Explaining employment relationships with social exchange and job embeddedness.

Abstract

The research reported in this article clarifies how employee-organization relationships (EORs) work. Specifically, the authors tested whether social exchange and job embeddedness mediate how mutual-investment (whereby employers offer high inducements to employees for their high contributions) and over-investment (high inducements without corresponding high expected contributions) EOR approaches, which are based on Tsui, Pearce, Porter, and Tripoli's (1997) framework, affect quit propensity and organizational commitment. Two studies evaluated these intervening mechanisms. Study 1 surveyed 953 Chinese managers attending part-time master of business administration (MBA) programs in China, whereas Study 2 collected cross-sectional and longitudinal data from 526 Chinese middle managers in 41 firms. Standard and multilevel causal modeling techniques affirmed that social exchange and job embeddedness translate EOR influence. A second multilevel test using lagged outcome measures further established that job embeddedness mediates long-term EOR effects over 18 months. These findings corroborate prevailing views that social exchange explains how mutual- and over-investment EORs motivate greater workforce commitment and loyalty. This study enriches EOR perspectives by identifying job embeddedness as another mediator that is more enduring than social exchange.