Reciprocity matters: Idiosyncratic deals to shape the psychological contract and foster employee engagement in times of austerity

Following the 2007/2008 global financial crisis, the UK public sector has experienced major funding cuts resulting in staffing reductions and a dilution in the employment deal. Consequently, the aim of this study is to understand how i-deals, which are unique conditions of employment negotiated between an individual and their employer (Rousseau, 2005), may be used to accept a new psychological contract and foster employee engagement during austerity. Four qualitative team case studies were conducted comprising senior, middle-line, and first-line managers, and either professional or nonprofessional employees, within one English local authority (LA). Methods included 29 x one-to-one and three focus group semistructured interviews incorporating the critical incident technique. By examining i-deals through the lens of social exchange theory (Blau, 1964), this research demonstrates the role of reciprocity in the form of i-deals to accept the new psychological contract and foster engagement. Here, for some employees, once concrete and universal resources were available to a certain level (e.g., pay), the difference (e. g., universal resources such as a pay rise, external training) was substituted by more particularistic resources (e.g., flexibility and developmental i-deals) herewith extending Foa and Foa's (1976, 1980, and 2012) resource theory. Furthermore, resultant economic or social exchange may be due to the individual attribution of why the i-deal was agreed, rather than the i-deal content. Finally, when i-deals are denied, action to lower the risk of psychological contract breach is advised.