Building psychological contract: the role of leader member exchanges

Published date05 December 2016
Date05 December 2016
DOIhttps://doi.org/10.1108/EBHRM-06-2015-0024
Pages257-278
AuthorFrancis Kasekende,John C. Munene,Joseph M. Ntayi,Augustine Ahiauzu
Subject MatterHR & organizational behaviour,Global HRM
Building psychological
contract: the role of leader
member exchanges
Francis Kasekende and John C. Munene
Department of Human Resource Management,
Makerere University Business School, Kampala, Uganda
Joseph M. Ntayi
Department of Procurement, Makerere University Business School,
Kampala, Uganda, and
Augustine Ahiauzu
Leadership Department, Rivers State University of Science and Technology,
Port Harcourt, Nigeria
Abstract
Purpose The purpose of this paper is to address the building blocks for psychological contract
among public institutions in Uganda by investigating the mediation effect of leader-member exchanges
(LMX) in the relationship between perceived environmental dynamism and psychological contract.
Design/methodology/approach The authors use structural equation modelling (AMOS) to
investigate the hypotheses.
Findings LMX is a significant mediator in the association between generational work values and
psychological contract and technological advancement and psychological contract among employees
in public institutions in Uganda.
Practical implications At commissions and agencies level, generational work values and
technological advancement seem to create better effects on employee-employer unwritten expectations
and obligations when they go through LMX. This has important implications for the investment in and
outcomes of these LMX endeavours from both the employer and the employee.
Originality/value The study is one of the pioneers to demonstrate that the presence of LMX
reflected in the form of a dyadic relationship helps to extend the positive effects generational work
values and technological advancement have on psychological contract.
Keywords Organizational climate, Psychological contract, Generational work values,
Leader-member exchanges, Public servants, Technological advancement
Paper type Research paper
1. Introduction
Research on psychological contract has seen a number of changes in focus. According to
Conway and Briner (2005) and Petersitzke (2009) the plethora of literature on psychological
contract has mainly focussed on psychological contract breach and its attitudinal
outcomes. On the other hand, the glut of literature on psychological contract has also dealt
with a variety of outcomes. For example, Paracha (2014) and Sturges et al. (2005) have
found the psychological contract to accentuate organizational commitment; while Bal et al.
(2010) and Freese and Schalk (2008) have found it to increase organizational citizenship
behaviours. In their study, Sutton and Griffin (2004) found the psychological contract to
improve employee retention levels whereas Bal et al. (2010) identified the psychological
contract as a contributor to improve job performance. Psychological contract has also been
correlated with intentions to quit (Willem et al., 2010).
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 4 No. 3, 2016
pp. 257-278
©Emerald Group Publis hing Limited
2049-3983
DOI 10.1108/EBHRM-06-2015-0024
Received 11 June 2015
Revised 17 October 2015
29 February 2016
15 April 2016
Accepted8May2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2049-3983.htm
257
Building
psychological
contract
According to Argyris (1960), the concept of psychological contract is used to
describe an implicit agreement between a group of employees and their supervisor.
Rousseau (2012) describes the psychological contract as the set of expectations and
obligations that individual employees have as work experiences. In his study of Belgian
employeespsychological contact, Willem et al. (2010) found that public sector
employees attach less importance to career development opportunities and financial
rewards promises, and perceive these promises as less fulfilled. These public secto r
employees also perceive social atmosphere and work-life balance as less fulfilled.
Willem et al. (2010) further observed gender differences as significant in the fulfilment
of the psychological contract. On the contrary, in Uganda, there is an evidence that the
public service experiences problems in managing the psychological contract
(Ssewanyana et al., 2011). Ssewanyana et al. (2011) argue that many employees feel
that despite government as an employer stipulating the terms of agreement in the
formal employment contract, it falls short of fulfilling some of their unwritten
exceptions. Employees assume that salaries will be paid at the end of each month. In
some sectors, employees receive their salaries late some in arrears of three months,
while in other government sectors their retirement packages are not ascertained
(Ssewanyana et al., 2011). This in essence breaches the psychological contract.
From the discussion above, we gather that while there is substantial literature about
psychological contract as a concept (Guest et al., 2007; Rousseau, 2012) and
psychological contract breach and its attitudinal outcomes (Coyle-Shapiro and
Parzefall, 2008; Freese and Schalk, 2008), there is little on what factors build the
psychological contract (Conway and Briner, 2005; Petersitzke, 2009). The purpose of
this paper is twofold: first, we build a model that will help researchers and practitioners
in the fields of human resource management and organizational behaviour to move
beyond existing frameworks when attempting to explain and predict psychological
contract. Second, we show that the presence of leader-member exchange (LMX) helps to
extend the positive effects generational work values and technological advancement
have on psychological contract.
Scholars such as Petersitzke (2009) observed that the key requirement for
organizational success in fulfilling the psychological contract is to appreciate the
unique and specific contribution of both, the leader and the led. Scholars have further
observed that appropriate LMXs are rooted in organizational appreciation of
environmental dynamism perceptions of its employees, such as generational work
values (Twenge et al., 2010), technological advancement (Schyns and Wolfram, 2008)
and organizational climate (Munene et al., 2003). Subsequently, Petersitzke (2009)
argues that environmental dynamism perceptions are more likely to yield LMXs , which
translate into honoured unwritten expectations and obligations between parties.
This study explores these concepts in the public service sector.
The public service sector is highly salient with employees seeking to satisfy the need
to realize their ideological values through helping others (Thompson and Bunderson,
2003) and, to a great extent, this is determined by a dynamic environment. There is a
degree of self-selection based on the ideological values associated with work in the
public sector, reinforcing findings reported elsewhere (Willem et al., 2010). Over the
past decade the Uganda Government has made efforts to improve the efficiency and
quality of the services they deliver to their employees (Cheema and Rondinelli, 2007;
Foley, 2008). Those at the helm of civil service reforms and public administration
(UNDP Report, 2010) have ensured that employees are trained in a cost effective
manner to meet the demands of a changing environment. These drastic human
258
EBHRM
4,3

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT