Although the concept of the psychological
contract originates from outside the Human Resource Management (HRM) field, it
has nevertheless become a major analytical device in propagating and explaining
HRM. There is a considerable amount of interest in the psychological contract
from academics and practitioners alike, as both search for the factors likely
to contribute to sustained employee motivation and commitment
The relationship between employees and
their employers has been conceptualized as involving a "psychological
contract." At a general level, the term "psychological contract"
is used to refer to a set of beliefs regarding what employees are to give and receive
with respect to their employer
As cited in
The term psychological contract refers to
an individual's beliefs regarding the terms and conditions of a reciprocal
exchange agreement between the focal person and another party. Key issues here
include the belief that a promise has been made and a consideration offered in exchange
for it, binding the parties to some set of reciprocal obligations.
Video 1 - Inspiration Session: The Psychological contract
Source:
How the concept of the psychological
contract is related to organizational commitment is a fundamental question
Psychological contracts are established at
a certain point in time, and they are assumed to be able to change over time.
Psychological contracts can be breached or violated, and can be abandoned or
deserted
I work in the IT industry, psychological contracts with employees is one of the significant success factors for the business. There are terms and conditions mentioned in the employment contract, however for the organization to perform better, achieve growth, organization require employees to be committed and motivated to deliver extraordinary results. Such engagement levels have been a key factor to the success of the current business status. Therefore, it is critical for the businesses to understand what leaders to strong and positive psychological contracts and cultivate a culture that facilitate commitment from both employee and employer. At the same time it is vital that the psychological contract expectations are deliverable and minimize the breach of contracts.
Below video further elaborates as to how
such organizational cultures are created by the leaders of organizations with
practical examples such as military soldiers.
Video 2 - Why good leaders make you feel safe
Source:
References
Briner, R., 2011. Youtube -
Inspiration Session: The Psychological contract: MSc Organizational
Psychology. [Online]
Available at: https://www.youtube.com/watch?v=iD9jLSWUlC8
[Accessed 07 05 2021].
Cullinane,
N. & Dundon, T., 2006. The psychological contract: a critical review. International
Journal of Management Reviews, 8(2), pp. 113-129.
Guest, D.
E., 2004. The Psychology of the Employment Relationship: An Analysis Based on
the Psychological Contract. Applied Psychology: An International Review, 53(4),
pp. 541-555.
Roehling,
M. V., 1996. The Origins And Early Development Of The Psychological Contract
Construct. Academy of Management Proceeding, pp. 203-206.
Schalk, R.
& Roy, R. E., 2007. Towards a Dynamic Model of the Psychological Contract.
Journal for the Theory of Social Behaviour, 37(2), pp. 167-182.
Sinek, S.,
2014. Youtube - Why good leaders make you feel safe. [Online]
Available at: https://www.youtube.com/watch?v=lmyZMtPVodo&t=91s
[Accessed 08 05 2021].
Agreed with your views Chamara, it would be interesting to investigate the consequences of contract fulfilment specifically in such a work context that demands continuous employee innovativeness and to study the role of work engagement in these relationships. Such a study could include a qualitative exploration of what innovative employees expect and what their psychological contracts are alike, or capture quantitatively the outcomes of perceived contract fulfilment in terms of innovative performance(Parzefall & Hakanen, 2008).
ReplyDeleteYes Indeevari. The psychological contract has offered an alternative reading of the employment relationship outside of the narrow legalistic frame of reference – one that expresses the subjective and indeterminate aspects of employment relations and HRM (Cullinane and Dundon, 2006)
DeleteAgreed with you Chamara, Adding to your article Wan, (2013) suggested that psychological contract had three functions: (a) it could reduce insecurity concerns between employees and organizations; (b) it can make employees feel his influence in the organizations, namely, employees understand their roles expected by the organizations; (c) it can shape employee behaviors.
ReplyDeleteYes Sachith. The foundation of PC is an individual employee’s belief that the organization has made a promise of future return and has the obligation to reward their contributions. PC is subjective and is recognized as an individual perception (Rousseau and Tijoriwala, 1998).
DeleteHi Chamara,
ReplyDeleteVery well-articulated. Psychological contract is indeed employees’ perception of an implicit agreement between themselves and the organization which establishes a shared responsibility between these two parties (Anggraeni et al., 2017). I agree on your point that psychological contract and employee commitment are linked. But, it is identified that psychological contract focusing on career development influences effective commitment of employees. Psychological contract includes transactional and relational contracts (Thomas et al., 2016). Transactional contract is related to short-term financial liabilities. Thus, does not develop a long term relationship between employees and the organization. For instance, the employer pays salary limiting to the contribution of the employee as per the job description. On the other hand, relational contract is long term oriented and includes broader components including socio-emotional commitment of employees and employee trust. Further, psychological contract is in place to build stability in the workplace and enhance organization-employee relations (Low et al., 2016). The types of psychological contract and its negative impacts could have been linked to the IT industry.
Apart from the above suggestions, it was a very interesting read.
References
Anggraeni, A., I., Dwiatmadja, C. & Yuniawan, A. (2017). The role of psychological contract on employee commitment and organisational citizenship behaviour: A study of Indonesian young entrepreneurs in management action. SA Journal of Industrial Psychology, http://dx.doi.org/10.4102/sajip.v43.0.1409
Low, C.H., Bordia, P., & Bordia, S. (2016). What do employees want and why? An exploration of employees' preferred psychological contract elements across career stages. Human Relations, 69(7), 1457-1481. https://doi.org/10.1177/0018726715616468
Thomas, D.C., Ravlin, E.C., Liao, Y., Morrell, D.L., & Au, K. (2016). Collectivist values, exchange ideology and psychological contract preference. Management International Review, 56(2), 255-281. https://doi.org/10.1007/s11575-015-0275-2
Yes Sathaharan. According to Guest (2004), for the psychological contract to be a suitable tool for analysing the employment relationship, it needs to realise the employment relationship is a two-way exchange, with the focus squarely upon the perceptions of reciprocal promises and obligations of both parties.
DeleteAgree with you chamara. Psychological contracts are often defined as employees' perception of the assured agreement between themselves and the company, which encompasses the shared responsibilities of both parties. (Festing & Schafer, 2014).
ReplyDeleteYes Harsha. Shared understanding aligns behaviour, reduces insecurity and encourages reliance on anticipated future exchanges (Rousseau, 2004).
DeleteWhile agreeing with you, I suggest that psychological enhances employee retention. Guest & Conway (2002) confirm that a positive psychological contract induces commitment, satisfaction and willingness to stay with the organization by the employee. The violation of a psychological contract results in a decline in willingness to contribute and intentions to stay in an organization (Nelesh & Sanjana, 2014). The psychological contract breach impacts negatively on employees’ willingness to contribute to the organization and his or her desire to stay (Robinson, 1996; Coyle-Shapiro, 2002).
ReplyDeleteYes Gagana. The breach occurs unavoidably in the workplace because contracts are based on the perception of exchange for promises (Lester et al., 2002).
DeletePsychological contact is a timely topic that every organization should look into. Maintaining the psychological contracts between an employer and an employee is important for an organization to have a satisfied workforce. However, the "state" of a psychological contract is rarely explored. A proper examination of psychological contacts may provide an idea about the level of engagement present in the workplace. To maintain the state of a psychological contract following should be considered (Gottschalk, 2013).
ReplyDelete1. Building trust.
2. Communication.
3. Practicing transparency.
4. Feedback and recognition.
5. Aligning work with strengths.
Yes Oshadee. Psychological contact primarily focuses on the relationship between employees’ perceived work experiences and the favorableness of perceived treatment from the organization (Aselage and Eisenberger, 2003).
Delete