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Article

Enhancing Sustainable Employment Relationships: An Empirical Investigation of the Influence of Trust in Employer and Subjective Value in Employment Contract Negotiations

by
Anca-Maria Clipa
*,
Cătălin-Ioan Clipa
,
Magdalena Danileț
and
Andreia Gabriela Andrei
Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iași, Bd. Carol I, nr. 22, Iași 700506, Romania
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(18), 4995; https://doi.org/10.3390/su11184995
Submission received: 14 August 2019 / Revised: 6 September 2019 / Accepted: 11 September 2019 / Published: 12 September 2019
(This article belongs to the Special Issue Trust Management: Key Factor of the Sustainable Organizations Embedded in Network)
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Versions Notes

Abstract

:
The article presents the results of an empirical study investigating the relationships between trust in the employer, the subjective value attained in the negotiation of the employment contract, job satisfaction and employee willingness to (re)negotiate in order to maintain long-term employment relationship. The study develops a research model, based on the existing literature, and uses the partial least-squares technique, and data collected from 373 information technology professionals, to test it. The results indicate the positive effect of the employee’s trust in the employer on job satisfaction and willingness to (re)negotiate. Furthermore, the subjective value perceived by the employee in the employment contract negotiation has an increased positive influence on both employee satisfaction and employee willingness to use (re)negotiation to overcome potential issues and maintain the employment relationship long term. Overall, the results of the study bring evidence about the importance of trust and the subjective value in attaining sustainable employment relationships, and therefore sustainable human resource management (HRM). The results provide valuable insights for managers committed to the development of their organizations by promoting sustainable employment relationships. The study offers to firms a ready-to-use model for promoting sustainable employment relationships in organizations operating in knowledge-intensive sectors, such as information technology (IT).

1. Introduction

The research on sustainability of human resource management (HRM) includes such topics as sustainable HRM, green HRM, socially responsible HRM and ethical HRM [1]. There are two main lines of argument sustaining the importance of sustainable HRM [2]. The first one focuses on closer relationships of any organization with its economic and social environment, which contends that HRM has a role in corporate sustainable development. The second one underlines the internal aspects of the HRM system and stresses such issues as scarce human resources, an aging workforce and work-related health problems, making the assumption that a sustainable HRM system may help organizations that depend on high quality employees.
Several authors focus on sustainable HRM and its relationship with employment, including the factors determining the features being desired in employment. Sustainable HRM has been viewed as an alternative for setting employment relations and as having a contribution to sustainable organizational development [3]. In terms of competitiveness of any organization, sustainable HRM fosters employment relations characterized by a long-term orientation and an increased care for the employees, including the care for meeting the needs of individuals [1,4]. It is considered a challenge for companies and public institutions operating in a dynamic environment to sustain “long-term socially and economically efficient recruitment, development, retainment, and disemployment of employees” [5] (p. 5). The concept of sustainable HRM is linked to trust, loyalty, commitment and equity in employment relationships supporting sustainable behaviour of individuals and organizations [6,7,8,9].
The sustainable HRM (SHRM) approach is vital, especially in organizations operating in information technology (IT), consultancy, auditing, research and experimental development, or other kinds of knowledge-intensive business service sectors (KIBS) as the competitive advantage of KIBS companies relies on people and knowledge [10,11,12,13]. According to Huggins [14], the human resource, and the knowledge it embeds, are the key drivers of growth for KIBS companies operating in highly competitive environments. There have been identified human resource (HR) practices that influence the productivity of employees in KIBS [15], and HR practices moderated by HR capabilities influence the performance of knowledge-intensive service firms [16]. As the previously mentioned studies report, if HRM practices fail to create sustainable employment relationships, companies may lose the competitive advantage of people, and their profit could be at stake. This approach is in line with the triple bottom line model (planet-people-profit) suggested by Elkington [17], in that as long as companies acting in knowledge-intensive business sectors, both local and multinational, compete globally to attract, retain and manage human resources having the knowledge to create added value for profit [18,19]. The challenge for KIBS companies is not just to improve and increase their productivity, but to foster a sustainable HRM (SHRM) that has “social and human outcomes, which contribute to the continuation of the organisation on the long term, that is, to a sustainable organisation” [20] (p. 9).
This study deals with SHRM in KIBS companies and reports the results of an empirical study conducted in companies operating in the information technology (IT) sector and software-related services, namely, C-KIBS firms, labelled under this term in the literature in the field [13,21,22]. It investigates the attainment of sustainable employment relationships, as a consequence of the cumulative effect of both the trust in the employer, and positive feelings experienced during the employment contract negotiation. The feelings experienced in negotiation are seen as a multifaceted construct explored by means of Curhan’s subjective value inventory scale [23] that has been applied here in the context of the employment contract negotiation aimed to measure the role of subjective value as perceived by employees at the beginning of the employment relationship.
Therefore, this study suggests and tests a conceptual model for attaining sustainable employment relationships (Figure 1), and uses as independent variables employee trust in the current employer (TR) and the subjective value perceived by employees in their first negotiation of employment contract with the current employer (SV). As sustainable employment relationships involve a long-term perspective, the suggested framework uses as dependent variables both employee satisfaction (SAT) and employee willingness to maintain the employment relationship by using (re)negotiation to overcome the issues which might appear in the future due to inherent social dynamics (WRN).
The above-mentioned conceptual model and the formulation of hypotheses are presented in the next section. The third section describes the methodology, the fourth section presents the results, and the fifth section summarizes the main findings and presents the conclusions.

2. Theoretical Framework and Hypotheses

Some examples may be found across several areas pointing out that incidents in working relations emphasize the importance of trust in terms of organisational productivity [15], competitive advantage [24], effective working relationships (e.g. [25,26]) or negotiations [23,27,28,29]. Trust is fundamental for any employment relation and it is reinforced right from the start of the employment contract negotiations. If the negotiation is viewed as being based on the norms of reciprocity, trust becomes part of the exchange agreement between the organization and the employee [30].
Employee satisfaction is important for promoting sustainable development and healthy organizations [31]. The employee’s job satisfaction is a multifaceted concept [32] which comes under the influence of various factors, such as institutional norms [33], perception of corporate social responsibility [34,35], wages [36], self-reported health measures [37], work-life balance [38,39], age [40,41] or education [42]. The consequences of the employee’s job satisfaction are beneficial for employers. The employees that register a higher level of satisfaction remain on the job for a long time [43], satisfied employees are more productive [44], have a relative low absenteeism rate [45] and a lower turnover [46].
Trust in the employer is related to job satisfaction [47,48,49] and predicts it [49,50]. Trust in the employer and interpersonal trust, either in co-workers and/or in management, strongly influences employee satisfaction, and consequently employee loyalty [49,51].
In accordance to what has been stated above, this study hypothesizes that:
H1. 
SAT (employee satisfaction with the job held with the current employer) is positively influenced by TR (the employee trust in the employer).
Given the importance of trust and job satisfaction for organisational commitment, a better understanding of the factors related to employment contract (re)negotiations offers important insights for SHRM practice and research.
The willingness to (re)negotiate is seen by Christen [52] as a pre-negotiation factor with the role of the communication trigger which may lead to the decision to negotiate. Communication and negotiation are active-constructive behaviours being an expression of the exit-voice-loyalty-neglect (EVLN) theoretical model for dissatisfied employees [53,54,55,56]. The voice (employees speak up) and loyalty (employees endure the situation) are preferred types of behaviour compared to exit (employees can leave) and neglect (employees distance themselves), when it comes to fostering sustainability of a business and SHRM. In this way, willingness to negotiate has been viewed as playing a role in enhancing the voice type of behaviour.
The relationship between willingness to (re)negotiation and trust falls under broader concept of psychological contract. “The psychological contract held by an employee consists of beliefs about the reciprocal obligations between that employee and his or her organization.” [57] (p. 226). In the context of employment relations, trust is closely related with the psychological contract that addresses perceptions of reciprocal promises and obligations between an organisation and an individual [58]. Trust is also closely linked to the psychological contract state concerning the degree of accomplishment and the fairness of both promises and obligations [58,59]. The employees often perceive that their organization has failed to properly carry out the contract and these perceptions have been found to reduce employee trust, job satisfaction, employee intention to maintain the employment relation with the organization [49,58,60,61,62,63]. Prior trust may buffer against the loss of trust when there has been a registered breach [62]. Trust is essential for effective employment relationships, and it plays a significant role in integrative negotiations. In this context, the voice and loyalty types of behaviour are signs that the psychological contract is still in place, and the employment relationship can be maintained through (re)negotiation. Developing an employment relationship, based on trust, implies a greater desire to maintain it in the future, and for this to happen, willingness to (re)negotiate is needed. Therefore, the following hypothesis has been formulated:
H2. 
WRN (employee willingness to maintain long-term employment relationship using (re)negotiation in order to overcome the issues which might appear in the future due to social dynamics) is positively influenced by TR (employee trust in employer).
Earlier studies have included the subjective and socio-psychological dimensions in the exploration of negotiation processes [23,27,64,65,66,67]. Thompson and Hastie [65] divided the outcomes of a negotiation into two categories: Economical and socio-psychological. The economic outcomes refer to explicit terms or goods resulting from negotiations. The socio-psychological outcomes are based on perception and, according to Thompson and Hastie [65], they comprise of three important categories: Perceptions of the negotiating situation; perceptions of the other; and perceptions of the self. Investigating the topic further, Curhan et al. [23] have spotted 4 categories of socio-psychological outcomes attained in negotiation: Feelings about the instrumental outcome of the negotiation; feelings about the self; feelings about the negotiation process; feelings about the relationship; all of them falling under the “subjective value” umbrella. Moreover, Curhan et al. [23] developed the subjective value inventory (SVI), a robust scale used to measure the subjective value.
Unlike economic outcomes, which are the explicit terms or the quantified results of negotiation, subjective value refers to feelings and perceptions of the involved. The subjective value is not a denial of an objective value. Curhan et al. [64] showed that the socio-psychological outcomes from a prior negotiation were influencing the economic results in a subsequent negotiation with the same partner. Their findings indicated the potential of subjective factors to influence objective factors, the agreed background issues, and the level of satisfaction felt by a negotiator [23]. Three years later, Curhan et al. [68] analysed how the economic and subjective value created in job offer negotiations for MBA students predicted their job attitudes and intentions. The authors have found that subjective value leads to a higher level of satisfaction with the job and a lower turnover intention. The economic outcomes that negotiators achieved had no apparent effects on these factors. The subjective value inventory [23,64,68] may be an advantage in itself, both as a negotiator’s intuition of the results and as a prediction of future objectives and subjective values.
Job satisfaction influences employee commitment to the organization [69], and “committed employees are more likely to engage in positive employee attitudes and extra-role behaviours (e.g., cooperation, trust, and organizational citizenship behaviours)” [6] (p. 918).
Therefore, the third hypothesis has been formulated:
H3. 
SAT (the employee satisfaction with the job held at the current employer) is positively influenced by SV (the subjective value attained by employees in their first negotiation of employment contract with the current employer).
Although a large number of studies analyse the success of a negotiation in terms of financial results, Croson et al. [70] found that the post-negotiation relationships between the parties are also an important outcome that should be considered. The relational outcomes and subjective values in negotiation have to be taken into account as prerequisites of building long-term relations. In a repeated negotiation, high subjective value is often a sign that there is a strong rapport and there is a high probability to stimulate the creation of future value. A low subjective value in negotiation has the potential to generate a negative spiral of trust together with weak communication [71,72,73].
Since the positive (or negative) valence of the subjective value (SV) alters dramatically the results of a negotiation in terms of perceptual and emotional consequences [23,64], the companies should take into consideration the subjective outcomes of the employment negotiation [74]. The breaking of the psychological contract leads to reduced loyalty, a lack of commitment and intensions to leave the organization as the employees are experiencing anger and distrust [49,58,60,61,62]. At the opposite side, when the company understands the importance of the subjective value in negotiation, it strives to improve the climate for integrative bargaining, which contributes to the negotiator’s commitment, information sharing, reciprocity, creative problem-solving and so on [64]. If the company is committed to establishing long-term relationships with its employees, the negotiation should not be treated as an isolated event, but rather as a dynamic process of adjustment. In this context, the employer’s ability to stimulate employee’s desire to use negotiation and re(negotiation) to establish, and subsequently maintain the employment relationship (WRN) becomes an intrinsic objective of SHRM, and it can be assumed that:
H4. 
WRN (employee willingness to maintain the employment relationship by using (re)negotiation as to overcome potential issues) is positively influenced by SV (the subjective value attained by employees in their first negotiation of employment contract with the current employer).

3. Methodology

In line with the research assumptions (H1, H2, H3, H4 hypotheses), the conceptual model presented in Figure 1 was developed considering the exogenous variables TR and SV, and the endogenous variables SAT and WRN.
The well-established reflective scales reported in the literature [23,27,49] were used to measure each of the constructs (TR–7 items, SV–4 items, SAT–2 items, WRN–2 items) included in the model (details in Appendix A), and a questionnaire was applied to collect the data, as detailed below.
Although reflective measurements have been used, the partial least squares structural equation modelling was the method applied in the analysis. Since our model comprises of constructs with less than 3 items, it was not possible to asses it with a covariance-based structural equation modelling, which otherwise would have been recommended to estimate a reflective model. However, the recent guidelines and testing criteria [75,76,77] introduced in the partial least squares (PLS) methodology recommend the use of PLS in the assessment of both the formative and reflective models. Therefore, this study complies with these recent guidelines [75,76,77] and applies the PLS method to asses a reflective model.
The subsections below present the materials and methods used to test the model.

3.1. Instrument and Procedure

As mentioned above, this study used a questionnaire as a data collection instrument. The instrument for data collection was developed in line with the literature [23,27,49] to measure the four dimensions included in the conceptual model (TR–trust in employer–7 items [49]; SV–subjective value attained in negotiation of employment contract [23]–4 items [23]; WRN–willingness to (re)negotiate–2 items [27]; SAT–employee satisfaction–2 items [49]), which are presented in detail in Appendix A, Table A1.
Therefore, the questionnaire comprised 27 items that collected respondent’s ratings on a 7–point Likert scale (1 = “not at all”; 7 = “very much”), plus personal information, such as the position held in the company, education, salary level, marital status, number of children, gender, nationality. The time required to fill-in the questionnaire was 7–8 min. It used language adapted versions of well-established scales [23]; [27]; [49] to collect data on the four dimensions of interest, as presented in detail in Appendix A, Table A1 and discussed below:
  • (TR) Trust in the employer was measured on 7 items scale of Robinson and Rousseau [49], built on aspects considered by Gabarro and Athos [78]. Gabarro and Athos [78] consider that trust in business relationships is based on beliefs regarding the other’s integrity, motives and intentions, behavioural consistency, openness and discreteness.
  • (SV) The subjective value attained by the employee in the first negotiation of the employment contract with the current employer was measured on the subjective value inventory (SVI) scale of Curhan et al. [23], which comprises 4 subscales (feelings about the instrumental outcome of the negotiation; feelings about the self; feelings about the negotiation process; feelings about the relationship), with 4 items each. In this study, the SVI scale was applied, in accordance with the indications of Curhan et al. [23] (p. 512) “the items within each of the four subscales were averaged (with equal weightings) to yield the four subscale scores (i.e., Instrumental, Self, Process, and Relationship)”.
  • (WRN) The employee willingness to (re)negotiate (in order to maintain long-term employment relationship by overcoming the issues which might appear in the future due to inherent social dynamics) was measured on 2 items according to the suggestions of Oliver et al. [27] and Curhan et al. [64]: The first item measures the willingness to (re)negotiate with the employer organization, and the second item measures the willingness to renegotiate with the same representative person of the employer organization.
  • (SAT) The employee satisfaction was measured, in accordance with the Robinson and Rousseau [49] model, on 2 items: The level of satisfaction with the current job, and the level of satisfaction with the current employer organization.
The decision to use scales with a fewer items for measuring WRN and SAT is based on the researcher’s aim of creating a questionnaire as short as possible in order to decrease the number of participants abandoning the filling-in after more than 10 min.

3.2. Data Collection and Sample

A total of 3000 professionals working in Romania in the IT sector and in software-related services were invited to fill-in the questionnaire and take part in the study. The sent invitations contained a questionnaire link and a QR code, and were intermediated by an organizer of workshops and events targeted at companies and professionals in the IT sector.
Although 3000 IT professionals were invited to participate in this study, the response rate was only 12.43%, resulting in a total of 373 complete responses, which had been collected by the end of May 2018, when data collection was completed.
Therefore, convenience sampling was used, and the questionnaire was applied in the Romanian language to IT professionals (N = 373 respondents) employed by companies of different sizes operating in Romania in the IT sector and software-related services, namely, C-KIBS firms.
According to the personal information collected from the study participants, the socio-demographic characteristics of the sample can be summarized, as follows: N = 373 (Romanian nationality; aged 18–50, with the following distribution: 90.88% Generation Y and 9.12% Generation X; 53.1% males; 68.4% single; 80.7% without children; 74.5% earning less than 24,000 Euro per year; 35.7% holding postgraduate degree; 54.3% graduate degree; 9.9% undergraduate degree), most respondents were developers (45.58%), 17.16% analysts, 11.80% project managers, 10.19% software engineers, 7.51% software testers and 7.77% having other jobs, such as IT consultant, IT security system specialist, information systems architect.

3.3. Analysis Method and Measurement Model Assessment

The collected data were used for testing the research model presented in Figure 1 and H1 to H4 hypotheses, considering the reflective constructs TR (trust in employer–7 items), SV (subjective value attained in the negotiation of the employment contract–4 items), WRN (willingness to (re)negotiate–2 items); SAT (employee satisfaction–2 items, shown in detail in Appendix A, Table A1).
The research model and the four hypotheses were tested applying the variance-based structural equation modelling with the partial least square (PLS) approach of Chin [79]. The model was assessed using the tools developed by Ringle et al. [75], the updated methodology for the application of PLS in the evaluation of the reflective models proposed by Henseler et al. [76], and also described in the instructions for PLS modelling in HRM research reported by Ringle et al. [77].
In light of the above-mentioned instructions, the research model was assessed in two steps, following the variance-based structural equation modeling procedure proposed by Chin [79] for the application of the partial least square technique. Therefore, the measurement model and the goodness of model fit (GoF) were analysed in the first step. The structural model and the statistical significance of its path relationships were analysed in the second step via a bootstrapping procedure.
In the first step of statistical analysis, the results indicated the goodness of model fit (GoF), according to Hu and Bentler [80], the criteria of a standardized root-mean-square residual (SRMR) lower than 0.08 value, as SRMR value was 0.067 in the saturated model, and 0.069 in the estimated model, respectively.
Furthermore, the measurement model assessment has shown that according to the formulated research assumptions, the proposed model complies with all the requirements of construct reliability and validity as indicated by the results shown in Table 1. More specifically, the reliability and the validity of the measurement model have been confirmed by the results reported in Table 1 as Cronbach’s α and rho_A are higher than 0.7, the composite reliability values are higher than 0.7, and the average variance extracted values are higher than the 0.5 for each construct, as indicated in the instructions for PLS in the study of Ringle et al. [75,77] and Henseler et al. [76].
The discriminant validity of the measurement model was also confirmed by the results reported in Table 2 and Table 3, respectively. The heterotrait-monotrait ratio of correlations (HTMT) is lower than the 0.85 threshold, as Henseler [76] recommends (see detailed results in Table 2), and the correlation of each construct with the other constructs is lower than the values shown in Table 3 in the diagonal positions, as Fornell and Larcker [81] recommend.
The absence of multicollinearity among the constructs was also confirmed by the statistical results, because the maximum of the inner variance inflation factor (VIF) values was 2.388, which was significantly lower than 3.3 limit allowed by Diamantopoulos and Siguaw [82].

4. Results of Structural Model Analysis

As the first step of the analysis (presented above) indicated that the measurement model complies with the conditions imposed by the literature [75,76,77,79,80,81,82], this study was able to proceed to the second step of the evaluation, namely, the structural model assessment.
In line with the methodology [75,76,77,79], in the second step, the structural model and the statistical significance of its path relationships were analysed via a bootstrapping procedure.
The results of structural model assessment via a bootstrapping procedure applied to 5000 re-samples for estimating the statistical significance of the hypothesized relationships are reported in Figure 2, Table 4 and Table 5.
The R square values reported in Table 4 and Figure 2 indicate that the proposed model holds. TR (the employee trust in the current employer) and SV (the subjective value perceived by employees in their first negotiation of the employment contract with the current employer) explain 65.3% of the variance in SAT (employee’s satisfaction with the actual job and employer), respectively, 44.5% of the variance in WRN (employee willingness to (re)negotiate in order to maintain long-term employment relationship by overcoming future issues which are inherent to social dynamics), as indicated by the values of R square.
The values and the statistical significance of the path coefficients (β) reported in Figure 2 and Table 5 have shown that the level of trust in the employer has a positive influence on employee satisfaction (H1 hypothesis is confirmed by the effect TR → SAT: β = 0.527, t = 9.672; p < 0.05), respectively, on employee willingness to (re)negotiate in the future, if needed (H2 hypothesis is confirmed by the effect TR → WRN: β = 0.243, t = 3.872, p < 0.05).
The subjective value attained by the employee in the negotiation of the employment contract has a direct positive influence on employee satisfaction with the current job and the employer (see the effect SV → SAT: β = 0.331, t = 5.414, p < 0.05; H3 confirms). Furthermore, the subjective value has a direct positive influence on the employee willingness to (re)negotiate in order to overcome potential issues and maintain long-term employment relationships (see the effect SV →WRN: β = 0.463, t = 7.535, p < 0.05; H4 confirms).

5. Discussion and Conclusions

While compliant with the current literature discussing the importance of the subjective value [23,64,68,70,71] and the manifold benefits of trust in all areas of social life [49,83,84], the results of our study brought evidence about their contribution to SHRM, and more precisely, to establishing sustainable employment relationships. As the study findings have shown, the level of trust in the employer (TR) and the subjective value perceived by the employee in the employment negotiation (SV) have an increased positive influence on both employee satisfaction (SAT) and employee willingness to use (re)negotiation to maintain the employment relationship long term (WRN).
The findings are highly important in terms of SHRM and sustainable business approaches, given the indications reported in other studies on beneficial influences of employee satisfaction on the reduction of job quitting [46], the growth of longevity in employment relationships [43], an increase of productivity [44], and the rise of employee commitment to the organization [69,85]. Moreover, the commitment to the organization implies positive attitudes and behaviours, such as cooperation and organizational citizenship [6], and together with employment longevity (expressed very clearly in our study by employee willingness to use (re)negotiation to maintain the relationship with the employer on a long term), all lead to increased organizational sustainability.
The findings bring a contribution to practice by providing to firms with a ready-to-use model for developing sustainable employment relationships due to employer trust and the subjective value experienced in the employment contract negotiation. Moreover, the findings are instructive because the model was tested in real world settings with participants employed in IT companies operating in Romania (South-Eastern Europe) as the student samples have been already used in previous studies investigating the role of subjective value [23,64,68].
Summarizing the findings, the model testing provided empirical evidence in support of all hypothesized relationships: H1 to H4.
On one hand, the results have indicated the positive effect of trust on satisfaction and willingness to (re)negotiate (TR → SAT, TR → WRN), confirming H1 and H2 assumptions. Since building trust represents one of the most vital investments made in social capital creation [86], our results confirm that a form of social capital creation resides in the possibility to identify multiple options for the negotiated agreements [27,70]. This means a high level of trust improves the quality and cooperation in negotiation. A low level of trust can generate a negative spiral when it comes to productive negotiations, since less productive negotiations are prone to decrease trust [28].
On the other hand, this study brings empirical evidence for sustainable value to be adopted as a principle of negotiation, as it was explained by Fisher et al. [87], who indicated that effective negotiators are inventing options for mutual gain while being tough on the problem and remaining soft on the people, as a way of building and maintaining relationships. In this respect, the findings of our study have shown that an increased subjective value attained by the employee in the negotiation of employment contract (SV) has a direct positive influence on employee satisfaction with the current job and the employer (SV → SAT), and also, it has a direct positive influence on the employee willingness to (re)negotiate in order to overcome potential issues and maintain the employment relationship in the long term (SV → WRN). Therefore, the attention to the softer side in the employer-employee negotiation pays off. The subjective value attained by the employee in the negotiation of the employment contract (SV) drives long-term benefits for the organisation, as Curhan et al. [64], have emphasised.
Stressing the primacy of people, our study is embedded in sustainable HRM, going beyond practices, toward the attitudes influencing the organizational behaviour of employees. Trust and the perceived subjective value cover elements involved in the employment contract (re)negotiation that influence employee participation, flexibility, compliance beyond labour regulations and employee cooperation. Trust in the employer and the dimensions of the subjective value in negotiation (perceptions about the relationship, negotiation process, self and outcome) are experienced by the employee/ job candidate in the negotiation of employment contracts. These contribute to employee satisfaction and also lead to its intent to interact in future negotiations having the possibility to adjust the terms of the employment relationship. This adjustment helps in building a long-term and sustainable employment relationship.
In Romania, the IT sector has a high demand for employees, which is much higher than the number of available IT specialists [88]. Having a great potential when it comes to talent in the IT domain, Romania has a relatively low capability to retain the talented workforce [89]. In order to manage the employment relationship in a sustainable way since its beginning, it is important to create a type of working relationship context, where managers in C-KIBS companies are responsible for maintaining open communication with the employees. In this regard, they can easily observe potential employment issues that arise and they can negotiate solutions instilling trust. The probability to leave is decreased when trust is built by promoting honesty, goodwill and integrity so the parties respect what has been assumed. In what regards compliance with sources of trust, the subjective value may serve as an insurance policy, increasing the chances for the parties to clarify the expectations and obligations set out in the terms of the agreement.
Trust in the employer and the subjective value perceived by the employee in the negotiation process are thus prerequisites for the commitment to remain in an employment relationship, since they influence both employee satisfaction and the employee’s willingness to renegotiate in the future with the employer. When the subjective value is high, the employee perception is that he/she is highly valued, is listened to, and the negotiations are integrative. As a result of high subjective value, the feelings of fairness, interpersonal rapport, voice and trust may contribute to information sharing and collaborative negotiations, encourage reciprocity and better knowing the counterpart’s preferences [64].
New human resource strategies should approach business through the lens of SHRM by considering factors influencing the dynamics of the employment relationship. It enables the creation of enhanced employment relationships that contribute to finding solutions to the shortage of ICT specialists and fostering the role of HRM in developing sustainable business organisations. Our study stresses the idea that C-KIBS companies could consider the relationships presented in the model to improve their capability to attract, retain and manage the main competitive advantage, the knowledge embedded in people. When the employees leave, this damages the competitive advantage. If losing employees is not prevented by creating and maintaining a high-level of trust and subjective value in the employment relationship, not only the company profitability is affected but its existence is at stake. This is more of a value since the millennials, which dominate the workforce, have greater social needs and stronger connections with peers [90], and this might determine the successive departure of employees from the same group [91]. This risk is higher for C-KIBS companies due to the strong competition in providing attractive jobs. As many parts of the world are facing a potential shortage of ICT specialists [92], the study pinpoints the imperative for the C-KIBS companies to promote sustainable HRM by considering people first in the employment relationship context.
Considering the presented results and the specifics of the studied companies, the limitations of this study should be addressed. First, the developed model serves as a background for sustainable employment relations and it should also be corroborated with other human resource management practices aimed to contribute to the development of SHRM, such as employer branding [4], career management and human resource development [93]. Second, the study was run only in IT companies, situated in a highly competitive sector, with a shortage of qualified human resources. The results cannot be extended to other sectors, where the level of competition is lower and the requirements for jobs are different.
In order to crosscheck the proposed model for other sectors, more research is needed, including different socio-demographic characteristics of the employees, job requirements and particularities of the operating context of companies. C-KIBS companies might have acknowledged the importance of sustainable employment relationships, becoming aware of the risk of the employee turnover. For other sectors, the results could be rather different and should be further investigated.

Author Contributions

Conceptualization, A.-M.C., C.-I.C. and M.D.; statistical method and analysis, A.G.A.; investigation, A.-M.C. and C.-I.C.; methodology, A.-M.C. and A.G.A.; writing—original draft preparation, A.-M.C. and C.-I.C.; writing—review and editing, A.-M.C., C.-I.C. and M.D.

Funding

This research received no external funding.

Conflicts of Interest

The authors declare no conflicts of interest.

Appendix A

Table
Table A1. Constructs and indicators.
Table A1. Constructs and indicators.
ConstructsIndicatorsReferences
TR
Trust in Employer
Reflective Construct with 7 Indicators		TR1_r. I am not sure I fully trust my employer (reversed).
TR2. My employer is open and upfront with me.
TR3. I believe my employer has high integrity.
TR4. In general, I believe my employer’s motives and intentions are good.
TR5_r. My employer is not always honest and truthful (reversed).
TR6_r. I don’t think my employer treats me fairly (reversed).
TR7. I can expect my employer to treat me in a consistent and predictable fashion.		Robinson and Rousseau [49]
SV
Subjective Value Attained in Negotiation of Employment Contract
Reflective Construct with 4 Indicators		SV_instr. The feelings about the instrumental outcome of negotiation (calculated by averaging the scores of the 4 items within subscale);
SV_self. The feelings about the self (calculated by averaging the scores of the 4 items within subscale);
SV_process. The feelings about the negotiation process (calculated by averaging the scores of the 4 items within subscale);
SV_relation. The feelings about the relationship (calculated by averaging the scores of the 4 items within subscale);		Curhan et al. [23]
WRN
Willingness to (Re)negotiate
Reflective Construct with 2 Indicators		WRN_org. Willingness to (re)negotiate with the employer organization.
WRN_pers. Willingness to (re)negotiate with the same person who represented the employer organization during the first negotiation of employment contract.		Curhan et al. [64]
Oliver et al. [27]
SAT
Employee Satisfaction
Reflective Construct with 2 Indicators		SAT_job. The level of satisfaction with the current job
SAT_org. The level of satisfaction with the current employer organization.		Robinson and Rousseau [49]

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Sustainability 11 04995 g001 550
Figure 1. Research model with hypotheses.
Figure 1. Research model with hypotheses.
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Figure 2. Structural model with path coefficients.
Figure 2. Structural model with path coefficients.
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Table
Table 1. Construct reliability and validity.
Table 1. Construct reliability and validity.
ConstructsIndicators and Scale Sourceαrho_ACRAVE
TR7 indicators, according to Robinson and Rousseau [49]0.8610.9050.8960.561
SV4 indicators, according to Curhan et al. [23]0.8960.9130.9280.764
SAT2 indicators, according to Robinson and Rousseau [49]0.9320.9350.9670.936
WRN2 indicators, according to Oliver et al. [27]0.8310.8480.9220.855
Table
Table 2. Discriminant validity: Heterotrait–Monotrait Ratio (HTMT).
Table 2. Discriminant validity: Heterotrait–Monotrait Ratio (HTMT).
ConstructsSATSVTRWRN
SAT−−−−
SV0.795−−−
TR0.8420.837−−
WRN0.7160.7420.691−
Table
Table 3. Discriminant validity: Fornell–Larcker criterion.
Table 3. Discriminant validity: Fornell–Larcker criterion.
ConstructsSATSVTRWRN
SAT0.967−−−
SV0.7320.874−−
TR0.7790.7620.749−
WRN0.6300.6480.5960.924
Table
Table 4. R square.
Table 4. R square.
ConstructsR SquareR Square Adjusted
SAT0.6530.651
WRN0.4450.442
Table
Table 5. Effects.
Table 5. Effects.
EffectB Original SampleM Sample MeanSTdev Standard DeviationT StatisticsP ValuesC.I. 2.5%C.I. 97.5%Hypothesis Testing
TR → SAT0.5270.5280.0549.6720.0000.4210.634H1 accepted
TR → WRN0.2430.2430.0633.8720.0000.1200.366H2 accepted
SV → SAT0.3310.3300.0615.4140.0000.2120.449H3 accepted
SV → WRN0.4630.4640.0617.5350.0000.3420.581H4 accepted

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Clipa, A.-M.; Clipa, C.-I.; Danileț, M.; Andrei, A.G. Enhancing Sustainable Employment Relationships: An Empirical Investigation of the Influence of Trust in Employer and Subjective Value in Employment Contract Negotiations. Sustainability 2019, 11, 4995. https://doi.org/10.3390/su11184995

AMA Style

Clipa A-M, Clipa C-I, Danileț M, Andrei AG. Enhancing Sustainable Employment Relationships: An Empirical Investigation of the Influence of Trust in Employer and Subjective Value in Employment Contract Negotiations. Sustainability. 2019; 11(18):4995. https://doi.org/10.3390/su11184995

Chicago/Turabian Style

Clipa, Anca-Maria, Cătălin-Ioan Clipa, Magdalena Danileț, and Andreia Gabriela Andrei. 2019. "Enhancing Sustainable Employment Relationships: An Empirical Investigation of the Influence of Trust in Employer and Subjective Value in Employment Contract Negotiations" Sustainability 11, no. 18: 4995. https://doi.org/10.3390/su11184995

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