Career stage and generational differences in psychological contracts Narelle Hess Challenge Consulting, Sydney, Australia, and

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1 The current issue and full text archive of this journal is available at Career stage and generational differences in psychological contracts Narelle Hess Challenge Consulting, Sydney, Australia, and Denise M. Jepsen School of Management, University of Technology, Sydney, Australia Career stage and generational differences 261 Received 28 September 2008 Revised 12 December 2008 Accepted 1 March 2009 Abstract Purpose The purpose of this paper is to determine how employees in different generational groups (or cohorts) and different career stages perceive their psychological contracts. Design/methodology/approach A survey of 345 working adults included psychological contract obligations, incentives and importance and the cognitive responses of job satisfaction, affective commitment and intention to leave. Super s Adult career concerns inventory measured career stage. Findings Small but significant differences between individuals psychological contract perceptions were based on both career stage and generational cohort: higher levels of balanced obligations and fulfilment were found than either relational or transactional obligations and fulfilment; relational and transactional obligations were significantly higher for Baby Boomers than Generation Xers; a stronger negative relationship was found between transactional fulfilment and intention to leave for Generation Xers than Generation Yers; higher balanced fulfilment had a significantly stronger positive relationship with job satisfaction for exploration compared with other career stages and commitment for exploration compared with maintenance stages. Research limitations/implications Cross-section methodology and difference scores in the female-dominated sample limits generalisability. The study s key theoretical contribution is the need to further investigate whether the protean career concept is operating within employees perceptions of their psychological contractual terms. Originality/value Despite widespread colloquial use of generational cohort groupings such as Baby Boomer, Generation X and Generation Y, small effect sizes were found. Implications for employers looking to manage employees psychological contracts include that there are greater similarities than differences between the different career stages and generational cohorts. Keywords Psychological contracts, Career development, Job satisfaction, Employee involvement Paper type Research paper The psychological contract (PC) has been defined as the implicit relationship between an employee and their organization that outlines what each should expect to give and receive in the relationship (Kotter, 1973). There has been a recent escalation of research exploring the psychological contract, driven by the need of researchers and practitioners to define the twenty-first century employment relationship (Atkinson, 2002; Granrose and Baccili, 2006; Latham and Pinder, 2005; Lester and Kickul, 2001). Organizations are required to manage an increasing number of older workers alongside younger workers in organizations with flatter structures and often, fewer career paths (Heijden et al., 2008; Kupperschmidt, 2000; Maguire, 2002; Pappas and Flaherty, 2006). The notion of lifetime employment is now often replaced by career Career Development International Vol. 14 No. 3, 2009 pp q Emerald Group Publishing Limited DOI /

2 CDI 14,3 262 flexibility. Individuals are making job and career changes that are not just upwards, but sideways and sometimes seemingly backwards where personal preferences and circumstances dictate (Briscoe et al., 2005). No longer can it be assumed that an older, supposedly baby boomer worker is more advanced in their career than their younger generation X or generation Y colleague (Kuppers Chmidt, 2000; Smola and Sutton, 2002). Examining generational differences is said to be a critical and underdeveloped area for management research (Westerman and Yamamura, 2007, p. 150). Using the colloquially popular generational cohort distinction for age, this paper examines the impact of age and career stage on the employee s psychological contract. The paper begins by examining the psychological contract and employees cognitive responses to their workplace exchange relationships before moving to an examination of age-related individual differences in perceptions of the psychological contract. Generational or cohort groups are defined before Baby Boomers, Generation X and Generation Y are described. Career stage theory is discussed using Super s (1957) theory of career development. The psychological contract The literature on the psychological contract (PC) has been dominated by the work of the individual-oriented approach (Rousseau, 1989, 1990, 1996, 2001, 2004; Rousseau and Tijoriwala, 1998). Rousseau s work on the structure of the PC is the most advanced in the field and used as the basis of the majority of PC research. Rousseau borrows from the economic exchange literature (Macneil, 1985) in defining a relational-to-transactional PC continuum. According to that literature, there are two types of contracts. Contracts may be relational or transactional. Relational contracts are open-ended and involve socio-emotional as well as economic terms. Transactional contracts are short-term and limited to an economic focus. Rousseau suggests that PCs, too, are relational or transactional in type. The two dimensions Rousseau used to distinguish between transactional and relational PCs are the duration of the relationship and the specificity of the performance requirements within the relationship. The duration dimension extends from short-term to long-term relationships (Kabanoff et al., 2000; MacNeil, 1985; Rousseau, 1989). The performance dimension refers to the degree of specificity of the performance standards (Rousseau, 2000). That is, the degree to which the performance standards are set by the employer or are left to the employee. These dimensions create a matrix of four relationship types (Figure 1. In a transactional exchange, organisations offer specific economic conditions as a primary incentive for certain tasks performed by the employee within a specific timeframe. At the other end of this continuum, the relational elements emphasise an open-ended relationship where trust, security, and loyalty are the focus of the exchange Figure 1. Psychological contracts typology

3 (Rousseau, 1995). Despite four contract types in the continuum, research into the content of the PC has largely focused on these two contract types. Herriot et al. (1997) found employees gave greater emphasis to the more tangible or transactional items than was expected by their managers, whereas Lester and Kickul (2001) found that the items related to the intrinsic or relational components of the PC received the highest employee importance ratings. More recently, researchers have found evidence of a changing PC. Perceptions of the relational component of the PC have reduced over time (De Meuse et al., 2001). These perceived changes supported Rousseau s (1995) framework of the changing PC. It has been reported that changes in the PC have stemmed from technological changes, downsizing and restructuring, and other social and labour market changes that have forced individuals to change organisations many times throughout their career (Pappas and Flaherty, 2006). Hall and Moss (1998) describe the shift in the PC as a shift from an organisational career to the protean career. In what they termed the new PC, the protean career moves the focus of career management to the individual while the organisation s role is to provide employees with opportunities for growth and development. The aim of the employee in the protean career is therefore to build the skills that ensure employability in a changing work context (Briscoe et al., 2005). This focus on individual development is synonymous with Rousseau s balanced PC, which emphasises high performance, ongoing development and scope for responsibility (Ho et al., 2006). Career stage and generational differences 263 Cognitive responses to the exchange relationship Beyond just looking at the contract terms, the PC definition provided by Rousseau extends Argyris (1960) and others definitions to include mutuality of obligations: An individual s belief in mutual obligations between that person and another party such as an employer (either firm or another person). This belief is predicated on the perception that a promise has been made (e.g. of employment or career opportunities) and a consideration offered in exchange for it (e.g. accepting a position, foregoing other job offers), binding the parties to some set of reciprocal obligations (Rousseau and Tijoriwala, 1998, p. 679). This mutuality of obligations is synonymous with social exchange theory. According to social exchange theory (Homans, 1958) relationships are a series of trading interactions and an examination of costs and rewards for the individual within the situation. Within the employment relationship, positive actions of employees are contingent on the rewarding reactions of employers, with positive exchanges over time leading to mutually and rewarding employment relationships (Vaughn and Hogg, 1998). However, when these exhanges are not mutual, negative outcomes result for both the employee and employer (Cropanzano and Mitchell, 2005). Based on the mutuality of the PC, when organisations fulfil or breach the PC terms, employees reciprocate both cognitively and behaviourally. The three most investigated responses of breach or fulfilment PC have been the cognitive responses of job satisfaction, affective commitment and intention to leave (Zhao et al., 2007). Job satisfaction is a function of the perceived relationship between what an individual wants from their job and what they perceive they are getting from their job. Affective commitment refers to an individual s emotional attachment, identification with and involvement in the organization (Allen and Meyer, 1990; Meyer et al., 2002) and reflects an employee s subjective assessment of their probability of leaving within a specific time (Tsui et al.,

4 CDI 14, ; Zhao et al., 2007). Increased breach has been found with lower job satisfaction (Gakovic and Tetrick, 2003; Lester and Kickul, 2001; Porter et al., 1998; Sutton and Griffin, 2004). Increased PC fulfilment has been found with reduced intention to leave the organization, higher job satisfaction and higher affective commitment (Flood et al., 2005; Larwood et al., 1998). Individual differences in the exchange relationship Beyond looking at this overall exchange between employees and employers, Rousseau (1995) identified the need to take individual differences into consideration in how employees perceive their PC terms, based on their differing motives and attitudes. An individual difference that has attracted a large amount of interest from researchers and practitioners has been the impact of perceived differences in employees motives based on age. Age-related differences have been found in relation to absenteeism, job satisfaction, job involvement (Rhodes, 1983), compensation and pay (Pappas and Flaherty, 2006; Rhodes, 1983), turnover (Finegold et al., 2002; Rhodes, 1983), values and needs (Conway, 2004; Pogson et al., 2003; Smola and Sutton, 2002) and organizational commitment (Allen and Meyer, 1993; Cohen, 1993; Conway, 2004; Finegold et al., 2002; Westerman and Yamamura, 2007). The two main theoretical frameworks used to explain and test age-related differences have been generational (cohort) and career stage. However, both research areas have been plagued by inconsistencies in measures. Generational or cohort differences A cohort is defined as individuals born in the same time period who are influenced by a particular set of historical and cultural conditions (Beck, 2001, p. 37). According to developmental theories, it is these conditions that tend to distinguish one generation from the next, so that each generational group has a unique pattern of behaviour based on their shared experiences (Beck, 2001; Kupperschmidt, 2000; Smola and Sutton, 2002; Westerman and Yamamura, 2007). Much research is reported using cohort labelling (for example, Broadbridge et al., 2007; Feyerherm and Vick, 2005; Terjesen et al., 2007) despite a lack of consistency in the labelling of birth years. This inconsistency has at times resulted in somewhat arbritary groupings of people (Westerman and Yamamura, 2007). To overcome these concerns in defining generational groups, Egri and Ralston (2004) recommend confirming cutoffs of generational groups through statistical analysis of what Kupperschmidt (2000) termed the core and cusp years of generational groupings. Yet despite the definitional concerns, there has been general consensus on the types of generational groups and the shared experiences that have influenced their values and motivations (Smola and Sutton, 2002; Westerman and Yamamura, 2007; Yu and Miller, 2004). The two generational groups most prevalent in today s workforce are Baby Boomers and Generation X (Smola and Sutton, 2002). Baby Boomers were born during 1946 to 1964 (Egri and Ralston, 2004; Smola and Sutton, 2002; Westerman and Yamamura, 2007). This group is often associated with values such as optimism and team orientation. They were raised as children with the psychology of entitlement and expecting the best from life (Smola and Sutton, 2002). Generation X, born during 1965 to 1979, grew up with financial, family and societal insecurity; rapid change; great diversity; and a lack of solid traditions (Smola and Sutton, 2002, p. 365). Generation X was also greatly influenced by changes in the labour force, including corporate

5 downsizing which saw their parents experience mass redundancies (Kupperschmidt, 2000), resulting in Generation X being seen as potentially cynical and untrusting of organizations (Westerman and Yamamura, 2007). In exploring these perceived differences between generational groups, Smola and Sutton (2002) found that the work values of Generation Xers were significantly different from those of the Baby Boomers. Generation Xers were less loyal to the organization and more me oriented. They wanted promotions more quickly and were less likely to feel that work should be an important part of one s life than Baby Boomers. Furthermore, Westerman and Yamamura s (2007) research into the generational preferences of work environment fit found goal orientation to have greater influence on Generation Xers satisfaction and intention to remain, whereas relationship fit had greater influence for Baby Boomers satisfaction and intention to remain (Westerman and Yamamura, 2007). Neither study measured generational differences for the newest group to enter the workforce, Generation Y, born 1980 to 1994 (Smola and Sutton, 2002). Generation Y are seen to be influenced by technological advancements and like Generation X have observed their parents being affected by corporate downsizing. Thus, Smola and Sutton (2002) purport that Generation Y will want even higher salaries, flexible working arrangements and more financial leverage than Generation X. Career stage and generational differences 265 Career stage differences An alternative theory to test and explain age-related differences has been related to differences in individual needs based on their career stage. According to Super s theory of career development (Super, 1957; Super et al., 1988) and later Savickas (2002) developmental theory of vocational behaviour, individuals experience four areas of career concern during the development of their careers. During the exploration stage, individuals are concerned with clarifying their career interests and aptitudes in order to make choices about their career direction and constructing their career. In the establishment stage, individuals are interested in consolidating their career choices. During the maintenance stage, individuals strive to hold on to what they have established. The final disengagement stage sees a decline in an individual s energy for and interest in their occupational area (Savickas, 2002; Smart, 1998; Super, 1957; Super et al., 1988). Measurement inconsistency has also limited the applicability of career stage theory. Career stage has been operationalised by a range of variable combinations, including rank of faculty member (Eck Peluchette and Jeanquart, 2000), occupational tenure (Aryee et al., 1994), age, organizational tenure and position tenure (Allen and Meyer, 1993; Morrow and McElroy, 1987), age (Pogson et al., 2003) and age as a function of organizational tenure (Cohen, 1993; Conway, 2004). Most of these conceptualisations have defined career stages as linear developments over the course of a lifetime. However, Super (1957) noted that employees could recycle back through the stages in mini-cycles rather than follow a consistent maxi-cycle through each stage sequentially. Thus, career stages should not be measured through linear measures of age and tenure, but through assessment of career concerns, related to career stages. Despite these methodological inconsistencies, researchers have found significant differences across the career stages for work ethic (Pogson et al., 2003), attitudes toward work (Smart, 1998), job attitudes (Flaherty and Pappas, 2002) and organizational commitment (Allen and Meyer, 1993). Allen and Meyer (1993) noted

6 CDI 14,3 266 that the career stage effect was only moderate, which led them to conclude that the importance of career stage as a concept in organizational commitment may be overstated. Therefore, rather than looking at a direct relationship between career stage and organizational variables, more recent investigations have looked at moderating variables between career stage and outcome variables. A study of remuneration strategies for different career stages found that employees differed in their job satisfaction and intention to remain based on their career stage (Flaherty and Pappas, 2002). Flaherty and Pappas (2002) concluded that salespeople s attitudes change according to their career stage and with these changes certain organizational management strategies become more or less appropriate. Similarly, Conway (2004) suggested that managing employee experiences across the career stages could be usefully considered by organizations. Different human resources practices based on career stage resulted in different levels of organizational commitment. Those in early career were more committed by career development and involvement, while those in mid career were more committed by job security and those in late career were more committed by income, involvement and employability. Aims of the current study Organizations are finding it increasingly difficult to understand and manage the PCs with their employees given the changing nature of the twenty-first century world of work. The present study aims to advance understanding of the PC through investigating the influences of age-related individual differences using both generational cohort and career stage analyses, as shown in Figure 2. The study first explores PC content and cognitive responses to PC fulfilment across employees, with the hypothesis that: H1. Respondents will report higher levels of balanced obligations than relational or transactional obligations. Figure 2. Hyphothesised relationships between age-related groups and the psychological contract

7 H2. Higher levels of balanced fulfilment will have stronger positive relationships with job satisfaction and affective commitment and a stronger negative relationship with intention to leave, than either transactional or relational fulfilment. To determine generational and career stage differences in the content of PC, it is hypothesised: H3a. Relational obligations will be higher for Baby Boomers than either Generation Xers or Generation Yers and the opposite will be true for transactional obligations. H3b. Balanced obligations will be higher for exploration stagers, relational obligations will be higher for establishment and maintenance stagers and transactional obligations will be higher for disengagement stagers than other career stagers. To determine generational and career differences in cognitive responses to PC fulfilment, it is hypothesised that: H4a. Balanced and relational fulfilment relationships with job satisfaction, commitment and intention to leave will be stronger for Baby Boomers than for either Generation Xers or Generation Yers and the opposite will be true for transactional fulfilment. H4b. With respect to relationships with job satisfaction, commitment and intention to leave, balanced fulfilment relationships will be stronger for exploration stagers, relational fulfilment relationships will be stronger for establishment and maintenance stagers while transactional fulfilment relationships will be stronger for disengagement stagers over other career stages. Career stage and generational differences 267 Method Procedure and data collection An online survey was distributed to 165 employees in a health insurance organization and approximately 500 currently-working individuals in a variety of occupations and industries on the mailing list of a management consulting firm. Respondent confidentiality was assured and informed consent was obtained. A total of 345 respondents from the two sources (76 insurance and 269 other) represented response rates of 46 per cent and 53 per cent respectively. Nine respondents were excluded due to missing data and a further 48 temporary staff responses were excluded because temporary staff have a different PC arrangement than permanent staff members (Chambel and Castanheira, 2005; De Cuyper and De Witte, 2006). There were 287 useable responses. Respondents Of the respondents 75 per cent were female, closely resembling the profile of the two sources sampled. Respondents ranged in age from 18 to 62 (M ¼ 37.66, SD ¼ 10.88), 90 per cent were employed full-time and 51 per cent had completed a university degree. Respondents were from a variety of occupational areas, including administrative (29 per cent), managerial (16 per cent), human resources (11 per cent), sales/marketing (11

8 CDI 14,3 268 per cent) and customer service (10 per cent). Respondents represented a range of industries, including insurance (25 per cent), finance (13 per cent), not-for-profit/government (10 per cent) and manufacturing (8 per cent). A third (36 per cent) of respondents had been employed by their organization for one year or less, with 39 per cent employed for two to five years. Measures Psychological contract obligations. Respondents were asked to indicate the extent to which they believed their employer was obligated to provide certain employment commitments or obligations. The 12 items (Coyle-Shapiro, 2002) explored parts of the employment relationship investigated in previous research (e.g. Coyle-Shapiro, 2002; Ho et al., 2006; Rousseau, 1990, 2000) and included long-term employment, job security, high pay based on industry standards, support to learn new skills, interesting work, pay based on current level of performance, wide scope of responsibility, career development, employment for a specified time period, be responsive to employee concerns and well-being, opportunities for promotion and a job limited to specific and well defined responsibilities. The stem of these items was Consider your relationship with your current employer. To what extent do you believe your employer is obligated to make the following commitment or obligation to you? An example is Long-term employment. A five point Likert scale from 1 ¼ not at all to 5 ¼ a very great extent was used. Respondents were also asked to indicate how important they believed it was for their employer to provide the same list of 12 obligations. The stem for these items was We would now like you to rate how important this same list of obligations or commitments is to you. A seven point Likert scale from 1 ¼ not at all important to 7 ¼ extremely important was used. To create a respondent s score for employer obligation, the level of obligation of each item was multiplied by its corresponding importance rating. Therefore, an item that was highly obligated and had high importance was given a greater weighting than an item that was weakly obligated and of low importance. This method has been used in previous research investigating the obligations of a PC (Coyle-Shapiro, 2002). Psychological contract fulfilment based on psychological contract incentives. There are two main ways that fulfilment has been measured, either by calculating a global measure or by calculating a specific fulfilment level based on a composite of obligations and incentives. The composite approach allows the researcher to compare the effects of the different types of fulfilment, namely: transactional, balanced and relational fulfilment (Ho et al., 2006; Shalk and Roe, 2007). The composite approach of calculating PC fulfilment is used in this study. Cronbach s alphas of 0.88, 0.89 and 0.77 were achieved for the relational, transactional and balance fulfilment scales respectively. To calculate PC incentives, respondents were asked to indicate the extent to which they had in practice been provided with the same list of 12 commitment or obligation items by their employer. Using a stem of To what extent do you believe your employer has provided you with these commitments or obligations a sample item is I am offered long term employment with this organisation. A five point Likert scale from 1 ¼ not at all to 5 ¼ a very great extent was used. These ratings were also multiplied by the respective importance level given to the matching obligation item.

9 In accordance with Coyle-Shapiro s (2002) procedure, PC fulfilment was calculated by subtracting employer obligations scores from employer incentives scores. Calculations were made for each type of psychological fulfilment, using the mean scores of relational, transactional and balanced items for both the obligations and incentives measures. For example, the mean relational obligations score was subtracted from the mean relational incentives score, forming the level of relational fulfilment for each respondent. Career stage. A total of 60 items from Super et al. s (1988) Adult Career Concerns Inventory (ACCI) were used to determine respondents level of career concern. There were 15 items for each career stage, including exploration (e.g. deciding what I want to do for a living), establishment (e.g. getting established in my work), maintenance (e.g. maintaining the occupational position I have achieved) and disengagement (e.g. cutting down on my working hours). A five point Likert scale from 1 ¼ no concern to 5 ¼ great concern was used. Respondents current career stage was calculated by the respondent s highest mean career concern score and highest number of great concern responses. For example, a respondent with equal mean scores across exploration and establishment, but a higher number of great concern responses in the exploration stage were allocated to the exploration stage for further analyses. This method was based on recommendations by Super et al. (1988). There were 22 respondents removed from career stage analyses because there was no clear variability in their career concerns scores. Distribution of remaining respondents across the four career stages was satisfactory: exploration (n ¼ 73), establishment (n ¼ 83), maintenance (n ¼ 50) and disengagement (n ¼ 59). Job satisfaction Respondents job satisfaction was measured with six items (Tsui et al., 1992), an example being I am satisfied with the nature of the work I perform. A seven-point Likert scale from 1 ¼ strongly disagree to 7 ¼ strongly agree was used. A Cronbach s alpha of 0.84 was achieved. Commitment. Respondents commitment to their organisation was measured using Allen and Meyer s (1990) eight-item affective commitment scale. An example item is I would be very happy to spend the rest of my life with this organization. A seven-point Likert scale from 1 ¼ strongly disagree to 7 ¼ strongly agree was used. A Cronbach s alpha of 0.84 was achieved. Intention to leave. The extent to which respondents intended to leave their employer was measured by three items adapted from Wayne et al. s (1997) scale. An example item is I am actively looking for a job outside this organization. A seven-point Likert scale from 1 ¼ strongly disagree to 7 ¼ strongly agree was used. A Cronbach s alpha of 0.85 was achieved scale. Generational cohort. Generational cohorts were calculated according to Egri and Ralston s (2004) method. To determine appropriate generational group cut-offs preliminary one-way ANOVAs were performed on the respondents PC obligations and cognitive response scores for the core and cusp generational groups. Respondents in the Silent Generation/Baby Boomer cusp ( ) had significantly different scores to the core Baby Boomer group so these three respondents were removed from further generational differences analyses. Respondents in the Baby Boomer/Generation X cusp ( ) had similar scores to the core Baby Boomer ( ) group so were combined with the Baby Boomers ( ) group for further analyses. Respondents in the Generation X/Generation Y cusp ( ) had similar scores to the core Career stage and generational differences 269

10 CDI 14,3 270 Generation X ( ) group so these two groups were joined to form Generation X ( ) for further analyses. The final generational group was the Generation Y ( ) group. The three cohorts were therefore Baby Boomers (n ¼ 100), Generation X (n ¼ 107) and Generation Y (n ¼ 77). Dummy variables. To compare generational group and career stage differences, dummy variables were created for each of the generational group and career stage categories (Aguinis, 2004; Aitken and West, 1991). Control variables. In order to rule out alternate explanations of generational group or career stage differences, individual and work-related variables found to be important in previous investigations were included as control variables. Variables found to influence an employees perception of work based on their life stage include year of birth, gender, education, number of dependents, organizational tenure, position tenure and career tenure (Auster, 2001; Beck, 2001; Scandura and Lankau, 1997). Results Scale means, standard deviations, Cronbach alpha reliabilities and intercorrelations are presented in Table I. Psychological contract types Inspection of the data and histograms confirmed the PC incentives variables were normally distributed. The correlation matrix indicated evidence of latent factors, with correlations above 0.3 and the large and significant Bartlett s test of sphericity and the Keyser-Meyer Olkin statistic indicating the data was suitable for factor analysis. An exploratory factor analysis using maximum likelihood extraction and oblimin rotation (Conway and Huffcutt, 2003; Fabrigar et al., 1999) on the incentives scores was conducted based on Ho et al. s (2006) three-factor PC measure. Table II shows the resulting three factors each captured facets comparable to Rousseau s (1995) PC terms. The first factor, explaining 47 per cent variance, comprised balanced incentives including ongoing development and performance (Rousseau, 1995). The second factor, explaining 10 per cent variance, comprised just two items of long-term stability and job security, consistent with Rousseau s (1995) relational contract. Finally, the four items in the third factor, explaining 8 per cent variance, related to a transactional relationship, including short-term benefits, pay and specific employment terms. Respondents levels of PC obligations, PC incentives and PC fulfilment were calculated using these three factors. Hypothesis 1: psychological contract obligations To investigate the within-subjects main effect, two post hoc comparisons (paired t-tests) were conducted using a Bonferonni adjusted alpha of (Tabachnick and Fidell, 2001). The level of balanced obligations was significantly higher than both relational t(286) ¼ , p, and transactional obligations t(286) ¼ , p, H1 was supported. Hypothesis 2: cognitive responses to psychological contract fulfilment Pearson s correlations of balanced, transactional and relational fulfilment and cognitive responses were inspected. Balanced fulfilment had a moderate positive relationship with commitment and job satisfaction and a moderate negative relationship with intention to leave. Both transactional fulfilment and relational

11 Mean SD PC employer obligations extent (0.90) PC employer obligations importance ** (0.90) PC employer obligation calculation ** 0.84 ** (0.90) PC incentives extent ** 0.41 ** 0.37 ** (0.89) PC incentives importance calculation ** 0.80 ** 0.69 ** 0.85 ** (0.90) PC fulfilment relational contracts ** ** ** ** (0.88) PC fulfilment transactional contracts ** 0.12 * 0.42 ** ** ** 0.41 ** (0.89) PC fulfilment balanced contracts ** 0.13 * 0.43 ** ** ** 0.42 ** 0.67 ** (0.77) Job satisfaction ** 0.13 * ** 0.46 ** ** ** ** (0.84) Organisational commitment * 0.14 * ** 0.37 ** ** ** ** ** (0.85) Intention to leave * ** ** 0.29 ** 0.25 ** ** ** ** (0.84) Notes: * p, 0.05; ** p, 0.01; Cronbach s alphas are given in parathenses on the diagonal Career stage and generational differences 271 Table I. Means, standard deviations, reliabilities and intercorrelations

12 CDI 14,3 272 Table II. Factor analysis of psychological contract incentives scores Balanced Relational Transactional Career development 0.91 Promotional opportunities 0.78 Support to learn 0.71 Interesting work 0.71 Wide scope of responsibility 0.67 Responsive to employee concerns 0.53 Job security Long-term employment Pay based on current level of performance 0.85 High pay based on industry standards 0.74 Employment for a specific time period 0.41 Job limited to specific responsibilities 0.34 Eigenvalues Variance explained fulfilment had a weak positive relationship with job satisfaction and commitment and a weak negative relationship with intention to leave. These relationships indicate the higher the fulfilment the higher the job satisfaction and commitment and lower the intention to leave. H2 was supported. Hypothesis 3: generational cohort and career stage differences Relational, transactional and balanced PC obligation scores for generational groups and career stages were analysed using a mixed repeated measures ANOVA (Howell, 2002; Tabachnick and Fidell, 2001). The ANOVA test assumptions were satisfactory, other than that the homogeneity of covariance was not achieved for obligations. Using an alpha level of 0.05, the between-subjects main effect for generational group was significant, F (2, 250) ¼ 3.67, p, 0.05, partial h 2 ¼ The within-subjects main effect for obligations was also significant with a Greenhouse-Geisser adjustment of the degrees of freedom, F (1.77, ) ¼ 4.67, p, 0.01, partial h 2 ¼ To investigate the between-subjects main effect of generational group, four post hoc comparisons (independent t tests) were conducted using the Bonferonni adjusted alpha of Testing H3a, there was a significant difference between relational obligations for Generation X and Baby Boomers t(205) ¼ , p, 0.008, with relational obligations higher for Baby Boomers than for Generation X. No significant differences were found between Generation Y and Baby Boomers for relational obligations. The difference between transactional obligations for Generation X and Baby Boomers was significant at the conventional alpha level of 0.05, t(205) ¼ 22.14, p, 0.05, with transactional obligations higher for Baby Boomers than Generation X. No significant difference was found between Generation Y and Baby Boomers for transactional obligations. H3a was partially supported. No significant main or interaction effects were found for career stage. H3b was not supported. Hierarchical regressions To test the remaining hypotheses, hierarchical regressions between different levels of PC fulfilment and commitment, job satisfaction and intention to leave were performed. These regressions were used to test moderated relationships (Conway, 2004; Finegold

13 et al., 2002). Control variables (number of dependent children, age, gender, organizational tenure, position tenure, career tenure and education) were entered at step one in each regression. In step two all the main effect variables (generational group, career stage and PC fulfilment) were entered. In step three all interaction effects with either generational group or career stage were entered. Interaction effects were created by multiplying each predictor variable by the career stage or generational group dummy variables. To serve as a basis of comparison the dummy variables for Generation Y and exploration were excluded from the initial analyses (Aguinis, 2004; Aitken and West, 1991). Subsequent regression analyses were conducted to compare the other generational groups and career stages with Generation Y and exploration. Hierarchical regression assumptions were satisfactory. To reduce family-wise error Bonferonni adjusted alpha was set at (Tabachnick and Fidell, 2001), however significant results at the conventional alpha level of 0.05 and 0.01 are reported due to the power problem in identifying significant interactions in multiple regression (Aguinis, 2004; Tabachnick and Fidell, 2001) The regressions results for H4a indicated that generational interactions with PC fulfilment explained a small but non-significant amount of additional variance in both job satisfaction (R 2 Change ¼ 0.010, p. 0.05) and commitment (R 2 Change ¼ 0.036, p. 0.05). There were no significant interactions for generational group at the Bonferonni adjusted alpha level. However with alpha set at 0.01 there was a significantly stronger positive relationship between balanced fulfilment and commitment for Baby Boomers than for Generation X (b ¼ , p, 0.01). A small and significant amount of additional variance was found for intention to leave (R 2 Change ¼ 0.051, p, 0.01). Lower transactional fulfilment was associated with higher intention to leave for Generation X as compared to Generation Y (b ¼ 0.342, p, 0.01) whereas lower balanced fulfilment was associated with higher intention to leave for Generation Y (b ¼ 0.289, p, 0.01) and Baby Boomers (b ¼ 0.436, p, 0.003) compared to Generation X. H4a was partially supported. Table III shows the generational cohorts hierarchical regressions for job satisfaction, commitment and intention to leave. Career stage interactions with PC fulfilment hierarchical regressions for H4b explained a small but non-significant amount of additional variance in job satisfaction (R 2 Change ¼ 0.036, p. 0.05). No significant interactions were found at the Bonferonni adjusted alpha level. However with alpha at 0.05, significant interactions were found between balanced fulfilment and exploration compared with other career stages. Higher balanced fulfilment was associated with higher job satisfaction for exploration stage than establishment (b ¼ 0.198, p, 0.05), maintenance (b ¼ 0.220, p, 0.05), or disengagement (b ¼ 0.244, p, 0.05) stages. The results explained a small but non-significant amount of additional variance in commitment (R 2 Change ¼ 0.046, p. 0.05). There were no significant interactions for career stage at the Bonferoni adjusted alpha level. However with alpha at 0.05 there was a significantly stronger positive relationship between transactional fulfilment and commitment for the maintenance stage than establishment stage (b ¼ 0.240, p, 0.05). There was also a significantly stronger positive relationship between balanced fulfilment and commitment for the exploration stage than maintenance stage (b ¼ 0.239, p, 0.05). The final regression explained a small but non-significant amount of additional variance for intention to leave (R 2 Change ¼ 0.033, p. 0.05). Lower relational fulfilment was associated with higher intention to leave for the establishment stage Career stage and generational differences 273

14 CDI 14,3 274 Table III. Generational groups hierarchical regressions predicting job satisfaction, commitment and intention to leave Job satisfaction Commitment Intention to leave Predictor variables Step 1 Step 2 Step 3 Step 1 Step 2 Step 3 Step 1 Step 2 Step 3 Controls Participant source Education Career tenure Position tenure Organization tenure Number of dependents Gender Year of birth ** 0.31 * 0.33 * Main effects Generation X Baby boomers Relational fulfilment * 0.16 Transactional fulfilment * Balanced fulfilment 0.52 *** 0.59 *** 0.47 *** 0.54 *** ** ** Interaction effects with generational groups Generation relational fulfilment Generation transactional fulfilment ** Generation balanced fulfilment ** Baby boomers relational fulfilment Baby boomers transactional fulfilment Baby boomers balanced fulfilment F *** 6.81 *** *** 4.70 *** 2.61 * 6.65 ** 5.77 ** Change R 2 n/a 0.28 *** 0.01 n/a 0.17 *** 0.04 n/a ** * Total R Notes: * p, 0.05; ** p, 0.01; *** p, 0.003

15 than exploration stage (b ¼ 0.167, p, 0.05). H4b was partially supported. Table IV shows the career stages hierarchical regressions for job satisfaction, commitment and intention to leave. Discussion The study sought to advance the understanding of employees PCs with particular emphasis on differences that might be detected using the two age-related paradigms of generational cohorts and career stage. The study first investigated employees perceptions of their employer s obligations. In support of H1, respondents reported higher levels of balanced obligations than either relational or transactional obligations. The balanced obligations included career development, wide scope of responsibility and support to learn. These results support Hall and Moss (1998) concept of the protean career, purporting that an employee s PC has changed in response to changes in the labour market such as corporate downsizing, with the PC evolving from a contract based on loyalty and commitment to one based on employability. Supporting H2, stronger relationships were also found between fulfilment of these balanced obligations and the cognitive responses of job satisfaction, commitment and intention to leave than for fulfilment of either the transactional or relational obligations. This result may be explained by the protean career concept: employees see the importance of having an employment relationship with a focus on balanced obligations to ensure their ongoing employability. Therefore, employees are more satisfied, committed and motivated to stay when these obligations have been met (Briscoe et al., 2005; Hall and Moss, 1998). The overall relationships between the different levels of fulfilment and the cognitive responses are also consistent with previous research and social exchange theory (Shalk and Roe, 2007). Social exchange theory posits that the exchange relationship is a calculation of costs and rewards; when the rewards are met employees are more motivated to continue the relationship (Cropanzano and Mitchell, 2005; Homans, 1958). Career stage and generational differences 275 Individual differences in psychological contract obligations The study next explored individual differences in employees perception of this exchange relationship, based on the age-related differences of generational group and career stage. In support of H3a, employees level of relational obligations was significantly higher for Baby Boomers than for Generation X. This result is consistent with Westerman and Yamamura s (2007) results that Baby Boomers were more motivated by relationship fit with their organization than Generation X. However, contrary to H3a, employees level of transactional obligations was also significantly higher for Baby Boomers than for Generation X. This result could be explained by what generational scholars have defined as Generation X s cynicism to work (Egri and Ralston, 2004; Kupperschmidt, 2000). Thus Generation X may have lower perceptions of all employment obligations than the other generational groups. An alternative framework to explain both these significant differences, however, are life stage or developmental perspectives (Beck, 2001). Those in later life stages are more concerned with ensuring they have enough resources and job security to support their retirement, whereas those in a middle life stage have greater focus on family responsibilities outside of work, therefore Generation X have less focus on the obligations of employers than Baby Boomers (Scandura and Lankau, 1997). Despite these significant differences between Generation X and Baby Boomers, there were no significant differences found

16 CDI 14,3 276 Table IV. Career stages hierarchical regressions predicting job satisfaction, commitment and intention to leave Job satisfaction Commitment Intention to Leave Predictor variables Step 1 Step 2 Step 3 Step 1 Step 2 Step 3 Step 1 Step 2 Step 3 Controls Participant source Education Career tenure Position tenure Organization tenure Number of dependents Gender Year of birth ** 0.13 * 0.15 * Main effects Establishment *** * Maintenance 0.18 *** *** ** Disengagement ** * Relational fulfilment * Transactional fulfilment Balanced fulfilment 0.48 *** 0.76 *** 0.42 *** 0.59 *** *** *** Interaction effects with career stages Establishment relational fulfilment * Maintenance relational fulfillment Disengagement relational fulfillment Establishment transactional fulfillment Maintenance transactional fulfillment Disengagement transactional fulfillment Establishment balanced fulfilment 0.19 * Maintenance balanced fulfilment 0.22 * 0.24 ** Disengagement balanced fulfilment F Change R Total R Notes: * p, 0.05; ** p, 0.01; *** p, 0.003

17 for Generation Y nor were there any significant differences for obligations among the different career stages, resulting in a failure to support H3b. Individual differences in the cognitive responses to the exchange relationship Results were also inconsistent for the hypotheses related to individual differences in cognitive responses to the PC. H4a was not supported as no significant interactions were found between relational fulfilment and generational groups. However a stronger negative relationship was found between transactional fulfilment and intention to leave for Generation X than Generation Y. This result is contrary to the predictions that Generation Y would have an even greater transactional need than Generation X or Baby Boomers (Smola and Sutton, 2002). Although not hypothesised, other generational differences that were found related to balanced fulfilment. Balanced fulfilment had a stronger relationship with commitment for Baby Boomers than for Generation X. Furthermore, lower balanced fulfilment was associated with higher intention to leave for both Baby Boomers and Generation Y than Generation X. These results could be explained by both generational cohort differences and age-related career stage research results. Researchers investigating generational groups have defined Baby Boomers as the cohort who were raised to be optimistic and wanting the best from life, whereas Generation X are defined as being more cynical (Smola and Sutton, 2002). Based on this premise, Baby Boomers had stronger cognitive reactions because they perceived that through opportunities for growth and development they were getting the best from life, whereas because Generation X are more cynical of organizations they are less affected by level of balanced fulfilment. An alternate view of these differences could be the age-related career stage differences found in previous research. Conway (2004) found that employees in early career were more committed by career development while those in late career were more committed by employability and involvement. Because by traditional standards Baby Boomers could be seen as being in their late career and Generation Y could be seen as being in their early career, they both had a stronger relationship based on balanced fulfilment, because this type of fulfilment related broadly to employability, career development and involvement. Results of interactions for career stage partially supported H4b. Higher balanced fulfilment had a significantly stronger positive relationship with job satisfaction for those in the exploration stage than other career stages and balanced fulfilment also had a significantly stronger positive relationship with commitment for those in the exploration stage than maintenance stage. These results are consistent with Super et al. s (1998) propositions about the career concerns of individuals during the exploration stage. During the exploration stage employees are focused on defining their career and thus look for opportunities to learn about their skills and aptitudes (Super et al., 1988). However, this significant difference for commitment was not found compared to establishment or disengagement stages, nor were there significant differences between exploration and other career stages for intention to leave. H4b was also partially supported by lower relational fulfilment being associated with significantly higher intention to leave for respondents in the establishment stage than the exploration stage. Similarly, this result supports Super et al. s (1998) career stage propositions: employees in the establishment stage are looking to establish their careers in their chosen profession and thus should be more affected by lack of job security than those in the exploration stage who are more concerned with expanding Career stage and generational differences 277

18 CDI 14,3 278 their career choices. Although not hypothesised, results also indicated that higher transactional fulfilment was associated with higher commitment for respondents in the maintenance stage than for those in the establishment stage. This is consistent with Super s (1998) propositions about the different concerns of maintenance compared to establishment stages. No significant differences for disengagement or other career stage interactions were found. Overall, these results add support to the main focus of the study to integrate individual differences in defining and managing the PC. However, contrary to popular perception of large variations among generational groups and career stages, the sizes of these individual differences effects were quite small and some hypothesised differences were not significant. There were also no significant main-effect differences between the generational groups or career stages for the cognitive responses to the psychological contract, despite a significant main-effect found for year of birth related to intention to leave. The overall pattern of these findings indicates that there are greater similarities than differences between the different career stages and generational cohorts. Furthermore, the sizes of the interaction effects across generational groups and career stage were small and thus limit the practical implications of these results. However, as noted by Aguinis (2004) small effect sizes in multiple regressions are common across social sciences research, such as this study when subgroups have different sample sizes. In fact Chaplin (1991) found that interaction terms typically only accounted for between one and three percent of variance in a review of research in psychology. Limitations and suggested future research The first limitation to highlight is that the survey responses were self-report and cross-sectional so common method variance (Podsakoff et al., 2003) may have impacted on the results. Second, despite criticism (Edwards, 2001) difference scores were used to calculate fulfilment, following the lead of earlier PC researchers (Coyle-Shapiro, 2002). Third, only two items loaded on to the relational PC factor in the factor analysis so caution is required in interpreting these results. Finally, the female-dominated sample limits the generalisability of the results. Future research could validate these generational and career stage effects and confirm their practical relevance for employers. Through longitudinal investigations, researchers could facilitate improved understanding of the influences of generational group and career stage as well as how individuals re-create their PC. Future researchers should note the conceptual problems in defining generational groups and career stages. This study s use of the ACCI (Super et al., 1988) distinguished career stage from age and tenure. However, not all employees conformed to these stages, which could either be a reality or a product of the career stage definitions (Savickas, 2002). Although this study used a more statistical approach for defining generational cohorts than in previous similar research, investigations into robust methods of defining generational group cut-offs would be beneficial. Last, future research could examine the content of the psychological contract more broadly using a qualitative interviews method similar to Herriot et al. (1997) to facilitate further understanding of the effects of the protean career. Conclusion This study accepted the challenge of attempting to disentangle the career stage and generational differences (Westerman and Yamamura, 2007, p. 158) with respect to the

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