Developing psychological contract to sustain construction industry workforce: a review of literature

Abstract

Sri Lankan Construction Industry suffers due to shortage of construction labour though the country records an unemployment rate above four percent. About seven percent of the physical production workforce in the industry is above its retirement age and they still have to struggle due tounavailability of effective and lifelong social security systems(VVijewickreme and Ekanayake, 2010). For the same reason,the industry finds it difficult to attract youth and retain experienced people within the construction industry. Inability of the construction industry to retain its experienced workforce is one of the main barriers to effective technology transfer (VVeerasinghe and Ekanayake, 2011). Hence, the requirement of good human resource management practices in making the existing employees more productive and retaining them has become important. It is found that satisfied employees are those who enjoy coining to work with an attitude to excel and exhibit a sense of pride and ownership in their work (Healthcare Registration, 2007). The key issue in the formation of this employee-employer relationship is the emergence of psychological contract (Barnard, 1973). Psychological contract emerges when an individual believes that he/she owes the employer certain contributions as hard work and loyalty, in return for certain inducements as high pay, job security etc. (Rousseau, 1990).This paper discusses the theoretical background and two models of psychological contract which can be related to the physical production workers of the construction industry. This paper is prepared based on an initial literature survey on an ongoing PhD-research work in the department of Civil Engineering.