The Impact of Psychological Contract on Employer-Employee Relationship in Operational Level Employees in Selected Two Apparel Companies in Anurdhapura, Sri Lanka

Abstract

Area of the Study

As a significant determinant of psychological contract to the employment relationship, this study is to investigate the impact of psychological contract on employer-employee relationship in selected apparel organization in Sri Lanka.

Problem of the Study

This research study attempts to explore the impact of psychological contract on employeremployee relationship of operational level employees in selected apparel organizations in Sri Lanka. Thus, the research problem of this study was; “Does the psychological contract have an impact on employer-employee relationship of operational level employees in selected apparel organizations.

Method of the study

The date was collected from a randomly selected sample of 170 operational employees in apparel industry by using a structured questionnaire, which consisted of 38 statements with a 5 point Likert scale. The data analysis included the univariate and bivariate analysis with the SPSS 16.0 (Version).

Findings of the Study

The findings of this study are that, perceived organizational support, organizational commitment and organizational citizenship behavior were positively correlated with transactional and relational psychological contract of sewing machine operators. As the regression analysis 29.9% variation in employer-employee relationship explained by the transactional contract while 50.4% variation in employer-employee relationship explained by the relational psychological contract.

Conclusion of the Study

It is concluded that psychological contract is an important variable to explain the employeremployee relationship. This study provides support for filling the gap of theoretical and practical understanding of the employer-employee relationship and psychological contract in apparel industry which is more helpful to maintain favorable relationship with employers and employees.

Keywords: Psychological Contract, Employer-Employee Relationship, Relational Contract, Organizational Citizenship Behaviors.