Psychological Contracts Paper - Essay Example

Psychological contract is a term used to refer to the mutual relationship existing between organization and its employee in terms of reciprocal obligations and promises implied in the employment relationship. It is good to understand that these contracts fall under the category of promissory contracts. On the other hand, this mutual understanding is mainly subjective to person’s perceptual and cognitive limits. This contract comes into effect the moment when the physical i.e. employment offer contract is signed.

It is worth noting that obligations under psychological contract unlike the physical contract are not signed rather they are implied. These obligations are merely promises and expectations. Thus, in general terms this contract refers to the mutual perceptions, beliefs and imprecise or informal responsibilities between an employee and an employer. Psychological contracts due to them being subject to emotional and social factors they are usually changeable in nature unlike the physical employment contracts (Makin, Cooper & Cox1996 pp 3-6).

Types of Psychological Contracts There are usually three types of psychological contracts. . Finally, we have the the “hybrid” or balanced form of psychological contract which entails aspects of the two mentioned above contracts i.e. relational characteristics such as long-term mutual committments and also the transactional attributes such as the renegotiations and job roles and functions. Nature of Psychological Contracts These contracts are assumed dynamic, informal, voluntary and subjective in nature.

They change in line with the changes occurring in relationship and expectations of both the employer and employee. There is usually no tangible agreement or contract; however, the following are deemed the obligations and components of this contract; The employees are anticipated to offer hard work, loyalty and commitment, or sacrifice while in employment. The organization is required to provide high pay, advancement, training and development, and job security Features of psychological Contracts a) It is a voluntary choice: A psychological contract is entered into voluntarily by the employee, afterwhich he will be motivated/obligated to fulfill his commitments to the employers organisation. b) There usually is a belief in mutual agreement: These psychological contract are based largely on the employee perceptions and understanding of the terms and conditions.

Consequently, the employee offers his/her services relying on the pressumpton that the contract was mutually agreed upon in total disregard of the reality. c) Psychological contracts are Incomplete. These contracts evolve and change over the relation and period of employment unlike the physical contracts which are usually complete at the beggining of employment. d) Multiple