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In order to retain and motivate employees, organizations must respond to their expectations, both in terms of meeting formal aspects of their employment contracts and in addressing their less formal expectations of the employment relationship. Within the current human resources management (HRM) literature, these informal expectations are known as psychological contracts. This paper reports on research that explored psychological contracts within the construction industry. In‐depth interviews were held with more than 80 construction managers and professional staff who worked for five large UK contracting organizations. The interviewees were asked to describe their career histories, and to discuss any tensions between the personnel policies of their organizations and their personal career aspirations and expectations. It emerged that responsibility for human resource development (HRD) had been largely devolved to divisional and operational management. This led to HRD becoming fragmented and unresponsive, and to employees becoming disillusioned by their employers' failure to meet their expectations. It is argued that construction companies require a more sophisticated understanding of their employees' expectations of the employment relationship if they are to be retained in the long term.

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