The Psychological Contract

Powerful Essays
Critically evaluate the utility of the psychological contract for understanding the contemporary employment relationship. (2500 Words)
Introduction
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



Bibliography: Argyris, C. (1960) Understanding Organisational Behavior. Homewood, IL: Doresy. Arnold, J. (1996) The psychological contract: a concept in need of closer scrutiny? European journal of work and organisational psychology 5, (4) p511-520. Boxall, P. & Purcell, J. (2003). Strategy and Human Resource Management. Basingstoke: Palgrave Macmillan. Cullinane, N. & Dundon, T. (2006). The Psychological Contract: A Critical Review. International Journal of Management Reviews, 8, (2), p113-129. Dick, P. (2006) The psychological contract and the transition from full to part-time police work. Journal of Organizational Behaviour, 27, (1) 37-58. Guest, D, E. (1998) Is the psychological contract worth taking seriously? Journal of Organizational Behaviour, 19 p649-664. Guest, D. E. & Conway, N. (1997) Motivation and the Psychological Contract. Issues in People Management, No. 21. London: IPD. Milward, L & Brewerton, P. (2000) Psychological Contracts: employee relations for the twenty-first century? International review of industrial and organisational psychology, 15, p1-61. Nadin, S. & Cassell, C. (2007) 'New deal for old. Exploring the psychological contract in a small firm environment '. International Small Business Journal, 25 (4) p409-432. Redman, T & Wilkinson A Rousseau, D, M. (1996). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Newbury Park, CA: Sage. Sparrow, P, R. (1999). The changing nature of psychological contracts in the U.K. banking sector: does it matter?, Human Resource Management Journal, 6 (4) p75-92

You May Also Find These Documents Helpful

  • Better Essays

    The Psychological Contract

    • 1215 Words
    • 5 Pages

    The Psychological Contract Shein (1980) explained the concept of the psychological contract as a set of mutual expectations held between the employee and employer within the workplace. It is an unwritten set of expectations operating at all times. It can also be described as individual beliefs shaped by the organisation that relates to the expectation the employee has in terms of pay, fair treatment, opportunities etc and the expectations that the employer has in terms of performance, loyalty, etc…

    • 1215 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Psychological Contract

    • 2375 Words
    • 10 Pages

    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…

    • 2375 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    The Psychological Contract

    • 7144 Words
    • 23 Pages

    Employee Resourcing – The Psychological Contract How can we define the psychological contract? Is it the set of mutual obligations/expectations and more often than not aspirations between employer and employee that extend beyond the formal, written contract of employment? This is the general consensus with modern scholars and workers alike, but just how far is this assertion true? The problem is trying to evaluate what the psychological contract actually is and what it stands for in our…

    • 7144 Words
    • 23 Pages
    Powerful Essays
  • Best Essays

    psychological contract

    • 2886 Words
    • 12 Pages

    respectively. That is the reason why psychological contract needs to be invented in a new economy whilst loss of trade unions. Subsequently, this essay will not only clarify how the psychological contract is defined and how it is evaluated and applied in organisations in reality but also answer the question why a psychological contract is considered as so important in the management of the contemporary employment relationship. By definition, psychological contract has been stated as “a set of unwritten…

    • 2886 Words
    • 12 Pages
    Best Essays
  • Powerful Essays

    Psychological Contract

    • 6484 Words
    • 26 Pages

    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…

    • 6484 Words
    • 26 Pages
    Powerful Essays
  • Powerful Essays

    The Psychological Contract

    • 5191 Words
    • 21 Pages

    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 | 4/24/2013 | | University of Hertfordshire, Business school. Department…

    • 5191 Words
    • 21 Pages
    Powerful Essays
  • Powerful Essays

    The Psychological Contract

    • 2021 Words
    • 9 Pages

    CIPD Factsheet The psychological contract Revised July 2011 ------------------------------------------------- What is the psychological contract? The term 'psychological contract ' was first used in the early 1960s but became more popular following the economic downturn in the early 1990s. It has been defined as '…the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other '1. These obligations will often be informal and imprecise:…

    • 2021 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    The Psychological Contract and its application The psychological contract and its application After the first descriptions and definitions of psychological contract 1960s, a great number of experts show their opinions on this topic and discuss with each other. The widely acknowledged definition of psychological contract may be in Michaei Armstrong’s book, the human resource management practice(10th Ed.,2006,cited in business ball):`…the employment relationship consist of a unique combination…

    • 1158 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Assignment 3 Individual research paper Psychological contract breach Nowadays managing the psychological contract is the main goal for organizations that strive for a ‘people building’ rather than a ‘people using’ organization (Guest & Conway, 1999). The concept of the psychological contract is complex but it provides a framework for the understanding of the employment relationship (Zhao et al., 2007). A widely accepted definition of the psychological contract is defined by Rousseau (1995); she…

    • 1137 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    critically analyse the nature of the psychological contract within the workplace and use 2-3 other themes and topics from the module to demonstrate the links between different concepts and issues. This essay intends to examine the psychological contract and its use at Delcam Plc. It is also going to look in depth at the way in which Delcam approaches the work-life balance, the relationship between managing the work-life balance and the psychological contract and finally the outcomes of satisfying…

    • 2775 Words
    • 12 Pages
    Powerful Essays