Abstract
Orientation: The workplace is characterised by numerous contracts of agreement that an employee and employer must sign to formalise their employment relationship. This includes an employment contract and other formal documents such as non-disclosure agreements. However, the informal agreement, known as the psychological contract, is often overlooked, yet it is pivotal in determining the engagement of employees in an organisation.
Research purpose: This study aimed to probe the perceptions line managers have of the influence of the psychological contract on employee engagement in a South African bank.
Motivation for the study: The psychological contract is formed between employees and their line manager. Thus, understanding how the psychological contract influences employee engagement within the banking sector from a line manager’s perspective can be of benefit to organisations. Understanding the factors that influence employee engagement can enable current and future line managers to improve their work relationship with their employees. This study also creates awareness of how line managers perceive the expectations of their employees in the South African context.
Research design, approach, and method: The study was carried out using a qualitative case study research approach. A purposive random sampling strategy was used to select thirteen (13) participants from different demographics with varied years of managerial experience who were interviewed using semi-structured, one-on-one interviews. The data collected were analysed using thematic analysis and verbatim quotes were used to support emergent themes in the findings.
Main findings: The findings of the study reveal that continuous change in the world, exacerbated by the COVID-19 pandemic, influences employee expectations. Thus, organisations have to be able to quickly adapt and adjust their talent attraction and retention mechanisms. Talent management, the nature of the business, structure and operations, the nature of the work environment, and emotional needs are the themes that emerged from the study.
Practical implications: This study contributes to the existing theoretical knowledge on how the line managers’ perceptions of the psychological contract influence employee engagement within the banking sector in South Africa. Further, the findings may be useful to policymakers
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at South African financial institutions to identify pertinent improvements in the employer-employee relationship and shape the future of employment policies.
Contribution/value-add: There is substantial existing literature on the research topic. However, with the constant change in the world of work, including industry disruptions continually imposed by the 4IR and other factors, employees’ expectations are ever-changing. Organisations have to keep adapting to attract and retain talent. This study adds value by addressing various aspects aligned with competitively adjusting to the current and future world of work.
Keywords: Psychological contract, employee engagement, banking, line manager, COVID-19 pandemic