Up until the 1990’s the psychological contract didn’t get a lot of research literature, whereas more recently it has become increasingly popular, and vast in both volume and critique. It is suggested that this blossoming of research is because of fundamental changes in the workplace, commonly referred to as the ‘new deal’ (Sparrow 1999). The traditional idea of having a “job for life” is no more, people now transfer across their careers to suit themselves, and it is not uncommon to see a graduate working in a field far from that of their study, ultimately leading to a growth in employee empowerment. These changes also include a demand for increased flexibility, not only in the amount of hours, but also in the ways of working. An area that was once controlled by formal contracts has seen the emergence of a continuing HR discourse, predominantly with the concept of the psychological contract. In recent years it has become an influential tool used to help us understand the contemporary employment relationship, although it has it critiques.
The aim of this essay is therefore to use the relevant academic literature to explore the many concepts involved in the employment relationship and the utility of the psychological contract. The second part of the essay will be used to critically evaluate these findings
The evolution and types of psychological contract
The written employment contract that has controlled work place politics for many years is fairly recent, emerging after the industrial revolution. Historically, the master – servant relationship was not a formal contract, and not legally protected. There was a need for a formal employment contract to protect workers and specify the exchange relationship between the employer and employee, traditionally these contracts were shorted and easier to understand but have
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