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The Psychological Contract
Objectives
 Define and understand the importance of the
psychological contract
 Examine the influences that affect workplace
expectations
PSYCHOLOGICAL CONTRACT
The psychological contract is
individual beliefs or
perceptions regarding the
terms of exchange between
the individual and
organization.
PSYCHOLOGICAL CONTRACT
 The perceptual and dynamic nature of the
contract makes it common that a violation will
occur
Types of Violations
 Inadvertent –divergent interpretations
 Disruption –impossible to fulfill the contract,
despite willingness to do so
 Breach of Contract – One side refuses to
fulfill the contract
Contract Makers’ Violations
Sources Violations
Recruiters • Unfamiliar with actual job
• Overpromise
Managers • Say one thing, do another
Co-workers • Failure to provide support
Mentors • Little follow-through
• Few interactions
Top management • Mixed messages
Broken Contracts
 Outrage, shock, resentment, anger
 Decreased trust and good faith
 Decreased job satisfaction
 Decreased productivity
 Decreased attendance
 Decreased commitment
 Turnover
Consequence
Managing the Psychological Contract
Provide realistic job expectations
Have frequent discussions of expectations
Check employee understanding
Give feedback
Be sensitive to individual differences
Check for changes in expectations

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Psychological contracts

  • 2. Objectives  Define and understand the importance of the psychological contract  Examine the influences that affect workplace expectations
  • 3. PSYCHOLOGICAL CONTRACT The psychological contract is individual beliefs or perceptions regarding the terms of exchange between the individual and organization.
  • 4. PSYCHOLOGICAL CONTRACT  The perceptual and dynamic nature of the contract makes it common that a violation will occur
  • 5. Types of Violations  Inadvertent –divergent interpretations  Disruption –impossible to fulfill the contract, despite willingness to do so  Breach of Contract – One side refuses to fulfill the contract
  • 6. Contract Makers’ Violations Sources Violations Recruiters • Unfamiliar with actual job • Overpromise Managers • Say one thing, do another Co-workers • Failure to provide support Mentors • Little follow-through • Few interactions Top management • Mixed messages
  • 7. Broken Contracts  Outrage, shock, resentment, anger  Decreased trust and good faith  Decreased job satisfaction  Decreased productivity  Decreased attendance  Decreased commitment  Turnover Consequence
  • 8. Managing the Psychological Contract Provide realistic job expectations Have frequent discussions of expectations Check employee understanding Give feedback Be sensitive to individual differences Check for changes in expectations