How does the psychological Contract effect the BPO employees in India and how much does this contribute in their attrition rate being high

ure of the other and thus creating an imbalance between them that leads to the breach of Psychological Contract.

Our working relationships are important features in our day -to-day lives. The social relationship employee s hold with one another and the relations between employer and employee can determine many aspects of an individual s behaviour. An employee s behaviour potentially impacts on an organization that experiences great performance and one that doesn t, for this reason, the employment relationship must be viewed with caution and a desire to preserve its fragile nature. Currently the employment relationship is known as  The Psychological Contract ; a concept that has much received notoriety in the last 40 years.

The concept of the psychological contract at a fundamental level represents an exchange relationship between employer and employee. Within this exchange are  The perceptions of both the parties to the employment relationship, organization and individual, of the reciprocal promises and obligations implied in that relationship. (Guest & Conway,2002:1).The definition considers the factors that succeed in shaping current relationships. The concept is valuable in that it strikes an interesting dichotomy through taking an individual perspective and generalizing it to organisation level; therefore considering both the individual nature of the psychological contract and the pertinence of the organisation as a whole. Furthermore, it endorses a voice for the individual employee whilst showing how the contexts of the company culture and policy shape their attitudes and behaviour. (Ibid.p.1). It is a valuable tool as it succeeds in drawing-out the intangible, subjective beliefs of workers, which frequently do not receive a platform for expression.

The Psychological contract presents a strong variable through which to drive research. With reference to Schein it is important as it can be used to determine:  ... whether people work effectively, whether they generate commitment, loyalty and enthusiasm for the organization and its goals, and whether they obtain satisfaction from their work. (Schein, 1965: 99 ). Consequently it will determine levels of organisational performance through the determination of how satisfied the workforce is with their daily experience of work.

Problem Statement

This research paper will helps us look at the perceptions and expectations of BPO employees when they enter into a psychological contract with their foreman and how the failure in fulfilment of these terms leads to the breach of the psychological contract existing between the two parties.

This would be done by finding out the reasons for high attrition rates in different BPO s in India and to what extent does breach of Psychological Contracts contribute to it. We will try to investigate how breach of Psychological Contracts has affected employees in these BPO s and especially focus on why 20 employees working for a BPO in India resigned on the same day. All these employees were working on the same business unit and the BPO belongs to one of the most successful corporate houses in India. The employees were paid on time, had job security due to the fact that the company was owned by one of the India s leading corporate giant. So what made them resign? Who was responsible for it? And what was the psychological impact it had on the employee s attitude (motivational level and employee s commitment)?

In the current economic scenario there is an air of insecurity prevailing throughout the world. Developed and developing countries all are affected by this downturn. Continuous economic changes, downsizing of the workforce, closing of many big and small companies world over like Lehman brothers, Northern Rock and HBOS are few examples of organisations affected by this economic uncertainty. All these factors make the employee wonder whether the conditions mentioned in these Psychological Contracts can be fulfilled by the employer. Many employees feel ambiguous because of these economic conditions and are more conscious about their requirements and take extra care about their Psychological Contracts terms and condition before moving into new employment.

Whereas the employer has a total different viewpoint on the set of requirements, and are usually firm towards these expectations. His perspectives, reasoning and the requirement for a particular job would be stringent. As both the parties requirement may differ from each other and their understanding may also vary, this would lead in misunderstanding of certain terms which would be interpreted as breach by either party.

As the employees of our study group worked for one of the successful corporate houses and none of the above mentioned factors had an impact on their Psychological Contract, it seems that now a days the employees are more adamant on certain principles that they use to evaluate and assess their set of expectations.

Background of the Study

The BPO s in India are mainly catering to US and UK based business needs. So most of the BPO s either work evening or night shifts to match the client s timings. People working in BPO s are not happy with the odd working hours and it has been observed that people face health related issues. This is one of the reasons which also creates physiological imbalance which in turn develops a negative attitude among the individuals.

Also in order to meet the client requirements the employees are made to extend their shifts by mangers who handle operations. Thus management practices adapted by the employers play a huge role in creating a sense of trust and belief among the employees. On an average the shift durations is 9 hours and it takes about 4 hours for the employees to commute to and from the office which means that unofficially on an average they do a 13 hours shift.

Significance of the Study

The study will help us to find out the various reasons which led to their resignation. Whether everyone had the same reason or they had different reasons. This study will help us to find out how different people react to a certain situation and does it psychologically impact everyone in a similar way. Also we will try to find out if psychological imbalance in different individuals was directly related to the working environment created by the employer or whether it was influential (individuals reacting to a situation under someone s influence). Different individuals react to situations differently and we assume that people of the same age group are expected to react in a similar fashion to a certain situation. . It is the psychological contract between the employer and the employees which plays huge part in establishing a strong bond between them. Sims (1994) describes psychological contracts as a working relationship between the employee and the employer that specifies what they expect from each other (set of expectations).

This study will also help us to find out the extent to which the psychological contracts affect different individuals and whether individuals of different groups react in the same way. Whereas Formal contracts define our responsibilities in a more generalized form, psychologically binds us with that organization. It is the psychological contract between the employer and the employees which plays huge part in establish