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A psychological contract is the unspoken trust between an organization and its workers. It covers things like job security, chances for growth, and work-life balance. These promises are vital for keeping employees happy and engaged.
Mar 23, 2011 · In this context, the "psychological contract" — an unwritten pact that complements the economic arrangement between the employee and the company and defines the psychological commitment between ...
Sep 14, 2024 · It’s crucial to understand that psychological contracts differ significantly from formal, written contracts. While a formal contract might stipulate your salary, working hours, and job responsibilities, a psychological contract deals with the intangible aspects of work.
- The Definition
- The Pros
- The Cons
- The Impact on The Bottom Line
As editor, I have written about this form of ‘contract’ on occasion. Below is an excerpt from The Importance of the Psychological Contract. Vera Hillman, a former HR Exchange Network contributor, has also written about the concept. In her piece, The Psychological Contract: Relevance for Our Everyday Business Operations, Hillmann outlined what she c...
Having defined the psychological contract in greater detail, let us turn the focus now to the pros and cons.
Not-On-Paper
As previously mentioned, the psychological contract is not a physical contract; it’s not documented in any way. This makes it very difficult to execute. In fact, some say it is for this reason alone a PC cannot actually be defined as a contract.
Inconsistent
The psychological contract isinconsistent. Every single employee develops their own PC with the company. While these contracts may be similar across the board, they are still just as unique as each member of the company workforce.
Redundant
There are some that believe the concept of the psychological contract is redundant, even obsolete. Why? There are other ways to measure the employee-employer relationship. This includes employee engagement and pulse surveys.
Like it or not, the psychological contract is real and in force for every employee. Ignoring this fact can be a detriment to the company. Why? These contracts, while the responsibility of both parties, are not created by the employer, but the employee. Additionally, they can change those contracts on a whim and there is no notice required to the em...
- Mason Stevenson
Aug 19, 2022 · A psychological contract isn’t something concrete you can hold like a job contract. It’s abstract, an idea. As well as being abstract, it constantly changes. Its rules and rewards are different in every workplace. Denise Rousseau developed the concept of the psychological contract.
Oct 15, 2024 · A transactional psychological contract is characterized by specific, short-term, and economic-focused agreements. It typically involves clear-cut expectations regarding salary, work hours, and specific job responsibilities. This type of employment contract is less about emotional or personal commitment and more about the exchange of work for pay.
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It outlines the determinants of the psychological contract, taking into account factors at the individual, organizational, sector and country levels. The results show that, even after taking all these factors into account, temporary workers still report a more positive psychological contract.
