Psychological contracts and intention to leave with mediation effect of organizational commitment and employee satisfaction at times of recession

Abstract

The purpose of this paper is to understand the implications of psychological contract on employees’ intention to leave and their relationship with employee commitment and satisfaction. The study focuses on measuring these attributes in the United Arab Emirates’ (UAE) multicultural workforce.Data were collected from a total of 373 employees from government, semi-government and private organizations covering different hierarchical levels across various industries. Structural equation modeling was used to test the predicted relationship. The study reveals that the relational component of psychological contracts plays a significant role in developing strong employer–employee relationships and reducing employee intentions to leave the organization. The study has also demonstrated the partial mediation effect of organizational commitment and employee satisfaction between the independent and dependent variables. Finally, our finding stresses the moderating effect of gender and citizenship demographics on the relationships between the independent and dependent variables. A limitation of this study was the fact that data collection was conducted in the context of economic crisis which is accompanied by downsizing of organizations. Another factor being the survey is restricted to the UAE which limits the generalizability of the results outside the region. As little is known about the potential effect of psychological contracts on the intention to leave in the Middle Eastern context, this paper is expected to provide empirical evidences that will make significant contributions to the employee engagement literature in the Middle Eastern contexts.