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THE PSYCHOLOGICAL CONTRACT
The Pilot Research Study
By
Ahmed Sheikh
Zeeshan Muneer Siddique
Muhammad Qasim
Raza Abbas Zaidi
Barkat Ullah Qadri
MAT-404
Inferential Statistics for Research
Sir Muhammad Haris Hayat
MAT-404
Inferential Statistics for Research
3
Acknowledgment
At first we would like to thank our course instructor Mr. Muhammad Haris
Hayat, who has supported and guided us, and helped us in preparing the
foundations of this pilot research all throughout this research and without
his help and guidance we would not have been able to complete this
research. His teachings were a guiding light for us all throughout this
research and the compilation of the report. We are very thankful to him.
We would also like to take this opportunity to thank all of the Human
Resource executives and employees, as without their support this research
would not have been possible and that they took out time from there busy
schedules to help us for the completion of this report.
And lastly I would appreciate the help of many graduates of Institute of
Business & Technology who guided us for our project.
Executive Summary
Business institutions are not more stable nor long lived in futureunpredictability overcome and job insurance is no more proposed by the
organizations who are less afraid to maintain a stable work force.
Flexibility, adjustability and pace of feedback are all very crucial and
employee roles can be likely to continual change- constancy and uniformity are
generally no more available for the employees in the organizations.
Due to this the one thing which also effects on employee and that is its wellbeing on work which causes much on an individuals performance.
Many companies are now accomplishing that the strides have to be
appropriated to create bond and to provide the extension for oblique career
development and improvement in expertise and intelligence through
different events for learning.
And the keygoal/aim of this study is to disclose the link b/w the
psychological contract and the employee well being in an organization.
The data collected for the research is conducted through primary source.
The instrument for the collection of data is questionnaire, having 33
questions in it and having 5 choices containing in each question and the
questions are divided along with both the variables so that the person who
is filling it out can feel and understand easily.
The analysis of the regression has been done to check the stability and the
authentication of the variables.
As this research which is showing a relationship between employees well
being and the psychological contract and we can clearly see through the
statistical results of this that psychological contract is dependent on
employee well being and there is a significant relationship between both of
them. And if there is a rise in the units of the psychological contract of any
employee then than there is a significant increase in the well being of that
employee.
Table of Contents
S.No.
1
2
3
4
5
6
7
8
9
Contents
Page
Acknowledgement
Executive Summary
Introduction
Variables
10
Results
14
Conclusion
18
Recommendations
18
References
20
Appendix
24
Introduction
Managing compensation, premium or award is generally about
administration of assumptions, hope, forecast about what things the
employees expect in return from their organizations against their
productivity and what the organizations expects from their representatives
in return for their pay and the time to work and establish their own inter
personal skills. Assumptions are created into the link of this employment
period, starting point of which is an understanding by an individual to work
with effort, hard work and skill to their organization, in return for which
the company blesses the employee with a monetary benefits like salary or a
wage.
The two different categories of psychological contract which clearly
defines the employment relationship:
Transactional Contracts: The type of psychological contract which have
very well explained conditions of conversion. It is based on the legal laws
and they are given in the terms of finance line, wages, salary etc.
Relational Contracts: Another type of psychological in which it is not much
defined or we can say that it cannot be defined at all. This contract relates
to the job security, job satisfaction etc.
Transactional or economical contracts are disclosed informal terms of
employment, which are in the drafted or undrafted and point out the
provisions and the situations of the employment service. Relational
contracts are defined, in so far if they are disclose at all, in what is mostly
called a Psychological Contract, a core of which is so it is indirect kind of
8
than declared and is not likely to the contract. The word psychological
means the adjustments is only in the minds of those anxious; it is not admit
between them. The image or approach of the psychological contract is a
crucial one so anybody get involved in it with reward administration
because it is very much anxious with explaining and meeting assumptions
anxious pay, performance and the establishment and application of
expertise and personal skills.
Problem Statement:
People know the thing to assume, we twist up to work, done that was
required by the organization and the organization provided the security and
future development. It was very difficult relationship and for the most of
organizations it worked very good, providing them with honesty, faith,
committed and steady work force.
Times is different now,
Business institutions are not more stable nor long lived in futureunpredictability overcome and job insurance is no more proposed by the
organizations who are less afraid to maintain a stable work force.
Flexibility, adjustability and pace of feedback are all very crucial and
employee roles can be likely to continual change- constancy and uniformity are
generally no more available for the employees in the organizations.
Due to this the one thing which also effects on employee and that is its wellbeing on work which causes much on an individuals performance.
Many companies are now accomplishing that the strides have to be
appropriated to create bond and to provide the extension for oblique career
development and improvement in expertise and intelligence through
different events for learning.
And the key goal/aim of this study is to disclose the link among the
employee well being and the psychological contract in an organization.
Variables
Dependent - Psychological Contract
Independent - Employee Well Being
Psychological Contract
Psychological contract is give and take between the "wants" and "offers"
surrounded by individuals, the employees and the employers. When there
is an engagement between them that what is needed by the employees and
what is proposed by the organizations, we are talking of the psychological
contract. So, as such with any kind of the contract, the contract named
psychological contract contains a conversion between individuals the
employees and the employers. Distinct from the other kinds of the contract
yet, is that the psychological contract doesnt mean that it contains
substantial products or services but fairly intangible goods determine that
how public feel and act (Makin et al. 1996)
Clutterbuck (2005) also explained about the psychological contract as it is
the undefined / unwritten assumptions of individuals the employees and
10
the organizations that they get about the fulfilled of the social conversion
b/w both of them. These kind of assumptions arent naturally shared, the
limit to which the employees and the organizations hold different kind of
assumptions which threaten the terms and the contents of this contract.
Rousseau (1990) explained about this psychological contract as an
employee's acceptance, faith and trust regarding mutual necessity'. They
begin in the background of cooperations and conversions with the
assumptions of some continuity into the future (Rousseau 1990).
Rousseau (1990) quarreled that the contented of the psychological contract
by querying the immediate bosses about the guarantee and pledge made to
newcomer employees. Guarantees employers desired by the newcomer
included faith, suggesting, advance note if appropriated a job else
somewhere, eagerness to accept the relocation, rejection to coordinate the
organizations competitors, working extra hours in an organization, and
keeping on job with the company for a at least of 2 years. Many promises
made to the newcomers contained long run job security / safety, elevation;
coordinate with private issues, wage was supposed to be given according to
the scope of work, career growth, and the high wages / salaries.
Dainty., et al. (2004) also defined about the psychological contract in the
structure design and create that the promises or commitments were built
about the debatable arrangement such as assuring the equal & stable
salaries / wages to the employees of an organization and perk advantages,
and
The transactional component are identify with the wage, salary / pay
working times, and the job period. And the relational component relates to
the career anticipation, duties, and work area convenience.
13
Results
Reliability Statistics
Cronbach's
Alpha
N of Items
.978
16
N of Items
.985
17
14
Table - 3
Table showing the summary of the model:
Model Summary
Mode
l
.981a
Adjusted R
Std. Error of
Square
Square
the Estimate
.963
.963
.221
15
Table 4
Table showing the ANOVA of psychological contract
ANOVAa
Model
1
Sum of Squares
Regression
Residual
Total
df
Mean Square
125.490
125.490
4.781
98
.049
130.271
99
F
2572.301
Sig.
.000b
16
Table - 5
Table showing the coefficients of psychological contract.
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
Std. Error
(Constant)
.273
.066
psyc
.906
.018
Coefficients
Beta
.981
Sig.
4.139
.000
50.718
.000
Conclusion
As this research which is showing a relationship between employees well being
and the psychological contract and we can clearly see through the statistical
results of this that psychological contract is dependent on employee well being
and there is a significant relationship between both of them. And if there is a rise
in the units of the psychological contract of any employee then than there is a
significant increase in the well being of that employee.
Recommendations
Here is what I will recommend for the organizations working in Pakistan to
follow, in order to take in the shape and define the psychological contract,
create a more productive employment relationship, and rises in the
employment commitment and hence to increase productivity.
18
Create performance management systems, which could make sure that the
performance, contributions and the competence assumptions are discussed
agreed and reviewed regularly
Concentrate on managers and team leader training so that they can understand
their character in managing the employment relationship
Strengthen up the maximum volume of the contact between the managers, the
team leaders and the employees
Create a total reward approach and make it sure that they are implemented
equally, fairly and consistently
Pay the employees on the basis of their contribution and performance to their
organization
Reward people according to their establishing the competence and the skills
Create team reward system that emphasize the importance of the team work,
flexibility and multi skilling
Human Resource practices and that how they operate which are critical
consequences in developing a positive psychological contract and the high
organizational performance and contributions. Hence Human Resources
19
Make sure that the truly capable and talented employees are correctly
classified. You can only give the best career choices to a few employees. Poor
classification risks give the wrong people the best breaks while the genuinely
capable and the talented people leave or quit to work elsewhere.
References
Moyle, P. (1998). Longitudinal influences of managerial support on
employee well-being. Work & Stress, 12(1), 29-49.
Dahlgaard-Park, S. M. (2014). Enhancing quality and employee wellbeing. Total Quality Management & Business Excellence, 25(11-12), 12071209.
De Cuyper, N., Van der Heijden, B. I., & De Witte, H. (2011). Associations
between
perceived
employability,
employee
well-being,
and
its
contracts?. The
International
Journal
of
Human
Resource
Tactics
and
Information
Seeking
in
Newcomers
Sels, L., Janssens, M., & Van den Brande, I. (2004).Assessing the nature of
psychological contracts: a validation of six dimensions. Journal of
Organizational Behavior, 25(4), 461-488.
EMPLOYEE
PERFORMANCE
employers. Journal
of
Occupational
and
Organizational
Ho, V. T., & Levesque, L. L. (2005). With a little help from my friends (and
substitutes): Social referents and influence in psychological contract
fulfillment. Organization Science, 16(3), 275-289.
upon
organizational
entry. Career
development
Ng, T. W., & Feldman, D. C. (2008). Can you get a better deal elsewhere?
The effects of psychological contract reliability on organizational
commitment over time. Journal of Vocational Behavior, 73(2), 268-277.
23
De Cuyper, N., Van der Heijden, B. I., & De Witte, H. (2011). Associations
between
perceived
employability,
employee
well-being,
and
its
International
Journal
of
Human
Resource
Gracia, F. J., Silla, I., Silla, J. M. P., & Ferreira, L. F. (2007).The state of
the psychological contract and its relation to employees' psychological
health. Psychology in Spain, (11), 33-41.
Benson, G. S. (2006). Employee development, commitment and intention
to turnover: a test of employability policies in action. Human Resource
Management Journal, 16(2), 173-192.
Fugate, M., Kinicki, A. J., &Ashforth, B. E. (2004). Employability: A
psycho-social construct, its dimensions, and applications. Journal of
Vocational behavior, 65(1), 14-38.
Henderson, D. (2012). Employment Contracts, Psychological Contracts
and Employee WellBeingAn International StudyEdited by David E.
Guest, Kerstin Isaksson and Hans de Witte. British Journal of Industrial
Relations, 50(2), 376-378.
Rousseau, D. M. (1989).Psychological and implied contracts in
organizations. Employee responsibilities and rights journal, 2(2), 121-139.
24
Appendix
NAME:
GENDER:
AGE GROUP:
18-21
21-25
26-30
30 & Above
EMPLOYEE WELLBEING
S.N
O
STRONGLY
DISAGREE
DISAGR
EE
DON'T
KNOW
AGRE
E
STRO
NGLY
AGR
EE
QUESTIONS
1
25
4
5
6
7
8
9
10
11
12
13
14
15
16
S.N
O
1
2
QUESTIONS
STRONGY
DISAGREE
DISAGR
EE
DON'
T
KNO
W
AGRE
E
STRONGLY
AGREE
3
4
5
8
9
10
11
12
13
14
15
16
17
27