Psychological contract; what does it mean and how can I use in the organizational context?
It is all about 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 relationship.
This contract contributes to creation of conducive working environment in a work organization.
Denise Rousseau introduced this concept, which for me is highly evident and helpful (Rousseau, D. M. 1990. New hire perceptions of their own and their employer's obligations: A study of psychological contracts. Journal of Organizational Behavior, 11: 389-400.; Rousseau, D. M. 1995. Psychological contracts in organizations: understanding written and unwritten agreements. Thousand Oaks: Sage). It describes the fact the relations between actors (individuals, collectives) go far beyond the part of expectations that are codified by formal rules. Very helpful or organizaitonsl research, as it explains phenomeny like organizational citizenship and extrarole behavioour.
I am actually working on part of this research now. Here's my review of the psych contract:
The psychological contract, “one form of social exchange that develops between employers and employees” (Johnson & O’Leary-Kelly, 2003, p. 628). Accordingly, employment is based upon the material and emotional expectations of benefits employers and employees reasonably have of each other (Conway & Briner, 2005). The three aspects of the psychological contract include: 1) exchange aspects, 2) career aspects, and 3) relational aspects (Maguire, 2002). The exchange aspect includes the basics of employment: employees provide time and fulfill the duties and responsibilities of their position in return for appropriate levels of rewards such as pay, benefits, et al (Rousseau, 1989). The career aspect includes employee commitment in return for upward organizational mobility and/or training, development, and education to increase employability. The relational aspect is based upon managerial competency and understanding, support to perform labor, participation in decision-making, and a sense of organizational belonging (Maguire, 2002).
Trust lies at the heart of the psychological contract and the employee-organizational relationship, influencing how each party behaves toward the other (Guest & Conway, 2002; Robinson, 1996). While a modicum of trust is given to the organization at the beginning of an employee’s tenure, trust is also developed over time as the employer fulfills various obligations (de Vos, Buyens & Schalk, 2003). If obligations continue to be fulfilled, employees hold more confidence and invest more in the relationship with employers (Gillespie & Dietz, 2009). Trust is a multi-dimensional process by which employees evaluate relationships with peers, superiors, and the organization as a whole (Galford & Drapeau, 2003). The importance of trust helps employees recognize psychological contract breach and how to respond to that breach (Lambert, Edwards & Cable, 2003).
From communication perspective, the psychological contract is co-constructed communicatively between the organization – including one’s supervisor who acts as the organization’s proxy – and the employee (Bambacas & Patrickson, 2008). This relationship is constituted over time through the development of trust, truthfulness, transparency, and kept promises (Lester, Kickul & Bergman, 2007). Promises are particularly important in building trust in relationships, as the keeping promises and breaking of them are important factors in the maintenance of or breakdown of trust in organizational relationships. In organizations, broken promises specifically impact the psychological contract. Most research on the psychological contract, however, minimizes communication – considering it another variable among many – rather than the means by which the contract is created, or broken, over time."
Here is an example of the application of psychological contract theory in an organizational setting
https://www.researchgate.net/publication/211390445_Pensions_as_Psychological_Contracts_Implications_for_Work_Outcomes
Best, Andrew
Article Pensions as Psychological Contracts: Implications for Work Outcomes
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