A critical examination of the impact that the violation of the psychological contract has on employee intention to quit, commitment, loyalty, and employee identification with the organisation : a study of Mutual Alliance Mortgage Bank, Nigeria

• Main Author: Amasi, O.
• Published: University of Liverpool 2017
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.733948

PURPOSE: The purpose of this study was to critically examine the impact the violation of the psychological contract has on employee intention to quit, commitment, loyalty, and employee identification with the bank (Mutual Alliance Mortgage Bank, Nigeria). DESIGN/METHODOLOGY/APPROACH: The research adapted both a collaborative action research methodology developed by Pellerin (2011) and a quantitative methodology utilising questionnaire. These research methods adapted, were a fit for the financial services industry. The researcher investigated Mutual Alliance Mortgage Bank, Nigeria. Two focus groups with seven employees each were set up. The focus groups acted as the Collaborative Professional Development Meetings (CPDM) to capture feedbacks and reflections as well as to develop actionable outcomes. Questionnaires were sent to all seventy employees of the bank to measure employee identification with organisational and organisational loyalty. FINDINGS: The findings indicate that a positive relationship exists between psychological contract violation and loyalty in bank employees and a negative relationship exists between psychological contract violation and identification with the bank in bank employees. Also, interestingly “Promotions” was the most violated item of psychological contracts because employees interpreted and associated “Promotions” with ‘immediate cash (pay) or financial gain. The results also highlighted that a positive relationship exists between intention to quit behaviour and the Nigerian culture in bank employees. The research further illustrates the moderating role of national cultural values (i.e., Nigerian culture – families/communities) on employee views towards an intention to quit behaviours. ACTIONABLE KNOWLEDGE: The Bank implemented new culture-specific policies that tackled economic and socio-emotional breaches; these included the establishment of a loss of breadwinner insurance scheme; giving employee’s foodstuffs at Christmas; Christmas parties for employees and families; birthday gifts to spouses of employees and monthly podcast on the bank's activities. On the issue of promotions (“pay”), the banks’ payroll was redesigned to include different salary scales within each grade level to accommodate pay increases without necessarily promoting employees to the next grade level; and the introduction of bi-monthly appraisals of employees that could result in salary increment for performing staff. RESEARCH LIMITATIONS: This research utilised data solely from Mutual Alliance Mortgage Bank, Nigeria thus its results cannot be generalised to other sectors or countries characterised by different contexts, cultures, and values. However, the approach utilised in this research can be applied in a wide range of situations consequently enabling the examination of its external validity.