The experience of the employee-organisation relationship by personnel in a South African mining organisation

T H E EXPERIENCE OF T H E EMPLOYEE-

ORGANISATION RELATIONSHIP

BY

PERSONNEL I N A SOUTH AFRICAN MINING

ORGANISATION

F.F. Jooste

Hons. B.Comm.

A dissertation submitted in fulfilment of the requirements for

the degree of Magister Baccalaureus Commercii in English at

the Potchefstroom Campus of the North-West University

Academic Supervisor:

Mr. B.J. Linde

November 2004

Potchefstroom

NORTH-WEST UNIVERSITY

POTCHEFTSROOM CAMPUS

Authors: Jooste, F.F. Linde,

B.J.

I h c articlc mlkcs two contibuttons to thc ps!rhologcal contract l~tcraturc: tt csamrncs the cclc\ancc of thc ps~chok~gical contract in a South . \ f ~ i c a n mimng enrimnmcnt; and it prondcs d d c d \-;tluc o n tlrc psychological contract htcraturc oC penn:mcnr ;md temporan- persont~cl. 1:rwn thc htcr;trurc it seems that the nru. pqcholog~clcal contl-;~t is morc tr:ins~ction:d ; ~ n d rcplacrd rhr <,Id relattotul ps~-chc~k~gic;d contmcl. 'Ibercfol-c, tlw use of t e t n p o r a ~ ~ personnel is more commrm

m orgmfi~tionswitlt pperfo~mance detennirung pay. I t was foond that cach ps~cholog~c,d contctct

Is uniqmr and if there is no clrar ct,r~unonicati<,~~, contr;lct l m d ~ or viola no^^ can occur. .i rwult of the new psyhologcal contract is n trust pap that comcs ulto cxwcnce. Thcl-ehe, orgmis;tta,ns

k c a new challcqge of o v c r c o m i n ~ this and mamtaining loydt!-. The c m p i r d ~nvcsngaiion slrowcd that pcrm,ment pcrsonncl cspe~iencc the p s j c h o l o g d contr;tct morr positwc th;tn thc

tcnqwmm p c ~ x m n c l . 7 1 ~ s can ire atmlrutcd to thc srrongcr i-cl;~ta,nsl~ip hcnvccn pcnnmcnr

NORTH WEST UNIVERSITY

POTCHEFTSROOM CAMPUS

Author: loosrc,

1-.t

I .mdc, 13.1.

iliffercnce "I cxpencncc I,? temporan- a d pernunent personnel III a Soutlr U ~ ~ c a n maung

rug;nisation. The targrt populz~t~on 1s n mlmng orgmlrannn with Iwo main n-pcb o i employmcot conrr;tcts. Ictnporar? and perm;mrnt rtnploycs, tot;dl~og 5(1(! c n ~ p l r , ~ r c s . R;udom i ; q d e s oi tlrsc two ~ r o u p s were used; being 100 pcrmanrnr :and LOO tcrnporal7- personnrl. \leotioc~cd qucsrionnam dctermu~es the p c ~ e p t i o n s of temporal? and p e r m m c i ~ t pcrson11~1 1~gxding tlw clarity ;tnd tmst o f emplo!mcnt reg~datilarbms, and then amdyscs pel-ccpt~rms of :cad alutudcs to\vxds rcccnl cliangcs in tllc mirung cnrironmenl.

ACKNOWLEDGEMENTS

I

wish to thank the following people and organisations:

The mirung (11-ganisation For the Facilities, support and interest in the reseal-ch

Special thanks to tnv .\cadcmic Supct-risor for thc guidance and assistat~cc during the last few ruonths. It is deeply appreciated.

.\ \\is11 OC gratirudc to all who participarccl in this stud\-, without tllcir input thc stud\- \would nor ha\-c bccn possible.

I

want to express tremendous appreciation to family and [I-iends who supported me with l o w and ut~dcrstat~cling.

Praise be to God who gave me intellect and s t r e ~ ~ g t h tu do the rcscal-ch

I.astl!., I want to dedicatc this study to my pal-cnts For thcic fmat~cial support and much more. Thank \.<XI For heliering.. .

TAL3LE

0 1 , (;ON'J'F.W'ILS

. I 1

p

I t r / - RESEARCH PROPOSAL

1. I Intn~cluctir~n and pn)bkm staternctlt

I . l<csc;~rch qucstiotls to the research problem

1.2.1 I'timaq research question

1.2.2 Secondary rcscarch questions

1.3 Rcscarch objectiws 1 . 3 1 I'l-in~ar!. objccti~-c I .1.2 S c c o n d a l ~ r)bjecti\w 4 Ikscarch method 1.4.1 Research design 1.1.2 Sample 1.4.3 hleasuru~g ll~stlurncnts 1.4.4 Data anall-sis 1.5 Division of chapters I

.G

(:o~lclusion

'1'.\111.1: 01: COh-TENL'S ( w i i . ) l ' q i ,

C. h N

p

I c I ?

-

T H E EXPERIENCE OF T H E PSYCHOLOGICAL

CONTRACT BY T H E PERSONNEL O F

A SOUTH AFRICAN

MINING ORGANISATION

Introduction

Basic

conceptions

and d c t i ~ t i o n s of the psrchological contract

'I'hc naturc of thc psychological cont~acr 45

The

employment

contract as part of the 53

ps\chological contract cxchangc.

The features of the ps!.chok)gical contract 58

\'idation and breach o f rhc ps~choloqcal contract 62

I <mpiical study (14

I<csc;u-ch design

(15

Stud\- populatiot~ 66

Statistical anal!.sis 68

Results 69

Conclusion and rcc~)tnmcndations 91

TABLE

OF (:ON'I''NTS (tuiii.)

/%ge

C. /i

(ip

I c r 3 -

T H E EXPERIENCE

OF

EMPLOYMENT

RELATIONS

BY

PERSONNEL OF A SOUTH AFRICAN MINING

ORGANISATION

1nt1-oducti~~n

F.nlplo\ menl relations defined

I'nm labour relations to employment relations

and how it is linked to the psychological contract

' l h e nature o f crnpk)ymcnt relations I'ernianent and temporal? cmploymcnt

Forms of regulation regardi~lg ternporaq

and permanent cniplo!n~cnt

l'rerequisites for effrctiw explicit

regulations

and l ~ c s t pactice (cmplo!mcnr policy)

Critical aspects for testing the validity and consistcnc!-

o f the expet-icncc of the cniplo!-ment relationship and

7.4

1)I.F.

O F (:C)NTENTS (mn/.) K~npirical study Research design Study population Statistical analysis Results Bibliography

C 11 o p f c i 4 -

CONCLUSIONS AND RECOMMENDATIONS

-1. I Conclusions and rccomnicndarion.;~

1.2 Rrcommcndatious for future ucscasch

Bibliography

LIST OF FIGURES

AND

TABLES

X ~ n ~ l ~ c r

ARTICLE ONE

Fiy,e 1. Four basic h-pes of ps!-chological cot~tract

ARTICLE TWO

GLOSSARY

Labour relations. \ c o ~ i ~ p l c s system of individual and collcctix-c actions ;ts well

as fomial and informal I-elationships existing between rhe sratc, cmplo!.crs,

crnpk,yccs m d related iusutuuot~s, concerning all aspects of the cm[tlo!~mcnr

rcl:ltio~lsliip.

Psychological contracts. Reliefs, based upon

promises

csprcsscd or implied, rcgzirdilg an exchange agrcemcnt henveen an illdix-idual and, in organisarions, the

emplr)!-ing firm and its agents (Kousseau,

1995;

Rousscau & Schalli, 2000).

Employment relations. 'l'lie systematic and clisciplu~cd stud!- of the cschangc of competitix-e and c<)operativc u&ties on an indix-idual and collcctix-c lcx-cl so as to

srrurtul-c labour in 2111 orgmisation hy means

<)I'

rule making and govcl-tiancc o f

thcsc rules (\utlior, 2004).

Implicit rights. Rights of otganisation and the employees may exercise, which arc protcctcd l x a lcgislarire framework prox-idcd b y the Govemmcnt of a

country (.\uthor, 2004).

Explicit rights. Rights that orgz~nisation and employees arc free to cscrcisc, mliicli xx-erc i~nplctncnted by the organisation itself, prorected by

procedures

and pdicics (.iuthor, 20114).

Employee-organisation relationship. . i n exchat~gc

relationship

het\vcen the ctnployx and the organisation lx rules and regulations, which can change ~co\ cr a period of time (ShScm e l dl., 2004).

Employer obligations. Pnmuses o r p a r a n t e e s the orgarusation has madc, in a contractual agrccmcnt with the cmploycc. ;\s well as promises o r guarantees the

c m p l y c c pcrcci\-c the organisation arc bound to keep (:\uthor., 7004).

Employcc obligations. I'romises or guarantees the cmpk~ycc h:ts made, In ;L

contracn~al agrectncnr \\:itti the r)rgarusation. . \ s well as pn)miscs or guarantees the r~rg~nisation pel-ceire the ctnployee are bound to kccp (.\uthor, 2004).

( / ~ ~ l p t ? r I

RESEARCH PROPOSAL

1.1

Introduction and problem statement

I'nm thc period frwn 1900 to 1993, South .\fi.lcans espcricticcd u~lprcccdcnrcd change, which also manifested in the employment relations @el, 1002). In addition t o c c o n m ~ i c and political pressures for change, c n x t s outsidc rhc counrn's bol-dcrs ;tlso pnwidcd a windon-

<,E

opp<,rtunir\. t r ) c.1-rku clungc ill rhc crnplo!mcnr rclations s!stcnl and ulumatcl!- rhc poliric;~l sphcrc (l.inncmorc,

1999). 'The anuouncemrut o f the then I'rcsident, I- \Y; de Iilerli, o n 2 l'cl)ruar!. 1990 had far-rcachng consequences fot- etnplo!-ment relations, as it placed South

.\frica o n the ro;d to a r c x r a n p n e n t o f its sociwcconomic and political spheres,

and rhcrcfore csscntiall!- set new dctnands for emplo!-mcnt relations

practitioners

and

emnplo~-merit

relations in general (Ncl, 1997). l'he announcemcnr entailed the

L I ~ - I ~ a n n i n g o f the prc\iously banncd political orp~nisations and rhc rclcasc of

'l'elson 12larldrlz (\vho \\-ould latcl- become l'rcsiclcnt). I t n-as c d c n t that a new

soci(>-political era had l,cgun and thar the process to\\-ads rhc insrirutic)n;~lisatio~~ of a dctnocratic;~ll\- elected go\crnment \\-as &re\-el-siblc (I'xndis, 20(11).

.\ccot-ding to Nel (2002), the fit-st fulll- dctnocratic elections UI . \ p d 1994, pared

the way for the cstablishmcnt of rhc Gorcrntncnt of National Knit! (GNL.),

which was s w m in on 1 ; \ h y 1994. The then Labour kfinistcr's (l'ito Libowcni) fi\-c-\-car plan cmcrgcd as the driving fol-cc I~chind the shaping o t the

employment r c l ; t t i ~ ~ ~ en\-kon~nent, and \vh;tr followcd \\,as the roll-our u f a scrirs

of lcgislarirc changes p e l , Gccrbe & \,'an I h k , 2001). 'l'hrough negotiations in

the National 1:conomic Lle~elopment and J2abou~- Council (Ncdlac) rhe

ctnplovtncnt sccnc changed dramaticall\-. Ncdlac came into being o n 18 1 , c l ~ s u a t ~

1995, 111 a bid to add lcgitimacr and transparency to the socio-cconomic dccisioo-

making process v e n t e r , 2001). l ' h c ncw go\-crnnicnt set ahout transforming the

whole legislatirc fran~ework of etnplopient relations to r e fruit to the

constitution and to t i n it inro tiuc with intcnlarional sr;~nd;ltds r ~ i r h ~

n t e r n a t i i a l

I O L I

O r n i i s ; t r i ~ 1 . 0 ) ( l i n n c t n r c 0 ) 'I'l~is p n w s . commcnccd with rhc prornulption of the ncw I.abour Rcl;ttions .\ct (No. 66 of

1995). This was followed b r the Basic Conditions of l':.mploymcnt . k t (No. 75 of 1097), which came into operation on 1 Uccctnbcr 1998, and rhcn by the

Emplo\-mcnt 1:quih .Act (No. 55 of 1998). l ' h c latter act came into operation in phascs, which commcnccd on 9 .\uptst 1999 (Nel, 2002). 'l'hc cniplor~iicnr

relations sl-stem had to adapt and dcrclop KIT rapidlv over the past decade, duc

these new implicit regulatims in the country and orgmisatirms implied a changing

cspcvicncc o f the emplo!.mcnt relationship h\- the employee (Jinde, 2002).

.\s a result of the new implicit regulations in South A\frica, many organisatkms implemented changes to their e ~ n p l r w n c n t rclationshps as \vcU ('l'ushmm,

Nc\vmau

cYr

Romanclli, 1988). 'l'hcsc changes did not cxcmpt the mining sector.

In the past, schol:~rs hccame k,cliecl in scri<us ;~c;~dcmic debate rhc

intcqxctatinn o f the role

( I E

cmplo\-crs in thc cl-cation I)[ a cheap ; ~ n d docile

labour force in this sector (I~innctiiorc, 1999). Greenberg (1980) tl-icd to explain

the early ciivisions in thc mining worliforcc as not only a conx-cnicnt cr)nsequencc

o f capitalist c o u t r d r)f the d c d r ~ p i n g econornv, but alsr) ha\.ing their origins in

cmploy~ncnt practices in the prc-c;~piralist economic era. Mining o~-gmni~atioos

mere seen as competing against one another for cheap labour- I-ather than acting

togcthcr as a monopoly to a constant cheap labour pool (leaves. 19x5).

'l'lic mining 1aIx)ur .;!stem in the 1900s has retained features t1i:lr havc cxisrccl sulce the early 1900s, and still relies o n a labour pool h-c~m southern -\frica. I'ct

\\hat have l x c n most pr-ornincnt since 1988 arc the declining cmplo\-mcnt levels

and the lesser o c c u r e t ~ c e o f long-term ernplr~!:tncat in the mining sccrot-

'llic 01-igins (if the cmplo\mcnt relaric~nship can l)c [I-aced \lack t o rhc ni~irrccnrh

ccntur\ ( l a r s d c n . 1 0 2 ) . In the cmplo!mcnr rclationship rlic focus is on thc

emplo~-ee who, because o f his mutual inr-oh-ctncnt

111

the organisaurjn, havc I ~ e c n

clustered together in a relationship and how they interact in this relationship

(L(end~x, 2001). Orgatusations imposed dramatic changes t o the nature o f rhc

cmplo\-mcnt I-clarionship as to adjust to changes in the external husincss em-inmmcnt, wliercby the demands o f the external cnr-konment shape the

cxcliangc hctwccn the ctnplr~ycr and the cmplr~\-cc (Capclli, 199')). N o w d a y s , tlic

rmplo!-ment relatmuhip is characterised I>!- lessel- h ~ n g - t e r m rrlatir)nships and incrcascd sllort-[crlii rclatinnsl~ipz, s o as 1~ crcatc grcarcr tlcxibiliry xvirhin rhc

orgal~isztir~n (Rochlillg, (:ax-anaugli, hlovnihan Kr Hos~vell, 2000). ( k e n rhc

changcsthat havc talzcn placc in the cmploymcnt relations arena and wirh ncw

t\pcs o f relationships f ~ r n l l n g , I ~ p a k and Sncll (1099) identified four types <,f

rclationships that arc likely to form, namely: partnership-, organisation focused-, job focused- a n d srmhiotic relationship. T h e emplovers o f the South .\f~-ican

. .

lnlnmg sector tnusr not onl!- manage thcsc fomls o f rclationships, bur must also implement them \virhin rhc boundaries o f the changing

I ~ ~ I ~ I L I I -

legislation I ' i ~ t h c ~ ~ i i ~ ~ c , rhc cmplriycc \vhu c\pcricncc rlicsc v a r i w s chaligcs in rhc

e ~ n p k ~ v m e n t r r l a t i m s l i p ncccl t o cope with it, since it can directl! influence thc

ph\sical, psychological and social wcllncss of the cniplo!-cc (Kendix, 2001; Shorc

'I'lic c m p l o \ c c - ~ ~ r g a ~ u s a t i o t ~ relationship (I~~Ol<)),;u~cl its i~iflucncc on work

wcllncss, has increasingly hccomc a focal point for academics in employmvnt

relations (Shorc t / [ I / , 2004). I l ~ c scope for rcscarch on the I :.( )K has \ridvt~cd o n

Ix~tli tlic indk-idual (cg. psychological contract) and thc gn)up or c q:rni.;ational

lex-cls (c.g. cmplo!mcnt relationships). Therefwe, the need esists t o Integrate rhv mcntioncd two lcrcls (psychological contract and the cmploymcnt relationship)

to achieve better understat~dhg of the

FOR.

,According to Shorc e l ~ r l . (2001) "the

t:C)11 occurs (1n multiple lcrcls and has multil-rlc inputs from \-aying Ic1-cls,

including organisation, job and grrx~p". The study of the L O K rarics according tc)

the focus point. l ' h e focus point of such a study can racy from the i o d i d u a l

( o - I e S I i a i ~ , 2000; I<ousscau, 199i), tu thc cmplr,!~cr-cmplovcc cxch:~ngc (l):il~o> & I<OL~SC:IU, 111

press),

t o thv \v<wli group o t - I X I I - ~ ~ I I I ~ I I ~ unit (li~cliolxm & )oIi11s, LOS.;), or rniploymcut coutri~ct

(Landers.

Rcbitzcr K. l'a! lor, IOO(1). or

r,)

tlic organisation tlusclid, 1995; Rouscau 8r Wade-Bcnzoni, 1 9 4 ) F.xisting

lircraturr shrnvs that much has been researched regarding thc LOR, \rith specific

focus o n the cmploycr-cmplo\-cc cschangc, including psvchological conti-;as

(Rousseau, 1995). and the employment rehtir~nship ('l'sui, I'cascc, I'ortel- &

'L'ripoli. 1997). I b r the purpose of tlus study, the objccti~-c is to illustrarc the

hnctir~ning o f the F . 0 R b r focnssi~~g 011 thc psychological cotrtract and the

'l'he notion o f the "ps\chologrcal contract" was first crined hy :\~-!:\.ris (1960) t o

refer t o c m p l o y x and cmplovcr cxpcctations o f thc cmpl(~\-mcnt relat~onsliip.

Fiistmically, the concept can he 7-iewecl as an extension of philosophical conccpts

of social contract theor!- (Shcciti, 1980; llochIrt1g. 1997). . \ c c o d i n g t o I.cvins011, Price, hIunden, hlandl a n d Sollel- (1962) the psvc11ok)gical contl-:let. . . "Has ;L

d y n m i c rclat~onship : ~ n d cv<,l\c o r change orel: tune as a result

o f

the changing needs a n d relationships t i both the

employee's

and

employer's

side". In

c~ltlt1;lchlal transf<~~~-malioti, an existing contract ends, somcrinics thn)ugh l~rcach,

sometimes

I>!-

cr~mpletion as well as other reasons, which ndl he cliscussed later

on, and a new contract is created (Rousscau, 1995).

.\ccorduig t o Rousseau (1995) the purpose o f the contract transformation is the

crcation o f a ncw c~)ntract in place o f an csisting one, \vhcrc the new contract

engenders commitment and effic;lc!- for all conccrncd. "l'hc old psychological

contract is d c d " , proclaims 11x1 (1903) and man\- other contcmpurar!- \vritcrs

(Hil-sch, 1087; Hirschorn & Gilmorc, 1992). .\ccorcling t o Macncil (1085) and I<ousscau (1980) thc study o f ~~svchologic;d contt-acts can l ~ c I m ~ u g h t tu nvo ends

o n a continuutn, namel!-: transactional and relational. T h e "dead old psvchological

contract" is very likcl! the p u ~ - c rclatIotial contt-act, 111 its vast iterations, which has

undergone exp;ltidcd perform;mcc requlrrmcnts due to the cmsion o f intcl-nal

labour tnarkcts and the relaxing o f orgmisational bounda~-ics (l<oussc;lu, 1995).

system perceived

( I F

"rclarir~oal" ~ ~ b l i g ~ t i o n s (Lee, 2001). P.mplr,\-el-.: gencrall\

A 5 , Carecf

<~ffcrcd ctnploycc? kmg-tcmr I-clatiunships, consisrcllr r c \ r . I -

~nanagctnetlt th n ~ u g h steady training and ad\:anccment and long-term compan!-

defined benefit plans (rctircmncnt), in cxch:mgc for the crpcctation that cmpk)!-ccs

mould give all theit I r ~ ~ a l n - . . and effort to the cornpan\- for the \-el? long-rcrm (F.hrtich, 1994).

In Inan\ cases, k q - r c r m organisation lo! alty to cmployccs has l~ccn scplaccd Iiy

the dcnl;ulds <,f ha\.inX a flesible morkfol-cc rh:lr can acljusr quickly tc~ marlxr

nccds, rcgmllcss of who nccds to bc lured, terminated or changcd (I.cc, 2001). as

currrutly espet-ienced

111

the South .\f~-ican mining sector. I<sscntiall\, I;~br,ul-

~narkcts appcar ro ha\c I~ccomc lar more mal-kct-drix-en o r cntcrnaliscd (Cappclli, 9 9 ) . Thus, the use of rcmpor;u?. cmpk,!ment became more frequent.

I:,niplo!.crs had nude it clear through action that, with the new busincss

em-iwnment, the!- could no longer 11c cspcctcd tu uwe emnplo!ecs the samc

<hlisations that had prc\-iously bccn pcrcci\cd as core ro the cmplo\-mcnr

contract (Lee, 2001).

1'1-act~t~oncrs a d acadctnics h;~\-c therefore r ~ b s c ~ ~ c c l and h\pothcsiscd the hirth of a \\-hole "new" psychological contract, with sig~iticantl\- diffcl-ctir pcrccix-cd

R1;hulson & Rousscau, 1994). 'l'he "new" psycholl;,gical contract can be clcscril)cd

simpl\ as a mo\~cmctlr towards a far more "rransactional" (short-rcrmj

psychological contract, and less I-cliance o n "relaticmal" (Il;~ng-tc~-mj obtig'~tions

((:a\-anaugh & Noc, 1000).

'l'lus relationship is onc of sclf-rcliancc for emplo~ccs. It has been described as a

shift from "paternalism", \vhcrc the organisation regulates and protects the entire

employment

relationship, to "partncl-ship", where employxs assurnc significanr

responsibilih- for thnl. own careers and jobs (FIo~witz & trskinc, 1995). Staffing for such svsrcms is increasingl!. based o n short-term strategy (O'l<ciIl\-, 1994).

.\llo\vmg f1;)r flexildc "hiring and fuing'' and c1i;lnging o f cmplovccs as \vcll as

contingcnr staffing as nccdcd, clcspitc

questions

as tr I tlic, clhcacv of this in a rcam

based en\-ironment ( M h e r , 199.5).

In addition, pay and pcrf(mnance appraisal arc incl-casing! rcflcctivc r)f truc

cmplo!.ce raluc, and less of scnio~ih-. Thus, incrcascd use of hccntivc and skill-

llasrd pav (Honvitz & Ersldtx, 1995). 01-ganisatirms ;Ire ;~lso u~crcasillgl\ abandoning cxpcnsix-c i~cnctit plans \\.irh fiscd outcome [el-cls (I.uccro & . \ k n .

LW4). Instead, rhc\- are capping their on-11 cl;~ntl-ihuril;~ns and xiring c ~ n ~ l o v e v s

more rcsponsibilit!- fix conrril,uting as well as more say in lc\-cls and r y e s of

flesllxlitv and porrahhh of benefits without tying cmplovees to the organisation

and I>~L.T 1vt:w (Barringer & M~kovich, 1998).

l3cc:~usc cmploymcnt contracts can potcntiall!- talzc an infinite n u ~ n l ~ c r o f f ~ r ~ n s , changing l~usuless PI-actices (1):n-is, 1987) and econrnnic pressures (Ikttis,

Bradley atid Hamcl, 1992) can easily et.ode many traditional ctnplo!mcnt features

if not abrogate cntirc contacts. ( h n g e s in the implicit rcgulauons fr:~~nc\vc,rl< Icd

to rc-orientation and re-creation of the contract of cmploymcnt. Contracrusl t ~ a n s f < ~ t m a t i o ~ offered a presc~iption For imprrn-ing the gcx~dness of fit between

;UI individual and the orgmisation and hchvccn the orgatllsation and its

cm.ironment (I:rcnch, Bell & Zawaclil, 1994). Org~nisations no longer had a

choicc - the\. had tu adapt their explicit regulations to SUIT-i\-c ( I i r c i t ~ ~ c r & liinicki,

2001). ' l h e contract of emplorment had to accommodate thc new Icgislar~\-t,

;~mcudmcnrs and rhc c1u:llistic apprwdl @ u m m c n t and tcnlporwy pcrson~lcl) in

many 01-gmisations ((;rogm. 2001). 'l'he n;tturc

of

the cmploymcnt contract cha~lgccl, which lcd to more short-term contracts and less guarantees of long-

term relati(~nslups with the orgmisation (X'cs~vood, Sparrow & Txnng, 2001 ) .

I'hcrcfr~t-c, bccausc of changes to the contract of cmploymcnt, the rclat~onship

with the o r p i s a t i o n alsu changes. The cmpl<)ymcl~t relauotlship is s o m c t l u ~ ~ g

distinct from and wider than thc contractual relationship (<;togm, 2001). I l i c contract of cmploynwnr specifics duties and obligatiotis for both the emplover

and the employee (\-mtcr, l O O i ) . Oncc thc cont~-act of cmplovmcor is changcd.

new rights and rcgulauons for both fonns of cmploytncnt arc established. .\

contract of etnploynient comes into csistencc when both parties voluntariI\- agrcc

that rhc cmpk~ycc will cntcr into cmplo!-tncnt v.~ith the clnplo!.cr (lienhx, 2001).

Akcordulg to (hogan (2001, p. 20), the contract of cmpk~ymcnt can be dcfitied as follows:

For this reason, the study sccs it important to ~ ~ n d c r s t a n d that the psycliok~gical contract is not oaly influcllccd b y numcmus othct factors c.g. the employment I-chtionship and its I-c&arions, but also by rhc couuact of ctnpk,!~mcnt.

IIuch is changing and has cha~ngcd (in South .\frica in general and spccificallv the mining i~ldustl?) in the e m p k j ~ m e n t contest. Many o r g a ~ s a h o n s were and are

still confronted with the chan~ws UI the clnployment legislation fl-amcwork and

flcsibilitv and t~ovelties. The traditionall\- relational contract has been exchanged

for a p u ~ I \ . transacrir~nal contract. Morc and more short-rcrm ~-clationsIi~ps arc

zccu with less long-re]-m guarantees. l'hcrchre, the txxurc of rhc cmpluvmcnl

relationship has c l ~ a t l ~ c d . ' l l ~ r o ~ g h ~ ~ u t all the mentioned c l ~ a t l ~ c s ihc cmph~!-cc-

organisation relationship also had to adapt. ,A concern, therefore, esists as to the impact it had o n the ctnployx in the mining sector. I-low did

the!-

interpret all the mentirined changes in terms of cont~-act breach or x-iolation, u~ldcrrtanding and

trust in the application of new org~tusation strategies atid explicit cti~pklymcnr

regulations?

1.2 Research qocstions to the research prohlem

1.2.1

Primary

research question

How d o the personnel of a Sourh .\fi-ican mining organisarioo

expe&nce the cmnpl~)~-ee-orgarusati~~~~ relationship?

1.2.2 Secondary research questions

How d o the

personnel

of a South :Ifi.ican mining organisation cqxricncc thc ps\ch~)logical c<~ntt-act>

IIo\v dc) the prrmancnr and tcmporal7- pcrwtmcl o f a Soutli \frican 11lulu1g organisation experience the p s ~ c h o l ~ ~ g i c a l c o n t ~ - ; ~ t ?

How do the personnel in :L South 21fricacan ~ n i n i n g organisat~im

experience explicit cmplo!m~cnt relations rcgulations?

F

I<,\\- dr, the permanent and tcmpr~rar! personnel in a South .\frican mining organisation espericucc c x p h i t rmpIo!~mcnt relations

rcgulations?

1.3 Rescarch objectives

1.3.1 Prirnay objective

'1'0 dctcrminc the e s p e ~ i e n c e o f the employee-orptnisatio~~

relationship

I)!

pcrsonncl in a South .\frican mining organisation

1.3.2 Secondaty objectives

-I

'lo

dctcmlinc thc cspel-icncc of thc ps\-c11ologic;lI co~ltl-;~ct I)!

personnel

in a lnumlg organisation in South .\frica.

'1'0 dctcrminc to what extent the esperiencc of the psychological

contract differs lxnvecn permanent and tcmp<,rar! persr)nnrl in a

mining organisation in South \ ft-ica.

1'0

dctclnninc the cxpe&ncc of the explicit emnploy~nent relations

n 'To determine to what extent the espericncc of the explicit cmpk)!-mcnt rel~tions rcsulations differ hcnwcn pcrmancnt and

temporal;- persotinel in a LIVIILL~~ organisation ill South .\&a.

L4

Research method

1.4.1 Research design

l'hc articlc lorm;~t is used for thc disscrratlon. \vhcrcin /12.~0~11h/i~~/1~rIiii~ ,riri,ih

willhe it~tcgratcd into the clisscrtation. ' l ' l ~ e tnetltiotlcd articles ntc written

in

accordance to rcscarch

methodological

prescriptions s r ~ as

n,

integrate with thc dissertation and to be totallx- lndcpendent from the disscrtarion as \\-cll.

'l'his entails that cach articlc will ha\,e its own; l i t c ~ x n ~ r c ~ stud!, cn~pi~-ical

k c s t i g a t i o n , cliscussion of significant tiudlngs, a conclusion and

11ibIiog1-apliy.

In the litcsan~rc stud\-, theol-ctical models asc idcntif~cd t o s u p p o r ~ thc

research objectives and to guide d ~ c structure and method o r the empirical

t c x t l x ~ ~ l i s , nc;ldcn~ic jourm~ls ; u ~ d topical s<~u~:ccs. arc uscd. Rcscarch

mechanisms that arc used include thc iwdinanr 1)osnna lil)rar\ of thc Kwrh-West C-~uversin. a d search eligincs <HI the lnternct.

t , o r the ctnpincal study, crc~ss-sectional desigls arc uscd to csaminc groups

of subjccts 111 various srages of

development

sltnultancousl~-, while rhc

SLIITCJ- dcscrilx a technique of data collcctirm in \vluch qucst~onnaires :[re

used to gather data about an identified population @%urns Kr <;rove, 1093).

'lhis design will be wcll suited lo the d-lcscrlpti~-c and pscdictlvc fnnctions

associated with correlational research, whcrel~y

relationships

bct\vccn

\ ariablcs ;KC cxuninccl (Shaunessc! & Zcchtmcis~cr. 1007). l'liis \\-ill

I K

done to test the espcrience of the psychological contl-act and the explicit

cmnplo!mcnt relations regulations by personnel In a mining organisation.

14.2

Sample

\ mining organisatiw~ in rhc North \Vest Pro\-incc in South . \ f r l a is

identified as an ;~cceptablc research p<)pulati<~n, cluc to i ~ s numlicr of

c n ~ p l o \ c c s (N=GOO), similar nutnbcrs of temporal-!- ancl pcrn1:lncnt cmplo\-ccs in this n-<)rliforce, the ability of the personnel tu succcssfull\-

rcspond on the

measuring

instrunicnts (taking literacy lcrcls in account), as well as the accessi11ilit~- of the 01-ganisation For this rcscarch.

'l'hc study population consists tnainh- of IT& respondents, due to the

inhrl-cut rcqu~rcn~cots of t h c i jobs. 'l'he a\ e r q e age of the respondents is

39 \-cars. 'l'hc a\.cragc lcngth of sen-icc with tlrc mining organisation is 0

ycars. 'She a\-el-age subordinates a responclenr have, arc 1.31. 1:or the

purpose

of this study the pcrsonncl wcrc split

up

into two groups or

populations. O n e being permanent personnel and the other being

temporary pcrsonncl. \ stratified, random sample < I € :lt least I l l 0

ctnployces of each gmup (pcrlnment 11,~=100 and temporary 1 1 , ~ 1 0 0

pel-sonncl in a mining organisation in South Ifl-ica) \\-ill be taken.

1.4.3

Measuring i ~ ~ s t r u m e t l t s

S h e rescar-ch g d s of this stud!. focus o n the emplr~ycc-organisati~~~n

trlati(~nship h\- testing the experience of the

psi-chr)logical

contract and the csplicit cmploymcnt

regulations

of permanent and rcmpor;tr! pcrsonncl <)f

a South :\ frican ~ l n i n ~ ~tgatusation. The foUo\ving ineasuring bi~ttcries \ d l

I x used to test the rarious espcrienccs.

'Tilburgse Psychologisch Contract Vragenlijst' (TPC), (Schalk,

H e i n e n & Freese, 2001)

I'he TI'(: contains clucstir~ns i-cgarding spccitic emplover (4.3 items) and ctnplovx (21 items) obligations. I'rcvious studies using this

questionnau-c provide support for the validitr and rcliabilin- of the scales used (scc Frccsc & Schalli, 1906; Scl~alk, Carnbcll Kr I;rccsc,

1998; Schalli & l.reese, 2000; Schalk, Heinen & 17rccse, 2001).

Experience of employment relations questionnaire (Linde, Schalk

&

Lindc, 2005)

This quesrionnaire asscsscs the empk)!-ccs' experience

!)E

.

.

ctnployncnt relations 111 rhc organisation with 61 itcms. Ihc items

art. divided in

nw

suhscalcs: clarity (39 items)

of

and uust (22 itcms) in explicit c m p l o p c n t qulations.

( . h i t ] ,

? f ' q p / i i t e?i~p/oymv~f rq111<1tiot1.r

Itcms in this subscalc assess the claritl in which thc emplo\-ccs hale

kno\vled~e ~-cg;~sdu~g rhe cxpl~cit e~nplo! meut regularlons and the

acccssil~ilil\- rhcrcto.

' \ ; X U in

n,p/i<j/

e ~ i ? p / o y ~ ; ~ , ~ ~ t n;y~htio~;.i

I h i s subscalc asscsscs the ctnployccs' cxpericncc in the fairness of

the esplicit employment

regulations of

the organisation, as w e U as the tl-usr in rhc application

of

it in the workplace. 'l'hc cmplo!.ccz' cupericnce o f consistcnc~- 111 the application of explicit cmpl!,!mcnt regulakms is also tested.

1.4.4

Data analysis

'L'hc clam anal! sis will ljc carricd out with the help of thc SI'SS program

(Sl'SS, 2004). This program

wll

be used to tarn out statistical anal!-sis r e g d i n g rcliabilitv, validity, construcr cquivalcncc and prcdictivc bias o f

the measuring instmments, descriptive statistics, t-tests, atlalysis r)f

variance,

correlation

coefficients, canonical analysis and nwdcrarcd mnltiple

. .

regression analvs~s. I'he SPSS-program will he uscd to Carl? out sm~cmral

cqu:~rion modelling.

'l'hc data-analvscs will proceed as follows:

l'rincipal factor cstraction with rarimas rotatirm will ljc performed o n the

ineasu~ing inst~umcnts, which hare n o confirmed factor structure.

l'rincipal component extraction will be uscd prior to principal factor cstraction to c s h ~ t e the number of factors, presence of outliers and

c t r a l ~ of thc cnrrcl:~tion matrice. ' l h c cigcn\:llucs a n d screen p k ~ r

d l be studied r o detcrminc the auml)cr of factors underlyin:,: a specific

~ncasu~-ing instrumctlt. 'l'hc oblique mcthod with a pn)max iv,tatiun will 11c

tcqucsted p i o r to the r a ~ i m a x nmtion, to clcre~mine whether obtained

s i q i f i c a n t l ~ related, anah-ses

\\:dl

proceed with the oblique method and a

~":"lnaS r"rauo11.

.I

proccdurc r o conduct tal-gctcd i-orations (1'1-ocustcs i-c~tations), ah

described b\. hIc(:r;te, Z o u d c n n a t ~ (:osta, Uond & I';~unonen (1996), will

I x

used to dctcrmine the construct cquh-aletlce of thc rncasuting

kistruments for different groups. Prior to an e\-aluation of the agreement of

factors in different groups, the matticcs of loadings shr~uld l ~ c n~tatccl wirh

rcgard to each other. The factor lo;~du~gs o f s e p a ~ x t c gmups are rotated to a

jc~int common tnatris of factor loa~lings.

The procedwe consists of the folknviy steps: 1:rc-srly the target srntcturc is

specified. Sccoildly thc hypothcsiscd n u ~ n b c r of hctors is extracted and 1-aritnax i-oraticm is used to obtain esploratog- factor loadings in the new sample. 'l'hirdl! a targctcd rotation is performed to cxanii~lc the cstent t o

\vluch differences between the target and racimax marsir arc duc solely n )

the mration of thc ascs. l ~ o u r t h l ~ cr)ngrucncics are calculatcd using

Tucker's cuefticient of agrcemcnt (Tucker's phi). N u s coefficient is

inscnsitivc to multiplications of thc lacror loadings. hut is scnsici~-c to a consrant added r o all k ~ a d i n ~ q of a I;~ctor. 'L'lus it&.: docs nor have ;I

known sampling distribution; hcncc it is i~npossihlc to estabLish c<mfidcncc

s i t ~ i I a r i ~ - , \\-hereas values lower as 0.85 are taken n, point to non-nedigiblc

incongruities c ' a n de T'ijx-cr & Leung, 1997).

.\n anal\-sis of \-:~riancc will l ~ c appbcd to idcntih- itcm bias in mc~suring instrummrs (l21n dc \'ijxc~- &

I

rung, 1007). 13iar n-ill be cxanuncd for each itcm scparatclv. 'l'hc item scot-c will hc rc.gz~rdcd as the dcpcnckcnt 1-21-iahlc,

while language g n q s and score lc\,els w i l l he rckmrdcd as the independent

variables.

CZronbach alpha coefficients and inter-item correlation

coefficients \\-ill he used to assess the 1-cL~bilitv and \didin- of the

measuring

insuurncnts (Clark & Watson, 1995). llcscripti\-e statistics (cg. means, standard dc\-latir)ns, range, skcwncss and kurtosis) and infercnual

statistics will bc used n) analvsc thc data. I'carson and Spc;lnn:~n cot-rclation

coefficients \\dl llr computcd t o dcrernlinc the relationships I x n w c n variahlcs. ( h o n ~ c a l aoalvscs \\-ill be c<)nducrcd to dctct-mitic the

wlationships between sets of 1-arial~les.

.\

cut-off point of

I-,

: (I.(l5 will l)c

set for the statistical sig~iticancc of the results. k<fFcct sizes will 11c used to

dccidc o n the practical sigluficancc of the findings. A\ cut-off poi11t of 0.30

(n~cdium effect) will hc set for the practical significance of corrc1;ltion coefficients. T-tests, .\NO\.;\ and X\h-OT;\ will be used to determine

the diffcrcnccs hctwccn groups. Modcratcd hicral-chical rcgl-cssion analyses

L5 Division of chapters

(.' 11 u p I c i.

I

: Introduction and pn)blem statement.

, ' I 1

p

f r 2 : .\rticlc Onc: 'l'hc cspericuce o f the psychological contmct by pcrsrmucl of a South .\fiican

mining

orgmisation.

C

I

1

p

I t i 7 : ,\rticlc 'I'xvo: 'l'hc espcriencc of the explicit cmploytncnt

regulations I>!- pcrsouncl iu a South :\€sican mining organisati<,n.

. ' I 1

p

I 4 : (:on~Iusio1~s and rccr)~ilmcnd;ition.;.

1.6

Conclusion

With this chapter the rcscarchcr wishes to ultroducc and cnticc thc rc:dcr lo the study. .An u~troduction of the literature covel-ed in this study was given t o set thc tone o f the study. I:urthcrrnorc, the rcsearcher pro\-ided a clear rcscarch problem

:u1d + n a r y ol)jcct~\-c t o answer this p n h l c n l . I11 addition. scconcl:u? obiccri\ c.5

\vcrc :lddcd to spccify and shape thc study. I t discussed how thc I~rc.r:~turc I\-oulcl be uscd and cxpandcd as \\-ell as ho\c the ol~jectircs

\

d

l

b c achic\-cd. Thc sources whcrc the literacut-c can he found and the method and processes o f empirical

111 the f d l ~ n v i n g chapters of the dissertation the ps\chological contrxcr and the

cnydoytncnt relationship arc cliscusscd. ;IS per F.:.C)ll. .\s mcntioncd cal-lies rhc

ti~Uo\vuig t\\-o chapters were \v~itrcn in ;I ~ ~ u l ~ b h a b l e article format. (;haptcr I ' w o

(or .\rticlc One) discusses rhc psychologcal contmct and Chapter 'lhrcc (or

.\rticle Two) d~scusscs thc e m p k ~ p n c n t I-elationship. Therefore, the reader might

experience a repeat of ccrtairi litcraturc to sotnc cstcnt as to accommodate for the

article options 111 this dissertation. The last chapter of the dtssertation is dcvotcd

to conclusions atid recornmendations from thc literature 21s well as the empirical

ARTICLE ONE

T H E EXPERIENCE OF T H E PSYCHOLOGICAL

CONTRACT BY T H E PERSONNEL OF A SOUTH

AFRICAN MINING ORGANISATION

BY

T1w c r n p l o y c c ~ ~ r ~ a m s i ~ t ~ o ~ ~ rclationsb~p (I:.-0 I<) c;w I,c dlvidcd mto tw, components, k i n g thc p s ! c h ~ ~ l o ~ ~ x I contr;m i dtlw hllmmng c m p l o i n ~ ~ ~ ~ t ~ . d i t t m n ~ l ~ q > . \ Y N ~ rlw C ~ ~ ~ ~ I of U IIIC I C ~ I

p ~ c l ~ d o , ~ c , d coutr.tct, rhltg;~tron\ .md cxpccr,lttc,os arc ctwtcd rl~n,ugb ;In ,rqcctncnr. I'hc d h g m o w ;mcl rxpccr:ttions of p e m ~ o ~ c n t and rcm[x,r:n> ernph>)t.cs in rmuhr 1,i,sm,ns ixnd

\ w r k n y C O L I ~ ~ I ~ O ~ S CNI illtfrt. l l w i u x ~ 01 tlus ;trt~clt. I S to d c n r ~ l , IN,\\ prrul;mcllr ;tnd tcnqx,ul\

Introduction

' I d a \ - ' s n ~ ~ r k p l a c c is undeqoing Lmtnense m d p c m l n c n t chnngcs (Olix-cr,

1999). ()rpiisations are being.. . "Reengince~-cd for grcsttcr spccd, cfficicnc!, and flczihih" (Hatnnier Kr (:hamp!-, 1993). 'l'lic change 111 the cmplwment s p t n in

South :\Erica and mining orgmisations ha\-e made the study of cn~plo!-ec-

organ~sxtion rclatiotlslups (I10Ks) ulcreas111gly critical. as qganis;tti<ms scck \\-a\-\ t o nlccl the ~wcds of thc orpnisations :tnd the pcoplc in tlrcm (Slrorc t / dl., 7004).

hlan!- concepts have focussed o n the exchange rehtionslup hchveen the

organisation and the cmplo!-cc, including that of thc psvchological contract

(Rousscau, 1995). The new ctnphasis of most mining organisations has bccn on

"flcsihihh-" and grcatcr "indiriduatisatic~tl" of thc contractual rclationship

(Salamon, 9 9 ) Within thts envisrmmcnt, the concept of thc ps\-cho1ogic;d

cont~-:tct has hccn 1-cbom and rcinx-ipratcd (Wcshvood pi id, 2001). Initiall\- in thc

IOOOs and early 10-0s. the concept remained xm~c\vIiat dormant until rcccnt

changcs rcnc\~-cd intcrcst for exploring the tacit undet-standings I ~ c h ~ c o

cmplo!-crs and cmplo\-ces within the contest of changing emplo!mcnt relations.

Indcrsranding and cffcctivcl\- managing thc ps!chological contxact can help

q m i s a t i o n s thrir-c (liousscau, 2004).

'l'hc ~ ~ c h o l o g i c a l contract is a "set of cspcctations hcld Iy the individual cmployre that specih- what the u~dir-idual and the organisation cspc,ct to @c and rcccirc in the \vorl<ing rclationship,

beyond

\L-hat is stipulated in the formal

contract of ctnplrmnenr" (liousscau, 1090,

p.

15). ' l h c r!-pc of rclarionship that dcl-clops lxrwccn c m p k w x s and urganisations is fiu~damcnt;ll t o (lrgmis:~tiotul success and sumival. ' f i e rrlariot~ship also forms the fi~undaticin of ~ n a n \ - streams

o f organisational bcliaviour rcscal-ch, including research into the ps!rhological contract.

\Krith the current turbulent business em-inmnicnt, ;~rguabl\- the traditional

p ~ c h o l o g i c a l contract, long-term relationships in turn for l i d work and k n a l n , . . has come under pressure (Sims. 1001). I ' h c ps\-ch(~logical cilntracr h ; ~ s

I ~ c c n used

I,\-

acaclcrnics tn anal\sc thc changing cmploymcnt rclat~onship (I'atc,

I\Iartin

cY.

hIc<;ddrick, 2001). In an unccrtam contcxt, o r p u s a t i o n a l changes often rnakc it unclear as to what both parties, the cn~ploj-ee and cmpk)!-cr acmII\

o\\.e each other, thus making the task for failing o b l i g ~ u o n s estremcl! difficult

(hlcl.cat~ Parks

cY.

Iiiddcr, 1994). As a result the €rcclucnc!- of m i s i n t c ~ ~ x c r a t i ~ m

and xiolation of the psychological contract escalates (Rol~inson, 1906; 13rau11,

1007).

Subscqucnr rcscnrch indicates that ps~cholngical contract breach is ~-cIati\ d y

COLIUI~OII (Ri~hinson i d R o ~ ~ s s e a u , 1994) and has shown that 1-ioL~tirm is the

lil<clihood where cmplo\.ccs fccl that thc ot.ganisation has reneged on its ol~l~gatiuns. I :tnplo!-crs can be expected to adjust theil- cmpli~\-mcnt and human

rcsour-cc policies and practices as to coincide with changes and tre~ids the\

pacci\-c OVcshvood e/ id, 2001). 'IXs may lead rhcm to cum-cv different and \-at-iable expectations regarchug the e ~ ~ l p k n n l e n t cnr-i~-(~nment and thus contrihurc

t o changcs io t h r p s \ c I ~ o k ) ~ ~ c a l conrract.

Rccausc of the change UI the cmploymcnt approach in the mining sector and tlic

pnjcesscs during change, the nature of the exchange relarionslup Ixnvccn the

indix-idual cmploycc and the organisation ma!. also changc (I.~ndc, 2002). 'Shis can

he scen in changes in worlung conditions o r working cnvimnrncnts, cmplo\-ment contracts and ultimately employment relationships (Schalli, Campbell & I;I-ccsc,

1908). '17herc has l x c n ;I shift from a m o d \ - "rclation;~l contmct" (\\it11 ~ J I I S tcrm

guxuirccs) t o a more "rransact~onal c o n t r ~ c r " (short-tcm~ r-clatio~~sl~~ps) \\it11 thc

i~rrplemctlratio~i of temporary ernplo!-mcnt (Livnm, 1995). Rcl;~tir)nal conuacrs

iacludc such tcrnls as loy~lt!., stability, permanent cmploymcnr and tringc

benefits. hlthough \ v o r k r s with a relational contract are likely to he particularly

upset when it is 1-iolatcd, worlicrs

generally

seek rcmcdics that will mainrai~~ the relationship \\-it11 the employer (Rousseau, 2001). i\t the other side of the rclatio~ial contract is the employer who is more f(~)cusscd o n the risk from

ccom~tnic ti~~ccrtahrics. Trans;&onal c(u~tl-acts i~icludc tcl-ms such as narrrnv duties and Ii~nite~I o r short-tc~iil duration with I X T ~ O ~ L I I ~ I I C C linked

n )

1 x 1 ~ .

conchtions change. Both worker and employer arc likely to immediately terminate

a ts;unsactional arrangement that fails to mccr their nccds. 'I'ransactional contracts

shift the risk associated with economic i~nccrtaitlties from the e t n p h y r to the

employee.

In rcccnt years, "hybrid" o r balanced contracts ha\-c cmcrgcd (Ilousscau, 2001).

'rhcse crnrracts c < ~ m b i n c the open-ended ririic frame and mutual concc~-n f o r

relational agrccmcnts with the pcrformancc demands and rctlcgotiarion o f

txa~isactional contracts. Ilalanced contracts

combine

comnittncnt from the c m p l o ~ c r , \uhilc anticipating thc flcsibilih- and \villingncss o f \uo~-kcls in times of

(1.e. economic o r orgmisauonal) change. I:or nlosr, thc legal contractual

relationship hctwccn ctnploycr and ctnplo!.cc is perceived as asytnctrical aod

not (me frcel\- entered into bcnvccn equals, esccpt for certain highh skilled and

spcci;ll~rcd indi\iduals cnrcring the labour marlict (Salamon, IWS).

l l i c South .\frican mining industn- is nor cscludccl from the mcntioncd c l i ~ ~ ~ ~ ~ i t y

p~c'hological contracts and the h i s t o l ~ of this sector clearlv

illustrates

this. .\cadctnics have l ~ c c o m c locked up in serious dchatc 011 the lntc~ptrtation of the

role of employers in the crcation of a c h a p and docile labour force in Suuth .\frica (I;inneli~ore, 1999;

Standing,

Sender c9: Wccks, 1996). Much mcotir~n has Ijccn i ~ l a d e r e g a d i q the early 1900s of the mining itldnstr\ in South .\f~-ica, and

the percciwxl clash for motlr~polv of cheap labour (mines ckmiinatu~g and

matlipulating the labour suppl\ in rhc counrr! j, I\-irh capital and thc starc assisting

111

enforcing

laws to generate and exploit thc chcap lahour suppll- on the mining

scctor (CXliuicos, 1981). hlltung orgatlisatiotls are \-ic\vcd

I I ~

lea\ cs (1985) as rivals because o f labour. .\ccot-cling to S t m d h g , Sender and &'eelis (1996),

cmplovtnct~t in the mining sector peaked in 1987, which coincided with a m a p -

indusm--\vide s t r k called h!- the National L'nion o f M u ~ e \ v ~ r k e r s

(WUliM).

Since 1988 the c m p l o y c n r lcr.cls dccrcascd in thc mining sector. With the dccrcasc,

rclenrlcss ten~porar\- ctnplo!-inent rclati~mships hare been associated nit11 the

mining l:~l~out- market. althou~gh major p g r c % has been m d c in thc stddisarion

of the employment contracts of pernlanent wr~rkcrs (Standing, Sender & W e k s ,

1996). '1-he reduction o f c t n p l o p c t l t levels since 1988 led to rhc shedding of

pn)portionatel!- marc surface emplo\-tnent in relatio~l to undcrground (Stand~nx,

Scndcr & \Vcclis, 1996). .\ccording to thc Chatnhet- of Mine's .\nnual llcpurr f w

1993 to 199.1, emplovment has decreased by 30 per cent (C:haml)er o f Mines, 1994). I-:mplovmcot again sral~iliscd in 1'994, I ~ u t ;I further decline was norcd iu

1995. 'rhcrefrxc, thc nutling sector had :I tlucruating cmplo! mcnr scene from thc

ctnpIo\-ees (Chamber of mines, 1994). There is a sizeable clistinctim bet\\-ccn the

qu;~tlrir!- of workers labcllcd as "in sen-ice" (cmployccs o n the 1)oul~s of thc

< I I - ~ I ~ I S ; ~ ~ ~ < , I I ) and rhc qu;mtit\- lallclled

II\

r l ~ c industn as "in-wol-1;" (Srandi~lg. Sender & \%'eel\-s. 1996). I'rr~~~~cssir-cl\ more, tnininS houscs arc

making

t ~ s c 01-

remporac emplo!.mt.rit by relying on p r i n t e e m p l o p c n t agencies (Srandhg,

9 9 0 ) '1-lie Chamhcr of Mine's

published

data siLpif!;ing a tvcnd towards :~ugmcnred use of tempora17- l a h ~ u r (Chamher of XIulcs, 1004). In 19S7,

tempo~-;t~? cmployccs scprcscntcd mncrely 3 pel- cent of the \\-orkforcc, whcrcas

I,!

1994 it escalated to 10 per cent. UY 1994, temporal:- cmplo\-ccs had a total

s t r c ~ ~ g t h of 29,657 WOI-kcrs underground. \vhich adds up to I1 per cent of the

cntil-c

underground

n-r)~-kf<)rce. ' l h e fashion twmrd tcmporw\ cmplovmcnt, and the us;u~c of tcmporarv crnplo~ccs 1~11- mining l;hl:)u~-, has Ixcn linlicd t o thc

nuoes' d r i w for el&\-xtcd PI-oducti~-it!, flcsilxhty and cost climinxting (Standing,

Sctldct Kr \Vccks, 1996).

I'hc implcmcntation of tctnporan- employment iucrcascd, for I>\-pxssing c o l l c c t i ~ agreements, I-aising questions about thc effect of such agreements o n cmp1wc1-

crnplo\-cc

relationship

(F.011). O f more signikcance for the concerns of this I-cscal-ch. has been an ;dtrration 111 rhc structure of lal>our markets in the mining

sector. l'his n~anifcst incorp<)l-;rrcd all-c-pcriphcl-:I[ o n

r

high lc\-cls rcmpol-ary, part-time m d c ~ s u ; ~ l h r m s of emplo!n~enr. 'lhcl-cfose, rhc naturc o f

fonnal contracts has altered, with mot-c short-term contracts a n d less guatmtecs

of long-term rclationships (Wcsnvood e/ a/., 2001).

Gix-cn thc changes in South I\frica, the cotltract of e m p l o ~ t n c n t and the

p ~ c h o l o g i c a l contract, the empIo!ee had r o change his or her cspcctations as

well. O n e catmot hclp to speculate 1111 the irnpact it had o n t l ~ c ctnploycc- rxgauisation uclatio~lslup. (:onsider~ng that the orprisation nu l r ~ n ~ c r guar:ulrccd

its obligations to the cmplovx, with r c p r d to a long-term

relational

contmct, good r e ~ ~ ~ u n e r a u o o and wcU integrated benefits.

The m a j m i h of this article provides a fmtnework of the \\-orkings 2nd fimctions

of the cmpk)vcc-osganisatic~~~ relationship (KCN), focussing on the psychologicd

contfilct. 'l'lus article is d e s i p e d ro pl-(nide 21 theoretical I~aclignxu~d of cxisting

lircrat~~rc and p r o d c an cxpansiun r o the hkmturc I J ~ dcfinitig ; I I I ~ d ~ s ~ u s s i ~ l g

rhc b:~sic cot~ccpts of the ps!cl~oIogical crmrract. 'l'hr litcraru~-c dcscribcs the

nature of the psychological conuacr. Furthcsmorc, it cxplains how thc conrracr d

mipkn-ment f o r ~ u s part of thc psychr)logical contr-act eschangc.

I

the litcrahlrc fcatul-cs of the ps~chological contract arc identihcd and discussed.

I:ll~ally, the downside to the p s \ . c h o l o p d contract is chscusscd with rcfercncc t o

To d i d a t e ; ~ n d m k e the literature s t u d nwrc s~gniticant ;In enipiricd

invcsri~gation was done, distributing qucsur)nnaircs to pcmi:ulcnc and tcmpor:lr!

personnel,

measuring the p s v c h r ~ l o ~ c a l contracts of a sample of personncl iu a

mining i)l;ganisation in the horrh-West I'rovincc of Sonth .\frica. I'hc

qucstir~nnaire was dh-idcd into two sections: One, testing the cspcricnce

~rcgarding the cmplo\-cr's obligations, as seen h!. thc pcrsonncl; and the other, testing the experience sepl-ding the enlplovec's oblig;~rions. The primal:-

objccri\-c, t h c l - c h c , is to determine the expcricncc m d pcrccptiow of pel-sonncl

regarding the ps!-chological contract. L~ut.rhcrmore, the seconda17- <hjccti~-c is to

:~oal!-sc thc cspcricncc and pcrccprions of the permanent aod tcmp<,t-ar\-

pcrxnmel regarding the psvchr)logcal contract.

By

doing so, a comparison bch\-ccn the cspcricncc of the ps~chological contmct b\- pcrm:~ncnt and

tcmporat? perxmiel in a ~mini~ig ~ r g a ~ i i s i ~ t i i m can he in;&. The mcthrd ot

investigation was as foUo\vs:

'L'hc 1-alidity and rcliabilit~ \\-as tested using Cri~nb;~ch's .\lpha cwFficicnc. I'hc

cmpit-ical i n r c s t i ~ ~ t i i r n attcmptecl to cluster the rnc;~suri~ig irctn. I-cspccti\-rl\-

under thc possil~lc twc factors using the irm--item correlations. 1 ) c s c r i p r i ~

st:ltistics \\.as unplementccl and discussed for the whole sample. ~\fte~xvards

clcscripti\-c group statistics \\:as irnplcnicnted and

discussed

for Imch permanent and tcmnpman- personncl to detc~tnine the cross col-relation. 'l'hc artlclc ends \ d l

several conclusions rcpr&g the ps1-chological contract a n d L-ccomtnendations

for improving the cxpc~lcncc of the psychological contract, hascd up<m thc

literature stud!- and en~plncal tindings.

Basic conceptions

and

definitions of

the

psychological contract

l h e bclicf o f the "psychological contract" \\:as first coincd by .\rg\-ris (1960) to

refer to the employer a n d employee rclatiwlship, i.e. mutual obhg:ltions, \-alucs,

cspcctations and aspirations thal opcmtc over ;md above the formal contract of

cmplo!.~ncnt. Since tlicn many attctnpts ha1.c been ma& to rctii~e rlus concept

( u s s c a ~ ~ , 9 8 9 9 9 9 9 2 0 1 ; 2 0 4 ; I c i c 1985; Sims. 10'94; Rochling,

199:: Sliort~ (,t , I / , 2004). 'l'~-;~<liti<~~~;lUv, rhc concepr \\as x.icwecI ;IS a11 c x t ~ ~ i ~ i o n < ) (

philosophical cot~ccpts of social conttxct t h c o ~ \ - (Schein, I98O: l<<)chling, 1997).

'l'he social cwltract, which deals with birth of thc state, s u ~ q c s t s that indi~.iduals

\-oluntarily approve ro part and parcel of an o~.g;~niscd socien-. \\ it11 c11fo1-cing

constraints and rights.

;\rqris ~~ . (1960) use the conccpt to elabomtc on an implicit agreement betwccn the

groups o f c m p l o \ w s ;tncl an cmploycr. Other influential writers such ;IS 1.c~-ison.

IYicc. hlundcn and S ~ l l c ! (1062) used the co~lccpt to Jcscrilx rhc 5cr

crpcctations and o l ~ l i p u o n s that indh-idual cniployccs spoke

<IF

\\lien nskcd abour their work experience. Roehling (1997) credits Levinson ct ui. (1962) with

esplicitl!- I-ecognising the dvtlanlic relatic~nslup o f the psrch~~k,gic:~l conn-act. Schcin (1965) cmphasiscd the irnpoaance of the psvchological contmct concept in u~iclcrsrat~dll~g and nunaging bchaviour in organisauons. I h t c r (1'973) has tnadc a d u a b l c contribution to the dcvclopment of thc 1x1-chok,+xl contract

tlicon- . In. . pointing out th;~t the ps!ch<~kg<cal contract ma!- :dso cha~lge according

to changes in rhc cxpcc~ari<)ns and situations o t the partics ~nvol\.cd. 1)~1rinp the early 1990s, Sltns (19'94) ppl-claltncd that an imponderable numbe~- of x-al-iahles

may be involved in a psvchological contract, of which onh- a few ma!. he active

o n a conscious level.

Recent drvek~pments psychological conuact theory are largch- ~. d ( ~ t l l u ~ a t c d b\-

llousscau (c.g. 1980; 19%; 2001; 2004). llousscau argues that the ps\-chok)gical

contract 1s ~ x o " s e - l ~ ; ~ ~ e d a d , dut-ing thc cuur-<c of timc, talics the FOI-111 o f $1

mental model, which is I-clativclv stahlc and durahlc. I:or r l ~ c purpose of this

article thc psvchr~logical contmct is defilicd as " b d r f s , l ~ a s e d u p w ~ r ~ ~ m i s c s

cxpresscd or itnplicd, regarding an cxchangc agrcctncnt bchvccn an individual

and, in r~r~aulsations, the eniplying fu-m and its agents" (Ilousseau, 1995:

The

nature of thc psychological contract

XIuch eridcncc has bccn published in academic and commercial literature to

sugqcst that significant changcs hare been forced upon cmplo!-mcnr rclationship~

since appl-osimatelr the mid 1980s, g1ohaIl~- ((:appeUi, 1999) and in South .\&a

( H o n v i r ~ & I,ranklin, 1996). I ' h c oc17- csistcllce of conflict also indicates that, regardless o f the actual terms, udr-iduals t o a contmct h a r e their ( ~ w n

pcrcclxi 111s ot \\hat mvcs l)cc\vc.cn the cmpb iycc ;~ncl the o ~ y ~ i i s : ~ t i o n , \\ liicli 1ii:1\

differ from the a c n ~ a l rcl-111s :lnd from each other (Ilousscau & Xlcl .c:m I1ark>,

19'93). I'sychological contracts spring from a dynamic rcl~tir~nship, thus pcrccir-cd

obligations can be subjectir-e and may change over tune (Txe, 2001).

.\!I existing contract ends, srm~ctimcs through brc:~ch, smnerimcs b! c<m$ct~rm and various othcr lcgislatirc reasons and a new contract can b c cl-cared

(liousscau, 5 ) .According tr, Rousseau (1095) the purpose o f contract r r a n s L m i i ~ r i m i s t h ~ erc:~tiot~

OI

a n c ~ C < I I I ~ ~ ; L C I in

place

o f :In cxistinX ow. n-hcl-c

thr new contract engendcrs commitnlrnt and cFtic;~c\ for all conccl-ncd. "l'lic old

ps!.chological contract is dead ", proclaitns a ( 0 . 3 , p. 54) and othcr

LIecause indix-idual contracts can potentially take a n infinite nurnl~cr C I ~ fornis,

changing busincss policies (llavis, 1987) and ccotlomic pressures (licttis, 13l-;dlc\

and tlamel, 1992) can casilv cl-odc man\. traditional cliiplo\-mcnt fcarurc.- if nor

a l ~ n ~ p t c entire conr~.acts. \c c i l d i n g to hlacncil (19x5) and I < o ~ ~ s s c a u (1980) thc s n d r

< I F

p s y c h o l o ~ ~ c a l contl-acts can be brought t o two ends o n the crmtinuum, namcl!-: /r~t~~.~ir~/io/tirlancl rclil/io/iid 'Theor! postulatcs that the tcrlns o r obl?gations

described 11r psyclrological contracts differ according t o the crtctit t o \c-hich they arc /~~IN.WLY~OIICI/ as opposed to i?'/i~/io~u/ in naturc ( l h b i m o n , l<raarz & Rousscau.

1994; Kousseau, 1990). 'I'ransacrional contmcts a w characterised by an attitude of

"a fair da!.'s work for a €air da\-'s

pa!",

and :Ire rooted in shorr-term rctul-11s f<,l-

scl-viccs rendered.

lielational cm~tracts, 011 the other hand, emphasise the existence o f indefinite

I-clarions in \vhich both parties h a w rnadc considcrahle in\-cstments (Kousseau K:

\Y'aclc-l3cnzoni, 1994). 'l'lic distinction behvccn these hvo Rpes o f contracts m a y

bc coml~itlcd \\:it11 two conditions; (a) thc period during \vhich scn.iccs arc

rcndcrccl (the pcriod in which an c m p l o y ~ i ~ c n t relationship is created and

. .

~ n a m t a ~ n c d ) , and (I,) the lcx-cl o f achic\-cmcnt, which refers to the outcome set for

the sen-ices rendered. .\ccording to Sirns (1094) a I~alanccd p s ~ h o b +a1 contract

is I achic\ccl \vhcn a harmwious rclatio~~sliip 11ch\-ccn thc e1i1plo!er m c l

l'lus combinatirm of h p c and condition leads t o a distinction among four 1);lsic

h p c s of psycliolog~cal contracts, which tnay bc graphically illustrated as follows:

F&,i,

I. Four basic n-pcs of psychological c o n t l ~ ~ s ( R m ~ s s c ; ~ ~ and \Y';tdc- ~ e n z o ~ ,

1994,

p.

468)

0 _{'l'ransactional cr~ntracts, \\hicli arc of limited duration and c<~ntain \~-cll-}

spccificd performance terms and conditions.

1ielation;d conti-acts arc chat-actcsised l x an open-ended meml~crship with

a t i ~ I ~ i g ~ ~ o u ~ ~ e ~ : f o r - ~ i i ~ ~ t ~ c e recluic~iients attached t o continued mcmbcuship.

I%:~lanced cl:~nrract.;, \vl~ich r c k ~ to r~pcn-ended and rclatio~lshil~-

orientated cmplo!-mcnt with wcll-specified pcrformmcc terms subjects t o

change o\-er time.

Iransiuonal contracts, \vl?ich csscntiall!- atnl:)uot to a stl:)ppagc in

contracts, reflecting the abscncc of c()mmitmcnt rcprding future

empll:,yment including, little or no, explicit pcrfl:)rmance dcnvands o r

contingent incentives (l<ousscau & Wade-lknzoni, 1994).

1)cspitc all thcsc distinctions, G u n o and N ( ~ o t l a o (1991) arc con\-i~rccd that all

p3-c11l:)k)gical cl:)atracts can l ~ c charactcrised

I>!-

110th t1a11saction;d and re1ation;d clcmcnts. 'l'hc l~alancc bctwccn t~atmactional and relational ps! chological contract

will depend on t l ~ c practices and the atmosphere in the orgarusation. This call 11c

illustrated as hlknvs:

Pel-son

A

is a tcmporaq ernplovee w h o entered into a clear contract that cxpl:~ins thc \vork to be done in exchange for mr)nc\. 'l'his n p c of

~ - c l ; ~ t i o ~ ~ s h ~ p is vituall\- nonambigui~us and c<,mplctcl\- tr:~nsacril:mill.

.

I'crson 13 is a pel-ma~lcnt cnlplol-cc in the 01-pris:~riou ;wd cxpccrs a hil- and equita1)lc salan- plus l~cnefits and a long-tenn rclarionship. ' I he

relational aspects of that psychological contract arc prett!. much dominant

'I'hc ps\chological contract of these two employees nu! be gaphic;~lly illust~xtcd as fc)llo\\-s:

Person A Person

B

F@w 2. I<samplc of tl-ansactional and relational relationships (Guzzo and ~ U O I I X I I , 1904, p. 449)

'l'lic "dead old psrchological contract" is \-cry likclv the pure relational contract, ul

its man!- iterations, \\-hidl has undcrgonc expanded pcrfom~ance requirc~ilcnrs,

thc cn)sion <)f intcmal labour tliarl<ets and the relasing ( ) i o ~ - ~ ; ~ ~ ~ i s a t i o ~ i ; ~ l I)ouncl;~rics (l<m~ssc:~u. 1095). 'l'lic old ps\-chological conrract that accompauiccl

2001). 1~1npliyersgencrall~- offer cmplcn-ecs long-tetm relatiomhips, ciitwistcnr

rewards, career tnanagcmcnt through stcad!- tcaining a i d ad\-anccmcnt and Iring

term crnnpany defined benefit plans (retirement), in exchange for thc crpcctation that employees would #re aU theit 10:-ah and effort to the compan! For the r - c n

Irm-term (Ehrlich, 1994). 111 man!- cases, k~ug-rcrm c<mp:tn\- 11naln- ru

cn,lilwccs has 11ccn rcplaccd I]\- rhc demands of ha+ a flcxildc \\<,~-l<k~l.cc rhar can adjust quickly t i mal-kct nccds, regardless of v-ho nccds to bc lured, tcrtninated o r changed

(I

AX, 2001). I~sscntially, labour markets appeared to hare bccr)mc far more markct driven o r cxtendiscd (Cappelli, 1995).

Thus, the use of temporan employment becomes mrlrc frequent. I~.:mplo!crs

~ n a d c it clear through action that, with the i ~ c w I~usiness cnrit-onment, the! could

n o 1oage1- I)c especred to ow-c crnpknws the same ol~tigarious rhat had pse\-iousl\

I ~ c c n pcrcci\-cd as core to the cmplo\mcnt c ~ ~ n t ~ - ; ~ c t (I .cc, 2001). L'hcsc changcs

o n both sides i ~ f the cmplr~!-meut c ~ ~ t l t ~ - a c t al-c leadins tu a widening rlf thc t r u s 'gap I~chvccn cmplor-ccs and their cmploycrs and arc

challenging

human I-esources pt-i~fcssio~lals to slift f r ~ ) m old paradigms, where jobs rcsultcd 111 liyalt!-, towards innmati\-c \\.A\-s of securing cmplo!~cc Iclvalt~. . . ( L ~ v s

CYI

Mat-tins, 1006).

I ' h c conccpt "psychr~logical conttact" is by n o means a new one; what is nc\v hrnverer, is the intcscst rliat managel-s are bc~G111ing to shrnv in it (hlorris<>u.

1901). l'ractitkjncrs and ac;dernics hare tlierefim obse17-cd ; ~ n d h!p~~tlicsiscd tlic

Iirth of a wholc new ps\-chological contract, with significantl\- diffcrcnt pcrccix-cd

ol,ligatii~as on both sides of the

employment

relationship (L<isslcr, 1094; llibbinsoo Pc llousscau, 1004). I'he new psvcholqical c o n t t x t can be r111scn-ed

simpl!- as a movement to~vards a far more "transactional" (short-term)

p s y c h o l o g d contract, and less reliance o n "relational" (long-tcmm) obligatiotls

(Car-xiaugli & &TIC, 1000). Tlus relationship is one of self-reliance for cmp1o1-ecs.

I t has hccn described as ;I shift from "paternalism" (\\-hcrc the orpnisation

rc$ates and protects the entire etnployncnt I-c1;ltionship) ti) "partncl-ship" (ctnplo\.ccs assulilcs significant rcsponsibilitv for their own c:trccrs :uld 1011s

(Flonvitz Pc Ersku~e, 1995).

Hilttop (1005, p. 88) s u g g s t s that the ne\v contr;tct should run something l k e this: "'l'hcrc is n o job sccuriq-. 'l'he employee will bc employed ;IS h o g as he or

she adds d u r to the organisation, and is pcluonally responsible f61- tin&1g nc\v

\\-:I\ s to add I-aluc. In turn, the cmplo\-cc has the right t o dcmand i n t c r c s t ~ n ~ and inmport~nt \vorli, has the tt-ccdom and rcsourccs t o perform it \\ell, I-ccci\cs p a \ that rcflccts his o r her contl-il~ution, and gets t11c expcricncc and mining nccded

t o be cmnplo~-able there ur elsc\vhere."

Staffing i11r such svstcms is incrcasingl! Insed o n s1io1-t-term strarcg\- (( YRcillv, 1004), allowing for flexible "hiring", "firing" and changing < I € e m p l ~ ~ ~ c e s as well