Fostering Employee Commitment: The Role of Psychological Contract

Abstract

The purpose of this study is to examine the relationship between psychological contract and employee commitment from the perspective of employees. In this regard, four types of psychological contract have been selected as independent variables and employee commitment as dependent variable. The primary data have been collected from 340 private sectors’ employees in Bangladesh through floating a structured questionnaire designed with five-point Likert measurement scale. Descriptive statistics and bivariate correlation have been applied to know the interplay among independent and dependent variables. The linear regression result and hypothetical analysis reveal that relational and balanced psychological contract have significant relationship with employee commitment. On the contrary, transactional and transitional psychological contracts hypotheses are rejected due to the insignificance. Eventually the findings of the study imply that majority of the employees highly prefer enduring relational employment with loyalty, faith, commitment and job security rather than short term ambiguous employment with high contingent pay and training.