Psychological contract and employee engagement pdf

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psychological contract and employee engagement pdf

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The psychological contract

To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Download Free PDF. Naman Sharma. Download PDF. A short summary of this paper. With talented employees as one factor which cannot be duplicated by the competitor firms, their engagement with the organization becomes an even more important concern for human resource managers Anitha, Engaged employees are additionally productive and are open to new ideas leading to vital business outcomes Joo and Mclean, ;Srivastava et al.

Organizations acknowledge that employee engagement leads to operational and process enhancement further leading to heightened organization's performance Harter et al. In developing countries like India, employee engagement can be used by firms to increase its competitive advantage Srivastava et al. Due to above mentioned reasons; employee engagement has become Naman Sharma and Pratibha Garg one of the popular areas for research now Choo et al.

Practitioners are leaving no stones unturned to identify the various factors that promote employee engagement in organizations today. The current study is thus an attempt to study employee engagement in Indian settings more specific to the IT sector which is considered as one of major drivers of Indian economy today.

Gallup in a research conducted on South Asia including India, Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka established employee engagement as predictor of vital job creation. However, such studiesconducted in Indian settings are very few.

One of the objectives of current study is to answer this particular research gap. Secondly, efforts have been made in this research to discuss the relationship of employee engagement with psychological contract and psychological empowerment for the employees.

These relationships have not been studied and discussed thoroughly in past research and hence it will be a valuable addition to employee engagement studies. Keeping this foregoing discussion in mind, the current study explores employee engagement in Indian IT sector and establishing its relationship with psychological contracts that employer share with its employees and psychological empowerment in Indian settings. Hence, general consensus on defining the term is thus lacking.

Later researches focused more on the emotional and cognitive intellectual commitment and viewed as a sign of engagement Baumruk, ;Richman, While other researchers suggest that employee engagement is not just commitment but it is one step further to commitment e. Robinson et al. Truss et al.

Dvir et al. Other researchers acknowledged engagement to be motivational state of fulfillment e. Maslach et al. Reviewing all these different definitions, one common ground can be build that employee engagement overall favors the organization and its employees. A widely accepted definition for employee engagement thus is given by Bakker and Salanove describing it as "Positive fulfilling work related state of mind that is characterized by vigor, dedication and absorption".

Current study also makes use of these three characteristics while measuring and describing the employee engagement in selected Indian IT companies.

Human resource management section from annual reports of Indian IT sector companies such as Infosys Ltd. But overall it has been observed that employee engagement in Indian organizations including IT sector has not been investigated much in a detailed manner Bhatnagar, There is a dearth of exhaustive research that identifies the antecedents for employee engagement in organizations.

There are only few empirical studies which provide details on the predictors of employee engagement. Most of these studies concerning employee engagement have used variables such as job characteristics, rewards and recognition, distributive and procedural justice, organizational and supervisor's support, job satisfaction, organizational commitment, organizational citizenship behavior etc.

Psychological contracts and psychological empowerment as predictors of employee engagement are rarely considered in these studies. Kickul, Neuman, Parker, and Finkl asserted that organizations from time to time need to maintain the psychological contract by delivering on its promises such as career advancement and providing new opportunities etc. Psychological contractIt has been well established through various studies that breach of psychological contract negatively affects the employee commitment and trust e.

On the basis of above studies, it can be said that if psychological contract is maintained in an organization, its employee are more likely to be engaged in that setting. Therefore, we hypothesize that: H1: Psychological contract positively affects the engagement of employees. Later researches claimed that empowerment can be derived through intrinsic motivation Spreitzer, Job satisfaction, innovative behaviour,managerial effectiveness, and decreased stress are some of the factors that influence psychological empowerment in employees Spreitzer, Knol and Van Linge suggest that empowerment occurs when employees are convinced about their roles in the organization.

Based on above findings, we hypothesize that:H2: Psychological empowerment positively affects the engagement of employees. This seven-point rating scale ranges from 0 never to 6 always and contains three items each for all three dimensions. These items measured the degree to which theorganization kept its promises with regard to 'providing opportunities', 'career advancement' etc. Psychological EmpowermentWe used a twelve-item scale formulated by Spreitzer's in this study for measuring the psychological empowerment in IT employees.

The items were registered on a five-point Likertscale with responses ranging from 1 completely disagree to 5 completely agree. A total of questionnaires 60 for each company were distributed, and completed questionnaires were received back, making 70 per cent responserate over a period of two months. Validity testWe used principal component analysis to measure the construct validity of the instruments Cavana et al. Varimax procedure for the orthogonal rotation was used in the factor analysis and it was found that eigenvalues for all the constructs were greater than the prescribed value of 1.

The eigenvalues for our constructs ranged from lowest 1. The convergent validity of the instruments were also established as all the factor loadings were greater than 0. Further since, there was no overlapping of factor loadings for any of the constructs the issue of discriminant validity also ruled out for the questionnaire.

While only 9. This shows that a majority of workforce in IT sector is young and the academic qualification necessary to enter IT industry in India is graduation Bachelor of Technology.

Table 1 below shows the correlations, means, and standard deviations for the variables used in our study. It is clear from the table that both psychological contract 0.

Both these correlation figures provide support for the proposed hypotheses of the study. To further establish this observation, regression statistics were used. Table 2 below shows the value for psychological contract and psychological empowerment with respect to employee engagement. Out of employees who were included in the study, 73 This shows that dedication component of employee engagement is satisfied for Indian IT sector employees. When asked whether they are immersed in their work at job, 97 employees This establishes the absorption component of employee engagement as well.

When we checked the vigor component of employee engagement, it was found that only 49 employees reported to feel like bursting with energy at work. While 72 employees agreed that they feel strong and vigorous at work. The organizations are thus advised to address this component of employee engagement.

Another important focal point of this research was to determine the contribution of psychological contract and psychological empowerment in employee engagement. Statistical findings from the tables above validated the influence of these variables on employee engagement.

Especially psychological empowerment was found to be a significant contributor towards employee engagement. This establishes that organizations which empower their employees and instills confidence in them are more successful in engaging these employees. Also it was found that psychological contract was a weak but positive contributor towards employee engagement.

Based on this finding, it can be suggested that an organization which maintains strong psychological contracts with their employees i. Interpersonal relationship between employer-employee registers slightly better employee engagement. It is clear from the above findings that employee engagement is now taken as a serious HR initiative in Indian IT industry. With employees satisfied with the dedication and absorption component of employee engagement, the strategies to keep employees engaged in IT sector seems to be fruitful.

However, these companies need to work on their vigor component also to harness the benefits of fully engaged employees. The importance of psychological contract despite of the weak relationship found in the study must not be overlooked as there might be an indirect contribution be present which was not taken into account. Psychological empowerment is definitely a significant contributor in employee engagement and the result obtained have established this notion in IT sector of India.

Psychological contracts and empowerment of employees increase their engagement with the organization. Thus the organizations that wish to increase their employees' engagement with them shall focus on strengthening the psychological contract that is being shared with the employees while also focusing on empowering these employees.

In addition to this significant research finding, the results of this research should also have practical significance for Indian IT sector. As discussed before the Indian IT sector is fast paced highly competitive industry which is continuously contributing towards higher economic goals for the country as well. In order to excel in such competitive situations, IT companies are always on their toes to retain and engage their talented employee pool.

There are various ways through which these companies are engaging employees. Current study suggests that if focus will be given on maintain psychological contracts and empowering the employees, employee engagement will further enhanced in the organization. Managers must employ individualistic approach towards strengthening the employer employee psychological contract.

Since each employee has his own individual parameters which provides him confidence and empowers him, custom HRM approach towards these employee is most suited in organizations. Once these personal objectives of employee will be fulfilled, there will better engagement in organization. Maintaining a good organizational culture serving individual goals promotes better compliance among employees towards organizational goals and objectives Kundu and Gahlawat, ;Becker and Huselid, The first limitation is related to the data collected for the study.

Data for current study was only collected for IT sector in India. This will further help to generalize the results for Indian settings in a better way. One other limitation is related to the location of these respondents. Future research may focus on different regions in the country while studying employee engagement or related variables.

SA Journal of Human Resource Management

Metrics details. Medicine is one of the most popular college degrees at both undergraduate and postgraduate level. Despite this, morale and wellbeing in doctors at all levels internationally is reportedly low. Long hours and stressful working environments have been implicated as the cause of this. The psychological contract is the implicit expectations and mutual obligations held between an employee and employer.

Exploring psychological contract contents in India: the employee and employer perspective

This paper aims to examine psychological contract contents, as perceived by two parties of the employment relationship, the employee and the employer. The study is conducted in two phases. Study 1 employs critical incidence technique CIT to elicit from individuals their perceptions regarding organization obligations. Study 2 is designed to corroborate the findings of the first study through a survey of employees and 66 employer representatives functional heads. The results of the two studies are consonant with existing literature; nevertheless the role of culture on psychological contract contents is visible.

Psychological contract, engagement and employee discretionary behaviours: Perspectives from Uganda

The impact of psychological contracts on employee engagement at a university of technology

About the Author s. The Author s. This is an Open Access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Orientation: Changing organisational dynamics have caused a need for organisations to understand the employment relationship processes and outcomes in order to improve organisational effectiveness, increase productivity and retain talented employees. Motivation for the study: The study was motivated by the findings of a climate survey at an institute of higher education, indicating that many employees were dissatisfied and believed that their expectations were not met by the organisation. The sample size was out of academic staff members. Main findings: The study confirmed that most employees appear to have developed a positive psychological contract.

The Importance of the Psychological Contract


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