Exploring the linkage between constructive deviance and organisational performance in insurance companies

Introduction

Constructive deviance has been defined by scholars in various ways. According to spritzer and Sonenshein (2004) constructive deviance is “intentional behaviours that depart from the norms of a referent group in honourable ways”. Galperin (2003) defined constructive deviance as “voluntary behaviour that violates significant organisational norms and in doing so contributes to the well-being of an organisation, its members, or both”. Constructive deviance as “behaviour that deviates from the reference group norms but conforms to hyper norms” (Warren, 2003). It has been regarded as honourable deviance in desirable ways (Garg and Saxena, 2020). Other scholars like Saxena et al. (2020), Garg et al. (2020), Sarkar and Garg (2020) have also studied constructive deviance in Indian context, and they elaborated that constructive deviance facilitates achievement of organisational goals. The most common characteristics of constructively deviant behaviours are—deviation from an established norm of the reference group, confirmation to commonly held beliefs and values which leads to welfare of the society.

Warren (2003) reported that the constructive deviance is an umbrella term that comprises of several different types of behaviours. These different types of behaviour also considered as constructs of constructive deviance. Jain (2020) summarised different forms of constructive deviance as pro-social rule breaking (Morrison, 2006), extra-role behaviours (Van Dyne et al. 1995), issue selling (Dutton and Ashford, 1993), Creative performance (Baer, lenders, Oldham, & Vadera, 2010), principled organisational dissent (Graham, 1983), whistle-blowing (Near and Miceli, 1985), tempered radicalism (Meyerson and Scully, 1995), and counter-role behaviour (stow and Boettger, 1990).

Literature Review

Insurance Industry and HR challenges

The service activities witnessed are an outstanding development and the Indian insurance industry has also seen noteworthy growth and penetration in recent times. It is a known and recognised fact that the service sector is a human resource intensive industry. In this era of throat-cut competition in the insurance sector, only human resource can act as a probable source of competitive advantage. Hence, insurance companies have begun strengthening Human Resource Management (HRM) practices.

A well-defined and established structure of high-performance work practices aids not only the business but similarly the workers. Human Resource policies of an organisation assist the employees by providing opportunities for progress in terms of higher pay packages, training and development and career management, in turn leading to job satisfaction and self-fulfilment. The most challenging hurdles are related to attrition, low morale and employee engagement level, high level of organisational stress and lesser mutual trust and esteem.

Liberalisation in the Indian insurance industry has unlocked the sector to private competition. A number of overseas insurance companies have set up typical offices in India and have also associated with various asset management companies (AMCs). All these advances have forced the insurance companies to be more competitively advanced. Existing companies must seek ways to become more efficient, productive, flexible and innovative (Kundu and Makhan, 2009). The customary ways of gaining competitive advantage must be appended with organisational capability and the firm’s ability to manage people (Ulrich and Lake, 1990). With utmost pressure on employees of the Indian insurance industry the frequency and magnitude of constructive deviance has arisen in recent times. Modern insurance companies do not only accept deviances which are for betterment of organisations but there is a growing trend towards appreciating and rewarding positive deviance at the workplace.

Constructive Deviance and HR issues

Indian insurance industry faces serious HR challenges on all three fronts i.e., perceived organisational performance, managerial effectiveness and job satisfaction. With the increasing pressure, HR manager of the insurance industry needs to constantly respond to such pressures initiating timely and effective changes in HR policies of the organisation. These organisational challenges check their ability to adapt to the changing business environment, improve work efficiency and capitalise on growth in the sector. HR needs to analyse, innovate and reconstruct existing policies in order to keep up with the frequent changes. With rapid, unpredictable and profound transformation underway in the insurance industry, the issues HR must face have increased multiple folds and calls for rapid involvement.

There is a need for creating new models and strategies, to adapt and evolve to such changes by the HR. One such highly appreciated model is the effective use of constructive deviance at workplace. Theoretical model hints at a probable association between constructive deviance and organisational outcome. The present paper tends to investigate the proposed linkage through empiricism and the following hypotheses are formulated:

Methodology

The primary aim of this study is to identify and establish the causal relationship between constructive deviance and perceived organisational performance. It also intends to study causal relationship between constructive deviance and perceived managerial effectiveness. The paper intends to investigate whether constructive deviance provides an effective solution to the most challenging and most prevalent issues of Indian insurance companies. The issues that challenge the HR department of every insurance company are work managerial effectiveness (at supervisory level) and perceived organisational performance (at organisational level). In other words, the paper tends to find a suitable and efficient answer to some crucial questions that keeps every HR manager on its feet. It is pertinent to find amicable solutions to these burning issues.

The research setting for the present study is offices of insurance companies. Data is procured with the help of a structured questionnaire ensuring that data is collected from all categories including gender and different levels of experience—aged personnel to fresh recruits, etc. Sample size of the present study is 510 employees. Primary data is collected through a structured questionnaire:

Result and Discussion

Table-2 represented correlation matrix and Cronbach’s alpha values which was used to investigate reliability of the data. According to Field, value of Cronbach’s alpha should be greater than 0.70. Bracketed values indicate Cronbach’s value and all bracketed values are greater than 0.70 which means data is reliable and could be subjected to further statistical investigation. It has been observed that six constructs of constructive deviance do not have statistically significant correlation amongst themselves. It means that six constructs of the study are different from each other and hence selection of these constructs is a statistically appropriate decision.

Further, statistically significant correlation was observed between independent variables (six measures of constructive deviance) and dependent variables. It concluded that the constructive deviance was significantly associated with job satisfaction, managerial effectiveness and perceived organisational performance. It was also reported that independent variables (six constructs of constructive deviance) have positive significance with both mediating variable (psychological empowerment and procedural justice).

Table-3 describes the results of multiple regression analysis for six constructs of constructive deviance and perceived organisational performance. It was observed that five constructs of constructive deviance (creative performance, issue selling, extra-role behaviour, Pro-social rule breaking and Organisation Citizenship Behaviour) were positively and significantly regressed with perceived organisational performance. Value of VIF confirms that there is no problem of multi-colinearity in the data. The regression equation presented below is derived from the result of the above table. The equation provides a mathematical model of the relationship between perceived organisational performance and five constructs of constructive deviance. HR manager could use following equation to bring about desired changes in organisational performance:

Table-4 concludes that the five constructs of constructive deviance explain 64% (coefficient of determination = .64) of variations in perceived organisational performance. The variation caused by constructive variance is reported to be statistically significant by F-value.

Table-5 describes the results of multiple regression analysis for six constructs of constructive deviance and Managerial Effectiveness. It was observed that only two constructs of constructive deviance (extra-role behaviour and Pro-social rule breaking) were positively and significantly regressed with managerial effectiveness. Value of VIF confirms that there is no problem of multi-colinearity in the data. The following regression equation is derived from the result of the above table. The equation provides a mathematical model of the relationship between managerial effectiveness and two constructs of constructive deviance. Managers could use the following equation to bring about desired changes in managerial effectiveness:

Table-6 illustrates that the two practices explain 50% (coefficient of determination = .50) of variations in managerial effectiveness. The variation caused by managerial effectiveness is reported to be statistically significant by F-value.

Discussion and Conclusion

One of the most important duties of the HR manager is optimum and efficient application of available human resources of the organisation. Active, flexible, proactive and pro-employee personnel policies and practices provides one of the ways of ensuring performance optimisation. HRM does not only comprise of personnel management, but it represents a broader perspective of managing employees’ skill, knowledge, values, ethics, experience, attitude and work behaviour (Jain, 2020). A dynamic and unstable work environment along with change in the attitude of employees towards work are amongst the major cause of this impact.

A turbulence in environment which is referred to as unpredictability directly affects an organisation’s productivity and profitability. The long-term planning of an organisation gets obstructed by unexpected and uncalculated alterations rising out due to uncertain situations. Organisations usually are under continuous competitive pressure to improve their organisation structure to get employees to perform better. To have a committed and dedicated team is definitely a valuable asset which contributes in attaining a competitive edge for the organisation.

There are many practical implications of the results of the present study for the Indian insurance industry. It tends to highlight the importance of different forms of constructive deviance for ensuring higher levels of organisational performance. Top management of Indian insurance companies can purposefully promote different facets of constructive deviance like creative deviance, issue-selling, organisational citizenship behaviour to facilitate organisational transition towards a more flexible, enriching and fulfilling workplace. This leads to enhanced performance, reduced absenteeism, and turnover. Management of Indian insurance industry could explore various awareness building initiatives like seminars, lectures, workshops, cross-industry training, etc. to strengthen employees’ and managers acceptability for constructive deviance.

Given the introductory nature of this study, future researchers need to explore further the field of constructive deviance and their relationship with organisational goal. Future studies have the scope to investigate the association of other forms of constructive deviance like pro-social rule breaking, extra-role behaviours, principled organisational, tempered radicalism and counter-role behaviour. The study has several limitations too. First, the data was collected from Indian firms only, thus given the cultural diversities of the eastern and western world, the results could not be generalised from the perspective of a western population. Second, the sample comprised of 510 people, a larger sample size would provide for better visualisation of the results. Further, a longitudinal study will make the results of the study more reliable and valid.

In conclusion, institutionalised and top management support for constructive deviance will help in addressing issues related to human resources of Indian insurance companies.

References

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