The Psychological Contract and Job Satisfaction: Experiences of a Group of Casual Workers

By Nelson, Lindsay; Tonks, Graeme et al. | Research and Practice in Human Resource Management, December 2006 | Go to article overview
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The Psychological Contract and Job Satisfaction: Experiences of a Group of Casual Workers

Nelson, Lindsay, Tonks, Graeme, Weymouth, Joshua, Research and Practice in Human Resource Management


Recent changes to the Australian workforce raise questions about the impact of casualisation on employees. This study explored the effects of casual employment on a group of university students using the psychological contract as an interpretative framework. Qualitative data indicated that while these employees adopted a transactional work orientation, they expressed concern over the relational obligations of employers. These findings were substantiated with quantitative research, which revealed low job satisfaction and problems with the psychological contract. Although respondents thought that the transactional dimension was satisfied, the relational contract remained mostly unfulfilled. In particular they felt exploited and treated less fairly than fulltime employees. This suggests management should pay more attention to the relational needs of all their employees.


The increased use of casual labour represents a significant development in the Australian labour market (Dawkins & Simpson 1993, Pocock 1998). The number of employees categorised by the Australian Bureau of Statistics (ABS 1996) as 'casual' rose from 700,000 in 1982 to 2.1 million in 2000, while 'casual density' increased over the same period from 13.3 per cent to 26.4 per cent (Burgess & Mitchell 2001). From 1988 to 2001, casual employment for workers, aged between 15 to 19 years, grew from 38 per cent to 66 per cent; and it is predicted that, if current trends continue, one in three Australian workers will be employed casually by 2010 (Watson, Buchanan, Campbell & Briggs 2003).

Casualisation has resulted from 'labour market fragmentation' and has been well documented over the past fifteen years or so. There is a general agreement that it emerged from political and economic factors, and labour market strategies used by employers to alleviate labour costs, and mitigate market uncertainty in order to gain a competitive advantage (Dawkins & Norris 1990, Walsh 1997, Campbell & Brosnan 1999, Standing 1999, Campbell & Burgess 2001, Hepworth & Murphy 2001, Watson, et al. 2003). Casual workers, compared with permanent workers, have substandard rights, benefits and protection, as well as substantial levels of precariousness (Campbell 2000). Although casual pay rates often include a loading (additional payment) intended as an insulation against employer exploitation (Campbell 1996), Campbell and Burgess (1997) argue that award provisions for casual employees are not aimed at providing protection and benefits, but are more to denying them, thus becoming an officially sanctioned gap in protection. Casual workers, therefore, may be classified as an inferior class of employee.

In this paper, perceptions of the psychological contract and job satisfaction of a group of casual workers is examined using established measures from Millward and Hopkins (1998), and O'Brien, Dowling, and Kabanoff (1978), together with interviews. The combination of both quantitative and qualitative approaches provides robustness to the findings. The objective is to identify the perceptions held by casual employees towards their employment situation, and as a consequence, their disposition towards their work and employer. The results begin with interviews followed by quantitative data. These results are discussed, together with a concluding section, to reflect on their relevance in terms of the work expectation of casual employees and the obligations of managers to endorse appropriate human resource management (HRM) practices.


The psychological contract has emerged as an analytical framework for analysing the impact which employment changes can have on individuals (Guest 2001). Based on an individual's perception that an employer has agreed to certain obligations in return for an employee's contributions to the organisation (Turnley & Feldman 2000), the psychological contract is an unique and subjective set of ".

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