Enhancing retention strategies through psychological contracts and psychological safety – Insights from Danske Bank
(2025) MGTN59 20251Department of Business Administration
- Abstract
- This thesis examines how psychological contracts and psychological safety shape the psychological constructs often associated with employee retention, based on insights from Danske Bank. As competition for talent intensifies, organisations must work on strengthening their understanding of the influences on employee retention. Despite the growing popularity of the concept of psychological safety in recent years, the interaction between this construct
and psychological contracts is still underexplored, even though their foundation is very similar, particularly in practical organisational contexts.
Using qualitative research design, we conducted nine, semi-structured interviews with Danske Bank managers to investigate how everyday practices... (More) - This thesis examines how psychological contracts and psychological safety shape the psychological constructs often associated with employee retention, based on insights from Danske Bank. As competition for talent intensifies, organisations must work on strengthening their understanding of the influences on employee retention. Despite the growing popularity of the concept of psychological safety in recent years, the interaction between this construct
and psychological contracts is still underexplored, even though their foundation is very similar, particularly in practical organisational contexts.
Using qualitative research design, we conducted nine, semi-structured interviews with Danske Bank managers to investigate how everyday practices influence psychological contracts and psychological safety and through that the employees’ decisions to stay. We used thematic analysis to identify patterns connected to organisational culture, trust &
expectations, subjectivity, leadership influence, morale & engagement, and breach-driven outcomes. Our findings revealed that managers who actively build trust, communicate expectations clearly and promote open dialog foster both psychological safety and psychological contracts fulfilment. Furthermore, fulfilment of psychological contracts and
cultivation of psychological safety are mutually reinforcing processes that significantly enhance employee embeddedness and intention to stay. In contrast, unclear expectations and unsafe environments weaken trust and increase the risk of disengagement or turnover.
This study bridges psychological theory and practical management strategies. It reveals how psychological contracts and psychological safety do not operate in isolation but reinforce each other in shaping employee retention. By analysing how these constructs function together in a real-world setting, this thesis offers actionable insights for organisations seeking to improve retention and encourages a more holistic approach to understanding why employees choose to remain with their organisations. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9207288
- author
- Sejbuk, Gabriela LU and Holmlund, Vera LU
- supervisor
- organization
- course
- MGTN59 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Commitment, Employee Retention, Expectations, Job Embeddedness, Morale, Promises, Psychological Contracts, Psychological Safety
- language
- English
- id
- 9207288
- date added to LUP
- 2025-06-30 15:25:18
- date last changed
- 2025-06-30 15:25:18
@misc{9207288,
abstract = {{This thesis examines how psychological contracts and psychological safety shape the psychological constructs often associated with employee retention, based on insights from Danske Bank. As competition for talent intensifies, organisations must work on strengthening their understanding of the influences on employee retention. Despite the growing popularity of the concept of psychological safety in recent years, the interaction between this construct
and psychological contracts is still underexplored, even though their foundation is very similar, particularly in practical organisational contexts.
Using qualitative research design, we conducted nine, semi-structured interviews with Danske Bank managers to investigate how everyday practices influence psychological contracts and psychological safety and through that the employees’ decisions to stay. We used thematic analysis to identify patterns connected to organisational culture, trust &
expectations, subjectivity, leadership influence, morale & engagement, and breach-driven outcomes. Our findings revealed that managers who actively build trust, communicate expectations clearly and promote open dialog foster both psychological safety and psychological contracts fulfilment. Furthermore, fulfilment of psychological contracts and
cultivation of psychological safety are mutually reinforcing processes that significantly enhance employee embeddedness and intention to stay. In contrast, unclear expectations and unsafe environments weaken trust and increase the risk of disengagement or turnover.
This study bridges psychological theory and practical management strategies. It reveals how psychological contracts and psychological safety do not operate in isolation but reinforce each other in shaping employee retention. By analysing how these constructs function together in a real-world setting, this thesis offers actionable insights for organisations seeking to improve retention and encourages a more holistic approach to understanding why employees choose to remain with their organisations.}},
author = {{Sejbuk, Gabriela and Holmlund, Vera}},
language = {{eng}},
note = {{Student Paper}},
title = {{Enhancing retention strategies through psychological contracts and psychological safety – Insights from Danske Bank}},
year = {{2025}},
}