Chapter 3: Psychological Contracts

As organisations attempt to utilise their human resources more effectively in order to improve their performance and achieve sustained competitive advantage, the relationship between organisations and employees has emerged as an issue of interest to human resource management researchers and practitioners. One construct that is central to understanding organisational–employee relationships is the psychological contract. At a general level, there is broad agreement that the psychological contract refers to the beliefs surrounding the terms of exchange between employees and employers. However, as researchers have attempted to refine and specify this construct, different constitutive definitions and operationalisations have emerged. For example, conceptualisations of the psychological contract differ according to the type of beliefs (e.g. obligations, expectations, promises) as well as the level at which the construct occurs (e.g. individual, dyadic, group, organisational, societal). Rousseau (1989), arguably the researcher who has contributed most to advancing our understanding of this construct, has focussed on the obligatory and promissory aspects of the beliefs that constitute the psychological contract. A variety of mechanisms may lead to a promise inference, including verbal discussion, representation by an organisational agent, or organisational policy and practice (Hornung & Glaser, 2010). Rousseau has consistently advocated that the appropriate unit of analysis is the individual level (Roehling & Boswell, 2004). Thus, according to Rousseau, the psychological contract refers to the informal, tacit and often unspoken and unwritten set of reciprocal obligations and promises held by the employee of the employer (Rousseau, 1990, 1995). These promises and obligations may involve promotion, responsibility, job security, training or career development.