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2007 28: 212Economic and Industrial DemocracyThomas Rigotti, Kathleen Otto and Gisela Mohr

Justice and Trust: Possible Reasons and ConsequencesWest Differences in Employment Relations, Organizational−−East

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East–West Differences in EmploymentRelations, Organizational Justice and Trust:

Possible Reasons and Consequences

Thomas Rigotti, Kathleen Otto and Gisela MohrUniversity of Leipzig

In a cross-sectional questionnaire study with 245 employees from

West Germany and 357 employees from East Germany, the inferior

labour market and economic situation in East Germany could be

shown to be related, as expected, to the psychological contract, with

a poorer delivery of the deal and lower levels of justice and trust.

Affective commitment, on the other hand, was shown to be higher in

the East than in the West German sample. Moderated multiple

regression analyses revealed that the cognitive perception of

psychological contract breaches is less related to emotional strain and

distributive justice in the East German than in the West German

sample. Results are discussed within the framework of economic and

normative differences, and also with reference to social exchange

theories.

Keywords: commitment, East Germany, justice, psychological contract, trust

Introduction

On 31 August 1990, the Federal Republic of Germany (FRG) andthe GermanDemocratic Republic (GDR) signed the contract of uni-fication. Two systems merged together, with enormously differenteconomies and labour markets. After the reunification of the twoGerman states the whole economic, corporate, legal and insti-tutional system of West Germany was transported virtuallyunchanged to the East. The adaptation process to the new demandsturned the economy of East Germany completely on its head. In

Economic and Industrial Democracy & 2007 Uppsala University, Sweden,Vol. 28(2): 212–238.DOI: 10.1177/0143831X07076111

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addition to these massive economic changes, the forced implementa-tion of the entire West German system continues to be perceived bymany as being unfair. East Germans did not have a voice, i.e. theywere not asked whether they accepted or rejected at least some ofthe West German institutions. On the contrary, even those struc-tures established in the former GDR that could be seen as beingmore progressive (e.g. shorter education to get a university entrancediploma) were simply abolished. Thus, it is questionable whether ornot East Germans can develop trust and perceive justice in the neweconomic, corporate, legal and institutional system.

This study consequently aimed at exploring and comparing theperceptions of East and West German employees regarding theexchange of promises with employers (psychological contract), orga-nizational justice and trust, and the impact on work-related out-comes. We assume that differences in perceptions between Eastand West Germany are related to different conditions on thelabour market, as well as differences in values and norms.

East Germany vs West Germany: Are There Still Differences?

Shortly after unification, tremendous economic modifications beganin East Germany due to the fact that its industry still relied on massproduction and its service sector was underdeveloped. Nonetheless,nearly 15 years after the unification have passed and differencesbetween the eastern and western parts are still glaringly apparent.Today, unemployment rates in the new federal states are about10 percent higher than in the old federal states. Looking only atthe German territorial states, we find unemployment rates between6.2 and 10.2 percent in the western and 16.7 and 20.5 percent inthe eastern parts of Germany (Statistische Amter des Bundes undder Lander, 2005). The discrepancies in these rates surely speakfor themselves.

Furthermore, approximately 44 percent of the East Germanunemployed are long-term unemployed compared to (only) 35 per-cent of the West German unemployed (Statistisches BundesamtDeutschland, 2005). The situation is not only more critical fortrained East Germans but also for school students and traineesfrom the new federal states who are planning to start vocationaltraining or to enter the labour market. Only 30 percent of the EastGerman trainees can assume that they will get a permanent contract

Rigotti et al.: Organizational Justice in East and West Germany 213



after finishing their vocational training (Grunert and Lutz, 2003),and for only half of the East Germans of the same age group dojobs exist at all (Lutz, 2001). To sum up, the cited statistics illustratethat the economic and labour market situation in East Germanyseems to be much worse than in the West.In addition to the aforementioned structural distinctions, differ-

ences can be expected on the individual level with respect to personalhistory and attitudes towards work and family resulting from thedifferences in the socialization processes: ‘Although linguisticallyand historically one people, 50 years of very different economic sys-tems led people to perceive the nature of work quite differently’(Kirkcaldy et al., 1999: 121). For example, East Germans in generalperceive higher job insecurity (Otto and Dalbert, forthcoming) thanWest Germans, and this independent of their professional biographyand actual work situation (e.g. current position, frequency of un-employment). Consequently, they value job security much higherthan West Germans (Heyn et al., 1997), and prefer secure jobsover jobs that demand, among other things, a lot of responsibilityor autonomy at work (Maier et al., 1994). Moreover, it was foundthat East Germans show higher uncertainty avoidance (Danne,1996). The economic transitions in East Germany were also con-nected to avoidance of individual responsibility (Frese et al., 1997).It has been reported that workforces in East Germany show high

organizational commitment (Mesner-Andolsek and Stebe, 2004)and possess an increased readiness to agree to concessions (Brixyand Christensen, 2002). In an East–West comparison, they weremore ready to practise a job that was below their professionalqualification or to accept changing working times, longer journeysto get to work and less satisfying working conditions. However,they were less ready to tolerate financial penalties. This should beseen in light of the fact that there is still a wage gap between Eastand West Germany, which is more accentuated for women, whoearn 75 percent of the men’s wages in the western parts and 95 per-cent of the men’s wages in the eastern parts (Luhrig, 2002).Although a general trend towards individualism can be observed

all across Europe (see Guest, 2004), there is some evidence to suggestthat East and West Germans still differ on the collectivistic-individualist dimension, with higher scores on a collectivistic orien-tation in the eastern part, even among students who had only spenttheir very early childhood years in the former GDR (Spieß and

214 Economic and Industrial Democracy 28(2)



Bruch, 2002). Overall, it can be assumed that people in the easternpart of Germany are likely to have different perceptions of employ-ment relations due to the diverse socialization and the differentlabour market conditions they experienced (see Borg and Braun,1996; Frese et al., 1997).

Psychological Contracts

Psychological contracts have become a prominent theoretical frame-work for the description of individually perceived employmentrelationships. The psychological contract (PC) is defined as an ‘indi-vidual’s belief about mutual obligations in the context of the rela-tionship between employer and employee’ (Rousseau, 1990: 391).Those obligations implied in the employment relationship mayalso include the perception of promises and their fulfilment, whichwe call the ‘delivery of the deal’ (see Guest, 2004). Albeit, we agreewith a social exchange approach of psychological contracts, includ-ing mutuality, in this article we limit our scope to organizationalinducements, i.e. employers’ promises and obligations as they areperceived by employees. Both positive effects of contract fulfilmenton work-related attitudes and citizenship behaviour, as well as nega-tive outcomes of contract violation have formed the core of empiri-cal studies over the past few years (see Lester et al., 2002).

Recent empirical studies have shown that individual traits influ-ence the perceptions of PCs, as well as moderating the effects of aperceived breach on diverse outcomes (Ho et al., 2004; Raja et al.,2004; Rigotti, 2005). When comparing samples from differentnations, cultures or, in our case, federal states, the underlyingassumption is that contextual factors have an impact on collectivelyshared norms and values within one group, which may then explaindifferences between two groups.

Our behaviour is based upon cultural values and norms (Schein,1992), which form individual perceptions about how things oughtto be or how one should behave. Thomas et al. (2003) assume thatcultural values may have an impact on the formation of PCs.According to these authors, culture may influence the perceptionof PCs via the shaping of cognitions and motives. Rousseau andSchalk (2000) postulate that the societal framework may influence




the ‘zone of negotiability’ of PCs. As we have the same legal employ-ment regulations in all of Germany, we assume potential differencesbetween East and West Germany to be caused by structural differ-ences (like unemployment rates, union density, economic growthrates) and/or socialization. These possible determinants (cultureand economy) may to some extent lead to different hypotheseswhen it comes to comparing East with West Germany.Cross-national research on PCs has so far focused mainly on the

description of employment relations in different societal contexts(e.g. Rousseau and Schalk, 2000) and failed to establish theory-based comparative studies. First, comparative studies, however,point towards the cultural sensitiveness of the PC concept. Kickulet al. (2004), for example, report differences in the perceptions ofPCs of American and Hong Kong Chinese, where Americansplaced higher importance on PC outcomes but also perceivedfewer breaches.Union density, how easy it is to fill a vacancy, the regional un-

employment rate, the qualification structure of potential employeesare all factors that may be connected to the establishment of a PC –for both partners. Employers who are not depending on the long-term commitment of their employees, because open vacancies caneasily be filled, may give fewer pledges. If we follow this line of argu-mentation with respect to the inferior labour market conditions inEast Germany as compared to West Germany, we can expectemployers to need to give fewer promises in order to find andkeep a qualified workforce, and thus we can expect employees inEast Germany to perceive a lower delivery of the deal regarding obli-gations and promises of their employers:

H1: Employees in East Germany report a lower delivery of the dealof employers’ obligations and promises compared to WestGerman employees.

Perceived breaches of PCs should have greater effects in situationswhere employees have high expectations towards organizations. It ispossible that employees perceive a breach of promises withoutexperiencing a strong emotional response to this event (see Morrisonand Robinson, 1997). As discussed in the introduction, people in theEast were found to possess an increased readiness to agree to conces-sions (Brixy and Christensen, 2002) and should therefore react tobreaches with lower levels of strain than West Germans. This




would also be in line with the proposition that collectivists will havea ‘higher overall threshold for the perception of a PC violation thanwill individualists’ (Thomas et al., 2003: 461). Low values in thedelivery of the deal can also be interpreted as a breach of perceivedpromises. We therefore assume:

H2: East Germans experience lower emotional strain when perceiv-ing a low delivery of the deal of the psychological contract than doWest Germans.

The perception of mutual promises and obligations is closelylinked to perceived justice and trust in the social exchange processbetween employers and employees (see Kickul et al., 2001; Robin-son, 1996). Hence, we also expected to find differences in perceptionsof organizational justice and trust between East and West Germanemployees. Therefore, in the following we would like to give briefdefinitions of these constructs and report some theoretical andempirical grounds that led us to our hypotheses.

Organizational Justice and Trust

Organizational justice, in the psychological connotation, is an indi-vidual’s perception concerning the allocation of resources (distribu-tive justice), the implementation of changes and procedures(procedural justice) and the social interaction (interactional justice)of people in the workforce (see Folger and Cropanzano, 1998).‘Justice and fairness are properties that exist largely in the eye(and the mind) of the beholder’ (Morris and Leung, 2000: 101).Numerous investigations have shown that distributive and pro-cedural justice cognitions are relevant for evaluating work-relatedattitudes (e.g. Tremblay and Roussel, 2001; Younts and Mueller,2001). Studies focusing on distributive justice measured how jobs,wages or career advancements should be distributed if they are tobe perceived as being fair, while studies from the procedural justiceperspective looked more at the effects of the level of employees’ par-ticipation in the decision-making within the organizations (for areview, see Colquitt et al., 2001). Distributive justice perceptionsare related more to cognitive, emotional and behavioural reactionsto particular outcomes, whereas procedural justice appears to be astronger predictor for reactions towards the organization as a




whole. Interactional justice is something that seems to affect theperception of the direct supervisor or source of justice (see Cohen-Charash and Spector, 2001). Others found justice to act as a media-tor between leadership behaviour and trust (e.g. Pillai et al., 1999).And trust, to continue this path, has again been found to mediatebetween justice and work-related outcomes (e.g. job satisfaction orcommitment, Aryee et al., 2002).Fischer and Smith (2004) could find greater perceived justice

among British employees than among East German ones, and pos-tulated that individual values may play a moderating role: ‘Thus,the perception of justice is an interaction between the actions ofauthorities and individuals’ values’ (Fischer and Smith, 2004: 672;see also Fischer, 2004). Several authors reported cultural differencesin effects of perceived organizational justice (e.g. Brockner et al.,2001; Tyler et al., 2000). Regarding these earlier empirical findings,and also the described inferior labour market situation in the easternpart of Germany (higher unemployment rates, lower career pro-spects, higher job insecurity and lower wages), we expected to findlower values of perceived justice in the East as compared to theWest:

H3: Employees in East Germany report lower levels of justice thando West German employees.

Whether unmet promises result in attitudinal and behaviouralreactions may strongly rely on the justice judgement (see Morrisonand Robinson, 1997). We expect that the relation between cogni-tively perceived breach of contract and perceptions of justiceshould be stronger in the West German sample than in the EastGerman sample.

H4: Delivery of the deal of psychological contracts is more stronglyrelated to justice perceptions in West than in East Germany.

A further important construct, when looking at the quality ofemployment relationships, is trust (e.g. Guest, 2004; Robinson,1996). In line with the previous arguments, we also expected tofind differences in perceptions of trust between the East and WestGerman samples. Even though there is less empirical evidence forthis relation than for organizational justice, both constructs areclosely linked, i.e. they are based on one another, in the sense that




trust cannot be developedwithout perceiving justice and, in turn, thattrusting other people in exchange relationships itself strengthensthe perception that justice will be delivered in the long term (for areview, see Lewicki et al., 2005). Thus, we derive our hypothesisfrom the findings of organizational justice research:

H5: Employees in East Germany report lower levels of trust thanWest German employees.

While we assume that delivery of the deal is more strongly linkedto perceptions of justice in the West as compared to the EastGerman sample (H4), we do not expect a moderating role of beingEast German in the relationship between delivery of the deal andtrust.

Even though trust is closely linked to justice it is clearly a differentconstruct. Besides the justice component,many other factors enhancethe development of trust, like openness (the willingness to be openand transparent in one’s actions and intentions), integrity (adher-ence to principles and willingness to follow through on commit-ments), benevolence (the desire to do good towards the other) orcompetency (having skills and capabilities in a key relationship con-text) and so on (for a review, see Lewicki et al., 2005). Looking at thecomponents of trust, there is no reason to expect that a perceivedcontract breach should have a more negative meaning for employeesin West Germany compared to those in East Germany

Differences in Attitudes between East and West

Despite the disadvantaged position of East Germany, organ-izational commitment is reported to be higher in East than in WestGermany (Mesner-Andolsek and Stebe, 2004). Wasti (2003), whoemployed a Turkish sample and focused on an individual level,reports a substantial positive association of horizontal collecti-vism and affective commitment (N ¼ 801–890, r ¼ :29, p < :001).A collectivistic cultural background should therefore predicthigher organizational commitment:

H6: On average, East German participants report higher affectivecommitment than West Germans (which should be true evenwhen background variables are controlled for).




There is no theoretical or empirical evidence, however, to supportthe idea that perceived contract breaches, organizational justice per-ceptions or trust, and their association to work-related attitudes,should generally differ between distinct groups (e.g. cultures,nations). Favourable correlates of perceived justice, such as trustor commitment, have been found across different country samples(see Morris and Leung, 2000).

Method

Sample

The sample is part of the research project PSYCONES. Data weregathered in 33 organizations from the educational, retail and foodsectors across Germany in 2004. In these three sectors we have(1) private companies as well as public organizations, (2) a broadvariety of educational and skill levels and (3) manufacturing aswell as service orientations. Thus, central features across the sectorsmatch, leading to comparable samples of employees working in the33 organizations. Overall, we gathered data from 643 employees.As we were interested in distinguishing East and West German

employees, we examined our East and West German participantsfurther. In West Germany, 262 employees from 14 organizations,and in East Germany, 381 employees from 20 organizations, par-ticipated. However, we found 24 persons now working in EastGermany who did not grow up in the former GDR, and 17 personswho grew up in the former GDR but were now working in WestGermany. In accordance with our aim to compare the East andWest German samples (based on both economic and value-differences), we focused only on those individuals who had notmoved to the respective other part of Germany. Consequently, weexcluded the movers from our sample, which then resulted inN ¼ 245 employees from West Germany and N ¼ 357 employeesfrom East Germany. Almost half of the respondents (45 percent)had a non-permanent employment contract.The percentage of females in the West German sample, 35 per-

cent, was far below the share in the East German sample, whichwas 62 percent (�2ð1Þ ¼ 43:40, p < :01). There were more blue-collar workers in the West German sample (38 percent as comparedto 16 percent, �2ð1Þ ¼ 38:80, p < :01), and the average age was lower




in the West (M ¼ 35:15, SD ¼ 11:69), than in the East (M ¼ 38:93,SD ¼ 11:89; t ¼ �3:83, p < :01; see Table 1 for details). Moreover,the educational background was, on average, higher in the EastGerman sample (M ¼ 4:16, SD ¼ 1:14) than in the West(M ¼ 3:45, SD ¼ 1:15, t ¼ �7:47, p < :01), measured against theinternational classification of educational levels, ISCED (OECD,1999). Therefore, we control for these differences in all multivariateanalyses.

Instruments

Controls. Age was assessed as a continuous variable and concate-nated in five age categories for multiple classification analyses.Gender is a dichotomous variable with 0 for females and 1 for


TABLE 1

Sample Characteristics after Exclusion of People Who Had Moved to the Respective

Other Part of Germany

West East

N

Organizations

N

Employees

N

Organizations

N

Employees

Food 7 142 2 51

Retail 2 20 9 171

Education 5 83 9 135

Total 14 245 20 357

Percentage blue-collar 38% 16%

Percentage females 35% 62%

Age M ¼ 35:15ðSD ¼ 11:69Þ

M ¼ 38:93ðSD ¼ 11:89Þ

Educational level a

Lower secondary level 22% 7%

Upper secondary level 42% 28%

Post-secondary level 5% 6%

First stage of tertiary

education

31% 50%

Second stage of tertiary

education

0% 5%

a Levels according to the international educational classification scheme ISCED (OECD, 1999).



males. Type of contract is a dummy, with 0 representing temporaryand 1 permanent contracts. Position, albeit assessed on six levels, isalso used as a dummy, contrasting blue-collar workers (1) withothers (0). Educational level was measured by using a combinationof school and vocational education and transformed to the six levelsof the international standard scheme, ISCED (OECD, 1999). Asusual, we considered this measure to be metric. The regional un-employment rate connected to the participating organizations wasgathered in October 2004 from the official websites of the respec-tive towns. The unemployment rate ranged from 3.80 percent to19.70 percent.

Delivery of the deal. Respondents were asked to indicate whetherthe organization had committed itself to a diverse range of 15 pro-mises. Seven topics were covered: content of the job, employmentrelationship, compensation, advancement, participation, social rela-tionship and work–family balance. Our subjects were requested toanswer the 15 items after having been given the instruction ‘Hasyour organization promised or committed itself to . . .’, e.g. ‘. . . pro-vide you with a reasonably secure job?’ Answers could range from0 ¼ ‘no’, in cases where employees perceived no promise, andfrom 1 ¼ ‘yes, a promise was given but not at all kept’ to 5 ¼ ‘yes,promise given and fully kept’ to rate the fulfilment of the promise(see Rigotti and Mohr, 2004). Delivery of the deal is operationalizedby computing the mean of promise keeping for every individual,with values ranging from 1 to 5. We performed factor analysesbased on tetrachoric correlations (see, for example, McLeod et al.,2001) using the programme Testfact (Bock et al., 2003) on thedichotomous answers. Although there was some evidence for atwo-factor solution (Eigenvalues: 8.86, 1.46, 0.93), a single factorexplains 56 percent of the variance. The ratios of chi-square anddegrees of freedom dropped only slightly from 2.52 (�2 ¼ 1544:42=d:f : ¼ 612 for one factor), to 2.15 (�2 ¼ 1282:73=d:f : ¼ 598 for twofactors), applying 100 iterations. Nevertheless, even after rotation offactor loadings, there were many cross-loadings of items. For theone-factor solution all loadings were greater than .60. Hence, forthe purpose of this study the use of the measure as only one under-lying latent construct seems to be justified. Analyses of internal con-sistencies (using codings from 0 to 5) yielded alphas of .87 (East) and.92 (West).




Organizational justice. Three dimensions of organizational justicewere assessed by single or two-item measures (items were takenfrom Guest and Conway [2002], who considered these items toreflect only one latent construct, ‘fairness’). Distributive justice wasreflected by the two items ‘Overall, do you feel you are rewardedfairly for the amount of effort you put into your job?’ and ‘Doyou feel you are paid fairly for the work you do?’, which showed acorrelation of r ¼ :80 (p < :01), and yielded alphas of .88 (West)and .89 (East). Procedural justice was assessed with the item ‘Doyou feel that organizational changes are implemented fairly inyour organization?’; and interactional justice with the item, ‘Doyou feel fairly treated by managers and supervisors?’ The responseformat ranged from 1 ¼ ‘not at all’ to 5 ¼ ‘totally’. The correlationsbetween the three dimensions of justice (rdp ¼ :40, rdi ¼ :41,rpi ¼ :46, p < :001, N ¼ 590–599) are in line with findings ofCohen-Charash and Spector’s (2001) meta-analysis and underpinthe validity of the one- and two-item measures respectively (seeTable 2).

Trust. To measure trust, we used a subset of three items fromGuest and Conway (2002; e.g. ‘In general, how much do you trustyour organization to keep its promises or commitments to youand other employees?’). Answers could be given on a five-levelscale ranging from 1 = ‘not at all’ to 5 = ‘totally’. The scale yieldedalphas of .79 in both subgroups.

Commitment. A four-item measure was used to assess affectivecommitment (Cook and Wall, 1980; e.g. ‘I am quite proud to beable to tell people who it is I work for’). Answer format rangedfrom 1 ¼ ‘strongly disagree’ to 5 ¼ ‘strongly agree’. Cronbach’salphas of the scale in our samples are .70 (West) and .65 (East).

Emotional irritation. This variable was measured using a subset ofthe Irritation Scale (Mohr et al., 2005a, 2005b). Irritation is definedas a state of psychological impairment, caused by perceived goaldiscrepancy, and includes rumination about problems at work(¼ cognitive irritation) and irritability (¼ emotional irritation; seeMohr et al., 2006; Muller et al., 2004). We chose to focus on emo-tional irritation as this concept has been proven to be a precursorof further impairments, such as psychosomatic complaints ordepression (e.g. Dormann and Zapf, 1999). The scale consisted of





TABLE2

PearsonCorrelations,Means(withandwithoutcontrol),Standard

Deviations,Cronbach’sAlphaSeparatelyfortheEastandWestGermanSamples,

Resultsoft-Tests

forIndependentSamplesandMCA

West

East

�1

�2

�3

�4

�5

�6

�7

MSD

aM

SD

a�t

d0

b

1Deliveryofthedeal

�.43

�.46

�.54

�.55

�.47

�.19

(4.10

(4.10)

0.61

.92

(3.97

(3.97)

0.72

.87

�2.38*

.19

.10*

2Distributivejustice

�.52

�.40

�.42

�.58

�.39

�.12

(3.32

(3.35)

1.11

.88

(3.24

(3.19)

1.13

.89

�0.81

.07

.07

3Proceduraljustice

�.39

�.39

�.46

�.72

�.31

�.04NS

(3.31

(3.24)

1.16

–(3.10

(3.17)

1.13

–�2.14*

.18

.03*

4Interactionaljustice

�.45

�.40

�.45

�.59

�.39

�.14

(4.08

(4.03)

0.97

–(3.89

(3.92)

1.04

–�2.40*

.19

.05*

5Trust

�.49

�.44

�.67

�.60

�.39

�.09NS

(3.56

(3.46)

0.91

.79

(3.28

(3.35)

0.96

.79

�3.33**

.30

.06**

6Affective

commitment

�.36

�.38

�.27

�.31

�.36

�.19

(3.76

(3.76)

0.76

.70

(3.95

(3.95)

0.65

.65

�4.77**

.27

.13**

7Emotionalirritation�.33

�.24

�.18

�.29

�.27

�.26

(2.30

(2.37)

1.16

.85

(2.39

(2.34)

1.12

.85

�0.64

.08

.01

East

vsWest

�.10

�.03NS

�.09

�.10

�.14

�.14

�.03NS

Notes:

Upper

diagonal:East

Germansample,N

¼314–357;lower

diagonal:WestGermansample,N

¼228–245.AllPearsoncorrelationsare

significantona1%

alpha-level,exceptthose

indicatedwithNS,�¼

Cronbach

’salpha,t¼

t-valueofsimplet-testforindependentsamples,d0¼

referringeffect

size,�¼

partialcorre-

lationsfrom

MCA.

*p<

:05,**p<

:01fort-testsandpartialcorrelationcoefficients

ofMCA.Meansin

parentheses

after

controlofsex,age,education,bluecollars,fixed-term

con-

tractsandsector.



five items (e.g. ‘I get in a bad mood when I am disturbed by others’),which could be rated on seven levels with 1 ¼ ‘strongly disagree’ to7 ¼ ‘strongly agree’. With an alpha of .85 in both subgroups, themeasure can be considered highly reliable.

Analyses

Multiple classification analysis (MCA). MCA, as well as dummyvariable regression (DVR), estimates additive models and assumesinteractions between independent variables to be non-apparent(Jacobsen, 1978). Concerning the prediction of the overall model,MCA and DVR are interchangeable. The difference between thetwo approaches is, however, that MCA measures the associationof the factors as a whole with the criteria, whereas DVR tests the‘pattern of effects in relation to a reference category for eachfactor’ (Jacobsen, 1978: 89). In contrast to DVR, the criteria maybe dichotomous in MCA (Jensen, 1978). As an additional result,we can see the observed mean values of each subgroup in the depen-dent variable in an MCA, as well as the estimation of the mean, con-trolling for all other predictors. The beta-values are analogous tobeta-coefficients in multiple regressions, and can be interpreted aspart correlation coefficients. For our main purpose of comparingthe East and West German sample, we chose MCA. Hence, someresults will be cross-validated with multiple regression analyses,which are used to test for moderating effects.

Moderated multiple regression analysis (MMR). In order to testhypotheses concerning the difference in strength of an associationbetween two variables across different groups, we performedMMR (see, for example, Aguinis, 2004; Aiken and West, 1991). Inthe first step, the predictor variable and the assumed moderator vari-able are entered and, in the second step, the product term of bothvariables is entered. A variable can be considered a moderatorwhen the interaction term yields a significant beta-weight in themultiple regression model and the change in R2 (variance explained)is significant, compared to when the independent and moderatorvariables are only included separately (see Jaccard and Turrisi,2003). From the R2 of the first and second step, effect sizes can becalculated (Aiken and West, 1991). Although Cohen et al. (2003)proposed labelling effect sizes of .02, .15 and .35 as small, medium




or large, Aguinis et al. (2005) found a mean effect size of f 2 ¼ :009across 636 published MMR analyses. An often ignored problem inMMR with categorical moderator variables is the assumption ofhomogeneity of error variances across categories of the moderatorvariable, which may lead to an increase in Type I errors if samplesizes are unequal across subgroups, and an increase in Type IIerrors if the subgroup with larger sample size presents the largererror variance (Aguinis, 2004). In their meta-analytic review,Aguinis et al. (1999) could show that the assumption of homogeneityof error variances was violated in 39 percent of analyses reviewed.We therefore also present Bartlett’s (1937) test of homogeneouserror-variances.

Results

Mean Differences between East and West German Employees

We hypothesized that participants from East Germany would givelower ratings on factors associated with the employment relation-ship, namely delivery of the deal (H1), justice perceptions (H3)and trust (H5). In Table 2, results from simple t-tests for indepen-dent samples, as well as from MCA controlling for importantsample differences in age, sex (0 ¼ female, 1 ¼ male), education(ISCED classification), type of contract (0 ¼ temporary,1 ¼ permanent), blue collars (1 = blue-collar, 0 = others) and sec-tors (sector_dummy1 ¼ 1 for food industry, sector_dummy2 ¼ 1 forretail, reference group educational sector). Except for distributivejustice, the null hypotheses have to be rejected for all employmentrelationship measures, indicating that East Germans gave lowerratings on delivery of the deal (t ¼ 2:38, p < :05, d 0 ¼ :19), pro-cedural justice (t ¼ 2:14, p < :05, d 0 ¼ :18), interactional justice(t ¼ 2:40, p < :05, d 0 ¼ :19) and trust (t ¼ 3:33, p < :01, d 0 ¼ :30).These mean differences do not vanish when controlling for samplecharacteristics in MCA, although effect sizes point towards smalleffects.Furthermore, we hypothesized that we would find higher ratings

in commitment (H6) in the East German than in the WestGerman sample. Differences in affective commitment turned outto be stronger than for the employment relationship measures.East Germans gave higher ratings on organizational commitment




(t ¼ �4:77, p < :01, d 0 ¼ :27). Effect sizes indicate a medium effectand differences are still significant after controlling for samplecharacteristics.

We also tested whether or not the regional unemployment rate,seen as an important indicator for the economic situation, mayexplain differences between the East and West German samples.We therefore performed partial correlation analyses. The resultsare shown in Table 3. It turned out that perceptions related to theemployment relationship are mediated by the regional unemploy-ment rate, as partial correlations fail to be significant. Differencesin affective commitment cannot, however, be explained by theregional unemployment rate.

The Impact of Delivery of the Deal when Comparing East andWest German Employees

Our first moderating hypothesis was that the effects of perceivedbreaches of the PC may be less pronounced for East Germansthan for West Germans (H2). We employed an MMR by first intro-ducing possible explanatory control variables: age, sex (0 ¼ female,1 ¼ male), education (ISCED classification), type of contract(0 ¼ temporary, 1 ¼ permanent), blue collars (1 ¼ blue-collar,0 ¼ others) and sectors (sector_dummy1 ¼ 1 for food industry,sector_dummy2 ¼ 1 for retail, reference group educational sector).In the second step, we introduced the sample dummy (0 ¼ West,1 ¼ East) and delivery of the deal as a predictor variable. In thefinal step, we introduced the interaction between sample and deliveryof the deal. The interaction term yielded a significant beta, and couldexplain 1 percent of additional variance. Effect size was f 2 ¼ :009(see Table 4). Bartlett’s test indicated homogeneous error variances(M ¼ 0:44, p ¼ :50) across subgroups.

The interaction plot using �1 SD (see Aiken and West, 1991)indicates that, in line with our hypotheses, the association betweendelivery of the deal and emotional irritation is stronger for WestGermans than for East Germans (see Figure 1).

Along the same lines, we tested whether or not perceived breachesof the PC (or delivery of the deal) led to different judgements ofjustice in the East than in the West German sample (H4). We usedthe same set of steps as predictors of distributive, procedural andinteractional justice separately in three MMRs. A moderating





TABLE3

Influence

ofRegionalUnem

ploymentRate

onSampleDifferences

Deliveryof

theDeal

Distributive

Justice

Procedural

Justice

Interactional

Justice

Trust

Commitment

Emotional

Irritation

East/W

est

�.10*

�.03

�.09*

�.10**

�.14**

.14**

.03

Unem

ploymentrate

�.10*

�.03

�.10*

�.11**

�.15**

.11**

.00

Partialcorrelationr sample.unemploymentrate

�.02*

�.02

�.01*

�.01**

�.01**

.11**

.06

*p<

:05,**p<

:01:



effect of sample could only be found for distributive justice, indicat-ing that delivery of the deal is more strongly associated with distri-butive justice in the West German sample than in the East Germansample. The interaction term explained 1 percent above the maineffects, which proved to be significant on a 5 percent alpha level(see Table 4). The effect size of f 2 ¼ :008 indicated a small effect.The interaction is plotted in Figure 2. No moderating effect couldbe found for procedural or interactional justice perceptions.


TABLE 4

Moderated Multiple Regression Analyses

DV: Emotional

Irritation

Distributive

Justice

Procedural

Justice

Interactional

Justice

Step 1

Age �.02 *�.12* �.03 �.04

Sex �.04 �.00 �.00 �.01

Educational level �.03 �.06 �.05 �.01

Type of contract �.07 �.08 �.01 **�.12**

Blue-collar �.07 �.06 �.05 �.06

Sector_dummy1 �.09 *�.04* �.01 �.07

Sector_dummy2 �.05 �.11 �.13* �.01

�R2 �.03 *�.03* �.03 **�.04**

Step 2

Delivery of the deal **�.36** **�.57** **�.45** **�.48**

Sample *�.59* �.45 �.08 �.15

�R2 **�.06** **�.21** **�.18** **�.25**

Step 3

Sample � delivery of the

deal

*�.57* *�.49* �.07 �.12

�R2 *�.01* *�.01* �.00 �.00

Adj. R2 �.07 �.24 �.19 �.27

Bartlett’s M M ¼ 0:44

(p ¼ :50)

M ¼ 1:54

(p ¼ :21)

M ¼ 1:14

(p ¼ :29)

M ¼ 6:12

(p ¼ :01)

f 2 .009 .008 <.001 <.001

Notes: N ¼ 522 after listwise deletion, * p < :05, ** p < :01, standardized betas.

Dummies: sample: East Germany ¼ 1, West Germany ¼ 0.




Delivery of the deal

West GermanyEast Germany

–1 SD +1 SD

4

3

2

1

Em

otio

nal i

rrita

tion

FIGURE 1

Delivery of the deal

West GermanyEast Germany

–1 SD +1 SD

4

3

2

Dis

trib

utiv

e ju

stic

e

FIGURE 2



Discussion

Guest (1998) defines an individual perception regarding the qualityof an employment relationship (state of the psychological contract)as the extent to which the promises and obligations in the psycho-logical contract have been delivered, whether the deal is perceivedto be fair and the degree of trust in whether it will continue to bedelivered in the future. Following this definition, we could find evi-dence that the perceived quality of the employment relationship islower in the East German sample than in the West Germansample. This was in line with our assumptions, which we derivedfrom the inferior labour market and economic situation in EastGermany and described in the introduction. The higher levels ofcommitment in East Germany may more likely stem from possiblecultural differences. The reported partial correlations, controllingfor the regional unemployment rate, support this conclusion.Higher values in affective commitment in the eastern sample couldnot be explained by the respective unemployment rate, and wewould therefore argue for cultural differences on this dimension.Further research could, nevertheless, explore alternative explana-tions. Research comparing different countries that show evenmore pronounced differences in their economic and labour marketsituations may be particularly interesting in light of the continuedexpansion of the European Union and may also offer a better frame-work for making cross-cultural comparisons.

Theories on social comparison may give an alternative frameworkto elucidate the pattern that East Germans in our study reported:less favourable employment relationships in terms of perceived orga-nizational promises (PC), procedural and interactional justice andtrust, but higher commitment than employees in West Germany,and no differences in distributive justice. In addition to a possibledifference in accentuation of values between the two subsamples, afurther possible explanation for our findings is offered by Adams’s(1963, 1965) equity theory. As described earlier, the proportion ofunemployed East Germans is much higher than that of unemployedWest Germans. Thus, to have a job at all and to be (still) employedmay have a different meaning for East German employees. Thesocial comparison with potential reference groups in East Germanymight result in a more favourable evaluation (see Morris and Leung,2000) and could probably explain the higher affective commitmentfor East German employees.




Although there is no significant mean difference regarding theself-reports of emotional strain between the two samples, the cogni-tive perception of the delivery of the deal with respect to perceivedpromises from the employer was shown to be more closely relatedto levels of emotional strain in the West German than in the EastGerman sample. This may be interpreted as a higher threshold forreacting towards breaches of the psychological contract (i.e. lowerdelivery of the deal) for the East Germans than for the WestGermans. This is in line with theoretical considerations based onindividualistic-collectivistic distinctions (see Thomas et al., 2003).Furthermore, the basic assumptions of cross-cultural organiza-

tional justice research seem to be met, as the same actions (i.e. setof employers’ promises) led to different judgements of distributivejustice (see Morris and Leung, 2000). That no moderating effectswere found for procedural and interactional justice in this studymay have several reasons. From a theoretical standpoint, wemight speculate that distributive justice is the major concern when-ever resources are scarce. Another reason might be the one-itemoperationalization of procedural and interactional justice; whereasweak power (sample size) is probably the least likely explanation.However, justice perceptions as such, as well as the level of trust,

seem not to differ in their association to affective commitment.

Limitations and Strength

We would also like to point out some of the limitations that cautionus not to overgeneralize our results. This study has to be seen withinthe historical context, and we have to be aware of the fact that thereported differences in this study are not static, and may shift witheconomic growth or decline. Morris and Leung highlight this fact:‘the prominent constellations of values, beliefs, and social contextsthat determine justice judgments shift with the historical moment’(Morris and Leung, 2000: 114).Although we controlled for sample differences in multivariate

analyses, it would be wise to verify the findings in a more balancedand representative sample. As we had to rely on the voluntary par-ticipation of organizations, the sampling method cannot be comple-tely random, and might be positively biased, as those organizationswith current problems are more likely to refuse participation.




Furthermore, the reliability of one-item measures of organizationaljustice may be questioned. Caution should thus be exercised wheninterpreting the results.

It is very common in cross-cultural, or let us say, in moregeneral comparative research, to compare groups that are verydistinct in certain features, such as, for example, the prominentindividualism–collectivism dimension. By comparing East withWest Germany, we chose two samples that naturally have manyaspects in common. They share, for instance, not only a certainpart of history, but also the same language, and the same legislativeframeworks. While most cross-cultural research has the short-coming that differences between samples could stem, not onlyfrom cultural differences, but also from problems in translating andunderstanding items, this limitation can be ruled out in our study.

Implications

This study is the first to look at East–West German differences con-cerning employment relationships, organizational justice and trust,and leads us to new theoretical insights and practical implications.We may conclude that labour market conditions seem to have animpact on labour relations, which is reflected in the subjectiveevaluation of the social exchange between employer and employees.If, in addition to structural differences, groups differ regardingtheir values and norms, this might influence the reactions associatedwith the perceived quality of the employment relationship. There-fore, we conclude that we should take an interactionist perspectiveto come to valid models in the prediction of employees’ attitudes.By combining both structural antecedents with individual differ-ences, we can improve our understanding of organizational andindividual behaviour, both within and across cultural settings.

Note

This research is part of the PSYCONES project (PSYchological CONtracts across

Employment Situations) supported by a grant from the EU, fifth framework pro-

gramme (HPSE-CT-2002-00121). Further information about the project is available

at: www.uv.es/~psycon




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Thomas Rigottiis research assistant at the Work and

Organizational Psychology Unit at theUniversity of Leipzig, Germany. His researchinterests include strain and health at work,

and the role of psychological contracts,including their antecedents as well as

consequences, and possible moderators.

Kathleen Ottois assistant professor at the Work andOrganizational Psychology Unit at theUniversity of Leipzig, Germany. Her

research interest lies in the field of careerdevelopment, mobility readiness and

organizational justice.

Gisela Mohris full professor for Work and OrganizationalPsychology at the University of Leipzig anddirector of the Institute for Psychology II.

Her main research interests areunemployment and job insecurity,

leadership, gender aspects, the effect of the(psychological) contract on health, and

(multilingual) measurement of occupationalstress effects.




economic and industrial democracy 2007 rigotti 212 38

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