Organisational climate, psychological contract breach and employee outcomes among university employees in Limpopo Province: moderating effects of ethical leadership and trust

Abstract

Globally, the economic, political and social environment is constantly changing, and this has posed various challenges for organisations in the world of work. South African universities have also not been spared from these changes as they are expected to meet international standards whilst operating in an environment where there are many changes in their work environment with regard to technology, language policy, decolonisation of the curriculum and globalisation. The dynamics in these aspects shape the organisational climate and psychological contracts of all institutions. Any changes in the organisational climate and psychological contracts may influence employee outcomes of organisational citizenship behaviour and intention to leave among employees. Therefore, this study responds to calls from previous studies on organisational climate and psychological contract research to investigate the role of moderators in their association with employee outcomes. There is an urgent demand for organisational leaders to practice ethical leadership and become trustworthy in order to inspire employees to exhibit organisational citizenship behaviour and reduce any intentions of leaving the organisation. The aim of this study was to examine the relationships between organisational climate, psychological contract breach and employee outcomes among university employees. It also further investigated the moderating roles of ethical leadership and trust on those relationships. Six objectives were developed based on the aims of the study. To answer the objectives of this study, the research followed cross-sectional design and a quantitative approach was adopted. A total of 202 employees were selected through stratified random sampling to participate in the study and a self- administered questionnaire was used to collect the data. The sample was made up of both academic and administration staff working in the universities. Item analysis was conducted to check the reliability of the scales and all the scales obtained acceptable Cronbach alphas. To explore the factor structure of the scales, exploratory factor analysis was conducted, and poor items were removed until a xv clear and desirable factor solution was obtained. Confirmatory factor analysis was conducted to validate the data and all the goodness of fit indexes achieved the required level. In addition, the composite reliability and average variance extracted for all scales met the required level. Moderated multiple regression analysis was conducted to measure the moderator roles of ethical leadership and trust in the organisational climate, psychological contract breach and employee outcomes relationships. The results showed that ethical leadership moderated the relationship between organisational climate and organisational citizenship behaviour (Δ R² = .078, F(3,148) = 8.994. p <.001, β = .285, p < .001); and also the relationship between psychological contract breach and organisational citizenship behaviour (Δ R² = .056, F(3,148) = 7.373, β = -.247, p < .005). However, non-significant results were found when testing the moderating role of ethical leadership in the relationship between organisational climate and intention to leave (Δ R² =.000, F(3,148) = 6.275, β =.000, p >.005); and also in the relationship between psychological contract breach and intention to leave (Δ R² = 0.03, F(3.148) = 12.878, β =.055, p > .05). In addition, the results also revealed that trust moderated the relationship between organisational climate and organisational citizenship behaviour (Δ R² =.030, F(3, 148) = 6.521, β =.175, p < .01); and also the relationship between psychological contract breach and organisational citizenship behaviour (Δ R² =.049, F(3.148) = 7.719, β = -.222, p < .001). However, non-significant results were also found in testing trust as moderator in the relationship between organisational climate and intention to leave (Δ R² =.001, F(3,148) = 10.373, β = -.022, p > .01); and also in the relationship between psychological contract breach and intention to leave (Δ R² = 014, F(3, 148) = 17.207, β =.120, , p > .05). The results provides sufficient evidence that organisational climate, psychological contract breach, ethical leadership, and trust can shape employee behavioural outcomes either positively or negatively. This study, therefore recommends that organisations should develop a strong and positive organisational climate in order to improve organisational citizenship xvi behaviour and reduce employees` intentions to leave the organisation. This is achievable with policies that speak to effective communication structure, job recognition, and career development paths. In addition, human resources managers are urged to prevent cases of psychological contract breach through providing employees with realistic overviews of the task to be performed and policy that can aid employees to air their grievances. The study further recommends the establishment of ethical corporate culture within the organisations through which only employees who meet the ethical standards of the organisation are promoted into leadership positions in order to improve the practice of organisational citizenship behaviour and in turn reduce employees` intention to leave the organisation.