Psychological contract and employee commitment in South African Local Municipalities : the mediating role of intrinsic rewards

Abstract

Changes are constantly happening in the workplaces, inter-alia due to the increase in technology and changes in bettering management skills. Municipalities have been failing return skilled staff and integrate employee commitment; signifying the presence of problems in employee - work relationship through perceived fulfillment of obligations between the employee and employer. Underlying mediating factors between the concept psychological contract and employee commitment in local municipalities remained unexplored. It was against this background this study examined the relationship between psychological contract and employee commitment and mediating role of intrinsic rewards. Study followed a descriptive cross-sectional survey where 250 participants who were available during data collection were included using total population sampling. Questionnaire employed was self-administered. A significant relationship between relational psychological and intrinsic rewards (Regression coeff = 0.1905, p= 0.0096) was observed. Likewise, a significant relationship was observed between intrinsic rewards and transactional psychological contract (Regression coeff = 0.1820, p = 0.0104). This means that both transactional and relational psychological contract had significant impact on intrinsic rewards. However, intrinsic rewards had no mediating effect on the relationship between psychological contract and employee commitment. Results of this study were quite unique in the sense that no other study in literature has reported similar results where both constructs of the psychological contract (relational and transactional) having no significant impact on employee commitment. Results of this study could be unique because the study was conducted in an African context which is a non-Western context (where the data collection tools were developed and validated) and because of this, the study is among the few studies which offer insights into the psychological contract, employee commitment and intrinsic rewards within the African context. This study was conducted at a time when the selected municipality was facing serious challenges associated with the amalgamation process which include among others high turnover rates.