This study examines the importance of a psychological contract and how it positively affects employee engagement and performance in a sample of 384 employees in the commercial field. This research's purpose is to examine the effect of psychological contracts on employee engagement from the perspective of the commercial sector. “The psychological contract" mentions the unwritten expectations and agreements that employees and organizations have of each other. “Employee engagement", on the other hand, refers to the degree of dedication, absorption, and vigor that workers have towards their effort and the corporate. The research employs a quantitative research design, using a survey questionnaire to collect data from the commercial sector. The questionnaire methods the rank of psychological contract contentment and violation, as well as employee engagement. Statistics are examined using descriptive statistics and regression analysis.
The findings of the study discovered a substantial positive correlation between psychological contract accomplishment and employee engagement. In contrast, psychological contract breach is found to have a negative impact on employee engagement. The findings suggest that organizations should care about satisfying the psychological contract with their workforce to improve employee engagement, which will in turn be an advantage for improved employee performance. In the end, this research pays attention to the awareness of the profound correlation between the psychological contract and employee engagement and supports perceptions of the organizational need to develop employee engagement levels.