Organizations in the contemporary world could be seen as a place where various forms of exchanges among various stakeholders of the organizations take place (Hecker and Grimmer, 2006). How these exchanges are carried out, maintained, respected and kept/breached have great implications for organizational members as well as for the organizations as a whole. The exchange/relationship may not always be formalized in terms of formal contract or agreement. In the recent years, increased attention has turned to the psychological aspects of this relationship because it works as a powerful vehicle that drives employees’ behavior in the organization, and this aspect of relationship is aptly called psychological contract. In modern business environment, it is well known that employees and employers form assumptions about their mutual expectations and obligations in their employment relationship and this develops because of both individual as well as organizational factors or because of interaction of various macro and micro variables (Coyle-Shapiro and Neuman, 2004).
Before we proceed further, a brief introduction of the market segment, on which the present research is based, is presented. Information Technology/Information Technology Enabled Services (IT/ITES) is a growing sector in India. Over the past decade, India has emerged as one of the fastest growing IT markets in the Asia-Pacific region. According to the India Brand Equity Foundation (IBEF, 2010), based on the statistics of the National Association of Software and Service Companies (NASSCOM), the apex body for software services in India, which recently released the publication Strategic Review 2010, the IT-BPO sector’s revenue as a proportion of the country’s Gross Domestic Product (GDP) grew from 1.2% in FY 1998 to an estimated 6.1% in FY 2010. The Indian workforce in this sector has earned an image of ‘low cost’ but ‘high quality’ technical workers. This has helped the Indian IT/ITES industry to maintain a promising growth rate. In order to maintain the growth rate and competitive advantage in this sector, it is necessary to understand employee’s expectation and perceived obligations as these influence many personal and organization-related outcomes. Therefore, how psychological contract develops in this market segment has both theoretical and practical implications. The issue becomes even more relevant, as except for very few studies (Tyagi and Agrawal, 2010), the construct of psychological contract has so far been a neglected area of research in the Indian context. Thus, this research was aimed at exploring the antecedents of psychological contract in IT/ITES industries in India. More specifically, two organization-related factors such as organizational culture and HR practices have been chosen for the present research.
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