Can Empowerment and Organizational Support for Development Stem Turnover? It Depends on Power Distance

Abstract

Research on the effects of psychological empowerment and organizational support for development (OSD) on turnover reveals mixed findings. Based on attraction–selection–attrition theory, we developed a model that examines individual-level power distance as a moderator of the relationships between psychological empowerment and turnover and OSD and turnover. Using a sample of 240 employees of a US software development company in India, we found that psychological empowerment was associated with higher turnover for high power distance employees and lower turnover for low power distance employees. Additionally, OSD was associated with higher turnover for high power distance individuals.

Keywords

Individual power distance organizational support for development turnover

Organizations are increasingly finding themselves in competitive environments with an ensuing “war for talent” and the push to be an employer of choice (Zhang & Agarwal, 2009). Turnover is highly disruptive to organizations and results in costly consequences. Both practitioners and researchers have endorsed the use of a variety of human resource (HR) policies and approaches in order to effectively manage retention (Arthur, 1994; Tzafrir, Harel, Baruch, & Dolan, 2004). Organizations have several options when implementing HR interventions to address turnover. Research by Lepak and Snell (2002) highlighted HR practices that are most helpful in a variety of employment contexts; their research found that for knowledge-based employment, a commitment-based HR configuration works best. One of these commitment-based HR approaches is fostering a high degree of employee psychological empowerment (Ergeneli, Ari, & Metin, 2007), that is, enhancing employees’ feelings of self-efficacy through increased power and control (Conger & Kanungo, 1988). Another commitment-based approach is to offer training and opportunities that support employee development. This has been studied as the construct of organizational support for development (OSD), defined as “the employees’ perceptions that the organization provides programs and opportunities that support employee development” (Kraimer, Seibert, Wayne, Liden, & Bravo, 2011, p. 486). Promoting employee empowerment and supporting employee development programmes that illustrate OSD are widely regarded as positive and helpful HR approaches (e.g., Aguinis & Kraiger, 2009). Although these approaches have received widespread acceptance, existing research suggests that their benefits may be contingent on certain factors. For instance, research has shown empowerment to have varying effects on satisfaction within different cultures (Robert, Probst, Martocchio, Drasgow, & Lawley, 2000). In a similar vein, research by Maurer and Lippstreu (2008) found that, for some employees, developmental support was not associated with greater commitment. In fact, they found a negative relationship between developmental support and commitment for those employees with a low learning orientation.

These results suggest that the effects of psychological empowerment and OSD may not be fully captured by simple main effects, as their positive effects are either buffered or even reversed by a moderating variable. In that vein, this research seeks to understand how individual-level power distance, which refers to individuals’ acceptance level of unequal power distribution (Clugston, Howell, & Dorfman, 2000), moderates the effects of psychological empowerment and OSD on employee turnover. Individual-level power distance is especially relevant to these relationships as employees’ power distance levels will impact how these practices are viewed, interpreted and either accepted or questioned. Many scholars have called attention to the fact that universal management solutions may not exist (e.g., Farh, Hackett, & Liang, 2007; Newman & Nollen, 1996), and differences in individuals’ power distance values may influence how commitment-based HR practices are viewed by employees and shape their work behaviours like voluntary turnover.

This study contributes to the turnover literature by expanding our understanding of how HR practices impact voluntary turnover by highlighting employees’ perceptions of commitment-based HR practices (i.e., empowerment and development support). Strategic HRM studies that explore HR practices and turnover focus on the organizational level and tend to aggregate “all employees as though they were managed with a single (or at least dominant) HR configuration” to understand how bundles of HR practices affect firm-level turnover (Lepak & Snell, 2002, p. 518). Similar to the work done by Kraimer et al. (2011), we argue that since simple main effects for particular HR practices may not fully represent the relationship with turnover, the most useful focus for understanding this relationship are the global perceptions individual employees hold about the effectiveness of the practices rather than the specific organizational practices themselves. As job satisfaction-based models of turnover have consistently shown low explanatory power, researchers have suggested that employees’ behaviour may be more dependent on considerations related to one’s career (Mobley, Griffeth, Hand, & Meglino, 1979). Focusing on commitment-based HR practices that are intended to retain employees, we theoretically derive power distance, conceptualized as an individual difference, as a moderator to explain the inconsistent main effect findings with these HR practices and turnover.

In addition, we also add value to the literature on psychological empowerment, OSD and individual differences in the following ways. First, we apply attraction–selection–attrition (ASA) theory to explore boundary condition in the form of individual-level power distance on the effects of promoting psychological empowerment and providing developmental support on dampening employee turnover behaviour. Although such a perspective has been explored with respect to employee attitudes like job satisfaction (Robert et al., 2000), it has rarely been examined in relation to employee behaviour including turnover. Taking individuals’ power distance values into consideration may show that empowerment and developmental support are not always perceived positively or they may not engender the positive behaviours organizations hope for when employees prefer clear hierarchical relationships. Second, our research focus on individual-level cultural variable to turnover is an important contribution as models of employee turnover tend to take a universal approach and typically have not considered individual-level cultural variables. Although individual-level power distance has been tested as a moderator with outcomes like work performance (Farh et al., 2007), to our knowledge this is the first study to examine voluntary turnover. In line with the theoretical basis of ASA (Schneider, 1987), power distance has the potential to enhance understanding of employees’ reactions to commitment-based HR configurations that promote psychological empowerment and provide OSD.

Power Distance

Power distance is an individual-level cultural value that has the potential to be a salient sense-making mechanism when employees assess the extent to which their values and the organization’s values are in congruence. This is especially critical when the HR approach or managerial practice involves the delegation of power or control and prompts employees to take control of their own careers. Indeed, research evidence demonstrates that the success of an HR practice is contingent upon a fit between the values underlying the HR practices and culturally based values of those who are being managed by these practices (Kirkman & Shapiro, 1997; Mendonca & Kanungo, 1994). Power distance has been popularized as a construct that operates at the societal level as well as at the individual level (Farh et al., 2007; House et al., 2004). Research has shown that although cultural variables differ across cultures, they may also differ across individuals within a culture (see Kirkman & Shapiro, 2001). For example, research done by Farh et al. (2007) showed that individual-level power distance served as a moderator between perceived organizational support and work outcomes in a Chinese sample. Specifically, they found that the relationship between perceived organizational support and job performance was positive and significant for those individuals who are low on power distance and significant and negative for those individuals who are high on power distance. However, Lee, Pillutla and Law (2000), in a study of Hong Kong employees, found different results for power distance at the individual level; they found that power distance moderated the relationship between distributive justice and contract fulfilment such that the relationship was stronger for those individuals with low power distance. Meta-analytic data also concluded that Hofstede’s Value Survey Module (which includes power distance) may actually be “more valid at the individual level, rather than the nation level” (Taras, Kirkman, & Steel, 2010, p. 433). These results provide evidence for the fact that although a country may be considered, for example, high in power distance, the individuals within the country may vary in the extent to which they internalize that cultural value.

Clugston et al. (2000, p. 9) defined power distance at the individual level as “the extent to which an individual accepts the unequal distribution of power in institutions and organizations.” Individuals’ power distance levels relate to their values regarding authority and power in organizations (Kirkman, Chen, Farh, Chen, & Lowe, 2009). We explore individual-level power distance as opposed to societal level power distance in our research, which is in line with previous research (see Maznevski, Distefano, Gomez, Nooderhaven, & Wu, 2002). Interestingly, Kirkman, Lowe and Gibson (2006) found that in reviewing empirical research that incorporated Hofstede’s cultural values in the past quarter century, more studies had employed individual-level examinations rather than societal-level examinations.

ASA Model of Psychological Empowerment and OSD

Schneider’s (1987) ASA model depicts a process whereby organizations become relatively homogeneous. The model implies that employees and organizations are attracted to each other by the apparent congruence of their values such that the organization’s values and the values of the individual are compatible. Additionally, the organization seeks to select and hire individuals whose values are consistent with its values. On the one hand, over time, people who do not find their values compatible with the organization’s values will leave if they are able. On the other hand, those individuals who feel the organization’s values are in congruence with their own values will be more likely to stay. To the extent that employees’ personal characteristics are matched to the organization’s design, they will choose to remain with the organization. HR practices have the capacity to convey how the organization views its employees and what it values; for instance, empowerment communicates to employees that the organization trusts their competence and judgement and views them as capable and organizationally important (Chen & Aryee, 2007; Pierce & Gardner, 2004). Schneider, Goldstein and Smith (1995) noted that personality, attitudes and values are the most relevant individual attributes to the ASA framework. From a practical perspective, a key take away of ASA is that the issue of employee attrition cannot be managed without addressing matching the organization’s practices with individual-level values. Thus, the ASA framework can help frame the question of whether individual-level power distance is a critical variable that needs to be aligned with organizational practices such as those related to employee psychological empowerment and support for an employee’s career development in order to promote employee retention.

Psychological empowerment involves giving increased control and autonomy to individuals, “a process of enhancing feelings of self-efficacy among organizational members” (Conger & Kanungo, 1988, p. 474). Liden and Arad (1996) noted that the empowerment concept has roots in intrinsic motivation. Psychological empowerment is a process whereby individual motivation is increased through the delegation of authority at work. It has been defined as being composed of four cognitions: meaning, competence, self-determination and impact (Conger & Kanungo, 1988; Spreitzer, 1995). Taken together, these dimensions represent an active view of one’s work role, whereby empowered individuals view their work role as shapeable by their actions (Spreitzer, de Janasz, & Quinn, 1999). Previous empirical work has supported the combination of these four dimensions into the overall construct of psychological empowerment (Spreitzer, 1995), and we draw on this as well as other research in using this multidimensional conceptualization of empowerment (e.g., Seibert, Silver, & Randolph, 2004). Psychological empowerment has been shown to be positively related to several desired job outcomes such as job satisfaction (e.g., Spreitzer, Kizilos, & Nason, 1997) and organizational commitment (e.g., Kraimer, Seibert, & Liden, 1999).

Research has mostly focused on the role of societal or national culture in shaping the effects of psychological empowerment on employee attitudes and behaviour. Newman and Nollen (1996) found that when management practices like reward systems were congruent with the national culture values, the work unit financial performance was higher. Although this research highlights a commonly held assumption that employees will respond positively to empowerment initiatives (Liden, Wayne, & Sparrowe, 2000), other researchers have questioned whether this reaction generalizes to all individuals and contexts. Empower, by definition, means to give authority or power to someone; power distance refers to one’s acceptance of unequal power. Individuals’ perceptions of psychological empowerment may be impacted by one’s understanding and acceptance of power in superiors and organizations.

Lepak and Snell (2002) note that along with empowering workers, employers who wish to retain knowledge-based workers, such as those involved in the design of software, also often invest heavily in training and development. Often referred to as an organizational career management system, this includes policies, practices and programmes that are intended to develop employees’ skills and equip them for future work roles (Baruch, 2003; Baruch & Peiperl, 2000). The presumption is that career development support serves to retain star employees for movement into future jobs (Garger, 1999). Research concerning this relationship has had mixed results. For example, research by Sturges, Conway, Guest and Liefooghe (2005), which differentiates between formal (e.g., being provided career-oriented training) and informal (e.g., being provided career-related advice) types of organizational career management practices, failed to find a significant relationship between employee participation in either type of practice with subsequent turnover. Other research, though, has found positive effects for career development, whereby these practices are negatively associated with turnover, mediated by perceived organizational support (Allen, Shore, & Griffeth, 2003; Wayne, Shore, & Liden, 1997). Still other research has shown detrimental effects, where development activities are positively related to turnover intentions (Ito & Brotheridge, 2005). These inconsistent results suggest that simple main effects may not fully explain the relationship between these activities and individual turnover. As with empowerment, and in line with research by Kraimer et al. (2011), we felt that the important focus for career development support’s impact on individual turnover behaviour is on the global perceptions individuals hold pertaining to the effectiveness of the organization’s career management system. We use Kraimer et al.’s (2011) conceptualization and definition of OSD as an individual-level construct derived from employees’ perceptual processes. They define OSD “as employees’ overall perceptions that the organization provides programs and opportunities that help employees develop their functional skills and managerial capabilities” (Kraimer et al., 2011, p. 486).

It cannot be assumed that the success of supportive and empowering practices will necessarily work in the same manner for all individuals. Rather, success is contingent upon “an appropriate fit between the assumptions, values, and beliefs inherent in any given managerial practice and the culturally based assumptions, values, and beliefs held by those who are being managed” (Robert et al., 2000, p. 643).

Psychological Empowerment and Turnover

Empowerment has been shown to be connected to several positive outcomes like job satisfaction (Spreitzer et al., 1997). Yet, the relationship between empowerment and turnover is not clear.

Many of the existing correlations suggest a negative correlation between empowerment and turnover; however, there has been a lack of statistical significance. Erdogan and Bauer (2009) found only a –0.08 non-significant correlation between psychological empowerment and voluntary turnover. Spreitzer and Mishra (2002) found similar results, reporting correlations between the four dimensions of empowerment and voluntary turnover ranging from 0 to −0.08, all non-significant. These conflicting results provide some evidence that a boundary condition may exist for empowerment. Furthermore, these results suggest that although a direct relationship between empowerment and turnover may not be significant, a cross-over interaction may be at play. Specifically, individual-level power distance may serve to explain why the direct relationship has shown non-significant results in the past (i.e., those who are high on power distance have an opposite direction relationship with turnover than those who are low on power distance). This cross-over interaction is explained more fully below.

Employees who are low on power distance are characterized by their desire for increasingly participative management styles and self-management. Low power distance individuals desire a more horizontal and decentralized organization. Self-reliance is valued by those who are low on power distance (Hofstede, 1980). Thus, individuals who internalize these values and are low on power distance would appreciate practices that highlight individual initiative and self-management. In these cases, both empowerment and development support would serve as beneficial practices for both organizations and employees. Employees who are low on power distance would be expected to react positively to empowerment and development support due to their sense that the organization exhibits values through its management practices that are compatible with their own.

On the other hand, individuals who are high on power distance are characterized by accepting and desiring hierarchical relations within the organization, rather than desiring a more relational, horizontal organizational structure. High power distance individuals expect organizations to be centralized (Newman & Nollen, 1996). Additionally, high power distance implies a desire for structured, closely monitored task performance (Child & Markoczy, 1993). High power distance employees expect those higher in authority to take charge, make decisions, know what is right and give orders (Robert et al., 2000). Individuals who are high on power distance would be expected to react with mistrust and disrespect to participative management practices, as these are not congruent with their cultural values (Newman & Nollen, 1996). High power distance individuals would view participative management practices as decreasing and possibly eliminating hierarchical relationships by which high power distance individuals define their behaviours. These individuals maintain greater social distance. High power distance individuals are reluctant to try new things on their own (Palich, Hom, & Griffeth, 1995). They would therefore likely be opposed to programmes and practices that push them to develop on their own and learn new skills without direct orders.

Organizations that increase employee empowerment do so by increasing the amount of power individuals have such that important decisions can be made at all levels of the organization. A focus on empowerment in organizations implies a more horizontal nature, with less formal hierarchy. As mentioned, psychological empowerment implies increasing intrinsic motivation through the delegation of authority and the sharing of control (Conger & Kanungo, 1988). Low power distance individuals desire equal power within organizations and empowerment implies a levelling of the playing field, as individuals are given greater power in performing their tasks. On the other hand, individuals who are high on power distance will find empowerment to be contrary to their own values and desires and will not benefit from increased psychological empowerment. Empowerment will not keep high power distance individuals at the organization as it defies their acceptance of unequal power distribution and vertical organizational structure. In part, personal values reflect desires and behavioural principles (Locke, 1976; Rich, LePine, & Crawford, 2010). ASA theorizes that when employees feel a disconnect between their own values and the practices of the organization, they will choose to leave the organization if they are able to. The overall idea here is that individuals who are high on power distance may not expect or even desire empowerment such that they will be more likely to leave the organization when empowerment levels are high.

Hypothesis 1: Power distance moderates the relationship between psychological empowerment and voluntary turnover, such that the relationship is negative when power distance is low but positive when power distance is high.

OSD and Turnover

We expect individual-level power distance to moderate the relationship between OSD and turnover in a similar fashion. The literature has shown mixed results for the effect of OSD on turnover, and most of the research has focused on turnover intentions rather than actual turnover. Some research has failed to find a direct relationship between perceptions of OSD and turnover intentions (Lee & Bruvold, 2003); another research has found participation in career development activities to be negatively related to turnover intentions, mediated by perceived organizational support (Allen et al., 2003; Wayne et al., 1997). Most notable for this research, Kraimer et al. (2011) found that the relationship between employees’ perceptions of OSD and turnover was moderated by perceived career opportunity (PCO) such that the relationship was negative when PCO was high and positive when PCO was low. In addition, Benson, Finegold and Mohrman (2004) found that for those individuals who used a company tuition reimbursement programme, a single career management programme, the likelihood of turnover was increased unless the employee received a subsequent promotion. Extending this line of research, we apply power distance as another moderator of this relationship. As another commitment-based HR practice, like empowerment, OSD serves to signal to employees that they are valued by the organization (Lee & Bruvold, 2003). Furthermore, these non-conclusive results suggest that a cross-over interaction may be happening here as well. In line with the arguments for empowerment, employees who are low on power distance will see development support as positive and beneficial. They will view the organization as respecting and valuing them, choosing to stay with the organization. On the other hand, those individuals who are high on power distance will view this support negatively and may even perceive this support as pushing them to try new things and taking control of their own career, which is not in line with high power distance values (Paliche et al., 1995). Some indirect support from a quasi-experimental study by Kossek, Roberts, Fisher and Demarr (1998) that found offering career development programme led to a decrease rather than an increase in employee career management suggesting that such programmes may be regarded as a means for shifting the responsibility of career development from the organization to the employee. Therefore, we predict that high power distance individuals are likely to leave and find an organization that has practices more in alignment with their own values.

Hypothesis 2: Power distance moderates the relationship perceptions of OSD and voluntary turnover, such that the relationship is negative when power distance is low but positive when power distance is high.

Method

Sample and Procedures

Survey data were collected from employees of a US-based software company in India. This sample has the potential to show many of the characteristics this research is concerned with as it is a US-based company (where empowerment initiatives are often used) but is located in India. Further, this sample consists of knowledge-workers, who are often the recipients of both empowerment and CDS-based HR initiatives in an attempt to retain these highly sought-after employees (Lepak & Snell, 2002). The company provides organizations with information technology (IT) solutions to business problems and has locations in several countries worldwide. Employees located at this site were mostly involved in research and design of the software products and solutions provided by the participating organization. The head of the subsidiary sent an email to all the employees of the company inviting their participation in the research and one of the authors administered the paper-and-pencil surveys onsite to employees during work hours. Employees came to predesignated rooms where they were presented with goals of the research. The participation was voluntary and no monetary award or incentive was provided; however, employees were assured that aggregated results of the research would be shared with them at the conclusion of the research study. Employees were assured confidentiality and surveys were collected by one of the authors. One year following the survey distribution, an HR representative provided turnover data for the original sample.

Of those sampled, 319 completed surveys were returned (41.8 per cent response rate). Of the 319 employees who completed surveys, 29 were involuntarily terminated during the subsequent year and 50 had missing data on our variables of interest; thus, we eliminated 79 respondents from our analyses. Our final sample size was therefore 240 respondents (31.5 per cent effective response rate). The sample was composed of 76.7 per cent males and 23.3 per cent females. The educational make-up of the sample was as follows: 2.9 per cent had some college or associate’s degree, 43.8 per cent had a bachelor’s degree and 53.3 per cent had a master’s degree or higher. The average age was 29.89 (SD = 4.27) years, the average position tenure was 1.83 (SD = 1.29) years, the average organizational tenure was 2.24 (SD = 1.49) years and 55 per cent of the sample was married.

Measures

Employees responded on a 7-point scale ranging from 1 (strongly disagree) to 7 (strongly agree), unless otherwise noted.

Psychological empowerment: Psychological empowerment was measured with Spreitzer’s (1995) 12-item scale. Designed to parallel Thomas and Velthouse’s (1990) definition of empowerment, this measure of psychological empowerment is composed of four sub-scales. An example item is “My job activities are personally meaningful to me” (meaning). Spreitzer (1995), using a higher order Confirmatory Factory Analysis (CFA) test, found support for a global empowerment measure combining the four sub-scales. As in previous research (e.g., Seibert et al., 2004; Spreitzer, 1995), we created a single empowerment score for each respondent by averaging scores from the four sub-dimensions (α = 0.85).

Organizational support for development: OSD was measured with a five-item version of the scale developed by Kraimer et al. (2011). An example item is “My organization has career development programs that help employees develop their specialized functional skills and expertise.” We averaged scores to the five items (α = 0.91).

Power distance (PD): Power distance was measured with items adapted from Dorfman and Howell’s (1988) dimensions of national culture scale. We used only those six items that corresponded to power distance and adapted them by adding “I believe” to the beginning of each statement, in order to reflect the directions from the original. Dorfman and Howell (1988) adapted these six items from Hofstede’s (1980) ecological level constructs of culture so as to reflect the cultural construct at the individual level. An example item is “I believe managers should make most decisions without consulting subordinates.” Responses to the six items were averaged to create a scale score (α = 0.72).

Turnover: The dependent variable was collected approximately one year after the survey administration, a common time lag for turnover research as it allows for a minimal quit rate (Griffeth, Hom, & Gaertner, 2000). A representative from the organization provided us with turnover data from company records. Turnover was coded 1 if the employee had voluntarily left the company and 0 if the employee was still employed by the company. Individuals who left the company involuntarily were not included in the analyses. Of those respondents included in the analyses, 11 per cent had left the company voluntarily. This turnover rate was considered average, given the job type and location of the employees.

Control variables: In order to eliminate alternative explanations for the relationship, we included several control variables. The inclusion of these controls also aided in increasing precision of our estimates. First, we controlled for organizational commitment and two specific aspects of job satisfaction, work satisfaction and promotion opportunities satisfaction. For the attitude-based models of turnover, organizational commitment and job satisfaction have been shown to be the primary drivers of voluntary turnover (Griffeth et al., 2000). Second, we controlled for employees’ perceived external job opportunities as this is theoretically expected to impact turnover. Additionally, employees’ cognitions of perceived job alternatives have been shown to be related to turnover (Griffeth, Steel, Allen, & Bryan, 2005). We also included several demographic variables—age, sex, education, marital status, organizational tenure, position tenure and salary—that have been shown to be related to turnover (Griffeth et al., 2000).

Organizational commitment was measured using Meyer, Allen and Smith’s (1993) six-item affective commitment scale (α = 0.90). Work satisfaction and promotion opportunities satisfaction were measured with 10 items from the Job Descriptive Index (Balzer et al., 1997), reflecting satisfaction with work on the present job and opportunities for promotion. Respondents were asked to relay whether each word or phrase described their job. Participants responded Y for “yes,” N for “no” and ? for “cannot decide” (α = 0.80, 0.76 respectively). Employees’ perceived external job opportunities were measured by 12 items from the Employment Opportunity Index (Griffeth et al., 2005). The 12 items reflected four sub-scales: ease of movement, desirability, networking and mobility. The scores for the 12 items were averaged to create a scale score (α = 0.73). Age, organizational tenure and position tenure were reported by respondents in terms of years. Sex (1 = female, 2 = male), marital status (1 = married, 2 = single), education (1 = some college or associate’s degree, 2 = bachelor’s degree and 3 = master’s degree or higher) and salary (ranging from 1 = less than ₹0.2 million to 5 = greater than ₹0.8 million; the US equivalent is 1 = less than $5000 and 5 = greater than $17,000) were each measured with categorical response options. These categories were recommended by the HR department representative.

Results

The descriptive statistics and correlations for all study variables appear in Table 1.

Table 1.

Descriptive Statistics and Correlations^a

Variables	Mean	SD	1	2	3	4	5	6	7	8
1. Position Tenure	1.83	1.29
2. Work Satisfaction	2.25	0.90	−0.10	(0.80)
3. Promotion Opportunities Satisfaction	1.40	0.89	−0.01	0.49**	(0.76)
4. Organizational Commitment	5.07	1.18	0.07	0.06	0.14*	(0.90)
5. Employment Opportunity Index	4.99	0.75	0.05	−0.04	−0.10	−0.25**	(0.73)
6. Psychological Empowerment	5.48	0.71	0.05	0.10	0.18**	0.42**	−0.00	(0.85)
7. Organizational Support for Development	4.30	1.31	−0.09	0.07	0.18**	0.43**	−0.14*	0.32**	(0.91)
8. Power Distance	3.19	1.07	−0.08	−0.01	0.08	0.11*	−0.03	0.01	0.06	(0.72)
9. Turnover	0.11	0.32	−0.12*	−0.10	−0.06	−0.11*	−0.04	−0.09	0.02	0.06

Source: Authors’ own.

Notes: ^a n = 240. Cronbach alphas appear on the diagonal where relevant.

* p < .05, ** p < .01

Preliminary analyses: We conducted analyses to determine whether it was necessary to control for all of the demographic variables. This was done in order to reduce model misspecification (Becker, 2005; Bernerth & Aguinis, 2016; Darlington, 1990). We tested this using regression where turnover was regressed on each of the seven potential control variables. Only one of the seven demographic characteristics was statistically significant: position tenure. Therefore, we only controlled for this one demographic characteristic when testing our hypotheses (and removed age, organizational tenure, sex, marital status, education and salary from further analyses). We also retained theoretically derived control variables—satisfaction with work, satisfaction with promotion opportunities, organizational commitment and perceived external job opportunities.

We also conducted a confirmatory factor analysis to confirm a three-factor structure of the empowerment, power distance and OSD scale items. The hypothesized three-factor model demonstrated good fit (χ² = 360.08, df = 217; comparative fit index [CFI] = 0.96, standardized root-mean residual [SRMR] = 0.06, root-mean-square error of approximation [RMSEA] = 0.05) (Bentler & Bonett, 1980; Hu & Bentler, 1999; Kline, 2004). We compared this factor structure to all possible two-factor alternative models whereby two of the variables were collapsed into a single scale (see Table 2 for these results). Each of these two-factor models resulted in significantly poorer model fit. The model comparisons showed that the three-factor model had better fit than the two-factor models and supported the distinctiveness of the three variables.

Table 2.

Results of Confirmatory Factor Analysis of Model Comparisons

Model	χ² (dj)	CFI	RMSEA	SRMR	Model comparisons
Model I: Three Factors^b	360.08 (217)	0.96	0.05	0.06
Model 2: Two Factors^c	533.69 (219)**	0.91	0.09	0.09	Model 2 compared to Model I
Model 3: Two Factors^d	540.23 (219)**	0.91	0.09	0.09	Model 3 compared to Model I
Model 4: Two Factors^e	631.74 (219)**	0.89	0.10	0.13	Model 4 compared to Model I

Source: Authors’ own.

Notes: ^a n = 240.

^b Empowerment, Organizational Support for Development (OSD), and Power Distance as separate factors.

^c OSD and Power Distance items as one factor.

^d Empowerment and Power Distance items as one factor.

^e Empowerment and OSD items as one factor.

* = p < .05.

** = p < .01.

Hypothesis testing: We used logistic regression to test the hypotheses. The variables were entered in three steps: first, the control variables were entered; second, the centred scores for the independent variables and power distance were entered; and third, the interaction term was entered. Centred scores were used to create the interaction term in order to reduce multicollinearity between the component variables and the interaction term and to improve interpretation of the interaction effect (Cohen, Cohen, West, & Aiken, 2003). If the third step was statistically significant, we continued to pursue the nature of the interaction effect in order to establish whether the interaction was consistent with our hypothesized moderating effect of power distance.

Table 3 shows the results for the logistic regression with psychological empowerment as the independent variable and turnover as the dependent variable. The interaction of psychological empowerment and power distance significantly related to turnover (Δχ² = 6.37, dƒ = 1, p < 0.05). Between the third step (full model) and the first step (control variables only), the proportional improvement pseudo R² was 5.6 per cent. We pursued the nature of the interaction effect using methods recommended by Hayes and Matthes (2009). Using an SPSS macro developed by Hayes and Matthes, we used the Johnson–Neyman technique (J–N technique) to find the values that define the limits of the regions of significance, which avoid the potential arbitrariness of the pick-a-point approach, most commonly 1 above and below the standard deviation. Especially in this data, one standard deviation above the mean would still only put power distance in the 4 range, signifying neutral power distance, rather than high power distance. The J–N technique results show that for all values of power distance below 2.15, the relationship between psychological empowerment and turnover is significant and negative, and for all values above 5.35, the relationship is significant and positive, providing support for hypothesis 1. Figure 1 illustrates this relationship at high (PD = 5.4) and low levels (PD = 2.1) of power distance.

Table 3.

Logistic Regression Results Predicting Turnover^a

Predictor Variables	Step 1	Step 2	Step 3
Position Tenure	0.97	0.97	0.97
Work Satisfaction	0.68	0.69	0.70
Promotion Opportunities Satisfaction	1.00	0.98	0.96
Organizational commitment	0.74	0.75	0.76
Employment Opportunity Index	0.76	0.75	0.79
Psychological Empowerment (PE)		0.93	0.79
Power Distance (PD)		1.21	1.34
PE X PD			1.98*
χ2 for Block	10.53	1.01	6.37*
χ2 for Model	10.53	11.54	17.92*
−2 Log Likelihood	158.29	157.28	150.91
R² (Cox & Snell; Nagelkerke)	0.04; 0.09	0.05; 0.09	0.07; 0.14

Source: Authors’ own.

Notes: ^an = 240. Exp(B) is reported; values > 1.0 indicate a positive effect, values = 1.0 indicate no effect, and values < 1.0 indicate a negative effect. The significance level is based on the Exp(B)’s associated Wald statistic.

* p < .05.

** p < .01.

Figure 1.

Source: Authors’ own.

Table 4 shows the results for the logistic regression with OSD as the independent variable and turnover as the dependent variable. The interaction of OSD and power distance significantly related to turnover (Δχ² = 5.67, dƒ = 1, p < 0.05), providing initial support for hypothesis 2. Between the third step (full model) and the first step (control variables only), the proportional improvement pseudo R² was 5.8 per cent. We pursued the nature of the interaction effect using the same methods described above. The J–N technique results show that for all values of power distance above 3.93, the relationship between OSD and turnover is significant and positive. Although the low power distance slope is not significant, it is in the hypothesized direction. Due to the nature of the results, Figure 2 illustrates this relationship at one standard deviation above the mean (PD = 4.3) and one standard deviation below the mean (PD = 2.1) rather than the J–N technique values as used in Figure 1.

Table 4.

Logistic Regression Results Predicting Turnover^a

Predictor Variables	Step 1	Step 2	Step 3
Position Tenure	0.97	0.97	0.97
Work Satisfaction	0.68	0.69	0.75
Promotion Opportunities Satisfaction	1.00	0.93	0.88
Organizational commitment	0.74	0.64*	0.63*
Employment Opportunity Index	0.76	0.74	0.74
Organizational Support for Development (OSD)		1.27	1.28
Power Distance (PD)		1.22	1.25
OSD X PD			1.38*
χ2 for Block	10.53	2.40	5.67*
χ2 for Model	10.53	12.94	18.60*
−2 Log Likelihood	158.29	155.89	150.22
R² (Cox & Snell; Nagelkerke)	0.04; 0.09	0.05; 0.10	0.08; 0.15

Source: Authors’ own.

Notes: ^a n = 240. Exp(B) is reported; values > 1.0 indicate a positive effect, values = 1.0 indicate no effect, and values < 1.0 indicate a negative effect. The significance level is based on the Exp(B)’s associated Wald statistic.

* p < .05.

** p < .01.

Figure 2.

Source: Authors’ own.

Discussion

Framed by ASA theory, our study aimed to better understand which employees would respond in the intended manner to certain organizational practices. Both psychological empowerment and development support are viewed and interpreted as positive practices, yet their benefits may be contingent on employee individual differences. Our results show that individual-level power distance is an important moderator of the relationship between psychological empowerment and voluntary turnover, even after accounting for other job attitudes commonly associated with voluntary turnover. We also found support for our second hypothesis concerning OSD. Although the slope was only significant for power distance as a moderator between OSD and turnover when power distance was high, the significant moderation was in the predicted direction for both levels of power distance. Specifically, our results suggest that for high power distance individuals, as OSD increased the probability of turnover also increased. This has implications for both theory and practical applications, as employee retention is a critical organizational concern and a common outcome explored in organizational research. More research is needed on this relationship, but these preliminary results suggest that employers may want to take into consideration their employees’ cultural values as well as those of the country in which they operate. These findings are in line, too, with the notion that past researchers have posited about universal management solutions not existing (e.g., Farh et al., 2007; Newman & Nollen, 1996). As such, HR practitioners may need to consider individual values when choosing HR solutions, or at least take time to assess their employees’ levels of cultural values rather than assuming that it is in line with the country’s mean level of cultural values.

More specifically, our results have important implications for understanding turnover in organizations. The results of this research support the idea that individual-level cultural variables may act as boundary conditions for commonly accepted relationships and have a considerable impact on turnover. Our research supports the notion that individuals within a culture may differ on cultural variables, highlighting the importance of exploring cultural variables at an individual level in addition to the national level. The results suggest that although empowerment and development support have been viewed as positive practices, there are employees who may not feel comfortable with these practices and then choose to leave.

More specifically, the results of our research imply that individuals who are high on power distance may not respond positively to empowerment and development support as organizations might expect. Rather, employees who are high on power distance might not appreciate organizational attempts to increase their self-determination and autonomy. Individuals who are high on power distance may see empowerment as a practice incongruent with their own values. They may in fact dislike the decrease of hierarchical relationships, whereby empowerment may actually increase turnover. Although our results are consistent with previous research highlighting the benefits of empowerment when considering low power distance individuals, our results suggest that empowerment is not always a beneficial practice for individuals and organizations. Additionally, we extend Kraimer et al.’s (2011) research which found support for career opportunities as a moderator for the relationship between OSD and turnover and show that power distance is another boundary condition for this relationship. We found that employees who are high on power distance respond with an increased likelihood of turnover as OSD increases.

Drawing on the attrition proposition of ASA, fit between the organization’s values and the individual’s cultural values is important for retaining employees within the organization. When employees feel that the organization is in line with their power distance values, they will choose to stay; however, attrition will occur when employees feel a disconnect between their power distance values and the values and implicitly expected behaviours of the organization. ASA also posits that organizations act to increase homogeneity, which may push employees to either comply with these efforts or leave. Additionally, we extend organizational research by showing that organizational practices and employees’ perceptions of them differ across cultural values. We also add to the turnover research by exploring an individual-level cultural moderator as a motivator for turnover, further exploring the context that affects the perception of empowerment and development support and their effects.

Practical Implications

The theoretical viewpoint and empirical results of this research suggest that organizations should take into account individuals’ cultural values when implementing and supporting practices and procedures. This is highly important in today’s business world, as many companies are now multinational and supervisors are increasingly managing culturally diverse employees. The research here implies that organizations must be aware not only of the cultural values at play but also of the individual variations of them. Companies may need to address these issues simultaneously in order to retain their employees.

Our results suggest that when employees are high on power distance, both empowerment and development support should be applied with caution, as these employees are potentially more likely to view these as incongruent with their values and subsequently leave the organization. Or there may be pressure from the organization for all employees, regardless of power distance, to comply with the existing programmes and policies or leave the organization. Organizations may or may not be applying this pressure purposefully.

For those organizations that are not intending to require conformity, it is important to understand that empowering employees who are high on power distance does not reap the same retention behaviour as empowering employees who are low on power distance. It is important to implement and highlight organizational values that are congruent with those of individuals employed by the organization. Thus, practices may need to be tailored to the location of the company and the individuals’ values rather than to one overarching organizational value system. Managers need to be aware of their employees’ differing cultural values and know that employees may desire different types of relationships accordingly. Although low power distance individuals will desire a more empowering leader, high power distance individuals desire a traditional hierarchical relationship with their leader. Organizations may also want to consider how they endorse development programmes and opportunities to employees who are high on power distance. These employees may still want clear and explicit direction on development and a maintained power relationship with their supervisor. In other words, rather than applying a “one-size-fits-all” practice, practitioners may want to customize these practices based on individual employees’ values and preferences. On the other hand, organizations may want to consider this cultural variable during the interviewing and screening process, keeping in mind that individuals who are high on power distance are likely to leave when empowerment and development support approaches are used. As such, organizations could screen out high power distance employees due to their propensity to leave. Organizations that have experienced a successful implementation of empowerment initiatives have done so by installing them throughout the organization, thereby reducing power distance by definition. Then, employees who retain their high power distance values are required to either change to a low power distance perspective or be asked to leave the organization. It must be acknowledged as well that there is the possibility that those employees who are “mismatched” in relation to empowerment and development support might not be the right employees for the organization. In this case, turnover of these employees may actually be functional. This, though, would be dependent on the organization and what they are looking for in an employee, especially as it relates to understandings of power distance.

Strengths, Limitations and Future Research

An important strength of our research is that it adds to the understanding of turnover research in a different cultural context than the US. Our use of a sample from India, a country that has relatively low representation in organizational behaviour research (see Kirkman & Law, 2005), adds to a better understanding of countries that are increasingly developing economically, especially as previous research in this area has mostly used samples from Anglo-Saxon countries. Moreover, by using an individual-level cultural variable, the results also suggest that this phenomenon may occur in Western cultures as well, as individuals within these cultures who are high on power distance would most likely experience a similar negative reaction to these programmes and policies. A second strength is our objective measure of turnover, collected one year after the initial data collection. Additionally, we also include several theoretically meaningful controls in our analyses.

Our sample consisted of employees from only one country, and we acknowledge that future research could benefit by examining this relationship in several cultural contexts. First, given that the cultural characteristics are distinct (House et al., 2004), the practice of organizational development and understanding of psychological empowerment may be distinct as well. Second, as we did not measure value congruence, we can only speculate that this is the mechanism at play. Future research should apply value congruence to the tested model. Additionally, our data are limited to one organization in the computer software and IT industry. It may be that employees in this field view empowerment differently. As such, the research would be strengthened by testing this relationship in several industries. Furthermore, the IT industry has culture characteristics (e.g., innovative culture) that may not be representative of other industries in India. Future research might explore the organizational and national cultural differences that may influence the results of our hypothesized model. Additionally, examining these relationships across several organizations may provide a more thorough picture of the ASA mechanisms at play. Third, it may be that our satisfaction measure may have questionable validity. We assessed two specific sub-dimensions of job satisfaction, satisfaction with work on the present job and opportunities for promotion, which may not accurately reflect job satisfaction in general. Future research may need to use a more general job satisfaction measure and include this in subsequent analyses.

Future research would complement and extend this research by taking into consideration the process model of turnover. Lee and Mitchell’s (1994) unfolding model of turnover introduced “shocks” as catalysts for turnover consideration, highlighting the importance for understanding employees’ decision processes when it comes to turnover. Recent research has worked to develop ways to better integrate the understanding of both the whys and the hows of turnover decisions in one study (Maertz & Kmitta, 2012), and we believe that future developments of the relationships tested in this article would benefit from these integrations. Additionally, future research along these lines might also look at the various stages of turnover, whereby some of the “stayers” may actually be in some stage of leaving as well. Furthermore, exit interviews could extend the understanding of this research to get at the exact reasons employees are choosing to leave.

Future research should continue to explore the boundary conditions that might exist within varying cultural values. Just as power distance moderated the relationship between empowerment and voluntary turnover, other cultural values such as individualism or uncertainty avoidance may act as moderators as well. Farh et al. (2007) noted the importance of including more than one cultural value within a study in order to compare the effect sizes. Additionally, such studies are needed that replicate our findings across additional industries and countries. Expanding on the findings of this research, future research in this area should explore additional HR practices beyond empowerment and OSD. For example, there has been a growing interest in the use of leaderless teams in organizations which may have similar findings as what was discovered in this study. These additions would allow a fuller understanding of the implications individuals’ cultural values have on employee turnover.

Future research could also explore other perspectives of empowerment such as empowering leadership. Arnold, Arad, Rhoades and Drasgow (2000) developed a questionnaire that measures this concept. Empowering leadership refers to behaviours and practices implemented by the leader, which facilitate employee’s empowerment. The fundamental difference of empowering leadership over other types of leadership is the shift of control from the leader to group members. The perspective of empowerment taken by Arnold et al. focuses on leadership behaviours that increase or facilitate employees’ psychological empowerment. This measure has the potential to explicate the relational aspect of power distance and how employees react to these practices and procedures.

Future research would also benefit from exploring both national and individual levels of cultural values within the same study. Because both levels are undoubtedly at play, this would allow HR solutions to be even better tailored to the situational context. Furthermore, a better understanding of how different employees with low and high power distances truly are would also extend this research. It might be, for instance, that different HR strategies are not necessarily needed, but that bridging the difference between these groups of employees might be possible.

As multinational organizations and culturally diverse workforces become increasingly more common, it is important to theorize and empirically test how theories and concepts transfer from one culture to another as well as within cultures. Our study sought to address the gap by exploring how the relationship between psychological empowerment and voluntary turnover as well as the relationship between OSD and turnover might be moderated by individual-level power distance. Our results highlight the importance of individual cultural values and the fit between organizational programmes and practices and employees’ cultural values.

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Can Empowerment and Organizational Support for Development Stem Turnover? It Depends on Power Distance

Abstract

Keywords

Power Distance

ASA Model of Psychological Empowerment and OSD

Psychological Empowerment and Turnover

OSD and Turnover

Method

Sample and Procedures

Measures

Results

Descriptive Statistics and Correlationsa

Results of Confirmatory Factor Analysis of Model Comparisons

Logistic Regression Results Predicting Turnovera

Logistic Regression Results Predicting Turnovera

Discussion

Practical Implications

Strengths, Limitations and Future Research

References

Descriptive Statistics and Correlations^a

Logistic Regression Results Predicting Turnover^a

Logistic Regression Results Predicting Turnover^a