Essay on psychological contract

The employee must know their task and do it effectively. Everyone have their right, employees also have it. So the employees and employers must know their right. While reward is one of the powerful influences. It is suggested that the formation of the psychological contract begins in the recruitment process Rousseau, , and.

To achieve this, there are two options that may be pursued. First demonstrate enhanced management. Psychological contract is defined by Rousseau , p.

Psychological Contract Essay - Words - BrightKite

They are informal, unwritten mutual expectation of input and subsequent output in employment relationship. Psychological Contract is an abstract contract that affects both employers and employees, a subtle contract without speaking or writing, contains assumptions and expectations from each party towards the other Rousseau Compared to the past centuries, people tend to change jobs frequently and pay more. As they can be explained differently by parties Osborn - Jones A psychological contract in the workplace may be useful from the point of view of the psychological contract concerning the role topic.

This is a written agreement between the employee and the employer.

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The manager worker's expectation, and indeed its opposite 0. Management should treat employees fairly, provide acceptable working conditions, explicitly state that they are fair, and provide feedback on employee performance. Employees need to respond by showing good attitudes, following instructions and by showing loyalty to the organization.

The way in which the concepts that form the state of the psychological contract might be related is shown in the centre of Figure 1. It goes beyond job satisfaction and is not simply motivation. CIPD, Therefore, in developing a positive psychological contract through particular configurations of HR policies and practices, organisations can produce greater effort though increased employee engagement. Given the dominant focus on breach of contract, this has been the most widely explored element within the model and the issues addressed have been similar whether an employer or employee perspective has been adopted.

The outcomes typically explored are listed on the right hand side of Figure 1 where a broad distinction is drawn between attitudinal and behavioural outcomes.

The Psychological Contract Essay

The aim in the extended model of the psychological contract is to provide a broad analytic framework within to explore employment relations in the 21st century. There have been many interesting and in-depth studies and research on the psychological contract. The backing of the psychological contract in the analysis of the contemporary employment relationship has come from a variety of sources. Kalleberg and Rogues , from a more institutional, sociological perspective, accorded it a central role in their study of employment relations in Norway.

In a large Norwegian sample, they found a positive association between more relational as opposed to transactional contracts and higher levels of commitment to the organisation, job satisfaction, and intention to stay.

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Research on employee perceptions of breach or violation of promises by the organisation and their consequences, including behavioural consequences such as absence, labour turnover, and withdrawal of cooperation and extra-role behaviour, comes close to addressing some of the outcomes in more traditional employment relations. In contrast, there is little research within a psychological contract framework on the perceptions of employers and their agents of how they react when they believe that employees have failed to keep their promises or to meet their obligations.


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They contain four types of exchange relationship that employers might follow, which they label under-investment in employees , over investment, mutual investment, and quasi-spot contracts. Tsui et al.

Introduction – Psychological Contract

The study shows how research might be developed that addresses employment relations from the perspectives of employers and employees. Guest and Conway report evidence of the utility of the psychological contract for employment relations.

Among a sample of 1, UK employment relations managers, 36 per cent said they used the concept of the psychological contract to help them manage the employment relationship and many more considered it potentially very useful. Interestingly, a number of managers acknowledged that the exchange was not always fair and tended to favour the employer. The study explored the application of high-commitment human resource practices as part of the context of the psychological contract and found an association between their greater application and management reports of more positive employee attitudes and behaviour.

Researchers are beginning to explore the extent to which employees and the employer have a shared understanding of the promises and obligations and the extent to which they have been met or breached. In summary, there are a variety of sources that can be drawn upon to argue the case for using the psychological contract as a framework to explore the employment relationship, incorporating the perspectives of both employer and employee.

Many show how important it is for a mutual understanding of the contract from both parties, otherwise it can lead one or the other being unfairly treated. Furthermore, there is evidence that a lot of the time there actually is a bias in the relationship, with one half being unfairly treated by the other. So can the psychological contract ever be completely fair?

Psychological Contract

The framework provides a basic analytical look into what the concept of the psychological contract is made up from and the key aspects of it. In this context, which elements, for example the more relational or transactional, are most highly valued and most susceptible to breach and violation? For example, does any shift from standard and positional deals to idiosyncratic deals increase the likelihood of perceptions of breach and create further employment relations problems? Much of the psychological contract research has focused on promises, what about obligations?