Idiosyncratic Deals from an Organizational-Level

Perspective

Consequences, Mechanisms and Boundary Conditions

D I S S E R T A T I O N of the University of St.Gallen,

School of Management, Economics, Law, Social Sciences and

International Affairs to obtain the title of

Doctor of Philosophy in Management

Submitted by

Anna Franziska Schuler

from

Germany

Approved on the application of

Prof. Dr. Heike Bruch

and

Prof. Dr. Stephan Alexander Böhm

Dissertation no. 4801

Difo-Druck GmbH, Bamberg 2018

The University of St.Gallen, School of Management, Economics, Law, Social Sciences and International Affairs hereby consents to the printing of the present dissertation, without hereby expressing any opinion on the views herein expressed.

St. Gallen, May 22, 2018

The President:

Prof. Dr. Thomas Bieger

Acknowledgments

Many people have played an important role in the development of this

dissertation.

First and foremost, I thank my doctoral advisor Professor Dr. Heike Bruch, for

supporting me over the last three and a half years. Her critical feedback and her

creative ideas have always motivated and inspired me. Our discussions have

always been a source of inspiration for new ideas, solutions and challenges and

the energy to address them. I am grateful for our mutual and exciting

experiences over the past years, which allowed me to develop professionally

and personally. I am also very grateful to Professor Dr. Stephan Böhm for

constructively supporting this dissertation as co-supervisor. I appreciated his

critical questions and his valuable and encouraging feedback.

Moreover, I owe special thanks to the Porsche AG for supporting this

dissertation. In particular, I am thankful to Elke Lücke, Markus Dreckmann and

Dr. Frank-Steffen Walliser, our project partners at Porsche.

I also want to express my gratitude to Stefan Berger, my fellow in this research

project, who was always willing to listen and to offer advice. He always kept a

critical eye on my work and encouraged me with his motivation and energy.

Furthermore, I wish to thank Dr. Hendrik Hüttermann for taking the time to

provide constant feedback and help with his expertise. He was always available

for all questions and has always had workable solution.

Additionally, many friends, colleagues and peers accompanied, inspired, and

enriched the journey of this dissertation in various ways. They always

supported me with an open ear, encouraging words and creative suggestions

for solutions. I want to thank all my friends and colleagues with special thanks

to Jessica Färber, Anna-Patricia München, Christina Block, Manuel Fleschhut,

Anna Brzykcy, Dr. Petra Kipfelsberger, Dr. Markus Rittich, Dr. Ulrich Leicht-

Deobald, Sabrina Heinl, Tristan Ricken, Aylin Ispaylar, Sandra Berenbold,

Andrea Schmid, Nicole Stambach, Karin Kupka, Dr. Josef Fischer, Geraldine

Mildner, Lukas Hölzl and Drew Wilson.

Last but not least, I wholeheartedly thank Lars Kreissner, who supported me

emotionally every day with his infinite patience and has been through all the

downs and ups with me in the last three years.

Most importantly, I also thank my parents Felizitas Schuler and Peter Maier-

Schuler, my brother Stephan Schuler and my aunt Elisabeth Schuler for their

unconditional support, which has meant so much to me.

St. Gallen, February 2018 Anna Franziska Schuler

I

Overview of Contents

List of Tables .............................................................................................................. VII

List of Figures .......................................................................................................... VIII

List of Abbreviations ................................................................................................. IX

Executive Summary ................................................................................................... XI

Zusammenfassung .................................................................................................... XII

1 Introduction ............................................................................................................ 1

1.1 Idiosyncratic Work Arrangements in the New World of Work.......................... 1

1.2 Practical Relevance of Idiosyncratic Work Arrangements .................................. 3

1.3 Positioning the Concept of I-Deals .......................................................................... 6

1.4 Theoretical Relevance of Idiosyncratic Work Arrangements ............................ 12

1.5 Literature Review on I-Deals Research ................................................................. 14

1.6 Research Gaps and Intended Contributions ........................................................ 28

1.7 Methodological Approach ...................................................................................... 36

1.8 Outline of the Dissertation ...................................................................................... 37

2 How Do I-Deals Relate to Organizational Performance? The Role of

Collective Attitude, Coworker Relations and Leadership Climate .................... 41

2.1 Introduction .............................................................................................................. 41

2.2 Theoretical Background .......................................................................................... 44

2.3 Method ....................................................................................................................... 57

2.4 Results ........................................................................................................................ 64

2.5 Discussion ................................................................................................................. 71

3 I-Deals Differentiation and Organizational Performance: Does Idiosyncrasy

Make I-Deals Non-Ideal? .......................................................................................... 78

3.1 Introduction .............................................................................................................. 78

3.2 Theoretical Background .......................................................................................... 81

3.3 Method ....................................................................................................................... 91

3.4 Results ........................................................................................................................ 96

3.5 Discussion ............................................................................................................... 103

4 Combining I-Deals and Human Resource Practices: Enhancing

Organizational Performance through Consistency ............................................ 110

II

4.1 Introduction ............................................................................................................ 110

4.2 Theoretical Background ........................................................................................ 112

4.3 Method ..................................................................................................................... 124

4.4 Results ...................................................................................................................... 129

4.5 Discussion ............................................................................................................... 136

4.6 Conclusion .............................................................................................................. 140

5 Overall Discussion and Conclusion ................................................................ 142

5.1 Summary and Integration of Research Findings ............................................... 142

5.2 Theoretical Contributions ..................................................................................... 147

5.3 Practical Implications and Recommendation .................................................... 156

5.4 Limitations and Directions for Future Research ............................................... 165

5.5 Conclusion and Outlook ....................................................................................... 173

6 References ........................................................................................................... 174

Curriculum Vitae ..................................................................................................... 209

III

Table of Content

List of Tables .............................................................................................................. VII

List of Figures .......................................................................................................... VIII

List of Abbreviations ................................................................................................. IX

Executive Summary ................................................................................................... XI

Zusammenfassung .................................................................................................... XII

1 Introduction ............................................................................................................ 1

1.1 Idiosyncratic Work Arrangements in the New World of Work.......................... 1

1.2 Practical Relevance of Idiosyncratic Work Arrangements .................................. 3

1.3 Positioning the Concept of I-Deals .......................................................................... 6

1.4 Theoretical Relevance of Idiosyncratic Work Arrangements ............................ 12

1.5 Literature Review on I-Deals Research ................................................................. 14

1.5.1 Underlying Theory and Mechanisms ........................................................................ 15 1.5.2 Consequences of I-Deals .............................................................................................. 20 1.5.3 Antecedents of I-Deals ................................................................................................. 22 1.5.4 Moderators and Relevant Context Factors ................................................................ 23 1.5.5 Mediators and Explanatory Mechanisms.................................................................. 25 1.5.6 Multilevel Research on I-Deals ................................................................................... 26

1.6 Research Gaps and Intended Contributions ........................................................ 28

1.6.1 I-Deals and Organizational Performance .................................................................. 29 1.6.2 Intermediate Processes at the Organizational Level................................................ 30 1.6.3 The Role of Leadership ................................................................................................ 31 1.6.4 The Role of Organizational Justice ............................................................................. 32 1.6.5 The Interplay between I-Deals and HRM ................................................................. 33

1.7 Methodological Approach ...................................................................................... 36

1.8 Outline of the Dissertation ...................................................................................... 37

1.8.1 Chapter 1: Introduction ............................................................................................... 37 1.8.2 Chapter 2: Study 1 - How Do I-Deals Relate to Organizational Performance? The Role of Collective Attitude, Coworker Relations and Leadership Climate ........................ 37 1.8.3 Chapter 3: Study 2 - I-Deals Differentiation and Organizational Performance: Does Idiosyncrasy Make I-Deals Non-Ideal? .......................................................................... 38 1.8.4 Chapter 4: Study 3 - Combining I-Deals and Human Resource Practices: Enhancing Organizational Performance through Consistency ............................................ 40 1.8.5 Chapter 5: Overall Discussion and Conclusion ........................................................ 40

IV

2 How Do I-Deals Relate to Organizational Performance? The Role of

Collective Attitude, Coworker Relations and Leadership Climate .................... 41

2.1 Introduction .............................................................................................................. 41

2.2 Theoretical Background .......................................................................................... 44

2.2.1 I-Deals ............................................................................................................................ 44 2.2.2 Effects of Organizational Median I-Deals on Employee Job Attitudes ................. 45 2.2.3 Effects of Organizational Median I-Deals on Coworker Relations........................ 47 2.2.4 The Role of Leadership Climate ................................................................................. 50 2.2.5 The Link to Organizational Performance .................................................................. 54

2.3 Method ....................................................................................................................... 57

2.3.1 Data and Sample ........................................................................................................... 57 2.3.2 Measures ........................................................................................................................ 59

2.4 Results ........................................................................................................................ 64

2.4.1 Descriptive Statistics .................................................................................................... 64 2.4.2 Data Analysis and Hypothesis Testing ..................................................................... 66 2.4.3 Alternative Model Testing........................................................................................... 70

2.5 Discussion ................................................................................................................. 71

2.5.1 Theoretical Implications .............................................................................................. 72 2.5.2 Strengths, Limitations and Future Research ............................................................. 74 2.5.3 Practical Implications ................................................................................................... 76 2.5.4 Conclusion ..................................................................................................................... 77

3 I-Deals Differentiation and Organizational Performance: Does Idiosyncrasy

Make I-Deals Non-Ideal? .......................................................................................... 78

3.1 Introduction .............................................................................................................. 78

3.2 Theoretical Background .......................................................................................... 81

3.2.1 I-Deals ............................................................................................................................ 81 3.2.2 Organizational Justice Climate ................................................................................... 82 3.2.3 I-Deals Differentiation and Distributive Justice Climate ........................................ 83 3.2.4 Organizational Median I-Deals and Procedural Justice Climate as Moderators of the Relation between I-Deals Differentiation and Distributive Justice Climate ................. 85 3.2.5 Mediation Effect of Distributive Justice Climate ...................................................... 89

3.3 Method ....................................................................................................................... 91

3.3.1 Data and Sample ........................................................................................................... 91 3.3.2 Measures ........................................................................................................................ 92

3.4 Results ........................................................................................................................ 96

V

3.4.1 Descriptive Statistics .................................................................................................... 96 3.4.2 Data Analysis and Hypothesis Testing ..................................................................... 96 3.4.3 Robustness Analysis ................................................................................................... 103

3.5 Discussion ............................................................................................................... 103

3.5.1 Theoretical Implications ............................................................................................ 104 3.5.2 Limitations and Future Research ............................................................................. 106 3.5.3 Practical Implications ................................................................................................. 108 3.5.4 Conclusion ................................................................................................................... 108

4 Combining I-Deals and Human Resource Practices: Enhancing

Organizational Performance through Consistency ............................................ 110

4.1 Introduction ............................................................................................................ 110

4.2 Theoretical Background ........................................................................................ 112

4.2.1 Flexible Working Arrangements .............................................................................. 112 4.2.2 I-Deals .......................................................................................................................... 113 4.2.3 Flexible Working Arrangements and Organizational Performance ................... 114 4.2.4 The Intermediate Effect of Organizational Productive Energy ............................ 115 4.2.5 The Moderating Effect of I-Deals ............................................................................. 119

4.3 Method ..................................................................................................................... 124

4.3.1 Data and Sample ......................................................................................................... 124 4.3.2 Measures ...................................................................................................................... 125

4.4 Results ...................................................................................................................... 129

4.4.1 Descriptive Statistics .................................................................................................. 129 4.4.2 Data Analysis and Hypothesis Testing ................................................................... 129 4.4.3 Robustness Analysis ................................................................................................... 134

4.5 Discussion ............................................................................................................... 136

4.5.1 Theoretical Implications ............................................................................................ 136 4.5.2 Limitations and Future Research ............................................................................. 137 4.5.3 Practical Implications ................................................................................................. 139

4.6 Conclusion .............................................................................................................. 140

5 Overall Discussion and Conclusion ................................................................ 142

5.1 Summary and Integration of Research Findings ............................................... 142

5.1.1 I-Deals and Organizational Performance ................................................................ 143 5.1.2 Intermediate Processes............................................................................................... 144 5.1.3 Context Factors ........................................................................................................... 144

5.2 Theoretical Contributions ..................................................................................... 147

VI

5.2.1 I-Deals Theory ............................................................................................................. 147 5.2.2 I-Deals and TFL Theory ............................................................................................. 151 5.2.3 I-Deals and Justice Theory ......................................................................................... 153 5.2.4 I-Deals and HRM Literature ..................................................................................... 154

5.3 Practical Implications and Recommendation .................................................... 156

5.3.1 Employer ...................................................................................................................... 157 5.3.2 HR Managers ............................................................................................................... 158 5.3.3 Line Managers ............................................................................................................. 161 5.3.4 Employees .................................................................................................................... 164

5.4 Limitations and Directions for Future Research ............................................... 165

5.4.1 Measurement of I-Deals ............................................................................................. 166 5.4.2 Level of Analysis......................................................................................................... 168 5.4.3 Study Design ............................................................................................................... 169 5.4.4 Additional Directions for Future Research ............................................................. 170

5.5 Conclusion and Outlook ....................................................................................... 173

6 References ........................................................................................................... 174

Curriculum Vitae ..................................................................................................... 209

VII

List of Tables

Table 1-1. Comparison of work design concepts (based on Hornung et al.,

2010b). .................................................................................................. 8

Table 1-2. The research questions of this dissertation. ................................. 35

Table 2-1. Means, standard deviations and intercorrelations among study

variables. ........................................................................................... 65

Table 3-1. Means, standard deviations and interecorrelations among study

veriables. ........................................................................................... 98

Table 3-2. Results of moderated regression analysis predicting distributive

justice climate. .................................................................................. 99

Table 3-3. Results of the moderated regression analysis predicting

organizational performance. ........................................................ 101

Table 3-4. Bootstrapping results for the test of conditional indirect effects at

specific values of the modertaor: mean and +/- standard

deviation. ......................................................................................... 102

Table 4-1. Means, standard deviations and intercorrelations among study

varibles. ........................................................................................... 130

Table 4-2. Regression results for the estimated coefficients of the mediation

model. .............................................................................................. 131

Table 4-3. Regression results for the estimated coefficients of the moderated

mediation model. ........................................................................... 133

Table 4-4. Bootstrapping results for the test of conditional indirect effects at

specific values of the moderator: mean and +/- standard

deviation. ......................................................................................... 135

VIII

List of Figures

Figure 1-1. Integrative research perspective. ................................................... 35

Figure 1-2. Overview of chapter structure. ...................................................... 39

Figure 2-1. Overview conceptual model. ......................................................... 57

Figure 2-2. Structural model results. ................................................................. 68

Figure 2-3. Moderation effect of the individual-focused leadership climate

on the relationship between organizational median i-deals and

collective job satisfaction. ............................................................... 69

Figure 2-4. Moderation effect of the collective-focused leadership climate on

the relationship between organizational median i-deals and

collective OCBI. ................................................................................ 69

Figure 3-1. Moderated mediation model of the relationship between i-deals

differentiation and organizational performance. ........................ 91

Figure 3-2. Three-way interaction on distributive justice climate. ............. 100

Figure 4-1. Moderated mediation model of the relationship between FWAs

and organizational performance. ................................................ 123

Figure 4-2. Moderation effect of organizational median i-deals on the

relationship between FWAs and organizational productive

energy. ............................................................................................. 134

IX

List of Abbreviations

α Cronbach’s alpha

ADM(J) average deviation index

AIC Akaike information criterion

AMOS analysis of moment structures

b / B b-value / unstandardized regression coefficient

β beta-coefficient / standardized regression coefficient

χ2 chi square value

CFA confirmatory factor analysis

CFI comparative fit index

CI confidence interval

Δ delta

df degrees of freedom

Ed. / Eds. editor / editors

ed. edition

EFA exploratory factor analysis

e.g. example gratia / for example

et al. et alii

F F-test value

FWAs flexible working arrangements

HR human resource

HRM human resource management

ICC intraclass correlation coefficient

I-deal idiosyncratic deal

I-dealer employee with an i-deal

i.e. id est / that is

IFI incremental fit index

LMX leader-member exchange

M mean

X

N/n number of observations

NWW new ways of working

ns not significant

OCB organizational citizensghip behavior

OCBI OCB directed towards coworkers

OCBO OCB directed towards the organization

p p-value

p. page

PLS partial least square

r Pearson product-moment correlation coefficient

R2 squared multiple correlation coefficient

RMSEA root mean square error of approximation

rwg index of interrater agreement

s.d. standard deviation

SDT self-determination theory

SE standard error

SEM structural equation modeling

SPSS statistical package for the social sciences

SRMR standardized root mean square residual

t t-test value

TFL transformational leadership

USA/ U.S. United States of America

VIF variance inflation factor

Vol. volume

XI

Executive Summary

In the modern world of work, standardized working agreements are often not

sufficient. Organizations are increasingly offering employees idiosyncratic

working conditions (so-called i-deals) in order to meet a variety of needs and to

recruit and retain high-performing employees. So far, research has largely been

limited to the positive effects of i-deals on individual employees. However, by

definition, i-deals are also beneficial to the employer. This dissertation therefore

addresses the question of whether, how, and under what conditions i-deals

have positive or negative effects on companies.

Study 1, with data from 87 companies, shows that i-deals can have negative and

positive effects on companies, depending on the type of leadership climate in

the organization. In addition, collective job satisfaction and coworker relations

mediate the effect of the median level of i-deals on organizational performance.

Study 2 is based on data from 96 companies and concerns i-deals differentiation,

which describes the differences between employees that arise through i-deals.

I-deals differentiation has a positive effect on perceived distributive justice and

organizational performance when there is a procedural justice climate and not

too many i-deals are awarded. Study 3 found that, based on 83 companies,

flexible HR practices only impact organizational productive energy and

organizational performance when employees, through individually negotiated

i-deals, can actually leverage the flexibility.

The three studies show that whether or not organizations benefit from the use

of i-deals depends on a variety of contextual conditions. This dissertation is a

starting point for i-deals research at the organizational level and aims to inspire

future i-deals research and the successful use of i-deals in practice.

XII

Zusammenfassung

In der modernen Arbeitswelt reichen standardisierte Arbeitsvereinbarungen oft

nicht aus. Unternehmen bieten Mitarbeitern zunehmend individualisierte

Arbeitsbedingungen (sogenannte I-Deals), um einer Vielzahl an Bedürfnissen

entgegenzukommen und leistungsstarke Mitarbeiter anzuwerben und zu

binden. Die Forschung hat sich bisher grösstenteils auf positive Auswirkungen

von I-Deals auf einzelne Mitarbeiter beschränkt. Laut Definition sind I-Deals

jedoch auch für den Arbeitgeber von Vorteil. Diese Dissertation geht daher mit

drei Studien auf die Frage ein, ob, wie und unter welchen Bedingungen I-Deals

positive und negative Auswirkungen auf Unternehmen haben.

Studie 1 zeigt mit Daten von 87 Unternehmen, dass I-Deals negative und

positive Effekte auf Unternehmen haben können, abhängig von der Art des

Führungsklimas im Unternehmen. Ausserdem zeigt sich, dass der Effekt von I-

Deals auf die Unternehmensleistung von kollektiver Arbeitszufriedenheit und

der Mitarbeiterbeziehung mediiert wird. Studie 2 beruht auf Daten von 96

Unternehmen und beschäftigt sich mit I-Deals Differenzierung, welche die

Unterschiede beschreibt, die durch I-Deals zwischen Mitarbeitenden entstehen.

Die I-Deals Differenzierung hat hierbei einen positiven Effekt auf die

empfundene Verteilungsgerechtigkeit und die Unternehmensleistung, wenn

ein prozedurales Gerechtigkeitsklima herrscht und nicht zu viele I-Deals

vergeben werden. Studie 3 erforscht anhand von 83 Unternehmen, dass flexible

HR Instrumente sich nur auf Organisationale Produktive Energie und

Unternehmensleistung auswirken, wenn die Flexibilität von den Mitarbeitern

auch tatsächlich durch individuell verhandelte I-Deals genutzt werden kann.

In den drei Studien zeigt sich, dass es von einer Vielzahl an

Kontextbedingungen abhängt, ob ein Unternehmen von der Nutzung von I-

Deals profitiert. Diese Dissertation stellt einen Startpunkt für die I-Deals-

Forschung auf Unternehmensebene dar. Sie soll zukünftige I-Deals-Forschung

und eine erfolgreiche Nutzung von I-Deals in der Praxis inspirieren.

Introduction 1

1 Introduction

“Workplaces are full of idiosyncrasies.”

Rousseau (2005, p. 27)

The Daily Muse (or just The Muse) is an American career and employment

website founded in September 2011. The firm’s client list includes Facebook,

Zappos, McKinsey, and Pinterest. On its website, The Muse offers career advice

as well as extensive information on employers including behind-the-scene

videos and interviews with current employees (The Muse, 2016a). Further, a list

of “10 companies that let you create your own job” is provided. Amongst other

companies, Zappos and The Wall Street Journal give applicants the opportunity

for general applications by proposing new job positions matching their own

needs and ideas (The Muse, 2016b).

1.1 Idiosyncratic Work Arrangements in the New World of Work

In the future, customized or so-called “idiosyncratic working arrangements”

will be no exception (Rousseau, 2005). In the 21st century, a new working era

has emerged. Environmental changes have altered the entire work context,

including the traditional organizational structures and the employer-employee

relationship (Sullivan & Baruch, 2009). Increased globalization, workforce

diversity and rapid technological advancements are creating changes in how

companies approach work (Demerouti, Derks, Ten Brummelhuis & Bakker,

2014) and how individuals enact and create their careers (Sullivan & Baruch,

2009; Sullivan & Mainiero, 2007). Today’s work is no longer limited by a specific

time and a fixed location or the traditional boundaries of organizations (De Kok,

2016). The focus of this new approach to work is flexibility in how employees

approach and organize their work (Demerouti et al., 2014). Employees have the

possibility of deciding for themselves when they work (i.e., schedule flexibility),

where they work (i.e., location flexibility), and which communication tools (e.g.,

2 Introduction

smartphone, email, videoconference) they use (Ten Brummelhuis, Bakker,

Hetland, & Keulemans, 2012). This new and flexible approach to work has often

been referred to as “new ways of working” (NWW; Demerouti et al., 2014). The

NWW concept comprises a myriad of different forms of modern work

arrangements and tools, such as working from home, mobile working, flexible

working hours, use of video conferencing, internet and collaborative tools (Blok,

Groenesteijn, Van den Berg, & Vink, 2011). The key principles of NWW are time

and location flexibility, and result orientation rather than a culture of

attendance, unlimited access to information and connectivity, and flexible work

relations (Baane, Houtkamp, & Knotter, 2010, as cited in De Kok, 2016). These

work principles aim at giving employees maximal autonomy in carrying out

their work (De Kok, 2016; Demerouti et al., 2014). Thus, NWW go hand in hand

with, and foster idiosyncratic work arrangements (Hornung, Rousseau, &

Glaser, 2008). When organizations have human resource (HR) practices which

allow employees to work from home or have flexible working hours, employees

are more likely to negotiate idiosyncratic work arrangements with their

supervisor, which enable them to use those offers according their own needs

(Bayazit & Bayazit, 2017; Hornung et al., 2008). Hornung et al. (2008) found that

formal organizational programs offering employees part-time work and home

office foster negotiation for customization beyond the scope of these officially

offered programs.

Merz Pharma, a German pharmaceutical company, is one of the few companies

today that already respond very individually to their employees’ needs. The

company has found that employees want to use human resource management

(HRM) offerings very differently. When caring for relatives, for example, the

range extends from a temporary complete withdrawal to a reduction in working

hours to full-time employment with the simultaneous use of care services. Even

with parental leave, employees use this resource in different ways. Some

parents return after half a year and then use the company day nursery for their

children while others take time off for several years. To meet the manifold

needs, Merz Pharma offers versatile options through a strong flexibilization of

Introduction 3

working forms offered by the HRM, for example through a basic range of

working time models. On the other hand, Merz Pharma has created a culture in

which employees can openly talk to their direct managers and HR managers

about their concerns and make individual arrangements that fit their personal

needs (berufundfamilie, 2015).

1.2 Practical Relevance of Idiosyncratic Work Arrangements

Idiosyncratic work arrangements are aimed at the needs of employees and

employers, which arise from a multitude of global mega-trends (Nauta & Van

de Ven, 2016). The hasty development of globalization and demographic change

implicates a more and more diverse workforce (Stangel-Meseke, Hahn, &

Steuer, 2015). On the one hand, organizations are increasingly making use of

international personnel recruitment as people become more mobile and able to

move internatinally between jobs (Stangel-Meseke et al., 2015). On the other

hand, more and more women are entering the workforce while the retirement

age is increasing and the workforce is aging (Nauta & Van de Ven, 2016; Stangel-

Meseke et al., 2015). The increase of the retirement age is a crucial challenge.

While a few years ago, many workers retired at the age of 60, today many

European countries demand that workers retire at the age of 65 or even 67

(Nauta & Van de Ven, 2016). Still, the retirement age will undoubtedly continue

to increase in the future. Older people often experience a loss of abilities and

thus fit less into standardized jobs (Nauta & Van de Ven, 2016). Idiosyncratic

work arrangements are an option to help older employees compensate for their

decreasing abilities and to stay motivated to continue working. Indeed, Bal, De

Jong, Jansen and Bakker (2012) show that especially idiosyncratic work

arrangements are important for older workers and their motivation to continue

working. Furthermore, the increasing participation of women in the labor

market observed in recent years leads to an increase in the number of dual-

career couples (Arnold, 2003). The so-called feminization of the workplace

challenges norms, values and traditional career paths of our society (Fondas,

1996). Idiosyncratic working arrangements can assist members of dual career

4 Introduction

couples in handling and balancing their various commitments at home and at

work and to be effective in their job (Arnold, 2003). Arrangements as for

example leave entitlements, career breaks, flexible working hours or home

office might be useful for dual career couples (Arnold, 2003, Bayazit & Bayazit,

2017). Furthermore, Generation Y, which has grown up in a digital world with

changing values and needs of the workforce contribute to the calls for

individualization at work (Bruch & Schuler, 2016; De Kok, 2010). For

organizations, idiosyncratic work arrangements will increasingly be an option

to attract skilled and diverse employees and to respond to the need for flexibility

and individualization (Bal & Rousseau, 2016). An HRM aligned towards the

various life phases of employees is becoming more important. In the future,

working arrangements must be matched precisely to each employee’s phase of

life and career (Bruch & Schuler, 2016). Finally, the rapid advancement of

technology is driving idiosyncrasy at work (Nauta and Van de Ven, 2016). Due

to these technological developments, job contents and work processes change

constantly and demand permanent adaptability from employees (Nauta and

Van de Ven, 2016). Successful career development is increasingly dependent on

employees’ flexibility, creativity and knowledge. All these aspects can be

promoted by employees through the negotiation of idiosyncratic work

arrangements, which might range from work-hour flexibility, taking on new

and challenging work assignments, or development and special training

arrangements (Nauta & Van de Ven, 2016). On the other hand, contemporary

organizations increasingly depend on employees’ skills and knowledge (e.g.,

Bal & Rousseau, 2016; Nauta & Van de Ven, 2016; Rousseau, 2005). Having

special, highly-developed and uncommon abilities makes employees difficult

to replace and strengthens their bargaining position (Rousseau, 2005). Thus,

those employees are able to negotiate effectively for special and customized

deals which fit their personal needs (Rousseau, 2005). Consequently, to design

successful careers and working conditions for both employees and employers

in the new organizational context, organizations and workers must

continuously negotiate and renegotiate what both parties expect to invest and

Introduction 5

receive in the employment relationship, leading to an increased use of

idiosyncratic work arrangements (Herriot & Pemberton, 1995; Rousseau, 2005).

Idiosyncratic work arrangements are already more common in organizations

than one might assume. Despite the widely known prime example of Silicon

Valley, European organization are also capable of what Google, Tesla and

Facebook do and are often even more innovative than expected (Esser &

Schelenz, 2013). Consequently, and contrary to the impression given by the

initial example of companies listed on The Muse, not just U.S. firms, provide

pioneering examples for the individualization of the workplace. In October

2012, The Brains recruitement agency published an innovative job

advertisement. While being a small company only founded in 2011, this Zurich-

based firm has had a successful start and was thus looking for a new employee.

The special feature of the job advertisement: the applicant could design his or

her own job. According to the motto “Design your own Job”, applicants had to

show, how they could contribute with their unique skills to the organization’s

performance. Amongst others, applicants could even define which tasks they

wished to take on and what percentage of working time they would suggest for

their future position (The Brains, 2012). The German machinery builder Trumpf

follows a similar path and offers a great deal of flexibility and individual options

for employees to meet each worker’s special needs. Each of the 4500 employees

decides for him or herself when he or she wants to work, with a minimum of 15

and a maximum of 40 hours per week. Furthermore, employees can save up a

maximum of 1000 working hours and use them for vacation or family

responsibilities, for example caring for relatives (Esser & Schelenz, 2013).

There can be a too much of a good thing effect, however, as employee relations

and organizational commitment might suffer when employees have the option

to work from wherever and whenever they wish to, especially when the

organizational culture does not fit to flexibility and individualization. Some

companies have failed introducing flexibility to their employees. Yahoo, for

example, had to refrain from allowing theirs to work from wherever they

wanted, since the collaboration and organizational culture suffered (Kossek,

6 Introduction

Thomspson, & Lautsch, 2015). No matter how many days employees chose to

work from home, they were ordered back into the office (The Guardian, 2013).

A similar fate befell IBM: they had already introduced the possibility of remote

working in the 1980s. By 2009, when flexible working locations were still a

novelty for most other companies, 40% of IBM’s 386,000 employees worldwide

were already working at home (Quartz, 2016). However, nowadays, IMB does

not only need increased productivity but also more innovation and creativity.

IBM believes that physical proximity between employees fosters new ideas,

communication, better understanding, and collaboration between coworkers

and thus abolished home office in 2017 (Quartz, 2016). Similarly, when Patrick

Pichette, Google’s CFO, was asked how many employees at Google can chose

where they want to work, he said: “As few as possible.” (Quartz, 2016).

These examples show big differences in whether and how companies allow and

use customized flexibility. Nevertheless, individualization can not be avoided

in today's world of work and will be increasingly important for organizations

(e.g., Nauta & Van de Ven, 2016). While Yahoo officially forbid home office,

some employees still do occasionally work from home (Huffington Post, 2015).

Thus, this ambivalence in organizational practices regarding flexible and

idiosyncratic working practices, which seems to reflect a certain degree of

uncertainty, is combined with the increasing relevance of individualized

working arrangements in the new world of work. This dissertation therefore

has the goal of clarifying what effects individualization at work has on

organizations and under which conditions organizations can use idiosyncratic

work arrangements while not harming but rather benefitting collaboration

between employees, organizational climate and organizational performance.

1.3 Positioning the Concept of I-Deals

Referring to Ebbinghaus’ prominent statement about psychology (Ebbinghaus,

1908, p. 7), Rousseau (2005) notes that, i-deals too, have a short history but a

long past. While i-deals research is still in its infancy, it is built upon a broad

Introduction 7

array of prior research on how individuals can proactively shape their jobs and

their employment relationships (Rousseau, 2005). Ostensibly unrelated research

areas such as work family balance, idiosyncratic jobs, job crafting, leader-

member-exchange (LMX), boundaryless careers and psychological contracts

constitute a rich foundation for the emerging research field of i-deals (Liao et

al., 2016; Rousseau, 2005). Research has for instance demonstrated that

employees with a high-quality relationship with their supervisor have more

access to resources such as information or support (Dansereau, Graen, & Haga,

1975; Liden & Graen, 1980), responsibility and decision-making autonomy

(Kozlowski & Doherty, 1989) as well as flexibility and development

opportunities (Rousseau, 2005). Other research streams demonstrate that

boundaryless career success depends on employee-employer negotiation

(Arthur, Khapova, & Wilderom, 2005) and that idiosyncratic jobs arise more

likely in less formal organizational settings (Granovetter, 1995).

Broadly spoken, i-deals can be classified as one approach to work redesign

(Hornung, Rousseau, Glaser, Angerer, & Weigl, 2010b). Job or work (re-) design

typically refers to setting up or changing tasks, jobs, contents, work settings and

employment conditions in ways that benefit both employees and employers

(Hackman & Oldham, 1975, 1980). Work redesign is beneficial for employees by

leading to more intrinsically satisfying work and greater well-being, while

employers benefit from increased employee attendance, retention,

performance, and proactivity (e.g., Fried & Ferris, 1987; Parker, Turner, &

Griffin, 2003). Two established approaches to work redesign are formal

management-led, top-down interventions and proactive bottom-up job crafting

(Hornung et al., 2010b). These two approaches differ to a great extent from each

other. Top-down approaches are management-led interventions to make job

classes more intrinsically motivating for employees to enhance their

performance (Hackman & Oldham, 1975, 1980). Job crafting refers to all

“physical and cognitive changes individuals make in the task or relational

boundaries of their work” (Wrzesniewski & Dutton, 2001, p. 179). Both top-

down intervetions and informal job crafting have limitations. On the one hand,

8 Introduction

top-down approaches to work redesign are restricted in their ability to establish

individually optimized work arrangements by meeting employees’ personal

needs (Hackman & Oldham, 1976, 1980; Walton, 1972), while on the other hand

bottom-up processes are constrained by the extend workers can substantially

alter their work setting and tasks without authorization from the leader

(Hornung et al., 2010b). I-deals therefore represent “a middle path between top-

down work redesign and a single worker’s private efforts to craft a job”

(Hornung et al., 2010b, p. 190). I-deals, which are customized working

conditions negotiated between employee and employer, are one possibility for

individual employees to receive idiosyncratic working conditions they cannot

create without formal approval of their employer (Rousseau, 2005). A detailed

comparison of all three concepts of work design - top down job redesign, job

crafting and i-deals - is shown in Table 1-1 (Hornung et al., 2010b, p. 188)0F

1.

Table 1-1. Comparison of work design concepts (based on Hornung et al., 2010b).

Dimensions Job redesign Job crafting I-deals

Initiation Top-down by management

Bottom-up by worker Bottom-up typically by worker

Implementation Planned intervention Employee discretion Employee-management negotiation

Authorization Formal Unauthorized or within zone of acceptance

Authorized by agents or human resources approval

Employee`s role Typically recipient Actor Both actor and recipient Focus Job classes or

idiosyncratic jobs Individual job or position

Individual job or position

Primary goal Intrinsic motivation/ performance

Personal needs Broad mutual benefit

Design content Work characteristics Tasks and interactions Any or all employment features

Results Objective changes Objective changes and/or cognitive redefinition

Objective changes

Process Discrete event Ongoing Intermittent events

1 This table was taken from Hornung et al. (2010b, p. 188)

Introduction 9

I-deals emerge due to a variety of personal goals and motives, ranging from the

need to balance work and family responsibilities to the need to know that one

is highly appreciated by the employer (Rousseau, 2005). Formally defined, i-

deals are a form of customizing job tasks, responsibilities, work conditions and

employment relationships (e.g., Rousseau, 2001, 2005). I-deals grant employees

special employment conditions which differ significantly from the standard

employment arrangements of their coworkers (Rousseau, 2005). This is done in

order to satisfy their personal needs (Rousseau, Ho, & Greenberg, 2006;

Hornung et al., 2008). The i-deals negotiated between an employee and his

employer reflect the employee’s market value ascribed by the employer (Bartol

& Martin, 1989). Representatives of the employer who negotiate i-deals with

employees are in most cases direct supervisors or HR managers (Liao et al.,

2016; Rousseau, 2005). These special arrangements are intended to benefit both

the employee through special consideration (e.g., through receiving special

training opportunities or schedule flexibility) and specifically the employer

through special contributions (e.g., through enhanced employee performance,

commitment and motivation; Rousseau, 2005). The customization of work

through i-deals is not limited to specific groups of workers, as for example high

performers (Rosen, 1981; Rousseau, 2005). Employees receiving i-deals are most

often called i-dealers in the i-deals literature (e.g., Rousseau, Tomprou, &

Simosi, 2016).

I-deals may be negotiated at different times of the employment relationship

(Rousseau, 2005) and those negotiated at the time of hire, for example during

the recruitment process, are called ex ante i-deals. When i-deals are negotiated

later in an ongoing employment relationship, they are called ex post i-deals

(Rousseau et al., 2009). Ex post i-deals are further distinguished in two forms:

Those in which an employee intends to quit and those in which the employee’s

past and assumed future contribution to the organization are the reason for

negotiations, as the company intends to keep the employee (Rousseau, 2005).

Customized deals vary considerably in content and scope, that is to say they

include minor adjustments in hours and work schedules, workplaces,

10 Introduction

responsibilities or tasks, but also highly individualized jobs (Miner, 1987). This

means that i-deals might consist of only one single idiosyncratic element in an

otherwise fully standardized employment contract or an entirely individualized

work arrangement (Rousseau, 2005). While i-deals can involve any resource

exchanged by employee and employer ranging from tangible elelements (e.g.,

money) to intangible (e.g., interpersonal support; Rousseau, 2005). However,

key features of i-deals regarding their content have been identified. Hornung et

al. (2010b) introduced four common types of i-deals: flexibility, developmental,

workload-reduction, and task i-deals. Flexibility i-deals allow employees to

schedule their work as they need it, developmental i-deals provide employees

special opportunities to use and expand their skills and to pursue career

advancement, workload-reduction i-deals refer to reduced work demands, and

task i-deals are arrangements to change the content of a job (Hornung et al.,

2010b). In contrast to Hornung et al. (2010b), Rosen et al. (2013) created an i-

deals scale according to established scale development methods. Their research

shows that employees negotiate i-deals across four content domains: schedule

flexibility, location flexibility, work responsibilities, and financial incentives

(Rosen et al., 2013). The two newly identified constructs, location flexibility and

financial incentives, describe special work arrangements that allow employees

to work outside of the office and to customize compensation arrangements,

respectively (Rosen et al., 2013). Nauta and Van de Ven (2016) go further by

distinguishing between “comfort i-deals”, which are about making work less

demanding for employees, and “challenge i-deals”, which aim at developing

employees’ skills and knowledge and therefore contribute to career

development.

Based on the fundamental theoretical postulate of mutual benefits for both

employee and employer, i-deals have been differentiated from dysfunctional

individual arrangements, such as favoritism or cronyism, which are based on

personal and political ties and, most likely, have a detrimental impact on the

team, the unit and the organization (Greenberg et al., 2004; Rousseau, 2005;

Rousseau et al., 2006). Although easily confused with one another, i-deals are

Introduction 11

also distinct from psychological contracts. I-deals are individually negotiated

agreements regarding the customization of certain employment features,

whereas the psychological contract is defined as an individual employee’s

beliefs regarding the terms and conditions of the reciprocal exchange to the

employer which represents the employment relationship (Rousseau, 2001).

More specifically, the psychological contract is a cognitive representation of the

working relationship, while i-deals refer to actually customized working

conditions (Rousseau, 2001, 2005). Thus, these two constructs are highly linked

with each other, but nevertheless distinct (Hornung, Glaser, Rousseau, 2010a).

In fact, the perceived nature of the employment relationship (i.e., the

psychological contract) may determine if and what kinds of i-deals are asked

for and how they are interpreted by employees (Hornung, Rousseau, & Glaser,

2009).

It becomes apparent that by negotiating i-deals, individual employees can shape

their employment relationships according to their personal needs and

requirements of their tasks and jobs as well as their intended contributions to

the organization (Rousseau, 2005). Nowadays, idiosyncrasy is more widespread

in organizations than one might think. Between 25% and 40% of employees

already have idiosyncratic work arrangements (Rousseau, 2005). To cite Denise

Rousseau, who first introduced the concept of i-deals: “On a given day in

virtually any organization, one individual or another is taking the initiative to

individualize some aspect of his or her employment relationship” (Rousseau,

2005, p. 22).

12 Introduction

1.4 Theoretical Relevance of Idiosyncratic Work Arrangements

In response to an increasing use of individualized work arrangements in

practice due to an increasingly diverse workforce and workplace (Broschak &

Davis-Blake, 2006), research on customization of work arrangements has

flourished over the previous years (Hornung et al., 2008; Rosen, Slater, Chang,

& Johnson, 2013; Rousseau, 2005; Rousseau, Hornung, & Kim, 2009). Growing

research interest has discussed and studied the role of employees in the new

working environment (Hornung et al., 2008) and suggests that workers will

increasingly have to design their jobs and to create their career opportunities

(Savickas et al., 2009). Extant literature shows that employees play a more

proactive role in shaping their own jobs (e.g., Sullivan & Baruch). Specifically,

employees strive to customize their tasks, responsibilities, work conditions and

employment relationships in response to their own needs (Wrzesniewski &

Dutton, 2001; Lawler & Finegold, 2000). Among other approaches, this

customization can be achieved through idiosyncratic deals (so-called “i-deals”),

where individual employees negotiate with their employer in order to adapt

their work conditions to better meet their personal needs (Hornung et al., 2008).

I-deals is probably the construct depicting individualization at work which has

received the most increasing research interest over the last few years (Hornung

et al., 2008; Rosen et al., 2013; Rousseau, 2005; Rousseau et al., 2009).

I-deals are assumed to have several beneficial effects for individual employees

and are related to a variety of positive employee attitudes and behavior, such

as engagement, affective commitment and proactiveness (for reviews see

Conway & Coyle-Shapiro, 2016; Liao, Wayne, &, Rousseau, 2016). Going

beyond the benefits for individuals, the definition of i-deals also promises

positive effects for organizations (e.g., Rousseau, 2005). However, little research

exists on the effects of i-deals for organizations (Conway & Coayle-Shapiro,

2016). Although scientific research is scarce, researchers surmise positive effects

for companies that offer their employees i-deals. Potential positive effects

include employee attraction, retention, development, motivation and

Introduction 13

employability as well as organizational performance (Kroon, Freese, & Schalk,

2016). Specifically, Kroon et al. (2016) suggest that i-deals could be applied as a

competitive advantage for organizations. In a first multilevel study, Bal and

Boehm (2017) found a positive relationship between i-deals and client

satisfaction at the unit-level. However, to my knowledge, no further research

exists to clarify the role of i-deals for organizations and their performance.

There seems to be a dark side of i-deals, however, especially at the collective

level, which has been neglected in i-deals research (Bal & Boehm, 2017; Garg &

Fulmer, 2017; Nauta & Van de Ven, 2016). Potential drawbacks of i-deals might

involve perceived unfairness and damaged relationships between employees

(Greenberg, Roberge, Ho, & Rousseau, 2004; Kroon et al., 2016). A main concern

voiced by researchers is the so-called “Mathew-effect” (Bal & Lub, 2016). Strong

negotiators might more often receive i-deals from their employer, which

enhances their career chances, making it easier to repeatedly negotiate for i-

deals in the future. In contrast, people who are not very skilled at negotiating

will probably not receive i-deals resulting in lower career chances (Bal & Lub,

2016). Consequently, coworkers without i-deals will likely feel treated unfairly,

which causes dysfunctional behavior, impeding the performance of the i-dealer

(an employee who receives an i-deal), the team, and the organization

(Greenberg et al., 2004). Furthermore, both employees with comparably high

and low career chances might try to leave the company, resulting in higher

turnover rates and decreased organizational performance (e.g., Kroon et al.,

2016; Ng & Feldman, 2010). Further potential costs for companies result from

long and complicated negotiation processes involving huge efforts from all

parties involved (Kroon et al., 2016). In addition, due to managers having little

experience negotiating and maintaining individualized working arrangements,

the chance for creating successful i-deals, which are perceived as fair by

everyone, is low (Greenberg et al., 2004).

These feared negative effects threaten to overshadow potential benefits of i-

deals for organizations and might be the reasons why many organizations shy

away from granting i-deals to their staff. As research is not yet far enough to

14 Introduction

either recommend or dissuade companies from i-deals (Conway & Coyle-

Shapiro, 2016), it is time to take a step further and examine effects of i-deals on

organizations. As Liao et al. (2016, p. 23) state in their review of i-deals studies

to date: “Greater attention on the theoretical implications of i-deals at the

organizational level is […] warranted”. Based on the defining feature that i-

deals are mutually beneficial for employee and employer (Rousseau, 2005), not

only the practical but also theoretical legitimacy of i-deals depends on whether

i-deals also contribute to collective performance. One as yet unanswered but

prominent question in i-deals research is therefore: “Do organizations that

encourage and allow i-deals perform better than ones without i-deals?” (Liao et

al., 2016, p. 23). This dissertation aims to answer this question and introduces

the organizational level of analysis to i-deals literature to this end.

1.5 Literature Review on I-Deals Research

Meeting current changes in society and the economy, a growing interest in i-

deals research and literature has emerged (Bal & Boehm, 2017). Lacking a single

standard definition however, existing studies slightly differ in terms of the

actual definition of i-deals (Conway & Coyle-Shapiro, 2016). Specifically, while

some i-deals articles focus on the benefits of i-deals for both employees and

employer (e.g., Bal & Boehm, 2017; Lai, Rousseau, & Chang, 2009), other i-deals

studies highlight the personal need satisfaction of the employee and thereby

emphasize the benefit of the individual worker (e.g., Hornung et al., 2010a; Ng

& Lucianetti, 2016). Furthermore, studies published to date on i-deals differ in

terms of how many dimensions of i-deals (e.g., location and schedule flexibility,

developmental and financial i-deals) are covered (Convay & Coyle-Shapiro,

2015). Most studies on i-deals are cross sectional and link self-reported i-deals

with self-reported outcomes, while longitudinal studies are rather rare in this

field of research (Conway & Coyle-Shapiro, 2016).

Introduction 15

1.5.1 Underlying Theory and Mechanisms

The theoretical foundations of i-deals can be retraced to social exchange theory

(Rosen et al., 2013). Social exchange is built on the basic principle that one

person does another a favor with a general expectation of unspecified

reciprocation in the future (Blau, 1964). Social exchange relationships are

characterized by the fact that individuals tend to reciprocate favors, even if not

required to do so (Blau, 1964). The nature of social exchange relationships is

dependent on what each party has to offer (Cropanzano & Mitchell, 2005). In

the employment relationship, employees may for example contribute with

effort, motivation and commitment to an organization, while employers may

offer higher compensation, recognition or career advancement and

development opportunities (Tsui, Pearce, Porter, & Tripoli, 1997). Social

exchange theory is used to explain the existence, nature and functioning of i-

deals throughout the relevant literature (Greenberg et al., 2004). First, social

exchange theory postulates that employees make voluntary contributions to the

organization because they are motivated by expected but unspecified

reciprocation in the future, surmising a long-term relationship with the

employer (Blau, 1964). Consistent with this aspect of investments in a long-term

relationship, i-deals are generally not negotiated and granted until the

employees have proven their value to the employer by for example high

performance (Rousseau, 2005). Therefore, i-deals may be a way for the employer

to reciprocate an employee’s efforts and contributions (Liao et al., 2016). Second,

social exchange relationships develop because two parties - such as employee

and employer - help each other to reach goals (Cropanzano & Mitchell, 2005).

Similarly, i-deals are negotiated because they are beneficial for both parties - the

employee and the organization (Rousseau, 2005). Finally, building on social

exchange theory, Rousseau et al. (2006) propose that i-deals influence employee

attitudes and behavior because they indicate that the organization is interested

in a high-quality and long-term exchange relationship. Thus i-dealers feel

obliged to reciprocate through beneficial work attitudes (e.g., commitment) and

behaviors (e.g., task performance; Liao et al., 2016). In sum, social exchange

16 Introduction

theory represents a well-established framework to explain why employers give

i-deals to selected employees and why i-dealers react as they do (Liao et al.,

2016). In line with predictions based on social exchange theory, Ng and Feldman

(2010) for example found in their study that the relationship between i-deals

and voice behavior is mediated by employees’ organizational trust.

However, some researchers have found evidence that receiving i-deals does not

always cause employees to reciprocate with enhanced performance,

commitment or motivation (e.g., Hornung et al., 2009; Rousseau et al., 2009).

Therefore, other explanatory mechanisms were suggested to account for the

seemingly more complex relationship between i-deals and outcomes. An

alternative explanatory mechanism suggested by Liao et al. (2016) refers to the

role of employees’ goals in pursuing and asking for i-deals (Latham & Locke,

1991, 2007). Goals are defined as internal states which help individuals to

regulate and align their behavior to achieve valuable targets (Latham & Locke,

1991, 2007). Liao et al. (2016) propose that employees seeking enhanced

flexibility or less workload may not necessarily be motivated to work harder on

their employers’ benefit. More likely, those employees are seeking personal

benefits such as increased work-life balance or less strain at work (Liao et al.,

2016). Furthermore, researchers suggest job characteristics theory as relevant for

i-deals research (Hornung et al., 2010a; Hornung et al., 2010b; Liao et al., 2016).

For instance, i-deals that provide individual employees the opportunity to work

on their preferred tasks change the perceived characteristics of the job,

specifically job complexity and autonomy (Hornung et al., 2010a; Hornung et

al., 2010b). Similarly, Ho and Kong (2015) draw on self-determination theory,

by stating that i-deals translate into beneficial attitudinal and behavioral

responses by need satisfaction, focusing on enhanced competence need

satisfaction. Self-determination theory implies that employees seek i-deals with

the aim to better fit their jobs to their individual needs (Rousseau et al, 2006).

Relevant for the work context are needs regarding job content and

responsibility, work hours and schedule flexibility as well as personal and

career development (Nauta & Van de Ven, 2016). In line with those theories, Bal

Introduction 17

and Boehm (2017) argue based on work adjustment theory that i-deals have

positive effects on individuals because they enhance the fit between personal

needs, skills and the job.

Although social exchange and need based processes are the most commonly

used theoretical mechanism in i-deals literature, they have been criticized for

being too general, offering ambiguous predictions and neglecting potential

damaging effects at the individual and the collective level (Conway & Coyle-

Shapiro, 2016). Conway and Coyle-Shapiro (2016, p. 59) demand “better

theorizing on the multilevel effects of i-deals”, including individual- and

collective-level effects. Indeed, scholars have suggested additional explanatory

mechanisms linking i-deals and outcomes, of which the most common are

presented in the following.

Akin to social exchange theory is the explanatory mechanism suggested by Liu,

Lee, Hui, Kwan and Wu (2013). The authors use self-enhancement theory to

explain the effects of granting i-deals to employees by proposing that i-deals

lead to improved outcomes (e.g., employee performance) by enhancing the self

(Liu et al., 2013). Employees pursue self-enhancement because they wish to see

themselves in the most positive light, regarding their behavior, attitudes,

characteristics and skills (Pfeffer & Fong, 2005). Korman (2001) suggests that

receiving information that facilitates personal development and performance

enhances employees’ self. According to Liu et al. (2013), granting i-deals to an

employee conveys the message that they are valuable to the employer, because

the employer is willing to make special concessions for their efforts. This is in

line with the arguments of Ho and Kong (2015), who assume that i-deals

function as signaling devices based on signaling theory. They suggest that i-

deals can be used as signals by the employer to convey his or her positive

evaluation and regard for valued employees in order to elicit desirable

attitudinal and behavioral responses that in turn benefit the organization.

Furthermore, justice theories play a major role in i-deals research, as i-deals

cause differences between employees (Rousseau, 2005). Equity theory, focusing

18 Introduction

on distributive justice, was introduced into i-deals literature by suggesting that

the effects of employees’ i-deals are dependent on their coworkers’ reactions

(Ng & Lucianetti, 2016). Adams’ (1965) equity theory proposes that equity arises

when employees compare themselves with others and perceive that the ratio of

their outcomes to their inputs is equal to their coworkers’ outcome/input ratio,

while inequity occurs when the ratio of own outcomes to inputs is unequal to

the ratio of others (Pritchard, 1969). Distributive inequity can occur when, for

example, two people work for the same person and compare their working

arrangement to each other (Ng & Lucianetti, 2016). Adams suggests four

strategies to avoid inequity: first, by cognitively changing one’s own, or others’

input/outcome ratio, second, by influencing others to change theirs, third, by

changing own inputs or outcomes and fourth, by changing the comparison

person or ending the employment relationship (Pritchard, 1969). Applied to i-

deals literature, researchers suggest that employees compare their work

arrangements with their colleagues’ (e.g., Rousseau, 2005). Individuals who

perceive that they are receiving less rewards and resources than their coworkers

are trying to change the unfair situation for example by negotiating their own i-

deals which grant them more resources (Ng & Lucianetti, 2016). If perceived

inequalities cannot be solved or are not addressed by i-dealers or supervisors, a

variety of problems might arise due to perceived injustice (Greenberg et al.,

2004). As such, employees’ justice perceptions are the core dilemma regarding

individual work arrangements (Nauta & Van de Ven, 2016). While not being

focused on as much as distributive justice, increasing attention is also being

payed to procedural justice theory. Procedural justice includes perceived

fairness of decision-making procedures and allocation processes (Li &

Cropanzano, 2009). Liao, Wayne, Liden and Meuser (2017) integrate i-deals and

procedural justice theory by suggesting that employees experience control and

voice in the process of modifying their work arrangements – both aspects of

procedural justice - through successful i-deal negotiations (Folger &

Cropanzano, 1998; Greenberg et al., 2004; Liao et al., 2017; Thibaut & Walker,

Introduction 19

1975). Supporting their reasoning, i-deals were related to enhanced procedural

fairness perceptions (Liao et al., 2017).

Vidyarthi et al. (2016) explore the effects of i-deals trough the lens of social

comparison and social identity theory. Akin to justice theories, these theories

assume that employees compare their work arrangements with those of their

coworkers. Because employees are embedded in a social context at work,

customized work arrangements different from those of others, such as i-deals,

invoke social comparison with coworkers (Anand & Vidyarthi, 2016). Social

comparison theory claims that individuals evaluate their own social status in

comparison to a reference group in order to construct self-awareness and social

reality (Festinger, 1954; Hyman, 1942; Mettee & Smith, 1977; Sheriff, 1936).

Social identity theory in turn postulates that an individual’s social identity in an

intergroup context shapes his or her self-concept in a group and thereby affects

attitudes and behaviors (Hogg & Terry, 2000; Tajfel & Tuner, 1985). Integrating

social comparison and social identity theory, Vidyarthi et al. (2016) show that

employees react to their relative status with respect to i-deals within their team

(measured by own i-deals compared to the groups mean i-deal) and that the

group context impacts the relationship between i-deals and work behaviors.

While research based on justice, social comparison and social identity theories

assumes that i-deals function in a social context and thus have examined

employees’ reactions to i-deals in group contexts, Bal and Boehm (2017) draw

on contagion theory to argue that benefits caused by i-deals at the individual

level are transferred across organizational members and ultimately to clients.

Contagion theory (Hatfield, Cacioppo, & Rapson, 1992) explains how

employees influence each other’s emotions and attitudes in teams, units and

departments, and organizations.

In summary, i-deals research is increasingly based on a rich theoretical basis.

However, what is clearly lacking are theoretical frameworks to explain the

relationship between i-deals and performance at the organizational level (e.g.,

Conway & Coyle-Shapiro, 2016; Liao et al., 2016). In the following, I summarize

20 Introduction

key findings of i-deals literature, without claim to completeness, regarding

consequences and antecedents of i-deals, moderators, and context factors as

well as mediating mechanisms between i-deals and outcomes. I conclude with

the results from initial studies examining i-deals from a multilevel perspective.

1.5.2 Consequences of I-Deals

I-deals have been linked to a variety of outcomes at the individual level such as

employee work-related perceptions, attitudes, and behavior. As such, research

has focused mainly on development and flexibility i-deals, while some studies

include task and work responsibility as well as workload reduction and

financial incentive i-deals.

Developmental i-deals were found to be related to several positive outcomes,

for example OCB towards coworkers and supervisors as well as towards the

organization as whole (Anand, Vidyarthi, Liden, & Rousseau, 2010), affective

commitment (Hornung et al., 2008), work engagement (Hornung, Rousseau,

Glaser, Angerer, & Weigl, 2011), increased performance, and motivation

(Hornung et al., 2009). However, developmental i-deals also show positive

relations to work-family conflict and unpaid overtime (Hornung et al., 2008). In

contrast, flexibility i-deals are negatively related to work-family conflict and

working unpaid overtime (Hornung et al., 2008; Hornung et al., 2009; Hornung

et al., 2011) as well as positively related to job satisfaction and organizational

commitment (Rosen et al., 2013). Ng and Lucianetti (2016) furthermore showed

that flexibility and development i-deals are related to in-role job performance.

Vidyarthi, Chaudhry, Anand, and Liden (2014) introduced the idea of possible

U-shaped relations of i-deals to outcomes on the individual level and found

evidence for a U-shaped relationship between flexibility i-deals and perceived

organizational support and career satisfaction. Specifically, high-perceived

organizational support and career satisfaction were found at low and high

levels of flexibility i-deals.

Introduction 21

In addition, i-deals are related to the nature of the employment relationship.

Developmental i-deals cause employees to perceive their employment as a

social exchange rather than an economic one, whereas flexible work hour i-deals

are positively related to perceiving employment as an economic exchange

(Rousseau et al., 2009). Similarly, Lee and Hui (2011) found that i-deals are

related to perceived psychological contracts. While personal development i-

deals are more positively related to relational and balanced (i.e., combining

relational and transactional features) psychological contracts, flexibility and

workload reduction i-deals are related more positively to transactional

psychological contracts.

Few studies have included other forms of i-deals than development and

flexibility i-deals, as for example task and work responsibility i-deals and

financial incentive i-deals. Considering those different types of i-deals in

addition to flexibility and developmental i-deals, Rosen et al. (2013) showed that

task and work responsibility i-deals positively relate to job satisfaction and

organizational commitment, while financial incentive i-deals are linked to

organizational commitment.

Some i-deals studies examine a composite measure including different forms of

i-deals. Ng and Feldman (2010) used an i-deals measure covering a broad array

of elements such as pay, advancement opportunities, training, career

development, job security and support with personal problems. They showed

that i-deals, including all these facets, were related to organizational affective

commitment. Using a general operationalization of i-deals as well, Hornung et

al. (2010a) showed that i-deals are positively related to job satisfaction. Bal and

Boehm (2017) found a negative relationship between an overall i-deals measure

and emotional exhaustion.

Finally, Rofcanin, Berber, Koch, and Sevinc (2016) compared the effects of i-

deals with those of job crafting on key employee outcomes. As I discussed

earlier, i-deals and job crafting represent possibilities for employees to better fit

their jobs to their needs with the difference that i-deals require the formal

22 Introduction

approval of the supervisor (e.g., Rousseau, 2005). Rofcanin et al. (2016) found

that i-deals are more strongly related to in-role work performance, citizenship

behaviors directed at organization and co-workers, affective commitment and

intentions to stay than job crafting.

1.5.3 Antecedents of I-Deals

As a second focus, i-deals research has examined several antecedents of i-deals.

Because i-deals research has focused on i-deals initiated by employees and

negotiated together with the direct supervisor, characteristics of employees and

line managers as well as their relationship play an important role for the

emergence of i-deals. First, the employee-supervisor relationship and

leadership behavior have been identified as one significant factor influencing

successful negotiations of i-deals. LMX and leader consideration were both

found to be positively related to employees’ i-deals in several studies (e.g.,

Hornung et al., 2010b; Hornung et al., 2011). While LMX describes the quality

of the relationship between employee and line manager, leader consideration

refers to an employee-centered leadership style focusing on social relationships

at work including concern and support for employees (e.g., Fleishman, 1973;

Graen & Uhl-Bien, 1985). Second, Las Heras, Van der Heijden, De Jong and

Rofcanin (2017b) showed that characteristics of the leader are important. Their

study showed that employees received more schedule i-deals when their

supervisors had caregiving responsibilities for their parents or in-laws.

However, whether or not supervisors had children was not related to their

subordinates’ schedule i-deals. Furthermore, individual characteristics seem to

play an important role in employees successfully negotiating and handling i-

deals. Lee and Hui (2011) showed that individualism is positively related to ex

ante i-deals, perceived insider status to ex post i-deals, and social skills are

associated with both forms of i-deals. Further studies have indicated that

personal initiative predicts i-deals (Hornung et al., 2008; Hornung et al., 2009).

Finally, Ng and Lucianetti (2016) showed that employees’ motivational goals

are important antecedents of i-deals. Comparing different motivational goals in

Introduction 23

their study, they found that achievement striving and status striving have

positive effects on i-deals negotiations, while communion striving has no effect.

In addition, characteristics of the working environment influence the

negotiation of i-deals. As already mentioned in Chapter 1.1, working

arrangements such as part-time work and home office, are positively related to

the negotiation of i-deals (Hornung et al., 2008). In line with these findings,

Bayazit and Bayazit (2017) showed that the perceived availability of flexible

work arrangements is positively related to the successful negotiation of

flexibility i-deals between employees and their leaders. In addition, structural

conditions such as unit size, group size and job constraints negatively influence

the negotiation of flexibility i-deals (Hornung et al., 2009).

1.5.4 Moderators and Relevant Context Factors

Research has also focused on moderators and context factors influencing the

effect of i-deals on employees and their coworkers. First, research has shown

that the relationship between the i-dealer and their team is an important factor.

Employees are more likely to accept the i-deal of a coworker if he or she is a

close friend and if they have a social, as opposed to an economic, exchange

relationship with their employer (Lai et al., 2009). Furthermore, the belief, that

an i-deal is also achievable for them in the future, is important for the acceptance

of a coworker’s i-deal (Lai et al., 2009). In addition, Ng and Lucianetti (2016)

found evidence that coworkers receiving i-deals motivates other employees to

ask and negotiate for i-deals themselves.

In addition to the relationship with coworkers, research has demonstrated that

the connection to the supervisor and the organization is critical. Anand et al.

(2010) showed that i-deals have no effect on OCB in settings with high quality

relationships (measuring the relationship quality between i-dealers, their

coworkers and supervisors) but are effective in settings with low-quality

relationships. Furthermore, supervisors more likely grant workload reduction

i-deals in the context of unfulfilled organizational obligations towards

24 Introduction

employees, characterized by a reward imbalance in the employee-employer

relationship (Hornung et al., 2009). Moreover, Ho and Tekleab (2016) showed

that i-deals requests were more positively related to actual i-deals receptions for

high than for low LMX. Finally, Las Heras, Rofcanin, Bal and Stollberger (2017a)

found that the effect of flexibility i-deals on family and work performance was

moderated by perceived organizational support, such that the relationship was

positive for high support but non-existent for low support.

The timing of i-deals negotiation is also important for their successful

negotiation and their effect on the employment relationship. Research shows

that employees are more successful in negotiating i-deals at the time of hire (ex

ante) than in later stages of the employment (ex post; Rousseau, 2005). Rousseau

et al. (2009) further showed that ex-post i-deals have greater impact on the

employment relationship compared to those i-deals negotiated ex ante

(Rousseau et al., 2009). Their study revealed in addition that i-deals negotiated

ex post are positively related with a social exchange relationship between

employee and employer and negatively with an economic exchange

relationship. On the contrary i-deals negotiated ex ante have no relation to

employees’ perceptions of the nature of the employment relationship (Rousseau

et al., 2009). Lee and Hui (2011) found similar results in a study showing that i-

deals made ex ante are more positively related to transactional psychological

contracts, while i-deals negotiated ex post are more positively linked to

relational and balanced psychological contracts. Furthermore, while ex ante

negotiation of i-deals leads more often to flexible work hour i-deals than to

developmental i-deals, ex post negotiation processes are related equally positive

to both forms of i-deals (Rousseau et al., 2009).

Moreover, initial results speak for the importance of the unit climate for the

functioning of i-deals: while flexibility i-deals contribute to a greater motivation

to continue working after retirement irrespective of the unit work climate, this

is not the case for developmental i-deals as they only contribute to a greater

motivation to continue working if the unit climate does not push older workers

Introduction 25

to withdraw from work and retire early but does encourage them to develop

themselves and use their knowledge and experience (Bal et al., 2012).

Finally, employees’ individual characteristics play a role as moderating

variables for the relationship between i-deals and outcomes. For example,

research reports that the positive relationship between i-deals and affective

organizational commitment is stronger for employees who have low self-

evaluations. In addition to employees’ self-worth, their age also plays a role.

Specifically, i-deals were most positively related to organizational commitment

for the group of older workers who had low self-evaluations (Ng & Feldman,

2010).

1.5.5 Mediators and Explanatory Mechanisms

A variety of theories were proposed in order to explain the functioning of i-

deals (see Chapter 1.5.1), which go hand in hand with several mediating

mechanisms that have already been explored in i-deals research. As I have

earlier discussed extensively the variety of theories and related explanatory

mechanisms, I now provide a brief summary of those not yet mentioned as well

as the most important mediators in the i-deals literature.

A majority of mediators for the relationship between i-deals and outcomes is

derived from theories based on social exchanges and need satisfaction.

However, other studies have also examined mediators based on less frequently

used theories in i-deals research such as self-enhancement or justice theory.

Basing their argument on social exchange theory, Ng and Feldman (2015) report

that i-deals are positively related to employee voice behavior, mediated by

flexible work role orientation, social networking behavior, and perceived

organizational trust. The mediating effects of all three intermediate variables

were generally stronger for development i-deals than for flexibility i-deals. Ho

and Kong (2015) showed in line with both social exchange and need satisfaction

perspectives that task and financial i-deals are related to coworker related OCB

via LMX and via competence need satisfaction. Infomed by person-job fit and

26 Introduction

subsequent need satisfaction, a study by Hornung et al. (2010b) examined task

i-deals and showed an association with a more positive evaluation of work

characteristics, specifically, higher perceived complexity, control, and lower

stressors. Perceived work characteristics further mediated positive indirect

effects of task i-deals on employee initiative and work engagement. Referring

to employees needs but also to equity theory, Hornung et al. (2010a) showed

that the positive effect of i-deals on job satisfaction is mediated by enhanced job

autonomy and perceived distributive justice. Liu et al. (2013) examined the

mediating roles of social exchange and self-enhancement and discovered that

the positive relationships between i-deals and proactive behavior as well as

between i-deals and affective commitment is mediated by different

mechanisms, depending on the cultural dimension individualism. Specifically,

perceived organizational support mediates the relationship between i-deals and

outcomes for low levels of employees’ individualism, while organization-based

self-esteem mediates this relationship for high individualism. Similarly,

Oostrom, Pennings and Bal (2016) used self-enhancement theory to show that

the positive relationship between task and work responsibility i-deals and

employability is mediated by employees’ perceived self-efficacy.

In addition, less common explanatory mechamisnsm were applied in i-deals

literature. Las Heras et al. (2017a) conducted an initial i-deals study based on

conservation of resource theory which states that possessing a resource leads to

the generation of other resources in the same but also in other domains.

Accordingly, they found that the effect of flexibility i-deals on work

performance was mediated by performance in the family domain. Finally, but

essential to i-deals literature and theory, Ho and Tekleab (2016) showed that the

relationship between i-deals request and job satisfaction, organizational

commitment and turnover intention is mediated by actual i-deal reception.

1.5.6 Multilevel Research on I-Deals

Calls have been raised for i-deals research to examine effects at the team and

organizational level (e.g., Liao et al., 2016) and some studies examining i-deals

Introduction 27

in team and unit contexts already exist. Relative i-deals (Vidyathi et al., 2016)

are a newly introduced construct in i-deals research, which aims at studying i-

deals in a team context. Vidyarthi et al. (2016) showed that the relationship

between relative i-deals (defined as an employee’s i-deal relative to the group’s

average level of i-deals) and employee performance is moderated by team

orientation and task interdependence and mediated by LMX social comparison.

LMX social comparison in their study represented an employees’ relative

standing with the leader compared to other group members. Liao et al. (2017)

showed in a multilevel model that the positive relationship between i-deals and

individual job satisfaction, in-role performance, and helping behavior is

mediated by employees’ perceptions of their leaders' procedural justice and

LMX quality in sequence. LMX differentiation moderates the mediated

relationship between i-deals and outcomes, such that the relationship between

i-deals and outcomes becomes stronger for greater LMX differentiation within

the team. Finally, Bal and Boehm (2017) combined the individual and the unit

level in a multilevel study and found that individual i-deals were negatively

related to individual emotional exhaustion and subsequently positively related

to collective commitment and client satisfaction within units. Furthermore, the

relationship between i-deals and emotional exhaustion was moderated by age

diversity in units such that the relationship was more negative in units with

high age diversity.

In sum, this literature review indeed reveals that theorizing and research is

scarce at the team and the unit level, while i-deals research seems to be

completely non-existent at the organizational level. This finding of the current

literature review is in line with scholars’ calls for future research to study the i-

deals – performance relationship from an organizational perspective (e.g., Liao

et al., 2016). As dicussed in Chapter 1.3, this dissertation aims at addressing this

gap in i-deals literature. In the following, I derive specific research gaps from

the existing literature regarding the relationship between i-deals and

organizational performance.

28 Introduction

1.6 Research Gaps and Intended Contributions

To explore the central question of how organizations can exploit the full

potential of individually negotiated deals with their employees, it is necessary

to break the question down into central issues that have not been investigated

by previous research which has neglected at least five major aspects.

First, research on i-deals has focused on individuals, while outcomes on

organizations have been neglected, although by definition, i-deals are beneficial

for both employees and organizations (e.g., Conway & Coyle-Shapiro, 2016).

However, the link between i-deals and performance has not been investigated

throughly especially not at the organizational level (e.g., Liao et al., 2016).

Second, introducing the concept of i-deals at the organizational level requires

examining intermediating processes between i-deals and organizational

performance such as collective attitudes, behavior, and organizational climate

(e.g., Liao et al., 2016).

Studying i-deals at the organizational level of analysis already implies that i-

deals operate in a social context, including manifold boundary conditions (e.g.,

Bal & Lub, 2016). Thus, the last three gaps relate to boundary conditions of i-

deals in the organizational context, which become especially relevant when i-

deals are studied at the organizational level. As third gap in i-deals research, I

identified the missing research on the role of the direct leader (e.g., Liao et al.,

2016). Despite the assumption that supervisors play an important role in the

negotiation and implementation of i-deals, research on the impact of different

leadership styles is scarce. Fourth, organizational justice is considered as

essential in i-deals theory, as i-deals cause differences between employees (e.g.,

Greenberg et al., 2004). Some authors have proposed that organizational justice

could mitigate negative effects when employees feel treated unfairly due to i-

deals (e.g., Liao et al., 2016). However, this potential positive effect of

organizational justice climate has not been studied yet. Fifth, the interplay

between i-deals and HRM has so far not been examined (e.g., Kroon et al., 2016).

While i-deals refer to individualized deals, they will probably relate to higher-

Introduction 29

level employment conditions rooted in an organization’s HRM (i.e., HR

practices for groups of employees; Kroon et al., 2016). Those five gaps in i-deals

research are discussed in detail in the following.

1.6.1 I-Deals and Organizational Performance

Research on i-deals has mainly focused on the positive effects of i-deals on

individual workers. Impacts on organizations have been neglected although i-

deals are defined as beneficial for both employees and organizations and

research has not yet explored the link between i-deals and organizational

performance (Anand & Vidyarthi, 2016; Conway & Coyle-Shapiro, 2016; Kroon

et al., 2016). However, i-deals are embedded in social and organizational

contexts and therefore influence not only outcomes at the individual but also at

the collective level (Rousseau, 2005). This is especially important as an

increasing number of firms is adopting flexible working arrangements to meet

a variety of societal trends and a corresponding diversification of employee

needs (e.g., Rousseau, 2005, Nauta & Van de Ven, 2016). The aim is to retain

valuable employees and motivate them to perform better (Bal & Rousseau,

2016). To date, research has not yet shown if these desired outcomes for

organizations occur (Conway & Coyle-Shapiro, 2016; Kroon et al., 2016). As a

first step, Bal and Boehm (2017) found a positive effect of i-deals on unit client

satisfaction. However, as Conway and Coyle-Shapiro (2016) claim, research has

not yet progressed enough in order to recommend i-deals to companies. Anand

and Vidyarthi (2016) suggest that introducing several levels of analysis to i-

deals literature, such as the individual, work group and organizational level,

will enrich i-deals research and further our understanding of individualized

work arrangements. To meet this challenge, researchers suggest two promising

options: first, effects at collective levels could be examined by focusing on

median i-deals, reflecting the average level of i-deals in a collective (Anand,

2012; Liao et al., 2016). Second, heterogeneity between employees regarding i-

deals, or so-called i-deals differentiation, seems to be a promising avenue for

future research at the collective level (Anand, 2012; Liao et al., 2016). Although

30 Introduction

today many employees have customized work arrangements, the degree to

which this idiosyncrasy is beneficial to organizations is still an unanswered

empirical question (Liao et al., 2017). Based on this reasoning, a key aim of this

dissertation is to examine the effect of both conceptualizations of i-deals (i.e.,

organizational median i-deals and i-deals differentiation) on organizations.

Research Question 1: How do organizational median i-deals and i-deals

differentiation influence organizational performance?

1.6.2 Intermediate Processes at the Organizational Level

When the concept of i-deals is examined at the organizational level, it is

important to consider potential intermediate processes by which i-deals

influence companies as i-deals are most likely not directly linked with

organizational performance (Liao et al., 2016). The question is how

organizational median i-deals and i-deals differentiation affect collective

processes, such as collective climates, attitudes and behavior, and ultimately

organizational performance (Bal & Rousseau, 2016; Liao et al., 2016). Identifying

intermediate processes in the relationship between i-deals and organizational

performance has been recognized as a crucial task for future i-deals research

(Conway & Coyle-Shapiro, 2016; Liao et al., 2016). The initial findings of Anand

(2012) and Bal and Boehm (2017) on group and unit level reveal that collective

processes and attitudes, such as team potency and collective commitment, are

positively affected by i-deals. However, many open questions remain,

especially at the organizational level, where i-deals may also have a dark side

(Conway & Coyle-Shapiro, 2016). A variety of potential mediating mechanisms

at the collective level, including potential negative effects of i-deals have been

suggested by researchers (e.g., Liao et al., 2016).

When i-deals are examined from the perspective of collectives, potential

negative reactions of coworkers have to be considered (Garg & Fulmer, 2017;

Greenberg et al., 2004). Serious concerns have been voiced that coworker

relations such as helping behavior between coworkers and collective climates

Introduction 31

might be impaired by i-deals in organizations (Conway & Coyle-Shapiro, 2016).

Furthermore, employees might perceive others’ i-deals as unfair (e.g.,

Greenberg et al., 2004; Marescaux & De Winne, 2016). One of the challenges in

managing i-deals is that differential distribution of i-deals within organizations

can erode the organizational justice climate (Liao et al., 2016). Attributions

coworkers make regarding others’ i-deals have implications for the

organizational justice climate, which can in turn increase costs for the

organization (Liao et al., 2016). Thus, the potential negative effects of i-deals on

coworker relations and the organizational justice climate likely affect

organizational performance (Conway & Coyle-Shapiro, 2016). This dissertation

aims to contribute to i-deals literature by examining potential mediation

mechanisms (i.e., collective attitudes, behavior, and climate), in the i-deals -

performance relationship at the organizational level. In this regard, both

potential positive and negative effects of i-deals on intermediate processes and

thereby on organizational performance are considered.

Research Question 2: Which processes, such as collective attitudes, behavior and

climate, mediate the relationship between i-deals and organizational performance?

1.6.3 The Role of Leadership

In most cases, i-deals are negotiated between employees and their direct

managers (Liao et al., 2016). Although supervisors play a key role in i-deals

literature, leadership has only thus far been treated mostly as an independent

variable and cause for i-deals. An exception is a study of Liao et al. (2017) who

focus on LMX differentiation as moderator for the relationship between i-deals

and outcomes. Furthermore, researchers have exclusively focused on

individual-focused leadership styles, which consider the relationship between

leaders and individual employees (LMX and leader consideration; Hornung, et

al., 2010b; Hornung et al., 2011; Hornung et al., 2014; Rosen et al., 2013). Despite

scarce research, there is a strong assumption that leaders not only influence the

negotiation (e.g., Ho & Tekleab, 2016; Hornung, Rousseau, Weigl, Müller, &

Glaser, 2014), but also the successful implementation of i-deals (Anand &

32 Introduction

Vidyarthi, 2016). This dissertation seeks to reinforce and expand the focus on

leadership in i-deals literature. Calls have been made for more research to

scrutinize how leadership styles beyond leader–member relationships shape

the effects of i-deals on organizations (Liao et al., 2016). Specifially, Liao et al.

(2016) have suggested that transformational leaders may create an environment

that encourages successful i-deals in organizations. In contrast to previous

studies, which include leadership styles focusing on the relationship between

the leader and individual employees, transformational leadership (TFL)

includes behaviors directed toward all members of the group and its individual

members simultaneously (Kark & Shamir, 2002). At the organizational level

when collective processes, such as collective attitudes, behavior, and climate

and ultimately organizational performance come into play, leadership behavior

directed towards all members of the group might become relevant. This is in

line with Greenberg et al. (2004) who suggest that supervisors should take the

needs of all stakeholders and not only of the i-dealer into account, when i-deals

are negotiated and implemented. Furthermore, a leadership climate is emerging

at the organizational level, which captures the average leadership behaviors in

organizations (e.g., Li & Cropanzano, 2009; Zohar & Luria, 2005). The current

dissertation therefore inspects the effects of organizational leadership climate,

including both individual- and collective focused leadership, on the successful

implementation of i-deals in organizations.

Research Question 3: How does the organizational leadership climate influence the

relationship between i-deals and organizational performance?

1.6.4 The Role of Organizational Justice

Liao et al. (2016) suggest the need for extensive future research on the role of the

organizational context in i-deals research. To date, only one study exists to my

knowledge which has investigated organizational climate as an important

context factor for i-deals to reveal their beneficial effects, including

organizational, supervisor, and work team support for older workers (Bal et al.,

2012). While organizational contexts include a broad variety of factors which

Introduction 33

potentially affect i-deals effectiveness, one key issue stands out from theoretical

discussions: while discussed in many papers, few studies have actually

combined i-deals and justice perceptions (e.g., Marescaux & De Winne, 2016).

Although all facets of organizational justice are often suggested as crucial

factors for effective i-deal implementation (Greenberg et al., 2004; Leventhal,

1980; Liao et al., 2016; Marescaux & De Winne, 2016; Rousseau, 2005), research

has focused solely on distributive and procedural justice perceptions at the

individual level (Liao et al., 2017; Marescaux & De Winne, 2016). Reactions and

fairness perceptions of coworkers are nonetheless becoming especially relevant,

when collective-level outcomes are examined. Particularly from a collective

perspective, social comparison processes are important as i-deals vary in

content and level for each employee (Liao et al., 2016). As a result, i-deals violate

the rule of consistency and negatively influence perceived justice (Liao et al.,

2016). However, scholars have argued that procedural justice in particular

might mitigate negative effects. Voice, transparency and consistency in

opportunity to negotiate i-deals – all key characteristics of procedural justice –

are suggested to mitigate negative effects of i-deals (Greenberg et al., 2004; Liao

et al., 2016; Rousseau et al., 2006). Most notably, consistency in opportunities to

negotiate i-deals is supposed to prevent aversion to i-deals differentiation (Liao

et al., 2016; Rousseau et al., 2006). Therefore, organizational justice climate with

a focus on procedural justice is also of interest for this dissertation.

Research Question 4: How does the organizational justice climate influence the

relationship between i-deals and organizational performance?

1.6.5 The Interplay between I-Deals and HRM

Research has claimed that, in addition to supervisors, the HRM plays a major

role in i-deals negotiations, however their influence on designing and

implementing effective i-deals has not yet been examined (Bal & Rousseau,

2016; Kroon et al., 2016; Liao et al., 2016). While HRM lays the foundation by

designing HR instruments, supervisors are in effect the organizational agents

who implement HR practices, grant requests for differentiation, and balance the

34 Introduction

interests of the employee and the employer (Greenberg et al., 2004; Hornung et

al., 2009). The increasing appearance of individualized work arrangements

shows that HR at present is not only a top-down process imposing HRM on

employees anymore, but also a bottom-up process by which employees try to

balance their own needs and those of their employer (Kroon et al., 2016).

Nonetheless, i-deals are not meant as a substitute for a HR instruments: they

can rather complement standard HR practices to make organizations more

flexible and attractive by offering additional flexibility and versatile options for

individualization to account for differences between employees and changes in

employees over time (Hornung et al., 2014). I-deals can also be used as a

management practice in order to repair imperfect fits between the standard

employment conditions and individual needs, such that the resulting working

arrangement satisfies both the requirements and needs of the employee and the

employer (Ostroff & Schulte, 2007). As suggested by researchers (e.g., Bal &

Rousseau, 2016; Kroon et al., 2016, Rousseau, 2005) one aim of this dissertation

is therefore to examine the interplay between HR standard practices and

flexibility through i-deals negotiated with the employee’s direct supervisor.

Research Question 5: How does the interplay between i-deals and HR practices

influence organizational performance?

This dissertation follows the five research questions derived above. Having

derived them based on extant i-deals literature and stated them, I briefly

summarize the overall research purpose of this dissertation. First and foremost,

this dissertation aims at investigation one of the most prominent but yet

unanswered questions in i-deals research: Are organizations that grant their

employees i-deals more successful than organizations that do not use i-deals

(Liao et al., 2016)? As discussed before in Chapter 1.2 and 1.3, this question is

relevant from a theoretical but also from a practical point of view. To delve more

deeply into this question, potential intermediating processes at the

organizational level are studied to clarify how i-deals affect organizational

performance. Those processes include collective attitudes, behavior and

climate. Beyond that, the organizational context becomes highly relevant for i-

Introduction 35

deals research on the organizational level and three prominent context

conditions are examined: leadership climate, organizationa justice climate, and

formal HR practices. The overarching model based on the five research

questions (see Table 1-2) for this dissertation is presented in Figure 1-1.

Table 1-2. The research questions of this dissertation.

Research Question 1: How do organizational median i-deals and i-deals differentiation influence organizational performance?

Research Question 2: Which processes, such as collective attitudes, behavior and climate, mediate the relationship between i-deals and organizational performance?

Research Question 3: How does the organizational leadership climate influence the relationship between i-deals and organizational performance?

Research Question 4: How does the organizational justice climate influence the relationship between i-deals and organizational performance?

Research Question 5: How does the interplay between i-deals and HR practices influence organizational performance?

Figure 1-1. Integrative research perspective.

Organizational Context

HR Practices Organizational Justice Climate

Organizational Leadership Climate

I-Deals

Organizational Median I-Deals

Indermediate Processes

Collective Climate

Organizational Performance

I-Deals Differentiation

Organizational Performance

Collective Attitudes and

Behavior

Operational Performance

36 Introduction

1.7 Methodological Approach

The afore-derived research questions are explored based on empirical research.

Specifically, quantitative, cross-sectional studies based on a positivist research

paradigm are conducted in this dissertation (Mackenzie & Knipe, 2006). In a

positivist worldview “causes probably determine effects or outcomes"

(Creswell, 2003, p. 7). This approach was chosen to explain and predict

relationships between constructs by general theories. The approach was

deductive in nature meaning hypotheses were theoretically derived and tested

(Mackenzie & Knipe, 2006). Because hypotheses cannot be confirmed, classical

testing methods aim to negate the null hypotheses (Popper, 1959). This

procedure was chosen over a qualitative or mixed methods approach as the

research began by deriving research questions and hypotheses from a literature

review (Mackenzie & Knipe, 2006).

As all derived research questions focus on the effects of i-deals from an

organizational perspective, my research was conducted with participants from

real settings, in this case organizations. To maintain the participation rate of the

requested companies and the generalization of the results as high as possible,

the participating employees and organizations should be disturbed as little as

possible in their daily work. Thus, an unobtrusive research method, namely a

cross-sectional survey study design, was used for all three studies (McGrath,

1981). To be able to gather survey data from a large sample of organization, the

data for all three studies was gathered in cooperation with a German benchmark

agency. Participating companies were small to medium sized. Specifically, data

was gathered with an online survey. This online survey was send to all potential

participants by the organizations themselves. To prevent same source bias,

several rater groups were asked for their participation in each organization,

namely employees, HR managers and members of the top-management team.

In line with research ethics and privacy policies, participation in the studies was

voluntary and full anonymity of all results was guaranteed to the participating

employees and organizations.

Introduction 37

1.8 Outline of the Dissertation

This dissertation is structured in five main parts (see Figure 1 – 2). The following

paragraph gives a short overview of the sections. As elaborated in the first

chapter, this dissertation examines i-deals within social contexts of

organizations. Thus, all three studies take on an organizational perspective with

the aim of examining the effect of i-deals on organizational performance.

Different intermediate processes and moderating aspects of the organizational

context are examined.

1.8.1 Chapter 1: Introduction

The first chapter introduced the concept of i-deals, gave an overview of existing

research, and identified research gaps. Specifically, the theoretical and practical

relevance of i-deals, especially from an organizational perspective, was

discussed. Five major research gaps and questions were derived from the

review of i-deals literature.

1.8.2 Chapter 2: Study 1 - How Do I-Deals Relate to Organizational Performance?

The Role of Collective Attitude, Coworker Relations and Leadership Climate

Study 1 focuses on the question of whether and how i-deals affect

organizational performance, inspired by Research Questions 1 and 2. This study

addresses these questions by introducing the organizational level of analysis in

i-deals research. Relying on social exchange and contagion theory, I propose

that organizational median i-deals affect employees’ collective job attitude

differently than coworker relations. I tested my propositions based on a sample

of 87 organizations. Results show that organizational median i-deals have a

positive, linear effect on collective job satisfaction, while having an inversed U-

shaped relationship to collective organizational citizenship behavior between

coworkers (OCBI). Both, collective job satisfaction and collective OCBI mediate

the relationship between organizational median i-deals and organizational

performance. Furthermore, inspired by Research Question 3, the organizational

38 Introduction

leadership climate was examined as a boundary condition for the functioning

of i-deals. While the effect of organizational median i-deals on collective job

satisfaction is moderated by the individual-focused leadership climate, the

effect on collective OCBI is moderated by the collective-focused leadership

climate. Support for moderated mediations are provided by the results.

1.8.3 Chapter 3: Study 2 - I-Deals Differentiation and Organizational Performance:

Does Idiosyncrasy Make I-Deals Non-Ideal?

Adding to Study 1 which examines the effect of organizational median i-deals

on organizational performance, Study 2 focuses on the relationship between i-

deals differentiation and organizational performance. In extant i-deals literature

concerns have been raised regarding the idiosyncratic nature of i-deals causing

inequality between employees, related negative justice perceptions, and

subsequent detrimental effects for organizational performance. The goal of this

study is to fill in this research gap by addressing the role of i-deals from an

organizational perspective, addressing again Research Questions 1 and 2. This

study is the first to examine the effect of i-deals differentiation on organizational

performance. Results imply that the extent to which i-deals differentiation is

beneficial to organizations is contingent upon context factors. Specifically,

Research Question 4 is addressed by examining the moderating effect of

procedural justice climate on the relationship between i-deals differentiation

and organizational performance. Study results based on a multi-source data set

containing 15,060 respondents from 96 companies reveal a three-way

interaction effect between i-deals differentiation, organizational median i-deals,

and procedural justice climate on perceived distributive justice of employees.

Further, distributive justice climate mediates the effect of i-deals differentiation

on organizational performance. Taken together, the results of the study provide

support for a moderated mediation model.

Introduction 39

Chapter 1: Introduction

Practical Relevance

Chapter 1: Introduction

Idiosyncratic Work Arrangements in the New World of Work Practical Relevance of Idiosyncratic Work Arrangements

Theoretical Relevance of Idiosyncratic Work Arrangements Positioning the Concepts of I-Deals

Literature Review on I-Deals Research Research Gaps and Indented Contributions

Methodological Approach Outline of the Dissertation

Chapter 2: Study 1

How Do I-Deals Relate to Organizational Performance? The Role of Collective Attitude, Coworker Relations and Leadership

Climate

Chapter 1: Introduction

Practical Relevance

Chapter 3: Study 2

I-Deals Differentiation and Organizational Performance: Does Idiosyncrasy Make I-Deals Non-Ideal?

Chapter 1: Introduction

Practical Relevance

Chapter 4: Study 3

Combining I-Deals and Human Resource Practices: Enhancing Organizational Performance through Consistency

Figure 1-2. Overview of chapter structure.

Chapter 5: Overall Discussion and Conclusion

Summary and Integration of Research Findings Theoretical Contributions

Practical Implications and Recommendations Limitations and Directions for Future Research

Conclusion and Outlook

40 Introduction

1.8.4 Chapter 4: Study 3 - Combining I-Deals and Human Resource Practices:

Enhancing Organizational Performance through Consistency

Study 3 focuses on Research Question 5 and addresses the interplay between

HR practices, specifically flexible working arrangements (FWAs) and i-deals,

representing informal arrangements between employees and their supervisors.

Nowadays, an increasing number of companies are implementing FWAs as HR

practices to meet differential needs of their workforce. The aim is to attract,

retain and motivate talented and high-performing employees for the good of

the organization. However, despite growing offers of FWAs in organizations,

supervisors are still able to refuse an employee’s use of FWAs according to their

personal needs, for example by negotiating for i-deals. From the perspective of

signaling theory, employees’ reactions to FWAs should be dependent on the

consistency between signals sent by the organizations’ HR systems and

managers. Based on a sample of 83 German companies, Study 3 shows that

FWAs only positively influence organizational productive energy and

organizational performance if flexibility through the HR system is

complemented by i-deals negotiated between employees and their supervisors.

1.8.5 Chapter 5: Overall Discussion and Conclusion

The final chapter of this dissertation revisits the research motivation and

questions as well as discusses the most important results and theoretical

contributions of the three empirical studies against the background of the

literature on i-deals, FWAs, organizational justice, and leadership. Furthermore,

this chapter offers practical implications for all interest groups involved in the

negotiation and implementation of i-deals. Finally, it summarizes the overall

limitations of the three studies and opportunities for future research.

Study 1 – How Do I-Deals Relate to Organizational Performance? 41

2 How Do I-Deals Relate to Organizational Performance?

The Role of Collective Attitude, Coworker Relations

and Leadership Climate

Study 1 of this dissertation was inspired by Research Question 1 and 2. It focuses

on whether i-deals influence organizational performance and which

mechanisms mediate this relationship. The study aims at investigating, if

organizational median i-deals are related to organizational performance.

Inspired by previous research, two potential explanatory mechanism –

collective job attitude and coworker relations – are examined. Furthermore, this

study draws on Research Question 3 and examines different leadership climates

as moderators for the i-deals – performance relationship.1F

2

2.1 Introduction

Do organizations that encourage and allow i-deals perform better than

ones without i-deals?

Liao et al. (2016, p. 23)

The nature of work is changing, leaving behind a massive need for research on

this phenomenon (Barley, Bechky, & Milliken, 2017). Societal changes make

organizations realize that standardized HR practices do not suffice anymore

and that individual arrangements are needed (Broschak & Davis-Blake, 2006).

Customization at the workplace has primarily been investigated from the

perspective of i-deals (e.g., Hornung et al., 2008; Rousseau et al., 2009),

individually negotiated employment arrangements that are intended to benefit

2 An earlier version of this study has been accepted at an international peer-reviewed conference,

namely the to 78th Academy of Management Annual Meeting 2018

42 Study 1 – How Do I-Deals Relate to Organizational Performance?

both the employee and the organization (Rousseau, 2005). Extant i-deals

research has mainly focused on positive effects of i-deals on individual

employees and only first few studies have applied multilevel methods to

examine i-deals in a team or unit context (Bal & Boehm, 2017; Liao et al., 2017;

Vidyarthi et al., 2016). A huge gap in research remains as scholars have not yet

studied i-deals from an organizational perspective. However, as the quote in the

beginning of this study implies (Liao et al., 2016), it is one of the most important

questions in i-deals literature, if i-deals are actually beneficial for organizations.

From a research perspective, it needs to be established if i-deals are positive for

organizations because i-deals are defined as beneficial for both employees and

employer (Rousseau, 2005). Similarly, from a practical perspective, i-deals are

only justifiable if they are beneficial for everyone involved, including the

organization (Bal & Boehm, 2017).

Thus, it is time to make a step further in i-deals research and examine

consequences of i-deals for organizations. However, scholars suggest that it is

not sufficient to investigate, if i-deals influence organizations, but that it is also

necessary to explore how and under which conditions this is the case. For

instance, Liao et al. (2016) suggest for future research to examine the effect of i-

deals on collective performance by identifying intermediating processes and

boundary conditions on the collective level. This study follows these

suggestions and addresses the question of whether, how and when i-deals

influence organizational performance.

The contribution to i-deals literature of the current study is threefold. First, the

current study examines, if the amount of i-deals in an organization is related to

organizational performance. I address this question by applying the construct

of organizational median i-deals, reflecting the median level of i-deals in an

organization (Anand, 2012; Liao et al., 2016). Second, possible mediating

mechanisms on the organizational level are examined. Scholars assume, that the

effect between i-deals and performance on collective level is mediated by

collective processes (e.g., Liao et al. 2016). However, there is still only limited

empirical evidence on how i-deals function in the workplace and how they

Study 1 – How Do I-Deals Relate to Organizational Performance? 43

influence collective attitudes and behavior, and consequently organizations (Bal

& Rousseau, 2016). While Bal and Boehm (2017) showed that i-deals contribute

to collective commitment within units, researchers suggest that teams,

departments and organizations are likely to suffer from i-deals regarding

coworker relations and helping behavior between coworkers (Conway & Coyle-

Shapiro, 2016). Indeed, Broschak and Davis-Blake (2006) find nonstandard work

arrangements to be negatively related to coworker relations and helping

behavior. To gain more clarity about processes mediating the relationship

between i-deals and organizational performance, this study proposes and

contrasts two possible explanatory mechanisms, namely collective job attitude

and coworker relations. Specifically, the current study focuses on how collective

job satisfaction, as most commonly studied job attitude, and coworker directed

organizational citizenship behavior (OCBI) are affected by the amount of i-deals

in organizations. Previous literature indicates that the effect of i-deals on

collective job satisfaction might be positive, while a negative effect on collective

OCBI could be possible (Bal & Boehm, 2017; Broschak & Davis-Blake, 2006;

Conway & Coyle-Shapiro, 2016). Third, from an organizational perspective,

organizational context factors shaping the relationship between i-deals and

performance come into play. Based on Rousseau’s (2005) framework, the

organizational context including employees’ direct manager influences how i-

deals are perceived by employees (Rousseau, 2005). Furthermore, i-deals are

negotiated and implemented in the leader-follower relationship (Rousseau,

2005). However, research on the role of leaders in the negotiation and

implementation of i-deals has been scarce and limited to leader consideration

and LMX (e.g., Hornung et al., 2011; Liao et al., 2017), thus focusing on

leadership behavior directed at building a relationship with individual

employees. In order to do justice to i-deals in an organizational context, this

study also examines leadership behavior that refers to the collective. To enhance

our knowledge about the role of different leadership styles in the

implementation of i-deals, the individual- and collective-focused leadership

climate in an organization are examined as contextual factors.

44 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.2 Theoretical Background

2.2.1 I-Deals

Although i-deals are individualized arrangements negotiated between one

individual employee and his or her employer to fit the employee’s needs

(Rousseau et al., 2006), i-deals should also benefit the employer (Rousseau et al.,

2006). Research has shown that i-deals have mostly positive effects for i-dealers

(Conway & Coyle-Shapiro, 2016), including a variety of positive employee

work-related perceptions, attitudes and behavior (Conway & Coyle-Shapiro,

2016; Liao et al., 2016) such as OCB (Anand et al., 2010), job satisfaction and

affective commitment (Hornung et al., 2008; Hornung et al., 2010a; Rosen et al.,

2013), work engagement (Hornung et al., 2010b), motivation and performance

(Hornung et al., 2009; Ng & Lucianetti, 2016). An extensive review of positive

outcomes on the individual level was presented in Chapter 1.5. Although

positive effects for organizations are assumed in the definition of i-deals,

evidence for a relation between i-deals and organizational performance is still

in its infancy (Bal & Boehm, 2017). As a first step, Bal and Boehm (2017) have

shown a relationship between individual i-deals, collective commitment and

client satisfaction in a multilevel model. To further address the usefulness of i-

deals to organizations (Liao et al., 2016) this study examines i-deals from an

organizational perspective. The level of i-deals in an organization is captured

by the concept of organizational median i-deals (Anand, 2012; Liao et al., 2016).

Following Anand (2012) and Liao et al. (2016), organizational median i-deals are

defined as the central tendency of i-deals in an organization. As discussed in

Chapter 1.4, i-deals differ in content, but previous research has shown that two

types of i-deals are most prevalent: time and location flexibility, and task and

development i-deals (Bal et al., 2012; Hornung et al., 2008; Rosen et al., 2013).

Therefore, this study will focus on these types of i-deals as well.

Study 1 – How Do I-Deals Relate to Organizational Performance? 45

2.2.2 Effects of Organizational Median I-Deals on Employee Job Attitudes

I-deals have been related to a variety of job attitudes, including job satisfaction

(Hornung et al., 2010a; Rosen et al., 2013). I focus on job satisfaction as it is one

of the most frequently studied job attitudes in psychological and individual-

level i-deals research (e.g., Liao et al., 2017; Rosen et al., 2013; Van Dick &

Monzani, 2017). Based on the core assumption of i-deals theory that employees

negotiate i-deals with their employer to match work arrangements to their

personal needs enhanced job satisfaction is a likely consequence (Hornung et

al., 2010a).

2.2.2.1 Collective job satisfaction

Job satisfaction is defined as “a pleasurable or positive emotional state resulting

from the appraisal of one's job or job experiences” (Locke, 1976, p. 1304) and is

regarded as an important aspect of employees’ well-being and mental health

(e.g., Warr, 2007). If outcomes at the organizational level are of interest, scholars

suggest construing job satisfaction at the collective level (Schneider, Smith, &

Sipe, 2000). Since employees of an organization share similar working

environments a collective job satisfaction is formed (Whitman, Van Rooy, &

Viswesvaran, 2010). Collective job satisfaction is defined as “shared internal

state that is expressed by affectively and cognitively evaluating shared job

experiences with some degree of favor or disfavor” (Whitman et al., 2010, p. 46).

2.2.2.2 Organizational median i-deals and collective job satisfaction

Research indicates that i-deals predict job satisfaction since they demonstrate

that the organization is concerned about the needs of individual employees

(Cropanzano, Rupp, Mohler, & Schminke, 2001b; Rosen et al., 2013; Tekleab,

Takeuchi, & Taylor, 2005). I-deals enable employees to change their jobs

through negotiation to meet their individual needs, which is likely to result in

increased job satisfaction (Hornung et al., 2010a; Rosen et al., 2013). Scholars

have argued based on work adjustment (Dawis & Lofquist, 1984) and self-

46 Study 1 – How Do I-Deals Relate to Organizational Performance?

determination theory (SDT; Ryan & Deci, 2000) that i-deals facilitate a greater

fit between the requirements at work, personal needs, and knowledge and

abilities of employees and thus enhance basic need satisfaction (Bal & Boehm,

2017; Ho & Kong, 2015). Studies show a positive relationship between i-deals in

general, task and work responsibilities i-deals as well as schedule flexibility i-

deals and job satisfaction (Hornung et al., 2010a; Liao et al., 2017; Rosen et al.,

2013). It is therefore likely that the higher the organizational median i-deals in

organizations, the more satisfied are employees with their jobs.

A variety of theories of attitude formation suggests that social interactions

between employees foster a collective job satisfaction (Whitman et al., 2010). Bal

and Boehm (2017) argue based on contagion theory that positive effects of i-

deals spill over between employees. Specifically, contagion theory explains that

attitudes within collectives are transferred from one employee to another

(Barsade, 2002) and Bal and Boehm (2017) indeed show that positive effects of

i-deals are transferred across organizational members. They found, that i-deals

are related to the formation of collective attitudes, in this case collective

commitment (Bal & Boehm, 2017). This is in line with Whitman et al. (2010) who

argue based on social comparison and social learning theory that collective job

satisfaction is formed because employees learn and build similar attitudes by

observing their coworkers (Whitman et al., 2010). Social comparison theory

implies that employees’ attitudes are influenced when important others, such

as coworkers, show that attitude (Festinger, 1954). Similarly, social learning

theory suggests that employees learn attitudes by observing the attitudes of

their coworkers (Bandura, 1977). Based on those theories, individual job

satisfaction caused by i-deals is likely to spread across employees, causing high

collective job satisfaction in organizations with a high level of i-deals. Thus, I

expect that the median level of i-deals positively influences collective job

satisfaction.

Hypothesis 1: Organizational median i-deals have a positive relationship with

employees’ collective job satisfaction.

Study 1 – How Do I-Deals Relate to Organizational Performance? 47

2.2.3 Effects of Organizational Median I-Deals on Coworker Relations

In contrast, the link to coworker relations seems to be more complex. As

Conway and Coyle-Shapiro (2016) state, collectives are likely to suffer from i-

deals in organizations regarding coworker relations and helping behavior

between coworkers. To examine the effect of organizational median i-deals on

coworker relations and helping behavior between coworkers, I focus on OCBI

in the following (Farmer, Van Dyne, & Kamdar, 2014).

2.2.3.1 Collective OCBI

Organ (1997, p. 95) defines OCB as “performance that supports the social and

psychological environment in which task performance takes place”. Williams

and Anderson (1991) categorize OCB on the basis of the target of the behavior.

Behavior benefitting the organization is called OCBO, while behavior directed

toward the benefit of other individuals, such as coworkers, is called OCBI. The

current study focuses on OCBI, which is defined as voluntary, extra-role

behavior directed toward other individuals (Williams & Anderson, 1991). In his

original definition of OCB, Organ (1988) states that while OCB is an individual

behavior, it influences organizational functioning in the aggregate across

individuals. Thereby, Organ emphasizes the importance of OCB for the

collective level, as positive effects for the organization are only realized when

OCB is not conceptualized as behavior at the individual but at the collective

level (Podsakoff, Podsakoff, MacKenzie, Maynes, & Spoelma, 2014).

2.2.3.2 Organizational median i-deals and collective OCBI

Due to several reasons, i-dealers engage in OCBI (Greenberg et al., 2004;

Rousseau et al., 2006). I-deals can create costs for coworkers since recourses are

most often constrained in organizations (Rousseau et al., 2006). Social exchange

theory (Blau, 1964) implies that i-dealers are likely to feel obligated to those who

granted or enabled their deals. Consequently, i-dealers will try to reduce

burdens caused by the deals for their coworkers through favors and helping

48 Study 1 – How Do I-Deals Relate to Organizational Performance?

behavior (Greenberg et al., 2004; Rousseau, 2005; Williams & Anderson, 1991).

Furthermore, recipients of i-deals might be inclined to convince their coworkers

that they are deserving of special working arrangements because they are

especially generous, high-performing and thus valuable employees (Greenberg

et al., 2004). By helping coworkers with work-related problems or to meet

important deadlines, for example, i-dealers eliminate the guilt and bad

conscience they feel (Greenberg et al., 2004). In addition, by engaging in OCBI

they are building close relationships with their coworkers who might feel

resentful of them (Greenberg et al., 2004; Rousseau, 2005). Indeed, OCBI has

been found to promote relationship quality among coworkers (Podsakoff,

MacKenzie, Paine, & Bachrach, 2000).

However, based on social exchange theory, i-deals do not seem to have

unlimited positive effects on collective OCBI. Following the argument of Anand

and Vindyarthi (2016), I propose that i-deals in an organization can change the

common understanding of exchanges. In fact, Takeuchi, Lepak, Wang and

Takeuchi (2007) found evidence indicating that employees can develop shared

exchange perceptions within their organizations. At low levels of i-deals (i.e.,

low organizational median i-deal), employees receive just few valuable

resources from the organizations. Therefore, employer and coworkers have

only limited expectations of reciprocity and i-dealers feel not obliged to

compensate their coworkers for potential losses (Vidyarthi et al., 2014). Thus, an

economics exchange climate is dominating the organization (Vidyarthi et al.,

2014). However, on moderate levels of i-deals (i.e., moderate organizational

median i-deal), the employer might already struggle to remain the balance

between being perceived as unfair and fulfilling the needs of i-deals seekers and

thus bigger costs might be caused for coworkers (Vidyarthi et al., 2014).

Therefore, the organization and coworkers will have higher expectations that i-

deal recipients will return the favor and employees feel pressured to engage in

helping behavior directed at their coworkers (Greenberg et al., 2004).

Consequently, a social exchange climate is emerging in organizations with

moderate organizational median i-deals (Rousseau et al., 2006). However, at

Study 1 – How Do I-Deals Relate to Organizational Performance? 49

high levels of i-deals (i.e., high organizational median i-deal), they may be taken

for granted, as benefits the organization generally should offer to all its

employees without any negotiations (Anand & Vindyarthi, 2016; Rousseau,

2005), causing again an economic exchange climate. Alternatively, Rousseau

(2005) proposes that too many i-deals create an economic exchange climate,

because every element of the employment relationship becomes subject to

negotiation when the level of i-deals is high. In this situation, employees might

have the perception that they need to bargain for every resource, reward and

benefit in their working relationship (Rousseau, 2005). Thus, exchanges in an

organization might be perceived a purely transactional, if the level of i-deals in

an organization is high (Anand & Vidyarthi, 2016). This means, employees feel

no longer obliged to return favors to parties who made their i-deal possible,

including their coworkers. Therefore, i-deals will not have much influence on

employees’ helping behavior towards coworkers (Anand & Vindyarthi, 2016).

Furthermore, given high levels of i-deals in organizations, recipients of i-deals

might not feel guilty towards their coworkers, as many others will also have i-

deals (e.g., Ng, 2017). Eventually, granting too many i-deals might change the

common understanding of exchanges in an organization again from a social to

an economic exchange climate (Anand & Vindyarthi, 2016). In line with this

assumption, research showed that the overuse of idiosyncratic arrangements

can be negative by creating dysfunctional conflict and competition among

employees (Mitchell & Silver, 1990). To summarize, I expect an economic

exchange climate at low levels of i-deals, a social exchange climate at moderate

levels of i-deals and again an economic exchange climate at high levels of i-deals

causing a curvilinear relationship between organizational median i-deals and

collective OCBI.

Hypothesis 2: Organizational median i-deals have an inverted U-shaped

relationship with employees’ collective OCBI.

50 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.2.4 The Role of Leadership Climate

I-deals are created in the leader-follower interaction (Liao et al., 2017). Leaders

influence the negotiation (e.g., Ho & Tekleab, 2016; Hornung et al., 2014) and

the successful implementation of i-deals (Anand & Vidyarthi, 2016). Liao et al.

(2016) argue that transformational leaders create an environment encouraging

successful i-deals in organizations. Liao et al. (2017) show that it is relevant to

perceptions of i-deals in a group, if leaders highly differentiate between

employees or if all members of a collective are treated in a similar way.

Expanding on this idea, I follow Kark and Shamir (2002) who propose that TFL

includes behaviors directed toward the entire group and its individual members

simultaneously. Leader behavior can have very different effects, dependent on

whether the behavior is directed at individual employees or the collective (Wu,

Tsui, & Kinicki, 2010).

2.2.4.1 Individual- and collective-focused leadership climate

Leadership climate captures the average of perceptions and behaviors in

organizations (e.g., Boehm, Dwertmann, Bruch, & Shamir, 2015; Li &

Cropanzano, 2009; Kunze, De Jong, & Bruch, 2016; Zohar & Luria, 2005), similar

to other climate constructs in extant literature (e.g., Li & Cropanzano, 2009;

Zohar & Luria, 2005). The organizational leadership climate can result from a

variety of social processes that lead to similar leadership behavior and similar

perceptions of leadership behavior (Klein, Dansereau, & Hall, 1994) such as

socialization, attraction-selection-attrition mechanisms, shared experiences and

regular interactions among employees (Kozlowski & Hattrup, 1992; Kunze et

al., 2016; Morgeson & Hofmann, 1999; Schneider & Reichers, 1983; Walter &

Bruch, 2010).

2.2.4.1.1 Individual-focused leadership climate

Drawing on TFL theories, Wang and Howell (2010, p. 1135) define individual

focused leadership “as behavior aiming to empower individual followers to

Study 1 – How Do I-Deals Relate to Organizational Performance? 51

develop their full potential, enhance their abilities and skills, and improve their

self-efficacy and self-esteem”. An individual-focused leadership climate

emerges if leaders in organizations show two behavioral patterns rooted in TFL

theory (Kunze et al., 2016; Wang & Howell, 2010). These are intellectual

stimulation and individualized consideration (Chun, Cho, & Sosik, 2016; Kark

& Shamir, 2002; Kunze et al., 2016). Intellectual stimulation is the degree to

which a leader encourages followers to challenge assumptions about their work,

to take risks and to approach existing issues and problems in new ways (Judge

& Piccolo, 2004; Kunze at al., 2016). Individualized consideration is the degree

to which a leader treats every follower as an individual entity, shows respect

and encouragement, attends to his or her unique concerns and needs, and is

thus acting as a mentor or coach (Judge & Piccolo, 2004, Kunze et al., 2016).

These two behaviors have in common that they differentiate among followers

regarding their personal characteristics and individual skills (Atwater & Bass,

1994; Kark & Shamir, 2002).

2.2.4.1.2 Collective-focused leadership climate

Wang and Howell (2010, p. 1135) define collective-focused leadership as

“behavior aiming to communicate the importance of group goals, develop

shared values and beliefs, and inspire unified effort to achieve group goals”. A

collective-focused leadership climate develops if leaders in an organization

engage in specific behaviors directed toward the collective, such as articulating

a collective vision and fostering collective goals (Kunze et al., 2016). Articulating

a vision includes developing and communicating a fascinating idea for the

future of the collective to inspire employees (Podsakoff, MacKenzie, Moorman,

& Fetter, 1990). Fostering collective goals refers to a leader’s behaviors aimed at

supporting and promoting cooperation and teamwork among employees to

reach overarching and shared goals (Podsakoff et al., 1990). These two behaviors

show employees that leaders throughout the organization are committed to

collective goals (Kunze et al., 2016).

52 Study 1 – How Do I-Deals Relate to Organizational Performance?

As mentioned before, I suggest that examining i-deals from a collective

perspective requires to include both individual- and collective-focused

leadership climate. Line managers also need to meet the needs of the i-dealer’s

coworkers, the whole team and the organization in the negotiation and

implementation of i-deals (Greenberg et al., 2004). In the following, I therefore

argue that the individual- and collective-focused leadership climate in an

organization are moderating the effect of organizational median i-deals on

collective job satisfaction and collective OCBI, respectively.

2.2.4.2 Individual-focused leadership as moderator

Research has shown that an appropriate and suitable organizational climate is

necessary that management practices, such as i-deals, have an effect on

employees’ attitudes, behavior and subsequently on organizational

performance (Bal et al., 2012; Bowen & Ostroff, 2004; Ngo, Foley, & Loi, 2009).

Liao et al. (2016) also point to the importance of the organizational climate in

supporting and enabling succesful i-deals. Their multilevel model of i-deals

indicates that the leadership climate might be one important moderating factor

for the relationship between organizational median i-deals and employee

attitudes such as job satisfaction (Liao et al., 2016). In line with this assumption,

Bal et al. (2012) showed that the effects of i-deals can be enabled or hindered by

the nature of the collective climate and thereby prove the impact of social

context on the effectiveness of i-deals. Specifically, they find that successful

implementation and execution of i-deals is determined by whether the

organizational climate fits to the deals. When the organizational climate and

managerial practices, such as i-deals, are in line with each other such that they

both enable and encourage employees to fit their jobs to their unique needs,

employee motivation, performance and satisfaction might be enhanced

(Schulte, Ostroff, Shmulyian, & Kinicki, 2009).

Just as i-deals, an individual-focused leadership climate emphasizes the

uniqueness of each individual employee, and thus activates individual level

identities (Kark & Shamir, 2002). An individual-focused leadership climate

Study 1 – How Do I-Deals Relate to Organizational Performance? 53

causes individual differentiation, just like i-deals, because leaders adjust their

behaviors based on followers' individual differences (e.g., personal needs and

abilities; Tse & Chiu, 2014; Wu et al., 2010). When an individual-focused

leadership climate is present in an organization, leaders focus on individual

need satisfaction (e.g., Wu et al., 2010). Indeed, research showed that leader

consideration is encouraging i-deals (Hornung et al., 2011). I thus argue that the

individual-focused leadership climate supports employees in implementing

their i-deals according to their own specific needs and fosters employees’

acceptance for individualized arrangements in an organization, enhancing

collective job satisfaction. Hence, even though employees may have negotiated

i-deals, a lower individual-focused leadership climate hinders the realization of

i-deals.

Hypothesis 3a: The relationship between organizational median i-deals and

employees’ collective job satisfaction is stronger, if the individual-focused leadership

climate is high.

2.2.4.3 Collective-focused leadership climate as moderator

Anand and Vidyarthi (2016) propose that an i-dealer’s reciprocity towards

coworkers is most likely a function of the organizational context. Specifically,

the extent to which i-dealer engage in OCBI is likely dependent on the degree

to which they identify with their coworkers and the organization (Greenberg et

al., 2004; Tajfel & Turner, 1985). A collective-focused leadership climate

activates a collective identity by focusing on the collective rather than

individuals, by emphasizing similarities among employees and the uniqueness

of the collective (Dansereau, Alutto, & Yammarino, 1984; Kark & Shamir, 2002).

As Wu et al. (2010, p. 92) state, “group attributes such as shared values and

common goals become salient to the members, while individualized

idiosyncratic characteristics lose prominence” when the collective-focused

leadership climate is high. Thus, employees perceiving themselves as belonging

to a collective due to a high collective-focused leadership climate emphasize

collective interests (Brickson, 2000; Turner, Hogg, Oakes, Reicher, & Wetherell,

54 Study 1 – How Do I-Deals Relate to Organizational Performance?

1987). Consequently, a collective-focused leadership climate promotes common

efforts, collaboration, teamwork and reciprocal exchange relationships between

coworkers (Chun et al., 2016). Garg and Fulmer (2017) propose that negative

reactions of coworkers to others’ i-deals might be mitigated in collectives with

a strong shared identity. This argument, that the salience of the team identity

decreases effects of i-deals, is in line with findings of Vidyarthi et al. (2016) who

find that the positive relationship between relative i-deals and employee

performance was stronger in groups with low team orientation. It is thus likely

that employees are more attentive to individualization caused by i-deals in

organizations with a low collective-focused leadership climate. I-deals should

therefore influence collective OCBI, causing the inversed U-shaped

relationship. However, in organizations with a high collective-focused

leadership climate, employees pay little attention to individual differences and

prioritize common goal. Consequently, collective OCBI should already be high,

while effects of i-deals are mitigated, causing a non-significant relationship.

Hypothesis 3b: The relationship between organizational median i-deals and

employees’ collective OCBI is inverted U-shaped for low collective-focused

leadership climate, but non-significant for high collective-focused leadership climate.

2.2.5 The Link to Organizational Performance

Research suggests that i-deals are beneficial for organizations by being related

to main strategic outcomes such as employee motivation and retention,

workforce employability and organizational performance (Kroon et al., 2016).

However, scholars assume that effects of i-deals on collective performance are

not direct but mediated by collective processes (e.g., Bal & Rousseau, 2016; Liao

et al., 2016). Based on the foregoing hypotheses, I propose that the effect of

organizational median i-deals on organizational performance is mediated by

collective job satisfaction and collective OCBI.

Study 1 – How Do I-Deals Relate to Organizational Performance? 55

2.2.5.1 The link through collective job satisfaction

Few topics in organizational psychology have been studied as extensively as the

relationship between job satisfaction and job performance (Judge, Thoresen,

Bono, & Patton, 2001b). In their meta-analysis, Judge et al. (2001b) estimate the

mean true correlation between overall job satisfaction and job performance to

be .30. Job satisfaction does also have a positive relationship with organizational

outcomes (e.g., Harter, Schmidt, & Hayes 2002; Judge et al. 2001b; Koys 2001).

Already the original satisfaction-performance theories proposed by human

relations theorists focused on the organizational and not on the individual level

of analysis (Schneider, Hanges, Smith, & Salvaggio, 2003, Whitman et al., 2010).

In their meta-analysis, Whitman et al. (2010) find that job satisfaction has a

positive impact on performance, productivity and turnover, when all constructs

are construed at the collective level. The literature thus indicates that the

relationship between organizational median i-deals and organizational

performance is mediated by collective job satisfaction. Based on the foregoing

hypotheses predicting an interaction between organizational median i-deals

and the individual-focused leadership climate on collective job satisfaction, I

suggest a moderated and mediated relationship between organizational median

i-deals and organizational performance.

Hypothesis 4a: The relationship between organizational median i-deals and

organizational performance is mediated by employees’ collective job satisfaction and

moderated by the individual-focused leadership climate.

2.2.5.2 The link through collective OCBI

In the original definition of OCB, Organ (1988) states that OCB is an individual

behavior, which influences organizational effectiveness in its aggregate. Thus,

he emphasizes that OCB is most often not beneficial for individuals but for the

organization (Podsakoff et al., 2014). Several processes might link collective

OCBI to performance. First, Nielsen, Hrivnak and Shaw (2009) propose that

collective OCBI helps new employees to adapt through increased member

56 Study 1 – How Do I-Deals Relate to Organizational Performance?

interactions in teams, which enhances information sharing. Furthermore, high

levels of helping behavior between employees can free team resources, such as

supervisor time (Podsakoff et al., 2000; Podsakoff & MacKenzie, 1997). Finally,

collective OCBI is likely to lead to regular feedback between members of a

collective and the leader, eventually improving collective performance

(Sundstrom, 1999). A meta-analysis by Podsakoff, Whiting, Podsakoff and

Blume (2009) reported that OCBI is positively related to individual

performance. Furthermore, high correlations between OCB (including both

OCBO and OCBI) and performance, productivity, profitability and turnover (r

= .43, .37, .15 and -.22, respectively) were found, when both constructs are

construed at the collective level (Podsakoff et al., 2009). The reviewed literature

suggests that collective OBCI mediates the relationship between organizational

median i-deals and organizational performance. Based on the foregoing

hypotheses predicting an interaction between organizational median i-deals

and the collective-focused leadership climate on collective OCBI, I suggest a

moderated and mediated relationship between organizational median i-deals

and organizational performance. The overall hypothesized model including all

hypothesized relationships is depicted in Figure 2-1.

Hypothesis 4b: The relationship between organizational median i-deals and

organizational performance is mediated by employees’ collective OCBI and

moderated by the collective-focused leadership climate.

Study 1 – How Do I-Deals Relate to Organizational Performance? 57

2.3 Method

2.3.1 Data and Sample

As explained in Chapter 1.7, data was collected in cooperation with a

benchmarking agency in order to receive data from multiple organizations.

Data collection for this study was conducted in 2016 in Germany. In sum, 87

German organizations participated in the study. Participating companies had

to be organizations located in Germany with a maximum of 5,000 employees,

and thus were small to medium sized companies. The size of those

organizations ranged from 23 to 2,015 employees, with a median organizational

size of 194. The organizations were from various industry backgrounds

including manufacturing (30%), service (47%), finance and insurance (10%) and

retail and wholesale (13%). Data was gathered via online questionnaires and

each company received a detailed benchmark report in return for its

participation.

Individual-Focused Leadership Climate

Collective Job Satisfaction

Organizational Median I-Deals

Organizational Performance

Collective OCBI

+

Collective-Focused Leadership Climate

Figure 2-1. Overview conceptual model.

58 Study 1 – How Do I-Deals Relate to Organizational Performance?

In line with researchers’ recommendations on reducing the risk for common

source biases (Dickson, Resick, & Hanges, 2006; Erdogan, Liden, & Kraimer,

2006; Podsakoff, MacKenzie, Lee, & Podsakoff, 2003; Podsakoff, MacKenzie, &

Podsakoff, 2012), a split-sample design was used (Rousseau, 1985). Five

different data sources, namely three different groups of employees, data from

HR departments and the top-management team, were included in the study

design. The following standardized procedure was used across all

organizations. Similar to other scientific studies (e.g., Kunze et al., 2016), email

invitations with a link to a web-based survey were sent to employees by each

organization. This email explained the study’s purpose, guaranteed

respondents’ voluntary contribution and full anonymity. After clicking on the

link, employees were randomly and evenly distributed via an algorithm

programmed in the online survey to three separate employee questionnaires.

This was done first to rule out common method bias and second to reduce the

item number each employee had to fill in. Information about the demographics

(i.e., age, gender and tenure) was captured from all participating employees.

The three different survey versions measured a) i-deals and collective job

satisfaction, b) collective OCBI, and c) the individual- and the collective-focused

leadership climate. Additionally, HR executives provided general information

about the company (e.g., industry affiliation, organizational size). Finally,

members of the top-management team were asked to rate the performance of

each company.

Across all companies, 13,354 employees participated in the study by completing

the online survey. The resulting within-organization response rate was 53%.

Participants had a mean age of 39 years (SD = 5.8) and were mainly male (47%

male and 38% female; 15% did not provide an answer). Employees had on

average worked 8 years (SD = 4.2) in their organization. Participants were

invited to the study from all major divisions and hierarchical levels of the

organization including middle management (10%), first-line supervisors (9%),

employees without leadership responsibility (67%) and other groups (14%, e.g.,

freelancer).

Study 1 – How Do I-Deals Relate to Organizational Performance? 59

2.3.2 Measures

All survey measures were translated into German applying a double-blind

back-translation procedure, because the study was exclusively conducted with

German companies (Schaffer & Riordan, 2003). The study focuses on the

organizational level, and thus all constructs measured through individual

responses were aggregated to the organizational level. Intra-class correlation

coefficients (ICC1 and ICC2; Bliese, 2000) and the average deviation index as an

interrater agreement measure (ADM(J); Burke, Finkelstein, & Dusig, 1999;

LeBreton & Senter, 2008; Smith-Crowe, Burke, Kouchaki, & Signal, 2013), were

calculated to justify the aggregation of constructs measured at the individual

level to the organizational level. ICC1 values are based on a significant one-way

ANOVA and thus are generally acceptable based on p-values. ICC2 values of

more than 0.60 are usually considered sufficient (Bliese, 2000; Chen, Mathieu, &

Bliese, 2004; Kenny & La, Voie, 1985). For the cutoff criteria for the ADM(J), I

followed LeBreton and Senter (2008), who suggest that values should be below

0.8 for measures assessed on a 5-point rating scale and below 1.2 for measures

assessed on a 7-point rating scale.

2.3.2.1 Organizational median i-deals

I-deals were measured using a 8-item scale based on Rosen et al. (2013), covering

schedule and location flexibility and work responsibility i-deals. Example items

are: “My supervisor considers my personal needs when making my work

schedule.”, “Because of my individual needs, I have negotiated a unique

arrangement with my supervisor that allows me to complete a portion of my

work outside of the office.” and “I have successfully asked for extra

responsibilities that take advantage of the skills that I bring to the job.”,

respectively. A 5-point rating scale (1 = strongly disagree, 5 = strongly agree)

was used. As in other i-deals research (e.g., Ng & Lucianetti, 2016), i-deals were

treated as one unidimensional construct. An exploratory factor analysis (EFA)

of the eight items shows that all of them loaded on one factor (factor loadings:

.80; .85; .83; .83; .81; .66; .79; 80; extracted variance = 64 percent). Internal

60 Study 1 – How Do I-Deals Relate to Organizational Performance?

consistency estimates were α = .89. The within-organizational median of the

individual-level i-deals scores was used to depict the central tendency among i-

deals within organizations. I-deals theory says that special work arrangements

vary considerably across employees in regards to scope (e.g., Rousseau, 2005).

Thus, within-organizational agreement is not expected for i-deals, and the

median is better suited for aggregation to the organizational level than the mean

(Bliese, 2000; Henderson, Liden, Glibkowski, & Chaudhry, 2009; Liden,

Erdogan, Wayne, & Sparrowe, 2006).

2.3.2.2 Collective job satisfaction

Collective job satisfaction was assessed with a 4-item scale by Judge, Parker,

Colbert, Heller and Ilies (2001a). An example item is: “Overall, how satisfied are

you with your job?” The other three items focused on perceptions of

development opportunities, salary and advanced training options. A 7-point

rating scale (1 = strongly disagree, 7 = strongly agree) was used. The definition

of collective job satisfaction presumes that employees of a collective share a

similar level of job satisfaction (Whitman et al., 2010). Collective job satisfaction

is therefore often conceptualized as direct consensus model, using the aggregate

of all individual scores (Whitman et al., 2010). Thus, individual ratings were

aggregated into a single organizational-level measure, which was supported by

aggregation statistics (ICC1 = .13, p < 0.001; ICC2 = .85; mean ADM(J) =1.19).

Internal consistency estimates were α = .89.

2.3.2.3 Collective OCBI

Collective OCBI was assessed with a 6-item scale by Lee and Allen (2002). An

example item is: “I take time to support others with work-related or other

problems.” A 7-point rating scale (1 = strongly disagree, 7 = strongly agree) was

used. Again, a direct consensus model was used as in most studies on collective

OCB (Podsakoff et al., 2014). Thus, individual ratings were aggregated into a

single organizational-level measure. The aggregation was supported by the

Study 1 – How Do I-Deals Relate to Organizational Performance? 61

respective statistics (ICC1 = .04, p < 0.001; ICC2 = .65; mean ADM(J) =.76). Internal

consistency estimates were α = .73.

2.3.2.4 Individual-focused leadership climate

The construct includes two sub-scales: intellectual stimulation and

individualized consideration. Seven items from Podsakoff, MacKenzie and

Bommer (1996) were used to assess the two sub-scales. As in previous research

on TFL climates (e.g., Kunze et al., 2016; Walter & Bruch, 2010), employees were

asked to assess the extent to which their direct supervisors displayed leadership

behavior on the two dimensions. All seven items had an individual referent. An

example item is: “My direct supervisor takes my personal needs into account”.

A 5-point rating scale (1 = strongly disagree, 5 = strongly agree) was used. A

direct consensus composition model (Chan, 1998) was used for the aggregation

to the organizational level. Aggregation statistics provided support for an

aggregation to the organizational level of analysis (ICC1 = .12, p < 0.001; ICC2 =

.84; mean ADM(J) =.77). Internal consistency estimates were α = .93.

2.3.2.5 Collective-focused leadership climate

The construct includes two sub-scales: articulating a vision and fostering

collective goals. Nine items developed by Podsakoff et al. (1996) were used to

assess the subscales. Once again, employees were asked to evaluate the extent

to which their direct supervisor showed leadership behavior on the two

dimensions of the construct. This time, all items had a collective referent (i.e.

“My direct supervisor encourages employees to be team players”). A 5-point

rating scale (1 = strongly disagree, 5 = strongly agree) was used. As for

individual-focused leadership climate, a direct consensus composition model

was used for the aggregation on the organizational level (Chan, 1998).

Aggregation statistics provided support for an aggregation to the

organizational level of analysis (ICC1 = .14, p < 0.001; ICC2 = .84; mean ADM(J)

=.75). Internal consistency estimates were α = .96.

62 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.3.2.6 Organizational performance

To account for a variety of organizational performance outcomes (Combs,

Crook, & Shook, 2005), organizational performance was measured with three

items relating to the overall company performance, employee productivity and

efficiency of business processes. All three performance items were assumed to

load on one common performance factor, which was confirmed by the results

of an EFA (factor loadings: .80; .84; .88; extracted variance = 71 percent). I gauged

the information on organizational performance by asking members of the top

management team. Previous literature (Rogers & Wright, 1998) measured

subjective performance metrics by asking top managers to rate their company's

performance relative to their direct competitors in the industry. I adopted this

approach for the current study. Furthermore, top-managers rated the

performance of their companies on a 7-point scale (1 = far below average; 7 = far

above average). Internal consistency estimates were α = .79. For 53

organizations, more than one top-manager provided information on the

company’s performance. For those companies, aggregation statistics justified

the aggregation to the organizational level (ICC1 = .28, p < 0.001; ICC2 = .57; mean

ADM(J) = .53).

2.3.2.7 Control variables

I controlled for variables that might provide alternative explanations for the

hypotheses. Company age and size were included as control variables as they

are related to organizational performance (e.g., Choi & Shepherd, 2005),

employee behaviors and outcomes (Ragins, Cotton, & Miller, 2000),

respectively. Company age and size were measured by asking HR managers for

the company’s founding year and for the total number of employees. As both

measures were skewed, I log-transformed them. Second, I controlled for the

characteristics of employees because research has shown that employee

attributes influence effects of i-deals on a variety of individual-level outcomes

(Bal et al., 2012; Marescaux & De Winne, 2016) by including employee age,

gender and tenure. As the measure for tenure was skewed, it was log-

Study 1 – How Do I-Deals Relate to Organizational Performance? 63

transformed. I further included a variable displaying organizational structure,

namely the number of locations per company. This variable was included in the

analysis because research showed that organizational structure influences the

organizational culture (e.g., Conrad & Sydow, 1984). The variable was also log-

transformed due to skewness. Furthermore, I included affiliation to industry

sectors, because industry affiliation can relate to organizational effectiveness

(Dickson et al., 2006). I added one dummy to capture service industry versus

other sectors (including manufacturing, finance and trade). The service sector

was chosen because Stavrou (2005) showed that flexibility at work can mainly

be found in the service sector. I further controlled for i-deals differentiation

operationalized by within-organization standard deviation. Liao et al. (2016)

suggest that the extent to which levels of i-deals vary within an organization

might influence effects of i-deals on employees. Thus, organizational median i-

deals should not be studied without controlling for i-deals differentiation.

Furthermore, to increase the predictive validity of the individual- and the

collective-focused leadership climate measures, I controlled for the potentially

related construct of LMX. I-deals research has shown, that the quality of the

relationship between employee and supervisor influences i-deals negotiation,

and has an impact on performance related outcomes (e.g., Anand et al., 2010;

Rousseau et al., 2006). Seven items based on Scandura and Graen (1984) and

adapted by Tangirala, Green and Ramanujam (2007) were used to measure

LMX. An example item was “My direct superior understands my problems and

needs” (1 = do not agree at all; 7 = agree completely). Internal consistency

estimates were α = .97. Finally, as research has shown that leadership climates

are influencing employee attitudes and behavior, and organizational

performance, I also controlled for direct effects of the individual- and the

collective-focused leadership climate on the mediators and outcome variables

(e.g., Kunze et al., 2016).

64 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.4 Results

2.4.1 Descriptive Statistics

Means, standard deviations and intercorrelations among the variables are

presented in Table 2-1. The correlation matrix shows no signs of

multicollinearity between study variables (Kennedy, 1979). In line with the

hypotheses, organizational median i-deals are positively correlated to both

collective job satisfaction and collective OCBI (r = .47, p < .01 and r = .38, p < .01,

respectively). Furthermore, both collective job satisfaction and collective OCBI

are positively correlated with organizational performance (r = .30, p < .01 and r

= .32, p < .01, respectively). As in other studies combining measured of both

leadership behaviors (e.g., Kunze et al., 2016), the individual- and the collective-

focused leadership climate show relatively high intercorrelations (r = .86, p <

.01). A confirmatory factor analysis (CFA) shows, that both scales can be

considered as two distinct factors despite their high correlation. To evaluate the

model fit, I assessed the standardized root mean square residual (SRMR) in

combination with two incremental fit indices, the comparative fit index (CFI)

and the incremental fit index (IFI; Bentler 2007). I used conventional cut-off

points to assess these indices (>.90 for the CFI and IFI and <.08 for the SRMR;

Hu & Bentler 1999). I furthermore report the Akaike information criterion (AIC;

Akaike, 1987), with lower values indictaing better fit. According to those fit

statistics, the two-factor model showed better fit (χ2 = 423, df = 103; CFI = .81, IFI

= .81, SRMR = .073; AIC = 495) than an alternative one-factor model (χ2 = 443, df

= 104; CFI = .80, IFI = .80, SRMR = .076; AIC = 507). I followed the

recommendations by Becker (2005) and kept only those six control variables in

the further analysis that showed significant correlations with the mediator and

outcome variables. These were company age, company sectors, company

locations, employee age and tenure, and LMX. This approach leads to more

stable estimates through a better parameter to sample size ratio.

Study 1 – How Do I-Deals Relate to Organizational Performance? 65

Ta

ble

2-1.

Mea

ns, s

tand

ard

devi

atio

ns a

nd in

terc

orre

latio

ns a

mon

g st

udy

vari

able

s.

V

aria

ble

M

SD

1 2

3 4

5 6

7 8

9 10

11

12

13

14

1Em

ploy

ee T

enur

e (lo

g)

.87

.21

2 Em

ploy

ee A

ge

39.1

7 5.

81

.46*

*

3 Em

ploy

ee G

ende

r 1.

43

.21

-.09

-.12

4 C

ompa

ny S

ize

(log)

5.

14

1.06

.3

0**

.02

.01

5 C

ompa

ny A

ge (l

og)

3.42

.9

4 .7

1**

.34*

* -.0

3 .4

2**

6 In

dust

ry S

ervi

ce

.47

.50

-.44*

* -.1

5 .1

5 .0

1 -.3

8**

7 O

rgan

izat

iona

l Loc

atio

ns

(log)

.4

5 .4

3 .0

5 -.0

8 .1

5 .4

3**

.11

.09

8 Le

ader

-mem

ber e

xcha

nge

5.00

.5

3 -.4

1**

-.25*

-.0

1 -.0

5 -.4

8**

.37*

* .1

6

9 I-

Dea

ls D

iffer

entia

tion

.81

.23

.08

-.03

-.14

.36*

* .1

5 -.0

9 .1

4 .0

2

10

Org

aniz

atio

nal M

edia

n I-

Dea

ls

3.27

.5

6 -.4

9**

-.18

-.05

-.17

-.50*

* .4

1**

.03

.60*

* -.1

5

11

Indi

vidu

al-F

ocus

ed

Lead

ersh

ip C

limat

e

3.63

.3

1 -.3

7**

-.16

.05

-.09

-.49*

* .3

6**

.12

.86*

* -.0

3 .5

4**

12

Col

lect

ive-

Focu

sed

Lead

ersh

ip C

limat

e 3.

70

.38

-.42*

* -.2

3*

.06

-.05

-.44*

* .2

3*

.16

.88*

* .0

4 .5

7**

.86*

*

13

Col

lect

ive

Job

Satis

fact

ion

4.97

.5

1 -.2

6*

-.22*

.1

7 -.1

1 -.3

7**

.12

.07

.44*

* -.2

0 .4

7**

.45*

* .4

6**

14

Col

lect

ive

OC

BI

6.04

.2

4 -.1

5 -.1

7 .1

3 .1

5 -.1

2 .3

1**

.29*

* .5

1**

.01

.38*

* .5

5**

.53*

*.3

4**

15

Org

aniz

atio

nal P

erfo

rman

ce

5.52

.6

9 -.1

1 -.0

5 .1

4 .0

0 .0

2 .0

1 .0

6 .2

2*

-.03

.07

.15

.24*

.3

2**

.30*

*

Not

e. *p

<.05

, **p

<0.0

1.

66 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.4.2 Data Analysis and Hypothesis Testing

The proposed hypotheses were tested within a structural equation model (SEM)

in order to test all hypothesized relationships in one model. The statistical

software package Amos 23 was used to test the proposed model. Several

researchers argue that SEM is a preferable alternative to partial least squares

(PLS), even when sample sizes are small (Goodhue, Lewis, & Thompson, 2012).

Relying on Monte Carlo simulations with varying sample sizes, Goodhue et al.

(2012) found that PLS, an approach often considered as superior to regression

and SEM for testing models with small sample sizes, is no solution to overcome

this challenge. At reasonable sample sizes (n = 90), SEM produces reliable results

and has equal power and greater accuracy than PLS (Goodhue et al., 2012).

Thus, the SEM approach was used for testing the hypothesized model.

Considering the small sample size of 87 organizations (Marsh & Hau, 1999;

Rego, Vitória, Magalhães, Ribeiro, & e Cunha, 2012), composite measures were

used in the model, which means that item scores were averaged to form a score

measuring each construct. To assess the fit of the model, three common fit

statistics were inspected: the root mean square error of approximation (RMSEA)

index and two incremental fit indices, the CFI and the IFI (Bentler 2007). I used

conventional cut-off points to assess these indices (>.90 for the CFI and IFI and

<.08 for the RMSEA; Hu & Bentler 1999). I also report the AIC (Akaike, 1987),

with lower values indicating better fit. Since the model assumes a curvilinear

relationship, the independent variable was squared before calculating

interactions terms and conducting the statistical analysis (e.g., Lechner,

Frankenberger, & Floyd, 2010). Furthermore, due to interaction effects,

varibales were mean centered before conducting the analysis (Aiken & West,

1991).

All hypotheses were tested in a moderated mediation model (see Figure 2-2).

The overall fit statistics were supportive (χ2 = 5.3, df = 9, p < .81; CFI = 1.00, IFI =

1.00, RMSEA = .00, AIC = 327). The overall model including standardized

coefficients is depicted in Figure 2-2. Organizational median i-deals are

positively related to collective job satisfaction (β = .29, t = 1.98, p < .05),

Study 1 – How Do I-Deals Relate to Organizational Performance? 67

supporting Hypothesis 1. Furthermore, organizational median i-deals squared

shows a significant negative relationship with collective OCBI (β = -.23, t = -2.00,

p < .05), supporting Hypothesis 2. In line with Hypotheses 3a and 3b, the results

revealed significant interaction effects between organizational median i-deals

and the individual-focused leadership climate (β = .25, t = 2.04, p < .05) as well

as between organizational median i-deals squared and the collective-focused

leadership climate (β = .37, t = 2.33, p < .05). To further inspect those interaction

effects, I plotted the simple slopes at one standard deviation above and below

the mean of the individual- and the collective-focused leadership climate (see

Figure 2-3 and 2-4; Aiken & West 1991). Simple slopes were calculated based on

bias-corrected bootstrap intervals. 20000 bootstrap samples were used. The

relationship between organizational median i-deals and collective job

satisfaction was significant positive for high levels of individual-focused

leadership climate (β = .53, p < .05), whereas under conditions of low individual-

focused leadership climate I observed a non-significant relationship (β = .00, p =

.89), supporting Hypothesis 3a. In support for Hypothesis 3b, the relationship

between organizational median i-deals and OCBI was inversed U-shaped for

low collective-focused leadership climate (β = -.27, p < .05) and non-significant

for high levels of collective-focused leadership climate (β = .03, p = .68).

Furthermore, as expected, collective job satisfaction and OCBI were both

positively associated with company performance (β = .38, t = 3.40, p < .001; β =

.34, t = 2.75, p < .01; respectively). The effect sizes showed that the model

explained 37, 49 and 30 percent of the variance in collective job satisfaction,

collective OCBI and company performance, respectively.

68 Study 1 – How Do I-Deals Relate to Organizational Performance?

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Study 1 – How Do I-Deals Relate to Organizational Performance? 69

Figure 2-3. Moderation effect of the individual-focused leadership climate on the relationship between

organizational median i-deals and collective job satisfaction.

Figure 2-4. Moderation effect of the collective-focused leadership climate on the relationship between

organizational median i-deals and collective OCBI.

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70 Study 1 – How Do I-Deals Relate to Organizational Performance?

To test Hypotheses 4a and 4b, predicting a moderated mediation model, I

examined whether the indirect relationship between organizational median i-

deals and organizational performance mediated by a) collective job satisfaction

and b) collective OCBI was conditional on a) the individual-focused leadership

climate and b) the collective-focused leadership climate. Applying

bootstrapping procedures (again 20000 bootstrap samples; Cheung & Lau, 2008)

I tested for the significance of the indirect effects between organizational

median i-deals and organizational performance under different values of the

individual- and the collective-focused leadership climate. The conditional

indirect effect of organizational median i-deals on organizational performance

was significantly positive for high levels of individual-focused leadership

climate (β = .27, p < .05), but non-significant for low and mean levels of

individual-focused leadership climate (β = .00, p = .90; β = .13, p = .07;

respectively). Furthermore, the conditional indirect effect of organizational

median i-deals squared on organizational performance was significantly

negative for low and mean levels of collective-focused leadership climate (β = -

.27, p < .05; β = -.12, p <. 05; respectively) but non-significant for high levels of

collective-focused leadership climate (β = .03, p = .57). Therefore, Hypothesis 4a

and 4b were supported.

2.4.3 Alternative Model Testing

To further inspect the robustness of the results, I compared the hypothesized

model with alternative models that could be proposed as potential alternative

explanations for the findings. To compare alternative model solutions with the

original model, I relied also on AIC (Akaike, 1987). Higher AIC values

compared to the hypothesized model (AIC = 327) indicate worse fit. First, I

tested if the individual-focused leadership climate also moderated the path via

OCBI and if the collective-focused leadership climate also moderated the path

via collective job satisfaction. In support of my theory and hypothesis, none of

those paths became significant. The alternative model had worse model fit,

however the difference was not significant (Δχ2 = 0.7, Δdf = 4, ns, AIC = 334).

Study 1 – How Do I-Deals Relate to Organizational Performance? 71

Second, a “no controls” model was tested by restricting all paths from the

controls to the dependent variables to zero. This model did not show a

significantly better fit (Δχ2 = 26.4, Δdf = 218, ns, AIC = 317), indicating that the

findings are not dependent on control variables. In the model without controls,

all hypothesized relationship remained significant, indicating a low probability

of bias due to control variables (Becker, 2005). Third, a “direct effects only”

model was tested, in which indirect relationships were set to zero. This resulted

in a significantly worse model fit than the original model (Δχ2 = 26.5, Δdf = 4, p

< .001, AIC = 346), suggesting that the indirect effects are essential to understand

the relationships between the model’s key variables. Fourth, to inspect if the

model indeed needs two parallel mediators, I tested two alternative models,

namely, a “collective OCBI only” model in which collective job satisfaction was

excluded as a mediator variable, and a “collective job satisfaction only” model

that excluded collective OCBI. Both models had a significantly poorer fit (Δχ2 =

64.2, Δdf = 12, p < .001, AIC = 366; Δχ2 = 49.8, Δdf = 13, p < .001, AIC = 351;

respectively), showing that the proposed framework indeed requires two

parallel mediators. Finally, I tested a model including paths between collective

OCBI and job satisfaction, because previous research shows that both variables

influence each other (e.g., Bateman & Organ, 1983). Both paths were non-

significant, and the model fit was slightly, however not significantly, worse

compared to the original model (Δχ2 = 1.7, Δdf = 2, ns, AIC = 330). In sum, these

results clearly support the hypothesized relationships and the overall model.

They suggest that alternative explanations are not likely a cause for the findings

of the proposed model.

2.5 Discussion

The current study examines the effect of organizational median i-deals on

organizational performance via two mediating paths. The results reveal several

key findings. First, i-deals have a linear positive effect on collective job

satisfaction but an inversed U-shaped relationship with collective OCBI.

Second, the path via collective job satisfaction is moderated by the individual-

72 Study 1 – How Do I-Deals Relate to Organizational Performance?

focused leadership climate and the path via collective OCBI is moderated by the

collective-focused leadership climate. Finally, organizational median i-deals are

related to organizational performance via the mediators collective job

satisfaction and collective OCBI.

2.5.1 Theoretical Implications

The findings of this study corroborate and extend contemporary theory in the

area of i-deals in several ways. First, results from the current study add to our

understanding of mediating mechanisms that explain the functioning of i-deals

from an organizational perspective. While studies so far have mainly focused

on individual i-dealers, this study compares two mediators (i.e., collective job

satisfaction and collective OCBI) in the i-deals – performance relationship on

the organizational level. The findings in line with the hypotheses show that

organizational median i-deals are related to collective job satisfaction in a linear

and positive manner, while the relationship to collective OCBI is inversed U-

shaped. These results are in line with findings of Bal and Boehm (2017), who

show a positive relationship between i-deals and another collective job attitude,

namely collective commitment. Furthermore, the current findings support

suggestions that i-deals might be negative for coworker relations (e.g., Conway

& Coyle-Shapiro, 2016), at least under some conditions. Second, researcher

believe that leadership plays an important role regarding i-deals (e.g.,

Rousseau, 2005). However, they have focused mainly on LMX and leader

consideration (e.g., Anand et al., 2010; Hornung et al., 2010a; Hornung et al.,

2010b; Liao et al., 2017; Rosen et al., 2013). The current study reinforces and

expands the focus on leadership in i-deals research. Results show that not only

leadership styles focusing on the individual employee are important but that

collective-focused leadership plays an evenly important role. Specifically,

results show that the individual-focused leadership climate moderates the

relationship between organization median i-deals and collective job satisfaction,

while the collective-focused leadership climate moderates the relationship

between organizational median i-deals and collective OCBI. Finally, I built and

Study 1 – How Do I-Deals Relate to Organizational Performance? 73

subsequently tested a unified organizational-level framework of the relation

between organizational median i-deals and organizational performance. This

addresses the prominent and yet unanswered question in i-deals literature, if i-

deals are also positive for employers (e.g., Conway & Coyle-Shapiro, 2016; Liao

et al., 2016) and opens up new theoretical avenues for future research on i-deals

from an organizational perspective. To my knowledge, this is the first study

examining, if i-deals influence organizational performance. In line with the

hypothesized moderated mediation model, results show that both effects of i-

deals on collective attitudes as well as on coworker relations are transferred to

organizational performance. Negative effects on organizational performance

are caused when organizational median i-deals are high and the collective-

focused leadership climate is low. On the other hand, organizational median i-

deals have a positive effect on organizational level when both organizational

median i-deals and the individual-focused leadership climate are high. The

results therefore imply, that i-deals indeed influence organizational

performance under some conditions.

The current study has also implications for theory development in i-deals

research. Social exchange theory is most prominent to explain the link between

i-deals and individual attitudes and behaviors (Conway & Coyle-Shapiro, 2016).

Liao et al. (2016) suggest that a huge need exists for theory development on the

organizational level. This study addresses this gap in i-deals research by

applying social exchange-based mechanisms to the organizational level. Results

imply that i-deals indeed may be able to change the exchange climate in an

organization (Rousseau, 2005). Furthermore, and in line with existing research

(Bal & Boehm, 2017; Liao et al., 2017; Vidyarthi et al., 2016), other theories

focusing on interactions between employees and collective dynamics, such as

contagion, social comparison, social learning and social identity theory, are

applied to i-deals research on the organizational level. Results of this study

imply that those perspective are valueable to i-deals research on the

organizational level, as effects of i-deals seem to spread across employees, to

74 Study 1 – How Do I-Deals Relate to Organizational Performance?

foster attitudes and behavior on the collective level and to operate depending

on the social context.

2.5.2 Strengths, Limitations and Future Research

An important methodological strength of the study design increases my

confidence in the results. Data from three different groups of employees, top-

managers and HR managers was included in the analysis. Multi-source data

minimizes the influence of common source bias and enhanced the validity of

the study design. However, the current study is not without limitations. First,

all organizations included in the study were from Germany, limiting

generalizability of the results. Second, all companies were SMEs with small to

medium numbers of employees. This fact works in favor of the proposed

hypotheses, increasing the probability that collective attitudes and behaviors as

well as leadership climates are formed in an organization. Future research

should examine if the results are robust in other cultural contexts and big

companies. Third, the current study is based on a fairly small sample of 87

organizations. Although research finds that SEM is reliable with n = 90

(Goodhue et al., 2012), I could not use latent constructs due to the sample size

in combination with numerous study variables. Therefore, measurement errors

in the constructs could not be taken into account. Future research should test

those or similar relationships in a larger sample size. Furthermore, future

research could rely on multilevel models to capture the structure of an

organization including individuals, teams and the whole company more

adequately as Bal and Boehm (2017) have done. Fourth, although it is common

practice in research to use a composite model with an individual referent to

capture collective job satisfaction and collective OCBI (Whitman et al., 2010,

Podsakoff et al., 2014), it would be preferable to use for example a referent-shift

consensus model with the collective as referent (Podsakoff et al., 2014). Finally,

i-deals were measured as one composite scale. However, future research should

take potential different effects of different i-deals into account (e.g., Rosen et al.,

2013).

Study 1 – How Do I-Deals Relate to Organizational Performance? 75

In addition, the study has further significant implications for potential future

research. Following suggestions of Bal and Boehm (2017), the currents study is

a further step in enhancing our limited knowledge of i-deals in the

organizational context. As current results show that effects for organizations

can be both positive and negative depending on how the organizational work

environment is shaped, i-deals research focusing on the organizational level

becomes even more relevant. Liao et al. (2016) suggest that organizations

providing i-deals might be more successful and productive than organizations

which do not provide i-deals. The current results indicate that the question of

whether or not i-deals improve organizational performance is not easy to

answer. Future research should examine this question for example with a focus

on additional relevant context conditions which might cause positive or

negative effects for organizations (e.g., Liao et al., 2016). As discussed in Chapter

1.6, the organizational justice climate might be a further important context factor

and will be examined in Study 2. Second, as also discussed in Chapter 1.6 of this

dissertation, it is an important step for i-deals literature to examine i-deals

differentiation on the organizational level and potential negative effects for

organizations. This will also be done in Study 2 of this dissertation. Third, to

expand research from an organizational level it is time to follow suggestions

(e.g., Liao et al., 2016) to examine we-deals. It is likely that we-deals have

different effects on teams and organizations than i-deals. For example, social

comparison might not take place between single employees in teams but

between teams and departments. Furthermore, the current study extends on our

knowledge on how i-deals influence organizations. Further mechanisms at the

collective level should be examined as for example justice climates in

organizations (e.g., Liao et al., 2016), which will be considered in Study 2 of this

dissertation. Finally, the current study shows that employees engage in OCB in

response to i-deals to mitigate potential drawbacks for coworkers. As Garg and

Fulmer (2017) state, potential other strategies of i-dealers to enhance coworker

support for their deals might be possible and should be considered by future

research.

76 Study 1 – How Do I-Deals Relate to Organizational Performance?

2.5.3 Practical Implications

Ng and Feldman (2010, p. 419) state: “Practically speaking, idiosyncratic deals

are costly to organizations”. The currents findings partially support this

perspective. While i-deals seem to be positive for collective attitudes, coworker

relations are affected differently. The current results indicate that organizations,

leaders and HR mangers need to be aware of the potential detrimental effects of

different leadership styles for organizational effectiveness, when i-deals are

granted to employees. The boundary condition of leader behavior cautions that

employers may need to consider a balance between i-deals and the context

within which they are negotiated and implemented. While a low individual-

focused leadership climate only hinders positive outcomes of i-deals, a low

collective-focused leadership climate causes even negative effects when

organizational median i-deals are high. These results are especially crucial in

the context of findings (Hill, 2007) that leaders underestimate their

responsibility to manage collectives. In contrasts, leaders often believe that

investing in relationships with each employee is sufficient to enhance

effectiveness at work (Hill, 2007). A first managerial implication of this study

therefore is that practitioners should realize that low focus on collective-focused

leadership could have detrimental effects on coworker relations and

organizational performance, when they wish to use i-deals. Second, I advise

managers to promote not only the collective-focused leadership throughout the

organization but also the individual-focused leadership, as effects for personal

attitudes and coworker relations as well as organizational performance are

more positively, when organizations use i-deals. Organizations could assess the

individual- and collective-focused leadership competencies during the

processes of recruiting and promoting leaders, as TFL can be assessed in a

relatively reliable way in organizations for example by employee surveys

(Goodstein & Lanyon, 1999). In addition, organizations could implement

leadership development programs focusing on individual- and collective-

focused leadership behaviors to promote both components of TFL to foster a

Study 1 – How Do I-Deals Relate to Organizational Performance? 77

strong leadership climate (Bass, 1990; Day, 2000). Thereby, a strong basis for

successful i-deals can be fostered in organizations.

2.5.4 Conclusion

Regarding the question if organizations providing i-deals are more successful

than organizations not providing i-deals (Liao et al., 2016), the results imply that

there is no definite answer. I found that the effect of organizational median i-

deals on collective job satisfaction and collective OCBI depends on the

respective leadership behavior, implying that effects of i-deals might be

conditional on a variety of context factors in organizations. I hope that the

current results offer scholars inspiration to continue investigating the role of i-

deals on collective attitudes and behavior and ultimately for organizational

effectiveness. Moreover, I hope that this study is beneficial for practice by

providing an empirically supported framework through which the functioning

of i-deals in the organizational context can be better understood, managed and

supported.

78 Study 2 – I-Deals Differentiation and Organizational Performance

3 I-Deals Differentiation and Organizational

Performance: Does Idiosyncrasy Make I-Deals Non-

Ideal?

Study 1 was guided by Research Question 1 and 2, whether i-deals have an

impact on organizational performance and through which mediating

mechanisms. Study 2 builds on these findings and focuses on i-deals

differentiation and subsequent collective perceptions of distributive justice in

organizations. Accordingly, consistency in opportunity to negotiate i-deals

including procedural justice climate, as stated in Research Question 4, is

examined in this study2F

3.

3.1 Introduction

The embeddedness of employees in a collective workforce can make i-

deals unsettling for all parties.

Rousseau (2005, p. 212)

In departing from traditional personnel management approaches,

organizations and managers must meet the challenge of promoting

organizational justice in their use of individualized arrangements.

Bal & Rousseau (2016, p. 128)

Customized work arrangements have become increasingly common in

organizations in recent years (Bal & Rousseau, 2016). An increasing number of

organizations is adopting individualized working arrangements to meet a

variety of economic and societal trends and a corresponding diversification of

3 An earlier version of this study has been accepted and presented at an international peer-reviewed

conference, namely the 77th Academy of Management Annual Meeting 2017.

Study 2 – I-Deals Differentiation and Organizational Performance 79

employee needs (Esser & Schelenz, 2013). I-deals, created through negotiation

between employee and employer, are one way to customize working

arrangements (Rousseau, 2001). A study by Rosen et al. (2013) found that the

majority of employees had negotiated at least one customized element in their

working arrangement. While employees strive to better fit their work with

personal needs, organizations aim to retain valuable employees and to motivate

them to perform better (Bal & Rousseau, 2016). However, as the quotes by

Rousseau (2005) and Bal and Rousseau (2016) illustrate, challenges may ensue

the introduction of i-deals to organizations due to perceived injustice. One such

challenge is that i-deals have been shown to create inequality between

coworkers (Liao et al., 2016; Marescaux & De Winne, 2016). As employment

arrangements constitute observable and salient characteristics of employees,

they are likely to affect employees’ attitudes and behavior at work, especially

when differences exist between employees (Broschak & Davis-Blake, 2006).

Although “workplaces [today] are full of idiosyncrasies” (Rousseau, 2005, p. 27)

leading to heterogeneity between employees, research has mainly neglected the

degree to which idiosyncratic working arrangements effect organizations (as

exception see Bal & Boehm, 2017). In general, research on i-deals demonstrates

a positive bias among researchers about effects on employees and employers

(Bal & Lub, 2016). I-deals have been linked to a variety of beneficial outcomes

at the individual level such as employee work-related perceptions, attitudes and

behavior (Conway & Coyle-Shapiro, 2016; Liao et al., 2016). As already

presented in Chapter 1.5 and Chapter 2.2, positive individual level outcomes

are OCB (Anand et al., 2010), job satisfaction and affective commitment

(Hornung et al., 2008; Rosen et al., 2013), work engagement (Hornung et al.,

2011), increased performance and motivation (Hornung et al., 2009; Ng &

Lucianetti, 2016). Despite the assumption that they play a major role (e.g.,

Greenberg et al., 2004; Rousseau, 2005), researchers have only just begun to shed

light on the role of i-dealer´s coworkers (Lai et al., 2009; Ng & Lucianetti, 2016).

Vidyarthi et al. (2016) introduced the concept of relative i-deals in teams and

showed a relationship to individual performance. In a first attempt to link i-

80 Study 2 – I-Deals Differentiation and Organizational Performance

deals to organizational performance, Bal and Boehm (2017) showed a

relationship to client satisfaction in a multilevel model. However, and most

surprisingly, effects of i-deals on organizations have not been further examined,

although several researchers have called for research in this area (Anand &

Vidyarthi, 2016; Conway & Coyle-Shapiro, 2016; Kroon et al., 2016; Liao et al.,

2016). In addition, the potential drawbacks of i-deals at the organizational level,

in particular, have also been neglected (Bal & Boehm, 2017).

Therefore, it is currently unclear as to whether i-deals are in fact beneficial to

both employees and organizations, as is stated in their definition (Conway &

Coyle-Shapiro, 2016; Kroon et al., 2016). This study addresses this gap in

research by following the suggestions in previous literature and introduces the

collective level of analysis to the i-deals literature (e.g., Anand & Vidyarthi,

2016). Specifically, the current study builds on the “multilevel model of i-deals”

proposed by Liao and colleagues (2016). However, while their focus lies at the

team level, I apply their propositions from an organizational perspective. The

authors claim that in particular, two phenomena related to i-deals occur at

collective levels, which are median i-deals and i-deals differentiation (Liao et al.,

2016). As i-deals are embedded in social and organizational contexts (Rousseau,

2005), the “multilevel model of i-deals” suggests intermediating processes and

organizational boundary conditions such as collective processes, organizational

culture, and climate to mediate and moderate effects of i-deals on collective

performance (Liao et al., 2016).

The current study makes the following contributions by transferring the

“multilevel model of i-deals” to an organizational perspective and by deriving

first specific hypotheses from this comprehensive model. First, I intend to

answer the question, if differentiating between employees is positive or

negative for organizations, addressing concerns regarding the differential

distribution of i-deals and the potential negative effects on employee attitudes

and behaviors and therefore on organizations (Greenberg et al., 2004). I delve

into this question by examining the effect of i-deals differentiation on

organizational performance through collective distributive justice perceptions

Study 2 – I-Deals Differentiation and Organizational Performance 81

as explanatory mechanism (Liao et al., 2016). Organizational justice perceptions

are proposed to be an essential explanatory mechanism through which i-deals

might influence employees’ performance (Greenberg et al., 2004; Rousseau et

al., 2006). Because i-deals challenge perceptions of distributive justice by

violating the rule of equal treatment (Rousseau, 2005), a special role is assigned

to distributive justice perceptions (Marescaux & De Winne, 2016). In addition,

research suggests that effects of i-deals differentiation might depend on context

factors (e.g., Rousseau, 2001, 2005), highlighting in particular consistency in

opportunity to negotiate i-deals (e.g., Greenberg et al., 2004; Lai et al., 2009; Liao

et al., 2016). Two context factors, which influence perceived consistency in

opportunity to negotiate i-deals are identified: the prevalence of i-deals in an

organization and the procedural justice climate.

3.2 Theoretical Background

3.2.1 I-Deals

Because i-deals are a form of customizing job tasks and conditions (Rousseau,

2005), they grant employees special employment conditions differing from

standard employment arrangements of their coworkers to satisfy their personal

needs (Hornung et al., 2008; Rousseau et al., 2006). According to their own

definition, i-deals cause an unequal distribution of resources (Rousseau, 2005),

resulting in intra-organizational heterogeneity (Klein et al., 1994). This is the

case because i-deals are not available to everyone (e.g., Liao et al., 2016;

Rousseau, 2001, 2005) and differences exist in the scope of i-deals, which refers

to the ratio of idiosyncratic to standardized features of an employment

arrangement (Liao et al., 2016). It is possible that an employee might negotiate

for an entirely idiosyncratic employment contract. Alternatively, low scope

results from a largely standardized work arrangement including only one or

two customized elements. Consequently, the amount of employees’ i-deals may

differ considerably between and within organizations (Liao et al., 2016). To

capture heterogeneity, both between and within organizations, I examine the

82 Study 2 – I-Deals Differentiation and Organizational Performance

relevant conceptualizations of collective i-deals in this study, namely

organizational median i-deals and i-deals differentiation. Organizational

median i-deals are, as already in Study 1, defined as the central tendency of i-

deals in an organization (Anand, 2012; Liao et al., 2016). Furthermore, i-deals

differentiation is defined as the variability of individual i-deals within an

organization focusing on the extent to which levels of i-deals vary within an

organization rather than their varying content (Liao et al., 2016).

As in Study 1, I follow research which has shown that employees negotiate i-

deals across four content domains: schedule flexibility, location flexibility, work

responsibilities, and financial incentives (Rosen et al., 2013). As the majority of

studies on i-deals focuses on the first three typologies, I limit my focus on them

as well.

3.2.2 Organizational Justice Climate

Organizational justice is a widely discussed topic in regards to i-deals (e.g.,

Greenberg et al., 2004; Marescaux & De Winne, 2016). Literature on i-deals

assumes that i-deals both have a significant impact on employees’ perceptions

of justice (e.g., Hornung et al., 2010a; Marescaux & De Winne, 2016) and that

employees evaluate i-deals in the context of organizational justice perceptions

(e.g., Greenberg et al., 2004). Organizational justice includes perceived fairness

of resource allocations and outcomes (distributive justice), decision-making

procedures and allocation processes (procedural justice) and interpersonal

treatment one receives from others (interactional justice; Li & Cropanzano,

2009). Research to date has examined employees’ distributive justice

perceptions only at the individual’s level regarding their own i-deals (Hornung

et al., 2010b) or a colleague’s i-deal (Marescaux & De Winne, 2016). Building on

i-deals research to date and following researchers’ suggestions (Liao et al., 2016;

Marescaux & De Winne, 2016), I focus on distributive and procedural justice

climates at the organizational level in relation to i-deals. Justice scholars

recognize that in addition to individual perceptions, collectives develop shared

cognitions of justice (Roberson & Colquitt, 2005). Due to regular interactions in

Study 2 – I-Deals Differentiation and Organizational Performance 83

these collectives, members learn how each other are treated (Roberson, 2006).

Engaging in collective sense making (Roberson, 2006), employees develop a

distinct collective-level cognition regarding how members are treated in general

(Tyler & Lind, 1992). Justice researchers have suggested that forces such as

information sharing and cognitive contagion give rise to the emergence of a

justice climate (Li & Cropanzano, 2009; Spell & Arnold, 2007). For instance,

when leaders distribute resources and rewards unequally between members of

a collective, feelings of injustice are likely to follow both at the individual and

collective level (Liden et al., 2006; Scandura, 1999). Pointing to organizational

justice climate as a potential explanatory mechanism for effects of i-deals on

organizational performance, research has furthermore shown that

organizational justice climate is related to work attitudes and behavioral

outcomes on individual as well as on collective level (e.g., Li & Cropanzano,

2009; Moliner, Martinez-Tur, Peiro, Ramos, & Cropanzano, 2005; Moon,

Kamdar, Mayer, & Takeuchi, 2008; Olkkonen & Lipponen, 2006; Simons &

Roberson, 2003; Spell & Arnold, 2007).

3.2.3 I-Deals Differentiation and Distributive Justice Climate

Because i-deals constitute an ‘exception to the rule’ and lead to unequally

distributed resources in organizations, they are likely to prompt questions of

fairness among employees (Rousseau, 2005). Thus, perceived organizational

justice has been proposed as one important driver of coworkers’ reactions

towards others’ i-deals (Greenberg et al., 2004; Lai et al., 2009). A key role has

been assigned to distributive justice by i-deals research (e.g., Marescaux & De

Winne, 2016), as unequal treatment of employees is likely to affect evaluations

of distributive justice (e.g., Greenberg et al., 2004). Furthermore, employees’

distributive justice perceptions are influential on a variety of workplace

behaviors such as higher work performance (Cohen-Charash & Spector, 2001).

Judgments about distributive justice in the workplace depend to a great extent

on social comparison among coworkers (Greenberg, Ashton-James, &

Ashkanasy, 2007; Rousseau, 2005). Thereby, the perceived distributive justice of

84 Study 2 – I-Deals Differentiation and Organizational Performance

i-deals can be assessed through the comparison of employees’ outcomes with

those of other members of the organization (Adams, 1965; Greenberg et al.,

2007) based on three principles: equality, equity and need (Deutsch, 1985;

Leventhal, Karuza, & Fry, 1980; Masrescaux & De Winne, 2016; Nauta & Van de

Ven, 2016). Equality implies that all employees receive the same output, while

equity refers to outputs being equal to employee inputs and need means that

outcomes are perceived as fair if they match employees’ needs (Adams, 1965;

Marescaux & De Winne, 2016). While i-deals, according to their own definition,

violate the equality rule (Greenberg et al., 2004; Rousseau, 2005), the principles

of equity and need make negative as well as positive judgments of distributive

fairness possible (Marescaux & De Winne, 2016). The equity norm of

distributive justice implies that people are rewarded in proportion to the work

they perform (Adams, 1965; Deutsch, 1985). When applied to the context of i-

deals, the equity principle implies that an i-deal is perceived as distributively

(un)fair, when it (distorts) maintains the input-output ratio of the i-deal receiver

compared to his or her coworkers (Marescaux & De Winne, 2016). Scholars (e.g.,

Colella, 2001) have further emphasized the importance of the need rule for

perceptions of distributive justice, which might be especially important in

regards to i-deals. As Rousseau (2005) states, i-deals are intended to meet the

increasingly diverse needs of the workforce. Furthermore, they constitute a

possibility for employees to match their employment arrangement to their own

individual needs (Rousseau, 2005). Transferred to the context of i-deals, the

need rule implies that an i-deal is considered as distributively fair when the

special work arrangement addresses specific individual needs of the i-deal

receiver in the coworkers’ view (Marescaux & De Winne, 2016). On the other

hand, i-deals might be perceived as distributively unfair, if coworkers do not

believe that the i-deal is nessecary to meet the receiver’s specific needs

(Marescaux & De Winne, 2016).

The reasoning above suggests that i-deals differentiation might both lead to

positive and negative judgments of distributive justice, depending on whether

i-deals are perceived to be in accordance with the equity and need rule

Study 2 – I-Deals Differentiation and Organizational Performance 85

(Marescaux & De Winne, 2016). Marescaux and De Winne (2016) found that

how employees assess the fairness of their coworkers’ i-deals depends on

gender and i-deals content and suggest for future research to examine other

situational factors that could play a role. This is in line with Rousseau (2001,

2005), who states that it depends on a variety of context conditions as to how

employees perceive i-deals and how effective they are for organizations. I

therefore propose that the organizational context determines whether i-deals

are assessed as fair or unfair. This proposition receives support from related

research on LMX, which has shown that providing employees in collectives

with different levels of resources may result in both positive and negative

evaluations and reactions, depending on context factors (Erdogan & Bauer,

2010). Therefore, based on the foregoing literature review, I suggest that

perceptions of distributive justice climate caused by i-deals differentiation

might be either positive or negative depending on organizational factors.

Potential organizational context factors are discussed in the following.

3.2.4 Organizational Median I-Deals and Procedural Justice Climate as Moderators

of the Relation between I-Deals Differentiation and Distributive Justice

Climate

Depending on how i-deals are managed, they might either be perceived as fair

or unfair (Greenberg et al., 2004; Rousseau, 2001). One of the main challenges of

managing i-deals within an organization is that i-deals differentiation

contradicts the rule of consistency (Liao et al., 2016). Differential distribution of

i-deals causes inequality between employees (Liao et al., 2016; Rousseau, 2005),

which might erode the organizational justice climate (Leventhal, 1980).

However, a way to foster the distributive justice climate is to implement

consistency in employee opportunities to negotiate i-deals (Liao et al., 2016). In

this case, i-deals differentiation might not lead to perceived injustice and

reduced organizational effectiveness (Rousseau, 2001; Rousseau et al., 2006).

Consistency in employee opportunities to negotiate i-deals means that all

employees in an organization believe that they have the opportunity to make

86 Study 2 – I-Deals Differentiation and Organizational Performance

customized arrangements similar to those of coworkers (Rousseau et al., 2006).

Coworkers’ belief in the chance to negotiate for future i-deals is positively

related to their acceptance of another’s i-deal (Lai et al., 2009). This is because

coworkers of an i-dealer are themselves prospective i-dealers (Rousseau et al.,

2006). Therefore, their beliefs about the likelihood of successfully negotiating i-

deals, if needed, is likely to influence perceived distributive fairness (Greenberg

et al., 2004; Rousseau et al., 2006). In other words, whether i-deals differentiation

is perceived as distributively fair or unfair might be highly dependent on

employees’ beliefs of having the chance to negotiate for i-deals themselves.

Consistency in opportunity to negotiate i-deals might be promoted by two

factors, which are organizational median i-deals and procedural justice climate.

3.2.4.1 Organizational median i-deals

The first factor influencing perceived consistency in opportunity to negotiate i-

deals is the perceived prevalence of i-deals in an organization reflected by the

organizational median i-deal. Employees working for the same organization

interact with one another on a regular, sometimes even daily basis (Liao, Liu, &

Loi, 2010). Such work environments facilitate social comparison (Henderson et

al., 2009). Consequently, employees evaluate their situation relative to those of

colleagues (Liao et al., 2010) and are constantly aware of what their coworkers

have or do not have in comparison to their own situation (Duchon, Green, &

Taber, 1986; Ng & Lucianetti, 2016; Weick, Sutcliffe, & Obstfeld, 2005). I-deals

are fueling social comparison between employees as differences in employment

arrenegments are in most cases easily noticed by coworkers (Greenberg et al.,

2007). Employees are likely to compare their i-deals with those of other

organizational members, and this social comparison is influencing the effects of

i-deals (Vidyarthi et al., 2016).

Ng (2017) showed that whether coworkers become jealous because of others’ i-

deals depends on the level of i-deals granted in an organization. This finding

emphasizes that employees’ reactions to i-deals depend on whether i-deals are

available to all employees in an organization (Ng, 2017). This is in line with

Study 2 – I-Deals Differentiation and Organizational Performance 87

Harder (1991), who argues that negative reactions to receiving comparatively

low outcomes are attenuated when people strongly expect to receive better

outcomes in the future. Furthermore, the way organizations and supervisors

handle i-deals is likely to have a signaling function (Ho & Kong, 2015; Rousseau

et al., 2006) and provides social clues that employees use to construct social

norms (Ng & Lucianetti, 2016). Employees who witness their coworkers

receiving a high level of i-deals are likely to believe that their organizations and

their supervisors are willing to grant customized work arrangements (Ng &

Lucianetti, 2016). Furthermore, when employees witness their coworkers’

requests for i-deals being granted, a social norm is created where i-deals are

accepted and supported by the organization (Hornung et al., 2008; Ng &

Lucianetti, 2016). As Hornung et al. (2008) state, a high level of varied

employment arrangements in an organization “convey[s] a normative message

to both workers and supervisors that idiosyncrasy, in employment terms, is

legitimate” (p. 656). Thus, high median i-deals in organizations signal to

employees that it is possible and socially acceptable to receive i-deals (Ng &

Lucianetti, 2016).

It is therefore that I propose employees feel they have the same opportunity to

negotiate for i-deals as their coworkers, if the organizational median i-deal is

high. Consequently, i-deals differentiation should be perceived as distributively

fairer in organizations with high median i-deals than in organizations with low

median i-deals.

3.2.4.2 Procedural justice climate

The second factor influencing perceived consistency in opportunity to negotiate

i-deals is procedural justice climate. Lai et al. (2009) propose that coworkers’

beliefs in the likelihood of obtaining comparable future opportunities to obtain

i-deals is closely related to justice perceptions. Based on the definition of

procedural justice as the fairness of decision-making procedures (Cropanzano,

Byrne, Bobocel, & Rupp, 2001a), procedural justice climate is specified as a

collective level cognition of how procedurally fair employees are generally

88 Study 2 – I-Deals Differentiation and Organizational Performance

treated in an organization (Naumann & Bennett, 2000). The central principles of

a procedural justice climate such as clear criteria for allocating benefits and

inducements, consistency in decision making procedures and a clear legitimate

basis of differences between employees are likely to support the creation of fair

i-deals (Rousseau, 2001). Therefore, leadership consistency across employees is

one of the six key procedural justice rules (Leventhal, 1980). Applying the

consistency criterion of procedural justice to i-deals, organizations and

supervisors give coworkers of i-dealers an equal opportunity to have a

comparable i-deal (Greenberg et al., 2004). A procedural justice climate indicates

the leaders’ consistency in applying decision procedures (Leventhal, 1980).

Therefore, all employees should be able to negotiate i-deals following the same

procedures (Anand, 2012). In other words, when organizations adhere to rules

of procedural justice, employees have the impression that they are able to

negotiate i-deals, if needed, in the future (Greenberg et al., 2004). Following

rules of procedural justice is likely to foster employees’ beliefs that their

supervisor will be willing to grant comparable i-deals if needed. Procedural

justice climate increases perceived consistency of opportunities to negotiate i-

deals as coworkers of i-dealers believe that they are generally treated fairly, and

supervisors are consistent in their decision making (Greenberg et al., 2004;

Rousseau, 2001). Consequently, employees have reason to believe that when

they need an i-deal, the procedural fairness climate will make it possible for

them to negotiate a customized deal (Greenberg et al., 2004).

I therefore propose that employees believe that they have the same

opportunities to negotiate for i-deals as their coworkers, so long as the

organizational procedural justice climate is high. Consequently, i-deals

differentiation should be perceived as distributively fairer in organizations with

high procedural justice climate than in organizations with low procedural

justice climate.

Taken together, these arguments suggest that i-deals differentiation should be

combined with both high organizational median i-deals and procedural justice

climate. In this way, employees perceive that everyone has the same

Study 2 – I-Deals Differentiation and Organizational Performance 89

opportunity to negotiate for i-deals in an organization. Consequently, the

distributive justice climate in an organization is perceived as high. In contrast,

when organizational median i-deals and procedural justice climate are low,

distributive justice climate should also be perceived as low. Thus, the

relationship between i-deals differentiation and distributive justice climate is

expected to be negative. Relative to organizations that have low median i-deals

and low organizational procedural justice, those that have high median i-deals

or high procedural justice climate should have a higher distributive justice

climate, while those organizations that have both high median i-deals and a

high procedural justice climate should have the highest distributive justice

climate.

Hypothesis 1: Organizational median i-deals and procedural justice climate jointly

moderate the relationship between i-deals differentiation and distributive justice

climate in such a way that i-deals differentiations and distributive justice climate

will have the strongest, positive relationship for high organizational median i-deals

and high procedural justice climate and a negative relationship for low

organizational median i-deals and low procedural justice climate.

3.2.5 Mediation Effect of Distributive Justice Climate

Although i-deals are defined as beneficial for both employees and employers,

several researchers recognize that i-deals differentiation might have the

potential to be both positively and negatively related to organizational

performance, depending on how i-deals are perceived by employees

(Greenberg et al., 2004; Liao et al., 2016; Rousseau, 2001). Organizational justice

perceptions are proposed as one important explanatory mechanism, through

which i-deals influence employees’ performance (Greenberg et al., 2004;

Rousseau et al., 2006). Guest (2004) suggests that effects of special work

arrangements on employee attitudes and behavior, as for example job

performance, are mediated by fairness perceptions. Employees who perceive

that wide differences exist in how members of a collective are treated and who

feel that these differences are not justified, may respond by withholding effort

90 Study 2 – I-Deals Differentiation and Organizational Performance

and performing lower than would be expected (Liden et al., 2006). Initial

research shows evidence for this theoretical proposition. Indeed, i-deals, which

are perceived as distributively unjust, cause coworkers to react in ways that

make i-deals less beneficial or even entirely ineffective. Specifically, i-deals

considered distributively unjust support counterproductive work behavior, for

example counteraction and the withholding of effort (Marescaux, De Winne, &

Sels, 2013b as cited in Marescaux & De Winne, 2016). Supporting my argument

at the organizational level, research shows that organization focused

distributive justice and distributive justice climate are related to several

organization oriented behavioral outcomes, such as turnover intentions and

extra-role performance (Li & Cropanzano, 2009; Olkkonen & Lipponen, 2006;

Moliner et al., 2005; Moon et al., 2008; Spell & Arnold, 2007).

Based on this reasoning, I propose that i-deals differentiation is related to

organizational performance through perceived distributive justice climate. As

Hypothesis 1 argues that the effect of i-deals differentiation on distributive

justice climate is reliant upon organizational median i-deals and procedural

justice climate, I propose a moderated mediation model (see Figure 3-1). In other

words, I assume that the mediation effect of distributive justice climate between

i-deals differentiation and organizational performance is dependent upon

organizational median i-deals and procedural justice climate.

Hypothesis 2: I-deals differentiation is related to organizational performance via

conditional indirect effects, such that the relationship with organizational

performance is moderated by organizational median i-deals and procedural justice

climate and mediated by distributive justice climate.

Study 2 – I-Deals Differentiation and Organizational Performance 91

3.3 Method

3.3.1 Data and Sample

As already explained in Chapter 1.7, data for Study 2 was collected with a

similar procedure as in in Study 1. As part of a larger study, data for Study 2

was collected in 2014 in cooperation with a benchmarking agency located in

Germany. 96 organizations participated in the study and in return, each

received a detailed benchmarking report. In order to participate in the study,

organizations had to be located in Germany and employ between a minimum

of 20 and a maximum of 5,000 people. Thus, the study’s sample consists of small

to medium sized companies. The organizations represented a variety of

industries (40% manufacturing, 36% services, 7% finance and insurance, and

17% retail and wholesale). The size of the organizations ranged from 28 to 3,659

employees (median number of employees = 238).

A split-sample design was used (Rousseau, 1985) in order to reduce concerns

about common method bias (Dickson et al., 2006; Erdogan et al., 2006; Podsakoff

et al., 2003; Podsakoff et al., 2012). In summary, I used four different data

sources – namely three unique groups of employees and data from HR

departments. Email invitations to the survey were sent through the HR

department of each participating organization in which the study’s purpose was

Organizational Median I-Deals

I-Deals Differentiation

Procedural Justice Climate

Distributive Justice Climate

Organizational Performance

Figure 3-1. Moderated mediation model of the relationship between i-deals differentiation and

organizational performance.

92 Study 2 – I-Deals Differentiation and Organizational Performance

explained and respondents were guaranteed full anonymity. A web-based

algorithm evenly transferred participants to one of three versions of the

employee survey. Demographic information (i.e., age, gender and tenure) was

captured from all employees. Furthermore, Survey Version 1 captured i-deals,

Survey Version 2 measured procedural and distributive justice climate and

Survey Version 3 asessed interactional justice climate (which was captured to

be used as control variable). Additionally, HR executives were asked to provide

information on their organization’s performance as well as general information

(i.e., industry affiliation and organization size).

Overall, 15,060 employees chose to participate in the survey, resulting in a

within-organization response rate of 30%. Employees’ mean age in the

participating organizations was 40 years (SD = 4.1) and mean tenure was 9 years

(SD = 4.1). Participants included more males (51%) than females (41%) with 8%

not indicating a gender. Participants also represented all major divisions of their

organizations on different hierarchical levels of the organization (9% middle

management; 11% first-line supervisors; 72% employees without leadership

responsibility and 8% other (e.g., freelancer)).

3.3.2 Measures

All survey versions were translated into German following a double-blind back-

translation procedure (Schaffer & Riordan, 2003). To justify the aggregation of

individual measures at the organizational level, I inspected common

aggregation statistics, such as ICC1 and ICC2 (Bliese, 2000) and the ADM(J) as an

interrater agreement measure (Burke et al., 1999; LeBreton & Senter, 2008;

Smith-Crowe et al., 2013). The same cutoff values as in Study 1 were applied to

assess these aggregation statistics and and were generally found to be adequate

to justify aggregation processes. Unless stated otherwise, 5-point rating scales

(1 = strongly disagree, 5 = strongly agree) were used to assess the measures

described in the following.

Study 2 – I-Deals Differentiation and Organizational Performance 93

3.3.2.1 Organizational median i-deals

I-deals were measured using a 4-item scale based on Rosen et al. (2013), covering

schedule flexibility, location flexibility and work responsibilities. One example

items is: “Because of my individual needs, I have negotiated a unique

arrangement with my supervisor that allows me to complete a portion of my

work outside of the office”. Following Ng and Lucianetti (2016), i-deals were

treated as a unidimensional construct in the analysis. An EFA of these four items

shows that all of them loaded on one factor (factor loadings: .88; .82; .83; 83;

extracted variance = 70 percent). Internal consistency estimates were α = .83.

Akin to Study 1, I used the within-organizational median of individual-level i-

deals scores, rather than the mean, to depict the central tendency among i-deals

within organizations. Because i-deals theory is based on the premise that special

work arrangements tend to vary significantly across employees (e.g., Rousseau,

2005), within-organizational agreement is not expected. Therefore, the median

serves better for aggregation in such circumstances when the mean is not an

appropriate measure of aggregation (Bliese, 2000; Liden et al., 2006; Henderson

et al., 2009). In addition, the median best represents the middle level of i-deals

within an organization, taking extreme values into account (Henderson et al.,

2009).

3.3.2.2 I-deals differentiation

Within-organization standard deviation was used to operationalize i-deals

differentiation for each organization. Higher within-organizational standard

deviation represents a greater variability in employees’ level of i-deals, meaning

more differentiation.

3.3.2.3 Procedural justice climate

Perceptions of procedural justice climate were assessed with a 4-item scale by

Erhart (2004). An example item is: “Procedures used to arrive at rewards have

been free of bias in our company”. Aggregation statistics provided support for

94 Study 2 – I-Deals Differentiation and Organizational Performance

an aggregation to the organizational level of analysis (ICC1 = .17, p < 0.001; ICC2

= .85; mean ADM(J) =.85). Internal consistency estimates were α = .92.

3.3.2.4 Distributive justice climate

Perceptions of distributive justice climate were assessed with a 4-item scale by

Colquitt (2001). An example item is: “In our company recognitions reflect the

efforts employees have put into their work”. Individual ratings were

aggregated into a single organizational-level measure. Aggregation statistics

again provided support for an aggregation to the organizational level of

analysis (ICC1 = .15, p < 0.001; ICC2 = .86; mean ADM(J) =.79). Internal consistency

estimates were α = .99.

3.3.2.5 Organizational performance

In line with Combs et al. (2005) and as already applied in Study 1, I defined

company performance as consisting of both organizational and operational

performance dimensions. For operational performance, I used two items

relating to efficiency of business processes and employee loyalty. To assess

organizational performance, I used four items relating to the overall company

performance, the current financial situation, overall return on investment, and

company growth. As in Study 1, the results of a CFA confirmed that all six

performance items loaded on one common performance factor, (χ2= 21, df = 9;

CFI = .95, IFI = .95, SRMR = .05; Hu & Bentler, 1999). Following prior studies

(Rogers & Wright, 1998), the subjective performance measure was benchmarked

by asking the HR managers to evaluate the performance of their company

compared to their direct industry rivals on a 7-point scale (1 = far below average;

7 = far above average). Internal consistency estimates were α = .86.

3.3.2.6 Control variables

In addition to the aforementioned variables, I also included several control

variables in the analysis. Because company size has been shown to be associated

Study 2 – I-Deals Differentiation and Organizational Performance 95

with various employee behaviors and outcomes (Ragins et al., 2000), I included

it as a control factor. Following research showing that company age is related to

productivity (Choi & Shepherd, 2005), I controlled for the companies’ age by

asking for the company’s founding year. As both measures were skewed, I log-

transformed them. Third, I controlled for the characteristics of the companies’

employees by including measures for employee age, gender and tenure as

research has shown that employee attributes influence effects of i-deals (Bal et

al., 2012; Marescaux & De Winne, 2016). I further included variables displaying

organizational structure, which is known to be highly influential on

organizational culture (Conrad & Sydow, 1984). Specifically, I determined

whether companies were family-owned or independent, including whether

companies were separate entities or part of a holding/subsidiary. Furthermore,

I included affiliation to industry sectors as a dummy variable, because industry

affiliation can relate to organizational effectiveness (Dickson et al., 2006). I

added one dummy to capture service industry versus other sectors (including

manufacturing, finance and trade), due to the fact that research finds the service

sector to be especially prone to flexible work arrangements (e.g., Stavrou, 2005).

Finally, to increase the predictive validity of the distributive and procedural

justice climate measures, I controlled for the potentially related construct of

interactional justice climate. Based on Colquitt (2001) I adapted three items to

measure interactional justice climate. An example item was “My direct

supervisor shows respect for my feelings” (1 = never; 5 = extremely

often/always). Aggregation to the organizational level was justified (ICC1 = .04,

p < 0.001; ICC2 = .60; mean ADM(J) =.83). Internal consistency estimates were α =

.90.

96 Study 2 – I-Deals Differentiation and Organizational Performance

3.4 Results

3.4.1 Descriptive Statistics

Means, standard deviations and intercorrelations among the variables are

presented in Table 3-1. The correlation matrix shows a correlation of .82 for

distributive and procedural justice climate, pointing to multicollinearity

between both variables (Kennedy, 1979). However, the variance inflation factors

(VIF) of 4.6 and 4.2 for procedural and distributive justice, respectively, indicate

that multicollinearity is not a major concern for the model (Bowerman &

O´Connell, 1990; Myers, 1990). The tolerance statistic also indicates that

multicollinearity constitutes no serious problems with all tolerance values

above 0.2 (Menard, 1995). Nevertheless, I considered potential multicollinearity,

which might increase the difficulty of interpreting the results of the multiple

regression analysis, during this process (Kraha, Turner, Nimon, Reichwein

Zientek, & Henson, 2012). Although multicollinearity does not affect the overall

fit of the regression model nor result in bad predictions, I considered correlation

coefficients during the interpretation of the results in order to evaluate each

predictor’s contribution to the overall regression model (Kraha et al., 2012).

Furthermore, I conducted a CFA, which shows that both justice scales can be

considered as two distinct factors despite their high correlation. A two-factor

model showed considerable better fit (χ2 = 32, df = 19; CFI = .99, IFI = .99, SRMR

= .02) than an alternative one-factor model (χ2 = 115, df = 20; CFI = .92, IFI = .92,

SRMR = .08).

3.4.2 Data Analysis and Hypothesis Testing

I used moderated regression models to evaluate the hypotheses. Variables were

mean centered before calculating interactions terms and conducting the

statistical analysis (Aiken & West, 1991). All tests conducted were two-tailed

and on the organizational level of analysis. The results of the moderated

regression analyses predicting distributive justice climate and organizational

performance are presented in Table 3-2 and 3-3. Results of the regression

Study 2 – I-Deals Differentiation and Organizational Performance 97

analysis as well as the correlation matrix support my proposition that i-deals

differentiation has no direct effect on distributive justice climate (Table 3-2,

Model 2).

Hypothesis 1, predicting a three-way interaction between i-deals

differentiation, organizational median i-deals and procedural justice climate is

supported. As shown in Table 3-2 (Model 4), the three-way interaction effect

was significant (b = -1.97, p < .01). The incremental variance explained by the

three-way interaction effect is 3%. To probe the nature of the significant

interaction effect, it was plotted. The plot is presented in Figure 3-2.

Consistent with my prediction, I find that the relationship between i-deals

differentiation and distributive justice climate is positive when either

organizational median i-deals or procedural justice are high. A simple slope test

using Preacher’s online interaction utility (Preacher, Curran, & Bauer, 2006)

showed that both slopes for low median ideals and high procedural justice

climate as well for high median i-deals and low procedural justice climate are

significantly positive (b = 1.02, p < .05; b = 0.99, p < .05; respectively). However,

and against the hypothesis, while the slope for high median i-deals and high

procedural justice climate is in its tendency positive, it is non-significant (b =

0.17, p = .53). Similarly, the slope for low median i-deals and low procedural

justice climate has a negative tendency as proposed, but is also non-significant

(b = -0.27, p = .29).

To more formally test the differences across the lines displayed in Figure 3-2, a

slope difference test based on Dawson and Richter (2006) was used. The analysis

shows that the slope for organizations with low median i-deals and low

procedural justice is significantly different from both slopes with either high

organizational median i-deals or high procedural justice (p < .05). Furthermore,

the slope with low median i-deals and high procedural justice is significantly

different from the slope with high median i-deals and high procedural justice

climate (p < .05).

98 Study 2 – I-Deals Differentiation and Organizational Performance

Tabl

e 3-

1. M

eans

, sta

ndar

d de

viat

ions

and

inte

reco

rrel

atio

ns a

mon

g st

udy

veri

able

s.

V

aria

ble

M

SD

1 2

3 4

5 6

7 8

9 10

11

12

13

1 Em

ploy

ee T

enur

e 8.

84

4.05

2 Em

ploy

ee A

ge

39.5

8 4.

07

.61*

*

3 Em

ploy

ee G

ende

r 1.

44

.21

-.18

-.07

4 C

ompa

ny S

ize

(log)

2.

36

.59

.43*

* .3

1**

-.02

5 C

ompa

ny A

ge (l

og)

1.54

.3

8 .6

5**

.28*

* .0

4 .3

1**

6 In

dust

ry S

ervi

ce

.36

.48

-.44*

* -.2

6*

.09

-.06

-.37*

*

7 Fa

mily

-Ow

ned

1.41

.4

9 -.0

5 -.0

6 -.0

1 -.1

6 -.0

8 .1

7

8 C

ompa

ny In

depe

nden

ce

.66

.48

-.29*

* -.2

5*

.13

-.41*

* -.1

5 .1

8 .0

2

9 In

tera

ctio

nal J

ustic

e C

limat

e 3.

66

.33

-.36*

* -.1

9 .1

1 -.0

7 -.2

7**

.24*

.0

3 .2

1*

10

I-D

eals

Diff

eren

tiatio

n .8

2 .2

2 -.0

3 -.1

3 -.1

5 -.1

0 .0

1 -.0

4 .1

1 -.0

9 -.0

9

11

Org

aniz

atio

nal M

edia

n I-D

eals

3.

22

.58

-.27*

* -.0

7 .1

1 -.2

4*

-.26*

* .2

7**

.14

.26*

*.4

7**

-.07

12

Proc

edur

al Ju

stic

e C

limat

e 3.

19

.47

-.27*

* -.2

3*

.15

-.20*

-.2

6*

.30*

* -.0

3 .3

1**

.44*

* -.2

1*

.60*

*

13

Dis

trib

utiv

e Ju

stic

e C

limat

e 3.

03

.54

-.26*

* -.2

1*

.11

-.38*

* -.2

5*

.23*

.0

6 .3

4**

.41*

* -.0

9 .5

0**

.82*

*

14

Org

aniz

atio

nal P

erfo

rman

ce

5.50

.8

1 -.2

4*

-.16

-.03

-.03

-.09

.03

-.07

.10

.30*

* .0

3 .2

6*

.36*

* .4

3**

Not

e. *p

<.05

, **p

<0.0

1.

Study 2 – I-Deals Differentiation and Organizational Performance 99

Tabl

e 3-

2. R

esul

ts o

f mod

erat

ed re

gres

sion

ana

lysi

s pr

edic

ting

dist

ribu

tive

just

ice

clim

ate.

M

odel

1

M

odel

2

M

odel

3

M

odel

4

Var

iabl

es

B SE

B SE

B SE

B SE

Con

stan

t 1.

64

.89

2.

55

.61

2.

48

.63

2.

57

.61

Empl

oyee

Ten

ure

.04

.02

.0

1 .0

1

.01

.01

.0

1 .0

1

Empl

oyee

Age

-.0

1 .0

2

.01

.01

.0

1 .0

1

.00

.01

Empl

oyee

Gen

der

.19

.23

-.0

2 .1

5

.01

.16

-.0

4 .1

6

Com

pany

Siz

e (lo

g)

-.31*

* .1

0

-.21*

* .0

7

-.22*

* .0

7

-.20*

* .0

6

Com

pany

Age

(log

) -.1

8 .1

7

.00

.11

.0

0 .1

2

-.02

.11

Indu

stry

Ser

vice

.1

6 .1

2

-.01

.08

-.0

1 .0

8

.03

.08

Fam

ily-O

wne

d -.0

4 .1

0

.05

.07

.0

5 .0

7

.09

.06

Com

pany

Inde

pend

ence

.1

4 .1

1

.03

.07

.0

4 .0

8

.08

.07

Inte

ract

iona

l Jus

tice

Clim

ate

.60*

**

.16

.1

7 .1

1

.17

.12

.1

6 .1

1

I-D

eals

Diff

eren

tiatio

n

.17

.15

.1

9 .1

6

.48*

.1

9

Med

ian

I-D

eals

-.07

.07

-.0

5 .0

8

-.14

.08

Proc

edur

al Ju

stic

e C

limat

e

.94*

**

.09

.9

4***

.0

9

.91*

**

.09

I-D

eals

Diff

eren

tiatio

n * M

edia

n I-D

eals

-.2

2 .3

2

.18

.34

I-D

eals

D

iffer

entia

tion

* Pr

oced

ural

Ju

stic

e C

limat

e

.1

8 .4

5

.25

.43

Med

ian

I-D

eals

* Pr

oced

ural

Just

ice

Clim

ate

.05

.13

.2

3+

.14

I-D

eals

D

iffer

entia

tion

* M

edia

n I-D

eals

*

Proc

edur

al Ju

stic

e C

limat

e

-1.9

7**

.69

Adj

uste

d R

² .2

7

.70

.6

9

.72

Δ R

²

.4

3***

.01

.0

3**

Not

e. A

ll te

sts a

re tw

o-ta

iled,

+ p<.

1, *p

<.05

, **p

<0.0

1, **

* p<0

.001

.

100 Study 2 – I-Deals Differentiation and Organizational Performance

Hypothesis 2 predicts that i-deals differentiation is related to organizational

performance via conditional indirect effects. While i-deals differentiation is not

directly related to organizational performance (Table 3-3, Model 2), Table 3-3

(Model 5) shows a significant and positive effect of distributive justice climate

on organizational performance (b = .65, p < .05).

To further test the overall moderated mediation model suggested in Hypothesis

2, a conditional indirect effects analysis was performed (Hayes, 2012; Preacher,

Rucker, & Hayes, 2007). The index of moderated moderated mediation is

significant (95% CI [-3.65, -0.25]; SE = .9), supporting Hypothesis 2. The results

depicted in Table 3-4 further show that i-deals differentiation has a significant

effect on organizational performance for low median i-deals and high

procedural justice climate, for moderate median i-deals and moderate as well as

high procedural justice climate. All significant conditional indirect effects of i-

deals differentiation on organizational performance are positive.

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

3.3

3.5

Dis

trib

utiv

e Ju

stic

e C

limat

e

(1) High Median I-Deal,High Procedural Justice

(2) High Median I-Deal,Low Procedural Justice

(3) Low Median I-Deal,High Procedural Justice

(4) Low Median I-Deal,Low Procedural Justice

Figure 3-2. Three-way interaction on distributive justice climate.

Low I-Deals Differentiation

High I-Deals Differentiation

Study 2 – I-Deals Differentiation and Organizational Performance 101

Tabl

e 3-

3. R

esul

ts o

f the

mod

erat

ed re

gres

sion

ana

lysi

s pr

edic

ting

orga

niza

tiona

l per

form

ance

.

M

odel

1

M

odel

2

M

odel

3

M

odel

4

M

odel

5

Var

iabl

es

B SE

B SE

B SE

B SE

B SE

Con

stan

t 3.

79

1.51

4.59

1.

56

4.

67

1.62

4.88

1.

56

3.

21

1.68

Em

ploy

ee T

enur

e -.0

7+

.04

-.0

9*

.04

-.0

8*

.04

-.0

8*

.04

-.0

9*

.04

Empl

oyee

Age

.0

0 .0

3

.01

.03

.0

1 .0

3

.01

.03

.0

0 .0

3 Em

ploy

ee G

ende

r -.4

2 .4

0

-.53

.39

-.4

9 .4

1

-.62

.40

-.6

0 .3

9 C

ompa

ny S

ize

(log)

.1

2 .1

7

.22

.17

.2

2 .1

7

.25

.16

.3

8*

.17

Com

pany

Age

(log

) .2

7 .3

0

.40

.29

.3

7 .3

0

.33

.29

.3

4 .2

8 In

dust

ry S

ervi

ce

-.20

.20

-.3

3+

.19

-.3

5+

.20

-.2

4 .2

0

-.26

.20

Fam

ily-O

wne

d -.0

9 .1

7

-.05

.17

-.0

6 .1

7

.02

.16

-.0

4 .1

6 C

ompa

ny In

depe

nden

ce

.06

.19

-.0

1 .1

9

.01

.19

.1

1 .1

9

.06

.19

Inte

ract

iona

l Jus

tice

Clim

ate

.64*

* .2

7

.28

.29

.2

6 .3

0

.23

.29

.1

2 .2

8 I-

Dea

ls D

iffer

entia

tion

.4

0 .3

8

.44

.42

1.

13*

.40

.8

2+

.49

Med

ian

I-D

eals

.07

.18

.1

0 .2

1

-.10

.21

-.0

1 .2

1 Pr

oced

ural

Just

ice

Clim

ate

.6

3**

.23

.6

3**

.24

.5

5*

.23

-.0

4 .3

4 I-

Dea

ls D

iffer

entia

tion

* Med

ian

I-Dea

ls

-.32

.82

.6

4 .8

7

.52

.85

I-D

eals

Diff

eren

tiatio

n * P

roce

dura

l Jus

tice

Clim

ate

.38

1.20

.57

1.11

.40

1.09

M

edia

n I-

Dea

ls *

Proc

edur

al Ju

stic

e C

limat

e

-.0

8 .3

2

.36

.35

.2

1 .3

5 I-

Dea

ls D

iffer

entia

tion

* Med

ian

I-Dea

ls *

Proc

edur

al

Just

ice

Clim

ate

-4

.70*

* 1.

78

-3

.42+

1.

82

Dis

trib

utiv

e Ju

stic

e C

limat

e

.6

5*

.28

Adj

uste

d R

² .0

6

.14

.1

1

.17

.2

2 Δ

R²

.08*

.03

.0

6**

.0

5*

Not

e. A

ll te

sts a

re tw

o-ta

iled,

+p<

.1, *

p<.0

5, **

p<0.

01, *

** p

<0.0

01.

102 Study 2 – I-Deals Differentiation and Organizational Performance

Tabl

e 3-

4. B

oots

trap

ping

resu

lts fo

r the

test

of c

ondi

tiona

l ind

irec

t effe

cts

at s

peci

fic v

alue

s of

the

mod

erta

or: m

ean

and

+/- s

tand

ard

devi

atio

n.

95

% C

onfid

ence

Inte

rval

Dep

ende

nt V

aria

ble

Val

ue o

f Mod

erat

or

Med

ian

I-Dea

ls

Val

ue o

f Mod

erat

or

Proc

edur

al Ju

stic

e C

limat

e

Con

ditio

nal I

ndir

ect

Effe

ct

SE

Low

er

Upp

er

Org

aniz

atio

nal

Perf

orm

ance

- 1 S

D (-

0.58

) - 1

SD

(-0.

47)

-.21

.29

-1.0

8 .1

9

- 1 S

D (-

0.58

) M

(0.0

0)

.29

.27

-.10

1.02

- 1 S

D (-

0.58

) +

1 SD

(0.4

7)

.78*

.4

9 .0

8 2.

12

M (0

.00)

- 1

SD

(-0.

47)

.28

.32

-.26

.98

M (0

.00)

M

(0.0

0)

.37*

.2

4 .0

5 1.

02

M (0

.00)

+

1 SD

(0.4

7)

.46*

.2

8 .0

3 1.

17

+ 1

SD (0

.58)

- 1

SD

(-0.

47)

.76

.6

5

-.1

7 2.

37

+ 1

SD (0

.58)

M

(0.0

0)

.44

.39

-.05

1.

51

+ 1

SD (0

.58)

+

1 SD

(0.4

7)

.13

.23

-.28

.67

Not

e. R

esul

ts a

re b

ased

on

1000

0 bo

otst

rap

sam

ples

. Con

ditio

nal i

ndir

ect e

ffect

test

s ar

e tw

o-ta

iled.

Study 2 – I-Deals Differentiation and Organizational Performance 103

3.4.3 Robustness Analysis

To further evaluate the robustness of the findings, I tested the hypotheses

independently of the control variables uncorrelated with the mediator and the

outcome variable (Becker, 2005; i.e., employee gender, family owned). In these

tests, the three-way interaction is significant (b = -1.80, p = .01) and distributive

justice climate is positively related to organizational performance (b = .65, p <

.05). Without non-significant control variables, these two regression coefficients

are therefore in the same direction and of the same significance level as those

coefficients obtained from models with all control variables included. Again,

conditional indirect effects of i-deals differentiation on organizational

performance were significant for low median i-deals and high procedural

justice climate, for moderate median i-deals and moderate as well as high

procedural justice climate.

3.5 Discussion

This research applies the concept of i-deals at the organizational level. My

underlying motivation was the need to clarify whether or not i-deals are

actually beneficial for organizations (e.g., Conway & Coyle-Shapiro, 2016). To

gain insight into this issue, this research drew on the organizations level

concepts i-deals differentiation and organizational median i-deals. My study

results yield three overarching findings. First, i-deals differentiation has no

direct effect on distributive justice climate or organizational performance.

Second, the effect of i-deals differentiation on distributive justice climate

depends on organizational median i-deals and procedural justice climate. Third,

the effect of i-deals differentiation on organizational performance is moderated

by organizational median i-deals and procedural justice climate and mediated

by distributive justice climate.

104 Study 2 – I-Deals Differentiation and Organizational Performance

3.5.1 Theoretical Implications

This research makes an important contribution to i-deals theory by examining

effects from an organizational perspective. Various researchers have

emphasized the need to verify the benefits of i-deals for organizations since they

are defined as being beneficial for employee and employer (e.g., Convey &

Coyle-Shapiro, 2016; Rousseau, 2005). Furthermore, the question has been

raised as to under which conditions i-deals are more beneficial or detrimental

for organizations (e.g. Liao et al., 2016; Rousseau, 2005).

The results mainly support the hypotheses. In the title of the study I posed the

question, whether idiosyncrasy makes i-deals non-ideal. The clear answer

provided by the results is no. Consistent with literature on LMX differentiation

(e.g., Erdogan & Bauer, 2010; Liden et al., 2006) and assumptions made in i-deals

literature (e.g., Liao et al., 2016; Marescaux & De Winne, 2016; Rousseau, 2005)

the results demonstrate that i-deals differentiation is not per se perceived as

distributively fair or unfair. In contrast, employees’ evaluations of i-deals

differentiation depend on organizational context factors. As proposed, the

results revealed a three-way interaction effect of i-deals differentiation,

organizational median i-deals and procedural justice climate.

Supporting my assumptions regarding the three-way interaction, I found a

positive relationship between i-deals differentiation and distributive justice

climate when either median i-deals or procedural justice climate are high.

Surprisingly, although slightly positive, the relationship between i-deals

differentiation and distributive justice is non-significant for high median i-deals

and high procedural justice climate. Both justice and i-deals literature give some

hints to explain the non-significant relationship between i-deals differentiation

and distributive justice climate for both high median i-deals and high

procedural justice climate.

I-deals literature postulates that a high level of i-deals can reduce differences

between employees and limit social comparison (Hornung et al., 2008). Liao et

al. (2016) suggest that differential treatment through i-deals may be more

Study 2 – I-Deals Differentiation and Organizational Performance 105

acceptable in collectives where most employees have i-deals. A single employee

with an i-deal is probably attracting attention if he or she is the only member

with special working arrangements (Liao et al., 2016). I-deals differentiation can

alter the relative standing of members of an organization (Rousseau, 2005).

However, due to heightened social comparison, i-deals differentiation might

only lead to salient status differences, if the median level of i-deals is low in an

organization (Hornung et al., 2008; Liao et al., 2016). Accordingly, justice

literature proposes that procedural justice most strongly affects perceived

distributive justice when status differences are high. While research finds that

perceptions of distributive justice can be enhanced by the presence of high levels

of perceived procedural justice (Brockner, Tyler, & Cooper-Schneider, 1992;

Cropanzano & Konovsky, 1995; Konovsky, 2000; Shapiro & Kirkman, 1999),

results also show that employees react more strongly towards perceived

procedural justice when status differences between employees are salient (Van

Prooijen, Van den Bos, & Wilke, 2002). The buffering effect of procedural justice

on reactions to decisions is further increased by unfavorable outcomes (Kwong

& Leung, 2002). As argued above, status differences and outcome

unfavourability should be highest for high i-deals differentiation and low

median i-deals. This might explain why a high procedural justice climate more

strongly enhances perceived distributive justice climate in organizations with

low median i-deals than in organizations with high median i-deals.

The final, and probably most important contribution of the current study is that

I am able to confirm that i-deals indeed have an influence on an organization’s

performance. These findings are in line with results of Study 1 of this

dissertation. Consistent with my expectations, i-deals differentiation has a

conditional, indirect effect on organizational performance. Specifically, i-deals

differentiation has a positive effect on organizational performance in

organizations with low median i-deals and high procedural justice climate as

well as for moderate levels of i-deals and both moderate and high procedural

justice climate. For all other combinations of organizational median i-deals and

procedural justice climate, i-deals differentiation has no effect on organizational

106 Study 2 – I-Deals Differentiation and Organizational Performance

performance. This is consistent with finding the strongest positive relationship

between i-deals differentiation and distributive justice climate for low median

i-deals and high procedural justice climate.

3.5.2 Limitations and Future Research

Despite numerous strengths, the following limitations should be considered

when interpreting the results of the current study. First, generalizability of the

study might be limited as data was collected from a unique sample comprised

of companies in only one country (Germany). Furthermore, the specified nature

of the sample comprising mainly small and medium-sized companies might

have worked in favor of the hypotheses. The social comparison processes that I

assume as an underlying theoretical mechanism for the proposed relationships

might be more likely to occur in small companies. In those settings, employees

get to know each other more - beyond the boundaries of groups and

departments - than in larger companies with several thousand employees and

numerous departments or even subsidiaries (Kunze, Boehm, & Bruch, 2013).

Thus, future studies could transfer the documented effects to larger companies

from different cultural backgrounds. In addition, the sample size was limited to

96 organizations and I encourage replications and extensions of the current

research in larger samples. Second, although data was collected from two

groups of employees and human resource executives, the research design does

not allow for causal inferences since all data was collected at one measurement

point. Avenues for future research might include examining the relationship of

i-deals on organizational level with organizational outcomes in longitudinal

settings. Third, i-deals were treated as unidimensional constructs, as the EFA

showed that the measurement items loaded on only one factor. However, Rosen

et al. (2013) demonstrated the existence of different subtypes of i-deals. Future

research could expand the findings of the current study by including

comparisons between subtypes of i-deals.

Beyond these limitations, my research offers several interesting directions for

future research. Rousseau (2005) defines i-deals as beneficial for both employees

Study 2 – I-Deals Differentiation and Organizational Performance 107

and employer. This study adds to current literature by being the first to

empirically examine i-deals differentiation on an organizational level. The

results imply, i-deals differentiation might either have a positive or non-

significant effect for organizational performance, depending on specific context

factors. In accordance with Conway and Coyle-Shapiro (2016) this study thus

supports the notion that we do not know enough yet to recommend the use of

i-deals to organizations. Because the effects of i-deals differentiation is highly

dependent on organizational context factors, future research should study other

relevant factors. In the current study, results show positive or nonexistent

effects of i-deals differentiation on organizations. However, under other

conditions it might also be possible that negative outcomes are transferred to

the organizational level. Potential moderators are different forms of

organizational justice, leadership climate, organizational size or sector

(Greenberg et al., 2004; Liao et al., 2016; Rousseau, 2005). As Study 1 has shown

that the leadership climate influences the relationship between organizational

median i-deals and organizational performance, this might also be possible for

i-deals differentiation. Supporting this idea, Vidyarthi et al. (2016) found that

employees compare own i-deals to those of others in the context of a team’s

social and structural attributes. Thus, leadership behavior might be important

in shaping reactions to i-deals differentiation in a collective context. I further

advise future researchers to also study other firm relevant outcomes, for

example employee health and turnover rates as well as objective performance

outcomes. Having profound implications for i-deals theory (Conway & Coyle-

Shapiro, 2016) it seems to be an enriching avenue for future research to examine

potential effects on organizations in detail.

Furthermore, the current research mainly focused on organizational justice

theory and social comparison processes. However, by transferring i-deals

research to the collective level, other theoretical frameworks and explanatory

mechanisms might come into play (Liao et al., 2016). Conway and Coyle-

Shapiro (2016) suggest that current conceptualizations and definitions might be

108 Study 2 – I-Deals Differentiation and Organizational Performance

insufficient in accounting for the effect of i-deals at collective levels. In my

opinion, this question possesses great potential for future research.

3.5.3 Practical Implications

The above limitations notwithstanding, the current research has important

implications for practice, especially for organizations who intend to use i-deals

as HR instruments for the success of the organization (Kroon et al., 2016). This

study points out to the fact that the mere presence of i-deals differentiation is

not per se positive or negative. It is rather the context that determines the extent

to which i-deals differentiation is beneficial for organizations: on one hand, the

number of i-deals granted in organizations plays a major role, while the on the

other hand, this study implies that a focus should be put on organizational

climate. In accordance with Rousseau (2005), this study therefore suggests that

practitioners, specifically line managers and HR managers, must monitor how

many i-deals are granted in an organization and under which conditions. Rather

than informally handling i-deals, organizations should have strict guidelines as

to how many i-deals can be granted (Hornung et al., 2014). Furthermore, it is

especially the task of direct supervisors to adhere to rules of procedural justice,

when i-deals are granted to individual workers (Greenberg et al., 2004).

Thereby, optimal effects on the organization might be created. This task is

complicated by the fact that both conditions must be met in order to induce

positive effects on the organization, demanding special attention from

organizations.

3.5.4 Conclusion

While i-deals theory assumes i-deals to be positive for employees and

employers, this study is the first to show that positive effects might actually

occur at the organizational level due to the idiosyncratic nature of i-deals. By

examining the effects of i-deals differentiation on organizational performance

this study gives rise to a variety of not yet examined areas in i-deals research.

The current study confirms that new constructs and thereby additional

Study 2 – I-Deals Differentiation and Organizational Performance 109

theoretical explanatory mechanisms come into play, when i-deals are examined

at the collective level. I hope that this research serves as an ideal starting point

for future research to investigate the relation between i-deals at collective level

and organizational outcomes and helps organizations capitalize on the benefits

of increasingly diverse working arrangements.

110 Study 3 – Combining I-Deals and Human Resource Practices

4 Combining I-Deals and Human Resource Practices:

Enhancing Organizational Performance through

Consistency

Study 3 focuses on Research Question 5 and inspects the interplay between i-

deals and HRM. Specifically, the interaction between FWAs, offered as modern

HR practices, and i-deals, negotiated with the supervisor, on organizational

productive energy and subsequently on organizational performance is

examined.

4.1 Introduction

I-deals are most effective in serving the employer’s interest when their

use is consistent with the firm’s strategy and HR system.

Rousseau (2005, p. 190)

Close interactions with HR departments can be crucial in maintaining

and promoting successful i-deals in the workplace […]

Bal & Rousseau (2016, p. 128)

In the context of a strong trend of individualization at work, an increasing

number of companies is including FWAs in their HRM (De Menezes & Kelliher,

2017; Rudolph & Baltes, 2017). Organizations and their HRM are becoming

increasingly interested in FWAs because evidence indicates that they facilitate

the wellbeing of their employees and increase the organization’s profitability

and effectiveness (e.g., Lewis, 2003; Montano, Hoven, & Siegrist, 2014; Quick,

Murphy, & Hurrell, 1992; Rudolph & Baltes, 2017). Even governments as for

example the European Union encourage greater availability of FWAs in

organizations to meet diverging needs of the modern workforce (European

Study 3 – Combining I-Deals and Human Resource Practices 111

Commission, 2012; as cited in De Menezes & Kelliher, 2017). However, it is

important to draw a distinction between flexible working policies in

organizations and actual flexible working by employees (e.g., Bayazit & Bayazit,

2017; Rudolph & Baltes, 2017). When organizations adopt FWAs, it is assumed

that employees are free to utilize them according to their personal needs

(Bayazit & Bayazit, 2017). However, organizations rather give employees the

right to ask for flexibility when they implement FWAs and managers still have

the right to refuse employees’ requests for flexible working conditions (Bayazit

& Bayazit, 2017). For example, research showed that although schedule

flexibility is the most commonly requested customized work arrangement, such

requests are only granted and implemented 58% of the time (Lauzun,

Morganson, Major, & Green, 2010). However, how HR practices are realized by

line managers may matter equally or even more for organizational performance

than the pure presence of FWAs in organizations (Edgar & Geare, 2005).

Therefore, it is important to make a distinction between the presence of FWAs

on the one hand, and how these HR practices are implemented and enacted by

direct line managers on the other hand (Marescaux, De Winne, & Sels, 2013a).

As proposed by Bayazit and Bayazit (2017), i-deals might play an important role

in the effective implementation of FWAs. I-deals are individually negotiated

working arrangements between employee and employer, intended to meet the

personal needs of the employee (Rousseau, 2005). Faced with individuals who

differ in what they need and how they want to work, managers can use i-deals

as a means to make HR practices accessible to employees (Rousseau, 2005).

This research contributes to the literature on FWAs and i-deals in various ways.

While an increasing number of organizations is adopting FWAs (Rudolph &

Baltes, 2017), it is still not clear, whether FWAs are positive for organizational

effectiveness and under which conditions (e.g., Allen, Johnson, Kiburz, &

Shockley, 2013; De Menezes & Kelliher, 2011; Lewis, 2003). I propose, that the

possibility to negotiate for i-deals with line managers is one important context

condition for the effectiveness of FWAs. Indeed, research showed that i-deals

are one way for employees to make use of FWAs according to their own needs

112 Study 3 – Combining I-Deals and Human Resource Practices

(Bayazit & Bayazit, 2017). Thus, the current study addresses recent calls to

distinguish between effects of formalized flexibility offered by the HR system

and informal flexibility negotiated with the direct supervisor (e.g., Bayazit &

Bayazit, 2017; Rudolph & Baltes, 2017). Furthermore, their interplay is examined

as suggested by several researchers (e.g., Bal & Rousseau, 2016; Kroon et al.,

2016; Rousseau, 2005). As the quotes by Rousseau (2005, p. 190) and Bal and

Rousseau (2016, p. 128) cited in the beginning of the study suggest,

organizations should ensure compatibility between their HR systems and their

managers’ behavior and decisions. Building on signaling theory, I suggest that

merely implementing flexibility through the HR system of an organization does

not affect organizational productive energy and thereby organizational

performance. I rather propose that managers need to act consistently to the HR

system and allow employees to actually leverage flexibility in the form of i-

deals, if FWAs are included in the HR system.

4.2 Theoretical Background

4.2.1 Flexible Working Arrangements

The focus of this study lies on HR practices providing flexibility for employees,

rather than flexibility of employees (Alis, Karsten, & Leopold, 2006; De Menezes

& Kelliher, 2011). This highlights the importance of FWAs to serve the

individual needs of employees. More and more organizations are implementing

HR practices to offer FWAs to their employees (e.g., De Menezes & Kelliher,

2017). FWAs are defined as “employer provided benefits that permit employees

some level of control over when and where they work outside of the standard

workday” (Lambert, Marler, & Gueutal, 2008, p. 107). FWAs are HR practices

offering a variety of options for flexibility, for example flexible working time,

working from home, part-time work, compressed work week and job-sharing

(Allen et al., 2013; Dunham, Pierce, & Castaneda, 1987; Lewis, 2003; Pierce &

Newstrom, 1982). Therefore, the term FWAs includes not only when (i.e.,

flexible working time) but also where (i.e., home office) and how long (i.e., part-

Study 3 – Combining I-Deals and Human Resource Practices 113

time work) employees work (Lambert, et al., 2008; Lewis, 2003). FWAs are often

also called family-friendly or work–life policies highlighting their purpose to

serve employees’ needs (Lewis, 2003).

Research evidence implies that offering employees freedom to design their

work environments more flexible through FWAs can be a valuable HRM

strategy. Numerous studies, reviews and meta-analyses showed that FWAs can

have positive effects on organizations (e.g., Baltes, Briggs, Huff, Wright, &

Neuman, 1999; Friedman & Greenhaus, 2000; Glass & Estes, 1997; Hill,

Hawkins, Ferris, & Weitzman, 2001; Kossek & Ozeki, 1999). Nevertheless, the

nature of the relationship between FWAs and relevant organizational outcomes

does not seem to be fully understood. Reviews and meta-analysis show that

results in studies on FWAs are not always consistent, effects of FWAs on

outcomes are often small in magnitude and contingent upon other critical

factors (Allen et al., 2013; Lewis, 2003). In a recent meta-analysis, Allen et al.

(2013) attribute the mixed findings among other things to the studies’

operationalization of FWAs via availability versus the actual use of flexibility.

Organizations which offer FWAs are giving employees only a right to request

flexibility (Bayazit & Bayazit, 2017). However, this implies that line managers

might refuse those requests for flexibility (Bayazit & Bayazit, 2017). Therefore,

the actual use of FWAs in organizations is dependent on the final approval of

supervisors (Bayazit & Bayazit, 2017). In line with Lewis (2003), I therefore

suggest that the availability of FWAs is only beneficial for organizations, if

employees perceive the availability of FWAs and are successful in negotiating

flexibility according to their personal needs. The question therefore is, whether

organizations offer FWAs, but more importantly, if requests for flexibility are

approved by line managers. This question can be addressed by examining the

role of i-deals in complementing FWAs.

4.2.2 I-Deals

As already dicussed in Chapter 1.4 of this dissertation, i-deals are often

negotiated to fit working arrangements to the needs of individual employees,

114 Study 3 – Combining I-Deals and Human Resource Practices

however, without neglecting the needs of the organization (e.g., Rousseau,

2005). Therefore, i-deals might be a vealuable instrument in combination with

more standardized HR practices to make those more applicable to individual

employees (e.g., Kroon et al., 2016).

As discussed already in Study 1 and 2, i-deals research shows that employees

negotiate i-deals across four content domains, which are schedule flexibility,

location flexibility, work responsibilities and financial incentives (Rosen et al.,

2013). Extant research has shown that two types of i-deals are most prevalent in

organizations: time and location flexibility i-deals and development or task and

work responsibility i-deals (Bal et al., 2012; Hornung et al., 2008; Rosen et al.,

2013), which are therefore also the focus of the current study. This is in

accordance with Study 1 and 2 of this dissertation. Furthermore, this focus is in

line with a study of Bayazit and Bayazit (2017) who related FWAs to i-deals in

the areas of flexible work schedules, work locations and work load. Prevalence

of i-deals in an organization is reflected by the organizational median i-deal.

Based on Anand (2012) and as in Study 1 and 2, organizational median i-deals

are again defined as the central tendency of i-deals in an organization. Due to

their individualized nature, i-deals are suggested as a possibility to make HR

practices, which are focused on flexibility and the individual needs of each

employee (i.e., FWAs), accessible to the workforce (Rousseau, 2005).

4.2.3 Flexible Working Arrangements and Organizational Performance

Increasing research evidence points to the importance of HR practices for

organizational performance (e.g., Becker & Huselid, 1998; Boselie, Dietz, &

Boon, 2005; Combs, Liu, Hall, & Ketchen, 2006). Research shows a positive

association between HRM and firm performance (e.g., Arthur, 1994; Delery &

Doty, 1996; Huselid, 1995). Additionally, two major reviews of HRM research

(Boselie et al., 2005; Combs et al., 2006) confirmed that the large majority of

published studies demonstrates a positive relationship between HRM and

organizational performance.

Study 3 – Combining I-Deals and Human Resource Practices 115

Similarly, several studies have examined the effect of FWAs on different

indicators of mainly individual-level performance. While a variety of studies,

reviews and meta-analyses have reported mixed results, the majority of results

points to a positive relationship with relevant organizational outcomes as for

example employee performance, absenteeism and job satisfaction (Allen et al.,

2013; Baltes et al., 1999; Friedman & Greenhaus, 2000; Glass & Estes, 1997; Hill

et al., 2001; Kossek & Ozeki, 1999). For instance, De Menezes and Kelliher (2011)

found in their review that the link between FWAs and outcomes on

organizational level is not clearly established. Especially the link of FWAs with

productivity and other performance and financial measures seems questionable

(De Menezes & Kelliher, 2011). However, more recent studies suggest a positive

association between flexibility for employees and employee performance (De

Menezes & Kelliher, 2017). This is supported by a recent study by Berkery,

Morley, Tiernan, Purtill and Parry (2017) who found that employees are more

productive in organizations which offer FWAs. Shen, Chanda, D'netto and

Monga (2009) further suggest that HR diversity management practices, which

are closely related to FWAs, are related to organizational performance.

Following these findings and propositions in extant literature, I suggest that

FWAs are positively related to organizational performance.

Hypothesis 1: FWAs have a positive relationship with organizational performance.

4.2.4 The Intermediate Effect of Organizational Productive Energy

While earlier research assumed a direct link between HR practices and

organizational performance, recent evidence suggests that this link is mediated

by employee attitudes and behavior (Alfes, Truss, Soane, Rees, & Gatenby,

2013b). Researchers found this relationship to be mediated by factors such as

job satisfaction, commitment, task performance, and OCB (Bowen & Ostroff,

2004; Den Hartog, Boselie, & Paauwe, 2004; Guest, Conway, & Dewe, 2004;

Kinnie, Hutchinson, Purcell, Rayton, & Swart, 2005; Kuvaas, 2008; Snape &

Redman, 2010; Takeuchi, 2009). The theoretical model describing the

relationship between HR practices and performance introduced by Guest (1997)

116 Study 3 – Combining I-Deals and Human Resource Practices

suggests that employee perceptions of HR practices lead to attitudinal

outcomes, which in turn lead to behavioral outcomes such as performance. In

line with this model, Alfes et al. (2013b) showed that the effect of perceived HR

practices on task performance is mediated by employee engagement.

This mediated relationship with performance is also suggested for the special

case of FWAs. Initial research showed that FWAs are positively related to a

variety of individual level attitudes such as job satisfaction, commitment and

employee engagement (Bond & Galinsky, 2006; Nadeem & Metcalf, 2007). De

Menezes and Kelliher (2011) conclude in their literature review on FWAs that

the literature suggests several mediators for the relationship between FWAs and

performance, such as job satisfaction, organizational commitment and

engagement.

Alfes, Shantz, Truss and Soane (2013a) propose that the relationship between

HR practices and behavioral outcomes is mediated by constructs which

comprise emotional, cognitive and physical components simultaneously, as for

example employee engagement. Viewing this relationship from an

organizational perspective, I propose organizational productive energy as

mediator on the collective level for the relationship between FWAs and

organizational performance. In accordance with the proposition of Alfes et al.

(2013a), organizational productive energy is characterized by three

components: affective energy, cognitive energy, and behavioral energy (Cole,

Bruch, & Vogel, 2012). First, affective energy refers to employees’ shared

experience of positive feelings and emotional arousal at work, second, cognitive

energy describes the shared intellectual processes that cause employees to think

constructively and to search persistently for solutions to problems at work, and

third, behavioral energy reflects employees’ collaborative efforts to benefit the

organization, such as pace and intensity with which employees purposefully

invest physical resources to contribute to the organization’s performance (Cole

et al., 2012; Lykken, 2005; Quinn & Dutton, 2005; Spreitzer & Sonenshein, 2004;

Spreitzer, Sutcliffe, Dutton, Sonensheim, & Grant, 2005). Based on this

definition, organizational productive energy is conceptualized by previous

Study 3 – Combining I-Deals and Human Resource Practices 117

literature as collective-level construct (Cole et al., 2012). Raes, Bruch and De

Jong (2012) further argue that a climate of productive energy can emerge in

organizations, which describes “the extent to which employees’ collective

resources and effort are focused on productive work (p. 171)

4.2.4.1 The signaling function of FWAs

The mediated effect of HR practices on organizational performance is often

explained by the signaling function of HR systems (Bowen & Ostroff, 2004). HR

practices have a signaling function by sending messages that employees

interpret to make sense of their work situation and their relationship to their

employer (e.g., Rousseau, 1995). HR practices can thus be considered as

communication from employer to employee (Guzzo & Noonan, 1994; Rousseau,

1995; Tsui et al., 1997). An organization’s HR practices represent a possibility

for the employer to signal long-term investment in employees which obligates

those to engage in reciprocation through positive attitudes and behavior (Gong,

Chang, & Cheung, 2010; Shaw, Dineen, Fang, & Vellella, 2009; Sun, Aryee, &

Law, 2007). HR practices imply that the organization values their employees

and cares about their well-being (Allen, Shore, & Griffeth, 2003). Specifically,

FWAs signal that the organization is supportive of employees and is seeking to

build a strong and long-lasting social exchange relationship with them because

FWAs are HR practices that suggest investment in employees and show

recognition of employee contributions by providing flexibility in working

conditions (e.g., Allen et al., 2003). Availability of FWAs signals that employees

are allowed to ask their supervisors for flexibility (Bayazit & Bayazit, 2017) and

that the organization is willing to support employees who wish to use flexible

working conditions (Ehrnrooth & Björkman, 2012; Bowen & Ostroff, 2004).

Thus, FWAs can be perceived as investment in the relationship to the employee

by the employer (e.g., Allen et al., 2003). To summarize, “HRM practices are one

way for employers to signal their willingness to invest in and support their

employees” (Alfes et al., 2013a, p. 334). Hence, perceived FWAs may be linked

118 Study 3 – Combining I-Deals and Human Resource Practices

with organizational productive energy and subsequently with organizational

performance.

4.2.4.2 FWAs, organizational productive energy and organizational performance

As research shows, employees’ energy is enhanced by perceiving both the

interest and support of their organization (Cole et al., 2012; Dutton, 2003). In

fact, Dutton and Heaphy (2003) propose that high-quality connections at work

cause positive feelings including vitality, alertness and energy. Indeed, research

showed that employees, who have a high-quality relationship with their

employer and thus feel supported by their organization report more positive

emotions and arousal, and increased experienced energy at work (Cameron,

Dutton, & Quinn, 2003; Dutton, 2003; Ryan & Frederick, 1997). Similarly,

Atwater and Carmeli (2009) found that employees with a supportive, high-

quality relationship with their leaders experience more energy at work.

Furthermore, the relationship to the organization is of importance for

employees’ energy level as perceived organizational support is related to

employee affective well-being at work (Panaccio & Vandengerghe, 2009).

In addition, organizational productive energy is related to organizational

performance. Extant literature conceptualizes employees’ energy at work as a

key motivational force that has positive implications for both individual

employees and organizations (Cole et al., 2012; Dutton, 2003; Russo, Shteigman,

& Carmeli, 2015). As Dutton (2003) states, energy makes “organizations and the

people within them extraordinary” (p. 6). Cole et al. (2012) propose that

energized employees are more likely to engage in knowledge creation and

successful problem-solving that benefit the organization’s performance.

Furthermore, organizational-level productive energy is proposed to be

beneficial for organizational goal attainment because employees invest more

effort in their work, and thereby positively affect organizational performance

(Cole et al., 2012). Indeed, Cole et al. (2012) showed that organizational

productive energy is positively related to overall organizational performance.

Similarly, Bruch and Vogel (2011) found that organizations with high levels of

Study 3 – Combining I-Deals and Human Resource Practices 119

organizational productive energy show significant higher overall firm

performance. Specifically, they showed that organizational productive energy

is strongly and positively related to a variety of performance parameters,

including organizational performance, profitability and efficiency (Bruch &

Vogel, 2011). Based on this review of recent literature, I suggest that the effect

of FWAs on organizational performance is mediated by organizational

productive energy.

Hypothesis 2: FWAs have a positive effect on organizational performance, which is

mediated by organizational productive energy.

4.2.5 The Moderating Effect of I-Deals

Employees’ direct managers play an increasingly important role in the

implementation of HR practices on the individual level (Purcell & Hutchinson,

2007). The HR practices experienced by employees are increasingly those

enacted by their direct supervisors and not those officially offered by the

organization (Purcell & Hutchinson, 2007). At the same time, researchers

observe a gap between practices formally offered in HR systems and what

supervisors actually provide their employees (Purcell & Hutchinson, 2007). An

important way how line managers might implement FWAs are i-deals (Bayazit

& Bayazit, 2017). Bayazit and Bayazit (2017) suggest, that employees can only

make use of FWAs, when line managers allow them to negotiate i-deals, which

in turn might lead to beneficial outcomes for both employees and the

organization.

4.2.5.1 The signaling function of i-deals

Similar to FWAs, i-deals convey messages to employees (Ho & Kong, 2015). Ho

and Kong (2015) assume that i-deals function as signals of the employer to the

employee based on signaling theory. They suggest that i-deals can be used as

signals by the employer to convey positive evaluations, recognition and

commitment to valued and high-performing employees in order to elicit

120 Study 3 – Combining I-Deals and Human Resource Practices

desirable attitudinal and behavioral responses that are beneficial for the

organization (Ho & Kong, 2015). Rousseau et al. (2006, p. 979) note that i-deals

‘‘can signal [to the employee] the value an employer places on him or her”. In

extant research on i-deals, scholars have assigned i-deals a signaling function

because they can function as powerful social cues by conveying positive signals

from employer to employees (e.g., Rousseau et al., 2006; Rousseau et al., 2009).

4.2.5.2 Signal consistency between FWAs and i-deals

In the organizational context, signals never operate in isolation but always

against the background of other organizational signals (Ho & Kong, 2015). As

Belogolovsky and Bamberger (2014, p. 1708) state, signals ‘‘may vary as a

function of signals inferred from other related management policies or

practices”. This implies that FWAs and i-deals represent signals that are

interpreted by employees in mutual dependency. As already mentioned before,

organizations which include FWAs in their HR system only provide employees

the opportunity to request customized working conditions from their

supervisors (Bayazit & Bayazit, 2017). However, those still can refuse to provide

their employees the flexibility they want (Bayazit & Bayazit, 2017). If this is the

case, the organization is not consistent in the messages which are sent to

employees. Signal consistency is defined “as the agreement between multiple

signals from one source” (Connelly, Certo, Ireland, Reutzel, 2011, p. 54), in this

case the organization. Researchers indicate that employees prefer consistency in

their working environment (e.g., Kelley, 1973; Siehl, 1985), which includes

agreement between signals sent by the organization (e.g., through HR practices

and line managers; Bowen & Ostroff, 2004). Inconsistency between messages

occurs, when signal are related to each other and the same subject or content,

but when they are incongruent or contradictory to each other (Bowen & Ostroff,

2004). Inconsistency between signals might have severe consequences for the

organization (Bowen & Ostroff, 2004; Connelly et al., 2011; Siehl, 1985).

Conflicting and inconsistent signals confuse employees, making the

organization’s communication less effective (Bowen & Ostroff, 2004), while in

Study 3 – Combining I-Deals and Human Resource Practices 121

turn signal consistency enhances a message’s effectiveness (Chung & Kalnins,

2001; Connelly et al., 2011; Fischer & Reuber, 2007).

HR systems characterized by high consistency are considered as strong HR

systems (Bowen & Ostroff, 2004, Guest & Conway, 2011). Through signal

consistency employees develop a shared interpretation of the organization's HR

practices as well as a shared perception about what behaviors are expected,

supported and rewarded by the employer (Bowen & Ostroff, 2004; Sun et al.,

2007). Consequently, strong HR systems are assumed to lead to a strong

organizational climate about the HRM content, in which employees share a

common understanding of HR practices, which means a shared perception of

the supportive organizational environment emerges (Bowen & Ostroff, 2004;

Sun et al., 2007). This organizational climate in turn motivates employees to

show positive collective attitudes and behavior which subsequently enhance

organizational performance (Bowen & Ostroff, 2004; Sun et al., 2007).

Consistency between signals is closely related to consensus between

organizational actors and key decision makers (Bowen & Ostroff, 2004, Guest &

Conway, 2011). This might be the case if both HRM and line managers support

flexibility for employees. Signals send trough HR practices are likely to interact

with signals send by managers by implementing those practices in affecting the

development of a collective climate about the HRM content (Ashforth, 1985;

Bowen & Ostroff, 2004; Ostroff, Kinicki, & Tamkins, 2003). Supervisors are the

organizational agents who enact and implement HRM practices for individual

employees (Bayazit & Bayazit, 2017). When employees perceive their direct

managers to implement practices, those actions support a common

interpretation and shared perception of the organizational climate regarding

HR practices among employees (Kozlowski & Doherty, 1989; Naumann &

Bennett, 2000). On the other hand, it becomes difficult to send unambiguous

and internally consistent messages to employees if HRM and supervisors do not

agree on the level of flexibility they are willing to offer (Fiske & Taylor, 1991).

Agreement among HRM and supervisors and therefore among the signals they

are sending (e.g., by FWAs and i-deals) fosters greater consensus among how

122 Study 3 – Combining I-Deals and Human Resource Practices

employees perceive their working environment and thus the emergence of an

organizational climate about the HRM content (Bowen & Ostroff, 2004). Thus,

supervisor behavior in line with the HRM system and formally offered practices

may strenghen the relationships between HR practices and the organizational

climate about HRM content, which influences in turn employee collective

attitudes and behavior, and finally organizational performance (Bowen &

Ostroff, 2004; Sun et al., 2007).

Regardless of the strength of the HRM system (Bowen & Ostroff, 2004), frequent

interactions and communication among employees are likely to result in

collective sense making in organizations (Jackofsky & Slocum, 1988). Thus, in

organizations where the strength of the HRM system is strong, the sense making

processes among employees will most likely result in the emergence of an

organizational climate regarding HRM content, which means shared

perceptions of a supportive organizational environment arise (Bowen & Ostroff,

2004; Guest & Conway, 2011; Sun et al., 2007). If the HRM system is weak, HRM

practices send signals to employee that are ambiguous, contradictory, and

inconsistent and subject to each individual employee’s interpretation (Bowen &

Ostroff, 2004). Shared perceptions about HR practices and their content in the

form of a collective climate will not emerge (Bowen & Ostroff, 2004; House,

Rousseau, & Thomas-Hunt, 1995), because employees individually interpret the

messages sent by HRM practices (Bowen & Ostroff, 2004). Thus, weak HR

systems, characterized by low consistency between signals, are likely to be

related to constructs at the individual but not at the organizational level (Bowen

& Ostroff, 2004). From this argument it follows that only strong HR systems,

which are those characterized through signaling consistency are influencing

collective employee attitudes and behavior as well as organizational

performance (Bowen & Ostroff, 2004; Guest & Conway, 2011). I therefore

suggest, that FWAs will only have a positive impact on organizational

productive energy and organizational performance, if they are complemented

by a high median i-deal in organizations. If the median i-deal is low, FWAs will

Study 3 – Combining I-Deals and Human Resource Practices 123

have no relationship to organizational productive energy and organizational

performance.

Hypotheses 1 and 2 suggest that the effect of FWAs on organizational

performance is mediated by organizational productive energy. Furthermore,

the reasoning above suggests that i-deals moderate the relationship between

FWAs and organizational productive energy. I propose two hypotheses to

model this interaction effect as well as the overall moderated mediation model

(James & Brett, 1984; Preacher et al., 2007). These relationships are reflected in

the overall theoretical model, illustrated in Figure 4-1.

Hypothesis 3: Organizational median i-deals moderate the relationship between

FWAs and organizational productive energy, such that the effect of FWAs on

collective productive energy is positive for high organizational median i-deals and

non-significant for low organizational median i-deals.

Hypothesis 4: The mediated effect of FWAs on organizational performance through

organizational productive energy is moderated by organizational median i-deals,

such that the effect of FWAs on organizational performance is positive for high

organizational median i-deals and non-significant for low organizational median i-

deals.

Figure 4-1. Moderated mediation model of the relationship between FWAs and organizational

performance.

Organizational Median I-Deals

FWAs Organizational Productive Energy

Organizational Performance

124 Study 3 – Combining I-Deals and Human Resource Practices

4.3 Method

4.3.1 Data and Sample

A similar data collection procedure was conducted as for Study 1 and 2 of this

dissertation. Data was collected from 88 organizations in 2015 in cooperation

with a German benchmarking agency via an online survey. However, 5

organizations had to be excluded from the analysis due to missing data.

Consequently, 83 organizations from a variety of industries (33%

manufacturing, 42% services, 6% finance and insurance, and 19% retail and

wholesale) and ranging between 20 and 5,200 employees (median = 190)

remained in the study.

Participating employees received a link to the online survey by each

participating organization. Three different data sources were used to reduce

concerns about common method bias (e.g., Dickson et al., 2006; Podsakoff et al.

2012). Employees provided information about the demographics (i.e., employee

age and gender), i-deals and organizational productive energy. HR executives

provided information on the organizations offers regarding FWAs as well as

general information (i.e., industry affiliation, organization size and age). Finally,

members of the top-management team were asked to provide information on

their organization’s performance.

15,694 employees across all 83 organizations participated in the online survey.

Employees’ mean age was 40 years and mean tenure was 8.7 years. Participants

included more males (50%) than females (36%). 14% of the employees did not

provide an answer regarding their gender. The participating employees were

from all major divisions and hierarchical levels of the organizations (9% middle

management; 11% group manager; 67% employees without leadership

responsibility; 6% trainee; 1% mini-jobber, freelancer and contract worker; 3%

other groups and 3% provided no answer).

Study 3 – Combining I-Deals and Human Resource Practices 125

4.3.2 Measures

To meet the needs of the German sample, again all survey versions were

translated to German following a double-blind back-translation procedure

(Schaffer & Riordan, 2003). Because the study focuses on the organizational

level, data analysis was conducted at the organizational level. Thus, all

measures assessed through individual level responses by employees were

aggregated to the organizational level. To justify the aggregation of individual

measure at the organizational level, common aggregation statistics, such as the

index for interrater agreement rwg (James, 1982; James, Demaree, & Wolf, 1984;

Klein & Kozlowski, 2000), and ICC1 and ICC2 (Bliese, 2000) were inspected. For

ICC1 and ICC2, the same cut-off values as in Study 1 and 2 were used. All values

of the ICC1 and ICC2 were satisfactory and supported aggregation of the

measures to the organizational level. For the rwgs, I followed recommendations

of LeBreton and Senter (2008), who state that values above .71 can be interpreted

as strong agreement between raters. The rwgs were indicating moderate to high

agreement for all organizations (LeBreton & Senter, 2008). Unless stated

otherwise in the description of all specific measures below, 5-point rating scales

(1 = strongly disagree, 5 = strongly agree) were used to measure the following

scales.

4.3.2.1 FWAs

FWAs were assessed with 11 items based on Lyness, Thompson, Francesco and

Judiesch (1999). HR executives answered with yes or no if their organizations

offered part-time employment, telework, sabbaticals, flexible working hours,

day care facilities, financial support for day care, support for elder care, further

training during parental leave, paid parental leave (for the care and education

of children, regardless of the age of the children), plans for reintegration after

parental leave and lifetime working time accounts. A total FWAs availability

score was computed by summing the number of items checked as yes by HR

executives so that higher scores indicated a greater number of FWAs available.

These 11 items create a formative measure. This means that the individual items

126 Study 3 – Combining I-Deals and Human Resource Practices

are not expected to correlate with each other because the assessed indicators are

considered to be the cause of the resulting construct (Bayazit & Bayazit, 2017).

Thus, the reliability of the composite measure for FWAs was not computed

(Edwards & Bagozzi, 2000).

4.3.2.2 Organizational median i-deals

In line with Study 2, 1-deals were measured using a 4-item scale based on Rosen

et al. (2013). The items were covering schedule and location flexibility as well as

task and work responsibility i-deals. An example item for schedule flexibility is:

“My supervisor considers my personal needs when making my work

schedule”. Following the approach of Ng and Lucianetti (2016), i-deals were

again conceptualized as a unidimensional construct in this study. The

unidimensional construct was supported by a factor analysis. An EFA of the

four items used to measure i-deals shows that all of them loaded on one

common factor (factor loadings: .76; .80; .90; 76; extracted variance = 65 percent).

Internal consistency estimates for the measure were α = .78. As discussed in

Study 1 and 2, I did not use the mean but the within-organizational median to

aggregate i-deal scores to the organizational level, because within-

organizational agreement is not expected for i-deals in one organization (e.g.,

Rousseau, 2005). Thus, the median is preferable to reflect the central tendency

among i-deals within organizations (Bliese, 2000; Henderson et al., 2009; Liden

et al., 2006; Rousseau, 2005).

4.3.2.3 Organizational productive energy

Organizational productive energy was measured with a 14-item scale by Cole

et al. (2012). An example item for the affective dimension is: “The employees are

energetic in their job”, an example item for the cognitive dimension is: “The

employees have a collective desire to make something happen” and an example

item for the behavioral dimension is: “The employees are currently working at

a very fast pace”. Aggregation statistics provided support for an aggregation to

Study 3 – Combining I-Deals and Human Resource Practices 127

the organizational level of analysis (ICC1 = .06, p < 0.001; ICC2 = .74; median rwg

=.77). Internal consistency estimates were α = .94.

4.3.2.4 Organizational performance

In line with Combs et al. (2005) and measures of organizational performance in

Study 1 and 2, I defined company performance as consisting of two dimensions:

organizational and operational performance. For operational performance, I

used two items relating to employee productivity, as well as employee retention

and fluctuation. To assess organizational performance, I used two items

addressing overall company performance and the current financial situation as

indicators. All four performance items were again loading on one common

performance factor. The one factor structure of the items was approved by a

CFA (χ2= 3.7, df = 2; CFI = .98, IFI = .98, SRMR = .04; Hu & Bentler, 1999). Akin to

performance measures in Study 1 and 2, the subjective performance measure

was benchmarked by asking top-managers to evaluate the performance of their

company compared to other organizations acting in their industry (Rogers &

Wright, 1998). Ratings were given on a 7-point scale (1 = far below average; 7 =

far above average). Internal consistency estimates were α = .77. For those

companies in which more than one top manager (n = 44) answered, aggregation

to the organizational level was justified (ICC1 = .31, p < 0.001; ICC2 = .65; median

rwg =.82).

4.3.2.5 Control variables

I included numerous control variables in the analysis that might bias the current

results. Company size was used as control variable because it is related to

numerous behaviors and attitudes within companies (Ragins et al., 2000).

Following research showing that company age is related to a firm’s productivity

(Choi & Shepherd, 2005), I controlled for the companies’ age by asking for the

company’s founding year. Company age was measured by asking an HR

manager for the founding year of the organization. As both vairables - company

age and size - were skewed, I log-transformed them before the analysis. Third,

128 Study 3 – Combining I-Deals and Human Resource Practices

I controlled for the characteristics of the companies’ employees and included

measures for employee age, gender and tenure as control variables. Previous

research has shown that employee attributes influence effects of i-deals on

outcomes, such as if i-deals are perceived as fair (e.g., Bal et al., 2012; Marescaux

& De Winne, 2016). Fourth, I included affiliation to industry sectors as dummy

variable, because industry affiliation can relate to organizational effectiveness

(Dickson et al., 2006). I added one dummy variable to capture service industry

versus other sectors (i.e., manufacturing, finance and trade), because first,

organizations in the service sector tend to have greater flexibility (e.g., Stavrou,

2005) and second, the majority of companies from the sample came from the

service sector. Fifth, I controlled for the number of organizational locations per

company. Kunze et al. (2013) suggest that collective processes and climates are

more likely created when employees have the chance for regular interactions,

which is the case in smaller companies with only one or just few organizational

locations. Finally, I controlled for i-deals differentiation as researchers propose

that the effects of the average level of i-deals and i-deals differentiation in

collectives are not independent from each other (e.g., Liao et al., 2016). This

assumption was supported by results of Study 2. Therefore, i-deals

differentiation was added to the analysis, which included organizational

median i-deals as moderator. This variable was operationalized with the within-

organizational standard deviation (as it was already done in Study 2).

Study 3 – Combining I-Deals and Human Resource Practices 129

4.4 Results

4.4.1 Descriptive Statistics

Table 4-1 provides the means, standard deviations, and intercorrelations of our

study variables. In line with Hypothesis 1, FWAs are positively related to

organizational performance (r = .24, p < .05). As proposed by Hypothesis 2,

FWAs are also positively related to organizational productive energy, which in

turn has a positive relationship to organizational performance (r = .22, p < .05; r

= .36, p < .05, respectively). Table 4-1 does not present high intercorrelations

between any of the variables that could raise concerns about multicollinearity

between the constructs.

4.4.2 Data Analysis and Hypothesis Testing

I utilized the PROCESS macro (Hayes, 2013) to estimate the mediation model

specified in Hypothesis 1 and 2 and the moderated mediation model proposed

by Hypothesis 3 and 4. I decided to use the PROCESS macro because it is

recognized as relying on a rigorous approach for detecting the significance of

conditional indirect effects because this method is based on bootstrap sampling

(Kisbu-Sakarya, MacKinnon, & Miočević, 2014). Variables were mean centered

before calculating interactions terms and conducting the statistical analysis

(Aiken & West, 1991). All tests were conducted two-tailed and on the

organizational level of analysis.

130 Study 3 – Combining I-Deals and Human Resource Practices

Tabl

e 4-

1. M

eans

, sta

ndar

d de

viat

ions

and

inte

rcor

rela

tions

am

ong

stud

y va

ribl

es.

V

aria

ble

M

SD

1 2

3 4

5 6

7 8

9 10

11

1 Em

ploy

ee T

enur

e 8.

69

3.04

2 Em

ploy

ee A

ge

39.8

8 3.

98

.48*

*

3 Em

ploy

ee G

ende

r 1.

39

.22

-.13

-.12

4 C

ompa

ny S

ize

(log)

2.

28

.46

.31*

* .0

0 .0

8

5 C

ompa

ny A

ge (l

og)

1.52

.4

3 .4

7**

.01

-.11

.40*

*

6 O

rgan

izat

iona

l loc

atio

ns

7.08

14

.88

.07

-.03

.20

.48*

* .1

3

7 In

dust

ry S

ervi

ce

.42

.50

-.28*

* -.0

7 .2

9**

-.10

-.36*

* -.0

9

8 I-

Dea

l Diff

eren

tiatio

n .8

3 .1

8 .0

6 .0

2 .1

3 .2

5*

.12

.00

-.10

9 O

rgan

izat

iona

l Med

ian

I-Dea

ls

3.29

.4

2 -.0

7 .0

6 -.0

9 -.1

1 -.0

3 -.0

3 .0

4 -.2

0

10

FWA

s .4

5 .1

7 -.0

2 -.0

3 .1

1 .1

5 -.0

4 .0

8 .1

0 .0

0 .3

3**

11

Org

aniz

atio

nal P

rodu

ctiv

e En

ergy

3.

53

.25

-.10

-.19

-.07

-.23*

-.1

9 -.0

2 .0

6 -.0

9 .3

7**

.22*

12

Org

aniz

atio

nal P

erfo

rman

ce

5.55

.7

9 -.0

3 -.0

3 -.0

8 -.0

1 .0

1 .1

7 -.0

6 .0

7 .0

3 .2

4*

.36*

*

Not

e. *p

<.05

, **p

<0.0

1.

Study 3 – Combining I-Deals and Human Resource Practices 131

Table 4-2. Regression results for the estimated coefficients of the mediation model.

Predictor B SE

Mediator variable model: Organizational Productive Energy

Constant

FWAs

Employee Tenure

Employee Age

Employee Gender

Company Size (log)

Company Age (log)

Industry Service

Organizational locations

𝑅𝑅2

4.67***

0.37*

0.02

-0.02*

-0.15

-0.17*

-0.10

0.01

0.00

.45*

(0.39)

(0.16)

(0.01)

(0.01)

(0.13)

(0.07)

(0.08)

(0.06)

(0.00)

Dependent variable model: Organizational Performance

Constant

Organizational Productive Energy

FWAs

Employee Tenure

Employee Age

Employee Gender

Company Size (log)

Company Age (log)

Industry Service

Organizational locations

𝑅𝑅2

1.68

1.03**

0.86+

-0.02

0.01

-0.37

-0.14

0.23

-0.05

0.01

.46*

(2.09)

(0.50)

(0.50)

(0.04)

(0.03)

(0.41)

(0.24)

(0.24)

(0.19)

(0.01)

Note: All tests are two-tailed, +p≤.1, *p<.05, **p<0.01, *** p<0.001.

132 Study 3 – Combining I-Deals and Human Resource Practices

The direct positive relationship between FWAs and organizational performance

predicted in Hypothesis 1 was not supported by the results of the regression

analysis. As shown in Table 4-2 the relationship is only marginally significant

(b = .86, p = .09). In line with Hypothesis 2, Table 4-2 furthermore reveals a

positive relationship between FWAs and collective productive energy and

between organizational productive energy and organizational performance (b =

.37, p < .05; b = 1.03, p < .01). To further test the indirect effect, I used PROCESS

analysis with 20000 bootstraps samples (Hayes, 2013). In contrast to other

theory tests (e.g. Sobel test), the bootstrapping procedure does not rely on

distribution assumptions, which is preferable to other tests, since the

assumption that indirect effects conform to normal distributions is often

problematic and inapplicable (Shrout & Bolger, 2002). Results show a significant

indirect effect (b = .38; 95% CI [0.01, 0.95]; SE = .25) of FWAs on organizational

performance via organizational productive energy. Therefore, Hypothesis 2

was supported. Hypothesis 3, predicting that organizational median i-deals

moderate the relationship between FWAs and organizational productive

energy was supported by the results of the regression analysis depicted in Table

4-3. The interaction effect was significant (b = .83, p < .05). To interpret the

interaction effect, it is shown in Figure 4-2. Furthermore, simple slopes analysis

shows that the effect of FWAs on organizational productive energy is

significantly positive for high median i-deals (b = .52, p < .05), but non-significant

for mean and low median i-deals (b = .11, p = .48, b = -.26, p = .33, respectively).

To further test the overall moderated mediation model suggested in Hypothesis

4, a conditional indirect effects analysis was performed (Hayes, 2012; Preacher

et al., 2007) based on 20000 bootstrap samples. I tested the conditional indirect

effect at the mean as well as at one standard deviation above and one below the

mean. The results show that FWAs have a positive relationship with

organizational performance mediated by organizational productive energy for

high organizational median i-deals and a non-significant relationship for low

and mean levels of organizational median i-deals as presented in Table 4-4,

which is supporting Hypothesis 4.

Study 3 – Combining I-Deals and Human Resource Practices 133

Table 4-3. Regression results for the estimated coefficients of the moderated mediation model.

Predictor B SE

Mediator variable model: Organizational Productive Energy

Constant

FWAs

Organizational Median I-Deals

FWAs * Organizational Median I-Deals

Employee Tenure

Employee Age

Employee Gender

Company Size (log)

Company Age (log)

Industry Service

Organizational locations

I-Deals Differentiation

𝑅𝑅2

4.66***

0.14

0.20**

0.83*

0.02*

-0.02*

-0.13

-0.16*

-0.12+

0.03

0.00

0.10

.58**

(0.37)

(0.16)

(0.06)

(0.38)

(0.01)

(0.01)

(0.12)

(0.07)

(0.07)

(0.06)

(0.00)

(0.15)

Dependent variable model: Organizational Performance

Constant

Organizational Productive Energy

FWAs

Employee Tenure

Employee Age

Employee Gender

Company Size (log)

Company Age (log)

Industry Service

Organizational locations

I-Deals Differentiation

𝑅𝑅2

1.95

1.02**

0.87+

-0.02

0.01

-0.46

-0.21

0.20

-0.02

0.01

0.60

.48*

(1.69)

(0.36)

(0.50)

(0.04)

(0.03)

(0.41)

(0.24)

(0.24)

(0.19)

(0.01)

(0.49)

Note: All tests are two-tailed, +p<.1, *p<.05, **p<0.01, *** p<0.001.

134 Study 3 – Combining I-Deals and Human Resource Practices

Figure 4-2. Moderation effect of organizational median i-deals on the relationship between FWAs and

organizational productive energy.

4.4.3 Robustness Analysis

Following Becker’s (2005) recommendation, the analysis was also conducted

without those control variables which were not significantly correlated with

either the mediator or the outcome variable. Therefore, only organizational size

remained in the analysis as control variable. Results in both the mediation

model and the moderated mediation model are in the same direction and of a

similar or higher significance level as those coefficients obtained from models

with all control variables included. Results without non-significant control

variables show again a significant indirect effect (b = .39; 95% CI [0.03, 0.89]; SE

= .22) of FWAs on organizational performance via organizational productive

energy. Furthermore, the conditional indirect effect of FWAs on organizational

performance was also significant for high levels of organizational median i-

deals (b = .56; 95% CI [0.08, 1.20]; SE = .29).

4.45

4.5

4.55

4.6

4.65

4.7

4.75

4.8

4.85

Low FWAs High FWAs

Org

aniz

atio

nale

Pro

duct

ive

Ener

gy

LowOrganizationalMedian I-Deals

HighOrganizationalMedian I-Deals

Study 3 – Combining I-Deals and Human Resource Practices 135

Tabl

e 4-

4. B

oots

trap

ping

resu

lts fo

r the

test

of c

ondi

tiona

l ind

irec

t effe

cts

at s

peci

fic v

alue

s of

the

mod

erat

or: m

ean

and

+/- s

tand

ard

devi

atio

n.

95%

Con

fiden

ce In

terv

al

Med

iato

r V

alue

of M

oder

ator

Med

ian

I-Dea

ls

Con

ditio

nal I

ndir

ect

Effe

ct

SE

Low

er

Upp

er

Org

aniz

atio

nal P

rodu

ctiv

e

Ener

gy

- 1 S

D (-

0.48

) -.2

6 .3

1 -.9

6 .3

2

M (-

0.04

) .1

2 .2

2 -.2

6 .6

1

+ 1

SD (0

.46)

.5

6 .3

3 .0

1 1.

28

Not

e. R

esul

ts a

re b

ased

on

2000

0 bo

otst

rap

sam

ples

. Con

ditio

nal i

ndir

ect e

ffect

test

s ar

e tw

o-ta

iled.

136 Study 3 – Combining I-Deals and Human Resource Practices

4.5 Discussion

The aim of the current research was to take a first step to clarify the complex

interplay between HR practices and i-deals (Kroon et al., 2016; Rousseau, 2005).

The current study makes two key contributions to current literature. First, it

supports the notion, that FWAs are not directly related to organizational

performance but that the effect is mediated by employee organizational

productive energy. Second, the current study shows, that FWAs are only

beneficial for organizational performance if they are complemented by i-deals

enacted by direct supervisors. Otherwise, FWAs have no effect on

organizational productive energy and thereby on organizational performance.

4.5.1 Theoretical Implications

The current study has numerous important implications for research on FWAs

and i-deals. The aim was to clarify, how flexibility on the one hand through the

HR system and on the other hand through negotiation with the direct

supervisor complement each other (e.g., Kroon et al., 2016; Rousseau, 2005). The

current study thereby addresses recent calls to distinguish between the impact

of formalized, policy-based access to FWAs and discretionary idiosyncratic

arrangements negotiated by individual employees with their direct supervisor

(Bayazit & Bayazit, 2017; Rudolph & Baltes, 2017).

Most of the hypotheses were supported by the results. First, and against

Hypothesis 1, the current findings show, that FWAs are not directly related to

organizational performance, since the relationship was only marginally

significant. Second, and in line with Hypothesis 2, the results show that the

effect of FWAs on organizational performance is mediated by collective

employee attitudes and behavior, which was operationalized with

organizational productive energy in the current study. However, these results

are in line with the literature on HR practices and FWAs. Recent research is also

supporting a mediated rather than a direct relationship (e.g., De Menezes &

Kelliher, 2011; Lewis, 2003). However, the current study also adds to existing

Study 3 – Combining I-Deals and Human Resource Practices 137

literature. While research so far has mainly focused on individual level

mediators and outcomes (e.g., Lewis, 2003), I follow suggestions of Bowen and

Ostroff (2004), that strong HR systems are influencing collective level outcomes

compared to weak HR systems which lack consistency between signals. Second,

research so far has mainly focused on effects of FWAs on outcomes as work-life

conflict (e.g., Bayazit & Bayazit, 2017) or individual performance (e.g., De

Menezes & Kelliher, 2017). The current findings extent on existing research by

showing a relationship between FWAs and organizational performance, which

has so far been established for general HR systems (e.g., Bowen & Ostroff, 2004)

and suggested for the closely related construct of HR diversity management

practices (Shen et al., 2009). Third, the results support the quotes by Rousseau

(2005, p. 190) and Bal and Rousseau (2016, p. 128) I referred to in the beginning

of the study. Indeed, HR systems and i-deals seem to be most effective for

employees and employers, if they are used consistently. Supporting my

assumptions, FWAs have only a positive effect on organizational productive

energy and organizational performance, when the median level of i-deals is

high in an organization. For organizations with low median i-deals, I find no

relationship at all. This is also in line with other research highlighting the

importance to differentiate between formalized HR based FWAs and informal

and negotiated i-deals (e.g., Bayazit & Bayazit, 2017; Rudolph & Baltes, 2017).

Furthermore, as Bowen and Ostroff (2004) suggest, it seems that only strong HR

systems, characterized by consistency, are related to collective-level outcomes.

4.5.2 Limitations and Future Research

Numerous strength notwithstanding, the study has limitations which should be

addressed by future research. First, I focused only on German companies,

limiting the generalizability of the results. Future research could try to replicate

the results of the current study in other countries with different cultural

backgrounds. Furthermore, the sample is limited to small and medium-sized

companies. This fact might have worked in favor of the hypotheses. The

signaling function of HR systems and i-deals might be stronger and more

138 Study 3 – Combining I-Deals and Human Resource Practices

homogeneous in small companies. In large companies with several thousand

employees and numerous departments or even subsidiaries, it is more likely

that employees perceive HR practices to be different and that they have

supervisors who treat them more differently regarding i-deals. Therefore,

FWAs and i-deals are more likely to cause an organizational productive energy

in small to medium-sized companies. Thus, future studies could transfer the

documented effects to larger companies. Third, although controlling for same-

source bias, I measured all variables at the same point in time, inhibiting causal

interferences. Furthermore, since availability of FWAs was measured by asking

HR managers, I did not account for the fact, whether employees and their

supervisors perceive FWAs to be available. Future research might not only

account for the availability of FWAs and the actual use of flexibility but also the

influence of how available employees perceive FWAs in their organization

(Lewis, 2003). In addition, the sample size is limited to 83 organizations and I

encourage replications and extensions of this research in larger samples.

Despite the limitations of this study, future research could address the following

gaps in research. In a first attempt to study the interplay between HR systems

and i-deals, I focused on the implementation of flexibility focused HR practices,

namely FWAs, through a combination with i-deals. However, several

researchers suggest considering the interplay between HR practices and i-deals

from a different perspective. The focus thereby lies on the tension between

standardization and individualization (e.g., Liao et al., 2016; Rousseau, 2005).

Liao et al. (2016) suggest that there might be an optimal ratio between HR

practices and i-deals or in other words between standardization and flexibility.

Because the current study focuses on flexible HRM and i-deals, I did not

consider the standardized features of HRM. While this study implies that

organizations benefit most from both high FWAs and high i-deals, examining

other HR practices might reveal the proposed trade-off between standardized

HR practiced and i-deals. Furthermore, the current study focused on a

collective-level mediator and outcome compared to the majority of existing

studies on FWAs (e.g., Bayazit & Bayazit, 2017; Lewis, 2003). As Bowen and

Study 3 – Combining I-Deals and Human Resource Practices 139

Ostroff (2004) state, there might be a difference between the effect of strong and

weak HR systems. While systems characterized by consistency between FWAs

and i-deals should affect collective-level outcomes, systems low in consistency

should only affect individual level outcomes (Bowen & Ostroff, 2004). Future

research is advised to take a step further and compare the different mechanism

how strong and weak HR systems caused by the respective combinations of

FWAs and i-deals differently affect employees in organizations. Inconsistency

between HR practices and the use of i-deals might influence attitudes and

behavior on the individual level – propably positively for those employees who

receive i-deals and negative for those who don’t receive i-deals. Finally, as line

managers seem to take over an important role in making HR practices effective,

future research might consider how organizations and HR managers can

support and motivate line managers to implement i-deals in their teams and

departments.

4.5.3 Practical Implications

While HRM lays the foundation with designing HR instruments, supervisors

are the ones in charge of implementing HR practices and granting requests for

differentiation, always balancing the interests of the employee and the

organization (Hornung et al., 2009). The increasing appearance of

individualized deals shows that HR practices nowadays are not only imposed

on employees in a top-down process, but that individual employees try to find

a match between their own needs and the requirements of the organization in a

bottom-up process (Kroon et al., 2016). Nonetheless, i-deals are not meant as a

substitute for HR instruments. I-deals can rather complement standard HR

practices to make flexibility offered by organizations accessible to each

employee according to his or her individual needs (Hornung et al., 2014; Ostroff

& Schulte, 2007).

Therefore, the current findings suggest that supervisors need to act in

accordance with the official HR policies of the organization and be open to

negotiate i-deals with their employees if FWAs are included in the HR system.

140 Study 3 – Combining I-Deals and Human Resource Practices

I-deals can work as a valuable supplement for FWAs rooted in a firm’s HR

system. Thus, line managers should be supported in granting i-deals. To ensure

the effectiveness of FWAs, HR managers need to sensitize line managers and

employees for their responsibility to implement flexible and customized

arrangements for the benefit of both the employees and the employer. For

example, HRM should educate line managers, that i-deals are desired practices

in an organization and offer to help them to negotiate, distribute and

communicate i-deals in their teams and departments (e.g., Greenberg et al.,

2004). It needs to be changed that to date, a large part of flexibility requests is

rejected by supervisors (Lauzun et al., 2010). Furthermore, and in line with

suggestions by Bayazit and Bayazit (2017) the current findings imply that

individual employees should be proactive in negotiating customized and

flexible arrangements according to their own needs with their line managers.

This is especially the case, when the HR system sends the signal, that flexibility

is accepted by introducing FWAs (Bayazit & Bayazit, 2017). Finally, the current

findings highlight the importance of government policies and regulations

(Bayazit & Bayazit, 2017), which aim at supporting employees who seek to

negotiate i-deals. The current study shows that processes to support employees

to successfully request flexibility according to their needs might benefit both

employees and employer.

4.6 Conclusion

While many organizations are introducing FWAs to their HR systems to meet

numerous societal trends, it is still unclear, whether they are beneficial for

employees and employer and by which intermediate processes. Furthermore,

concerns have been raised regarding the differentiation of formalized and HR

based FWAs and the implementation of i-deals created through individual

negotiation processes. The current study shows that FWAs are only beneficial

for organizations, if they are complemented by i-deals. This study gives rise to

the idea that FWAs need to be introduced by the HRM but also implemented

by direct line managers as customized deals. I hope that this study functions as

Study 3 – Combining I-Deals and Human Resource Practices 141

a first step for future research to explore the role of i-deals in modern HR

systems.

142 Overall Discussion and Conclusion

5 Overall Discussion and Conclusion

This is the closing chapter of this dissertation. First, it recaps the research

motivation of this dissertation (i.e., whether i-deals are relevant for

organizational performance and how organizations successfully implement and

maintain i-deals) and, based on this, links the five derived research questions

with the findings of the three empirical studies intended to respond to these

questions. Then, the chapter highlights the most important comprehensive

findings and integrates them into the literature of i-deals, leadership,

organizational justice and FWAs. Finally, the chapter discusses general

limitations and directions for future research and offers the main integrative

practical implications of the three studies.

5.1 Summary and Integration of Research Findings

With this dissertation, I intended to broaden our limited knowledge about the

effects of i-deals on organizational performance. This dissertation thereby

makes an important contribution to i-deals research and theory. Extant i-deals

research has mainly focused on individual-level effects and only few studies

have applied multilevel analyses to examine i-deals in a team or unit context

(Bal & Boehm, 2017; Liao et al., 2017; Vidyarthi et al., 2016). From a theoretical

perspective, researchers need to find out if i-deals are positive for organizations

because i-deals are defined as beneficial for both employees and employer

(Rousseau, 2005). Akin, from a practical perspective, i-deals are only justifiable

if they can bring advantages for all parties and do not disadvantage anyone –

be it the i-dealer’s coworkers or the employer. However, it is not sufficient to

investigate, if i-deals influence organizations (Research Question 1). It is also

necessary to explore how (Research Question 2) and under which conditions

this is the case (Research Question 3, 4 & 5). To this aim, three studies were

conducted on the organizational level of analysis. For organizational level

research, new constructs to capture i-deals on the organizational level were

Overall Discussion and Conclusion 143

needed. Consequently, two constructs suggested by i-deals scholars were

introduced to the organizational level: organizational median i-deals and i-

deals differentiation (Anand, 2012; Liao et al., 2016). Study 1 (Chapter 2) and 2

(Chapter 3) of this dissertation examined if organizational median i-deals and i-

deals differentiation, respectively, affect organizational performance. Both

studies considered relevant mediation mechanisms and context factors as

moderators (i.e., leadership and organizational justice climate). Study 3

(Chapter 4) deals with the integration of i-deals and FWAs, as modern HR

practices, and their combined effect on organizations. While the specific results

of the empirical investigations have already been discussed in detail within each

study (see Chapters 2.5, 3.5, and 4.5), I will summarize the overall findings of

all three studies from an integrative perspective. From an integrative

perspective, the conducted studies yield the following three key conclusions.

5.1.1 I-Deals and Organizational Performance

First, this dissertation finds that i-deals are related to organizational

performance, and thereby provides an answer to Research Question 1. A

relationship to organizational performance was found, when i-deals were

examined from the perspective of the median level of i-deals in an organization

(i.e., organizational median i-deals), or the variety in scope between employees’

i-deals (i.e., i-deals differentiation). Organizational median i-deals were

operationalized with a composite measure of all individual scores in one

organization and i-deals differentiation was captured with the within-

organizational standard deviation (e.g., Anand, 2012). Indeed, Study 1 and

Study 2 showed that organizational median i-deals and i-deals differentiation,

respectively, are related to organizational performance. Organizational

performance was assessed by subjective ratings of organizational and

operational performance following Combs et al. (2005), evaluated once by the

top-managements team (Study 1) and once by an HR manager (Study 2). In

Study 1, organizational median i-deals had a direct relationship to

organizational performance (Study 1), which was positive and linear. In Study

144 Overall Discussion and Conclusion

2, i-deals differentiation had no direct but an indirect relationship with

organizational performance. However, both Study 1 and 2 suggest that the

relationship between organizational median i-deals as well as i-deals

differentiation and organizational performance is mediated through

intermediate processes.

5.1.2 Intermediate Processes

Consequently, this dissertation implies second, that the relationship between

organizational median i-deals as well as i-deals differentiation and

organizational performance is mediated by a variety of intermediate processes

on the organizational level. The dissertation thereby provides a first answer to

Research Question 2. Specifically, Study 1 showed that organizational median

i-deals are related to organizational performance via two parallel mediating

processes: collective job satisfaction and collective OCBI. While the effect of

organizational median i-deals on collective job satisfaction and thereby on

organizational performance was positive, the effect of organizational median i-

deals on collective OCBI and thereby on organizational performance was

curvilinear, namely inversed U-shaped. Moreover, Study 2 showed that the

relationship between i-deals differentiation and organizational performance is

mediated by the distributive justice climate in the organization. In sum, both

studies imply that organizational median i-deals and i-deals differentiation are

related to organizational performance via mediating mechanisms such as

collective attitudes, behavior, and organizational climate. However, all these

effects depend on context factors, which leads to the third major conclusion of

this dissertation.

5.1.3 Context Factors

The third key finding of this dissertation is that the valence of the relationship

between i-deals on organizational level, operationalized as either organizational

median i-deals or i-deals differentiation, and organizational performance

depends on a variety of context factors. Specifically, this dissertation addresses

Overall Discussion and Conclusion 145

organizational median i-deals in interaction with the organizational leadership

climate (Study 1) and HR practices (Study 3) and i-deals differentiation in

interaction with organizational median i-deals and the organizational

procedural justice climate (Study 2).

Study 1 addresses Research Question 3, if the relationship between i-deals and

performance at the organizational level depends on the leadership climate in an

organization. The results of Study 1 show that the relationship between

organizational median ideals, collective job satisfaction, collective OCBI and

organizational performance indeed depends on the leadership climate in an

organization. Findings reveal that the individual-focused leadership climate

moderates the relationship between organizational median i-deals, collective

job satisfaction and organizational performance, such that the relationship is

significantly positive for a high individual-focused leadership climate, but not

significant for a low individual-focused leadership climate. In turn, the

collective-focused leadership climate moderates the relationship between

organizational median i-deals, collective OCBI and organizational performance,

such that the relationship is inversed U-shaped for a low collective-focused

leadership climate, but not significant for a high collective-focused leadership

climate.

Study 2 addresses Research Question 4, focussing on whether the relationship

between i-deals and organizational performance is dependent on the

organizational justice climate. The results imply that both procedural justice

climate and organizational median i-deals shape the relationship between i-

deals differentiation and organizational performance. Specifically, the results of

Study 2 show a significant positive relationship between i-deals differentiation,

distributive justice climate and organizational performance, when either

median i-deals or procedural justice climate are high in an organization.

However, the relationship is non-significant, when both organizational median

i-deals or procedural justice climate are high or low.

146 Overall Discussion and Conclusion

Study 3, which is mainly focusing on Research Question 5, examines if the

interplay between i-deals and HR practices influences organizational

performance. Results show that the fit to HR practices in an organization is a

further context condition, which determines if i-deals are positive for

organizations. Study 3 implies, that i-deals, representing working conditions for

individuals, interact with higher-level employment conditions, created for

groups of employees. Specifically, Study 3 shows that i-deals are closely related

to the HR practices in an organization. In fact, i-deals enable a positive effect of

FWAs on organizations. In Study 3, FWAs have a positive effect on

organizational productive energy and organizational performance, when

organizational median i-deals are high. Specifically, i-deals and FWAs only

have a positive effect on organizational productive energy and organizational

performance, when both are high. Having just high FWAs or high i-deals in an

organization, does not suffice to boost performance. When i-deals and HRM do

not fit together, no positive effects occur for organizations. Thus, while i-deals

represent a necessary condition for FWAs to be effective, FWAs in turn

represent a necessary context condition for beneficial i-deals as well.

In sum, this dissertation indicates that there indeed exists a link between i-deals

constructs at the organizational level, such as organizational median i-deals and

i-deals differentiation, and organizational performance. This link is mediated

by collective employee attitudes, behavior, and organizational climate. These

findings imply that the median level of i-deals in an organization as well as

differences in scope between employees’ i-deals influence employees’ collective

attitudes, behavior, and organizational climate (i.e., collective job satisfaction,

collective OCBI and distributive justice climate) and subsequently

organizational performance. However, the valence of the effects of both,

organizational median i-deals and i-deals differentiation is dependent on

context factors. I-deals function in the context of leadership climate,

organizational justice climate and HR practices. The results outline an

empirically supported framework which helps to better understand and

manage the functioning of i-deals in the organizations.

Overall Discussion and Conclusion 147

5.2 Theoretical Contributions

In addition to the theoretical contributions presented in the discussion sections

of the individual studies, this dissertation also provides some comprehensive

theoretical contributions to extant research and theory, which are outlined

below. To present the key theoretical contributions of this dissertation, the

findings are integrated into extant literature and theory in the areas of i-deals,

TFL, organizational justice and HRM.

5.2.1 I-Deals Theory

5.2.1.1 Mutual benefit of i-deals

This dissertation addresses one of the most popular but as yet unanswered

questions in i-deals research, namely whether i-deals are only beneficial for the

i-dealer or also for the employer who grants the deal (e.g., Conway & Coyle-

Shapiro, 2016). This question is especially interesting and relevant from a

theoretical perspective as Rousseau (2005) defined and differentiated i-deals

from other constructs such as shady deals (e.g., preferential treatment) by

referring to their “win-win” character. This implies, that customized work

arrangements can basically only be referred to as i-deals, if they are proven to

be beneficial for the employee and the employer. However, besides numerous

advantages such as flexibility, i-deals literature has identified several potential

drawbacks of i-deals, which jeopardize positive effects for organizations, as for

example negative reactions of coworkers and perceived injustice (e.g., Garg &

Fulmer, 2017; Greenberg et al., 2004). This dissertation reacts to these worries

and contributes to i-deals theory by examining effects of i-deals on the

organizational level and by taking potential negative effects into account (Bal &

Boehm, 2017). The results of all three studies indicate that i-deals can have

positive effects on organizations. However, they need to be managed in the

right way. Thereby, this dissertation follows researchers’ call for an integrative

perspective on the relationship between i-deals and organizational performance

by considering several context factors (e.g., Liao et al., 2016). Potential levers

148 Overall Discussion and Conclusion

identified in this dissertation are the leadership climate (Study 1), the

organizational justice climate (Study 2), the amount of i-deals in an organization

(i.e., organizational median i-deals; Study 2) and the fit to HR practices in an

organization (Study 3). This means that individualized working arrangements

negotiated between employee and employer just fulfill the defining criteria of

an i-deal when they are embedded in an organizational context characterized

by those prerequisites. This has far-reaching implications for i-deals theory as i-

deals have only the expected effects, if context conditions enable them to be

beneficial.

5.2.1.2 I-deals constructs at the organizational level

A second important contribution to i-deals research lies in the fact that this

dissertation applies two constructs, which have been proposed by i-deals

scholars, to the organizational level, which are organizational median i-deals

and i-deals differentiation (Anand, 2012; Liao et al., 2016). While Anand (2012)

has already applied median i-deals and variability in i-deals to the group level,

this dissertation is to my knowledge the first research examining those construct

at the organizational level of analysis (Study 1, 2 & 3) and thereby shows that i-

deals are meaningful and influential at the organizational level, too.

First, this dissertation shows (Study 1) that organizational median i-deals are

related to employees’ collective attitudes and behavior and thus implies that the

prevalence of i-deals in organizations is perceived by employees and shapes

their perceptions, evaluations and subsequently attitudes and behavior. While

organizational median i-deals were positively associated with an attitude

directly related to one’s own work (i.e., job satisfaction), they were related to

coworker relations (i.e., OCBI) in a curvilinear manner (Study 1). Thus, for

organizations with high organizational median i-deals, the effect on OCBI is

becoming negative (Study 1). A similar phenomenon became evident in Study

2, which showed that i-deals evaluations of distributive justice are most positive

for organizations with high procedural justice climate but low organizational

median i-deals. These results imply that organizational median i-deals might

Overall Discussion and Conclusion 149

have different effects on diverse outcomes. It might be that merely job-related

outcomes are more positively affected than outcomes related to the social

context in which i-deals operate. In sum, this dissertation shows that

organizational median i-deals are a complex construct highly relevant for i-

deals research.

Second, as their idiosyncratic nature is a defining feature of i-deals, they are

different for each employee per definition (Rousseau, 2005). This fact makes i-

deals differentiation especially relevant for i-deals research. This dissertation

indeed supports the notion that heterogeneity between employees’ i-deals is an

important perspective in i-deals research. Specifically, I found that i-deals

differentiation can both be non-significant and positive for organizational

climate and performance (Study 2), depending on the procedural justice climate

and the median level of i-deals in an organization. This finding is in line with

LMX research, which shows that providing employees in collectives with

different levels of resources may result in both positive and negative

evaluations and reactions, depending on context factors (e.g., Erdogan & Bauer,

2010). Furthermore, and in accordance with propositions by Liao et al. (2016),

this dissertation suggest that i-deals differentiation is a construct highly relevant

to i-deals research on the collective level. This dissertation therefore opens up a

new area of interesting research questions regarding the influence of i-deals

differentiation on collective processes and outcomes from a group and

organizational perspective.

Furthermore, Study 2 of this dissertation implies that organizational median i-

deals and i-deals differentiation are two aspects of the same construct and

should not be examined in separation. It is an important implication for i-deals

theorizing and research on the team, unit and organizational level that both

constructs are intertwined and should be studied in combination by studying

their combined effect (as in Study 2) or at least by considering the other

construct as control variable (as in Study 1 and 3).

150 Overall Discussion and Conclusion

5.2.1.3 Explanatory mechanisms on the organizational level

The current dissertation further adds to i-deals theory by theorizing on

explanatory mechanisms on the organizational level. So far, the social exchange

perspective is dominating the majority of i-deals research. This predominance

points out that the explanatory framework used in i-deals research should be

broadened by investigating other potential mechanisms (Liao et al., 2016). This

dissertation aimed at examining potential explanatory mechanisms from an

organizational perspective. The results imply that theories focusing on

collective processes gain importance at the collective level.

Study 1 shows that social exchange-based mechanisms, which are most often

applied to i-deals theory, can also be useful at the organizational level.

However, results imply that social exchange climates in organizations are not

as positively affected by i-deals as social exchange relationships between i-

dealer and organization, which were in the focus of i-deals research so far.

Specifically, while a medium level of i-deals in an organization seems to cause

a social exchange climate, too much i-deals in an organization seem to create an

economic exchange climate. This is in line with suggestions that too many i-

deals might hamper the organizational climate (e.g., Rousseau, 2005).

Furthermore, Study 1 applies contagion theory, which was already used by Bal

and Boehm (2017) for i-deals research at the unit level, as well as social learning

and social comparison theory to argue that effects of i-deals spread across

employees and hence cause collective attitudes. Social comparison theory

(Festinger, 1954) was proposed as useful perspective to shed light on the effects

of i-deals in the social context of organizations, where coworkers compare each

other’s working relationships (Liao et al., 2016). Similar to other studies focusing

on i-deals in a group context, Study 1 indicates that social comparison theory is

a promising perspective to study and explain the functioning of i-deals in an

organizational context. Akin, Study 2, applied social comparison in

combination with justice theories, which have so far mainly used in individual-

level i-deals research. However, especially at the team, unit and organizational

Overall Discussion and Conclusion 151

level, these perspectives seem promising as is cannot be neglected that

employees compare their own work arrangements with those of others,

especially because i-deals are different for every employee regarding scope and

content (Rousseau, 2005). Study 1 furthermore applies social identity theory, as

Vidyarthi et al. (2016) have done, on the organizational level, to show that i-

deals operate depending on the social context they are embedded in.

In addition, Study 3 shows based on signaling theory that HRM and i-deals

commonly influence the organizational climate. Although i-deals tend to be

created at the individual level, this research based on signaling theory shows

that i-deals influence all employees in an organization, just as HR practices do.

Thus, theories from HR literature, such as signaling theory but also for example

resource-based view stating that employees can be a competitive advantage for

organizations (Barney, 1991), might lead to valuable insights applied to i-deals

on the organizational level (Kroon et al., 2016).

In sum, this dissertation builds on theories already used in i-deals literature and

applies them to the organizational level. In addition, this dissertation uses

completely new theoretical arguments for i-deals research, as for example social

learning theory (Study 1) and signal consistency (Study 3). Therefore, this

dissertation follows calls for more and better theorizing in i-deals research (e.g.,

Conway & Coyle-Shapiro, 2016) and hopefully functions as inspiration for

future work. The findings imply that some theoretical mechanisms already

applied to the individual level are also relevant for the team and organizational

context, such as social exchange perspective. However, these mechanisms

might function differently on higher levels and new explanatory mechanism

gain importance, which focus on collective processes.

5.2.2 I-Deals and TFL Theory

This dissertation contributes by integrating i-deals and TFL theory. I-deals are

created in the leader-follower relationship (e.g., Rousseau, 2005). Thus, to

understand the functioning of i-deals in the workplace, it is essential to study

152 Overall Discussion and Conclusion

the role of leadership behavior. However, leadership has received relatively few

research interest in i-deals literature to date. Nevertheless, or perhaps because

of that, researchers have called for more research on the role of the direct leader

in regards to the negotiation, implementation and maintenance of i-deals (e.g.,

Liao et al., 2016). Although often assumed in initial studies on i-deals (e.g.,

Hornung et al., 2011), the creation and implementation of i-deals is not restricted

to the dyadic relationship between i-dealer and line manager. A variety of

parties, such as coworkers, plays a role, when i-deals are seen from a social

perspective (e.g., Greenberg et al., 2004; Rousseau, 2005; Rousseau et al., 2006).

Thus, it seems evident that an emphasis on leadership behavior targeting the

relationship to individual employees cannot be sufficient to shape the

functioning of i-deals in the organizational context. On the contrary, manager

also need to be attentive to and serve the needs of the i-dealer’s coworkers, the

whole team and the organization (Greenberg et al., 2004). While prior research

has focused primarily on LMX and individual-focused leadership, such as

individual consideration (e.g., Anand et al., 2010; Hornung et al., 2010a;

Hornung et al., 2010b; Liao et al., 2017; Rosen et al., 2013), the current

dissertation reinforces and expands the focus on leadership in i-deals literature.

While i-deals are a construct focusing on the individual, calls have been raised

that i-deals are embedded in a social context, which should not be neglected

(e.g., Liao et al., 2016). This dissertation follows this call by integrating i-deals

with TFL theory, which assumes a dual-level effect of leadership, highlighting

different effects of leader behavior directed towards the collective and the

individual (Wang & Howell, 2010). Study 1 indeed shows that the individual-

as well as the collective-focused leadership climate in an organization are

essential in making the effect of i-deals on organizations as beneficial as

possible. So far, i-deals literature has assumed that especially individual-

focused leadership is important for the negotiation and implementation of i-

deals (e.g., Rousseau, 2005). This dissertation shows that the focus on leadership

and i-deals has to be broadened, as both the individual- and the collective-

focused leadership climate shape the effect of i-deals on organizational

Overall Discussion and Conclusion 153

performance. While prior literature has already suggested to include TFL in i-

deals research, researchers have mainly focused on individual consideration

and intellectual inspiration, both leadership behaviors directed at individual

employees (e.g., Liao et al., 2016; Rousseau, 2005). In sum, this dissertation

shows that in i-deals literature, the collective level plays a major role and

accordingly, leadership addressing a collective identity seems to be essential to

understand the functioning of i-deals in the workplace.

5.2.3 I-Deals and Justice Theory

This dissertation is a further step in bridging literature on idiosyncratic work

arrangements and justice. Study 2 identifies boundary conditions for the

formation of justice perceptions and thereby also introduces organizational

justice climate as boundary condition for the i-deals – performance relationship

on the organizational level. Employees’ justice perceptions are one of the most

important and prominently discussed topics in i-deals research (e.g., Greenberg

et al., 2004; Rousseau, 2001). I-deals are defined as being different regarding

content and scope from the employment conditions of an i-dealer’s coworkers

(Rousseau, 2005). Thus, i-deals have the potential to cause perceived injustice

(Rousseau, 2005). Distributive but also procedural, interpersonal and

informational justice have been discussed as basis on which employees evaluate

i-deals (Greenberg et al., 2004). Much has been written and theorized about i-

deals and justice (e.g., Greenberg et al., 2004; Rousseau et al., 2006). Liao et al

(2016) suggest that collective justice climate can function first, as a mediator and

second, as a moderator for the i-deals – performance relationship. Initial

research by Marescaux and De Winne (2016) and Liao et al. (2017) supports that

distributive and procedural justice perceptions are influenced by i-deals.

Furthermore, Marescaux and De Winne (2016) suggest that especially

procedural justice might be able to buffer potential negative effects of i-deals on

distributive justice perceptions. Scholars highlight the importance of justice in

managing i-deals (Greenberg et al., 2004). Liao et al (2016) recommend for future

research to investigate how it can be prevented for example trough

154 Overall Discussion and Conclusion

transparency that i-deals lead to coworkers’ perceptions of inequity and thereby

jeopardizing their own legitimacy. Nevertheless, surprisingly few research

exists on that topic (e.g., Conway & Coyle-Shapiro, 2016; Marescaux & De

Winne, 2016). This dissertation contributes to the integration of i-deals and

justice literature by suggesting that i-deals may be associated with employee

distributive justice perceptions at the collective level. Indeed, i-deals

differentiation is related to distributive justice climate to a greater or lesser

degree according to the procedural justice climate and the amount of i-deals

granted in an organization. The results of this dissertation show that

organizational justice climate can both be a context condition shaping reaction

to i-deals and also a consequence of how i-deals are managed in an organization

(Study 2). The results further support that procedural justice is a prerequisite to

beneficial i-deals (Greenberg, 1987). Furthermore, the results of Study 2 are in

line with Hornung (2018, p. 267) who suggests “the social-psychological

importance of procedural over distributive justice” in i-deals theory.

5.2.4 I-Deals and HRM Literature

Literature streams on HRM and i-deals are strongly related fields and much has

been written about the relation between i-deals and HRM (e.g., Kroon et al.,

2016; Rousseau, 2005). I-deals literature suggests that i-deals are highly related

to organizational HR practices or might even be a part of the HR strategy

(Rousseau, 2005). Kroon et al. (2016) argue that employees are becoming more

important in constructing HRM in the modern world of work and suggest that

more attention is needed to how employees contribute to HRM by negotiating

and closing i-deals. Rousseau (2005) summarizes three options, how employers

might allocate resources to employees: first, general HR practices for all

employees, second, special practices and resources for high-status employees or

third, individually bargained deals. I-deals thereby can be a substitute or

supplement to more standardized HR practices, whereby the second option is

highlighted more in the i-deals literature (Kroon et al., 2016; Rousseau, 2005).

Although scholars suggest an important relation, only initial research exists

Overall Discussion and Conclusion 155

linking i-deals and HRM (Bayazit & Bayazit, 2017). Study 3 of this dissertation

builds on this initial research and further explores the meaningful interplay

between i-deals and HRM. Study 3 of this dissertation supports Rousseau’s

(2005) assumption that i-deals should be aligned to HR practices and that

employees’ proactive behavior is increasingly important in designing an

organization’s HR practices. The role of i-deals might indeed lie in making HR

practices even more suitable to fit employees’ needs (Rousseau, 2005). Much has

been theorized about the FWAs - performance relationship in extant literature

(e.g., De Menezes & Kelliher, 2011) and indeed, this dissertation (Study 3)

implies that i-deals theory has much to add to HR literature in this regard. I-

deals seem to be one possibility to enable positive effects of FWAs for

organizations. This dissertation therefore supports literature that has already

suggested a strong link between i-deals and HRM (e.g., Bayazit & Bayazit, 2017,

Kroon et al., 2016; Rousseau, 2005) and implies that the interplay between i-

deals and HRM might be relevant to clarify the link between both constructs

and performance. Both HR practices and i-deals are intended to attract, retain

and motivate employees. However, it may well be that both will only contribute

to the success of the company if they are precisely matched. This means for

research and theory on i-deals as well as on HRM that there lies indeed high

potential in combining both fields.

156 Overall Discussion and Conclusion

5.3 Practical Implications and Recommendation

Despite the widely assumed superiority of standardized HR practices for all

employees in organizations, differential treatment of employees has inevitably

become an essential part of today’s managerial practice (Rousseau, 2005).

Although research on i-deals has flourished during the last years (e.g., Bal &

Boehm, 2017), research seems to be a step behind practice regarding i-deals. As

Conway and Coyle-Shapiro (2016) pointed out, researchers are not yet “in a

position to prescribe i-deals to organizations” (p. 62). Many organizations still

shy away from granting i-deals to their staff. I-deals seem to be costly by taking

time and effort during the negotiation process (Kroon et al., 2016) and

organizations and managers fear negative reactions of coworkers (e.g.,

Greenberg et al., 2004). In addition, there are some examples of companies that

have failed with the introduction of flexible and individualized work.

Organizations such as Yahoo and IBM, whose experiences with customized

work arrangements have been presented in the introduction of this dissertation,

have made headlines with their decisions to abolish flexibility policies such as

the possibility to work from home (Kossek et al., 2015). These experiences show

that flexibility and individualization were causing problems such as

undermining collaboration among employees, due to a missing fit between

flexibility policies and the existing corporate culture (Kossek et al., 2015). Other

companies might feel discouraged by those prominent examples in the press. In

addition, managers are overstrained with i-deals as they have little experience

negotiating and maintaining individualized working arrangements (Greenberg

et al., 2004). As this dissertation has aimed at examining the i-deals –

performance relationship from an organizational perspective, this dissertation

contributes to managerial practice. All three studies of this dissertation have

already provided practical implications based on the study’s findings.

Incorporating those insights, I develop propositions, which describe and

summarize how to successfully negotiate, implement and maintain i-deals in

organizations. The aim is to provide organizations and agents involved in i-

deals with hands-on suggestions to make the use of i-deals less frightening.

Overall Discussion and Conclusion 157

As i-deals are increasingly requested and used in the contemporary world of

work, HR managers, line managers, employees, and co-workers are likely to

find themselves involved in i-deals. Involvement might either be directly, as

participants, indirectly, as third parties who are influenced by the deals or most

likely both (Greenberg et al., 2004). The results of this dissertation suggest that

i-deals are doomed to fail if the interests of all stakeholders are not respected

and balanced in their negotiation and implementation. In addition, all these

stakeholders have to contribute with their behavior to make i-deals work. In the

following, suggestions are given to all these interest groups.

5.3.1 Employer

In the context of current societal trends highlighting individualization at the

workplace, employers might feel that allowing employees to negotiate i-deals

is an option to attract a skilled, motivated, and diverse work force. However, i-

deals should not be included in an organization’s HR strategy in a rush. To

make sure that i-deals actually have the desired effects on the company, the

employer must consider a few aspects in advance.

5.3.1.1 Lever 1: Ensure fit to the organization

This dissertation shows that i-deals are mainly beneficial for the organization

and their employees, when the use of i-deals fits to the organization and is in

line with the organizational culture. Before employers decide to use i-deals as a

means to make their organization more attractive to the modern workforce and

thus instruct their HRM and management team to negotiate i-deals with

employees in the future, employers should make sure that i-deals fit to the

company’s culture and HR system (Study 1, 2 and 3). Companies could for

example conduct an employee survey or workshops with representatives of

each interest group to make sure that i-deals fit the existing corporate culture

and to find out whether i-deals are desired by everyone in the company. If

employees, line managers, or HR managers have reservations about i-deals and

158 Overall Discussion and Conclusion

do not want to use them, it may be better to invest in culture development in

advance.

5.3.1.2 Lever 2: Involve all stakeholders

This dissertation supports suggestion of Rousseau (2005) and Greenberg et al.

(2004) that several stakeholders have to be taken into account, when i-deals are

used in organizations. Key stakeholders are the employer himself or the

organization, supervisors, HR managers, i-dealers and their coworkers. All

three studies included in this dissertation imply that organizations can indeed

use i-deals as a means to increase organizational performance. However, this is

only the case if i-deals are managed carefully by all parties involved. Thus, the

key stakeholders should be included in the process of implementing i-deals in

an organization. As dicussed above, companies should first consider whether

employees, line managers and HR managers are ready and willing to use i-

deals. Second, i-deals must match the more standardized HR practices offered

by the organization (Study 3). Third, managers need to be able to build a strong

leadership and justice climate in an organization (Study 1 and 2) and fourth,

employees must be willing to ask and negotiate for i-deals in a transparent

process and to compensate coworkers for potential disadvantages of the deal

(Study 1 and 2). Thus, all three parties should constantly be accompanied and

trained in the negotiation, implementation and maintenance of i-deals by the

employer. In addition, the employer is reliant on regular feedback by all three

parties on how well the i-deals are implemented in an organization. If not

already existing, the employer should implement regular feedback processes in

order to obtain feedback from employees, HR managers and line managers. In

the following, I discuss in detail levers for successful i-deals for each interest

group (i.e., HR managers, line managers and employees).

5.3.2 HR Managers

HRM is changing – HR practices are increasingly including flexible working

options (e.g., Bayazit & Bayazit, 2016). However, in a modern world of work,

Overall Discussion and Conclusion 159

HR practices are not just designed top-down, but also bottom-up (Kroon et al.,

2016). To meet a variety of different employee needs, i-deals are a possibility to

make already flexible HR practices (such as opportunities for home office) even

more accessible to employees, as each worker is able to use those practice

according to own needs (e.g., Hornung et al., 2008). For example, some

employees might not want to work from home at all, some might want to work

from home on special days (e.g., to care for sick children), and again others

might want to make use of home office on a regular basis between one and five

days per week. Although i-deals are most often negotiated in the leader-

follower relationship (e.g., Rousseau, 2005), HR managers have a huge

responsibility in guiding this process.

5.3.2.1 Lever 1: Ensure fit to HR practices

Nowadays, various organizations are implementing flexible working

arrangement in their HRM (e.g., Lewis, 2003; Montano et al., 2014; Quick et al.,

1992; Rudolph & Baltes, 2017). This dissertation shows that this implementation

should not be done hastily. I-deals will be of no benefit for the organization, if

they do not match and complement the existing HR practices in the organization

(Study 3). If i-deals complement an HR system, which is oriented towards

flexibility for employees, the company can profit from i-deals, otherwise, no

impact on the organizational performance can be expected (Study 3). Therefore,

HR managers need to ensure that i-deals are in line with existing HR practices

or, if necessary, adjust them before introducing i-deals to the organization.

5.3.2.2 Lever 2: Involve employees and managers

Using a top-down approach to introduce flexibility and individualization in

organizations seems to be no promising approach. While introducing flexibility

into HR practices does give employees and line managers the possibility to

negotiate i-deals, it does not guarantee that they do so. In contrast, Study 3 of

this dissertation implies that HR managers need to make sure that all parties are

ready for i-deals and open to negotiate and use i-deals. As a first step, HR

160 Overall Discussion and Conclusion

manager should find out about employee needs, for example in the context of

an employee survey. Second, HR managers need to educate line managers and

employees that flexibility and customization is supported in the organization

(Study 3). It is the task of HR managers to promote a lively dialogue and lived

practice concerning i-deals in their organization. This is essential because the

communication between employees and their direct supervisors is the most

important place, at which i-deals are negotiated. By setting a reliable framework

for open and honest communication, employees can be encouraged to ask for

flexibility and line managers are encouraged to offer i-deals. This might foster

an open organizational culture, where employees have the courage to express

their needs and ask for an i-deal. In addition, employees might also talk with

their coworkers about their negotiations or the whole team might become part

of the negotiation process, enhancing transparency between employees about

their deals and thereby increase perceived fairness.

5.3.2.3 Lever 3: Implement leadership training

Furthermore, line managers need to be trained in areas such as individual- and

collective-focused leadership (Study 1) and procedural justice rules like voice

and transparency (Study 2). Especially TFL, which includes both individual-

and collective-focused leadership behavior, can be assessed in a relatively

reliable way by asking employees for their perceptions on their leader’s

behavior (Goodstein & Lanyon, 1999). In the aftermath and based on the the

results of the employee survey, HR managers and organizations can gauge

individual and collective focused leadership skills in the recruiting and

promotion process of leaders. In addition, organizations could conduct

systematic leadership trainings based on individual- and collective-focused

leadership behavior to foster a strong leadership climate, which makes i-deals

beneficial for the organization. Akin to TFL, a procedural justice climate can be

strengthened through leadership trainings. Aspects like consistency in

treatment and giving employees voice in decision-making processes can be

Overall Discussion and Conclusion 161

trained and enhances employees’ perceptions of the organizational justice

climate (Skarlicki & Latham, 1997).

5.3.2.4 Lever 4: Guide the negotiation process

Finally, HR managers could become involved in the i-deals negotiation process

with employees who request i-deals, their line managers and in the best case

also their coworkers who will be affected by the deal. It is the task of HR

managers that all parties follow the identified rules for successful i-deals

implementation, such as transparency. Knowledgeable people should be

established who help employees and their supervisors to coordinate their

different interests and advise all interest groups during the negotiation process.

Those people must be visible in the organization so that employees and

managers know whom to turn to if they need help with negotiating, designing

and implementing i-deals. Thereby, HR managers can enhance the chance that

i-deals are successfully negotiated, implemented and maintained, without

negative but positive influences on all parties and thus on the organization.

5.3.3 Line Managers

Line managers have a great responsibility in negotiating i-deals in a fair and

responsible way (e.g., Rousseau, 2005). However, this dissertation implies that

leaders also play a critical role in implementing and maintaining i-deals (Study

1 and 2). Managers need to recognize that their behavior influences, if

employees ask for i-deals, if i-deals are accepted by coworkers, if i-deals are

perceived as fair and how i-deals influence employees’ collective attitudes,

behavior and consequently organizational performance. This dissertation

however indicates that it is no easy task to manage i-deals in a beneficial way,

because managers need to consider a variety of points in creating successful and

long-lasting i-deals.

162 Overall Discussion and Conclusion

5.3.3.1 Lever 1: Balance individual- and collective-focused leadership

This dissertation suggests that the leadership style applied is crucial for

successfully maintaining i-deals. Study 1 shows that low individual-focused

leadership only hinders positive outcomes of i-deals, while low collective-

focused leadership causes even negative effects when organizational median i-

deals are high. Leaders need to recognize that their leadership behavior,

specifically low focus on collective-focused leadership could have detrimental

effects on coworker relations and organizational performance, when i-deals are

used in an organization. Managers need to be self-critical, reflect on their

leadership style and promote both collective- and individual-focused

leadership, to make outcomes of i-deals as beneficial as possible for everyone

involved. Managers could also ask their team for feedback regarding their

leadership style, in order to be able to adapt their behavior accordingly.

Showing individual- and collective-focused leadership behavior means

empowering and developing individual employees while at the same time

emphasizing and developing group goals, common values and beliefs (Wang &

Howell, 2010).

5.3.3.2 Lever 2: Be procedurally fair

In accordance with previous suggestions (e.g., Greenberg et al., 2004; Hornung,

2018) Study 2 shows that rules of procedural justice are key to a successful use

of i-deals in organizations. For several reasons, line managers often resign from

being open and transparent about their decisions on i-deals. Some line

managers do not want to justify themselves in front of their employees or are

afraid of causing a flood of other employees requesting i-deals (Garg & Fulmer,

2017). However, by being open and transparent about to whom, when and why

i-deals are granted, managers can reduce negative and enhance positive

reactions to i-deals (Study 2; Greenberg et al., 2004). Coworkers’ reactions to i-

deals are likely to differ depending on the reasons why an i-deal was granted –

as reward for high professional achievements, as reaction to specific personal

needs or as favor based on a strong supervisor-employee relationship (Liao et

Overall Discussion and Conclusion 163

al., 2016). If employees do not receive any information, they will speculate about

the reasons for the deal. This will quickly lead to mistrust and dissatisfaction

between coworkers (Greenberg et al., 2004). Attributions employees make about

others’ i-deals can have implications for the organizational climate and create

social costs (Liao et al., 2016; Study 2). In the best case, coworkers are even

included in the i-deal negotiation process. As suggested by Study 2, line

managers should be transparent and grant voice to everybody, who is involved

and affected by the deal (Greenberg et al., 2004). The i-deal is more likely to be

perceived as fair if the i-dealer and his or her coworkers decide together,

especially when interdependence is high between workers, which is often the

case in organizations (e.g., Greenberg et al., 2004; Rousseau, 2005). Maintaining

openness about i-deals is an opportunity for leaders to enhance procedural

justice (Greenberg, 1986). Furthermore, joint decisions making processes

represent a solid basis for finding solutions for any complications and conflicts

the deal creates. As Study 2 implies, all employees should have the chance to

receive an i-deal, if they need one (Study 2). This impression might be enhanced

when transparency and voice are guiding the negotiation process (Liao et al.,

2016). Finally, if managers feel not at ease with communicating an i-deal to the

i-dealer’s coworkers, it might be a strong sign that coworkers will find the deal

suspect. In this case, it might be better not to grant the deal at all than to keep it

secret. The chances are high that coworkers will find about the deal and then

regaining their trust will be difficult (e.g., Greenberg et al., 2004).

5.3.3.3 Lever 3: Monitor the amount of i-deals

Finally, this dissertation implies that manager should have an eye on the

amount of i-deals they are granting. Study 1 implies that although

organizational median i-deals have unlimited positive effects on collective job

satisfaction, they are only positive for collective OCBI to a certain point and then

the effect becomes negative again. Furthermore, Study 2 implies that the

relationship between i-deals differentiation and the distributive justice climate

in an organization is most positive for high procedural justice climate but low

164 Overall Discussion and Conclusion

organizational median i-deals. Therefore, these studies show in accordance with

other i-deals literature (e.g., Greenberg et al., 2004) that too many i-deals are not

the perfect solution to increase performance. Leaders should know very well

how many i-deals they are granting in their teams. Line managers need to be

aware that granting every employee an i-deal is not automatically perceived as

fair (Study 2). Furthermore, if too many i-deals are approved in an organization,

employees might take i-deals for granted and feel not pressured to reciprocate

to coworkers and organization (Study 1). Managers should therefore only grant

i-deals if necessary. Every deal should have a good reason – which is again

related to the rule of procedural justice dicusses in Section 5.3.3.2. If it is

important for managers to be able to justify every deal in front of themselves,

the team, and the organization through its usefulness to all parties, there should

not be too many deals in an organization.

5.3.4 Employees

Employees are probably the most important party involved in the process of

negotiating, implementing and maintaining an i-deal. In most cases, i-deals are

initiated by employees and not by other parties such as HR managers or line

managers (Rousseau, 2005). Furthermore, employees can take on the role of the

i-dealer, the role of the i-dealer’s coworker or most likely both in the modern

world of work.

5.3.4.1 Lever 1: Ask for i-deals

I-deal negotiations are initiated in most cases by employees (Rousseau, 2005).

Accordingly, individualization of work is rarely initiated by managers. Thus, it

is important that employees voice their wishes for flexibility. Employees who

express their needs, life and career planning to their leaders are relatively likely

to get the opportunity to include them in their work in one way or another. The

current dissertation implies that employees should indeed have the courage to

ask for i-deals, as they can be confident that the deal will also benefit the

organization (Study 1, 2 and 3). These results strengthen the bargaining

Overall Discussion and Conclusion 165

arguments of the employees and they can feel confident to ask for i-deals. If

those arguments, that i-deals have the potential to be beneficial for all parties

and even for organizational performance, are presented in the negotiation

process, managers and employers might be more inclined to grant i-deals.

5.3.4.2 Lever 2: Avoid negative effects for coworkers

The results of this dissertation also provide some clues as to how employees can

increase the certainty that the process of negotiation and implementation of the

i-deal runs positively. The results imply (Study 2) that employees should be

open about their requests for i-deals in front of their coworkers to enhance

transparency about i-deals in organizations (Study 2). Furthermore, tactics to

compensate coworkers for potential negative effect caused by an i-deal might

be promising to prevent negative effects for relations to coworkers and

organizations (Study 1). If such behavior is displayed, coworkers and the

organization might be more likely willing to support and maintain the i-deals

in the long term, as organizational performance is enhanced.

5.4 Limitations and Directions for Future Research

The studies of this dissertation have numerous methodological strengths. The

studies are based on a valuable data base. First, not many studies exist on the

organizational level of analysis as data gathering is complex and time

consuming. To my knowledge, the studies presented in this dissertation are the

initial organizational-level studies in i-deals research (e.g., Liao et al., 2016).

Second, the studies are based on data from 83 to 96 organizations, representing

impressive and relatively large samples for studies on the organizational level.

Third, data from different rater groups were included in each study (i.e.,

different groups of employees, HR managers and top-managers). Multi-source

data minimizes the influence of common source bias and enhanced the validity

of the study design, increases my confidence in the results. Furthermore, studies

including multi-source data are not common in i-deals research (Conway &

166 Overall Discussion and Conclusion

Coyle-Shapiro, 2016). These strengths notwithstanding, the studies of this

dissertation show some common limitations.

5.4.1 Measurement of I-Deals

Rosen et al.’s (2013) measure to assess i-deals was used for all three studies.

While they addressed limitations of previous measures with their scale, still

limitations remain (Liao et al., 2016). For example, only five out of sixteen items

include that i-deals are special arrangements which should be negotiated.

Second, some items refer to the basis upon which i-deals are negotiated

including employees’ needs, unique skills or contributions, while others do not.

To date, no better option exists to assess i-deals (Liao et al., 2016), which is why

this measure was used. However, limitations of this measure are also limitations

of this dissertation.

The current dissertation has further measured i-deals as a uni-dimensional

construct in all three studies. Although i-deals have mainly been examined

separated by content, Liao et al. (2016) propose that i-deals can be treated as a

single theoretical concept that represents the extent to which employees have

negotiated customized work arrangements. This approach has already been

applied by several i-deals studies (e.g., Bal & Boehm, 2017; Ng & Feldman,

2010). However, specific content dimensions (e.g., flexibility and task i-deals) of

an aggregated multidimensional construct are not necessarily highly correlated

with each other, meaning that employees who receive a flexibility i-deal may

not necessarily receive a task i-deal (Liao et al., 2016). Indeed, research showed

that depending on the content, i-deals might have different effects on

organizations (e.g., Rosen et al., 2013). In sum, there are good reasons to

construe i-deals as a multidimensional construct just as there are good reasons

to treat different forms of i-deals as distinct variables (Liao et al., 2016). As Liao

et al. (2016, p. 13) state, “[t]he appropriateness of each approach depends on the

nature of the research question”. In a first approach to examine i-deals on the

organizational level and to answer the question if i-deals have an impact on

organizational performance, I chose to treat i-deals as one general concept. This

Overall Discussion and Conclusion 167

is in line with initial multilevel studies in i-deals reseach, which also included

the collective level and used i-deals as an overall construct including several

sub-dimensions (Bal & Boehm, 2017; Liao et al., 2017; Vidyarthi et al., 2016).

Future research should however differentiate between different forms of i-deals

also on the organizational level of analysis, to clarify which forms of i-deals have

impact on what kind of performance indicators (e.g., financial performance,

employee turnover, company growth). Developmental i-deals have shown to

be stronger related to employees’ effort to contribute to the organization than

flexibility i-deals (Liao et al., 2016). Furthermore, developmental i-deals often

involve scarce resources compared to flexibility i-deals and therefore more

negatively impact justice perceptions (Liao et al., 2016; Rousseau, 2005). Varying

effects of different forms of i-deals might also be noticeable on organizational

level regarding climate and performance. Furthermore, it might be that it

depends on the organizational industry, organizational size or culture which

specific i-deals are beneficial or detrimental to collective processes and

ultimately to organizational performance. Google, for example, tries to avoid

location flexibility, however, fosters unequal pay between employees

depending on their contribution to the organization, to remain true to their

organizational values and corporate culture (Bock, 2015; Quartz, 2016). Future

research should clarify if such strategic decisions indeed have an impact on the

organization’s performance and if effects of different forms of i-deals are

dependent on the organizational culture.

The current dissertation further excluded financial i-deals following findings of

Rosen et al. (2013) that flexibility as well as task and work responsibilities i-deals

are more common than financial i-deals. However, Kroon et al. (2016) suggest

that financial i-deals might have different effects on organizational relevant

outcomes such as turnover rates than other forms of i-deals. Thus, when future

research aims at comparing effects of different forms of i-deals on organizations,

financial i-deals should in any case be included.

Furthermore, as other i-deals research (e.g., Liao et al., 2017), I did not make an

empirical distinction between participating in the i-deal negotiation process and

168 Overall Discussion and Conclusion

obtaining an i-deal. I differentiated between employees who received an i-deal

and those who did not receive an i-deal. In fact, there is however a difference

between employees, who have not asked for an i-deal, employees who have

asked for but not received an i-deal and employees who have asked for and

received an i-deal. Especially those workers who have asked for an i-deal but

not received one, might react especially negative to others’ i-deals.

Finally, this dissertation focused on i-deals differentiation regarding the scope

of i-deals in an organization. However, researchers have also proposed the

importance of variability in regards to i-deals content between employees (Liao

et al., 2016). In addition to organizational median i-deals and i-deals

differentiation regarding scope, future research should also measure and

examine i-deals differentiation regarding i-deals content. Teams, units and

organizations provide suitable contexts to compare effects of all three

conceptualizations of i-deals (i.e., organizational median i-deals, i-deals

differentiation regarding scope and content) and to examine their combined

effects for example in a three-way interaction. Furthermore, it is an interesting

question for future research whether one of these constructs is more salient to

employees and therefore most likely influences collective attitudes, behavior

and culture in organizations (Liao et al., 2016).

5.4.2 Level of Analysis

This dissertation focused on the organizational level of analysis to address the

question of whether i-deals are beneficial to the employer. However, the team

and unit level were neglected. Furthermore, theorizing is necessary on whether

and how i-deals function differently on the team, unit and organizational level.

In addition, i-deals research could not just explore if i-deals have different

effects on individuals and collectives, but also, if difference exist in outcomes

for teams, units and organizations. It is also a question for future i-deals

research, if effects on different collective levels are distinguishable in the

modern world of work. Assumptions of static team boundaries, with

employees’ work being restricted to only one team are increasingly inaccurate

Overall Discussion and Conclusion 169

due to the changing nature of work (Mortensen, 2014). Researchers indeed

suggest, that teams in organizations are increasingly interlinked and

overlapping (e.g., Ancona & Bresman, 2007; Matthews, Whittaker, Moran,

Helsley, & Judge, 2012; O’Leary, Mortensen, & Woolley, 2011). When

employees are members in several teams, i-deals also have an impact on

coworkers in more than one team. It is thus an interesting question for future

research, if i-deals function differently at various collective levels.

Although introducing the organizational level of analysis to i-deals literature,

the current dissertation also focuses on one level of analysis as most other

studies did (as exception, see Bal & Boehm, 2017; Liao et al., 2017; Vidyarthi et

al., 2016). However, cross-level relationships are assumed to be highly

important to understand how i-deals function in an organizational context (Bal

& Boehm, 2017; Liao et al., 2016). For example, as the results of this dissertation

imply, group and organization-level characteristics are relevant contextual

factors that might also have cross-level effects on the functioning of i-deals at

the individual level. Future research might want to address the gap in i-deals

research that cross-level phenomena have not received much attention and also

include the organizational level in multilevel models on i-deals.

5.4.3 Study Design

All three studies of the current dissertation rely on cross-sectional data. This

limits the quality of the results in that no cause-effect relationship can be

inferred from the studies. Liao et al. (2016, p. 24) claim that “the most important

methodological shift in future i-deals research is the adoption of longitudinal

designs". They propose that i-deals themselves and their effects propbably

evolve over time (Liao et al., 2016). Furthermore, the benefits and drawbacks for

the different parties (i.e., i-dealer, coworker, team, leader, and organization)

might be realized at different points in time (Liao et al., 2016). For example,

perceptions of an i-deal’s justice might change over time, especially when

coworker also receive i-deals. Future insights could be created by applying a

170 Overall Discussion and Conclusion

longitudinal design to explore how effects of i-deals spread throughout the

organization and change with time.

Furthermore, all three studies are based on a sample of German companies.

Although a meta-analysis of Liao et al. (2016) shows that the correlations

between i-deals and other variables are relatively robust across Western and

Eastern cultures, results reveal also several differences. Rousseau (2005) for

example states that it might be much easier to negotiate for individual work

arrangements in the USA than in Germany due to more flexible human resource

practices. Future research should more closely investigate differences between

i-deals in different cultural background and test potential effects on

organizational performance. As Rousseau (2005) proposes, it might be easier to

negotiate i-deals in other cultures than in the German society, due to low

acceptance of negotiability. This might lead to higher median i-deals in

organizations, changing reactions of employees and subsequently effects for

organizational performance.

5.4.4 Additional Directions for Future Research

All research questions posed in this dissertation represent prominent and major

gaps in i-deals literature (e.g., Bal & Rousseau, 2016; Conway & Coyle-Shapiro;

Kroon et al., 2016; Liao et al., 2016). However, this dissertation has only taken a

first step in the direction to answer these questions exhaustibly. Thus, the three

studies still leave many questions open, or the results even raise interesting new

questions.

First, examining leadership and organizational justice climate as moderators in

the i-deals – performance relationship represents just a first step in studying

potential relevant context factors from an organizational perspective. As this

dissertation shows that the effects of i-deals are strongly dependent on context

factors, it becomes highly relevant to gain a holistic picture of potential

influencing factors. For example, organizational characteristics such as industry

and size might also moderate the relationship between i-deals and

Overall Discussion and Conclusion 171

organizational performance (Liao et al., 2016). Furthermore, leadership and

organizational justice themselves provide options for future research. Future

studies interested in i-deals and leadership could explore sub-dimension of TFL

separately (i.e., articulating a vision, providing an appropriate model, fostering

the acceptance of group norms, high performance expectations, individualized

support, intellectual stimulation; Podsakoff et al., 1996). As research shows, sub

dimension of TFL have considerably different relationships to employee

attitudes (Podsakoff et al., 1990). Furthermore, modern forms of leadership

might be highly relevant for future research on i-deals. Empowering or shared

leadership might enhance employee responsibility taking for their work, and

foster i-deals negotiation and implementation together in a team. Empowering

leadership “encourages initiative, self-responsibility, self-confidence, self-goal

setting, positive opportunity thinking, and self-problem solving” (Sims, Faraj,

& Yun, 2009, p. 151). Because employees are led to discover their own potential

(Sims et al., 2009), empowering leadership might encourage employees to ask

their supervisors for i-deals. Researchers further suggest that shared leadership

in a team fosters group-level caring, characterized by connecting with other

emotionally and helping others to develop and learn (Houghton, Pearce, Manz,

Courtright & Stewart, 2015). It might thus be that in teams with high shared

leadership, employees are encouraged to negotiate for i-deals, the i-deal

negotiation process includes the whole team and i-deals implementation is

supported by all members. Changing team structures including memebrships

in several teams (Mortensen, 2014) in the modern world of work further leads

to the question, how i-deals are negotiated, when employees have several line

managers with different interest, with whom they have to negotiate for the deal.

Furthermore, different aspects of the organizational justice climate need to be

examined in future research. Interpersonal justice and informational justice

(Greenberg et al., 2004) have not yet been examined in i-deals literature.

Nonetheless, it might be that perceptions of i-deals are strongly influenced by

how well employees feel treated and informed during the negotiation and

implementation of others’ i-deals (Greenberg et al., 2004).

172 Overall Discussion and Conclusion

The same applies to the intermediate processes between organizational median

i-deals, i-deals differentiation and organizational performance. Different aspect

of the organizational climate might be interesting for i-deals research, for

example climate for inclusion (Kroon et al., 2016) could be examined in further

research. In addition to organizational climates, a variety of collective processes

such as collaboration between employees become relevant at the collective level

(Liao et al., 2016). Rich possibilities for future research on intermediate

processes on the organizational level of analysis also exist in regards to potential

organizational-level theorizing. As on individual level, mediating mechanisms

might for example vary based on the type of i-deals (Hornung et al., 2014).

Furthermore, consistent with arguments I have raised in my discussion of the

theoretical contributions of this dissertation to i-deals research (Section 5.2.1),

much may be gained by going beyond social exchange theory when explicating

mechanisms by which i-deals are linked to performance on the organizational

level (Liao et al., 2016). Scholars (e.g., Liao et al., 2016; Liao et al., 2017; Vidyarthi

et al., 2016) have suggested that justice, social comparison, and social identity

theory are promising perspective. Theorizing and research based on such

theories focusing on the functioning of i-deals in collectives should be extended

by future research.

Finally, this dissertation implies that i-deals and HR practices in an organization

are strongly intertwined and should not be viewed in isolation. However, many

open questions remain, as for example the trade-off between standardization in

the HR systems and flexibility through i-deals (Kroon et al., 2016). Since HR

strategy increasingly combines standardized and customized employments

arrangements to manage human capital, combining i-deals with HR research

with a different focus than FWAs is highly relevant (Kroon et al., 2016). As Liao

et al. (2016) state, there might be an “ideal ratio of i-deals to standard HR

management practices that maximize firm performance” (p. 23). If this is the

case, future research should explore this ratio in detail. Furthermore, Rousseau

states that the “tension between consistency and flexibility is not a problem to

solve, but a fact to be managed.” (Rousseau, 2005, p. 193). Examining how

Overall Discussion and Conclusion 173

managers could handle i-deals such that everybody receives the flexibility he or

she needs but that enough consistency is established so that the work

environment is still perceived as fair, is another fruitful direction for future i-

deals research.

5.5 Conclusion and Outlook

This dissertation adds to i-deals literature by transferring i-deals research to the

organizational level and by focusing on the theoretically and practically

relevant question of whether i-deals are beneficial for organizations. In sum, the

studies of this dissertation imply that i-deals can have a positive effect on

organizational performance, if i-deals are carefully managed from an HRM,

leadership and organizational justice perspective. This dissertation has a variety

of implications for i-deals research and theorizing on collective level, regarding

important constructs (e.g., median i-deals and i-deals differentiation), and

theories for explanatory mechanisms (e.g., signaling theory, social exchange

theory, social identity theory, justice theories and social comparison theory). I

hope that the findings of this dissertation inspire other scholars to explore i-

deals from a collective perspective. Future research should further consider the

important defining feature of i-deals of being mutually beneficial for employee

and employer and context conditions which enable those positive effects.

Ultimately, I believe that i-deals can have a huge positive potential for

organizations. It is up to HR and line managers to recognize this potential and

turning it into a competitive advantage for the organization.

174 References

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Curriculum Vitae

Anna Franziska Schuler, born August 7, 1990 in Ueberlingen, Germany

EDUCATION

2014 – 2018 University of St.Gallen, St. Gallen, Switzerland

Doctoral Studies in Management (Dr. oec.)

2013 – 2014 Erasmus University Rotterdam, Rotterdam, The

Netherlands

Master of Science in Organizational Psychology

2009 – 2013 University of Konstanz, Konstanz, Germany

Bachelor of Science in Psychology

2001 – 2009 Droste-Hülshoff-Gymnasium, Meersburg, Germany

Abitur (equivalent to high school diploma)

WORK EXPERIENCE

Since 2014 University of St.Gallen, St. Gallen, Switzerland

Research Associate, Institute for Leadership and Human

Resource Management

2012 – 2013 University of Konstanz, Konstanz, Germany

Research Assistant and Tutor, Department for Methodology

2011 – 2012 Center for Creative Leadership (CCL), Brussels, Belgium

Internship in Leadership Training

2010 – 2011 University of Konstanz

Research Assistant and Tutor, Department for Methodology