The Impact of Organizational Support on the Relationship between Income, Employee Benefit Programs and the Psychological Contract

Background: Along with the increased incidences of unstable employment throughout social work organizations because of the organizations’ periphery, insecure work environments can be more detrimental to social workers’ well-being and their outputs. The psychological contract is the biggest resource among social workers, and it is formed through their income and employee benefits. Indeed, psychological contracts have important work-related outcomes including job satisfaction, job performance, organizational commitment, organizational citizenship behavior, and organizational trust. The purpose of this study was to examine the influence of income and employee benefits on psychological contracts along with the mediating effects of organizational support on the relationships among social workers.

Method: Data were collected from 328 social workers in non-profit organizations (e.g., community center) in Gwangju, South Korea. The research questions are: 1) Does income affect psychological contract? 2) Do employee benefits affect psychological contract? 3) Does organizational support affect psychological contract? 4) Do organizational supports mediate the effects of income on psychological contracts? 5) Do organizational supports mediate the effects of employee benefits on psychological contracts? Using AMOS 20.0, structural equation modeling (SEM) path analysis was conducted to test the hypothesized theoretical mediation model among income, employee benefit, organizational support and psychological contract with mediators was conducted.

Results: The initial fit of the model was good: χ2 =192.582, p<0.001 CFI = 0.958, RMSEA = 0.082(0.069, 0.095). There was a significant positive prediction of psychological contract by organizational support (B=.349, p<.001), and of organizational support by employee benefits (B=.416, p<.001). This produced a significant positive indirect effect of employee benefits on psychological contracts via organizational support (B=.281, p<.001), partial mediation. However, income did not have a significant effect on organizational support, and income was a significant positive prediction of psychological contract (B=.182, p<.001).

Implication: This study provides empirical support for both the positive effects of income and employee benefits on social workers’ psychological contracts. Specifically, higher employee benefits were found to lead to more organizational support that, in turn, enhances psychological contracts. At the same time, income does not affect psychological contracts via organizational support. The findings suggest that social work organization or targeted assistance for those social workers designed to be supportive and provide better work environments needs to attend to both employee benefits and organizational support in order to improve suggestions on finding ways to increase psychological contracts among social workers.