This research paper associated with its core aim to investigate the effect of Psychological contract on organizational commitment. It is a research gape to work on “Influences of Psychological contract on organizational commitment” for public sector institutions like IIUI. The employees of government sector institutions are not mainly focused by the researchers. At the end of testing the hypothesis, this research paper providing facts about the association of Psychological contract with organizational commitment of the faculty members of a public sector institution. Furthermore, this research study finds either the Psychological contract has positively influence the organizational commitment or not.

· How psychological contract influence on employee affective commitment?

· How psychological contract influence on employee continuance commitment?

· How psychological contract influence on employee normative commitment?

· To investigate the influences of psychological contract on employee affective commitment;

· To investigate the influences of psychological contract on employee continuance commitment;

· To investigate the influences of psychological contract on employee normative commitment.

Psychological contact is employee understanding and perception of the exchange relationship between what employees gives to the organization and what the organization gives in return [7] (Cassar & Briner, 2011). Psychological contract also refers to the beliefs an individual held related to the implicit terms of agreements between individual and his/her organization [8] (Rousseau, 1995, 2000). The psychological contract can be classified in to two aspects including transactional and relational [8] (Rousseau, 1995, 2000). The transactional contract is based on the satisfaction from both sides based on the material benefits. The relational contract is based on the satisfaction gained from both sides based on social affection. When employee feels that their agreement (psychological contract) between them and organization is fulfilled, it results in increased job performance and other favorable outcomes [5] (Sturges, Conway, Guest, & Liefooghe, 2005). On the other hand, if such psychological contract is perceived to be unfulfilled, then it may result in negative outcomes such as turnover, work withdrawal and so on.

Research related to the outcome of psychological contract violation and fulfillment shows that when psychological contract is violated, it results in negative outcomes. For example, a study conducted by [9] (Deery, Iverson, and Walsh 2006) used sample from customer service employees; and find out that when psychological contract is violated, it results in increased absenteeism and decreased trust towards organization. Beside on other factors, Psychological contract has a significant role to keep employee motivated with organizations. The organizations which have more employees’ Psychological contract, such organizations have more employees’ job commitment & citizenship behavior [7] (Cassar & Briner, 2011).

Another study conducted by [10] (Robinson and Rousseau, 1994) examined the relationship between psychological contract violation and different outcomes. Their findings were that when psychological contract is violated, it associates negatively with violations and trust, satisfaction, and intention to remain within organization. Another study conducted by [11] (Chrobot-Mason, 2003) examined the moderating role of trust between the psychological contract violation and organizational cynicism. Research found that when under the situation of high trust by individual, when psychological contract is violated, it is more likely to results in feeling of cynicism compare to the individuals having low level of trust. Research related to the influence of individual and group also shows that perceived psychological contract is also influenced by friends who may hold similar beliefs regarding the fulfillment of the psychological contract [12] (Ho & Levesque, 2005).

Organizational commitment is the employee’s psychological perception of the relationship between individuals and organizations and it reflects employee psychological status of being loyal to the organization [13] (Meyer and Allen, 1991). Organizational commitment is about psychological status between employees and organization. Organizational commitment is important since it result in employee’s intention to stay or leave the organization. The three dimensions of organizational commitment are affective commitment, normative commitment, and continuance commitment [13] (Meyer and Allen, 1991). The three components model of organizational commitment given by [13] (Meyer and Allen, 1991) is an important model since it not only categorizes organizational commitment, but also greatly facilitated commitment related research. Based on the model, affective commitment is about emotional attachment and organizational involvement. Continuance commitment is about perceived cost of leaving the organization. Finally, normative commitment is about sense of obligation to stay within current organization. Past studies show that normative commitment along with the pairing of affective commitment leads to several favorable employee related outcomes and behavior [14] (Gellatly, meyer, & Luchak, 2006). Relationship between organizational commitment and intention to stay is also established in previous studies [15] (Wasti, 2005; Glazer & Beehr, 2005). Relationship between organizational commitment and job satisfaction is also established in past studies [16] (Clugston, 2000). Employees are more jobs committed if they have perception that organization is being working also for their interests [17] (Kamran Nawaz, Mudassar Usman, 2018). The employees who are emotionally attached with the organizations have more degree of work commitment. Beside on working hours, such employees work for organization at their highest level [16] (Clugston, 2000). If an organization have less degree of person-organization fit than the employees are not creative and nor performs the tasks in best way. In this situation, workers are not emotionally engaged with their works. Therefore, employees either want to leave the organization or being fired by institutions. This situation negatively affects the continuance commitment of employees [17] (Kamran Nawaz, Mudassar Usman, 2018). The organizations which have high degree of systemic organizational justice, this will affect the employee’s affective & normative commitments both in positive way. In these organizations, the state of mind of employees about organization is positive and they want to stay long term with organization [18] (Sieger, P., Bernhard, F., & Frey, U. 2011). In any working place, the both side trust b/w employee & employer are very important. High degree of trust shows more affective commitment of employees with organization. In these circumstances, employees do not want to leave the organization and their organizational commitment enhanced [19] (Zeinabadi, H., & Salehi, K. 2011). Organizational justice affects the organizational commitment of employees. If organization treated the employees equally, providing equal chance for career path and also address the employee’s interests than they have more organization committed work force. They have also low turnover ratio and workers have proud to be part of such organization [20] (Zubair Aslam, Amir Javed, 2018).

Different theories and researches describe influence of psychological contract on organizational commitment with different fact in their settings.

The proposed hypothesis is for this research work:

H₁: There is positive influence of psychological contract on affective commitment.

H₂: There is positive influence of psychological contract on continuance commitment.

H₃: There is positive influence of psychological contract on normative commitment.

The study is conducted at International Islamic university Islamabad. The total employees in this organization are about 500. Based on the sample size calculator table provided by [21] (Bartlett, Kotrlik, and Higgins. 2001) the required sample size is 90. Sample will be drawn across the academic staff Lecturers, assistant professor, associate professor and professors at the university through convenience sampling technique. Structured closed ended questionnaire will be used as main method of data collection.

This research is consisting of three parts. First part is about basic demographic questions. Second part is used for measuring psychological contract adapted from [10] (Rousseau, 2000). The measure is based on two dimensions including perceived psychological contract by employer and perceived psychological contract by employees and consists of 4 items. Organizational commitment is measured by measure adapted from [13] (Meyer and Allen, 1991). In this measure, there are 8 items for measuring affective commitment, 8 items for measuring normative commitment, and 8 items for measuring continuance commitment. Reliability test is applied by following the minimum criteria of 0.60 for acceptance. The value of alpha is above than 0.60 so it is reliable for research.

The analysis is based on statistical method including Reliability statistics, descriptive statistic, and regression analysis. SPSS used for data analysis. The value of alpha for Psychological Contract is 0.61. The values of alpha for the components of dependent variable organizational commitment Affective Commitment, Continuance Commitment and Normative Commitment are 0.76, 0.72, and 0.81 respectively. Values are above than the minimum criteria of alpha reliability 0.60 so acceptable for research.

The following chapter intends to provide results and discussion. Figure 1 shows the model for research with both variables. As Figure 1 is showing the psychological contract and effect on organizational commitment of employees whereas, Figure 2 showed the demographic information of the survey participants as follow:

Demographic Information of the Participants

Demographic information including gender, age, related to the participants of this research study is as under.

Table 1 showed the participants with respect to gender. There were total of 65 male and 25 female respondents. The higher proportion of male participation in the research is due to the higher number of male workers in the selected organization. Figure 2 also shows the blue as a majority which is for male respondents as well.

Table 2 shows the participants belonged to the age group of 18 to 30 years of age. 48 participants belonged to the 30 to 40 years of age. 15 participants belonged to the age group of 40 to 50 years of age. Finally, 5 participants belonged to the above 60 years of age.

Figure 3 shows also the age groups of participants. Green is 30 - 40 years of old which are majority respondent in the research.

Table 3 shows that there are total of 25 lecturer’s participants in the research study. 40 assistant professors participated in the survey. 11 associate professors participated in survey. Finally, 14 professors participated in this research work.

Figure 4 is showing the participants designation ratio: Assistant Professor, lecturers, Professor and Associate Professor respectively.

Table 4 shows the value of reliability alpha for the variables. Psychological Contract is measured by 4 items with value 0.61. Affective commitment is measured by 8 items with value of 0.762. Continuance and Normative Commitments also measured by 8 items with alpha values of 0.72 and 0.814 respectively.

Descriptive statistics for the variables in the study are given below.

Table 5 shows descriptive statistics suggest that participants in the selected organization only moderately satisfied with the psychological contract (M = 3.10, SD = 0.80). Further, the affective commitment (M = 3.33, SD = 0.67); continuance commitment (M = 3.28, SD = 0.68); and normative commitment (M = 3.37, SD = 0.76) are also just around average level in the selected organization. Figure 5 also is also showing findings of Table 5. It is showing the value of mean and standard deviation values.

Regression analysis is used for testing the relationship between psychological contract and employee commitment. For this purpose, there were three regression models used and in each model, the dependent variables changed based on the three dimensions of organizational commitment. Results are as under.

The objective of the study was to see the effects of psychological contract on employee commitment in the context of higher educational institutes. The hypothetical model showing in Figure 1 explains the aim of study. For this purpose of analysis, a single university is selecting, and data was collected through survey questionnaire. The findings indicate that psychological commitment is having positive and significant effects on employee’s affective commitment, continuance commitment, and the normative commitment. The findings are consistent with the findings of previous studies. For example, studies including [4] (Lemire & Rouillard, 2005) and [5] (Sturges and Colleagues, 2005) founded positive outcomes of psychological commitment including employee’s commitment. Further, other studies also found other favorable outcomes of psychological commitment such as job satisfaction, lower job stress, and higher performance [1] (Bocchino, Hartman, & Foley, 2003); [5] (Sturges, Conway, Guest, & Liefooghe, 2005); [8] (Rousseau, 2000). Thus, it can be concluded that psychological contract result in favorable outcomes including employee commitment.

R = 0.747, Rsquare = 0.558, Fstat = 111.111 (0.000). a. Dependent Variable: Continuance Commitment.

R = 0.695, Rsquare = 0.483, Fstat = 82.302 (0.000). a. Dependent Variable: Normative Commitment.