Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)


Psychological Contract and Employee Performance in the Nigerian Manufacturing Industry: A Conceptual Review

Author(s): Opeyemi Joel, Chinonye Moses, Ebeguki Igbinoba, Olokundun Maxwell, Odunayo Salau and Adejana Omobolanle

Psychological contract has increasingly become a relevant aspect of exchange between individuals and the organisation. The potency of the contract is determined by how employees perceive employers’ fulfilment of their responsibility and obligations as stated in the contract of employment. But despite the importance placed on psychological contract (employee-employer relationship), many industries in Nigeria are still striving to identify inducing strategies for fulfilling employees’ expectations that will aid their performance. Hence, this study critically assessed the relationship between psychological contract and employee performance, emphasising the Nigerian manufacturing industry. But despite the dynamics in human motivation, organisations are yet to explore its benefits to achieving employee performance. The specific objectives were to (i) identify the relationship between transactional contract and job satisfaction; (ii) examine the linkage between relational contract and employee commitment; (iii) determine the relationship that exists between balance contract and employee loyalty, and (iv) examine the linkage between transitional contract and organisational citizenship behaviour. The study adopted social exchange theory and conceptual analysis to explain the issues and predict the difficulties of the psychological contract. The paper concluded that employees become loyal to an organisation only when their expectations of a psychological balance contract are gratified and fulfilled.

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