Abstract:
This study aimed to investigate the impact of employee relations on employee
performance within the apparel sector in the Rathnapura District of Sri Lanka. The
primary objectives were to examine the relationship between the overall employee
relations framework and employee performance, and to assess the individual influence
of psychological and legal contracts specifically. A quantitative research design was
employed, utilizing a deductive approach. Data were collected from a sample of 280
employees from two major apparel companies using a structured questionnaire. The
collected data were analyzed using descriptive statistics, correlation, and regression
analyses via SPSS version 25. The findings revealed a strong, positive, and significant
relationship between employee relations and employee performance. Both the
psychological contract and the legal contract were found to be significant positive
predictors of employee performance, collectively explaining 60.4% of its variance. The
psychological contract demonstrated a more substantial relative influence compared to
the legal contract. Practically, this research provides apparel sector managers with a
clear directive: enhancing both the unwritten, tmst-based expectations (psychological
contract) and the formal, documented terms of employment (legal contract) can lead to
substantial improvements in workforce performance, productivity, and organizational
competitiveness. The study's scope was limited to two firms in the Rathnapura district,
suggesting that future research could explore this dynamic across different geographical
regions and industries to broaden the generalizability of the findings.
Keywords: Apparel Sector, Employee Relations, Employee Performance,
Psychological Contract, Legal Contract.
