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Joumal of Organizational BehaviorJ Organiz Behav 24, 561-583 (2003)Published online in Wiley InterScience (www.interscience.wiley.com).DOI I.l002/job.202

The employment relationships of foreignworkers versus local employees:afieldstudyof organizational justice,johsatisfaction, performance, and OCBSOON ANG', LINN VAN DYNE^* AND THOMAS M. BEGLEY^

Business School. Nanyang Technological University, SingaporeEli Broad Graduate School of Management, M ichiffan Suite University.Ea MLansing, Michigan. U.S.A.CollegeofBusiness Administration, Northeastern University. Boston. Massachusetts U.S.A.

umm ry Foreign workers seek overseas employm ent without sponsorship from a firm in their homecountry and hold temporary work visasin thehost country. Despite the rising numbers offor-eign workers, thereis very little research that examines employment relationships andworkbehaviorsof foreign workers.In this study,wedraw on social exchange theory andpredictdifferences in work perceptions, attitudes,andbehaviorsof foreign versus local employeesbasedondifferences in their exchange relationships. We then draw on social comparison the-ories and propose that these differences in perceptions, attitudes, and behaviors will beaccen-tuatedforworkers njobs w ith high task interdependence. We examined these hypothesesinaI field studyof466 ethnic Chinese employees (213 foreign w orkers from the People s Republicof China and 253 local workers in Singapore with ongoing employment status). Resultsdemonstrate lower distributive justice judgment.s. performance, and organizational citizenshipfor foreign versus local employees. Furthermore, results demonstrate that differences in dis-tributiveandprocedural justice, performance, and organizational citizenship w ere heightenedby task interdependence. We discuss findingsand the implications of employing foreignworkers. Copyright ,r,, 2003 John Wiley &Sons,Ltd.

IntroductionEmploying foreign workers witb temporary work visas is a global business trend, especially in nationstbat experience shortages of highly skilled workers in their local labor markets (Rogler, 1994). Forexample, the United States recruits IOO(X)O skilled foreign workers annually from Europe, Asia, Cen-tral and South America (West & Bogumil, 2000). Other parts of tbe world (notably Australia, Canada,and tbe Middle East) also experience skilled labor shortages and rely beavily on foreign workers(Sowell, 1996). In Singapore, tbere are approximately balf a million foreign workers, a sizeable 20per cent of the workforce (Verma, Kochan, & Lansbury, 1995; Yap, 1999).

* Correspondence to:Linn Van Dyne, Eli Broad Graduate School of Management, N424 North Bu.siness, Michigan StateUniversity, East Lansing,MI48824 . U.S.A. E-mail: vandyne@m su.edu

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562 S. ANG ETALGiven the increasing prevalence and number of foreign workers, the objective of this research is toexamine differences in work perceptions, attitudes, and behaviors of foreign compared to localemployee s. In this study, we define foreign workers as employees who have no permanent residentialstatus in the host country and who seek overseas employment without sponsorship from any firm in

their home nations (Alarcon, 1999; Sowell, 1996; West & Bogumil, 2(KK)). Thus, we do not focus onexpatriates (Guzzo, N oonan, & Elron. 1994). Expatriates are similar to foreign workers because theytypically have no permanen t residential status in the host country. However, expa triates differ fromforeign workers because they are sent on overseas assignments with sponsorship from a home countryorganization (Black, Gregersen. Mendenh all, & Stroh, 1999). In addition, the home country organiza-tion typically finds new positions for expatriates at the end of their overseas assignments (Guzzo et al.,1994). Expatriates therefore have ongoing employment relationships both before and after a specificoverseas assignment whereas foreign workers seek new employment relationships that are of limitedduration with firms, with no expectation of ongoing employment beyond the expiration of their tem-porary work visas (Aiarcon, 1999; Sowell, 1996).Employing foreign workers, therefore, poses a major challenge to employing organizations in the

host country. Since foreign workers have no ongoing employment relationship and hold only tempor-ary work visas, their employment is by definition of limited duration. Altbough in some exceptionalcases organizations may petition to have the visa of a specific foreign worker extended, renewals arenot regularly awarded because many countries discourage 'permanent' foreign workers with the goalof reducing dep enden ce on foreign wo rkers (Sowel , 1996). Acco rdingly, organiza tions m ust craftalternative employment relationships with foreign workers compared to local employees.Foreign workers under employment of limited duration create greater variety of alternative staffingstrategies for the employing organization (Kalleberg. 20(X)) and present an interesting contrast to localworkers who hold thes mejob and perform the same tasks, but who are hired at will and for indefinite orlong-term emp loyment relationships (Pfeffer & Baron, 1988). Past research on w orkers under alternativestaffing strategies who do not have ongoing employm ent relationships (for exam ple, contingent, tem por-ary, contract, on-call, and part-time workers) demonstrates that alternative staffing strategies can havesignificant social-psychological effects on employee a ttitudes and behavior (see. for exam ple, Ellingson,Gniys, & Sackett, 1998; Marier, Barringer, & Milkovich, 2002; Pearce, 1993; Van Dyne & Ang, 1998),We therefore expect that foreign work status (temporary work visas with no assurance of ongoingemployment relationships) will influence work perceptions, attitudes, and behaviors in the host country.Our paper is organized as follows. First, we draw on social exchange theory (Blau, 1964; Thibaut &Kelley, 1959) to predict that foreign workers will have lower distributive justice, procedural justice,and job satisfaction. Second, and again based on .social exchange theory, we predict that foreign work-ers will have lower performance and exhibit less organizational citizenship behavior than localemployees performing the same work. Third, drawing on social comparison theory (Festinger,1954), we propose that differences in perceptions, attitudes, and behaviors will be accentuated forworkers in jobs with high task interdependence. We then present results of a field study of 466 skilled

technical employees (213 foreign w orkersfrom the Peo ple's Republic of China and 253 local employ-ees in Singapore) that tests these hypotheses and conclude by discussing the theoretical and humanresource implications of our findings.

Social Exchange: Foreign Versus Local WorkersSocial exchange theory (Blau, 1964) and reciprocity norms (Gouldner, 1960) suggest that foreignworkers will have less positive exchange relationships than local employees b ecause foreign workers

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FOREIGN VERSUS LOCAL EMPLOYEES 563receive different inducements such as pay, benefits, access to career development, and opportunitiesfor advancement from the organization (March Simon, 1958). Local employees with open-endedrelationships are eligible for promotion, training and career development, more paid vacation, over-time, medical benefits, contributions to retirement, and can resign voluntarily vfithout financial penal-ties.In contrast, foreign workers with limited duration em ployment are not eligible for promotion, notentitled to career development benefits, have less paid vacation, no overtime, no medical benefits, andmust pay a penalty in the event of voluntary resignation for non-com pletion of their employment con-tract. As a result, the social exchange relationships of foreign workers contain fewer tangible andintangible outcomes because their employment relationships are more bounded.

In this research, we focus on comparisons between local employees and foreign workers. We sug-gest that the reality and immediacy of the proximal context focuses their attention on local compar-isons.At the same tim e, we acknowledge that foreign workers may also contrast their social exchangerelationships with those they had in previous employment relationships in their home country. In thenext section, we develop this idea in more detail and predict differences in distributive justice, proce-dural justice, and job satisfaction when comparing foreign and local employees.

Distributive justice procedu ral justice and job satisfactionAccording to Greenberg (1990), distributive justice involves employee assessments of fairness ofrewards and inducements received in exchange for contributions at work. Prior research and theoryon social exchange and distributive justice suggest that when employees receive inducements thatare commensurate with their knowledge, skills, and abilities, they are more likely to think that theiroutcomes such as pay, benefits, and terms of work are fair and just {Greenberg, 1990). In contrast, ifemployees feel tbat outcomes are not congruent with their human capital, they will make lower dis-tributive justice judgments than local employees. In general, foreign workers, especially those thathold professional jobs, often represent employees with outcomes that are not commensurate with theirhuman cap ital (Alarco n, 1999). In many cases such as in our sample, foreign w orkers have high erlevels of education than local employees in the same jobs. This is because their educational and pro-fessional credentials are not fully recognized due to institutional barriers. Accordingly, we expect for-eign workers to make lower distributive judgments than local employees.

Hypothesis :Distributive justice judgments will be lower for foreign compared to local workers.Procedural justice involves employee assessments of the extent to which decisions are based on fairmethods and guidelines (Folger Greenberg, 1985). In other words, employees evaluate the extent towhich they feel processes used to make decisions that infiuence them are just (Niehoff Moorm an,1993). Prior research and theory on social exchange and procedural justice suggest that whenorganizational decision-making is consistent and meets the bias suppression rule (uniform treatmentofall),employee s have positive assessments of procedural justice (Leventhal, 1980). In contrast, whendecision-making processes apply differentially to employees (based, for example, on theirdemographic or employment status characteristics), procedural justice judgments of those affectedare lower. In applying this to foreign workers, we expected that their limited duration employmentstatus would cause them to feel that policies were differentially applied to them com pared to localemployees. When exchange relationships differ, decision-making will be less uniform (foreign com-pared to locals) and foreign workers may feel they do not have equal access to appeal mechanisms.Accordingly:

Hypothesis 2: Procedural justice judgments will be lower for foreign compared to local workers.

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564 S. ANG ETALJob satisfaction refers to an employee's overall sense of well-being at work. It is an intemal state basedon assessing the job and job-related experiences with some degree of favor or disfavor (Locke, 1976).Based on tbeir etnployment status, foreign workers receive different inducements from the organiza-tion and cannot expect ongoing employment. Since these differences are a function of employmentstatus and are not a function of qualifications or job responsibilities, we propose that foreign workerswill have lower satisfaction than local employees. In other words, we suggest that foreign workers willhave a lower sense of well-being, based on lower-quality employee-organizational linkages. Thus:

Hypothesis 3:Job satisfaction will be lower for foreign com pared to local workers .or performanceWe now turn our attention to two key work behaviors: work performance and organizational citizen-ship.Work performance is typically viewed as fundamental or in-role responsib ilities that employee sare hired to perform in exchange for their compensation packages (Rousseau McLean Parks, 1993).Since foreign workers receive less from the organization (e.g., temporary employment, no long-termbenefits, no access to promotions). It seetns reasonable to expect them to contribute less to the orga-nization. Accordingly, we expect them to feel less responsibility to contribute at high performancelevels. This is consistent with the logic used by Feldman (1996), who suggested that lower perfor-mance is one mechanism workers can use to restore personal feelings of equity regarding the workexchange relationship. Accordingly:

Hypothesis 4: Job performance will be lower for foreign compared to local workers.

Orga nizational citizenship behavior OC B)OCB is constructive behavior, not included in an employee's formal job description (Organ, 1988). Spe-cifically, we focus on helping forms of organizational citizenship, the most commonly researched form ofOCB,such as when workers use discretion and decide to assist co-workers with their work or when theyvolunteer to do things that benefit the workgroup (LePine, Erez, Johnson, 2002). Consistent with thelogic used above for performance, we suggest that since foreign workers receive less from the organiza-tion, they will contribute less to the organization. Organizational citizenship can be viewed as a socialresource that can be exchanged by individuals who have been the recipient of social rewards (Moorman,1991 ;Kaufman, Stamper, Tesluk,2 M)]).Thus, when employees feel as though they receive a lot fromthe organization, their citizenship behavior will be higher. When they feel their exchange relationship isless positive, they can withhold these discretionary behaviors with littie fear of negative consequences.This is because organizational citizenship is not required by the job and there are no formal sanctionsfor failing to contribute these behaviors to the organization. Not engaging in discretionary behavior, there-fore, can help foreign workers balance perceived inputs and outcomes. Accordingly:

Hypothesis 5: Organizational citizenship will be lower for foreign compared to local workers.

Social Comparison: The Moderating Role of Task InterdependenceIn the preceding sections, we used social exchange theory and the norm of reciprocity to justify ourpredictions that foreign worker perceptions, attitudes, and behaviors w ould be less positive than those

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FOREIGN VERSUS LOCAL EMPLOYEES 565of local employees. We now draw on social comparison theories (Festinger, 1954; KniglanskiMayseless, 1990) to propose that task interdependence will accentuate differences between foreignand local workers.

Task interdependence organizational justice and job satisfactionWhen task interdependence requires employees to coordinate their work with others on an ongoinghasis, interaction and proximity heighten the vividness of contrasts (Kiggundu, 1983). such as thosebased on employment status. For example, social cognitive research demonstrates that social compar-isons and social judgmen ts are m ore likely when comp arison others are proxim ate and salient {Nisbett Ross, 1980). Similarly, research on social information pro cessing and relative deprivation (Crosby,1984) shows that social com parison occurs autom atically when em ployees interact with each other. Infact, it is difficult for individuals to avoid social com pariso n, espec ially w hen regularly interacting w ithco-workers.

In other words, the differences in the employm ent exch ange relationships (em ployment status, ben-efits,and opportunities) will be more obvious when em ployees must interact regularly than when inter-action is optional and comparison others are less evident. When differences in employmentrelationships are more obvious due to proximity (such as high task interdependence), differences inperceptions of justice and assessments of satisfaction (local compared to foreign) will be magnified.Accordingly:

Hypothesis 6:The relationship between em ployment status (foreign versus local) and emp loyeeperceptions at work will be moderated by task interdependence, such that the relationship willbe stronger for those in jobs with high task interdependence (6a: distributive justice; 6b: proceduraljustice: 6c: job satisfaction).

Task interdependence and work behaviorsHere we propose that when employees hold jobs with high task interdependence, social comparisonprocesses will accentuate differences in work behaviors (foreign compared to local). First, consistentwith the social exchang e logic used above for Hy potheses 4 and 5 and the social comparison logic usedfor Hypothesis 6, we suggest that differences in inducements and contributions will be more salient toemploy ees when they must coordinate their work efforts and must work closely with others. Thus, hightask interdependence should make workers more aware of differences in their employment relation-ships and this should heighten differences in the behavior of local and foreign workers. Second, draw-ing on social comparison processes, we suggest that supervisor perceptions of worker contributions arealso subject to social com parisons. U nder conditions of high task interdependence, supervisors will bemore aware of contrast effects and will be more likely to perceive differences in the behavior (perfor-mance and OCB) of foreign workers compared to local employees. In other words, when employeeshold jobs with high task interdependence, observers will also experience automatic social comparisonprocesses and supervisors will be more likely to notice differences and/or rate foreign employee per-formance and organizational citizenship behavior lower than that of local employees. Thus:

Hypothesis 7:The relationship between employm ent status (foreign versus local) and em ployeework behaviors will be moderated by task interdependence, such that the relationship will be stron-ger for those in jobs with high task interdependence (7a: performance; 7b: organizational citizen-ship behavior).

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566 S. ANG ETALResearch Context

Despite chronic sbortages of skilled labor, Singapore regulates stringently Ibe inflow of foreignworkers because readily available foreign labor may discourage employers from investing in devel-oping the skills of tbe local workforce (Tan, 1996). Singapore bas introduced a number of measuresto regulate tbe employment of foreign workers and control the numbers of foreign workers in tbelocal economy. First, Singapore grants work visas very stringently, based on staffing demands andon efforts to manage tbe mix of local and foreign workers. Second, organizations must pay amontbly levy of SIN 20 0-4 00 for eacb foreign work er, thereby raising tbe cost of em ployin g for-eign workers. Employers are tberefore discouraged from recruiting too many foreign workersbecause tbe levy raises their wage costs and ensures that foreign workers do not become an inex-pensive source of labor at tbe expense of local workers.Tbird, organizations must ensure that tbeir ratios of local to foreign workers do not exceed 2:1 in

tbe manufacturing sector and4: or5: in tbe service sector. Eourtb, work visas have a maximum of2 years, although organizations may apply to renew for another term of 2 years. In many cases, nofurtber renewals are awarded because tbe system discourages 'perm anen t' foreign workers, with thegoal of reducing dependence on foreign workers through greater use of technology as a substitutefor foreign labor. Further, where tbere is a cbange of employer, foreign workers must apply for newwork permits. Thus, foreign workers on temporary work permits are repatriated after a m aximum of4 years.

MethodContextWe collected data from highly skilled technical em ployees at a large property m anagement and devel-opment organization in Singapore. Singapore is a good setting to compare skilled local and foreignworkers because Singapore's bigh economic growth creates chronic labor shortages and Singaporehas a history of employing foreign workers as skilled employees (Verma, et al., 1995). Foreign workersaccount for a sizeable 20 per cent of tbe existing workforce in Singapore (Yap, 1999). Unemploymentbas been about 1.8 per cent, and the annual job vacancy rate at 18 -25 per cent (Ang, Tan, & Ng, 2000;Bian & Ang, 1997). Singapore stringently regulates the inflow of foreign workers because readilyavailable foreign labor may discourage employers from developing the skills of the local workforceand from investing in technology as a substitute for labor (Tan, 1996).

Each year, the organization in our study recruits from large cities in China. Prospective candidatesare tested on their technical skills and selected based on their technical competencies. Once hired andon the job , foreign workers and local employees receive equal training to perform current job duties.Foreign workers in this organization receive less favorable terms of employment tban their localcounterparts. Local employees have open-ended, ongoing employment relationships and are eligiblefor promotion and are entitled to 14 days annual career development in management and leadership.Local employees receive 12 paid vacation days atinually, overtime pay, medical benefits, and at least

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FOREIGN VERSUS LOCAL EMPLOYEES 56720 per cent contributions to retirement. In the event of voluntary resignation, local employees can give1 month 's notice and leave without a pay penalty. In contrast, foreign workers are not eligible for pro-motion, overtime, medical, career developm ent, or retirement benefits. Foreign workers receive 9 paidvacation days during their fixed-term, 2-year contracts. In the event of voluntary resignation, foreignworkers must pay a heavy financial penalty for non-completion of their contract.ProcedurePrior to data co llection, we conducted structured interviews with six local and five foreign workers toobtain information on work percep tions, attitudes, and behaviors and to m ake sure the questions in oursurvey had face validity and were interpreted as intended. Individuals participated in the study volun-tarily and all participants were assured their individual responses would remain confidential. A bilin-gual Chinese person translated the English version of the questionnaire into Mandarin and a secondbilingual Chinese person then back-translated to English to assure comparable meaning (Brislin,1980). Finally, two additional individuals (a Human Resources representative and a native-bomChinese person) reviewed the final questionnaire for clarity and comparability.

Local employees and foreign workers provided data on their demographic characteristics, culturalvalues, perceptions, and attitudes. Supervisors provided data on employe e job performance, organiza-tional citizenship, and the percentage of foreign workers in the work unit. A total of 6ethnic C hineseemployees were asked to complete questionnaires during normal work hours. We obtained useabledata from 466 em ployees and their supervisors. The response rate was 87 per cent for local employ ees(Singaporeans) and 80 per cent for foreign workers (People's Republic of China).

Re.spondentsAll participants (both local and foreign) were ethnic C hinese. Local employees n =253) were 54 percent of the sample, 72 per cent m ale, and 75 per cent had at least 2 years of community college experi-ence. On average. local employees were 31 years old. had 8.33 years of organization tenure, and 10years of work experience. Foreign workers (/j213) were 46 per cent ofthesamp le. 86 per cent male,and all held at least a Bachelor's degree from universities in the People's Republic of China. On aver-age, foreign workers were 29 years old, had 1.9 years of organization tenure, and 7 years of workexperience. We note that some of the foreign workers in our sample had 3 years of tenure because,owing to the labor shortage, their work visas had been renewed. These renew als, however, are not guar-anteed and no renewal notice is given until about 3 months before contract expiration, thus creatingperceptions of limited duration employ ment. Contracts are not renewed more than once.

Nature of jobsLocal employees and foreign workers performed the same highly skilled technicaljobs,all in the samejob classification level. These employees held technical jobs related to architecture, construction, andinspection. Specific duties included drafting architectural drawings and building plans, revising blue-prints, inspecting work for quality assurance, testing materials against standards, and ensuring com-pliance with safety procedures. Overall, 37 per cent of the sample had jobs of high taskinterdependence (61 percent of locals and 39 percent of foreign) and 63 percent had jobs of low taskinterdependence(50percent of Iocalsand50percentof foreign). Jobs with high task interdependence

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568 S. ANG ETAL.were organized using reciprocal interdependence. Individuals in these jobs needed to coordinate theiractions with co-workers in order to accomplish their work. Their primary contacts were with othertechnicians. In contrast, jobs with low task interdependence were organized based on pooled interde-pendence. Employees in these jobs did not need to coordinate their efforts with other co-workers.Instead, their primary contacts were one-on-one interactions with suppliers and vendors outside ofthe organization.

MeasuresWe obtained information on employment status from organizational records (0 foreign worker; i.e.,Mainland Chinese; I = local; i.e., Singaporean Chinese).

We assessed distributive justice {I = very unfair; 7 = very fair) with eight items (NiehoffMoorman, 1993;Price Mueller. 1986). Respondents indicated the extent to which tbey believed spe-cific aspects of their work (work schedule, pay level, workload, rewards, job responsibilities, jobassignment, use of skills, and effort expected) were lair or unfair (Cron bach's alpha = 0. 9 2) . Weassessed procedural justice (1 never; 7 always) with six items (Niehoff Moorm an, 1993).Respondents were asked to indicate how often the listed procedures w ere observed at work. The pro-cedures included the following: job decisions are made in an unbiased manner; all employees' con-cems are heard before job decisions are made; to make job decisions, accurate and completeinformation is collected; when requested by employees, decisions are clarified and additional informa-tion is provided; all job decisions are applied consistently across all affected emp loyees; and em ploy-ees are allowed to challenge or appeal job decisions (Cronbach's alpha 0.83). We assessed overallemployee job satisfaction I = strongly disagree; 7 = strongly agree) with tbree items from the shortform of the Job Diagnostic Survey (Hackman Oldham, 1980). Items were as follows: generallyspeaking I am very satisfied with this job, I am generally satisfied with the kind of work I do in thisjob, and most people in this job are very satisfied with the job (Cronbach's alpha0.82).Supervisors assessed work performance and organizational citizenship (Istrongly disagree;7 = strongly agree). For work performance we used four items from Ashford, Lee, and Bobko(1989). Items were as follows: the performance level of this employee is satisfactory, this employeeis effective in his or her jo b, this employee performs better than many oth er emplo yees who performthe samejob,and this employee produces high-quality work (Cro nbach 's alpha 0.90). We u.sed fouritems from Van Dyne and LePine's (1998) helping measure iov organizational citizenship behavior.Items included 'belps orient new employees and helps others who have heavy workloa ds' (Cronb ach'sa lpha -0 .83) .To avoid common method bias, we asked two pairs of senior executives to rate level of task inter-dependence for the jobs in the study. Items included (1=^ strongly disagree ; 7 = strongly agree):employees work in groups; individuals work in a group rather than work alone. The average correla-

tion between ratings of each pair of senior executives wa s 0.94 (0.87 and 1.0), witb significant differ-ences (/ = 8 .4 9 , d.f. = 2 , /7

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FOREIGN VERSUS LOCAL EMPLOYEES 569language skills. English proficiency is important in Singapore because English Is the language of busi-ness and common first language of everyday living. Respondents rated their English proficiency withthree items (I none at all; 7 = excellent): U nderstanding E nglish, Speaking English, and W ritingEnglish (Cronbach's alpha0.95). Finally, past research has also demonstrated that group composi-tion can influence perceptions, attitudes, and behaviors of workers in alternative staffing strategies(Pearce, 1993). Accordingly, we controlled for the percentage of oreign workers in the work unit.

We designed our research to hold ethnicity constant among local and foreign employees (i.e., ethnicChinese regardless of em ployment status). However, we expected differences in cultural values eventhough all participan ts were ethnic Chine se (see Bon d, 1996: Lam . Hui, Law, 1999) and explicitlycontrolled for collectivistn, uncertainty avoidance, and power distance (1-strongly disagree;7 = strongly agree).We assessed collectivism with two item s fWagner, 1995): I prefer to work with others in a grouprather than working alone and working with a group is better than working alone (Cronbach's alpha= 0.81). We assessed power distance with three items based on Dorfman and Howell (1988). Itemswere as follows: it is better not to disagree with management decisions; when my boss makes a deci-sion with whichIdisa gree , I prefer to accept it rather than question it; and I believe that it is not right todisagree with my boss (Cronbach's alpha 0.66). Although our Cronbach alpba of 0.66 is slightlyhigher than Dorfman and Howell's (1988) eariier findings (0.63). we note that it is still low. A mitigat-ing factor is our use of power distance as a statistical control and not as a substantive construct. Wemeasured uncertainty avoidance based on Hofstede (1984) with five items developed specifically forthis study (Cronbach's alpha = 0.77). Since these are new items, we list them in the Appendix andassessed their discriminant validity relative to other constructs in the study.We analyzed the factor sttucture of the 30 self-report items, using principal components analysiswith varimax rotation (see Table ). Results produced the expected seven-factor structure (eigenvalues> 1.0), explained 66.3 per cent of the variance, and supported the discriminant validity of constructsrepresenting distributive justice, procedural justice, job satisfaction, collectivism, power distance,uncertainty avoidance, and English proficiency. All items loaded on expected factors (range of primary

loadings = 0.59-0.94) with no problematic loadings (maximum cross loading 0.33). We also factoranalyzed the supervisor-rated items (.see Table 2). Principal components analysis, with varimax rota-tion, of the eight items produced the expected two-factor structure, explained 71.8 per cent of the var-iance, and supported the discriminant validity of performance and organizational citizenship. All itemsloaded on expected factors (range of primary loadings =0 .6 0- 0. 85 ). Other than one OCB item (helpsothers who have heavy workloads) that had a cross-loading on performance of 0.46, all items hadcross-loadings of 0.40 and below.

Psychometric equivalence ofme sureshetween M ainland Chinaand Singapore samplesWe exatnined the psychometric equivalence of the measures across the two samples (mainlandChinese and Singaporean Chinese) using the procedures recommended by Byrne (1998). Eirst wetested the extent to which the items comprising each construct were factorially equivalent. We exam-ined the equivalence of factor structures (i.e., number of factors) across the two samples, relying on thecomparative fit index (CFI) and the incremental tit index (lEI) in the CEA models. We also report rootmean square error (RM SEA : Byrne, 1998; Joreskog Sorbom, 1993) as a reference for overallmodel fit. The fit of the simultaneous test for factor structure across the two samples was acceptable.Tbe test of num ber of factors y ielded a x^ ^ 1622.19, d.f. = 1126, both CEI and lEI - 0 91 andR M S E A - 0 . 0 4 8 .

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57 S. ANG ETALTable I. Factor loadingsfor self-report itemsItemDistributive JusticeIDistributive Justice2Distributive Justice3Distributive Justice4Distributive Justice5Distributive Justice6Distributive Justice7Distributive Justice8Procedural Justice1Procedural Justice2Procedural Justice3Procedural Justice4Procedural Justice5Procedural Justice6English Proficiency1English Proficiency2English Proficiency3Uncertainty Avoid,tUncertainty Avoid.2Uncertainty Avoid.3Uncertainty Avoid.4Uncertainty Avoid.5Job Satisfaction1Job Satisfaction2Job Satisfaction3Power DistancePower Distance2Power Distance3Collectivism 1Collectivism 2

Factor1 87 85 876

74 72 71 660.260.220.200.130.250.060.040.020.020.090.100.030.080.040.210.300.130.090.110.040.130.11

Factor20.080.170.210.130.160.120.170.30 78 77 74 766

630.030.040.030.040.050.060.150.210.220.270.160.010.040.150.090.06

Factor0.030.040.100.090.140.250.090.030.030.040.020.060.020.04 94 92 90.L30.060.080.13- 0 . 2 00.080.010.050.03- 0 . 1 10.030.010.03

Factor40.040.050.020.050.060.110.110.060.140.150.110.050.030.080.030.010.02 77 75 72 66 640.160.200.020.060.050.050.200.22

Table2. Factor loadingsfor supervisor-report itemsItemPerformancePertbrmancePerformancePerformanceHelping1Helping2Helping3Helping4

1234

Factor 85 83 78 60.330.200.350.46

1

Factor50 .10.040.030.290.120.120.330.060.070.130.080.080.160.180.060.00.00.100.040.01O. 4O. 3 82 76 630.060.200.060.130.1

Eactor60.03(). 40.190.120.060.070.05.060.030.040.150.010.08O. 40.040.060.080.050.080.130.170.030.060.050.282

72 590.060.01

Factor20.330.380.240.39 78 74 74 67

Factor70.040.060.090.03O. O0.050.05O. O0.060.09O. 30.09O. O- O . 90.030.060.050.150.02O. 90.060.030.060.07O. 20.060.060.05 88 87

Second, we examined the extent to which content of each item of each construct was interpretedequivalently across groups (Byrne, 1998) by testing for factor loadings invariance. We estimated amodel where we constrained the chi-square parameters to be equal between the two samples. We thencompared this with the model in the first procedure, where only the number of factors was held invar-iant. Results provide strong support for invariance in factor loadingslx~1657.88. d.f.=1154) withno significant difference in chi-square between the first and second models (A 35.69, Ad.f. 28,p >0.05).

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FOREIGN VERSUS LOCAL EMPLOYEES 571Third, we tested simultaneously for invariance between the two samples in structural relationsamong the factors (i.e., factor covariances). We estimated a model wbere all factor covariances wereconstrained to be equal and tben compared this witb the model in the second procedure w bere tbe fac-tor loadings were held invariant across the two samples. Results of this tbird test indicate strong sup-

port for the invariatice of factor covariances across tbe two samples. Tbe test of tbe factor covariancesyielded a \ 1696.09, d.f. 190. Tbe difference in cbi-square between tbe second and third modelswas not significant (A ^ = 38.21,Ad.f.= 36,p> 0.05), suggesting that tbe structural relations amongtbe factors were tbe same for botb samples. In sum, tbe three psychometric equivalence proceduressuggest tbat the factor structures, factor loadings, and structural relations among the factors and factorcovariances are equivalent between tbe mainland and Singaporean Chinese samples.

AnalysesWe tested our hypotbeses w ith hierarchical regression, entering dem ographic controls (gender, educa-tion, work experience, English proficiency, and percentage of foreign workers in tbe work unit) in step1, cultural values (collectivism, power distance , and uncertainty avoidance) in step 2, employmen t sta-tus (foreign or local) in step 3. task interdependence in step 4, and interactions in step 5. We interpretedresults witb AF statistics and interpreted interactions using Aiken and West 1991).

ResultsTable 3 includes descriptive statistics and intercorrelations for tbe full sample, and Table 4 reports tbisinformation for eacb subsample. Table 5 presents results from five hierarchical regressions that predictdistributive justice, procedural justice, job satisfaction, job performance, and organizational citizen-ship. These regression equ ations explain between 16 and 22 per cent of the variance in perceptions,attitudes, and bebaviors at work. Results support Hypotbesis 1. indicating tbat foreign workers rateddistributive justice lower than local employees. After accounting for gender, education, work experi-ence. English proficiency, and percentage of foreign workers in step 1, and collectivism, power dis-tance, and uncertainty avoidance in step 2. tbe addition of employment status in step 3 was significant(A F = 9.50, / < 0 . 0 1 , / - 0 . 2 5 , ; ? < 0 . 0 1 ; mean for foreign - 3.48, mean for lo ca l- 4. 07 ) andincreased/? by 0.03. In contrast, results failed to support Hyp otbesis 2 (/J 0.04,;? > 0.05) or H ypoth-esis 3 3 = -0.05,p> 0.05), indicating no differences in procedural justice or job satisfaction based onemployment status.Results support Hypotbeses 4 and 5. After accounting for tbe control variables, employment statuswas significant for work performance (AF 14.13,/ ?\, /?< 0.001) and increasedR ^by 0.04. Results for organizational citizenship AF = 18.17,/?

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FOREIGN VERSUS LOCAL EMPLOYEES 573

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satisfaction. The interactions accounted for an additional 1-2 per cent variance explained, over andabove controls and main effects. Figure I illustrates the form of these interactions, showing strongerrelations (steeper slope) for those in jobs with high task interdepend ence and supporting Hypotheses6a, 6b, 7a. and 7b.

DiscussionThis study responds to the increasing use of foreign workers by organizations that have shortages ofqualified technical and professional workers. The objective in this paper was to examine differences inwork perceptions, attitudes, and behaviors of foreign workers compared to local employ ees. In makingthis comp arison, we emphasized differences in em ployee -organ ization relationships based on the lim-ited duration of employment for foreign workers who hold temporary work visas compared to localemployees who can expect ongoing employment. Results provided general support for our predictionsbased on social exchang e and social comparison theories. Foreign workers had less positive work per-ceptions, as well as lower performance and lower organizational citizenship behavior compared tolocal employees who held the same jobs and performed the same tasks. In addition, results demon-strated that differences in distributive justice, procedural justice, pertbrmance, and citizenship wereaccentuated for those in jobs with high task interdependence.

Social exchange and differences in work perceptions attitudes and behaviorsResults demonstrated that foreign workers had lower perceptions of distributive justice compared tolocal employees. When foreign employees have limited duration employment, they receive differentinducements from the organization as a function of their employment status. In contrast, foreign andlocal employees had similar perceptions of procedural justice. To further understand this unexpectedfinding, we conducted post-survey interviews with supervisors at the organization. These discussionsindicated that severe labor shortages had increased the organization's dependence on foreign workersand that accordingly the organization strictly designed procedures to apply similarly to both local andforeign workers in performance feedback, socialization processes, work unit meetings, and work-related social gatherings. The contrasting findings for distributive and procedural justice reinforcethe benefits of including both typ es of justic e in research, bec ause they can be differentially relatedto substantive constructs.

Results showed no significant differences in job satisfaction of foreign and local workers. Post-sur-vey interviews indicated that, contrary to our expectations, foreign workers assessed their job satisfac-tion based on improvement over their previous work situations in their country of origin. Foreignworkers emphasized the opportunity to work w ith different technical processes and equipm ent, ratherthan comparisons with local employees.Results also demonstrated lower foreign employee w ork performance and organizational citizenshipcompared to local employees. Based on their limited duration employment, foreign workers receivedfewer inducements from the organization (e.g., temporary employment, no long-term benefits, noaccess to promotions). Consequently it is not surprising that they did not reciprocate with the samelevel of performance or organizational citizenship behavior as local workers. Instead, withholdingpositive behaviors such as performance and citizenship may increase personal feelings of equity forforeign workers (Feldman, 1996), Another possible explanation could be the effect of relational

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576 S. ANG ETALla : Distr ibutive justice

DistributiveJustice

4 5

4

3.5

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Foreign LocalEmployment statusl b : Procedural justice

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High Task Interdependence

Low Task Interdependence

High Task InterdependenceLow Task Interdependence

Low Task Interdependence

High Task Interdependence

Foreign LocalEmploynient statusFigure 1. The interactions between employment status and task interdependence

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FOREIGN VERSUS LOCAL EMPLOYEES 577

similarity or the similar-to-m e effect (see Tsui & Gute k, 1999). This occurs when supervisors ratesimilar others {e.g,, national origin) higher than those who are different. We recommend futureresearch on the effects of relational similarity on ratings of behavior.

Social comparison and the moderating role of task interdependenceFinally, our most interesting finding showed that four of the five outcomes demonstrated heightenedcontrasts between local and foreign workers under conditions of high task interdependence. This isimportant, given the emphasis on horizontal management and groups as strategic elements of workdesign (Mohrman, Cohen, & Mohrman, 1995). Figure illustrates these interactions, showing steeperslopes in the relationships for high task interdependence compared to low task interdependence fordistributive justice, procedural justice, performance, and organizational citizenship.

We note that even though the four interactions support our predictions that the proximity of high taskinterdependence accentuates social comparisons, the focus of the interactions differs based on the out-come of interest. Figure (a) shows that task interdepen denc e m ade a difference in percep tions of dis-tributive justice of locals but not foreign workers. Foreign workers perceived low distributive justiceregardless of the task interdependence of the job. Local employees seemed more likely to notice andvalue their ongoing employment relationships with the firm and their additional perks and benefitswhen comparisons with foreign workers (who get less) were salient. In contrast. Figure l(b) showsthat task interdependence made a difference in the perceptions of procedural justice for both localand foreign workers, such that the effects of high task interdependence enhanced perceptions of pro-cedural justice for local employees and detracted from those of foreign workers. We speculate that thesocial comparison processes triggered under conditions of high interdependence drive these differen-tial perceptions of procedural justice among foreign workers. For example, even if procedures aredesigned similarly for hoth local and foreign workers, these procedures may be applied differentially(based on employment status) when employees work side-by-side under conditions of high taskinterdependence. Perceptions of procedural justice may be more positive for local employees (andmore negative for foreign employees) when high task interdependence heightens contrast effects.Another interpretation is that foreign workers may feel they are subject to discrimination becausecontrast effects cause them to believe that policies and proc edure s are applied differentially basedon employment status.

Figure l(c) shows, as predicted, that the relationships between work status and behavior (both per-formance and citizenship) were stronger under high task interdependence. Interestingly, the form ofthis interaction (.see Figure l(c)) differed from those for distributive and proced ural jus tice . For workbehaviors, task interdepend ence made m ore of a difference for foreign workers than for local employ-ees. In interpreting this difference, we suggest that the communication and coordination required injobs with high task interdependence most likely present more of a challenge to foreign workers than tolocals.For example, foreign workers may have more difficulty comm unicating given language differ-ences. They may also find organizational routines difficult to understand. Both of these factors coulddetract from their performance and organizational citizenship under conditions of high task interde-pendence. A nother possible interpretation is that biased supervisor ratings were more likely when taskinterdependence heightened comparisons based on similarity. When there is high task interdepen-dence, the similarity between the local workers and supervisors may become more salient than whenthere is low task interde pendence . As above, we recomm end that future research probe deeper into theeffects of relational similarity and potential supervisor bias in rating work behaviors.

We also comment on the lack of any significant moderated relationship for job satisfaction based onemployment status and task interdependence. Foreign worker ratings of job satisfaction did not differ

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578 S. ANG ETAL.

frotn those of local employees overall and also did not differ under conditions of high task interdepen-dence. Our follow-up interviews suggested that foreign workers in our sample assessed their overalljob satisfaction and well-being based on com parisons with previous employm ent in their home nationrather than current contrasts. It would be interesting for future research to ascertain when foreignworkers make comparisons with local employees and when they make comparisons with former worksituations.

We provide one final observation regarding the role of task interdependence in our sample. Chi-square analysis of employment status and task interdependence ix~ = 5.77, p< 0.05 demonstratedthat there were proportionately more locals than foreign workers in jobs with high task interdepen-dence and proportionately m ore foreign workers than locals in job s with low task interdepend ence.Follow-up discussions with human resource specialists indicated that this was not a deliberate staffingdecision made by management. In.stead, the proportion reflects the labor supply of local employeesfor thesejobs.Nev ertheles s, we encou rage future research that exam ines potential staffing differencesbased on employment status and potential influences on employee perceptions, attitudes, andbehaviors.

Implications for Future ResearchThis study has a num ber of strengths . First, to the best of our kno wled ge, it is the first study that focusesspecifically on the growing global trend of employing skilled foreign workers. It also is the first com-parison of work perceptions, attitudes, and behaviors of foreign and local employees performing thesame jobs. Second, our predictions are based on theory where we juxtaposed social exchange andsocial comparison theories to predict differences in foreign and local employee perceptions, attitudes,and behaviors. Our third strength is methodological. In our design, we used valid and reliable mea-sures; chose a site with foreign and local workers of the same ethnicity (Chinese); collected matchedself-supervisor data to avoid common method bias; and tested for psychometric equivalence of mea-sures between mainland China and the Singapore samples.

This study has a number of boundary cond itions that suggest future research opportunities. We con-sider the three broad topics of generalizability, theory building and extensions to our model, andresearch designs that could be included in future research.

Gene ra HzabilityWe restricted our study to foreign workers who seek overseas employment voluntarily without spon-sorship from any firm in the host country. Our sample com prised foreign workers who cannot expectrepatriation or transfer to another location at the end of their assignments. Accordingly, the theoreticalarguments that foreign workers typically receive fewer inducements from the organizations because oflimited duration employm ent do not apply to expatriates and we do not expect our findings to general-ize to expatriates.

As with all research, ours was conducted in a particular organization, in a specific setting. Giventhe current global shortages of skilled workers in many locations (e.g., the United States. Canada.Australia, and the Middle East), it would be useful to examine work percep tions, attitudes, and beha-viors of foreign workers compared to locals in other settings to see if relationships are comparable tothose we found in our sample. For exam ple, in Singapore, the likelihood of conversion to permanent

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FOREIGN VERSUS LOCAL EMPLOYEES 579Status for foreign workers is extremely remote. There would be benefits to future research that exam-ines this issue in contexts where conversion opportunities are more realistic. We also note that bothlocal and foreign workers in our sample were from cultures that are historically collectivistic.Althoug h we controlled for possib le effects of individual cultural v alues, we recom mend futureresearch that contrasts local and foreign workers from cultures that are historically less similar. Forexample, it would be interesting to examine these relationships in settings where the host nation ismore individualistic (e.g., the United States) and foreign workers are recruited from more collectivisticsocieties (e.g., China, or Mexico).

Comp arison of local and foreign workersWe recommend future research that contrasts foreign workers such as those in this study with othertypes of foreign workers such as expatriates who typically have ongoing employment with the orga-nization, albeit at another location. Also, as one reviewer pointed out, foreign workers may have dif-ferent motives in seeking employment opportunities outside their home country. For example, someforeign workers cannot get comparable pay or benefits in their home country and others may simplywish to 'explore the world '. In formulating the hypotheses oft isstudy, we assumed that local employ-ees would be the primary referents when the foreign workers evaluated their treatment and induce-ments from the local organization. Results indicate the benefits of future research that includescomparisons with the current situation and with previous work situations.

Theory building and extensions to our modelBased on social comparison theories, we focused on task interdependence as a key contextual variablethat changed the relationship between work status and employee outcomes. Future research shouldalso consider other aspects of context such as type ofjob,specialization, accountability, work pressure,norms, and organizational culture that could potentially interact with employment status to influenceperceptions, attitudes, and beh aviors. Alternatively, it might be worthwhile to focus more specificallyon under-employment (Alarcon, 1999). In many cases, such as in our sample, foreign workers havehigher levels of education than local employees in the same jobs. Future research might explicitly the-orize that underemployment of foreign workers may be a causal mechanism that links employmentstatus with work outcomes (Feldman, 1996; Johnson, Morrow, Johnson, 2002). Finally, futureresearch might also include objective aspects of performance such as attendance and punctuality aswell as other types of citizenship such as voice (speaking up and making constructive suggestionsfor changes that would benefit the organization).

Research designsFuture research could focus on other research designs with an emphasis on longitudinal relationships.If foreign wo rkers con sistently perform at lower levels than lo cals, a self-re in forcing dow nward spiralcould result (Lindsley, Brass, Thom as, 1995) where supervisors overload local employees with spe-cial assignments, critical projects, and difficult tasks. This could negatively affect justice judgments,performance, and organizational citizenship of local employees, leading to increased turnover and anincreased need to hire foreign workers. This speculative scenario reinforces the benefits of future

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580 S. ANG ETALresearch that enhances our understanding of how the experiences of local and foreign workersdiffer and how they evolve over time. Another idea related to longitudinal research is the possibilitythat foreign workers sometimes become regular workers with on-going employment. This can occurwhen em ploying organizations sponsor specific individuals who apply for permanent residence. Thus,it would be interesting to assess the effects of changes from foreign to local status on the workerperceptions, attitudes, and behavior.

ConclusionResults of this study highlight the importance of focusing on work status and employment relation-ships of foreign workers. Results demonstrated that even after controlling for cultural anddemographic differences, foreign workers had lower perceptions of distributive justice than localemploy ees and that supervisors rated performance and organizational citizenship behavior of foreignworkers lower than those of local employees. More importantly, high task interdependence accentu-ated differences in distributive justice, procedural justice, performance, and citizenship behaviorfor local versus foreign workers. This work represents the first study to examine differences inperceptions, attitudes, and behaviors of foreign workers and local employees, based on differencesin their employment relationships. As organizations continue to expand their use of foreign workers,future research should further enhance our knowledge of the effects of non-traditional employmentrelationships.

Author biographiesSoon ng(PhD , University of Minnesota) is Professor of Managem ent and IT and Chair of the Divi-sion of Strategy, Management and Organization (SMO) at the Nanyang Business School, NanyangTechnological University of Singapore. Her research has been published inAcademy of ManagementJournal. Managem ent Science. Organization Science. Information Svstems Research. MIS QuarterhJournal of Management and others. Her current research interests focus on cultural intelligence, indi-genous models of leadership, managing foreign talent, and outsourcing.Linn Van Dyne is Associate Professor, Department of Management at the Broad College of Business,Michigan State University. U.S.A. She received her PhD from the University of Minnesota in StrategicManagement and Organizations. Her research, which focuses on proactive employee behaviors (suchas helping, voice, and minority influence), international organizational bebavior, and the effects ofwork context, roles, and groups on employee attitudes and behaviors, has been published in AMJAMR.JAP. OBHDP. ROB JOB and other outlets.ThomasM .Begleyis Associate Professor in the Human Resources Group at N ortheastern University.Professor Begley's primary research and teaching interests are in the areas of organizational behavior,cross-cultural management, human resources management, and entrepreneurship. His research hasbeen published in outlets such as theJoumal of Applied P.sycholog y Journal of Mana gement the Jour-nal of International Business Studies and Sloan Management Review. Professor Begley holds a PhDfrom Cornell University.

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Appendix: Original Questionnaire Items for Uncertainty AvoidanceUncertainty avoidance items Factor loadings(1) 1 prefer work that has detailed standard operating procedures spelled out. 0.77(2) It is better to have job requirem etits and instructions spelled out in detail so that 0.75employees always know what they are expected to do.(3) prefer work ihat is highly structured. 0.72(4) I prefer to work for supervisors who expect employees to closely follow instructions 0.66and procedures.(5) Rules and regulations are important because they inform employee s what the 0.64organization expects of them.

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