Effects of early employment experiences on anticipated psychological contracts

Abstract

Purpose – The purpose of this paper is to investigate how initial employment experiences of new entrants to the labor market, which results from changes in organizations employment practices affect individuals’ expectations from their future employers (their anticipatory psychological contracts and anticipated job insecurity) and to explore the implications of these effects for theory and practice. Design/methodology/approach – The paper focussed on four common experiences and tested the hypotheses about their effects using data collected by a relatively large survey among mature college students with work experience (n=1,164). Findings – Individuals who had been exposed to the experiences of being laid off, witnessing layoffs and having to accept reductions in pay or status held higher transactional and lower relational expectations from their future employers, in comparison with individuals who had not been exposed to such experiences. They also anticipated a higher level of job insecurity in their future employment. Practical implications – In order to mitigate the potential negative consequences of the phenomenon discovered on employee retention and organizational performance, organizations have to develop and implement specific HR practices to deal with cohorts of new members, who have been exposed to the employment experiences investigated. Of particular importance are orientation and socialization practices that address new recruits’ concerns and expectations, and exposing new members to training and learning experiences that increase their employability outside the organization. Originality/value – This is one of a few studies that documents empirically the (anecdotally based) claims about the effects of changes in the economic environment on individuals’ employment expectations and perhaps the first study to focus specifically on the effects of initial experiences of entrants to the labor market. It extends psychological contract research by focussing on the antecedants and formation of the psychological contract rather than on its consequences and on the anticipatory contract rather than on employees’ current psychological contracts.

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