However, only the means between the quasi-spot-contract and mutual investment relationship were significantly different from each other (t = 3.01. p < .01). Thus, hypothesis 6 was only partially supported. In conclusion, the final results shown in Table 3 indicate that both mutual and overinvestment were associated with better performance and more favourable attitudes than either the quasi-spot contract or under-investment relationship Discussion and conclusions This study has shown that temporary employees managed under the mutual investment relationship generally performed better and had more favourable attitudes than those managed under the other three relationships. These results are in agreement with those of Tsui et al. (1997). An explanation for this phenomenon could be the higher level of employees' contributions made under the mutual investment relationship as compared to the quasispot contract and over-inve.stment relationships. According to Lawler (1986. 1988. 1992), employee contributions in the form of suggestions to improve an organization's overall operations can be viewed as a form of 'involvement'. In his proposed "high involvement system', it is postulated that employees working under such a system generally perform better, are more satisfied with their work situation and are less likely to leave the company. Furthermore, temporary employees in the mutual investment relationship also enjoyed greater employment agency-provided investment than those managed under the quasi-spot contract and under-investment type of relationships. This provides yei another possible explanation for employees' favourable reactions towards the mutual investment relationship.

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As Dyer and Holder (1988) pointed out, high levels of training investment promote employee performance and cotmnitment to the organization by showing to employees that the management cares about them personally. In the case of temporary employees, acquisition of skills is often one of the primary motivators (Hippel et at., 1997). As such, training programmes provided by employment agencies to enhance their skills would have a significant positive effect on their commitment to the agency, as well as on their work satisfaction. The mutual investment relationship was also associated with a higher employee perception of fairness as compared to the quasi-spot contract and under-investment relationships. Intuitively, fairness perceptions under the mutual investment relationship would be higher than under the under-investment relationship because of the balance in the exchange between temporary employees and employment agencies. In contrast with the mutual investment relationship, the lack of fringe benefits for temporary employees managed under the quasi-spot contract and under-investment situations may also be interpreted as unfair. In fact, temporary workers often resented the fact that employment agencies make significant profits from their labour but offer them few or no benefits (Feldman et at., 1994; Feldman and Doerpinghaus. 1992). On the other hand, fairness perceptions under the mutual investment and overinvestment situations were not different from each other even though the 'unbalanced' situation was more favourable to employees than employers. One reason could be that employees managed under the over-investment situation tend to rationalize the overpayment made by employer. On the whole, the ANCOVA results indicate that temporary employees reacted best to the mutual investment type of employee-organization relationship. This finding is supportive of the results obtained by Arthur (1992, 1994). As mentioned earlier, his proposed 'commitment' human resource system is a conceptual equivalent of the mutual investment relation.ship. In his study, Arthur (1992, 1994) found that steel mills with 'commitment' human resource systems performed better and had lower employee turnover than mills with 'control' human resource systems. Besides, offering employees high levels of involvement, general training, wages and benefits was also observed to be assix:iated with improved employee motivation (Thomas and Velthouse, 1990) and organizational citizenship behaviours (Organ, 1988). The over-investment relationship exhibited somewhat similar results to that of the mutual investment relationship. Our findings indicate that, relative to either the underinvestment or quasi-spot contract relationship, the over-investment relationship resulted in better employee attitudes and performance. Specifically, it obtained more favourable results in employee job performance, overall job satisfaction, affective commitment and perception of fairness and turnover intention. However, turnover intentions among employees under the over-investment situation were not significantly lower than under the quasi-spot contract relationship. In fact, contrary to hypothesis 4. the overinvestment type of employee-organization relationship did not yield the lowest turnover intention as compared to the other three relationships. In a similar fashion, Tsui et at. (1997) also observed that employees under the over-investment condition were perceived by their supervisors and peers to be less dependable in terms of continuation of employment than those under the mutual investment relationship. This observation seems rather counter-intuitive given the generous benefits temporary employees under the over-investment relationship enjoy. An explanation could be that temporary employees view the over-investment condition as 'too good to be true' and, thus, unlikely to last. Moreover, as mentioned earlier, the contributions made by temporary employees under the mutual investment relationship bind them more

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strongly to the employment agency, thus resulting in lower tumover intentions (Lawler, 1988). Perception of work options among temporary employees under the over-investment relationship was not significantly higher than under the quasi-spot contract and underinve.stment relationships. This suggests a weak relationship between the work options construct and the employment relationship. A closer look at the individual items of this construct revealed that they could be influenced by an individual's perception of current economic conditions. Such perceptions may not be easily altered by the human resource policies implemented by employment agencies. For instance, the recent economic crisis has had a negative impact on the overall sentiments of Singaporeans regarding job security {The Straits Times, 1998b). And as more Singaporeans share similar viewpoints about future work options, the effect of the employee-organization relationship on work options may be masked. The results provide general support for what we have termed the under-investment relationship, where open-ended contributions from employees are not reciprocated with equally open-ended investments made by employers. Temporary employees who worked under such a condition showed the worst results in employee job performance, overall job satisfaction, affective commitment, intention to tumover, perception of faimess and perception of work options. This suggests a real cause of worry for employment agencies who need quality temporary workers to gain an edge over their competitors but are unable or unwilling to invest in their employees. The quasi-spot contract was associated with less desirable temporary employees' performance and attitudes as compared to the over-investment and mutual investment relationships. Most of the findings are highly consistent with our hypotheses regarding the quasi-spot contract relationship. However, the hypothesized superior job performance on the part of temporary employees under the quasi-spot contract relationship was not .supported. Instead, both the mutual investment and over-investment relationships were associated with higher levels of job performance. This result is in line with Tsui et al. (1997) who also found that employees managed under the quasi-spot contract relationship exhibited lower levels of job performance than employees who worked under mutual investment and over-investment relationships. In a similar fashion, Arthur (1992, 1994) found that organizations with 'control' human resource systems have lower productivity and manufacturing perfonnance than organizations with 'commitment' human resource systems. And as mentioned earlier, the 'control' and 'commitment' human re.source systems are equivalent to the quasi-spot contract and mutual investment relationships respectively While the lack of fringe benefits probably accounted for their poor work attitudes, the lack of training investment by the agencies in Singapore must have accounted for the ptwrer performance of those who operated under the quasi-spot contract, This explanation is supported by Krueger and Rouse (1998) who found that the average improvement in self-reported job performance is higher among trainees than among non-trainees at a service company. In their research, it was shown that an increa.se in the number of training hours could enhance employees" perception of their ability to do the job. Therefore, temporary employees' reaction to the quasi-spot contract relationship may not be entirely surprising. All these findings highlight the important role played by the employee-organization relationship in enhancing the performance and attitudinal responses of temporary employees. The results show that both the mutual investment and over-investment relationships were associated with higher levels of employee performance and more favourable attitudes than either the under-investment or quasi-spot contract relation-

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ships. The outcomes were most favourable when employees were also expected to make contributions in addition to their current job assignments. In contrast, the lower levels of investment made by employment agencies adopting the quasi-spot contract and the under-investment relationship involved a trade-off. That is, employment agencies may have to sacrifice temporary employees' pertbrmance on the job. Although reduced investments made by agencies may lower costs, decreased employee performance and commitment under these employee-organization relationships may have a negative effect on employment agencies in the long run. This suggests that investments made by employment agencies in their temporary employees may be able to improve their performance and attitudes. These findings have a few practical implications. First, employment agencies whether in Singapore or elsewhere, should offer their temporary employees open-ended rewards such as training, career development, as well as fringe benefits, since both mutual investment and over-investment employeeorganization relationships entail broad and open-ended obligations on the part of the employer. While incorporating training as part of their company's policy, employment agencies can consider adopting a skills focus (Hippel et al., 1997). Job assignments could be structured in such a way that task variety is enhanced. This would ensure that adequate opportunities exist for temporary employees to build up their competencies and skills on the assignments. At the same time, sophisticated databases to track temporary employees' skill development could be implemented to complement the above measure. It is also recommended that the employment agency do more research into what its business customers want in a temporary employee. In doing so, the employment agency can help business organizations meet their goals and objectives by sending out the appropriately trained temporary workers. And, as employers shift the main responsibility for career development to employees, the long-term trend may see employment agencies assuming more leadership in this area. Manpower, for instance, offers training and development programmes to prepare its temporary workforce for future jobs (Albrecht, 1998). These programmes appeal especially to technical individuals who want to gfiin new skills and create new career opportunities for themselves. A longer-term approach for employment agencies would be to assume the entire contingent staffing role, and coordinate this area of staffing needs for organizations (Caudron, 1994). This strategy will ensure a better alignment of the agencies' training efforts with the needs of the organization;. Second, our sludy has also shown that the provision of fringe benefits to employees is also an avenui; for eliciting the desired employee-organization relationships, at least in Singapore. Thus, employment agencies should consider extending benefits packages to temporary employees on their payroll. Such an inducement enhances the agencies' ability to attract and maintain retention-quality workers. Besides, this measure also exerts a direct impact on the reaction of temporary employees with regard to their attitudinal and behavioural outcomes (Feldman and Doerpinghaus, 1992). To maximize returns from their investments, employment agencies should offer fringe benefits that are important to their temporary employees. In particular, different benefits packages could be given to reward different staff. Furthermore, employment agencies could also consider allowing their temporary employees to accumulate fringe benefits based on the number of years with the agency. In this way, temporary employees who worked the longest for the employment agency (as in Singapore) will be rewarded and this further enhances their commitment and loyalty to the agency. All the above suggestions aim to achieve the balance of keeping temporary employees long enough in their job assignments in order to obtain a fair return on the agencies" investments. It should be noted that the recommendations might not pay off

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until several years later. Although employment agencies have traditionally operated under the quasi-spot contract and under-investment types of employment relationship, the results of this study suggest that they should consider adopting the mutual investment or over-investment approaches in managing (heir temporary employees. Finally, some limitations of this research need to be mentioned. For example, the present approach used in defining the employee-organization relationship includes only two types of investments by an employer - training and fringe benefits. It is possible that other forms of investments, such as wages and employment security, may be equally or more imporiani in defining the employee-organization relationship. Next, the current definition of the employee-organization relationship captures only two elements of broad, open-ended contributions - whether employees are expected to accept assignments outside their primary area of expertise and provide suggestions to improve the agency's operations. Other dimensions of contributions, such as taking individual initiatives and so on, could also be included. Therefore, future research should also examine the relevance and importance of other forms of investments and contributions in defining the employee-organization relationship. If possible, a combination of multiple forms on both the investment and the contribution dimension of the employee-organization framework could be incorporated. This would satisfy the concern regarding the possibility of Ihe employee-organization relationship being configurational rather than unidimensional (Meyer et ai, 1993). Acknowledgement This research was supported by the National University of Singapore grant RF397207I. References
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