A study of the Impact of Psychological contract on Organizational commitment among Temporary and Permanent Employees in Organizations

Abstract

The proportion of the workforce on temporary contracts of employment is increasing, as organizations use temporary employees as a flexible resource. Such temporary staff has a different psychological contract with the organization than their permanent counterparts (Rousseau and Wade-Benzoni). These differences will influence staff attitudes and behavior.In this academic research, the researcher has measured the impact of psychological contract on organizational commitment among permanent and temporary employees in five organizations belonging to the manufacturing industry in Palakkad.During this study the researcher was able to find that the level of Psychological Contract was varying among the permanent and temporary employees. But this was not in the case of Organisational Commitment. Both the Permanent and Temporary Employees showed no significant difference in Organizational ommitment .Traditionally permanent employees were preferred above temporary employees considering this myth of higher levels of commitment.Thus this study has proved that investment in temporary employees would prove to be advantageous, beyond economical benefits. Few of the benefits of these higher levels of Organizational Commitment are Retention (Withdrawal Cognition, Turnover Intention, Turnover), Productive Behavior (Attendance, Performance, Citizenship) and Employee Well-Being (Psychological Health, Physical Health, Career Progress). In the case of improving Psychological contract, it is recommended that organizations must ensure that human resource strategies, policies and procedures are reflective of distributive, procedural and interactional justice, and that organisations communicate honestly and openly with employees, in order to minimise misunderstandings that may result in perceived violations.