Abstract
This research investigates the key factors affecting retention of skilled employees using the psychological contract as a framework in an emerging economy context. The focus of the study was on employees’ perspectives regarding elements of the employment relationship they consider valuable and how these inducements affect their commitment and loyalty to the organization. Data were collected from 98 made up of professional employees within private and public firms in Gauteng Province. The population was drawn from top employers in South Africa.. The main findings of the study show that retention practices focusing on the relational elements of the psychological contract such as job security and career development are more important to employees than those with a transactional inclination such as financial rewards. Trust also seems to play an intervening role in the employment relationship leading to less intense feelings of psychological contract violation amongst employees. Key words: Psychological contract, employee retention, trust, South Africa.
Highlights
The dynamics of the labour market are changing with the balance of power within the employment relationship swinging towards employees (Puchala, 2008)
This research investigates the key factors affecting retention of skilled employees using the psychological contract as a framework in an emerging economy context
The main findings of the study seem to support the argument that a reasonably positive psychological contract does exist among employees
Summary
The dynamics of the labour market are changing with the balance of power within the employment relationship swinging towards employees (Puchala, 2008). In this dynamic environment, successful organizations recognize that employee retention and talent management (Hughes and Rog, 2008) are integral to sustaining leadership as well as continued growth in the market. Creating a retention-rich organization that attracts, engages and builds lasting loyalty among its most talented employees is a key success factor in the modern globalized economy (Devi, 2009). Employers increasingly find themselves battling to retain their valuable employees due to this critical shortage of experienced candidates and aggressive recruitment tactics of rivals. The country’s best and brightest employees are constantly being poached by companies such as BMW, Nokia-Siemens, Unilever and many others (Gillingham, 2008)
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