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A factor analytical study of perceived organizational hypocrisy.

Intuition and common sense suggest that hypocrisy in management--"do as I say and not as I do"--will have negative effects on employees. The same goes for inconsistencies between the organization's stated mission and values and management's actual behavior. Can these effects be measured? A statistical study based on 396 responses (out of 500) uncovered three key factors or constructs affecting perceived organizational hypocrisy: perceived management actions, perceived culture, and perceived rewards. Overall, a perception of organization hypocrisy correlated positively with an employee's intention to leave. Other results examined the separate effects of the three factors on two groups of employees--those intending to stay and those intending to leave.

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Hypocrisy in an organization has meaning to anyone who has encountered it. Organization leaders articulate behavioral expectations of others, but disregard their stated expectations in their own conduct. For example organizational leaders claim that "quality is job number one," but, then focus only on meeting productions schedules. Or, top executives insist on significant cost reductions while rewarding themselves lavishly.

Fernandez-Revuelta Perez and Robson (1999) refer to organizational hypocrisy as inconsistencies or disjuncture when "(a) talk results in informal agreements; (b) decisions result in formal discussions or policies which are recorded within the organizational hierarchy and usually enacted through written documents, including plans and budgets; and (c) actions where organization actors "do" as opposed to what they have formally agreed or informally said that they would do. The inconsistency between talk, actions, and organizational goals often reflects multiple and perhaps contradictory messages" (1999, p. 389). Fernandez-Revuelta Perez and Robson postulate that organizational hypocrisy is initiated when good decisions can be easily stated and not so easily achieved. Similarly, Spiegel (1999) describes a hypocrite as a person who espouses beliefs, words, and actions that are inconsistent with his or her other actions.

Although hypocrisy is often acknowledged as pervasive in an organization, its constructs and actual effects are not as clear. The primary purpose of this paper is to identify those factors or constructs associated with perceived organizational hypocrisy. The question we address is: What is important to organizational members (employees) when they assess hypocrisy behavior in their leaders? Numerous researchers have speculated that perceptions of organizational inconsistency have an affect on organizational members in terms of job satisfaction, absenteeism, commitment, and intention to leave (Jensen and Van Gilnow, 1985; Brussun, 1989; Philippe and Koehler, 2004). What remains to be answered is: "What constructs emerge when an organizational member perceives organizational hypocrisy." To determine the emerging factors of perceptions of organizational hypocrisy we first operationally defined the concept of perceived organizational hypocrisy, followed by the development of a survey instrument to facilitate a factor analysis. Further, we examine these factors relative to an organization member's intention to leave his or her position.

Definition of Terms

For the purpose of this study, "perceived organizational hypocrisy" is the voluntary behavior of an individual acting as an organizational trustee or a person who extols or makes a public proclamation or action that establishes a critical expectation in other organizational members. This is followed by a trustee's disregard for fulfilling the expectations. In a nutshell, perceived organizational hypocrisy is the perceived inconsistency between words, previous actions, and subsequent action of the organization's trustees. "Intention to leave" is defined as a thoughtful desire to exit the organization within one year.

Review of Key Concepts Affecting Perceived Organization Hypocrisy

Discussions of inconsistencies in the organization that relate to organizational hypocrisy were made salient in Argyris and Schon's 1974 work titled "Theory in Practice." Their concept of perceived organizational hypocrisy focused on the disconnection between the organization's espoused theory and its theory-in-use. Simply stated, organization management and members espouse beliefs, values, principles, etc., and give allegiance to them, but do not behave in accordance with them. There are inconsistencies between what the organization members say and what they do (Argyris and Schon, 1974, p. 6). This disconnect can be covert, obvious, implicit, or explicit.

Steven Kerr's (1975) classic article "On the folly of rewarding A, while hoping for B" illustrates the Argyris and Schon theory. Kerr describes practical issues of the use and abuse of rewards and other inducements to motivate people in organizations. He contends that a formal reward system should positively reinforce desired behaviors, not cause inconsistencies to be surmounted. For example, incentive-based compensation systems (Gomez Mejia and Balkin, 1992) and formal organizational norms of ethical conduct that reward violations of those norms are likely to cause perceived organization hypocrisy. These predicaments or conditions create and reinforce linkages between the organizational reward system and the magnitude of an organization member's unethical behavior (Jansen and Von Glinow, 1985).

Can inconsistencies or perceived inconsistencies be avoided in organizations? Not according to Brunsson (1989). In his book "Organization of Hypocrisy," Brunsson identifies organizational hypocrisy as the organizing and managing of discontinuities. Conflicting demands are balanced to the extent possible, and any possibilities for creative actions are exploited. He elaborates that the management of inconsistencies is the management of hypocrisy. Brunsson says the failure to balance politics and actions is not necessarily a sign of organizational dysfunction or inefficiency, but may be a natural part of organizational life. He goes on to say that the true challenge is to arrange trade-offs among the various sets of conflicting norms, decisions, actions, and talk, while maintaining high values. This is especially evident in politics, where a politician may speak about a chicken in every pot, which, in reality, cannot be achieved.

Of interest in the present study is not whether perceived hypocrisy is a maintenance strategy but what constructs are salient, and what, if any, constructs actually affect organization behavior. Kouzes and Pozner (1993) contend that the effects of hypocrisy occur when there is an inconsistency between espoused fundamental beliefs, values, and principles, and the action that follows. The result is conflict and false expectations, which diminish the capacity for an organization member to continue in his or her job (Kouzes and Pozner, 1993, p. 121).

Without consistency in management talk and actions organization members spend time initiating ways to devise solutions that may be capriciously discarded later on. Organization members are aware of what managers and others in the organization give most of their attention to. According to Deal and Kennedy (1982, p. 33) these inconsistencies will be magnified out of proportion. They maintain that organization members, by knowing what is expected of them, will have a general understanding of how to act in certain situations. However, if perceived feedback is inconsistent between the task feedback and the feedback from organizational leaders, then uncertainty is likely to be created. Uncertainty often becomes a source of anxiety and may indicate that an organization member does not understand the work or the work environment (Greenberger, Strasser, Cummings and Dunham, 1989). A decrease in consistency will be mirrored by an increase in the level of stress and may affect an organization member's desire to remain.

Kouzes and Pozner (1993) regard inconsistency as nonconformity to expectations. Morris and Moberg (1994), who call important expectations "pivotal expectations," argue that the basic presumptions of pivotal expectations are known, are common, and are accepted as legitimate by both the organization member and the employer. Violations of pivotal expectations cannot be explained on the basis of ambiguity, confusion, or as an exemption. There are no acceptable excuses. Some pivotal expectations tend to remain unstated; they also tend to transcend the work group and are attached to the organization. According to Morris and Moberg (1994, p. 175), pivotal expectations "have a powerful and fundamental influence on the person who holds them."

Pivotal expectations also transcend the contractual obligations or standards of performance that concern the organization member and the employer because they involve conventional understanding about moral conduct, justice, and human decency. They are more fundamental than the formal codes and mandates espoused by the organization, and whether implicit or explicit, they are sacred. These types of expectations involve profound mutual constraints on conduct of both subordinates and management (Morris and Moberg, 1994). Pivotal expectations play an important role in deciding how an action is to be interpreted. They can be differentiated from minor expectations by the repercussion they are violated. When management actions are perceived as inconsistent, and when these inconsistencies rise to the level that violates any pivotal expectations, the organization member may then view the organization as hypocritical.

Methodology

This study is designed to develop an understanding of the factors of perceived organizational hypocrisy and explain the effects of organizational hypocrisy, specifically those relating to the intention to leave. The literature on perceived organizational hypocrisy seldom includes specific measures. Therefore, a survey was constructed for this study using the Churchill paradigm for developing better measures (Churchill, 1979).

Following Churchill's suggested procedures, the first step was to specify the domain of the constructs. This was achieved though an extensive review of the literature and the use of focus groups. Academic studies from engineering, philosophy, management, and psychology were analyzed. The literature directed the conceptual specification of the constructs regarding what to include in the domain. In addition, focus groups supplied depth from personal knowledge and other perspectives that contributed to the range that bound the domain of the constructs.

Next, a large pool of items was generated to grasp the nuances of each of the constructs. The wording of each statement was reviewed for preciseness and meaning. A number of items were inspected, clarified, and corrected for social desirability, and duplicate and ambiguous items were removed. Eliminating difficult to understand items reduced the pool further. The item pool was then operationalized as a measurement instrument, incorporating a seven point Likert scale.

The final survey comprised two sections. The first contained the measurement items for the theoretical construct of organizational hypocrisy. Each item required a subjective response from the respondents specifying the magnitude to which they agreed or disagreed with it. Subjects responded with their perceptions of how each item applied to their respective organizations. The second section was designed to include measures that defined the characteristics of the individual and his or her organization, including a question pertaining to the subject's intent to leave his or her job.

Subjects

During a six-month period, 500 measurement instruments were administered and 396 responses received--a 79.2% response rate (see table 1 for demographic details). The respondents were graduate engineering and graduate business school students at the University of South Florida. The main reason for this selection was that these two groups were likely to be employed in a full-time, permanent capacity. Graduate students provide a broad sample that represents many different organizations in the community. This variety produced the variation of experience needed to perform the required statistical analyses.

Administration of Survey

Two sampling procedures were employed: (1) the investigator administered and retrieved the survey during an appointed time; and (2) the survey was administered during one class period and retrieved at the next appointed class period. Only subjects who were currently employed or had been employed on a full time basis within the last 12 months were asked to complete the measurement survey. The instrument had 57 measurement items, to each of which the subjects responded on a 7-point Likert scale. The rest of the measurement items were necessary to develop the respondent's perceived individual characteristics and specific organization. These included the intention to leave his or her job.

Participation in this study was completely voluntary and responses were anonymous. A concern with all research that utilizes survey data is whether or not there is nonresponse bias, that is, whether the perception of respondents might be different from those who did not respond (Armstrong and Overton, 1977; Lambert and Harrington, 1990). Since this study's measurement survey was anonymous, the investigations were not able to solicit feedback from nonrespondents.

Results of Factor Analysis

To understand the constructs of perceived organizational hypocrisy, the study used an exploratory factor analysis with oblique rotation to examine the underlying properties of the perceived organizational hypocrisy scale. The purpose of the factor analysis was (1) to begin the process of assessing and validating scale construction and item weighting, and (2) to empirically support the theory that perceived organizational hypocrisy is made ur/AEof identifiable constructs.

Of 396 results items with factor loadings of 0.33 or greater were retained. Finally, an oblique rotation was used because of the moderately high factor inter-correlation. With oblique rotation, factor interpretations were based on the pattern matrix as well as the structure matrix. The exploratory factor analysis supported the notion that perceived organizational hypocrisy is a valid concept and appeared yield three constructs: (A) perceived management actions; (B) perceived culture; and (C) perceived rewards.

Perceived managerial actions (Factor 1) contained items pertaining to managerial actions. Examples included items such as "It seems goals are changed at random," or "The organization says things that I do not expect to happen," or "Most of what management says can be ignored." Factor 1 correlated 0.69 with Factor 2, and 0.57 with Factor 3 (Table 2). The internal consistency of this factor was 0.92. Item loadings on the structure matrix (simple correlations) ranged from 0.34 to 0.76. These loadings changed only slightly after the effects of the other factors were removed (0.45 to 0.81 regression coefficients), provided evidence that perceived management actions contributed most of the variances.

Perceived culture (Factor 2) consisted of items pertaining to understanding organizational vision, mission, and values. Typical examples included, "I understand my organization's vision," or "I know what the goals of my organization are," or "My organization's values are the same as my work values." Factor 2 correlated 0.56 with Factor 3, and the estimated internal consistency as measured by Cronbach Alpha was 0.91 (Table 2). Item loading on the structure matrix for this factor ranged from 0.35 to 0.76, and maintained its high loadings (0.46 to 0.78 on the factor pattern matrix), providing evidence of the unique contribution of Factor 2.

Perceived reward systems (Factor 3) consisted of items with the theme of rewards. Examples included, "I am rewarded based the achievement of my goals," or "Rewards are used as a guide in management decisions," or "Better performing employees get better pay increases than average performers." The estimated internal consistency for Factor 3 was 0.73 (Table 2). Structure loading ranged from 0.41 to 0.77, and changed only slightly (0.54 to 0.79) after the effects of the other factors were removed, suggesting that this factor contributed unique information to the perceived organizational hypocrisy.

Reliability and Validity

The measurement instrument was tested for reliability and validity. The reliability or internal consistency was measured using Chronbach's alpha, which far exceeded 0.7 for all uncovered constructs. The validity of the measurement instrument was assessed qualitatively and quantitatively. Content validity was derived from a thorough review of the literature and by using an accepted theoretical methodology for scale development. Criterion validity was established with measures on intention to leave one's job. Construct validity was demonstrated by expert opinion and by means of an exploratory factor analysis. The results of the expert opinions and the exploratory factor analysis confirm that the measurement instrument had construct validity.

In summary, this analysis uncovered three factors affecting perceived organization hypocrisy: perceived management actions, perceived culture, and perceived reward. The results supported a multifaceted construct of perceived organizational hypocrisy.

Although the primary focus was to identify the significant constructs of perceived organizational hypocrisy, we applied these results to the organization member's intention to leave. A Hotelling [T.sup.2] test was used to determine if the subjects in the intention-to-leave group were statistically significant. Results revealed an overall multivariate effect, Hotelling-Lawley Trace = .31, F (6, 371) = 28.7; p <. 01. Post hoc procedures that followed the statistically significant multivariate result applied the Tukey simultaneous confidence interval (Stevens, 1996) to maintain Type I error control at the nominal level of 0.05. Results revealed that participants in the intention-to-leave group were statistically significantly different and more negative in their perceptions of organizational hypocrisy than the intention-to-stay group.

To further explore the relationship between perceived organizational hypocrisy and intention to leave subjects were divided into two groups: those who intended to leave (n=172) and those who did not intend to leave (n-206). See Table 3 for the means and standard deviations of the two groups for the perceived hypocrisy factors.

Discussion

The factor analysis provided construct validity for the theory of perceived organizational hypocrisy. While the three-factor theoretical constructs version was supported, it is important to note that individuals see the factors of perceived culture and management actions as both the source and outcome for consistency comparison. The analysis also supported the notion that perceived rewards are outcomes inherent in the individual. As Kerr (1995, p.7) pointed out, "It is the reward system, stupid." This aspect was upheld as a basic construct of the theory of perceptions of organizational hypocrisy. The analysis brought into focus the most salient constructs of this theory.

Results of this study also indicated that perceptions of organizational hypocrisy influence the organization member's intention to leave his or her job. Employees are strongly influenced by management actions, organizational culture, and rewards. The idea that organizational goals were more important than consistency between perceived culture, rewards, and management action was not supported by our data.

Another important aspect of the data was the lack of significant differences in gender, tenure in position, tenure in the organization, or total work experience. These findings show that an employee does not become callous to the expected consistency or the perceived inconsistencies, but rather makes those comparisons all the time. These comparisons reflect the individual's expectations arising from his or her view of organizational culture. Therefore, perceptions of organizational hypocrisy may wax and wane with time and changes of expectations.

* Perceived management actions

This construct was designed to examine the perceived consistency of management actions in relation to organizational culture and perceived rewards. The construct of perceived management actions was strongly supported in this study. For example, subjects who indicated their "intention to leave" (Group 1) and those with "no intention to leave" (Group 2) scored similarly on the item "management's behaviors shows their commitment to the organization's values." Although the magnitude and standard deviation differed, the affirmation by both groups suggests that individuals scrutinize management behaviors to infer information. The two groups also indicated in a like manner that most of what management says cannot be ignored. Whether consistent or inconsistent, the sample respondents recognized that the proclamations of management are going to have an effect.

The groups differed in their assessment and perceptions of management action. The intention-to-leave group rated their perceptions of management actions as more inconsistent with organization values and goals, implying an incongruence between the perceived culture and perceived management actions. The data from this group also suggested perceived management action was based principally on goals, and that goals were more important than values. Group 1 scored lower than Group 2 in perceptions of consistency in management action that directly affected the individual and actual outcomes. These outcomes were denoted as the amount of work, quality of work, work interactions, and goal direction.

Data from those not intending to leave (Group 2) indicated less inconsistency and more congruence between perceived management actions and perceived culture. Group 2 uniformly indicated that perceived management actions were consistent with the intent of the construct of perceived management action and the construct of perceived personal rewards. These findings were consistent with previous findings that this group had a lower degree of perceived organizational hypocrisy. The groups differed in their perceptions of "fairness" regarding management actions. The intention-to-leave group invariably saw more inconsistency in how standards were applied to employees, fairness to employees, and feedback to employees. While other factors can create a climate of inconsistency, perceived management action has immediate and direct effects on the individual.

Data from both groups indicated that they used external knowledge to make comparisons. The groups split on how management decisions were based. The intention-to-leave group was slightly more negative in its perception of the consistency in management decisions, while the intention-to-stay group was slightly more positive. The differences between the two groups were statistically significant for the factor of perceived management actions.

* Perceived culture

The second construct, perception of the organization culture, examined the organization member's perception of "how things get done." Culture is influence by numerous variables, and, this study focused on vision, mission, and espoused values that arguably provide the common sense of identity. Results of our study strongly supported our notion that perceived culture was a construct that affected perceived hypocrisy. Also, the data supported the link between the perceived culture and perceived rewards.

Both the intention-to-leave group and those with no intention to leave had relatively high scores on questions of understanding the mission, values, and the vision of the organization. However, the groups' perceptions differed regarding the implementation of organization's culture. For example, Group 1 was more negative than Group 2, when perceptions of organization values were compared with perceptions of reward distributions. Both groups were aware of their respective organization's culture and of the respective outcomes. When these outcomes are invalidated or are perceived to be inconsistent, as was the case in Group 1, there was a higher level of perceived organizational hypocrisy. When these outcomes are validated or are consistent with the individual's perceptions, as in Group 2, perceived organizational hypocrisy is lower.

A significant finding was that the two groups differed regarding their perceptions of the linkages. The construct of perceived culture provides an employee a perspective of the organization's values, goals, and mission. The construct is interpreted in relation to the other constructs of perceived management actions and perceived rewards. This interpretation is then compared to the perceived culture for consistency. The quality of the consistency between constructs is readily observed by comparing differences and indicates the level of perceived organizational hypocrisy. If these constructs are perceived as consistent, there is a suggestion of a low perception of organizational hypocrisy and less intention to leave. If the constructs are not perceived as consistent, as in Group 1, there is a greater intention to leave. Inconsistency between expectations created by the construct of perceived culture and those arising from the construct of perceived rewards can create frustration and stress (Spector, 1997). The intention-to-leave group was statistically significantly different and more negative in their perceptions of organizational hypocrisy than the intention-to-stay group.

* Perceived rewards

The construct of perceived rewards composes items that indicate perceived reward outcomes to the individual. Both the intention-to-leave and the intention-to-stay groups responded that they understood what they must do to receive rewards. The groups split, however, on how consistently the rewards were distributed. The intention-to-leave group was slightly more negative in their view of how consistently rewards were distributed, while the intention-to-stay group was slightly more positive.

Summary

The results uncovered three factors affecting perceived organization hypocrisy: perceived management actions, perceived culture, and perceived rewards. In addition, the data suggested a positive correlation between an employee's perception of organizational hypocrisy and his or her intention to leave. Perceived inconsistencies in management actions, culture, and rewards directly affected an individual's decision to leave or stay. It is apparent from our data that individuals are very aware of their expectations. For example, our study indicates that if an employee is exposed to a proclamation in the company newsletter that affects his expectations of corporate responsibility, and if his or her manager violates the proclamation, the employee is more likely to leave.

Perceptions of organizational hypocrisy are genuine and have real consequences. Acts of inconsistency influence an organization member's intention to leave. Practitioners who believe they can ignore "walking the talk" because they provide a paycheck should realize their actions can have negative ramifications.

The idea that organizational flexibility and goals are more important than consistency between perceived management action, culture, and rewards needs to be reevaluated in light of these results. Management practitioners can use these results to understand how inconsistencies between what they say, do, and believe can affect the people they supervise. Organization members observe what happens to them and around them and draw conclusions about their organization's expectations. They then set their own expectations. Guided by these perceptions, organization members decide where to focus their energies and competencies. Consistency in expectations becomes a major factor in creating a climate of low organizational hypocrisy.
Table 1. Subject Demographics

Responses 396
Response 79.2%
Gender Males 220 Females 160
Mean Age 32.5
College Degree 274
Masters or Higher 91
Work Experiences 11.1 years
Organizational Tenure 4.4
Position Tenure 2.8

Note: 16 respondents did not respond to gender and 31
did not respond to education.

Table 2. Factor Intercorrelations and Internal Consistency

 Factor Coefficient
Factor Name Intercorrelations Alpha
 2 3

1. Perceived management actions 69 57 92
2. Perceived culture 56 91
3. Perceived rewards 73

Table 3. Means and Standard Deviations of the Two Groups for the
Perceived Hypocrisy Factors and Intention to Leave

 Factor 1 Factor 2 Factor 3
 Perceived Perceived Perceived
 Management Culture Rewards
 Actions

Group N Mean Std Dev Mean Std Dev Mean Std Dev

Intention to 172 3.67 0.99 4.53 1.01 3.91 1.29
Leave
No Intention 206 4.56 0.95 5.32 0.08 4.47 1.14
to Leave


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Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management Journal, 18, 776-783.

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Krammer, R. M. (1995). The distorted view from the top: Power paranoia and distrust in organizations. In R. Bies, R. Lewicki and B. Sheppard (Eds.), Research on negotiation in organizations, 5, 119-154. Greenwich, CT: JAI Press.

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Lind, E. A., and Tyler, T. R. (1988). The social psychology of procedure justice. New York: Plenum.

Morris, J. H., and Moberg, D. J. (1994). Work organizations as contexts for trust and betrayal. In T. Sarbin, R. Carney, and C. Eoyang (Eds.), Citizen espionage: Studies in trust and betrayal, 163-187. Westport, CT: Praeger.

Philippe, T. W., and Koehler, J. W. (2004). The effects of perceived organizational hypocrisy on intention to leave and job satisfaction. Review of Business Research, 3(1) 14-21. Pfeffer, J. (1992). Managing with power. Cambridge, MA: Harvard Business School.

Spector, P. E. (1997). The role of frustration in antisocial behavior at work. In R. Giacalone and J. Greenberg (Eds.), Antisocial behavior in organization, 18-36. Thousand Oaks, CA: Sage.

Spiegel, J. S. (1999). Hypocrisy moral fraud and other vices. Grand Rapids, MI: Baker Books.

Dr. Koehler has authored numerous books, articles, and professional papers. He has been affiliated with the University of South Florida for the past 26 years, where he has served as Assistant to the President, Dean of Extended Studies, and Chair of the Department of Management. Also, he served as Deputy Secretary of the Florida Department of Labor and Employment Security in Tallahassee. Professor Philippe is an associate professor in the College of Technology and Management at St. Petersburg College.
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Author:Philippe, Thomas W.; Koehler, Jerry W.
Publication:SAM Advanced Management Journal
Date:Mar 22, 2005
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