A Linkage Model of Implemented HRM, Experienced HRM, Psychological Contract Fulfilment and Employee Intention to Leave

AbstractThis study aims to investigate the indirect impact of HRM on employee outcomes. The novelty of this study is to adopt a linkage model and to examine the relationships between implemented HRM by line managers,... [ view full abstract ]

Abstract

This study aims to investigate the indirect impact of HRM on employee outcomes. The novelty of this study is to adopt a linkage model and to examine the relationships between implemented HRM by line managers, experienced HRM by employees, psychological contract fulfilment and intention to leave. Using data collected from 1810 employees working in professional service context including accounting, consulting, ICT, law, marketing etc., a double mediation model with the studied variables was tested using Hayes’ (2017) PROCESS syntax. Support was found for proposed linkage model where implemented HRM is positively associated with experienced HRM, which increases psychological contract fulfilment, ultimately reducing employees’ intention to leave.

Key words: Implemented HRM; Experienced HRM; Psychological Contract Fulfilment; Intention to Leave; Linkage Model; Professionals

Human resource management practices have been found to be positively associated with organisational outcomes such as financial performance (Guthrie, 2001; Huselid, 1995), and innovation (Chen and Huang 201; Fu et al., 2016). According to Wright and Nishii (2013), these HRM practices are categorized as the “intended” HRM, which are not necessarily translated to employees in most of cases. In order to enable the “intended” HRM to be effective, these HRM practices need to be implemented by line managers and translated to employees to have experienced HRM expected by the organisations (Jiang et al., 2012; Wright and Nishii, 2013). This suggesting a link between implemented HRM and experienced HRM. Based on this, McDermott and her colleagues have theorized the implemented and experienced HRM influences employees’ attitude and behaviours, e.g. intention to leave, via the mediating role of psychological contract fulfilment (McDermott et al., 2013). In the context of employment, psychological contract refers to an employee’s beliefs regarding mutual expectations and obligations between that person and their employer (Rousseau and Tijoriwala, 1998). When employees experience the HRM practices positively, they feel their employers have fulfilled their psychological contract. Employees who feel their psychological contract being fulfilled will less likely to leave their employer. Therefore, the following hypotheses are proposed.

Hypothesis 1: Implemented HRM will be positively linked to the experienced HRM.

Hypothesis 2: Experienced HRM will be positively linked to the psychological contract fulfilment.

Hypothesis 3: Psychological contract fulfilment will be negatively linked to intention to leave.

Hypothesis 4: Experienced HRM and psychological contract fulfilment will mediate the link between implemented HRM and intention to leave.

Figure 1 presents our research model which links the implemented HRM, experienced HRM by employees, psychological contract fulfilment and intention to leave.

Research Methodology, Analysis and Results

An online survey was sent to 43,478 professionals who have registered their details with one agency organisation based in Ireland. Overall, 2734 responses were received with a response rate of 6%. After deleting missing data as well as the responses who were not working at the survey time, 1903 respondents (4%) were used in this study.   For implemented HRM practices, we adopted similar format of questions from Bos-Nehles et al. (2013) by asking respondents to what extent they were satisfied with their line managers in  implementing  seven HRM practices to them. Example items included “informing and encouraging me about training and development opportunities”,  “providing performance feedback to me”, “managing my performance”, and “promoting my participation within my team”. The  reliability coefficient was .93. Experienced HRM was measured by ten items which were adopted from Den Hartog et al. (2013) with coefficient of .90. Psychological contract fulfilment was measured by using five items adopted from Robinson and Morrison (2000) with reliability coefficient of .89. Intention to leave was measured by one question asking respondents if they would change their job (1 = yes, 0 = no).  For testing  hypotheses 1 and 2, multiple linear regression was used. For testing hypothesis 3, binary logistic regression was used.  Table 1 presents the results which provide support for the first three hypotheses on the impact of implemented HRM on experienced HRM (b = .71, p < .001), experienced HRM on psychological contract fulfilment  (b = .43, p < .001), and psychological contract fulfilment  on intention to leave (B = -.59, SE = .08, p < .001). Using Hayes’ (2013) PROCESS, the indirect effect of implemented HRM on intention to leave via experienced HRM on psychological contract fulfilment was  -.18 with 95% of confidence interval between -.23 and -.13, supporting hypothesis 4.

Discussion

This study set to reveal how HRM influences employees’ attitude by proposing and testing a linkage model where implemented HRM by line managers increases employees’ experienced HRM, which in turn develops their psychological contract fulfilment, ultimately reducing their intention to leave. Using data collected from 1903 professional workers in the accounting, consulting, ICT, law, marketing etc., support was found for the above linkage model. This study empirically tests the theoretical model proposed by McDermott et al. (2013). It contributes to our understanding of the line manager HRM implementation as a key driver for employees’ positive experience with organisational HRM practices, fulfilling their psychological contract and retaining them in the organisation. Organisations need to  invest in their managers to be able and motivated  to implement organisational HRM practices effectively.

References are available upon request.