1. Introduction
Retail employees deliver products or services in a polite and sincere manner, and thus play an important part in a retail company’s performance. Moreover, they interact with individual customers and attempt to establish and develop a relationship with customers (Bitner, Booms, & Mohr, 1994). However, retail employees control and adjust personal emotions to achieve job performance (Ashforth & Humphrey, 1993). The artificial control of emotion generates a conflict between the emotions that employees experience and the emotions they feel they should express, which creates stress (Grandey, 2003). If companies fail to manage retail employees’ emotion, it will likely trigger a decline in performance that would lead to negative customer relationships and increase employee turnover (Zablah, Franke, Brown, & Bartholomew, 2012).
Can a retail industry, which relies on its human resources, prevent the loss of quality employees and still maintain excellent customer relations? Understanding employee emotions and what they feel can answer this question. Previous research shows that employees’ positive emotions positively affect motivation and performance (Bakker & Demerouti, 2008). This research focused on using the job demands–resources (JD–R) model to identify which factors affect retail employees’ emotions. The JD–R model is a theory that categorizes variables of job contexts into job demands and job resources. The theory can then explain the effects of relevant factors on emotion (burnout or engagement) and performance. Thus, it is related to employees’ emotions and well-being.
Job demands represent the job-related physical and mental effort that a company consistently demands of its employees. Job resources represent a job characteristic that can lead to a decrease (burnout) and/or increase (engagement) in job performance. As such, job demands and job resources affect the burnout and engagement of an employee and other staff as well (Bakker & Demerouti, 2007). From a JD–R model perspective, job demands and job resources of a retail employee may vary considerably. Previous research using this model only considered a company’s general physical, social, and organizational factors, while research reflecting an individual’s proclivity was limited (Bakker, ten Brummelhuis, Prins, & van der Heijden, 2011; Hu, Schaufeli, & Taris, 2011). Therefore, this research establishes entrepreneurial proclivity as one of the job resources in order to examine its effect on job engagement and satisfaction.
Considering the JD–R model, entrepreneurial proclivity can be the predisposing factor that enhances job engagement. In entrepreneurial proclivity, “innovativeness” refers to the tendency to develop new processes to resolve problems and “proactiveness” refers to the inclination to think optimistically and act in a goal- and future-oriented manner. In addition, risk-taking refers to the tendency to invest resources by willingly accommodating risks in spite of unclear performances (Zehir, Gurol, Karaboga, & Kole, 2016). Such personal traits—that is, individuals’ senses that can successfully control and exert influence on occupational environment—are personal resources (Hobfoll, Johnson, Ennis, & Jackson, 2003). Furthermore, previous studies mention personal resources as one of the job resources that have positive effects on job performance (Xanthopoulou, Bakker, Demerouti, & Schaufeli, 2007). However, these studies lack empirical evidence for the effects of entrepreneurial proclivity on retail employees. Even though De Clercq and Rius (2007) identified the effects of entrepreneurial proclivity on employees as a characteristic of an organization, the current study is different because it examined the effects of entrepreneurial proclivity on individuals as a personal trait.
To summarize, this study aimed to identify the effects of entrepreneurial proclivity subfactors on retail employees’ job engagement and job satisfaction. Through it, whether entrepreneurial proclivity becomes a job resource for retail employees as a personal resource will be examined.
2. Theoretical Background
2.1. The Job Demands–Resources Model
The JD–R model explains which factors influence the burnout and engagement felt by employees and the outcomes. Demerouti, Bakker, Nachreiner, and Schaufeli (2001) stated that burnout not only emerges from service jobs, but also from other ordinary job situations. That is, when there are limited job resources, satisfying great demands requires more effort. This depletes energy, leading to burnout from low motivation. Thus, employees can experience burnout in a variety of job situations. Here, job demands refer to the elements of resource loss aspect by employees who constantly demand mental or physical efforts in physical, mental, organizational, and social aspects. For instance, physical environment in negative aspect, time pressure, and customer interaction in emotional aspect are the elements of job demands. Such job demands require high efforts by employees, and become stressful elements for employees if there is weak or no compensation. Moreover, job resources reduce psychological and physiological expenses related to job demands, help with achievement of job objectives, and apply positively to personal growth and development. This has to do with psychological, physical, organizational, and social aspects in an occupation; and so diverse factors, such as high salary, career opportunity, and support by superiors and colleagues emerge as job resources (Bakker & Demerouti, 2007).
As mentioned previously, the JD–R model can classify job status of employees into job resources and job demands. Moreover, the elements belonging to the four categories— demand, resource, engagement, and burnout—influence job results (Demerouti et al., 2001; Schaufeli & Bakker, 2004). This means that two psychological processes—motivation or occupational pressure toward employees—are implied. The first psychological process—strain process—involves burning out resources by not allowing employees to, or distracting them from, accumulation of resources. The second psychological process is the motivational process that induces motivation by allowing employees to obtain and accumulate resources. Job demands and job resources not only intervene in respective psychological processes, but also give rise to a buffering effect by engaging in these processes (Bakker & Demerouti, 2007). Therefore, it is crucial to understand and manage the factors of job demands and job resources.
Personal resources—the individual capability of controlling and exerting influence on the environment—belong to job resources (Van Wingerden, Derks, & Bakker, 2017). Previous studies mentioned that personal resources not only assist employees in overcoming stress, but act positively toward mental well-being (Xanthopoulou et al., 2007). Even though the JD–R model focuses on work characteristics as a main factor that influences job engagement or burnout, personal resources can precede job resources and job demands. Since personal resources become the determinant of an individual’s understanding, responding to and developing the environment and personal resources ultimately create a positive work environment (Kohn & Schooler, 1982; Xanthopoulou et al., 2007). In this sense, understanding which tendency plays the role of job resources as personal resources is an important topic of discussion.
2.2. Entrepreneurial Proclivity
Entrepreneurial proclivity is derived from entrepreneurship. Entrepreneurship is the activity of perceiving opportunities through creativity and individuality in uncertain situations and pursuing performance through innovation (Zehir et al., 2016). Ever since Schumpeter (1934) stated entrepreneurship, and being a social skill that is used to target diverse goals, it has been applied in a variety of research fields, subjects, and situations (Welter, Baker, Audretsch, & Gartner, 2017). Early studies on entrepreneurship have focused on individual entrepreneurial traits (McClelland, 1961), but more studies now focus on its process or behavioral aspect (Lerner, Hunt, & Dimov, 2018). In addition, the extent of analyses is diversifying. Earlier, entrepreneurship was applied to entrepreneurs or CEOs. However, it is currently not only being applied to group-level departments and overall organization levels, but also employees (García-Sánchez, García-Morales, & MartínRojas, 2018; Hatak, Harms, & Fink, 2015).
Research on entrepreneurial proclivity, however, focuses on the individual perspective rather than the organization or company perspective. It is called proclivity, tendency, or preference as individuals seeking new opportunities are not bound by controllable resources (Stevenson & Jarillo, 2007). In other words, an individual with proclivity seeks innovation, takes risks, and demonstrates leadership by meeting challenges courageously. Scholars have differing views on the factors that determine entrepreneurial proclivity, but they generally comprise innovativeness, risk-taking, and proactiveness.
Miller (1983) claimed that innovativeness, proactiveness, and risk-taking are the components of entrepreneurial proclivity, while Covin and Slevin (1989) studied entrepreneurial proclivity by classifying it into innovativeness, proactiveness, and risk-taking. Lumpkin and Dess (1996) added competitive aggressiveness and autonomy to the three components stated by Miller (1983) and Covin and Slevin (1989). Even though the elements of entrepreneurial proclivity differed slightly, numerous studies on it consider innovativeness, proactiveness, and risk-taking to be key factors (Mason, Floreani, Miani, Beltrame, & Cappelletto, 2015).
Innovativeness refers to an attitude of dealing with matters actively, with a creative mind and new ideas (Peters & Waterman, 1982). Individuals with this proclivity create new and improved processes over established ones. In addition, entrepreneurial proclivity strays from existing technologies and customs; it produces outcomes surpassing the existing status quo (Kimberly & Evanisko, 1981). Similarly, retail employees with high innovativeness strive to discover innovative solutions after going beyond the existing methods in terms of work performance. They suggest ideas, processes, products, services, and work-related individual roles to organizations (De Jong, Parker, Wennekers, & Wu, 2015). Innovativeness is the most important element in entrepreneurial proclivity (Arzubiaga, Kotlar, De Massis, Maseda, & Iturralde, 2018).
Risk-taking refers to the will to resolutely meet challenges while accepting the uncertainty of the results (Sexton & Bowman, 1986). Risk-takers tend to enjoy the adventure of achieving a goal even if the risk is potentially greater than the outcome (Lumpkin & Dess, 1996). Thus, an individual or an organization with entrepreneurial proclivity invests resources even if success is uncertain (Zhai, Sun, Tsai, Wang, Zhao, & Chen, 2018). From the perspective of retail employees, risk-taking leads to behaviors that help actively resolve problems relevant to work in order to accomplish high work performance (Dess & Lumpkin, 2005). To achieve this, they embrace and experiment with new ways of thinking, procedures, and skills. Even if such behaviors are unlikely to resolve problems and likely to fail, retail employees seek active challenges and opportunities (Zhai et al., 2018).
Proactiveness implies a proclivity to view the future with optimism and to work with purpose. A proactive person also tends to be competitive and work actively in anticipation of a positive future and outcome in mind (Lumpkin & Dess, 1996). Individuals with high proactiveness tend to adopt active strategies and behaviors so as to excel over competitors (Zhai et al., 2018). Retail employees with high proactiveness act spontaneously and actively take part in organizing efforts. They preoccupy the initiative in order to acquire new opportunities related to work and attempt to lead others. They demand and act such that the organization’s internal environment is transformed, and it can respond to its external environment (De Jong et al., 2015).
2.3. Relationship between Entrepreneurial Proclivity and Job Engagement.
When retail employees perform work and problems occur in the work process, innovativeness enables work performance ability through creative thinking or discovery of solutions. Innovativeness motivates individuals to enhance work capability and improve work-related skills (Zhai et al., 2018). Through this process, retail employees can create and master new knowledge, which can enhance their work ability (Menon & Varadarajan, 1992).
Risk-taking deals with the situation of accepting and implementing new knowledge, skills, and procedures. Retail employees must display new services to satisfy customer demands, which keep evolving (Kohli & Jaworski, 1990). They must thus decide on whether to use uncertain external information and skills. Since retail employees who exhibit high risk-taking have relatively low anxiety toward new external information and skills, they can embrace them and offer new services. Ultimately, risk-taking assists development of work ability by improving innovativeness (Zhai et al., 2018).
Retail employees with high proactiveness focus on accomplishing higher performance than others do (Zhai et al., 2018). This leads to continuous motivation for personal competency reinforcement, leading to active obtainment of information, knowledge, and work-related skills. Eventually, high proactiveness of retail employees leads to behavior such as spontaneously improving work situation or strengthening capability (Parker & Collins, 2010). As examined so far, entrepreneurial proclivity of retail employees plays the role of personal resources as the motivational tendency that develops individual competency related to work. Since the factor of personal resources reduces stress and motivates the transformation of work situations and environment, it plays the role of job resources (Xanthopoulou et al., 2007). In this sense, the factors of entrepreneurial proclivity will improve job engagement. Accordingly, this research sets the following hypotheses:
H1a: Innovativeness will have a positive effect on job engagement.
H1b: Risk-taking will have a positive effect on job engagement.
H1c: Proactiveness will have a positive effect on job engagement.
2.4. Relationship between Entrepreneurial Proclivity and Job Satisfaction.
Regulating emotions is an important aspect of retail employees’ jobs, which customers also expect (Molino, Emanuel, Zito, Ghislieri, Colombo, & Cortese, 2016). The obligation to express positive emotions entails a high psychological expense, which leads to stress and burnout (Wharton, 1993). In spite of this, retail employees with high entrepreneurial proclivity actively participate in work and willingly take the trouble of improving work performance style in order to generate better outcomes (De Jong et al., 2015). This is because such employees can self-regulate emotions without being influenced by their work environment because entrepreneurial proclivity, in turn, enhances their internal loci of control (Miller, 2015). The internal loci of control that is improved through entrepreneurial proclivity enhances self-efficacy, self-esteem, and passion toward work (Arora, Haynie, & Laurence, 2013). The motivation to pursue goals leads to high performance and satisfaction (Luthans & Youssef, 2007). Eventually, entrepreneurial proclivity is anticipated to be related to performance, satisfaction of work and life, career improvement, and other positive outcomes. Accordingly, this research sets the following hypotheses:
H2a: Innovativeness will have a positive effect on job satisfaction.
H2b: Risk-taking will have a positive effect on job satisfaction.
H2c: Proactiveness will have a positive effect on job satisfaction.
2.5. Relationship between Job Engagement and Job Satisfaction.
Reducing or removing factors that negatively affect individuals does not always lead to positive emotions or activities. It is therefore important to only acknowledge relevant factors that influence employees’ motivation and positive activities that achieve outcomes (Bakker & Schaufeli, 2008). A working engagement is a positive emotion when employees relate to their duties, since motivation is generated by job resource factors. An employee with high work engagement is challenged and absorbed in his/her work. They are industrious and generate many positive outcomes (Bakker & Demerouti, 2008).
Job engagement includes vigor, dedication, and absorption in work. Vigor is seen as both an exercise of high-level energy and cognitive therapy while employees complete tasks. Dedication means that employees engage in their duties with fervor and passion, while absorption means that employees are absorbed in their duties and are not easily decoupled from their work (Schaufeli & Bakker, 2004). Employees with these characteristics show high passion and energy for their duties with great focus on their work (May, Gilson, & Harter, 2004). This work engagement comes into employees’ positive emotions and may positively affect other factors, such as job satisfaction and organizational absorption (Schaufeli & Bakker, 2004). Accordingly, this research sets the following hypothesis:
H3: Work engagement will have a positive effect on job satisfaction.
3. Research Methodology
3.1. Data Collection and Survey Sample Characteristics
This research collected data to examine the effect of entrepreneurial proclivity on job engagement and satisfaction from retail employees in the distribution industry in the Republic of Korea. Data was collected through an online survey agency. The survey respondents were not limited to a certain area or organization in Korea, and individuals who had agreed to participate were included in the survey. In order to choose survey targets, this study requested participants to select their occupation. Those who were not retail employees were unable to take part in the survey. Then, individuals who selected the retail industry among a variety of industries were targeted.
A total of 224 people responded to this survey, comprising 130 men (58%) and 94 women (42%). By age demographic, 54 were 20~29 years (24.1%), 70 were 30~39 years (31.3%), 63 were 40~49 years (28.1%), and 37 were 50~59 years (16.5%). By employment years of service, 36 were less than 1 year (16.1%), 60 between 1~4 years (26.8%), 54 between 4~7 years (24.1%), 27 between 7~10 years (12.1%) and 47 with more than 10 years of employment service (21%).
3.2. Measurement of Variables
The variables were modified from the criteria of similar previous research. Entrepreneurial proclivity was assessed by the seven items developed by Matsuno, Mentzer, and Özsomer (2002). Innovativeness was measured by two items (E.g., “When it comes to problem solving, I value creative new solutions more than the solutions of conventional wisdom”). Risk-taking was measured by three items (E.g., “I tend to reduce risk rather than change (R)”). Proactiveness was measured by two items (E.g., “I think various changes related to work will have positive effects on me”).
Job engagement was assessed by nine items developed by Schaufeli, Bakker, and Salanova (2006) (E.g., “At work, I burst with energy”). Job satisfaction was assessed by three items developed by Jaramillo, Grisaffe, Chonko, and Roberts (2009) (E.g., “All in all, how satisfied are you with your present line of work?”). All items were evaluated on a five-point scale, ranging from 1, meaning strongly disagree, to 5, meaning strongly agree.
4. Analysis Results
4.1. Measurement model
Confirmatory factor analysis was performed to verify the reliability and validity of each measurement question by the configuration concept (Hair, Black, Babin, Anderson, & Tatham, 2006). To confirm convergent validity, composite reliability and average variance extracted was examined. In general, the standard of reliability was 0.7 or more. Convergent validity is achieved when composite reliability is 0.7 and average variance extracted is 0.5 or more (Fornell & Larcker, 1981; Nunnaly, 1978). The result of confirmatory factor analysis showed that all indicators exceeded the standard, and thus achieved convergent validity of composition concept (see [Table 1]). Meanwhile, discriminant validity was evaluated by verifying whether the squared correlation between the composition concepts was less than the average variance extracted or, conversely, the square root of the average variance extracted was more than the coefficient correlation of composition concept (Fornell & Larcker, 1981). Upon examination, it was confirmed that the coefficient correlation of composition concept was less than the square root of average variance extracted, and thus achieved discriminant validity. Thus, all variables were included in the analysis (see Table 2).
Table 1: The entrepreneurial proclivity dimensions in literature
In the previous study, entrepreneurial proclivity was identified from the perspective of the company, but this study was confirmed from the perspective of the employees.
Table 2: Scale items and confirmatory factor analysis results
χ2 =285.96, df=142, p=.00, GFI=.887, CFI=.945, TLI=.934, RMSEA=.067, RMR=.030
Note. All factor loadings are significant (p< .01); CR= composite reliability, AVE= average variance extracted
4.2. Hypotheses testing
The fitness of the research model suggested by this study shows that it was acceptable (χ²=285.96 (df=142, p=.00), GFI= .887, CFI= .945, TLI= .934, RMR= .030, RMSEA= .067). The results confirmed that innovativeness (β = 0.469, p<0.01) and proactiveness (β=0.167, p<0.05) of retail employees’ entrepreneurial proclivity had a positive effect on job engagement. Risk-taking, however, was not statistically significant (β=0.093, p>0.05). Thus, H1a and H1c were accepted, but H1b was rejected. Next, whether retail employees’ entrepreneurial proclivity affects job satisfaction was verified. Innovativeness (β=0.243, p<0.05) and proactiveness (β=0.482, p<0.01) were demonstrated to affect job satisfaction. Risk-taking (β=0.088, p>0.05), however, did not affect job satisfaction at all. Accordingly, H2a and H2c were accepted, but H2b was rejected. Finally, job engagement had a positive effect on job satisfaction (β =0.248, p<0.01), thus, H3 was supported. Confirmatory factor analysis and hypothesis verification was conducted through the structural equation model.
4.3. Mediating effects of job engagement
Furthermore, based on innovativeness and proactiveness, whose statistical significance has been verified, this study verified the mediating effects that lead to job engagement and job satisfaction. This study identified that innovativeness and proactiveness enhanced job engagement, which, in turn, influenced job satisfaction. Thus, innovativeness and proactiveness are expected to influence job satisfaction by mediating job engagement. This direction coincides with the existing studies on the JD–R model.
Regarding the verification of the mediating effect, Preacher and Hayes (2004) suggested that there are a number of cases in which a simple mediating effect did not accomplish normal distribution or t-distribution, and they suggested verifying the mediating effect based on bootstrapping. Bootstrapping is identifying the existence of mediating effect is not the result arising from random error by identifying the significance of mediating effect with respect to respective virtual random sampling. This study verified the mediating effect through the bootstrapping analysis method based on the simple mediation procedure devised by Preacher and Hayes (2004). The bootstrap resamples were set as 10,000.
In the analysis, the indirect effect of job engagement, which mediates innovativeness and job satisfaction, was 0.1325 and the confidence interval did not include 0. Moreover, in the Sobel test, since the Z-value was 3.9918, it was significant at p< .01. The indirect effect of job engagement, which mediates proactiveness and job satisfaction, was 0.0876 and the confidence interval did not include 0. Going further, since the Z-value was 3.3313, it was significant at p< .01. Therefore, job engagement mediates the effects of innovativeness and proactiveness with regard to job satisfaction (see Table 3).
Table 3: Discriminant validity results
Note. **p < 0.01; the number in the diagonal is the square root of the AVE
Figure 1: Results of the hypotheses
Note. **p < 0.01, *p < 0.05
5. Conclusion
5.1. Theoretical implications
Using the JD–R model, this study examined whether an entrepreneurial proclivity affects job engagement and satisfaction, which are retail employees’ job-related positive aspects; and whether job engagement effects job satisfaction. The study led to the following findings. First, innovativeness and proactiveness of retail employees’ entrepreneurial proclivity had a positive effect on job engagement and job satisfaction, but risk-taking did not affect either job engagement or job satisfaction. Second, job engagement had a positive effect on job satisfaction.
This study contributes to the retail literature by applying the concept of entrepreneurial proclivity in the retail employee context. Owing to the influence by retail employees, the significance of emotional management of retail employees is emphasized. Previous studies took into account physical, social, and organizational factors for emotional management of employees, while studies on individual preferences are limited (Jung & Yoo, 2017; Yoo, Arnold, & Frankwick, 2014). Entrepreneurial proclivity is an individual preference that strongly influences occupational behaviors (Gupta, Niranjan, Goktan, & Eriskon, 2016), but how it is applied to the emotional aspects of retail employees has not been explained so far. Moreover previous research relating to entrepreneurship focused only on the organization or company. This study puts forward empirical evidence that identifies the effect of entrepreneurial proclivity as a job resource that influences job engagement and job satisfaction in the JD–R model. Thus, this study surmounts the limitation of prior studies by examining entrepreneurial proclivity from the aspect of retail employees.
Table 4: Mediating effect tests
Note. **p < 0.01, N = 224, Bootstrap resamples 10,000.
5.2. Managerial implications
There are several practical implications to this study. First, innovativeness and proactiveness of retail employees appear to have a positive effect on job engagement and satisfaction. This implies that the effort to develop retail employees’ entrepreneurial proclivity may improve emotional stability. Since retail employees’ work requires contact with customers, they must respond to issues that arise during the course of their interaction. Customers’ negative responses owing to inadequate handling of problems have negative consequences toward the emotional aspect of retail employees and directly influence job outcomes (Grandey & Melloy, 2017). Innovativeness and proactiveness enable better ways of handling problems that arise from job performance, leading to lower stress and greater job engagement. Moreover, it is confirmed that job engagement positively affects job satisfaction. The results show that educational programs can improve entrepreneurial proclivity by improving retail employees’ welfare and emotional stability. In addition, the autonomy of retail employees as related duties is a factor in improving entrepreneurial proclivity (Hornsby, Kuratko, & Zahra, 2002). As a result, it may also improve employees’ job engagement and satisfaction. Thus, it is necessary to establish human resource management focused on empowering employees. In other words, a company culture guaranteeing employees’ autonomy via delegation of authority is strongly required. In doing so, employees are expected to embrace an attitude of entrepreneurial proclivity, be devoted to their duties, and gain satisfaction from their work. In addition, changing company culture into a more open and horizontal culture is another way to develop employees’ entrepreneurial proclivity (Zahra, Hayton, & Salvato, 2004).
Further, the results show that innovativeness and proactiveness influenced job satisfaction by mediating job engagement. The motivational process of the JD–R model shows that the elements of job resources influenced performance through job engagement (Bakker & Demerouti, 2007). Thus, this study identified that innovativeness and proactiveness become individual resources that play the role of job resources for retail employees.
Second, risk-taking in retail employees did not affect job engagement and satisfaction. There are several reasons for this. First, as entrepreneurial proclivity is derived from entrepreneurship, it is a concept understood from a company’s standpoint and not suitably from an employees’ standpoint. That is, in terms of innovativeness and proactiveness, it may be better understood from an individual standpoint as a concept of problem solving or change. Second, risk-taking is a factor related to decision-making from an organizational standpoint. This implies that an employee’s entrepreneurial proclivity should be established in a brand-new type suited to an individual. Further, retail employees currently have low levels of decision-making authority, so risk-taking is assumed to not be required of them. In other words, retail employees induce customers to use products and services by confronting customers. Risk-taking refers to the tendency to accommodate and take risks (Dess & Lumpkin, 2005). Risks in the context of retail employees could mean that customers avoid purchasing a product or service. Thus, retail employees are expected to work without taking risks. Thus, risk-taking does not play the role of job resources.
5.3. Limitations
This research has some limitations. First, it was conducted within the scope of the JD–R model without examining burnout. Thus, future research must examine the negative effect of burnout on employees. Second, this research did not examine whether other job demands or job resources affect entrepreneurial proclivity in terms of controllable effect. Thus, future research on the effect of entrepreneurial proclivity on job engagement or burnout must examine which factors of job demands and resources affect the controllable effect.
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