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Does one size fit all?
Does one size fit
all?
A study of the psychological contract in the UK
working population
Carol Atkinson
647
Manchester Metropolitan University Business School, Manchester, UK, and
Peter Cuthbert
Manchester Metropolitan University – Cheshire, Crewe, UK
Received 16 February 2004
Revised 13 December 2004
Accepted 20 December 2005
Abstract
Purpose – This paper sets out to investigate the effect of position in the organisational hierarchy on
an employee’s psychological contract.
Design/methodology/approach – This paper presents a statistical analysis of secondary data
taken from the Working in Britain 2000 (WIB) dataset, an ESRC/CIPD funded study, to investigate the
perspectives on the content of the psychological contract of different employee groups, namely
managers, supervisors and “shop floor” employees.
Findings – The results show that differences do emerge between different groups of employee,
managers having a generally more relational contract. These differences are not, however, as large as
may be expected and, for some aspects of the psychological contract, there are also considerable
similarities between all the groups.
Research limitations/implications – Analysis is limited by the data present in the dataset,
meaning that certain aspects of the psychological contract, for example, trust, are not as fully explored
as is desirable.
Practical implications – The research has implications for how to appropriately manage the
employment relationships of differing employee groups.
Originality/value – Most existing empirical data assume that there is “a” psychological contract
within an organisation and the findings from this research demonstrate that the position is, in fact,
more complex.
Keywords Psychological contracts, Intergroup relations, Transactional leadership, United Kingdom
Paper type Research paper
Introduction
In recent years, the psychological contract has achieved prominence as an investigative
paradigm within organisational research (Marks, 2001). However, while there is a
growing body of research into the psychological contract, there remain key areas that
are unexplored. In particular, there is a tendency to describe “the” psychological
contract that prevails within an organisation, rather than considering the range of
contracts that may exist. This stands in contrast, however, to a body of literature that
explores the difference in the experience of work of different groups of employees (see,
for example, Collom, 2003; Gallie et al., 2004), and would support the argument that
multiple perspectives on the psychological contract in an organisation exist. In this
paper, we sets out to investigate the perceptions of the psychological contract by three
different employee groups within the organisation using data from the ESRC/CIPD
funded study, Working in Britain 2000 (WIB). This particular analysis selects a sub-set
International Journal of Manpower
Vol. 27 No. 7, 2006
pp. 647-665
q Emerald Group Publishing Limited
0143-7720
DOI 10.1108/01437720610708266
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648
of questions from the self-completion questionnaires in the study that are deemed to
relate to aspects of the psychological contract. The respondents used for the analysis
are limited to those who were employed, thus ignoring the self-employed section of the
WIB data.
It would seem that perceptions of the psychological contract do, indeed, differ by
employee group, but that the differences may not be as great as had been anticipated.
While managers tend to have a more relational contract than supervisors and
employees, the contracts of these latter two groups are not wholly transactional and
contain a number of relational obligations. These findings provide an additional
insight into managing the employment relationship.
The psychological contract
There is no broadly agreed definition of the psychological contract construct, the one
adopted in this paper being drawn from Guest and Conway (2002) and holding that the
contract comprises perceptions of mutual obligations implied within the employment
relationship. While this definition suggests that both employer and employee may hold
psychological contracts, the dataset used in this study permits investigation of only the
employee’s perception of the psychological contract.
Guest and Conway (1998) suggest a model around which to build much-needed
theory in the psychological contract field which comprises of the causes, content and
consequences of the psychological contract. While there is little agreement on the most
appropriate way to investigate the psychological contract (Freese and Schalk, 1996), we
adopt the content aspect of Guest and Conway’s (1998) model for the purposes of this
paper, the content being suggested to comprise of fairness, trust and delivery of the
“deal”, i.e. the extent to which obligations are fulfilled. There is little critique of this
model in the extant literature, albeit some have argued that trust is an outcome of the
psychological contract (Shore and Barksdale, 1998). Other studies, however, have also
found that trust is part of the psychological contract (Fox, 1974, Rousseau, 1995) and
the model’s origin in a series of well respected CIPD studies and its adoption in other
academic studies (see, for example, Martin et al., 1998) lead us to argue for its
robustness. The exploration of fairness, trust and delivery of the deal is key to this
study and relevant literature is presented in more detail below.
Fairness
The first element of the content is “fairness”, this equating to consideration of
organisational justice. Organisational justice describes the individual’s and the group’s
perception of the fairness of treatment received from an organisation and their
behavioural reaction to such perceptions (James, 1993). While detailed
conceptualisations of organisational justice hold it to be tripartite (Ayree et al.,
2002), the limitations of the dataset adopted within this study lead to organisational
justice being considered at a general level, rather than in its specific forms.
Trust
Guest (1998) suggests that trust is the key integrative concept within the psychological
contract, the key influence on trust is whether each side (employer and employee) has
kept its promises and commitments to each other, i.e. delivered the “deal” (Guest and
Conway, 2001).
Employees can develop trust in specific individuals, such as supervisor, and
generalised representatives such as the organisation (Whitener, 1997). At an
organisational level, where much psychological contract research is currently situated,
employees hold beliefs and attitudes about a generalised and perhaps
anthropomorphic organisation and can develop trust in the organisation itself
(Morrison and Robinson, 1997). It is currently suggested that employee expectations
develop incrementally in the employment relationship and become embedded in a
psychological contract reflecting their beliefs about the nature of the reciprocal
exchange agreement between themselves and their employer (Whitener, 1997).
Does one size fit
all?
649
The “deal”
The “deal” refers to the obligations contained within the psychological contract. A
range of research has produced a wide array of obligations that are deemed to form the
content of the psychological contract and, in common with many other aspects of this
construct, there is no clear agreement on these obligations. While Herriot et al. (1997)
produce a very detailed set of employee and employer obligations, most writers have
aggregated detailed lists of obligations in order to suggest a more succinct description
of the deal. Herriot and Pemberton (1996) suggest, for example, job content, job
security, training and development, rewards and benefits, and future career prospects.
Alternatively, fair pay, good working conditions and job security are proposed by
McFarlane Shore and Tetrick (1994).
Further research has led to analysis of these obligations and the suggestion
that distinct types of employment relationship can be discerned from patterns of
employer and employee obligations (Rousseau, 1990). Many have termed these
patterns “transactional” and “relational” psychological contracts, indicating the
type of obligation contained within each (MacNeil, 1985).
Transactional contracts are specific, “monetizable” exchanges between parties over
a finite and often brief period of time. Relational contracts are open-ended less specific
agreements that establish and maintain a relationship (Robinson et al., 1994). Although
it is not always clear which obligations belong to which category (Arnold, 1996),
Rousseau’s (1990) description of transactional and relational obligations may be
expressed diagrammatically in Figure 1.
Thus, the deal can be considered as having elements of both transactional and
relational features and being on a continuum, rather than being wholly of one type or
the other (Coyle-Shapiro and Kessler, 2000), a perspective already established in the
literature on relationship marketing (e.g. Buttle, 1996). It should be noted, however, that
there is particular debate as to whether advancement should be categorised as a
transactional obligation, viewing it from a career resilient perspective (Rousseau, 1990)
Figure 1.
Employer obligations
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or whether it should be categorised as relational, viewing it from an organisationally
based career perspective (Stiles et al., 1997). This is a point to which we return later in
the paper.
Having established the theoretical basis from which this study investigates the
psychological contract, we now turn to consider how perspectives on the contract may
vary by employee group.
650
One psychological contract?
Much of the available research, rather than considering the issue of varying content,
suggests that the content of the psychological contract in the UK is general across most
workers. Herriot et al.’s (1997) study, for example, identifies few differences in content
between various categories of employees and, similarly, the CIPD studies suggest that
differences between such groups are not considered significant (see, for example, Guest
et al., 1996; Guest and Conway, 1997). One Belgian study (Sels et al., 2000) presents
findings indicating that white- and blue-collar workers have very different
psychological contracts, but attributes this to specific labour laws that apply in
Belgium.
Some consideration has been afforded to differing employee groups with a variety
of findings. Freese and Schalk (1996) investigated the psychological contracts of
full-time versus part-time employees, finding few differences between the two groups.
In investigating the psychological contracts of temporary staff, McDonald and Makin
(2000) demonstrated that the contracts of permanent and temporary staff did not differ
significantly, a finding supported by consideration of psychological contracts in the
financial services sector (Sparrow, 1996). Other studies have implicitly recognised the
possibility of differing psychological contracts in discrete groups of workers. King
(2000) for example, investigated white collar reactions to job insecurity and Flood et al.
(2001) explored the causes and consequences of the psychological contract in
knowledge workers. What remains largely unexplored, however, is possible
differences among the content of psychological contracts dependent on place in the
organisational hierarchy, the focus in a hierarchical context being on the impact of a
changing employment relationship on the managerial or professional psychological
contract (see, for example, Atkinson, 2002).
It is argued in this literature that a shift has occurred in such contracts from an “old”
relational contract to a “new” more transactional contract (Hiltrop, 1996) in which there
have been reductions in job security and career progression and a shift to a career
resilient approach. The literature is largely silent on the impact of such changes on
non-managerial/non-professional employee groups, albeit one US study suggested that
relational contracts have diminished across all employee groups (De Meuse et al., 2001).
Another study indicates that supervisors are slightly likely to have a more relational
contract than other employees (Freese and Schalk, 1996), while Herriot et al.’s (1997)
findings suggest that the nature of the employee psychological contract is
fundamentally transactional. There is, therefore, no consensus in this area. Further,
while Guest and Conway’s (1998) model of the psychological contract does not
explicitly consider transactional/relational issues, their large scale surveys of a range
of employee groups suggest that the degree of change in the psychological contract has
been exaggerated (Guest and Conway, 1999) and that traditional psychological
contracts are still widely to be found. Thus there are contradictions and omissions in
the extant literature: it is unclear to what extent the managerial psychological contract
has become less relational and there is little evidence on how this contract compares to
the contract of a “shop floor” worker. The focus of this paper, therefore, is to
investigate the extent to which psychological contracts vary across employee groups in
the UK, this also potentially giving insight into whether relational or transactional
contracts dominate in the contemporary employment relationship.
In seeking to theorise why employee groups may hold varying psychological
contracts, we draw on motivation theory, considering Herriot et al.’s (1997) study which
presents transactional obligations as hygiene factors (Herzberg et al., 1959), which
must be fulfilled prior to the development of relational obligations, which constitute
motivational factors. Herriot et al.’s (1997) study identifies pay and safe working hours
and conditions, transactional obligations, as the main focus for employees, suggesting
that managers under-estimate the importance of such obligations and focus to a greater
extent on relational obligations. Sels et al. (2000) also present transactional obligations
such as pay as being fundamental within a blue collar contract, white collar contracts
being predicated on relational obligations such as job security and career progression.
The validity of Herzberg’s theory of motivation has been recently reaffirmed (Brislin
et al., 2005) and, while this study does not explicitly adopt a psychological contract
framework, it compares the impact of different aspects of the employment relationship
on the motivation of Japanese managers and employees in terms that can be
interpreted as obligations within the psychological contract. For example, Brislin et al.,
(2005) suggest that pay and working conditions, transactional obligations, are key
within the employee psychological contract, and again that managers under-estimate
the importance of these to employees and over-estimate the importance of relational
obligations such as job advancement.
Such findings lead to the inference that it is more likely that managers will have
relational contracts than employees. Acceptance of such a proposition may, however,
be controversial, ignoring as it does the debate in the literature as to the extent that pay
actually motivates employees (Armstrong, 2002) and the argument that employees at
all levels are motivated by aspects of the job such as responsibility and interesting
work (Morse, 2003). What is clear, however, is that literature in this area does not
reflect the varying work experiences of different employee groups in the way that other
bodies of literature do, for example, job satisfaction (Rose, 2003) and autonomy
(Collom, 2003). We argue that this is an area in need of further investigation.
We need also to consider the implications for the other two elements of the content
of the psychological contract, trust and justice (Guest and Conway, 1998). Rousseau
(1995) argues that trust is part of a relational contract only, so it may be inferred that
employees with a transactional contract have either low or non-existent trust in their
employing organisation. It might also be expected that managers in a relational
contract would have higher levels of trust, although this may be impacted on by
changes that are argued to have been wrought to their contracts. Finally, it may be that
employees have lower expectations of being fairly treated within a transactional
contract: they hold little power in comparison to managers, may not anticipate
interactional justice in a transactional contract and may even perceive that distributive
justice is limited if dissatisfied with their pay.
In summary, we draw on limited empirical data that suggests that employees are
more likely to have transactional psychological contracts and managers relational
Does one size fit
all?
651
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contracts, although we recognise the contentious nature of this proposition and argue
the need to investigate it more fully in relation to obligations, trust and justice within
the content of the psychological contract. Findings supporting this proposition will
clearly have significant implications for a high commitment HRM agenda that seeks to
win “hearts and minds” in order to harness employee commitment and is likely to
founder in the face of an employee focus on overwhelmingly transactional issues.
652
The data source and survey population
This study of the psychological contract draws data from the Working in Britain 2000
(WIB) survey, an ESRC/CIPD funded study. The WIB survey presents data gathered
as part of a detailed investigation into various aspects of the contemporary
employment relationship in the UK. A key aspiration of the WIB study is that it is
representative of all working groups in the UK. The respondents comprise the
employed, the self employed, workers, managers, supervisors and “shop floor”
employees. The focus within the study reported in this paper, however, is somewhat
narrower. It seeks to address issues relating to the psychological contract for
respondents that have employed status. The self-employed group in the WIB data,
while probably an interesting group in themselves, have been omitted for the purposes
of this analysis.
In order to facilitate investigation of the issues outlined above, it has been necessary
to reduce the data within the dataset just to employed respondents. This subsection of
respondents comprises 87.5 per cent of the original data.
In the context of the WIB dataset and based on the above discussion drawn from
extant literature, the proposition is that perceptions of the psychological contract will
differ between the different groups of employees: managers, supervisors and
employees. Thus the sub-set identified above has been re-coded generating a new
variable that identifies three employment groupings:
(1) manager;
(2) supervisor; and
(3) employee.
While the focus is on the employment groups of manager, supervisor and employee,
the data were also controlled for issues of age and gender (no data being available in
respect of ethnicity). Using a Mann-Whitney U test for two independent samples in
respect of gender, no significant differences were detected in the sample in relation to
gender when considering either fairness or the deal. Kruskal Wallis tests, however,
reveal that age produces significant variances in both fairness and, to a lesser extent,
the deal. It is argued, however, that consideration of such issues is outwith the scope of
this study.
Sample design issues
The User Guide for the WIB survey states that the intention is to achieve a sample that,
“should allow an achieved national sample of 2,500 with a nationally representative
sample of the employed population in Great Britain aged between 20 and 60” (User
Guide 10, p. 3), using postcode sectors as primary sampling units, and selecting a total
of 167 sectors. It also states that this objective has been achieved with a final screened
sample of 2,465 respondents representing an overall response rate of 64.6 per cent,
further descriptives of the sample being available in the WIB User Guide. On the basis
of the information provided in the User Guides, the data are deemed appropriately
representative of the current workforce in Britain.
Does one size fit
all?
Identifying the psychological contract in the WIB dataset
As explained earlier, Guest and Conway (1998) suggest that the three key elements of
the content of the psychological contract for employees are fairness, trust and delivery
of the deal. In order to operationalise these elements, the self-completion questionnaires
in the WIB survey were considered and questions identified that appeared to reflect
relevant aspects. The WIB survey questionnaire adopts a single scale approach to
measurement, asking the extent to which obligations have been fulfilled or not.
For the first element, fairness, each of the questions chosen for use in this study is
shown below with its original question number and full text. The first question number
relates to the question position in the non-managerial questionnaire, while the second
number relates to its position in the managerial questionnaire (Table I). It is argued
that these questions are valid in operationalising fairness in that they reflect anxiety (a
perceptual state) about a range of unfair treatment, from dismissal to victimisation to
bullying. These issues do, however, relate largely to an interactional form of justice,
and investigation of other aspects of justice, which would enhance the analysis, is not
possible based on the adopted dataset.
The selected questions were subjected to factor analysis to identify the underlying
constructs. A two-factor model emerged in which all the obligations items and trust
formed one factor, while the fairness items formed a second factor. Cronbach Alpha
was calculated for the two scales. The Alpha value of 0.9251 for the five items of the
fairness scale is considered adequate.
The second element of the psychological contract considered is “trust”. For this, just
one indicator question that concerns trust in the employer to keep commitments made
(Table II) was identified. It is recognised that a single item measuring trust creates
653
Variable
Fairness
Fairnes1
Fairnes2
Fairnes3
Fairnes4
Fairnes5
Q. 8/12 How anxious are you about these situations
affecting you at your work?
Being dismissed without good reason
Being unfairly treated through discrimination
Victimisation by management
Bullying
Sexual harrassment
Variable
Trust
Trust1
Q.15/19 Overall, how much do you trust your
employer to keep their promises or commitments to
employees?
Table I.
Original questions from
the Working in Britain
2000 survey used to
consider “fairness”
Table II.
Original questions from
the Working in Britain
2000 survey used to
consider “trust”
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654
limitations in respect of the findings for this element of the content of the psychological
contract.
The third element of the psychological contract considered is the “deal”. This has
been analysed using indications of commitments from the employer regarding features
of the employment relationship and it is argued that this is a satisfactory
operationalisation of the deal as such commitments can be argued to be obligations
that are based on promises from employer to employee (Rousseau, 1995). Again all the
items used are from the self-report section of the questionnaire. The specific questions
selected for this study, in their original form, are shown in Table III.
The Cronbach Alpha for these 11 items is 0.9327 which is again deemed to be
adequate in order to consider these items as a scale. Although factor analysis produced
a two factor model which conflated obligations and trust, removing the “trust” item
from the obligations scale improves the alpha value to 0.9346.
All the variables available for this analysis have yielded ordinal data, and the
sub-groups within the sample are of different sizes. So, in order to investigate
differences between the groups, the Kruskal-Wallis One-way ANOVA (K-W) by ranks
has been used. Similarly, the median is deemed to be the most appropriate measure of
central tendency with these data. While other statistics such as quartile points could
have been used to analyse these data in greater detail, such analysis has not been
included due to the limitations of space of this paper. For the analysis, the proposition
that perceptions of the psychological contract will differ between the different groups
of employees has been rendered into the following generic hypotheses:
H0. The groups are drawn from the same population, so there is no difference
between the median scores of managers, supervisors and employees for the
particular variable.
H1. The groups are drawn from different populations and so differ with respect to
the median scores for the particular variable.
Table III.
Original questions from
the Working in Britain
2000 survey used to
consider the “deal”
Variable
The deal
Deal1
Deal2
Deal3
Deal4
Deal5
Deal6
Deal7
Deal8
Deal9
Deal10
Deal 11
Q.14/18 Some of the commitments that employers make to their employees are
written down in contracts or “terms and conditions”, others are verbal promises
or understandings. Below are a list of commitments that your employer may
have made, and for each I would like you to indicate to what extent you think
they have kept that commitment
(a) To give you the training you need to do your job well
(j) To offer you flexibility or choice over your working hours
(j) To reward good job performance
(b) To provide a decent working environment
(d) To provide long-term job security
(e) To give you chances for promotion within the organisation
(f) To provide challenging work
(g) To train you in skills you can use if you leave
(h) To provide pay rises to maintain your standard of living
(i) To provide time off for family requirements
(b) To be fair in the application of rules
Findings
Fairness
Given that the items selected to assess the issue of fairness are deemed to form a scale,
an overall rating for respondents has been calculated, using the median rating. Next,
the hypothesis of a difference in the overall rating for fairness between managers,
supervisors and employees is investigated using the Kruskal-Wallis One-way ANOVA
test. The result suggests that the differences between patterns of responses of the
groups are significant (p ¼ 0:033), as shown in Table IV.
It is interesting to notice that, while the proportional patterns of rating are very
similar, the employees show a greater level of anxiety than mangers. Those falling into
the two anxious categories form 17 per cent for employees and 12 per cent for
managers.
The next section considers the items comprising the Fairness Scale individually.
Two of the five variables show statistically significant differences between the three
groups. For the first variable (Table V), “Dismissal without good reason”, the
Kruskal-Wallis test result is significant (p ¼ 0:003) and the cross tabulation clearly
shows the difference between the managers and the other two groups. It is of note that
only half the respondents claim not to be anxious about unfair dismissal, and that more
than a quarter of supervisors and employees have chosen the two most anxious
categories.
For the second variable, “Anxiety about discrimination”, the K-W test suggests that
there are significant differences (p ¼ 0:001) but in this case the overall level of anxiety
appears to be slightly lower. Over 20 per cent of supervisors and employees describe
themselves as very or fairly anxious about discrimination, with once again the pattern
of much lesser anxiety by managers (12.4 per cent in these two categories) showing up
clearly.
For the third and fourth variables, “Anxiety about victimisation” and “Anxiety
relating to bullying”, the differences between the groups are not statistically significant
(p ¼ 0:170), although managers continue to show somewhat lesser anxiety than the
other groups. Despite this, around 13 per cent of supervisors and employees are
concerned about bullying in the workplace.
Managers
Supervisors
Employees
Managers
Supervisors
Employees
Very anxious
(%)
Fairly anxious
(%)
Not very anxious
(%)
Not at all anxious
(%)
Total
(%)
4.6
6.3
8.4
7.0
7.1
8.7
25.4
24.7
25.3
63.0
61.9
57.6
100.0
100.0
100.0
Very anxious
(%)
Fairly anxious
(%)
Not very anxious
(%)
Not at all anxious
(%)
Total
(%)
5.9
13.5
11.7
9.7
13.5
13.7
27.3
23.9
23.6
57.1
49.1
51.0
100.0
100.0
100.0
Does one size fit
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655
Table IV.
Perceptions of anxiety
about an employer’s
fairness (median rating)
cross-tabulation
Table V.
Perceptions of anxiety
about dismissal without
good reason (fairnes1)
cross-tabulation
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The fifth variable, “Anxiety about sexual harassment”, does not yield a statistically
significant difference (p ¼ 0:350). However, the cross tabulation in Table VI still shows
that proportionately fewer managers are anxious about the issue.
Taken overall, the pattern of responses seems to suggest that respondents who are
managers are less anxious and have a greater perception of fairness in their
psychological contract than for the other two groups.
656
Trust
For the single item chosen to represent views on the issue of trust, a similar approach is
adopted to that used with the fairness scale. A hypothesis of a difference between the
groups is investigated using the Kruskal-Wallis One-way ANOVA test. In this case,
the result shows similar medians, and the differences between the groups appear not to
be significant (p ¼ 0:049), as shown in Table VII.
For Table VII, the pattern of responses for the three groups appears to be very
similar. Only one-third of all the groups place a high level of trust in their employer. A
further third show some trust in their employer while the remaining third have little or
no trust. The pattern of employees being the most pessimistic and managers being the
most optimistic about their employer, first identified for Fairness, is repeated here, but
the differences are very small and not significant.
The deal
Once more a similar approach is adopted in relation to the eleven items comprising the
deal scale. The hypothesis of a difference between the groups is investigated using the
Kruskal-Wallis One-way ANOVA test. Table VIII relates to the average responses for
the scale over the eleven items. In this case the differences between the groups are
significant (p ¼ 0:000).
In the case of Table VIII, it is clear that the pattern of responses for employees
suggests that they have a rather lower belief in the possibility that their employer will
honour “the deal”. Nearly twice the proportion of employees feel that the employer has
made no commitment while at the opposite end of the scale, employees are the smallest
Table VI.
Perceptions of anxiety
relating to sexual
harassment
cross-tabulation
Table VII.
Perceptions of levels of
trust in employer to keep
promises
Managers
Supervisors
Employees
Managers
Supervisors
Employees
Very anxious
(%)
Fairly anxious
(%)
Not very anxious
(%)
Not at all anxious
(%)
Total
(%)
3.0
6.6
6.4
1.9
3.6
2.9
19.9
19.4
16.3
75.1
70.4
74.3
100.0
100.0
100.0
A lot
(%)
Somewhat
(%)
Only a little
(%)
Not at all
(%)
Employer makes
no commitment
(%)
Total
(%)
35.7
34.4
33.1
43.5
35.1
38.2
12.4
18.7
17.1
5.6
7.6
6.9
2.8
4.2
4.8
100.0
100.0
100.0
group to think that the employer has done extremely well. This contrasts strongly with
the pattern of responses for Table VII that relates to perceptions of levels of trust in the
employer to keep promises. These differences relate perhaps to the average pattern of
responses of 11 relatively different aspects.
For Table VIII, it appears to be managers that hold the most different views to
supervisors and employees. The distribution of their responses suggests that they feel
that the employer has delivered more on the deal in comparison to the two other groups.
The transactional-relational perspective. Categories of transactional and relational
obligations within the psychological contract were outlined earlier in this paper (see
Figure 1). These are reflected by the following questions from the WIB survey data
(Table IX).
The three variables identified as relating to a transactional view of the
psychological contract, and the five items that are considered to relate to the
relational view have been subjected to the Cronbach Alpha procedure. For both the
transactional items and the relational items, the resulting Alpha values are less than
0.6, and thus it has been decided that the variables cannot be treated as scales. For this
reason the variables will be considered individually.
For the three transactional variables, “Good promotion prospects”, “Good pay” and
“Extra reward for performing well”, a hypothesis of a difference between the three groups
has been tested using the Kruskal-Wallis ANOVA procedure. In the case of question 2,
Promotion, and question 3, Pay, a significant difference is identified (p ¼ 0:000,
p ¼ 0:008), but for “Extra reward” there appears to be no significant difference between
the groups. To simplify Table X the latter variable has been omitted.
Managers
Supervisors
Employees
Element
Extremely
well
(%)
Very Well
(%)
12.4
13.4
10.2
36.3
27.9
27.9
Fairly well
(%)
Not very
well
(%)
No commitments
made
(%)
Total
(%)
31.9
34.7
34.5
10.3
15.6
11.4
9.1
8.4
15.9
100.0
100.0
100.0
Does one size fit
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657
Table VIII.
Managers, supervisors
and employee’s ratings of
their employer’s
commitment to keeping
their side of the “deal” –
median rating
cross-tabulation
Question
B1 I am going to read out a list of things people may look for in a
job and I would like you to tell me from this card how important
you feel each one is to you when looking for a job
Transactional
Advancement
High pay
Merit pay
Relational
Training
Job security
Development
Development
Support
2. Good promotion prospects
3. Good pay
11. Extra reward for performing well
9. Good training provision
5. A secure job
6. A job where you can use your initiative
8. The opportunity to use your abilities
12. Hours of work that leave time for family or leisure
Table IX.
WIB Survey questions
considered to relate to
transactional versus
relational views of work
obligations
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(2) Good promotion prospects
Managers
19.6
Supervisors
12.3
Employees
11.7
(3) Importance
Managers
Supervisors
Employees
of good pay
29.0
36.8
28.7%
Table X.
Perceptions of the
importance of key
transactional and
relational aspects of the
job
Fairly important
(%)
Not very important
(%)
Do not know
(%)
43.8
49.1
33.5
28.1
29.4
35.4
8.3
9.3
18.8
0.2
0.0
0.6
45.1
45.7
47.4
24.2
15.2
22.1
1.5
1.9
1.6
0.2
0.4
0.2
(9) Importance
Managers
Supervisors
Employees
of good training
21.4
46.2
28.6
49.8
24.7
47.5
27.0
18.2
22.1
5.4
3.3
5.2
0.0
0.0
0.5
(5) Importance
Managers
Supervisors
Employees
of a secure job
29.8
35.3
33.7
43.8
52.4
50.8
20.5
10.8
12.3
5.4
1.5
2.8
0.4
0.0
0.4
(6) Use initiative in your job
Manager
27.9
Supervisors
20.1
Employees
18.3
59.7
62.5
54.0
11.5
16.4
25.3
0.7
1.1
1.8
0.2
0.0
0.6
(8) Use abilities
Managers
Supervisors
Employees
56.6
55.4
56.4
7.4
16.4
18.2
0.9
1.5
1.2
0.0
0.3
0.3
time for family
33.8
39.4
37.2
43.5
37.0
45.3
21.8
15.6
14.9
4.6
3.7
2.5
0.4
0.0
0.0
(12) Job allows
Managers
Supervisors
Employees
Essential
(%)
Very important
(%)
in your Job
35.1
26.4
23.9
In Table X, promotion prospects are clearly more important to managers and
supervisors of whom more than 60 per cent chose the top two categories. By
comparison only 45 per cent of employees chose the top two categories, with most of
their responses being in the lower importance categories. It should be noted that, given
the debate in the literature about the appropriate categorisation of promotion, it is
possible to argue that this finding lends weight to the suggestion that promotion
should indeed be viewed as a relational obligation, forming part of the manager’s
contract more often than an employee’s contract.
Good pay (Table X) appears to be more important to supervisors of whom 82 per
cent chose the top two categories, compared to employees and managers of whom
around 75 per cent chose those responses.
The results shown in Table X would seem to suggest that for employees, the
transactional elements of promotion and pay are rather less important than for
managers and supervisors.
For the five questions that are considered to represent the relational view of the
psychological contract, the K-W tests suggests that a significant difference is found to
exist between the three groups (Q 9, p ¼ 0:005, Q 5, p ¼ 0:000, Q 6, p ¼ 0:000, Q 8,
p ¼ 0:000, Q 12, p ¼ 0:012). The patterns of responses for each item will be considered
below.
It is clear from Table X that all groups consider training to be important with more
than two-thirds of all respondents choosing one of the top two ratings. However, the
supervisors group shows a significantly higher emphasis than the other two groups.
A secure job is considered to be highly important with more than 70 per cent of all
the respondents choosing one of the top two categories. However, Supervisors are in
the majority with 88 per cent of that group choosing these two rating points, compared
to managers of whom only 74 per cent chose one of the two highest categories.
The three patterns for the question, Importance of a Job where you can use your
initiative, take the shapes that might have been expected with managers showing the
greatest preference, followed by supervisors, with employees coming lowest. However,
lowest is a relative term, and it should be noticed that more than 72 per cent of
employees chose one of the top two categories. This would seem to suggest that a
significant proportion of all employees would like to be able to use their initiative at
work.
The question about “Opportunities to use your abilities” is similar to, but slightly
different from, the question about initiative. However, the patterns of preferences are
similar with managers having the highest proportion of responses in the top two
categories, and employees having the least. Once again, employees clearly want to
make use of their abilities with 80 per cent of these respondents choosing one of the top
two categories.
In relation to the issue of support, the WIB question on time for family is selected.
This is deemed to be the most closely related issue within the data. In this case, both
employees and supervisors show very similar patterns of responses. For both groups,
more than 82 per cent of respondents selected one of the two most important categories
of response. However, the managers group showed fewer responses in the top two
categories, although these respondents represented more than 72 per cent of their
group.
Overall, this examination of the transactional and relational aspects of the
psychological contract shows that, for the most part there are significant differences
between the views of managers, supervisors and employees. For the transactional
aspects, promotion is more important to managers and supervisors than to employees.
Similarly, whilst all groups believe that good pay is important, supervisors rate this
more highly than other groups.
For the relational aspects, supervisors rate training, and also a secure job more
highly than the other two groups. For the issue of “Using initiative”, as might be
expected, managers rate this most highly, followed by supervisors and then employees.
However, for this issue more than two-thirds of employees thought it at least very
important. A similar picture emerged in relation to “Using abilities”, but in this case
more than 80 per cent rated this issue at least very important. For support, as measured
by the importance placed on time with the family, managers rated this less important
than employees or supervisors. However, more than 70 per cent of managers felt this
issue to be at least very important.
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Discussion
This paper has set out to investigate an identified gap in empirical data: to what extent
the psychological contracts of employees differ dependent on their place in the
organizational hierarchy. Significant differences in the salience of the differing parts of
the contract by employee group are evidenced, but also there are considerable areas of
similarity.
The above findings present an interesting insight into the psychological contract.
The statistical analysis of the WIB dataset provides, via factor analysis of the items
extracted, support for the model of the psychological contract adopted in this study.
Factor analysis suggests a two-factor model, fairness and obligations, trust being
included with obligations. Removing trust from obligations would, however, make this
factor more robust and it is argued that, were more data available on trust, this might
emerge as the third factor.
The findings also contribute to the current debate as to the “state” of the
psychological contract (Atkinson, 2002). It is questioned whether there is a positive,
trusting relationship between organizations and their employees, as some would
suggest (Guest and Conway, 1999), or whether the psychological contract has been
degraded by continuous change leaving employees feeling insecure and dissatisfied as
suggested by others (Robinson and Morrison, 2000). The findings from this study
would seem to support the argument that a reasonably positive psychological contract
exists. For example over 80 per cent of all employees have low levels of anxiety about
unfair treatment, over 70 per cent of all employees have some or a lot of trust in the
employer to keep promises and over 70 per cent of employees believe that employers
will honour their commitments at least reasonably well. However, the results at a more
specific level, suggest that the “positive psychological contract” is, perhaps, an
over-optimistic reading of the data.
In terms of fairness, significantly more employees are anxious about unfair
treatment than are managers and this is especially so with reference to dismissal
without good reason and discrimination. The levels of anxiety are somewhat
surprising (25 per cent for employees, 21 per cent for managers), especially given
employment legislation that is intended to regulate these issues and would suggest
that there is significant scope for improvement in the employment relationship.
Additionally, 13 per cent of supervisors and employees are concerned to some degree
about bullying. These data consider only the content of the psychological contract, but
the outcomes of the contract cover issues such as motivation, satisfaction,
organizational citizenship behaviour and intention to quit (Guest and Conway, 1998)
and thus the impact on these issues on lack of perceived fairness among a fair
subsection of employees must be of concern.
Issues relating to trust are assessed on the basis of only one item and it seems
somewhat surprising that this construct is not more rigorously investigated within the
WIB study. While there are no significant differences demonstrated between the
different groups, it is interesting to note that only one-third of all employees place a lot
of trust in their employer to keep promises. This supports evidence from elsewhere
(Guest and Conway, 2001) and, again in terms of the outcomes of the psychological
contract, raises concerns about the robustness of the employment relationship.
It is, however, apparently at odds with the data presented concerning ratings of the
respondents’ belief that their employer is committed to keeping its side of the “deal”.
The patterns observed for the scale of the “deal”, that is the belief of employees that the
employer will honour its commitments, are similar to those described for fairness.
Managers seem to have greater belief in the employer’s intention to honour the deal
than do supervisors and employees. This is especially so in terms of the items relating
to promotion, pay, training, job security, use of initiative and ability and work/life
balance (i.e. all except reward).
The rhetoric of HRM suggests that employers should strive to develop a relational
contract in order to win “hearts and minds” and, in harnessing commitment, thus drive
high performance (Guest and Conway, 2001). This focus on relational issues has,
however, been called into question (Herriot et al., 1997) by suggestions that employers
are in danger of underestimating the fundamentally transactional nature of the
employment relationship. The broad findings of this paper would appear to tentatively
support the argument that employee groups other than managers, i.e. supervisors and
employees, are less likely to have relational contracts and that their more transactional
contracts are likely to incorporate perceptions of lower levels of justice and less trust.
However, the patterns of and absolute data presented here do not support the view
that for many employees the employment relationship is wholly transactional. While it
is true that, in terms of patterns, managers and supervisors seem to place more value
on many of the relational issues, employees do not place a higher value on the
transactional issues. Indeed the one issue on which they place more importance than
the other two groups is a relational one. In terms of absolute data, the levels of
importance placed on both relational and transactional issues are high for all groups,
demonstrating the salience of these issues across all employees. What does emerge
clearly from the data is that managers have greater perceptions of being treated fairly
by the employer and a greater belief that the employer will honour its commitments,
seeming thus to trust the employer more, despite the limited data on trust itself.
The probable implications of these results are that the facets of the psychological
contract are more complex than the simplistic continuum model shown in Figure 1.
Despite a model suggesting that trust, fairness and obligations are part of the content
of the psychological contract, most extant data on transactional and relational issues
adopts an obligations-only based perspective. We argue that incorporating
considerations of trust and justice into the debate gives a more rounded perspective
on transactional and relational aspects of the psychological contract and aim to open
this debate with the findings presented in this paper.
It seems clear that all employees want to be challenged and developed although to a
different degree depending on their place in the organisation. The challenge then for
line managers and HRM is to develop policies and practices that meet the needs of the
different employee groups, it appearing possible to move beyond a wholly
transactional psychological contract for all employee groups and to strive towards a
“committed” workforce at all levels.
Conclusions
In this research, we set out to investigate the psychological contract using the WIB
survey data. It has emerged that there are differences between the employee groups,
represented in the survey, in relation to their perceptions of the contract. Managers
appear to have a more “positive” take on the psychological contract than the other two
groups. However, in key elements of the deal, such as use of initiative, the other two
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groups are not far behind managers in their importance ratings. Supervisors have also
been shown as a group with quite different perspectives for many of the obligations
examined. The research has also highlighted an interesting difference between
respondents rating of the single Trust item, and the lower ratings for the aggregated
deal scale. Overall, it seems safe to conclude that it would not be sensible to postulate a
single “vision” of the psychological contract that is applicable to all employees,
although the findings here do not give clarity to the exact differences between the
groups. It is argued that a fuller consideration of the elements of the content of the
psychological contract might usefully inform this debate.
In adopting a secondary data set as the basis for analysis, this study has necessarily
faced limitations, not least in considering the element of trust, for which there is only a
single item. Further, the single scale approach used in the survey questionnaire
requires employees to respond as if employers have given commitment on certain
issues and makes no provision for if this is not the case, the advantage of a two scale
method which asks first if the commitment has been made, and then whether it has
been fulfilled. The questionnaire also explores justice to a limited extent, the focus
being on interactional rather than distributive or procedural. Finally, the employee
perspective is provided, but there is no insight into the employer perspective, which
would provide a fascinating contrast.
Further research should investigate this notion of a variety of psychological
contracts by employee group, considering the implications of this for a whole range of
issues relating to the management of the employment relationship. It is also suggested
that fuller exploration of the significance of age on the psychological contract would
make a useful contribution to the understanding of this construct. More detailed
consideration of the elements of trust and justice within the psychological contract
would provide further valuable insights. Finally, it is worth noting that the data set
provides a perspective on the employment relationship in the UK which is likely to be
context specific. Comparative studies of the employment relationship are also likely to
provide useful, contrasting data.
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About the authors
Carol Atkinson is a Senior Lecturer in HRM at Manchester Metropolitan University Business
School. The psychological contract was the focus of her doctoral thesis and she has subsequently
gone on to develop other areas of psychological contract research, adopting both qualitative and
quantitative approaches. Her other areas of research are the employment relationship in the
small firm and working time flexibility. Carol Atkinson is the corresponding author and can be
contacted at: c.d.atkinson@mmu.ac.uk
Peter Cuthbert is a Senior Learning and Teaching Fellow and Senior Lecturer in Quantitative
Techniques and Research Methods at Manchester Metropolitan University – Cheshire. Peter’s
general research interests are relationship marketing, service quality, quality assurance and
consumer decision making in higher education, health and other services. He is currently
researching student retention and attitudes to and use of e-learning resources.
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