Amount: $23.81 |

Format: Ms Word |

1-5 chapters |


Bank Name: FCMB Bank

Account Type: Savings
Account number: 7749601025

Bank Name: Access Bank

Account Type: Current
Account number: 0107807602



The notion of the psychological contract is one very important variable that comes to bear on any social exchange situation or agreement between two persons.     Although implicit and many times unstated, it goes a long way to influence the positive or negative outcomes of such relationships. Nevertheless because of the peculiarities and economic characteristics associated with the Nigerian commercial banking industry, this study therefore seeks to thoroughly examine the concept of the psychological contract with special emphasis on the experiences of commercial banks’ employees in Nigeria.



  1. Background to the study

            Effective utilization of firms’ resources by management to gain competitive advantage, will repeatedly bring positive and desired results to a firm. To achieve this, both the organization and employee must blend to become formidable otherwise they would be swallowed up by the ever gathering storm engendered by rivalries that are usually characteristic of competitive markets. It is therefore not surprising that the employee-organization relationship has frequently emerged as a topic of interest for both organizational researchers and practitioners (Capelli, 1999; Rousseau, 1995; Tsui, Rearle, Pirler, & Hite, 1995). One very important variable in such relationships is the psychological contract.

History as far back as thousands of years ago provides that the idea of the psychological contract finds its origin in some of the world’s major religions. One of the most important prayers in the Jewish faith, for example, the Amidah, refers to the mutual expectations in essence the psychological contract between God and the Jewish people. More recently social and political philosophers such as Hobbes and Locke talked about a ‘social contract’ as an understanding between citizens and the state regarding reciprocal expectations, obligations and duties.

In today’s society the notion of  the social contract between individual citizens or country residents and the state continue to be fundamental to the lives of people everywhere .For persons in knowledge economies, the social contract is something  pretty much taken for granted. Citizens expect the state to provide them with things like a democratic process for electing a government, an equitable judicial system, an army and police to protect the country both   externally and internally, and social services such as education, public transport, healthcare and recreational spaces. To sustain protection by the state and other services they, for their part, have an obligation to pay taxes,  keep the laws of the land, and control the way they choose to express their feelings and  desires in other to peacefully and harmoniously co-exist with other people in the community. When this arrangement breaks down, as it appears to have done in Iraq, and almost did in some other countries, then the stability of society is threatened. The social contract has an implicit and typically unspoken nature and this is a major feature of the psychological contact.

Organisational researchers believe that When employees join an organization, they make an unwritten psychological contract with it. A psychological contract resembles a standard legal contract in some ways, but is less formal and less well defined”.

The psychological contract can be defined as “an individual’s beliefs about the terms of the exchange agreement between employee and employer” (Rousseau, 1989). Other research works with relations to the early development of the concept includes, Kotter (1973), Nicholson and Johns (1985) and some others. Some of these researchers focused on absence behaviour and the links between this and an individual’s ‘work contract’ with his/her organization.

Rousseau (1995) also made suggestions that psychological contract depends on the employee’s understanding of the explicit and implicit promises regarding the exchange of employee contributions (such as efforts, loyalty and ability) and organizational inducements (such as pay, promotion, job security). Two major components can be said to exist in the employment relationship: the legal contract of service, which covers the legal relations between the employer and the employee; and the psychological contract, which covers the behavioural relations between the parties. The legal expectations of this relationship are characterized by outcomes that are observable and quantifiable, while the psychological expectations are invisible, but nonetheless real. In this study our focus will be majorly from the employee aspect of the psychological contract construct.

  1.       Statement of the Research Problem

McLean Parks, Kidder, and Gallagher (1998) so aptly point out, “It is their perception of reality, not any so-called ‘objective’ reality, that shapes their expectations, their attitudes, and their behaviors. Consequently, to understand employee attitudes and behaviors, it is necessary to understand their perceptions—their reality” (1998:697).Employers, as change agents, necessarily need to understand the process of the psychological contract and how their employees’ behaviors and attitudes towards their jobs and the organization as a whole are influenced one way or the other by it.

Couple of renowned Writers and researchers as we would see after,  have looked into the psychological contracts as a whole examined the different sides to it that have been revealed overtime and have been able to clearly establish the significance of the study of this construct as a whole and how it relates to better understanding of employment relationships and effective  human resources management practices. However, not many studies have been done to examine the state of the psychological contract from specifically the Nigerian commercial bank’s employee’s angle, its process of formation and the impact of perceived breach of these unspoken expectations on employee’s job satisfaction and organizational commitment. Therefore this study will attempt to breach this gap in knowledge and help users understand this perspective of the psychological contract concept with focus on the Nigerian commercial banks’ employees.

1.3   Research Questions

This study seeks to answer the following research questions:

  1. What is the state of the psychological contract among commercial bank employees in Nigeria?
  2. What are the sources, and the process of formation of what constitutes the content of the psychological contract among Nigerian commercial bank employees?
  3. What is the dominant psychological contract type that exists among commercial banks’ employees in Nigeria?
  4. What significant effects will perceived breach of the psychological contract among commercial banks’ employees in Nigeria have on Job satisfaction and organizational commitment among them?

1.4   Objectives of the study

This study has been embarked upon to fulfill a purpose, this purpose however has been broken down into specific and clearly stated objectives. The specific objectives of this research includes to:

  1. Examine the state of the psychological contract among commercial bank employees in Nigeria;
  2. Identify the sources and analyze the process of formation of what constitutes the content of the psychological contract among Nigerian commercial bank employees;
  3. Identify  the dominant psychological contract type among Nigerian commercial banks’ employees;
  4. Examine the relationship that exist between perceived breach of the psychological contract and job satisfaction; perceived breach and organizational commitment among Nigerian commercial bank employees.

1.5     Significance of the Study

This study will add to the larger body of knowledge on the psychological contract literature, with major emphasis on the Nigerian commercial banks’ employees, therefore helping human resources management students and practitioners to enhance their knowledge generally on better ways of applying the practice to organizational situations.

This study will also attempt to help organizations, specifically Nigerian commercial banks’ management and other employers to understand more clearly the need to find out the state of employees’ psychological contract or their perceptions and expectations regarding the organization(content), the sources of such perceptions and the process of formation of such expectations, the breach effects on job satisfaction and Organizational commitment, this would help them maintain cutting edge practices in their Human Resource Management function and ensure higher retention of talented and productive employees in order to remain stable and formidable in the present ever evolving and competitive business world both locally and internationally, knowing that employees are the major drivers of the organization.

1.6       Scope of the study

This study seeks to examine the state of the psychological contract of employees in the banking sector .To this end, this study will be delimited to employees of eight (8) commercial banks in Benin City, Edo state, Nigeria. The banks are Stanbic IBTC bank, Diamond   Bank, Eco Bank, First City Monument Bank (FCMB), Access Bank, First bank, Fidelity Bank and United bank of Africa (UBA).The sample size is chosen because of ease of access to respondents and proximity to the researcher. The questionnaire designed as a research instrument for this study will be delimited to the research problems and questions identified earlier.

  1.       Limitations of the Study

In the course of carrying out this research, one of the major challenges experienced by the researcher was the inability to get sufficiently large number of respondents. Another major problem was the poor response gotten from some of the respondents, some of the respondents complained of being too busy to spare any time in filling the questionnaires, even though a number of them eventually filled it. The use of questionnaires made the researcher assure the respondents in no small manner that their anonymity will be protected, yet they weren’t all so willing to completely answer the questionnaires.

Since the researcher used only survey method through questionnaires for information gathering, and therefore result was based on this data gotten from this method. It was assumed that response was not in anyway influenced by anyone but by the freewill of the respondents.

Finally, the success of a study of this nature is majorly a function of time and financial resources among others, therefore it is of great importance to note that because of these same factors, a cross-sectional survey was carried out rather than a longitudinal survey which would have revealed far more extensive results in this research.