Effect of Knowledge about Workers’ Psychological Contract Imbalance on Organizational Performance

WANG Yongan()， SUN Minggui()

1College of Humanities，Donghua University，Shanghai200051，China2Glorious Sun School of Business and Management，Donghua University，Shanghai200051，China

Abstract：Knowledge-based employees are the inexhaustible motive force for the sustainable development of modern enterprises.Being consistent with the psychological expectation of knowledge-based employees is conducive to stimulating the intrinsic motivation of knowledge-based employees and promoting the innovation performance of enterprises.Based on 175 valid questionnaires，the analysis shows that the knowledge about employees’psychological contract can be divided into two-dimension，transactional or relational dimension.Both of them are independent to each other.The correlation analysis shows that the transactional psychological contract and relational psychological contract have positive correlation with team performance and organization performance.At the same time，the team performance and organization performance have positive correlation.Regression analysis shows that compared with relational psychological contract，transactional psychological contract can promote team performance and organizational performance more effectively.Both two psychological contracts can mediate the organizational performance by virtue of team performance.

Key words：knowledge employee；psychological contract；psychological imbalance；organizational performance

Introduction

Psychological contract is the cornerstone of organizational development and a bridge between the organization and its members， which is related to the stability of the staff and the sustainable development of the organization itself.Prof. Argyris， who is a pioneer in this academic field， coined the term “psychological contract” in 1960. In his book “Understanding Organizational Behavior”， Argyris studied various relationships of workers in the work environment， and found the special relationship between employees and employers. Argyris named it the “psychological work contract”[1]. That is the earliest study of the psychological contract.

The literature of psychological contract included in Social Sciences Citation Index(SSCI) is a high level of well-cited or well-read academic papers. The more the literature includes， the higher the research enthusiasm of this research topic is. It is a common sense in academic circles. Based the overall analysis of literatures related and referenced， the psychological contract research in organizational management is usually divided into two stages(2007—2011 & 2012—2017). The trends of psychological contract research in 2007—2011 differ from that in 2012—2017. As shown in Fig. 1， the number of psychological contract research papers change dramatically over the years between 2007 and 2011. This phase of psychological contract research is still in constant exploration. At this stage， the research on psychological contract is still under continuous exploration， which explores the research content and emphasis on the organizational management of psychological contract. In 2012-2017， the literature of psychological contract quantity tends to be stable， and is on the rise. At this stage， the psychological contract in the group of active management research has obtained the certain identity， and has great progress， and the psychological contract has been widely used in the organization and management.

Fig. 1 Quantity of paper on psychological contract in SSCI (2007-2017)

In Table 1， it can be seen that the researches on psychological contract have been basically mature. The existing researches on psychological contract mainly focus on the perspective of social exchange theory research[2-3]. There are also combined with the theory of activation[4]， group value model[5]， organization theory[6]， and the resource conservation theory[7].

Table 1 Different theoretical perspectives of psychological contract

It can also be seen from existing studies that the performance of psychological contract will directly affect the overall performance of the organization. Robinson and Rousseau[8]pointed out that the degree of performance of psychological contract was positively correlated with employee performance and organizational performance. The research of Turnley and Feldman[9]showed that the degree of realization of psychological contract was positively correlated with the positive behaviors of employees. Zhu and Wang[10]pointed out that employee psychological contract had a good predictive effect on some major organizational effect variables. Therefore， through the study of the research of psychological contract fulfillment， we can monitor the effectiveness of the organization performance management in a timely manner to predict organization personnel flow rate， providing reliable talent guarantee for the development of organization. This study intends to empirically analyze how to effectively improve organizational performance from the perspective of psychological contract and its internal correlation， and explores the influence of psychological contract on team performance and organizational performance.

1 Theoretical Basis

Knowledge staff， also known as knowledge workers， this term Drucker[11]first suggested， refers to “those who master and use symbols and concepts， the use of knowledge or information work”. Levinsonetal.[12]clearly pointed out that the psychological contract was the combination of mutual expectation between organization and employee， and these expectations were vague and implicit sexual meaning. In this study， the main emphasis is on how organizations meet the psychological expectations of knowledgeable employees. Organizational performance refers to the performance of the whole organization in a certain period of time. The content of organizational performance changes over time. In the 1960s and 1970s， most researchers defined organizational performance from the perspective of finance， such as sales volume， profit rate and investment return rate，etc. Later， people began to pay attention to non-financial indicators. In the 1980s， when assessing organizational performance， a set of evaluation indicators system was gradually formed， which mainly focused on financial indicators and supplemented by non-financial indicators. In the 1990s， non-financial indicators received more attention. There is a close relationship between the creation of psychological contract and the improvement of organizational performance management efficiency. Herriot and Pemberton[13]pointed out that the destruction of transactional psychological covenants lead to three behavioral outcomes： (1) open negotiations； (2) adjust work input； (3) resignation， more serious will also lead to the occurrence of factory violence. Tsuietal.[14]found that the psychological contract based on relational elements showed better performance of employees in cognitive organization， task performance， organizational citizenship behavior and sense of commitment. Millward and Hopkins[15]further believed that relational contracts had better predictive power in organizing civic behavior than transactional contracts. In addition， the psychological contract and a high level of organizational support consciousness， professional expectations， emotional commitment and lower levels of turnover intention is related to the job satisfaction and meaning has a significant influence on the policy and organization， leaving both sides of the consistency of the psychological contract is higher， the greater the employee satisfaction to the organization. Freese and Schalk[16]find out that employees feel that the higher level of responsibility led to the higher commitment of its factory and organizational commitment through the 328 investigations of Netherland. An important index used to evaluate the success of establishing and balancing psychological contract is organizational performance. But， on the application of psychological contract theory in organizational performance management， literature and the present study mainly focused on employee commitment， employee satisfaction，etc. Obviously， we also need to pay attention to the relationship between psychological contract and organizational performance.

2 Research Questions

2.1 Constitution of psychological contract

In terms of composition， psychological contract itself is a complex system. In recent years， many psychological contract theories are studied， including the research of knot theory， the structure of the 2 dimensional structure theory， the 3 dimensional structure and multi-dimensional structure，etc. But supporters of the 2 dimensional structure occupy most of the research. Relevant research showed that in view of the trading relationship between composition and composition factor analysis mostly found two independent factors， and also was a Transactional Contract and Relational Contract. In Refs.[14， 17-19]， the authors confirmed the existence of transactional contract and relational contract. The research of this paper will also take the theory of two-dimensional structure as the theoretical foundation.

2.2 Dynamic mechanism influencing the innovation behavior of knowledge-based employees

Wu and Shi[20]put forward the innovation behavior of employees， knowledge， thinking， motivation， time(KTMT) trigger system model， and the model consists of the following four factors： knowledge， thinking， dynamic machine and time. Among them， knowledge and thinking are the internal factors influencing employees’ innovation behaviors. These two internal factors， as employees’ characteristics， determine the possibility of employees’ innovation behaviors. The external factors influencing employees’ innovation behaviors are motivation and time， which need to be supported by the relevant atmosphere of the organization and affect the reality and frequency of the innovation behaviors of knowledge-based employees.

2.3 Influencing knowledge staff innovation behavior of the organization factors and individual factors

Affected by the dynamic mechanism model of innovation behavior， a new behavior motivation and employee personal traits and the organization of internal factors are closely related. In fact， the factors of job characteristics and external environment of the organization are also the factors that influence the innovation behavior， but this paper mainly focuses on individual factors and internal factors of the organization. By reviewing the previous literature， the influence factors of these two aspects are divided. Knowledge staff personal characteristics factors (self-efficacy， motivation， confidence， independence，etc.) and organization factors (organizational culture and atmosphere， leadership and style，etc.) are a source of innovation power， and both of them affect the production of innovation behavior.

3 Research Processes

3.1 Research hypothesis

Based on the above analysis， this paper will make some exploratory analysis on the influence of psychological contract on organizational performance. The performance of psychological contract will affect employee satisfaction， and employee satisfaction has a direct impact on individual performance. Individual employee performance of organization performance and staff performance on team performance and eventually to organizational performance effect， team performance of organization performance， employee individual performance through the role of the mediation team performance effect has direct or indirect impact on organizational performance. Therefore， in the management of organizational performance， it is of vital importance to maintain the balance of psychological contract， as well as the rapid establishment of new psychological contract balance relations after its breakdown and violation. The mechanism of psychological contract on organizational performance is shown in Fig. 2. Then five hypotheses are further proposed.

Fig. 2 Research framework and hypothesis

Hypothesis H1： psychological contract can be divided into two dimensions， the transactional psychological contract and the relational psychological contract， and they are independent of each other.

Team performance based on psychological contract is to determine the team performance based on organizational performance， and we determine the individual performance based on team performance， thus put forward the hypothesis of H2.

Hypothesis H2： the psychological contract has a significant positive correlation with team performance.

Hypothesis H2a： the transactional psychological contract has a significant positive correlation with team performance.

Hypothesis H2b： the relational psychological contract has a significant positive correlation with team performance.

Either from the financial index or the non-financial indicators， it is particularly important to manage the employees’ psychological contract， because the situation of employees’ satisfaction will directly or indirectly affect the employees’ individual performance， through the layers of influence organizational performance， thus we have naturally put forward the hypothesis of H3.

Hypothesis H3： the psychological contract has a significant positive correlation with organizational performance.

Hypothesis H3a： the transactional psychological contract has a significant positive correlation with organizational performance.

Hypothesis H3b： the relational psychological contract has a significant positive correlation with organizational performance.

In the process of the organizational development， to improve each teams’ performance， the organization performance will be enhanced， so as to form a good organizational climate. Therefore the core competitiveness of the organization is enhanced significantly， and the sustainable development of the organization is realized. Thus we postulate the hypothesis of H4.

Hypothesis H4：the team performance has a significant positive correlation with organizational performance.

Hypothesis H5： the team performance plays an intermediary role in the relationship between psychological contract and organizational performance.

3.2 Method

We use SPSS 18.0 in the Statistics and analysis to conduct reliability and validity analysis， factor analysis， correlation analysis and regression analysis on the data collected through the questionnaire survey. The questionnaire method was a method to collect research data and data from studies on elephants by means of written form and strictly designed psychological measurement items or questions. Questionnaire research is on the basis of the interview and the purpose of the employee to fill in the questionnaire. Then the research asks for volume data statistical analysis to further demonstrate the relationship between psychological contract and the performance effect， and the general conception of validation studies and assumptions. Questionnaire collection adopted a combination of a large number of questionnaires and interviews. The purpose of the interview with employees is to make them understand the purpose of the questionnaire survey， eliminate the concerns and ensure the authenticity of the questionnaire as much as possible. The main purpose of issuing a large number of questionnaires is to obtain sufficient data for empirical analysis through systematic survey and sampling. There are two ways to distribute the questionnaire. The first is to invite senior management to interview， and then organize employee to fill in the questionnaire we prepared. The second is to introduce the content of the questionnaire to employees through the opportunity of employee training and issue them to fill in the questionnaire. This study used two ways(online and offline) to send out 200 questionnaires， recycling of 175. After the recycling and sorting questionnaires， the study gets 156 valid questionnaires， the average recovery and effective recovery of 87.5% and 78.0% respectively.

3.3 Factor analysis

Factor analysis uses the SPSS 18.0 soft. With the 175 effectively obtained questionnaires， the factor analysis uses the method of principal components analysis to extract 2 common factors (using the method of maximum variance for rotation). To delete the terms from the two factors which load is close to or less than the measurement of 0.5， and extract 2 common factors including 7 measurement terms finally， the 2 factors’ explain rate of accumulated variance has reached 62.730%. The sample adequacy of Kaiser-Meyer-Olkin(KMO) has a testing coefficient of 0.870， and the distribution of the test sample’s spherical Bartlett is 691.287， and the degrees of freedom is 21， and the significant level is Sig.=0.000， which indicates that the sample data is suitable for factor analysis. Factor analysis is verifying the structure of psychological contract of the original design， and verifying the psychological contract including two dimensions： transactional psychological contract and relational psychological contract， and these two dimensions are independent of each other， which supports the Hypothesis H1.

To analyze some of the effective samples’ performance for factor analysis， the study selects the common factor whose characteristic value is greater than 1.0. Among them， the team performance sample adequacy of KMO has a testing coefficient of 0.670， and the distribution of the test sample’s spherical Bartlett is 177.465， the degrees of freedom is 3， and the significance level is Sig.=0.000， indicating that the sample data is suitable for factor analysis. Applying the same method to analyze the organizational performance， we can find that the organizational performance sample adequacy of KMO has a testing coefficient of 0.741， the distribution of the test sample’s spherical Bartlett is 683.778， the degrees of freedom is 6， and the significance level is Sig.=0.000， indicating that the sample data is suitable for factor analysis.

3.4 Correlation analysis

Pearson correlation analysis was conducted for the factors of each factor of psychological contract and job performance.

Table 2 shows that the organizational transactions responsibility and the organizational relationships liability， and the employee liability for self-dealing， and the employee relations responsibility， and the team responsibilities of employees， are included in the psychological contract which having a significant correlation with the task performance of employees. The organizational transactions responsibility， and the organizational relationships liability， and the organization team responsibility， and the employee liability for self-dealing， and the employee relations responsibility， and the team of staff responsibility， are included in the psychological contract which have a significant correlation with the employee relations performance. Therefore， there is a significant correlation between psychological contract and job performance.

Table 2 Correlation results of analysis of psychological contract and organizational performance

Note： ** meansp<0.001

The two dimensions of the psychological contract have a significant correlation with the team performance and the organizational performance at the confidence level of 0.01， which verifies the establishment of the hypothesis H2 (including H2a and H2b)and H3(including H3a and H3b). The correlation coefficient of the two dimensions and team performance was higher than that of the correlation coefficient and organizational performance significantly， which illustrates that the role of the psychological contract on organizational performance is more direct， but part of the work by the team performance. By using the method of partial correlation analysis， the research selects the team performance as a control variable to analyze the relation of psychological contract and organizational performance. The results showed that the two dimensions of psychological contract at the confidence level of 0.01 still had significant correlation. The correlation coefficient ratio decreased significantly without adding control variables， which illustrated that the role of the independent variable on the dependent variable plays a part by the role of the mediating variables (team performance) to some extent， which verifies the hypothesis H5.

3.5 Regression analysis

The regression results of the psychological contract to the team performance show thatF=19.333， Sig.=0.000. Because the probable value is very small， the effect of significant regression is significant at the level of 5%. The result also means that the two dimensions of psychological contract have a significant effect on the team performance. In order to verify the establishment of hypotheses H2a， H2b， the constant term of regression coefficient constant of the psychological contract is 1.473. Both two dimensions of the psychological contract to the regression equation show that the higher contribution of the transactional psychological contract to the team performance (β=0.329)， the lower values ofβis the relational psychological contract (0.247). This result is consistent with previous analysis.

The regression results of the psychological contract to the team performance show thatF=9.103， Sig.=0.000. The effect of significant multivariate regression is significant at the level of 5%. The regression results show that the two-dimension of psychological contract has an significant effect on the organizational performance. The constant term of regression coefficient constant to the organizational performance regression coefficient is 1.067. The regression equation show that the higher contribution of the transactional psychological contract to the organizational performance (β=0.351)， the lower values of Beta the relational psychological contract is (β=0.163). The result is consistent with the previous analysis， and verifies the hypothesis H3.

The regression results of the team performance to the organization performance show thatF=18.031， Sig.=0.000. The effect of significant regression is significant at the level of 5%. The result showed that the team performance has a significant effect on the organization performance， which verifies the hypothesis H4. The regression coefficient of the team performance on organizational performance is 0.570.

As we can seen from Table 3， all the independent variables and the mediating variables bring into the regression equation. The significant relationship between the independent and dependent variables does not disappear completely. Δβ values of the two factors are 0.223 and 0.116. The explanatory power of their organizational performance has decreased to varying degrees. That is to say， on one hand， the psychological contract has a direct effect on the organizational performance. On the other hand， the influence of the psychological contract on organizational performance still has a quite parts through the mediating role of team performance. Then the result verifies the establishment of the hypothesis H5. After the statistical analysis， and corresponding to the results of the study above， we can make a conclusion that the 5 hypotheses are supported.

Table 3 Variables regression of the team performance as a intermediary

In Table 3， the dependent variable is organizational performance.arepresents of predictor variables，brepresents on behalf of the beta value of the predictor variables，crepresents the beta value of the team performance， and Δβis the forecast variableβvalue of the step1βto minus the forecast variableβvalue of the step3[21].

4 Conclusions

(1) The relationship between the transactional psychological contract and the team performance

As can be seen from the correlation analysis， the two dimensions of the psychological contract have a significant positively correlation with the team performance at the level of 0.01. The correlation coefficient of the transactional psychological contract and the team performance is higher which is 0.282， and the coefficient of the relational psychological contract is 0.291. This shows that the transactional psychological contract and the team performance have a close relationship， and the relationship of the psychological contract and the team performance is weaker relatively. In the process of the regression analysis， all the two dimensions of psychological contract have a significantly influence on the team performance. The transactional psychological contract has a larger contribution to the organizational performance， and the coefficient is 0.259， and the relational psychological contract has a small contribution on the organizational performance， which coefficient is 0.241. This shows that， in the process of the economic transformation in China， people pay more attention to economic and physical factors， which are based on the salary and benefits.

(2) The relationship between the psychological contract and the organizational performance

In the process of the regression analysis， all the two dimensions of the psychological contract have a significantly influence on the organizational performance. The degree of the transactional psychological contract which has a contribution to the organizational performance is higher， and the coefficient is 0.351， but the degree of the relational psychological contract which has a contribution to the organizational performance is lower， and the coefficient is 0.163.Results reveal that the transactional psychological contract has a bigger effect on team performance and organization performance. The dimension of the transactional psychological contract has an outstanding performance， which may be related to the environment and the economy of our country. China is a developing country currently， and the level of economic development is not high so consumers’ demand for money and material aspects might be higher than other requirements.

(3) The relationship between the psychological contract and the organizational performance， and the team performance

From the correlation analysis， the team performance has a significant positive correlation with the organizational performance at level of 0.01， and the correlation coefficient is 0.341. The partial correlation analysis shows that， the team performance plays a mediating role in the relationship between the psychological contract and the organizational performance. In the process of the regression analysis， the psychological contract has a significant impact on the organizational performance， and the team performance has a significant impact on the organizational performance， too. The team performance which is the intermediary variables affect the relationship between psychological contract and organizational performance， this view has a very strong inspiration to deepen the research on the psychological contract theory in the future.