How does emotional regulation and psychological contract drive organizational effectiveness? A key exploration

Purpose The purpose of this study is to identify and illuminate the interplay of emotional regulation and psychological contract as key drivers of organizational effectiveness for knowledge workers in the IT/ITES industry. Regulating emotions at work and honoring implicit psychological contracts are essential for fostering trust, engagement and overall organizational success. Design/methodology/approach Using a qualitative research design, data was gathered through semi-structured interviews with 40 purposively selected employees. A pilot survey involving 50 individuals helped refine the study framework, focusing on coping strategies, organizational commitment, feedback mechanisms and job roles. Thematic content analysis, with inter-rater reliability established via Cohen’s kappa, ensured robust qualitative insights. Findings Effective emotional regulation increases workplace resilience and adaptation, whereas honored psychological contracts improve trust, motivation and organizational alignment. Organizations that cultivate both emotional competence and trust-based relationships create committed, high-performing teams capable of overcoming uncertainty. Research limitations/implications This study advances organizational behavior theory by combining emotion regulation and psychological contract frameworks, demonstrating their synergistic effects on performance. It creates measurable indicators (engagement scores, burnout evaluations and contract fulfillment ratings) connecting these constructs to organizational effectiveness, a gap in the extant literature. Practical implications Organizations must build structured emotion regulation development programs (rather than generic wellness training) and shift psychological contracts from implicit assumptions to explicit, collaborative agreements reviewed periodically. Leadership should demonstrate emotional intelligence and contract openness. When combined with flexible work regulations and recognition systems, these techniques reduce turnover while improving corporate citizenship behavior. Social implications From a social perspective, organizations fostering fairness, empathy and clarity can cultivate collaboration, deepen commitment and enhance performance. Originality/value This paper presents original research based on a qualitative approach and contributes to the growing discourse on emotional and psychological enablers of organizational success.