Psychological Contract

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Presentation transcript:

Psychological Contract Psychology 445

The Psychological Contract “An individual’s implicit belief in mutual obligations (expectations) between that person and another party” (Rousseau, 1989) Based on employees’ and employers’ perceptions of obligations Unspoken Continually shifting

Types of Psychological Contracts Transactional Short time frames Specific obligations (e.g., financial) Relational Longer time frames Diffuse obligations Socio-emotional based (e.g., commitment, affiliation)

Fulfilling/Violating Psychological Contracts Fulfilling psychological contracts is associated with increased trust and cooperation (e.g., Conway & Briner, 2002). Violating psychological contracts is associated with increased anger, frustration, and intentions to quit (Robinson & Rousseau, 1994). Typical violations Training Compensation Promotion Job Security People When violated, contracts become more transactional and less relational

Managing Psychological Contracts Planned termination SHARING INFORMATION AND NEGOTIATING Renegotiation under duress (new contract) ROLE CLARITY AND COMMITMENT Return to the way things used to be (misunderstanding) Resentful termination Planned renegotiation Crunch Choice point STABILITY Ignore Pinch Choice point Resentment, anxiety DISRUPTION OF SHARED EXPECTATIONS Ambiguity, uncertainty

Why is this Useful to Know? Changing nature of the workplace: More part-time and temporary contracts Flexible job descriptions Doing more with less (downsizing) Constantly changing service standards Constantly changing technology Changing attitudes about work.

Application Contract Content Traditional Contract New Contract? Security for commitment New Contract? Fair pay Fair treatment Opportunity to develop Younger generations? Work-outside balance Excitement Community Higher purpose Increasing Employee Commitment 3 dimensions of commitment Affective Normative Continuance Increasing commitment Herzberg’s Theory Clear mission, vision, and values Fairness Communication (Listening) Management style Managing expectations