Effect of Psychological Contract on Employees Perceived Performance: A Case of Nib Insurance Share Company
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Date
2019-06
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Addis Ababa University
Abstract
This main aims of this study is to examine if a relationship exists between psychological contract and employees perceived performance mainly employee beliefs about the reciprocal and promissory obligations between them and their employer in the case of Nib Insurance Share Company in Addis Abeba. The research was conducted with quantitative research approach. In this study, research questions and hypothesis were developed to analyze if psychological contract through the transactional and relational dimension affects employee’s perceived job performance. A stratified probability sampling was employed. A set of standard questionnaires were used following a pilot test and reliability test for measuring psychological contract and employee job performance. A total of 186 sample questionnaires were collected. Data was analyzed using descriptive and inferential statistics such as; Percentage, mean average standard deviation as well as, correlation and regression analysis. The Pearson correlation analysis result have revealed that there exists a positive relation between psychological contract and employee perceived job performance. The correlation coefficient analysis has also revealed that the relational dimension of psychological contract has a positive significant effect on employee perceived performance. The regression analysis of the study proved that 54|% of employee performance variation is caused to psychological contract. Besides, the highest variation on employees’ performance is attributed to the relational dimension of psychological contract than the transactional dimension of psychological contract. It is therefore recommended that the effect of psychological contract on employees perceived performance has to be given due attention and considered in the development of the different human resource practices in NIC especially in the human resource performance management system
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Keywords
Psychological Contract, Employee, Perceived Performance