Work engagement and intention to leave after a joint venture : the role of the psychological contract and positive employment relations

Abstract

The competitive fast-moving consumer goods (FMCG) industry is one of the biggest contributors to the ountry’s economy. A popular trend in the FMCG industry is the establishment of joint ventures between international and local companies. Joint ventures introduce organisational changes which include the introduction of new technologies, management as well as a new organisational structures which impact the employment relationship negatively; and, as a result, lead to negative organisational outcomes such as work disengagement and turnover intention. The result of such negative organisational outcomes could be ascribed to a psychological contract breach/violation due to the changes implemented by the joint venture and the failure of employers to uphold positive employment relations which comprise trust, respect, support, social integration/communication, equity and equality, and conflict management after a joint venture. The organisation’s inability to engage and retain talent after a joint venture is a risk for the success of the organisation, especially one operating in the fast-paced FMCG industry in South Africa. The aim of the study was to investigate the role of the psychological contract and positive employment relations in terms of the work engagement and turnover intention of employees after a joint venture. A cross-sectional design was utilised to collect data (N=281) in the FMCG organisation across non-managerial levels of the organisation. The measuring instruments utilised were a Biographical Information Survey, Employee Relations Scale, Psychological Contact Breach and Violation Scale, Work Engagement Scale and Turnover Intention Scale. The results of Manuscript 1 (Chapter 2) found that psychological contract breach statistically significantly influenced positive employment relations negatively. Positive employment relations had a statistically significant influence on work engagement and a negative influence on turnover intention. Psychological contract violation statistically significantly influenced turnover intention. Manuscript 2 (Chapter 3) tested for moderation yet found that positive employment relations had no moderating effect on the relationship between psychological contract breach/violation, work engagement and turnover intention.