Psychological Contract

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Psychological Contract
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The Psychological Contract

• An individuals 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

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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)

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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

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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
STABILITY
Ignore
Resentment, anxiety
DISRUPTION OF SHARED EXPECTATIONS
Ambiguity, uncertainty
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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.

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Application

• Contract Content
• Traditional 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
• Herzbergs Theory
• Clear mission, vision, and values
• Fairness
• Communication (Listening)
• Management style
• Managing expectations