To What Extent Is Psychological Contract Applicable in the 21st Century?

954 WordsNov 21, 20114 Pages
What is psychological contract? To what extent is psychological contract applicable in the 21st century? Psychological contract, not written compared to legal contract, is mostly accepted by the two parties in the employment. In 21st century, since the nature of work has experienced a great change, psychological contract, which seems to have new content, is paid more attention to than before. It appears that a fair and positive psychological contract may contribute to success of a business. The first session of the essay will define what psychological contract is. The second session will discuss the changes of the psychological contract in 21st century, and the third will show how psychological contract is applicable…show more content…
It is clear that these employees, who are fulfilled with good welfare and a work life balance, are more likely to perform well. Companies, which succeed in maintaining employee commitment, may retain competitive employees and make more profits. However, some external factors such as economic recession may bring about negative effect on psychological contract. An example of this is the global economy recession in 2008. This recession has generated bad influence on employee attitudes, including job dissatisfaction and insecurity. Organization leaders may have challenge to fulfill employee commitment. (The psychological contract, n. d.) Although psychological contract is paid more attention to in 21st century, it is still not applicable in some situations. Guest and Conway (2002) suggest that the contract is base on employees’ and employers’ belief, and ‘the extent to which employers adopt people management practices will influence the state of the psychological contract’. In 21st century, there are still many family companies with some autocratic shareholders. Psychological contract may be not quite applicable in these hierarchical companies. In addition, as the liberal professionals such as writers, reporters do not have tight relationship with employers; the professionals do not need to reply on the employers. That is to say, psychological contract may not exist in this situation. This essay has shown the application

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