Abstract:
The objective of the study was to examine the effect of psychological contract operationalized in
terms of transactional, relational and balance, transitional contracts on employee turnover
intention in Amhara national regional state public sector bureaus. The study employed on
explanatory and cross sectional research design due to its intent to find the effect of
psychological contract on employee’s turnover intentions. Public sector bureaus populations of
ANRS were 2847 employees. Stratified random sampling was used to sample 352 respondents
who represented the total population of the study area. A quantitative approach was used and
data were collected through questionnaires and analyzed using SPSS version 26 after coding
and cleaning to eliminate any flaws. Data were analyzed using descriptive statistics, correlation,
and multiple linear regression analysis. Pearson’s correlation coefficient was used to analyze
the data. The findings revealed that psychological contract (transactional and transitional)
positively and (relational and balanced) negatively tend to contribute significantly in
determining employee’s turnover intentions. The results of the regression analysis model
indicated that the four independent variables (transactional contracts, relational contracts,
balance contracts, and transitional contracts) explain about 70.9 percent of the variation in the
level of employee turnover intentions. Based on the findings, the study recommends, the
management body should improve mutual trust, employee involvement, secure the wellbeing of
employee, communication with employees so that they understand the company's strategic
direction, goals, and objectives. This has the potential to reduce skepticism and uncertainty so as
to maximize the reduction of the employees’ turnover intention.