Balancing HRM: the psychological, contract of employees A multi-level study

Purpose - This study aims to "bridge" two streams of HRM research: organisation level research on FIRM and performance and individual level research on employee work perceptions and behavioural performance. This study seeks to analyse the value of organisation level FIRM practices for individual level employees' assessment of the degree of violation of their psychological contracts. It also aims to examine the contribution of commitment HRM practices and traditional FIRM practices in explaining perceptions of psychological contract violation. Design/methodology/approach - Based on a sample of 49 organisations with 2,099 individual respondents, the paper analyses the relationship between organisation level FIRM practices and individual level employees' assessment of the degree of violation of their psychological contracts, using multi-level analysis. Findings - The findings show a clear positive influence of a number of FIRM practices. More use of FIRM practices leads to lower levels of perceived psychological contract violation for individual employees, regardless of individual characteristics. Commitment FIRM practices explain about half of the variance in psychological contract violation that is due to the total amount of FIRM practices. Research limitations/implications - A limitation of the study is its cross-sectional design and the measure of FIRM practices, indicating more or less explicit attention for FIRM in an organization, but not possible substitutable and synergetic effects between various FIRM practices. Further research should therefore explore the effect of combinations of HRM practices. Findings however do indicate the relevance of organization level FIRM for individual level perceptions of the employment relationship. Practical implications - It is in the interest of managers to have a clear knowledge of which organisational activities will elicit those attitudes and behaviours necessary to achieve organisational goals. These findings highlight the importance of FIRM practices to contribute to employees' realistic assessment of the mutual demands of their employment relationship with their organization. The more FIRM practices the better in terms of employees' psychological contract violation. Furthermore, the findings show the importance of commitment FIRM practices, but also the remaining relevance of more traditional practices. Originality/value - This study combines insights on organisation level HRM with insights on individual level psychological contracts. Although the necessity of using multi-level analysis in these kinds of studies has been argued by various researchers, this study is one of the first to use this analytical technique, thus genuinely showing the impact of organizational level FIRM practices on individual level HR outcomes (in this case the psychological contract).