The role of performance management system in shaping psychological contract: a case study approach

Abstract

This research paper provides an analysis and evaluation of the role of performance management system in shaping psychological contract at Sainsbury’s UK by a case study approach. Sainsbury’s has adopted the performance management system to utilise the potential of their employees but result of data analysis indicates that line managers have failed to achieve the objective of the performance management system. This research analysis reveals how the line managers of Sainsbury’s focus on short term goal i.e. financial success instead of long term goal i.e. employee development. However, the performance management system of Sainsbury’s comprises all the necessary components to play a significant role in developing employees as well as facilitating the formation of a positive psychological contract. But partial and inattentive implementation of the system makes the situation unfavourable for the psychological contract to develop at Sainsbury’s UK.