Psychological Contract & Selection

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Nikolaou, I.& Tomprou, M. (2007). Dynamics of the psychological contract; The role of selection practices and individual characteristics in the Greek banking sector. 13th European Conference of Work & Organisational Psychology, Stockholm, Sweden.

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Psychological Contract & Selection

  1. 1. Dynamics of the psychological contract: The role of selection practices and individual characteristics in the Greek banking sector Ioannis Nikolaou & Maria Tomprou Department of Management Science & Technology Athens University of Economics & Business, Greece
  2. 2. Psychological contract defined <ul><li>Examined as a conceptual schema: </li></ul><ul><ul><li>“ the beliefs, based upon promises expressed or implied, regarding an exchange agreement between an individual and, in organizations, the employing firm and its agents” (Rousseau, 2004, p. 120) </li></ul></ul><ul><ul><li>An inherently subjective perception or as an </li></ul></ul><ul><li>An explanatory framework indicating the transition from old to new deal (Arnold, 1996; Guest, 2004) </li></ul>
  3. 3. A framework for applying the psychological contract (Guest, 2004) Guest, D. E. (2004). The psychology of the employment relationship: An analysis based on the psychological contract. Applied Psychology-an International Review, 53 , 541-555.
  4. 4. Aims of the study: <ul><li>To explore the role of selection processes on the form and breach/violation of the psychological contract. </li></ul><ul><li>To explore the role of individual characteristics (tenure, number of subordinates) as well as personal experiences and motives, such as history of perceived breach and careerism to the form and breach/violation of the psychological contract and </li></ul><ul><li>To explore the role of employees’ attitudes (trust, job satisfaction and commitment) on employees’ PC breach and violation in the Greek banking sector </li></ul>
  5. 5. The Greek Banking Sector <ul><li>The most dynamic part of Greek Economy </li></ul><ul><li>Experiencing radical changes since the mid-90s </li></ul><ul><ul><li>Mergers, acquisitions, expansion in Balkans </li></ul></ul><ul><ul><li>Foreign banks entering the Greek market before and after Olympics 2004 </li></ul></ul><ul><ul><li>Public banks functioning with private sector standards </li></ul></ul>
  6. 6. Hypotheses <ul><li>“ Objective” selection methods, such as psychometric tests, assessment centres and work samples, as opposed to interviews, application blanks and references, will be negatively related to PC breach and violation </li></ul><ul><li>The selection interview and the use of realistic job preview is related to the formation of relational PC </li></ul><ul><li>Careerism is related to the formation of transactional PC </li></ul><ul><li>Tenure and history of perceived breach are related to breach and violation </li></ul><ul><li>Trust, job satisfaction and organizational commitment are negatively related to breach/violation and positively to the formation of relational PC </li></ul>
  7. 7. Method - Measures <ul><li>236 participants from various banks and banking positions </li></ul><ul><li>Measures: </li></ul><ul><ul><li>Psychological Contract Inventory ( Rousseau, 2001) </li></ul></ul><ul><ul><ul><li>Types of PC: relational (.79), transactional (.54), balanced (.94), transitional (.93); overall job satisfaction </li></ul></ul></ul><ul><ul><li>Careerism (Robinson & Rousseau, 1994) (.65) </li></ul></ul><ul><ul><li>Trust ( Gabarro & Athos , 1976 ; Robinson & Rousseau , 1994) (.70) </li></ul></ul><ul><ul><li>History of perceived breach (Robinson & Morrison, 2000) (.73) </li></ul></ul><ul><ul><li>Breach (.78) and violation (.96) of PC (Robinson, 2000) </li></ul></ul><ul><ul><li>Organizational commitment (Jones, 1986) (.72) </li></ul></ul><ul><ul><li>Measures of selection (e.g. selection methods, realistic job preview [.72]), tenure, number of subordinates </li></ul></ul>
  8. 8. Inter-correlation matrix (N=236)
  9. 9. The role of selection processes 1/3 <ul><li>Usage of methods: </li></ul><ul><ul><li>Application blanks: 61% </li></ul></ul><ul><ul><li>Personal Interview: 66.5% </li></ul></ul><ul><ul><li>References: 25% </li></ul></ul><ul><ul><li>Personality tests: 28.8% </li></ul></ul><ul><ul><li>Ability tests: 46.2% </li></ul></ul><ul><ul><li>Assessment centres: 17% </li></ul></ul><ul><ul><li>Work samples: 7.2% </li></ul></ul><ul><li>Application blanks </li></ul><ul><ul><li>Not related to PC type, breach and violation </li></ul></ul><ul><li>Personal Interview </li></ul><ul><ul><li>Related to transitional PC type and breach </li></ul></ul><ul><ul><li>Those attending interview score lower in transitional PC and breach. </li></ul></ul><ul><ul><li>Not related to relational PC, as expected. </li></ul></ul>
  10. 10. The role of selection processes 2/3 <ul><li>References </li></ul><ul><ul><li>Not related to PC type, breach and violation </li></ul></ul><ul><li>Personality tests </li></ul><ul><ul><li>Related to balanced PC type and breach. </li></ul></ul><ul><ul><li>Those completing personality tests score higher in balanced PC and lower in breach. </li></ul></ul><ul><li>Ability tests </li></ul><ul><ul><li>Related to relational PC, balanced PC, transitional PC, breach and violation. </li></ul></ul><ul><ul><li>Those completing ability tests score higher in relational and balanced PC and lower in transitional PC, breach and violation. </li></ul></ul>
  11. 11. The role of selection processes 3/3 <ul><li>Work samples </li></ul><ul><ul><li>Not related to PC type, breach and violation </li></ul></ul><ul><li>Assessment centres </li></ul><ul><ul><li>Related to balanced PC and breach. </li></ul></ul><ul><ul><li>Those participating in AC score higher in balanced PC and lower in transitional PC, breach and violation. </li></ul></ul><ul><li>RJP </li></ul><ul><ul><li>Related to the formation of relational (r: .40), balanced (r: .39) and transitional PC (r:. -.34) </li></ul></ul>
  12. 12. The role of individual characteristics <ul><li>Careerism is not related to any type of PC </li></ul><ul><li>Tenure is related to transitional PC (r: .26) and breach (r: .20) and violation of PC (r: .21) </li></ul><ul><li>Number of subordinates is related to history of perceived breach (r: -.19) and breach (r: -.13) </li></ul><ul><li>History of perceived breach is related to breach (r: .20). Not related to violation, as expected. </li></ul>
  13. 13. The role of employees’ attitudes 1/2 <ul><li>Trust, job satisfaction and organizational commitment are negatively related to breach and violation and positively to the formation of relational PC (r: >.40, p<.01) </li></ul>
  14. 14. The role of employees’ attitudes 2/2 .52*** .33*** -.34*** -.24*** -.21** Transitional .31*** -.27*** -.06 -.08 β Breach Violation Trust Org. Commitment Job satisfaction .36*** .27*** .12 .03 β -.03 .04 .07 Transactional -.05 .11 .15 Relational .39*** .31*** .22*** Adj. R 2 -.15 .32*** .22* Balanced β β β Predictors
  15. 15. Hypotheses Review <ul><li>“ Objective” selection methods, such as psychometric tests, assessment centres and work samples, as opposed to interviews, application blanks and references, will be negatively related to PC breach and violation  PARTIALLY SUPPORTED </li></ul><ul><li>The selection interview and the use of realistic job preview is related to the formation of relational PC  PARTIALLY SUPPORTED </li></ul><ul><li>Careerism is related to the formation of transactional PC  NOT SUPPORTED </li></ul><ul><li>History of perceived breach is related to breach and violation  PARTIALLY SUPPORTED </li></ul><ul><li>Trust, job satisfaction and organizational commitment are negatively related to breach/violation and positively to the formation of relational PC  SUPPORTED </li></ul>
  16. 16. Conclusions <ul><li>RJP is significant for the formation of a positive PC </li></ul><ul><li>Selection methods did not differentiate between the various forms of contracting </li></ul><ul><li>Tenure and history of perceived breach are related to PC breach </li></ul><ul><li>The type of PC (especially transitional and balanced) is especially important in defining employees’ attitudes. </li></ul>
  17. 17. Implications-Limitations <ul><li>Research : Further research is needed on the PC contract in non-US and non-West European countries </li></ul><ul><li>Practise : Individual characteristics and the selection processes play a significant role on employees’ type of PC, especially newly-recruits. </li></ul><ul><li>Cross-sectional samples & common method variance effects </li></ul><ul><li>Low reliability of transactional scale of PCI </li></ul>
  18. 18. Thank you for your attention <ul><li>For more information please contact: </li></ul>Ioannis Nikolaou (inikol@aueb.gr) Department of Management Science & Technology Athens University of Economics & Business, Greece

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