The manager as employer agent: The role of manager personality and organizational context in psychological contracts

Managers develop psychological contracts (PCs) with staff as part of their people management responsibilities. A second-stage mediated moderation model explains how a manager’s personality influences the content and fulfillment of PCs in different organizational contexts. The paper aims to discuss these issues.

Survey data from 749 managers at Australian organizations were collected and regression analyses were used to test the hypotheses. The Edwards and Lambert (2007) approach was used to analyze conditional indirect effects.

Managers high on agreeableness, conscientiousness and extraversion are more likely to establish relational PCs with their staff than managers low on these personality traits. The effects of agreeableness and conscientiousness on the fulfillment of the PC occur through the “relational PC” variable. Once a relational PC is established, a manager’s ability to fulfill the PC is constrained by the extent to which polices and practices are formalized.

Organizations may need to delegate more power and discretion to managers to enable them to fulfill employer obligations toward their staff, and/or clearly communicate to managers their boundaries in employment promises. In turn, managers need to be aware of personality’s influence on the creation and fulfillment of promises. Causality cannot be inferred because of the study’s cross-sectional data.

Research has focused on employees’ personality and perceptions of the PC. This study is the first to focus on managers’ personality and PC creation and fulfillment.