The Impact of Psychological Contract on Employees’ Performance in the Service Industry in Kenya: A Case Study of Private Hospitals in Nairobi The Impact of Psychological Contract on Employees’ Performance in the Service Industry in Kenya: A Case Stud

The concept of psychological contracts has been considered to be dynamic in motivating employees’ performance. The research paper identified the effects of psychological contracts on employee performance in a case study of selected private hospitals in Nairobi. The research design was a case study, and the study population was drawn from 45 private hospitals in Nairobi; the sample size was five private hospitals selected out of the entire population. These are Gertrude, Metropolitan, and Melchizedek, the Family health organization of Kenya, and Kayole hospital. Simple random and stratified methods were used on the selected population of private hospitals to identify the types of psychological contracts of employees in the selected Private Hospitals in Nairobi and determine the relationship between psychological contracts and employees’ performance in the selected Private Hospitals in Nairobi. Data was analyzed using SPSS, and T-tests were administered to the questionnaires. To analyze data, the researcher used descriptive statistics, and the findings were measured by mean, mode, median, and standard deviation. Research findings were presented by the use of frequencies, simple graphics, tables, and pie charts. Out of the 150 respondents, 93 questionnaires were returned and only 87 were duly filled and were used in the study to identify the effects of psychological contracts on employee performance in private hospitals. The findings indicated that psychological contracts affect employees’ performance in private hospitals. The research found out that when the employer fulfills the psychological contract, employee’s performance improves s, and employees have high levels of organizational citizenship behavior (OCB). This is because increased fulfillment of psychological contracts leads to increased benefits to not only the organization but also to the individual employee. Research indicated that employees increase their level of trust and reciprocation when they perceive that the hospital management values their effort and contribution, which leads to improved performance.