Profiling virtual employees: the impact of managing virtually.

Leaders in the age of virtual work require an understanding of how this affects their employees' relations with management. From a survey of employees working in a variety of virtual and conventional settings, an empirical profile of employee-manager relationships was completed using a multidimensional measure of virtual status. The profile identified distinct virtual characteristics for two types of virtual employment relationships free agents and regular core employees who work virtually--and contrasting characteristics for conventional employment relationships. Further analysis of the identified groups suggests that trust in one's manager and perceived managerial support differ across types of employment relationships. Specifically, the findings indicate lower levels of trust and support within virtual as compared to conventional relationships, and lower levels of trust within free-agent versus regular-employee virtual relationships. Implications for future research and management practice are discussed.

Keywords: virtual work; employee-manager relationships; leader-member exchange

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Virtual work arrangements have become pervasive across organizations, but the effect of these arrangements on the important relationship between manager and employee has received insufficient attention (Wallace, 2004; Wiesenfeld, Raghuram, & Garud, 2001). Research indicates that a virtual context affects relationships between team members and attitudes of employees toward their organization. For instance, cohesiveness and team identification are lower (Fjermestad & Hiltz, 2000) and performance evaluations among team members are based more on actual contributions (Weisband & Atwater, 1999) in virtual teams as compared to in conventional teams. Additionally, virtual employees tend to feel less connected to their organizations than do conventional employees (Kurland & Egan, 1999; Scott & Timmerman, 1999; Wiesenfeld, Raghuram, & Garud, 1999a). If virtual contexts also affect the quality of manager--employee relationships, leaders who fail to recognize and adapt to these differences risk alienating a growing segment of the workforce.

To consider the effects of virtual work arrangements on manager--employee relationships, one must first identify and define the nature of virtual employment relationships. According to a survey conducted by The Dieringer Research Group in 2004, there are 24.1 million teleworkers in the United States who work at home during business hours at least 1 day per month--nearly one fifth of the American workforce. (The total number of virtual workers is even greater because many employees work virtually from locations other than their home.) Of that 24.1 million, 16.5 million are self employed. Although there is little consistency in how virtual work is actually defined in the extant literature, these statistics support a generally agreed upon definition that virtual employment relationships fall into two categories: (a) privileged core employees who are allowed to work virtually but are otherwise considered regular employees of the organization and (b) free agents who are employed on a contract basis (see Sparrow, 2000; Sparrow & Daniels, 1999). Similar trends are seen throughout much of the developed world. For instance, teleworkers in the United Kingdom comprised 8% of the working population as of early 2005, up from 4% in 1997, according to the United Kingdom Office of National Statistics (Bird, Ruiz, & Walling, 2005).

Categorizing virtual employees by regular versus free-agent status is a start, but identifying more specific distinguishing characteristics of virtual employment relationships is necessary if one hopes to assess patterns in virtual employee behaviors or attitudes and, ultimately, determine best management practices for virtual contexts. This study, therefore, begins by clarifying a comprehensive definition of what makes work virtual. A major deficiency in the managerial and organizational literature to date is inconsistent and narrow definitions of virtual (Shin, El Sawy, Sheng, & Higa, 2000). The definitional issue is addressed in the following section by integrating existing definitions of virtual into a multidimensional definition of the construct.

With a comprehensive definition of virtual status established, employee-manager relationships are profiled to flesh out distinct virtual characteristics for the two types of virtual employment relationships described above and contrasting characteristics for conventional employment relationships. Finally, these groups are further discriminated by employee trust in manager and perceived managerial support.

The focus in this study is on the connection virtual employees have with their direct manager--instead of organization, coworker, or some other organization member--because the relationship between employees and their manager has been identified as critical to the success of working in virtual contexts (Raghuram, Garud, Wiesenfeld, & Gupta, 2001; Wiesenfeld, Raghuram, & Garud, 1999b). Wiesenfeld and colleagues (1999b) anecdotally found that managers directly influence the satisfaction and productivity of virtual employees through support and cooperation, which is not dissimilar from the influence managers have in conventional employment contexts. Empirically, Raghuram and colleagues (2001) found that virtual worker perceptions of mutual trust between themselves and their manager and organizational peers played an important role in the worker's adjustment to virtual work (assessed by a self-report of satisfaction with virtual work, job performance as a consequence of virtual work, productivity, commitment to virtual work, and ability to balance work and nonwork demands) in that greater perceptions of mutual trust were related to higher levels of adjustment to virtual work.

Virtual Status Defined

Existing organizational research and writings distinguish between virtual and conventional status in various ways. For instance, virtual may refer to non-temporal work relations, geographical dispersion, the intensity of communication processes through electronic means, or some combination of these elements (El-Shinnawy, 1999; Wallace, 2004). Although many studies assess virtual status on only one of these aspects, this study uses a multidimensional definition that incorporates all of the above-identified dimensions to sufficiently distinguish regular employees who work virtually from free-agent virtual employees and both types of virtual employees from conventional employees.

Often the distinctions between virtual and conventional are a function of the writers' particular level of analysis or interest (e.g. teleworkers, virtual teams, and virtual organizations). Virtual employees such as teleworkers are typically distinguished from conventional employees by their geographic dispersion--the amount of time members spend working away from central offices or production facilities (Belanger, 1999; Belanger & Collins, 1998; Gupta, Karimi, & Somers, 1995; Kurland & Egan, 1999; Scott & Timmerman, 1999; Wiesenfeld et al., 1999a; Zimmer, 1998). Thus the communication process for teleworkers is a means to allow geographic dispersion rather than an integral part of the definition of the virtual construct.

Virtual teams are often defined by their communication process--whether communication is in the conventional face-to-face mode (Dennis, Kinney, & Hung, 1999; Lind, 1999; Potter & Balthazard, 2002; Powell, Piccolo & Ives, 2004; Weisband & Atwater, 1999) or is temporally synchronous (Robey, Khoo, & Powers, 2000). Some researchers also specifically include geographic dispersion in their definition of virtual teams (Jarvenpaa & Leidner, 1999; Robey et al., 2000; Townsend & DeMarie, 1998). Specifically, Mohrman (1999) strongly stressed the importance of geographic dispersion by suggesting that a primary characteristic of virtual teams is the geographical separation of team members and that electronic communication is a consequence, not necessarily a defining attribute, of virtual relationships.

A primary attribute of virtual organizations is their flexible and temporary work alliances (Burn & Barnett, 1999; Chutchian-Ferranti, 1999; DeSanctis & Monge, 1999; Galbraith, 1995), something not often referred to at other levels. Geographic dispersion and electronic communication are also prevalent in the definitions of virtual organizations (Berendt, 1998; Chutchian-Ferranti, 1999; DeSanctis & Monge, 1999).

Although many of the studies presented above assess virtual status using a single aspect of virtuality, a unidimensional definition of virtual status fails to sufficiently capture the richness and complexity of virtual employment relationships. For example, simply measuring the number of days worked outside the office does not distinguish free agents from regular virtual employees. Nor does it clearly distinguish virtual from conventional employees because employees may work at the same geographic location as their managers but have little direct communication or low employment permanence as temporary employees. Therefore, this study includes the following aspects of virtual status: (a) geographical dispersion, (b) communication process (encompassing both communication intensity and medium), and (c) employment permanence.