Work-related stress and Job satisfaction of the Self-employed: coping effect of
self-efficacy
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4.1 Introduction
‘Instead of traditional organisational structures that heavily rely on management control
and economic principles of cost reduction, efficiency, and cash flow, the focus in modern
organisations is in the management of human capital.’ (Bakker and Schaufeli, 2008: 29)
By drawing the positive psychology, that is, ‘what is good about life is as genuine as what
is bad and therefore deserves equal attention’ (Peterson, 2006: 4), the recently emerging
field of positive organizational behavior, or simply POB, which attempts to give a
renewed emphasis to the importance of a positive approach. A recent survey of the articles
in the occupational health literature found about a ratio (of positively to negatively
focused articles) of 1 (positive) to 15 (negative) (Schaufeli and Salanova, 2007). Thus, the
current organisational behaviour academia calls for a more positive approach than the
dominant negative perspective regarding occupational stress and workplace wellbeing
urgently. In light of this significant gap, this study aims to apply the POB as the
foundation for the present study.
Luthans (2002:59) defines POB as ‘the study and application of positively oriented
human resource strengths and psychological capacities that can be measured, developed,
and effectively managed for performance improvement in today’s workplace’. POB
origins from positive psychology but transplanted to the world of work and organisations,
and it constitutes the study of positive human strengths and competencies, how it can be
assessed, facilitated and managed to improve performance in the workplace. Moreover,
POB emphasised the employees who hold hope spend
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energy on meeting goals and using willpower to face challenges. The objective of
POB is creating determined employees who can seise alternative solutions to
complete the task when problems arise and can regard problems at work as challenges
and more effectively produce results beneficial to the organisation. Besides positivity,
to be included as a psychological capacity within this defined POB framework, it must
meet the following criteria: (a) The capacity must be theory and research-based and
validly measurable, and (b) the capacity must also be ‘state-like’ (i.e., open to change
and development) and have a demonstrated performance impact (Luthans, 2002a,
2002b; Luthans, Youssef, et al., 2007). In its emphasis on theoretical grounding, valid
measurement, and rigorous research, POB stands in stark contrast to the exponentially
expanding body of popular best sellers, which share its positivity but lack theory,
measurement, and empirical support. Particularly, the state-like criterion of POB
emphasises on micro, individual-level constructs, which separates it from other
positive perspectives that address positive organisations and their related macro-level
variables and measures (Luthans, Youssef, et al., 2007).
In the past, entrepreneurial success has almost exclusively been defined regarding
financial outcomes (ROI, profits, growth in sales, etc.) and nowadays, the
‘entrepreneurial success’ needs somewhat broader definitions (Baron, Franklin and
Hmieleski, 2016). There is currently growing recognition in the field of
entrepreneurship that, aside from purely financial goals, they are also caring about the
influence of self-employment on their wellbeing (Baron, Franklin and Hmieleski,
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2017). Indeed, the workplace wellbeing of the self-employed would be an interesting
topic to study. Empirically, compared with wage-paid employees, self-employed may
experience greater challenges arising from uncertainties, complexity, risks and
pressures in the process of running a business (Baron, Franklin and Hmieleski,2017).
These particular situations and challenges mean that the self-employed may
experience considerable work-related stress, which is the negative side of workplace
wellbeing. On the other hand, evidence from previous research indicates that the self-
employed present the higher levels of job satisfaction, which is the positive side of
workplace wellbeing, than those who are the wage paid employees (Blanchflower et
al., 2001; Bradley and Roberts, 2004). Thus, for the self-employed, there is a greater
possibility to experience both negative and, positive wellbeing.
When the POB theory is applied to entrepreneurship, an intriguing possibility emerges.
It is emphasised that when the self-employed navigate the ever-challenging work
environment, they increasingly recognise the importance of positivity and concentrate
on enhancing their strengths, rather than dwell on the negative and trying to fix the
self-employment’s vulnerabilities and weaknesses. Thus, from the POB perspective,
one explanation of the self-employed has possibility to experience both higher level of
negative workplace wellbeing and positive workplace wellbeing, can be assumed as
the self-employed have a better psychological capability to cope with negative
workplace wellbeing and enhance positive workplace wellbeing (Bradley, and Roberts,
2004). In addition, due to POB emphasises how the added value of positivity over and
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above the negativity, therefore, a question of how to cope with negative workplace
wellbeing and enhance positive workplace wellbeing of the self-employed can be
regarded as an essential topic within POB as well. One significant element of the
psychological capability of the coping mechanism of the self-employed assumed in
this paper is self-efficacy.
Self-efficacy has been defined in the workplace as ‘one’s conviction (or confidence) about
his or her ability to mobilise the motivation, cognitive resources, and courses of action
needed to execute a specific task within a given context successfully’ (Stajkovic and
Luthans, 1998:66). Among the POB criteria-meeting capacities selected for inclusion,
Self-efficacy represents the best fit to all the criteria (Luthans, 2002). As it has the most
established theoretical foundation and has been primarily supported (Bandura, 1997) and
measured (e.g., Maurer and Pierce, 1998; Parker, 1998) as a state. Aside from the theory
contribution, more importantly, self-efficacy can be practically developed through
modelling and vicarious learning from others’ successful experiences, formal and informal
training programs, mastery and vicarious experiences, social persuasion through positive
feedback, group support and encouragement, respect, and trust (Fredrickson, 2001, 2003).
In entrepreneurship research, self-efficacy is always linked with entrepreneurial intentions
(Boyd, and Vozikis, 1994; Wilson, Kickul, and Marlino,2007), performance(Hmieleski,
and Baron, 2008; Markman, Balkin, and Baron, 2002) and measurements of an
entrepreneur(Chen, Greene., and Crick, 1998; Singh, and DeNoble, 2003). Few have
focused on its impact on the wellbeing of the
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self-employed. Moreover, In the field of entrepreneurship, there is a dearth of research
on the coping mechanisms for work-related stress, and scholars have recently called
for further research on this topic (Shepherd and Patzelt, 2015; Baron et al., 2016).
Therefore, this study aims to shed some light on how self-efficacy helps the self-
employed cope work-related stress and increase job satisfaction. Moreover, this study
will delve this issue by comparing the coping mechanism of self-efficacy between the
self-employed and employees.
This study sets out to answer the following questions in this paper, firstly, do the self-
employed have a higher level of job satisfaction than employees? Secondly, what’s
the relationship between work-related stress and job satisfaction? Thirdly, does self-
efficacy can effectively moderate the relationship between work-related stress and job
satisfaction? The dataset is sourced from Understanding Society; the largest UK
household dataset consisted of 12162 observations (Employees: n=10481; self-
employed: n= 1681).
This study aims to contribute the current knowledge in three ways. Firstly, it will test the
relationship between the positive and negative side of workplace wellbeing, which has not
understood thoroughly by previous studies. Secondly, previous entrepreneurship research
tends to relate self-efficacy to work-related performance outcomes (e.g., Bandura and
Locke, 2003; Stajkovic and Luthans, 1998) rather than the coping mechanisms for work-
related stress and enhance job satisfaction. Thus, we will add the knowledge of how Self-
efficacy associate with work-related stress and job
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satisfaction among working people and self-employed. This study aims to test the
moderating coping mechanism of self-efficacy on the relationship between work-related
stress and job satisfaction by entrepreneurial evidence. Thirdly, this paper will use
matching approach to updating the dataset and eliminate the selection bias, which has
been identified as one of major problems within the comparative analysis, which has
employed the large dataset to select sub-sample (Rosenbaum and Rubin, 1985). It is
believed that by applying this method, controlling the selection bias between groups can
be more accurate for researchers dealing with group differences and can shed some light
on the research approach for the further multi-group research.
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