A study of employee affective organizational commitment and retention in Pakistan: the roles of psychological contract breach and norms of reciprocity

Abstract

Social exchange theory and notions of reciprocity have long been assumed to explain the relationship between psychological contract breach and important employee outcomes. To date, however, there has been no explicit testing of these assumptions. This research, therefore, explores the mediating role of negative, generalized, and balanced reciprocity, in the relationships between psychological contract breach and employees’ affective organizational commitment and turnover intentions. A survey of 247 Pakistani employees of a large public university was analyzed using structural equation modeling and bootstrapping techniques, and provided excellent support for our model. As predicted, psychological contract breach was positively related to negative reciprocity norms and negatively related to generalized and balanced reciprocity norms. Negative and generalized (but not balanced) reciprocity were negatively and positively (respectively) related to employees’ affective organizational commitment and fully mediated the relationship between psychological contract breach and affective organizational commitment. Moreover, affective organizational commitment fully mediated the relationship between generalized and negative reciprocity and employees’ turnover intentions. Implications for theory and practice are discussed.     

Why and when organizational culture fosters affective commitment among knowledge workers: the mediating role of perceived psychological contract fulfilment and moderating role of organizational tenure

Drawing on Denison and Mishra (1995)’s framework of organizational culture, this study examines why and when organizational culture is related to knowledge workers’ affective commitment. Data were collected from 640 employees working in three high-technology companies in China. The findings indicate that the relationship between organizational culture and affective commitment is mediated by perceived psychological contract fulfilment. In addition, organizational tenure moderates the relationship between two external dimensions (i.e. adaptability and mission) of organizational culture and perceived psychological contract fulfilment. This study extends the current theoretical framework of organizational culture by demonstrating the underlying mechanism and the boundary condition of the relationship between organizational culture and affective commitment. The findings also provide practical implications for international managers to design appropriate human resource management policies and practices in China.     

The difference a manager can make: organizational justice and knowledge worker commitment

The quality of the employment relationship is argued to be central to knowledge workers' commitment, which in turn supports knowledge creation. Given the high levels of discretion enjoyed by knowledge workers, managers' decisions over work distribution, content and resources become more critical for commitment and knowledge creation. However, little research has explored how justice perceptions shape the quality of the employment relationship and the consequences for commitment. Using a sample of 429 R&D workers from across six science and technology-based firms this paper explores the three-way interaction of procedural and interactional justice with the psychological contract to predict knowledge worker commitment. We found that when employees simultaneously perceived high levels of procedural and interactional justice this moderated the relationship between psychological contract breach and knowledge worker commitment. Furthermore, where there was contract breach, positive perceptions of procedural justice moderated the relationship with commitment. However, in the context of contract fulfilment, low perceived levels of interactional justice predicted lower comparative levels of commitment, regardless of the level of procedural justice.

The results suggest that the perceived quality of the relationship between knowledge workers and their manager can make a positive difference in the context of breach of the psychological contract and this in turn can help maintain levels of commitment important for knowledge creation.     

Relational quality and innovative performance in R&D based science and technology firms

The knowledge‐based view of the firm implies that the innovative performance of R&D based organisations is strongly influenced by the quality of their relational capital. However, the quality of the employment relationship has been underplayed in this perspective. A model is developed that tests the quality of three dimensions of the employment relationship – the psychological contract, affective commitment and knowledge‐sharing behaviours – and their consequences for innovative performance amongst 429 R&D employees in six different science and technology based firms. Analysis found that affective commitment plays an important role in mediating psychological contract fulfilment on knowledge‐sharing behaviour, which in turn is strongly related to innovative performance. More specifically, fulfilment of the job design dimension of the psychological contract has an independent positive association with innovative performance, whereas fulfilment of the performance pay dimension is negatively associated.     

Balancing psychological contracts: Validation of a typology

In this study, a psychological contract typology based on both content and exchange balance was developed. Content was defined along the transactional-relational dimension. Balance was assessed by comparing employees' perceptions on the number of employees' obligations relative to employer's obligations. Furthermore, the typology was related to type of employment contract (temporary versus permanent) as perhaps the most important antecedent of psychological contracts, and to various psychological consequences (job satisfaction, life satisfaction, organizational commitment, and psychological contract violation). Results were based on Belgian and German data (N = 1267). Latent Class Analyses suggested four psychological contract types which are clearly distinct with regard to content terms and exchange balance: mutual high obligations, employee over-obligation, employee under-obligation and mutual low obligations. Temporary workers were more likely to hold psychological contracts with few employer obligations, such as the mutual low obligations and the employee over-obligation type. Finally, the mutual high obligations type was most beneficial in terms of psychological outcomes. Implications for future research are discussed.     

How Adult Attachment Styles Relate to Perceived Psychological Contract Breach and Affective Organizational Commitment

The current study examines the relationship between adult attachment style and both perceived psychological contract breach and affective organizational commitment in a sample of college students with employment experience. Attachment style is argued to be an individual difference factor that affects how an individual perceives organizational events based on theory and existing empirical research related to adult attachment style. Individuals with insecure attachment styles were predicted to perceive more psychological contract breach and have lower levels of affective organizational commitment. The results reveal that individuals with higher levels of preoccupied and dismissive attachment styles perceived higher levels of psychological contract breach, and preoccupied attachment style significantly and negatively relates to affective organizational commitment. The relationship between attachment style and psychological contract dimensions was stronger for relational than transactional contract dimensions. Evidence is also found that perceived psychological contract breach mediates the relationship between preoccupied attachment style and affective commitment. Future potential research directions are described. The implications of these findings for managerial practice is discussed.     

Consequences Of The Psychological Contract For The Employment Relationship: A Large Scale Survey*

The renewed interest in the concept of the psychological contract has come to the fore in attempts to describe, understand and predict the consequences of changes occurring in the employment relationship. Recognizing that the employment relationship includes two parties to the exchange process, we set out to examine the content and state of the psychological contract from both the employee and employer perspective. The two perspectives permit an examination of the mutuality of obligations, which has not received much empirical attention to date. The research methodology consists of two surveys conducted in a large local authority directly responsible and accountable for a range of public services including education, environmental health and social care to the local population. The key findings suggest that the majority of employees have experienced contract breach. This view is also supported by managers, as representatives of the employer, who further indicate that the organization, given its external pressures, is not fulfilling its obligations to employees to the extent that it could. Overall, the results indicate that employees are redressing the balance in the relationship through reducing their commitment and their willingness to engage in organizational citizenship behaviour when they perceive their employer as not having fulfilled its part in the exchange process.     

The power of goal internalization: studying psychological empowerment in a Venezuelan plant

This study, based in a manufacturing plant in Venezuela, examines the relationship between perceived task characteristics, psychological empowerment and commitment, using a questionnaire survey of 313 employees. The objective of the study was to assess the effects of an organizational intervention at the plant aimed at increasing productivity by providing performance feedback on key aspects of its daily operations. It was hypothesized that perceived characteristics of the task environment, such as task meaningfulness and task feedback, will enhance psychological empowerment, which in turn will have a positive impact on employee commitment. Test of a structural model revealed that the relationship of task meaningfulness and task feedback with affective commitment was partially mediated by the empowerment dimensions of perceived control and goal internalization. The results highlight the role of goal internalization as a key mediating mechanism between job characteristics and affective commitment. The study also validates a Spanish-language version of the psychological empowerment scale by Menon (2001).     

Challenges to the psychological contract in Hong Kong

This study investigates empirically the psychological contract of a sample of 205 Hong Kong junior and senior managers. It determines the perceptions of factors that employers and employees see as relevant to the employment relationship, and then analyses perceptions of and attitudes towards recent changes in the Hong Kong business environment. In addition to exploring the nature and content of manager's psychological contracts in Hong Kong, the study explores how contracts are related to and affected by both the external environment and internal management practices. A survey questionnaire is used to measure the promises and commitments perceived to have been made by organizations, and the obligations that employees perceive they owe to their employer. In addition, the actual policies and practices of the employing organizations are determined. The impact of the HRM climate of the employing organizations (actual policies and practices) and the attitudes, expectations and feelings of organizational members about ongoing changes in the business and management environment on this exchange relationship are isolated. The study makes two contributions to the psychological contract literature: it examines the relevance of a psychological contract approach in a nonWestern geographical region; and it moves the concept of HRM preferences more centrally into the psychological contracting literature. This enables a better understanding of the construct in relation to the comparative management literature. The content of the psychological contract is shown to be multi-dimensional. Perceptions of organizational commitments and promises focus around four judgements: an intrinsically satisfying and challenging environment; a secure and rewarding job; equity; and supportive leadership. By Western standards the employee side of the employment relationship 'deal' is more one-sided. The proportion of managers who believe employees are strongly obligated to do certain things for their employers is very high. The study examines the factors that predict employees' psychological contracts. Actual HRM practices are shown to predict perceived commitments and obligations, and the strength of obligation is related to perceived promises and commitments. In contrast to the emphasis on the internal cognitive and individualized conception of the psychological contract in much of the literature, this study indicates that this decontextualizes psychological contracts. The true nature of a psychological contract is shown to be an exchange relationship firmly linked to a culture's reciprocity norms.     

Serving two organizations: Exploring the employment relationship of contracted employees

Although growth has occurred in contract employment arrangements both in the public and private sectors, scant research has been conducted on the organizations and employees affected by these arrangements.This study examines the employment relationship of long‐term contracted employees using a social exchange framework. Specifically, we examine the effects of employee perceptions of organizational support from contracting and client organizations on their (a) affective commitment to each organization and (b) service‐oriented citizenship behavior. We also examine whether felt obligation toward each organization mediates this relationship. Our sample consists of 99 long‐term contracted employees working for four contracting organizations that provide services to the public on behalf of a municipal government. Results indicate that the antecedents of affective commitment are similar for the client and contracting organization. Employee perceptions of client organizational supportiveness were positively related to felt obligation and commitment to the client organization. Client felt obligation mediated the effects of client perceived organizational support (POS) on the participation dimension of citizenship behavior. Our study provides additional support for the generalizability of social exchange processes to nontraditional employment relationships. Implications for managing long‐term contracted employees are discussed. © 2006 Wiley Periodicals, Inc.     

Perceptions of HR practices,person–organisation fit,and affective commitment: The moderating role of career stage

In a three‐wave survey study among 487 Dutch university employees, we examined how and when employees' perceptions of high‐performance work practices (HPWP) affect employee affective commitment. We proposed that perceived person–organisation (PO) fit mediates this relationship and that the relationships among perceptions of HPWP, perceived PO fit, and affective commitment differ across career stages. Our results confirm that perceptions of HPWP enhance PO fit perceptions and, in turn, strengthen affective commitment. Moreover, the relationship between perceptions of HPWP and perceived PO fit is only significant among employees in the advancement stage of their careers; however, direct comparison across different career stages reveals no significant differences in the HPWP–PO fit relationship. Furthermore, career stage partly moderates the relationship between PO fit and affective commitment, which is only significant among employees in the maintenance career stage. These findings have important implications for the literature on strategic Human Resource Management and PO fit.     

Ideological currency in psychological contracts: the role of team relationships in a reciprocity perspective

This study focused on the role of ideology in psychological contracts, which has been a neglected theme in psychological contract research. A study among Dutch middle managers in education revealed that ideological psychological contract fulfillment explained additional variance in relation to employee obligations toward the organization. Moreover, it was found that team relationships moderated the relations between some aspects of employer contract fulfillment and employee obligations, but no significant interactions were found between employer ideological fulfillment and team relationships in relation to employee obligations.     

One job,one deal…or not: do generations respond differently to psychological contract fulfillment?

This paper investigates generational differences in the relations between psychological contract fulfillment and work attitudes. Data were collected from a sample of 909 employees in the Dutch service sector. Structural equation modeling analyses were used to test the moderating effects of generational differences on the influence of psychological contract fulfillment on affective commitment and turnover intention. The relationship between psychological contract fulfillment and these work outcomes was moderated by generational differences. Furthermore, results indicate that different generations respond differently to different aspects of psychological contract fulfillment, such as career development, job content, organizational policies, social atmosphere and rewards. The study provides evidence that generational differences impact the reciprocal relationship between employer and employee. Results from this study suggest that Baby Boomers and Generation X may be more motivated by social atmosphere, whereas Generation Y may be more motivated by job content and career development. Fair organizational policies are particularly motivating to Generation X, and providing rewards, though more important to Generation Y, seem mostly unrelated to work outcomes. This article is the first to study the moderation of generational differences in the relationships between psychological contract fulfillment and work outcomes.     

Organization‐Based Self‐Esteem,Psychological Contract Fulfillment,and Perceived Employment Opportunities: A Test of Self‐Regulatory Theory

This study addresses organization‐based self‐esteem (OBSE) development by examining the role of perceptions of employer psychological contract fulfillment, and the self‐regulatory processes by which OBSE evolves and produces its effects. Self‐regulatory theory helps reveal why psychological contract fulfillment relates to OBSE, how OBSE mediates its effects, and the ways in which OBSE might interact with perceived employment opportunities to affect job satisfaction, performance, and turnover intentions. The results show that OBSE is related to and mediates the relationships between relational contract fulfillment and employee job satisfaction and performance, but OBSE is not related to transactional contract fulfillment. Nor does OBSE mediate the relationships between transactional contract fulfillment and the dependent variables. Perceived employment opportunities moderate the relationships of OBSE with job satisfaction and turnover intentions. This study concludes with recommendations of ways managers can increase their sensitivity to the types of messages they communicate to employees. © 2014 Wiley Periodicals, Inc.     

Human resource management's role in clarifying the new psychological contract

This article discusses the importance of understanding and managing the changing employee–employer relationship (psychological contract). It offers a brief discussion on changing employee–employer expectations and provides a definition and discussion on the importance of the psychological contract in managing employee–employer relationships. Several employee–employer interactions in which human resource management (HRM) personnel can help clarify and reshape the psychological contract are presented.     

Causes and consequences of psychological contracts among knowledge workers in the high technology and financial services industries

As organizations shift the central focus of their competitive strategy away from value appropriation towards value creation it is to knowledge workers that they will look to provide the innovation to fuel their continued development. The state of the relationship between the knowledge worker and the employer - the psychological contract - will determine whether this source of innovation and creativity is released. In this study, we developed and tested a causal model of the causes and consequences of psychological contract. Over four hundred participants who were knowledge employees drawn from eleven leading edge companies in the high-technology software, manufacturing and financial services sector participated in the study. We found support for the hypothesis that the psychological contract and those organizational processes relating to procedural justice would have a direct effect on two critical organizational outcomes, namely, employee commitment and intention to remain with the organization. We also found support for the hypothesis that psychological contract variables mediated the relationship between organizational processes and employee commitment and intention to stay with the organization.     

Theorizing the relationship between discretionary employee benefits and individual performance

The literature on compensation has devoted little attention to the relationship between discretionary employee benefits and individual performance, perhaps because benefits are allocated equally to large groups of employees, are not tied to individual performance, and are viewed as entitlements. Discretionary benefits include all the benefits an employer provides to employees voluntarily (i.e., not legally required). Employees can use internet search tools to make comparisons between focal and referent firms of their expenditures on discretionary benefits, which can symbolize employer support for employee well-being or invoke perceptions of equity. In our paper, we provide a novel insight into the relationship between discretionary benefits and employee individual performance through a theoretical lens that combines insights from organizational support theory and equity theory shaped by perceptions of social and economic exchange relationships. In our conceptual model we develop theoretical logic that explains that perceived discretionary benefits, moderated by benefits satisfaction and mediated by perceived organizational support and perceived equity, are linked to individual performance. The paper concludes with a discussion of the theoretical implications and directions for future research.     

Inducements,contributions, and fulfillment in new employee psychological contracts

This longitudinal study of newly hired Chinese college graduates (N = 143) investigates the effects of contract fulfillment, employee reports of company inducements (organizational support and job rewards), and supervisory reports of individual contributions (job performance and extra‐role citizenship behavior) upon changes in the graduates' psychological contracts. Three survey waves were administered a year apart, starting with the recruits' job offer acceptance. Analyses revealed that employee fulfillment and perceived contributions predicted particular changes in employer psychological contract obligations, whereas employer fulfillment and perceived inducements predicted changes in employee obligations. The effects of inducements on employee obligation changes and contributions on employer obligation changes were mediated by their respective fulfillment measures. Changes in obligations were greater in the first year of employment than in the second. This study yields implications for managing newcomers and researching the initial phase of employment. ©2011 Wiley Periodicals, Inc.     

Employees' perceptions of HR investment and their efforts to remain internally employable: testing the exchange-based mechanisms of the ‘new psychological contract’

This study investigates the relationship between perceived investment in employee development (PIED) and the internal employability efforts that such perceptions are assumed to influence under the terms of the ‘new psychological contract’. A cross-sectional survey among 238 employees in a Norwegian IT and management consulting firm provides support that PIED relates positively to employees' openness to develop themselves and adapt to changing work requirements (‘internal employability orientation’) and their active pursuit of new competencies and career trajectories within the organization (‘internal employability activities’). However, our findings challenge widely held claims that investment in employee development elicits these responses by way of the reciprocal mechanisms of a social exchange relationship. While PIED is found to relate positively to employees' perceptions of a social exchange relationship with their organization, these positive exchange experiences are not supported to influence internal employability outcomes. Our findings do support, however, that PIED relates negatively to perceived economic exchange relationships that in turn undermine internal employability orientations. Suggestions for future research and implications for practice are discussed.