Keywords

Defining the Psychological Contract

Rousseau (1989) defined the psychological contract as an individual’s belief regarding the terms and conditions of a reciprocal exchange agreement between that central person and another party . As such, the psychological contract can be seen as a set of beliefs about what the employee and employer expect to receive and are compelled to award in exchange for the other party’s contribution (Bal and Vink 2011) . In other words, from an employee’s viewpoint a psychological contract indicates what is assumed of what the organization has promised or offered in exchange for the employee’s commitment and contributions to the organization (Freese and Schalk 2011) .

Rousseau (2001) also claims that the factors that form the expectations and obligations of the psychological contract are formed before employment and can include the recruiting process, as well as socialization with the other employees when first starting in the job . The employee has certain ideas about the organization, even before he actually starts working there (Linde and Schalk 2006) . As indicated in Fig. 1, Rousseau (1995) states that the individual psychological contract consists of four influences of other contracts, namely the social contract (including labor legislation and other societal norms), the legal contract (such as the employment contract) , the normative contract (this usually is the norms of the groups the individual associate with), and the implicit contract (including the background as well as personal characteristics of the individual). Thus, a psychological contract can be influenced by pre-entry expectations , even if a clear actual employment contract exists .

Fig. 1
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Contracts influencing the psychological contract. (Adapted from Rousseau 1995, p. 9)

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Each individual has an unique psychological contract, based on his own understanding of obligations towards the organization (Clinton and Guest 2013) . Employees with balanced psychological contracts are less likely to want to leave a relationship, such as an employment relationship (Scott et al. 2001) , while employees with unreasonable expectations and unbalanced psychological contracts may easier exit employment relations, or become frustrated employees (Katou 2013) .

Psychological contract breach occurs when an employee experiences that the organization did not live up to its obligations (Restubog et al. 2006; Turnley et al. 2003) . According to Paul et al. (2000) and Morrison and Robinson (1997) , a failure to meet the employee’s expectations may result in a breach of the psychological contract between the employee and employer . If this breach is significant, it constitutes an experience of violation. Linde (2007) defined contract breach as the cognitive perception an employee experiences when the employee perceives that the organization has failed to uphold one or more aspects of the psychological contract. On the other hand, a violation of the psychological contract refers to the emotional and affective reactions, such as those that can arise when an employee feels that the organization failed to properly maintain its end of the psychological contract (Hellgren 2003; Linde 2007; Morrison and Robinson 1997) .

The Difference Between Expectations and Entitlements in the Psychological Contract

Since 1960, when research began on the psychological contract, expectations were considered interrelated to the psychological contract (Freese and Schalk 2008; Van den Heuvel and Schalk 2009; Paul et al. 2000) . According to the Oxford Dictionary (2010), an expectation is a strong belief about the way something should happen or how somebody should behave. When entering an employment relationship, people tend to develop certain expectations about that relationship. Employees learn what the other party (employer) expects them to contribute and, in return, these employees develop ideas about what they should receive for services rendered to the employer (De Jong et al. 2012) . Sutton and Griffin (2004) used the term ‘pre-entry expectations’ to refer to newcomer expectations that were formed prior to actual employment. These implicit or explicit expectations constitute the perceived contract—the psychological contract—in a relationship.

However, according to VandenBos (2006) , the word entitlement refers to the right or benefits legally bestowed on a person or group, for instance through legislation or a contract, or unreasonable claims to special consideration (the latter referring to psychological entitlement) . Snyders (2002, p. 21) describes entitlement as “a sense of deservingness”. It may become a sort of identity which presupposes the individual’s own rights and needs, such as the rights to status and power, others’ mind and bodies, space and place, not to pay attention to other peoples’ reactions, not to be empathic, view of life as a constant battle, winning and losing, with losing resulting in shame and humiliation for the individual, blame outwards and blame others without considering one’s own role in problems and processes, and viewing oneself as superior.

Snyders (2002) also described the entitlement as an attitude, or a way of viewing life . Harvey and Harris (2010) mention that a person or group may also feel a sense of entitlement due to factors within that person or group. They (Harvey and Harris 2010) refer to this perception of entitlement as psychological entitlement . Psychological entitlement can be perceived as a fairly stable and universal characteristic that occurs when an individual expect a high level of reward or preferential treatment regardless of his ability and performance level (Campbell et al. 2004; Harvey and Harris 2010) . According to Snyders (2002) , persons with this approach of entitlement believe that they are owed many things in life where they do not have to earn what they get, but they are just entitled to it, because of who they are .

When considering the model, adapted from Rousseau (1995) , in Fig. 1, there is a collective and individual component to the psychological contract theory. Psychological entitlement is a perception of an individual and—although it can be generalized to the group the individual is associated with—it doesn’t form part of the group’s entitlement beliefs as such . When a sense of deservingness arises as part of a normative contract , the reference to the term “normative entitlement” can be further explored. A normative entitlement can develop where a specific group believes that being part of that group promises special treatment. An example of such a normative entitlement can be in South Africa, where affirmative action is protected by law to balance out past racial discrimination in the workplace . Therefore certain groups receive preference in employment and remuneration, which can enhance entitlements .

From the above paragraphs the main difference between expectation and entitlement can be seen as the “sense of deservingness”, where an expectation is the individual’s anticipation to receive something and entitlement is the individual’s perceived right to receive something, even without a formal contract confirming this right. Considering this, there tend to be a fundamental difference between expectations and entitlements. In this chapter we attempt to identify the anticipatory psychological contract of undergraduate management students and explore the influence of entitlements on it.

Unrealistic Entitlements and Career Development

Unrealistic entitlement perceptions can cause problems for both employees and employers. Snyders (2002) confirms that there should be a warning to individuals who are in the process of attaining something that they perceive as significant—like a degree or diploma—and then fall subject to the danger of this psychological entitlement . Such a qualification level may also influence the entitlement belief of the candidates, since such a higher qualification can lead to higher expectations and entitlements. Ochse (2005) reports on a study that was conducted by the University of South Africa—determining the academic expectation and perceptions of university students—and found that all groups within South Africa have fairly unrealistic expectations for future conditions of employment and success, and that these students believed that they were intellectually above average. Furthermore, Ochse (2005) found that students from all racial and gender groups overestimated their future success, where they had lower actual achievement. In truth, the achievement of a degree does not entitle any person to anything but merely marks the beginning of a process of earning respect, success, status and capital (Snyders 2002) .

Such entitlements can develop into a menacing perception, which has the potential to lead to heavy complacency, low self-esteem and low productivity. In other words, the person becomes lazy, self-satisfied and comfortable. A job seeker with a high level of psychological entitlement can also miss good career opportunities by not being interested in work, perceived as beneath him .

High levels of entitlement can also influence employee conduct. Research that focused on psychological entitlement in the work context found that psychologically entitled employees displayed a tendency toward unethical behavior and conflict with their supervisors, high pay expectations, low levels of job satisfaction, and high levels of turnover intention (Harvey and Harris 2010; Harvey and Martinko 2009; Kets de Vries 2006; Levine 2005) .

Measuring the Anticipatory Psychological Contract of Undergraduate Management Students

We used a quantitative approach to data gathering to determine the expectation and entitlement levels of undergraduate management students in South Africa. Since this study focus on entitlement experiences, we incorporated

We also differentiated between participants who benefit from the affirmative policies of South Africa—the designated groups—and those who do not—the non-designated group. The motivation for this differentiation is based on the entitlements that were identified through interviews in a South African context, where affirmative action initiatives were associated with the perceived entitlement that preference should be given to previously disadvantaged employees (Gresse and Linde, in press) . Entitlement beliefs, based on employment equity regulations, are also relevant to samples outside of South Africa, since it is associated with legitimate expectations, protected by legal regulations.

Convenience sampling was used to select a sample from the study population composed of final year university students. Structured questionnaires were administered to students during a third year class at a tertiary academic institution. The questionnaire was completely anonymous and none of the information obtained made the respondents by any means identifiable. This was an attempt by the researchers to enhance the overall honesty of the respondents and to limit researcher bias .

Research Participants

The sample consisted of 179 (n = 179) third year economic and management sciences students. The majority of the participants were female (63.1 %) and 36.3 % male. The majority (91.1 %) of the respondents was between the ages of 20 and 22. 74.2 % of the respondents were from the designated group as defined in the Employment Equity Act (EEA; no 55 of 1998): Females, Africans, Indians, Coloreds and people with disabilities. 25.8 % of respondents were from the non-designated group (white males). The main qualifications that the respondents were studying for were in labor relations, human resource management, industrial psychology, business management and tourism.

Measuring Instrument

The questionnaire used was developed to measure the entitlement beliefs and anticipatory psychological contract . It consisted of three sections, where the first section gathered the biographical information of the respondents. This included their gender, employment equity group association, age and qualification. This information had to be filled out by the respondent. The second section consisted of items that determined the entitlement perception of respondents. There were a total of eight items in the second section of the questionnaire. A combination of a one to seven Likert scale and a dichotomous response scale were used for each item to determine the entitlement perception of that specific item. According to Trochim and Donnelly (2008) , Likert scaling can be defined as “the process of developing a scale in which the rating of the items is summed to get the final scale score; rating is usually done using a one-to-five disagree-to-agree response format” (p. 136). A dichotomous response scale is defined as a question that has only two possible responses (Trochim and Donnelly 2008) ; in this case the option for response was either positive or negative.

The final section of the questionnaire determined the various expectations levels of the participants. This section consisted of two parts. Firstly, the respondent had to provide his/her salary expectation (ZAR per month). Secondly, a one to seven Likert scale was used on a total of 15 items to determine the expectations level of the respondent .

Statistical Analysis

The statistical analysis was carried out with the IBM SPSS program (IBM 2011). Firstly, cross-tabulation was used to display the positive/negative frequency of entitlement beliefs . Factor analysis was used to determine the validity of the items in the questionnaire by analyzing the internal consistency between the items of entitlement factors and expectations. This was achieved through a data reduction process . Descriptive statistics will display the entitlement factors and expectations of the respondents. The descriptive statistics provided the mean, standard deviation, skewness, kurtosis and the Cronbach’s alpha coefficient of each factor. According to Trochim and Donnelly (2008) , the Cronbach’s alpha coefficient (α) determined the reliability of the questionnaire. According to Trochim and Donnelly (2008), a questionnaire is considered reliable when the Cronbach’s alpha coefficient is higher than 0.7 (α > 0.7). The correlation coefficient was used to determine the relationship between the factors that influence entitlement beliefs and the expectation of the respondents. Analysis of variance (ANOVA) has been used to determine the differences between designated and non-designated groups’ salary expectations and a t-test was administered to determine the difference between the male and female salary expectations. Pearson’s product moment correlation coefficients were used to determine the strength of the relationship between various expectation and entitlement variables.

Results

The frequency of positive/negative entitlement beliefs are displayed in Table 1. This frequency table displays the respondents’ belief regarding the effect of the identified entitlement factors on their employment expectations (qualifications, personality, professionalism, self-efficacy, affirmative action, labor market tendencies, and previous experience), as well as the difference between the EEA groups. Designated groups refer to the applicants to new jobs that receive preference, under the employment equity regulations of South Africa. Gresse and Linde (in press) indicated this preference as an entitlement of South African job seekers.

Table 1 Frequencies of positive/negative entitlement beliefs
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As indicated in Table 1, the majority of the respondents regarded their qualification, personality, professionalism, self-efficacy level, affirmative action and previous job experience as having a positive influence on their future employment, whereas the majority of respondents (52.5 %) considered the current labor market tendency as having a negative influence on their future employment.

The part of the questionnaire that measured the anticipatory expectations of the participants had a total of 15 items. An extraction method was used to reduce these 15 items into four encompassing components. The results of the extraction method for expectations are displayed in Table 2.

Table 2 Expectation extraction method
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The items for expectations could be grouped into three components, but considering the items in “employee wellness”, it was evident that these items’ characteristics did not correlate logically with each other, which led to the creation of an additional factor: “career aspiration” . Therefore the items medical, pension and employee assistance program formed part of the component “employee wellness” and skills development; career development, high work status, and respect in the workplace formed the additional component “career aspirations” .

The same process of extraction method was also used to reduce the amount of entitlement factor items. By conducting a principal component analysis some entitlement belief items could be grouped together to form a singular component (entitlement factors). The items that formed part of the entitlement factor component were qualification, personality, professionalism, self-efficacy, labor market tendency and previous job experience.

From the above extraction method the results of the respondents’ expectations will be provided in terms of expectations regarding employee wellness, conditions of employment, job benefits and occupation aspiration. The results of the entitlement beliefs of respondents will be provided in terms of entitlement factors, personality, affirmative action and workplace location. The results of the extraction method for expectations are displayed in Table 3.

Table 3 Entitlement beliefs extraction method
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The descriptive statistics and Cronbach’s alpha of the measurement components, expectations and entitlement factors, are reported in Table 4.

Table 4 Descriptive statistics and Cronbach’s alpha
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As indicated in Table 4, all the measurements of the questionnaire had a relative normal distribution. Considering the mean of the expectations components, the respondents’ expectations regarding employee wellness, occupation aspirations, conditions of employment and benefits were all relatively high considering that the average mean would be 3.50 (M = 3.50). The overall Cronbach’s alpha coefficients are acceptable when following the ≥ 0.07 guideline (Pallant 2007) .

Pearson product moment correlation coefficients were used to determine the strength of the relationship between expectation and entitlement variables. The correlation coefficients can be seen in Table 5.

Table 5 Correlations between entitlement factors and expectations
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The most significant findings are the correlation between the following factors: entitlement factors and occupation aspiration, which has statistical and medium practical significance; entitlement factors and benefits, which is practically significant with a large effect; personality and employee wellness, which has statistical and practical significance (medium effect); personality and occupational aspirations, which has statistical and medium practical significance; affirmative action and employee wellness, which is statistically and practical significant (medium effect); affirmative action and occupational aspirations, which has statistical and medium practical significance; and workplace location and employee wellness, which is statistically significant. Salary had no practical or statistical significance with any factors that influence an employee’s entitlement perception.

Comparative means were used to determine the difference between salary expectations of different EEA groups. The average salary expectations, according to EEA groups, were: Africans with a mean of R 15,695.65 pm, Indians with a mean of R 10,222.22 pm, Colored with a mean of R 13,846.15 pm and Whites with a mean of R 13,838.07 pm.

Analysis of variance (ANOVA) with EEA group as independent variable and salary as depended variable was used to determine if there was a significant difference between salary expectations of EEA groups. The results displayed that the significance level is 0.120, which indicate that there is no significant difference between salary expectations of these groups.

An independent-sample t-test was conducted to compare the salary expectations scores for males and females. There was a significant difference in scores for males (M = R 15,301.59 pm, SD = R 6,215.58) and females (M = R 13,004.46, SD = R 5,493.85) with sig.(2-tailed) = 0.012.

Conclusion

According to the results all the respondents, irrespective of EEA group association, had relative high normative entitlement perceptions and organizational expectations. This correlates with the findings of Ocshe (2005), who reports that all the groups in South Africa have fairly high expectations for future organizational success. The only difference between designated and non-designated groups is in terms of their perception of how certain factors will influence their future organizational expectations. The only factor that showed a difference between designated and non-designated group expectations was in terms of the potential affirmative action policy of their future employer, where the majority of the non-designated group regarded affirmative action as having a negative effect on future employment expectations. It should, however, still be noted that these individuals still had relative high expectations regarding their total expectations irrespective of affirmative action playing a major role in South Africa. According to Naumann et al. (2002) , total perceptions of entitlement in the social sciences are assumed to vary along a continuum, which has the effect that more than one factor may lead to the total entitlement perception of an individual and that some factors may have a greater impact on the total entitlement belief of prospective employees, for instance the respondents’ result for qualification where more than 95 % of the respondents regarded their qualification level as having a positive effect on future employment expectations. This may explain the reason why the respondents displayed high normative entitlement levels, also accompanied with high expectations levels.

An interesting finding from the results is that approximately 20 % of the designated group respondents regarded affirmative action as having a negative influence on their future expectations, although theoretically affirmative action enhances their future employment possibilities and career mobility. This notion is reinforced from the findings which displayed a practical and statistical significant link between the respondents’ believe regarding the influence of affirmative action and their occupational aspiration expectation. This response, where some designated group respondents view affirmative action as a negative influence on their employment expectations, may be as a result of the negative stigma associated with affirmative action appointees, where unqualified or incompetent employees are appointed on the basis of affirmative action (Sebola 2009) .

When considering the link between entitlement factors and expectations there was no statistical link between entitlement factors and salary expectations. In other words, salary expectations are influenced by other aspects than what is identified in this paper. A survey conducted by the South African Graduate Recruiter Association (SAGRA 2011) regarding the starting salaries of graduates in South Africa, found that the median graduate starting salary for 2011 was about R 130,000 per annum, which was approximately R 10,000 pm (SAGRA 2011). The highest starting salaries for 2011 were for positions at investment banks or fund managers, consulting firms, law firms and engineering or industrial companies, which each have a median starting salary in excess of R 230,000, which is approximately R 19,000 pm (SAGRA 2011). When considering the normative expectations of the respondents, all the designated and non-designated groups had higher salary expectations than what is regarded as average, with no significant difference between groups. There was a significant difference between male and female salary expectations, where females had a lower salary expectation than males. This may be due to the traditional perspective that women are stereotyped as a homemaker (Penchiliah 2005) and men as the primary breadwinner.

Practical Implications for Career Counseling and Guidance

The main entitlement factors that influenced the normative entitlement perception of designated and non-designated groups were characterized in terms of entitlement factors, personality, affirmative action policies and workplace location. The main expectations that employees had were characterized in terms of expectations regarding employee wellness, conditions of employment, benefits and career aspirations . From the results it was evident that the normative entitlement of both designated and non-designated groups was high, and this high entitlement belief level was also associated with high expectation levels.

From the findings there was a correlation between entitlement factors and expectation levels of prospective employees. At least one of each factor that influences the entitlement perception of prospective employees had a statistically and/or practically significant correlation with the future expectations of those individuals. This concludes that entitlement perceptions of prospective employees can be seen as an antecedent of expectations. Hurst and Good (2009) stated that the “pre-entry expectations are based on prior experiences . Therefore, college graduates take preconceived expectations to their first post-graduation job. And, because these pre-entry expectations contribute to their entitlement perceptions, we conceptualize pre-entry expectations to be an antecedent of entitlement perceptions” (p. 576). Although this is in contradiction with the abovementioned conclusion, it is important to note that Hurst and Good (2009) researched college graduates that already had experience, although not necessarily formal work experience, in the retail industry; thus it makes sense that these individuals alter their entitlement perception according to past experiences.

The career practitioner should be aware of the influence of entitlement perceptions on expectations, they may be able to better understand and shape graduate entitlement beliefs to prepare them for more realistic organizational expectations. It is possible to minimize breach or violation of the psychological contract between these prospective employees and their potential employers, by managing the normative entitlements and expectations of scholars and graduates. The career practitioner should prepare scholars and students (graduates) that unrealistic expectations can lead to the experience of contract breach, as well as violation. This can still materialize, even with a clear employment contract that the employee agrees with. Furthermore, a job seeker with high psychological entitlement levels will enhance an unrealistic psychological contract and can further amplify the violation experience .

Chapter Summary

This chapter provided an overview of the psychological contract, as well as pre-entry expectations and entitlements of scholars and students that can influence this contract. The perceived future employment expectations and obligations of undergraduate management students were investigated, based on entitlement and anticipatory psychological contract themes identified through a qualitative study on a similar study population. The influence of psychological entitlement on this anticipatory psychological contract was determined, after which the results of the empirical study were discussed. Finally, implications for career counseling and guidance in the contemporary workplace were explored.