Organizational psychology and performance in IS employment outsourcing and insourcing

In recent years, organizations have increased their use of outsourcing (contract) employment in information systems (IS). Yet, we know very little about outsourced workers´ contributions toward organizational performance and effectiveness. Based on theories of individual-organizational linkages, this paper examines differences in the organizational psychology and performance of IS insourced and outsourced workers from the perspectives of multiple informants in a large IS organization. First, individuals evaluate themselves on their level of individualism and their perceptions of organization support, workplace justice and alienation. Second, peers rate their co-workers in terms of in-role and organizational citizenship behaviors. Third, supervisors evaluate their insourced and outsourced subordinates on individual performance and trustworthiness. We find significant differences in organization citizenship behaviors, performance expectations, trustworthiness and individual characteristics between the different types of workers. Our results suggest that there can be negative consequences of employment outsourcing and that organizations may need to adjust their human resource practices to use outsourced workers more effectively