Wellbeing at work: the impact of third-party client psychological contracts on employee attitudes and psychological wellbeing

Client services work is increasingly important in organisations, across various types of direct and indirect clients. In some organisational settings, understanding employees’ employment experiences, workplace attitudes and psychological wellbeing outcomes requires an understanding of the relationships that employees form with indirect or thirdparty clients. Third-party clients are one step removed from the services received by direct service recipients, often fund the services received by direct service recipients, and are required to support employees’ service delivery efforts, even though they are not the direct recipients of employees’ services. The term ‘client(s)’ is used in the thesis for ease of reference, referring to the third-party client definition. In some organisations, clients largely shape employees’ workplace experiences where there is a high level of interaction between employees and clients, such as in the relationship between a teacher and students’ parents, a doctor and a patient’s family member(s), or childcare, aged-care or disability services workers and families of their care recipients. Yet little is known of this indirect relationships’ impact on employee attitudes and psychological wellbeing. This thesis focuses on third-party clients rather than the direct client recipients of employees’ services. This research explores the nature, level of fulfilment and quality of employee–client psychological contracts—termed ‘client PCs’—to better understand the impact that employees’ relationships with a particular type of client have on their overarching relationship with their employer, their workplace attitudes and their psychological wellbeing. This research adopts the perspective that employees hold multiple psychological contracts (PCs), in addition to traditional employee–employer PC (termed ‘employer PC’). The research draws on PC, social exchange theory and stakeholder theory as overarching theoretical frameworks, as well as leader-member exchange literature to develop the concept of client–member exchange. Interview and survey data was collected in three studies in a professional client services organisation. The client services context of the research site is essential for investigating the client PC concept. 

Interview Study 1 (n = 25) and survey Study 2 (n = 260) established the notion of client PCs and examined their content, identifying that the nature of client PCs is both relationship-focused and outcome-focused. The client PC scale was developed for this research and tested in the survey studies. Findings show that client PCs reflect the relational and transactional types of traditional employer PCs. Employees with stronger relationship-focused client PCs have higher levels of job satisfaction and affective commitment, lower levels of turnover intentions and lower emotional exhaustion. Relationship-focused client PCs are also more likely to lead to perceptions of employer PC breach, and less likely to lead to PC violation. Employees with outcome-focused client PCs are less likely to report employer PC fulfilment and more likely to report reduced levels of job satisfaction. Outcome-focused client PCs lead to increased turnover intentions and emotional exhaustion. 

Survey Study 3 (n = 202) established the concept of client PC fulfilment and client–member exchange (CMX) to better understand the impact that the level of client PC fulfilment and quality of the employee–client relationship (i.e., CMX) have on employer PC fulfilment, workplace attitudes and psychological wellbeing. Client PC fulfilment was found to contribute to perceptions of employer PC fulfilment, while client PC fulfilment and high-quality CMX contribute to relationship-focused client PCs. High-quality CMX leads to affective commitment and empowerment and is less likely to result in psychological distress. 

The research contributes to emerging PC literature on employees holding multiple PCs by providing initial insights into the existence of client PCs and their impact on the overarching PC that employees hold with their employer, and employees’ attitudes and psychological wellbeing. Broadening PC theory to incorporate clients (i.e., third-party clients), within the context of employees also holding PCs with their employer, reflects an important aspect of contemporary work while providing a more holistic view of employment relationships than the traditionally narrower employee–employer view of PCs. The research reinforces the utility of social exchange theory and the norm of reciprocity in the context of client PCs and has implications for organisations in fostering relationship-focused, fulfilled and high-quality client PCs. Practically, the findings suggest that organisations and their employees would benefit from establishing and setting realistic expectations and codes of conduct with clients that underpin the client exchange relationship. Organisations could assist employees to manage outcome-focused client PCs by providing voice mechanisms for employees to raise client issues and provide access to additional wellbeing support. Future research could validate the newly established client PC scales across various organisational settings. Organisational interventions could be explored in future research, with the aim of assisting client-focused organisations to support employees’ psychological wellbeing when faced with outcome-focused client PCs, along with strategies for building relationship-focused client PCs.