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Employment Contracts, Psychological Contracts, and Employee Well-BeingAn International Study$

David E. Guest, Kerstin Isaksson, and Hans De Witte

Print publication date: 2010

Print ISBN-13: 9780199542697

Published to Oxford Scholarship Online: September 2010

DOI: 10.1093/acprof:oso/9780199542697.001.0001

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International Comparisons of Employment Contracts, Psychological Contracts, and Worker Well‐Being

International Comparisons of Employment Contracts, Psychological Contracts, and Worker Well‐Being

Chapter:
(p.213) 9 International Comparisons of Employment Contracts, Psychological Contracts, and Worker Well‐Being
Source:
Employment Contracts, Psychological Contracts, and Employee Well-Being
Author(s):

Rita Claes

René Schalk

Jeroen de Jong

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199542697.003.0009

Abstract and Keywords

The study was designed to explore the impact of any country differences on the use of and impact of temporary employment contracts. In addition, data were collected from three broad sectors to represent different types of work. This chapter reports the effects of country and sector on the results. A first step was to agree a number of relevant dimensions on which to compare countries and a number of institutional and cultural factors were identified. However comparison across the six European countries and Israel revealed rather few differences of the sort that might be expected to have an impact on temporary employment. Despite this, there are large national differences in the use of temporary workers. The statistical analysis of our survey data reveals that the amount of variation in outcomes that can be explained by the country or sector level is small. It rarely exceeded ten per cent and was generally overwhelmed by the much greater influence of factors at the organizational and workplace levels.

Keywords:   national comparisons, sector comparisons, institutional factors, cultural factors

Introduction

This chapter examines national influences on the role of temporary employment contracts, psychological contracts, and on the influence of employment contracts on well‐being and other outcomes. The core issues of interest are whether the national context and the related differences in norms and values affect the adoption and utilization of employment contracts, the content and fulfilment of psychological contracts, and how these relate to workers' well‐being.

Country‐specific factors are particularly likely to affect the behaviour of employers. For example, aspects of the labour market might influence the reasons for hiring temporary workers as well as the type of temporary workers hired. National norms and values might influence the psychological contracts offered by employers to permanent and temporary workers and their perceived obligations to fulfil the promises they make. This chapter therefore focuses on both employer and employee data.

While the emphasis in this chapter is primarily on national factors, the influence of sector differences is also examined. Our sample covered three sectors: food manufacturing, retail services, and education. These sectors were selected because of availability and accessibility in all participating countries, because of the amount of temporary workers in each sector, and the range of skills and educational levels represented across them. In practice, these sector categories were interpreted quite broadly when the data were collected, so the rationale for expecting differences was potentially compromised. We therefore focus more on country differences.

(p.214) The chapter is structured as follows. We start by characterizing the country‐specific context of the participating countries in terms of six societal dimensions that are relevant for psychological contracts. These societal dimensions can potentially be used to interpret patterns in the findings, but the main reason for considering them is to determine the extent of similarities and differences across countries and therefore the likely influence of national differences. We then examine our data sets to compare national and sectoral influences on reasons for hiring temporary workers and reasons for accepting temporary work. This is followed by an exploration of national and sectoral influences on psychological contracts. Finally, we assess the relative importance of country and sector influences compared with organizational and individual factors on the relationship between type of employment contract and the various outcomes included in the study. The concluding discussion offers tentative interpretations of the findings. For more detailed technical descriptions of the methods, we refer the reader to Chapter 2 of this book, and for a description of the development of the qualitative comparative analysis, outlined in the following section, to the relevant Psycones reports (2004, 2005).

National Comparisons of Factors that might Influence Employment Contracts and Psychological Contracts

The European Union has been seeking standardization of various aspects of employment legislation, including legislation affecting the employment of temporary workers. Nevertheless, there is still some scope for national interpretation of such legislation, reflecting the traditions, norms, and priorities of each country. We know that there are persisting differences in the proportions of temporary workers across European countries in general, including those in our sample. We might expect even more scope for national differences in psychological contracts, and national factors seem likely to have a bearing on the way psychological contracts function in the interplay between employers and employees (Schalk and Soeters, 2009). We agree with Rousseau and Schalk (2000a, b), Schalk and Rousseau (2001), Thomas, Au, and Ravlin (2003), and Westwood, Sparrow, and Leung (2001) that we need to explore the cross‐national contexts of psychological contracts, particularly bearing in mind the expansion of multinational firms and labour markets and the need to understand any key national influences (p.215) on psychological contracts and on their consequences. Rousseau and Schalk's book Psychological Contracts in Employment: Cross‐National Perspectives (2000) showed that there are differences in psychological contracts between the thirteen countries that were examined. However, the data were not strictly comparable across all countries, and in this respect, the present study may provide a more rigorous comparison and analysis of country differences.

The study of country differences

‘Country’ is a potentially broad proxy for a range of different and complex influences on behaviour. A number of researchers, such as Hofstede (2001) and Schwartz (1999), have attempted to measure characteristics of national cultures and then to identify clusters of countries with similar cultures. In doing so, they imply that in important respects the similarities between countries within a cluster may outweigh the differences. Others have adopted what is typically described as an ‘institutional’ approach (Whitley, 1999) to national comparisons in which the role of key institutional factors that are likely to have a bearing on national systems and behaviour are identified and compared.

In this study, we were particularly interested in factors that might explain national differences in the role of employment contracts and psychological contracts. We therefore adopted a more institutional approach but also sought to take some account of the national cultural context. Our aim was to seek factors that might lead us to expect differences in the role of employment contracts and psychological contracts across the seven countries included in our research. Following a thorough literature review and after the consultation with experts from different disciplines in each of the countries, described in Chapter 2, six societal dimensions were identified as being likely to have a major influence on the content and impact of employment contracts and, more particularly, psychological contracts. Specific indicators for each of the dimensions were suggested by experts. In total, twenty‐seven indicators were selected for the six dimensions. The most reliable comparative data with which each of the indicators could be measured were identified and used. In cases where no comparative data could be found, the experts were asked to provide an appropriate rating. This body of information was then used as a basis for cross‐country comparisons.

(p.216) Country comparisons on key national dimensions

Below we describe the six dimensions. In addition, we point out the potential impact of each dimension on employment contracts and psychological contracts. We then use these dimensions to describe any distinctive national characteristics for the seven countries included in the study based on information available for the period at the start of data‐collection (i.e. 2003–4).

Laws and regulations include legal facilitators and constraints that shape the conditions for both the formal employment contract and the psychological contract. Firstly, laws and regulations define the zone of negotiability, the bargaining space for employer and employee (Rousseau and Schalk, 2000a). The zone of negotiability is determined by state laws and regulations, and by any (central) agreements between unions and employers. A narrow zone of negotiability may constrain both the circumstances under which temporary workers can be employed and the scope for variability in the content of the psychological contract. Secondly, sanctions for violation incorporated in laws and regulations may inhibit breach of the rules concerning the employment of temporary workers and breach of the psychological contract. Thirdly, laws and regulations help to define the issues that may be, or in some cases must be, either agreed in contracts of employment or bargained over by representatives of employers and employees.

The industrial relations system is ‘the system by which workplace activities are regulated, the arrangement by which the owners, managers and staff of organizations come together to engage in productive activity. It concerns setting standards and promoting consensus. It is also about the management of conflict' (Pettinger, 2000, p. 1). The industrial relations system shapes employer–employee exchanges at various levels (societal, industry, organizational, and workplace) and in so doing may affect the psychological contract at the individual level as well. The level of trade union power, for which trade union density can be used as an indicator, may be brought to bear on an organization's policy concerning the employment of temporary workers.

The labour market and the economic system. The labour market refers to the exchange of labour supply and demand within the broader economic system. The current and anticipated labour market is likely to influence the use of temporary workers. The degree of welfare support in a society, as an outcome of the economic system, may also influence the content of both the employment contract and the psychological contract.

The educational system (the provision of education, development, and training for children, young people, and adults) affects the employment contract and the psychological contract in at least three ways. Firstly, the (p.217) educational system constrains or facilitates an organization's ability to obtain employees with the skills they need. Secondly, the educational system affects the individual's market power, including power to negotiate both the type of employment contract and the content of the psychological contract (Rousseau, 2005). Thirdly, the educational system establishes school‐to‐work pipelines, prepares people for employment, and helps to create norms and expectations about the nature of work and employment.

Family orientation refers to family structure and family ties. The family structure (e.g. large family, single‐parent, or dual‐earners household) and family ties can influence both the type of employment contract and the content of the psychological contract that employees seek in order to satisfy their family obligations. Depending on the societal attitude towards their role, parents, and in particular mothers, may seek employment contracts and psychological contracts that can accommodate family obligations.

Cultural values, according to Schwartz (1999, p. 25), are ‘implicitly or explicitly shared abstract ideas about what is good, right, and desirable in a society’. These values are likely to influence employment contracts and the psychological contract. In the first place, they can facilitate or constrain one's ability to enter into agreements (Rousseau and Schalk, 2000b; Schalk and Rousseau, 2001). Secondly, cultural values can influence the kind of exchanges that are considered to be negotiable. Thirdly, cultural values can give different meanings to whether promises and obligations have been kept. Fourthly, cultural values can influence perceptions of the nature and meaning of fairness and trust, which, we have argued, help to determine the state of the psychological contract. To assess the cultural values in the different countries, we used Schwartz's cultural map of the world (Schwartz, 1994a).

The current study collected data in six member states of the European Union (covering countries in the north, south, and west of Europe) and in Israel. Rousseau and Schalk (2000a) argue that psychological contracts can only develop in countries that comply with two key requirements, namely a minimum level of personal freedom and a minimum degree of social stability. The countries we examined fulfil Rousseau and Schalk's key requirements for studying psychological contracts.

Cross‐country differences on the six comparative dimensions

The main purpose in identifying core societal dimensions and developing operational measures for each of them was to establish the degree of similarity or difference between the seven countries. This in turn would help to predict (p.218) whether country‐level factors are likely to make a significant contribution in explaining the use of temporary employment, the nature of the psychological contract, and the relationship between employment contracts and outcomes. Furthermore, where major national differences emerge, the analysis of the specific dimensions might help to explain the nature of the country effect.

In the event, both the available data and expert feedback revealed only a few often relatively minor differences between the countries. We found significant outlier countries on twelve of the twenty‐seven societal indicators we included in our analysis, with five countries revealing at least one distinctive and relevant societal characteristic. The Netherlands is characterized by a particularly high percentage of part‐time employment. Sweden has a particularly favourable attitude towards working mothers. The United Kingdom combines a very large zone of negotiability with very few sanctions for violations; further, it has very weak family ties. Spain combines very low rates of part‐time employment, fertility, and divorces with very strong family ties and highly egalitarian cultural values (i.e. ‘transcendence of selfish interests in favour of voluntary commitment to promoting the welfare of others’, Schwartz, 1994b, p. 111). Israel has a very limited welfare state, a very high fertility rate, and a very high score on educational expenditure. Additionally, Israel's cultural values are characterized by low harmony (i.e. ‘fitting harmoniously in the environment’, Schwartz, 1994b, p. 111), high embeddedness (i.e. ‘maintenance of status quo, propriety, and restraint of actions or inclinations that might disrupt the solidarity group or the traditional order’, Schwartz, 1994b, p. 111), and low egalitarianism. Belgium and Germany are very similar to the other Psycones countries with no outlying characteristics.

Despite some apparent differences on elements of Schwartz's cultural dimensions, all seven countries fall in two adjacent regions of values on Schwartz's cultural map of the world (1994a) and are thus rather similar in their scores on cultural values. Belgium, Germany, the Netherlands, Spain, and Sweden are in the ‘West Europe’ region of values, which is characterized as attributing a high level of importance to egalitarianism and intellectual autonomy. ‘These are cultures in which individuals are viewed as autonomous but subject to legitimate expectations to concern themselves voluntarily with the welfare of their fellow citizens’ (Schwartz, 1994b, p. 111). Israel and the United Kingdom are in the ‘English‐speaking’ region of values, which emphasizes the importance of affective autonomy and mastery. ‘These are entrepreneurial cultures in which mastering and controlling the environment are central goals’ (Schwartz, 1994b, p. 111).

On the basis of this broad analysis of societal dimensions, we expect more similarities than differences among the seven countries in the likely impact of employment contracts on well‐being and other outcomes and in the (p.219) content and consequences of psychological contracts across the countries studied.

The Relative Importance of Country and Sector for Psychological Contracts

In this section, we use our data to examine the role of countries and sectors in explaining variations in the various aspects of psychological contracts and, more briefly, well‐being. Ideally, we would use multilevel analysis but with only seven countries and three sectors, it is not possible to undertake conventional multilevel analysis. We therefore included the country and sector level indicators in our regression analyses reported in Chapters 3, 6, and 8. The regressions show the amount of overall variation in the dependent variable explained by the range of independent variables and also indicate which specific variables had a significant influence on the outcome. The analyses reveal that the country variables were often significant. The next step is then to determine the relative proportion of explained variance attributable to different levels of aggregation, namely individual, organization, sector, and country. For example, in the employee sample, all the independent variables explain 26 per cent of the variation in breadth of content of the psychological contract. The question we are particularly interested in, in this chapter, is what proportion of that 26 per cent can be attributed to country or sector level. The results of these analyses are presented below, first for the employer data, and after that for the employee data.

Employer data

Table 9.1 shows the proportion of the variation in responses of employers that can be explained by the national, sector, and organizational levels. In a regression analysis, the adjusted R‐squared score tells us the percentage of total variation in responses on a dependent variable that can be explained by the items included in the analysis. If these items explain 20 per cent of the variation in responses, then we are interested in the proportion of that 20 per cent that can be explained by country or sector differences. This proportion might range from 0 to 100 per cent. Table 9.1 reveals that the major part of the variation in employers' reports of the psychological contract can be explained by factors at the organizational level, a minor part is attributable to the country level, and a very small part is explained by the sector. More specifically, organizational‐level factors account for between 84 and 89 per cent of the variation, national factors account for (p.220)

Table 9.1 Percentage of variance explained by different levels of analysis for psychological contracts in the employers' data set

Employers (n)

Organization (%)

Sector (%)

Country (%)

Permanent workers

Content of employers' obligations

188

89

1

10

Content of employees' obligations

202

84

1

15

Delivery of employers' deal

187

88

2

10

Delivery of employees' deal

183

86

1

13

Temporary workers

Content of employers' obligations

186

86

2

12

Content of employees' obligations

202

84

0

16

Delivery of employers' deal

184

88

1

11

Delivery of employees' deal

180

86

2

12

between 10 and 16 per cent, and sector‐level factors account for between 0 and 2 per cent. This is the case for psychological contracts of employers with respect to both temporary and permanent employees.

Additional analyses revealed only two significant country‐specific differences. Belgian employers reported a significantly narrower content of the psychological contract (i.e. lower number of employer and employee promises and obligations) for both permanent and temporary workers compared to most countries. Spanish organizations reported a significantly broader content of temporary workers' promises and obligations, as judged by employers, compared with most other countries.

In summary, it appears from these results that it is organizational policies and practices that explain most of the variation in employers' views of psychological contracts with national characteristics playing only a minor part while sector has almost no influence.

Employee data

With the employee data, we can compare four levels by adding the individual level to country, sector, and organization. Analysis of the employee responses again confirms the limited impact of country differences. As Table 9.2 reveals, around 90 per cent of the variance was explained at the individual level. The variance explained by the country level varied between 3 and 5 per cent. This was somewhat lower than the variance explained by the organizational level (3–7%), but higher than the variance explained by the sector level (0–2%).

(p.221)

Table 9.2 Percentage of variance explained by different levels of analysis for psychological contracts in the employees' data set

Employees n

Individual (%)

Organization (%)

Sector (%)

Country (%)

Content of employers' promises and obligations

5,271

91

6

1

3

Content of employees' promises and obligations

5,284

88

6

2

5

Fulfilment of employers' promises and obligations

4,999

92

6

0

3

Fulfilment of employees' promises and obligations

5,188

92

3

0

5

Trust

5,285

89

7

0

4

Fairness

5,294

89

6

0

5

Violation of the psychological contract

5,183

90

7

0

4

In considering the results in Table 9.2, we must take into account the dominance of the individual level in the analysis. This category included variables such as hours, occupational level, and tenure. It is therefore an amalgam of individual characteristics, such as age and family responsibilities and current employment experiences. The organizational level was restricted to size, public–private sector, proportion of temporary workers employed, and type of establishment; it did not include potentially important features such as organizational culture, leadership style, and strategy which were beyond the scope of this study. The analysis of employee responses may therefore underplay the significance of organizational factors. Nevertheless, this does not affect the key finding which is the limited impact of the country and sector levels.

With respect to employee well‐being and related outcomes, similar analyses and tests as above were performed and showed that the major part (87–97%) of worker well‐being was explained by the individual level. A minor part was explained by the organization (1–7%) and by the country (2–8%). A barely existent part (0–1%) was accounted for by the sector. The conclusion is that country factors also appear to have a limited impact on variations in employee well‐being.

Country differences in psychological contracts

Although the country level accounts for only a small proportion of the variation in psychological contracts, there are, nevertheless, some significant differences (p.222) between countries on each of the psychological contract measures. The data presented in Chapter 6, and more specifically in Tables 6.1 and 6.2, provide information with which to compare the psychological contracts across the seven countries. Here, we summarize how each country differs from the average across the seven countries in the sample on the basis of data provided by employees about both the employers' promises and obligations and their own.

Sweden has a smaller content of employer promises and obligations, lower fulfilment of employer promises, and a smaller content and lower fulfilment of employee promises.

Germany has a smaller content of employer promises and obligations, lower fulfilment of employer promises, lower violation of the psychological contract reported by employees, and higher fulfilment of employee promises.

The Netherlands is close to the average with respect to employer promises and obligations and has smaller content and lower fulfilment of employee promises.

Belgium has lower violation of the psychological contract reported by employees and a lower fulfilment of employee promises.

Spain has a broader content of employer promises and obligations, lower levels of violation of the psychological contract reported by employees, and a larger content of employee promises.

Israel has a smaller content of employer promises and obligations, lower fulfilment of employer promises, more violation of the psychological contract reported by employees, and higher fulfilment of employee promises.

The United Kingdom has a broader content of employer promises and obligations, more violation of the psychological contract reported by employees, and a smaller content of employee promises.

The analysis in Table 6.1 also reveals significant country effects with respect to levels of trust and fairness. Both are significantly higher in Germany, the Netherlands, Belgium, and Spain and significantly lower in Sweden, Israel, and the United Kingdom.

With respect to sector, compared with the retail services sector, education has a smaller content and higher fulfilment of employer promises and obligations, and both food manufacturing and education have a smaller content of employee promises and obligations.

This section has shown that there are some significant differences between countries with respect to the psychological contract. However, it has also shown that national characteristics play only a minor part in explaining the overall variation in psychological contracts. We should therefore not give much weight to national differences.

(p.223) Country Influence on Reasons for Hiring Temporary Workers and Undertaking Temporary Work

Psychological contracts and well‐being reflect individual perceptions and experiences and we might therefore expect them to be largely determined by factors at the individual and workplace or organizational levels. On the other hand, reasons for hiring temporary workers or for seeking to become a temporary worker may be more strongly influenced by societal factors such as legislation and the state of the labour market. In this section, we therefore explore country differences in the use of temporary employment, reasons offered by employers for hiring temporary workers, and motives outlined by employees for accepting temporary work.

Proportion of temporary employees in the sample

The overall ratio of permanent to temporary employees in our sample is about 60:40. We should bear in mind that the sample was deliberately biased to ensure a sizeable proportion of temporary workers and it proved easier to gain access to organizations employing large numbers of temporary workers in some countries than in others. As a result, there are quite marked differences in the proportion of temporary workers in the national samples ranging from approximately 20 per cent in the United Kingdom to 50 per cent in Belgium. These figures bear no direct relation to the actual proportion of temporary workers in each country which, in 2005, ranged between 5.5 per cent in the United Kingdom and 33.3 per cent in Spain (OECD, 2006).

We used a technique (Chi‐squared automatic interaction detection) on the employee data set to identify any national differences in the personal and work‐related characteristics of permanent and temporary employees. This revealed both similarities and differences between countries. Organizational tenure, sector, and supervisory position were the main factors associated with the type of employment contract. In all countries, longer organizational tenure predictably corresponded with having a permanent contract. In most countries, respondents employed in the manufacturing sector were more likely to have permanent contracts. In Israel, the Netherlands, and Spain, having a position as supervisor was related to having a permanent contract. In Sweden, being a union member and not having an additional job were also associated with having a permanent contract. In the UK education level and (p.224) in Israel age were associated with permanent employment. Gender, living conditions, household contribution, hours worked per week, and night shifts showed no association with the type of employment contract in any of the seven countries. We should emphasize again that these results are specific to our sample and should not be generalized to the wider national populations of permanent and temporary workers in these countries.

Employers' reasons for employing temporary workers

Table 9.3 highlights the influence of country and sector in explaining employers' reasons for using temporary workers. The results show that most of the variation (between 76 and 96 per cent according to the reason) is explained by the organization. Country‐level factors explain between 2 and 20 per cent, while the sector level explains between 0 and 9 per cent. Country influence is the strongest with respect to the use of temporary workers to cover for unfilled vacancies, followed by limiting the recruitment of core workers, testing out new employees, and covering long‐term absence. Spain, in particular, makes more extensive use of temporary workers to cover unfilled vacancies.

These results are plausible in suggesting that labour market factors at the national level exert some influence on employers' motives for hiring temporary workers. Similarly, sectors feature more strongly with respect to the influence of peaks in production and the requirement for specialist skills, both of which might quite plausibly be sector‐specific issues.

Table 9.3 Percentage of variance explained by different levels of analysis for employer motives for using temporary workers

Employers (n)

Organization (%)

Sector (%)

Country (%)

Peaks in production

185

87

9

4

Replace due to short absence

188

94

0

6

Replace due to long absence

187

84

4

12

Unfilled vacancies

182

76

4

20

Specialized skills

184

91

5

4

Limiting core workers

183

83

3

14

Improving performance

182

96

2

2

Testing new employees

185

84

2

14

Working unusual hours

185

89

3

8

Saving salary costs

184

93

1

6

Saving training costs

185

92

4

4

Saving benefits costs

184

90

0

9

(p.225) Workers' reasons for choosing temporary employment

When we turn to reasons why workers accepted temporary employment, the findings reveal that, when the total explained variance is put to 100 per cent, the major part (more than 81%) is explained by the individual level or the workplace level, up to 15 per cent by the organization level, a lesser part by the country (up to 9%), and a very minor part (up to 2%) by the sector. A more detailed inspection of the country data reveals an almost total lack of country differences.

In summary, the results presented so far suggest that country and sector levels play only a rather minor part in explaining variations in psychological contracts, even though there are some statistically significant albeit small country differences with respect to specific dimensions of the psychological contract. We also found some evidence of national differences in employers' reasons for hiring temporary workers, but again the influence of the national level remains relatively small. The differences between sectors are consistently smaller and able to explain only a very minor proportion of the overall variance. In considering the wider significance of these results, we need to take into account some consideration of how much national variation we might expect and more specifically, what proportion of the explained variance we might reasonably expect to attribute to country‐specific factors. Our comparison based on the six identified dimensions suggested that we should expect relatively little variation between countries and analysis of our data has confirmed that this is indeed the case.

Country and Sector influences on Relationships Between Employment Contracts, Psychological Contracts, and Worker Well‐Being

In this section, we take the comparison of country differences a step further by examining whether country and sector have an influence on employee well‐being and, in particular, on the relationships between employment contracts, psychological contracts, and employee well‐being.

The influence of country and sector on the relationships between type of employment contract, the psychological contract, and well‐being was examined by exploring the interaction effects of countries and sectors. With respect to the countries, Israel was used as the comparison country, and for sectors, retail services was the comparison sector. In other words, we explored whether the associations between type of employment contract, aspects of (p.226) the psychological contract, and employee well‐being reported in previous chapters were affected by country or sector; and we did this by comparing each country in turn with Israel and each sector with retail services to provide standard bases for comparison. We tested country interactions and sector interactions for each of fifteen outcomes related to worker well‐being; that is, a total of 1,050 interactions. Given the very large number of tests of interactions, we only considered an interaction significant when its standardized regression coefficient had a low chance of occurring (p < .01). On this basis, there were significant country or sector differences in only 18 out of 1,050 interactions (thus, not even 2%). This is only a little above what we might expect by chance, indicating once again that national‐ and sector‐level factors have only a very minor influence.

Because any significant results might be a product of chance effects, we should view them with considerable caution. With this in mind, we briefly review some of the significant associations. First, we explore the effect of country and sector on the relationship between type of employment contract and employee outcomes; then, we explore their impact on the relationship between the psychological contract variables and employee outcomes.

There are only six significant interactions where either country or sector affected the relationship between the type of employment contract and worker outcomes. Compared with Israel, which served as the reference or comparison country in all cases, occupational self‐efficacy and organizational commitment in Belgium were lower among permanent workers. In Germany, workers in permanent employment reported more interference of work on home life. In Sweden, occupational self‐efficacy was lower among permanent workers. In the United Kingdom, permanent workers reported lower perceived performance than temporary workers, as compared to Israel. Moving on to sector differences, compared with retail services, permanent employees from the manufacturing sector displayed lower job satisfaction than temporary employees.

When we explore the effect of country and sector on the relationship between the psychological contract variables and employee outcomes, there are twelve significant interactions. In Belgium and Germany, higher fairness is more likely to be associated with higher life satisfaction. In Spain, presence at work when sick increases slightly with higher fulfilment of promises and obligations by employees, whereas in Israel there seems to be a non‐linear relation, with higher fulfilment of employee promises and obligations associated with either low or high sickness presence. In Spain, a broader content of the employer's psychological contract is associated with higher job satisfaction, and higher fairness is associated with higher organizational commitment and lower perceived performance. In Sweden, there is a significant (p.227) interaction effect for sickness presence but it is very hard to interpret. In the United Kingdom, higher fulfilment of promises and obligations by employees is associated with lower presence at work when sick. Also, in the United Kingdom, higher fulfilment of employees' promises and obligations is associated with higher perceived performance, while the relationship is non‐linear in Israel. Turning again to the effects of sector, compared with retail services, employees from the manufacturing sector who report a broader content of their own promises and obligations also report higher irritation and lower trust. Among employees from the education sector, a broader content of employee promises and obligations is associated with poorer general health.

In this section, we have reported the different relationships between the type of employment contract, psychological contract variables, and worker well‐being variables, across countries. There are only a few significant interactions and, moreover, there is no coherent pattern to them implying that they may reflect random findings. The overall conclusion from this section supports the view that there is considerable similarity between the countries included in this study with respect to the effects of type of employment contract and features of the psychological contract on employee well‐being and other outcomes.

Discussion and Conclusions

The results presented in this chapter have revealed some minor country effects and some minor, albeit statistically significant, differences between countries with respect to a range of issues associated with psychological contracts. In particular, we found some country differences in employer motives for hiring temporary workers, and in employee reports of their psychological contracts. However, compared to the contribution of the individual and organization levels in explaining variations in psychological contracts and worker well‐being, the role of the country level is limited. The sector level has an even smaller effect. The absence of noteworthy country effects was reinforced when we explored interactions between country, psychological contracts, and worker well‐being and found very few significant results.

The same pattern of results was found when we explored the relationships between type of employment contract and worker well‐being and other outcomes. These relationships are similar in each of the countries we have examined. Our testing of the effect of country on the relationships between type of employment contract and worker well‐being outcomes yielded only (p.228) a few significant interactions. Furthermore, the results displayed no coherent or easily explained pattern.

In the Introduction to this chapter, we outlined a range of societal dimensions that might be expected to affect the employment relationship. Our preliminary conclusion, on the basis of the literature and the feedback from a number of experts, was that the similarities between the seven countries in our sample outweighed the differences. Analysis of the results from our seven‐country study has confirmed this conclusion. We should not be surprised by this since one of the aims of the European Union is to promote harmonization of employment relations systems. Israel provided a comparator country but it, too, is similar in many relevant respects. Perhaps if we are to identify national differences, a more heterogeneous sample of countries will be needed.

Despite the limited impact of country differences in this study, it is important not to ignore them. We know that important differences exist between the countries in our sample in the proportion of workers employed on temporary contracts and in the proportion of part‐time workers. Spain and Sweden provide interesting comparisons in this respect. In the analyses reported in this chapter, country effects have accounted for about 10 per cent of the explained variation in employer responses and about 5 per cent for employees; the figure is sometimes a little higher, and sometimes rather lower. This raises the question of what proportion of the variance we might expect to be accounted for by country factors. Evidence from other studies of relatively homogeneous countries, such as the Eurobarometer and European Social Surveys of worker satisfaction suggests that the country effect is generally low. In this context, we should perhaps not be surprised by the findings we have reported.

In summary, our answer to the questions ‘Does country matter in explaining the role of type of employment contract in shaping worker well‐being?’ and ‘Does country matter in explaining the role of the psychological contract in shaping worker well‐being?’ is ‘not much’. A negative answer can be provided even more emphatically with respect to sector differences. As such, the current chapter's findings support the use of the total sample across countries presented in previous chapters. At the same time, we cannot afford to ignore the country effects altogether. In this study, country factors appear to have at least as much influence as in some other work‐related pan‐European studies. Set against this, the analysis reported in this chapter of the effects of different levels—individual, organization, sector, and country—confirms the importance of workplace experiences for work‐related outcomes. Indeed, despite reference to the ‘individual’ level, it is work experiences, rather than individual factors that operate independently of (p.229) work, that matter most. The analysis of the employer data reduces the levels of analysis but confirms the importance of what happens at the organizational rather than the sector or national level in considering employment policy and practice. To reiterate, despite its explicit comparative framework, the Psycones study confirms that worker well‐being is largely determined by experiences at work. The onus therefore lies on the social partners and in particular the employers, to ensure that appropriate policies and practices are in place. (p.230)