PSYCHOLOGICAL CONTRACT AND EMPLOYMENT RELATIONSHIP

PSYCHOLOGICAL CONTRACT AND EMPLOYMENT RELATIONSHIP

Harold Andrew Patrick
Coordinator OB and HRM, Institute of Management, Christ University, Bangalore [e-mail] Abstract
Psychological contract refers to mutual unwritten expectations that exist between an employee and his/her employer regarding polices and practices in their organization.
Psychological contract influences the job attitudes and performance of employees. This study is aims at developing a deeper understanding about psychological contract and employment relationship.

Six psychological contract variables (relational contract,

transactional contract, employer‟s commitment/obligation to employee, employee‟s commitment/obligation to employer, employer‟s relationship with employee, and employee‟s relationship with employer) were measured on 202 employees from 15 IT companies from randomly chosen for the study. A 52 item Psychological Contract
Questionnaire adapted from Psychological Contract Scale (Millward & Hopkins, 1998) and Psychological Contract Inventory (Rousseau, 1995) was used for data collection. The study revealed that relational contract was dominant in the IT companies under study.
Employees‟ commitment/obligation to employers was higher than employers‟ commitment/obligation to employees. Employees‟ relationship with employers was also stronger than employers‟ relationship with employees. Implications of the study for IT industry have been discussed for harnessing the energy, knowledge and creativity of employees for competitive advantage.

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Electronic copy available at: http://ssrn.com/abstract=1284775

INTRODUCTION
Psychological contract has now become an accepted part of the thinking and vocabulary of human resource practitioners. Relationships between employers and employees in many modern Indian organizations resemble a marriage under stress, characterised by poor communication and low levels of trust. Neither is getting the

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