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Management - Psychological Contract - Essay Example

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Psychological Contract Professor Date Effects of psychological contract on employees and organization Psychological contract is an emerging issue in many organizations currently. This is mainly because most of the organization are shifting into using contract labor and temporary staffing as a means of managing costs and efficiencies…
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Management - Psychological Contract
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"Management - Psychological Contract"

Download file to see previous pages Most employers try to retain employees is through making promises. However, most of the promises made may not be achievable. This process through which organizations makes promises is termed as psychological contract (O'neill, Krivokapic-Skoko & Dowell, 2010). The case provided is a clear example of the psychological contract. Failing to meet the promises lead to a phenomenon that is called psychological contract breach. Psychological contract breach is a significant problem mainly because it fosters a belief within employees that the organization does not support them. It is a main obstacle facing the employees in most of the organization today (Chen, Tsui & Zhong, 2008). Psychological contracts are those perceptions that employees have on employer related to the training, promotion, or any other promise not explicitly recognized in formal contract. These forms of psychological contract are normally used by most of the employers to entice the employees into accepting the job being offered by the employer. Principally, under normal situation, the employer-employee relationship is expected that the employer offer compensation to the employee for the performance of the job duties. Chen, Tsui & Zhong (2008) describes the psychological contracts as mental templates that sum up the perceived promises that employees believe that the organization has made to them in exchange for their efforts on behalf of the organization. As mentioned above, psychological contracts are beneficial and useful to both the employer and employee. For the employer, psychological contract constitute the best way in which an organization can advertise for the job vacancies. Psychological contracts are used to attract the attention of the applicant and make them loyal to the company. For the side of employee, psychological contract becomes beneficial only if they are fulfilled (Tyagi & Agrawal, 2010). Psychological contract breach is a term used to describe the inability of the employer to fulfill the psychological contracts or the promises that he or she made during the recruitment period. The case study is a typical example of psychological contract breach. This is because the employer did not fulfill what he had promised the recruited. Just as the case depicts, psychological contract breach results in reduced performance, negative attitudes and more importantly, withdrawal behaviors. The problems associated with the psychological contract breach pose particular concern for organizations (Bordia, Restubog & Tang, 2008). Fundamentally, most organization tries their best to fulfill their psychological contracts but a number of factors limit them from meeting this objective. These factors include downsizing, outsourcing and rapid change. Consequently, avoiding psychological contract breach is a difficult task for the current organizations. The case presented in the case study implies that employees had higher expectation form the company. However, as they starts working in the company, they realized that they are not getting what they expected. They found out that the kind of jobs or duties they are given are below their standards. They end up becoming psychologically tortured. They also loss confidence in the organization. As they plan to leave their job, they feel that they may not get another job. This means that these employees need to be advised on what they should ...Download file to see next pagesRead More
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