Psychological Contract Theory Research Articles

Entrepreneurial Psychological Contracts: Shaping the Future of Work in Times of Uncertainty

In the backdrop of a global work environment characterized by uncertainty, fragmentation, and precarization, this paper introduces the ‘entrepreneurial psychological contract’, a concept that reshapes our understanding of employment relations in new venture creation. The paper responds to the need for reimagining employment in an era where standard, stable employment is increasingly an exception. By extending psychological contract theory with insights from incomplete contracting literature, a nuanced perspective is provided on how entrepreneurs navigate the inherent uncertainties of new ventures to establish employment agreements. The paper is conceptual, and it reveals that entrepreneurial psychological contracts are markedly different from traditional bureaucratic contracts, characterized by their procedural, associational, constitutional, and polyarchic nature. This distinction is pivotal in comprehending the adaptive employment strategies in entrepreneurial environments, which mirror the global trends of work fissuring and employee precarization. This paper contributes to the broader discourse on how work and employment should be reorganized in contemporary capitalism. It offers theoretical advancements in entrepreneuring, human resource management, and contracting under uncertainty, and presents practical insights for entrepreneurs in crafting flexible and resilient employment relations. The paper aligns with the call for broadening perspectives on work, promoting sustainable organizational practices, and envisioning new ways of mobilizing workers in the face of global challenges.

The Psychological Contract Theory on Student Retention: A Systematic Literature Review

The purpose of this article is to cover the themes central to psychological contract theory as well as its impact on student retention. While psychological contract theory has been extensively studied and applied in work-related settings, its influence in educational settings has not been fully explored. To address this gap, this study collected and analyzed data following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. Data was collected from studies published between 2013 and 2023, resulting in the analysis of 24 eligible papers from various academic databases in the review. Based on the number of eligible papers within a ten-year timeframe indicates a scarcity of research on psychological contracts in educational contexts, particularly concerning student retention. The findings from the 24 eligible papers were synthesized and reported using descriptive analysis and tabulation, thus shedding light on how psychological contract theory influences student retention. The analysis suggests that unfulfilled psychological contracts between students and academic staff can contribute to student attrition, especially when students' expectations, formed during earlier educational experiences, are not met. This systematic literature review emphasizes the importance of the psychological contract in educational settings particularly in managing the dynamic student and academic relationship. The review made suggestions for practical implications for academic leaders, policymakers, and education administrators, stressing the need for adaptive, inclusive, and forward-looking approaches in education, and recommendations for future studies.

Casually cynical or trapped? Exploring gig workers’ reactions to psychological contract violation

PurposeDrawing on psychological contract (PC) theory and platform labor research, the purpose of our study was to explore gig workers’ reactions to perceived PC violation. Our study was set against the backdrop of the COVID-19 pandemic, which brought workplace health and safety issues into much sharper focus, even in nonstandard employment arrangements like gig work.Design/methodology/approachThis study employed a mixed-methods design. In Study 1, we tested a conceptual model of US-based ride-hail drivers’ (n = 202) affective and cognitive reactions to Uber’s (lack of) commitment to safe working conditions. In Study 2, we conducted interviews with 32 platform workers to further explore an unexpected finding from Study 1.FindingsIn Study 1, we found that drivers’ perceptions of PC violation were related to decreased trust in Uber and higher intentions to leave this line of work; however, cynicism toward Uber only predicted withdrawal intentions for those drivers who did not believe that they had job alternatives available outside of gig work. We explored this further in Study 2, where we found that workers with low economic dependence on gig work could afford to be casually cynical toward the platform, while high-dependence workers felt “trapped” in this line of work.Originality/valueWe contribute to the social/relational theoretical approach to gig work more broadly and to the literature on PC in platform work more specifically. We also add to the emerging literature on how economic dependence shapes workers’ experience of platform work. Our findings around low-dependence gig workers experiencing a more indifferent form of cynicism – which we have termed casual cynicism – highlight the importance of treating the context of gig work as unique, not merely an extension of traditional management research.

Promoting Employee Green Values Beyond the Office Walls Through Green HRM Utilizing Employee Environmental Knowledge as a Mediator

Organizations are adopting green initiatives in response to global environmental crises and climate shifts. While previous research has examined how green HRM affects employees' in role and extra-role working behaviors, less is known about how it influences employees' behavior outside of work due to their green values (GV) that develop because of implementing organizational green actions. The study addresses the issue, while also considering employees’ environmental knowledge (EK) as a mediating factor, utilizing social learning theory and psychological contract theory. Data were collected using the convenience sampling method, where the sample size was 320, from ten selected large-sized ceramic companies operating in Bangladesh. The structural equation modeling (SEM) was used to analyze the data. Results infer that green HRM effectively enhances EK among employees and redirects their GV beyond the workplace. Additionally, EK substantially and positively mediates between the green HRM and GV relationship. The conclusions correspond to the recommendations are indicated in the relational psychological contract theory and the social learning theory. The findings have imperative theoretical and managerial ramifications since they address the knowledge gap in the literature and outline knowledge enhancing green HRM practices that organizations may adopt to improve their green performance. The study also outlines actions for adopting green HRM activities in organizations, aligning the scope for improving employees’ EK and giving them the opportunities to practice green actions for sustainable social outcomes through their increased sense of GV.

How do medical students' expectations shape their experiences of well-being programmes?

Medical schools have a duty of care to support their students' health and well-being. Student support studies have tended to focus on outcomes in respect of effectiveness and satisfaction. In contrast, little is known about how student expectations of support may shape their experiences and engagement with support mechanisms, as well as the relationships students have with those offering support (including the institution itself). To address this gap in knowledge, we explore how medical students' expectations of student support systems shape, and are shaped by, institutional rules and processes. We employed a qualitative case study approach using an institutional ethnography informed methodology. Our context was a medical school that provides a well-advertised, formal institutional support system where students are assigned a personal tutor. Data collection included interviews with medical students (n = 13) plus document analysis (public facing artefacts and internal policies/guidelines related to the support system). We applied the lens of psychological contract theory to guide abductive analysis of interview and text data. Students expected a strong support system to be provided by the medical school and the personal tutors. However, their experiences did not always align with their expectations. Some felt excluded by the system while others regarded the relationship with their personal tutor as more transactional than relational. Where their expectations were unmet, students responded by reducing their engagement with the formal support system and creating their own peer-support network that supplemented existing formal support. Student expectations matter in shaping their experiences of support systems. Where expectations are unmet, students may disengage and/or find alternatives. This may be easier for some students compared with others. More understanding of the relationship between expectations and engagement with support can inform the development of institutional support structures that meet the needs of all students across time.

Relationship of professional identity and efficacy of Chinese public university lecturers under the appointment system in sustainable human resource management

For Chinese university lecturers, implementing sustainable human resource management (SHRM) is particularly critical. China's higher education is going through an essential stage of appointment system reform aiming to overturn the traditional civil service status of university lecturers and introduce a more flexible work and talent management mechanism to universities to international teaching standards; lecturers also raise concerns about their professional role, educational mission, balance of rights and interests, and the reshaping of the evaluation system. Based on the resource-based perspective and psychological contract theory, this study aimed to explore the relationship between sustainable human resource management (SHRM) and lecturers' professional identity in the context of China's appointment system, focusing on analyzing the moderating role of lecturers' self-efficacy. This study used a quantitative research approach to collect survey data from 610 lecturers at public colleges and universities in China. The data were analyzed with a structural equation model to test the hypothesized relationships. SHRM was directly and positively related to lecturers' self-efficacy and sense of professional identity and indirectly improved sense of professional identity by enhancing self-efficacy. The findings are consistent with existing literature, emphasize the importance of SHRM in promoting lecturers' career development, and provide empirical support for applying SHRM in the context of Chinese higher education. The study provides recommendations in three dimensions: Government, University, and Faculty. It provides guidance for strategic reform of human resource management in higher education, faculty career development, and improving education quality.

The role of previous experience in the analysis of the psychological contract and its outcomes during the socialization process: a signalling theory perspective

Psychological contract theory has largely neglected the role of previous experience. In this study, we examine how previous work experience influences outcomes of communication with organizational insiders during organizational socialization among healthcare staff. We develop a model based on signalling theory, within which information acquisition during socialization is associated with psychological contract fulfilment, which is in turn is related to better health, happiness, and social relationships. Moderated mediation analysis based on data collected at entry and three months later confirms indirect effects between three types of information acquisition and three employee outcomes via the mediating role of psychological contract fulfilment. Importantly, these indirect effects are present only for inexperienced newcomers. Our findings build on signalling theory and add to knowledge about how the psychological contract forms during early socialization. They also suggest that organizations should pay particular attention to inducting inexperienced newcomers.

Understanding the dynamics of social interaction in SIoT: Human-machine engagement

The Social Internet of Things (SIoT) amalgamates social networks with the Internet of Things (IoT) to enable intelligent devices to form social connections analogous to human networks. This research is grounded in psychological contract theory, which examines the reciprocal mechanisms arising from diverse customer interactions to encourage user engagement and provide recommendations on social media platforms. This study in particular identifies the factors that drive customer engagement on social media. It is unique in its exploration of customer interactions within the framework of psychological contracts across multiple levels of customer engagement (through customer empowerment). The findings reveal that psychological ownership among customers is influenced by empowering interactions on social media, which ultimately drive engagement behaviors.

Leader and Employee Behavioral Decision-Making in Construction and Demolition Waste Recycling Projects under Psychological Contract Theory

Although the beneficial role of enterprises in the management of construction and demolition waste (CDW) should not be overlooked, existing relevant studies have neglected to address the specific effects of the behavioral decisions of leaders and employees within enterprises in CDW recycling projects. This study creatively introduces psychological contract theory into the field of CDW management and aims to reveal the mechanism of recycling participation behaviors between leaders and employees in CDW recycling projects. Using the Stackelberg game method, a model consisting of leaders and employees in the construction enterprise was constructed to analyze the optimal decision-making of the enterprise under two cases of whether or not the employees contributed additional effort. The conclusions of this study are as follows: (1) The profits of construction enterprise leaders are always positively correlated with the degree of employee additional effort. Unlike the case of leaders, the effect of additional effort on employee profits hinges on the coefficient of employee additional effort. When the coefficient of employee additional effort is below the threshold, excessive additional effort can negatively impact their own profits. When the additional effort coefficient exceeds the threshold, the employee profits are positively related to the degree of additional effort. (2) Similar to the change in employee profits, the change in the total profit of the construction enterprise with the degree of additional effort is influenced by the additional effort coefficient. However, as the additional effort coefficient increases, the total profit of the enterprise shows a significant increase before employee profits. This study enriches the theoretical study of psychological contracts and provides guidance for decision-making between leaders and employees in the management of CDW recycling projects.

No More the Nice Guy: Coping with Abusive Supervision through Service Sabotage Behaviours

‘Atithi Devo Bhav’, implying that guests must be treated as Gods, is the philosophical belief of Indian society indicating the importance of treating the customers with utmost respect and courtesy. The current study examines service sabotage behaviours by utilizing time-lagged method to collect data in three waves from 332 employees from Indian hotel industry. The study highlights the effects of abusive supervision on the employees who perceive disrespect, public humiliation or rude supervisory behaviours towards them as breach of psychological contract, and they retaliate by displaying deviant workplace behaviour such as service sabotage. The unique proposition of the research is to investigate the sequential mediating role of psychological contract violation and retaliation intention on the relationship between abusive supervision and service sabotage. The research utilizes psychological contract theory and frustration–aggression theory to draw logical inferences from the findings. Findings indicate that when employees perceive mistreatment or injustice, they experience psychological contract violation that instigates an urge to retaliate against the unfair treatment by engaging in negative service behaviours, for example, sabotage. Therefore, the hospitality organizations must implement practices and processes to take care of any unjust, unfair or hostile behaviour at play in the organization, as the success of the industry is dependent on the service quality and frontline employees’ encounters with the customer. The study provides some interesting and useful managerial and theoretical implications.

Experience layoffs, work engagement and the buffering effect of POS: a psychological contract perspective

PurposeThis study aims to explore the relationship between experience layoffs and employees’ work engagement. Drawing on the psychological contract theory, we examine the parallel mediating role of cognitive and affective job insecurity, along with the moderating role of perceived organisational support.Design/methodology/approachThe hypotheses were tested based on data collected from 737 employees of companies in various industries in China in an online survey.FindingsThe results showed the significant effect of experiencing layoffs on employees’ work engagement through cognitive and affective job insecurity, and the effect was stronger when perceived organisational support was lower. The moderated mediation effect mainly occurred through affective job insecurity but not cognitive job insecurity.Originality/valueThis study deepens the understanding of the mechanism of the negative effect of experiencing layoffs and the boundaries of its impact from a psychological contract breach perspective. By analysing the mediating role of cognitive and affective job insecurity, we have enhanced our understanding of the exchange-based mechanism of employees after experiencing layoffs. By examining the moderating role of perceived organisational support, we reveal the important role of supportive behaviours of organisations in mitigating the negative effects of experiencing layoffs.

Unlocking Human Potential: A Literature Review on HR Challenges and Innovations in SME Entrepreneurship

This literature review explores the intricacies of human resource management (HRM) in small and medium-sized enterprises (SMEs), focusing on the unique challenges and innovative practices that characterize HR operations within this sector. The primary objective of this study is to synthesize existing literature to understand how SMEs manage their human resources amidst resource constraints and competitive pressures from the global talent market. Employing a qualitative research methodology, this review meticulously analysed scholarly articles, industry reports, and case studies to develop a comprehensive understanding of the current HR landscape in SMEs. The findings reveal that SMEs frequently grapple with issues such as limited financial and human resources, difficulties in attracting and retaining talent, compliance with complex employment laws, and the integration of technology in HR practices. Despite these challenges, SMEs often adopt flexible and innovative HR approaches that leverage their agility and close-knit organizational cultures to enhance employee engagement and organizational loyalty. Theoretical frameworks like the Resource-Based View, Psychological Contract Theory, and Social Exchange Theory provide valuable insights into effective strategies for managing human resources in SMEs. The study underscores the importance of strategic HR management in leveraging human capital as a key asset for competitive advantage. It also highlights the critical role of technology in streamlining HR operations, suggesting that SMEs can significantly benefit from embracing HR innovations to overcome inherent limitations and foster sustainable growth.

Integrating modern research on social courage via psychological contract theory: direct and interactive effects of work engagement and moral disengagement

PurposeThe current article integrates four prominent directions of modern research on workplace social courage. We (1) apply a novel framework, psychological contract theory, to identify (2) work engagement and moral disengagement as potential antecedents of social courage, (3) unethical pro-organizational behaviors as a possible duplicitous outcome of these antecedents and (4) moderating effects of moral disengagement on the relations of work engagement with these outcomes.Design/methodology/approachWe perform a two-wave survey study (n = 347), wherein antecedents are measured at Time 1 and outcomes are measured at Time 2 (one week later).FindingsWe support that work engagement and moral disengagement significantly relate to both workplace social courage and unethical pro-organizational behaviors. We also support that moral disengagement moderates the relation of work engagement with unethical pro-organizational behaviors but not workplace social courage.Practical implicationsWe highlight that work engagement can be a possible avenue to promote workplace social courage, but organizations should monitor any interventions because it may also promote unethical pro-organizational behaviors for those who are morally disengaged. We also contend that the current results support the “resiliency of courage” by discovering a nonsignificant moderating effect, providing further support for this broadly replicable aspect of workplace social courage.Originality/valueWe discuss how these findings support psychological contract theory as a viable lens to understand workplace social courage, and we call on future researchers to apply the theory to identify further relations of the construct.

Give and take: understanding innovative behaviour from a psychological contract perspective

ABSTRACT Despite numerous studies, little is known about public employees’ motivation to innovate. Based on psychological contract theory, this article examines why they have different levels of motivation for innovative behaviour. Using national-scale surveys of public employees in South Korea, this study demonstrates that employees become less innovative when financially compensated as expected, but more innovative when their expectations regarding career development and well-being are met. This indicates that individual motivation for innovation varies depending on the quality of the relationship with the organization, emphasizing that the organization should make a relational commitment to employees to foster innovative behaviour.

Give full play to the overqualified individuals: Do job crafting and leader–member exchange matter?

Drawing upon psychological contract theory, this study investigated how and when perceived overqualification may affect employees’ creativity. Data were collected from 164 employees and their immediate supervisors in Chinese manufacturing, information technology (IT), and services companies (female = 53.05%; age range 31–50 years; bachelor’s degree = 70.73%) using a two-wave approach over one month. Results from hierarchical regression analysis and bootstrapping analysis indicated that self-perception of overqualification was associated with lower employee creativity via less job crafting. Furthermore, higher leader–member exchange accentuated the indirect effect of perceived overqualification on creativity via job crafting. These findings are consistent with psychological contract theory in that overqualified employees are aware of organisations’ failure to live up to the psychological contract. These findings imply a need for addressing organisational context factors to provide guidance for supporting employee job crafting across qualification levels.

An empirical study on the influence of new generation employees’ job satisfaction on contextual performance in the energy industry

New generation employees in the energy industry generally suffer from several problems such as poor psychological endurance, lack of professional literacy, excessive mental stress, and low labor enthusiasm, which will affect the employee's individual contextual performance and stability of the labor market. In the context of energy transition, therefore, it is of practical significance to solve their problems in routine work and identify the factors affecting the contextual performance of next generation employees in the energy industry. In this paper, the theoretical model with job satisfaction as an independent variable, organizational commitment as a mediator, the sense of self-efficacy as a moderator, and contextual performance as a dependent variable is established; and several research hypotheses are proposed on the basis of the two-factor theory, psychological contract theory, and self-efficacy theory. The following conclusions are made through the testing of hypotheses based on questionnaire investigation: Job satisfaction of new generation employees in the new energy industry positively affects the contextual performance; organizational commitment plays a mediating role between job satisfaction and contextual performance; the sense of self-efficacy plays a role of moderating job satisfaction, organizational commitment, and contextual performance. There is a mediated moderation effect and regulated mediation effect in the model. These conclusions are of great significance to the healthy development of new generation employees in the energy industry.

The relationship between the behavioral integrity and organizational commitment the mediating effects of the job satisfaction and psychological safety

PurposeThis study aims to apply the affective events theory and psychological contract theory to investigate how job satisfaction and psychological safety mediate the effect of the behavioral integrity of supervisors on the organizational commitment of employees.Design/methodology/approachA questionnaire survey was conducted using purposive sampling. In total, 500 questionnaire copies were distributed, and 453 responses were collected, of which 441 were valid (valid response rate = 88.2%).FindingsThe behavioral integrity of supervisors has a direct negative effect on organizational commitment but significant positive effects on job satisfaction and psychological safety, and job satisfaction and psychological safety have significant positive effects on organizational commitment. Job satisfaction and psychological safety have significant mediating effects on the association between the behavioral integrity of supervisors and the organizational commitment of employees.Practical implicationsLeaders and top management should “practice what they preach,” integrate honesty into organizational culture through training and establish a code of conduct to ensure that employees uphold their commitments. Companies should establish appropriate disciplinary systems and norms related to work and other aspects of organizational culture; they should also establish fair, just and open assessment systems to minimize the gap between their employees’ actual and expected earnings.Originality/valueThis study is the first to simultaneously consider the mediating effects of job satisfaction and psychological safety on the association between behavioral integrity and organizational commitment.

Examining the Role of HRM Practices in Fostering Employee Engagement Towards CSR Initiative.

This paper investigates the pivotal role of Human Resource Management (HRM) practices in fostering employee engagement towards Corporate Social Responsibility (CSR) initiatives within organizations. CSR has become a cornerstone of modern business strategy, acknowledging its significance in promoting sustainable practices and societal well-being. Employee engagement serves as a crucial link between CSR initiatives and organizational success, influencing attitudes, behaviors, and commitment levels among employees. Drawing upon existing literature and empirical evidence, this research provides insights into how HRM practices can effectively nurture and sustain employee engagement towards CSR, thereby contributing to enhanced organizational performance and social impact. [1] Theoretical frameworks such as Social Exchange Theory and Psychological Contract Theory are utilized to understand the mechanisms through which HRM practices shape employee attitudes and behaviors towards CSR. Social Exchange Theory elucidates how HRM practices serve as indicators of organizational support and commitment, fostering reciprocity and engagement among employees towards CSR goals. Psychological Contract Theory highlights the role of HRM practices in shaping the implicit expectations and obligations between employees and organizations, influencing perceptions of trust, fairness, and mutual respect, which in turn drive engagement towards CSR. [2] The paper explores key HRM practices that play a vital role in fostering employee engagement towards CSR initiatives, including recruitment and selection, training and development, performance management, and rewards and incentives. It discusses how organizations can integrate CSR considerations into these practices to create an enabling environment that motivates and empowers employees to actively participate in CSR efforts. Furthermore, implications for HRM practice are outlined, emphasizing the need for strategic alignment between HRM and CSR objectives, leveraging technology and communication channels to enhance employee engagement, and fostering a culture of transparency and accountability. DOI: https://doi.org/10.52783/tjjpt.v45.i02.6106

Psychological Contract, Symbolic Interactionism, Social Exchange, and Expectation Violation Theories: A Literature Review

This article presents a literature review on Symbolic Interactionism, Social Exchange, and Expectation Violation Theories and their relevance to the Psychological Contract. The review is part of a doctoral thesis on the socialization process and can be helpful to Human Resource Managers (HRM), scholars, and practitioners. The review's findings show that while there are many studies on the newcomer's adaptation in the international literature, there are very few academic studies on this topic in the Brazilian context where the cost of losing a job can induce a golden cage behavior as we see in the public sector companies. Therefore, the review provides a new perspective on the socialization process of a firm's newcomer by combining the theories above, which have not been studied together before.

Best Practices and Strategies for Talent Acquisition, Retention and Development in Egypt

Purpose: The aim of the study was to investigate best practices and strategies for talent acquisition, retention, and development.
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: In talent management, key strategies include assessing both skills and cultural fit in recruitment, providing continuous learning opportunities, promoting diversity and inclusion, offering competitive compensation, and fostering a supportive work environment through regular feedback and opportunities for advancement. These practices contribute to successful talent acquisition, retention, and development.
 Unique Contribution to Theory, Practice and Policy: Human capital theory, psychological contract theory & resource-based view (RBV) may be used to anchor future studies on best practices and strategies for talent acquisition, retention, and development. Organizations should adopt a comprehensive talent management approach that strategically integrates these practices, ensuring consistency across HR functions.HR policies and guidelines should promote the alignment of talent management practices, emphasizing the synergy between acquisition, retention, and development to optimize human capital.