Why me? The frog-pond effect, relative deprivation and individual outcomes in the face of budget cuts

Abstract

Conservation of resources (COR) theory proposes that both individual characteristics and environmental factors predict stress reactions, but does not consider interactions between individual variables and the immediate social context. Using theories regarding the frog-pond effect, which relates to how an individual perceives themselves in relation to that of those around them, and relative deprivation, we tested the hypothesis that employees who were personally more affected by a potential stressor, yet were in an organizational unit less affected by that stressor, would report more negative outcomes than employees who were subjected to the same stress but were in more affected units. Utilizing multilevel modelling and departmental- and individual-level data from a university experiencing severe budget cuts, it was found that both individual perceived budget cut impacts and departmental impacts were related to less job satisfaction, reduced affective commitment, greater perceptions of psychological contract breach and increased turnover intentions, supporting COR theory. Interestingly, as predicted by the frog-pond effect and relative deprivation theory, affected academic staff within departments that were less affected by the cuts had more negative responses than equally impacted individuals in more affected departments. We concluded that the frog-pond effect is relevant to work stress research and practice.