Abstract
The psychological contract plays a crucial role in shaping an employee's job satisfaction and retention intentions. It is argued, organisations that effectively meet employees' beliefs and expectations related to the psychological contract are likely to increase job satisfaction and reduce employee turnover. A quantitative, cross-sectional survey design was employed to collect primary data from employees in junior leadership positions across various departments, such as marketing, purchasing, operations, and finance. The analysis employed descriptive statistics, exploratory factor analysis, Pearson's product-moment correlation, and PROCESS macro was used to test for moderation. The EFA identified two main factors: Factor 1, Employer Support and Growth Opportunities, which includes employer-provided support, career advancement prospects, training opportunities, and fostering a positive work environment; and Factor 2, Unmet Expectations and Compensation Issues that highlight dissatisfaction arising from unfulfilled promises concerning career growth and compensation.
The study found a significant negative correlation between job satisfaction levels and the intention to leave the organisation. However, it was not statistically significant when considering how psychological contracts might moderate this relationship. Nevertheless, breaches in the psychological contracts particularly regarding salary issues as well as opportunities for career progression or flexible working arrangements greatly increased employees' intent to leave their jobs. These findings emphasise the crucial role of fulfilling psychological contracts in boosting employee retention rates.