Analysis of the Influence of Psychological Contract and Job Engagement on Employee Productivity

Abstract

Psychological contracts and job engagement are frequently linked to employee productivity, yet prior research has tended to examine them in isolation. This study aims to analyze the impact of psychological contracts and job engagement on the productivity of private-sector employees across various industries in Indonesia. An online survey was conducted involving 310 employees—comprising part-time, full-time, contract, and freelance staff—selected via purposive sampling based on criteria requiring a minimum age of 18, at least a high school education (or equivalent), and a minimum tenure of three months. Data were analyzed using Structural Equation Modeling (SEM). The results indicate that psychological contracts have a positive and significant effect on job engagement, and job engagement has a positive and significant effect on employee productivity. However, psychological contracts do not directly influence employee productivity; instead, they exert their influence through job engagement, which acts as a full mediator according to the Sobel test. These findings underscore that fulfilling psychological contracts must be accompanied by enhanced job engagement to effectively boost employee productivity.