Contractors and their Psychological Contracts

Abstract

It is commonly assumed that contractors are largely calculative, instrumental and self‐interested in their relationship with organizations and interface with them accordingly (e.g. low corporate interest and emotional investment). This paper describes a survey involving 117 contractors (62 on ‘permanent’ agency contracts and 55 on ‘temporary’ agency contracts) and a comparable (age, job level/grade, years of work experience) group of 86 direct employees (on fixed‐term contracts). The survey comprised measures of the psychological contract, of organizational identification, social (corporate) attraction, team spirit and intention to leave. The findings show that contractors are not inevitably ‘emotionally’ detached from their place of work, in some cases investing in it as much as direct company employees. While transactional (e.g. financial gain, instrumentality) exchange considerations were more salient among contractors than employees, this did not appear to preclude the development of a relational (e.g. corporate integration and long‐term investment) contractual orientation. ‘Team spirit’ and ‘organizational identification’ predicted the development of relational contracts over and above contractual status. The findings and their management implications are discussed in terms of ‘strategic partnership’.