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Mutual Investment Employee-Organization Relationship: A Conceptual Model of How and When it is Functional

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    A conceptual model is delineated on the process how and when Mutual Investment Employee-Organization Relationship (EOR), relative to other EOR forms, leads to employee reactions. Besides the widely used social exchange-based model that is used to explain this process, we build on theory to hypothesize that Mutual Investment EOR is also associated to improved employee reactions through an empowerment-based model. The social exchangebased model asserts that Mutual Investment EOR sends signals of valuing and caring for the employees, which leads to social exchange. As a result, the employees reciprocate their organizations by exhibiting improved employee reactions. The empowerment-based model holds that Mutual Investment EOR provides employees with feelings of empowerment, which results in improved employee reactions. Furthermore, the effectiveness of empowerment is hypothesized to be stronger than the effectiveness of social exchange in high-complexity jobs. The implications of the conceptual model are discussed.

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    Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 12/778.

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    Length: 28 pages
    Date of creation: Mar 2012
    Handle: RePEc:rug:rugwps:12/778
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    1. A. De Vos & D. Buyens & R. Schalk, 2003. "Making Sense of a New Employment Relationship: Psychological Contract- Related Information Seeking and the Role of Work Values and Locus of Control," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/209, Ghent University, Faculty of Economics and Business Administration.
    2. Ed Snape & Tom Redman, 2010. "HRM Practices, Organizational Citizenship Behaviour, and Performance: A Multi-Level Analysis," Journal of Management Studies, Wiley Blackwell, vol. 47(7), pages 1219-1247, November.
    3. Loi, Raymond & Mao, Yina & Ngo, Hang-yue, 2009. "Linking Leader-Member Exchange and Employee Work Outcomes: The Mediating Role of Organizational Social and Economic Exchange," Management and Organization Review, Cambridge University Press, vol. 5(03), pages 401-422, November.
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