Employment Relationships and the Psychological Contract: The case of Banking Sector in Albania

Abstract

This paper identifies the connection between ‘breaches’ of the psychological contract and employment relations as reflected in three dependent variables: organizational commitment, work satisfaction and the propensity of the employee to leave. For this purpose a study was conducted of 145 employees in the Albanian banking sector, with particular emphasis given to banks in Tirana. The distributed questionnaire considers two types of the psychological contract – transactional and relational. The study attempted to identify breaches in the psychological contracts that affecting employees’ attitude and behavior. Demographic indicators such as age, educational level, study background and work position are key factors influencing perception of breaches of psychological contracts. Age and study background are positively related to organization commitment and work satisfaction, while educational level indicates a negative relation. Organizational commitment has a positive relation to work satisfaction and negative relation toward “intention to leave”. Increases in satisfaction are associated with a lower aim of leaving. Breach of the transactional contract reflects a very high level propensity (0.722) to resign. Finally, results showed that the relational contract provides an organizational commitment around 4 times higher than transactional contract