The Psychological Contract

Topics: Management, Social exchange theory, Exchange Pages: 16 (5191 words) Published: May 21, 2013
Organisational Behaviour: Theory and Practice.|
Question; It can be argued that the state of the relationship between the actors within an organisation influences its ability to achieve its goals. The employment relationship is arguably one of the more significant relationships that occur in an organisation particularly the psycho-social component. Critically evaluate the so called theory of the the psychological contract, does it provide a valid, reliable and predictable explanation that may contribute to an understanding of the organisational success and failure?| |

Date |

University of Hertfordshire,
Business school.
Department of Human Resource Management.

According to Cullinane and Dundon (2006) there has been a lot of interest in the concept of the psychological contract by researchers. This interest has grown progressively over the last 10 years. Although this concept first originated outside HRM, it has become a device for analysing and explaining HRM. Furthermore, the concept of the psychological contract has been helpful in understanding organisational behaviour and employment relationship that exist between the employer and employees in an organisation (Cullinane and Dundon, 2006).

In spite of the wide interest and wealth of literature concerning the psychological contract, there still is no one accepted definition (Anderson and Schalk, 1998). The definitions are in various perspectives as to what the psychological contract is meant to do and what it is, also the importance of implicit responsibilities of the employer and employee and other emphasise on the importance of understanding what the employee expectations are from the organisation. (Rousseau and Tijoriwala, 1998; Atkinson et al, 2003).

This research will be looking at the role of the psychological contract in the organisation. Furthermore we will trace the origin of the psychological contract and also clarify some of the major theoretical contributions that have provided the knowledge and understanding of the concept. Consequently, major unresolved theoretical issues will be addressed. And in conclusion there are some suggestion for future in-depth study about the psychological contract.

Researchers have been aware of the concept of psychological contract over a century ago. The psychological contract developed in two phases from 1958 to 1988 and 1989 onwards (Barling and Cooper, 2008). The major developments that have steered its use as an analytical framework has been provided by Rousseau. According to Cullinane and Dundon (2006) interest in the psychological contract as a management theory was driven in the 1990s by researchers in order to search for a recent and more innovative people management practice in the midst of economic downturn.

Argyris (1960) is the first to coin the term psychological contract, however the employment relationship as an idea of exchange can be traced back to the work of Barnard (1938) and March and Simon (1958). The theory of equilibrium of Barnard (1938) posit that employees continuous engagement depends on adequate rewards from the organisation. There is an idea of the reciprocal exchange underlying the organisation-employee relationship. This has been elaborated by March and Simon (1958) in their inducement-contributions model. They argue that employees tend to be more satisfied when more inducement is offered by the organisation compared to what they have to give in return. The organisation feels that the employee needs to contribute more to the organisation in order to get incentives from the organisation, which in turn needs to be striking enough to draw out contributions from the employee. The research by March and Simon (1958) is seldom accepted in the concept of the psychological...

References: Agee, J. (2000) Understanding psychological contract breach: An examination of its direct, indirect, and moderated effects. Unpublished doctoral dissertation, State University of New York at Albany.
Cassar, V. (2001) Violating psychological contract amongst Maltese public service employees: Occurrence and relationships. Journal of Managerial Psychology, 16, 194- 208

Chen, M. & Fang, M. (2003) The impact of psychological contract breach on employees work behaviour: An example in high-tech industry. Fu Jen Management Review.
Coyle-Shapiro, J. & Conway, N. (2005) Exchange relationships: Examining psychological contracts and perceived organizational support. Journal of Applied Psychology, 90, 774-781.
Deery, S., Iverson, R., Walsh, J. (2006) Toward a better understanding of psychological contract breach: A study of customer service employees. Journal of Applied Psychology, 91, 166-175.
Donkin, R., Wilkinson, H., Tulgan, B. (2002) The future of careers. Executive Briefing. London: CIPD.
Gakovic, A. & Tetrick, L. (2003b). Psychological contract breach as a source of strain for employees. Journal of Business & Psychology, 18, 235-246.
Guest, D. (1998) "Is the psychological contract worth taking seriously?" Journal of Organizational Behaviour, 19: 649–664.
Guest, D. (2004) The psychology of the employment relationship: an analysis based on the psychological contract. Applies psychology, 53, 541-555.
Guest, D. & Conway, N. (2002) communicating the psychological contract: Human Resource Management Journal, 12, 22-38.
Guest, D. & Conway, N. (2004) Employee well-being and the psychological contract: A report for the CIPD.
Guest, D., Conway, N., Briner, R., Dickman, M
Hui, C., Lee, C., Rousseau, D., (2004) Psychological contract and organizational citizenship behaviour in China: Investigating generalizability and instrumentality. Journal of Applied Psychology, 89, 311-321.
Johnson, J. & O 'Leary-Kelly, A., (2003) The effects of psychological contract breach and organizational cynicism: Not all social exchange violations are created equal. Journal of Organizational Behaviour, 24, 627-647.
Lester, S. & Kickul, J. (2001) 'Psychological Contracts in the 21st Century: What Employees Value Most and How Well Organisations are Responding to These Expectations ', Human Resource Planning, Vol 24, No 1, pp 10-21.
May, D., Gilson, A,. Harter, L.(2004) 'The Psychological Conditions of Meaningfulness, Safety and Availability and the Engagement of Human Spirit at Work ', Journal of Occupation and Organisational Psychology, Vol 77, pp 11-37.
Roehling, M. (1997) ' 'The origins and early development of the psychological contract construct ' ' journal of management history (archive) Vol. 3 Iss:2, pp.204- 217
Pate, J., Martin, G., McGoldrock, J
Robinson, D., Perryman, S., Hayday, S., (2004) 'The Drivers of Employee Engagement ', Institute for Employment Studies, Brighton.
Rousseau, D. (1995) Psychological contracts in Organisation: Understanding the Written and Unwritten Agreements. London Sage.
Saks, A
Schein, E. (1965) Organisational Psychology, Prentice-Hall, Englewood cliff, NJ.
Spindler, G. (1994) Psychological contracts in the workplace: a lawyer’s view, Human Resource Management, New York 
Stalker, K
Turnley, W., Bolino, M., Lester, S., Bloodgood, J. (2003) 'The Impact of Psychological Contract Fulfilment on the Performance of In-Role and Organisational Citizenship Behaviour ', Journal of Management, Vol 29, pp 187-206.
Vos, A., Buyens, D., Schalk, R. (2003) 'Psychological Contract Development during Organisational Socialisation: Adaptation to Reality and the Role of Reciprocity ', Journal of Organisational Behaviour, Vol 24, No 5, pp 537-559.
Wright, P., Gardner,T., Moynihan, L., Allen, M. (2005) 'The Relationship between HR Practices and Firm Performance: Examining Causal Order ', Personnel Psychology, Vol 58, No 2, pp 409-38.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Psychological Contract
  • The Psychological Contract Essay
  • Psychological Contract Essay
  • psychological contract Essay
  • The Psychological Contract Essay
  • The Psychological Contract Essay
  • Hrm: Psychological Contract Essay
  • Psychological Contract and Leadership Style Essay

Become a StudyMode Member

Sign Up - It's Free