Psychological contract and organizational commitment: The mediating effect of transformational leadership

Abstract

Purpose – The purpose of this paper is to investigate, within a non‐western context, the impact of the psychological contract, relational psychological contract (RPC) and transactional psychological contract (TPC), on organizational commitment (OC) as mediated by transformational leadership (TL). In addition, the paper also explores contractual status: does the theory fit, whether one is employed on a full or part time basis.

Design/methodology/approach – The empirical part of the article is based on self‐administrated questionnaires completed by 433 respondents from across a range of service industries in the UAE. Findings – The results indicate that both RPC and TPC are positively related to TL. The study did not identify any meaningful relationship between TL and OC. The study also suggests that TL has, at best, only a partial mediating role in relation to the RPC, TPC, and OC. As respondents' contractual status was employed as a control moderator, the paper can also report that part versus full time employment does not influence the outcome regarding the aforementioned relationships. Research limitations/implications – The findings suggest that practitioners and academics alike should note that the nature of the psychological contract employed will impact commitment and retention. Also, consistency of approach is very important when one is searching for sustainable employee commitment. The principle limitations associated with this research relate to the self reporting nature of the study: it both negates meaningful triangulation and qualitative interrogation of the results. Further, the industry level, services, and investigation precludes inter industry comparison, and the context, the UAE, may limit the generalizability of the findings. Originality/value – The paper contributes to the literature by being the first to study the mediation effect of TL on the relationship between RPC, TPC, and OC within a non‐western context. In addition, it also suggests that there may be some value in considering employee contractual status with regard to psychological contract and commitment.