Chapter 8: Moral Contracts

A considerable amount of research has focused on the psychological contract as a way to understand employees’ subjective interpretations of the mutual obligations that exist between them and their employing organizations. More specifically, the psychological contract is defined as “an individual’s beliefs regarding the terms and conditions of a reciprocal exchange agreement between that focal person and another party” (Rousseau, 1989, p. 123). By definition, the exchange agreement underlying a psychological contract exists in the “eye of the beholder” (MacNeil, 1985). Employees, in particular, rely on written and unwritten organizational cues to shape their beliefs regarding organizational promises (Rousseau, 1989). Employees are expected to make certain contributions to the organization in exchange for the organization’s promise fulfillment.