The Psychological Contract
If we look at a job as a relationship, we can see that there are two parties involved: the employee and the position. The employee puts in resources, psychological and emotional, and is compensated, not only monetarily, but also psychologically and emotionally.
Psychologists have referred to this relationship as a psychological contract. A psychological contract refers to the unwritten agreement concerning the underlying reciprocal relationship between the employee and employer (Levinson et al., 1962; Rousseau, 1989).
Many studies have focused on what happens when there is a breach in the psychological contract. When employees believe that the organization has breached the psychological contract, they frequently respond in one of the following negative results:
- Diminished trust (Atkinson, 2006, Robinson, 1996)
- Job dissatisfaction (Bunderson, 2001; Johnson & O’Leary-Kelly, 2003;Lemire & Rouillard, 2005; Pate, Martin, & McGoldrick, 2003),
- Diminished performance (Robinson & Morrison, 1995)
- Increased frequency of complaints and increase in employee turnover rates (Turnley & Feldman, 1999, 2000).
Employees respond negatively to a breach in the psychological contract because they view the relationship as unfair and unbalanced. This is because the psychological contract specifies what each expects to give and get in the relationship (Kotter, 1973). If we consider relationships with friends and significant others, we see that the successful relationships denote when both parties equally give and get psychologically and emotionally.
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