Evaluating the prevalence and distribution of dependent self‐employment: some lessons from the European Working Conditions Survey

This article advances understanding of the prevalence and distribution of dependent self‐employment. Analysing the 2015 European Working Conditions Survey of 35,765 employees in 28 European countries, the dependent self‐employed are found to comprise 4.3% (1 in 23) of the EU workforce, 47% of all those reporting themselves as self‐employed without employees and 31% of all self‐employed. The prevalence of dependent self‐employment, however, is found to have decreased since the previous 2010 survey, is not found to be concentrated among marginalised population groups and is significantly more likely in agriculture, forestry and fishing, arts, entertainment, recreation and other service activities, and the household services sector. The implications for theorising and tackling dependent self‐employment are discussed.     

Risky Businesses? Young People in Informal Self‐Employment in Sofia

This article studies how perceptions of the risks associated with informal self‐employment depend on the interplay between the institutional, structural (network) and cultural embeddedness of economic action. Informal self‐employment should create at least three types of risk. The first concerns the possible legal and social sanctions that stem from the illegal character of the entrepreneurial action. The second is related to the complete lack of social security protection among those for whom informal self‐employment is their sole employment. The third is connected with the lack of guarantees concerning contract enforcement, which may increase the probability of opportunistic behaviour by business partners and clients. On the basis of a qualitative study of young, highly educated, informally self‐employed workers in Bulgaria's capital Sofia, I argue that these risks are compensated by the specific network and cultural embeddedness of the economic action. This compensation takes the form of various types of insurance against risks. Its core is the replacement of the vacuum of institutional‐system trust with interpersonal trust. Thus, the specific constellation of institutional, network and cultural embeddedness is able to solve the problem of opportunism, as well as to create the perception that the informally self‐employed are faced with not much greater risks than registered self‐employed workers.     

Differentiating emotional intelligence in leadership

Leadership has received considerable attention since the 1990s. We claim that leaders can be found at all levels of employment, and at the very least, all managers are expected to be leaders. Yet managerial status does not guarantee leadership. Leadership is a necessary component of and a filter for successful management. Effective managers demonstrate leadership capabilities. Leadership attributes are well captured in measures of emotional intelligence (EQ). Hence, leadership can improve if managers work to develop their EQ. We show how EQ, and hence leadership, can vary by level of employment among a composite international group of 3,305 employees with the Six Seconds Emotional Intelligence Assessment. The relationship between six leadership groups, as based on their EQ performance, across different employment levels was statistically examined, suggesting that leadership is realized in different ways depending on level of employment. It appears that employees become more skillful in emotional literacy and consequential thinking as they progress up the employment ladder. Intrinsic motivation and optimism are best leveraged by nonmanagerial rather than senior employees. The diminishing incorporation of empathy with an increase in employment level seems to stand in sharp contrast. Nonmanagerial employees, specialists, and entrepreneurs will benefit from developing their competence in pursuing their objectives with an overarching sense of purpose. The finding that high‐EQ leaders seem to dominate in the managerial levels may be viewed as encouraging.     

The decision to moonlight: does second job holding by the self‐employed and employed differ?

This article considers drivers of second job holding among the self‐employed in comparison with the employed. Econometric analysis of panel data explores whether the self‐employed are more or less likely to take on a second job when already running their own business than their employed counterparts. The findings contribute to the literature through identification of a need‐based variable—difficulty in meeting housing costs—as a key driver of movements from self‐employment to hybrid entrepreneurship. Findings, further, identify different patterns of second job holding by gender, particularly among self‐employed individuals.     

Inequality for Wage Earners and Self‐Employed: Evidence from Panel Data*

In this paper we highlight the importance of analysing the evolution of income inequality separately for employees and self‐employed workers. Using Spanish panel data on income and consumption for the period 1987–96, we find noticeable differences across these groups in the evolution of income inequality, and in the relative importance of the transitory and permanent components of income variance. The evolution of inequality is mainly explained by movements in the transitory component for the self‐employed and by the permanent component for the employees. Our results suggest that different policies should be implemented for each group.     

Customer‐oriented employees: Blessing or curse for firms?

I investigate whether the presence of customer‐oriented employees benefits firms in a competitive environment. Employees are defined as customer‐oriented if they are interested not only in their wage but also in the well‐being of their customers. I find that firms may obtain higher profits by hiring self‐interested rather than customer‐oriented employees. This is because the employees' customer orientation has opposing effects on the profits obtained by the firms. On the one hand, customer‐oriented employees provide a given level of quality for a lower wage. On the other hand, the employees' customer orientation increases competition reducing prices. If the second effect dominates, firms find themselves trapped in a prisoners' dilemma as the strategy of hiring self‐interested employees is strictly dominated by that of hiring customer‐oriented employees. Hence, the very presence of customer‐oriented employees may hurt firms. If motivated employees are merely interested in the quality of the good provided, the effect on the price outlined before disappears.     

Employees as Active Consumers of HRM: Linking Employees’ HRM Competences with Their Perceptions of HRM Service Value

Recognizing the importance for companies of having high‐quality employment relationships with employees, previous studies have sought to explain the variability in employees’ perceptions of HRM service value. However, most of these studies view employees as inactive in employment relationships and, therefore, do not consider whether employees’ own attributes affect their perceptions of HRM service value. In accepting the alternative notion that consumers create value “in use,” the current study regards employees as active consumers of HRM practices, and so examines the extent and way in which employees’ HRM competences (i.e., knowledge, skills, and abilities) explain the variability in HRM service value. Based on data collected from 2,002 employees in 19 companies in the Netherlands, a positive relationship has been found between employees’ HRM competences and their perception of HRM service value, albeit one that is mediated by the perceived quality and nonmonetary costs of HRM services. The main implication of our findings is that employees should be seen as active agents in employment relationships who, through coproducing and consuming HRM services as well as leveraging their knowledge and skills, influence the value of HRM services and have the potential to increase or undermine the outcomes of the employment relationship. © 2015 Wiley Periodicals, Inc.     

Going beyond self–other rating comparison to measure leader self‐awareness

Data were collected from leaders who rated their interpersonal competencies, were rated by their direct reports on the same competencies, and then were asked to predict as accurately as possible how their direct reports rated them. Leader self‐awareness was examined by analyzing self–other ratings and prediction–other ratings with a supervisor‐rated measure of leader effectiveness. Results showed that prediction–other ratings explained a greater percentage of the variance in leader effectiveness than did self–other ratings. These results suggest that prediction–other rating comparison may be a viable additional way to measure self‐awareness in organizational settings and may avoid some of the disadvantages when only using self‐ratings or self–other ratings.     

The effects of mandatory employment arbitration systems on applicants' attraction to organizations

This study draws on organizational justice theory to investigate the effects of mandatory employment arbitration on organizational attraction. Specific attention is given to the characteristics of employment arbitration procedures that moderate the adverse effects these programs have on applicants' intentions to continue with the recruitment process. A total of 389 professional and executive MBA students read simulated employment brochures. Making employment arbitration mandatory was found to have a significant negative main effect on applicant attraction. This negative effect was mitigated when procedures afforded employees more due process considerations and when employees were given a just‐cause protection in return for giving up their right to sue. Finally, this negative effect was greater among minorities than nonminorities. © 2005 Wiley Periodicals, Inc.     

Turning Unemployment into Self‐Employment: Effectiveness of Two Start‐Up Programmes*

Turning unemployment into self‐employment has become a major focus of German active labour market policy (ALMP) in recent years. If effective, this would not only reduce Germany's persistently high unemployment rate, but also increase its notoriously low self‐employment rate. Empirical evidence on the effectiveness of such programmes is scarce. We evaluate the effectiveness of two start‐up programmes for the unemployed, where we include the probability of being employed, the probability of being unemployed and personal income as outcome variables. Our results show that at the end of the observation period, both programmes are effective. The considerable positive effects present a stark contrast to findings from evaluations of other German ALMP programmes in recent years. Hence, ALMP programmes aimed at moving the unemployed into self‐employment may prove to be among the most effective, both in Germany and elsewhere.     

Organization‐Based Self‐Esteem,Psychological Contract Fulfillment,and Perceived Employment Opportunities: A Test of Self‐Regulatory Theory

This study addresses organization‐based self‐esteem (OBSE) development by examining the role of perceptions of employer psychological contract fulfillment, and the self‐regulatory processes by which OBSE evolves and produces its effects. Self‐regulatory theory helps reveal why psychological contract fulfillment relates to OBSE, how OBSE mediates its effects, and the ways in which OBSE might interact with perceived employment opportunities to affect job satisfaction, performance, and turnover intentions. The results show that OBSE is related to and mediates the relationships between relational contract fulfillment and employee job satisfaction and performance, but OBSE is not related to transactional contract fulfillment. Nor does OBSE mediate the relationships between transactional contract fulfillment and the dependent variables. Perceived employment opportunities moderate the relationships of OBSE with job satisfaction and turnover intentions. This study concludes with recommendations of ways managers can increase their sensitivity to the types of messages they communicate to employees. © 2014 Wiley Periodicals, Inc.     

Race,Self‐Employment,and Labor Absorption

Past studies have argued that in the large cities of developing societies, unemployment is often alleviated when displaced workers are absorbed into the small‐scale entrepreneurial activities of the informal economy. The present study applies this argument to an analysis of women's self‐employment in the U.S. South during the Great Depression. Census data show that in large southern cities in 1940, the unemployment of black women was meaningfully reduced by the self‐employment of these women in domestic service. These data further suggest that dynamics of race, unemployment, and the self‐employment of women in domestic service can be represented by an inverted‐U‐shaped labor absorption curve. These results make several contributions to research on race, labor‐market disadvantage, and self‐employment in the informal sector.     

Can green behaviors really be increased for all employees? Trade‐offs for “deep greens” in a goal‐oriented green human resource management intervention

This study explores the complex interaction between psychological and goal‐relevant boundary conditions that influence levels of individual engagement in a green human resource management (HRM) intervention designed to encourage employee green behavior (EGB). Data were collected from 1,112 employees in an automobile manufacturing plant. Consistent with goal‐setting theory, the level of feedback received predicts EGB. However, a three‐way interaction demonstrates how employees with high levels of autonomous motivation do not gain the expected benefits of high feedback and high goal commitment in the enactment of EGB. Instead, only those with weak autonomous motivation are affected by these goal‐related constructs. Findings suggest that both goal‐setting and self‐determination theories are relevant to green HRM interventions. Managers should consider that interventions that are effective for employees who do not have strong autonomous motivation towards the environment may not be effective for those who do.     

A study of impending derailment and recovery of middle managers across career stages

Why do some fast‐track managers derail? Why do some recover and return to the fast track? This study investigates these questions by analyzing managerial skills and self‐awareness during different career stages. The results suggest that derailers have significantly lower skill profiles than do successful managers at all career stages. The study also identifies specific skills that managers need to be successful in their careers; furthermore, it reports that derailers overestimate their skills in comparison to successful managers at all career stages. The results imply that one can avoid derailment or recover from derailment by developing both self‐awareness and specific managerial skills. © 2000 John Wiley & Sons, Inc.     

Assessing skills and autonomy: the job holder versus the line manager

Managers and their employees may have different perceptions of the skills used in jobs. We carried out a survey aimed at explaining such differences, in respect of verbal, physical, problem‐solving and planning skills, the qualifications required to get the job and indicators of workplace autonomy. First, for most skills there is a reasonably good match between the perceptions of the line manager and those of the employee. But in the case of the contested skills associated with autonomy there is little agreement. Secondly, for most skills there is a small ‘perceptions bias’, in the sense that employees rate required skills at a higher level than their line managers. Thirdly, consistent with the hypothesis that skills are socially constructed, when the manager is male and the worker female there is a tendency for the boss to underestimate and/or the worker to overestimate their skill level by comparison with other gender combinations.     

Can We Still be Friends? The Role of Exit Conversations in Facilitating Post‐Exit Relationships

Organizations might benefit from maintaining relationships with former employees, who could be rehired later or encouraged to refer job applicants and customers. We integrate the management literature on voluntary resignations and the communication literature on relationship dissolution to explore how conversations between an exiting employee and his or her manager facilitate (or constrain) post‐exit relationships. Employees who had recently resigned from full‐time jobs described their exit experiences in semistructured interviews with the research team. The results suggest two dominant patterns. When employees exited for external reasons (e.g., to pursue a program of study), they engaged in very direct communication strategies, elicited positive responses from their managers, and left with high interest in a post‐exit relationship. But when employees exited for internal reasons (problems within the employment relationship), they engaged in multiple exit cycles and moved from indirect communication strategies toward increasingly direct ones. Managerial responses to these strategies failed to capitalize on opportunities to nurture post‐exit relationships and sometimes generated a “vendetta effect” among exiting employees. The results suggest that managers might benefit from training in how to conduct effective exit conversations, particularly with employees who are leaving for internal reasons. © 2014 Wiley Periodicals, Inc.     

The returns to formality and informality in urban Africa

This paper addresses the questions as to the size and causes of earnings differentials in two urban African labor markets, those of Ghana and Tanzania. We have panel data so we can ask how far time invariant unobservables, market ability for short, matters in the determination of earnings. We also have information on whether the individual is own self-employed, self-employed with employees, a private or public sector wage employee and the size of the enterprise in which wage employees work or which the self-employed owns. We find, mirroring work on developed economies, that unobserved individual market ability is by far the most important factor explaining the variance of earnings. With controls for such ability the gap between private wage employment and civil servants is about 50%. With controls for enterprise size we find that wage employees earn the same as the self-employed in both Ghana and Tanzania. Enterprise size matters. At most half of the OLS effect of size on earnings can be explained by unobservable ability. Workers in the largest firms are the high earners with wage rates which exceed those of civil servants. These results all assume exogenous movement. We find evidence that endogeneity bias may be serious and may be understating the extent of both the size effect and the private sector wage (negative) premium. The implications of our results for understanding the nature of formal and informal employment in Africa are discussed.     

What Do Wages Add to the Health‐Employment Nexus? Evidence from Older European Workers

The role of wages in the health‐employment nexus can be important for designing employment policies aimed at older workers with health limitations. We, therefore, estimate the direct effect of health on employment and hours worked and its indirect effect that is mediated through wages using individual‐level panel data from SHARE. The endogeneity of self‐reported health is controlled for by instrumenting it with severe health conditions in a correlated random effects model. For men, we find that the direct effects of health deterioration, as measured by a reduction in health from the 75th to the 50th percentile of the health distribution, are about a 20% point lower employment probability and about 171 fewer hours worked per year. The indirect health effects through wages work in the opposite directions as health positively affects wages and wages negatively affect employment and hours worked. The total effects of this health deterioration amount to a 12% point lower employment probability and 95 fewer hours worked per year. In particular our finding of a large direct health effect on employment suggests an instrumental role for policy aimed at accommodating workers with health limitations to keep them employed at older ages.     

The effects of offering flexible work practices to employees with unpaid caregiving responsibilities for elderly or disabled family members

Approximately one in 10 employees in Australia, the United States, and Europe have unpaid caregiving responsibilities for elderly or disabled family members. This combination of employment and caregiving roles is problematic when there is conflict between their simultaneous demands. Flexible work practices can be an important mechanism for assisting these employees. However, limited attention has been given to determining the benefits of flexible work practices for these employees, or the process by which these effects arise. We address these gaps via a survey of employees with unpaid caregiving responsibilities for family who are elderly or disabled. Results indicate that greater availability of flexible work practices improves perceptions of workplace support for combining caregiving and employment. This effect was partially and sequentially mediated by disclosure, practice utilization, and practice helpfulness. Additionally, practice availability had a direct positive effect on practice utilization, while disclosure had a direct positive effect on perceived support. Overall, the findings demonstrate the benefits of flexible work practices for employees with caregiving responsibilities. The study also points the way to interventions that can improve the effectiveness of flexible work practices by demonstrating how the potential benefits of these practices are translated into actual improvements in perceived support.