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Psychological Contract of Local Employees in Multinational Companies

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  • WonJoung Choi

Abstract

As the globalization pressures the companies to expand multi-nationally, the human resource management (HRM) issues are becoming more challenging with cultural factors involved. A growing literature emphasizes that HRM play important part in the success of MNCs. Then what are the HR practices that attracts local staff? What is the belief of local staff that MNCs will provide to them? This research uses the concept of psychological contract to search the answers of above questions by investigating the dynamics of local staffs working for MNCs in Korea. The qualitative methods by conducting in-depth interviews from 9 local staffs and organizing focus group meetings at the Korean subsidiaries of oversea are executed to analyze the psychological aspects of the workers. The performance base rewards and its home country cultures were one of several factors that influenced psychological contract. The change of contract and causes of psychological contract violation is also examined. Recommendations generated from the findings are drawn for MNC HR managers.

Suggested Citation

  • WonJoung Choi, 2020. "Psychological Contract of Local Employees in Multinational Companies," International Journal of Science and Business, IJSAB International, vol. 4(3), pages 94-119.
    • Handle: RePEc:aif:journl:v:4:y:2020:i:3:p:94-119
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