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Social and
Social and economic exchange in economic
the employee-organization exchange
relationship: the moderating role
701
of reciprocation wariness
Received January 2009
Lynn M. Shore Revised May 2009
Department of Management, College of Business Administration, Accepted May 2009
San Diego State University, San Diego, California, USA
William H. Bommer
Department of Management, Craig College of Business Administration,
California State University, Fresno, Fresno, California, USA
Alaka N. Rao
College of Business, San Jose State University, San José, California, USA, and
Jai Seo
Department of Business Administration, Kyonggi University,
Seoul, South Korea

Abstract
Purpose – This paper examines the relationships that social and economic exchanges, two elements
of the employee-organization relationship (EOR), had with affective commitment, turnover intentions,
employer trust, and altruism. The paper also aims to determine whether reciprocation wariness,
reflecting fear of exploitation in reciprocation, moderated relationships that exchange elements had
with outcomes.
Design/methodology/approach – A total of 453 employees of a large Korean electronics
organization completed a survey on their work attitudes, behaviors, and demographic characteristics.
Findings – Results showed that reciprocation wariness moderated relations that social exchange had
with commitment, turnover intentions, and trust, and that economic exchange had with turnover
intentions.
Research limitations/implications – The significance of examining social and economic
exchange and of developing conceptualizations of the EOR that incorporate individual differences
is discussed.
Practical implications – Organizational leaders need to consider how individuals may differ in
responses to exchange elements of the EOR. Common assumptions about the EOR that social
exchange is universally beneficial and that the necessity of economic exchange is accepted by all
employees may not be accurate.
Originality/value – New theorizing and testing of the role of reciprocation wariness in the EOR
contributes to an emerging literature on social and economic exchanges and how individuals may
respond to these elements of the EOR.
Journal of Managerial Psychology
Keywords Employee turnover, Employees, Korea, Job satisfaction Vol. 24 No. 8, 2009
pp. 701-721
Paper type Research paper q Emerald Group Publishing Limited
0268-3946
DOI 10.1108/02683940910996752
JMP Central to conceptualizations of the employee-organization relationship (EOR) (Shore
24,8 et al., 2004) are the tenets of social exchange theory as enumerated by Blau (1964).
Specifically relevant to the EOR are the beneficial effects of relationships based on
social exchange for creating trust and a high degree of mutual obligation between
exchange partners. Studies at both the micro (e.g. psychological contracts, Rousseau,
1995; perceived organizational support (POS), Rhoades and Eisenberger, 2002) and
702 macro levels of analysis (e.g. the employment relationship, Wang et al., 2003) have
produced empirical results consistent with the predictions of social exchange theory
and the norm of reciprocity (Gouldner, 1960). These studies have found that employees
generally reciprocate favorable organizational treatment with more positive attitudes
and higher levels of performance.
Until recently, most studies have focused on social exchange in the EOR with very
little empirical research on economic exchange (Cropanzano and Mitchell, 2005). Based
on long-standing theoretical arguments supporting the potential value of both social
and economic exchange processes (Blau, 1964; Macneil, 1985; Rousseau, 1995), Shore
et al. (2006) posed an integrative model in which social and economic exchange
constitute distinct elements of the EOR. Shore et al. (2006) based their model on classic
sociological articles on social exchange and reciprocity (e.g. Blau, 1964; Gouldner, 1960)
as well as scholarly applications of these ideas to work organizations (Eisenberger et al.,
1987; Rousseau and McLean Parks, 1993).
According to Blau (1964), social exchange involves indefinite obligations such that
when an individual does another party a favor, there is an expectation of some future
return. However, the timing and form of the return is often unclear, thus creating an
opportunity for exchange partners to show their trustworthiness. Consistent with this
perspective, Shore et al. (2006) argued that when the employee perceives high levels of
the social exchange element, he/she views the EOR as involving trust and mutual
investment, diffuse and open-ended obligations between the employee and the
organization, and a long-term orientation.
In contrast, with economic exchange “transactions between parties are not long
term or ongoing, but represent discrete, financially oriented interactions” (Shore et al.,
2006, p. 839). When high levels of the economic exchange element are present, the
employee perceives the EOR as incorporating a set of financial and material
organizational obligations in exchange for employee fulfillment of job duties.
Economic exchange is impersonal and does not entail investment in the relationship by
either the employee or the organization.
Initial empirical findings suggest that social and economic exchanges are distinct
and relate differently to organizational antecedents such as perceived investment in
employees, CEO leadership style, organizational culture, and the employment
relationship (Hom et al., 2009; Kuvaas et al., 2008; Song et al., 2009) and outcomes such
as commitment, OCBs, and performance (Gakovic and Tetrick, 2003; Kuvaas and
Dysvik, n.d.; Shore et al., 2006; Song et al., 2009) as well as employee perceptions of
future opportunities in the organization and acceptance of a co-worker’s i-deal (Lai et al.,
2009). This emerging body of research supports Shore et al.’s (2006) conceptual
arguments that social and economic exchange elements of the EOR are different as
shown by distinctive relations with antecedents and outcomes, and that employees
perceive both types of exchange elements to exist concurrently with their organization,
and in varying degrees.
While the studies described above support the unique value of social and economic Social and
exchanges, yet to be explored is the role of individual differences in responses to these economic
exchanges with the organization. Individual differences may be associated with
employee perceptions and responses to the EOR (Colbert et al., 2004; Raja et al., 2004). exchange
Even though one individual may perceive social exchange as a sign of investment and
caring by the organization, another might view this type of exchange with open-ended
obligations and a long-term reciprocity orientation as entailing greater personal risk 703
(Eisenberger et al., 1987). Likewise, the impersonal nature of economic exchange may
exacerbate fears of being taken advantage of by some employees, while others may
accept this exchange as a business necessity. Therefore, in the present research we
have included reciprocation wariness as a moderator of the relationships between
social and economic exchanges and several outcomes. Reciprocation wariness refers to
a generalized fear of exploitation in interpersonal relationships involving reciprocation
(Eisenberger et al., 1987), suggesting wariness may be associated with employee
responses to social and economic exchange elements of the EOR. Following, we first
review literature on outcomes of social and economic exchange, and then discuss the
role of reciprocation wariness as a moderator of exchange-outcome relations.

Outcomes of social and economic exchanges


The EOR literature has demonstrated strong theoretical and empirical support for the
importance of social exchange mechanisms for building organizational commitment
(Shore et al., 2004). Affective commitment reflects an employee’s emotional attachment
to and identification with the organization (Meyer and Allen, 1984, 1997) and is
associated with high levels of the social exchange element of the EOR (Gakovic and
Tetrick, 2003; Hom et al., 2009; Shore et al., 2006). Given the strong predictive validity
of affective commitment in relation to turnover intentions and turnover (Hom and
Griffeth, 1995), we also expect social exchange to be negatively related to turnover
intentions. Not surprisingly, social exchange with relational components of mutual
obligation and a long-term orientation lower employee intentions to leave the
organization (Hom et al., 2009).
In contrast, economic exchange has been found to be negatively related to affective
commitment (Gakovic and Tetrick, 2003; Shore et al., 2006) and likewise is not expected
to lower turnover intentions given the impersonal and narrow set of obligations
reflected in this exchange element. In fact, high economic exchange should serve to
undermine affective commitment and increase turnover intentions by emphasizing
formal and contractual relations, especially since, unlike social exchange, economic
exchange does not involve the consideration of employee needs and preferences (Blau,
1964; Emerson, 1981). Thus, social exchange should be positively related to affective
commitment and negatively related to turnover intentions, and economic exchange
should show the opposite pattern with these variables.
Blau (1964) highlighted the role of trust in the emergence and maintenance of
relationships that emphasize social exchange. Based on social exchange theory, Molm
et al. (2000, p. 396) argued that:
Trust is more likely to develop between partners when exchange occurs without explicit
negotiations or binding agreements. Under these conditions, the risk and uncertainty of
exchange provide the opportunity for partners to demonstrate their trustworthiness.
JMP Thus, trust is an intrinsic social reward that serves as a basis for social exchange
24,8 between partners, in which trust begets trust (Ferrin et al., 2007).
We expect that social exchange will be positively related to trust in the employer, a
form of cognition based trust reflecting integrity and reliability (McAllister, 1995),
given that the open-ended and diffuse obligations inherent in such relationships
provides the employer and its agents with the opportunity to offer benefits to focal
704 employees for favors provided. Without such reciprocity, the employee will lose trust
in the employer and the social exchange element of the EOR will decline.
Economic exchange, on the other hand, should not be associated with trust in the
organization given that the short-term, tit-for-tat basis of this EOR element provides
little opportunity to prove trustworthiness among exchange partners. There is little
risk associated with the inducements and contributions provided in economic
exchange, given the formalized and impersonal basis of this exchange. In addition, the
financial and material inducements provided for performing the job in economic
exchange is standard business practice, with potential legal ramifications for the
organization and job loss for the employee if the terms of the exchange are not fulfilled.
Yamagishi and Yamagishi (1994) pointed out that structures that prevent exploitation
in exchange such as legal or normative sanctions for failure to fulfill obligations also
prevent the development of trust. In sum, the risk of non-reciprocity and opportunity to
prove trustworthiness in social exchange should be associated with trust in the
employer, whereas the quid-pro-quo obligations in economic exchange should not lead
to trust in the employer.
Lastly, we examine the relationships that social and economic exchanges have with
supervisor-directed altruism. Altruism has been conceptualized in the organizational
citizenship behavior literature as employee behaviors directed at helping others in the
organization (Van Dyne and LePine, 1998). Since supervisors are agents of the
organization, employees should view employee-provided altruism directed toward
supervisors as a means of reciprocating favorable organizational treatment.
Organ (1990) argued that social exchange theory was the best theoretical
explanation for organizational citizenship behavior. Citizenship behaviors are
conceptualized as being “above and beyond” the requirements of the job, suggesting
that economic exchange with the emphasis on a narrow set of bounded obligations
should be unrelated to citizenship behaviors. In addition, the impersonal inducements
associated with economic exchange would not be viewed by the employee as reflecting
their value to the organization (Eisenberger et al., 1997; Shore and Shore, 1995) nor
inspire returns beyond meeting role requirements for continued employment. In
support of these arguments, Shore et al. (2006) and Kuvaas and Dysvik (n.d.) each
tested a model incorporating both social and economic exchange elements, and
provided evidence that social exchange was associated with higher levels of
organizational citizenship, while economic exchange was not predictive of citizenship
behavior.
Drawing on these findings, we expect that social exchange will be positively, and
economic exchange unrelated to employee altruism.
In summary, based on the above review:
H1a. Social exchange will be positively related to affective commitment.
H1b. Social exchange will be negatively related to turnover intentions.
H1c. Social exchange will be positively related to trust in the employer. Social and
H1d. Social exchange will be positively related to altruism. economic
H2a. Economic exchange will be negatively related to affective commitment. exchange
H2b. Economic exchange will be positively related to turnover intentions.

Reciprocation wariness
705
Social exchange in relationships necessarily entails uncertainty and risk (Molm et al.,
2000), given the open-ended and non-negotiated exchange between parties. In social
exchange, the “nature of the return is not bargained about but is left to the discretion of
the one who makes it” (Blau, 1964, p. 34). Such discretion provides an opportunity for
the recipient to show that they are trustworthy, since trustworthiness can only be
proven without the assurance of negotiated exchange, or binding agreements (Blau,
1964; Molm et al., 2000).
Early research on reciprocity (e.g. Gouldner, 1960) generally assumed the norm of
reciprocity to be universal. Subsequent research by Perugini et al. (2003) found that
individuals differ in the extent to which they adopt and the degree to which they follow
the norm of reciprocity. So, while all people may respond to the norm of reciprocity, the
degree to which they reciprocate appears to vary significantly between people. Such
individual differences may affect responses to social and economic exchange.
To capture this individual variance in the degree to which people follow the norm of
reciprocity, we focused on reciprocation wariness as a moderator of exchange-outcome
relations. Wariness is a generalized cautiousness in reciprocating aid stemming from a
fear of exploitation in relationships, including relationships with the organization
(Lynch et al., 1999). Wary individuals either receiving or extending aid fear that others
will violate the reciprocity norm through non-reciprocation of beneficial treatment. As
a result, highly wary employees adopt self-protective behaviors, such as minimal
reciprocity (Cotterell et al., 1992; Kamdar et al., 2006; Lynch et al., 1999). Kamdar et al.
(2006, p. 843) likewise concluded that “wary individuals have lower baseline
expectations for exchange relationships – including not only what they can expect to
receive from others but also what they are obligated to contribute to them – than less
wary individuals.”
Since Blau (1964) contends that reciprocation is critical to reinforcing and stabilizing
trust and creating an on-going relationship between social exchange partners, highly
wary individuals behave in ways that undermine trust building by approaching
reciprocity in relationships with great caution. Therefore, the social exchange element
of the EOR should be more strongly and positively associated with the contributions of
low wary than of high wary employees. That is, the low wary should respond to social
exchange with the organization in a manner that is consistent with predictions based
on social exchange theory by showing more positive attitudes and behaviors toward
the organization. The highly wary employee, on the other hand, is much less likely to
respond in this positive manner due to fears of exploitation in reciprocation.
When the economic exchange element of the EOR is high, we expect wary
employees to respond more negatively than the non-wary by lowering their
contributions to a greater extent. Kamdar et al. (2006) argued that employees who are
highly wary focus on exchange in terms of the favorability of their own outcomes. This
strong focus on outcomes for the self, rather than others, stems from fear of
JMP exploitation. With high economic exchange, the organization may be perceived to be
24,8 behaving in a self-serving manner by providing a narrow set of bounded obligations.
Such limited inducements and seemingly self-serving arrangements should increase
the high wary employee’s fears of exploitation. Since highly wary individuals are more
inclined than low wary individuals to endorse negative reciprocity norms of
reciprocating unfavorable treatment (Lee and Tetrick, 2005), these employees should
706 respond negatively to economic exchange by having lower affective commitment and
higher turnover intentions. In contrast, low wary employees’ commitment and
intentions should be less affected by economic exchange in light of their lesser
concerns about exploitation in reciprocation.
Consistent with the assertions above, we predict that employees’ responses to
exchange will be moderated by reciprocation wariness. More specifically:
H3a. Reciprocation wariness will moderate the relationship between social
exchange and affective commitment, such that the relationship will be more
positive for low wary than high wary individuals.
H3b. Reciprocation wariness will moderate the relationship between social
exchange and turnover intentions, such that the relationship will be more
negative for low wary than high wary individuals.
H3c. Reciprocation wariness will moderate the relationship between social
exchange and trust in the employer, such that the relationship will be more
positive for low wary individuals than for high wary individuals.
H3d. Reciprocation wariness will moderate the relationship between social
exchange and supervisor-directed altruism, such that the relationship will
be more positive for low wary individuals than for high wary individuals.
H4a. Reciprocation wariness will moderate the relationship between economic
exchange and affective commitment, such that the relationship will be more
negative for high wary than for low wary individuals.
H4b. Reciprocation wariness will moderate the relationship between economic
exchange and turnover intentions, such that the relationship will be more
positive for high wary than for low wary individuals.

Method
Research context
The application of western theories across cultures has been broadly debated (c.f.
Gelfland et al., 2008). The employment relationship theory upon which the present
study is based was developed by western scholars, so that the testing of those theories
in a South Korean context in the present study potentially raises some questions. In
East Asian societies such as Korea that is collectivistic, harmony in relationships is
strongly emphasized (Triandis, 1995). Trust is based on acquired social ties with
family or other groups to which members of the society belong (e.g. educational ties;
Bstieler and Hemmert, 2008; Han and Choe, 1994). While Korea has had a tradition of
lifetime employment that is consistent with collectivism and also with social exchange
in the EOR, in the last ten years there has been a greater adoption of western practices
that are more consistent with economic exchange in the EOR such as layoffs (Chang,
2002; Lee and Corbett, 2006). These types of global trends in organizational practices Social and
suggest the value of studying both the social and economic exchange elements of the economic
EOR in non-Western settings. Furthermore, western theories of the EOR have been
successfully applied in other East Asian societies such as China (see Wu et al., 2006), exchange
suggesting that the current setting is a suitable one for studying the
employee-organization relationship.
707
Participants and procedure
A total of 453 employees completed a survey in a large Korean electronics organization.
These employees performed similar types of technical jobs and were in entry-level
positions. Due to missing data, the final sample size of the study was 421.
Approximately 70 percent (69.8 percent) of the participants were males; they averaged
28.9 years old (SD ¼ 5:1); and 21 percent of the sample graduated from college. The
mean tenure of the employees in the organization was 6.8 years (SD ¼ 4:7) and the
typical employee had reported to their supervisor for 2.9 years (SD ¼ 2:8).
The English version of the survey was translated into Korean by an author who is
Korean and has a PhD in business from a US university, with the back translation
independently confirmed by another individual who was educated in the US and who
is fluent in both languages (Brislin, 1986). A high-level executive in human resources
gave permission to one of the authors to administer surveys to employees for
completion during working hours, and no individual employee identifying information
was associated with individual surveys. Employees were assured of confidentiality,
and that participation was voluntary. Each respondent was asked to answer questions
regarding demographic information (age, tenure, and sex), their exchanges with the
organization, and questions about their work attitudes and behaviors.

Measures
Control variables. Age, tenure, and sex were used as control variables in the regression
analyses. Age and tenure were reported in years, and sex was coded such that
1 ¼ male and 2 ¼ female.
All other measures utilized five-point Likert-type scales (1 ¼ strongly disagree and
5 ¼ strongly agree). The measures were subjected to a confirmatory factor analysis
(CFA) before being used in the study. The CFA is presented after the descriptions of
the measures.
Social and economic exchanges. We used Shore et al.’s (2006) measures of social and
economic exchange. These measures include 16 items overall, eight representing social
exchange and eight to measure economic exchange. Sample items from the two
measures include “I watch very carefully what I get from [my organization], relative to
what I contribute” as an item indicating economic exchange and “I try to look out for
the best interest of [the organization] because I can rely on my organization to take care
of me” for social exchange. The items in this scale were found to load on their
respective factors by Shore et al. (2006).
Reciprocation wariness. To assess reciprocation wariness, we used Lynch et al.’s
(1999) ten-item reciprocation wariness scale. Sample items are “I feel used when people
ask favors of me” and “When I help someone, I often find myself thinking about what is
in it for me.”
JMP Affective commitment. Affective commitment was measured with six items
24,8 assessing employees’ emotional attachment to their organization (Meyer et al., 1993). A
sample item is “I really feel as if this organization’s problems are my own.”
Trust in employer. Seven items (Robinson, 1996) were used to measure the extent to
which employees trusted their employer. A sample item is “My employer is open and
upfront with me.”
708 Turnover intentions. An employee’s intention to turnover was assessed with the
three items developed by Cammann et al. (1979) and reported in Cook et al. (1981). A
sample item is “I will probably look for a new job in the next year.”
Supervisor-directed altruism. Three items from Podsakoff and MacKenzie’s (1989)
altruism scale were modified to reflect behavior directed at the supervisor. A sample
item is “I frequently lend a helping hand to my team leader.”

Results
Before testing the hypotheses, a measurement model was constructed to assess
whether the survey items measured the latent constructs in which we were interested.
First, a confirmatory factor analysis (CFA) was conducted using LISREL 8.53 with all
45 items representing the seven measures. The full model exhibited marginal fit (Chi
square ¼ 2960.74, df ¼ 922, RMSEA ¼ 0:079, CFI ¼ 0:90, NFI ¼ 0:86). An
examination of the factor loadings suggested that four items might be problematic
due to their low variance explained. After removing these four items (one each from the
trust in employer, the affective commitment, the social exchange, and the reciprocation
wariness scales), an improved fit was achieved. This 41-item model fit the data
relatively well (Chi Square ¼ 2187.68, df ¼ 756, RMSEA ¼ 0:069, CFI ¼ 0:92,
NFI ¼ 0:88), and thus the final scales were based on the elimination of these four
items and the seven original scales were retained. While it is difficult to know exactly
why these items did not load highly, the cultural context of the items may have differed
and even though back translation was performed (Brislin, 1986), the items may have
had unintended contextual differences which resulted in them not tapping their
hypothesized domain to the expected degree.
Based on the results of the measurement model described above, Table I reports the
descriptive statistics, scale reliabilities, and bivariate correlations. In general, the
correlations reflect expected relations. Social exchange was positively related to
affective commitment (r ¼ 0:65), trust in employer (r ¼ 0:53), and supervisor-directed
altruism (r ¼ 0:55) and negatively related to turnover intentions (r ¼ 20:44) as
predicted in H1a-H1d. Economic exchange was less consistently related to the
dependent variables, but was negatively related to the dependent variables posited in
H2a-H2b. More specifically, economic exchange was significantly correlated with
affective commitment (r ¼ 20:31) and turnover intentions (r ¼ 0:26). These
significant correlations were in the expected directions as predicted in H2a-H2b.
While the correlations suggest initial support for the hypotheses, the hypotheses were
formally tested via regression.
The hypotheses in our study were tested using moderated multiple regression. The
results are presented in Table II as a series of hierarchical models. In each regression,
the independent variables were entered in step 1 and the centered interaction terms (i.e.
social exchange £ reciprocation wariness and economic exchange £ reciprocation
wariness) were entered in step 2. Variance inflation factors (VIFs) were checked in all
Variable Mean SD 1 2 3 4 5 6 7 8 9 10

1. Sex 1.30 0.42 –


2. Age 28.85 5.11 20.56 –
3. Tenure 6.85 4.65 20.32 2 0.71 –
4. Social exchange 3.36 0.56 20.28 0.23 0.13 (0.86)
5. Economic exchange 3.03 0.49 0.02 2 0.02 0.00 2 0.08 (0.79)
6. Reciprocation wariness 2.62 0.58 0.02 0.04 0.04 2 0.17 0.43 (0.86)
7. Affective commitment 3.37 0.60 20.21 0.23 0.14 0.65 20.31 20.24 (0.75)
8. Turnover intentions 2.53 0.81 0.01 0.04 0.03 2 0.44 0.26 0.28 2 0.56 (0.73)
9. Trust in employer 3.27 0.51 20.19 0.20 0.07 0.53 20.17 20.21 0.53 20.35 (0.78)
10. Supervisor directed altruism 3.27 0.63 20.21 0.25 0.19 0.55 0.04 0.04 0.48 20.23 0.38 (0.78)
Notes: The alpha internal consistency reliability coefficients appear in parentheses along the main diagonal; n ¼ 421, all r’s . 0.11, p , 0.05, r’s . 0.14,
p , 0.01
exchange
economic

and scale reliabilities


deviations, correlations,
Means, standard
Social and

709

Table I.
24,8
JMP

710

Table II.

exchange and
Regression results:

employee outcomes
social and economic
testing the interaction of

reciprocation wariness on
Supervisor-directed
Affective commitment Turnover intentions Trust in employer altruism
Model 1 Model 2 Model 1 Model 2 Model 1 Model 2 Model 1 Model 2

Sex 0.04 0.04 20.08 20.09 0.01 0.01 0.01 0.00


Age 0.10 0.11 0.10 0.07 0.16 * 0.18 * * 0.07 0.06
Tenure 0.00 20.01 0.00 0.02 2 0.10 2 0.11 0.07 0.07
Social exchange 0.61 * * * 0.61 * * * 20.45 * * * 20.49 * * * 0.48 * * * 0.48 * * * 0.55 * * * 0.48 * * *
Economic exchange 20.24 * * * 20.20 * * * 0.17 * * * 0.15 * * 2 0.09 * 2 0.04 0.03 0.08
Reciprocation wariness 20.04 20.02 0.13 * * 0.08 2 0.09 * 2 0.06 0.11 * 0.09
Social exchange £ Reciprocation wariness 20.10 * 0.12 * 2 0.13 * 2 0.06
Economic exchange £ Reciprocation wariness 20.03 0.14 * 2 0.02 0.12 * *

F 66.08 * * * 50.91 * * * 27.38 * * * 23.14 * * * 30.89 * * * 24.47 * * * 34.53 * * * 27.24 * * *


df 6 8 6 8 6 8 6 8
R2 0.489 0.497 0.284 0.309 0.310 0.323 0.333 0.345
DR 2 0.008 * 0.026 * * * 0.013 * 0.012 *
R 2adj 0.481 0.487 0.273 0.296 0.300 0.309 0.314 0.333
Notes: Values are standardized regression coefficients; * * *p , 0.001, * *p , 0.01, *p , 0.05; n ¼ 421
cases to assess multcollinearity and these results suggested that multcollinearity was Social and
not a major concern in the regression models. All of the hypotheses were evaluated economic
from the step 2 results (labeled model 2 in Table II).
Social exchange was hypothesized to be associated with all four outcomes assessed exchange
in this study. Consistent with H1a, H1b, H1c, and H1d, when employees had stronger
social exchanges, they also demonstrated more positive attitudinal and behavioral
criterion variables. More specifically, in all four cases hypothesized in H1a-H1d, the 711
relationship between social exchange and the criterion measures was consistent with
the direction hypothesized.
Compared to social exchange, economic exchange was hypothesized to have
narrower associations with the criterion measures. H2a hypothesized a negative
association between economic exchange and affective commitment, whereas H2b
posited a positive relationship between economic exchange and turnover intentions.
H2a and H2b were supported due to the significant negative relationship between
economic exchange and affective commitment (b ¼ 20:24, p , 0.001), and the
significant positive relationship between economic exchange and intentions to
turnover (b ¼ 0:17, p , 0.05).
For the main effects, we conducted some additional analyses to assess whether
same source variance was a significant influence on the data. We did this by
constructing a model consistent with the recommendations of Podsakoff et al. (2003).
Based on the Podsakoff et al. (2003) guidelines, we ran a single factor method model (i.e.
model 3A). More specifically, we ran a series of main effects models where a common
source latent factor is included in the model. The results of this analysis revealed that
for all twelve main effects (i.e. the regression coefficients for social exchange, economic
exchange, and reciprocation wariness across the four criterion measures) included in
Table II, that the effects were only negligibly different. That is, the sign of these eleven
relationships was the same as is reported in Table II and the magnitude of the effect
did not meaningfully differ (i.e. effects which are statistically significant in Table II
were also statistically significant in the common source latent model and effects which
do not meet statistical significance in Table II were also not significant in the common
source latent model). As a result of this additional analysis, we had greatly increased
confidence that the results we obtained were not primarily the result of same source or
common method variance.
In addition to the main effects discussed above, reciprocation wariness was
hypothesized to have relatively broad moderating effects on the relationships between
the exchanges and the criterion measures. More specifically, H3a-H3d posited that
reciprocation wariness would moderate the effects of social exchange across all four
criterion variables measured. Table II indicates that moderation occurred in three of
the four cases hypothesized. To determine the form of the significant interactions, the
relationships were then graphed and simple slopes analyses conducted using a þ 1/2 1
standard deviation split (see Figure 1).
H3a-H3c were supported because the relationships between social exchange and the
criterion measures for the high reciprocation wary employees were weaker than the
relationships between social exchange and the criterion measures for the less wary
employees. More precisely, social exchange had stronger relationships (b ¼ 0:63,
p , 0.001 for affective commitment; b ¼ 20:58, p , 0.001 for turnover intentions;
b ¼ 0:65, p , 0.001 for trust in employer) when reciprocation wariness was low, than
JMP
24,8

712

Figure 1.
Split plots associated with
social exchange
when reciprocation wariness was high (b ¼ 0:37, p , 0.001 for affective commitment; Social and
b ¼ 20:01, n.s. for turnover intentions; b ¼ 0:27, n.s. for trust in employer). As a economic
result, H3a-H3c were supported but H3d involving altruism was not supported.
The last set of hypotheses (H4a and H4b) posited that reciprocation wariness would exchange
also moderate the relationships that economic exchange had with affective
commitment and turnover intentions. Of the two effects hypothesized, an
examination of the regression results showed a significant interaction in one case. 713
The split plot was then examined to determine the pattern of the relationship (see
Figure 2).
H4a proposed that reciprocation wariness would moderate the relationship between
economic exchange and affective commitment. The interaction term, however, was not
significant. On the other hand, the interaction term associated with H4b was
significant. H4b posited that reciprocation wariness would moderate the relationship
between economic exchange and turnover intentions. The findings support this

Figure 2.
Split plots associated with
economic exchange
JMP assertion, as the relationship between economic exchange and turnover intentions was
24,8 more positive for highly wary individuals (b ¼ 0:20, p , 0.05) than it was for less
wary individuals (b ¼ 0:02, n.s.).
The interaction term between economic exchange and reciprocation wariness,
although not hypothesized, was also significantly associated with the
supervisor-directed altruism measure. An examination of its split plot revealed that
714 the relationships were relatively weak in both cases, but were significantly different
from each others (b ¼ 0:06, n.s. for high wary versus b ¼ 20:12, n.s. for low wary
employees).

Discussion
The results of this study are generally consistent with social exchange theory
arguments (Blau, 1964), and prior empirical research (Gakovic and Tetrick, 2003; Shore
et al., 2006) that social exchange is related to positive employee attitudes and
behaviors. Likewise, economic exchange has independent and negative effects on
affective commitment and turnover intentions, as expected. These findings suggest
that both social and economic exchange elements of the EOR are associated with
important organizational outcomes, and that these elements operate independently.
Our study shows that unlike social exchange, economic exchange is not related to
the same types of positive outcomes desired by organizations, thus suggesting that
limited compulsory terms and financially-focused inducements of the EOR may not be
as liable to serve the organization’s interests as those based on social exchange. What
is less clear is how organizational agents shape perceptions of economic exchange
through their policies, practices, and decisions. We suspect that high economic
exchange may be especially likely when organizations are financially challenged, or
during times of major organizational change (e.g. mergers, acquisitions, and layoffs)
when the less formalized relations underlying social exchange may be disrupted or not
viewed by management as adequate for maintaining employee efforts on behalf of the
organization.
Our findings also show that three of the effects of social exchange and one of
economic exchange, are moderated by reciprocation wariness. Specifically, our
findings indicate that for three of the four outcomes, highly wary employees responded
less favorably to social exchange than those employees who are low on wariness.
Likewise, highly wary employees were more liable than low wary employees to intend
to turnover when they had perceptions of strong economic exchange. This suggests the
importance of more elaborated models of the EOR that consider the role of individual
differences (Colbert et al., 2004; Raja et al., 2004).
One implication of the pattern of findings related to reciprocation wariness is that
relationships emphasizing social exchange may not be as universally beneficial for
organizations as has been assumed (c.f. Shore et al., 2004). Our results are largely
consistent with the research on reciprocation wariness which has also shown that
high-wary individuals demonstrated less generosity than low-wary individuals
following offers of cooperation from exchange partners (Cotterell et al., 1992).
Furthermore, highly wary employees responded less favorably to procedural justice
from the organization than low wary employees (Kamdar et al., 2006). In sum, we found
that individuals who were wary of reciprocation did not respond as favorably to
relationships involving diffuse obligations and long-term investment, as the low-wary Social and
in terms of affective commitment, turnover intentions, and trust in the employer. economic
Future research should explore whether there may be other bases of exchange, such
as employee values, that may more effectively enhance the contributions of the highly exchange
wary. For example, a number of researchers (McLean Parks and Smith, 1998; McLean
Parks et al., 1998; Thompson and Bunderson, 2003) argue that in addition to social and
economic resources, ideological resources may serve as a basis of exchange in the EOR. 715
Such exchange with a focus on ideology may benefit the reciprocation wary by
enhancing trust through common values with the employer.
Molm’s (2003) work on reciprocal and negotiated exchange may also inspire a new
avenue of research on reciprocation wariness. To have a positive effect on the highly
wary, stronger and more beneficial guarantees may be required in the EOR than those
reflected in economic exchange. This may particularly be the case in light of the
differences in power between the employee and organization (Shore and Shore, 1995),
and the somewhat nebulous “agents” representing the organization in the EOR
(Coyle-Shapiro and Shore, 2007). Both of these aspects of the EOR make the likelihood
of exploitation and non-reciprocation by the organization greater than with an
individual partner. Therefore, when organizations need the support of highly wary
employees, managers may find it advantageous to engage in negotiated exchange with
its focus on joint decision-making and agreement on the terms of the exchange, to
provide the highly wary with the needed assurances to encourage their contributions.
Likewise, employees who are reciprocation wary may benefit from understanding
that the self-protective responses that they display may be detrimental to building
strong and positive work relationships (Cotterell et al., 1992). Such responses may
prevent high wary employees from obtaining career-enhancing opportunities, as their
weaker reactions to social exchange relative to low wary employees may be viewed as
signifying a lack of responsiveness or concern for others. Future research should thus
expand on the outcomes included in this study by examining the potential association
of reciprocation wariness in relation to such important criteria as promotion rate,
developmental feedback, and salary increases.
The finding that supervisor-directed altruism was not affected by interactions
between social exchange and reciprocation wariness was surprising given that the
supervisor is an important organizational agent (Shore and Tetrick, 1994). Rather, the
main effect for social exchange was the primary determinant, and the interaction
between reciprocation wariness and economic exchange a secondary determinant. Note
however, that this interaction was not hypothesized nor were either of the simple
slopes significant, suggesting little explanatory value. Since there is less ambiguity in
an exchange with a supervisor than with an organization, reciprocation wariness may
be less important when examining employee attitudes and behaviors toward the leader
than in studies of the EOR. Another explanation for this finding is that in Korea,
managing good relationships with the supervisor is critical to having a successful
career (Yoon and Lim, 1999). As a result, wary employees may seek to carefully
manage the levels of altruistic behavior toward the supervisor. Unlike altruistic
behavior, attitudes such as affective commitment and turnover intentions are likely
assumed by employees to be less apparent to the supervisor, and less likely to upset the
harmony in relationships that is important in collectivistic societies (Triandis, 1995).
JMP Clearly, this relationship needs to be replicated in a Western setting to establish
24,8 whether culture played a role in determining these results.
Similar to social exchange, we proposed that reciprocation wariness would
moderate the relationship between economic exchange and affective commitment and
turnover intentions. The pattern of results however, only supported one of our
predictions (turnover intentions). The split plot suggests that high wary employees
716 may respond somewhat more negatively to economic exchange than low wary
employees by intending to leave the organization. This finding is consistent with
Eisenberger and colleagues’ (Eisenberger et al., 1987; Cotterell et al., 1992) arguments
that the highly wary fear exploitation in interpersonal relationships, viewing the
provision of benefits to an exchange partner as running “the risk of being taken
advantage of by a self-seeking partner” (Cotterell et al., 1992, p. 658). Strong economic
exchange with compulsory financial and role-related provisions may be interpreted by
the highly wary as signaling the presence of a self-interested organizational partner in
the EOR. Low wary employees may view these same provisions as necessary and
practical in order for managers to ensure that the best interests of the organization are
served (Coyle-Shapiro and Shore, 2007). However, additional research is needed on
economic exchange before we can make strong conclusions since this is a relatively
new construct with limited empirical research available. In particular research is
needed that examines how employees make sense of this type of exchange, and if
responses to economic exchange are related to variables other than wariness such as
power and status associated with the job and whether an employee is treated similarly
or less favorably than peers.
The results of this study suggest several significant contributions to the literature
on the employee-organization relationship. Our study highlights the role of individual
differences in understanding the EOR. We found that individual differences can
indeed, color the lens through which employees view and respond to exchange
relationships, as previous research (Colbert et al., 2004; Raja et al., 2004) has suggested.
While one individual perceives social exchange as a sign of support from the
organization, another might view this type of employment relationship with
open-ended obligations and a long-term reciprocity orientation as entailing greater
personal risk (Eisenberger et al., 1987). Indeed, individuals who are generally cautious
in relationships and fear being exploited might be more predisposed to perceive the
latter – where social exchange entails greater risk, causing them to engage in
self-protective acts, such as reducing the strength of their positive responses.
Another contribution of our study is that it incorporates the idea of risk in
reciprocation for understanding the employee-organization relationship. Most prior
research on the EOR has focused on the idea of support and mutual obligation to
explain the dynamics underlying exchange (Shore et al., 2004). Here, we integrate
literature that incorporates the role of risk in social exchange (Molm, 2003) to
understand the same relationship. We find that fear of non-reciprocation, creating
perceptions that exchange relations may be exploitive, as represented in the individual
difference variable of reciprocation wariness, helps to improve predictions about how
individuals perceive and respond to the EOR. Note however, that the unique variance
accounted for ranged from 1 to 3 percent, suggesting that the moderating effect of
reciprocation wariness is somewhat small, and clearly, the present findings need to be
replicated to determine their generalizability.
It could be argued that since we did not use an experimental design with the ability Social and
to assess causality, that our view of wariness as a determining variable in responses to economic
social and economic exchange is premature. However, two prior experimental studies
involving students in a bargaining task (Cotterell et al., 1992; Eisenberger et al., 1987) exchange
established that reciprocation wariness is an individual difference variable that
influences reciprocation behavior. Additional research is needed however that provides
more information about the properties of the reciprocation wariness construct 717
including the stability of reciprocation wariness and its antecedents. Furthermore,
additional experimental studies on wariness and social and economic exchange would
be quite valuable to determine whether risk in the case of social exchange and a
self-interested organization in the case of economic exchange are the basis for the
influence of reciprocation wariness in work settings.
Like most research, our study is not without limitations. All of our measures were
self-reports from employees, and all data were collected from a single survey. Some of
the same-source variation problems, however, are mitigated by our tests of interaction
effects, which are not subject to the same type of inflation as are main effects. In
addition, we conducted a single factor method model to determine whether same source
variation was prevalent (Podsakoff et al., 2003). In this analysis, we found that the
effects of common method variance were minimal and this provided increased
confidence in our findings. Furthermore, our hypotheses were tested in a single sample
taken from a large Korean organization. Future research should extend this study
across multiple contexts to test the generalizability of our findings.
In spite of these limitations, the results of our study have important implications for
those who study the EOR. This study suggests the value of examining both social and
economic exchange elements of the EOR. Our pattern of results shows that social
exchange has stronger effects than economic exchange, and that these effects are
positive. Economic exchange, on the other hand, has more limited effects, at least in
relation to the particular outcomes studied. Nonetheless, these effects are important, as
they detract from positive outcomes for organizations. Another significant implication
is that individual differences should be included in studies of the EOR to better
understand the relationships that social and economic exchanges have with employee
attitudes and behaviors. The fact that high reciprocation wary individuals responded
comparatively weakly to social exchange and somewhat more negatively to economic
exchange paints a more complicated picture; one that urges us to elaborate on the
foundations of exchange theory, to understand the meaning of exchange relationships
across individuals and contexts.

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About the authors


Lynn M. Shore is a Professor of Management at San Diego State University. She was previously
on the faculty at University of California, Irvine, and Georgia State University. Her primary
research areas are on the employment relationship and work force diversity. Her research on the
employment relationship focuses on the influence of social and organizational processes on the
employee-organization relationship, and effects of this relationship on employee attitudes and
behavior. Dr Shore’s work on diversity has examined the impact that composition of the work
group and employee/supervisor dyads has on the attitudes and performance of work groups and Social and
individual employees. She has published numerous articles in such journals as Academy of
Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of economic
Organizational Behavior, and Personnel Psychology. Dr Shore was an Associate Editor for the exchange
Journal of Applied Psychology from 2003-2008. Lynn M. Shore is the corresponding author and
can be contacted at: lshore@mail.sdsu.edu
William H. Bommer is an Associate Professor of Management and a Craig Faculty Fellow in
the Craig School of Business at California State University, Fresno. Bill has previously on the 721
faculties of Cleveland State University and Georgia State University. His primary research areas
are organizational citizenship, forms of intelligence, leadership, cross-level research, and the
employment relationship. He has published numerous articles in journals including Academy of
Management Journal, Journal of Applied Psychology, Personnel Psychology, Organization Science,
Organizational Behavior and Human Decision Processes, Journal of Management, Intelligence,
Academy of Management Learning and Education, Leadership Quarterly, Journal Vocational
Behavior, and Journal of Organizational Behavior.
Alaka N. Rao is an Assistant Professor of International Business at San Jose State University.
She received her PhD from the Merage School of Business at the University of California, Irvine.
Her research centers on the management of complex collaborations across geographical and
cultural divides. This research examines the critical role of national culture, employee cognition,
and trust in the management of global collaborations, specifically outsourcing relationships. Dr
Rao’s also conducts research on how managers exchange and build trust in countries lacking
institutional support. Her work has been published in the Journal of International Business
Studies.
Jai Seo is a professor of Management at Kyonggi University in Korea. He was previously on
the faculty at Daegu University of Daegu, Korea. His primary research areas are on employees’
psychological attachment to an organization and leadership. His research on employees’
psychological attachment and leadership focuses on the influences of a leader in the formation of
attitudinal consistency toward an organization. Also, many of his studies focused on leader
influence on the development of employees’ positive organizational behaviors. His recent
research moves toward the role of workplace spirituality in the process of developing employees’
positive psychological attachment toward an organization. He tried to refine the concept of
workplace spirituality and its measures. Dr Seo published many articles in such journals as
Korean Academy of Management Journal, The Korean Journal of Human Resource
Management, The Korean Journal of Human Resource Development, Human Resource
Management Review, and Journal of Management.

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