Psychological contract and its functions and types
Answers
Psychological Contract :
Psychological Contract “Psychological contracts are the beliefs individuals hold regarding the terms and conditions of the exchange agreement between themselves and their organisations ”. “The set of expectations held by the individual employee that specify what the individual and the organisation expect to give to and receive from each other in the course of their working relationship.” “What employees are prepared to give by way of effort and contributions in exchange for something they value from their employer, such as job security, pay and benefits or continuing training.”
Types of Psychological Contract :
Types of Psychological Contract There are four types of psychological contract: Transactional Relational Transitional Balanced
Transactional
Relational
Transitional
Balanced
Function of Psychological Contract:
Function of Psychological Contract To reduce the insecurity of employees To fill the gaps in the employment relationship that cannot be addressed in a formal written contract To shape behaviour of the employees To help employees to weigh their obligations towards the organisation against the obligations of the organisation towards them and To adjust their behaviour on the basis of critical outcomes To give employees a feeling of influence on what happens to them in the organisation