Psychological Contract

Topics: Contract, Employment, Contractual term Pages: 19 (6484 words) Published: November 17, 2012

The purpose of the report is to discuss the theory of psychological contracts in organizational employment and to see its evolution by discussing various theories of different authors, its present form, issues related to it and its importance in training and apprenticeship programs. This report basically discusses both the theoretical and practical aspects of psychological contract. This report shows how that how the concept of psychological contract has evolved and what different authors have said about this. And sees through what changes psychological contract has gone through and what shape it has adopted now finally. Psychological contracts are becoming complex day by day. Its complexity and implications are discussed. The new psychological and the old psychological contracts are discussed. How the role of communication effects this is also seen. The role of psychological contract in training and apprenticeships programs are also explained in this report. The issues related to the psychological contracts and how these can be minimized so that both the employees and employers may be satisfied is also emphasized in this report. Finally the analysis of the report is given and conclusions are made.

The Psychological Contract
'The Psychological Contract' is an increasingly relevant aspect of workplace relationships and wider human behavior that’s why I have selected this topic for the assignment. Simply, in an employment context, the Psychological Contract is the fairness or balance (typically as perceived by the employee) between: •How the employee is treated by the employer, and

What the employee puts into the job.
At a deeper level the concept becomes increasingly complex and significant in work and management - especially in change management and in large organizations. Interestingly the theory and principles of the Psychological Contract can also be applied beyond the employment situation to human relationships and wider society. At the heart of the Psychological Contract is a philosophy - not a process or a tool or a formula. This reflects its deeply significant, changing and dynamic nature. The way we define and manage the Psychological Contract, and how we understand and apply its underpinning principles in our relationships - inside and outside of work - essentially defines our humanity. Respect, compassion, trust, empathy, fairness, objectivity - qualities like these characterize the Psychological Contract, just as they characterize a civilized outlook to life as a whole. Primarily, the Psychological Contract refers to the relationship between an employer and its employees, and specifically concerns mutual expectations of inputs and outcomes. In management, economics and HR (human resources) the term 'the Psychological Contract' commonly and somewhat loosely refers to the actual - but unwritten - expectations of an employee or workforce towards the employer. The Psychological Contract represents, in a basic sense, the obligations, rights, rewards, etc., that an employee believes he/she is 'owed' by his/her employer, in return for the employee's work and loyalty. The concept of the Psychological Contract within business, work and employment is extremely flexible and very difficult (if not practically impossible) to measure in usual ways, as we might for example benchmark salaries and pay against market rates, or responsibilities with qualifications, etc.

The Psychological Contract is quite different to a physical contract or document - it represents the notion of 'relationship' or 'trust' or 'understanding' which can exist for one or a number of employees, instead of a tangible piece of paper or legal document which might be different from one employee to another. Although its origins can be traced to 1960, the concept attracted minimal academic and practitioner interest until the last decade or so.

Now we will see what...

References: Argyris, C. (1960), Understanding Organisational Behaviour (Homewood, Illinois: The Dorsey
Press Inc)
Schein, E. (1965), Organisational Psychology (Engelwood Cliffs, NJ: Prentice-Hall)
Menninger, K, M.D., The Vital Balance, The Viking Press, New York, 1963
Levinson, H, et al. Management and Mental Health, Harvard University Press,
Cambridge, Ma, 1966
Kotter, J. P. and Schlesinger, L. A. (1979), ‘Choosing strategies for change’,
Harvard Business Review, Vol. 57, no. 2, 106-114.
Schein, E. H. 1980. Organizational Psychology. Englewood Cliffs, NJ: Prentice-
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