Psychological Contract

Psychological Contract
HUMAN RESOURCE
MANAGEMENT – 947326
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Psychological Contract
Table of ContentsIntroduction.......................................................................................................................3
Psychological Contract.................................................................................................................3
Breach in psychological contract..................................................................................................3
Implications of breach in psychological contracts for employees.......................................3
Conclusion.........................................................................................................................5
Bibliography......................................................................................................................6
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Psychological Contract
Introduction
Psychological Contract
Psychological contract, in the field of human resource management, is referred to a set of
unwritten expectations that are established between an employee and an employer. These
expectations are not a part of the written job description and are developed between the two
parties over a period of time (CIPD, 2019).
The concept of psychological contract was developed by Denise Rousseau. In general, a
psychological contract includes informal arrangements, mutual beliefs, common ground and
perception between two parties. Psychological contract develops between employees and
employers over a period of time and because of communication or because of a lack of
communication (Jones, 2017). For example, a potential promotion in the near future promised
by the employer might form a psychological contract.
Breach in psychological contract
Psychological contract plays an important role in how the employees commit themselves to
their jobs and to the organisation as well. A breach in a psychological contract is said to occur
when an employer is unable to materialize an obligation or a promise made to an employee.
A breach in a psychological contract can have a number of negative impacts on the
employees and also on an organisation on the whole.
Implications of breach in psychological contracts for employees
As discussed above, a psychological contract is an expectation of an employee that his or her
employer would reciprocate certain obligations towards him or her and a failure of an
employer to meet these expectations causes a breach in the psychological contract (Ballou,
2013). The implications that a breach in the psychological contract can have on the
employees are discussed below:
Cynicism
Cynicism is a school of thought under which people believe that they are being used by their
organizations for the fulfilment of their self-interests whenever there is an opportunity for
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