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FACTORS INVOLVED IN INCREASING CONVERSION RATES
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FACTORS INVOLVED IN INCREASING CONVERSION RATES
OF INTERNS INTO FULL-TIME EMPLOYEES

By

Jessica Lynn Hurst

A DISSERTATION
Submitted to
Michigan State University
in partial fulﬁllment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
Department of Advertising, Public Relations, and Retailing

2007

ABSTRACT
FACTORS INVOLVED IN INCREASING CONVERSION RATES
OF INTERNS INTO FULL-TIME EMPLOYEES
By

Jessica Lynn Hurst

Employee turnover in retailing has always been high. Nevertheless, due to
the abundant, young labor force in the United States, retailers have experienced
high turnover with minimal consequences, until now. The BLS (2005) predicts a
labor shortage due to retiring baby boomers and small number of the next
generation entering the workforce. The labor shortage will affect the retailing,
hospitality and food services industries most dramatically, due to the
demographic nature of their employees (i.e. young and ﬁrst-time employees).
Additionally, the rate of voluntary turnover is rising and BLS data (2005) reveal
the average employee turnover cost for professional and business services (i.e.
retailing) is $15,726 per employee. The high cost of turnover, combined with the
shrinking labor pool forces retailers to compete more vigorously to attract and
retain talent. One viable strategy is for retailers to offer internship opportunities to
college students (i.e. potential future hires).

lntemships allow companies to create awareness about their organization
while offering college students the opportunity to work with professionals in their
ﬁeld and see ﬁrsthand what takes place inside the industry. lntemships also give
the company a chance to evaluate students’ work capabilities before a potential

offer for full-time employment is extended.

This research identiﬁes the relationships between interns’ perceptions of
psychological contract outcomes of employer and employee obligations,
supervisory support, job satisfaction (with the job/work itself and pay),
organizational commitment (affective and continuance), perceptions of
advancement opportunities, and conversion intentions. An interpretive framework
derived from psychological contract theory (Corbin, 1952; Roloff, 1987;
Rousseau, 1990) and organizational socialization theory (Van Maanen, 1975;
Feldman, 1976) is employed to test these relationships.

Data were collected by partnering with companies and cooperating with
faculty from other universities who have access to internship students. The
survey instrument was on-line. A structural equation procedure (EQS 6.1) was
used to test a model of internship conversion.

Structural model results Show a direct relationship between 1) interns’
perceptions of psychological contract outcomes of employer obligations and
affective organizational commitment and 2) organizational commitment (affective
and continuance) and conversion intentions. Therefore, model testing results
support the applicability of psychological contract theory and organizational
socialization theory to interns as well as full time employees. Findings also reveal
that when interns feel their employer has fulﬁlled their expected obligations, they
may be more satisﬁed with their job and may be more committed; which in turn,
may increase the chances of interns wanting to remain with the company and

accept an offer for full-time employment upon graduation.

To my Lord and Savior, Jesus Christ...through You, all thing are possible! To my
devoted husband, Nicholas. Your endless support and encouragement, along
with your unconditional love, made this dissertation and doctoral degree possible.

iv

ACKNOWLEDGEMENTS

Completion of my doctoral degree would not have been possible without
the support and guidance from some signiﬁcant individuals. I would ﬁrst like to
thank Dr. Linda K. Good, my Major Professor and Chair of my Doctoral
Committee. Because of her, I have grown signiﬁcantly an academician and a
researcher. Her continued guidance, encouragement, and support were greatly
appreciated! I would also like to thank Dr. Patricia Huddleston and Dr. Kynoung-
Nan Kwon for being wonderful mentors throughout my doctoral program. My
doctoral experience in the Merchandise Management! Retailing program at
Michigan State University has been extremely fulﬁlling and tremendously
rewarding. I would also like to thank Dr. Roger Calantone in Marketing and
Supply Chain Management for keeping me on “happy street” and preventing me
from going down the “boulevard of broken dreams”. His research expertise,
insightful recommendations and personal encouragement were very much
appreciated. Thank also to Dr. Dan Ilgen in Psychology. His subject matter
expertise, insightful feedback and personal encouragement were also greatly
appreciated.

Finally, I would like to acknowledge the endless support and love from my
wonderful husband, Nicholas. I would like to thank him for the sacriﬁces he
made for me to make this doctoral degree possible. His patience and
understanding have helped me through the stressful times that brought me to
tears. Thanks also to my mother, Pamela Miller for her emotional support and

encouragement. Additional thanks to my dad, brother and parents-in-law.

TABLE OF CONTENTS

LIST OF TABLES ......................................................................... viii
LIST OF FIGURES ........................................................................ ix
CHAPTER 1
INTRODUCTION ........................................................................... 1
Signiﬁcance of Study ............................................................. 2
Problem Deﬁnition ................................................................. 4
Objective of the Study ............................................................. 7
CHAPTER 2
LITERATURE REVIEW ................................................................... 8
Theoretical Frameworks ......................................................... 8
Organizational Socialization Theory ................................. 8
Psychological Contract Theory ........................................ 11
Model Development ............................................................... 15
Psychological Contracts/Psychological Contract Outcomes. 15
Supervisory Support ...................................................... 18
Organizational Commitment ............................................ 23
Affective ............................................................. 24
Continuance ....................................................... 25
Job Satisfaction ............................................................ 26
Perceptions of Advancement Opportunities ........................ 28
Conversion Intentions .................................................... 29
CHAPTER 3
METHODS ................................................................................... 31
Sample ................................................................................ 31
Instrument ............................................................................ 31
Measures ............................................................................. 32
Reliability and Validity .................................................... 36
Data Collection Procedure ....................................................... 38
Sampling Frame & Response Rate ................................... 39
Data Analysis ........................................................................ 40
CHAPTER 4
RESULTS AND DISCUSSION ........................................................... 42
Measurement Model ............................................................... 44
Structural Model ..................................................................... 53
Hypothesis Testing ................................................................. 56

vi

CHAPTER 5

CONCLUSION ................................................................................ 71
Implications ........................................................................... 76
Limitations and Future Research ................................................ 80

APPENDICES ................................................................................ 85

Appendix A: On-Iine Survey Instrument .................................... 86
Appendix 8: Cover Letter ....................................................... 99
Appendix C: Item Content for Measurement Model Constructs ...... 101
Table
1 Psychological Contract Outcomes: Employer
Obligations ....................................................... 102
2 Psychological Contract Outcomes: Employee
Obligations ....................................................... 103
3 Supervisory Support ........................................... 104
4 Job Satisfaction (with Job/Work Itself) .................... 105
5 Job Satisfaction (with Pay) ................................... 106
6 Perceptions of Advancement Opportunities ............. 107
7 Affective Organizational Commitment ..................... 108
8 Continuance Organizational Commitment ................ 109
9 Conversion Intentions .......................................... 1 10
10 Largest Standardized Residuals And Cross-Loadings
of Items Deleted During Conﬁrmatory Factor
Analysis ............................................................. 1 1 1
11 Standardized Estimates of Items Deleted During
Conﬁrmatory Factor Analysis ................................. 1 12
REFERENCES ............................................................................... 113

vii

LIST OF TABLES
Table 1. Sample Characteristics of Interns ............................................. 43

Table 2. Measurement Model Constructs: Correlation Matrix with
VAVE (Variance Extracted) on the Diagonal ................................ 50

Table 3. Measurement Model Constructs: Coefﬁcient Alpha and
Variance Extracted ................................................................ 51

Table 4. Conﬁrmatory Factor Analysis of Measurement Model Constructs... 52
Table 5. Structural Model Results of Internship Conversion ....................... 55

Table 6. Hypothesized Relationships of lntemship Conversion ................... 57

viii

LIST OF FIGURES

Figure 1. Conceptual Model of Hypothesized Relationships of lntemship
Conversion ...................................................................... 30

Figure 2. Research Path Model of Internship Conversion
with Path Coefﬁcient Values ................................................. 54

Figure 3. Path Model of Signiﬁcant Hypothesized Relations of lntemship
Conversion with Path Coefﬁcient Values ................................ 70

ix

CHAPTER 1
INTRODUCTION

Employee turnover in retailing has always been high. Nevertheless, due to
the abundant, young labor force in the United States, retailers have experienced
high turnover with minimal consequences, until now. The Bureau of Labor
Statistics [BLS] (2005) predicts a labor shortage, due to the large number of
retiring baby boomers and the small size of the next generation entering the
workforce. The BLS predicts that the labor shortage will affect the retailing,
hospitality and food services industries most dramatically, due to the
demographic nature of their employees (i.e. young and ﬁrst-time employees).

Moreover, according to the BLS (2006), the US. will have 10 million more
jobs than people by 2010. As a result, organizations must come to terms with
and acknowledge the fact that this imminent labor shortage will only increase the
value of every employee, regardless of their age and tenure with the company
(Southard & Lewis, 2004). In addition, the BLS (2007) reports that from January
2006 to December 2006, the following ﬁve industries had high rates of both hires
and voluntary/involuntary disruptions of employment (i.e. separations) : 1) retail
trade, 2) hospitality and food services, 3) professional and business services, 4)
arts, entertainment, and recreation, and 5) construction. In sum, these ﬁve
industries accounted for 59% of total (nonfarrn) hires in the US. and 59% of total
(nonfarrn) separations (i.e. employee turnover) in the US.

Both the BLS (2005) and the Employment Policy Foundation (2005) report

that the rate of voluntary turnover is rising. Usually, turnover rates are higher for

industries that employ a younger-than-average workforce. Furthermore, costs of
recruiting, ﬁlling vacancies, and training new employees, increases operating
costs, reduce job productivity, and ultimately, cuts into the ﬁrms’ proﬁts. Based
upon BLS data (2005), the average employee turnover cost for professional and
business services (i.e. retailing) is $15,726 per employee. Clearly, employee
turnover is a signiﬁcant cost driver for Ameriwn businesses. Nevertheless, as
the pool for entry level employees shrinks, retailers must compete more
vigorously to attract and retain talent. One way retailers can compete and
attract/retain talent is by offering internship opportunities to college students (i.e.
potential future hires). Companies create awareness about their organization by
offering lntemships, and internships offer college students the opportunity to work

with professionals in their ﬁeld and experience the industry ﬁrsthand.

Signiﬁcance of Study

The most successful source of new hires for many companies comes from
their intern pool (Sessions, 2006). Internships give students the opportunity to
personally experience what working for that particular company really entails.
lntemships also give the company a chance to evaluate students’ work
capabilities before a potential offer for full-time employment is extended. In
addition, internships allow both the intern and the company the opportunity to
determine if the intern possesses the qualities necessary to adapt to the ﬁrrn’s
culture.

In order to compete for an optimal post-college position, students must

develop a core of marketable skills, such as communication, time-management,

self-conﬁdence, and self-motivation; all of which are now considered
requirements by the industry. lntemships help students strengthen these skills.
Moreover, internships help students sharpen job skills and work values, focus on
making wise career choices, gain direct access to job sources, and even impress
potential employers, all of which help improve future job opportunities (Mihail,
2006). Knouse, Tanner, and Harris (1999), for example, found that upon
graduation, business students who completed an internship obtained jobs more
readily than students who did not. In sum, gaining work experience through
internship programs provides a plausible way to soften the reality shock of
making the transition from the world of academics to the world of work (Garavan

8. Murphy, 2001; Collin & Tynjalla, 2003).

Internship Conversion Rates

Converting interns to full-time employees is a critical initiative for many
companies today. ‘Internship conversion’ is desirable within the industry
because an intern who has a successful experience may also have an increased
sense of commitment, belonging, and loyalty toward the company. Due to these
feelings of attachment, interns are more likely to accept an offer for full-time
employment with the organization upon graduation. Ultimately, the decision to
accept a position is based on the perspective of the internship experience, which
provides a more realistic picture of what the position entails and what the
company culture is like (Knouse et al., 1999).

lntemship conversion rates are typically calculated by dividing the number

of interns who accepted a job offer after internship completion by the number of

offers extended to interns (37 acceptances from a pool of 100 eligible interns is a
37% conversion rate). For many companies, to stay competitive in today’s job

market, a conversion rate of 50-70% is the target benchmark (Pedersen, 2007).

Problem Deﬁnition

Collegiate internships in American businesses are a recent topic of
interest. The perceived value of internships from both the employers’ and
students’ point of view is illustrated by the signiﬁcant growth in student/employer
involvement over the past two decades. For example, in 1980, only about 1 out
of every 36 graduates completed an internship prior to graduation, compared to 3
out of 4 graduates completing an internship prior to graduation by the year 2000
(Cook, Parker, & Pettijohn, 2004). Although lntemship programs serve many
purposes and have potentially positive outcomes for corporate stakeholders, the
needs and objectives of the interns (i.e. college students) must be satisﬁed for
such programs to persist. For example, in a recent longitudinal study regarding
the perceptions of interns, Cook et al. (2004) found that 87% of the interns felt
that their internship experience improved their general ability to get along with
people in work situations. Additionally, 78% of interns agreed that the internship
experience gave them greater conﬁdence in ﬁnding a job upon graduation, and
57% of the interns felt that their internship experience inﬂuenced their future
career choices (i.e. afﬁrrning, changing, etc).

The ﬁndings of Cook et al.’s (2004) study provide empirical support for
existing opinions regarding the value of internship programs. However, more

empirical research is needed to identify what employers can do to differentiate

their internship programs from their competitor’s programs, and ultimately, how
employers can increase their lntemship conversion rates each year. Increasing
internship conversion is beneﬁcial to the employer for a number of reasons,
speciﬁcally: 1) the intern pool represents a partially trained workforce that can
immediately contribute to the organization (Dixon, Cunninham, Sagas, Turner, &
Kent, 2005), 2) hiring from the intern pool saves the employer a signiﬁcant
amount of money both in hiring and training costs (Pianko, 1996), and 3) hiring
interns potentially increases organizational commitment and decreases voluntary
turnover because the intern already has a general understanding of what the
company culture is like and what the job may entail (Gault, Redington, &
Schlager, 2000) .

For example, a recent meta-analysis of employee commitment by Meyer,
Stanley, Herscovitch, and Topolnytsky (2002), found affective organizational
commitment (the employees’ desire to stay with the company because they want
to) and continuance organizational commitment (the employees’ desire to stay
with the company because they feel they have to) to be negatively related to
withdrawal cognition and turnover. Additionally, Meyer et al. (2002) found that
affective organizational commitment was directly linked to job satisfaction,
increased attendance and job performance, and decreased turnover intentions.

Typically, job satisfaction and organizational commitment are studied in
the context of current, continuing employees, and are consistently examined as
attitudinal variables (Firth, Mellor, Moore, & Loquet, 2004; Meyer et al., 2002;

Clugston, 2000). However, there is little empirical research regarding job

satisfaction and the commitment of interns, who are more like “contract” or
temporary employees with the potential of becoming continuing employees.
Hence, to more fully understand internship conversion rates, further investigation
of additional explanatory variables is necessary.

Recent research suggests that one’s psychological contract (i.e.
obligations owed to the employee/employer) (Rousseau, 2000), psychological
contract breach (i.e. unfulﬁlled obligations) (Robinson, 1996), and supervisory
support (i.e. guidance, mentoring and encouragement) (Hom & Kinicki, 2001)
predict intent to leave (i.e. intent to decline a job offer after completing the
internship) and voluntary turnover. Conversely, these variables have also been
found to predict intent to stay (i.e. intent to accept a job offer after completing the
internship).

The lntemship experience, albeit short and temporary in nature,
represents an integral time in forming impressions of, or commitment to, the
organization (Dixon, et al., 2005). And, although the employee (i.e. intern) and
the employer both know that the internship is not a guarantee for future
employment, developing intern commitment is important for both parties because
many organizations have high expectations of hiring from their intern pool
(Sessions, 2006; Gault et al., 2000). Hence, examination of the aforementioned
variables (psychological contract outcomes/breach and supervisory support),
combined with more commonly researched variables (organizational commitment
and job satisfaction), will provide further insight into the nature of these

relationships. This insight can then be used to assist management in gaining

more control over the salient motivators that cause interns to turn down an offer
and augment motivators that cause interns to accept an offer after successful

completion of their internship.

Objective of the Study

The most successful source of new hires for many companies comes from
their intern pool (Sessions, 2006), thus the objective of this study is to examine
the motivating factors that inﬂuence internship conversion. To do this, I will study
college students who have successfully completed a business or retail-related
internship during 2006 or spring 2007 for a company in the United States. I will
investigate internship conversion by measuring interns’ intent to accept a job
offer from the company. I will also assess the inﬂuence of psychological contract
outcomes (i.e. unfulﬁlled obligations) and supervisory support on: a) job
satisfaction (with the job/work itself and pay), b) perceptions of advancement

opportunities, and c) organizational commitment (affective and continuance).

CHAPTER 2

LITERATURE REVIEW

The US. will have 10 million more jobs than people by 2010 (according to
the Bureau of Labor Statistics (BLS), 2006). Nevertheless, as the pool for entry
level employees shrinks, retailers must compete more vigorously to attract and
retain the highest quality talent. Employers face great challenges gaining‘the
commitment of younger and ﬁrst-time employees because employees bring to
the workplace their own set of values and expectations. Henceforth, employers
that adjust their human resource (HR) strategies to be more competitive will
narrow the gap between future retail leaders and the dwindling quantity of
available talent. Additionally, adjusting these HR strategies enhances the
company’s ability to become the workplace of choice (Lowe & Schellenberg,
2002).

Theoretical Frameworks
Organizational Socialization Theom

Organizational socialization theory explains how newcomers learn the
culture and values of new job settings (Van Maanen, 1975). The theory also
explicates how newcomers must develop the necessary work skills and adjust to
the work environment (Feldman, 1976). Compared to other phases of
organizational entry (i.e. recruitment, orientation, and training), organizational
socialization is the longest and most complex. Socialization concerns the ways

in which newcomers change and adapt to the organization, and Ieam what is

“acceptable” behavior. Socialization is an interpersonal process that involves
becoming part of a ‘group’ at work, as well as becoming a part of the organization
(Wanous, 1992; Argyris, 1971).

Past research involving organizational socialization theory sought to
identify inhibitors to newcomer socialization (Good & Fairhurst, 1999; Major,
Kozlowski, Chao, & Gardner, 1995; Chao, O’Leary-Kelly, Wolf, Klein, & Gardner,
1994). The theory suggests that anticipatory socialization (pre-entry)
expectations are formed during the recruitment and selection process. Once on
the job, expectations translate into reality as roles become apparent. Good and
Fairhurst (1999) point out that job expectations are derived from a variety of
sources including work experience, academic preparation, job-shadowing,
internship programs, and the job search process (which includes internal and
external information acquisition). Presumably, the more information gathered,
the more likely job expectations are congruent with reality. These expectations
form the foundation for an individual’s transition into the organization (Thorton &
Nardi, 1975).

Employees in retailing bring to the organizational environment their own
unique expectations of what the job will be like. And, justiﬁably, they place high
salience on the attainment of these expectations (Knight, Crutsinger, & Kim,
2006; Good & Fairhurst, 1999). Therefore, job expectations must be met for the
employee to feel worthwhile and remain with the organization (Porter & Steers,
1973). If their expectations are not met, then successful socialization into the ﬁrm

may be inhibited (Feldman, 1976). Porter and Steers (1973, p. 152) state that

unmet expectations are “the discrepancy between what a person encounters on
his job in the way of positive and negative experiences and what he expected to
encounter". There are various types of objects for which employees establish
expectations. Some of them include intrinsic and extrinsic rewards, job content
and context factors, and professional relationships (Mowday, Steers, & Porter,
1979)

During organizational socialization, newcomers try to develop and adjust
their cognitions according to the information made available to them, along with
any information they seek in a proactive manner (Thomas & Anderson, 1998;
Chao et al., 1994; Ostroff & Kozlowski, 1992). In fact, past research in
organizational socialization took an “information acquisition’ perspective that
emphasized the newcomer's role as a proactive learning agent (Major et al.,
1995; Chao, Kozlowski, Major, & Gardner, 1994). F urtherrnore, newcomer’s
knowledge acquisition during socialization affects important performance and
mental health outcomes, such as: job satisfaction, commitment and turnover
(Major et al., 1995; Chao et al., 1994; Ostroff & Kozlowski, 1992).

A signiﬁcant amount of relevant information can originate from existing
organizational members. Since the reality of the organizational culture can be
socially constructed, learning from those who are familiar with the organizational
environment is essential in order to gain an understanding of the reality of the
organization’s culture (Ostroff 8. Kozlowski, 1993). This Ieaming assists in the
establishment of a viable psychological contract between the employee and the

employer (Thomas & Anderson, 1998). As a result, newcomers’ psychological

10

contracts (i.e. employees’ beliefs about the reciprocal obligations between them
and their organization) are likely to adjust towards or be similar to those of
experienced insiders as they become acclimated to and accepted as an integral

part of the organization (RousSeau & Parks, 1993).

Psycholggical Contract Theory
The roots of psychological contract theory are based upon (but not limited

to) disciplines such as legal theory regarding contracts, relational obligations, and
promises—both silent and spoken (Corbin, 1952; Atiyah, 1981; Macneil, 1985),
marriage and the family regarding contracts, commitment and mutuality (Sager,
1976), and social psychology regarding exchange relationships (Roloff, 1987).
Psychological contracts are brieﬂy deﬁned as an individual’s belief in
mutual obligations between that person and another party, such as an employer
(i.e. a firm or another person) (Rousseau, 1998). In other words, psychological
contracts determine what I feel the other party owes me and what I feel I owe the
other party, based upon implicit or explicit promises that bind each party to a
particular course of action (Rousseau, 2005). However, it is important to realize
that a central dimension of this construct is incompleteness; the full array of
associated exchange obligations is typically not known or knowable at the onset
of the exchange relationship, requiring the contract to be ﬂeshed out over time.
According to Rousseau (2005, 2001 ), partial contracts are completed, updated
and revised throughout the course of the exchange relationship in a manner that
affects both the degree of the actual agreement between the exchange parties,

as well as the ﬂexibility of the psychological contract in the face of change.

11

Psychological contracts develop via an interactive process that often
begins during the recruitment process (Rousseau, 1990). But, they may be
inﬂuenced by a number of other human resource practices such as performance
reviews, compensation, training, employee manuals and beneﬁts (Rousseau &
Greller, 1994). A new employee brings to the job a set of expectations about a
possible future relationship with the employer (Shore & Tetrick, 1994) that are
subject to change over time as the newcomer acclimates to the company culture
and accepts his/her role within the organization. Therefore, unlike pre—entry
expectations, psychological contracts are formed through interaction with the
employer once on the job (Sutton & Grifﬁn, 2004; Rousseau, 2000).

However, prior to organizational entry, it is possible for individuals to begin
developing their psychological contract based upon the organizational agents
with whom they have interacted, such as a recruiter or supervisor/manager
(Shore & Tetrick, 1994). Recruiters can inﬂuence the perceived attractiveness of
a job through their behaviors, which applicants tend to interpret as signals about
working conditions within the company; a friendly recruiter is seen as indicating a
warm, friendly work environment (Turban & Dougherty, 1992). Additionally,
recruiters inﬂuence attractiveness by providing applicants with information about
the job and organizational attributes (Rynes, 1989).

Evidence suggests that recruiters do play a key role in inﬂuencing
applicant attraction to a ﬁrm (Arthur, 2001; Schmitt & Coyle, 1976); however,
some research suggests that recruiters inﬂuence attraction only when applicants

have minimal information about the job (Powell, 1984; Rynes & Miller, 1983). For

12

example, in their study of business school seniors, Fisher, Ilgen and Hoyer
(1979) found that applicants were very reluctant to accept a job offer with the
company when their only source of information was the campus
interviewer/recruiter. In addition, Turban and Dougherty (1992) surveyed
business school students after campus interviews and found that when recruiters
spent too much time discussing the job, applicants felt that there was something
wrong with the job or the ﬁrm. Therefore, the recruiter is not always considered a
very credible source of information; consequently, newcomers often rely
extensively on their supervisor/manager (Fisher, 1990). Newcomers tend to rely
on their supervisor to carry out many of the contractual obligations owed to them;
hence, employees are likely to view their supervisor as the chief agent for
establishing and maintaining their psychological contract.

In sum, one of the major contributions of psychological contract theory is
empirical research that combines employer-based beliefs (i.e. employer
obligations) with individual-based beliefs (i.e. employee obligations) regarding the
nature of an agreement and the relationship between that individual and his/her
employer. Combining perceptions of employer-based obligations with employee
obligations allows for an ideal assessment of speciﬁc idiosyncratic information
that is meaningful and unique to each individual, as well as the ﬁrm (Robinson,
Kraatz, & Rousseau, 1994). Therefore, since psychological contracts involve
reciprocal exchange agreements, it is critical to link employee and employer

terms in order to gain insight as to what factors are the primary cause of a

13

possible disconnect between employers and their employees (Rousseau &
Tijoriwala, 1998).

In the next section, using theoretical underpinnings from organizational
socialization theory (Van Maanen, 1975; Feldman, 1976) and psychological
contract theory (Rousseau, 2000), I propose a conceptual/research path model
(see Figure 1) that reveals the relationships between psychological contract
outcomes of employer and employee obligations, supervisory support, job
satisfaction (with the job/work itself and pay), perceptions of advancement
opportunities, organizational commitment (affective and continuance), and
conversion intentions. The proposed model (Figure 1) is intended for use with
college students who have successfully completed a business or retail-related
lntemship during 2006 or spring 2007 for a company in the United States.

While some studies examine the relationship between college students’
work experience, career expectations, career intentions, job satisfaction, and job
outcomes (Babin 8. Boles, 1996; lgbaria, Parasuraman, & Badawy, 1994; Knight
et al., 2006), few studies investigate the holistic relationship that incorporates
interns’ perceptions of their future job obligations (i.e. psychological contracts)
and organizational commitment. No studies, to the best of my knowledge,
examine the relationship that integrates psychological contract outcomes (e.g.
unfulﬁlled obligations) with interns’ supervisory support expectations, job
satisfaction, organizational commitment and ultimately, their conversion

intentions.

14

Model Development

Psychological Contracts and Psycholggical Contract Outcomes

Psychological contracts are individual’s beliefs in a mutual obligation
between themselves and another party (i.e. an employer or supervisor). These
contracts develop when individuals presume promises (i.e. employment
opportunities or promotions; something psychologically owed to the employee by
the company) that cause them to believe in the existence of a reciprocal
obligation (i.e. accepting the employment offer or the promotion; something
psychologically owed to the company by the employee) between them and the
other party (Rousseau, 2000). In other words, psychological contracts are beliefs
about what each individual feels he or she owes the other. Shore and Tetrick
(1994) found that even in the presence of formal contracts, psychological
contracts are established by employers and employees to reduce uncertainty,
direct employee behavior without surveillance, and to give employees a sense of
control and predictability.

Prior to recruitment and employment, applicants possess beliefs regarding
their occupation and the organization (Bunderson, 2001; Rousseau, 2001).
Recruitment experiences create understandings regarding the promises workers
and employers make to each other. Post-hire socialization continues the
processing of new and existing information regarding the employment
relationship and the promises related to it (Rousseau, 1989). Thomas and
. Anderson (1998) suggest that organizational newcomers have only rudimentary

psychological contracts. Therefore, psychological contract perceptions,

15

expectations and obligations are continually modiﬁed and adjusted during the
socialization process.

However, if newcomers are unable to revise their psychological contracts
in a way that allows them to properly adjust and socialize to the organizational
culture, and meet their own and their employers’ beliefs and expectations, a
psychological contract breach occurs (Robinson & Rousseau, 1994). A
psychological contract breach refers to one’s belief that the other party has failed
to adequately fulﬁll the promised outcomes or obligations of the psychological
contract (Rousseau, 1989; Robinson, 1996). When these promised outcomes or
obligations go unmet, newcomers are more likely to become frustrated and
dissatisﬁed with their work, and ultimately quit their job.

These unfulﬁlled outcomes or obligations (i.e. psychological contract
breach) are subjective experiences based not only on the employer’s actions or
inactions, but also on an individual’s perceptions of those actions or inactions
within a speciﬁc social context. As a result, the experience of psychological
contract outcomes (i.e. unfulﬁlled obligations or breach) usually depends upon
the social and psychological factors that are speciﬁc to the employment
relationship in which it occurs (Morrison 8: Robinson, 1997).

Unfulﬁlled outcomes or obligations are directly related to training and
development, compensation, promotion, nature of the job, job security, feedback,
level of responsibility, and/or coworkers (Robinson & Rousseau, 1994).
Furthermore, in their literature review on organizational citizenship and the

changing work relationships in the 1990’s, Parks and Kidder (1994) point out that

16

a negative psychological contract outcome may cause employees to quit,
withdraw or engage in anti-role behaviors such as theft, negativism, harassment,
sabotage, and vandalism. Moreover, Robinson and Rousseau (1994) afﬁnn that
this breach of promise and trust produces feelings of betrayal. Thus, employees
experience a greater intensity of feelings towards their beliefs about respect,
codes of conduct, and other employee-employer relationship-associated
behaviors. In addition, Bunderson (2001) found that professional employees
respond to negative outcomes (i.e. breaches) with feelings of dissatisfaction and
lowered organizational commitment and job performance; all of which resulted in
increased turnover intentions and actual turnover.

Since the highest level of voluntary turnover occurs within the ﬁrst 12
months on the job (Bureau of Labor Statistics, 2005), it is important to
understand how and why newcomers adjust their psychological contracts over
time. Failure to modify and adapt employment obligations to ﬁt within company
culture may be a signiﬁcant driver of voluntary turnover.

In a longitudinal study, Robinson (1996) surveyed MBA students just prior
to graduation, 18 months later, and again 30 months later. She found that over
this two-and-a-half year period, employees’ perceptions of employer obligations
had increased signiﬁcantly in the following areas: advancement, high pay, and
merit pay, and decreased signiﬁcantly in training. Additionally, employees’
perceptions of their own obligations decreased signiﬁcantly in the following
areas: overtime, loyalty, transfers, advance notices, and minimum stay. In sum,

their psychological contract shifted over the two-and-a-haif years so that

17

perceived obligations of employers increased, whereas obligations of employees
decreased. Robinson’s (1996) ﬁndings support the notion that newcomers’
psychological contracts evolve quite considerably over time.

To broaden our knowledge about how retailers can acquire quality
employees by increasing their internship conversion rates, further examination of
psychological contract outcomes (i.e. fulﬁlled or unfulﬁlled obligations) is
necessary. This will lend insight into the effects that psychological contract
outcomes of employer and employee obligations have on interns’ job satisfaction,
organizational commitment and conversion intentions (see Figure 1). Thus, I
pose the following hypotheses:

H1: lntems’ perceptions of the extent to which psychological contract
outcomes of employer obligations were fulﬁlled will have a positive
effect on a) job satisfaction (job/work itself and pay). b) affective and
continuance organizational commitment and c) perceptions of
advancement opportunities.

H2: Intems’ perceptions of the extent to which psychological contract
outcomes of employee obligations were fulﬁlled will have a positive
effect on their: a) job satisfaction with the job/work itself, b) affective
organizational commitment, and c) perceptions of advancement
opportunities,

H2d: Intems’ perceptions of the extent to which psychological contract
outcomes of employee obligations were fulﬁlled will have a negative

effect on continuance organizational commitment.

H3: lntems’ perceptions of the extent to which psychological contract

outcomes of a) employer and b) employee obligations were futﬁlled
will have a positive effect on conversion intentions.

Supervisou Support

Supervisory support is the degree to which employees perceive their

supervisor as providing direction, encouragement, and mentoring. The role of

18

the supervisor is vital to a new employee’s job experience for several reasons:
1) supervisors control the degree of structure, ambiguity, and conﬂict in the work
itseif, 2) supervisors provide informal and formal feedback to employees
regarding their performance and work behavior, and 3) supervisors control
rewards and possible job security that may beneﬁt employees (Krackhardt,
McKenna, Porter and Steers, 1981). All of these job experience factors are
extremely important to newcomers because they are trying to familiarize
themselves with a new organizational environment and culture (Van Maanen,
1975)

New hires will inevitably experience many ambiguities regarding their job-
duties, their co-worker, and their supervisors. For example, in their study of 261
full-time food service workers, Babin & Boles (1996) found that increased
perceptions of supervisory support reduced employee role conﬂict and role
ambiguity, and increased job satisfaction. In addition, Jamrog (2002) found that
the supervisor was the key inﬂuence on whether or not young employees
remained with the company. Therefore, supportive supervisors are critical
because they can enhance job satisfaction and facilitate the pursuit of one’s
future career intentions (Knight et al., 2006).

Lack of proper supervisory support can result in an untrained, unmotivated
workforce and is a potential cause of increased absenteeism, low morale, poor
customer service, and increased employee turnover (Crutsinger & Knight, 2003).

Conversely, a workplace with high levels of supervisory support can have a

19

positive impact on job performance, job satisfaction and turnover intentions
(Babin 8. Boles, 1996).

Employees value organizational support not only from their supervisors,
but from their co-workers as well (Ray & Miller, 1991). For example, in their study
of elementary school teachers, Ray and Miller (1991) found that supportive
communication from the both the supervisor (principal) and co-workers helped
reduce role ambiguity. Additionally, if employees perceive that their supervisor
shows concern for them and their co-workers, and provides socioemotional
support, then this will lead to a positive appraisal of the work environment and
increase job satisfaction directly (Kopleman, Brief, & Guzzo, 1990).

Furthermore, extant literature includes important alternative perspectives
regarding the link between supervisory support and various foci of organizational
commitment (F iorito, Bozeman, Young and Meurs, 2007). One alternative
perspective discusses the inﬂuential role that the supervisor may play in
determining employees’ level of commitment; hence, indicating the possibility for
employees’ level of commitment to the company to be enhanced because they
are committed to their immediate supervisor (Morrow, 1993).

Today, many college students are employed in part-time retail jobs that
provide minimal supervision, leaving employees with no role model or direction to
promote their development of positive and valuable work traits or habits
(Schneider & Stevenson, 1999). A structured internship program that provides an
adequate amount of supervisory support or mentoring can only help promote

positive work habits of the intern in the future. However, according to Gault et al.

20

(2000), one criticism of internship programs is the inconsistency of supervision
and organization of tasks. Compared to full-time employees, it is possible for
interns to face less clearly deﬁned lines of authority and less contact with
supervisors (Dixon et al., 2005). This does not discount the importance of the
role of the supervisor during internship programs, but highlights how important it
is for organizations to structure the supervision of interns in a way that maximizes
their experience with the organization. lntemship programs not only provide an
initial look inside the organization, but also provide a preliminary indication of the
potential supervisory support a company has to offer. Thus, it is important for
companies to provide the appropriate amount of supervisory support to each
intern.

In addition to supervisory support, it is also critical for supervisors to
provide feedback to employees regarding their performance (Ilgen & Moore,
1987). For example, in their study of newly hired retail executive trainees’ met
and unmet expectations, Good and Fairhurst (1999) found the largest
discrepancy between their expectations and reality was in the amount of
supervisor feedback provided; new hires expect to receive more feedback from
their supervisor than they actually receive. In addition, Moore (2002) found that
low levels of supervisory support and communication (i.e. feedback) between
supervisors and nurses contributed to nurses’ increased feelings of stress and
burnout, and hence to their intention to quit.

Furthermore, according to focus group research (Crutsinger and Knight,

2003), college students often relate positive part-time work experiences with

21

supervisors who are professional and knowledgeable. Conversely, students who
have negative experiences and are not considering a career in retailing after
working part-time in a store often mentioned that supervisors were
unprofessional and lacked managerial training. This implies that if college
students are going to be satisﬁed with choosing a career in a business or retail-
related ﬁeld, they expect their supervisors to be professional, knowledgeable,
respectful, and supportive. Hence, I hypothesize the following:

H4a: Intems’ supervisory support will have a positive effect on job
satisfaction with the job/work itself.

H4b: lntems’ supervisory support will have a positive effect on
affective organizational commitment.

H4c: lntems’ supervisory support will have a positive effect on
continuance organizational commitment.

Additionally, in their study of retail salespeople, Firth et al (2004) found
that supervisory support mediated the relationship between job stressors and job
satisfaction, commitment to the organization, and intention to quit. Hence,
employees are more likely stay if they have a good relationship and open
communication with their immediate supervisor (Human Resource Institute,
2004). Therefore, since newcomers tend to rely on their supervisor to carry out
many of the contractual obligations owed to them, employees are likely to view
their supervisor as the chief agent for establishing and maintaining their
psychological contract. Thus, I suggest the following hypotheses:

H4d: lnterns’ supervisory support will have a positive effect on
psychological contract outcomes of employer obligations.

H4e: lnterns’ supervisory support will have a positive effect on
psychological contract outcomes of employee obligations.

22

Organizational Commitment and Job Satisfaction

Organizational commitment is deﬁned as “the relative strength of an
individual’s involvement in a particular organization” (Steers, 1977, pg. 46).
Organizational commitment is a signiﬁcant predictor of turnover (Steers, 1977;
Mowday, Steers, & Porter, 1979). Furthermore, organizational commitment has
been viewed as a more stable construct than satisfaction and is revealed to be a
better discriminator between stayers and leavers than job satisfaction alone
(Steers, 1977).

In their review of organizational commitment literature, Meyer and Allen
(1991) identiﬁed three dimensions of organizational commitment: 1) commitment
as an affective attachment to the organization, 2) commitment as the perceived
costs associated with leaving the organization, and 3) commitment as an
obligation to remain with the organization. They referred to these three
dimensions of organizational commitment as affective, continuance and
normative, respectively. For the current study, I include only two dimensions of
organizational commitment: affective and continuance (Meyer & Allen, 1991).
The third dimension of organizational commitment (i.e. normative) proposed by
Meyer and Allen (1991) is not included in the current study because it deals
primarily with one’s desire to remain with the company out of duty or moral
obligation; hence, it is not likely that interns will feel that they need to stay with
the company because they ought to (Clugston, 2000).

Moreover, common to Meyer and Allen’s ( 1991) three dimensional

assessment (affective, normative, and continuance) of organizational

23

commitment, is the viewpoint that organizational commitment is a psychological
state that: 1) characterizes employees’ relationship with the organization, and 2)
has implications for employees’ decision to continue or discontinue membership
with the organization. Since employees can experience varying degrees of all
three forms of commitment, the nature of the psychological state for each form of
commitment is quite different (Meyer, Allen, & Smith, 1993).

Affective commitment is an attitudinal process where people eventually

 

think about their relationship with the organization in terms of value and goal
congruency. Research shows that people with strong affective commitment
remain with the organization because they want to (Clugston, 2000). The
relationship between affective organizational commitment and positive work
outcomes is well established in a variety of industries, such as manufacturing,
health care professionals, and business executives (Vandenberghe, Bentein, and
Stinglhamber, 2004; Becker, Billings, Eveleth, and Gilbert, 1996; Mowday, 1998;
Meyer and Allen, 1991).

F urtherrnore, in their meta-analysis of antecedents, correlates and
consequences of affective, normative and continuance organizational
commitment, Meyer et al. (2002) found that affective organizational commitment
is consistently linked to increased job performance, increased organizational
citizenship behaviors (OCBs), increased attendance, decreased turnover
intentions, and decreased turnover behavior. Additionally, employees whose

work experiences within the organization are consistent with their expectations

24

and satisfy their basic needs tend to develop a stronger affective attachment to
the organization than employees whose experiences are less satisfying.

Continuance commitment is a person’s need to remain with the
organization based on the costs associated with leaving (Meyer & Allen, 1991).
Continuance commitment is apparent in two major ways: 1) as individuals gain
tenure, they accrue investments (i.e. pension plans, seniority, local afﬁliations,
non-transferable/specialized job skills, etc.) which may be sacrificed or lost by
changing jobs, and 2) individuals may feel as though they have to remain in their
current job because they do not have any alternative job prospects. Thus,
continuance commitment presumably develops as employees recognize that
they have accumulated investments that would be lost if they were to leave the
organization, or as they recognize that the availability of comparable alternatives
is limited. Hence, Meyer and Allen (1991) propose that employees with strong
continuance commitment remain with the organization because they feel as
though they have to.

Past research establishes a relationship between the three components of
organizational commitment (i.e. affective, normative and continuance) and intent
to leave (Clugston, 2000). In their meta-analyses of antecedents, consequences
and correlates of organizational commitment, Mathieu and Zajac (1990) reported
that both affective and continuance organizational commitment had a negative
effect on intent to leave. In addition, Hackett, Bycio, and Hausdorf (1994), Meyer

et al. (1993) and Cohen (1993) found that affective, normative, and continuance

25

organizational commitment had a negative impact on intent to leave in private
sector organizations.

Although much research investigates organizational commitment in the
context of established employees, I found little research on the organizational
commitment of interns. The intern experience, although short term in nature, still
represents a vital time for forming impressions of the organization (Dixon et al.,
2005). Furthermore, Meyer and Allen (1988) state that even the early months of
employment are a particularly important period in the development of work
attitudes (i.e. organizational commitment and job satisfaction).

Job satisfaction is deﬁned as a person’s overall feeling about work and the
work organization (Champoux, 2003). Even though many factors affect a
person’s feelings about work and the organization, the job is a basic connection
between the person and the employing organization. Therefore, a person’s job
has some effect on their feelings of overall job satisfaction.

Using data from two different samples (i.e. community mental health
center employees and employees from a large insurance company) Williams and
Hazer (1986) used structural equation modeling to show that job satisfaction is
an antecedent to organizational commitment. In addition, in their meta-analysis,
Mathieu and Zajac (1990) found that job satisfaction was related to both affective
and continuance commitment. As a result, Meyer and Allen (1991) suggest that
there might be differences in on-the-job behaviors, work experiences and
performance associated with affective and continuance commitment. For

example, they state that since affective commitment is expected to develop when

26

employees are given the opportunity to do satisfying work, affective commitment
should be positively related to job satisfaction and job performance. Conversely,
since continuance commitment is expected to develop as employees make
investments (i.e. time and effort put into acquiring job-speciﬁc skills) that would
be lost or reduced in value if they left the organization, continuance commitment
is expected to be unrelated or negatively associated to job satisfaction and job
performance (Meyer et al., 1993).

Furthermore, Hackett, et al. (1994) surveyed nurses and bus operators
and discovered that job satisfaction had a positive inﬂuence on their affective and
normative organizational commitment, but had a negative effect on their
continuance organizational commitment. Additionally, when Konovsky and
Cropanzano (1991) surveyed pathology laboratory employees, they found that
job satisfaction had a negative impact on continuance organizational
commitment. In sum, job satisfaction has a positive impact on affective
organizational commitment, and a negative impact on continuance organizational
commitment (See Figure 1).

Empirical studies by Tate, Whatley and Clugston (1997), Netemeyer,
Burton and Johnson (1995), and Igbaria and Guimaraes (1993) found that job
satisfaction had a direct and negative impact on intent to leave. In addition,
when Schaubroeck, Cotton, and Jennings (1989) surveyed civilian government
manufacturing and university maintenance workers, they were able to determine
(via structural equation modeling) that job satisfaction had a signiﬁcant, negative

effect on the employees’ intent to leave.

27

Based upon ﬁndings related to job satisfaction, organizational commitment
(i.e. affective and continuance), and intent to leave/stay, I pose the following
hypotheses:
H5: lntems’ job satisfaction with the job will have a positive effect on
a) affective organizational commitment, and a negative effect on
b) continuance organizational commitment.
H6: lntems’ job satisfaction with pay will have a positive effect on
a) affective organizational commitment, and a negative effect on
b) continuance organizational commitment.

H7: lntems’ job satisfaction with a) the job and b) pay will have
a positive effect on conversion intentions.

H8: Interns’ a) affective and b) continuance organizational commitment will
have a positive effect on conversion intentions.

Perceptions of Advancement Opmrtunities

For the current study, perceptions of advancement opportunities is brieﬂy
deﬁned as one’s awareness or insight regarding promotion and advancement
opportunities the company has to offer beyond the duration of the internship.
Throughout the internship process, interns gain knowledge and formulate
perceptions of what a future career path with their internship company would
entail, should they decide to accept an offer for full-time employment upon
graduation. If they perceive there to be good career advancement opportunities,
and feel that there is potential for continued growth within the company, they are
more likely to want to remain with that organization after their internship is over
(Dixon et al., 2005). Thus, I posit the following:

H9: lntems’ perceptions of advancement opportunities will have a positive
effect on conversion intentions.

28

Conversion "Legions

In the present study, conversion intentions consist of the interns’ intent to
accept on offer. Intent to accept an offer from the company is one’s decision to
remain with the organization and begin full-time employment upon graduation
(Robinson, 1996). By studying this construct further, I hope to gain insight on
what motivates individuals to stay with the organization upon completion of their

internship program.

29

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30

CHAPTER 3
METHODS

Sam Ie

The population considered for this study consists of college students who
completed a business or retail-related lntemship during 2006 or spring 2007. In
addition, I only included those interns who worked 26 or more hours per week in
order to study interns for whom the internship was a substantial part of their
weekly activities. Using the guideline of taking the number of indicator (i.e.
manifest) variables times 10 (Von Eye, 2006), the ideal sample size appropriate
for model testing in this study is 620 (62 indicator/manifest variables X 10). This
sample size would be extremely difﬁcult to obtain, given the limited resources
available for this study. Since the chi-square statistic is biased in complex models
with small sample sizes (N s 100), Kline (2005), MacCallum, Browne, and
Sugawara (1996), and Bearden, Shanna and Tel (1982) suggest that a
minimum sample size for use in a complex model is 200. Furthermore,
Calantone (personal communication, November 28, 2006) suggests that a

sample size of 200-250 is sufﬁcient to estimate the proposed model (see Figure

1).

Instrument

I use an on-line, self-administered, questionnaire to measure the
constructs in the proposed path model (see Figure 1). To develop the
preliminary instrument, I use existing scales and scales developed from of a

review of both the psychological contract literature and the organizational

31

socialization literature in several areas: stages of socialization, role of the
supervisor, exchange obligations of the employer and the employee and the

dimensionality of organizational commitment. The full instrument appears in

Appendix A.

Measures

For the current study, in order to more fully capture the internship
experience, and because there are few empirical studies regarding interns,
I use modiﬁed versions of the following existing scales:

Psychological Contract Outcomes: Employer Obligations. I use eight items
modiﬁed from work by Robinson (1996) and Rousseau (1990), to assess intems’
perceptions of how well they feel their employer fulﬁlled implicit or explicit
promises and obligations to them during their internship. I modiﬁed scale items
from existing psychological contract scales (Rousseau, 1990; Robinson, Kraatz,
& Rousseau, 1994) to reﬂect the nature of the internship, and measure them
using a 1 to 5 scale (1 = Not at all Fulﬁlled, 5 = Very Well Fulﬁlled). Sample
statements include: ‘Competitive pay’, ‘Sufﬁcient level of responsibility and
power’, ‘Adequate supervision and feedback about my job performance’, and
‘Anticipated number of working hours was approximately equal to the number of
hours actually worked’ (Rousseau, 1990; Robinson, 1996; Robinson, et al., 1994;
reported coefﬁcient alpha of .81).

Psychological Contract Outcomes: Employee Obligations. Equally
important in the psychological contract literature, is what employees feel they

owe their employer (Rousseau, 2000), and the degree to which they feel they

32

fulﬁll implicit or explicit promises and obligations to their employer. Six items
assess intems’ perceptions of how well they feel they fulﬁlled implicit or explicit
promises and obligations during their internship. I modiﬁed sale items from
existing psychological contract Scales (Rousseau, 1990; Robinson et al., 1994;
reported coefﬁcient alpha of .79) to reﬂect the nature of the internship, and
measure them using a 1 to 5 scale (1 = Not at all Fulﬁlled, 5 = Very Well
Fulﬁlled). Sample statements include: ‘Working extra hours when necessary’,
‘Loyalty’, ‘Volunteering to do non-required tasks on the job’, and ‘Willingness to
do a variety of job tasks’ (Rousseau, 1990; Robinson, 1996; Robinson et al.,
1994).

Supervisory Support. Six items modiﬁed from work by Caplan, Cobb,
French, Van Harrison, and Pinneau (1980) measure interns’ supervisory support
(Caplan et al., 1980; reported coefficient alpha of 0.85; Wolken & Good, 1995;
reported coefﬁcient alpha of 0.92). Item responses use a 1 to 7 scale (1 =
Strongly Disagree, 7 = Strongly Agree). Sample statements include: ‘My
supervisor goes out of his/her way to make my life easier for me’, ‘It is easy to
talk with my supervisor“, and ‘My supervisor appreciates the work I do’.

Job Satisfaction. Using measures based upon the Job Descriptive Index
[JDI] (Smith, Kendall, & Hulin, 1969), sixteen items measure intems’ job
satisfaction in two areas: the job/work itself (12 items) and pay (4 items). Good,
Page, and Young (1996) reported coefﬁcient alphas of 0.95. Responses range
from 1 to 5 (1 = Strongly Disagree, 5 = Strongly Agree), and include items such

as: ‘The work was exciting’, “The work was challenging’, ‘I felt a sense of

33

accomplishment.’, ‘The jobs were boring and monotonous’, and ‘The pay was
comparable to similar internships in other areas’. If the intern was unpaid, they
were instructed to omit the four questions regarding pay.

Perceptions of Advancement Opportunities. Six items modiﬁed from the
JDI (Smith et al, 1969) measure interns’ perceptions of advancement
opportunities. Responses range from 1 to 5 (Strongly Disagree, 5 = Strongly
Agree), and include items such as: ‘Opportunities for advancement appeared to
be reasonable’, ‘Chances appeared to be good for promotion’, and ‘The company
appears to have unfair promotion policies’.

Organizational Commitment: Twelve items measure interns’ two
dimensions of organizational commitment: affective and continuance (Meyer &
Allen, 1991; Allen & Meyer, 1996; reported coefﬁcient alphas for the two
dimensions of organizational commitment of 0.85 and 0.79, respectively;
Clugston, 2000; reported coefﬁcient alphas for the two dimensions of
organizational commitment of 0.85 and 0.88, respectively). The response format
ranges from 1 to 7 (1 = Strongly Disagree, 7 = Strongly Agree).

Six items measure each type of commitment: affective and continuance.
Affective commitment includes items such as: ‘This organization has a great deal
of personal meaning for me, ‘I do not feel a strong sense of “belonging” to my
internship company’, and ‘I would be very happy to spend the rest of my career
with my internship company. Continuance commitment includes statements like:
‘One of the few negative consequences of leaving my lntemship company would

be the scarcity of available alternatives’, ‘Staying with my internship company is a

34

 

matter of necessity as much as desire’, and ‘If I had not already put so much of
myself into my internship company, I might consider working elsewhere’.

Conversion Intentions. To fully capture conversion intentions, I measure
both intent to accept an offer and intent to decline an offer. Four items measure
intems’ intent to accept an offer from the organization (for similar items
measuring Intent to Remain, see: Robinson, 1996; reported coefﬁcient alpha of
0.86), and four items query interns about their intent to decline an offer from the
organization upon completion of their lntemship (for similar items measuring
Intent to Leave, see: Clugston, 2000; reported coefﬁcient alpha of 0.89; Ganesan
8 Weitz, 1996; reported coefﬁcient alpha of 0.83).

To form a singular conversion intentions construct that focuses on intent to
accept an offer, I reverse code each of the intent to decline items and combine
them with the intent to accept items. The response format ranges from 1 to 7
(1 = Strongly Disagree, 7 = Strongly Agree). Statements include items such as: ‘If
I have my way, I will be working for my internship company after I graduate’, ‘I
would accept a job offer from my lntemship company before considering a job
offer from another company”, ‘I would consider a job offer from any other
company before considering a job offer from my internship company’ and ‘I am
looking for other jobs now, rather than considering a job with my internship
company’.

Conversion Intentions (open-ended). In order to assess the salient factors
that inﬂuence interns to accept a job offer or turn down a job offer upon

successful completion of the internship, I ask a series of open-ended questions.

35

These open-ended questions are self-designed based upon literature review,
personal work experience, and advice from subject matter experts.
Demographics. In order to describe the sample, I ask a series of
demographic questions at the end of the survey. Examples of questions include:
gender, year born (i.e. age), class level, major in school, overall GPA, and

tentative graduation date.

Reliability and Validity

To ensure reliability and validity of the measures, I use previously tested
and/or modiﬁed versions of existing scales. To assess content and construct
validity and internal reliability, I conducted stage one of the pre-test on the
instrument using a sub-set of interns in a focus group setting. This consisted of
two separate focus-group sessions with 6 interns each. Focus group sessions
consisting of 6-12 participants are generally deemed sufﬁcient to detect any
underlying problems (Wimmer & Dominick, 2003).

During the focus group sessions, prior to completing a hard-copy of the
survey, participants read a cover letter explaining the study. Once they
completed the survey, we discussed the survey instrument in great detail. For
example, we speciﬁcally discussed which survey items students felt were most
relevant to the internship experience regarding employer and employee
obligations (i.e. psychological contract outcomes), supervisory support, job
satisfaction (i.e. the job/work itself and pay), perceptions of advancement
opportunities, and organizational commitment. In addition to item relevancy, we

also discussed the wording clarity of the survey items.

36

In order to more fully understand the variables in the model, we also
discussed additional salient factors affecting students’ conversion intentions. For
example, the original employer/employee obligations (psychological contract
outcomes) scales include items such as: ‘Long term job security’, ‘VWllingness to
accept a transfer“ and ‘Spending a minimum of two years with the organization’
(Rousseau, 1990; Robinson et al., 1994). Focus group participants felt that these
items were not relevant to their lntemship experience, and should be replaced
with ‘Anticipated number of working hours was approximately equal to the
number of hours actually worked’, and ‘Willingness to do a variety of job tasks’.
In sum, the feedback received during the focus group sessions provided valuable
insight regarding modiﬁcations to the existing survey, in order to fully capture the
internship experience.

After I modiﬁed and reﬁned the survey based on the focus group
feedback, I collected data for stage two of the pre-test. For this stage, I sent a
cover letter (via e-mail) explaining the study, along with an HTML link to the on-
line survey to a subset of college students within the business school and the
department of advertising, public relations and retailing. Based upon these pre-
test results, combined with reliability checks (i.e. Cronbach’s alpha), no further
modiﬁcations were needed.

To ensure convergent validity for the survey items for each of the ﬁrst-
order factors (PCO_ER, PCO_EE, SS, JS_job, JS_pay, PAO, AOC, COC, CI_A)
(see Figure1), I look for evidence regarding the extent to which one measure

correlates highly with other measures designed to assess the same concept (i.e.

37

convergent validity). To ensure discriminant validity for the survey items for each
of the ﬁrst-order factors, I look for evidence of low correlations between the

measures.

Data Collection Procedure

In order to attain the necessary sample size, I utilize two different methods
for data collection: 1) Partnership with companies and 2) Cooperation with faculty
from other universities who have access to internship students.

1. P_art_nership with com; Once a company agreed to participate in the
study, I sent a cover letter (see Appendix B) explaining the study to the
Human Resource representative, who fonrvarded it to internship
participants from 2006 and spring 2007. The cover letter explaining the
study included an HTML link that directed participants to the On-line
survey. The cover letter explained that participation was completely
voluntary. In hopes of maximizing our response rate, the HR
representative sent a reminder email to the internship participants after
two weeks.

2. Cooperation with facumr from other universities: Once the faculty
members agreed to participate in the study, I sent them a cover letter (see
Appendix B) explaining the study, so they could fonlvard it to their students
who completed an lntemship during 2006 or spring 2007. The cover
letter explaining the study included an HTML link that directed participants
to the On-line survey. The cover letter explained that participation was

completely voluntary. In hopes of maximizing our response rate, the

38

faculty sent a reminder email to the internship participants after two

weeks.

As an incentive for participating in the study, I offered each of the
respondents a chance to be entered in a rafﬂe to win a $50.00 Visa check card.
The respondents shared their e-mail address if they were interested in having
their e-mail address put in a rafﬂe for a chance to win one of ﬁve, $50.00 visa
check cards; the email address allows me to contact them if they win the raffle. In
addition, respondents were told that they can request a summary of research

results by sending an email to me.

Sampling Frame & Response Rate

Two different sampling frames assisted in data collection: 1) a group of
pre-identiﬁed interns (N = 248) and 2) a group of students from the college of
business and the college of communication, arts & sciences (N = 4586), who
were eligible to complete internships; these students were asked to self-identify
themselves as an intern if they had completed an internship during the time
period of interest.

The group of pre-identiﬁed interns consisted of students for which I had
records verifying that they had completed an internship during 2006 or spring
2007. For the group of pre-identiﬁed interns, a total of 22 surveys were
undeliverable. So, of the 226 deliverable surveys, a total of 57 were returned, of
which, 51 were useable for the current study. Thus, the overall response rate for

the pre-identiﬁed interns was 23%.

39

 

 

The group of self-identiﬁed interns consisted of students who were eligible
to complete an internship, but had to identify whether or not they had. Of the
4586 deliverable surveys to this group, a total of 288 were returned, of which,
199 were usable for the current study; resulting in a 4% response rate. However,
since we do not know how many students actually completed internships and
how many did not participate in an internship within this group, the response rate
of self-identiﬁed interns is an imprecise estimate.

In sum, a ﬁnal total of 250 surveys are usable for the current study.
Preliminary analysis (i.e. t-tests) of the two sample groups revealed no signiﬁcant
differences between sampling frames, thus sample participants were pooled into

one group.

Data Analysis
I use structural equation modeling (Bentler, 2004) to test the proposed

model (see Figure 1). First, I estimate the measurement model, and then
continue with the structural model (Anderson and Gerbing, 1988). I also conduct
a conﬁrmatory factor analysis on the following ﬁrst order factors: PCO_ER,
PCO_EE, SS, JS_job, JS_pay, PAO, AOC, COC, CI_A). I obtained estimates
using EQS 6.1 Maximum Likelihood procedure, using the covariance matrix of
the scale items as the input for the measurement model. As necessary, revisions
to the measurement model are made prior to estimation of the structural model.
Using the revised measurement model covariances, I then estimate the structural

model.

40

E2

I estimate the measurement model using a multi-step process of
conﬁrmatory factor analysis. First, conﬁrmatory analyses are conducted for the
nine individual model constructs. Examination of covariance matrix factor
patterns and assessment of large residuals serve as a check for construct
validity. Positive and signiﬁcant indicator to factor loadings indicates convergent
validity (Anderson & Gerbing, 1988). l assess discriminant validity by using
EQS’s standardized residuals. Item measures that cross-loaded are removed
one at a time until a model of best ﬁt is obtained. Some items are deleted as a
result of this process. This multi-step procedure determines: 1) if the constructs
function well together, 2) if each measure is unidimensional and non-redundant,
and 3) the overall ﬁt of the hypothesized model to the data. I use coefﬁcient
alpha and variance extracted to assess reliability of construct indicators.

The second stage of analysis involves estimating the structural model.
Factor covariances produced by the measurement model serve as the input data
for the structural model. Analysis focuses on testing the hypothesized construct
relationships regarding the effect that intem’s psychological contract outcomes
and supervisory support have on their job satisfaction (with the job/work itself and
pay), perceptions of advancement opportunities, organizational commitment
(affective and continuance), and conversion intentions. Steps are again taken to
assure validity, parsimony, and overall model ﬁt. Chapter four discusses data

analysis steps and model testing results in greater detail.

41

CHAPTER 4

RESULTS AND DISCUSSION

Sample Characteristics

The sample for the current study consists of 250 students throughout the
United States; all of whom did a business or retail-related internship for various
ﬁrms during 2006 or spring 2007, and worked 26 or more hours per week.
Obtaining a sample size of approximately 250 allows for a representative sample
of the population of interest. Since the interns in the current sample completed
lntemships at a variety of business or retail-related ﬁrms throughout the US. (i.e.
Macy’s, Target, Johnson & Johnson, Nordstrom’s, General Electric, Home Depot,
Fidelity Bank, AOL/Time Warner, Walgreens, etc), the results are reasonably
generalizable. Broad sampling extends the generalizability of ﬁndings to other
internship experiences and organizational settings.

About 60% of the interns surveyed are female and 31% are male. The
average age is 22 years old and a majority of the interns are juniors or seniors
(73%). About ninety-ﬁve percent of the interns were paid and ﬁve percent were
unpaid. Over half of the interns surveyed (52%) have an overall GPA between
3.4 and 4.0, and approximately 80% of the interns plan to graduate between May
2007 and May 2008. Various majors include: Accounting, Business
Management, Advertising, Human Resource Management, Fashion
Merchandising, Hospitality Business, Marketing and Supply Chain, and

Retailing/Retail Management. Table 1 shows complete sample characteristics.

42

Table 1. Sample Characteristics of lntems.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Characteristics Frequency % Mean
Gender
Make 78 31.2%
Female 151 60.4%
Missing 21 8.4%
Age 22.22
19-20 8 3.2%
21-22 158 63.2%
23-25 53 21.2%
26 or more 8 3.2%
Missing 23 9.2%
Class Level 3.86
Freshman (1 ) 1.2%
Sophomore (2) 4 1.6%
Junior (3) 13.6%
Senior (4) 163 65.2%
Graduate (MS, MBA or PhD) (5) 20 8%
Missing 26 10.4%
Overall GPA 4.53
1.9 or less (1) 0 0
2.0 to 2.2 (2) 0 0
2.3 to 2.7 (3) 5 2.0%
2.8 to 3.3 (4) 96 38.4%
3.4 to 4.0 (5) 129 51.56%
Missing 20 8.0%
Tentative Graduation Date 3.14
May ’07 (1) 85 34%
August ’07 (2) 14 5.6%
December ’07 (3) 29 1 1.6%
May ’08 (4) 57 22.8%
August ’08 (5) 2 .8%
December ’08 (6) 12 4.8%
Other (7) 30 12%
Missing 21 8.4%

 

43

 

Model Testing

Model testing results are presented in three parts. Conﬁrrnatory factor
analysis and causal model testing provide a general framework for data analysis
(Anderson & Gerbing, 1998). First, a full conﬁrmatory factor analysis employing
all latent and observed variables is presented to assess the nomological network
of the measurement model. Second, results of testing the initial structural model
and hypotheses are presented and discussed. Third, based upon ﬁt assessment,
the structural model with path coefﬁcient values is presented. I use EQS 6.1 to

conduct all analyses (Bentler, 2004).

Measurement Model
Confirmatogy Factor Analysis by Construct

To assess dimensionality, individual constructs were subjected to
conﬁrmatory factor analysis (CFA). The aim of the analysis was to determine
uni-dimensionality of the constructs and provide partial assessments of model ﬁt.
All measurement items from the survey were entered into the analysis by
respective construct. Covariances for scale items served as input for analyses.

Standard procedures were used for model assessment. First, ﬁt statistics
were checked to evaluate model ﬁt. The chi-square statistic is an absolute
measure of model ﬁt; however, it is biased when dealing with large samples (200
or >), complex models, and models with large numbers of indicators (Kline,
2005). Since these conditions apply to the present model, an alternative ﬁt index
of absolute f'rt is also referenced, such as Root Mean Square Error of

Approximation (RMSEA). RMSEA is a particularly meaningful index of absolute

ﬁt that measures how well the model would ﬁt the population covariance matrix (if
available). RMSEA values less than .05 indicate good ﬁt, while values between
from .08 to .10 indicate moderately acceptable ﬁt (Bollen & Curran, 2006; Browne
& Cudeck, 1993). Accuracy of‘RMSEA estimates are assessed using EQS’s
90% conﬁdence interval (CI). A narrow conﬁdence interval around the RMSEA
estimate suggests good precision and model ﬁt within the population (Kaplan,
2000).

In addition to absolute indices of ﬁt, incremental ﬁt indices are also
considered. Incremental ﬁt indices compare the hypothesized model to the null
model, and generally include the the Bentler-Bonnett Nonned-Fit Index (NNFI)
and the Comparative Fit Index (CF I). Perfect ﬁt for all incremental ﬁt indices is
1.0 (Kline, 2005). Also considered when assessing model ﬁt is the Standardized
Root Mean Square Residual (SRMR). The SRMR transforms both the sample
covariance matrix and the predicted covariance matrix into correlation matrices;
thus, it is the overall difference between the observed and predicted correlations.
SRMR values less than .10 are generally considered favorable (Kline, 2005).

Second, item to factor loadings were evaluated to determine convergent
validity of the model. Item to factor loadings that are positive and signiﬁcant
support the convergent validity of the model. EQS modiﬁcation indices (i.e.
standardized residuals) were also checked for item to factor cross-loading to
determine discriminant validity. Cross-loaded items that produced high error
estimates were subjected to further evaluation by checking their standardized

residuals. Standardized residuals are considered problematic if they form a

45

pattern of error among construct indicators (Bentler, 2004; Bollen, 1989). To
provide an assessment of construct validity, cross-loaded items with high error
terms (C) and low standardized estimates (A’s) were removed one at a time,
assessing model ﬁt after each revision. However, prior to any item deletions or
modiﬁcations, results of the initial CFA revealed a signiﬁcant chi-square statistic
of 3918.674 (df = 1784, p s .001). The RMSEA (.072) and its associated
conﬁdence interval (90% Conﬁdence Interval (CI) = .069 - .075) demonstrate
moderate model ﬁt. Values for the following incremental ﬁt indices also indicate
mediocre ﬁt: NNFI = .746, CFI = .763, SRMR = .086.

The nine model constructs (Figure 1) are maintained during initial
conﬁrmatory factor analysis. Items retained and deleted per construct as a result
of model building are noted in Appendix C, Tables 1 through 9. Acceptable ﬁt
was attained for SS (Appendix C, Table 3) and JS_pay (Appendix C, Table 5)
constructs, thus no items were deleted. However, due to high construct cross-
loadings and low standardized estimates (A), items V1, V2, and V4 were
removed from the PCO_ER construct (Appendix C, Table 1), which resulted in
improved model ﬁt. Due to a low standardized estimate (A), V13 was deleted
from the PCO_EE construct (Appendix C, Table 2). Additional deletions due to
high error terms (C) and/or low standardized estimates (A), included items: V26,
V28, V30, and V32 from the JS_job construct (Appendix C, Table 4), V39 and
V42 from the PAO construct (Appendix C, Table 6), V43 from the AOC construct
(Appendix C, Table 7), V49, V50, and V51 from the COC construct (Appendix C,

Table 8), and V57 and V60 from the CI_A construct (Appendix C, Table 9). See

46

Appendix C, Table 10 for a summary of cross-loaded items with high
standardized residuals (C), and Appendix C, Table 11 for a summary of
standardized estimates (A) of deleted items.

For a ﬁnal assessment cf discriminant validity, I looked at the correlations
between each construct and calculated the square root of the variance extracted
(AVE) for each construct (seen on the Diagonal in Table 2). Assessment of
construct correlations revealed a high correlation between PCO_ER and JS_job
(r = .765). Thus, it is possible that this lack of discriminant validity between these
two constructs may suppress the path coefﬁcients of certain hypothesized
relationships. However, all of the constructs meet or exceed the desired value of
.70 or greater (Fomell & Larcker, 1981), except for CI_A (sq. root AVE = .662),
which could be due to its high correlation with AOC (r = .675). Logically, this high
correlation is expected since AOC measures the level of attachment, which is
linked to staying with the company (i.e. conversion intentions). Thus, no other
modiﬁcations are necessary.

To assess the internal consistency of the revised construct scales, I used
coefﬁcient alpha and variance extracted (Table 3). Scales for all nine constructs
meet or exceed minimum levels (.70) of acceptable reliability (Nunnally, 1978).
Variance extracted also meets or exceeds the minimum standard of .50 for all
constructs except PCO_EE (variance extracted = .493) and CI_A (variance
extracted = .438) (Hair, Anderson, Tatham, & Black, 1998). One explanation for

the low variance extracted for the CI_A measure is that it was the most difﬁcult

47

scale to modify from a full-time employee’s perception of intent to remain to an
intem’s perception of intent to accept a job offer from the internship company.
Conﬁrrnatogy Factor Analﬁis of Measurement Model

A ﬁnal phase of conﬁrmatory factor analysis was conducted on the full
measurement model (Figure 1). The model consists of all nine latent constructs
and their observed variables. This CFA analysis evaluates the relationship
between the constructs and assesses the nomological network of the
measurement model. This ﬁnal CFA also provides a test of validity by assessing
the overall factor structures and dimensionality. Nomological validity is
determined by evaluating between construct correlations (Table 2). Kaplan
(2000) suggests that this assessment of the full CFA allows for overall evaluation
of construct relationships and model ﬁt; hence, due to this assessment, one can
have more conﬁdence in ﬁndings related to the hypothesized structural model.
Results of the ﬁnal CFA analyses are shown in Table 4.

Results of the ﬁnal CFA reveal a signiﬁcant chi-square statistic of
1887.581 (df = 952, p s .001). The RMSEA (.063) and its associated conﬁdence
interval (90% Conﬁdence Interval (CI) = .059 - .067) demonstrate moderate
model ﬁt. Values for the following incremental ﬁt indices also indicate moderate
ﬁt: NNFI = .861, CFI = .872, SRMR = .063. Because the CFA results were not as
desirable as preferred, I investigated the standardized solution and standardized
residuals. Final review of the standardized estimates (A’s) revealed signiﬁcant

(p < .05) loadings for each variable of .50 or higher (Bentler, 2004) (Table 4), and

48

the largest standardized residual (between V54 and V56) was low (-.233)
Appendix C, Tables 8 & 9). Since the loadings are satisfactory and the largest

standardized residual is fairly low, no further modiﬁcations were necessary.

49

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50

Table 3. Measurement Model Constructs: Coefficient Alpha and Variance

 

 

 

 

 

 

 

 

 

 

 

 

Extracted.
Coefﬁcient Variance
“"3"“ Alpha Extracted
Psychological Contract Outcomes: Employer 866 523
Obligations (PCO_ER) ' '
Psychological Contract Outcomes: Employee 810 493
Obligations (PCO_EE) ' '
Supervisory Support (SS) .944 .618
Job Satisfaction with Job (JS-job) .926 .560
Job Satisfaction with Pay (JS-pay) .724 .546
Perceptions of Advancement Opportunities (PAO) .850 .536
Affective Organizational Commitment (A00) .861 .526
Continuance Organizational Commitment (COC) .828 .515
Conversion Intentions: Intent to Accept (CI_A) .794 .438

 

 

 

51

Table 4. Conﬂrmatory Factor Analysis of Measurement Model Constructs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construct Observed Parameter t-value“ Standardlzed Standardlzed

Variable Estimate “ p < .05 Estimate Residual

Variance
Psychological V3 .854 1 1.273“ .660 .752
Contract V5 .964 14.865“ .805 .593
Outcomes: V6 . .839 12.480“ .712 .702
Employer V7 .818 12.330“ .706 .708
Obligations V8 .932 14.735“ .801 .599
Psychological V9 .481 8.660“ .548 .837
Contract V10 .601 12.597“ .738 .675
Outcomes: V11 .593 12.217“ .721 .693
Employee V12 .510 13.413“ .773 .635
Obligations V14 .509 10.860“ .659 .753
V15 1.335 17.118“ .869 .495
V16 1.233 16.169* .839 .545
Supervisory V17 1.350 18.465“ .909 .417
Support V18 1.293 15.536“ .817 .576
V19 1.095 16.425“ .847 .532
V20 1.123 5.442“ .814 .581
V21 .924 16.243“ .840 .542
V22 .934 18.362“ .905 .424
.... £3 23?. 123231 232 2;;
aﬂ‘ggﬂ‘m v25 .831 15.089“ .801 .598
V27 .801 11.681“ .666 .746
V29 .557 1 1.849“ .674 .739
V31 .679 9.809“ .580 .815
2:: 1.1:: 1:21;: :3 :2:
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V36 .891 11.770“ .695 .719
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Opportunities ' ' ,, ‘ '
V41 .663 10.333 .618 .787
V44 1.250 11.965“ .691 .723
Affective V45 1 .159 1 1 .663“ .678 .735
Organizational V46 1 .21 3 1 1 .566“ .673 .739
Commitment V47 1.230 13.382“ .750 .661
V48 1.524 17.208“ .888 .461
Continuance V52 1.202 12.311“ .723 .691
Organizational V53 1.298 15.419“ .863 .506
Commitment V54 .975 14.016“ .801 .598
V55 1.095 9.261“ .577 .817
V56 1 .024 9.766“ .603 .798
2131212322" V58 1.035 8.120“. .516 .856
Intent to Accept V59 1.639 15.440 .856 .516
V61 1.116 9.357“ .583 .813
V62 .877 7.856“ .503 .864
- Chl- .
Overall Flt square df p RMSEA 90 /. CI NNFI CFI
”ﬁzfremem 1887.581 952 <.001 .063 .059-.067 .861 .872

 

 

 

 

 

 

 

 

 

 

52

Structural Model

The next step of modeling involved estimation of structural parameters
and hypothesis testing (see Figure 2). Factor covariances of the nine model
constructs produced by the measurement model served as the input data for the
structural model. The analysis produced a non-signiﬁcant chi-square statistic (x2
= 9.283, 6 df, p < .158), indicating excellent model ﬁt (see Table 5). The Root
Mean Square Error of Approximation (RMSEA) of .047 and associated
conﬁdence interval (90 % Conﬁdence Interval (CI) = 000 - .102) also indicate
good model ﬁt. The incremental ﬁt indices are as follows: NNFI = .979 and CFI =
.997 with an SRMR of .018. Strong and distinct item-factor loadings were
produced for all model dimensions.

Since analysis of the structural model indicate good ﬁt, I now discuss
results of hypothesis testing as indicated by parameter estimates of the original

structural model (Figure 2).

53

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54

Table 5. Structural Model Results of Internship Conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paths Standardized Estimates (3:32;;
PCO_ER -> (+) JS_job .701 11.509*
PCO_ER 9 (+) JS_ pay .419 7.282“
PCO_ER -) (+) A00 .283 3.463“
PCO_ER e (+) coc .253 2223*
PCO_ER -> (+) PAC .707 12.743*
PCO_EE -> (+) JS_job .089 1.839
PCO_EE -> (+) A00 .041 .813
PCO_EE -> (+) PAC -.063 -1.157
PCO_EE -> H 000 -.341 4.826“
PCO_ER -> (+) CI_A .150 1.871
PCO_EE -> (+) CI_A -.049 -.934
33-) (+) JS_job .021 .392
53-) (+) A00 .149 2533*
ss-) (+) 000 .119 1.450
55-) (+) PCO_ER .697 15.338“
55-) (+) PCO_EE .415 7.198“
JS _iob -> (+) A00 .347 5270*
JS _job -) H 000 .146 1.595
JS_pay -> (+) A00 .065 1.403
JS_pay —> (-) 000 -.136 -2.102*
JS_job-) (+) CI_A .123 1.751
JS_pay-9 (+) CI_A .184 3.186“
ADC-9 (+) CI_A .388 6.134“
000-) (+) CI_A .252 5513*
PAC 9 (+) CI_A -.023 -.386
Overall Fit Ch" df p RMSEA 90% CI NNFI CFI
square
333”“ 9.283 6 .158 .047 .000 - .102 .979 .997

 

 

 

 

 

 

 

 

55

 

 

Hypothesis Testing

Most hypothesized relationships in the structural model (Figure 2) are
supported. Hypothesis testing results (Table 6) are presented in sequential
order, beginning with psycholOgical contract outcomes of employer and
employee obligations.

lnterns' perceptions of the extent to which employer obligations (PCO_ER)
were fulﬁlled is hypothesized to have a positive effect on job satisfaction with the
job and pay (H1a), affective and continuance organizational commitment (H1 b),
and perceptions of advancement opportunities (H1c). A positive and signiﬁcant
relationship is found between PCO_ER and JS_job (B = .701, p < .05) and
PCO_ER and JS_pay ([3 = .419, p < .05), supporting H1a. This suggests that
when interns feel that their internship employer has fulﬁlled the expected
obligations, they are more satisﬁed with their job and the pay. These ﬁndings are
consistent with Robinson and Rousseau’s (1994) ﬁndings regarding the positive
inﬂuence that perceived psychological contract fulﬁllment has on one’s job
satisfaction. Furthermore, psychological theory states that it may become very
difﬁcult for an employee to be motivated to perform, and obtain job satisfaction
when the employee can no longer rely on their employer to fulﬁll promised
inducements (Porter & Lawler, 1968). Hence, when employees (i.e. interns) feel
that their employer has fulﬁlled expected obligations or promises, it positively
inﬂuences their overall job satisfaction.

A positive and signiﬁcant relationship is indicated between PCO_ER and

affective organizational commitment (B = .283, p < .05) and PCO_ER and

56

Table 6. Hypothesized Relationships of lntemship Conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hypotheses Paths 33:33:?" (333%?) Sgpaoomé?)
H1a. PCO_ER -) (+) JS_job .701 11.509* 3
PCO_ER -> (+) JS__ pay .419 7282*
H1b PCO_ER 9 (+) A00 .283 3463* s
PCO_ER -> (+) 000 .253 2223* 8
H1O PCO_ER ') (+) PAC .707 12.743' 3
H28 PCO_EE 9 (+) JS_jOb .089 1.839 NS
H2b PCO_EE -> (+) A00 .041 .813 NS
H2O PCO_EE 9 (+) PAC -.063 4.157 NS
H2d PCO_EE 9 (-) COC -.341 -4.826'r S
H3a PCO_ER -> (+) CI_A .150 1.871 NS
H3b PCO_EE -> (+) CI_A -.049 -.934 NS
H48 $3“) (+) JS_jOb .021 .392 NS
H4b SS9 (+) AOC .149 2.533' S
H4c ss-) (+) coc .119 1.450 NS
H4d 33-) (+) PCO_ER .697 15.338* 8
H4e 88-) (+) PCO_EE .415 7.198' 3
H58 JS JOb 9 (+) AOC .347 5.270' S
H5b JS _job -> (-) 000 .146 1.595 NS
H6a JS_pay -) (+) A00 .065 1.403 H8
H6!) JS_pay -) (-) COC -.136 4.102" S
H7a JS_job-) (+) CI_A .123 1.751 NS
H7b JS_pay-) (+) CI_A .184 3186* 6
H88 AOC" (+) CI_A .388 6.134'
H8b CDC") (4') CI_A .252 5.513"
H9 FAQ -> (+) CI_A -.023 -.386 NS

 

57

 

continuance organizational commitment (B = .253, p < .05), thus supporting H1b.
This implies that when interns feel that their internship employer has fulﬁlled their
expected obligations, they will remain with their internship company because
they want to (affective organiZational commitment), but also because they may
feel they have invested too much time and effort in their intemshipfrntemship
company to leave (continuance organizational commitment). Psychological
contract theory suggests that when employers fulﬁll obligations to their
employees, trust in a reciprocal relationship between the employer and the
employee is formed. This, in turn, enhances employee’s level of commitment
(Rousseau, 1995).

Thus, for those interns who are remaining with the company because they
want to (affective organizational commitment), it appears that this trust in a
reciprocal relationship of employer fulﬁlled obligations enhances their sense of
belonging and loyalty to the company. This ﬁnding is consistent with Meyer and
Allen’s (1991) notion that affective commitment is an attitudinal process where
people come to think of their relationship with the organization in terms of value
and goal congruency. Conversely, since continuance organizational commitment
is based upon a person’s need to remain in the organization based on the costs
associated with leaving (Meyer & Allen, 1991), it appears that some of the interns
may, like full-time employees, feel the pressures associated with costs of leaving
or having no alternative job prospects.

For H1c, a positive and signiﬁcant relationship is found between PCO_ER

and perceptions of advancement opportunities (B = .707, p < .05). Support of this

58

hypothesis suggests that when interns feel that their internship company has
fulﬁlled the expected obligations, they are more likely to have positive
perceptions of the company’s promotion policies and advancement opportunities.
This ﬁnding is consistent with Sutton and Grifﬁn (2004) who found that when
employees felt that their employer had fulﬁlled promised obligations, then
employees’ perceptions of advancement opportunities were heightened.
lntems’ perceptions of the extent to which they feel they, themselves,
fulﬁlled psychological contract obligations (PCO_EE) is hypothesized to have a
positive effect on job satisfaction with the job (H2a), affective organizational
commitment (H2b), and perceptions of advancement opportunities (H2c). In
addition, I proposed that intems’ perceptions of the extent to which they felt they,
themselves, fulﬁlled psychological contract obligations (PCO_EE) would be
negatively associated with their continuance organizational commitment (H2d).
For H2a, a positive, but non-signiﬁcant relationship is found between
PCO_EE and job satisfaction with the job (B = .089, p > .05), and PCO_EE and
affective organizational commitment (H2b) (B = .041, p > .05). For H2c, a
negative, but non-signiﬁcant relationship is found between PCO_EE and
perceptions of advancement opportunities (B = -.063, p > .05). These results
suggest that just because interns feel they have fulﬁlled their expected
obligations to the company, it does not necessarily mean they will be any more
satisﬁed with their job, committed to the company or have a more positive
viewpoint regarding the potential for advancement opportunities within the

company. Additionally, it is possible that interns would try to fulﬁll expected

59

obligations, even if they are not satisﬁed with their job or committed to the
company, in order to receive positive feedback and a good reference letter at the
end of the internship; both of which are important for future employment
opportunities. Alternatively, it is pessible that this relationship was suppressed
due to the lack of discriminant validity between JS_job and PCO_ER.

Therefore, based on these results, it appears that perceptions of the
extent to which interns feel their employer has fulﬁlled the expected obligations
(PCO_ER) is a better predictor of job satisfaction with the job, affective
organizational commitment and perceptions of advancement opportunities than
PCO_EE. One explanation for this may be that interns perceive themselves as
powerless to effect changes in their employer’s behavior, and thus, simply adjust
their own perceived obligations (PCO_EE) in order to redress the situation
(Robinson et al., 1994).

The relationship between PCO_EE and continuance organizational
commitment (H2d) is signiﬁcant and negative, as expected (B = -.341, p < .05).
This ﬁnding indicates that interns in the current study feel as though they have
fulﬁlled expected obligations to their employer, but do not feel as though they
would remain with the organization based upon costs associated with leaving or
lack of alternative job opportunities. Psychological contract theory posits that
commitment to an organization is intertwined with maintaining a relationship of
consistency and good faith (Robinson, et al., 1994). Therefore, if the employee
knows that the company values the following employee obligations: willingness to

do a variety of job tasks, loyalty and volunteering to do non-required tasks on the

60

job, and the employee continually strives to fulﬁll those obligations, then helshe is
demonstrating value/goal congruency with the organization (i.e. affective
organizational commitment).

The third set of hypotheses proposes that interns’ perceptions of the
extent to which psychological contract outcomes of employer (PCO_ER) (H3a)
and employee (PCO_EE) (H3b) obligations were fulﬁlled will have a positive
effect on conversion intentions. For H3a, a positive and non-signiﬁcant
relationship is indicated between PCO_ER and conversion intentions (B = .150, p
> .05), suggesting that interns’ perceptions of employer obligations being fulﬁlled
is not a strong enough predictor of conversion intentions alone; thus, other
factors (i.e. job satisfaction and organizational commitment) need to be
considered.

For H3b, a non-signiﬁcant relationship between PCO_EE and conversion
intentions (B = -.O49, p > .05) is found. Intuitive logic could argue that if interns
willingly fulﬁll expected obligations to their internship company then this may
ultimately result in an increased chance for conversion (i.e. accepting a job offer
upon graduation). However, the insigniﬁcant relationship found between
employee obligations (PCO_EE) and conversion intentions in H3b suggests that
just because interns feel they have fulﬁlled expected obligations to the company,
it does not automatically translate into them being more likely to accept a job
offer for full-time employment upon graduation from their internship company.
This is consistent with ﬁndings by Robinson et al. (1994) who found that the

opportunity and investment costs incurred by employees through their continued

61

contributions (i.e. fulﬁlled obligations) and association with the ﬁrm was seen as
sufﬁcient payment regarding the reciprocal and social debt (Blau, 1964). This
instrumentality approach leads individual’s to overestimate their own
contributions and underestimate the costs incurred by exchange partners (Taylor
& Brown, 1988). Hence, this instrumental pattern of change may be especially
applicable to interns in the current study, given the self-serving biases that this
younger generation possesses. Additionally, employee perceptions regarding
contributions and entitlements may, to some extent, reflect individual
predispositions, consistent with an interactionist model of newcomer socialization
(Reichers, 1987).

Hypothesis 4a posits that supervisory support (SS) will have a positive
impact on job satisfaction with the job/work itself (JS_job). A positive but non-
signiﬁcant relationship (v = .021, p > .05) implies that interns in the current study
do not feel that supervisory support enhances their job satisfaction as strongly as
evidence suggests for full-time employees (Babin & Boles, 1996; Jamrog, 2002).
One explanation for this could relate directly to the nature of the internship and
the caveats for proper socialization. Research with full-time employees proposes
that 1) supervisors control the degree of structure, ambiguity and conﬂict, 2)
supervisors provide informal and formal feedback about employee performance,
and 3) supervisors often control rewards and possible job security (Krackhardt et
al., 1981); all three of which are particularly important for proper organizational
socialization (Van Maanen, 1975). For example, in their study of full-time

employees, Babin and Boles (1996) found that increased perceptions of

62

supervisory support signiﬁcantly increased job satisfaction (y = .41, p < .01).
Perhaps, due to the nature and structure of the internship (i.e. moving from one
functional area to another), interns in the current study required more guidance,
leadership and support (i.e. mentOringlcoaching) from their supervisors regarding
the job/work itself than they actually received. On the other hand, it is possible
that this relationship was suppressed due to the discriminant validity issue with
JS_job.

In H4b, I propose a positive relationship between SS and affective
organizational commitment (AOC). Positive and signiﬁcant support is found for
the relationship between SS and A00 (y = .149, p < .05), signifying that
supervisory support helps interns feel a sense of belonging to the company
(Clugston, 2000). The mutual attachment of the intern and the organization is
consistent with research on commitment that demonstrates a signiﬁcant
relationship between high emotional identiﬁcation with the organization (i.e. AOC)
and high degrees of organizational support (i.e. supervisory support) (Rousseau,
1995). Furthermore, empirical studies on supervisory support have consistently
found the effectiveness of the supervisor to be a signiﬁcant predictor of
organizational commitment (Caykoylu, Egri, & Havlovic, 2007; Krackhardt et al.,
1981)

In H4c, l hypothesize that SS will have a positive effect on continuance
organizational commitment (COC). Results indicate a positive but non-signiﬁcant
relationship between SS and continuance organizational commitment (COC)

(y = .119, p > .05). Again, since 000 presumably develops as employees

63

recognize that they have accumulated investments that would be lost if they were
to leave the organization or as they recognize that the availability of comparable
alternatives is limited (Meyer et al., 1993), it is apparent that 000 is less
dependent on what happens with the supervisor and more dependent on the
actions of one self. Thus it makes sense that the relationship between 000 and
SS is not supported.

lnterns’ supervisory support is posited to have a positive effect on
PCO_ER (H4d) and PCO_EE (H4e). Positive and signiﬁcant relationships are
found for both hypothesized relationships (y = .697, p < .05 and v = .415, p < .05,
respectively). These results are supported by Robinson and Rousseau (1994),
who state that perceptions of fulﬁlled psychological contract obligations are
dependent on a contract formed under speciﬁc conditions that is inﬂuenced by
ongoing interaction between the employee and organizational representatives,
such as a supervisor. Therefore, as suggested by psychological contract theory,
the longer the relationship endures and/or the more the intern and the supervisor
interact, with repeated cycles of fulﬁlled obligations and reciprocity, the broader
the array of contributions and inducements that might be included in the contract
(Rousseau, 1989).

Hypothesis 5a proposes that interns’ job satisfaction with the job (JS_job)
will have a positive effect on affective organizational commitment (AOC). This
hypothesis is supported (B = .347, p < .05), indicating that interns’ satisfaction
with the job/work itself signiﬁcantly contributes to their strong sense of

attachment with the organization (AOC) because their internship has proven to

64

be a satisfying experience (Meyer, et al., 1993). This is consistent with ﬁndings
from Caykoylu et al. (2007), who found that job satisfaction played a key role in
determining the levels of organizational commitment of healthcare employees
(nurses, paramedics, non—clinical personnel).

Since continuance commitment is expected to develop as employees
make investments (i.e. time and effort put into acquiring job-speciﬁc skills) that
would be lost or reduced in value if they left the organization, continuance
commitment is expected to be unrelated or negatively associated to job
satisfaction and job performance (Meyer et al., 1993). Consequently, in
hypothesis 5b, I propose that job satisfaction with the job (JS_job) will have a
negative effect on continuance organizational commitment (COC). Interestingly
enough, a non-signiﬁcant, positive relationship is found (B = .146, p > .05). A
likely explanation for the current study’s results is possibly due to the fact that
interns demonstrated low mean COC scores (M = 2.40); thus, regardless of their
level of satisfaction with the job (JS_job), these interns felt that they would have
little difﬁculty leaving their internship company if they wanted to.

Hypothesis 6a states that job satisfaction with pay (JS_pay) will have a
positive effect on AOC. A positive, but non-signiﬁcant relationship is found (B =
.065, p > .05), suggesting that for interns in the current study, pay does not have
a strong inﬂuence on their level of attachment with the organization. This is
similar to Cook et al.’s (2004) ﬁndings regarding intems’ perceptions regarding
their level of pay. They state that although money may contribute to intems’

decisions to accept the internship in the ﬁrst place and/or remain with the

65

company until their internship is over, it is not the overriding factor. This ﬁnding
also conﬁrms the relative importance of intrinsic versus extrinsic rewards
regarding the notion that it is not always about the money.

Hypothesis 6b posits that job satisfaction with pay (JS_pay) will have a
negative effect on continuance organizational commitment. A negative and
signiﬁcant result (B = -.136, p < .05) indicates that as satisfaction with pay
increases, the level of staying with the company because they feel they have to
(C00) decreases. These results imply that interns’ satisfaction with pay may be
a unique contributor to their low mean COC scores (M = 2.40) and their higher
mean affective organizational commitment (AOC) scores (M = 4.51). Fiorito et al.
(2007) lend some insight into this ﬁnding by noting that favorable exchanges
between the employer and the employee (i.e. pay) should strengthen employee
attraction to the employment relationship and increase an employee’s desire to
remain with the company (i.e. commitment). Moreover, since psychological
contract theory refers to reciprocal rights and obligations that individuals perceive
within exchange relations, it can also be used to understand commitment
(Rousseau & Wade-Benzoni, 1995). Therefore, because interns in the current
study have higher affective organizational commitment (AOC) and lower
continuance organizational commitment (000), it is logical that the relationship
between JS_pay and A00 is positive (H6a), and the relationship between
JS_pay and COO is negative (H6b).

Job satisfaction with the job (JSJob) (H7a) and job satisfaction with pay

(JS_pay) (H7b) were hypothesized to have a positive effect on conversion

66

intentions (CI_A). For H7a, a positive and non-signiﬁcant result is found (B =
.123, p > .05) and for H7b, a positive and signiﬁcant result is found (B = .184, p <
.05). These results indicate that for interns in the current study, JS_pay plays a
direct role in interns’ decision to accept a job offer for full—time employment upon
graduation from their internship company while JS_job does not. One
explanation for this may be due to the favorable exchange relationship (i.e. pay)
between the employer and the employee, as explained by psychological contract
theory (Rousseau, 1995). In addition, as Fiorito et al. (2007) suggest, favorable
exchanges between the employer and the employee (i.e. pay) have the ability to
strengthen employee attraction to the employment relationship and increase an
employee's desire to continue employment with the company (i.e. conversion
intentions).

For the next set of hypotheses, I propose that AOC (H8a) and COO (H8b)
will have a positive effect on conversion intentions. Positive and signiﬁcant
results are found for both hypotheses (B = .388, p < .05 and B = .252, p < .05,
respectiveIY); implying that interns’ desire to remain with the company because
they feel a sense of attachment and belonging to the organization (AOC),
combined with their time invested in the company (COC) plays a signiﬁcant role
in their decision to ultimately accept a job offer for full-time employment upon
graduation from their internship company. This is consistent with ﬁndings from
Bauer, Bodner, Erdogan, Truxillo, and Tucker (2007) regarding their meta-
analytic review of newcomer adjustment during organizational socialization.

They state that newcomer adjustment following organizational entry consists of

67

working through both task and social transitions. So, it is plausible that as the
interns in the current study transitioned from being organizational outsiders to
insiders, their level of commitment was enhanced. Furthermore, as supported by
organizational socialization theory, when newcomers successfully adjust to their
roles and work environment, they are more likely to have a strong attachment
(i.e. commitment) to the company, and should be less likely to quit (Wanous,
1 992).

In hypothesis 9, I posit that perceptions of advancement opportunities
(FAQ) will have a positive effect on conversion intentions. A non-signiﬁcant,
negative relationship is found (B = -.023, p > .05), meaning that PAO does not
affect conversion intentions. Intuitive logic could argue that as more positive
perceptions of advancement opportunities are formed, the more they would play
an inﬂuential role on conversion intentions. However, in the current study, interns
appeared to have more neutral perceptions of advancement opportunities (M =
3.52); thus, possibly contributing to the negatively low path coefﬁcient between
FAQ and CI_A. Perhaps interns took a more neutral stance regarding
advancement opportunities because they did not acquire enough knowledge
regarding promotion and advancement opportunities throughout their internship
experience. Additionally, it is possible that interns did not take a long-term view of
advancement opportunities and evaluated acceptance of an offer based on job
satisfaction and organizational commitment. Alternatively, since the relationship
between FAQ and CI_A is indirectly inﬂuenced by the relationship between

PCO_ER and FAQ (i.e. indirect effect), it is possible that the hypothesized path

68

coefﬁcient between FAQ and CI_A was suppressed due the discriminant validity
issue regarding PCO_ER.
A ﬁnal path model presenting only the signiﬁcant hypothesized

relationships of internship conversion is presented in Figure 3.

69

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70

CHAPTER 5
CONCLUSION

The purpose of this study was multi-tiered. My initial aim was to collect
baseline information regarding interns’ perceptions of psychological contract
outcomes of employer and employee obligations, supervisory support, job
satisfaction, and organizational commitment, and to determine what effects these
factors had on interns’ conversion intentions.

The second objective was to apply psychological contract theory and
organizational socialization theory to the study of interns. This is the ﬁrst study,
to the best of my knowledge that applies psychological contract theory to the
study of interns. Structural model results of the current study show a direct
relationship between 1) interns’ perceptions of psychological contract outcomes
of employer obligations and affective organizational commitment and 2)
organizational commitment (affective and continuance) and conversion
intentions. As such, I demonstrate that psychological contract theory is as
applicable to the employment relationship of interns, as it is for continuing full-
time employees.

The study of psychological contracts of interns is valuable because it
augments and extends organizational attachment constructs, such as affective
and continuance commitment. Furthermore, results of the current study indicate
that for interns, like full-time employees, organizational commitment is
signiﬁcantly associated with intem’s conversion intentions (i.e. intent to remain).

Commitment can be constructed as a variety of obligations that employees incur

71

as a result of the incentives they accept from employers. Consistent
conceptualizations of commitment as an affective attachment to the organization
(Meyer et al., 1993) or as an employee’s investment in the organization imply,
but do not directly delineate the role of obligations, reciprocity and fulﬁllment. In
addition, it is possible that obligations and their fulﬁllment may underlie
organizational commitment (Robinson & Rousseau, 1994) and organizational
socialization (Bauer et al., 2007). Hence, ﬁndings in the current study provide
initial support for the application of psychological contract theory and
organizational socialization theory to the study of interns.

Thirdly, since there is little research regarding interns and the impact that
internship experiences have on conversion intentions, my ﬁndings contribute
substantially to the limited research on the employment relationship regarding
intemsﬁntemships.

Additionally, in order to provide recommendations for employers who seek
to develop or improve an internship program, I asked interns a series of open-
ended questions regarding their lntemship experience. For example, when
interns were asked to rank the top ﬁve factors that would motive them to accept a
job offer from their lntemship company, the most cited reasons were:
competitive starting salary, hours, low stress, co—workers and the reputation of
the company. Conversely, when asked to rank the top ﬁve factors that would
motivate them to decline a job offer from their internship company, the most cited
reasons include: low starting salary, unclear career path, long hours (i.e.

nights/weekends), lack of potential to move up within the company and high

72

stress. In sum, based upon qualitative feedback from interns, pay appears to be
a signiﬁcant motivator behind intem's decision to accept or decline a job offer
from the company. Structural model results also indicate a direct relationship
between intems’ satisfaction with pay and their conversion intentions; implying
that salary is a contributing factor in interns’ future career decisions. Support for
this is also provided in the following quotes from interns in the current study
regarding their number one reason for accepting an offer:

“It paid well and was a job I wanted.”

“The prestige of the company and high salary.”

“They offered me the exact position I wanted at an above average

salary.”
Conversely, the following quotes confer the number one reason for interns’
decision to decline an offer:

“I had another offer that paid a little bit more and will allow me to
work overseas.”

“Bad location and low pay”

“I couldn’t afford to live off the salary that they were offering,
[combined with] the fact I had too much experience to start in the
position they were offering.”

I was also interested in ﬁnding out how many of the interns received a job
offer upon completion of the internship, and if so, did they accept it and why. In
the current study, about 87 (35%) of the interns received a job offer, 82 (33%) of
them did not, and 57 (23%) of them had offers pending. Of the 35% that

received job offers, 53 (21%) interns accepted the offer; which is quite a bit lower

73

than the target benchmark of 50—70% for internship conversion (Pederson, 2007).
Some of the interns that had accepted offers stated the following as their number
one reason for accepting the position:
“The corporate culture and sense of belonging was great. The staff
members really care about everything they do, and there are plenty of

opportunities to move up in the corporation if I work hard.”

“I like the people that I work for and there is a lot of potential and career
advancements with the company.”

“I felt like part of the company and knew that I could be successful there.

The starting pay was also high enough that I did not need to look around

for other alternatives.”

Overall, based upon qualitative feedback from interns in the current study,
it appears that work environment (i.e. co-workers, company culture and values),
reputation of the company, competitive pay, level of responsibility, potential for
continued growth, promotion and advancement opportunities and sense of
belonging (i.e. attachment or commitment) within the company are the driving
forces behind interns’ conversion intentions.

In regards to intems’ level of attachment or commitment, structural model
results in the current study also indicate how important it is for interns to feel a
sense of belonging or emotional attachment (i.e. affective organizational
commitment) to the company. This is demonstrated by the signiﬁcant
relationships between the following: psychological contract outcomes of
employer obligations (PCO_ER) and affective organizational commitment (AOC),
job satisfaction with the job (JS_job) and affective organizational commih‘nent

(AOC), and affective organizational commitment (AOC) and conversion

intentions (CI_A) (see Figure 3).

74

Conversely, some of the interns who received a job offer, but declined it
had this to say about their number one reason for doing so:

“They only wanted to pay me $10 an hour and I would have to move

myself all the way out to CO on my own. Plus, I would have to work

weekends and holidays. It was very upsetting because I loved working
there and the people were great!”

“A combination of the location and pay not quite being what I wanted, as

32:35 other interns and friends from my internship declining the offer as

“A competitive salary was not offered and I did not ﬁnd the job to be

satisfying.”

In general, for the current study, location, low pay, unclear career path, .
and job dissatisfaction appear to be the main factors preventing interns from
accepting an offer. Again, results of the current study’s structural model also
capture this by demonstrating signiﬁcant relationships between JS (with job and
pay) and organizational commitment (affective and continuance), and JS_pay
and conversion intentions. Henceforth, if companies are going to increase their
internship conversion rates, they need to take these factors into consideration
and make the necessary adjustments that are within their power to change.

For example, if companies want to enhance interns’ job satisfaction and
organizational commitment, in an effort to increase internship conversion, the
following adjustments should be considered: 1) Build a work environment that is
enjoyable and fulﬁlling, 2) Be ﬂexible in recognizing, understanding, and adapting

to individual needs and personal views, 3) Help individuals grow within the

company by providing coaching that focuses on job skills training and talent

75

development, and 4) Provide tuition reimbursement and/or innovative reward

programs (Frank, Finnegan, & Taylor, 2004).

Implications

Continued research is needed to assist companies in their efforts to
increase conversion rates of high-performing interns. As the 21"t century unfolds,
major changes will continue to occur within the workplace. One of the major
changes that businesses will have to overcome is the labor and talent shortages
issue; most of which is due to the large number of retiring baby-boomers and the
small number of the next generation entering the workforce. Hence, the Bureau
of Labor Statistics (2006) is projecting a labor shortage of 10 million workers by
2010. With this labor and talent shortage looming overhead, companies need to
focus more attention and energy on recruiting and retaining talented employees
(i.e. interns), and keeping them actively engaged. Since research shows that the
most successful source of new hires for many companies comes from their intern
pool (Sessions, 2006), companies and HR professionals need to implement new
strategies regarding the use of internships as a recruitment and retention tool.

Findings of the current study are particularly relevant to companies as
they develop and structure internship programs in an attempt to enhance their
conversion rates. Some strategies that could provide augmentation of lntemship
conversion and maximize the possibility of a successful lntemship program
include: 1) Treat interns as a part of the organizational team and invite them to
staff meetings, 2) Involve interns in project planning and ask for their ideas or

suggestions, 3) Hold interns accountable for projects and deadlines, 4) Assign

76

projects that are challenging, yet accomplishable, 5) Assign a supervisor or
mentor to each intern to provide the necessary guidance and training, and
6) Establish a process for permanent hire considerations and share that
information with interns (Coco, 2000).

Although internship programs serve many purposes and potentially create
positive outcomes for stakeholders (i.e. interns, organizations and
academicians), it should be noted that the needs and objectives of the students
must be satisﬁed for those programs to convert interns into committed, full-time
employees. For instance, in the current study, perceived fulﬁllment of
psychological contract outcomes of employer obligations (PCO_ER) was a better
indicator of job satisfaction (with the job/work itself) and perceptions of
advancement opportunities than was perceived fulﬁllment of psychological
contact outcomes of their own (the employees’) obligations (PCO_EE). In other
words, perceived fulﬁllment (or unfulﬁllment) of employer obligations is more
salient to employees’ job satisfaction than perceived fulﬁllment (or unfulﬁllment)
of their own (the employees’) obligations. Since obligations are based upon
beliefs of promise or debt, the failure of one party to fulﬁll its obligations to
another can expectedly erode the affected party’s beliefs in reciprocal obligations
(Robinson et al., 1994). Therefore, unfulﬁlled obligations by an employer may
affect not only what an employee feels he or she is owed by the employer, but
also what the employee feels he or she is obligated to offer in return.

In addition, both psychological contract outcomes of employer (PCO_ER)

and employee (PCO_EE) obligations inﬂuenced interns’ desire to remain with the

77

company because they wanted to (affective organizational commitment). These
results indicate that when interns feel their employer has fulﬁlled their expected
obligations, they may be more satisﬁed with their job and may be more
committed; which in turn, may increase the chances of interns wanting to remain
with the company and accept an offer for full-time employment upon graduation.

Results of the current study also indicate that psychological contract
outcomes of employer obligations (PCO_ER) has little direct impact on
conversion intentions alone; however, it appears that the effect of psychological
contract outcomes of employer obligations (PCO_ER) on conversion intensions
is mediated by job satisfaction (with the job/work itself and pay) and
organizational commitment. This supports the notion that if companies want to
convert choice interns into committed, full-time employees upon graduation, they
need to ﬁnd ways to continually enhance interns’ job satisfaction and level of
commitment (Dixon et al., 2005).

One way companies can do this is to structure the internship program in a
way that introduces new challenges (i.e. new tasks/job duties or skill sets) and
responsibilities (i.e. work deadlines, management) each week. By providing the
intern with the opportunity to learn new skills and have increased responsibilities
each week, it will allow them to more properly acclimate and socialize into their
work role without ovenrvhelming them; thus, creating a more enriched and
meaningful internship experience. Supporting this notion is the following quote
from an intern in the current study:

“I had an excellent experience there [internship company] where I
did the same work full-time employees did. It gave me a great

78

overview of what a career there would be like, and the responsibility
they gave me right from the start was great.”

Furthermore, in her qualitative study on business school interns, Rothman
(2007) found that interns wanted more speciﬁc, quality projects designed for
interns. They wanted challenging and interesting work that would provide them
with the opportunity to learn and contribute to the organization. In sum, job
challenge has been found to be a signiﬁcant factor in intems’ organizational
commitment (Dixon et al., 2005). Support for this is demonstrated by the
following quotes from interns (in the current study) regarding why they would
consider a future career with their internship company:

“I had a wonderful time working there [internship company] and I
feel that it was challenging and fun.”

“It has a friendly working environment and dynamic projects to
pursue.

Conversely, as one intern stated for why helshe would not consider a future
career with his/her internship company:
“I think I can ﬁnd a more challenging job in a more prestigious
environment.”
Additionally, after reviewing the individual job satisfaction items, it appears
that it is also important for interns to feel that their work was valuable (M = 4.04)
and worthwhile (M = 3.94), and that they felt a sense of accomplishment
regarding their job (M = 4.14). This suggests that organizations should focus their
energies on developing meaningful (and challenging) work experiences for

interns that provide personal and academic growth opportunities.

79

Furthermore, internships are a major investment on the part of the student
and employer. Although internships are different from full-time employment (i.e.
short-tenn, may be unpaid, Ieaming component, etc), employers still need to
provide interns with: 1) a clear understanding of what the interns are expected to
accomplish, 2) challenging assignments, 3) meaningful feedback regarding
performance on an on-going basis, 4) continued guidance (i.e. mentor or
supervisor), 5) clear communication regarding the expectations of the intern at
the on-set of the internship , and 6) adequate responsibility and meaningful tasks
that allow interns to contribute to the organization (Rothman, 2007).

In sum, ﬁndings of this study provide unique and valuable insight
regarding the recruitment and retention of interns. Since an increasing number of
employers are using internships as recruiting tools for future employees (Coco,
2000), identifying the key antecedents regarding conversion intentions (i.e.
psychological contract obligations, job satisfaction and organizational
commitment) of interns provides important implications and/or strategies for HR

professionals regarding the development and structure of internship programs.

Limitations and Future Research

As with most survey research, a common method bias may be present
since all of the data were collected using self-report measures. This type of self-
report bias is likely to be present in behavioral research studies where the data
for both the predictor and the criterion variables are obtained from the same
person in the same measurement context using the same item context and

similar item characteristics (Podaskoff, MacKenzie, Lee, & Podaskoff, 2003).

80

Therefore, in order to control common method variance through procedural
remedies, one must identify the commonalities between the predictor and the
criterion variables and eliminate or minimize the bias through the design of the
study. However, since the constructs in the current study asked for interns’
perceptions of fulﬁlled or unfulﬁlled obligations, attitudes, and conversion
intentions, self-report data are appropriate for this study (Clugston, 2000).

In addition, due to the cross-sectional nature of the data collection,
drawing causal inferences among constructs may not be entirely appropriate.
Thus, in order to minimize common method bias and strengthen the ability to
draw causal inferences, future research will consider the following remedies: 1)
obtain measures of the predictor and criterion variables from different sources, 2)
create a temporal separation by introducing a time lag between the measurement
of the predictor and the criterion variables, and 3) collect data at multiple times to
create difference scores.

This study was exploratory. More research is needed to test and reﬁne
item measures for the variables developed and modiﬁed in this study. Although
reliability coefﬁcients and variance extracted for most of the scales meet or
exceed acceptable levels of .70 or higher (Nunnally, 1978), development of these
scales can only be viewed as preliminary. Testing of these scales with a larger
sample size and a broader population of interns in a variety of industries will be
helpful in attaining more reliable and valid measures (i.e. discriminant validity) of
each construct as they relate to the lntemship experience. Reﬁnement of these

scales will assist in the attainment of more accurate data regarding the nature of

81

the internship relationship. This will enhance our understanding regarding the
distinct differentiation between lntemships and full-time jobs. More speciﬁcally, I
posit that supervisory support, pay, and continuance organizational commitment
will lend further insight into the unique differences that exist between the nature
of internships and full-time employment relationships.

The proposed conceptual and structural models of internship conversion
were an initial effort to determine the relationships between psychological
contract outcomes of employer and employee obligations, supervisory support,
job satisfaction with the job/work itself and pay, perceptions of advancement
opportunities, organizational commitment and conversion intentions. Thus,
continued research is needed to test the structural model in various
organizational contexts. Attaining more information regarding internship
conversion intentions and its antecedents will yield richer information regarding
the salient motivators that contribute to converting interns into committed, full-
time employees. This will also yield richer information on relationships among
variables and the tested constructs by adding more in-depth and interesting
ﬁndings among interns in different organizational contexts. These ﬁndings will
also contribute needed depth to the literature regarding internship experiences
and their effect on lntemship conversion (Rothman, 2007; Cook et al., 2004)

An immediate extension of this research includes testing the structural
model across multiple groups. Multiple groups will be created using the ﬁlter of
“hours worked". For the current study, I included only those interns who worked

26 or more hours, in hopes of capturing an internship experience that was more

82

closely related to a full-time employee's position. This multi-group analysis will
provide further insight as to the “tipping point" (Gladwell, 2002) regarding the
effect that number of hours worked has on perceptions of psychological contract
outcomes of employer and employee obligations, level of commitment and
ultimately, conversion intentions. I posit that this information will provide
important implications for companies regarding the structure, development, and
potential re-organization of internship programs.

Additionally, since one of the primary functions of the internship is to
provide reality testing during college to decrease the amount of reality shock one
encounters while entering the world of work upon graduation (Knouse et al.,
1999), future research should examine what aspects of the internship provide the
most realistic expectations (i.e. work deadlines, dealing with problems on the job,
interaction with co-workers, dealing with customers, etc). According to Gault et
al. (2000), internships allow students to bridge the gap between career
expectations developed in the classroom and the reality of full-time employment
in the work world. In their of study business college interns, Gault et al. (2000)
provide empirical evidence to support earlier perception-based research
suggesting that interns would be better prepared to enter the job market and
would enjoy greater job satisfaction than non-interns. Additionally, in her study of
nursing students, Atkins (1980) found that the students who had been nursing
interns had higher initial job satisfaction and lower turnover than nurses who had
not been interns. Hence, further investigation of the relationship between realistic

job previews (RJP’s), job satisfaction, organizational commitment and internship

83

conversion may shed some light on how to increase job satisfaction and reduce

high turnover of new job holders.

84

Appendices

85

Appendix A:

On-line Survey Instrument

86

 

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96

 

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97

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98

Appendix B:

Cover Letter

99

DEAR INTERN:

We are partnering with Michigan State University (MSU) in an Online lntemship survey. MSU is
trying to identify linkages between retailers’ human resource management techniques and
internship conversion. To achieve this goal, MSU needs to collect data from college
students who completed an internship during 2006. This study is conducted as a ﬁnal stage
in the pursuit of Mrs. Jessica Hurst’s Ph.D. in Retailing; therefore we hope you will help her out.
Michigan State University houses the, largest undergraduate retailing program in the nation and
the only Ph.D. program in Retailing.

Your input is valuable to the project and we appreciate your participation in this survey that
should take about 10-15 minutes to complete. The purpose of the survey is to gather information
that will help retailers plan effective human resource management strategies related to
internships. By having a better understanding of the retailer’s organizational environment, MSU
hopes to better prepare the retailing majors for their careers. Likewise, the results will provide a
basis for implementing strategies that may have productive results for the company.

Your participation in this survey is completely voluntary. There are no right or wrong answers to
any questions. If you choose to participate, you may choose to not answer a question if you
desire. Your privacy will be protected to the maximum extent allowable by law. Your participation
will be conﬁdential, and you must be 18 years or older to participate in this study. All of your
answers will be anonymous. Responses will be combined so that individual responses cannot be
isolated. Only the principal investigators at MSU will have access to the data.

As an incentive for your participation, you can choose to be entered in a rafﬂe for a
chance to win 1 of 5, :50 Visa Check Cards. At the end of the survey, we will ask for an email
address so that we can contact you if you should win. If you choose to enter your name/email
address into the drawing for a $50 Wsa Check Card, the survey is no longer anonymous at that
point; however, your responses will remain strictly conﬁdential.

Please take a few minutes to answer the survey by clicking on the following URL or cutting and
pasting it into your browser.

http://www.surveymonkeycom/s.asp?u=83963547480
PLEASE NOTE THAT:

so Individual responses are strictly CONFIDENTIAL and NO arson within your intern company
is able to see any of your responses.
0:0 Responses are only used and reported in a summarized form.

If possible, MSU would like to receive your completed survey by May 1", 2007. if you have any
questions about the survey or problems using the form, please contact Dr. Linda Good, Professor
of Retailing (GOODL@msu.edu) or Jessica Hurst (HURSTJL3@msu.edu) Also, if you would
prefer to receive a paper copy of the survey, just email Mrs. Hurst and she will send one to you. If
you have any questions or concerns regarding your rights as a study participant, or are
dissatisﬁed at any time with any aspect of this study, you may contact - anonymously, if you wish
- Peter Vasilenko, Ph.D., Director of the Human Subject Protection Programs at Michigan State
University, by phone: (517) 355-2180, fax: (517) 432-4503, email: irb@msu.edu, or regular mail:
202 Olds Hall, East Lansing, MI 48824.

Sincerely,

Linda K. Good, Professor - Retailing Jessica L. Hurst, Ph.D. Candidate - Retailing
Phone: 517-355-1282 Fax: 517-352-1058 Phone: 517-267-8490

373 Com Arts Building 366 Com Arts Building

East Lansing, MI 48824-1030 East Lansing, MI 48824-1030

Michigan State University Michigan State University

100

Appendix C:

Item Content for Measurement Model Constructs

101

 

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110

Table 10. Largest Standardized Residuals And Cross-Loadings of items Deleted
During Confirmatory Factor Analysis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cross-Loaded Variables Standardized Residual Estimate (C)

V1, V2 .621
V1, V34 .517
V1, 36 .505
V1, V33 .455
V1, V35 .452
V2, V36 .433
V2, V34 .418
V2, V33 .381
V2, V35 .376
V30, V27 .326
V51, V45 -.322
V51, V26 -.301
V51, V42 -.296
V55, V42 -.288
V35, V42 .272
V59, V43 .269
V39, V6 -.263
V51, V4 -.260
V51, V30 -.258
V51, V23 -.256

 

 

 

 

111

Table 11. Standardlzed Estimates of Items Deleted During Conflrmatory
Factor Analysis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable Standardized Estimate (A)
V1 .412
V2 .371
V4 .434
V13 .468
V26 .514
V28 .481
V30 .453
V32 .448
V39 .462
V42 .572
V43 .776
V49 .601
V50 .452
V51 .647
V57 .764
V60 .472

 

 

 

112

References

113

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