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134 Corporate Reputations, Branding and People Management employees perceive being delivered against what they feel they are entitled to expect, weighted by their importance/value to employees. The psychological contract gap ϭ (E ϫ Ve) Ϫ D We regard this weighting element to be important because it is of little use to employees or employers to have expectations sat- isfied that are not important to them, a topic we will return to in Chapters 5 and 6 when discussing workforce segmentation. Some organizations spend a great deal of wasted time and effort in meeting or even over-delivering on employee expectations that are not particularly valuable to certain individuals or groups, while under-delivering on ones that are. The consequences, as Huselid et al. (2005) have pointed out, can be very important for strategy execution, as we have discussed when examining the employability thesis. Engaging employees We will look at engagement in its more specific sense in the last part of this chapter; first, however, we want to focus on the notion of engagement in a more general sense (see Figure 4.1). From our perspective, employee engagement and its associated behaviours in an organization depend on four key processes: ■ individual identification and identities (who am I?) ■ internalization (what do I believe?) ■ psychological ownership (is it mine?), and ■ commitment (will I stay?). These four components of individual–organizational rela- tionships have been the subject of intense research and specu- lation, and are at the core of modern human resource management. As Sparrow and Cooper (2003) have argued, the individualization of the employment relationship has been one of the most important developments of recent times among organiza- tions in most developed countries, especially where the influence of trade unions has decreased and the use of non-standard forms of employment contracts has increased. Such developments towards individualization can be seen in two ways. On the one hand, some writers and critics have highlighted the negative side by pointing out how modern nation-states and large organiza- tions have rejected their responsibilities for providing employ- ment security and passed the onus on to individuals to make themselves employable through calls for self-development and displays of flexibility. On the other hand, proponents of these changes have argued that many employees are increasingly motivated by the need for autonomy, actively seeking more career flexibility and the opportunities to follow rather differ- ent, boundaryless career and work patterns from those of their predecessors, a point discussed in the previous section. Many such individuals tend to work in knowledge-intensive and cre- ative occupations and organizations, business and financial con- sultants, professional engineers, entertainment, education and healthcare. Because these people have such different orien- tations to work and because they tend to be in short supply, organizations and nations increasingly find themselves compet- ing for talent and having to devise new ways of managing them (Davenport, 2005; Florida, 2005). Measuring and managing identification, commitment, psychological ownership and internalization In our attempt to review this complicated field of individual– organizational linkages, we have come across a plethora of terms associated with engagement, including those we discuss below and others, such as organizational citizenship, culture, climate and so on. The volume of words, academic articles and books spilled out on these topics over the past thirty or so years would stun the average lay reader, as would the complex and often bitter arguments that different camps prosecute (Henry Kissinger, a well-known, former US Secretary of State, once opined that academic arguments were so bitter because they had so little to argue about). For HR managers, however, it is important they understand the differences between these Chapter 4 The quality of individual employment relationships 135 terms since many employee surveys conducted by ‘blue-chip’ organizations fail to distinguish between them, or, even worse, confuse them. As a consequence, HR managers often have to rely on measures for A (e.g. commitment) while hoping for B (e.g. organizational identification). Individual identities, identification and internalization We have made the point repeatedly in the past few chapters that organizational identity and individual identities, while linked through the process of identification, are not the same thing; nor can we assume that individuals will necessarily identify with the organization’s values, even if they understand why they are necessary and form part of the wider interests of everyone in the organization. So, managing change at the organizational level does not mean changes will occur in the self-concepts of individual employees, though this may be what organizations are really attempting to achieve. Most of us will recognize this in the tensions of our own careers, in achieving a balance between self interest and the interest of others, which is often played out in the work–life balance issues, e.g. will I write this book or spend more quality time with my children? If you don’t recog- nize it in your own careers, you will see it frequently exhibited in the political behaviour of others in leadership and manage- ment positions. The link between individual identity and identification with organizations is best explained by social identity theory (SIT) and the related notion of self-categorization (Ashforth and Mael, 1989; Dutton et al., 1994; Hatch and Schultz, 2004). Though there are variations on the theme, SIT sees the individual and organization as potentially linked through a process something like the following: 1 Individuals develop a personal identity, which is made up from idiosyncratic personal features, including per- sonality traits, physical features, abilities and interests, e.g. extroverted, physically fit, soccer player, often with few other interests or abilities, except a desire for 136 Corporate Reputations, Branding and People Management celebrity status (take your pick from a number who appear on British television!). A key component of personal identity is a need to preserve or enhance self- esteem, which is often equated with a healthy or unhealthy degree of narcissism (Brown, 1997). 2 Individuals begin to develop a social identity, the first stage of which is to self-categorize the different, salient groups that they wish or do not wish to belong to, e.g. let’s say in the case of one of us, our understanding of the categories of man, father, academic, HR practi- tioner, Scotsman, etc. Self-categorization involves a process of having knowledge of these reference groups and understanding something of their values. 3 Personal identity and self-categorization interact to begin to form a self-concept, a self-definition and understanding about oneself that is continuously tested out by rounds of impression management. This self- concept is conditioned by the likely and actual reac- tions of salient others or groups they aspire to identify with (in-groups) to enhance their self-esteem. A self- concept is also formed in relation to groups the person does not wish to identify with (out-groups). To continue with our soccer player example, their in-groups might be the pop world, media celebrities and even (usually self-made) business people and politicians with an eye for the main chance (increasingly such in-groups are seen to hang out together as their world blurs into one of celebrity); out-groups might be political activists or intellectuals. In essence, this is a theory about oneself, involving actual or imagined agreement about what you are like (Scott and Lane, 2000). 4 Social identification occurs when an individual’s self- concept is seen to be at one with, or belonging to, a particular social group one aspires to, i.e. by psycholog- ically accepting the values and norms of the group as an integral part of themselves. This can occur either sym- bolically (e.g. dressing like an academic, or flying a Scottish flag, which, incidentally, neither of us do) or actually becoming one (e.g. prioritizing the academic, then the HR professional identity in the case of one of Chapter 4 The quality of individual employment relationships 137 us, and reversing that prioritization in the case of the other). This process helps answer the question ‘Who am I?’. For those of us with an interest in talent management, SIT provides one of the best ways of forecasting whether someone will fit the organiza- tion and be able to become an effective performer in it. Pro- jections about a recruit’s ‘future self-concept’ have been shown to be one of the best predictors of what people will eventually do for a living (Herriot, 2001). Note, we have not said anything as yet about individuals incorporating a corporate, organizational identity into their self-concept (see Box 4.4), which is why we have emphasized the distinction between individual and organi- zational identities and suggested the latter is not just the sum of the former, though this process does imply a possible connection. 138 Corporate Reputations, Branding and People Management Box 4.4 Self-disclosure, identity and (lack of) organizational identification To continue in the spirit of self-disclosure (but, hopefully, not self- aggrandizement) and, in the process, learning about yourself through writing (Clegg et al., 2005; Grey, 2005), let’s use one of us as an illustration (readers and students often tell us it is a help to provide a personality behind the words). He is a full-time business school academic, who was by no means an extrovert but had a healthy(?) need for self-esteem, and whose early interests and abilities lay in understanding people and busi- ness studies, and competitive sports, e.g. football and athletics. His career ‘anchors’, those underlying features that have shaped his work life (at least according to assessment guides) are the need for auton- omy, developing expertise and being entrepreneurial/creative. After try- ing early, failed, ‘careers’ in football and art (a little, but not sufficient, talent/motivation for both), he did a degree in business because it was the only programme available in the vicinity that taught applied social sci- ences in which he had developed an interest. Following graduation, he became involved in personnel management, but soon began to think about an academic career because of his, rather romantic, view of aca- demics in higher education, and in business schools in particular (since Chapter 4 The quality of individual employment relationships 139 he had studied in one as an undergraduate, which helped him self- categorize what it meant to be an academic, and had a high regard for some of the, rather bohemian, people who taught him). With the passing of time and other degrees, he progressively came to value the independence and intellectual aspects of academic life, and sought through research, teaching and writing the esteem of his profes- sional colleagues, which is institutionalized in the UK by the peer- reviewed Research Assessment Exercise (your work is judged by peers in relation to everyone else’s to help provide your institution – and, indir- ectly, you – with a score). The idea that he could also do something use- ful to help managers and employees work together to make the Scottish economy more effective also began to figure progressively in his refer- ents (although English by origin, he had come to identify himself as a Scot, based on what he understands an educated Scot to be, and identify with the economic and social development of Scotland). All along, he had continued to identify himself with the HR profession because he val- ued what reflective, influential HR practitioners and consultants could do to improve industrial and economic life. Note, we have not said any- thing about him identifying with a particular university or organization; indeed, his current portfolio career, which involves him in teaching in a number of different ones in various parts of the world (exporting people and ideas is what Scotland seems to do best) and consulting for different companies, suggest that a single organizational affiliation is not some- thing that he would feel at one with. Besides, he had already spent 23 years with one university, which he outgrew and it outgrew him. You might say that this is his autobiographical image; others will author his biographical reputation(s), including his wife, kids and mother-in-law in due course, as he struggles to cope with other aspects of his identity. This attempted self-disclosure is not mere self-indulgence (though there may be a degree of (healthy?) narcissistic rationalization) but an example of what Denise Rousseau (1995) terms an idiosyncratic career and what Richard Florida (2002, 2005) would see as an increasingly important component of the ‘creative class’. Increasingly, organiza- tions are faced with managing such people, which is one of the most difficult challenges they face, and one that requires quite different solutions to conventional ‘talent’ management, as we shall see in the next chapter. There are several rather subtle, but important, implications that emerge from this version of social identities. The first is that to identify with an organization does not require someone to expend effort in doing so; a person only needs to see them- selves as ‘psychologically intertwined’ with the organization (Ashforth and Mael, 1989). So organizationally focused behav- iour and loyalty (or affective commitment) are rather different ideas and, according to different theories, are either causes or consequences of identification. We will return to this point when discussing the contribution of engagement to under- standing individual–organizational linkages. The second is to emphasize that this is a relative process. We tend to highlight the similarities between our own self-identity and those of the group we aspire to relate or belong to, and play up the distinc- tiveness between ourselves and those groups that don’t fit in with our self-identity (Sparrow and Cooper, 2003). So, for example, this may be the reason many people do not define themselves as belonging to their organization; it also fits into our earlier analysis of cosmopolitans and locals. Third, the ques- tion ‘Who am I?’ is not the same as ‘What do I believe?’. This lat- ter question is addressed by the process of internalization. Internalization is the process of incorporating the goals and values of an organization into one’s identity or ‘as part of them- selves’ (Mael and Ashforth, 1992; Dutton et al., 1994; Pierce et al., 2001). Getting employees to internalize the organization’s iden- tity is what most organizations seem to be striving for, reflecting the idea of ideological psychological contracting cited earlier and the oneness between individual and social identity in the original formulation of SIT. It reflects employees’ motivations to be on the side of right and not wrong – there can be few shades of grey here – and is based on a need to believe in the virtues of the organization. The results are pride in membership and positive inclinations to the organization and its leadership (Reade, 2001), as well as behaviours such as remaining with the organization and performing ‘beyond contract’. Some of the original work on internalization in relation to organizational identities was carried out on alumni of US uni- versities, a number of whom, you might expect, have fully intern- alized the values of their alma mater, and have put their hands in their pockets to ever-increasing degrees to make endowments 140 Corporate Reputations, Branding and People Management of the size that universities in other countries can only dream of. There are cynics among us, however, who would question the degree of internalization and suggest that such giving may be attributable, in certain cases, to the kinds of unhealthy nar- cissism, ego-defensive and self-aggrandizing motivations and behaviours associated with ‘semi-detached’ leadership (Brown, 1997) or, more prosaically, tax breaks. Part of the problem with these ideas is that you cannot really look into someone’s head for motives; you can only examine what they do and what they say, which is why questionnaires are often a poor test of internalization. You may have guessed that there is an important qualification in what you have read: social identification and internalization are changeable over the course of employment and subject to constant negotiation and re-negotiation. The identification process is a continuous round of iterations, confirmation and disconfirmation of self-identity, which is often associated with re- inventing one’s career. The idea of an increasingly boundaryless career, in which employees are believed to not only move in and out of organizations but also occupations during their employ- ment history, often having second and third careers, is one illus- tration of these processes (Arthur et al., 1999). Both of us, for example, have had three careers and three professional identi- ties, sometimes simultaneously, as HR practitioners, academics and consultants. These three identities can lead to tensions and, at various times in our careers we have emphasized one more than the other in the process of our career re-inventions. The social identification and internalization processes are also dependent on continuous positive evaluation of the organi- zation’s image by its employees; such an evaluation also takes into account what employees believe important others (e.g. cus- tomers, close friends, etc.) think about its image. This last elem- ent is one of the most important features of how images are incorporated internally (Dutton et al., 1994). Finally, how leaders behave in their governance and day-to-day actions can influence this continued identification enormously; we are now witnessing calls for more and better feedback evaluations of individual and collective leadership at the boardroom level (Goffee and Jones, 2005). This is a role in which HR can play an important part, as we shall discuss in the final chapter of this book. Chapter 4 The quality of individual employment relationships 141 Psychological ownership Jon Pierce and colleagues (2001) have argued that, although identification and internalization are important constructs for understanding the relationships and attachments between indi- viduals and their organizations, neither is a complete nor even necessary explanation of one of the most important individual– organizational connections, namely psychological ownership. They define this idea as follows: As a state of the mind, psychological ownership … is that state in which individuals feel as though the target of ownership (material or immaterial in nature) or a piece of it is ‘theirs’ (i.e., ‘It is MINE!’). The core of psychological ownership is the feeling of possessiveness and of being psychologically tied to an object. (Pierce et al., 2001, p. 299) Rather slickly, they contend that ‘mine’ is a small word, but one with enormous consequences for organizations. Ownership, they argue, arises because people have a built-in need to pos- sess, or because it satisfies certain human motives, which are either socially derived or genetic. These include: ■ the need to control our lives; ownership confers on us certain rights and abilities to shape our work environ- ment so that we can become more effective – for example, the degree to which we can determine our working times and places through flexible working ■ self-identity, which is formed partly through our inter- actions with what we possess, and our reflections on what they mean – for example, company cars and the way we personalize our computer equipment ■ the need to have a place, or ‘home’, that we can call our own, which is not only a physical but also a psycho- logical space. For example, employees not only seek office or work spaces they can call their own, but also look for ‘soul mates’ they can metaphorically set up a ‘home’ with at work. This is an argument against the current fashion for saving costs and forcing communi- cations through open-plan offices and ‘hot-desking’. 142 Corporate Reputations, Branding and People Management Ownership is achieved by three ‘routes’, involving: ■ having a strong degree of control of the object of our ownership, such as the job or the organization and its performance ■ coming to know the object of our ownership intimately by having a ‘living’ relationship with it, for example the metaphorical gardener who comes to feel the garden belongs to him/her after a certain time of working in it ■ investing the self into the object of our ownership. Through time, as we expend effort into shaping, creat- ing or making something, we feel that we come to own what we have shaped, created or made, such as machines, ideas and even people, e.g. our projects, pro- tégés and apprentices. The consequences of psychological ownership are to create among employees a set of perceived rights and responsibilities that help explain why individuals promote and resist change. So, change that is self-initiated by employees who have high levels of psychological ownership is more likely to be promoted and accepted because it enhances feelings of self-efficacy and con- trol. Likewise, imposed change is likely to be resisted because it diminishes feelings of self-efficacy and self-control. This concept is extremely important in understanding the success or other- wise of stock or share ownership in organizations, often given as a form of reward to individuals and as a way of creating organ- izational identification. As Sparrow and Cooper (2003) point out, providing employees with share or stock options without building in the routes to psychological ownership will not pro- duce the hoped-for benefits in terms of greater organizational identification and motivated behaviour. Finally, however, it is also worth noting that high levels of psy- chological ownership can also create pathological responses among those people who become separated from the objects of their ownership. For example, many years ago one of us worked as a personnel manager in a construction company. Some senior managers in that company proposed laying-off a large number of young electricians who had spent many months installing electrical wiring in a new and high profile building, on which many of these apprentice electricians were naturally proud to Chapter 4 The quality of individual employment relationships 143 . alma mater, and have put their hands in their pockets to ever-increasing degrees to make endowments 140 Corporate Reputations, Branding and People Management of. for saving costs and forcing communi- cations through open-plan offices and ‘hot-desking’. 142 Corporate Reputations, Branding and People Management Ownership