Psychological Contract
“The concept of the psychological contract, with its focus on the exchange of perceived promises and commitments, is increasingly used as a framework to study the employment relationship (Guest & Conway, 2002).” Armstrong (2014) describes psychological conract as an unwritten and understood set of mutual expectations that exist between employees and employers. Echoing the same, Herriot & Pemberton (1997) describe it as the attitude of employees and employers towards the reciprocal promises and obligations implied in their relationship. Rousseau & McLean Parks (1993) further add that the reciprocal nature of this relationship is of great importance.
Guest and Conway (2002) further state that effective organizational communication can facilitate the creation of a more explicit and effective psychological contract. Robinson & Morrison (2000) also point out how important it is to communicate the particulars of the psychological contract at the recruitment stage. Turnley and Feldman (1999) take a more formal approach to this and argue that formal top-to-down forms of communication such as mission statements convey the psychological contract. Herriot & Pemberton (1997) develop this argument further by stating that there should be regular and ongoing communication between employers and employees about matters such as workload, career prospects and development. Rousseau (1995) further elaborates on this by adding that organisational communications such as performance appraisals could be ideal modes of establishing rapport and communicating expectations with employees.
Ex:
I am employed at a leading BPO company. Right at the point of recruitment, I was given a clear picture of the nature of the business and the kind of culture that exists in the organization. Even the interviewers repeatedly pointed out the kind of culture that exists in the organization and wanted me to be absolutely certain as to whether I would be a good fit for the organization. Similarly, upon being selected, I had to undergo the induction process which went on for two weeks and was very detailed. The organization maintains a strict policy where each line manager is expected to have an individual connect with each team member every month. Possible grievances, potential opportunities, and other expectations are discussed at these meetings. The annual performance appraisal is also basically an extension of this meeting.
The fairness of the contract and any perceived violation of said contract will be assessed by the parties involved (Herriot and Pemberton, 1997). Roseau & McLean Parks (1993) state that the reciprocal nature of this arrangement is such that employees respond favourably to positive behaviour from the employers.
References
Armstrong, M. (2014). Armstrong’s handbook of human resource management practice. 13th ed. London: Kogan Page
Guest, D. And Conway, N., 2002. Communicating the psychological contract: an employer perspective. Human Resource Management Journal, 12(2), pp.22-38.
Herriot, P. And Pemberton, C. (1997). `Facilitating new deals’. Human Resource Management Journal, 7: 1, 45-56
Robinson, S. L. And Morrison, E. W. (2000). `The development of psychological contract breach and violation: a longitudinal study’. Journal of Organizational Behavior, 21: 5, 525-46.
Rousseau, D. M. (1995). Psychological Contracts in Organizations: Understanding Written Agreements, Thousand Oaks, CA: Sage.
Rousseau, D. M., & McLean Parks, J. (1993) The Contracts of Individual Organizations, 15, p.2-10.
Turnley, W. H. And Feldman, D. C. (1999). `The impact of psychological contract violations on exit, voice, loyalty, and neglect’. Human Relations, 52: 7, 895-922.
Hi divaker, I agree with your points, The psychological contract include parts are explicit, implicit expectations and commitments and there is little agreement on how explicit a commitment can be stops being part of the ' psychological ' contract. its considered simply as a legal or employment contract (Briner, 2009).
ReplyDeleteHi Dineth, I agree with your observations. CIPD (2021) points out that the legal contracts drafted at the beginning of the term of employment acts as a cornerstone for the relationship between the two parties.
DeleteHi Divakar, You have detailed, excellent examples. Furthermore, Stephen and Timothy (2002) explain the psychological contract as an unwritten agreement between employees and employers. This agreement will define the mutual expectations, what management expects from workers and what workers will expect from the management. The psychological contract provides a robust foundation for the employers to pay attention to the ’human side of the employment relationship, such as individuals’ values, motivations, and ambitions. However, this varies across time and individuals. For example, job security is not something everyone desires these days, and it is rarely the main offer of the modern employment relationship. However, the availability of training and development opportunities might be more attractive (CIPD, 2019).
ReplyDeleteHi Nirmika, valid observations, I must say. Arora and Dhole (2019) also point out that the employees of the present culture actually expect learning and growth opportunities more than stability.
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ReplyDeleteHi Divakar, Employers nowadays looking through their working life for different things than they were ten years ago. Employees with busy schedules, 60 hours of work in a week, weekend practice, regular meetings require a balance of family life, community engagement and leisure. Employees are currently looking for perks such as support programs, family leave, flexible hours, quick advancement and financial assistance programs. As the size and complexity of corporate companies increased, communities developed standards of a better work-life balance, reinforced by legislation (Bala,2013)
ReplyDeleteHi Amila, true. John Controls, Haworth and iDEA Report (2010) suggest that employees are prepared to face long working hours, provided that there is plenty of flexibility in working patterns.
DeleteHi, Divakar. Also a psychological contract, according to Patrick (2008), is a set of unspoken expectations between an employee and his or her employer on corporate policies and practises. Psychological contracts have an impact on employee attitudes and performance.
ReplyDeleteHi Isuru, agreed. Turnley and Feldman (1999) also state that failure to comply with the impressions given at the inception of the relationship could actually cause the employees to lose interest in the job.
DeleteHi Diwakar, agreed your points and adding to that according to Armstrong & Taylor (2014) Employee relations are concerned with managing and maintaining the employment relationship, taking into account the implications of the notion of the psychological contract. This means dealing with employees either collectively through their trade unions or individually, handling employment practices and terms and conditions of employment and issues arising from employment.
ReplyDeleteHi Lakshan, valid observations. However, CIPD (2021) states that the present trend in employee relations is such that the both employees and employers prefer dealing with these matters at an individual level.
DeleteWell said Divakar. A Psychological contract between an employee and an employer works exactly the same way - for that relationship to flourish in the long term, both sides have to feel that it is balanced and their contribution is fair (Jack Enright,2018).
ReplyDeleteHi Upeksha, thank you for your comment. Interestingly, Patrick (2008) also likens this relationship to the relationship that exists between a husband and a wife.
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ReplyDeleteWell-written article Divaker. However, the term is usually used these days to describe the expectations an employee has of the organization and the expectations the organization has of the employee. This idea can be applied to relationship like what a wife expects from her husband or what a husband expects from his wife(Patrick, 2008).
Hi Dileep, interesting observation. Similarly, Rousseau (2001) also states that the parties are bound together by a mutual understanding of a shared goal.
DeleteHi Divakar. Agree with your points. Rousseau (1995) defines that, psychological contracts are unwritten, implicit contracts which refer to employees’ expectations regarding reciprocal exchange agreements with their employers that arise from the employees’ interaction with the organization, indicating that employees believe organizations to meet certain requirements
ReplyDeleteHi Gihan, true. Rousseau (1995) differentiates psychological contracts from written contracts by pointing out that the responsibilities and entitlements are not clearly expressed in the case of psychological contracts.
DeletePsychological contract fulfilment can be assessed using the psychological contract inventory which is a psychometrically sound tool (Rousseau, 2001). It can be used as a self-scoring assessment as well.
ReplyDeleteRousseau, D.M., 2001. Psychological contract inventory: Technical report. Boston: British Library.
Hi Ravi, agree with your points. Expanding thus further, Rousseau & Wade-Benzoni (1994) state that an important part of such an assessment is the identification of the nature of the contract in relation to the appropriate typology out of the following; relational, transactional, balanced and transitional.
DeleteHi Divakar, Well explained, however Psychological Contract plays a major role of an organization in employee relationship. This has to be maintain from the leadership in order to improve the facts and methods of the company in order to get the best out put for the employee development as well for the organization development (Persson and Wasieleski, 2015).
ReplyDeleteHi Deshani, agree with your points. Echoing the same, Rousseau & McLean Parks, 1993, state that employees respond favourably to positive behaviour from the management.
DeleteWell written article , Adding to your points, Psychological contracts are dynamic, constantly evolving through organizational experiences. They basically highlight individuals’ belief structures of what is expected to occur in the organization and what is expected of them (Patrick,2008)
ReplyDeleteHi Manoj, agreed. Robinson, Kraatz & Rousseau (1994) also point out that psychological contracts of the relational variety tend to be long term oriented, vague and dynamic.
DeleteA well written article, The psychological contract refers to unwritten mutual expectations between an employee and their employer regarding policies and practices in the organization. Argyris (1960)
ReplyDeleteHi Surangi, agreed. Herriot & Pemberton (1997) also state that it involves the attitude of the employees towards the implied obligations.
DeleteHi Divakar, Agreed with you, Phycological contract is the most important part of employee relationship. It embodies a chain of shared prospects and requirements on part of the employer and the employee relationship, (Faisal, A., Zaeema, A.M., Farooq, A., Syed, S. Z. Z. 2017).
ReplyDeleteHi Divakar, The psychological contract refers to the unwritten set of expectations of the employment relationship as distinct from the formal, codified employment contract. Taken together, the psychological contract and the employment contract define the employer-employee relationshipTurnley, W. H. And Feldman, D. C. (1999)
ReplyDeleteHi Purnima, true. Rousseau (2000) also points out that it is a belief system where both parties of the contract believe that an exchange of promises have been made in relation to the implied obligations.
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