Relationship between Psychological Contract and Personality: A Study of Employees of Selected Government Organisations / PSUs in India Dissertation Submitted to the Padmashree Dr. D.Y. Patil University, Department of Business Management in partial fulfillment of the requirements for the award of the Degree of Master in Philosophy (Business Management) Submitted by: MANOJ GOYAL (Roll No. DYPM Phil 0701006) Research Guide: Dr. R. Gopal Director Padmashree Dr. D.Y. Patil University, Department of Business Management Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai. 400 614 March 2009
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Relationship between Psychological Contract and Personality:
A Study of Employees of Selected Government Organisations / PSUs in India
Dissertation Submitted to the Padmashree Dr. D.Y. Patil University, Department of Business Management
in partial fulfillment of the requirements for the award of the Degree of
Master in Philosophy (Business Management)
Submitted by:
MANOJ GOYAL (Roll No. DYPM Phil 0701006)
Research Guide:
Dr. R. Gopal Director
Padmashree Dr. D.Y. Patil University, Department of Business Management
I hereby declare that the dissertation “Relationship between
Psychological Contract and Personality: A Study of Employees of Selected
Government Organisations / PSUs in India” submitted for the degree of
Master in Philosophy (Business Management) at Padamshree Dr.
D.Y. Patil University’s Department of Business Management is my
original work and the dissertation has not formed the basis for the
award of any degree, associate ship, fellowship or any other similar
titles.
Place: Mumbai --sd-- Date: 27.03.09 (MANOJ GOYAL) Signature of the Student
CERTIFICATE
This is to certify that the dissertation titled “Relationship between
Psychological Contract and Personality: A Study of Employees of
Selected Government Organisations / PSUs in India” is the bona fide
research work carried out by Mr. MANOJ GOYAL, student of Master
in Philosophy (Business Management), at Padamshree Dr. D.Y. Patil
University’s Department of Business Management during the period
2007-2009, in partial fulfillment of the requirements for the award of
the Degree of ‘Master in Philosophy (Business Management)’ and
that the dissertation has not formed the basis for the award
previously of any degree, diploma, associate ship, fellowship or any
other similar title.
Place: Mumbai --sd-- Date: (Dr. R. Gopal)
Signature of the Guide
ACKNOWLEDGEMENT
In the first place, I am indebted to the Padamshree Dr. D.Y. Patil University’s Department of Business Management, which has accepted me for M. Phil. program and provided an excellent opportunity to carry out the present research project. I sincerely thank Dr. R. Gopal, Director, Department of Business Management of Padamshree Dr. D.Y. Patil University, for having given me his valuable guidance for the project. Without his guidance, it would have never been possible for me to complete this project.
I would also like to thank people from various government organizations, who have helped me in collection of data for this project, without which this project could have never been completed.
I would be failing in my duty if I do not acknowledge, with a deep sense of gratitude, the sacrifices made by my wife Tuhina and son Advyay for allowing and supporting me to spend my free time on this project work and thus have helped me in completing the project work successfully.
Place: Mumbai Date: 27.03.09 --sd--
(MANOJ GOYAL) Signature of the Student
CONTENTS
Chapter No.
TITLE
Page No.
EXECUTIVE SUMMARY 1
Chapter - 1 INTRODUCTION 9
Chapter - 2 CONCEPTS AND THEORY 12
Chapter - 3 LITERATURE REVIEW 28
Chapter - 4 OBJECTIVES AND HYPOTHESES 87
Chapter - 5 RESEARCH METHODOLOGY 99
Chapter - 6 DATA ANALYSIS AND HYPOTHESES TESTING
114
Chapter - 7 CONCLUSION AND LIMITATION
129
APPENDICES:
Appendix - 1 RESEARCH QUESTIONNAIRE 139
Appendix - 2 S.P.S.S. OUTPUTS 150
Appendix - 3 BIBLIOGRAPHY 193
Appendix - 4 COPIES OF SOME LITERATURE/ RESEARCH ARTICLES REVIEWED
LIST OF TABLES
TABLE No.
TITLE
PAGE No.
2.1
The Big Five Personality Domains and their Facets
27
3.1 Old Deal vs. New Deal 55
4.1 Research Hypotheses 98
5.1 List of Organizations Selected for Data Collection 102
5.2 Analysis of sample Collection 104
5.3 Demographic Analysis of Sample 106
5.4 Dimensions of Psychological Contract and their sub-scales
111
6.1 Score on Various types of Psychological Contracts 117
6.2 Score on Relational Contract of Various Age Groups 118
6.3 Mean Scores of Male and Female Employees on various types of Psychological Contracts
119
6.4 Correlations between Transactional Contract and
Big Five Personality Factors 122
6.5 Correlations between Relational Contract and Big
Five Personality Factors 124
6.6 Correlations between Balanced Contract and Big
Five Personality Factors 126
6.7 Result of Hypotheses Testing 128
7.1 Summary of Objectives and Outcomes 134
LIST OF FIGURES
FIGURE No.
TITLE
PAGE No.
2.1
Four Types of Psychological Contracts
17
2.2 Assessment of Psychological Contracts 21
3.1 Responses to Violation 34
3.2 Framework of Strategy & PC 35
3.3 Main factors predicting occupational behavior 38
* Furnham Adrian; Personality at Work – the role of individual differences in the workplace; 1995, Routledge, London.
38
• Longitudinal studies of people at work, and
• Biographical or Case-History Research
A research model has also been proposed by the author as shown in
following Fig 3.3, showing some of the main factors predicting
occupational behavior.
3.2.3 Chapter-2 deals with issue of Personality testing in the work place.
Personality tests have been used fairly extensively in management
over many years. However, there remains considerable skepticism
in applied circles as to the usefulness of personality tests. This
chapter has presented a comprehensive review of the early, as well
as more recent, literature on personality test correlates of
occupational behavior.
3.2.4 In Chapter-3, author has explored the linkage between personality
and vocational choice of individuals. Two theoretical concepts were
explored: person-job fit and expectancy theory. One way of
exploring the usefulness of personality variables is to examine their
Ability
Personality Traits
Occupational Behavior
Motivation
Demographic factors
Intelligence
FIG-3.3: Some of the main factors predicting occupational behavior
39
predictive and discriminating validity with specific groups. Also the
relationships of personality with academic performance and
learning styles were explored which have clear implications for
vocational guidance.
3.2.5 Chapter-4 covers the interesting topic of personality and work
motivation. Author has noted that despite the number of theories
concerning work motivation, there is little research on individual
difference in this area and suggested one area of research using
the locus of control concept which does seem both highly relevant
and very promising.
3.2.6 Chapter-5 discusses the relationship between personality and
productivity. There are practical limitations, as measurement of
productivity and various performance measures across different
occupations may not be strictly comparable. Therefore, it is noted
that, the issue of personality correlates of productivity is fraught
with experimental problems, mainly because of problems in the
measurement of productivity. Further this chapter has concentrated
on the psychology of the entrepreneurs.
3.2.7 Chapter-6 on ‘Personality and Work Satisfaction’ attempts to review
the existing literature on personality determinants of job
satisfaction. A large number of individual difference factors have
been shown to relate to job satisfaction either directly or in
interaction with other variables. These include genetic factors,
traits, needs, values, perception of equity and attributional style.
Various theories tend to focus on different individual difference
factors and it could be argued that some are the result of others.
40
3.2.8 Chapter-7 concentrates on non-personality factors, such as Ability,
Biography and Demographical variables, which have been shown
to be predictive of job success. It is noted that only about ten
percent of the variance appears to be accounted for by ability. A
second, rapidly growing area of research and interest is that of bio-
data. But this method is both a-theoretical and job specific. Finally,
there is increasing evidence of significant sex differences at work.
Author has noted that the gender is important, along with
personality, in understanding behavior at work.
3.2.9 Chapter- 8 discusses Personality and Work Related Problems like
absenteeism, accidents, illness and stress. Personality plays a
minor or negligible role in absenteeism, which is influenced by other
powerful organizational factors. However, personality does play a
significant role in accident-proneness. There are good theoretical
reasons and substantial literature to suggest that extraversion and
neuroticism are closely tied to accidents of all kinds. Finally it is
noted that there exist some theories/ models that link personality-
determined social behavior with endocrinal and immunological
changes that relate directly to stress, and hence illness.
3.2.10 Chapter-9 on ‘Personality, Leisure, Sport, Unemployment and
Retirement’ focuses on the effect of personality on ‘after-work’
behavior both in the sense of at the end of the working day/week,
and at the end of the working life. A number of observations
emerged from literature -1) the lack of good research studies in this
area, 2) general neglect of personality variables and, 3) problems in
the measurement of the variables.
3.2.11 Chapter-10 discusses ‘Implication for Selection Training and
Reward Structure’. The fact that individual differences in personality
41
beliefs and abilities relate specifically to occupational success has
obvious and immediate implications. The first is to select people for
certain jobs who have desired traits that are correlated with
success. But it may not be possible because of historical; legal or
other limitations. The next best thing to do is to train people
selectively to reach certain standards. Finally, it is suggested, that
the way in which people are rewarded/ compensated at work, too
should take into account the values and preferences of the
employees.
3.2.12 Chapter-11 concludes the book. Author has noted that there is,
indeed, considerable evidence that personality factors are related
to various occupational behaviors. However the role of personality
testing in the business world has been both good and bad for
research. Critics have pointed out that the proliferation and
aggressive marketing of poorly constructed psychometric tests has
frequently overstated and wrongly assessed their predictive value.
Finally author has concluded this final chapter with following hope:
“Hopefully, there will be a growing rapprochement between
occupational and personality psychology, and that well
designed and executed research will reveal not only which
personality factors relate to various occupational behaviours,
but why they do so”
3.2.13 It is amply clear from review of this book is that the ‘personality’ do
affect work behavior of employees in some or other ways. The
process by which behavior is related to personality factor may be
psychological contracting. Psychological contract include process
of exchange between employers and employee, and hence
employee’s behavior at work and psychological contracts is
affected by personality being idiosyncratic and personalized in
42
nature. The present study is an attempt to understand the plausible
link between personality and psychological contracts.
3.3 BOOK: Understanding Psychological Contracts at Work: A
Critical Evaluation of Theory and Research (By Neil Conway and
Rob B. Briner)*
3.3.1 In recent time, the concept of psychological contract has gained
importance to understand the relationship between employer and
employee. The concept throws light on the implicit nature of many
of the beliefs surrounding the relationship, the ways in which these
beliefs are shaped by, and shape, the behaviors of both parties,
and how the relationship can go wrong. Many aspects of the
concept of psychological contract are being researched and
evolved, and the literature available is fragmented. This book
attempts to club all these materials together, review various
research findings and provide a detailed critical evaluation.
3.3.2 Chapter-1 of the book presents introduction to the concept of
psychological contract and provide overview of the book. In
organization psychology, as in all areas of behavioral and social
science, there are many ways of explaining human behavior.
Psychological contract is about the exchange relationship between
employee and employer. However, what makes the psychological
contract a psychological as opposed to a legal contract is that the
* Conway Neil and Briner Rob B.; Understanding Psychological Contracts at Work : A Critical Evaluation of Theory and Research ; 2005; Oxford University Press, Oxford .
43
nature of this exchange is based on the perception of each party
rather than what has been written down or explicitly agreed.
Psychological contract is about perception of reciprocal exchange
relationship. Authors have set following three aims of this book.
- To provide a comprehensive review of psychological
contract research and theory.
- To critically evaluate psychological contract research and
theory and suggest fields for future research.
- To consider how the psychological contract can be
practically applied in organization setting.
3.3.3 Chapter-2 covers ‘The History and Development of the
Psychological Contract Concept’. While tracing the history of the
concept, two major periods have been considered by authors:
i)early history up to but not including Rousseau’s seminal re-
conceptualization in 1989 and ii) second period or ‘modern’ period
which concerns Rousseau’s work and developments since then.
With the exception of some early theoretical developments by
Argyris, Levinson and Schein, there was little interest in
psychological contract until Rousseau’s re-conceptualization in
1989. Rousseau’s interpretation of the psychological contract as
consisting of implicit and explicit promises is regarded as highly
influential in reinvigorating research on the psychological contract,
and her interpretation has been adopted widely by contemporary
researchers. It is noted that current psychological contracts
research is mainly concerned with the contents of ‘psychological
contract’ and their structure and the effects of violation on
employee attitudes and behavior.
44
3.3.4 Chapter-3 attempts to define the psychological contract by
reviewing how it has been defined and identifying variations across
definitions offered by researchers. Various definitions of the
concept have been given by various researchers and this chapter
has discussed following key terms and features of psychological
contract found in this diverse range of definitions:
• The beliefs constituting the psychological contract
• The implicit nature of psychological contracts
• The subjective nature of the psychological contract
• Perceived agreement – not actual agreement – is
necessary for psychological contracts
• The psychological contract is about exchange
• The psychological contract is the entire set of an
employee’s beliefs regarding the ongoing exchange
relationship with his/her employer
• The psychological contract is an ongoing exchange
between two parties
• The parties to the psychological contract
• The psychological contract is shaped by the organization
3.3.5 Currently, the most widely agreed definition of the psychological
contract is that put forward by Rousseau, in which the
psychological contract is considered to be an employee’s subjective
understanding of promissory –based reciprocal exchange between
him or herself and the organization. Even critics of Rousseau’s
conceptualization of the psychological contract do not reject the
concept, but call for further research to clarify certain terms
contained in it.
3.3.6 Chapter-4 describes the ‘Contents of Psychological Contracts’. This
chapter explains what is meant by the contents of the psychological
45
contract, evaluates empirical support for the contents of the
psychological contract, considers the factors that form perception of
promises and obligations, and examines how the contents have
been categorized and related to outcomes. The content of the
psychological contract refers broadly to the perception of an
employee about contributions they promise to give to their
employer and what they believe the organization promises in
return. The psychological contract includes many items and these
are categorized or standardized into transactional and relational
contracts. The chapter further discusses the factors which shape
perceptions of employees about psychological contract. These
factors could be outside the organization or within organization.
Further individual level factors like personality and social factors
also affect content of psychological contract. The chapter also
discusses how the contents of the psychological contract may
affect outcomes like job satisfaction, organizational commitments,
job performance and employee turnover.
3.3.7 Chapter-5: “How does the Psychological Contract affect Behavior,
Attitudes, and Emotion?” considers how the idea of breach has
been used to understand how the psychological contract affects
behavior. It also considers some weaknesses with the concept of
breach and some alternative theoretical approaches. Contract
breach has been defined as less than perfect performance by one
of the parties regarding contract terms. Further antecedents and
consequences of breach of psychological contract have been
discussed. Further moderators of the effect of breach on outcomes
have been discussed. Finally some unresolved issues have been
discussed, which in the opinion of authors, require further
investigation.
46
3.3.8 Chapter-6: “Researching the Psychological Contract” considers, in
detail, how research in this field has been done and its limitations. It
is noted that the method of cross- sectional questionnaire survey
has been most commonly used for researching the psychological
contract. The author has concluded that near exclusive use of
survey method has no doubt hampered conceptual, theoretical, and
empirical advance in this area. Authors have suggested to use
more appropriate means – a diary method being one example – of
examining the psychological contract as an event based social
process.
3.3.9 Chapter-7 covers “Challenges for Psychological Control
Researchers”. The weaknesses and limitations of ideas are often
discovered through the process of researching a theory or trying to
use it in a practical context. It is noted that, in spite of its almost fifty
years history and many fairly obvious weakness and limitations, the
psychological contract has received little attention. Authors have
listed six challenges for future research in these areas: 1) what are
the differences between expectations, obligations, and promises? ,
2) What is meant by implicit promises? , 3) Are psychological
contract beliefs only those shaped by the employee’s current
organization? , 4) What are the precise specific links in the
reciprocal exchange between the employer and the employee? , 5)
Who, or what, do employees perceive to be the organization? , and
6) How do employees anthropomorphize the organization?
3.3.10 Chapter-8: titled as ‘Understanding the Psychological Contract as a
Process’ explains the concept of psychological contract as a
process. A process approach is more likely to capture a fuller
representation of the experience of being party to a psychological
contract. In fact, one of the most appealing aspects of the
47
psychological contract concept is that, it is a sort of ongoing and
unfolding process. The chapter discusses how existing approaches
do not adequately consider process and some ways in which this
can be done.
3.3.11 Chapter-9: ‘Managing the Psychological Contract’ starts with
discussion on key issues involved in management of psychological
contract and then consider how contents and breach can be
managed. The key issues discussed are :
1) What are we trying to manage and why?
2) Is managing the psychological contract by making
promises explicit really managing for psychological
contract as such?
3) Is managing the psychological contract by making
promises explicit likely to work?
4) What counts as managing the psychological contract and
who does it?
5) What do we know about managing the psychological
contract?
The contents of psychological contract can be managed through
imposing change, by communicating promises or through
negotiation. The contract breach can be managed by monitoring for
early signs of breach, preventing breach from happening, and by
redressing breach. Finally, some difficulties and dilemmas have
been discussed which are experienced while managing the
psychological contract.
3.3.12 Chapter-10 summarizes the entire book and presents conclusions
drawn by authors. This book has identified many weaknesses and
48
limitations in psychological contract research and has suggested
ways in which they may be overcome. Authors have noted that:
“we believe that the psychological contract concept
has much to offer but it has been erected on somewhat
shaky conceptual and empirical foundations. …………..It is
our contention that its potential contribution to understanding
behavior at work will never be known if we do not
acknowledge and address some of its fundamental
limitations.”
3.4 BOOK: Organization and the Psychological Contract: Managing
People at Work (by Peter J. Makin, Cary L. Cooper, Charles J. Cox)*
3.4.1 In this book, authors have looked at many of the topics of
organizational behaviors and human resource management
discipline in terms of the relatively new concept of the
‘Psychological Contract’. The objective of authors has been to
describe how the psychological theories and practice can be
effectively and usefully applied to the behavior of the people within
the organization.
3.4.2 The concept of the psychological contract is explained and
explored in the introduction, as its relation to the other chapters in
the book. The chapters cover various aspects of human resource
practices in the organizations, e.g. selection & placement,
motivation, personality and individual differences, organizational
* Peter Makin, Cary Cooper and Charles Cox; ‘Organizations and the Psychological Contract : Managing People at
Work; 1996; The British Psychological Society; Published in India by Universities Press (India) Limited, 1999.
49
change etc. Each chapter concludes with the section that links back
to the psychological contract and how it relates to the particular
chapter or particular topic.
3.4.3 Authors have noted that in the modern life, we are surrounded by
contractual obligations. The central features of the ‘contracts’,
whilst they differ in terms of their formality and specialty, they all
involve exchange. This perhaps is the essential features of all the
contracts. Contracts do not have to involve the exchange of
physical goods or services; exchange can take place which do not
involve physical things but, at the same time, are important in
affecting the people’s behavior and feelings. The concept of
contract has been extended to psychological domain.
3.4.4 However, the essence of psychological, as opposed to the
economic, contract is that the expectations concern non–tangible,
psychological issues. The psychological contract is characterized
not only by the expectations, but by the ‘promissory and reciprocal
obligations’. Perceived obligations are considered to be stronger
than expectations, hence when these obligations are broken; they
produce more emotional and extreme reaction than when weaker
expectations are broken. Broken obligations lead to feelings of
anger and a re-assessment of the individual’s relationship with the
organization.
3.4.5 Authors have further contended that the work in organization would
become more effective if the psychological contract was clarified
and agreed in much the same way as in the legal contract.
3.4.6 Chapter-1 covers the topic of ‘Selection, Placement, and Careers’.
The selection process is where the individual and the organization
50
have their initial contact. It is here that initial expectation will be
established and, early in the career, either fulfilled or not. Both
sides will approach the process with their own ideas of what is
expected. What happens and indeed, how it happens can have an
influence on the psychological contract. Authors have described
the various aspects of selection process and career development
and its possible effects on the psychological contract of the
employees and have suggested means to manage these issues
effectively.
3.4.7 Chapter-2 deals with the issues of ‘Personality and Individual
Differences’. Authors have noted the recent developments in
personality theory. In particular, there is now some agreement
about the number of major personality dimension, the so called ‘Big
Five’. The extent to which work related behavior is determined by
personality has been discussed. In terms of the psychological
contract, individuals differ in their expectation of how they will be
expected, or allowed, to behave. Two of the most common and
important work–related attitudes, i.e. job satisfaction and
organizational commitment, have been discussed as to what impact
they have on an individual’s performance and other work related
behaviors. It is noted that violation of the psychological contract can
have the negative effect on job satisfaction and commitment to
remain with the organization.
3.4.8 In chapter-3, authors have beautifully described ‘Interpersonal
Perception & Interaction’. It includes detailed discussion on
transactional analysis. The authors have noted that the different
ego states are involved in both the economic and psychological
contract. A motivated work force will have its child needs satisfied,
and finally the negotiation and ongoing re–negotiation of the
51
psychological contract is likely to be ineffective unless both parties
are operating from “I’m OK, You’re OK”.
3.4.9 Chapters-4 & 5 deal with the subject of ‘Motivation’ and ‘Behavioral
Approach to Motivation’. Major classical theories have been
discussed. Perhaps the most important theory, from the view of
psychological contract, is ‘equity theory’. Equity theory is concerned
with the underlying principles by which rewards are distributed, and
how these are perceived fair or otherwise. The links between equity
theory and the psychological contract are clearly drawn .The
behavioral approach combines the theories of ‘goal setting’ and
‘organizational behavioral modification.’ In many respects, the
behavioral approach fulfils many of the requirements for the
psychological contract. The main point made is that almost any
change has the potential to change the psychological contract. It is
part of the function of leaders to re-negotiate such changes.
3.4.10 Chapter-6 discusses the ‘leadership and management styles’. The
major theories of leadership have been discussed including the
Ohio and Michigan studies, contingency theories and situational
leadership theory. Expectations about the type and nature of
leadership are likely to figure large in the psychological contract.
The nature of the psychological contract will influence, and in turn
be influenced by, the interaction between managers and their staff.
Authors have noted that the situation such as appraisal interview
provides opportunity to achieve negotiation and continuing re-
negotiation of psychological contracts.
3.4.11 Chapter-7 deals with ‘Group Dynamics at Work’. The function of
groups, decision-making in groups, and team roles are discussed.
Further the nature, causes, and cures of inter-groups conflicts are
52
discussed. The psychological contract in groups is concerned with
issue of how individual relates to each other in groups and may
also contain elements concerning inter group relations. It has been
noted that the breach of psychological contract may damage the
group effectiveness.
3.4.12 In chapter-8, authors have moved to macro level of organization.
Different types of organizations are considered. Organizational
culture and its significance, different types of organizational
structures and climates are discussed. The effect of organizational
culture is all pervasive for the psychological contract. It will define,
at the macro level, how people are dealt with in organization and
what the possibilities are for change. Changing the culture will
have, therefore, an enormous impact on the psychological contract
and hence on the organizational effectiveness.
3.4.13 Chapter-9 discusses the issues of ‘Organizational Change’. This
chapter considers how organization can change and adapt. It will
involve individuals, groups and the top management. For any
change to be effective, it needs to take in to account the
psychological contract of those who are getting affected by the
change. It is seen that any organizational change intervention
involves a continuous process of negotiation and re-negotiation of
the psychological aspect of contracts, between the OD consultant
and the member of the organization, and to be handed skillfully to
be effective.
3.4.14 The final three chapters of the book lay emphasis upon the
application of the theories to practical situation. Chapter-10 deals
with boss management, chapter-11 deals with ‘coping with change’
53
and finally chapter-12 deals with self-management. It is noted that
change of any significance usually involve changes in both the
economic and psychological contracts. These will need to be re-
negotiated. Empowerment and self management involve a major
change in the psychological contract. Authors have noted that a
well planned and openly re-negotiated move to greater self-
management is essentially a non-zero sum game. Both the parties
(employees & employers) stand to gain from the new psychological
contract.
3.4.15 Thus it is seen that this book is well written book about
psychological contract, its linkages for various HR processes and
how management can effectively use the concept of psychological
contract for increase effectiveness of organization. The linkages of
psychological contract with other processes at macro level have
been covered in detail, but the micro level linkages at individual
level have been ignored. The linkages between psychological
contract and the personality are not dealt with in this book although
the personality of a person is likely to have an effect on nature of
his/her psychological contract.
REVIEW OF JOURNAL ARTICLES / RESEARCH PAPERS
3.5 Psychological Contracts: Employee Relations for the Twenty First
Century (By Lynne J Millward and Paul M Brewerton)*
3.5.1 This is one of the chapter in the book ‘Personnel Psychology and
Human Resource Management’, edited by Ivan T. Robertson and
Carry L. Cooper. In this chapter, authors have presented the
* Lynne J. Millward and Paul M. Brewerton; ‘Psychological Contract: Employee Relations for the twenty first century’
appeared in Cary L. Cooper and Ivan T. Robertson (Eds), IRIOP 2000 v 15, 2000, John Wiley & Sons Ltd.
54
development of concept of ‘Psychological Contract’ from its initial
conception to the most modern status as a scientific construct. As
noted by authors:
“the employment contract is basic to organizational membership
and it constitutes the mainstay of employment relation,
establishing an exchange of promises and contributions
between two parties: employer and employee”
3.5.2 It has been noted in this paper that until the last decade, the term
‘Psychological Contract’ was used mainly as a framework or
backdrop (rather than a scientific construct) and little research
had been undertaken at that time. However, since 90s the
psychological contract has acquired construct status as a
cognitive-perceptual entity, and deemed to be measurable and
owned solely by the individual, as opposed to being a property of
the relationship between two parties. The authors have noted the
major contribution made by Rousseau through her research
papers and further researches done by her students.
3.5.3 Changes in economic and political life, with the attendant collapse
of traditional organizational designs and structures (through
forms of employer-employee exchange (E.g. Job Security offered
in exchange for loyalty). This led to organizational behavior
researchers to the study of “contract” between employer &
employee. The concept of psychological contract is now of
worldwide interest and significance.
3.5.4 Authors have noted following trends in changing nature of
employment and employee relations:-
55
a) New ways of working: The changing context of the
workplace in the 1990s derives from a variety of economic,
technological and sociological phenomena and these
changes have had significant implications for the majority of
full time workforce. Full time jobs have been reduced and
part time or temporary jobs are on increase. There has been
a shift from traditional working pattern to a
core/complementary structure; that is organization
employing core long–term contract based and
complementary short-term contract based employees having
major implications for both type of employees.
b) The New Deal: The changes in the context of working as
noted above have wide ranging implications for the
workforce, regardless of the form of the work adopted. The
typical changes being noticed are summarized in TABLE –
3.1. The potential impact of these changes is immense.
TABLE 3.1: Old Deal Vs. New Deal
Old deal New deal
• Long-term security • Fair pay for good performance
• structured ,predictable employment scenario
• Career managed by organization • Time and Effort rewarded
• Income related to experience/status
• Offered promotion prospects and supported in return for ‘going the extra mile’
• Mutual trust and Investment
• No security • High pay for high performance
• Flexible and ambiguous employment scenario
• Career managed by individual • Performance expected
• Income related to performance- performance related pay
• Transactional attitudes ‘tit for tat’ mentality
• Little Trust and much cynicism
56
c) Diversity and the multicultural working world:
Recognition of diversity and its systematic management has
become the key for organizational survival and success.
Diversity has major implication for how people work together
and how they perceive the work & its environment and thus
provides an essential backdrop against which to investigate
contractual issues.
3.5.5 It has been argued that an investment or input by both employee
and employer is crucial to organization’s success. However until
recently the focus of interest has been less in what the
organization can offer to the employee in exchange for their
loyalty and commitment, and more in terms of what an employee
can offer the organization. However it is clear that the behavior of
individuals in the organization cannot be understood in a social
vacuum. Psychological Contract, then, can be described in terms
of both the content (the perceived terms of employment contract)
and the process (how the contract was arrived at). Authors have
further discussed various issues relating to content as well as
process of psychological contracts.
3.5.6 Further the outcome of violation of the psychological contracts,
which have major practical implications for HR managers, have
been discussed. It is noted that the ‘contract violation’ is most
likely to result in negative outcomes for the organization and for
the individual. It has been further noted that in many cases
‘violation is a trauma for a relationship and undermines good
faith’- once lost it is not easily restored. Violation is said to be
most likely to occur when there is:
57
• A history of conflict and low trust
• Social distance - parties do not understand the perspectives
of the other
• External pattern of violation (e.g. during an era of business
retrenchment)
• Incentives to breach contracts are high
• One party perceives little value in the relationship
3.5.7 Authors have further discussed issues related with
operationalisation of psychological contract - i.e. measurement of
type of contract (both content focused measures as well as
process focused measures), performance implications and its
evaluation.
3.5.8 Authors have explored the relationship found between the
psychological contract and other measures of workplace
perception and reaction, notables among them being:
1) organizational commitment and
2) Links with organizational culture.
3.5.9 Before concluding the chapter, authors have noted various
contemporary trends in psychological contracts (i.e. shift from
relational to transactional contracts and self- correcting contracts)
and issue of sex-differences in the context of formation of
particular type of psychological contracts.
3.5.10 In conclusion authors have noted that the term psychological
contract has a potential utility as a scientific and analytical
construct over and above constructs such as commitment,
however much work remain to be done in clarifying our use of
term, both theoretically and empirically.
58
3.6 The Psychological Contract and Individual Differences: The Role of
Exchange and Creditor Ideologies (By Jacqueline A-M. Coyle-Shapiro
and Joel H. Neuman)*
Dramatic changes have been noted in contemporary business
practices and this has led to implicit social contracts long held
between employees and employers. This has led to the increased
interest in ‘psychological contract’ to understand and analyze the
relationship between employer and employees in current context.
Lot of research work in this field has focused on the outcome of
contract fulfillment, or its breach on employee’s attitudes and
behavior. However, little work has been done to examine the role of
dispositional variables in psychological contract process. Authors
have noted that “when you stop to consider that the psychological
contract is in essence based on an idiosyncratic belief, dispositional
characteristics would seem critical – and antecedents – to the
process.”
3.6.1 The article under review is about a research study which explores
the relationship between two such dispositional characteristics
(exchange and creditor ideologies) that relate strongly to the
social exchange process and the formation of psychological
contract beliefs. The influence of these dispositional
characteristics on psychological contract process has been
examined in this study.
* Coyle-Shapiro, Jacqueline A-M. & Neuman, Joel H. (2004), The psychological contract and individual differences: the
role of exchange and creditor ideologies [online], London: LSE research Online, Available at: http://eprints.lse.ac.uk/archive/00000826.
59
3.6.2 Exchange ideology has been defined as the degree to which an
individual’s work effort depends upon perceived organizational
treatment. It is a dispositional orientation reflecting a person’s
expectations for the person - organization exchange. A person
with a strong exchange ideology will work hard if treated well or
fairly, whereas individuals with a weak exchange ideology will
continue to work hard even if perceive themselves as being poorly
or unfairly treated.
3.6.3 Broadly, individuals can be divided into three categories based on
types of exchange ideology they have: Benevolent (individuals
who are more tolerant to under-reward), Equity Sensitive and the
Entitled (those who are more tolerant to over-reward).
Consequently it has been proposed by the authors that “exchange
ideology will be different amongst the three groups; each group
will evaluate their relationship with the organization regarding the
balance between employee and organizational contributions”.
Individuals with a high level of exchange ideology focus on what
they receive, prefer high outcomes for themselves, and feel that
the organization is in their debt. As a result, these individuals are
more likely to think that the organization ‘owes’ them and are
more likely to have weaker obligations to the employer and less
likely to fulfill those obligations.
3.6.4 Creditor ideology refers to dispositional orientation of an individual
towards the giving of greater value than that received. As noted
by experts, “partners may differ in their readiness to reciprocate
benefits on the basis of ideologies concerning the most effective
ways to strengthen exchange relationships”.
60
3.6.5 As confirmed by some laboratory experiments, the individuals
rated high in creditor ideology returned greater help than they had
received. In the employment relationship, creditors are more likely
to invest in the relationship through increasing their perceived
obligations to their organizations and fulfilling those obligations to
a greater extent.
3.6.6 This article outlined the research study carried out by authors to
test their propositions about exchange and creditor ideologies and
its effect on psychological contract. The study confirmed that
there is a strong relationship between employer obligations and
employee fulfillment of obligations when exchange ideology is
high. Further the relationship between perceived employer
fulfillment of obligations and employee obligations is stronger for
employees with a low creditor ideology than for employees with
high creditor ideology.
3.6.7 Authors report that the inclusion of exchange ideology and
creditor ideology in the regression analysis explained unique
variance in employee obligations and fulfillment above that
accounted for by the situational determinants. Specifically the
direct effects of the individual difference variable explain a further
7% and 4% variance in the dependant variable respectively.
3.6.8 It has been noted by authors that the unique contributions of
exchange and creditor ideologies, in explaining employee
outcomes, highlights the importance of individual dispositions in
understanding organizational behavior. This article demonstrates
that some individuals are predisposed to contributing more to the
relationship with their employer than others and to respond
differently to situational factors: such as employer obligations and
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fulfillment of those obligations. In short, while it is recognized that
situational factors are important determinants in shaping behavior,
individual difference contribute another important element.
3.7 Psychological Contracts in the Workplace: Understanding the Ties
that motivates (By Denise M. Rousseau)*
3.7.1 This is an article by one of the leading researcher and authority in
the area of psychological contract theory. It summarizes current
researches in the exciting area of psychological contract theory.
3.7.2 To start with, the author has emphasized the need of managing
the psychological contracts of employees in modern time. Flatter
organizations, geographically dispersed work locations, and ever
increasing aspiration levels for service and innovation make it
difficult for employer to motivate workers strictly through
supervision or monetary incentives. However understanding and
effective management of psychological contract can help
organization thrive.
3.7.3 The author has listed six features of psychological contracts as
under:
a) Voluntary Choice: Psychological contracts have element of
voluntary choice by employees and hence motivate them to
keep their obligations.
b) Belief in Mutual Agreement: Psychological contract involves
perception of mutual obligations, regardless of whether that
is the case in reality.
* Rousseau Denise M., Psychological Contracts in the workplace: Understanding the ties that motivate, Vol 18, No 1,
2004, Academy of Management Executives.
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c) Incompleteness: Neither employers nor employees can
initially spell out all the details of a long term employment
relationship. Moreover, changing circumstances mean that
not all contingencies can be foreseen. This implies that,
probably with the exception of short term, limited transaction,
psychological contracts tend to be incomplete and need to
take shape over time.
d) Multiple Contract Makers: The interpretation of their
psychological contracts by employees is influenced by many
sources of information like boss, co-workers, and human
resource practices such as training and performance
appraisal process. When various sources convey different
messages, it erodes the mutuality of the psychological
contract.
e) Managing Losses When Contract Fail: When psychological
contracts are violated it results in negative reactions.
Therefore workers and employers must focus both on
fulfilling commitments of their psychological contracts as well
as managing losses when existing commitments are difficult
to keep.
f) The Contract as Model of the Employment Relationship: A
psychological contract creates an enduring mental model of
the employment relationship and this mental model provides
a stable understanding of future expectations and guides all
the future actions accordingly.
3.7.4 The author has further discussed various types of psychological
contracts. These are general patterns that differentiate how workers
and employers behave towards each other. Following types of
contracts have been identified by the author:
i) Relational Psychological Contracts
63
ii) Transactional Psychological Contracts
iii) Hybrid or Balanced Psychological Contracts
3.7.5 The author further notes that agreement between worker and
employer on what each owes the other is critical to the employment
relationship’s success. Creating mutuality is the gold standard in
employment relations. A long list of dysfunctional outcomes is
generated when an employer or worker believes that the
psychological contract has been willfully breached by the other
side.
3.7.6 Author has further thrown light on how do workers shape their own
psychological contracts. It is suggested that workers shape their
psychological contracts in three ways:
i) Through their career goals
ii) Personality of workers
iii) Idiosyncratic deals ( special employment arrangements)
3.7.7 The article presents following guidelines for employers to help firms
effectively manage psychological contracts and, in so doing,
increasing the odds of achieving important organizational goals:
i) strive for consistent implementation of psychological
contract
ii) Establish a clear meta contract that can be used
across the firm
iii) Build flexibility into psychological contracts
3.7.8 To conclude the article, the author notes:
“Overall, the psychological contract is a product of complex
web of exchanges between worker and employer, with the
latter represented by several parties at the same time. Many
64
employers simply have no clue how many different “contract
makers” shape the beliefs that their workers hold, implying
obligations without fully comprehending their ramifications. In
contrast, employers that deliberately formulate and execute
consistent psychological contracts are in a position to keep
their commitments and motivate the worker contributions
essential to their mutual success. Enterprises that serve their
stakeholders well are sustained by principled leadership and
a highly committed workforce, and psychological contracts
are their fundamental building blocks.”
3.8 The Psychological Contract and Job satisfaction: Experience of a
group of casual workers (By Lindsay Nelson, Graeme Tonks & Joshua
Weymouth)*
3.8.1 In this article, authors have presented a study conducted by them
about the effect of casual employment on a group of university
students using the psychological contract as interpretative
framework in the context of Australian labour market. It has been
noted that Australian labor market has witnessed a significant
development in the increased use of casual labor in the recent past.
The “casualisation” has resulted from ‘labor market fragmentation’
and there is a general agreement that it emerged from political and
economic factors, and labor market strategies used by employers
to alleviate labor costs, and mitigate market uncertainty in order to
gain a competitive advantage. However, casual labor, compared
* Nelson Lindsay, Tonks Graeme & Weymoutn Joshua; The Psychological Contract and Job satisfaction: Experiences of
a Group of Casual Workers, 2006, Research and Practice in Human Resource Management.
65
with permanent workers, have substandard rights, benefits and
protection, as well as substantial levels of precariousness.
3.8.2 In this study, perceptions of the psychological contract and job
satisfaction of a group of casual worker is examined using
established measures together with interviews. The study was
conducted in three phases. Firstly, exploratory interviews were
conducted, second phase assessed the transactional-relational
orientation of psychological contract and lastly level of job
satisfaction was examined. A small group of 20 students, who were
enrolled in various Australians universities, undertaking an
undergraduate business management course and also engaged in
paid employment on a casual basis participated in the study. The
participant students represented many diverse organizations,
although the majority worked in the service sectors, particularly the
hospitality and retail industries.
3.8.3 Data obtained from the interviews were analyzed using computer
software and it revealed two primary categories reflecting the
transactional and relational contract entities. From this initial
divergence, software revealed a number of sub categories. The
transactional dimension exposed concerns about pay & benefits as
expected. However, the relational dimensions was mere complex
and surfaced various factors like ‘hard and soft versions’ of HRM,
interaction with colleagues and supervisors, issues of trust,
commitment, organizational citizenship behaviors(OCB) and anti
role attitudes. The result showed there was agreement with an
expectation of being paid for overtime, and doing the job for money
as expected in transactional psychological contract. The result
suggests that respondents did not expect that relational aspects of
the psychological contract would be fulfilled. Further it was noted
66
that casual workers were dissatisfied with many aspects of their
job, yet were prepared to endure these features of the workplace in
order to gain employment.
3.8.4 The research results, as reported in this study, demonstrate that
casual are treated derogatively and unfairly by their employers
regularly. Respondents felt that they were treated in an inferior
manner because of their employment status and were aware of
power differentials between themselves and their employer.
Respondents often felt that they were victims of injustice and power
abuse by managers. This, in turn, invoked low job satisfaction, as
well as low levels of trust and commitments, a withholding of
organizational citizenship behaviour (OCBs) and involvement in anti
role behaviors by employees.
3.8.5 Although the sample size used for the study was small, the findings
showed a strong transactional orientation. Employees held no
thoughts of permanent relationship or a sense of belonging and
involvement. At the same time, however, the qualitative data
revealed a strong feeling of dissatisfaction over the way these
employees were treated.
3.8.6 The authors have noted that:
“Thus, in a convoluted way, although the relational
obligations were at a very low level, workers resented the
poor treatment to which they were exposed, indicating that
even these contingent workers wish to be treated with
respect and dignity. For this reason, and not withstanding
support for the transactional obligations, it appears that the
relational side of the psychological contract was regarded as
67
important. --- In fact, the finding suggests that relational
qualities are more important than the transactional
orientation, because its fulfillment or unfulfillment can have
impact on individual’s attitudes and behaviors and thus, on
organizational performance.”
3.8.7 Although this study is undertaken in an Australian context, it may be
noted that employment environment is no different in other parts of
the world. The present global environment encourages deregulated
labor market which offers little motivation for corporate loyalty and
attachment to jobs. Whilst casual labor does provide employers and
employees with particular benefits, the management of such
arrangements needs to be considered carefully. If the organization
sticks to the notion of the relative importance of financial rewards,
they may be creating structures that could ultimately contribute to
reduced performance, or even their own failure. Organization
wishing to capitalize on the advantages of using casual labors need
to configure their HRM policies and practices to strengthen links
with the relational dimension of the psychological contract, requiring
much greater emphasis on the tenets of ‘soft’ HRM.
3.9 Psychological Contract development during organizational
Socialization (By Ans de Vos, Dirk Buyens and Rene Schalk)*
3.9.1 The psychological contract has been viewed as a relevant construct
to explain important employee attitudes and behaviours like
commitment, turnover and organizational citizenship behaviours.
Most researches have been focused on outcome of psychological
* Ans De Vos, Dirk Buyens and Rene Schalk; Psychological Contract Development during Organisational Socialisation:
adaptation to reality and the role of reciprocity; Journal of Organisational Behaviour, 2003, Published online in Wiley InterScience (www.interscience.wiley.com); John Wiley & Sons, Ltd.
68
contract breach in terms of responses by employees. The authors
have noted that the process of psychological contract formation
remains theoretically underdeveloped and has received limited
empirical attention with few exceptions. In this research study, the
main objective is to gain better understanding of the process of
psychological contract formation by the newcomers during
socialization process. Specifically, this study investigates the
process of psychological contract formation in following ways:-
a) To investigate psychological contract formation as a sense
making process taking place during organizational
socialization. This study examines how changes in
newcomers’ perceived promises are associated with their
interpretation of experiences encountered after
organizational entry.
b) To relate the process of psychological contract formation to
the socialization process. The socialization period is
generally considered as an important stage in the
formation of psychological contract.
c) It takes into account newcomer’s perception of both
parties’ promises and actions (employer and employees).
Taking into account newcomer’s perception of both parties’
promises and actions makes it possible to examine how
both are dynamically interrelated over time.
3.9.2 It has been theorized that socialization is characterized by sense
making process through which newcomers come to understand,
interpret, and respond to their new environment. These sense
making processes are seen as critical to the development of
attitudes and behaviors that enable newcomers to function
effectively within their new environment. Further the psychological
contract is a perceptual cognition defined at the level of the
69
individual. It means that it is the perception of reality, not reality par
se, which is the central focus of the psychological contract
research. This means that employees actively make sense of their
psychological contract based upon their experiences within the
organization.
3.9.3 Newcomer’s psychological contracts are comprised of beliefs about
the inducements they have been promised by their employer and
the contribution they have promised to make in return. The role of
unilateral and reciprocal adaptation in explaining changes in new
comer’s psychological contract perception are modeled as shown in
FIGURE – 3.4.
3.9.4 The individual’s adjustment to the organization further occurs
during the sixth or twelfth month after entry, i.e., the acquisition
stage of socialization. As a more stable cognitive schema about the
employment relationship develops, uncertainty about the new
relationship is reduced and active sense making process
decreases. Therefore it is expected that during this period,
newcomer’s experiences will become less likely to affect changes
in their psychological contracts.
3.9.5 In this study, the research sample consisted of full time employees
with a permanent employment contract, working for six large
privately owned firms in Belgium (N= 333). Data was collected at
four points in time: 2 weeks after entry (T1) and then 3 months (T2),
6 months (T3) and 12 months(T4) after entry, using a longitudinal
research design to assess the perceived promises, perceived
inducements, and contributions.
70
Fig: The role of unilateral and reciprocal adaptation in explaining changes in
3.9.6 The analysis and result of the study has shown that newcomers
changed their perception of what their employer had promised them
based on their perception of the employer inducements actually
received. They also changed their perceptions of what they had
promised their employers based on their perception of what they
actually contributed to their employer.
3.9.7 The study shows that during the first year after entry newcomers’
interpretations of their experiences within the work setting are
associated with changes in their perceptions of the terms of their
employment deal. It implies that newcomers’ psychological contract
are not formed once and for all at the time they enter the
organization. They evolve and are periodically revised as a result of
sense made of experiences encountered after entry.
3.9.8 These results underscore many potential implications for
employers. It is important for employer to be aware of the impact of
their human resource policies on employees’ expectations and on
their intended contributions and employer can manage employees’
perceptions of their own promises directly by providing concrete
information and feedback about their own contributions.
3.9.9 In conclusions, the findings of this study contribute substantially to
the research on psychological contracts by focusing on the
important but neglected issue of psychological contract formation. It
is shown that it is important to view the psychological contract as a
dynamic set of expectations which, at least during the socialization
process, are affected by newcomers’ interpretations of their
experiences after entry.
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3.10 The Changing Nature of Psychological Contract in the IT industry:
1997-2001 ( By Philippa Davidson) *
3.10.1 This paper outlines the nature of psychological contract formed by
employees of IT industry and it further analyze variations in the
nature of the contract as perceived by employees with different
demographic and career profiles.
3.10.2 The author has proposed that psychological contract is a series of
six bipolar continuums, the position of any individual on these six
continuums will vary according to their demographic profiles and
career experiences and finally the perceptions of individual of the
form of their psychological contract have changed in marked but
measurable ways over recent years.
3.10.3 For the purpose of this study, the authors have concentrated on IT
industry of UK during the period 1997 – 2001.
3.10.4 The authors have identified three key themes as a result of
psychological contract research. First, six key elements are
conceived to form the psychological contract, viz.
i) A balance between benefits given by an individual
and their expected rewards
ii) The amount of choice perceived to be present
iii) The pace of change experienced
iv) The perceived importance of trust in the contract
v) The existing level of clarity
vi) The extent to which the contract was individualistic
* Davidson Phillippa; The changing Nature of the Psychological Contract in the IT Industry: 1997-2001; Research Papers
in Human Resources Management; Kingston Business School; Kingston University, UK.
73
3.10.5 The second theme that emerged was that the psychological
contract is affected by a number of influences and in particular
following six factors were explored:
• Age
• Gender
• Individual’s role within the organization
• Type of organization : IT company or IT department
within a non IT company
• Length of time the individual had worked within IT.
• Length of time the individual had worked for the
current employer
3.10.6 And, finally the author notes that individual’s psychological contract
had changed over the period, following changes in wider work
environment.
3.10.7 To explore the key themes as mentioned above, it was important to
collect quantitative and qualitative data. For this purpose, the
author has considered it appropriate to use the semi-structured
interviews for data collection. The sample chosen by author
included employees of IT industry representing wide cross section
of respondents with different demographic characteristics and
career histories. However author has admitted that the sample
chosen was indicative rather than fully representative of IT industry.
3.10.8 The numerical data collected was analyzed using appropriate
computer programs. The finding of this research study confirmed
that the psychological contract can be modeled as a series of six
bipolar continuums, as shown in FIGURE - 3.5.
74
High
Low
Balance of benefits and rewards
Choice
Pace of Change
Trust
Clarity
Individualism
FIGURE 3.5: Bi-polar Features of the Psychological Contract
75
3.10.9 The above continuum is based on the supposition of there being a
strong relationship between the benefits an individual is expected to
give to an organization and the reward they expect in return.
3.10.10 The author has identified following four distinct groups from the
research sample:
• Challenge-hunters tended to be male, under 40, worked
in the technical roles in IT departments and had been
employed by their current employers for less than two
years; they were also uninterested in Corporate Culture
and Job Security.
• Lifestyle-enthusiasts, on the other hand, were females
who had spent five years or more in their current
organizations; like Challenge–hunters they did not value
Job Security and ranked Corporate Culture and Loyalty
to the Company as relatively unimportant.
• Reward seekers were male, worked in management
roles in IT companies, had spent up to 20 years working
in IT and between two and five years in their current
companies; they shared the Lifestyle- enthusiast’s views
about Job security, Corporate Culture and Loyalty to the
Company and added Physical Working Environment to
the list of unimportant factors.
• Company-servers were 40 or over and had 20 or more
years experience in the IT industry; they felt that Physical
Working Environment and Working Hours were the least
important factors.
3.10.11 Further, conclusion was drawn that factors such as demographics
and career experience had a noticeable effect on individual’s
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psychological contracts. The four types of persons identified in the
findings supported this conclusion.
3.10.12 In the last, the authors have noted that the contract breaches (in
the form of redundancies) have had a marked effect on individuals
whether they have experienced them at first hand or not. It,
therefore, appears that mere awareness of breach is enough to
have an impact on the psychological contract. Further it is noted:
“The psychological contract has been shown to be a highly
subjective concept. Each individual’s experiences, both at
work and in their lives in general, play a part in defining both
current and future attitudes to the employment relationship.
This individuality makes the psychological contract an
interesting research subject: general findings may show
similarities across studies but detailed responses will always
exhibit an element of uniqueness.”
3.11 From Me to We: The Role of psychological contract in Team Formation
(By John E Galvin, Vicki R McKinney & Katherine M Chudoba) *
3.11.1 This paper was a part of proceedings of 38th Hawaii International
conference on system sciences- 2005 .This paper explains the
process of team formation with the help of psychological contract
literature and concepts.
* Galvin John E., Mckinney Vicki R. and Chudoba Katherine M.; From Me to We: the Role of the Psychological
Contract in Team Formation; Proceedings of 38th Hawaii International Conference on System Sciences-2005.
77
3.11.2 The role played by work teams to accomplish business objectives is
universally accepted as very important. Unfortunately not all work
teams are effective and it is important to understand the process of
formation of teams to make them more effective.
3.11.3 To form work teams, individual join together to achieve a common
goals dependent on contributions from all team members. This
establishes a level of interdependence within the team and instills a
measure of vulnerability on the part of each team member since
their individual performance is, at least in part, based on the results
of the collective group.
3.11.4 In this paper, authors have proposed a model to help better
understand the process of transformation from being individually
centric to being team centric.
3.11.5 As part of the individual’s integration with the team, there is an
implied agreement established between the team members and the
team which represents the “individual beliefs, shaped by the
organization, regarding terms of an exchange agreement between
individuals and their team. This has been referred to as an
individual’s “psychological contract” and describes the beliefs,
expectations and perceptions held by individuals concerning what
they are to give and receive as part of their working relationship
with the other participants.
3.11.6 The congruence of an individual’s psychological contract with that
of other team members provides a basis for transforming into a
team player since the individual’s expectation became aligned with
that of the team.
78
3.11.7 When the individuals come together to form a team, they are
coming together to achieve a common goal. As team members join
the team, they bring with them their own personal goals and
objectives. These personal expectations provide them with scripts
and beliefs about how the team should function but are not
necessarily held in common with other team members. These
personal expectations form the individual psychological contract
with the team and become the framework for establishing shared
team mental models. Further the development of a shared team
model requires communication and as additional information is
received from other team members, individuals selectively use this
information to update their knowledge. As the team member
integrates their newly acquired knowledge with their existing
knowledge structures, their team mental model will be updated and
this process continues throughout the life of the team, thus allowing
the team members’ mental model to evolve towards shared models
with other team members.
3.11.8 The paper is concluded by authors with observation:
“A team’s success depends on the effective
integration of team members, and the transformation from
“me” to “we”. The concept of psychological contract is helpful
in understanding this transformation and thus helping
management with insights for guideline to be developed for
team formation.”
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3.12 An Analysis of Psychological Contracts in Volunteerism and the
Effect of Contract Breach on Volunteer Contributions to the
Organization (By Becky J. Starnes, PhD)*
3.12.1 This research article explores if the psychological contract is
developed between volunteer workers and the organization they
serve, and the effect of perceived breach of the psychological
contract on volunteers’ attitudes and behavior.
3.12.2 The not-for-profit sector (NGO etc.) form important part of modern
society and relies heavily on the support of volunteers to respond to
increasing demands for service, quality and accountability.
Therefore, it becomes necessary for managers of volunteers to do
all they can to recruit, retain, and improve the efficiency of their
volunteer workforce.
3.12.3 This study used the reasoning that volunteers develop
psychological contracts with the not-for-profit organization they
serve and that they will reduce their level of contributions if they
perceive a breach of the contract. A longitudinal cross sectional
panel design consisting of volunteer responses to a survey
instrument at two points in time was used for data collection.
3.12.4 The survey finding confirmed that the volunteers who perceived a
breach in the psychological contract were likely to reduce the
number of hours they worked, and increase (or perceive an
increase) in the quality of their work. However no relationship
between the volunteer’s intentions to remain with the organization
and a perception of a breach in the psychological contract was
* Starnes Becky J., An Analysis of Psychological Contracts in Volunteerism and the Effect of Contract Breach on
Volunteer Contributions to the organization; volume XXIV, Number 3, January 2007, The International Journal of Volunteer Administration.
80
found. However, data suggest that age and the length of time
served may influence the relationships between the volunteer’s
perceptions of a breach of contract and their intentions to remain
with the organization.
3.12.5 The research finding reflects that volunteers can develop
psychological contracts with their not-for-profit organization and
perceive breaches of those contracts. The study of psychological
contracts may play a purposeful role in understanding volunteer’s
contributions. Managers of not-for-profit organizations may consider
conducting honest feedback sessions with volunteers as a tool for
identifying and correcting perceived breaches before they result in
negative feelings and behaviors on the part of the volunteer.
3.13 The Role of Psychological Contract in Retention Management
(By Ans De Vos, Annelies Meganck & Dirk Buyens)*
3.13.1 This article is a part of Vlerick Leuvan Gent Management
School’s working paper series. It examines the views of
employees and HR managers on the factors affecting
retention of employees in the frame work of psychological
contract.
* Ans De Vos, Annelies Meganck & Dirk Buyens, The Role of the Psychological Contract in Retention management:
Confronting HR-Managers’ and Employees’ views on Retention factors and the Relationship with Employees’ Intentions to Stay; Vlerick leuven Gent working paper series 2005/05, Vlerick Leuven Gent Management School.
81
3.13.2 It is noted that due to ongoing environmental challenges like
globalization, competitive market conditions and
deregulation, organizations are required to be more flexible
and responsive. It has resulted in fundamental changes in
employment relationship also, and has led to more attrition
rate of talented employees. The organizations are pressed to
attract and retain talented employees who have
competencies that are critical for organization’s success.
This has resulted in emphasis on ‘retention management’. At
the same time, the concept of psychological contract has
become a relevant construct for understanding and
managing contemporary employment relationships.
3.13.3 While retention management focuses on the type of
organizational incentives and HR strategies that are required
in reducing the attrition rate, the psychological contract
focuses on employee’s subjective interpretations and
evaluation of inducements and how these affect their
intention to stay.
3.13.4 It implies that retention practices might only turn successful if
they are in line with expectations and value system of
employees.
3.13.5 The inducement offered by organization for retention of
employees can be put into following five major groups
1. Financial Rewards
2. Career development Opportunities
3. Job Content
82
4. Social Atmosphere
5. Work-Life Balance
3.13.6 Since the psychological contract involves employees’
subjective interpretation and evaluation of their employment
deals, the above retention factors will only turn out to be
effective for employees’ retention if they are in line with
employees’ subjective views and expectations.
3.13.7 Authors studied the views of both HR managers and
employees on retention management and thereby
integrating the concept of retention management and the
psychological contract. For this purpose, a two step research
was conducted. In the first step, telephonic survey among a
sample of HR managers was done. The second phase
consisted of a large-scale written survey among employees
representing organizations from different industries.
3.13.8 The outcome of above survey supported the idea of the five
categories of retention factors both by HR managers and
employees. However, the result indicated that not all five
types of retention practices are equally important in affecting
employees’ retention. The evaluation of promises about
‘career opportunity’ appears to be most predictive of
employees’ intention to leave and of their job search
behaviors.
3.13.9 This study indicates that HR managers should better take
into account what their employees value and how they
evaluate their organization’s efforts towards retention
management if they are to contribute in a cost efficient way
83
to the strategic objectives of the organization. The
psychological contract hereby provides a practically useful
framework to manage employees’ expectations and to
engage in an open process of communication and
negotiation about the employment deal.
3.14 Violation of the Psychological Contract: The Mediating Effect of
Relational versus Transactional Beliefs (By Martin Grimmer & Mathew
Oddy)*
3.14.1 In the present study, authors have presented the result of
their research work on ‘psychological contracts’ in an
Australian context and explore the effect of it on the
employees’ organizational behavior.
3.14.2 Authors have noted that the recent trends in the employment
contracts which lay stress on short-term employment
contracts and a loss of job security. These factors have
resulted in a re-definition of career expectations and of the
nature of the employment relationship. It has been noted that
the old contract of ‘security in exchange for loyalty’ has been
replaced by a new contract of ‘employability for flexibility’.
* Martin Grimmer and Mathew Oddy; Violation of the Psychological Contract: The Mediating Effect of Relational Versus
Transactional Beliefs; vol. 32, No. 1, June 2007, Australian Journal of Management.
84
3.14.1 Authors have further mentioned about two major types of
psychological contract: relational and transactional.
Relational contract characterizes beliefs about obligations
based on exchange of socio–emotional factors (e.g. loyalty
and support) rather than purely monetary issues.
Transactional contract, on the other hand, are focused on
short-term monetary agreements with little close involvement
of the parties. Relational contract tends to describe
perceived obligations that are emotional and intrinsic in
nature, whilst transactional contract describe obligations that
are economic and extrinsic. Relational contract are,
therefore, more subjective and less tangible in comparison to
transactional contracts.
3.14.2 It is further pointed out that this transactional – relational
divide is not necessarily an exclusive one. The employment
relationship can better be described as comprising of varying
degrees of both relational and transactional elements. In
other words, people are not one versus the other and can
instead have elements of both types in their own individual
psychological contract.
3.14.3 Authors have presented the results of an exploratory study
that investigated the psychological contract of MBA students
at two Australian universities for the following purposes:
1) To evaluate the type of psychological contracts held
by the MBA students, using the classical relational
and transactional dimensions.
2) To consider the effect of contract violation.
85
3) To assess the possible mediating effect of the
contract type, relational versus transactional, on the
impact of contract violation.
3.14.4 A total of 90 students enrolled in MBA program of the
University of Tasmania and Monash University participated
in the study. The survey battery contained 17 items
impulse control that facilitates tasks and goal-directed
behavior, such as thinking before acting, delaying
gratification, following norms and rules, and planning,
organizing and prioritizing tasks. High conscientiousness
refers to persons who focus on fewer goals and exhibits the
self- discipline associated with such focus. Highly
conscientious people exhibits high self-control resulting in
consistent focus on personal and occupational goals. On the
other hand less conscientious person is more easily
distracted, is less focused on goals, is more hedonistic, and
is generally more lax with respect to goals. A passing idea,
activity, or person easily seduces them from the task at
hand; i.e. they have weak control over their impulses.
Flexibility facilitates creativity, inasmuch as it remains to
open to possibilities longer without driven to closure and
moving on.
96
4.3.14 Keeping above discussion in view, the relevant null and
alternative hypotheses are:
Hypothesis - 4:
H4O : The formation of ‘Transactional Contract’ is not related
to the personality .
H4A : The formation of ‘Transactional Contract’ is more likely
to be positively associated with scores on Extraversion
scale, Neuroticism scale and negatively associated with
‘Openness to Experience’ scale, Agreeableness scale and
Conscientiousness scale.
Hypothesis - 5:
H5O : The formation of ‘Relational Contract’ is not related to
the personality.
H5A : The formation of ‘Relational Contract’ is more likely to
be positively associated with scores on ‘Openness to
Experience’ scale, Agreeableness scale and
Conscientiousness scale and negatively associated with
Extraversion scale and Neuroticism scale.
97
Hypothesis - 6:
H6O : The formation of ‘Balanced Contract’ is not related to
the personality.
H6A : The formation of ‘Balanced Contract’ is more likely to
be positively associated with scores on ‘Openness to
Experience’ scale, and Conscientiousness scale and
negatively associated with Neuroticism scale.
Hypothesis - 7:
H7O : The formation of ‘Transitional Contract’ is not related to
the personality.
H7A: The formation of ‘Transitional Contract’ is more likely to
be positively associated with scores on Neuroticism scale.
4.3.15 Various hypotheses (null as well as alternative) are tabulated
in TABLE – 4.1.
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TABLE – 4.1: RESEARCH HYPOTHESES
Sr. No.
Null Hypothesis
Alternative Hypothesis
H1
The type of psychological contract formed by government employees is not specific in nature.
The type of psychological contracts formed by government employees tends to be predominantly ‘Relational’ in nature.
H2
Age does not have any significant effect on type of psychological contract of government employees.
As age increases, there will be a significant shift towards relational dimension of psychological contract of government employees.
H3
There will be no significant difference in type of psychological contract in male and female employees.
There is a significant difference in the type of psychological contract formed by male and female government employees.
H4
The formation of ‘Transactional Contract’ is not related to the personality.
The formation of ‘Transactional Contract’ is more likely to be positively associated with scores on Extraversion scale, Neuroticism scale and negatively associated with ‘Openness to Experience’ scale, Agreeableness scale and Conscientiousness scale.
H5
The formation of ‘Relational Contract’ is not related to the personality.
The formation of ‘Relational Contract’ is more likely to be positively associated with scores on ‘Openness to Experience’ scale, Agreeableness scale and Conscientiousness scale and negatively associated with Extraversion scale and Neuroticism scale.
H6
The formation of ‘Balanced Contract’ is not related to the personality.
The formation of ‘Balanced Contract’ is more likely to be positively associated with scores on ‘Openness to Experience’ scale, and Conscientiousness scale and negatively associated with Neuroticism scale.
H7
The formation of ‘Transitional Contract’ is not related to the personality.
The formation of ‘Transitional Contract’ is more likely to be positively associated with scores on Neuroticism scale.
99
CHAPTER – 5
RESEARCH METHODOLOGY
5.1 The current research attempts to find out if there is a relationship
between the type of personality and type of psychological contracts
formed by persons employed in government organizations in India.
For this purpose, diagnostic research design is adopted.
5.2 The research process followed in this study is depicted in
FIGURE– 5.1.
5.3 As already discussed, the diagnostic research design is adopted for
this study. Under this design, attention has been paid on following
aspects:
a) Selection of Sample
b) Method of data collection
c) Data collection
d) Data processing and analysis
e) Interpretation
5.4 SAMPLE DESIGN: The target population covered under this project
are the employees of selected government departments / or
organizations owned by the government like PSUs. To ensure wide
100
FIGURE - 5.1: The model of the research process followed
cross section of the sample, government departments/ PSUs
were selected to represent following industry / functions:
i) Production / Manufacturing
ii) Civil construction / Projects
Literature Review
Define Research Problem
Review of concepts
and theories
Review of previous
research in related area
Formulation of research
objectives and hypothesis
Research Design
(Including sample design)
Data Collection
Data Analysis
& Hypothesis testing
Interpretation of Results
101
iii) Banks/ Insurance/ Finance
iv) Office jobs / Ministries
v) Armed Forces
vi) Education, Training and HRD
vii) Public Transport
viii) Marketing / Sales
ix) Health care / hospitals
x) Research & Development
5.4.1 Sampling: Sampling method used in this project is
best described as complex random sampling. To
ensure a true representative sample, few
organizations were selected at random to represent
various industry/ functional areas and also keeping
the convenience of data collection in mind. Then
samples were drawn at random from these
organizations to ensure cross section representation
from these organizations.
5.4.2 Specifically for the purpose of collection of sample for
this study, data were collected from organizations
shown in TABLE – 5.1.
TABLE 5.1: LIST OF ORGANISATIONS SELECTED FOR DATA COLLECTION
and negatively associated with Neuroticism (r = -.21,
p<0.05).
All these correlation coefficients were found to be
statistical significant at 0.01 level of significance except
correlation with Neuroticism, which is found to be
125
statistical significant at 0.05 level of significance and
having negative medium correlation.
6.5.5.4 Thus null hypothesis (H5O) of no association
between relational contract and personality is
rejected. The alternative hypothesis (H5A) is accepted
with respect to association between relational
contract and various personality factors except with
respect to association with Extraversion which was
found to be having positive significant correlation
against negative correlation as hypothesized.
6.5.6 HYPOTHESIS –6: It was hypothesized that ‘Balanced’
contract is more likely to be positively associated with
‘Openness to Experience’, & Conscientiousness, and
negatively associated Neuroticism.
6.5.6.1 The Pearson correlation coefficients between scores on
‘Balanced’ contracts and that on Big Five Personality
factors were calculated. The SPSS output is enclosed as
Annexure-8.
6.5.6.2 The Pearson correlation coefficients between scores on
‘Balanced’ contracts and various personality factors are
shown in TABLE-6.6, as under.
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TABLE – 6.6 : Correlations between ‘Balanced’ contract and Big Five Personality factors.
Balanced Openness Conscientiousness Neuroticism
Balanced - .27 ** .20 * - .15
Openness - .30 ** - .25 **
Conscientiousness - - .45 **
Neuroticism -
** Correlation is significant at the 0.01 level (2 - tailed). * Correlation is significant at the 0.05 level (2 - tailed).
6.5.6.3 It is observed that score on Balanced contract is
positively correlated with scores on Openness ( r = .27,
p<0.01), Conscientiousness (r = .20, p< 0.05), and
negatively associated with Neuroticism (r = - .15, p>0.05)
as expected.
All these correlation coefficients were found to be
statistical significant at 0.01 level or 0.05 level of
significance except for correlation with Neuroticism, and
having medium correlation values.
6.5.6.4 Thus null hypothesis (H6O) of no association
between balanced contract and personality is
rejected. The alternative hypothesis (H6A) is accepted
with respect to association between balanced
contract and various personality factors as
hypothesized, however the relationship between
balanced contract and neuroticism was not found to
be statistically significant.
127
6.5.7 HYPOTHESIS –7: It was hypothesized that ‘Transitional’
contract is more likely to be positively associated with
Neuroticism.
6.5.7.1 The Pearson correlation coefficients between scores on
‘Transitional’ contracts and that on Big Five Personality
factors were calculated. The SPSS output is enclosed as
Annexure-9.
6.5.7.2 The Pearson correlation coefficients between scores on
‘Transitional’ contract and Neuroticism is found to be
r = .2, p< 0.05
6.5.7.3 The above indicates a small positive but statistical
significant (at 0.05 level) correlation between Transitional
contract and Neuroticism as expected.
6.5.7.4 Thus null hypothesis (H7O) of no association
between transitional contract and personality is
rejected. The alternative hypothesis (H7A) is accepted
with respect to association between transitional
contract and neuroticism.
6.6 The results of hypotheses testing have been summarized in
TABLE-6.7.
128
TABLE – 6.7: Result of Hypotheses Testing
Sr. No.
Null Hypothesis Alternative Hypothesis
H1
The type of psychological contract formed by government employees is not specific in nature. -REJECTED
The type of psychological contracts formed by government employees tends to be predominantly ‘Relational’ in nature. - ACCEPTED
H2
Age does not have any significant effect on type of psychological contract of government employees. - ACCEPTED
As age increases, there will be a significant shift towards relational dimension of psychological contract of government employees. -REJECTED
H3
There will be no significant difference in type of psychological contract in male and female employees. - ACCEPTED, except for transitional
contract
There is a significant difference in the type of psychological contract formed by male and female government employees. -REJECTED, except for transitional contract
H4
The formation of ‘Transactional Contract’ is not related to the personality. -REJECTED
The formation of ‘Transactional Contract’ is more likely to be positively associated with scores on Extraversion scale, Neuroticism scale and negatively associated with ‘Openness to Experience’ scale, Agreeableness scale and Conscientiousness scale. - ACCEPTED , but partly(with respect to Agreeableness only)
H5
The formation of ‘Relational Contract’ is not related to the personality. -REJECTED
The formation of ‘Relational Contract’ is more likely to be positively associated with scores on ‘Openness to Experience’ scale, Agreeableness scale and Conscientiousness scale and negatively associated with Extraversion scale and Neuroticism scale. - ACCEPTED , (except with respect to
Extraversion)
H6
The formation of ‘Balanced Contract’ is not related to the personality. -REJECTED
The formation of ‘Balanced Contract’ is more likely to be positively associated with scores on ‘Openness to Experience’ scale, and Conscientiousness scale and negatively associated with Neuroticism scale. - ACCEPTED
H7
The formation of ‘Transitional Contract’ is not related to the personality. -REJECTED
The formation of ‘Transitional Contract’ is more likely to be positively associated with scores on Neuroticism scale. - ACCEPTED
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CHAPTER – 7
CONCLUSION, SUGGESTION AND LIMITATION
7.1 CONCLUSION :
7.1.1 This study was designed to investigate the relationship between
type of psychological contracts and personality of people employed
in government organization in India. The existing literature in the
area of psychological contracts suggests four types of
and Transitional. The personality is often seen as a spectrum of Big
Five factors - viz. Openness to Experience, Conscientiousness,
Extraversion, Agreeableness and Neuroticism. Apart from these big
five factors, the gender is a natural way of classification of society
and so is the age of the employees. Hence gender and age are
also considered to study the effect of these two variables on
psychological contracts.
7.1.2 The literature review indicates that personality factors (big five
factors, gender and age) may have an effect on the type of
psychological contracts formed by employees. The study was
restricted only to the persons employed in government organization
in India. The reason of focusing on government employees were:
i. The government offers a unique employment condition in
India, viz. life time career job, stable pay and limited
130
responsibility etc. These features of employment are not
observed in jobs in the private or corporate sectors where
job conditions are market driven.
ii. Government job in India are considered coveted and much
sought for. Also a sizable workforce is employed by the
Government in India.
iii. Citizen now expect positive response and better work
culture from government organizations.
iv. Psychological contract has emerged as a way to analyse
and manage the behaviour of employees.
7.1.3 Nature of Psychological Contract of Government Employees:
Analysis was conducted to determine the nature of psychological
contract primarily held by government employees in India. It was
revealed that government employees have a psychological contract
which is predominantly “relational” in nature, as expected. The
probable reason for this being employment conditions offered by
government jobs in India, viz. life time career job. The score on
‘relational’ contract was found significantly higher than other type of
contracts.
7.1.4 Pattern of Personality displayed by Government Employees:
The scores obtained on ‘Big Five Inventory’ were analysed to
ascertain the pattern of personality displayed in general by
government employees. It is noted that that the personality factors
of ‘Conscientiousness’ and ‘Agreeableness’ were most prominent,
and the presence of ‘Neuroticism’ is the least. This could explain
that only persons, who are high on Conscientiousness and
Agreeableness, take government employment, because these traits
are valued in bureaucratic working. Since the area of focus of this
131
study was “Psychological Contracts”, no further detailed study on
this aspect was undertaken.
7.1.5 Comparison of Psychological Contracts of Male & Female
Employees: Since the gender is a natural variable around which
social world is organized, it is natural to compare persons
belonging to these two groups viz. males and females. Literature
review and numerous previous studies have revealed that no
significant difference have been noticed in the behavior & attitude
of males and females in the context of work-related behavior. The
same conclusion is drawn in the current study also.
Analysis was conducted to compare the mean score of male and
female employees on various type of psychological contracts, and
this yielded that there is no significant difference in the type of
psychological contracts held by males and female employees,
except for transitional contracts. The mean score of female
employees was higher than male employees with respect to
transitional contracts. This outcome needs further research and
validation.
7.1.6 Comparison of Psychological Contracts of Employees belonging to
various Age Groups: Based on the literature review, it was noted
that as persons grow older, their personal, family & social
requirements change over time. This leads to a requirement of
stable job. Accordingly it was hypothesized that as age increases,
there will be a significant shift towards ‘Relational’ type of
psychological contracts.
Analysis was conducted to compare scores on various types of
psychological contracts held by employees belonging to different
132
age groups, and contrary to expectation, no significant change in
scores on various types of contract across different groups was
noticed.
The finding could be attributed to the fact that government
employees tend to have a psychological contract, which is strongly
“relational” in nature in Indian context. Therefore, the effect of age
is not noticeable on the type of psychological contracts of
government employees.
7.1.7 Relationship between Personality and the type of Psychological
Contract: The psychological contracts are an individual’s belief
system regarding mutual obligations and are formed by individuals
themselves. Hence, psychological contract is idiosyncratic and
subjective in nature and is an individual level phenomenon. As
suggested in literature, the psychological contracts of workers are
shaped by their personality.
Analysis was conducted to find out association between Big Five
Factors of personality and the type of psychological contracts.
The relational contract was found to be significantly and positively
associated and with Extraversion, Openness, Agreeableness &
Conscientiousness, and negatively with Neuroticism.
No statistical significant correlation of Transactional contract was
found with personality factors except Agreeableness, which has
negative significant, although small (r = -.19, p<0.05) correlation.
Positive & significant correlation of ‘Balanced’ contract was found
with Openness and Conscientiousness. ‘Balanced’ Contract was
133
found to be negatively associated with Neuroticism, although this
correlation is small and non-significant statistically.
Finally, the Transitional contract was found to be positively and
significantly associated with Neuroticism (r=0.2, p<0.05).
The above discussion indicates that personality factors have
significant association with types of psychological contract.
7.1.8 The objectives and outcomes of this study are summarized in
TABLE -7.1
7.2 SUGGESTION :
7.2.1 The concept of psychological contract has provided
academics and practitioners an umbrella concept to
understand the changes taking place in the nature of work. It
has brought a new vocabulary into their discussions – with
talk about employee mindsets, implicit deals, disengaged
behaviour and a host of other issues in modern
organizational life about which people are concerned.
7.2.2 The management of ‘hearts and minds’ has now become a
central human resource management task and it is being
used to bring together a series of organizational behaviour
studies in related topics such as commitment, job-
satisfaction, socialization and the fit between the employee
and employer. In terms of definition, it encompasses several
psychological phenomena –such as perception, expectation,
134
TABLE - 7.1: Summary of Objectives and Outcomes
Sr. No.
Objective Outcome
1 To investigate about the type of psychological contract held by the employees of government organizations in India
The type of psychological contract held by government employees was found to be significantly ‘relational’ in nature.
2 To investigate the pattern of personality (Big Five Factors) displayed in general by government employees
The pattern of personality revealed the maximum presence of ‘Conscientiousness’ and ‘Agreeableness’ factors and the least presence of ‘Neuroticism’ factor.
3 To investigate the difference in type of Psychological Contracts held by male and female employees of government organizations.
No significant difference was noticed in the type of Psychological Contracts held by male and female employees of government organizations.
4 To investigate the difference in type of Psychological Contracts held by persons of different age groups employed in government organizations.
No significant effect of Age was noticed in the type of Psychological Contracts held by persons of different age groups employed in government organizations.
5 To investigate the relationship between type of Psychological Contracts and personality of government employees
The relationships between types of Psychological Contracts and the personality of government employees were found as under: i) Transactional Contracts were found
to be significantly correlated negatively with Agreeableness.
ii) Relational Contracts were found to be significantly correlated positively with Openness, Extraversion, Conscientiousness, and negatively with Neuroticism.
iii) Balanced Contracts were found to be significantly correlated positively with Openness & Conscientiousness, and negatively with Neuroticism.
iv) Transitional Contracts were found to be significantly correlated positively with Neuroticism.
135
beliefs, promises and obligations – each of which actually
implies different levels of psychological engagement. In the
same way that idea about culture, climate and competencies
were used to help practitioners capture complex changes
needed in their organization, the psychological contract can
be used as a frame of analysis that helps to:
- Capture changes taking place at the individual,
organizational and societal level.
- Discriminate between organizational responses.
- Serve as a basis for predicting individual behaviour.
7.2.3 Further it is important to note that in capturing expectations
of reciprocal behaviour in the employment contract,
discussion of the psychological contract also covers a range
of societal norms and interpersonal behaviour and is based
on changing perceptions of the employer-employee balance
of power. The sense of mutuality implicit in the psychological
contract has provided a useful vehicle to capture the
consequences of perceived imbalances of new employment
relationship.
7.2.4 The psychological contract is different for each individual
and for each type of employment relationship. However,
there are some individual difference factors that can help
organizations to categorize this complexity and spot patterns
in overall shape and content of the psychological contracts,
and therefore devise HR strategies that are more able to
cope with the twin challenges of creating flexibility and
fairness. There are very good reasons to consider that some
important aspects of the psychological contract can be
gleaned from individual measures. The present research
136
study is a small step to understand this linkage between
individual measure of personality and the psychological
contracts.
7.2.5 A conceptual framework for applying the psychological
contract to the employment relationship is shown in FIG 7.1.
It is seen that the ‘personality’ is one of the individual level
background factor in formation of psychological contract
between employee and organizations.
7.2.6 The personality traits are relatively stable over time and
unique to an individual and many reliable and valid standard
instruments are available to assess the personality of
persons. The knowledge of personality can be used to
predict the type of psychological contract likely to be formed
by the employees. The contracts have the effect of reducing
uncertainty for both parties. The reduction of uncertainty is
important both for individuals and organizations. The
reduction of uncertainty allows individuals and organizations
to predict future events and to undertake planning.
7.2.7 There are various types of jobs and functions that an
organization performs. These functions require different type
of psychological contracts on part of employees which are
most appropriate depending on the requirements of job. For
example, the persons employed for specific project or limited
responsibility may require a psychological contract which is
transactional in nature, whereas persons employed for long
term objectives may prefer relational or balanced contract.
The knowledge of personality can be used by the
organizations to assess the preferred type of psychological
41 to 50 years 51 3.5515 .65248 .09137 3.3680 3.7350 1.50 4.50
51 to 60 years 34 3.5938 .69924 .11992 3.3498 3.8377 1.63 4.69
Total 149 3.6003 .64273 .05265 3.4962 3.7043 1.50 5.00
Test of Homogeneity of Variances RelationAvg
Levene Statistic df1 df2 Sig.
.768 3 145 .514
Appendix-2: S.P.S.S. Outputs
Annex-4
160
ANOVA RelationAvg
Sum of
Squares df Mean Square F Sig.
Between Groups .455 3 .152 .362 .780
Within Groups 60.684 145 .419
Total 61.139 148
Robust Tests of Equality of Means RelationAvg
Statistic(a) df1 df2 Sig.
Welch .445 3 71.205 .722
a Asymptotically F distributed.
Post Hoc Tests Multiple Comparisons Dependent Variable: RelationAvg Tukey HSD
95% Confidence Interval
(I) Age (J) Age
Mean Difference
(I-J) Std. Error Sig. Lower Bound Upper Bound
31 to 40 yeras -.11867 .16465 .889 -.5466 .3093 41 to 50 years .02064 .15589 .999 -.3845 .4258
21 to 30 Years
51 to 60 years -.02163 .16854 .999 -.4597 .4164
31 to 40 yeras 21 to 30 Years .11867 .16465 .889 -.3093 .5466
41 to 50 years .13932 .13863 .747 -.2210 .4996
51 to 60 years .09704 .15272 .920 -.2999 .4940 41 to 50 years 21 to 30 Years -.02064 .15589 .999 -.4258 .3845
31 to 40 yeras -.13932 .13863 .747 -.4996 .2210
51 to 60 years -.04228 .14323 .991 -.4145 .3300
51 to 60 years 21 to 30 Years .02163 .16854 .999 -.4164 .4597
31 to 40 yeras -.09704 .15272 .920 -.4940 .2999 41 to 50 years .04228 .14323 .991 -.3300 .4145
Appendix-2: S.P.S.S. Outputs
Annex-4
161
Homogeneous Subsets RelationAvg Tukey HSD
Subset for alpha =
.05
Age N 1
41 to 50 years 51 3.5515
21 to 30 Years 26 3.5721
51 to 60 years 34 3.5938
31 to 40 yeras 38 3.6908
Sig. .803
Means for groups in homogeneous subsets are displayed. a Uses Harmonic Mean Sample Size = 35.150. b The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error levels are not guaranteed.
Means Plots
21 to 30 Years 31 to 40 yeras 41 to 50 years 51 to 60 years
Age
3.55
3.575
3.60
3.625
3.65
3.675
3.70
Me
an
of
Re
lati
on
Av
g
Appendix-2: S.P.S.S. Outputs
Annex-5
156
Annexure -5 : Testing of Hypothesis -3 : Indendent Sample t - Test Explore