The psychological contract and retention practices in the higher education context: the mediating role of organisational justice and trust

Abstract

Employee turnover and talent retention are both key concerns for higher education institutions because they are losing highly qualified staff members to the private sector and other higher education institutions that offer better rewards and benefits. This study explored the mediating effect of perceptions of organisational justice and trust relationships on the link between higher education institution staff’s psychological contract perceptions and satisfaction with organisational retention practices. The study involved a cross-sectional quantitative survey with a sample of ( N = 493) full-time employees, both from academic and support staff, at an open distance learning higher education institution in South Africa. Structural equation mediation modelling and mediation analysis showed that organisational justice and trust relationships function as positive parallel and separate mediating mechanisms in the psychological contract – retention practices’ satisfaction link. The study highlighted the importance of employees’ psychological contract beliefs in the employee–organisation relationship, and especially in determining mutual expectations that guide and shape perceptions of organisational justice and trust. Employees’ satisfaction with retention practices is positively enhanced when they experience mutually satisfactory just and trustworthy relations in the organisation.