What Is the Psychological Contract?

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

What is the psychological contract?

Nowadays, job-hopping has been a prevalent phenomenon. People change their jobs frequently for they are not satisfied with the present situation. This action of employees, however, brings tremendous stress and trouble to many enterprises. Therefore, the psychological contract is becoming increasingly important that more and more people focus on it and the question of what extent Psychological Contract is applicable in the 21st century has also caused attention. The Psychological Contract is an increasingly relevant aspect of workplace relationships and wider human behavior (Alan Chapman, 2011). This essay firstly elaborate on what is the Psychological Contracts and the developments in conceptualization, subsequently focuses on the changes of Psychological Contract, and finally the question of what extent Psychological Contract is applicable in the 21st century will be discussed.

The concept of Psychological Contract was first applied by Argyris in 1960, but he did not give an obviously and clearly definition on it. Levinson (1962), the “father” of Psychological Contract, further researched this concept and gave a conclusion that the psychological contract is the sum of mutual expectations between the organization and the employee. Schein (1965, 1980) also takes psychological contract into account. The above studies are undoubtedly founded upon the precept that the psychological contract is essentially an exchange relationship between two parties: employer and employee.

In the late 1980s, a debate about how to determine the level of organization of the psychological contract emerged and two different theories of concepts exist, one is following the original intent of the concept of psychological contract by Schein et al. They consider that psychological contract is the subjective...
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