The role of the formal employment contract in the range and fulfilment of the psychological contract: Testing a layered model

Abstract

This study investigates the employment contract (temporary vs. permanent) in relation to psychological contract content and fulfilment. The psychological contract includes employees' perceptions of their obligations and their entitlements. We hypothesize that transactional elements constitute a common core that is shared both by temporary and permanent workers. Relational elements are added to this core to show employees' and employers' loyalty, and their intentions to do more than necessary. These elements are more likely to be perceived by permanent workers as compared to temporary workers. Additionally, we suggest that relational elements are difficult to fulfil. Accordingly, we expect lower levels of perceived fulfilment for permanent workers as compared to temporary workers. Based on exchange theory, we furthermore hypothesize that these perceptions follow a similar pattern in how employees report entitlements (i.e., what they receive from the company) and reports of their own obligations (i.e., what they give in return). Results based on a seven-country sample (N permanent = 3354; N temporary = 1980) show that permanent workers as compared to temporary workers perceive more relational entitlements and obligations but a similar level of transactional entitlements and obligations. Thus, these results supported the idea of a layered model. The relationship between contract type and fulfilment of the psychological contract was only partly in line with expectations. Temporary workers reported higher fulfilment of entitlements and transactional obligations, but no difference was found for fulfilment of relational obligations.