INFLUENCE OF PSYCOLOGICAL CONTRACT ON EMPLOYEES TURNOVER INTENTION IN CASE OF ETHIOPIA COMMODITY EXCHANGE

Abstract

The purpose of this study was to investigate the effect of three type of psychological contract namely relational, transactional and balanced psychological contract on employee’s turnover intention in Ethiopia Commodity Exchange. The study adopted the quantitative research method and stratified sampling method was used. The data was collected using questioners from 106 (85% response rate) from employees of ECX. The obtained data was analyzed using the statistical package for social science (SPSS) using regression & correlation analyses. The result of this study indicates that majority of the respondents agreed that the relational psychological contract was the most practiced psychological contract type which emphasize that the company provides secure employment and has concern for personal wellbeing of its employees and families by providing stable benefit for employee’s family. The correlation result shows that the relationships between the three variables of the study were negative and moderate, except the relation between relational and balanced psychological contract. And relational psychological contract has significant and negative correlations with employee’s turnover intention. Moreover, relational psychological contract is the most contributing psychological contract traits in the prediction of employee turnover intention with beta value .302. This result shows that ECX need to give more emphasis on providing more secure employment, stable benefit and pass decisions with employee’s interest in mind. The present paper recommends to ECX about the need to enhance steady employment, give emphasis for employee’s personal welfare, communication prior to decisions have been made and provide long term developmental opportunities to change the attitudes of employees towards employee’s intention to leave.