Psychological Contract

that are relevant to the practice of management. They describe two contrasting models of workforce

* Human Relations- assumes employees dislike work but can be induced to work in order to satisfy their social needs.

The first benefit is the fairness of the contract at will. Epstein concludes that the freedom of contract is an end in itself and so an aspect of individual liberty. While employers own capital, employees own labor. Therefore, they are free to exchange their properties when they see appropriate. Moreover, Epstein criticizes the excess government intervention undermines the freedom of both parties. Thus, EAW can reduce the use of force or fraud in taking advantages during negotiations since either party can cease the relation.

2b. Psychological- refers to anything that relates to your mind-set. Including emotions, thoughts and mentality. Ruth hated being a migrant worker. She expressed having suicidal thoughts. She often said if she were to commit suicide it would just be “another migrant girl dead”. She explained having what she called ‘Psychological determinism’ which to her is that everyone has a reason to be driven in life.

Limitations that could be identified in the study were the small sample size that included only managers, was conducted only in New Zealand and therefore may not be able to be generalized to other countries (Cable, 2010). Results and discussion suggests that future research could expand the understanding on how the fulfillment of the psychological contract could impact an individual employee’s attitudes and behaviors (Cable, 2010).

Lester (2002) submitted that employees are likely to experience a diminished level of commitment, a decreased level of work performance, and they are likely to witness to the fact that their psychological contract had being breached. In addition, Conway & Briner (2002) stated that the psychological wellbeing of employees is likely to reduce when there is a breach in the psychological contract and as result, talent retention in an organisation will diminish (Tekleab & Taylor, 2003).

Critically evaluate the utility of the psychological contract for understanding the contemporary employment relationship. (2500 Words)

Employee behaviour is influenced by the organization ' 's expectations of how employees act. If the company creates rules and regulations to apprehend offending employees, employees will be caught and disciplined. The cycle repeats and repeats ... if a manager believes employees are lazy, his belief is confirmed when an offending employee is caught. Furthermore, if the only way an employee can get recognition is by breaking the rules, then he or she will break the rules because negative recognition is preferable to none at all. Behavioural scientists, such as McGregor and Likert, based their management theories on the belief that man is by nature an experimenter, a thrill-seeker and an inventor. They indicated that management should provide meaningful work and equitable compensation, that jobs should be whole and exciting work modules. Given this,

My understanding about the employer-employee relationship has also been shaped by these articles. I have learnt that

The results of breach are more negative to employees such that Rousseau and Schalk (2000) advocate focusing on not breaking the psychological contract and; as Dainty et al. (2004) puts a strong emphasis on re-negotiation and adjustment whenever possible as one of the remedy to the relationship. Considering its dynamic nature, Makin et al. (1996) and Atkinson (2002) stressed that Psychological contract are best kept open, emphasising on more identifiably contracting process and well known to all parties involved. This is unfortunately not always the case.

The concepts consist of many variables such as employee morale, dynamics of group worker, the supervision method; relationship between workers; and the behavioural principles of motivation (Owen, 1987). This argument is actually strengthened by Marie Parker Follet theory, which was established before the Hawthorne Experiment. Like Follet theories, of the group empowerment; followership; and full involvement in the organisational construct, with other addition theories which are linked to the human relations in organisation. Even before The Hawthorne’s experiment took place, in 1863 William Hearn from Australia put forth the idea of the hierarchy of human needs and Hugo Munsterberg came up with the industrial psychology in 1890s at Harvard. But, Mayo’s, with the Hawthorne, manuscripts and books is still known as the foundation of Human Relations approach (Lemak, 2004). The other author who contributed in the Human Relations Approach was Edward Mcgregor who has the famous X and Y theories. Theory X is explaining the basically human dislike of work; therefore needing control, guide, and force toward organisational objectives. Conversely, Theory Y said that people like to work and they are able to learn and seek responsibility under the right conditions (Zilbert, 2000). From supervisory context of managing strengthening people in an organisation is the key idea of

In recent years, there exist many new types of economy in globalisation, and then it results in varying new types of job in which different job descriptions depending on different industries. More importantly, the role of employees is day by day appreciated as a core component in the development and the success of any organisational productivity and any company respectively. That is the reason why psychological contract needs to be invented in a new economy whilst loss of trade unions. Subsequently, this essay will not only clarify how the psychological contract is defined and how it is evaluated and applied in organisations in reality but also answer the question why a psychological contract is considered as so important in the management

The relationship between employers and employees has long been the subject of widespread study and debate within the business world. This employment relationship can be defined as a complex system in which social, economic and political factors combine with an employee who exchanges mental and manual labour for rewards allocated by the employer (Encarta Encyclopaedia Deluxe. 2004). Industrial relations and human resource management advocates have traditionally held different views on the subject of organisational conflict. Many authors have argued that organisational conflict is inevitable in most work settings and that the employment relationship is essentially a trade-off ground (Alexander and Lewer, 1998; Deery, Plowman, Walsh and Brown

I can say that Theory X presents the pessimistic view of employees’ nature and behaviour at work, while Theory Y presents the optimistic view. With reference to Maslow’s theory, Theory X is based on the assumption that the employees emphasize on the physiological needs and the safety needs; while Theory Y is based on the assumption that the social needs, esteem needs and the self-actualization needs dominate the employees.

Other titles in the Issues series: Employee Motivation and the Psychological Contract Employment Attitudes in Britain Fairness at Work and the Psychological Contract Performance Management through Capability The State of the Psychological Contract in Employment Working to Learn: a work-based route to learning for young people These titles can be ordered from Plymbridge Distributors Tel: 01752 202301