José M. Peiró*, Hans de Witte**, Francisco Gracia*, Nele de Cuype** *University of Valencia. Spain

1. THE IMPACT OF CONTRACT PERMANENCY AND PSYCHOLOGICAL CONTRACT ON EMPLOYEE WELL-BEING AND RELATED OUTCOMES José M. Peiró*, Hans de Witte**, Francisco Gracia*, Nele de Cuype** *University of Valencia. Spain **University of Leuven. Belgium

2. INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING • Job flexibility is one of the ways companies use to adapt to global competition • Temporary employment is a form of numerical flexibility since it concerns the fluctuation of the number of employees who do not actually belong to the company • Effects of contractual flexibility on employees. In the literature they are viewed mainly as problematic based on several theories: Deprivation theory (comparison between primary and secondary labour market), psychological contract and job stress theory

3. INTRODUCTION: CONTRACT PERMANENCY AND PSYCHOLOGICAL WELL-BEING • Temporary employment. Can it be used as an ‘objetive’ indicator of job insecurity? • If this would be the case and it has a negative impact on well being, temporary workers should present lower levels of job satisfaction, life satisfacction and work self efficacy and higher levels of proensity to leave. • However, results from the literature are not unequivocal. Revision of 24 studies on temporary employees from the point of view of their occupational health and safety found a negative association 14 out of 24 (Quinlan et al. 2000).

4. INTRODUCTION: THE ROLE OF VOLITION • Under certain circumstances flexibility is also of interest for employees and produces benefits for them. • Volition of flexible types of contract could eliminate the negative effects of temporary contracts on psychological well being. • Thus, control of volition is foreseen in our study, when testing the effects of contract flexibility on well-being.

5. INTRODUCTION: PSYCHOLOGICAL CONTRACT AND WELL-BEING • Psychological contract (fairness and trust relationship) is expected to have a positive relation to well-being and self-efficacy. • Reseach has demonstrated that violation of PC are associated with a variety of negative outcomes. • However, no much research is available on the effects of psychological contract (fairness and trust) on psychological well being

6. INTRODUCTION: MODERATING ROLE OF PSYCHOLOGICAL CONTRACT. • One critical question of our study about the effects of temporary contract on psychological well being is the one related with the moderating role of psychological contract. • Does the PC buffer the negative effects of temporary, non preferred, contracts on psychological well being?. • If relationships between the employee and the company are perceived as fair and trustful, we expect that the negative effects of the flexible contract be buffered

7. AIMS OF THE STUDY • To set any association between types of employment contract and employee well-being and related outcomes • Assess the relationship between the state of the psychological contract and employee well-being and related outcomes • Test the moderating role of psychological contract between type of contract and employee well-being and related outcomes

8. METHOD: SAMPLE • 1675 employees • from 7 countries: Belgium (37.9%), Germany (12.1%), Israel (3.3%), Netherlands(3.2%), Spain(22.8%), Sweden (9%), U.K.(11.7%). • 3 sectors: Health care (35.5%); Retail (19.6%); Temporary Agencies (21.3%). Others (8.2%) • Type of contract • Permanent (69.7%) • Flexible contracts (fixed term, hourly based. Probation, other) (30.3%) • Sex: Male (33.7%) Female (66.3%) • Age: 35.02 (Sd= 10.21) • Education: Primary school (6.5%) Lower secondary (16.3%) Upper secondary (25.7%) College-university (no degree) (27.3%) College degree or higher (24.1%)

9. METHOD: VARIABLES • Sex: (0) Male; (1) Female • Contract: (0) Temporary; (1) Permanent • Volition: 3 items (Ellingson, 1998; Krausz (p.c. 2002) (alpha .73) • Psychological contract, Trust: 4 items (constructed) (alpha .78) • Psychological Contract, Fairness: 4 items (constructed) (alpha .84) • Job satisfaction: 5 items (Price, 1997) (alpha .82) • Life Satisfaction: 6 items (alpha .83) • Turnover intention: 2 items (Price, 1997) (alpha .72) • Work- related Self-efficacy: 6 items (Schyns & Collani, 2002) (alpha .86).

10. RESULTS: descriptive

11. RESULTS: correlations

12. RESULTS: job satisfaction

13. RESULTS: life satisfaction

14. RESULTS: LIFE SATISFACTION Interaction contract*trust

15. RESULTS: Propensity to leave

16. RESULTS: Self-efficacy

17. DISCUSSION AND CONCLUSIONS • Volition plays a significant and positive role in predicting psychological well-being. Having a contract of preference, be it temporary of permanent, has a possitive effect on job and life satisfaction, self-efficacy and negative on propensity to leave • More research is needed to explore the different effects of distinct types of temporary contracts on employees’ well-being

18. DISCUSSION AND CONCLUSIONS • Temporary contracts in our sample do not have a negative effect on psychological well being, and in some cases have a positive one. Two issues for further study • Types of temporary contracts in different countries • Stability in temporary contracts • Control for other job characteristics and HR practices in permanent and temporary jobs

19. DISCUSSION AND CONCLUSIONS • Psychological contract positively contributes to job satisfaction and life satisfaction and reduces propensity to leave. It has no impact on self efficacy • The interaction between contract and trust has only be found in the case of life satisfaction. • Trust plays a significan role in enhancing life satisfaction in permanent employees. • In order to contribute to life satisfaction it is not enough to have a permanent job it is also needed to experience trust in the relations with the employer.