Shaping Psychological Contracts in the Public and Private Sectors: A Human Resources Management Perspective

ABSTRACT

Organizational choices shape the way in which individuals experience their employment relationship. Given the multiple differences between the public and the private sectors, this study seeks to identify variations in employee perceptions of their psychological contract depending upon the sector in which they work. The psychological contract is seen as lying at the heart of the employer-employee exchange relationship. The study took place in Greece, and involved 398 employees from the public sector and 747 from the private sector. Participants were asked to evaluate 41 organizational obligations, on the basis of how important they believed them to be in terms of a desirable employment relationship. Factor analyses revealed 10 contract dimensions, while multiple analyses of variance suggested that the sector of employment and organizational tenure had a significant impact—both separately and in combination—on employees' view of their contract. The practical implications for effective human resources management and the limitations of the research are discussed at the end of the article.