The Mediating Role of Relational and Transactional Psychological Contract Fulfilment on the Relationship between Strength of the HR Signals and Job Satisfaction

Abstract

The article is an employee-level, quantitative survey-based study investigating the relationship between HR signals and job satisfaction through the intermediary role of psychological contract (PC) fulfilment. Signalling theory and attributional theory provide the theoretical context to the study linking HR signals to job satisfaction. PC fulfilment has been viewed in terms of relational and transactional contract types. Analysis of the mediating ability of the two PC types reveals the differential extent of influencing the considered relationship. Primary data, in terms of employee responses from participating firms, have been collected through questionnaires. A two-step sampling process has been followed to select participating firms and respondents. Structural equation modelling has been carried out to examine the hypothesized relationships among the variables. The study contributes to the literature and has implications for practising managers. It provides evidence towards the attributional role of HR signals within firms. Moreover, it reveals a higher mediating effect by relational PC fulfilment than transactional PC fulfilment. Based on the study’s findings, practising managers need to pay closer attention to relational PCs than transactional PCs. The study contributes to a better understanding of the role of HR signals in manufacturing sector firms. The time, cost incurred for the survey and accessibility to firms for participation are some of the significant limitations affecting the study.