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- However, the psychological contract describes the relationship between employers and workers and influences how people behave from day to day. Unlike the legal contract of employment, the psychological contract is not tangible. It’s built on the everyday actions and statements made by one party and how they are interpreted by the other.
www.cipd.org/en/knowledge/factsheets/psychological-factsheet/
Explore the types and examples of psychological contracts to better understand their impact on the employee employer relationship and expectations.
Psychological contracts form the foundation of trust and engagement within organisations. While formal contracts lay out the terms and conditions of employment, psychological contracts delve into the realm of unspoken expectations, beliefs, and mutual commitments.
The term psychological contract refers to the often unspoken set of expectations and assumptions that two parties (employees and the organisation, its leaders and managers) have of each other about things like how they will behave and act.
The psychological contract is not same as a physical contract where it deals with trust, relationship, understanding employee or group of employees in the organization instead of dealing with a legal document which differs from one employee to another.
By contrast, the “psychological contract” describes how the parties themselves understand their agreements, an inquiry that refers to the legal rules but also relies heavily on evidence from behavioral decision research: psychology, experimental economics, and empirical legal scholarship.
Rousseau distinguishes four phases in psychological contract formation and evolution. Firstly, in the pre‐employment phase, professional norms and societal beliefs play a general role. Secondly, more specific components of psychological contracts are formed in the recruitment process.
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What is a psychological contract?
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This synthesis of past evidence provides the foundation for reviewing the present emerging and developing themes in psychological contract research. This discussion is organized around the expansion of resources exchanged and the antecedents of contract breach and outcomes, moving beyond reciprocity as an underpinning explanation.
