Critically Discuss the Psychological Contract in the Contemporary Organisation

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Every human being is an unique individual. This is an undeniable fact, thus organisations have to explore the various antecedences of the psychological contracts between employees and the organisation. Employees have different perceptions and thinking over the concept of psychological contracts. Generation Y is slowly filling up the positions in contemporary organisations. Therefore, what are the influencers revolve around this power craving group of people? Research has concluded that employees and employers have different perceptions on job support and resources (Attridge 2009, 392; Kahn 1990, 708) and even job satisfaction (McShane and Travaglione 2007, 180). Employee disengagement has been occurring more and more often nowadays (Bates 2004, 44). Employee engagement is closely linked with the result of the organisation (Medlin and Green 2009, 948; Harter, Schmidt and Killham 2003, 27), where employee disengagement may cause unsatisfactory employee achievement; leading to undesirable organisational advancement and financial development. Because of these, organisations should examine the psychological contracts between them and the employees, especially that of the Generation Y. Psychological Contracts

Ppsychological contract is defined as ones beliefs about shared responsibilities and commitments in the framework of the relationship between employees and the organization (Robert, Kristie and Kathryn 2010, 220). Cyril (2004, 1) mentioned that psychological contracts are the employees’ mindset about what they look forward to from the organization and what they feel they should commit to the organization. The psychological contracts emphasize more on the relationship between an employee and employer as a whole rather than traditional compensation issues (Robert, Kristie and Kathryn 2010, 220). The concepts of the psychological contract are commitments particularly based on perceived obligations by the others (Robert, Kristie and Kathryn 2010, 220). Whether well expressed or not, the perceived obligations create commitment and responsibility that must be executed for the contract to be affirmed (Robert, Kristie and Kathryn 2010, 220). For instance, the organization making use of a relational psychological contract is responsible to account for the individual fairly, provide hazard free working conditions, allow employees justifiable personal time, and provide adequate materials to accomplish their job. On the contrary, the employee is responsible to accomplish given tasks, display a positive attitude, boost the reputation of the company, and abide corporate policy (Robert, Kristie and Kathryn 2010, 220). Given so, these obligations do not only encompass on the quantity of work is to be carried out for a certain amount of pay, but also draw in the whole pattern of rights, privileges, and obligations between employee and organisation (Mario Pepur, Sandra Pepur, and Dr. Ljiljana Viducic 2010, 231). For instance, after serving the company for a number of years, the employee may expect the company not to fire him and similarly, the company may expect that the worker not to tarnish company’s reputation or leak out confidential secrets to rival companies(Mario Pepur, Sandra Pepur, and Dr. Ljiljana Viducic 2010, 231). Expectations as such are not transcribed into contractual agreement between employees and organisation, yet they work as power determinants of behaviour (Mario Pepur, Sandra Pepur, and Dr. Ljiljana Viducic 2010, 231). Literature Review

No doubt, the theory on psychological was established in the 1960 by Argyris (Cyril 2004, 1), it is still highly applicable in today’s context. Rothbard’s (2001, 656) empirical study shows that there is a relationship between psychological contracts and employee engagement. Rothbard (2001, 656) mentioned that attention is the psychological presence and the time spent by the employee contemplating about his responsibilities at work, while absorption is concerned with the...
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