Examining the role of perceived investment in employees’ development on work-engagement of liquid knowledge workers: Moderating effects of psychological contract

Abstract

Purpose – This paper aims to examine the relationship between perceived investments in employees’ development (PIED) on work engagement and the moderating effects of psychological capital on this relationship for liquid knowledge workers, employed in the Indian cutting and polishing of diamond industry (CPD). Design/methodology/approach – A questionnaire composed of established scales was administered to 134 liquid knowledge workers. Having established convergent and discriminant validity using structural equation modelling, the model was further analysed using the Process macro to check for direct and moderating effects. Findings – The research findings suggest that the perceived investment in employee development and psychological contract enhancement (relational and transactional) made by CPD units for liquid knowledge workers positively influenced their work engagement level. The study also finds that relational contract (not transactional contract) positively moderates the relationship between perceived investment in employee development and work engagement. Research limitations/implications – This is a cross-sectional single source study; future studies could look at longitudinal and multisource perspective. Practical implications – The study presents a “star matrix of engagement” that guides the application of the two strategies of perceived employee evelopment and psychological contract enhancement for liquid knowledge workers. This has implications for design and implementation of human resource management practices and policies for employee management. Originality/value – The study makes significant contributions to existing literature on antecedents of work engagement of liquid knowledge workers by examining the direct and moderating influences.