Hrm: Psychological Contract

1159 Words5 Pages
Contents page Introduction Psychological contract The characteristics of a psychological contract are the mutual beliefs, informal obligations, perceptions of the employee and employer towards each other; the expectations an employee has of the organisation and the expectations the organisation has of the employee and the reciprocal promises in that relationship. This helps to set out the aims and objectives in the company for the work to be done professionally. The employee has different contents and outputs for the business as to the employer. The employee seeks for fairness followed by an output of behaviour, whilst the employer seeks for trust and performance _(Annette Sharpe, 2004)._ There can be informal and imprecise…show more content…
The employers have understood the different offers and changed their way of satisfying the employee and offering them different aspects for the work to be done and the business to be successful. In the 1970’s, the offers were security, promotion and care. In the 1990’s it had changed to a job and a salary, and current offers are employability, flexible contract and individualised rewards _(blackboard slides, 2008)_. Changes are done to match the needs and wants of the employee to work hard for the business because the employees are the main key for the business to stay alive. Why the psychological contract is changing A reason why the psychological contract is changing is because organisations realize that the previous method has had a negative effect within the company. Reasons can also be such as the relationship has not worked as planned between the employers and employees or the promises are not fulfilled by the employers or the dedication from the employees are not met to the expectations of the employers. When expectations are not met, the organisation can face negative effect such as decreased employee commitment, poor performance and high labour revenue. The psychological contract in organisations has undergone a paradigm shift (Stone J, R, 2005). According to Stone, expectations and assumptions about employment relationships have been swept away. Meaning that loyalty, qualifications, superior performance does not
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