The Impact of Psychological Contract on Employees’ Loyalty of Private Higher Education Institutions: A Case Study of the Arab Academy for science, Technology, and Maritime Transport (AASTMT)

Abstract

Purpose – The purpose of this paper is to examine the relationship between psychological contract, employee's loyalty and organizational trust. Moreover, the study clarified the moderating effect of organizational culture on the relationship between psychological contract and employee's loyalty. Finally, the study shows the mediating effect of organizational trust on the relationship between psychological contract and employee's loyalty. Design/methodology/approach – This study is based on questionnaire method distributed on employees working at a private education institution; which is Arab Academy for Science, Technology and Maritime Transport (AASTMT). Findings – Results based on a structural equation modeling for data analysis indicated that psychological contract has significant effect on both employee’s loyalty and organizational trust and there was a significant relationship between Organizational Trust and Employees Loyalty. Furthermore, the significant moderator role of organizational culture and organizational trust. Practical implications – The findings are important to enable decision makers to Studying this topic will lead to necessary understanding of the root cause of psychological contract violation in the Egyptian environment, enable organizations to build and maintain the necessary mutual trust with employees. As well as open, the research field to others to study the variables and other aspects that contribute to maintaining the success of the organizations and institutions operating in Egypt. Research limitations– The primary limitation of this study is the scope of its sample.