Psychological Contract
Faculty of Business and Law
UWE BA (Hons) Tourism Management– Year 2
Module: Human Resource Management
(UMPD3E -20-2)
Module Leader: Anthony Fenley
Student Number: 12022651
Definition
The psychological contract has been defined as 'A set of unwritten reciprocal expectations between an individual employee and the organization' (Schein, 1978) and '…the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other' (Guest and Conway 2002). According to Schein (1978), the expectations between the organization and the individual employee do not only cover how much work is to be performed for how much pay, but also a whole set of obligations, privileges and rights. Schwerin's insightful contribution alerts us to the idea that labor unrest, employee dissatisfaction and worker alienation comes from violations of the psychological contract that are dressed up as explicit issues such as pay, working hours and conditions of employment which form the basis of a negotiable rather than a psychological agenda. The concept of the psychological contract gained increasing popularity in the 1980s and 1990s. These years were characterized by many large-scale and small-scale organizational changes. Because of these changes, the 'traditional' employment relationship was put to a test. Serious behavioral and attitudinal reactions among employees could be observed. The psychological contract was used to describe, analyze, and explain the consequences of these changes. Although it is not an authentic contract, it plays an irreplaceable role in the relationship between the organization and employees.
The role of the psychological contract
1. Reduce the insecurity. Because the written contract is not likely to include all aspects of the employment relationship, and the psychological contract is filled to blank employment relationship.
2. Shape employee behavior. Employees will compare responsibility difference with
UWE BA (Hons) Tourism Management– Year 2
Module: Human Resource Management
(UMPD3E -20-2)
Module Leader: Anthony Fenley
Student Number: 12022651
Definition
The psychological contract has been defined as 'A set of unwritten reciprocal expectations between an individual employee and the organization' (Schein, 1978) and '…the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other' (Guest and Conway 2002). According to Schein (1978), the expectations between the organization and the individual employee do not only cover how much work is to be performed for how much pay, but also a whole set of obligations, privileges and rights. Schwerin's insightful contribution alerts us to the idea that labor unrest, employee dissatisfaction and worker alienation comes from violations of the psychological contract that are dressed up as explicit issues such as pay, working hours and conditions of employment which form the basis of a negotiable rather than a psychological agenda. The concept of the psychological contract gained increasing popularity in the 1980s and 1990s. These years were characterized by many large-scale and small-scale organizational changes. Because of these changes, the 'traditional' employment relationship was put to a test. Serious behavioral and attitudinal reactions among employees could be observed. The psychological contract was used to describe, analyze, and explain the consequences of these changes. Although it is not an authentic contract, it plays an irreplaceable role in the relationship between the organization and employees.
The role of the psychological contract
1. Reduce the insecurity. Because the written contract is not likely to include all aspects of the employment relationship, and the psychological contract is filled to blank employment relationship.
2. Shape employee behavior. Employees will compare responsibility difference with