Perceived Overqualification and Employee Development: The Mediating Role of Peer Social Comparison and the Moderating Influence of Work-Group Inclusion

Abstract

This study examines the paradoxical nature of perceived overqualification. Building on social cognitive career theory, it proposes the two dimensions of peer social comparison (abilities and opinions) as underlying mechanisms between perceived overqualification and investment in employee development. In addition, it investigates the moderating effect of work-group inclusion. The time-lagged data was collected from 202 employees working in Pakistan software development firms (a.k.a. software houses). PLS-SEM (Partial Least Squares Structural Equation Modelling) was employed to analyze it. The findings showed both dimensions of peer social comparison, i.e., abilities and opinions, to mediate the relationship between perceived overqualification and investment in employee development. Specifically, overqualified employees perceive the likelihood of investment in employee development through ability comparison. In contrast, making an opinion comparison leads them to believe that their organization didn’t invest in their development. Additionally, work-group inclusion weakens the perceived overqualification’s positive impact on peer social opinion comparison. Meanwhile, work-group inclusion could not moderate the relationship in the case of peer social ability comparison.