Idiosyncratic Deals: How work arrangements affect job performance

Typically, when an employee and an employer enter into a work agreement, the employee has pre-defined responsibilities. For instance, an employee must complete tasks a, b, and c during a specified time period in a specific location. A marketing manager, for example, must develop the company’s marketing strategy over two months, while working at an office in San Francisco. However, there are exceptions to this typical work arrangement. An employee may be assigned additional roles or tasks that make a flexible schedule or alternate work location more appropriate. Despite the fact that the employee was originally expected to work eight hours a day from the San Francisco office, the employer agrees to allow this employee to work from any location. These exceptions to employer-employee work arrangements are known as idiosyncratic deals or “i-deals.”

In response to receiving an i-deal, an employee usually is more emotionally committed to the job, and will go above and beyond in trying to help the company. Though this relationship between idiosyncratic deals and work outcomes is relatively well understood, what is less known is exactly why i-deals lead to positive work outcomes. Previous research indicated that part of the reason is due to social exchange theory. According to this theory, when an employee is granted an i-deal, they feel grateful and want to pay back the favor, which they do by performing at an even higher level, as a way of compensating their employer for the benefits they receive from the modified work arrangement. However, in shedding more light on the relationship between i-deals and job performance, the authors of this study found that, in addition to social exchange theory, self-enhancement theory offers another reason why idiosyncratic deals lead to positive work outcomes. According to this theory, when an employer grants an i-deal, the employee feels valued and important; thus, confidence is built and job performance improves. The authors found that this was a better explanation for why i-deals lead to positive work outcomes than the gratitude-based social exchange theory.