The relationship between organizational performance and performance ratings of in-role and extra-role behaviors.

Parayitam, Satyanarayana ; Guru-Gharana, Kishor Kumar

INTRODUCTION

Interest in organizational citizenship behaviors (OCBs) or extra-role behaviors has escalated since the publication of Organ and Bateman's (1983) seminal article. Subsequently, considerable research has examined antecedents of OCBs (George & Bettenhausen, 1990; Moorman, 1991; Munene, 1995; Organ & Konovsky, 1989; Podsakoff, Niehoff, MacKenzie & Williams, 1993; Smith, Organ & Near, 1983; Williams & Anderson, 1991; Podsakoff, MacKenzie, Paine & Bachrach, 2000; Shaw, Dinnen, Fang, & Vellella, 2009). While most of the research has addressed antecedents and consequences some researchers have attempted to link OCBs to performance under the assumption that OCBs are functional rather than dysfunctional. Some empirical evidence (Podsakoff, MacKenzie, Moorman & Fetter 1990; MacKenzie, Podsakoff, & Fetter, 1991; Sun, Aryee, & Law, 2007; Farh, Zhong & Organ, 2004) indicates that OCBs are related positively to performance. However, previous research has not examined the effect of organizational performance on performance ratings of in-role and citizenship behaviors. For example, how might the overall performance level of an organization affect how raters judge in-role and extra-role behaviors? If two employees have similar in-role and extra-role behaviors, will the organization's performance affect supervisor's ratings of the employees? Will organizational performance increase or decrease the effect of OCB's on performance ratings? These are the questions the present paper is trying to answer: that is to say, the aim of the paper is to examine the in-role and extra-role behaviors through the lens of organizational performance.

THEORETICAL BACKGROUND AND DEVELOPMENT OF HYPOTHESES

There is evidence that OCBs play a crucial role in promoting the effective functioning of the organization (Smith et al, 1983; Brief & Motowidlo, 1986; George & Bettenhausen 1990, Schnake, 1991, and Borman & Motowidlo 1993). OCBs are "behavior(s) of discretionary nature that are not part of the employee's formal role requirements, but nevertheless promote the effective functioning of the organization" (Organ, 1988: p.4). Five specific categories of these discretionary behaviors (some scholars prefer to call these extra-role behaviors) are: Altruism, Conscientiousness, Sportsmanship, Courtesy, and Civic Virtue. Based on this initial categorization scheme, researchers have sub-divided these OCBs into two categories viz., OCBOs (Organizational citizenship behaviors benefiting the organization) and OCBIs (citizenship behaviors benefiting specific individuals) (Williams & Anderson, 1991). Williams and Anderson (1991) demonstrated that raters distinguish between two types of OCBs as well as in-role behaviors (IRB). The present study focuses on IRBs and OCBs in performance ratings of employees. A simplified model is presented in the Figure 1.

[FIGURE 1 OMITTED]

Existing literature reveals that in addition to objective performance (i.e. in-role productivity) managers take extra-role contributions into account in their ratings of their employees (Avila, 1988; MacKenzie et al, 1991; Orr, Sackett, & Mercer, 1989; Werner, 1994). Since managers define performance more broadly than 'in-role' behavior, OCBs (both OCBOs and OCBIs) are expected to have an impact on performance ratings. Managers take into account extra-role behavior because they believe these behaviors promote organizational effectiveness by contributing to resource transformation, innovativeness, and adaptability (Organ, 1988).

H1a: Overall performance ratings will be significantly related to both in-role behaviors and citizenship behaviors.

Following Werner (1994), and Williams and Anderson (1991), this study separates organizational citizenship behaviors that benefit the organization in general (OCBO's) from those behaviors benefiting specific individuals (OCBI's). Williams and Anderson's (1991) factor analysis showed that raters can distinguish OCBO's, OCBI's, and IRB's from one another. It is likely that supervisors would pay more attention to OCBI's than OCBO's since the former have greater hedonic relevance (Jones & Davis, 1965) for them. Jones and Davis (1965) argue that when an outcome has a greater personal consequence for a person, their evaluations will be more strongly affected than for outcomes with less personal relevance. Thus, OCBI's should affect performance ratings to a greater extent than OCBO's.

H1b: Overall performance ratings will be more highly associated with citizenship behaviors benefiting individuals than to citizenship behaviors benefiting the organization.

How might performance of the organization affect performance ratings supervisors and managers give their employees? While there is no direct empirical research that suggests an answer, prospect theory (Kahneman & Tversky, 1979), attribution theory (Heider, 1958; Jones & Davis, 1965; Kelley, 1967), Meyer and Zucker's (1989) theory of declining organizations, and empirical findings from the appraisal literature provide some guidance. First, we contend that performance of the organization will affect a rater's frame of reference. Evidence from the decision-making literature suggests that decision-makers are affected by whether they are in a gain or loss situation (Huber, Neale & Northcraft, 1987; Kahneman & Tversky, 1979; Marshall, Mowen & Stone, 1995). If a manager's organization's performance is problematic, they may perceive and interpret information very differently than when organization performance is strong and positive. Indeed, in high performing organizations, managers have less need to seek and examine negative information and will tend to focus on positive behaviors. However, when the organization needs extra-role behaviors from its members, workers who fail to demonstrate suck behaviors are apt to be judged more harshly than those exhibiting such behaviors. Attribution research (Jones & de Charms, 1957; Lanzetta & Hannah, 1969) suggests that if causes of behavior are attributing to lack of effort rather than ability, raters tend to punish more harshly. We argue that OCB's can be a more visible and isomorphic indicator of worker motivation and effort than IRB's. Therefore, managers in poorly performing organizations are likely to give greater weight to OCB's than managers in high performing organizations.

Meyer and Zucker (1989) contend that employees in low-versus high performing organizations will be more motivated to maintain the organization. Their argument is based upon the contrast of interests and motives of owners or other "residual claimants" versus employees under conditions of high versus low organizational performance. In high performing organizations, both owners and employees are motivated to maintain the organization. However, when performance declines, owners seek to cut their losses and shut down, while employees want the organization to continue since they are dependent on it. Poor organization performance will increase the hedonic relevance of subordinate performance for supervisors thus increasing the weight they may place on OCBI-type behaviors. Therefore, supervisors in low-performing organizations will place more emphasis on teamwork, cooperation and other OCBI-type behavior than in higher performing organizations.

Werner (1994), and Kiker and Motowidlo (1999) show that workers must have some minimum level of effective performance of IRB's before OCB's will have a positive effect on overall ratings or rewards. Thus, ratings will differ between employees demonstrating average versus high OCB'S only when IRB's are average or high. These arguments suggest the following their hypotheses:

H2: Overall performance ratings will be lower in low than high performing organizations.

H3: There will be a significant interaction between organization performance and OCB's.

H4: There will be a significant interaction between in-role behaviors and citizenship behaviors.

METHOD

SUBJECTS

Subjects were 130 fourth-year students enrolled in business administration courses at a large university. Of 130 students, fifty-eight were females (45%) and seventy-two students were male (55%). The median age of Subjects was 22 years (SD = 5.44); average work experience was 5.8 years (SD = 5.62). Half the Subjects had supervisory experience and the average number of subordinates supervised was 4.6 (SD = 10.74).

Procedure

The experimental procedure utilized a scenario design in which Subjects role-played managers who job it was to evaluate the performance of staff working in the school of business at a university. Half the Subjects read a scenario describing a poor performing business school that was experience declining funding and enrollment, accreditation problems, and other difficulties while the other half read about a college that was performing very well. All Subjects were asked to rate six hypothetical employees based on six dimensions of IRB and OCB and overall performance. Order of presentation of employees was randomized to prevent order effects. Three levels of IRB were manipulated to portray high, average and low performance. Two levels of OCBI were manipulated portraying average and high levels of citizenship toward specific individuals (Puffer, 1987; Williams & Anderson, 1991). Following Werner (1994), OCBO was tied toward to level of IRB and only OCBI was manipulated. The resulting design is a 2 between and 2 X 3 within Subjects. Stimulus materials and measures are drawn from an earlier study by Jon Werner (1994). Stimulus materials included empirically derived critical incidence for each performance dimension.

Variables and Measures

Overall Performance ratings, Subjects provided overall ratings for each of six hypothetical employees (arbitrarily named Chris, Jody, Kim, Lynn, Pat and Terry) on a seven-point scale. A rating of seven was labeled exceptional and consistently exceeds expected levels; four was labeled as competent, meets all the job requirements; and a rating of one was labeled unsatisfactory representing below acceptable levels.

In-role Behavior (IRB) and Citizenship Behavior Ratings. Subjects rated two dimensions of IRB (productivity and job knowledge, and accuracy), two dimensions of general organization citizenship behavior (OCBO) (attendance and following policies), and two dimensions of citizenship benefiting individuals (OCBI) (cooperation and teamwork and extra effort and initiative). The scales were the same as used to rate the overall performance.

Independent variables

The independent variables were the level of IRB (high, average, or low) and the level of OCBs (high or average). The independent variables were manipulated using a 3x2 within subjects' design in which each rate repeated one possible pairing of IRB and OCB. Performance dimensions and corresponding categories are:

Dimension 1. Job knowledge and accuracy of work: possessing the necessary knowledge and skills to perform the job and accuracy and thoroughness of work (IRB).

Dimension 2. Productivity: the amount of work completed and ability to efficiently organize work (IRB).

Dimension 3. Dependability and attendance: infrequent tardiness, unscheduled absences, and others (OCBO).

Dimension 4. Following policies and procedures: following all necessary rules, regulations, policies and procedures (OCBO).

Dimension 5. Cooperation and teamwork providing assistance and support to others and coordinating with others (OCBI)

Dimension 6. Extra effort and initiative: takes on extra tasks when needed and goes the extra mile.

These performance dimensions and corresponding categories were used in prior studies (Williams & Anderson, 1991; Werner, 1994).

Data Analysis

We used one between and two within-subjects experimental design in our study. An advantage of the within-subjects portion of this design is its greater statistical power, compared to between subjects designs, to detect significant effects (Kirk, 1996).

Hypotheses H1a and H1b were tested using correlations and Hypotheses H2 through H4 were tested using repeated measures multivariate analysis of variance (MANOVA). The SPSS Statistical Package provides partial eta-squared values with which effect size may be estimated. Though these partial eta squared values are not equivalent to the squared semi-partial coefficients in regression analysis, they do provide a general sense of the relative magnitude of the hypothesized effects (Cohen, 1977).

RESULTS

Manipulation checks for the between subjects variable, organizational performance, was examined via a single five-point scale item asking the subjects to rate the performance of the business school in the scenario from poor to excellent. The mean for the poor performing condition was 3.29 (SD = .73) versus 3.67(SD = .56) (t = -3.319, p < .001). In addition to the statistical manipulation check, written responses from subjects suggest they understood the task, took the task of employee performance appraisal seriously, and viewed it as realistic. Finally, means for overall performance ratings of the six hypothetical employees were in the same rank order but were slightly more lenient than ratings provided by 15 subject matter experts in Werner's 1994 study (Werner, 2000).

Hypothesis 1a stating that overall performance ratings will be significantly correlated with both OCBO's and OCBI's is supported by the data shown in Table 1. Table1, showing means, standard deviations, and correlations for overall performance, IRB's, OCB's, OCBO's and OCBI's shows that ratings of overall performance are significantly related (p<.01) to all other performance ratings. Hypothesis 1b, which states that overall performance, will be more highly correlated with OCBI's than OCBO's also receives only directional support from the data shown in Table 1.

The difference between the correlations, .87 for OCBI and overall performance versus .085 for OCBO is small. Interestingly, IRB has the smallest correlation (.78) with overall performance and OCB's correlate the highest at .91.

Hypothesis 2 argues that overall performance ratings will be lower in the low versus high performing organization. Results of MANOVA, seen in Table 2, show a significant main effect for performance (F = 2.29, p < .05, partial eta square =. 037). Mean overall performance ratings for the low performing organization is 4.02 versus 4.21 for the high performing organization.

Hypothesis 3 states that organization performance will interact with OCB's. Table 2 shows that the interaction between performance and OCB's is not significant thus failing to support Hypothesis 3. Results also indicate no interaction between IRB's and organizational performance. However, IRB's OCB's and the IRBxOCB interaction are all significant (p < .001) and have large effect sizes. Specifically, effect sizes for IRB's are .882, for OCB's, .475 and for the interaction of IRB and OCB's .187. The absence of a three-way interaction suggested pair-wise comparisons and examination of pairs for significant differences. Results of Multivariate Analysis of Variance are presented in Table 3.

The pair-wise comparisons shown in Table 4 revealed that the differences between three levels of IRB and two levels of OCB are significant. These findings further corroborated the strength of the design.

These tests are based on the linearly independent pair-wise comparisons among the estimated marginal means.

The results of multivariate tests for the effects of IRB and OCB, based on linearly independent pair-wise comparisons among the estimated marginal means also revealed interesting results. The partial eta squares are as high as 0.954 for IRB and 0.727 for OCBs.

Hypothesis 4 contends there will be an interaction between IRB's and OCB's. Support for this hypothesis is seen in Table 2 (F = 14.63, p < .001), partial eta square = .187). As hypothesized, the difference between means of overall ratings is not-significant for low IRB's (3.09 versus 3.22) but significant at both average (4.51 versus 4.93) and high (5.03 versus 5.53) IRB's (See Figures 2 and 3).

[FIGURE 2 OMITTED]

DISCUSSION

Overall, the results for H2 and H3 of this study suggest that organization performance can affect performance ratings, but the effect is the main or level effect rather than the hypothesized interaction. Logically, no organization performance effect should have emerged since subjects were rating exactly the same workers. This suggests that the decision-making frame of raters may have a small but significant biasing effect. Specifically, it appears that Meyer and Zucker's failing organization effect can influence the perception of raters such that behaviors that would help a failing organization are emphasized in subordinate ratings. Additionally, this is consistent with attribution theory research since the declining organization makes subordinate performance more hedonically relevant to supervisors (Jones & Davis, 1965). Also research by Jones and de Charms (1957) and Lanzetta and Hannah (1969) suggest workers demonstrating OCBI-type behaviors would be rewarded more than other behaviors. Results of Hypothesis 1a and 1b indicate strong positive relationships among all performance ratings with ratings of overall performance. While this finding is consistent with Werner (1994), the relationships are stronger than in some research (MacKenzie et al, 1991; Williams & Anderson, 1991).

Hypothesis 4 found an interaction between IRB's and OCB's as hypothesized based upon work by Werner (1994) and Kiker and Motowidlo (1999). Since Werner and others have argued that OCBI's have a greater influence on ratings than OCBO's we also examined them separately. Comparison of Figure 2 with 3 shows that OCBI's not, OCBO's account for the bulk of the IRBxOCB interaction. This finding further supports arguments of Williams and others that cooperation and teamwork, extra effort and initiative are the true essence of OCB's. Additionally, the fact that performance ratings are not affected by OCBs' particularly OCBI's until the level of IRB is at least average or high is consistent with Werner(1994) and Kiker and Motowidlo's (1999) findings. Thus, as seen in Figure 3, from an attribution perspective, supervisors reward high level of OCBI more than average OCBI, especially when IRB's are high. Finally, it is likely that, regardless of organization performance level, OCBI's are perceived as more valuable or hedonically relevant for supervisor than OCBO's (see Figures 2 and 3). Indeed, the correlations between IRB and OCBI (.67) versus IRB and OCBO (.85) suggest that supervisor difference OCBI's from IRB's is to greater extent than OCBO's. This suggests future appraisal research should consider more closely examining OCBI-type behaviors.

Implications for practice

Present research demonstrated that organizational success depends on both task behaviors and citizenship behaviors of employees. While task performance is directly related to the technical core, the citizenship behaviors beyond the defined roles go a long way in enhancing organizational effectiveness. The present research focuses on the relationship between citizenship behavior and organizational performance, especially in the context of low-performing organizations. When performance of organizations is falling, the managers need to focus on employees' extra-role behaviors that promote to the benefit of organization (Shaw, Dinnen, Fang, & Vellella, 2009). Some of the latest human resource practices focus on the employees' extra-role behavior (both OCBO and OCBI) and following the prospect theory, such focus would enhance both employee productivity and organizational performance (Lepak & Shaw, 2008). Absence of rewarding the employees who contribute to the organization may often results in counterproductive behavior (Dalal et al, 2009). Managers also need to focus on individual personality traits and their effects on the patterns of citizenship behavior (Ilies, Scott, & Judge, 2006). The results from the present research indicate that job performance function not only of task performance but of contextual behavior, such as organizational citizenship behavior, of employees at job.

Limitations of the study

Some may argue this laboratory study is 'artificial' and lacks external validity. Responses to such arguments have been provided by Berkowitz and Donnerstein (1982) who contend ".... to the extent that this artificiality stems from control over irrelevant variables, the artificiality is a strength and not be a weakness of experiments" (1982:256). To corroborate further, Dipboye and Flangan (1979) argue that "contrary to the common belief that field settings provide for more generalization of research findings than laboratory settings do, field research appears as narrow as laboratory research in the actors, setting and behaviors sampled" (1979:141). Ilgen (1986) laid the conditions for which laboratory studies are appropriate and maintained that "laboratory conditions can be constructed that establish performance conditions against which ratings can be compared and accuracy can be assessed" (1986:263). The data of this study closely match those of Werner (1994) study in which supervisors and managers responded to identical stimuli presented via computer program. Finally, it is important to remember that the concept of OCB had its birth in the laboratory. Earlier research by Williams and Anderson (1991) and Werner (1994) continued this tradition analyzing the effect of in-role and extra-role behaviors in carefully manipulated experimental settings.

This study examined the effects of a 'declining organization' (Meyer & Zucker, 1989) on performance ratings while replicating the Werner (1994) study. Future research should attempt to verify our findings of greater emphasis on OCBI's in actual declining organizations. Ideally, longitudinal research should examine shifts in the weight given to OCBI-type behaviors from times of organization success to those of failure or decline. Finally, if participants in troubled organizations demonstrate more of the cooperation and teamwork of OCBI's, it is an empirical question if these behaviors lead to better organization performance.

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Satyanarayana Parayitam, University of Massachusetts Dartmouth

Kishor Kumar Guru-Gharana, Texas A&M University-Commerce

Table 1. Descriptive statistics and zero-order correlations between
the variables

           Mean   SD    IRB      OCB      OCBO     OCBI

IRB        3.97   .58
OCB        4.59   .57   .80 **
OCBO       4.18   .56   .85 **   .76 **
OCBI       5.11   .65   .67 **   .95 **   .76 **
OVERALL    4.45   .55   .78 **   .91 **   .85 **   .87 **

** p < .01 (2-tailed)

Table 2. The Multivariate Analysis of Variance for In-role
Behaviors (IRBs), Organizational Citizenship Behaviors (OCBs),
and Interaction effects with performance

                           Wilks             Significance   Effect
                           Lambda     F          of F        Size

Performance                 .899    2.296      p < .05       .037
OCB                         .525    57.424     p < .000      .475
IRB                         .118    474.57     p < .000      .882
Performance x IRB           .972    1.774      p > .100      .027
Performance x OCB           .997     .335      p > .100      .003
OCB x IRB                   .812    14.62      p < .000      .187
Performance x OCB x IRB     .982    1.124      p > .100      .017

Table 3. The Multivariate Analysis of Variance for In-role
Behaviors (IRBs), Organizational Citizenship Behaviors benefiting
individuals (OCBIs), and Citizenship Behaviors benefiting
organization (OCBO) and interaction effects.

             Wilks Lambda      F      Significance of F   Effect Size

OCBO             .957        5.688        p < .05            .043
OCBI             .441       162.524       p < .001           .559
IRB              .118       474.571       p < .001           .882
IRB x OCBO       .899        7.161        p < .001           .101
IRB x OCBI       .721       24.595        p < .001           .279

Table 4. Pair-wise comparisons and multivariate tests for the
effects of IRB and OCB

      I   J     I-J      Wilks Lambda    F Value     Eta square

IRB   1   2    .562 *        .954       1258.470 *      .954
      1   3   2.127 *
      2   1   -.562 *
      2   3   1.565 *
      3   1   -2.127 *
OCB   1   2    .351 *        .253       324.501 *       .727
      2   1   -.351 *

* p < .001