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.
The purpose of the study is to determine which elements of the academic employee’s psychological contract are impacting employee engagement at a university of technology.
The study was motivated by the findings of a 2013 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.
A quantitative technique via online questionnaires was employed for data collection. The sample size was 400 out of 900 academic staff members.
The study confirmed that most employees appear to have developed a positive psychological contract. It indicated, however, that many employees may be experiencing discord in the employment relationship. Both transactional and relational elements of the psychological contract appeared to be essential to academic employees.
The study identified factors of importance to academic employees that should be considered in the compilation of retention policies.
The results of the study could contribute towards addressing some of the challenges by creating a better understanding of the needs of academic employees and the impact of psychological contract fulfilment and breach. This could benefit the higher education sector as a whole.
For an organisation to achieve its strategic objectives and obtain a competitive advantage, it must be committed to appointing, developing, sustaining and retaining the right people with the appropriate skills (Devi,
These expectations of the employee form an unwritten contract referred to as a ‘psychological contract’ (Aggarwal & Bhargava,
The main objective was therefore to determine the impact of the psychological contract on employee engagement at an institute of higher education. In order to reach the objective, the research question was stated as follows:
What elements of the academic employee’s psychological contract have impacted academic employee engagement at an institute of higher education in Pretoria, Gauteng?
Because limited studies have been conducted on the nature of the relationship between psychological contracts and employee engagement (Bruce, Zeynep, & Yalabik,
Barnard’s theory of equilibrium of 1938 referred to an employment relationship as an exchange, suggesting that an employee’s continued participation in an organisation depended on adequate rewards received from the employer (Coyle-Shapiro & Parzafall,
While the terms of an employment contract are formal and legally binding, psychological contracts are informal, subjective in nature, not legally binding and lacking in clarity. Coyle-Shapiro (
Aggarwal and Bhargava (
Factors influencing the development of psychological contracts.
Study | Findings |
---|---|
Freese and Schalk ( |
The study found more male employees were dissatisfied with opportunities for personal development. |
Singh ( |
Singh’s study revealed that an individual’s past experiences influence their attitudes and behaviour at work. This could motivate employees to focus on their own goals rather than those of the organisation. |
Martin, Staines and Pate ( |
White-collar workers had different expectations and training needs than blue-collar workers. While blue-collar workers’ training needs were linked with a desire to remain with the organisation, white-collar workers saw training as a means of improving their marketability outside the organisation. |
Blancero, DelCampo and Marron ( |
A study conducted on the Hispanic population of the USA indicated a significant difference in perceived fairness because of age. |
Winter and Jackson ( |
This study on the role of hierarchical levels on the psychological contract affirms that, although managers and employees had similar responses to the state of the psychological contract, they ascribed different reasons to these states. Managers had rational explanations and emphasised restrictions in resources as a cause. Employees had emotional explanations and attributed it to unfair, uncaring and distant managers. |
Psychological contracts are categorised in terms of two underlying dimensions, transactional and relational. Transactional contracts refer to a narrow range of behaviours over a limited time period, emphasising financial rewards in exchange for a fairly tightly defined set of employee behaviours. Relational contracts, on the other hand, are based on a longer-term relationship where a broader range of benefits and opportunities are provided in exchange for a deeper and more extensive commitment to the organisation. These contracts tend to be more unstructured, uncertain and open-ended and to rely on a higher level of trust (Coyle-Shapiro & Parzefall,
The content of a psychological contract is important because it establishes the deal between employee and organisation. Guest and Conway (
Trust can be defined as a willingness to be vulnerable to the actions of another party (Mayer, Davis, & Schoorman,
Cohen (
Fair treatment of employees not only fosters trust but also influences outcomes such as employee engagement. Organisations should therefore be transparent and have regular communication with employees. Supervisors should be well trained with good interpersonal skills and should treat their subordinates with respect (Aggarwal,
The deal refers to the obligations included in the psychological contract. These include job content, job security, training and development, rewards and benefits, fair pay, good working conditions and future career prospects (Atkinson & Cuthbert,
Because the psychological contract is based on the norm of reciprocity, it can be inferred that an employee will reciprocate fulfilled promises with loyalty and lower turnover intentions. Literature on turnover intention indicates employee attitudes such as organisational commitment and job satisfaction to be the main causes of turnover intention. The higher the level of job satisfaction and organisational commitment an employee experiences, the lower the turnover intentions.
One of the reasons that organisational efforts to limit turnover intentions do not always deliver the expected results is because human resources managers do not focus on the inducements that are important to employees when they develop retention policies. They devote much time to the financial inducements in their retention policies, but they should shift their focus to factors that employees deem important, such as social atmosphere and job content, rather than focusing only on extrinsic factors such as work–life balance and financial rewards. They should consider what their employees value and how they evaluate the organisation’s efforts towards retention management if they are to contribute in a cost-efficient way to the strategic objectives of the organisation (De Vos & Meganck,
George (
Management in the higher education sector may find that the concept of a psychological contract offers a powerful means of organisational leverage in pursuit of employee retention and higher levels of employee organisational commitment. Shen (
Bal, De Cooman and Mol (
Contract breach, on the other hand, refers to the event where either party fails to fulfil the perceived obligations. This leads to the erosion of trust and a breakdown in the employment relationship. Parzefall and Coyle-Shapiro (
Empirical evidence (Cassar,
According to De Vos and Meganck (
Allen, Bryant and Vardaman (
the loss of knowledge and expertise
the likelihood of critical information falling into a competitor’s hands
the need for considerable investment to hire and train replacements.
Despite the efforts of human resource managers, employee turnover is often prevalent. It results in a drain on management time and creates pressures in workforce planning and service delivery. Intangible costs include the negative impact on culture and employee morale, adverse effects on social capital and the erosion of organisational memory. The average turnover costs for a full-time professional employee in the private sector have been estimated to be as high as 150% of the employee’s annual compensation package (Pitts, Marvel, & Fernandez,
Professional workers are a group of people who are involved in the same kind of work and belong to a specific profession. They often display high levels of expertise, autonomy, a belief in the regulation of the profession by its members and a belief in the importance of the specific profession. Professional workers are loyal to and identify with both the profession and their organisation (George,
According to Devi (
Academic literature provides a number of definitions for
Schaufelli (2002), as quoted by Parzefall and Hakanen (
Overall engagement levels internationally are not very high. Many economies worldwide pay the price for active disengagement. Empirical evidence (Gallup,
Not engaged or neutral: Employees who are not engaged are not hostile or disruptive but are merely unconcerned with important organisational activities.
Actively disengaged: These employees are on a mission to damage an organisation. They have a higher rate of absenteeism and are more likely to quit than engaged employees.
Engaged employees: This group of employees is involved in, enthusiastic about and psychologically committed to their jobs. They help to build an organisation and are in an emotional and psychological state that goes beyond having a merely satisfactory experience at work to one of 100% psychological commitment to their roles (p. 19).
Chughtai and Buckley (
Based on the knowledge gained from the literature review and in support of the main research question, this study set out to answer the following subquestions:
What are academic employees’ perceptions of the outcomes of psychological contract fulfilment or breach?
What is the current state of the academic employees’ psychological contract?
What transactional or relational elements of the psychological contract are important to academic employees?
What are the factors that influence discontent in the employment relationship?
What are academic employees’ perceptions of the current retention practices at their organisation?
The article will proceed in explaining the methodology of the study as well as the results obtained from the data. It will also present recommendations to institutes of higher educations as well as for future research.
This research falls under a positivistic paradigm with emphasis on a deductive approach. The study predominantly relied on quantitative data and the employment of a survey questionnaire, which is aligned with the characteristics of positivistic research (Neuman,
The study was conducted in the social world using the quantitative research paradigm. The research is both descriptive and analytical in nature and data were collected through a standard questionnaire. A survey questionnaire was deemed the most appropriate method for this study, allowing insight into the motivations, beliefs and attitudes of the respondents. It offers a greater possibility of anonymity, is better for sensitive and personal topics and is cost-effective. It also provides an overview of a representative sample of a large population and allows easy comparison with other studies that use similar questions (Punnett & Shenkar,
The target population for this study comprised permanent and fixed-term academic employees across all six faculties of a university of technology in Pretoria, Gauteng. Academics from the lowest level (junior lecturer) to the highest level (professor) were targeted in view of the practical implications, specifically the significant costs associated with the loss of talented employees in the higher education sector. The population measured 800 permanent and 100 fixed-term academic employees.
A total stratified random sample of 300 academic employees was chosen for the study. A sample from each faculty was selected in proportion to the size of the faculty in relation to the population as a whole. A pilot test was performed by 30 academic employees who were contacted personally. The indication was that the questionnaire was in a suitable format and the questions clear and easy to understand, although somewhat lengthy.
Primary as well as secondary data were collected for this study. The main sources of secondary data were various journals, Internet articles, research articles and textbooks. Primary data were collected via a self-administered questionnaire. The link to the online questionnaire was distributed on 22 September 2016 with a 4-month response window. The response rate was fairly slow because of student protest action that took place nationally at higher education institutions during that period. A reasonable sample of 230 responses was received, representing a response rate of 57.5%. A total of 23 responses were incomplete; therefore only 207 responses were included in the study.
Because participation in this study was online and the data were presented in Excel spreadsheets, it did not have to be manually encoded, captured or cleaned, eliminating errors. A range of descriptive and inferential data analysis techniques were conducted on the primary data collected in order to address the research question.
The research results were presented as graphical and descriptive statistics. Bar graphs, frequency tables and percentages were calculated using Stata version 13 statistical software. The mean, standard deviation median, minimum and maximum values were produced for categorical variables.
The chi-square test was used to test for association between any two categorical variables. The interpretation was performed at
To analyse data from the open-ended questions, quantitative content analysis was used to extract common themes through frequency counts. The textual information was reduced and its properties, such as the frequencies of most used keywords, were systematically identified, in the content of the open-ended questions.
Standardised questionnaires on psychological contracts were adapted in order to include items that were deemed relevant to the higher education sector. The questionnaire consisted of three sections with the ‘Introduction’ section addressing the demographic information of the respondents. The ‘Research design’ section dealt with the perception of the respondents regarding ten factors influencing the psychological contract. These were fairness, trust, the deal, transactional and relational elements, breach, violation, job satisfaction, organisational commitment, employee engagement and intentions to quit or stay. The ‘Results’ section presented three open-ended questions dealing with turnover intentions.
The participants of the study were mostly male employees and 80% were in the age group of 30–59 years of age. The average time of employment at the current position was 5 years, with 40% of the respondents being employed for less than 6 years and 12.4% for more than 20 years; 78% were permanently employed. The main qualification of the respondents was a doctorate degree followed by a master’s degree. Very few respondents were in leadership positions with only 1% acting as deans or assistant deans. Heads of department accounted for 7.83% and section heads for 5.65%. Only 26.52% of the respondents had been promoted within the organisation.
Cronbach’s alpha was applied to measure the instrument’s internal consistency. When the alpha is 0.70 or higher, it is considered acceptable in most social science research situations. The results for the subscales are presented in
Results from Cronbach’s alpha.
Item description | Cronbach’s alpha coefficient |
---|---|
Fairness | 0.8229 |
Trust | 0.8926 |
The deal | 0.8808 |
Transactional and relational elements | 0.7497 |
Breach | 0.9303 |
Violation | 0.9202 |
Job satisfaction | 0.7866 |
Organisational commitment | 0.8212 |
Employee engagement | 0.6140 |
Intentions to quit | 0.7900 |
The responses to the items measuring fairness in the institute indicate many different perceptions. Of note is that 26.57% of the respondents perceived some form of discrimination to be present. The responses to victimisation and bullying were equally positive and negative with a large percentage of uncertainty regarding the handling of sexual harassment incidents.
The issues dealt with in this section – victimisation, bullying, discrimination and sexual harassment – are not necessarily widely reported on in an organisation, as they are of a sensitive nature; therefore many employees might not be aware if they did actually occur, and if they did, how the organisation dealt with it.
The pattern of responses for the element of trust indicated that while most participants seemed to place a high level of trust in the employer to keep their promises, be honest and open and treat them fairly, a substantial percentage did not feel the same way. The percentages of agreeing with the statements was mostly in the vicinity of 50%, with the exception of honesty and truthfulness, where only 35.75% agreed.
On measuring the perceptions of the deal, a number of specific items were presented. The participants’ highest responses in specific categories were as follows:
The findings of this study suggest that both transactional and relational elements of the psychological contract were important to the participants. All elements, both relational and transactional in nature, elicited responses of 80% and higher. The highest responses recorded were for the elements of promotion at 92.27%, support at 90.33%, job security at 94.69%, initiative at 90.34%, abilities at 97.10% and work–life balance at 91.31%. The most important top three elements were promotion, measuring 92.27% (transactional), job security at 94.69% (relational) and abilities at 97.10% (relational).
The opportunity to use their skills and abilities effectively (97.10%) is the most important relational element to participants. The element ‘being able to use your initiative’ is somewhat related to abilities and also elicited a high response (90.34%). It is clear that participants want to be given the opportunity to effectively use their skills, abilities and initiative. Job security (94.69%) was the second most important relational element. Traditionally academic institutions are seen to provide job security that one does not necessarily find in the private sector. Promotion (92.27%), the only transactional element, was considered the third most important element by participants.
The data collected indicated that positive psychological contracts appear to exist among participants. This is portrayed by the significant 50% of participants whose responses indicated that they did not perceive their contracts being breached. Those who did not share this positive view varied between a significant 30.92% and 37.68%. The results regarding violation of the psychological contract were very much in line with these responses. It is necessary, however, to take note of the respondents who did not agree with the statement. Feelings of frustration, betrayal and anger were reported by 34.78%, 23.18% and 18.84%, respectively.
The findings of this study showed that most employees were satisfied with their jobs; 85.51% of participants indicated that they were satisfied with their jobs while 89.86% disagreed with the statement that in general, they did not like their jobs. An overwhelming 90.82% of participants indicated that they liked working at the organisation. Because the majority of the respondents were satisfied with their jobs, there is no surprise in the fact that the majority also indicated organisational commitment. Once again there was a substantial number who seemed to lack commitment.
The responses to the statements regarding levels of engagement suggested that most employees see themselves as constructively engaged at their workplaces, with high agreeable rates for knowing what is expected of them (91.79%), having materials and equipment available (76.81%), opportunities to exercise their natural abilities (78.26%), having a positive relationship with supervisors (74.88%), knowing the mission and purpose of their jobs (84.54%) and feeling that their opinion counts (79.22%). There were, however, a few notable exceptions:
As for the intentions to quit, a large percentage of respondents indicated that they were not actively looking for alternative employment and that there was some gain in staying with the institute. Of concern, though, is the 35.75% of respondents who were often thinking about leaving and the 24.64% who were actively looking for alternative employment.
By means of the Stata version 13 statistical software, the descriptive statistics for each set of variables were calculated. The mean, standard deviation, median, minimum and maximum values were produced for categorical variables. The median value was 4 for all the scales where the seven-point Likert scale was used. For the items of fairness, trust, breach, job satisfaction, organisation commitment and employee engagement the median was higher than the mean, indicating that the data were negatively skewed. The other four items, namely the deal, transactional or relational elements, violation of the contract and intentions to quit, had a median score lower than the mean, indicating that the data were positively skewed.
The chi-square test of association was performed in order to identify variables of significance. From the analysis it became clear that the ages of the participants had a significant influence on most statements, while leadership was much less significant, with only two
Further to the chi-square, the ANOVA test was also applied to identify significant relations between variables. The results indicated that tenure carried the most weight in influencing the participants’ perceptions.
The last section of the questionnaire consisted of open-ended questions that requested participants to nominate the most important reasons that employees stay with their organisations, why employees leave and the actual practices implemented at the organisation to enhance employee retention.
The most frequently cited reasons for employees staying with the organisation were as follows:
competitive and fair remuneration – 14%
recognition for contribution to the department, organisation and the profession – 10%
career development – personal and professional growth and development – 9%
job security – 9%
The most frequently cited reasons for employees leaving an organisation were as follows:
management: poor leadership, favouritism, conflict, low staff morale – 13%
unfair treatment – 12%
discrimination: based on culture and race – 11%
poor and unsafe work environment, perpetuated by student unrest – 9%
victimisation: particularly by managers – 8%
inconsistent or no promotion opportunities – 8%
heavy workload – 6%
recognition: no recognition for contributions to the department, faculty or organisation – 6%
The most recommended retention practices were as follows:
support: from managers and faculty in terms of growth and development of academics, including women – 11%
competitive remuneration and performance-based packages – 9%
promotion – 6%
A significant 55% of participants indicated that the organisation did not have any retention practices in place to retain talented employees. Most of the recommended retention practices overlapped with the reasons why employees would leave the organisation, suggesting that management should consider implementing some of these recommendations from employees in order to retain them.
During the period of study, the essential ethical considerations were followed. Written approval was obtained from the ethics committee of Tshwane University of Technology for the study to be conducted at the university. The process included submission of the proposal, the questionnaire and the informed consent form for survey participants. Permission was also obtained to make use of an anonymous online data collection system, Question Pro, to collect data from a sample of randomly selected academic employees, in all six faculties at the institution.
The main research question of this study was:
What elements of the academic employee’s psychological contract have impacted academic employee engagement at Tshwane University of Technology?
As the psychological contract fulfilment or breach has a direct influence on employee engagement, the study posted questions to determine the perceptions of the employees regarding these aspects. The findings indicated that the majority of the participants did not experience contract breach or violation. A significant percentage, however, felt that the organisation failed to keep promises made to them. According to Parzefall and Coyle-Shapiro (
The majority of employees indicated that they were satisfied with their jobs, in general, liked their jobs and liked working at the organisation, indicating high levels of job satisfaction. This is in contrast to the literature by Shen (
The study found that both transactional and relational elements of the psychological contract were essential to academic employees. This is contrast to the findings of Shen (
Based on the findings of the study, the following recommendations are presented to the organisation.
Organisational agents must ensure that a realistic perception of the organisation is presented to prospective employees and be aware of promises made during this process. Policy or procedure changes must be communicated and explained clearly to manage possible breach. Efforts must be made to foster a trusting and quality relationship between employees, the organisation and its agents. The organisation must regularly assess the changes in employees’ expectations of the organisation and what the organisation needs to contribute. Management should consider the factors contributing to intentions to quit when determining retention strategies for the organisation and ensure that they are integrated into policies and practices at the organisation. The organisation should invest in the employees and commit to making them feel valued and important. Included in this is encouragement and feedback on the employees’ progress by managers and supervisors.
Some of the above can be achieved by effective management practices. The organisation must therefore ensure that managers possess the required management skills instead of using management jobs as promotional opportunities for career paths. Managers with the right talents are able to support, position, empower and engage their staff. They must be held accountable for their employees’ engagement. Organisations should coach managers to take an active role in building engagement plans with their employees.
They should define engagement goals in everyday terms for employees and make them meaningful to employees’ day-to-day experiences. Regular discussions and integration of engagement into daily interactions and activities enhance engagement. Managers should be aware of the factors most relevant to engagement among their employees and use every interaction with an employee as an opportunity to improve engagement levels and inspire discretionary effort.
The organisation should further offer inducements such as teamwork, pleasant working conditions, considerate treatment of employees, growth opportunities, skill enhancement and abundant training opportunities, creating the perception that there is a future with the organisation. Practices such as flexible working hours, which best support employees in balancing their work and home environments, should also be considered.
The most important factors that emerged from the transactional and relational elements were promotion, job security and the use of abilities and initiative. Management should consider these needs and ensure that they are able to fulfil them to the best of their ability.
The most recommended retention practices were as follows:
support: from managers and faculty in terms of growth and development of academics, particularly women
competitive remuneration and performance-based packages
promotions
Management should consider urgently implementing a retention strategy that is relevant to employees in higher education, taking into consideration what academic employees value.
The organisation should assess why such a significant number of participants have intentions to leave the organisation, particularly those within the age group of 30–39. The organisation should strive to build a positive and strong organisational culture and assist new employees in adopting the culture of the organisation, which enhances commitment and satisfaction and improves retention.
This study contributes the application of the psychological contract to engagement and retention management in a higher education context. Not many studies have been conducted in this field; therefore the study provides further insight into this phenomenon. The results of the study contribute to psychological contract literature. The study advances an understanding of academic employees’ views of what they believe is important in terms of the psychological contract and employee retention and how this relates to behavioural and attitudinal outcomes such as engagement, organisational commitment and job satisfaction.
The study brought into focus salient inducements such as competitive and fair remuneration, recognition of contributions, career development and job security that are specific to the psychology contracts of academic employees. When considering retention policies for the organisation, the organisation must include suggested inducements such as training for protean careers.
For organisations to be effective in managing the psychological contract, they must abandon commonly held views of what employees value. The study assisted in identifying what the respondents viewed as important, making a valuable contribution to the understanding of knowledge workers. In addition, employees should be part of the engagement process when determining organisational strategies regarding retention, employee engagement and job satisfaction. This will reduce the gap between promises made to employees and reality experienced and ensure greater levels of retention and engagement of talented employees, which is a critical factor for competitive advantage in organisations.
The study focused on a single higher education institution and academic employees only. The results can therefore not be generalised to all institutions of higher education and the views of the support staff of the organisation.
Another important limitation is that the perceptions of organisational agents such as human resources managers, on whether employees were fulfilling their part of the psychological contract, were not explored. Further research including perceptions from both the organisation and employees is necessary to assess the impact of psychological contracts on employment relationships.
Another limitation faced is that in adopting a secondary data set as the basis for analysis, the questionnaire was limited with regard to certain aspects such as psychological contract breach and violation, as well as trust. The questionnaire also explores justice to a limited extent, the focus being on interactional rather than on distributive or procedural justice. Surveys, via questionnaires, are subject to bias, as they are instruments that are reported on by an individual. The impact of this bias nature could result in responses from the sample being over-reported or under-reported.
The following themes for further research emerged:
A mixed methods research approach could be used with the existing sample, as well as support staff, expanding the scope of well-structured interviews to include not only employees but other parties such as organisational agents.
The study was limited to a single higher education institution. Further studies could include other institutions of higher education in South Africa. This would provide a national perspective on psychological contracts in higher education institutions in South Africa.
There have been limited studies conducted on the relationship between psychological contracts and employee engagement. The results of this study add greatly to the body of academic knowledge on the psychological contract and employee engagement. The results of this study also add to the understanding of the nature of the academic psychological contract, which could assist higher education institutions in managing it. It also creates a better understanding of the needs of academic employees and the impact of psychological contract fulfilment and breach. This could benefit the higher education sector as a whole.
The purpose of this study was to assess whether the current state of academic employees’ psychological contracts has impacted their levels of employee engagement. A review of the literature indicated a gap within the body of knowledge with respect to the academic psychological contract. The objective of the study was to investigate and attempt to answer the main research question: ‘What elements of the academic employee’s psychological contract have impacted on academic employee engagement at a university of technology?’ The researchers believe that valuable findings and recommendations stem from this work.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
I.A. conducted the study and all data collection. R.R. was the first supervisor, guiding the student and overseeing the collection of the data and ethical conduct of the student. V.N. was the co-supervisor, ensuring the accuracy of data presentation.