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The rapidly growing startup ecosystem in Kolkata presents unique challenges and opportunities concerning psychological contracts between employers and employees. This thesis explores the phenomenon of psychological contract breaches, which occur when one party perceives that the other has failed to deliver on agreed-upon expectations. The study aims to understand how these breaches affect employee motivation, job satisfaction, and retention within Kolkata's startups. Through qualitative and quantitative analysis, the research identifies key factors contributing to psychological contract breaches and their consequences on employee performance and well-being. It concludes with recommendations for startup leaders to foster a healthier work environment that aligns employee expectations with organizational realities.
The concept of the psychological contract, which encompasses the unwritten set of expectations between employers and employees, is increasingly relevant in today's dynamic work environments, particularly within startups. As companies grow quickly, the potential for psychological contract breaches rises, leading to disengagement and aspiration misalignment. This thesis investigates the implications of such breaches for employees in Kolkata’s burgeoning startup ecosystem—a context characterized by high uncertainty and rapid change.
Despite the theoretical significance of psychological contracts, empirical insights into their breaches and subsequent impacts on workforce engagement in Kolkata’s startups remain sparse. This research seeks to understand the specific challenges entrepreneurs and employees face regarding psychological contracts in this regional context, ultimately addressing the question: How do psychological contract breaches influence employee motivation, job satisfaction, and retention in Kolkata's startup landscape?
A psychological contract refers to the beliefs and expectations regarding mutual obligations between employees and employers (Rousseau, 1989). Breaches arise when one party perceives that the other has not fulfilled these obligations (Morrison & Robinson, 1997). Prior studies highlight various forms of contract breaches, including unmet promises regarding promotion, salary, and workload (Robinson & Judge, 1996).
Research indicates that psychological contract breaches can lead to reduced job satisfaction, increased turnover intentions, and lower organizational commitment (Zhao, Wayne, Glibkowski, & Bravo, 2007). Such negative outcomes are particularly pronounced in volatile environments like startups, where the pace of change can outstrip communication efforts (Gonzalez et al., 2021).
In the Indian startup ecosystem, characterized by rapid technological advancements and turbulent market conditions, the importance of maintaining psychological contracts is magnified. Prior studies indicate that Indian employees place a high value on job security and career development, making psychological contract management crucial (Chowdhury & Sadid, 2020).
This thesis employs a mixed-methods approach combining quantitative surveys and qualitative interviews. A sample of 200 employees from various startups in Kolkata was surveyed to gather quantitative data on job satisfaction, retention intentions, and perceived breaches. Additionally, in-depth interviews with 15 startup founders and HR managers provided qualitative insights into how psychological contract breaches manifest and their impact on organizational culture.