Psychological contracts and their effect on employee engagement -

Abstract

Trying to better understand relationships between various factors that affect employee performance and outcomes, researchers throughout the years try to observe behaviors and study attitudes, considering different aspects of each. Most notable among these variables is psychological contract; a theory that is described as a set of mutual expectations between employer and employee. Given the impact of such complex relationships on important factors at the workplace, recent studies have tried to build a link between these subjective implicit contracts and employee engagement. As this concept of engagement captures the attention of local and regional organizations in the Middle East, this study analyses the correlation between the two variables along with the effect of generational differences on these results within Bank Audi employees. Results revealed that a strong correlation exists between psychological contracts and employee engagement, specifically within Generation Y – Millennials. Based on these results, it is crucial for organizations to set action plans required to change mindsets and culture in the way expectations are shaped and perceived.