psycological contract at workplace
DESCRIPTION
What employees expect and what they think the organization expects from them: A presentation. Difference between males and females, difference in job descriptionTRANSCRIPT
Psychological Contract at workplace – An Indian employee perspective
Agenda Definition of Psychological Contract
Difference between Psychological contract and Employment Contract
Literature review
Scope and Methodology
Research Hypotheses
Discussion and Findings: Hypothesis Testing
Implications and Recommendations
Psychological Contract
Psychological contract is defined as
─ Historically, in India PC is affected due to the Attitudes of respect for authorities and subservience Existence of Bureaucratic processes Limited growth of women in corporate world due to male dominance
─ Deregulation of Economy has brought about many positive changes
─ Work environment has undergone significant transformations
─ Employee has started to believe that he/she is an equal to the bosses
Mutual expectations, perceptions and obligations between an employer and its employees, setting the dynamics of the relationship and detailing the responsibilities needed to be carried out.
Psychological vs. Employment Contract
PSYCHOLOGICAL CONTRACT• Represents the mutual beliefs, perceptions, and
informal obligations between an employer and an employee
• Invisible, assumed, unspoken, informal or at best only partially vocalized
• Also known as RELATIONAL contract• Equal importance is given to both employee and
employer
EMPLOYMENT CONTRACT• Represents mutual duties and responsibilities• Formal, written, explicit, codified, well-stated• Also known as TRANSACTIONAL contract• Dominated by employer expectations
Research work so far… According to Rousseau (1990),
Psychological Contract
Employee Obligations Employer Obligations
LoyaltyMinimum Stay
OvertimeExtra-role Behaviors
Acceptance of Transfers
Job SecurityTraining & Development
High PayAdvancement
Support
Contain both Transactional & Relational Elements
Principle of Reciprocity
Psychological Contract Breach/ Fulfilment
Psychological ContractFulfilment
Delivered Employee Obligations
Employer Obligations
Satisfied Employee Need to Rebalance Employment Relationship
Employee’s Perception
Psychological Contract Breach
Intentional Failure
Fulfilled Obligations
In-Role Performance Organisational Citizenship Behaviour
As a result of Equity Theory
Guest & Conway’s Psychological Contract
IndividualAge
GenderLevel in Org.Type of workHours workedMarital Status
ChildrenOrganisational
SectorOrg. sizeLocation
Background
HR Policy & PracticesDirect Participation
Job AlternativesOrganisational Support
Work CentralitySurveillanceOrg. Change
Promises made
PolicyInfluences
Fairness
Trust
Delivery of the Deal Behavioural
Consequences:Intention to stay or quit
Knowledge Sharing
Attitudinal Consequences:
Org. commitEmployee Engagement
Job SecurityMotivation
Content of PsychologicalContract
The Outcomes
Scope and MethodologyPsychological Contract
Expectation from
Employee
Perception of
Employee
Perception of
Employer
Expectation from
Employer
Employer Employee
Mismatch Mismatch
Positive or Negative Impact on Employee Behaviour
Positive or Negative Impact on Employer Behaviour
Influ
ence
s
Influences
Perception of
Employer Expectations
Perception of
Employee Expectations
HR PoliciesHR
Policies
• Field an online survey to collect employee perception data on expectations and behaviour
• Conduct Primary Interviews with HR personnel to understand currently existing policies to fulfil psychological contract
Methodology
Research Objectives
Develop a model of Psychological Contract of an Indian Employee
Identify the relationship between Psychological Contract and Employees’ Behavior in the organization
Suggest suitable HR policies considering the insights from the study
Research HypothesisH1
• The content of Psychological contract differs across employees performing different roles in the organization
H2
• Demographic factors do not have a significant bearing on employees’ perception of Psychological Contract fulfilment
H3
• As work experience increases, the expectations and perceptions change which alters the content of psychological contract
H4
• There is a positive relationship between Organizational Commitment and Psychological Contract fulfilment
H5
• Fulfilment of Psychological Contract has an impact on the employees’ intention to quit the organization
H6
• Existing HR policies are in line with the prevalent employee expectations
Questionnaire & Discussion Guide design
1) Questionnaire Design – Employee Study (Closed-ended)• Importance of expectations – Psychological contract content (Rank) • Expectations from your organizations (Rating)• Organization’s expectation from you (Rating)• Association/ relationship with Organization – Behavioral Impact (Rating)
2) Discussion Guide – HR personnel (Open-ended)• Understand various touch points with employee and its intended purpose• Discuss reasons of attrition and check if Psychological contract unfulfillment plays any role in attrition• Current HR policies to address employee dissatisfaction/ expectation gap
68%
32%
Sample – By Work Expe-rience
Below 4 years
Above 4 years
Role0%
50%
100%
9%8%2%
55%
8%
19%
Sample – By Work Profile Roles
Other
Manufacturing
Technical/Research
General Man-agement
Sales/Marketing
Financial/Clerical
% o
f Res
pond
ents
68%
32%
Sample – By Gender
MalesFemales
Sample Distribution – Employee Study (N=53)
Findings from Primary Research – Online Study with Employees of Different
Organizations N=53
H1: The content of Psychological contract differs across employees performing different roles in the organization
0%
20%
40%
60%
80%
100%
120%
140%
160%
57%
53%0.43
59% 60%33%
0.8
0.33
Top 2 Attributes in Psychological Contract
- By Work Profile/ Role
Work life balance
Adequate fi-nancial rewards
Job Content
Career De-velopment%
of
Re
spo
nd
en
ts
ran
kin
g 1
or
2
• Career development rated as one of the top 2 important parameters of psychological contract by 3 of 4 job categories (Technical/ Research, S&M, Manufacturing)
• Job content one of the important expectations that employees from Financial/ Clerical & Technical/ Research roles had from their psychological contract
VERDICT: Hypothesis accepted
H2: Demographic factors do not have a significant bearing on employees’ perception of Psychological Contract fulfilment
• Decision making Authority: Males prone to greater dissatisfaction
• Performance based financial Rewards: Males feel lesser compensated for the amount of effort that they put in
• Challenging Work: Males more dissatisfied by the amount of challenges that they face while at work
• Thus, Need for Power higher amongst males. However, Females and males equally need Affiliation and Recognition
VERDICT: Hypothesis rejectedChallenging Work Environment
Decision making authority
Lucrative pay and Benefits package
Performance based financial rewards
Growth Opportunities
-1.8 -1.6 -1.4 -1.2 -1 -0.8 -0.6 -0.4 -0.2 0
-0.06
-0.53
-0.94
-0.88
-1.35
-0.92
-1.08
-1.17
-1.42
-1.69
Dissatisfaction Index Across At-tributes - By Gender
(Top 5 attributes)Male (n=36)
Dissatisfaction Rating
H3: With work experience, the changes in expectations and perceptions of employees alter the content of their psychological contract
Decision making authority
Lucrative pay and Benefits package
Performance based financial rewards
Growth Opportunities
-2.5 -2 -1.5 -1 -0.5 0
-0.78
-0.75
-0.97
-1.36
-1.18
-1.82
-1.82
-2.06
Dissatisfaction Index Across Attributes - By Work Experience
>=4 yrs Work Ex (n=18) < 4 yrs Work Ex (n=35)
Dissatisfaction Rating
• Employees with <4 years work-ex directionally less satisfied compared to ones with >4 years work-ex
• Greater the work-ex, more is the dissatisfaction with growth opportunities
• Also (not shown in chart but can be found in report), for >4 years work-ex, content wise, positive social atmosphere and adequate financial rewards hold more importance
• Perceptions change, but content of psychological contract is intact
VERDICT: Hypothesis partially true
H4: The fulfilment of psychological contract results in greater organizational commitment than in the event of its violation
Low Sa
tisfacti
on (n=15)
Modera
te Satisfa
ction (n
=22)
High Satisfa
ction (n
=16)0
1
2
3
4 3.23.81 4.03
Organization Commitment Index- By Satisfaction Ratings
Mea
n Co
mm
ittm
ent I
ndex • With increased satisfaction, commitment
towards the organization also increases.• Fulfilment of psychological contract results in
greater organizational commitment.
VERDICT: Hypothesis accepted
H5: Fulfilment of Psychological Contract has an impact on the employees’ intention to quit the organization
0
1.5
32.87 3.1 3.53
Intention to stick to the organi-zation
- By Satisfaction Ratings
Me
an
Ra
tin
g
• Positive correlation between employee dissatisfaction and his/ her intention to quit
• Higher loyalty index for people having higher satisfaction index in their organization
VERDICT: Hypothesis Accepted
Fulfilment of psychological contract results in improved intentions to stick
to the organization
Findings from Primary Research – Telephonic Interviews with HR personnel of
few organizations N=4
To validate H6: Existing HR policies are in line with the prevalent employee expectations
H6: Existing HR policies are in line with the prevalent employee expectations
There is always a gap between the expectations of the employee and the organization. Those gaps give rise to various policy initiatives by the HR team
Career & Growth
• Development Cell
• Training Center
Job Satisfaction
• Role Clarity• Team Fit• Psychometric
Analysis
Working Environment
• Social Interactions
• Celebrations• Team
Building
Financial Rewards
• Industry Based
• Performance Based
• Growth Based
Work-Life Balance
• Flexible working hours
• Work From Home
H6: Existing HR policies are in line with the prevalent employee expectations
Crèche FacilityInternal Job Posting
Friendly SportsFun Competitions
Fee Waiver to Staff’s wards
Interest Free Personal LoansHousing Loans
Women’s Safety in ShiftsRegulations on Overtime
Flexible Leave PolicyMedical Loan for Dependents
Implications and Recommendations
• The content of psychological contract does differ across roles• Findings suggest that employees in financial services are
primarily concerned with financial rewards while those in marketing and sales give more importance to growth and work life balance
• The HR needs to understand particular motivations of each case in address them accordingly
Demographic factors don’t affect
fulfilment of PC
• Findings suggest that males are in general more dissatisfied than females
• Males look forwards to more challenging work and expect performance based financial rewards
• HR should make employees realize the importance of their jobs and ensure that in the long run they are rewarded for performance
H2
The content of psychological
contract differs across roles
H1
Understand Motivations
Across Diverse Work Profiles
Emphasize the linking of
rewards to performance (especially for
males)
Reject
Accept
Implications and Recommendations
Organizational Commitment, Low
Attrition and Satisfaction are
positively correlated
• Findings suggest that all three factors are positively correlated• HR should lay special stress on satisfaction management of the
employees which in the long run according to findings leads to lower attrition and higher organizational commitment
H4, H5
Existing HR policies are in line with
employee expectations
• Several programmes are implemented in each organization to ensure employee satisfaction
• HR should exercise constant vigilance to judge effectiveness of the programs in place
H6
With work experience, the content of PC
changes
• Employees with over 4 years of work experience are relatively more dissatisfied with their growth opportunities and pay
• HR should set realistic growth expectations and manage expectations of their employees
H3
Set realistic growth expectations from
early years in organization
Control overall commitment and attrition through
satisfaction management
Dynamics needs require constant vigilance of HR programmes
Partially Accept
Accept
Accept