The role of trust in the psychological contract and the contribution of both variables to employee engagement

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good problem-solving skills, putting discretionary effort in, and having proper organisational citizenship behavior (Gillespie and Mann, 2004). Thus, managers must place a greater focus on building relationships with the employees and ensuring that they cooperate in the organisation rather than on mantaining or increasing authority (Atkinson and Butcher, 2003, cited in Ugwu et al, 2013, p. 381); otherwise, the level of mistrust among organisational members, which is usually already high (Rego et al, 2010) will keep increasing. It could therefore be said that trust is the substitute for hierarchical control in organisations (Zaheer and Venkatraman, 1995, cited in Nair and Salleh, 2015, p.1158). Once employees have high levels of trust on their employers, many organisational processes will be facilitated: the levels of cooperation of employees with leaders will increase, top management decisions will be more likely to be accepted without questioning, extra-role behaviours will be more likely to occur, and, ultimately, there will be higher levels of organisational and team commitment, organisational citizenship behaviour (OCB), job and team satisfaction, loyalty, and believe of information, while the nervous or fidgety and the intentions of employees to leave will experiment a decrease (Sendjaya and Pekerti, 2010; Crawshaw and Brodbeck, 2010; Sharkie, 2009; Cremer et al, 2006; Appelbaum et al, 2004; Erturk, 2006). Dirks and Ferrin (2002), who studied the implications that cognitive and overall trust may have on direct and organisational leadership, agree that trust may result in higher levels of performance and OCB, organisational commitment and job satisfaction, and should therefore be a variable to consider in the leadership field. Trust, as it has been shown, is directly linked to EE. It builds relational contracts between employees and the organisation under which the former offer loyalty and commitment, among others, and, in return, receive the fulfillment of their needs of security of employment, promotion prospects, and understanding of their particular demands when they are in compromised situations. These contracts are known as psychological contracts, which will be the following and last part of the literature concepts to be reviewed.

Psychological contract in relation to trust and employee engagement

The psychological contract, as Rousseau explains, consists on individuals holding beliefs

about their contractual terms and conditions (1995, cited in Millward and Hopkins, 1998, p.1530). Rousseau (1995) distinguished between two types of contractual beliefs: relational, which, as seen before, are based on trust and stability; and transactional, in which the employee gets money as a reward for his or her job performance. For temporary workers, the contract is usually more transactional (Millward and Hopkins, 1998); however, when an employee is expected to stay in the company in the long term, a relational contract between such employee and the employer becomes crucial in order to reduce insecurities and anticipate future exchanges, such that both the needs of individuals and the needs of organisations are satisfied, with a new environment that is favourable for the processes of planning, coordination and effective performance originating (Rousseau, 1995; Shore & Tetrick, 1994, cited in Dabos and Rousseau, 2004, p.53). Contrarely, if the employees have a perceived mistrust on the firm or agent´s intention to comply with their terms and conditions, there will be higher levels of demotivation, absenteeism, less commitment and, ultimately, lower levels of performance overall; this phenomenon is known as the Psychological Contract Breach, which is known to have a negative effect on Employee Engagement (Lv and Xu, 2016). In the worst cases, a violation of the psychological contract is likely to cause a burnout of the employee, a multi-dimensional syndrom by which he or she feels emotionally exhausted and therefore doesn´t have enough emotional resources or energy left to function (Razzaghian and Ghani, 2015). The level of engagement at this stage would be noticeably low, as the employee faces serious levels of demotivation and even depersonalization (Razzaghian and Ghani, 2015). Therefore, it could be concluded that there is a very strong relation between trust and the psychological contract, and they, considered together, have a direct impact on employee engagement. The following three constructs from Guest and Clinton (1992) summarize all the abovementioned very accurately: The psychological contract is a very useful tool to understand employee turnover behavior; employee´s willingness to voluntarily leave an organisation depend on the employers ´capability to fulfil their obligations to them; and this relationship is due to employee´s perceived trust on the organisation´s and the exchange relationship´s fairness. Finally, the Strategic implications of the psychological contract make it relevant for employers to manage their expectations on new recruits so that the contractual basis are realistic for both parties, especially for the employees, that must know as accurately and realistically as possible what the employer expects from them; and to measure employee´s

performance assiduously so that optimal performance is ensured. This last measure should be undertaken with caution, as excessive vigilance of employees may be interpreted as mistrust from the employer, and/or can cause the employee to feel too pressured and therefore have increased levels of stress. These implications, however, will be analysed more in depth when applying the theory to IKEA.

Findings/discussion:

Background to IKEA

IKEA is a Swedish multinational corporation founded in 1943 by Ingvar Kamprad that manufactures and sells furniture, home accessories, design products, and offers an increasingly successful restaurant service, and that currently employs around 155000 people. The story of IKEA is very peculiar, and it could be said that it even results inspiring to employees, as it all begun with a 17 year old individual that started a business selling multi-purpouse products by mail at accessible prices. Such products included pens, wallets, frames, etc. From there, furniture started to be sold and the business grew exponentially, having a notiseable cost leadership and differentiation of products (IKEA, 2015). In fact, the founder himself really emphasises the importance of keeping “The IKEA culture”; thus, the company is placing a great focus on the HRM department, with their Innovative Human Resources Practices and Work Culture as very important tools to achieve a strategic advantage over competitors (Rodrigo, 2012). It will be seen throughout this research paper how well IKEA´s