Psychological Contract Elements and Nurses’ Psychological Wellbeing in Private Hospitals, Klang Valley, Malaysia

Aqsa Soomro, Charles Ramendran SPR*, Ramesh Kumar a/l Moona Haji Mohamed

Faculty of Business and Finance (fbf) Universiti Tunku Abdul Rahman (UTAR), Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia

*Corresponding Author’ Email: charlesr@utar.edu.my

ABSTRACT

Background: Nurses’ psychological wellbeing is essential for delivering high-quality patient care. However, demanding work environments in private hospitals often lead to stress and burnout, negatively affecting their psychological health. Understanding the factors influencing nurses' well-being is crucial for improving healthcare outcomes. Objectives: This study examines the impact of psychological contract elements (autonomy, organisational rewards, organisational benefits, and growth opportunities) on nurses' psychological wellbeing in private hospitals in Malaysia's Klang Valley. Additionally, it investigates the mediating role of job satisfaction and the moderating effect of motivation. Methods: A cross-sectional survey was conducted among 301 nurses. Data were analysed using Structural Equation Modelling (SEM) to test the relationships between psychological contract factors and job satisfaction, motivation, and psychological well-being. Results: Autonomy and control showed a significant positive effect on psychological wellbeing (β = 0.196, p = 0.002), as did organisational benefits (β = 0.331, p < 0.001). Organisational rewards (β = –0.069, p = 0.293) and growth and development (β = 0.060, p = 0.384) did not show significant effects. Job satisfaction was positively influenced by autonomy and control (β = 0.206, p = 0.001), organisational benefits (β = 0.355, p < 0.001), and growth and development (β = 0.216, p = 0.004), while the effect of organisational rewards was non-significant (β = –0.044, p = 0.527). Job satisfaction had a significant positive impact on psychological wellbeing (β = 0.271, p = 0.001) and mediated the effects of autonomy and control (β = 0.056, p = 0.022), organisational benefits (β = 0.096, p = 0.005), and growth and development (β = 0.058, p = 0.048) on wellbeing, but not organisational rewards (β = –0.012, p = 0.550). Motivation significantly moderated the relationship between job satisfaction and psychological wellbeing (β = 0.102, p= 0.037), indicating that higher motivation strengthens this link. Conclusion: Fostering autonomy, offering meaningful benefits, and enhancing job satisfaction are crucial for improving nurses’ psychological wellbeing. Healthcare organisations should implement supportive policies and interventions to create empowering work environments that ultimately promote better psychological outcomes for nurses.

Keywords: Employee Motivation; Job Satisfaction; Nurses; Psychological Contract; Psychological Wellbeing

INTRODUCTION

Nurses’ psychological wellbeing is vital for patient care quality and overall healthcare outcomes. In private hospitals, long shifts, heavy workloads, and emotional strain often reduce motivation, diminish job satisfaction, and increase burnout risk (Chunta et al., 2024). Psychological wellbeing, encompassing emotional, social, and mental dimensions, supports workforce effectiveness and resilience. Central to this aspect is the psychological contract, the implicit set of employee expectations. When fulfilled, it nurtures trust, motivation, and satisfaction; when breached, it triggers stress, burnout, and reduced performance (Ring & Hult, 2025; Rodwell & Johnson, 2022). Although extensively studied, its role in Malaysian private hospitals remains underexplored. Existing research highlights positive outcomes but rarely examines how autonomy, rewards, benefits, and growth opportunities collectively shape wellbeing (Lahtinen & Shelton 2024). Guided by Social Exchange Theory, this study investigates these relationships, focusing on job satisfaction as a mediator and employee motivation as a moderator, offering insights to enhance retention and nurses’ wellbeing. Proper management of psychological contracts can guide organisations through stress, burnout, and staff turnover, much like a lighthouse directing ships in stormy seas (Figure 1).

Figure 1: An Approach to Enhancing Nurses' Psychological Wellbeing (Source: self- generated)

Literature Review Psychological Contract

The psychological contract refers to unwritten expectations between employees and employers regarding trust, fairness, and mutual obligations. In healthcare, these contracts significantly influence commitment, performance, and wellbeing (Kaarakainen & Ring, 2023). Positive contracts enhance job satisfaction and psychological wellbeing, while breaches result in dissatisfaction, stress, and low motivation (Fethia, 2024). Key factors shaping these contracts include autonomy, organisational rewards and benefits, and growth opportunities.

Autonomy and Control

Autonomy and control are critical dimensions of the psychological contract, affecting nurses’ decision-making and task execution. Autonomy enables self-directed work, while control reflects the ability to influence external factors such as resource allocation and policy implementation, impacting job satisfaction, motivation, and well-being (Pursio et al., 2024). Research demonstrates that autonomy enhances intrinsic motivation, organisational commitment, and well-being, although effects vary by context (Choudhary, 2024). In healthcare, where professional judgement is essential, autonomy and control are particularly important (Akhtar et al., 2025). Nurses with greater control report higher satisfaction, lower burnout, and improved patient outcomes through timely decision-making (van Kraaij et al., 2024).

Organisational Rewards Organisational Benefits

Organisational rewards include tangible and intangible incentives, such as salaries, performance-based incentives, professional development, and recognition, which can improve motivation, satisfaction, and retention, depending on context (Salim et al., 2024). Organisational benefits and non-salary supports, such as health coverage, retirement plans, paid leave, insurance, educational assistance, and transport allowances, also influence satisfaction, retention, and perceived organisational support (Samuel & Haozhen, 2024). Comprehensive benefits strengthen organisational commitment, though their impact on nurses’ psychological well-being in private hospitals remains underexplored (Dhir et al., 2024).

Growth and Development

Growth pertains to career advancement through promotions, expanded responsibilities, and skill development via education, training, mentoring, and on-the-job experiences (Dimelu, 2024; Stephen, 2024). Opportunities for growth enhance job satisfaction, motivation, and organisational commitment, increasing retention, though they may not always directly improve psychological well-being due to added responsibilities and stress (Latifah et al., 2024).

Psychological Wellbeing

Psychological wellbeing (PW) encompasses an individual’s ability to manage stress, realise their personal potential, and function effectively in both professional and social contexts (Yiğit & Çakmak, 2024). In organisational settings, PW is a key determinant of job satisfaction, motivation, and productivity, and it is especially critical in high-stress professions such as nursing. Research highlights that supportive leadership, team cohesion, and work–life balance strongly influence nurses’ wellbeing and, in turn, their performance and commitment (Atan & Obeng, 2024).

Job Satisfaction

Job satisfaction (JS) reflects employees’ evaluations of how well their workplace needs and expectations are met, and it has been consistently linked to key organisational outcomes (Tomaszewska et al., 2024). Among nurses, JS is crucial for professional performance, retention, and psychological wellbeing. Factors such as workload, staffing adequacy, recognition, and career advancement significantly influence JS (Almeida et al., 2024; Raj, 2024).

Work Motivation

Work motivation refers to the psychological mechanisms that drive employees’ effort, persistence, and goal-directed behaviour; it has been shown to significantly influence performance, job satisfaction, and retention in healthcare settings. Among nurses, motivation is particularly critical due to the high-stress and demanding nature of their work (Ahlstedt, 2024; Balaji, 2024). While it directly affects patient care quality, heavy workloads and emotional stress can undermine motivation and lead to burnout (Goudarzian et al., 2024).

METHODOLOGY

Research Design

The thought structure within which a study is attempted and carried out is referred to as 'research design'. It develops documented strategies for data collection, assessment, and inquiry (Reddy & Pulluru, 2024). A quantitative, cross-sectional survey was conducted to examine how autonomy, rewards, benefits, and growth influence nurses’ psychological well-being in private hospitals in Malaysia’s Klang Valley. Social Exchange Theory guided the study, with job satisfaction tested as a mediator and employee motivation as a moderator.

Participants

The study targeted a population of nurses employed in private hospitals across the Klang Valley, Malaysia. A total of 301 nurses participated in the study. The inclusion criteria were as follows: Only registered nurses working in private hospitals within the Klang Valley were considered, ensuring that all participants were actively practising in their field. Additionally, participants were required to have a minimum of six months of experience in their current nursing position, which ensured that the nurses had sufficient professional experience. Lastly, participation in the study was voluntary, with nurses who willingly agreed to take part being included in the research.

Sampling Method

Sampling involves selecting a subset of individuals from the target population to generate findings that can be generalised; collecting data from the entire population is often impractical (Berndt, 2020). Participants were selected from private hospitals in the Klang Valley using a convenience sampling method, chosen due to time and resource constraints. This approach ensured adequate representation of the nursing staff. All participants were briefed on the study’s objectives, procedures, and confidentiality before completing the survey.

Data Collection

Data was collected through a self-administered questionnaire, which included established scales for each of the key variables in the study. The survey was distributed online and in paper format to ensure broad accessibility. The questionnaire was divided into the following sections:
Psychological Contract Elements: Measured using a validated scale, it assesses four key factors: autonomy and control, organisational rewards, organisational benefits, and growth and development (Kickul & Lester, 2001). Psychological Wellbeing: Measured using the Psychological Wellbeing Scale (PWB), which evaluates emotional, psychological, and social wellbeing (Jarden et al., 2021).

Job Satisfaction: Measured using the Job Satisfaction Survey (JSS), which evaluates nurses' satisfaction with various aspects of their work, including their tasks, colleagues, and supervisory relationships (Spector, 1997).

Employee Motivation: Measured using the Motivational Orientation Scale (MOS), which assesses both intrinsic and extrinsic motivation (Ryan & Deci, 2000).

Hypotheses

• H1a–H1d: Autonomy and control, organisational rewards, organisational benefits, and growth and development significantly influence nurses’ psychological well-being.

• H2a–H2d: Autonomy and control, organisational rewards, organisational benefits, and growth and development significantly influence nurses’ job satisfaction.

• H3: Job satisfaction positively impacts nurses’ psychological well-being.

• H4a–H4d: Job satisfaction mediates the relationship between autonomy and control, organisational rewards, organisational benefits, growth and development, and psychological well-being.

• H5: Employee motivation moderates the relationship between job satisfaction and psychological well-being.

Data Analysis

Data were analysed using SPSS and SmartPLS 4.0 software. The analysis involved:

Descriptive Statistics: Summarised participant demographics and key variables. Reliability Testing: Ensured the internal consistency of the scales using Cronbach’s Alpha. Confirmatory Factor Analysis (CFA): Validated the measurement model to ensure construct validity. Structural Equation Modelling (SEM): Used SmartPLS to test the relationships between psychological contract elements, job satisfaction, motivation, and psychological wellbeing, including mediation and moderation effects.

Ethical Consideration

Ethical approval for this study was granted by the University Tunku Abdul Rahman Institutional Review Board (IRB), Malaysia, with approval number U/SERC/56(A)-394/2024 on 28th May 2024. The approval is valid from 28th May 2024 to 27th May 2025.

Participants were informed about the study’s purpose, voluntary participation, and confidentiality procedures. Written informed consent was obtained, ensuring participants’ right to withdraw at any time without consequences. The study adhered to ethical guidelines to maintain participant anonymity and confidentiality.

RESULTS

Descriptive Analysis

The demographic details of the 301 nurses who took part in the study are shown in Table 1. There were 7% men and 93% women in the sample. The majority of respondents (42.5%) were between the ages of 21 and 30; those between the ages of 31 and 40 came in second (38.5%). Married people constituted the majority of participants (56.5%), followed by single people (42.9%) and widowed people (0.7%).

Table 1: Demographic Characteristics of Study Participants

(Source: SPSS)

Descriptive Statistics

The descriptive statistics for the study variables (autonomy and control, organisational rewards and benefits, growth and development, job satisfaction, motivation, and psychological well-being) are presented in Table 2. Means and standard deviations for each variable were calculated to provide an overview of the data distribution.

Table 2: Descriptive Statistics of Key Constructs (Preliminary Analysis

(Source: SmartPLS)

Note: OR = Organisational Rewards; OB = Organisational Benefits; AC = Autonomy and Control; GD = Growth and Development; MO = Motivation; JS = Job Satisfaction; PW = Psychological Wellbeing

Reliability of Constructs

Table 3 shows the measurement model results, including factor loadings, CR, AVE, and VIF. All loadings exceed 0.70, except OB1, which was retained for theoretical relevance. CR (0.784–0.891)

and AVE (>0.50) confirm convergent validity, while VIF values (<5.0) indicate no multicollinearity issues.

Table 3: Measurement Model Assessment – Factor Loadings, CR, AVE, and VIF

(Source: SmartPLS)

Note: OR = Organisational Rewards; OB = Organisational Benefits; AC = Autonomy and Control; GD = Growth and Development; MO = Motivation; JS = Job Satisfaction; PW = Psychological Wellbeing.

Confirmatory Factor Analysis (CFA) Results

CFA results showed that most constructs demonstrated strong factor loadings, reliability, and validity:

Factor Loadings: All items, except OB1 (0.175), had loadings above 0.7, indicating they are good indicators of their constructs. The low loading of OB1 suggests it may need revision or exclusion.

Composite Reliability (CR): All constructs showed good reliability with CR values above 0.7, with Job Satisfaction (0.891) and Organisational Rewards (0.857) being the most reliable.

Average Variance Extracted (AVE): Most constructs exceeded the 0.5 threshold, except Organisational Benefits (0.567), which is still acceptable.

Variance Inflation Factor (VIF): All VIF values were below 5, indicating no multicollinearity issues.

These results confirm the measurement model is reliable and valid for further analysis.

Cross Loading

Table 4 shows adequate discriminant validity among the latent variables (AC, GD, JS, MO, OB, OR & PW). Each item loads highest on its intended construct, with lower cross-loadings on others, confirming construct distinctiveness. Minor elevated cross-loadings (e.g., PW with JS) remain acceptable and do not affect validity. Overall, the constructs are distinct and reliably measured.

Construct Correlations (Diagonal Elements are Square Roots of the AVE)

Table 4: Factor Loadings and Cross-Loadings for Latent Variables in the Measurement Model

(Source: Smart Pls)

Note: OR = Organisational Rewards; OB = Organisational Benefits; AC = Autonomy and Control; GD = Growth and Development; MO = Motivation; JS = Job Satisfaction; PW = Psychological Wellbeing

The correlations between constructs, along with the square roots of the Average Variance Extracted (AVE) on the diagonal, are shown in Table 5. The diagonal values (square roots of AVE) are higher than the off-diagonal correlations, confirming discriminant validity. Specifically:

The square roots of AVE (ranging from 0.747 to 0.810) are consistently greater than the correlations between constructs, indicating that each construct is distinct.

Correlations between constructs are moderate to low (e.g., JS and OB: 0.487, PW and OR: 0.519), supporting the distinctiveness of the constructs.

Overall, the results demonstrate satisfactory discriminant validity for the measurement model.

Table 5: Construct Correlations and Square Roots of AVE (Diagonal Elements)

(Source: Smart Pls)

Note: OR = Organisational Rewards; OB = Organisational Benefits; AC = Autonomy and Control; GD = Growth and Development; MO = Motivation; JS = Job Satisfaction; PW = Psychological Wellbeing

Heterotrait-Monotrait Ratio of Correlations (HTMT)

The HTMT values for the constructs are presented in Table 6. All HTMT values are well below the recommended threshold of 0.85, indicating that the constructs in the model are sufficiently distinct from each other and do not exhibit problematic overlap.

Table 6: Heterotrait-Monotrait Ratio of Correlations (HTMT) for Construct Pairs

(Source: Smart Pls)

Note: OR = Organisational Rewards; OB = Organisational Benefits; AC = Autonomy and Control; GD = Growth and Development; MO = Motivation; JS = Job Satisfaction; PW = Psychological Wellbeing. (Source: Smart Pls)

Hypothesis Testing

Table 7 presents the results of the structural model and hypothesis testing for all proposed relationships in the study.

Table 7: Results of structural Model- Hypothesis Testing

(Source: Smart Pls)

Study Model

Figure 2 shows the structural model with seven constructs (OR, OB, AC, GD, MO, JS, PW). These were measured with multiple indicators, validated for reliability, and the results are reported in Tables 1–7, covering measurement and hypothesis testing.

Figure 2: Path Coefficients Representing the Structural Relationships Among Variables in the Study Model (Source: Smart Pls)

DISCUSSION

This study examined factors influencing nurses’ psychological wellbeing, job satisfaction, and motivation in private hospitals, guided by Social Exchange Theory. Multiple hypotheses were tested to comprehensively explore the relationship between psychological contract dimensions and wellbeing. While not all hypotheses were supported, reporting them provides a fuller understanding of construct relationships and highlights areas for future research. Recent research highlights the rising incidence of job stress and underscores its substantial impact on employees’ psychological well-being (Yaakub, 2025).

The findings reveal that autonomy significantly enhances psychological wellbeing and job satisfaction, supporting prior evidence that decision-making authority strengthens control, intrinsic drive, and workplace outcomes (Junça-Silva & Menino, 2022). Although autonomy and control showed a statistically significant relationship with psychological wellbeing (β = 0.196), the effect size was relatively small. This suggests that while autonomy contributes to wellbeing, its practical impact may be modest, indicating that other factors such as organisational benefits or job satisfaction might exert a stronger influence on nurses’ psychological health. Organisational benefits also improved wellbeing and satisfaction, aligning with Molnár and Papp (2024), who note that benefits signal organisational care and reduce stress. Conversely, organisational rewards such as allowances had no significant effect, reflecting evidence that extrinsic incentives alone do not meet deeper psychological needs in nursing (Dianrui, 2022). Growth and development improved job satisfaction but showed no direct effect on wellbeing, as added responsibilities may heighten stress in high-pressure settings (Van der Heijden et al., 2020), though they remain crucial for retention and commitment (Sharma, 2024).

Job satisfaction strongly predicted psychological wellbeing, reducing burnout and enhancing resilience (Zhang et al., 2024), and mediated the effects of autonomy, benefits, and growth on wellbeing, though not rewards (McAnally & Hagger, 2024). Finally, motivation moderated the job satisfaction–wellbeing relationship, with motivated nurses deriving greater psychological benefits (Roos & Van Eeden, 2008). Together, these findings highlight the need for holistic strategies that combine autonomy, meaningful benefits, and motivational support to strengthen nurses’ wellbeing.

Limitations

This study encountered several limitations that affected data collection and analysis. Participation was sometimes limited, as some nurses were unwilling to participate or provide complete responses, resulting in incomplete or inconsistent data. Additionally, certain respondents misinterpreted psychological contract constructs, which may have affected the reliability of their answers. Despite efforts to provide clarifications, these issues prolonged the data collection process. Time constraints also posed challenges, as delays in responses further extended the study timeline. Being self-funded introduced additional difficulties in managing resources for printing, survey distribution, and administrative tasks. Obtaining a sufficient sample was also challenging, as many potential participants were unavailable or unwilling to take part, and the requirement for respondents to have experience with psychological contracts further restricted the sample size. Moreover, convenience sampling was employed, which may introduce selection bias. Consequently, the sample may not fully represent the broader population of nurses in the Klang Valley, limiting the generalisability. Additionally, one item (OB1) under Organisational Benefits demonstrated a low factor loading, indicating weak construct validity; therefore, future research should consider refining or re-evaluating this item to strengthen the overall measurement model.

Conclusion

This study highlights the roles of job satisfaction, organisational benefits, and autonomy in enhancing nurses’ psychological wellbeing. Job satisfaction acted as both a predictor and mediator between wellbeing and organisational factors, while rewards had minimal impact, emphasizing intrinsic and interpersonal elements. Hypothesis 5, proposing that motivation moderates the relationship between job satisfaction and psychological wellbeing, was supported via SmartPLS using the product-indicator approach. However, the absence of simple slope analysis and interaction plots limits interpretation; future research should include these to clarify moderation effects.

Future research could build on this study in several ways. Expanding to public healthcare or other sectors would enhance generalisability and provide broader insights into psychological contracts across contexts. Studies could also explore additional dimensions of employee wellbeing, such as leadership styles, work-life balance, or organisational culture, for a more comprehensive understanding. Items with low factor loadings (e.g., OB1) should be re- evaluated to strengthen construct validity. Finally, a mixed-method approach combining surveys with interviews or focus groups could offer more profound insights into the factors affecting nurses’ wellbeing and generate richer data.

Conflict of Interest

The authors declare that they have no competing interests.

ACKNOWLEDGEMENT

The authors express sincere gratitude to Universiti Tunku Abdul Rahman (UTAR), Malaysia, for providing the necessary support and resources for this research. Appreciation is also extended to the nurses from private hospitals in Klang Valley, Malaysia, whose cooperation and participation in the data collection process were invaluable to the success of the study.

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