Bus 140 Human Resources In Business

psychological contract

Psychological Contract A concept that has been useful in discussing individuals' relationships with their employers is that of a psychological contract, which refers to the un-written expectations employees and employers have about the nature of their work relationships. The psychological contract can create either a positive or negative relationship between an employer and an individual. It is best on trust and commitment that leads to meeting both the employer's and employee's expectations and needs. Unwritten psychological contracts between employers and employees encompass expectations about both tangible items ( e. g., wages, benefits, em-ployee productivity, and attendance) and intangible items ( e. g., loyalty, fair treatment, and job security). Employers may attempt to detail their expecta-tions through handbooks and policy manuals, but those materials are only part of the total " contractual" relationship. Traditionally, employees expected to exchange their efforts and capa-bilities for secure jobs that offered competitive pay, a solid range of benefits, and career progression within an organization, among other factors. But as some organizations have changed in economic terms, they have had to ad-dress various organizational crises by downsizing and eliminating workers who had given long and loyal service. Consequently, in these firms, remaining employees may question whether they should remain loyal to and stay with their employers. The psychological contract has changed. A psychological contract may include these expectations: Employers Provide Employees Contribute • C ompetitive compensation and benefits • F lexibility to balance work and home life • C areer development opportunities • C ontinuous skill improvement and increased productivity • R easonable time with the organization • E xtra efforts and results when needed