THE IMPACT OF CONTRACT PERMANENCY AND PSYCHOLOGICAL CONTRACT

THE IMPACT OF CONTRACT PERMANENCY AND PSYCHOLOGICAL CONTRACT ON EMPLOYEE WELL-BEING AND RELATED OUTCOMES José M. Peiró*, Hans de Witte**, Francisco Gracia*, Nele De Cuyper** *University of Valencia. Spain **University of Leuven. Belgium

INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING • Job flexibility is one of the ways companies use to adapt to global competition • Temporary employment is a form of numerical flexibility since it concerns the fluctuation of the number of employees not belonging to the company • Effects of contractual flexibility on employees. In the literature they are mainly viewed as problematic based on several theories: Deprivation theory (comparison between primary and secondary labour market), psychological contract and job stress theory

INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING • Temporary employment. Can it be used as an ‘objective’ indicator of job insecurity? • If this would be the case and it has a negative impact on well-being, temporary workers should present lower levels of job satisfaction, life satisfaction and work self efficacy and higher levels of propensity to leave. • However, results from the literature are not unequivocal. In their revision Quinlan et al. (2000) found a negative association between temporary work and occupational health and safety in 14 out of 24 studies.

INTRODUCTION: THE ROLE OF VOLITION • Under certain circumstances flexibility is also of interest for employees producing benefits for them. • Volition of flexible types of contract could eliminate the negative effects of temporary contracts on psychological well-being. • Thus, volition is controlled for in our study, when testing the effects of contract flexibility on wellbeing.

INTRODUCTION: PSYCHOLOGICAL CONTRACT AND WELL-BEING • Psychological contract (fairness and trust relationship) is expected to be positively related to well-being and self-efficacy. • Reseach has demonstrated that violation of PC is associated with a variety of negative outcomes. • However, not much research is available on the effects of psychological contract (fairness and trust) on psychological well-being

INTRODUCTION: MODERATING ROLE OF PSYCHOLOGICAL CONTRACT. • One critical question of our study about the effects of temporary contract on psychological well-being is the one related with the moderating role of psychological contract. • Does the PC buffer the negative effects of temporary, non preferred, contracts on psychological well-being? . • If relationships between the employee and the company are perceived as fair and trustful, we expect the negative effects of the temporary contract to be buffered

AIMS OF THE STUDY • To set any association between types of employment contract and employee well-being and related outcomes • Assess the relationship between the state of the psychological contract and employee well-being and related outcomes • Test the moderating role of psychological contract between type of contract and employee well-being and related outcomes

METHOD: SAMPLE • 1675 employees – from 7 countries: Belgium (37. 9%), Germany (12. 1%), Israel (3. 3%), Netherlands(3. 2%), Spain(22. 8%), Sweden (9%), U. K. (11. 7%). – 3 sectors: Health care (35. 5%); Retail (19. 6%); Temporary Agencies (21. 3%). Others (8. 2%) – Type of contract • Permanent (69. 7%) • Flexible contracts (fixed term, hourly based. Probation, temporary agency workers) (30. 3%) – Sex: Male (33. 7%) Female (66. 3%) – Age: 35. 02 (Sd= 10. 21) – Education: Primary school (6. 5%) Lower secondary (16. 3%) Upper secondary (25. 7%) College-university (no degree) (27. 3%) College degree or higher (24. 1%)

METHOD: VARIABLES • Sex: (0) Male; (1) Female • Contract: (0) Temporary; (1) Permanent • Volition: 3 items (Ellingson, 1998; Krausz (p. c. 2002) (alpha. 73) • Psychological contract, Trust: 4 items (constructed) (alpha. 78) • Psychological Contract, Fairness: 4 items (constructed) (alpha. 84) • Job satisfaction: 5 items (Price, 1997) (alpha. 82) • Life Satisfaction: 6 items (alpha. 83) • Turnover intention: 2 items (Price, 1997) (alpha. 72) • Work- related Self-efficacy: 6 items (Schyns & Collani, 2002) (alpha. 86).

RESULTS: descriptive

RESULTS: correlations

RESULTS: job satisfaction

RESULTS: life satisfaction

RESULTS: LIFE SATISFACTION Interaction contract*trust

RESULTS: Propensity to leave

RESULTS: Self-efficacy

DISCUSSION AND CONCLUSIONS • Volition plays a significant and positive role in predicting psychological well-being. Having a contract of preference, be it temporary of permanent, has a positive effect on job and life satisfaction, selfefficacy and negative on propensity to leave • More research is needed to explore the different effects of distinct types of temporary contracts on employees’ well-being

DISCUSSION AND CONCLUSIONS • Temporary contracts in our sample do not have a negative effect on psychological well being, and in some cases have a positive one. Two issues for further study – Types of temporary contracts in different countries – Stability in temporary contracts – Control for other job characteristics and HR practices in permanent and temporary jobs

DISCUSSION AND CONCLUSIONS • Psychological contract positively contributes to job satisfaction and life satisfaction and reduces propensity to leave. It has no impact on self efficacy • The interaction between contract and trust has only be found in the case of life satisfaction. – Trust plays a significan role in enhancing life satisfaction in permanent employees. • In order to contribute to life satisfaction it is not enough to have a permanent job it is also needed to experience trust in the relations with the employer.