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    The Psychological Contract

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    Nrityam Nundlall
    The psychological contract refers to the unwritten expectations between employees and employers. It is based on their perceptions of obligations to each other and can be transactional (short-term specific obligations) or relational (long-term diffuse obligations like commitment). Fulfilling the contract builds trust and cooperation, while violating it causes anger and intentions to quit. Managing expectations and maintaining transparency can help develop a positive psychological contract.

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    The Psychological Contract

    Uploaded by

    Nrityam Nundlall
    40 views10 pages
    The psychological contract refers to the unwritten expectations between employees and employers. It is based on their perceptions of obligations to each other and can be transactional (short-term specific obligations) or relational (long-term diffuse obligations like commitment). Fulfilling the contract builds trust and cooperation, while violating it causes anger and intentions to quit. Managing expectations and maintaining transparency can help develop a positive psychological contract.

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    The psychological contract refers to the unwritten expectations between employees and employers. It is based on their perceptions of obligations to each other and can be transactional (short-term specific obligations) or relational (long-term diffuse obligations like commitment). Fulfilling the contract builds trust and cooperation, while violating it causes anger and intentions to quit. Managing expectations and maintaining transparency can help develop a positive psychological contract.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    40 views10 pages

    The Psychological Contract

    Uploaded by

    Nrityam Nundlall
    The psychological contract refers to the unwritten expectations between employees and employers. It is based on their perceptions of obligations to each other and can be transactional (short-term specific obligations) or relational (long-term diffuse obligations like commitment). Fulfilling the contract builds trust and cooperation, while violating it causes anger and intentions to quit. Managing expectations and maintaining transparency can help develop a positive psychological contract.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 10

    THE PSYCHOLOGICAL CONTRACT

    THE PSYCHOLOGICAL CONTRACT


    DEFINED

    A psychological contract is a set of unwritten


    expectations that exist between individual employees
    and their employers
    The Psychological
    Contract
    • “An individual’s implicit belief in mutual obligations
    (expectations) between that person and another
    party” (Rousseau, 1989)
    – Based on employees’ and employers’
    perceptions of obligations
    • Unspoken
    • Continually shifting
    Types of Psychological Contracts

    • Transactional
    – Short time frames
    – Specific obligations (e.g., financial)
    • Relational
    – Longer time frames
    – Diffuse obligations
    • Socio-emotional based (e.g.,
    commitment, affiliation)
    Fulfilling/Violating Psychological
    Contracts

    • Fulfilling psychological contracts is associated with


    increased trust and cooperation (e.g., Conway & Briner,
    2002).
    • Violating psychological contracts is associated with
    increased anger, frustration, and intentions to quit
    (Robinson & Rousseau, 1994).
    – Typical violations
    • Training
    • Compensation
    • Promotion
    • Job Security
    • People
    • When violated, contracts become more transactional and
    less relational
    Why is this Useful to Know?
    • Changing nature of the workplace:
    – More part-time and temporary contracts
    – Flexible job descriptions
    – Doing more with less (downsizing)
    – Constantly changing service standards
    – Constantly changing technology
    – Changing attitudes about work.
    OPERATIONAL MODEL OF THE PSYCHOLOGICAL
    CONTRACT

    Causes Content Consequences

    Organizational culture Fairness Organizational


    citizenship
    HRM policy and practice
    Organizational
    Experience Trust commitment

    Expectations Motivation

    Alternatives The delivery of Satisfaction and


    the deal well-being

    Source: D E Guest, N Conway, R Briner and M Dickman (1996) The State of the Psychological Contract in Employment, London, Institute of
    Personnel and Development

    8
    Managing Psychological Contracts
    Planned
    Renegotiation
    SHARING INFORMATION termination
    (new contract) AND
    NEGOTIATING

    Return to ROLE CLARITY


    Resentful the way things AND
    termination used to be COMMITMENT
    (misunderstanding) Planned
    renegotiation

    Crunch STABILITY
    Choice point
    Ignore

    Pinch
    Resentment, Choice point
    anxiety

    Ambiguity, DISRUPTION
    uncertainty OF
    SHARED EXPECTATIONS
    THE PSYCHOLOGICAL CONTRACT AND
    THE EMPLOYMENT RELATIONSHIP

    The psychological contract provides answers to the two


    fundamental employment relationship questions which
    individuals pose:
    1.'What can I reasonably expect from the organization?‘
    2.' What should I reasonably be expected to contribute in
    return?'
    DEVELOPING A POSITIVE
    PSYCHOLOGICAL CONTRACT

    • Define expectations during recruitment and induction


    programmes
    • Communicate and agree expectations
    • Adopt a policy of transparency on company policies and
    procedures and on management’s proposals and
    decisions
    • Generally treat people as stakeholders, relying on
    consensus and cooperation rather than control and
    coercion

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