The effect of psychological contract fulfillment on manager turnover intentions and its role as a mediator in a casual, limited-service restaurant environment

Abstract

Job satisfaction is the most consistent predictor of turnover intention; however, its correlation with turnover intention in most studies is modest. Leader–Member Exchange (LMX) has not proven to be a reliable predictor of turnover intention. Meanwhile, the psychological contract has emerged as a useful framework for understanding the employee/employer relationship. In the present research, which utilizes a sample of managers in a casual, limited-service restaurant environment, a structural equation model is developed in which psychological contract fulfillment serves a mediating role between LMX and turnover intention. Psychological contract fulfillment is also found to be a statistically significant predictor of turnover intention. Findings from the study suggest that management turnover may be mitigated if organizational leaders develop strong relationships with their managers based upon respect, trust and mutual obligation and then utilize these relationships to understand and fulfill the unwritten contract perceived to exist between the firm and its management personnel.