Maximizing Human Potential - Professional Workplace Environment

Work Environment and Perceived Fulfillment of Psychological Contract: A Study of Private
and Public Sector Organisations

Author(s): Sudeepa Bose and Manisha Agarwal
Source: Indian Journal of Industrial Relations, Vol. 38, No. 4 (Apr., 2003), pp. 460-479
Published by: Shri Ram Centre for Industrial Relations and Human Resources
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IJIR, Vol. 38,No. 4, April 2003
WORK ENVIRONMENT AND PERCEIVED

FULFILLMENT OF PSYCHOLOGICAL CONTRACT: A
STUDY OF PRIVATE AND PUBLIC SECTOR
ORGANISATIONS
Sudeepa Bose and Manisha Agarwal
The study examined the relationshipbetween certain positive

dimensions of the work environment and members' perception
that theirorganisation had fulfilled its psychological contract
with them bymeeting theirexpectations through its human
resourcepractices. It was hypothesized thatpublic sector and
private sector organisationswould differwith respect towork
environmental dimensions such as climate innovation,
for
procedural justice in implementationof decisions regarding
human resources, and interpersonal trust among their members
at differenthierarchical levels. It was also hypothesized that
despite these differences, such positive work environment
dimensions would foster perception of psychological contract
fulfillmentby theorganisation in as much as human resource
practices are capable ofmeetingmembers' expectations in both
typesof theorganisations. The resultsprovidedpartial support
to both thehypotheses.
INTRODUCTION
Competitive world markets, slow growth of domestic economy

and focus on short-term to demonstrate
strong profits have begun
their effectson the traditional employment relationships inwork
Ms. Sudeepa Bose is Research Scholar and Dr. Manisha is Lecturer,

Agarwal
Department of B.H.U., Varanasi.
Psychology,

Work Environment and Psychological Contract 461
Research in this direction has uncovered some

organisations.
common of in the work
patterns change organisational
as
environment during major upheavals caused by events such
During such periods organisations appear to

downsizing. undergo
a of deterioration of communication at many levels
period
& Bowman, 1995), even communication
(Dougherty though
appears to be particularly important at these times. Similarly,
appear to suffer a deterioration of trust

downsizing organisations
(Buch & Aldrige, 1991) and an increase in fear. In addition, the
work environment of downsizing organisations appear to be
marked by high levels of uncertainty and chaos (Tombaugh &
White, 1990)
In the light of such developments, psychological contracts are

beginning to take on an increasing importance inhelping todefine
the employment relationship. Psychological contracts consist of
the beliefs employees hold regarding the terms of the informal
exchange agreements between themselves and their organisations
(Rousseau, 1989,1990). Of critical importance in the establishment
of the psychological contract is the belief that a 'promise' (either
implicit of explicit) has been made and that a 'consideration' has
been offered in exchange for it. That
is, psychological contracts
emerge when individuals perceive that their organisation has

to them with certain rewards in return for the
agreed provide
contributions that theymake to the organisation. Psychological
contract violations occur when that the
employee perceives
organisation has failed to fulfil one or more of its obligations
comprising the psychological contract (Rousseau & Parks, 1993).
While psychological contracts have frequentlybeen discussed in
theoretical terms, empirical research on this topic is fairly recent.
Researchers in this direction have proposed that violation of
contracts may be perceived to have two basic causes:
psychological
reneging and incongruence (Morrison& Robinson, 1997).Reneging
occurs when the organisation breaks a to the
knowingly promise
either on purpose or because of unforeseen
employee,
circumstances. In contrast, occurs when the
incongruence
employee and the organisation have different understandings
regarding what the employee has been promised. Thus, in

violations due to incongruence, the organisation believes that it

462 Indian Journalof IndustrialRelations
has lived up to its commitments, but the individual perceives that

the organisation has failed to keep one or more of its promises.
Researchers have that psychological contracts can

suggested
be violated in the sense that important obligations have not been
fulfilled or psychological contracts can be over-fulfilled in the sense
that the organisation provides employees with more than they
were and Feldman (1998) examined the nature,
promised. Turnley
extent and consequences of psychological contract violations faced
by employees in firmsundergoing downsizing, reorganisations,

mergers and acquisitions. that managers in
They reported
restructuring firmswere significantlymore likely to perceive
psychological contractviolations in areas of job security,input into
decision making, opportunities for advancement, and amount of
Managers in these firms

responsibility. were also significantlymore
likely tobe looking fornew jobs and were less likely to be loyal to
their employers, However, situational factors such as
procedural
justice in handling layoffs,low likelihood of futureviolations and
positive relationshipswith colleagues were likelytomitigate against
managers' strong negative reactions to psychological contract
violations. Further research demonstrated that psychological
contract violations can result in increased levels of exit, voice and
neglect behaviours and decreased levels of loyalty to the

organisation (Turnley & Feldman, 1999). Turnley and Feldman
(2000) also reported thatunmet expectations and jobdissatisfaction
partiallymediate the relationship between psychological contract
violations and behaviours such as intention to
employee quit,
neglect of in-role job duties and citizenship behaviours.
Among the situational factors that may arouse strong negative

reactions contract violations are issues
against psychological
related to procedural justice, for example, the fairness of layoff
procedures, pay raises and promotion decisions in the organisation.
In a programme of research in
legal settings, Thibaut and Walker
(1978), demonstrated thatperceptions of the justice of a decision
are not a matter of unfavourableness of the outcome, but
solely
also of the process used to arrive at the outcome. Thibaut and
Walker (1975) found that people prefer conflict resolution
procedures that grant control over the process. In
disputants

Work Environmentand Psychological Contract 463
particular, people prefer procedures that offer control over the

process while yielding control over the final decision to a third
party. Most related to untangling
of the research procedural and
distributive demonstrates that justice was more
justice procedural
an outcome was
important when group-based while distributive
was more when the outcome was individual
justice important
based. On the other hand, Greenberg (1987) suggested that
procedural justice
was more
important for a favourable or
high
outcome.
researchers have a of
Organisational gathered strong body
evidence showing thatemployees care a great deal about the justice
of organisational human resource (HR) systems, including
compensation (Folger & Konovsky, 1989), performance
management (Taylor, Tracy Renard, Harrison, & Carroll, 1995),
and staffing. These researchers have reported that the more just
or fair
employees consider such systems to be, the more satisfied
and accepting are of the resultant outcomes even when those
they
outcomes are less than desirable. Thus, procedural justice principles
require thatHR decisions be governed by a set of procedures that
safeguard accuracy, consistency, correctability, freedom from bias
and employees' input (Leventhal, Karuza & Fry, 1980). It therefore
becomes important to examine the influence of procedural justice
on contract fulfilment.
psychological
Other factors that can be expected to facilitate the perception

of psychological contract fulfilment in organisations are an
innovation-supportive climate and the level of interpersonal trust

between members. It has been noted that innovative organisations
are characterised an orientation toward and
by creativity
innovative change, support for their members in functioning
independently in the pursuit of new ideas (Kanter, 1983) and a

tolerance for diversity among their members. Also critical for
innovation are of such resources as
adequate supplies equipment,
facilities and time. Studies on innovation have focused on different
levels of analysis. Pierce and Delbecq (1977) have suggested three
cause innovation
perspectives. Firstly, structure and context may
member values and attributes can be cast as the
Alternately,
primary causal force in determining organisational innovation.

Finally, the interaction between both structure and membership
may influence the relationship between the organisation and

innovation. Scott and Bruce (1994) have that an
reported
innovation-supportive climate affects individual innovative
behaviour. At the individual level, innovative behaviour begins
with problem recognition and the generation of ideas or solutions,
either novel or It then encompasses of
adopted. adaptation
or processes from outside the organisation. Scott and
products
Bruce have further reported that subordinates who had
relationships with their supervisors characterised by high levels
of support, trust and autonomy also reported the organisation to
be supportive of innovation and judged the resource supply to be
it seems reasonable to expect that an
high. Consequently,
innovation-supportive climate should facilitate the perception of
psychological contract fulfilmentby providing the flexibility and
opportunity required for innovation behaviour thereby fostering
interpersonal trust among members of work groups.
Trust has been conceptualised at the cognitive and affective

levels byMcAllister (1995). Cognition-based trust is grounded in
individual beliefs about reliability and dependability in
interpersonal relationships. Affect-based trust, on the other hand,
is grounded in reciprocal care and concern.
interpersonal
Organisations abound with relationships based on dependability
and faith inwhich moderate of interpersonal care and
expressions
concern are not uncommon. It can, therefore, be suggested that
perception of psychological contract fulfilment in organisations

should have strong connections with the degree of interpersonal
trust that among members at different levels.
prevails
THE STUDY AND ITS OBJECTIVES
The above review suggests thatwhile psychological contract

violations may lead to negative consequences for the organisation,
psychological contract fulfilment may generate positive outcomes

for the organisation. A proactive approach to this issue should
aim to identify those conditions under wh|ch an can
organisation
meet the expectations of itsmembers. The aim of thepresent study
was therefore, to examine the effects of certain dimensions of the

work environment on the of psychological contract

perception
fulfilment among organisational members across and private
public
sector Indian organisations. Members' perceptions that their
had met their expectations resource
organisation through its human
was considered the main
component of psychological
practices
contract fulfilment construct. It has been argued that certain positive
dimensions of the organisational work environment such as an
innovation-supportive climate, perception of procedural justice in

human resource practices and interpersonal trust in organisational
relationships are likely to influence the employer-employee

and enable members to perceived the organisation as
relationship
fulfillingitspsychological contractdespite changing policies thatcan
affectthe termsof employment. Itwas specificallyhypothesized that:
1. The work climate dimensions will be different in Indian

organisations belonging to theprivate and public sectors.Due
to lesser degree of bureaucratisation, the work environment
in private sector organisation will have higher levels of
procedural justice, support for innovation and interpersonal
trust among members as to the public sector
compared
As such, levels of psychological contract
organisations.
will be higher inprivate sector organisations.
fulfilment
2. However, in spite of the assumed differences in thework

environments of private and public sector organisations, it
was furtherhypothesized that:
a) Demographic characteristics such as age, duration of ser

vice in the organisation, number of promotions received
and salarywill be related tomembers' perception ofpsy
chological contract fulfillment in both types of
organisations.
b) The extent of innovation-supportive climate will be re

lated tomembers' perceptions of psychological contract
fulfillmentin the two types of organisations.
c) of procedural justice in human resource prac

Perception
ticeswill relate tomembers' perception of psychological
contract fulfillment in the two types of organisations.

d) Finally, the degree of interpersonal trustfor the superior,

subordinate and peers among members will be related
to theirperception of psychological contract fulfillment
in private and public sector organisations.
METHOD
Sample
The sample for the study consisted of 200 managerial and

supervisory personnel belonging to twopublic sectororganisations
(N=105) and two private sector organisations (N=100). All four
were
organisations manufacturing organisations.
Measures and Procedure
The studywas conducted on thepremises of theorganisations

under The HRM in each was
study. department organisation
approached for its co-operation in data collection. Measures
consisted of five scales which were related toperceived fulfilment
of psychological contract, climate for innovation, procedural
justice, perceived level of interpersonal trust,and demographic
characteristics of the sample.
The Psychological Contract Fulfilment Scale, designed on the

basis ofmeasures used by Turner and Feldman (1998) consisted of
11 itemswhich measured the extent of fulfilmentof members7
expectations regarding job conditions in theorganisation on Likert
type fivepoint scale. The reliabilitycoefficientof the scale was .75.
Among the antecedent variables, Innovative Climate was

measured by 16 items on five point scale which were adapted
from the 'climate for innovation scale' developed by Scott and
Bruce (1994). Factor analysis of the scale by means of principal
components method with varimax rotations revealed four factors
in perceived climate for innovation (Table 1 ) namely, System
support (24.71 per cent variance), Rigidity (19.80per cent variance),
Encouragement to creativity (7.57 per cent variance), and
Conformity (6.67 per cent variance). These factors explained 59

per cent variance.

The Procedural Justice Scale consisted of 8 items which

measured the fairness of human resource in the
practices
and the reliability coefficient was found to be .77.
organisation
Following Mc Allister (1995), affect-based and cognition based

Interpersonal Trust was measured at three levels, that is, at the
supervisory, peer and subordinate levels. The scale contained 11
items which measured participants' trust for a boss, a
colleague
and a subordinate. The of the scale was .85.
realibility
A four items scale measured characteristics of

demographic
the participants consisting of salary, tenure, number of promotions
received and age.
RESULTS
Data were for measuring the differences in the

analysed
levels of demographic variables and work environment
dimensions, namely, levels of interpersonal trust, innovative
climate dimensions and perceptions of psychological contract
fulfilment in the private and public sector organisations. The
differences in themean values for thevariables understudy in the
two types of organisation were analyzed by computation of t-test
(Table 2). Results showed that the two types of organisations
(private and public sector) differed significantlyon several of the
variables. The mean age of participants in the private sector was
significantly lower (40 years) than themean age of participants

in the public sector organisation (45 years). Similarly, themean
of service in the private sector was
length organisations
significantly less in theprivate sector organisation (12.83 years) as
compared to thepublic sector organisation (17.83 years). However,
the salary and number of promotions received by members of
sector were not different from
private organisations significantly
those of their counterparts in the public sector organisations.
The mean values indicated significantly different levels of

perceived psychological contract fulfilment (PCF) in the private
and public sector organisations. PCF was higher in the public sector
organisations to the private sector organisations.

compared
Surprisingly, rigidity and conformity (factors which may be

regarded as negatively related to innovation) were reported to be

higher in the private sector organisations. Perceptions of procedural
justice in human resource practices did not differ significantly in

the two types of organisations. Among the interpersonal trust
dimensions, levels of trust were observed to be
cognition-based
generally higher than levels of affectbased trust inboth theprivate
and public sector organisations. However, in private sector
organisations level of affect-based trustwas significantlyhigher

for boss as to public sector organisations.
compared Conversely,
levels of affect-based trust for colleague and subordinate were
significantlyhigher in public sector organisations as compared to

private sector organisations. In contrast, cognition-based trust was
higher in public sector organisations at all three levels of analysis

as to private sector organisations. But
compared cognition-based
trustdiffered significantonly forcolleagues and subordinates and
not for the boss.
The correlation analysis of factors in thework environment

(Table 3)with psychological contract fulfilmentshowed thatamong
thedemographic variables, salarywas positively relatedwith PCF
in theprivate sectorbut negatively related toPCF only in thepublic
sector organisations. all four dimensions of the
Interestingly,
innovative climate scale were positively related with PCF in the
private sector organisationswhile in thepublic sectororganisations
'rigidity'was one factorwhich was negatively but insignificantly
related to PCF. Procedural in human resource
justice practices
was very highly related toPCF inboth types of organisations. The
results also showed that affect-based and cognition-based
dimensions of interpersonal trustwere positively related to PCF
at all three levels in both the types of organisations. However,
affect-based trustwas not significantly related to PCF at the level
of the boss in thepublic sector organisations.
A of stepwise regression
comparison analysis
(Tables 4 & 5) forpredicting psychological contract fulfilment(PCF)
in private and public sector organisations showed that among the
demographic variables, while promotions predicted 8 per cent

variance in PCF in the private sector, in the public sector, salary
emerged as a negative predictor of PCF (14 per cent variance) and

-Work Environment and Psychological Contract 469
age of participants emerged as a positive significantpredictor of

PCF (20 per cent variance). Among the dimensions of climate for
innovation, in both the private and sector organisations,
public
three factors, namely, system-support, encouragement to creativity
and conformityemerged as significantpredictors of PCF. Similarly,
perceptions of procedural justice in the organisations' human
resource practices emerged as a powerful predictor of PCF in both
types of organisations. However, while affect-based interpersonal
trustat the levels of colleagues, boss and subordinates significantly
predicted PCF inprivate sector organisations, in thepublic sector
affect-based trust for colleague was the sole
organisations
significantpredictor of PCF. In contrast, cognition-based trust for
theboss and subordinate significantlypredicted PCF in theprivate
sector organisations, while in thepublic sector organisations PCF
was significantly predicted by cognition-based trust toward
colleague and subordinate.
DISCUSSION
The present study examined (a) differences in the work
environment of private and public sector organisations and (b)
the patterns of relationship between work environment dimensions
and members' of the extent to which human resource
perception
practices in the two types of organisations met theirexpectations
therebyfulfillingthepsychological contractswith them.The results
provided considerable support to the hypotheses regarding both
the objectives. Although the public sector and private sector
organisations differed substantially in the quality of theirwork
environment, a similarity in the trends of relationships have
emerged from the study.Regarding Hypothesis 1, the data show
that members of the private sector were younger
organisations
than theircounterparts in thepublic sector organisations and had
correspondingly fewer years of service to their credit but their
perception of the fulfilmentof thepsychological contractby their
was also lower than in the public sector
organisations significantly
organisations. These findings highlight the significance of long
term that the
employer-employee relationships. They demonstrate
a person has been in an the greater are the
longer organisation,
chances thathe will get the desired opportunities to achieve his
goals and will therebyperceive his organisation as fulfilling its

promises. Likewise, the data indicated that among the factors of

climate for innovation, although the perception of rigidity and
was in
conformity significantly higher public sector organisations,
levels of system support and creativity were also reported to be
minimally higher in public sector organisations. Here again the

findingsprove the fragilityof thewidely held assumption that the
work climate is likely tobemore conducive forinnovation inprivate
sector organisations than in public sector organisations.
The results further showed that the perceived levels of

procedural justice in human resource practices in both the types
of organisations were similar. The results also demonstrated the
differences in the levels of interpersonal trustin the organisations.
Affect-based trust, that is, trust based on liking for boss and
subordinate was reported to be higher in the private sector
organisations while itwas reportedly higher with regard to the
colleague in the public sector organisations. It appears that
members of private sector organisations are less inclined to trust
the collegue based on their liking of theperson. However, levels
of cognition-based trustwere reported similarly for the boss in
both typesof organisations, butwere significantlyhigher forpeer/
colleague and subordinate in the public sector organisations.
Analysis ofHypothesis 2 revealed that some differences in

the relationships between the variables have emerged between
the two types of organisations. With respect to the relationship
between demographic characteristics and perceived fulfilmentof
psychological contract (PCF), the results showed thatwhile salary
and promotions were positively related toPCF in theprivate sector
organisations, salary was negatively related to PCF in the public
sector organisations. demonstrated that
Regression analysis
although promotions predicted PCF in the private sector
organisations, in the
public sector organisations PCF was positively
predicted by the age of participants, butwas negatively predicted
by salary. These findings highlight the extent towhich human
resource related to the number of promotions received
practices
bymembers and the salary paid to them are capable of promoting
perceptions of psychological contract fulfilmentamong them. The
findingsalso indicate that thehigher age level ofmembers of public

sector organisations might be an important factor leading to

perceived fulfilmentof expectations by the organisations' human
resource
practices. A longer duration of organisational membership
develop bonds between the organisation and its members
irrespective of whether the salary given to them is as

expected.
These findings assume furthersignificance inview of the fact that
most Indian organisations have been attempting to attract and
motivate new members by giving them higher salaries but have
not been able to ensure employee loyalty. If thepresent findings
are to be considered , they only point to the futilityof such an
exercise.
Results have further shown that the factors of climate for

innovation, namely, system support, creativity, and conformity
were positively related toPCF inboth theprivate and public sector
organisations, while rigiditywas negatively related with PCF in
thepublic sector organisations but positively related with PCF in
private sector organisations. System-support predicted the
maximum amount of variance in PCF in both the types of
organisations followed by creativity and conformityrespectively.
These findingslend credibilityto theearlier contentions thatsupport
for innovation and resource are functions of the
supply
can
organisational system which strengthen innovative behaviour
(Scott& Bruce, 1994).However, Indian organisations seem todiffer
fromWestern organisations with respect to the 'conformity' factor.
It appears that an environment inwhich new problems can be
solved in accordance with tried and confirmed ways, may be
crucial factor of the climate for innovation which may promote
perception of psychological contract fulfilment in Indian
organisations.
Uniformity between the two types of organisations has also

emerged with regard to the relationship between PCF and
in the of human resource
procedural justice implementati?n
practices. Procedural justicewas stronglypredictive of PCF inboth
types of organisations. It is not surprising that irrespectiveof the
type of organisation, if one were to consider the human factor, the
perception of procedural justice by organisational members with
to implementation or related to
regard organisational policies

human resource practices can lead to perception of fulfilled

among themembers even if the outcomes are
expectations negative
for individuals. Thus ifno increase in salary is justified by the
procedures followed, itwill still foster feelings of expectations
having been fulfilledby the organisations as reported earlier in
the section. This in part, explains the negative prediction of PCF
by salary in thepublic sector as reported earlier.
Finally, the results showed that interpersonal trustbetween

members at different levels was a very factor that was
important
positively related to PCF in both the private and public sector
organisations. Affect-based and cognitive-based trust were found
tobe significantlyrelatedwith PCF at all three levels of analysis in
the private sector organisation. In these organisation, while affect
based trust for the colleague was the largest predictor of PCF,
cognitive based trust for the boss emerged as themost significant
predictor ofPCF. In sharp contrast,affectbased aswell as cognitive
based trust for the colleague emerged as themain predictor of
PCF in thepublic sector organisations. In these organisations, trust
for the boss was not a significant predictor of PCF. It seems that
public sector organisations need to emphasize the promotion of
psychological contract fulfilmentby building interpersonal trust
between supervisor and subordinate if theyhave to survive in the
turbulent and competitive domestic and environments.
global
CONCLUSION AND IMPLICATIONS
As has been earlier mentioned, a

large number of researches
have already demonstrated the negative impact of psychological
contract violations on attitudes and behaviours. It has
employee
been shown that the negative consequences of psychological
contract violations are likely to go beyond the hurt feelings and
disillusionment feltby employees; theymay result in behaviours
that are damaging to organisational effectiveness as well. However,
this study has attempted to identifycertainpositive dimensions of
the organisation's internal work environment which may foster
perception of psychological contract fulfilment by meeting

employees' expectations and also help in countering the negative
impact ofmajor organisational upheavals during restructuring

and layoffswhich change the employer-employee relationship.

Work Environmentand PsychologicalContract 473
It is reiterated that a long-term relationship between the

employer and employee can go a longway inpromoting perception
of psychological contract fulfilment by meeting employee
expectations over a of time. Also, of
longer period perception
procedural justice in decisions related to human resources may
be conducive in the employer-employee
maintaining relationships
in the face of major changes in organisational policies. In the
Indian context, differences in the work environment of private
and public sector organisations need not generate too much
concern about their respective and disadvantages. The
advantages
similarity in the patterns of relationship between perceived
psychological contract fulfilment and dimensions of the
organisations^ internal work environment such as an innovation
supportive climate, justice in human resource

procedural practices
and interpersonal trustseem to signify that thekind of 'ownership'
is not a major variable that is likely to influence the employer
employee relationship in Indian organisations. Rather organisations
should concentrate on building relationships based on trustand
fairness. Hence, it is suggested that future research in this area
should seek to establish the relationship between psychological
contract fulfilmentand employee behaviours such as loyalty and
commitment.
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Table 1. Climate for Innovation Scale
Items %Variance
Factor 1 24.71
1. Assistance in new ideas is readily available.
developing
2. There is time available to pursue creative ideas here.

adequate
3. This organisation gives me free time to pursue creative ideas

during theworkday.
4. The reward here encourages innovation.
system
5. This organisation publicly recognizes thosewho are innovative.
Factor 2 19.80
6. A person can't do things that are too different around here
without provoking anger.
7. People around here are expected to deal with theproblems

in the same way.
8. Lack of funding to investigate creative ideas is a problem in

this organisation.
9. Personnel inhibit innovation in this organisation.

shortages
Factor 3 7.57
10. is here.
Creativity encouraged
11. Our ability to function creatively is respected by the leadership.
Factor 4 6.67
12. The main function ofmembers in this organisation is to follow
orders, which come down channels.
through
13. Around here, a person can get into a lot of trouble by being
different.
14. The best way to get along in this organisation is to think

theway the rest of the group does.
15. In this organisation we tend to stick to tried and trueways

of problem solving.

Table 2: 't'values forSignificance ofDifference between Means ofVariables in

Private Sector and Public Sector Organisations (N=100).
Variables Means SD T Values
Private Public Private Public

Sector Sector Sector Sector
(N=100) (N=105)
Demographic
Age 40.3 45.39 7.67 8.56 -4.61"
Duration 12.83 17.83 7.27 8.26 -4.38"
Salary 1.47 1.52 0.82 0.87 1.40
Promotion 1.78 1.56 0.98 0.83 -.68
Psychological Contract 37.60 39.80 7.29 7.89 -2.07*
fulfilment
Innovative Climate
Fl System Support 16.88 17.57 3.88 4.11 -1.23

F2 Rigidity 13.54 9.87 3.11 3.33 7.85**
F3 Creativity 6.84 7.09 1.58 2.01 -1.01
F4 Conformity 14.35 13.25 2.59 2.99 2.78**
Procedural Justice 27.45 28.33 5.73 5.53 .98
Interpersonal Trust
Dimensions
Affect-Based Trust
Boss
17.50 16.14 3.75 2.89 2.92**
Colleague 18.37 19.55 3.12 3.71 -2.42*

Subordinate 17.13 18.26 3.36 2.74 -2.63**
Cognition Based Trust

Boss
20.62 20.97 4.25 3.45 -0.40
Colleague 21.76 23.10 3.57 4.37 -2.15*

Subordinate 19.97 22.13 3.99 5.74 -2.87**

Table 3 Correlation Coefficients of Variables with Psychological Contract

Fulfillment (PCF) in Private and Public Sector Organisations. (N=205)
Variables Private Sector Public Sector

R with PCF R with PCF
Demographic
Age .08 .16
Duration. .02 .16
.24* -.39*
Salary
Promotion .29* .00
Innovative Climate
Fl System Support .61*
.71**
F2 Rigidity -.17
.39*
F3 Creativity .58**
.55*
F4 Conformity .52*
.30*
Procedural Justice .82*

.83*
Trust
Interpersonal
Dimensions
Affect-Based Trust:
Boss .57* .03
Colleague .63*
.62*
Subordinate .61*
.49*
Cognition Based Trust:

Boss .67 .39*
.58*
.56*
Colleague
Subordinate .42*
.67*

Table 4. Stepwise Regression Analyses of Factors in theWork Environment

with PCF (N=100) in Private Sector Organizations.
Independent R R2 R2 %variance Beta t

variables
change coefficient
Demographic
Promotion .29 .08 .08 8 .29 2.45*
Innovative Climate
Fl. .61 .37 .36 37 .37 4.69**

System-support
F3. Creativity .71 .50 .12 12 .34 4.54**
F4 Conformity .74 .54 .04 4 .24 3.09**
Procedural Justice
Procedural Justice .83 .69 .6969 .83 15.06:
trust
Interpersonal
AffectBased Trust_
Colleague .63 .40 .40 40 .30 3.11**
Boss .71 .50 .10 10 .32 4.09**
Subordinate .73 .54 .033 .26 2.67**
Cognition Based trust
Boss .68 .46 .46 46 .43 5.22**
Subordinate .75 .57 .1111 .41 5.08**
*P>. 05, **p>.01

Table 5: Stepwise Regression Analyses of Factors in theWork Environment

With PCF (N=105) in Public Sector Organisations.
Independent R R2 Rs2 %variance Beta t

variables
change coefficient
Demographic
Salary .37 .14 .14 14 -.37 -3.24**
Age .59 .34 .20 20 .47 4.54**
Innovative Climate
Fl.
System-support
.71 .51 .51 51 .52 6.32**
F3. Creativity .74 .55 .04 4 .26 3.37**
F4 Conformity .76 .57 .02 2 .15 2.34**
Procedural Justice
Procedural Justice .83 .69 .69 69 .83 14.81*
trust
Interpersonal
AffectBased Trust:
Colleague .63 .40 .40 40 .63 8.19**
Cognition Based trust
Colleague .56 .32 .32 32 .46 5.17**
Subrodinate .59 .35 .03 3 .20 2.19*
*P>. 05, **p>.01


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Work Environment and Perceived Fulfillment of Psychological Contract: A Study of Private

and Public Sector Organisations

This content downloaded from 111.68.105.84 on Thu, 2 May 2013 03:24:49 AM

WORK ENVIRONMENT AND PERCEIVED

Sudeepa Bose and Manisha Agarwal

The study examined the relationshipbetween certain positive

Competitive world markets, slow growth of domestic economy

Ms. Sudeepa Bose is Research Scholar and Dr. Manisha is Lecturer,

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Research in this direction has uncovered some

During such periods organisations appear to

appear to suffer a deterioration of trust

In the light of such developments, psychological contracts are

emerge when individuals perceive that their organisation has

regarding what the employee has been promised. Thus, in

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has lived up to its commitments, but the individual perceives that

Researchers have that psychological contracts can

by employees in firmsundergoing downsizing, reorganisations,

Managers in these firms

neglect behaviours and decreased levels of loyalty to the

Among the situational factors that may arouse strong negative

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particular, people prefer procedures that offer control over the

Other factors that can be expected to facilitate the perception

innovation-supportive climate and the level of interpersonal trust

independently in the pursuit of new ideas (Kanter, 1983) and a

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Finally, the interaction between both structure and membership

may influence the relationship between the organisation and

Trust has been conceptualised at the cognitive and affective

perception of psychological contract fulfilment in organisations

THE STUDY AND ITS OBJECTIVES

The above review suggests thatwhile psychological contract

psychological contract fulfilment may generate positive outcomes

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work environment on the of psychological contract

innovation-supportive climate, perception of procedural justice in

relationships are likely to influence the employer-employee

1. The work climate dimensions will be different in Indian

2. However, in spite of the assumed differences in thework

a) Demographic characteristics such as age, duration of ser

b) The extent of innovation-supportive climate will be re

c) of procedural justice in human resource prac

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d) Finally, the degree of interpersonal trustfor the superior,

The sample for the study consisted of 200 managerial and

Measures and Procedure

The studywas conducted on thepremises of theorganisations

The Psychological Contract Fulfilment Scale, designed on the

Among the antecedent variables, Innovative Climate was

Conformity (6.67 per cent variance). These factors explained 59

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The Procedural Justice Scale consisted of 8 items which

Following Mc Allister (1995), affect-based and cognition based

A four items scale measured characteristics of

Data were for measuring the differences in the

significantly lower (40 years) than themean age of participants

The mean values indicated significantly different levels of

organisations to the private sector organisations.

This content downloaded from 111.68.105.84 on Thu, 2 May 2013 03:24:49 AM

regarded as negatively related to innovation) were reported to be

justice in human resource practices did not differ significantly in