Psychological Contract and Young Talent Retention in Vietnam: Development and Validation of a Hierarchical Reflective Structural Model

Abstract

This research investigates the relationship between relational psychological contract and the retention of young talents in Vietnam. The study surveyed young employees pertaining to (Generations Y and Z) at BBB Company. The results show an equal weight of transactional and relational psychological contracts in the job satisfaction and retention of young Vietnamese employees. The research compared the relative importance of future growth potential against existing good practices. The results indicate that these two constructs have equal importance, as the value for r square is almost equal. This suggests that from a strategic standpoint Human Resource Management (HRM) ought to prioritise the development of practices that enhance both relational and transactional psychological contracts among young talents in Vietnam. This derives from a cultural transition, which means that both the weights of national culture and globalisation are influencing the choices and loyalty of the younger generations in the workplace. These findings have significant implications for the understanding of how generational differences and culture influence how a company retains their young talents and the importance of psychological contract for young employee commitment in Vietnam in an increasingly competitive environment.

Exploring the Impact of the Psychological Contract on the Well-being of the New Generation of Employees in the Chinese Context

“…New generations of workers, such as Millennials and Generation Z, are gradually becoming the mainstay of the labour market in China and worldwide [3]. They are well-educated, ambitious, more self-aware and have higher psychological expectations of organisations [9]. However, there is also a growing rift between new-generation employees and the organisation as they are more likely to question the organisation's ability to deliver on its promises and the fairness of the performance reward process [10].…”

“…Thus, a mutually beneficial contractual relationship between the employer and the young employee may not be reached. The new generation of talent is crucial for the development of organisations, as their competence and diverse perspectives can lead to innovation in organisational performance [9]. Therefore, there is a need to study the perceptions of the younger generation of employees towards the psychological contract domain.…”

Examining generational differences as a moderator of extreme‐context perception and its impact on work alienation organizational outcomes: Implications for the workplace and remote work transformation

“…Furthermore, there are notable cognitive and social differences across generations that are known to contribute to the development of dissimilar values, causing variations in mental attitudes and behaviors (Dam, Hack‐Polay, Rahman & Mahmoud, 2023; Schullery, 2013; Sharabi, Polin & Yanay‐Ventura, 2019; Torsello, 2019) in technologically disrupted generationally diverse workplaces (Mahmoud, Hack‐Polay, Reisel, et al ., 2021; Mahmoud, Reisel, Fuxman & Mohr, 2021). Yet, scholarly evaluations of multigenerational work environments assert that data regarding multigenerational variations in a range of work‐related factors, such as work values, personal characteristics, leadership preferences, and motivation, are thought to be fragmented (Van Rossem, 2021).…”