Psychological Contract and Employee Retention: The Role of HR

Abstract

Understanding the individual and organizational consequences of breach of psychological contract justifies continuing research into the phenomenon. The global competition which has altered business environment has engineered the need for organizations to devise new ways to survive, enhance performance, retaining skilled employees and ensure healthy and progressive relationship between employers and their employees. Today, the biggest challenge that organizations are facing is not only managing its human resource but also retaining them. Securing and retaining skilled employees play an important role for any organization, because the knowledge and skills of employees have become highly important in gaining competitive advantage. It is against this backdrop that this paper explored the concepts of psychological contract and employee retention, the of impact psychological contract on employee retention and HR practices that influences the state or nature of the psychological contract and employee retention. The paper also peeps into the effect of covid-19 on psychological contract and employee retention. The paper adopted qualitative research design as it relies on secondary data collected from documentations through books, internet sources and journal articles and were content analyzed in relation to the scope of the study. The paper concludes that a significant important should be accorded to the informal contract of employment to ensure fulfillment of obligations and expectations to retain competent and skilled workforce. Thus, the paper recommends among others that Organizations should encourage flexible working arrangements such as telecommuting and prevent discrimination and exclusion relating to Covid-19 pandemic.