IMPACT OF PSYCHOLOGICAL CONTRACT ON EMPLOYEE RETENTION OF NOR LANKA MANUFACTURING COLOMBO LTD

Abstract

Introduction Psychological contract is an essential factor for employee retention. The aim of this research is to investigate the relationship between the contents of the psychological contract and employee intention to retain of or Lanka Manufacturing Colombo Ltd.

Objective To examine the relationship between contents of Psychological Contract and employee's intention to retain.

Methodology The sample of this study consisted of 175 employees' works at Nor Lanka Manufacturing Colombo Ltd. In order to gather information a structured questionnaire is developed and distributed. The data were analyzed using SPSS 20 version and Descriptive Statistical technique, Correlation and Regression were used to test the hypotheses.

Findings The statistical results of the study reveals that Job Security and Flexible Time Schedules are significant predictors of Employees Intention to Retain.

Conclusion The review of literature suggests that the psychological contract is extremely important for organizations to manage as it has an impact on employee Intention to Retention. The study concludes that it is important to manage the psychological contract and human resource employee retention significantly impacts employee development as well as assessment of psychological contract fulfillment. The failure of a company to comply with its obligations (as perceived by an employee) can erode the employment relationship.