The Psychological Contract and Student Retention: A Framework for Sustainable Engagement in Higher Education

Fahira Shahdzul Kahar, Dilla Syadia Ab Latiff and Murni Zarina Mohamed Razali

Information Management and Business Review, 2025, vol. 17, issue 2, 345-359

Abstract: Malaysia is among the leading developing countries in higher education. Although many efforts have been implemented and planned to make Malaysia one of the top countries in education systems, there are still a few problems that have not been completely solved. One key challenge is student retention in higher education institutions. The purpose of this study is to investigate the relationship between psychological contract and student retention. This study adopts a quantitative research design, employing probability sampling. The development of research questions has been made using the theory of psychological contract (relational contract, balanced contract, transactional contract, transitional contract) and student retention. These 4 types of psychological contract are crucial in understanding student retention as they reflect the nature of students' perceived relationship with the institution, influencing their level of engagement, satisfaction and likelihood to persist or withdraw. The collected data were analysed using various statistical methods to examine the determinants influencing student retention decisions. This research offers valuable insights for academic staff and faculty members aiming to enhance student retention strategies and promote sustained engagement in higher education. Preliminary findings indicate a significant relationship between psychological contracts and student retention, specifically in public higher education institutions in Malaysia.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:rnd:arimbr:v:17:y:2025:i:2:p:345-359

DOI: 10.22610/imbr.v17i2(I)S.4611

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