Psychological Contracts Introduction
Psychological Contracts: an introduction to the concept
Richard Hall
Associate Professor in Work and Organisational Studies
University of Sydney
While the origins of the concept of ‘the psychological contract’ can be traced to the 1960s, the idea gained widespread currency in the academic and research fields of organisational psychology, organisational behaviour and HRM in the 1990s following the publication of a key article, then a book, by Rousseau (1989, 1995) which stimulated renewed interest in the idea. The concept is now also popular in practitioner circles. Its contemporary popularity with human resource professionals is suggested by a 2002 UK survey that found that 36% of HR Managers used the concept ‘to manage the employment relationship’ and that 90% agreed that it was ‘a useful concept’ (Guest and Conway 2002). Despite its popularity in both academic and practitioner circles, the concept remains controversial for several reasons: questions remain as to the precise meaning of the concept, its theoretical and practical utility and its ideological and political usage in organisations.
This overview seeks to introduce the concept by: defining psychological contract, identifying what is normally thought to be contained in one, explaining the different types of psychological contract, explaining why the concept is so popular and highlighting some potential problems with the concept.
The implications of psychological contracts for management, leadership and organisations are considered in companion briefing paper – Why do psychological contracts matter?
What are ‘psychological contracts’?
While there is no one universally accepted definition of the psychological contract, most definitions tend to see it as the implicit understanding of the mutual obligations owed by an employee and their employing organisation to one another. It is often contrasted with the formal, legal employment contract that specifies the formal duties, responsibilities and
Richard Hall
Associate Professor in Work and Organisational Studies
University of Sydney
While the origins of the concept of ‘the psychological contract’ can be traced to the 1960s, the idea gained widespread currency in the academic and research fields of organisational psychology, organisational behaviour and HRM in the 1990s following the publication of a key article, then a book, by Rousseau (1989, 1995) which stimulated renewed interest in the idea. The concept is now also popular in practitioner circles. Its contemporary popularity with human resource professionals is suggested by a 2002 UK survey that found that 36% of HR Managers used the concept ‘to manage the employment relationship’ and that 90% agreed that it was ‘a useful concept’ (Guest and Conway 2002). Despite its popularity in both academic and practitioner circles, the concept remains controversial for several reasons: questions remain as to the precise meaning of the concept, its theoretical and practical utility and its ideological and political usage in organisations.
This overview seeks to introduce the concept by: defining psychological contract, identifying what is normally thought to be contained in one, explaining the different types of psychological contract, explaining why the concept is so popular and highlighting some potential problems with the concept.
The implications of psychological contracts for management, leadership and organisations are considered in companion briefing paper – Why do psychological contracts matter?
What are ‘psychological contracts’?
While there is no one universally accepted definition of the psychological contract, most definitions tend to see it as the implicit understanding of the mutual obligations owed by an employee and their employing organisation to one another. It is often contrasted with the formal, legal employment contract that specifies the formal duties, responsibilities and
References: Bratton, J. (2007) Work and Organizational Behaviour. Houndmills, Basingstoke: Palgrave. Cappelli, P Conway, Neil & Briner, Rob B. (2005) Understanding Psychological Contracts at Work: A Critical Evaluation of Theory and Research. Oxford: Oxford University Press. Guest, D Herriot, P., Manning, W. and Kidd, J. (1997) ‘The Content of the Psychological Contract’ British Journal of Management, 8: 151-162. Lester, S Rhoades, L. and Eisenberger, R. (2002) ‘Perceived Organizational Support: A review of the Literature’ Journal of Applied Psychology, 87 (4): 698-714. Robbins, S.P., Judge, T.A., Millett, B Rousseau, Denise, M. (1989) ‘Psychological and Implied Contracts in Organizations’ Employee Responsibilities and Rights Journal, 2(2): 121-139. Rousseau, Denise M Shields, J. (2007) Managing Employee Performance and Reward. Cambridge: Cambridge University Press.