Psychological Contract and its Relation to Perceived Organisational Climate among Employees in Service Sector

This study was done keeping in mind the high prevalence of turnover in organisations in the service sector. Explanations as to why people engage in frequent shifts in their career and whether psychological contract theory could explain the high prevalence rate of attrition was aimed for in the study. This study aimed at determining the relationship between psychological contract and organisational climate and work experience within the organisation. The study involved a sample of 70 individuals all employed in different organisation belonging to the service sector. The participants were asked to fill Psychological Contract Inventory (Rousseau, 2000) and Perceived Organisational Climate (Singh, 1986). It was found that psychological contract is significantly related to the perception of organisational climate and the experience within the organisation. It was also found that psychological contract significantly predicts the perception of organisational climate. In addition the relational psychological contract is the major contributor to perceived organisational climate. When the predominant contract types were ascertained, it was found that a predominant relational contract is significantly related to perceived organisational climate.