Psychological contract

psychological contract , a concept Developed in contemporary organizational research by scholar Denise Rousseau , [1] Represents the mutual beliefs, perceptions, and informal obligations entre year use and year employee. It sets the dynamics for the relationship and defines the practical reality of the work to be done. It is distinguished from the formal written contract of employment which, for the most part, only identifies mutual duties and responsibilities in a generalized form.

ALTHOUGH Rousseau’s 1989 paper [1] did highlight highlighted by Coyle-Shapiro “was very influential in guiding contemporary research”, [2] the concept of psychological contract was first Introduced by Argyris (1960) – “Since the foremen Realize the employees in this system will tend to produce optimally under passive leadership, and since the employees agree, a relationship May be hypothesized to evolve entre les employees and the foremen qui might be called Expired the ” psychological work contract .” The employee will Maintain the high output, low grievances, etc., if the guarantee and respect of the norms of the informal employment culture (ie, let the employees alone, make sure they make adequate wages, and have secure jobs) “. [3]

Psychological contracts are defined by the relationship between an employer and an employee where they are unwilling mutual expectations for each side. A psychological contract is rather defined as a philosophy, not a formula or devised plan. Characterizing a psychological contract through qualities like respect, compassion, objectivity, and trust. [4] Psychological contracts are formed by beliefs about exchange agreements and may arise in a wide range of situations that are not necessary to employ-employee. [5]However, it is most important in its function as defining the workplace relationship between employer and employee. In this capacity, the psychological contract is an essential, yet implicit agreement that defines employ-employed relationships. These contracts can cause you to be virtuous and vicious circles in some circumstances. Multiple scholars define the psychological contract as a separate exchange of agreement between an individual and another party. [5] The psychological contract is a type of social exchange relationship. [6] Parallels are drawn between the psychological contract and the social exchange theory because the relationship is defined by a cost-benefit analysis. [7]The implicit nature of the psychological contract makes it difficult to define, but there is some general consensus on its nature. This consensus identifies psychological contracts as “promissory, implicit, reciprocal, perceptual, and based on expectations.” [8]

These psychological contracts can be impacted by many things like mutual or conflicting morals and values ​​between employer and employee, external forces like the nudge theory, and relative forces like the Adams’ equity theory. [4]


The psychological contract came to be identified in 1960 by Argyris . However, only within the last ten years of the future. [8] As studies in industrial relations developed and grew more complex, they were more likely to perform better in certain work environments. The early works of Frederick Winslow Taylor . Building upon this, Douglas McGregor developed Theory X and Theory Yto define two contrasting types of management styles that have been effective in attaining a certain goal. These differing management types hold different psychological contracts between employer and employee, as described in more detail under “training of the psychological contract.”

Works by Denise M. Rousseau and later went more in-depth on the details and perspectives of the psychological contract. [8] [9] [10] Sandra L. Robinson reported that they were reported to have a breach of the contract, and that the effects of contracting breached productivity and productivity. [11]

Maslach, Schaufeli and Leiter stated in 2001:

“Now employees are expected to give more in terms of time , efforts , skills , and flexibility , whereas They Receive less in terms of career Opportunities, lifetime employment , job security , and so on. Violation of the psychological contract is Likely to Produce burnout because it erodes the notion of reciprocity , which is crucial in maintaining well-being. ” [12]

The formation of the contract

Psychological contract training is a process of employing and employing a prospective employee and developing their mental maps of one another. According to the outline of phases of psychological contract formation, the contracting process begins before the employment itself, and develops throughout the course of employment. As the employment relationship grows the psychological contract also grows and is reinforced over time. [13] However, the psychological contract is effective only if it is consented to on a voluntary basis. [7] It is also useful in revealing what incentives workers can expect to receive in return for their employment. [7]There are two types of contracts depending on the nature. These are relational psychological contracts and transactional psychological contracts.

  • Transactional psychological contract: focuses on the explicit elements of the contract. These are more common in organizations with authoritative management styles and hierarchal control. [7] Transactional contracts are found to be “related to careerism, lack of trust in employment, and greater resistance to change.” [5] They tend to be shorter term in nature. [13]
    • Some scholars consider McGregor’s Theory X to be closely related to transactional employer-employee relationships or authoritarian management, which are bound by transactional psychological contracts that keep them working for extrinsic reasons and maintain the status quo. [7]
  • Relational psychological contract: stresses interdependence of the organization and level of social exchange. These psychological contracts tend to be longer in nature. [13]
    • McGregor’s Theory Y is seen in participative management that emphasizes leadership and has similarities with relational psychological contracts in their common focus on commitment and belief in the intrinsic values ​​of people. [7] Relational contracts are found to be associated with trust and increased acceptance of change. [5]

The content of different types of management. It also depends on the type of profession and differs widely based on internship in career; for example, between graduates and managers. [13] Denise Rousseau is credited with outlining these 5 phases of contract training:

  1. Pre-employment- The initial expectations of the employee through the norms and societal beliefs that are influenced by the organization and how certain occupations are portrayed by the media.
  2. Recruitment- The first instance of two-way communication involving the promise of employment and the prospective employee during the recruiting process.
  3. Early socialization- Promise exchanges continues with both parties actively pursuing their search for information about one another through multiple sources.
  4. Later experiences- The promise of information and information. There may be changes to the psychological contract at this stage.
  5. Evaluation- The existing psychological contract is evaluated and possibly revised. Incentives and costs of change. [13]

Internships in career development

The employment relationship emerges through the interpersonal relationships formed in the workplace. How employers, supervisors and managers behave on a day-to-day basis is not determined by the legal contract. Employees slowly negotiate what they must do to satisfy their side of the bargain, and what they can expect in return. This negotiation is sometimes explicit, eg in appraisal or performance review sessions, but it often takes the form of behavioral action and reaction through which parties explore and draw the boundaries of mutual expectation. Hence, the psychological contract determines what the parties will, or will not do and how it will be done. When the parties’ expectations match each other, performance is likely to be good and satisfaction levels will be high. So long as the values ​​and loyalty persist, trust and commitment will be maintained. The map followed by the parties is the development of an individualized career path that makes it possible for the employee to be employed in the workplace, with adequate support from managers and co-workers, background, and experience.Motivation and commitment will be enhanced if transfers and promotions follow the agreed path in a timely fashion.

The psychological contract changes over time. Since an employee’s level of work in their career, the psychological contract that was established when they first began their career changes, too. As an employee is encouraged by their career, they expect more from their psychological contract because they are putting more of themselves into their work. Each stage of a career creates another editing process to the contract. The internships include apprentice, colleague, mentor, sponsor, exploration, establishment, maintenance, and disengagement. [14] The details of each step as follows:

  1. Apprentice Internship- Employees are new to the company and are expected to learn what they are supposed to do in this internship under the supervision of people in higher internships. Employees do their best to meet the expectations of the employer.
  2. Colleague Internship- Employees in this workflow independently and handle tasks without supervision. They are capable of completing assignments alone.
  3. Mentor Internship- Employees in this internship have the ability to oversee apprentices and guide them while completing their own work.
  4. Sponsor Internship- Employees in this internship take over managerial roles and help the company rather than oversee apprentices like mentor internship.
  5. Exploration Internship – Employees in this internship are new and have an unclear path in their career and are uncertain if they will stay with the same organization. They search for guidance and motivation from the organization to help them make decisions about their future.
  6. Establishment Stage- Employees in this internship want to establish themselves in their organization. Employees want more responsibilities, more opportunities for promotion, and performance-based rewards.
  7. Maintenance Internship – Employees in this internship as well as their role in the organization has reached a stagnation and care to pursue other things in life besides just work.
  8. Disengagement Internship – Employees in this internship are nearing the end of their career path. They are close to retiring, taking over work, and working at slower paces.

Yani Likongo is a student with a strong background in the field of “informal deal” and “work-life balance”. These “deals” support the idea of ​​a constructivist approach to both the employer and the employee, based on a give-and-take situation for both of them. [15] Similarities are drawn between the psychological contract and social exchange theory in which the relationship is defined by a cost-benefit analysis. [16]The employee’s attitude towards the changes in the company which leads to changes in the psychological contract. An employee’s attitude towards change is directly linked to the employee’s psychological contract with the manager or employer. An employee’s attitude and mindset about what changes could be beneficial in their relationship with the manager. [17]

If managed effectively, the relationship will foster mutual trust between parties, matching the objectives and commitments of the organization to those of their employees. But a negative psychological contract can result in the use of disenchanted, demotivated and resentful of authoritarianism within the organization. This will result in an increased inefficient workforce which will no longer correspond to the organization they work for. The main cause of disappointment is that they are protective of their status and safety in the eyes of their superiors, and they are in a position to fulfill their obligations to their subordinates.


Psychological Contracts are widely binding on the employer and employee, with trust being the basis for the social exchange. [18] A breach in the Psychological Contract occurs when they perceive that their firm, or its agents, have failed to deliver on what they perceive was promised, or vice versa. Employees or employers who perceives a breach in the face of the other. [18]Responses may occur in the form of reduced loyalty, commitment, and organizational citizenship behaviors. These feelings typically increase negative tension in the environment. Perceptions that once again, or after years of satisfactory service. A breach in the contract may occur when the organization changes its position as a result of its existence. [18]The impact may be localized and contained, but it is more affected, the performance of the organization may be diminished. The risk for breach can be reduced when the organization knows and respects the contracts of the employees. Further, the activities of the organization are perceived to be immoral gold, eg, aggressive downsizing or outsourcing, significant adverse action, and its public reputation and brand image may also be damaged. [18]


  • Conway, Neil & Briner, Rob B. Understanding Psychological Contracts at Work: A Critical Evaluation of Theory and Research . Oxford, UK: Oxford University Press, (2005)
  • Cullinane, Niall and Dundon, Tony. “The psychological contract: a critical review”, International Journal of Management Reviews , 8 (2): 113-129 (2006).
  • Feldheim, Mary. Downsizing . Paper presented at the Southeastern Conference of Public Administration, St. Petersburg, FL, October 6-9 (1999).
  • Rousseau Denise M . Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements . Thousand Oaks, CA: Sage, (1995).
  • Guest, David E. “Is the psychological contract worth taking seriously?” Journal of Organizational Behavior , 19: 649-664 (1998).
  • Lester, Scott W; Kickul, Jill. “Psychological contracts in the 21st century: What employees value most and how well are they responding to these expectations”. Human Resource Planning , 24 (1): 10 (2001).
  • Boddy, John. “Negotiating the ‘psychological contract ‘ “. Training Journal , Aug 2000: 10. Jenna Pickup


  1. ^ Jump up to:b Rousseau, DM (1989). Psychological and implied contracts in organizations. Employee Responsibilities and Rights Journal, 2: 121-139.
  2. Jump up^ Coyle-Shapiro, Jacqueline AM. and Parzefall, M. (2008) Psychological contracts. In: Cooper, Cary L. and Barling, Julian, (eds.) The SAGE Handbook of Organizational Behavior. SAGE Publications, London, UK, pp. 17-34.
  3. Jump up^ Chris Argyris, Understanding Organizational Behavior (Homewood, IU: Dorsey Press, 1960).
  4. ^ Jump up to:b Chapman Alan. “The Psychological Contract.”, Theory, Diagrams, Definitions, Examples of Businesses, Businesses, Organizations and Management. Bussinessballs Corp, nd Web. Oct 20, 2016.
  5. ^ Jump up to:d Rousseau, Denise M. (1998). “The ‘Problem’ of the Psychological Contract Considered”. Journal of Organizational Behavior . 19 : 665-671 – via JStor.
  6. Jump up^ Turnley, William H., and Daniel C. Feldman. “Re-Examining the Effects of Psychological Contract Violations: Unmet Expectations and Job Dissatisfaction as Mediators.” Journal of Organizational Behavior 21.1 (2000): 25-42. JStor. Web. October 14, 2016.
  7. ^ Jump up to:f Gautier Chantal (2015). The Psychology of Work . Kogan Page. pp. Chapter 7 – via ProQuest Ebook Central.
  8. ^ Jump up to:c George Christeen. Psychological Contract: Managing and Developing Professional Groups. Maidenhead, GB: Open University Press, 2010. Chapter 1: Introducing the psychological contract. ProQuest ebrary. Web. October 14, 2016.
  9. Jump up^ Denise M. Rousseau. “Schema, promise and mutuality: The building blocks of the psychological contract.” Journal of Occupational and Organizational Psychology. Volume 74, Issue 4 November 2001 Pages 511-541. Web. October 26, 2016.
  10. Jump up^ Rousseau, Denise M. “The ‘Problem’ of the Psychological Contract Considered.” Journal of Organizational Behavior 19 (1998): 665-71. JStor. Web. October 14, 2016
  11. Jump up^ Sandra L. Robinson. “Trust and Breach of the Psychological Contract.” Administrative Science Quarterly Vol. 41, No. 4 (Dec. 1996), pp. 574-599. Web. October 21, 2016
  12. Jump up^ Maslach, C .; Schaufeli, W .; Leiter, M. (2001). “Job burnout”. Annu. Rev. Psychol. (52): 397-422. See p. 409.
  13. ^ Jump up to:e George Christeen (2010). Psychological Contract: Managing and Developing Professional Groups . Maidenhead, GB: Open University Press. pp. Chapter 1 – via ProQuest ebrary.
  14. Jump up^ Low, Chin Heng (2016). “What Do Employees Want And Why?” An Exploration of Employees’ Preferred Psychological Contract Career Stages “. PsycINFO .
  15. Jump up^
  16. Jump up^ Gautier, Chantal (2015). The Psychology of Work .
  17. Jump up^ van den Huevel (2016). “What’s In It For Me? A Managerial Perspective On The Influence Of The Psychological Contract On Attitude Towards Change”. Journal of Organizational Management .
  18. ^ Jump up to:d van den Heuvel, Sjoerd, and Rene Schalk. “The Relationship Between Fulfillment Of The Psychological Contract And Resistance To Change During Organizational Transformations.” Journal of Experimental Botany 66.6 (2015): 283-313. Academic Search Ultimate. Web. October 21, 2016.

Leave a Reply

Your email address will not be published. Required fields are marked *