Exploring the working relationship between professional contractors and permanent employees through organisational socialisation and the psychological contract
Authors:   , Yarrow Ellen 
Published: December 2021

<p>This study explores the relationship between professional contractors and the permanent employees they work with at organisations in New Zealand. This thesis uses two concepts, organisational socialisation and the psychological contract, as lenses through which the working relationship is explored. The 20th century notion of standard employment has largely been eroded, giving way to different forms of non-standard work. Professional contractors are now found performing a variety of roles in many organisations across this country. Many are doing the work of permanent employees, but they are neither employees nor permanent. Professional contractors are a type of non-standard, transient worker. As part of a blended workforce, professional contractors work alongside permanent employees, but little is known about how they work together.  This qualitative study involves 49 face-to-face interviews with professional contractors, permanent employees and managers working in the Information Technology (IT) divisions of 10 organisations in three major cities in New Zealand. This research design results in a rich data set. The data collected was subject to analysis using the software NVIVO. This data was analysed in relation to the literature on organisational socialisation and the psychological contract to further explain the working relationship between professional contractors and permanent employees.  The findings reveal professional contractors’ experience of Van Maanen’s (1979) socialisation tactics were: collective, informal, variable, random and serial. It was found that an organisation’s policy sets the tone for the treatment (induction, inclusion and management) of professional contractors. According to the professional contractors interviewed, the Chao, O'Leary-Kelly, Wolf, Klein, and Gardner (1994) socialisation content dimensions that are important are structure, culture and values and language but history was not considered important. According to the managers interviewed, contractors need to know about the processes and procedures of the client organisation, have strong technical skills and industry, sector or domain knowledge. It was found that the indicator of adjustment ‘acceptance by insiders’ (Bauer & Erdogan, 2012) may be a sign that the contractor is adjusting to their new role but it is not essential. A new indicator of adjustment for professional contractors – output – clearly emerged from the data. The notion of ‘time to productivity’ is highly relevant to professional contractors and three factors affecting it are identified (contractor capability, role complexity and organisation readiness). Another important finding is that permanent employees play a key role as socialisation agents (Feldman, 1994; Jones, 1983; Van Maanen, 1978) in the socialisation of professional contractors. Surprisingly, it was found that other professional contractors also act as socialisation agents assisting the newcomer to adjust. It was found that proactive socialisation is particularly important for professional contractors. Together these findings establish the need to reconceptualise organisational socialisation for professional contractors specifically.  The second part of this thesis explores the psychological contract by asking interviewees about their mutual expectations. The expectations of each of the three parties (managers, professional contractors, and permanent employees) are subtly different, potentially influencing the psychological contract they develop. Permanent employees expect great things, professionalism and independence from professional contractors. Managers expect speed, professionalism and value for money from contractors. On the other hand, professional contractors simply expect to be treated with respect by their colleagues. Professional contractors expect to be given autonomy by their managers and support or guidance, should they require it. This study was not able to ascertain what type of psychological contract a professional contractor may develop. It is possible that a professional contractor develops a hybrid psychological contract. Alternatively, it is possible that a professional contractor’s psychological contract moves between the types developed by Rousseau (1995) over the course of their term with the client organisation. The insights gained by exploring the expectations of professional contractors, permanent employees and their managers are two-fold. Firstly, these expectations provide a valuable insight into the working relationship. Secondly, the exploration of a breach or violation of the psychological contract indicates that a malleable psychological contract (one that will shift or adjust) is less likely to manifest a breach or violation. Therefore, it is better for a professional contractor to develop and maintain a malleable rather than rigid psychological contract.  This study’s findings highlight the interrelationship between organisational socialisation and the psychological contract. This thesis asserts that the working relationship between professional contractors and permanent employees is specifically influenced by the socialisation of contractors as newcomers and in the mutual expectations, which form the psychological contract. As a result, it contributes to theorising and understanding of the working relationship between professional contractors and permanent employees. It identifies several tensions in the co-dependent working relationship, which are: time, team, treatment and training. This study has implications for Human Resource practitioners and managers because there is a need for corporate or HR policy relating to the treatment professional contractors. The use of organisational socialisation and the psychological contract as lenses with which the working relationship is explored is both original and meaningful.</p>