The impact of human resource practices on the psychological contract : a quantitative study

Abstract

Human resource practices represent a major mechanism for implementing a firm’s strategic plan. These practices create a distinct type of relationship between employee and employer which can be characterised as psychological contracts, that is, the belief people hold regarding the terms of their employment relationship (Rousseau and Wade-Benzoni, 1994). The purpose of the research was to examine the type of psychological contracts that exist within an organisation and show the impact of human resource strategies and practices on the different contracts. Human resource practices play a significant role in building the psychological contract that supports the strategy. This could help organisations to allocate investments accordingly, especially in difficult times. This research was carried out amongst knowledge workers, with a 32% response rate. The findings reveal that it is important for the employer to realise that employees perceive themselves as contributing more than the employer to the relationship. It further highlights supervision as a dimension for establishing relational and balanced contracts. Training and development is perceived as the most important human resource practice for developing relational and balanced contracts. A model was developed to show organisations the impact of human resource practices on the psychological contract. It also depicts how investment should increase within the different human resource practices and how this translates to organisational performance.