The Mediating Role of Psychological Contract

Abstract

This chapter reviews the literature on salient HR practices, employee psychological contract and employee cognitive and behavioral outcomes to build the theoretical model for the quantitative study. The chapter starts with literature identifying the salient HR practices for this study and presents a review of current literature on six salient HR practices. In the next two sections, employee psychological contract and how HR practices lead to the creation of employee psychological contract are discussed. After that, literature on the mediating role of employee psychological contract, employee–employer relationship in the light of social exchange theory and fulfillment or breach of psychological contract is discussed. Finally, the chapter discusses the relationships between employees’ cognitive and behavioral outcomes, perceived fulfillment or breach of employee psychological contract and employee performance. Based on the reviewed literature, relevant hypotheses are proposed to test those relationships quantitatively. The chapter concludes with a presentation of the research framework.