Explain Analytically What Is Meant by ‘Psychological Contract’. Critically Assess Which Process Theories of Motivation Could Help Employers Establish a ‘Psychological Contract’ with Their Employees?

2. Explain analytically what is meant by ‘psychological contract’. Critically assess which process theories of motivation could help employers establish a ‘psychological contract’ with their employees?

According to Anderson & Schalk (1998) within an organization there are obligations and expectations between employer and employee, some of which are written down as a formal employment contract and some of which are just implied, not discussed, which constitutes the psychological contract. Employees may have expectations like a safe working environment, progression opportunities, recognition of both innovation and new ideas, performance feedback, interesting and challenging work, respectful treatment from co-workers, customers and employers alike, whereas employers might expect willingness to work extra hours, being loyal towards the organization, bringing innovative ideas and practices and being courteous to clients and co-workers (Jafri, 2011). Originally both the employee and employer were considered the parties involved in the contract however more recent studies have shown that focus has shifted more onto the employees ' perceptions (Rousseau, 1997; Coyle-Shapiro & Kessler, 2000). “The employee oriented approach to psychological contract is of view that the belief does not need to be agreed formally by the employee and employer and thus exists based on the employee 's perception. This type of beliefs and expectations are subjective and perceptual in nature” (Jafri, 2011). Lambert (2011) splits the psychological contract in four belief components: promised inducements, delivered inducements, promised contributions and delivered contributions. Studies on inducements show breach and fulfilment are closely tied to important outcomes for employers and staff alike (Chen et al, 2008; Coyle-Shapiro, 2002; Robinson & Morrison, 2000). Contributions on the other hand are a result of promised and fulfilled inducements (Robinson & Morrison 1995). Lambert (2011) goes on

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