Purpose Based on social exchange theory, this study investigates the impact of transactional and relational psychological contracts on in-role and extra-role performance among frontline banking employees. We also explored the mediating role of employee empowerment in the relationship. Design/methodology/approach Data were acquired from 257 frontline banking personnel in Jammu and Kashmir, India, using a convenience sample method. We used AMOS 28 to test the proposed hypotheses. Findings The empirical findings show that transactional psychological contracts have a considerable positive impact on in-role job performance. Furthermore, relational psychological contracts were proven to improve extra-role performance. Notably, the findings show that employee empowerment mediates the relationship between psychological contracts and performance outcomes. Practical implications The findings of this study offer several practical implications for managers and HR practitioners seeking to enhance employee performance in real-world organizational settings. Originality/value This study extends social exchange theory by exploring the impact of psychological contracts on the work performance of frontline employees and highlighting the role of employee empowerment in the banking sector.
Iqbal et al. (Tue,) studied this question.