Psychological contract and attrition in information technology sector

Abstract

What causes attrition and break of psychological contract in Information Technology (IT) sector, why they pose a serious problem to human resource managers and how they can be arrested are focal points of the present study. In any organisation the only living resources are human resources. This animate resource has the ability of rational and independent thinking. So, more the gap between employees’ expectations prior to their entry and what they actually get, the more is the chance of attrition. Organisations based on Information Technology are, in fact, skill-based industry. So, in such organisations attrition means loss of skill and expertise. Present researchers have found out the factors of psychological contract-breach and psychological contract violation leading to attrition. Forecasting attrition is indeed very difficult. Therefore, two sets of factors have separately been identified in the present article – a) factors responsible for breaking psychological contract and b) factors behind attrition. Attempts have been made here to find out the common factors affecting both psychological contract and attrition. In doing so, they at first have taken the help of previous literatures. Then through questionnaire they have collected the responses of 266 respondents of a Kolkata-based IT organization to find out causes of attrition. Method of Principal Component Analysis (PCA) has been used for the purpose. Five significant components of attrition-problem have been found similar to the factors of breaking psychological contract. Finally, the researchers have introduced a new factor i.e., effect of technological change on psychological contract and attrition. This research work will help human resource managers to identify and control causes of breaking psychological contract and of attrition. There is a scope for future studies on the newly introduced factor.