Psychological Contract in the 21st Century

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‘What is the psychological contract?’ Examine to what extent it is applicable in the 21st century.

Name: Lin, Lina Linda

Tutor’s name:Catherine Tsai


Word count:963.
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 1989). Compared to the past centuries, people tend to change jobs frequently and pay more attention to employees’ rights. It is a critical element in human resource management and plays a big role in modern society. This essay has been organized in the following way. At first, this essay will define the psychological contract meaning and show a general description regard to the influence of psychological contract in the current situation. Then, a profound significance of psychological contract in strategic training practices will be examined. In contrast, a negative effect of psychological contract will be discussed by using an example from Chinese employees among Macao between 2005 and 2007. A comparison will be made of two key aspects: breach and fulfillment. The final section will evaluate the extent of psychological contract applicability in the 21st century.

Psychological contract plays a key role in the 21st century. People’s lives today are richer and more colorful, especially much easier to communicate with each other by using high technology. The poor are struggling to meet a higher living standard, the rich are eager to pursue a high-grade life. Among people’s interaction, psychological contract becomes quite important in human resource management, it affects both employers and employees and might have a decisive influence on the result. Psychological contracts are defined as “employees’ perceptions of what they owe to their employers and what their employers owe to them” (Robinson 1996:574). Where the psychological contract is accepted by...
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