The Psychological Contract

Topics: Employment, Emotion, Organization Pages: 4 (1215 words) Published: February 10, 2015
The Psychological Contract
Shein (1980) explained the concept of the psychological contract as a set of mutual expectations held between the employee and employer within the workplace. It is an unwritten set of expectations operating at all times. It can also be described as individual beliefs shaped by the organisation that relates to the expectation the employee has in terms of pay, fair treatment, opportunities etc and the expectations that the employer has in terms of performance, loyalty, etc. Key Characteristics of the Psychological Contract

The psychological contract has roots in the following theories: Equity theory: the employees disposition towards their psychological contract will remain positive as long as they feel the treatment they receive is fair in comparison to others. Exchange theory: this describes how the employee invests and contributes to their work in return for a particular reward or outcome Expectancy theory: this explains how the employees expectations affects their motivation and performance. Content of the Psychological Contract

The content of the psychological contract varies for both employer and employee. Essentially, as long as the following factors are fulfilled then the contract will remain, however if any are violated it can have damaging long-term effects, which will be discussed later. Employee expectations

Reasonable job security
Pay matches performance
Opportunities for learning and development
Opportunities for performance
Supportive working climate
Employer expectations
High performance levels
Loyalty to organisation
Commitment to organisational goals and values
Creativity
Ability to self-develop
Violation of the Psychological Contract
If the psychological contract is violated in any way, for example if the employer does not hold up their end of the bargain, then it can have either a short term effect if it is a simple breach, or long-term, damaging effects. Violation is an emotional affective...
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