Organizations have significantly increased their use of contracting in information systems (IS), hiring contractors to work with permanent professionals. Based on theories of social exchange and social comparison, we hypothesize differences in work attitudes, behaviors, and performance across the two groups, and evaluate our hypotheses with a sequential mixed-methods design. Our first study surveys contract and permanent professionals on software development teams in a large transportation company. Our second study involves in-depth interviews with contract and permanent IS professionals in three organizations. We find support for many of our hypotheses but also some surprising results. Contrary to our predictions, contractors perceive a more favorable work environment than permanent professionals but exhibit lower in-role and extra-role behaviors than their permanent counterparts. Supervisors perceive their contract subordinates as lower-performing and less loyal, obedient, and trustworthy. In-depth interviews help to explain these findings. Job design emerges as an important factor influencing contractors’ work attitudes, behaviors, and performance. Supervisors restrict the scope of contractors’ jobs, limiting their job behaviors and performance. To compensate, permanent professionals are assigned considerably enlarged job scopes, leading to their lower perceptions of the work environment. We propose a theoretical model that embraces job design in explaining differences in work outcomes for contract versus permanent professionals on software development teams. The results from our study imply that organizations should carefully design and balance the jobs of their contractors and permanent employees to improve attitudes, behaviors, and workplace performance.
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