Abstract

This study examined the exchange relationship of small business owners and their employees. The primary purpose of this research was to consider how small business owners' personality and motivation, as seen through the Big Five model and self concordance theory respectively, affect their promises and commitments made to employees as well as their work attitudes. Data were collected from 50 small business owners and 253 of their employees in small organizations in the provinces of Ontario and Quebec. To minimize common method bias, owners' promises to employees were assessed via self and employee reports. Overall, the results indicated that among the Big Five personality traits, Agreeableness was the best predictor of psychological contract orientations and owner attitudes, while Neuroticism and Extraversion were unrelated to any dimension of the psychological contract. On the other hand, Conscientiousness and Openness to Experience partly explained small business owners' contract orientations and work attitudes. Self-concordant goals were unrelated to both psychological contracts and small business owner attitudes. These findings suggest that small business owners should recognize the importance of their personality characteristics and their impact on establishing vital exchange relationships with their employees. Limitations are discussed in light of the unique context of the small business in which this study was conducted and directions for future research are provided.