Understanding Employee Psychological Contract and Job Satisfaction

Objective – Organizational changes and transformations are common phenomenon these days. Changes may lead to the breach of psychological contract of employer-employee expectation on the employment thus affect employee's job satisfaction. This study was conducted with the aim to identify the relationship between psychological contract and employee's job satisfaction. Methodology/Technique – Two component of psychological contract were used in this study namely transactional dimension and relational dimension. Data was collected using questionnaire which involved the total of 100 employees at Oil and Gas Company in Malaysia. Findings – Generally, the results indicated that there was a significant relationship between psychological contract and job satisfaction. However, only relational dimension of psychological contract is significantly related to job satisfaction. Thus, it is important to understand the influence of psychological contract towards employee's job satisfaction since it will affect the overall performance of an organization. Novelty – It is crucial for organization to develop mutual long term interdependence with their employees by providing on-going training and development and promotion opportunities in return making employee obligated to go beyond the explicit requirement of their role.Type of Paper: Empirical