Psychological Contract

Topics: Management, Employment, Human resource management Pages: 8 (2375 words) Published: August 4, 2013
Faculty of Business and Law

UWE BA (Hons) Tourism Management– Year 2

Module: Human Resource Management
(UMPD3E -20-2)

Module Leader: Anthony Fenley

Student Number: 12022651

Definition
The psychological contract has been defined as 'A set of unwritten reciprocal expectations between an individual employee and the organization' (Schein, 1978) and '…the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other' (Guest and Conway 2002). According to Schein (1978), the expectations between the organization and the individual employee do not only cover how much work is to be performed for how much pay, but also a whole set of obligations, privileges and rights. Schwerin's insightful contribution alerts us to the idea that labor unrest, employee dissatisfaction and worker alienation comes from violations of the psychological contract that are dressed up as explicit issues such as pay, working hours and conditions of employment which form the basis of a negotiable rather than a psychological agenda. The concept of the psychological contract gained increasing popularity in the 1980s and 1990s. These years were characterized by many large-scale and small-scale organizational changes. Because of these changes, the 'traditional' employment relationship was put to a test. Serious behavioral and attitudinal reactions among employees could be observed. The psychological contract was used to describe, analyze, and explain the consequences of these changes. Although it is not an authentic contract, it plays an irreplaceable role in the relationship between the organization and employees.

The role of the psychological contract
1. Reduce the insecurity. Because the written contract is not likely to include all aspects of the employment relationship, and the psychological contract is filled to blank employment relationship. 2. Shape employee behavior. Employees will compare responsibility difference with an organization and according to the important conclusion to adjust their behavior. Although they do not discuss the psychological contract in public, the psychological contract is the important factors to decide the employee behavior and attitude. 3. Increasing employees' present. Make employee feels that what they did will get the influence of the company operation.

Evaluation
Psychological contract is a kind of coordination between an employer and its employees regarding their mutual expectations, it is not protected by the law, and there are the following features: 1.Subjective

Psychological contract is a way of psychological expectations which be hidden by both employer and employees. They are looking forward to being understood and estimated by each other. Because it may be different from the channels and information transfer, or the different understanding, it often could cause that the expectations are not similar with interpretation. On the other hand, the staff has expectations of enterprise, not only depends on the enterprise management policies, but also by their own factors (such as personal experience, psychological characteristics, etc.). Many employees have different expectations of aspects of salary and benefits, training, promotion; this means the psychological contract has strong subjectivity. Some employees realize that the enterprise has positive behavior. They consider that the enterprise performs the contract; on the contrary some employees realize that enterprise has negative behavior and fails to do his duty. Different comments are in an enterprise's evaluations. Marlow's hierarchy of needs (1943) reveals that the periodic and diversity for people's needs. It performs that the psychological expectations show diversity and difference in real life. If the individual needs, expectations are ignored, it is easy to cause failed to coordinate between staff and enterprise mutual expectation. This situation in enterprise management is...
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