THE IMPACT OF CONTRACT PERMANENCY AND PSYCHOLOGICAL CONTRACT ON EMPLOYEE WELL-BEING AND RELATED OUTCOMES José M. Peiró*, Hans de Witte**, Francisco Gracia*, Nele De Cuyper** *University of Valencia. Spain **University of Leuven. Belgium

INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING Job flexibility is one of the ways companies use to adapt to global competition Temporary employment is a form of numerical flexibility since it concerns the fluctuation of the number of employees not belonging to the company Effects of contractual flexibility on employees. In the literature they are mainly viewed as problematic based on several theories: Deprivation theory (comparison between primary and secondary labour market), psychological contract and job stress theory

INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING Temporary employment. Can it be used as an objective indicator of job insecurity? If this would be the case and it has a negative impact on well-being, temporary workers should present lower levels of job satisfaction, life satisfaction and work self efficacy and higher levels of propensity to leave. However, results from the literature are not unequivocal. In their revision Quinlan et al. (2000) found a negative association between temporary work and occupational health and safety in 14 out of 24 studies.

INTRODUCTION: THE ROLE OF VOLITION Under certain circumstances flexibility is also of interest for employees producing benefits for them. Volition of flexible types of contract could eliminate the negative effects of temporary contracts on psychological well-being. Thus, volition is controlled for in our study, when testing the effects of contract flexibility on well- being.

INTRODUCTION: PSYCHOLOGICAL CONTRACT AND WELL-BEING Psychological contract (fairness and trust relationship) is expected to be positively related to well-being and self-efficacy. Reseach has demonstrated that violation of PC is associated with a variety of negative outcomes. However, not much research is available on the effects of psychological contract (fairness and trust) on psychological well-being

INTRODUCTION: MODERATING ROLE OF PSYCHOLOGICAL CONTRACT. One critical question of our study about the effects of temporary contract on psychological well-being is the one related with the moderating role of psychological contract. Does the PC buffer the negative effects of temporary, non preferred, contracts on psychological well-being?. If relationships between the employee and the company are perceived as fair and trustful, we expect the negative effects of the temporary contract to be buffered

AIMS OF THE STUDY To set any association between types of employment contract and employee well-being and related outcomes Assess the relationship between the state of the psychological contract and employee well-being and related outcomes Test the moderating role of psychological contract between type of contract and employee well-being and related outcomes

METHOD: SAMPLE 1675 employees –from 7 countries: Belgium (639, 37.9%), Germany (204, 12.1%), Israel (55, 3.3%), Netherlands(54, 3.2%), Spain(385, 22.8%), Sweden (151, 9%), U.K.(197, 11.7%). –3 main sectors: Health care (599, 35.5%); Retail (331, 19.6%); Temporary Agencies (359, 21.3%). Others (396, 8.2%) –Type of contract Permanent (1153, 69.7%) Flexible contracts (fixed term, hourly based. Probation, temporary agency workers) (501, 30.3%) –Sex: Male (563, 33.7%) Female (1106, 66.3%) –Age: (Sx= 10.21) –Education: Primary school (107, 6.5%) Lower secondary (268, 16.3%) Upper secondary (424, 25.7%) College-university (no degree) (451, 27.3%) College degree or higher (398, 24.1%)

METHOD: SAMPLE 1675 employees –from 7 countries: Belgium (37.9%), Germany (12.1%), Israel (3.3%), Netherlands(3.2%), Spain(22.8%), Sweden (9%), U.K.(11.7%). –3 sectors: Health care (35.5%); Retail (19.6%); Temporary Agencies (21.3%). Others (8.2%) –Type of contract Permanent (69.7%) Flexible contracts (fixed term, hourly based. Probation, temporary agency workers) (30.3%) –Sex: Male (33.7%) Female (66.3%) –Age: (Sd= 10.21) –Education: Primary school (6.5%) Lower secondary (16.3%) Upper secondary (25.7%) College-university (no degree) (27.3%) College degree or higher (24.1%)

METHOD: VARIABLES Sex: (0) Male; (1) Female Contract: (0) Temporary; (1) Permanent Volition: 3 items (Ellingson, 1998; Krausz (p.c. 2002) (alpha.73) Psychological contract, Trust: 4 items (constructed) (alpha.78) Psychological Contract, Fairness: 4 items (constructed) (alpha.84) Job satisfaction: 5 items (Price, 1997) (alpha.82) Life Satisfaction: 6 items (alpha.83) Turnover intention: 2 items (Price, 1997) (alpha.72) Work- related Self-efficacy: 6 items (Schyns & Collani, 2002) (alpha.86).

RESULTS: descriptive

RESULTS: correlations

RESULTS: job satisfaction

RESULTS: life satisfaction

RESULTS: LIFE SATISFACTION Interaction contract*trust

RESULTS: Propensity to leave

RESULTS: Self-efficacy

DISCUSSION AND CONCLUSIONS Volition plays a significant and positive role in predicting psychological well-being. Having a contract of preference, be it temporary of permanent, has a positive effect on job and life satisfaction, self- efficacy and negative on propensity to leave More research is needed to explore the different effects of distinct types of temporary contracts on employees well-being

DISCUSSION AND CONCLUSIONS Temporary contracts in our sample do not have a negative effect on psychological well being, and in some cases have a positive one. Two issues for further study –Types of temporary contracts in different countries –Stability in temporary contracts –Control for other job characteristics and HR practices in permanent and temporary jobs

DISCUSSION AND CONCLUSIONS Psychological contract positively contributes to job satisfaction and life satisfaction and reduces propensity to leave. It has no impact on self efficacy The interaction between contract and trust has only be found in the case of life satisfaction. –Trust plays a significan role in enhancing life satisfaction in permanent employees. In order to contribute to life satisfaction it is not enough to have a permanent job it is also needed to experience trust in the relations with the employer.