The Role of Psychological Contracts in Recruitment and Retention

1. The Role of Psychological Contracts inRecruitment and Retention William H. Turnley Kansas State University Military Personnel Research Conference June 5, 2002

2. Introduction • Recent Recruitment and Retention Challenges Strong economy Low unemployment Propensity of high school graduates to enter college • Why study psychological contracts? Increasingly important in defining the employment relationship

3. Psychological Contracts • consist of the beliefs employees hold regarding the terms and conditions of the exchange relationship between themselves and their organizations • define what individuals expect to contribute to the organization and what they expect to receive in return

4. Prior Research on Psychological Contracts Has generally focused on two areas: • the changing nature of the psychological contract and the decline of mutual loyalty between employees and employers • consequences of psychological contract breach on employees’ work attitudes and behaviors

5. Goals of this Research Project • This research focuses on several issues related to the development and maintenance of psychological contacts: • how psychological contracts are formed (promises communicated by various sources) • the extent to which applicants distort information about themselves in the recruitment process • how the accuracy of information provided (by both organizations and individuals) impacts motivation, commitment, turnover, and performance • how the attributions that individuals make when their psychological contracts are breached impact their reactions to such occurrences

6. Study 1 – Brief Overview • A longitudinal study that examines how psychological contracts develop during the recruitment process and the extent to which psychological contract fulfillment impacts employees’ attitudes and behaviors during the initial year of employment • Approach Recently graduated university students were initially surveyed after having accepted a job but before they had started to work. These same individuals will be surveyed after they have completed their first year of work.

7. Study 1 – Brief Overview (continued) • Time 1 Survey (At hiring) • Data collected on: Implicit and explicit promises made by organizational agents How the promises were communicated The extent to which individuals distorted info about themselves Perceptions of person-job fit • Time 2 Survey (Approximately 1 year later) • Data to be collected on: Extent of psychological contract breach Employment history (promotions, raises, transfers, turnover) Employee motivation, commitment, and performance

8. Study 1 – Brief Overview (continued) • Status Time 1 data has been collected from approximately 150 individuals. Time 2 data collection will begin later this summer.

9. Study 2 -- Objectives • Examine Antecedents of Psychological Contract Breach • Individual Differences • Relationship Quality • Supervisor-Subordinate Similarity • Examine psychological contracts for • African-Americans • Hispanic-Americans • Examine Consequences of Psychological Contract Breach • In-Role Performance • Extra-Role Performance

10. Study 2 - Procedure • Approach Surveyed existing supervisor-subordinate dyads Samples chosen to provide access to African-American and Hispanic-American respondents • Two Samples • PhD Project Participants • 138 respondents (29% response rate) • 69% African-American, 31% Hispanic-American • 62% Female • County Government in New Mexico • 109 respondents (25% response rate) • 70% Hispanic-American, 30% Caucasian • 57% Female

11. Model Individual Differences Psychological Performance Relationships Contract • In-role Breach Performance • Extra-role Similarity Performance

12. Antecedents of Psychological Contract Breach • Individual Differences • Affective Disposition • Equity Sensitivity • Relationship Quality • Perceived Organizational Support • Leader-Member Exchange • Similarity • Supervisor-Subordinate Demographic Similarity

13. Individual Differences • Affective Disposition • H1: Negative affective disposition will be positively related to the perception of PCB. - H1 supported. • Equity Sensitivity • H2: Benevolent individuals will be less likely than entitled individuals to perceive PCB. - H2 supported.

14. Relationship Quality • Perceived Organizational Support • H3: Perceived organizational support will be negatively related to the perception of PCB. - H3 supported. • Leader-Member Exchange • H4: In-group members will be less likely than out-group members to perceive PCB. - H4 supported.

15. Supervisor-Subordinate Similarity • Relational Demography - Similarity Attraction Paradigm • H5: Mixed gender dyads - H5 not supported. • H6: Mixed race dyads - H6 only partially supported. • H7: Age difference - H7 not supported.

16. Outcomes of Psychological Contract Breach • Social Exchange Theory • In-role Work Performance • H8: Psychological contract breach will be negatively related to in-role performance. - H8 supported. • Extra-role Work Performance • H9: Psychological contract breach will be negatively related to the performance of organizational citizenship behaviors. - H9 supported.

17. Implications • Individual personality differences matter • Relationship quality matters at multiple levels • Organizational level • Supervisor-Subordinate level • Supervisor-Subordinate relational demography generally does not matter • However, the subordinate’s gender and race do matter • Women and racial minorities are more likely to perceive pcb • Both in-role and extra-role work performance is negatively impacted by psychological contract breach