Psychological Contract and Employee Engagement; The Mediating role of Job-Stress, evidence from Pakistan

This study has been conducted to examine the influence of the type of psychological contract on employee engagement by taking job-stress as a mediator. For this purpose, data were collected from three hundred and seventeen managers and officers working in seventeen private-sector commercial banks in Peshawar through a highly structured questionnaire. Statistical Package for Social Sciences version 16 was used for data analysis. In the first phase, descriptive statistics were used to find out the type of psychological contract of the respondents, their engagement level and the level of occupational stress. In the second phase, correlation and simple linear regression were used to study the impact of psychological contract on employee engagement. Similarly Process Macro was used for the mediation analysis. Findings indicate that the employees formed a strong psychological contract with their employer, and were actively engaged while experiencing a moderate level of job-stress. Furthermore, it was confirmed that a strong psychological contract has a significant positive influence on employee engagement. The study, however, did not find any evidence in support of the mediating role of job-stress for the given sample.