Do HRM Practices Affect Employees’ Psychological Contract Profiles? An Empirical Investigation

Abstract

The purpose of the current study is to explore the relationship between human resource management (HRM) practices and employees’ psychological contract profiles and the effect of psychological contract profiles on employees’ job performance and work engagement. In doing so, we examined four aspects of HRM practices (job participation and involvement, staffing, training, and rewards) in determining psychological contract profile membership. Using a sample of 302 working adults collected for an online survey in the U.S., we identified three distinct psychological contract profiles, namely, transaction dominant, relation dominant, and a hybrid contract profile among survey participants. Results from latent profile analysis showed that reward-oriented HRM practices increased the likelihood of being classified into a relation dominant psychological contract profile. We also found significant interaction effect between staffing and reward-oriented HRM practices and organizational trust in predicting classification into a relation dominant psychological contract profile. Our analysis indicated that employees in hybrid profiles underperformed those having a dominant contract type, either transaction or relation dominant. We discussed the implications and limitations of our study and suggested future research avenues.