Psychological Contracts and the Informal Social Structure of Organizations: Systemic and Local Effects Guillermo E. Dabos Management Department Universidad de San Andrés & UNICEN Victoria, Buenos Aires B1644BID, Argentina Tel: (54 11) 4725-7000 (Ext. 7154) Fax: (54 11) 4725-7010 gdabos@udesa.edu.ar Denise M. Rousseau Heinz School of Public Policy and Management and Tepper School of Business Carnegie Mellon University Pittsburgh, Pennsylvania 15213 Tel: (412) 268-8470 Fax: (412) 268-5338 rousseau@andrew.cmu.edu WORKING PAPER An earlier version of this paper won the Organizational Behavior Division Best Paper Award and appears in the 2004 Academy of Management Meeting Proceedings. We wish to thank David Krackhardt and Violet Ho for their contributions to this paper. A Heinz Foundation Research Chair supported this research. ABSTRACT Using network analysis, the link between informal social structure and psychological contracts is examined via data collected from 96 university faculty members. Effects vary by type of contract term. When psychological contract terms involve competitive resources, significant relationships are found for advice centrality, a systemic or network-wide effect. When psychological contract terms involve non-competitive resources, proximity yields relationships via both direct friendship ties (cohesion) and similar friendship ties with other faculty members (structural equivalence), a local effect. Psychological Contracts and the Informal Social Structure of Organizations: Systemic and Local Effects The relationship between employee and employer is increasingly viewed through the lens of the psychological contract, that is, the system of beliefs an individual holds regarding the terms of the exchange agreement with the organization (Rousseau, 1995). During the last decade, the concept of psychological contract has received a wealth of attention in employment research. Scholars have predominantly investigated the nature and content of the psychological contract (e.g., Rousseau, 1990; Herriot, Manning, & Kidd, 1997) and the consequences associated with contract fulfillment, violation, and change (e.g., Robinson, Kraatz, & Rousseau, 1994; Robinson, 1996; Coyle-Shapiro & Kessler, 2000; Turnley & Feldman, 2000). This research demonstrates that contract fulfillment increases employee satisfaction, trust in the employer, and intent to remain in the organization, whereas contract violation engenders intense negative reactions on the part of employees who, in consequence, often cut back on their commitment and contributions to the organization. Moreover, it also confirms that individuals with different psychological contracts respond differently to contract fulfillment, violation, and change (e.g., Robinson & Rousseau, 1994; Robinson & Morrison, 1995; Rousseau & Tijoriwala, 1999). Although these findings are noteworthy in terms of understanding and effectively managing the employment relationship, research is also needed on how psychological contracts are formed in the first place. To date, little is known about the factors shaping psychological contract beliefs. Psychological contract theory postulates that several factors operate in forming individual beliefs regarding the employment relationship’s terms, including internal individual predispositions and cognitive schemas, and external cues provided by human resource practices, communication with managers, recruiters, and coworkers, and other social influences (Rousseau & Greller, 1994; Rousseau, 1995, 2001, in press). Yet, direct empirical examinations of how internal individual constructions and external organizational and social influences affect psychological contract formation are rare (see Raja, Johns, & Ntalianis, 2004, for an exception). 1 The present study addresses this often overlooked issue by investigating the relationship of informal social influence within the organization to employee beliefs regarding promises the employer has made. This study examines two levels of informal influences resulting from employee social interaction. At the individual-level, it investigates the relationship between an individual’s psychological contract beliefs and those beliefs held by socially-proximate coworkers in both the informal friendship and advice networks. Individuals tend to hold work-related attitudes, perceptions, and beliefs similar to those of other employees with whom they interact frequently in local or confined areas of a social network (e.g., Dean & Brass, 1985; Rice & Aydin, 1991; Ibarra & Andrews, 1993; Burkhardt, 1994; Pastor, Meindl, & Mayo, 2002). Local effects based on network proximity reflect social influences transmitted through interpersonal ties. Although similarity in beliefs can create friendship or advice seeking ties, shared beliefs can also be a consequence of these social interactions. To examine the basis for this similarity, we investigate both close ties based upon frequent interaction between two parties such as friends or advicegivers (i.e., cohesion) and indirect ties via similar sets of friends or advice-givers (i.e., structural equivalence). At the organization-level, the informal social structure can afford individuals differential access to and control over resources depending upon their network position or social standing. Individuals in powerful or high status positions in an organization’s informal network can thus hold beliefs regarding psychological contract terms differing from those of their less well-positioned counterparts. Systemic effects from informal social position are investigated by examining the relationship an individual’s centrality in the larger informal social structure has with his or her beliefs regarding the strength of the employer’s obligations. This study investigates local and systemic influences resulting from social interaction across types of contract obligations and network ties. In particular, we examine whether the effects of social interaction differ for psychological contract terms involving scarce resources distributed competitively (e.g., support for professional development) and non-competitive 2 resources that when offered are widely available (e.g., congenial or safe work environment). We also examine whether the relationship between social interaction and psychological contract beliefs differs for network ties based upon personal friendship and work-related advice giving. In all, the present study addresses three fundamental issues: (1) the link between informal social network processes and employee psychological contracts, (2) how interpersonal ties among proximate individuals and position in the informal social structure relate to specific psychological contract terms (i.e., competitive and non-competitive), and (3) how different types of network ties (i.e., friendship and advice) are related to psychological contract beliefs. Psychological Contract Theory An employee’s psychological contract constitutes his or her interpretations regarding reciprocal obligations with the employer. The psychological contract, by definition, is subjective in nature and belongs to the domain of individual beliefs (Rousseau & Parks, 1993; Rousseau, 1995). Employees can develop different understandings of what the employer has promised to them, even when efforts are made to convey similar promises to all employees (e.g., safe work environment) or to specific groups of employees (e.g., seniority-based benefits for core workers). Psychological contracts are shaped by multilevel factors including the individuals’ internal predispositions (e.g., cognitive styles, self-schemas) and the external influences that operate in the work setting (e.g., human resource practices, social cues). Among them, the social interaction patterns at work are particularly likely to affect the creation of meaning around the promises exchanged and the perceptions of the scope of obligations associated with them. For example, informal interactions such as helping train newcomers or assisting coworkers in do their jobs can lead employees to believe that the employer has an obligation to reciprocate (Rousseau, in press). Psychological contract theory postulates the existence of multiple contract makers within an organization, including coworkers, managers, mentors, recruiters, and other organizational actors, along with administrative signals such as human resource practices (Rousseau & Parks, 1993; Rousseau & Greller, 1994; Rousseau, 1995). Organizational insiders play a key role during 3 formal socialization, influencing newcomers’ perceptions of the exchange terms by providing information and cues that enable them to interpret events, learn about their ropes, and incorporate work-related norms and standards of behaviors (Louis, 1980; Nelson & Quick, 1991; Morrison, 1993). Coworkers in particular are often the most available and frequently accessed source of information about the job, the organization, its policies and procedures. For instance, coworkers can provide overt statements or direct evaluations of the job, make certain aspects of the workplace more salient by talking frequently about them, or tip the balance in ambiguous situations by offering socially-constructed interpretations (e.g., depending on whether employees trust the management, a change in technology may be seen as a threat to the status quo or, alternatively, as organizational support for improved performance). An employee can gather information from coworkers through two commonly available mechanisms: verbal statements providing information about the job and direct observation or monitoring of practices and behaviors (Rousseau, 1995). The messages various coworkers convey can sometimes reflect inconsistent or contradictory views of the same practices or behaviors. Regardless of their consistency, the readily available social cues coworkers offer are postulated to play an essential role in the psychological contracting process by “providing messages for contract creation, conveying social pressure to conform to the group’s understanding of the terms, and shaping how individuals will interpret the organization’s actions” (Rousseau, 1995: 39). Recent research has addressed the effect of social influence on employee evaluations of psychological contract fulfillment (Ho, 2002). Such evaluations involve an assessment of the discrepancy between what was promised by the employer and what was delivered in turn, an important concept in explaining how psychological contract violation arises (Rousseau, 1995; Morrison & Robinson, 1997). Ho (2002) postulates that an employee’s evaluation of fulfillment is contingent not only on his or her own perceived discrepancy (between what was promised and delivered), but also on the discrepancy experienced by his or her social referents (i.e., other 4 individuals selected as targets for comparison such as coworkers and supervisors). While Ho found some support for the role of social referents such as friends and substitutes in shaping employee evaluations of psychological contract fulfillment, little empirical evidence exists regarding the relationship between social interaction patterns and psychological contract beliefs. Social Interaction Patterns The impact of social interaction on attitudes, perceptions, and beliefs has been broadly established since the early research on social influence and conformity (e.g., Festinger, 1954; Asch, 1955, 1956; Deutsch & Gerard, 1955). Asch, for instance, provides compelling evidence of conformity to group pressure in his experiment using simple comparisons of lines with obvious differences in length. He found that individuals with normal vision would ignore their own objective judgment to publicly agree with an inaccurate group judgment. Deutsch and Gerard identified two main reasons for conformity: (1) the individual’s concern for making accurate judgments (informational influence), and (2) the individual’s concern for seeking social approval (normative influence). Festinger’s theory of social comparison offers further insights into processes of social influence. He argues that individuals use the opinions and beliefs of similar others as a reference point in evaluating their own opinions and beliefs. Reliance upon social comparisons is stronger in ambiguous situations where objective standards to validate one’s own opinions and beliefs are not available. Nonetheless, even in situations that are not ambiguous, social influence can operate through the impact of authority, individual affiliation or identification, and desire for group acceptance (Ajzen & Fishbein, 1973; Moscovici, 1976, 1985). In organizations, the social structure plays an active role in the comparison process either by constraining the availability of information about potential referents (Goodman, 1977) or by imposing certain non-selected or forced comparisons (Allen & Wilder, 1977; Wood, 1989). The role of the social context in shaping individuals’ attitudes, perceptions, and beliefs also has been recognized in theories of social information processing (e.g., Salancik & Pfeffer, 1978; Blau & Katerberg, 1982; Zalesny & Ford, 1990) and sensemaking (e.g., Greenberg, 1995; 5 Weick, 1995; Gioia & Thomas, 1996). In particular, social information processing posits that “the multiple social influences on attitudes [and perceptions] are more consequential for predicting attitudes [and perceptions] at work than are individual needs or other characteristics” (Salancik & Pfeffer, 1978: 248). In organizations, these influences stem from social processes occurring at two different levels: local influences from the individual’s more immediate social interactions and systemic influences from the larger informal social structure in which individuals are embedded (Ibarra & Andrews, 1993). In the sections that follow, we use a social network perspective to discuss both local and systemic influences and to develop a framework for examining the processes by which social interaction patterns relate to employee psychological contract beliefs. Local Influences: Interaction among Socially-Proximate Individuals The people with whom an individual interacts on the job can directly or indirectly affect his or her attitudes, perceptions, and beliefs. In the social network literature, two primary mechanisms account for the influence observed among socially-proximate pairs of individuals: cohesion and structural equivalence. Influence via cohesion occurs through direct (i.e., nonmediated) relationships with other members of the social system. Cohesion denotes “simple adjacency whereby two actors are proximate if, and only if, they are directly tied in a network” (Marsden & Friedkin, 1994: 7). The frequent communication and emotional closeness that characterize cohesive relationships offer ample opportunities for engaging in information sharing and social comparison. Over time, people can come to adopt attitudes, perceptions, and beliefs similar to those of others with whom they are directly tied. Direct exposure to others’ opinions and behaviors influences the saliency of information and in turn the focal individual’s attitudes, perceptions, and beliefs (Rice & Aydin, 1991; Burkhardt, 1994). Indirect exposure, occurring through intermediaries, has weaker effects (Friedkin, 1982; Erickson, 1988). Selection effects can also operate such that people seek out and remain in relationships with others who share their beliefs. 6 The effects of cohesion are well-documented in a classic study of social influence in the diffusion of a medical innovation (Coleman, Katz, & Melzer, 1966). Coleman and colleagues observed that physicians resolved the uncertainty surrounding the adoption of a new drug by engaging in informal interactions primarily through direct ties of a professional nature such as advisors or discussion partners. Moreover, this advice was supplemented by information they obtained from friends in the medical community. Frequent discussions about the effects of the new drug and whether others prescribed it led physicians to adopt beliefs and prescribing behaviors similar to those with whom they had direct ties. Likewise, studies have found cohesion to influence other work-related perceptions (Ibarra & Andrews, 1993), beliefs about personal mastery (Burkhardt, 1994), attitudes toward a new technology (Rice & Aydin, 1991), attributions about fellow employees (Krackhardt & Kilduff, 1990), and patterns of behaviors during jobsearch (Kilduff, 1990). The substantive basis of influence via cohesion hinges upon cooperation and solidarity among directly tied individuals (Marsden & Friedkin, 1994; Shah, 1998). When the opinion of members embedded in cohesive networks become manifest, it promotes agreement and compromise (Friedkin, 1993, 1998). Alternatively, influence via structural equivalence occurs when individuals share access to the same people in a social system. Structural equivalence exists when a pair of individuals has identical ties or relationships with other actors in a network (Lorrain & White, 1971; Marsden & Friedkin, 1994). That is, two individuals are structural equivalent if both have ties with (and thus lack ties with) identical sets of other individuals. Because structural equivalent individuals occupy similar roles in the social system, they are likely to be exposed to similar information and social demands, and therefore to develop similar attitudes, perceptions, and beliefs. Two things are worth noting about structural equivalence. First, it defines roles in terms of the pattern of social ties between members of a social system, not in terms of the formal organizational structure (Rice & Aydin, 1991). In other words, two product managers who perform exactly equivalent jobs in the formal organization structure, but lack common ties to 7 other organizational members are not structural equivalent. Second, frequent contact is not required for a pair of structural equivalent individuals to reach attitudinal or perceptual convergence. Regardless of the strength of any direct relationship, social influence via structural equivalence occurs to the extent that two individuals are involved in the same set of ties with other people from whom they both develop similar attitudes, perceptions, and beliefs. Thus, for example, two doctoral students are structurally equivalent in the advice network if both have exactly the same advisory committee (regardless of whether the two students ever interact). Insofar as structurally equivalent people need not chose their tie to each other, effects of structural equivalence are less attributable to self-selection. However, structural equivalents may hold common beliefs as a result of having selected themselves into roles where those beliefs are compatible with role-senders, as in the case of graduate students who select a similar set of advisors because of shared interest in a subject. Informal roles are likely to be a source of information regarding the employer’s obligations since psychological contract beliefs are tied to post-recruiting communications as well as initial employer promises (Thomas & Anderson, 1998; Rousseau, in press). Burt (1987) depicted the effects of structural equivalence reexamining Coleman et al.’s (1966) data from the medical innovation study. He concluded that when social influence occurred among physicians it was not because of their direct interactions with other colleagues but because of their perceptions of what a proper action would be given the role each physician occupied in the social system of colleagues. Structural equivalence also influences attitudes toward computers (Burkhardt, 1994), perceptions of task variety (Meyer, 1994), judgments regarding product development (Walker, 1985), attitudes toward technology adoption (Burkhardt & Brass, 1990; Rice & Aydin, 1991), and perceptions of the social context (Pattison, 1994). The effects of structural equivalence on shared beliefs have also been attributed to similar socialization, equivalent role demands, comparable experiences and constraints (Rice & Aydin, 1991; Marsden & Friedkin, 1994; Shah, 1998), such as the case of the two doctoral students with 8 the same advisory committee. Thus, effects of structural equivalence need not come through direct interaction but from common experiences in the organization and informal social system. These experiences can form the basis of shared schemata or mental models regarding one’s role and relationship with the employer, giving rise to comparable psychological contract beliefs (Rousseau, 2001). Systemic Influences: Relative Standing in the Informal Social Structure The larger informal social structure shapes the opportunities and constraints individuals encounter, affecting their attitudes, perceptions, and beliefs. Systemic influences in organizations stem from differential access to and control over resources (Emerson, 1962; Pfeffer & Salancik, 1978). The position each individual has in the organization’s informal network impacts his or her access to valued resources such as financial support and career opportunities. Individuals better positioned to access and use valued resources enjoy more opportunities for obtaining their desired goals, and thus are likely to develop more positive perceptions of the employment exchange. In an informal social network, an important indicator of position is centrality (Friedkin, 1998). People with greater centrality in the network possess superior resource control, more power, and higher status compared to their less central counterparts (Ibarra & Andrews, 1993), and thus centrality reflects the relative standing of the individuals in a social system (Frank, 1985). Accordingly, benefits and opportunities within organizations accrue to those who occupy a central position in the network of informal relationships because of their superior access to and control over valued resources (Burt, 1982; Brass, 1984; Ibarra, 1993). Whereas most research has focused on centrality in organizations as a source of leadership and power (e.g., Burkhardt & Brass, 1990; Krackhardt, 1990; Brass & Burkhardt, 1993; Ibarra, 1993), centrality also shapes attitudes, perceptions, and beliefs by enhancing or constraining the opportunities for individual goal attainment (Friedkin, 1993, 1998; Ibarra & Andrews, 1993). Centrality in the informal social structure differs from cohesion and structural equivalence in the way it influences beliefs. In the case of centrality, the frequent interaction 9 characterizing cohesion is not essential to shaping individuals’ beliefs. Neither is the extent to which individuals are structurally equivalent or involved in similar sets of ties with other people. Rather, centrality’s influence on individual beliefs stems from power or status differentials in the larger informal structure that affect the allocation and use of valued resources. Individuals with high-status informal positions relative to others develop more positive attitudes and perceptions of the work setting (Frank, 1985, Ibarra & Andrews, 1993). Types of Psychological Contract Beliefs The type of beliefs studied matters in understanding informal social effects. In workplace psychological contracts, the social information workers look to in forming their beliefs can depend upon the resources involved. In particular, whether these resources are accessed via competition with others can determine the sources of social information used (Ho, 2002). In a study of fulfillment evaluations, Ho found that workers rely on different social networks for competitive and non-competitive resources in gauging whether their employer has fulfilled its obligations. Competitive resources refer to those that are scarce in an absolute or socially imposed sense. Resources can be scarce because of constraints in the available amount (e.g., limited project budget, promotions in a hierarchical firm) or allocation rules that restrict attainment (e.g., seniority-based benefits; Hirsch, 1976). In the presence of abundant or noncompetitive resources, an individual’s attainment does not condition the likelihood of others’ future attainment. Employer promises regarding a competitive resource imply that access is granted selectively. Whether a resource is allocated competitively impacts not only the likelihood that individuals will expect to receive that resource but also whether they consider their relative standing compared to others in estimating their likelihood of attainment. Attaining competitive resources depends on factors shaping individual standing, including performance and factors affecting it such as resource access and support from powerful others. Workers in powerful or high status positions are more likely to successfully compete for resources and are better able to 10 negotiate support from powerful others than are their less well-positioned counterparts. Part of this support from powerful others has been found to include promises regarding developmental activities, visible projects, participation in key decisions, and information critical to job performance (Rousseau, in press). It follows that central individuals develop more positive beliefs regarding promises involving competitive resources than do peripheral individuals. Hypothesis 1: An individual’s centrality in the organization’s informal social structure will be positively related to the strength of psychological contract beliefs involving competitive resources. Conversely, when promises relate to non-competitive resources, one person’s attainment need not diminish another’s. Social processes based on mutual support or identification tend to prevail in the latter case, triggering convergent beliefs in socially-proximate individuals. In the network literature, accounts of how social influence occurs center around two arguments described above: cohesion and structural equivalence. Because direct ties are built upon frequent contact, cooperation, and feelings of kinship such as liking or esteem, cohesive coworkers are likely to develop similar beliefs in promises relating to non-competitive resources. By conforming to the beliefs of cohesive others, an individual also satisfies his or her concern for securing social approval (Deutsch & Gerard, 1955). Alternatively, influence from structural equivalence occurs by means of similar access to or common ties with other organizational members. Employees who occupy similar roles in the informal organization are likely to experience comparable social demands and socialization from the same others. Regardless of the strength of any direct relationship, employees who share relationships to the same people are likely to develop similar beliefs regarding promises that relates to non-competitive resources. Conformity to the opinions held by structurally equivalents satisfies an individual’s concern for adopting beliefs appropriate for a particular role in the informal organization (Burt, 1987). In contrast, centrality based on power or status differentials is unlikely to be very influential in shaping psychological contracts if promises relate to resources that when offered are widely 11 available. Status differences afford no advantage in accessing resources that are abundant. For promises pertaining to non-competitive resources, cohesion and structural equivalence are expected to shape employee psychological contracts. Hypothesis 2a: The psychological contract beliefs of coworkers to whom an individual is directly tied (cohesion) will be positively related to comparable beliefs of that individual with regard to non-competitive resources. Hypothesis 2b: The psychological contract beliefs of coworkers with whom an individual shares similar ties in the organization (structural equivalence) will be positively related to comparable beliefs of that individual with regard to non-competitive resources. Bounding the Effects of Social Interactions Though we have postulated direct relationships between informal social structure and psychological contract beliefs, certain boundary conditions can affect the strength of these relationships. People have different motives when interacting with each other, thus creating a diverse array of relationships within a social structure (Krackhardt & Brass, 1994; Marsden & Friedkin, 1994). Social network research categorizes network types by the content of the tie or nature of the relationship. Two types of ties have been extensively examined: (1) instrumental ties that arise from work-related interactions such as giving or receiving advice, and (2) expressive ties that arise from emotional closeness such as friendship and personal support. Previous research has shown that different ties yield different outcomes (e.g., Krackhardt, 1990, 1992; Ibarra, 1992; Ibarra & Andrews, 1993). For instance, employees tend to rely on friendship ties for dealing with highly stressful circumstances such as radical change or organizational crises (Krackhardt, 1992), but often use advice ties for coping with task uncertainty at work (Burkhardt & Brass, 1990; Rice & Aydin, 1991). Although both shape work-related beliefs, advice and friendship relationships channel their influences in different ways. Advice networks reflect instrumental action on the part of the employee and tend to influence beliefs through the effects of centrality, whereas friendship 12 networks reflect expressive motives and do so through proximity (Ibarra & Andrews, 1993). Advice relationships are likely to emerge over the course of work-related interactions as individuals mobilize resources to obtain desired outcomes. Often formed based upon the centrality of individuals in the informal social structure, advice relationships can be characterized as “weak, asymmetrical ties that serve as connections to disparate parts of the social system and that are critical for instrumental action” (Ibarra & Andrews, 1993: 283). As such, their patterns are likely to reflect systemic influences resulting from power or status differentials. Conversely, friendship relationships are often formed based upon similarity in interests, personal attributes, or organizational affiliation. Friendship ties tend to be symmetrical and characterized by frequent contact and emotional intimacy (Granovetter, 1973, 1982). As such, friends are often perceived as reliable sources for information regarding their own and third parties’ (e.g., friends of friends, structural equivalents) opinions and behaviors. The type of network interaction therefore is expected to bound both systemic and local effects with regard to psychological contract beliefs. In consequence, the systemic effects of centrality on psychological contract beliefs are more likely to be observed in advice relationships (Hypothesis 1), and the local effects of proximity (Hypotheses 2a and 2b) more likely in friendship relationships. Methods Sample and Procedure Data were collected at a bioscience school of a growing national university in Latin America. The initial phase of the project consisted of regular site-visits and semi-structured interviews with faculty members, departmental heads, and school’s authorities. The goals were twofold: (a) to obtain an understanding of the research context, its culture, structure, and activities, and (b) to adapt a widely-used psychological contract instrument (Rousseau, 2000) to the specific context of this research so that survey items assessed employment conditions meaningful to respondents. During the second phase, faculty members completed questionnaires containing psychological contract statements and sociometric questions. This study used surveys 13 in Spanish. To guarantee consistency with the original English scales, survey measures were independently translated back and forth from the original English version (Brislin, 1980). The few discrepancies in meaning resulting from the comparison of the two versions of the questionnaires in the source language were solved by the bilingual author using a process of consultation and collaboration with bilingual members of the school’s top management team (Frey, 1970). School administrators, technical staff, and part-time faculty were not included in this research due to the very distinct nature and content of their work. Participants were assured that all survey responses would be confidential. Demographic data were collected from official administrative records. All 107 full-time faculty members in the three major academic departments at the school were surveyed, yielding 96 completed surveys (89.72%). At the school, the dominant human resource strategy was to develop its own faculty by supporting their formal education for the job. Almost 60% of the faculty held a graduate degree. Respondents represented the five formal positions of the tenure system in this university: 21% assistant professors (the typical entry level), 27% senior assistant professors, 28% associate professors, 18% senior associate professors, and 6% full professors. They were fairly evenly distributed with respect to gender (51 were male and 45 were female). Average age was 39.42 years (SD = 7.43 years). Average organizational tenure was 12.36 years (SD = 7.23 years), reflecting a relatively low turnover rate. Measures Sociometric indices. Respondents were provided with a complete roster of full-time faculty and asked to place a check next to the names of the faculty members (1) to whom their went for help or advice regarding work-related problems and general organizational matters, and (2) with whom they went to lunch or met socially outside of work on a frequent basis. These answers provided the raw data to define advice and friendship networks, respectively. A cell entry Xij in the raw advice sociomatrix was coded 1 if faculty i went to faculty j for advice and 0 otherwise. Because this research also required measures of power or status differences, 14 asymmetries in responses were preserved to make a distinction between being the origin (source) or destination (object) of a relational tie (Burt, 1982). An actor has higher power or status when he or she is the destination of a relational tie, reflected by the actor’s indegree in the raw sociomatrices. In the advice sociomatrix, for example, an actor’s indegree reveals the number of other people who go to that actor for advice. Thus, the transpose of the raw sociomatrices was used to represent the relationship (i.e., being sought after for advice). Structural equivalence. Structural equivalence measures similarity in access to other people. Two actors are structural equivalent when they have identical relations with others in a network (Lorrain & White, 1971; Marsden & Friedkin, 1994). That is, the two actors have ties with and lack ties with identical sets of other actors. However, this restrictive definition of structural equivalence is seldom realized in actual networks given that the likelihood of having two actors with exactly identical ties decreases dramatically with the size of the network. For that reason, structural equivalence was operationalized here in terms of degree using the Pearson product correlation coefficient of every pair of actors computed on both the rows and columns entries of the sociomatrices (Borgatti, Everett, & Freeman, 2002). In this procedure, diagonal elements are treated as missing values. Results are interpreted such that the greater the correlation coefficient for a given pair of actors, the greater their structural equivalence. We assessed structural equivalence in both advice and friendship sociomatrices. Centrality. Because the focus is on power or status differences, centrality was operationalized using the Bonacich’s c(,) measure which allows for different relationships between power or status and centrality (Bonacich, 1987). This measure is formally defined as: c ( , ) k R k 1 1 k 1 In this formula, is a scaling factor used to normalize the measure, R is the transpose of the raw sociomatrices, is an attenuation factor, and 1 is a column vector of ones. Central to the definition of the Bonacich’s power-based centrality measure is the parameter , which reflects 15 the extent to which an actor’s power is contingent on the power of other actors to whom he or she is connected in the network. When > 0, it means that not all relationships contribute equally to an actor’s power; that is, being connected to powerful others increases an actor’s power in the network, whereas being connected to powerless others is not very consequential. By simply setting different values, the c(,) measure can account for all possible relationships between power and centrality. In particular, when β = 0, the formula yields results proportional to degree centrality because direct ties are taken into account regardless of the other actors’ centralities. Of particular interest for the present study is the case when β > 0, which reflects that an actor’s power is positively affected by his or her connections to other powerful actors. Because higher values of β give greater weight to the systemic power structure (as opposed to the local structure), we set the attenuation factor β at three-quarters of its upper bound given by the reciprocal of the largest eigenvalue of the R matrix (cf. Podolny, 1993). Finally, the Bonacich’s measure is suitable for both symmetric and asymmetric networks; yet, it measures centrality in the former and power (as long as > 0) in the latter. For that reason, it was essential to preserve the asymmetries in the data. Reciprocation rates of 23.98% for advice and 60.47% for friendship reflect the distinctive nature of these two types of relationships. Psychological contract scales. Using items adapted from the Psychological Contract Inventory (PCI) (Rousseau, 2000), faculty evaluated the extent to which the employer had made such promises or commitments to them. All items used a 5-point Likert type scale response format ranging from 1 (not at all) to 5 (to a great extent). Faculty responded to several statements assessing promises that relate to both competitive and non-competitive resources. In particular, three dimensions of the PCI were framed in terms of scarce resources and thus used to denote promises relating to competitive resources. Dynamic performance describes the extent of the employer provided resource necessary to support faculty projects and successful fulfillment of performance requirements. The scale consisted of three items including resource support to 16 attain the highest possible levels of performance, to respond to ever greater academic challenges, and to meet increasingly higher goals. Cronbach’s alpha () for the scale was 0.89. Career development describes the extent of resource support for faculty advancement and development opportunities enhancing faculty long-term employability. The scale consisted of three items including resource support for training and development within the organization, for conference attendance and participation in professional events, and pursuit of further formal academic education ( = .79). Involvement in the organization describes the extent to which employees enjoy opportunities for high involvement in the organization. The scale consisted of three items including involvement in organizational matters, participation in decision making, and participation in ad-hoc committees ( = .86). In our examination of the research setting, we found these three dimensions of the PCI suitable to reflect promises relating to competitive resources. In the case of support for performance and for career development, budget constraints limited both resources allocated to projects and to employee development opportunities. Although the school had several programs supporting its core activities of teaching, research, and outreach, faculty had to compete for that funding by submitting internal proposals for project performance and scholarly development. Due to limited funds many proposals failed to receive support and solid proposals often obtained only partial support. The competitive nature of organizational involvement derives from structural requirements restricting faculty involvement and participation. A faculty member’s participation in one or more of the several committees that governed the school was contingent on meeting specific criteria (such as rank or tenure) and/or being elected or appointed for the position (which often necessitated building sufficient political support). In addition, three other dimensions of the PCI were found suitable to represent promises relating to non-competitive resources. Security describes whether the employer has committed to offering stable benefits and long-term employment. The scale consisted of three items including 17 secure employment, wages and benefits the employees can count on, and stable benefits for employees and families ( = .85). A promise involving wages was categorized as noncompetitive because faculty wages in this university were regulated by the federal government. Loyalty describes the extent of the employer’s concern for the well-being and long term interests of employees. The scale consisted of three items including the employer’s concern for employee welfare, responsiveness to employee concerns and well-being, and whether the employer makes decisions with employee interests in mind ( = .79). Finally, predictability describes the extent of certainty regarding the employer’s future commitments. The scale consisted of three items including predictability regarding the future direction of this employment relationship, future commitments to employees, and future demands ( = .82). Interviews with top management in the school indicated that they sought to build an open-ended relational agreement with faculty to provide a stable personnel base with which to pursue the school’s long-term strategic goals. Security, loyalty, and predictability are core features of relational employment arrangements. We examined the discriminant validity of the psychological contract scales using a confirmatory factor analysis with maximum likelihood estimation. Using Amos 5, the factor structure reached the standards of good fit along a variety of indices. The ratio of chi-square relative to its degrees of freedom (2/df) was 1.133, considerably better than the suggested ratio of 2 (Arbuckle & Wothke, 1999). Incremental fit index (IFI) and comparative fit index (CFI) of .978, and Tucker-Lewis index (TLI) of .972 were all above the recommended standard of .90. Finally, the factor structure presented a root-mean-square error of approximation (RMSEA) of 0.037, suggesting a reasonable fit to the hypothetical population covariance matrix of optimally chosen parameter values (i.e., RMSEA values less than .05, Browne & Cudeck, 1993). Control Variables. Data analyses controlled for several additional variables to rule out alternative explanations of the results, including effects of employee characteristics and formal positions (Rice & Aydin, 1991; Burkhardt, 1994). Among the demographic variables, we 18 controlled for gender, organizational tenure, educational level, and individual prestige. Gender in particular is often associated with access to opportunities in academic settings (e.g., rank advancement, Long, Allison, & McGinnis, 1993), with men often enjoying better opportunities than women. Faculty tenure in the university, measured in years, was controlled for because employees from similar cohorts are likely to share similar experiences and thus to develop similar perceptions at work (Krackhardt & Kilduff, 1990). Educational level is also likely to condition access to and control over resources, with those holding doctoral degrees enjoying better opportunities within the university. Finally, faculty members with higher reputation or prestige can have preferred access to resources based on their past achievements. Prestige was measured using a weighted index of number of referred publications, conference presentations, and invited seminars that this university used for internal appraisals. In addition, academic departments and rank were the two structural variables included in the analysis. As described above, faculty belonged to three different academic departments and represented the five formal positions of the tenure rank (coded from 1 to 5). Table 1 presents the means, standard deviations, and correlations between all relevant variables. -----------------Insert Table 1 about here -----------------Data Analysis A central methodological concern in social network research is how to approach the problem of autocorrelation. The relational observations in the sociomatrices are interdependent because they represent patterns of location and interaction among individuals in the informal social structure. A correlation exists between the perceptions of a person in a given location within the informal social structure and the perceptions of others in neighboring locations (e.g., his or her friends, advice-givers, or structural equivalents). In the presence of network autocorrelation, ordinary-least-squares (OLS) procedures cannot be used to test the significance 19 of regression coefficients. Previous research has shown that increasing autocorrelation weights produce biased OLS tests, where significance levels tend to be consistently overestimated (Krackhardt, 1987, 1988). One frequently used technique for coping with the network autocorrelation problem is the Quadratic Assignment Procedure (QAP), a nonparametric, permutation-based approach to test for network effects in relationships where both predictor and outcome variables are represented in network or dyadic form. Yet, QAP has also been used to test social influence by examining whether the patterns of interaction among pairs of individuals are related to attitudinal or perceptual similarity (e.g., Burkhardt, 1994; Ho, 2002; Pastor, Meindl, & Mayo, 2002). To assess the degree of similarity in attitudes and perceptions, these studies used dissimilarity matrices constructed by transforming the vector of individual ratings on the scale measuring the attitude or perception of interest into a square matrix composed of absolute differences between ratings for each pair of individuals. This model presents important limitations because it does not provide a direct test of social influence (i.e., whether the rating of an individual in a given location is affected by the ratings of others in neighboring locations) while incurring in a loss of relevant information (i.e., whether the individuals’ ratings on attitudes or perceptions were more positive or negative). A superior model for directly testing the social influence process is the network autocorrelation model, also known as mixed regressive spatial autoregressive model (Cliff & Ord, 1981; Doreian, 1982; Doreian, Teuter, & Wang, 1984; Anselin, 1988). This method accounts for network autocorrelation by including a lagged dependent variable (Wy) as one of the explanatory variables and yields parameter estimates for the independent variables that can be interpreted in the same way as in OLS regression. Although several procedures exist for the estimation of network autocorrelation models, the maximum likelihood (ML) is the most extensively used and the one with the best overall performance (Leenders, 2002). Formally, the model can be expressed as y = ρWy + X + ε 20 where y is a vector of observations on the dependent variable, W represents the strength of the influence process between every pair of observations, ρ is the network autoregressive coefficient that represents the average effect of others’ ratings on the dependent variable on one’s own rating, X is a matrix of observations on the exogenous explanatory variables with its associated vector of regression coefficients , and ε is the vector of normally distributed random error terms with zero means and constant variances. Based on the assumption of normal error term, an iterative maximum likelihood approach can be used to estimate the coefficients of the network autocorrelation model. The autoregressive coefficient ρ associated with the inclusion of the lagged term is an estimate of the degree and direction of the network dependence or proximity effect, such that ρ reflects the extent to which the perception of an individual in a given location is shaped by the perceptions of others in neighboring locations within the social space. At the same time, the inclusion of the lagged term allows for an examination of exogenous variables while controlling for the network dependence in the observations. Central to the implementation of this model is the specification of the W weight matrix representing the dyadic-level process by which influences are transmitted among sociallyproximate individuals (Leenders, 2002). Different specifications of the weight matrix can reflect various proximity-based mechanisms of social influence and types of social ties. In this study, we computed the weight matrix on the basis of cohesion and structural equivalence in both advice and friendship networks. However, the alternative weight structures were tested in separate models due to current limitations in the estimation procedures for network dependence. Limitations also make it impossible to test directly for differences in the magnitude of effects for influence mechanisms or types of social ties. To estimate the model, all W matrices were rowstandardized by dividing each element in a row by the corresponding row sum. In the case of binary matrices (e.g., advice), this means that each outgoing tie exerts the same amount of influence on the focal actor and that the total influence accepted is equal for all actors. 21 Our model also includes the corresponding measures of centrality, individual characteristics, and formal position. One caveat for use of this maximum likelihood analysis is that its standard error of estimate tends to be underestimated in smaller samples. Because statistical inference in maximum likelihood estimation is based on asymptotic (or large-sample) properties, it can yield an overly optimistic indication of significance in smaller samples (Anselin, 1988). This study’s sample size (N=96) is relatively large by network research standards where N’s typically are below 80 (e.g., Rice & Aydin, 1991; Friedkin, 1993; Ibarra & Andrews, 1993; Burkhardt, 1994; Meyer, 1994). Because the small sample corrections that exist do not apply to network autocorrelation models, we employ .01 as our criterion for statistical significance. Results at the .05 level will be reported but interpreted with caution. Results Using network indices derived from advice ties, Table 2 presents the regression analyses for the psychological contract terms involving competitive resources: support for performance, support for career development, and involvement opportunities. For each of them, cohesion and structural equivalence are included in separate regression equations. Then, each regression model is presented in two steps so that effects of informal social structure can be more clearly identified. In step I, we report the estimates of all the control variables along with the corresponding effect of local proximity (cohesion or structural equivalence). In step II, centrality in the larger informal social structure is also entered into the regression equation allowing for a simultaneous examination of both local and systemic effects. Overall, our results provide support for Hypothesis 1 that centrality is related to those employee psychological contract beliefs involving competitive resources. In particular, centrality in the advice network was related to employee beliefs regarding the extent to which the employer had promised support for performance even after controlling for the effects of cohesion (B = 1.951, p < .001) or structural equivalence (B = 1.879, p < .001). Likewise, advice centrality was significantly related to employee beliefs regarding involvement opportunities (B = 1.483, p < 22 .01, and B = 1.469, p < .01, after controlling for cohesion and structural equivalence, respectively). In addition, faculty member prestige was positively related to beliefs regarding performance support, whereas his or her rank or formal position in the tenure system was positively related to beliefs regarding involvement opportunities. Neither cohesion nor structural equivalence predicted psychological contract beliefs regarding performance support or involvement opportunities. -----------------Insert Table 2 about here -----------------Advice centrality was not significantly related to beliefs regarding support for career development. In this case, however, we did find a significant (albeit unexpected) effect of structural equivalence for advice ties (ρ = 0.377, p < .01, and ρ = 0.358, p < .05, before and after controlling for advice centrality, respectively). In other words, having similar access to other faculty in the advice network shapes employee beliefs regarding the extent of support for career development. It is worth noting, however, that results at the .05 level should be interpreted with caution in light of the model’s tendency toward underestimating standard errors in small samples. In addition, tenure was negatively related to psychological contract terms relating to support for career development, suggesting that more recently-hired faculty held more positive beliefs regarding advancement and development opportunities than did long-tenured faculty. Finally, we used network indices derived from friendship ties to examine relationships with those psychological contract terms involving competitive resources. Unlike findings regarding advice ties, no significant relationship was found between either proximity or centrality in friendship ties with employee beliefs involving competitive resources (See Table 3). -----------------Insert Table 3 about here -----------------23 Turning to psychological contract terms involving non-competitive resources, results partially support hypotheses 2a and 2b. Proximity in the advice network, based either on cohesion or on structural equivalence, had no significant relationship with psychological contract terms regarding job security and stable benefits or genuine concern for employees (see Table 4). Cohesion in advice ties, however, was significantly related to employee beliefs regarding the predictability of the employment relationship’s future direction (ρ = 0.336, p < .01, and ρ = 0.278, p < .05, before and after controlling for advice centrality, respectively). Faculty members tend to hold beliefs regarding the predictability of their employment relationship’s future that are similar to those of other faculty to whom they go to for advice regarding work-related issues. Moreover, advice centrality yielded a significant (albeit unexpected) relationship to beliefs regarding the future of one’s employment in the organization (B = 0.945, p < .05), suggesting that individuals who enjoy a central position in the advice network tend to develop more positive beliefs regarding the future of their employment with the organization. Lastly, faculty rank was also positively related to beliefs regarding predictability, a result plausible given the nature of the stable employment relationship characteristic of academia’s higher ranks. -----------------Insert Table 4 about here -----------------Table 5 presents the regressions of psychological contract terms involving noncompetitive resources upon the relationship and control variables. The friendship proximity measures, that is, cohesion and structural equivalence, were strongly related to employee beliefs regarding job security and stable benefits, even after controlling for friendship centrality (ρ = 0.360, p < .001 for cohesion, and ρ = 0.433, p < .001 for structural equivalence). These results suggest that, when assessing promises regarding job security and stable benefits, a relationship exists between the beliefs of an individual and those of both close friends and structural equivalents in the friendship network. Likewise, both cohesion and structural equivalence in the 24 friendship network were significantly related to beliefs regarding the employer’s genuine concern for employees (after controlling for friendship centrality, ρ = 0.233, p < .05 for cohesion, and ρ = 0.303, p < .05 for structural equivalence). As noted above, these latter results at the .05 level should be interpreted with caution. Proximity in the friendship network, on the other hand, was not a significant predictor of employee beliefs regarding predictability of the employment relationship. Finally, friendship centrality was unrelated to the three psychological contract terms relating to non-competitive resources. -----------------Insert Table 5 about here -----------------Taken together, the regressions above provide evidence for boundary conditions operating on the relationships between social interaction and psychological contract beliefs. The relationship of centrality to psychological contract beliefs was significant for advice ties but not for friendship. This pattern was particularly evident for beliefs involving competitive resources such as support for performance and involvement opportunities in the organization. Centrality in the friendship network had no significant association with any psychological contract belief studied here. Because the Bonacich’s centrality measure allows for different relationships between power and centrality, we also conducted follow-up examinations setting different values for , that is, the parameter representing the extent to which an actor’s power depends on the power of the other actors with whom he or she is connected. In results not presented here, we confirmed that regression coefficients for both advice and friendship centrality were stable and consistent with those reported here along an ample range of meaningful values (0.5 1). Furthermore, we also confirmed the stability and consistency of these relationships when both advice and friendship centrality were entered into the same equation. Proximity’s relationships, in contrast, were significant for friendship ties and particularly with psychological contract terms involving non-competitive resources (e.g., security and stable 25 benefits, concern for employees). Although proximity in the advice network also demonstrated some significant relationships with psychological contracts (i.e., cohesion on beliefs regarding predictability and structural equivalence on beliefs regarding career development), overall, the effects of proximity manifest in the friendship network. Finally, in the two cases where both proximity-based mechanisms yielded significant relationships with psychological contract beliefs (i.e., security and stable benefits, and concern for employees, see Table 5), we conducted a follow-up examination to determine whether relationships involving cohesion dominated those of structural equivalence, or vice versa. Augmented regressions were used to test non-nested hypotheses by considering each specification of the weight matrix (i.e., cohesion or structural equivalence) in turn as an alternative hypothesis (Anselin, 1984, 1988; Leenders, 2002). In formal terms, the two alternative specifications are represented in pairwise fashion, as follows: H0 : y = ρcWcy + Xc + ε H1 : y = ρseWsey + Xse + ε where Wc represents the weights for cohesion, Wse represents the weights for structural equivalence, and the X matrix of observations on the exogenous variables is the same in both models. First, the structural equivalence model (H1) is considered in an attempt to falsify the cohesion model (H0, set as the null in the previous formulation). This simply requires a test for the significance of a nesting coefficient in the following augmented regression: y (1 )(cWcy Xc) ( seWsey X se ) where se and se are ML estimates calculated from the alternative specification using structural equivalence only (H1). This test is also known as the J-test (Davidson & MacKinnon, 1981). In the model, a significant would reveal that the null specification is rejected in favor of the alternative specification, suggesting that structural equivalence provides a superior account for the influence structure than does cohesion. However, because the J-test is not symmetric, the 26 test must be carried out again but reversing the roles of null and alternative hypotheses. In other words, the cohesion model (now set as alternative hypothesis) is considered in an attempt to falsify the structural equivalence model (now set as null). A problem with the J-test is that several results are possible. Ideally, one specification is rejected in favor of the other. But is also possible that neither of the hypotheses can be rejected or that both hypotheses can reject each other. Therefore, the test may or may not indicate the presence of a superior specification. Our results reveal that cohesion dominated structural equivalence for psychological contract terms relating to job security and stable benefits. In particular, when cohesion was set as null, the alternative specification using structural equivalence could not reject the null hypothesis ( = 0.67, n.s.). On the other hand, when we reversed the roles setting structural equivalence as null, the alternative specification using cohesion rejected the null hypothesis ( = 2.17, p < 0.05). Although both proximity-based mechanisms were significantly related to employee beliefs regarding the extent of job security and stable benefits (see Table 2), this result suggests that being close friends (cohesion) may provide a superior account for social influence than having similar friendship ties (structural equivalence). Finally, for psychological contract terms relating to the employer’s genuine concern for employees, no single specification could falsify the other. Discussion This study calls attention to the advantages of examining psychological contracts in the context of the informal social structure in which employees are embedded. In large measure, the core hypotheses of this study are supported, underscoring the relationship between social factors and employee psychological contracts. Simultaneously examining social processes operating at different levels reveals relationships between psychological contract beliefs and both systemic effects of centrality in the larger informal social structure and local effects of proximity between pairs of individuals. The specific relationships involving centrality and proximity depend on the particular contract obligations and social tie examined. We note also that while causal direction is not directly tested in the present study, the pattern of results is largely consistent with the role 27 of informal social structure as a source of information regarding the psychological contract between employees and their organization. Centrality is positively related to worker beliefs in psychological contract terms involving competitive resources. People differing in their standing in the larger informal social structure hold distinct views of their employment relationship but only for obligations regarding competitive resources such as financial support and influence over decisions. Insofar as individuals with high standing are well-positioned to receive employer commitments regarding both competitive and non-competitive resources, we observe that their standing is related only to competitive resources. Moreover, if sense of entitlement leads people to seek central positions, their levels of all psychological contract beliefs should be elevated. Since highly central individuals do not manifest across-the-board entitlement, it seems more likely that their belief in access to competitive resources is due to their informal power. Individuals in powerful positions are better able to fill requests for others, to contribute effectively, and otherwise engage in actions that create beliefs that the employer is obligated to reciprocate by providing them special access to scarce resources (cf. Flynn, 2003, Rousseau, in press). This pattern of results suggests that centrality is a cause rather than a consequence of holding particular psychological contract beliefs. The fact that relationships with centrality were found for advice but not for friendship ties provides support for the notion that advice ties are critical for instrumental action as individuals mobilize resources to obtain desired goals (Ibarra & Andrews, 1993). It further supports a resource-based view of centrality predicated upon power or status differentials. Those who are better positioned to control how resources are allocated often enjoy better organizational opportunities. In consequence, they develop more positive beliefs in promises involving competitive resources. Power or status differences often coincide with the rank or position each individual holds in the formal organizational hierarchy. In this study, rank was positively related to psychological contract beliefs regarding organizational involvement, suggesting that faculty 28 members with superior positions expect to enjoy better opportunities to participate in decisions. Nonetheless, effects of rank diminished considerably when advice network centrality was entered into the equation (see step II, Table 2). This result suggests that the effects of formal position may in part be captured by relative standing in the informal social structure surrounding advice ties. In general, the relationship between centrality and psychological contract beliefs are not only substantial but can be greater than formal sources of influence. Proximity was expected to be positively related to beliefs pertinent to non-competitive resources. This relationship was partially supported using both cohesion and structural equivalence to specify proximity. In particular, for psychological contract terms regarding job security and stable benefits, workers were found to hold beliefs similar to those of their close friends (cohesion) and to those of others with whom they shared close friends (structural equivalence). A comparable albeit weaker relationship was also found for terms regarding the extent of employer concern for employees. These results suggest that friendship ties characterized by frequent contact and emotional closeness play a role in shaping promissory beliefs pertinent to non-competitive resources. Notably, the observed relationships associated with the friendship network occur both directly through close friends and indirectly via friendship ties with similar others. To a certain extent, this finding can reflect the confounding effects of cohesion and structural equivalence (Burt, 1987). When friendship ties are embedded within cohesive subgroups confined to specific areas of the network (e.g. those based on unit affiliation or common interest), direct ties are also likely among structurally equivalent individuals. In situations like this, both cohesion and structural equivalence predict social influence and “contagion (if for different reasons) between people strongly tied to each other and similarly tied to other persons” (Burt, 1987: 1291). The confounding effects of these two proximity-based mechanisms remain important, even though follow-up analyses using augmented regressions revealed that relationships involving cohesion dominated those involving structural equivalence in the case of job security and stable benefits. The similarity of 29 relationships involving cohesion and structural equivalence for friendship ties raises the issue of how social influence operates through structural equivalence. In this setting a highly plausible explanation is the solidarity and identification among people socialized similarly in an organization (Marsden & Friedkin, 1994; Friedkin, 1998; Shah, 1998) where shared friendship ties often occur (e.g., having the same mentor). Proximity in the advice network demonstrated relationships with one competitive and one non-competitive psychological contract term, though effects differ for cohesion and structural equivalence. Individuals tied to the same advisors shared beliefs regarding the extent of support for career development (a competitive term). One plausible explanation for this finding is that advisors were instrumental for getting access to career development opportunities, and thus, faculty members connected to similar advisors reported similar beliefs. This situation might be particularly likely in settings such as this where the dominant human resource strategy was to develop its own personnel (typically hired at entry levels) by supporting their formal education (e.g., pursuing a doctoral degree either at the university or abroad). Advice ties, which often reflect asymmetries in rank or status, are likely to include junior faculty going to senior colleagues for guidance regarding scholarly advancement and development. Thus in the case of the advice network, similarity in beliefs can reflect shared experiences among structurally equivalent others who rely upon the same advisor for information or commitments regarding the treatment each can expect from the employer. In addition, we note that faculty held beliefs regarding predictability of the employment relationship (treated here as a non-competitive term) similar to those of their advice-givers and that both rank and advice centrality were also related to predictability. The relationship between these instrumental influences and the predictability of one’s future with the employer suggests that this belief is a function of competitively allocated opportunities in this setting. Interviews with top management in the school confirmed the role senior faculty played in channeling advancement and development opportunities to their advisees. Ties to senior faculty 30 and other advice-givers can thus impact how faculty foresee their future employment opportunities in the university. The central role of senior faculty is supported by several other findings. In particular, tenure was negatively related to psychological contract terms regarding support for career development, suggesting that the school was targeting most of its training and development efforts toward younger or more-recently hired faculty. Moreover, neither rank nor advice centrality yielded significant relationships in this instance. We conjecture that faculty members in high rank or status positions did not benefit directly from the career development opportunities available in this organization (largely because most of them already held advanced degrees). Instead, they were prompted to use their privileged access to resources to ensure advancement and development opportunities as well as a continuing relationship with the university for their advisees. This is consistent with the university’s policy of building openended relational agreements with faculty to provide a stable personnel base with which to pursue long-term strategic goals. Our findings suggest that beliefs regarding predictability of the employment relationship were shaped simultaneously by the local effects of direct advice ties, the systemic effects of advice centrality, and the employee’s rank in the formal organization. Strengths and Limitations This study overcomes several limitations of previous research on the formation and development of the psychological contract. Although that research has been largely limited to theoretical or descriptive explanations, our analysis offers an empirical examination of the relationship between informal social interaction patterns and employee psychological contracts. Methodologically, this study demonstrates the advantages of using network autocorrelation models for investigating social influence (Leenders, 2002). The weight structure of network dependence was computed on the basis of both cohesion and structural equivalence and, when deemed necessary, a superior structure was chosen using the falsification approach for testing non-nested models. This study also simultaneously examined systemic relationships involving 31 centrality and the consistency of the results using alternative weights for the attenuation factor of the Bonacich’s power-based centrality measure. This study’s generalizability may be limited by peculiarities in the research context. Employees cannot always infer that coworkers are party to a comparable psychological contract with the employer. In firms with diverse employee backgrounds and job categories, the role of social information in shaping psychological contracts is likely to be limited to interactions between those doing similar work. In contrast, the university setting studied here may be an optimal environment for investigating social influence in the employment relationship. Not only did faculty members do similar work, by they also played a very active role in their school’s governance by taking on managerial responsibilities and by blessing the selection of other colleagues. Such active involvement is more characteristic of knowledge-driven organizations but may be less common in other firms. Other limitations include use of Spanish translations from survey measures developed in the United States. Although the scales’ validity and reliability are confirmed in other regions and different languages (e.g., Rousseau, 2000; Hui, Lee, & Rousseau, 2004), response patterns may differ from those observed elsewhere. In addition, the sociometric questionnaires assessed intraorganizational relationships only, whereas social interaction patterns with outsiders remained unobserved. Future research should investigate the circumstances under which external relationships are likely to play a role in shaping psychological contracts. Finally, this study focuses on general promises conveyed to all employees. Although an important number of contract expectations were several specific to particular departments (e.g., course teaching units, research centers, extension projects), these expectations did not provide a common base for comparison across all faculty due to their distinctive tasks and responsibilities. Implications for Theory and Research This study has important implications for both psychological contract and social network theory and research. It provides evidence regarding two key issues in psychological contract 32 research: the antecedents of psychological contract beliefs and the factors shaping mutuality or agreement among workers regarding these beliefs. The social information employees obtained directly or indirectly from advice-givers, friends, and their relative standing in the informal social structure is related to their formulations of the psychological contracts with the employer. Psychological contracts are based on information from a variety of sources, mentors, coworkers, supervisors, top managers and from practices including training and performance appraisals (Rousseau & Greller, 1994; Rousseau, 1995; Cooper & Sparrow, 2003). In the setting studied here it is reasonable for one faculty member to infer that colleagues on the same faculty are party to a comparable psychological contract, making social information regarding the employment information personally relevant. In contrast, where coworkers are not expected to share the same relationship with the employer, the impact of social information on one’s understanding of the psychological contract is less likely. Research is needed on the boundary conditions shaping whether workers actually use the information their social contacts provide in understanding the psychological contract. Resource type impacts the kinds of social influence shaping the psychological contract (Ho, 2002); however, more research is needed regarding the mechanisms behind this influence. Socialization research indicates that employees can derive information via active inquiry from friends and advice givers and through monitoring and observation of the conversations and experiences of others (Morrison, 1993, 2002). Although our results indicate that close friends and structural equivalents in friendship tend to agree on non-competitive terms, we do not know how this agreement arises in the first place. For instance, two friends might have spoken about these employment conditions and arrived at a common point of view, might have become friends because they think similarly, or might have observed each other accessing the same noncompetitive resources and concluded therefore that they were each entitled to the same thing. Any and all of these conditions can give rise to perceptual agreement based upon relational 33 proximity. Teasing out these effects necessitates use of in-depth qualitative methods as well as longitudinal studies of social influence. The present study indicates that agreement regarding psychological contract terms can exist between workers adjacent to each other or similarly tied to other people in the social network, particularly regarding non-competitive resources. Agreement in psychological contract terms is typically conceptualized as mutual understanding between worker and employer. Our findings suggest that social influence creating agreement among workers can contribute to mutuality of understanding between workers and their employer. Shared information is critical to mutuality regarding psychological contracts (Rousseau, 2001). Employers who convey information in a fashion that builds agreement among work groups and the organization’s broader informal social structure (e.g., by conveying conditions of employment in a public setting such as a town meeting) are more likely to create employee-employer mutuality. Mutuality is an important feature of the employment relationship because it shapes both worker and organizational outcomes associated with the exchange (Dabos & Rousseau, 2004). More research is needed on the kinds of shared information used to create mutuality. In the present study, the role of the social network may be accounted for in part by the fact that all employees surveyed were faculty members and likely to be party to comparable psychological contracts and a common underlying normative contract. When there is broad agreement across the psychological contracts of coworkers, a normative contract exists (Nicholson & Johns, 1985; Rousseau, 1995). Normative contracts are beliefs regarding terms of employment shared by a work group. They have the advantage in that social interaction can reinforce shared interpretation when employers seek to standardize terms of employment throughout the organization (as in the case of many employers who seek to become employers of choice, Cappelli, 2000) or for members holding comparable positions (Rousseau & Ho, 2000) who are part of the same social network (e.g., tenure-track faculty in universities, engineers in a product development firm). Research is needed on the role of social interaction in shaping psychological contract beliefs 34 of workers in different job categories (e.g., faculty and support staff) and units having dissimilar normative contracts (e.g., departments with different emphases on research or teaching). Workers also differed in their beliefs regarding their individual psychological contracts. Findings indicate that one’s relative standing in the larger social structure may itself be a contract-making signal, particularly in the case of access to competitive resources. People with greater centrality experience more support for project performance, involvement opportunities, and predictability regarding their future with the employer than their less central colleagues. Power or status differences shape both the content and direction of information exchange and play a potentially important role in differentiating psychological contract terms among workers in the same organization. When an individual’s psychological contract combines terms coworkers share with those idiosyncratic to that individual, we would expect social influence processes to operate differently between these shared and idiosyncratic terms. Those social processes that reinforce mutuality among shared terms may also foster comparisons that erode agreement where idiosyncratic terms exist. Conclusion This study advances our understanding regarding how psychological contracts in employment are formed and maintained. The informal social structure provides potentially important information regarding one’s relationship with an employer. But its influence can depend upon the type of resources employers offer to workers. This study argues for careful attention in employment research to how resources are allocated, whether competitively to a few or widely shared. To network scholars this study speaks to the critical role that the nature of information plays in shaping how network influence functions. 35 References Ajzen, I., & Fishbein, M. 1973. Attitudinal and normative variables as predictors of specific behaviors. Journal of Personality and Social Psychology, 27: 41-57. Allen, V. L., & Wilder, D. A. 1977. Social comparison, self-evaluation, and conformity to the group. In J. M. Suls & R. L. 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Psychological Bulletin, 106: 231-248 Zalesny, M. D., & Ford, K. J. 1990. Extending the social information processing perspective: New links to attitudes, behaviors, and perceptions. Organizational Behavior and Human Decision Processes, 47: 205-246. 43 Table 1 Descriptive Statistics and Correlations among Variables Mean s.d. 0.53 0.50 12.36 7.23 .13 3. Educational Level (Ph.D.) 0.58 0.50 .26** .46** 4. Prestige 7.39 3.97 .33** .34** 5. Academic Department 1 0.26 0.44 .18 6. Academic Department 2 0.42 0.50 -.01 7. Academic Department 3 0.32 0.47 -.15 8. Faculty Rank 2.61 1.18 .33** .67** .50** .62** -.11 .13 -.04 9. Advice Centrality 0.28 0.23 .44** .30** .38** .51** .12 -.04 -.07 10. Friendship Centrality 0.32 0.21 .07 -.04 .24* .09 .04 -.12 .09 .09 .39** 11. Support for Performance 3.06 1.09 .28** .01 .23* .44** .25* -.18 -.05 .19 .47** .19 12. Support for Career Development 3.22 0.94 .08 -.23* .01 .09 .19 -.28** .12 .05 .17 .18 .18 13. Involvement Opportunities 2.99 1.07 .25* .38** .44** .42** .11 .00 -.11 .55** .54** .15 .20 .11 14. Security and Stable Benefits 3.05 0.92 .25* .27** .24* .33** .11 -.09 -.01 .40** .39** .17 .24* .09 .20 15. Concern for Employees 3.23 0.89 .09 -.04 .02 .19 .29** -.38** .13 .04 .17 .19 .16 .12 .05 .08 16. Predictability regarding Future 3.22 0.93 .23* .19 .30** .42** .06 .02 -.08 .48** .49** .17 .29** .10 .33** .22* Variables 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Individual Characteristics 1. Gender (Male) 2. Organizational Tenure .42** Formal Position -.21* .32** -.14 .07 .24* -.01 -.11 -.50** -.05 -.11 -.41** -.58** Structural Centrality .56** Psychological Contract Scales Note. N = 96 for all variables. * p < 0.05 ** p < 0.01 44 .06 Table 2 ML Estimation of Network Autocorrelation Models for the Effects of Advice Ties on Promises Relating to Competitive Resources Support for Performance Outcomes Cohesion I Support for Career Development Equivalence I II II Cohesion I II Equivalence I II Involvement Opportunities Cohesion I II Equivalence I II Predictors: Constant Gender (Male) Organizational Tenure Educational Level (Ph.D.) Prestige Academic Department 2 Academic Department 3 Rank Rho (ρ) – Cohesion 2.772*** (.512) 0.343 (.212) -0.019 (.020) 0.238 (.236) 0.113*** (.034) -0.294 (.281) -0.175 (.273) -0.047 (.139) -0.099 (.128) 2.910*** (.481) 0.157 (.205) -0.015 (.018) 0.163 (.221) 0.096** (.032) -0.228 (.261) -0.123 (.254) -0.196 (.137) -0.140 (.124) Rho (ρ) – Equivalence 2.070*** (.592) 0.288 (.212) -0.015 (.020) 0.226 (.235) 0.109** (.034) -0.234 (.276) -0.142 (.272) -0.084 (.139) 0.144 (.163) 1.951*** (.526) Advice Centrality 2.409*** (.580) 0.112 (.206) -0.013 (.019) 0.158 (.223) 0.095** (.032) -0.197 (.260) -0.107 (.256) -0.221 (.138) 2.543*** (.492) 0.001 (.189) -0.047** (.017) -0.009 (.210) -0.009 (.030) -0.336 (.246) -0.065 (.241) 0.291* (.124) 0.223 (.125) 0.036 (.167) 1.879*** (.531) 2.619*** (.497) -0.034 (.195) -0.047** (.018) -0.019 (.210) -0.012 (.030) -0.333 (.246) -0.060 (.241) 0.262* (.130) 0.204 (.126) 2.028*** (.538) 0.057 (.185) -0.043* (.017) -0.033 (.206) -0.008 (.030) -0.276 (.243) -0.054 (.235) 0.255* (.122) 2.099*** (.543) 0.026 (.191) -0.042* (.017) -0.041 (.206) -0.011 (.030) -0.274 (.244) -0.049 (.236) 0.233 (.128) 0.377** (.141) 0.358* (.143) 0.288 (.486) 0.360 (.495) 1.686*** (.453) 0.021 (.194) 0.001 (.018) 0.441* (.216) 0.007 (.031) -0.298 (.251) -0.331 (.251) 0.377** (.129) 0.063 (.128) 1.972*** (.444) -0.113 (.193) 0.004 (.017) 0.375 (.208) -0.004 (.030) -0.253 (.240) -0.336 (.240) 0.279* (.130) -0.033 (.129) 1.609** (.540) 0.010 (.195) 0.002 (.018) 0.438* (.216) 0.007 (.031) -0.302 (.249) -0.338 (.248) 0.380** (.128) 1.965*** (.548) -0.110 (.193) 0.004 (.017) 0.378 (.208) -0.004 (.030) -0.251 (.239) -0.328 (.238) 0.277* (.129) 0.093 (.163) -0.031 (.172) 1.469** (.496) 1.483** (.494) R-Square .258 .353 .258 .346 .191 .196 .197 .202 .361 .414 .360 .413 df 87 86 87 86 87 86 87 86 87 86 87 86 * p < 0.05; ** p < 0.01; *** p < 0.001. Unstandardized coefficients. Standard errors are in parentheses. 45 Table 3 ML Estimation of Network Autocorrelation Models for the Effects of Friendship Ties on Promises Relating to Competitive Resources Support for Performance Outcomes Cohesion I Support for Career Development Equivalence I II II Cohesion I II Equivalence I II Involvement Opportunities Cohesion I II Equivalence I II Predictors: Constant Gender (Male) Organizational Tenure Educational Level (Ph.D.) Prestige Academic Department 2 Academic Department 3 Rank Rho (ρ) – Cohesion 2.975*** (.455) 0.342 (.211) -0.024 (.020) 0.254 (.234) 0.113*** (.034) -0.312 (.273) -0.181 (.269) -0.035 (.138) -0.161 (.111) 2.814*** (.466) 0.343 (.209) -0.019 (.020) 0.172 (.240) 0.114*** (.033) -0.307 (.270) -0.197 (.267) -0.047 (.138) -0.165 (.112) Rho (ρ) – Equivalence 2.818*** (.539) 0.338 (.212) -0.020 (.020) 0.245 (.236) 0.114*** (.034) -0.294 (.277) -0.187 (.271) -0.066 (.140) 2.689*** (.550) 0.342 (.210) -0.015 (.020) 0.162 (.242) 0.116*** (.034) -0.291 (.274) -0.206 (.269) -0.080 (.139) -0.107 (.144) -0.123 (.143) 0.627 (.468) 0.612 (.465) Friendship Centrality 3.563*** (.470) 0.027 (.192) -0.053** (.018) 0.048 (.215) -0.010 (.031) -0.484 (.250) -0.130 (.245) 0.287* (.127) -0.053 (.114) 3.515*** (.477) 0.029 (.191) -0.050** (.018) -0.022 (.220) -0.009 (.030) -0.497* (.248) -0.145 (.243) 0.274* (.126) -0.086 (.114) 2.736*** (.541) 0.008 (.191) -0.050** (.018) 0.008 (.212) -0.012 (.030) -0.356 (.248) -0.090 (.243) 0.297* (.126) 0.180 (.139) 0.581 (.427) 2.733*** (.556) 0.010 (.190) -0.048** (.018) -0.042 (.219) -0.011 (.030) -0.370 (.247) -0.107 (.242) 0.287* (.125) 2.101*** (.380) 0.068 (.194) 0.000 (.018) 0.430* (.215) 0.014 (.031) -0.279 (.248) -0.379 (.247) 0.409** (.128) -0.113 (.104) 0.149 (.140) 0.402 (.423) 2.013*** (.392) 0.073 (.193) 0.003 (.018) 0.370 (.221) 0.015 (.031) -0.271 (.246) -0.393 (.246) 0.402** (.128) -0.130 (.104) 1.762*** (.429) 0.025 (.195) 0.000 (.018) 0.428* (.216) 0.007 (.031) -0.304 (.250) -0.358 (.249) 0.388** (.129) 1.663*** (.445) 0.025 (.194) 0.003 (.019) 0.382 (.223) 0.008 (.031) -0.300 (.250) -0.367 (.248) 0.380** (.129) 0.044 (.133) 0.046 (.133) 0.340 (.431) 0.439 (.428) R-Square .264 .277 .257 .270 .169 .183 .175 .185 .366 .372 .360 .364 df 87 86 87 86 87 86 87 86 87 86 87 86 * p < 0.05; ** p < 0.01; *** p < 0.001. Unstandardized coefficients. Standard errors are in parentheses. 46 Table 4 ML Estimation of Network Autocorrelation Models for the Effects of Advice Ties on Promises Relating to Non-Competitive Resources Security and Stable Benefits Outcomes Cohesion I Concern for Employees Equivalence I II II Cohesion I II Predictability regarding Future Equivalence I II Cohesion I II 1.165** (.411) -0.008 (.169) -0.028 (.016) 0.188 (.189) 0.032 (.027) 0.119 (.217) -0.013 (.216) 0.324** (.112) 0.336** (.113) 1.362** (.420) -0.099 (.172) -0.027 (.016) 0.152 (.186) 0.024 (.027) 0.139 (.213) -0.006 (.212) 0.264* (.115) 0.278* (.116) Equivalence I II Predictors: Constant Gender (Male) Organizational Tenure Educational Level (Ph.D.) Prestige Academic Department 2 Academic Department 3 Rank Rho (ρ) - Cohesion 1.722*** (.456) 0.221 (.182) 0.013 (.017) -0.010 (.202) 0.014 (.029) -0.319 (.236) -0.158 (.234) 0.170 (.120) 0.212 (.127) 1.816*** (.458) 0.154 (.187) 0.014 (.017) -0.034 (.202) 0.008 (.029) -0.301 (.234) -0.138 (.232) 0.129 (.125) 0.180 (.128) Rho (ρ) - Equivalence 2.135*** (.582) 0.202 (.185) 0.011 (.017) -0.006 (.206) 0.012 (.029) -0.347 (.238) -0.149 (.235) 0.227 (.122) 0.059 (.174) 0.630 (.474) Advice Centrality 2.305*** (.590) 0.126 (.189) 0.012 (.017) -0.035 (.204) 0.006 (.029) -0.326 (.235) -0.125 (.233) 0.172 (.126) 2.518*** (.504) 0.030 (.179) 0.014 (.017) -0.185 (.199) 0.027 (.029) -0.663** (.242) -0.207 (.229) -0.014 (.118) 0.246 (.126) 0.003 (.180) 0.747 (.481) 2.575*** (.505) -0.005 (.185) 0.015 (.017) -0.198 (.200) 0.023 (.029) -0.660** (.241) -0.198 (.229) -0.044 (.124) 0.231 (.126) 3.260*** (.654) 0.068 (.183) 0.011 (.017) -0.160 (.204) 0.028 (.029) -0.820*** (.249) -0.225 (.233) -0.007 (.120) 0.035 (.174) 0.373 (.468) 3.351*** (.654) 0.019 (.188) 0.012 (.017) -0.176 (.203) 0.024 (.029) -0.811** (.248) -0.211 (.232) -0.043 (.126) 0.010 (.176) 0.484 (.476) 1.451** (.522) -0.019 (.173) -0.032* (.016) 0.166 (.192) 0.033 (.028) 0.029 (.221) -0.086 (.220) 0.378*** (.114) 1.715** (.537) -0.108 (.175) -0.031 (.016) 0.137 (.189) 0.024 (.027) 0.067 (.217) -0.071 (.215) 0.310** (.117) 0.263 (.151) 0.180 (.160) 0.994* (.452) 0.945* (.441) R-Square .220 .235 .206 .225 .200 .206 .181 .190 .328 .362 .314 .351 df 87 86 87 86 87 86 87 86 87 86 87 86 * p < 0.05; ** p < 0.01; *** p < 0.001. Unstandardized coefficients. Standard errors are in parentheses. 47 Table 5 ML Estimation of Network Autocorrelation Models for the Effects of Friendship Ties on Promises Relating to Non-Competitive Resources Security and Stable Benefits Outcomes Cohesion I Concern for Employees Equivalence I II II Cohesion I II Predictability regarding Future Equivalence I II Cohesion I II Equivalence I II Predictors: Constant Gender (Male) Organizational Tenure Educational Level (Ph.D.) Prestige Academic Department 2 Academic Department 3 Rank Rho (ρ) - Cohesion 1.466*** (.353) 0.187 (.172) 0.003 (.016) 0.042 (.190) -0.001 (.027) -0.207 (.220) -0.131 (.218) 0.162 (.113) 0.361*** (.097) 1.313*** (.365) 0.187 (.170) 0.007 (.016) -0.031 (.195) 0.000 (.027) -0.202 (.217) -0.145 (.216) 0.150 (.112) 0.360*** (.096) Rho (ρ) - Equivalence 1.273** (.390) 0.147 (.172) 0.005 (.016) 0.018 (.190) -0.003 (.027) -0.314 (.222) -0.162 (.218) 0.190 (.113) 0.432*** (.113) 0.545 (.377) Friendship Centrality 1.115** (.402) 0.146 (.170) 0.008 (.016) -0.056 (.195) -0.002 (.027) -0.308 (.219) -0.176 (.216) 0.178 (.112) 2.482*** (.433) 0.034 (.175) 0.011 (.016) -0.214 (.195) 0.032 (.028) -0.650** (.233) -0.201 (.224) -0.017 (.116) 0.268* (.104) 0.433*** (.112) 0.553 (.377) 2.462*** (.452) 0.039 (.174) 0.015 (.016) -0.270 (.201) 0.032 (.028) -0.669** (.232) -0.217 (.223) -0.026 (.115) 0.233* (.106) 2.202*** (.487) 0.048 (.174) 0.016 (.016) -0.204 (.194) 0.033 (.028) -0.632** (.233) -0.201 (.222) -0.039 (.115) 2.216*** (.509) 0.050 (.174) 0.019 (.016) -0.257 (.200) 0.033 (.028) -0.651** (.232) -0.215 (.222) -0.044 (.115) 0.343** (.124) 0.303* (.127) 0.438 (.387) 0.477 (.389) 1.804*** (.377) 0.012 (.174) -0.033* (.016) 0.178 (.193) 0.036 (.028) 0.043 (.223) -0.090 (.222) 0.369** (.115) 0.149 (.103) 1.709*** (.386) 0.012 (.173) -0.030 (.016) 0.127 (.199) 0.037 (.028) 0.047 (.222) -0.101 (.221) 0.362** (.115) 0.145 (.103) 1.854*** (.449) -0.001 (.175) -0.037* (.016) 0.191 (.195) 0.034 (.028) 0.050 (.224) -0.096 (.223) 0.396*** (.115) 1.737*** (.459) -0.002 (.174) -0.034* (.017) 0.137 (.201) 0.034 (.028) 0.054 (.223) -0.107 (.222) 0.387*** (.115) 0.134 (.132) 0.136 (.131) 0.401 (.387) 0.378 (.387) R-Square .262 .278 .257 .273 .214 .230 .218 .232 .309 .316 .305 .313 df 87 86 87 86 87 86 87 86 87 86 87 86 * p < 0.05; ** p < 0.01; *** p < 0.001. Unstandardized coefficients. Standard errors are in parentheses. 48