A psychological contract describes the expectations between a company and its workers, and can also apply to other relationships. It starts in the interview process and can change over time due to business alterations, which can lead to dissatisfaction.
A psychological contract is an economic and psychological concept which generally explains the relational dynamics between a company and its workers. The basic concept can also be used to describe the dynamics in many types of relationships where people expect to benefit each other. At the simplest level, a psychological contract with an employer usually involves some set of expectations regarding the work the employee is expected to provide, while the employer is expected to provide a particular work environment and some type of security for the future. Whether an employee or employer is comfortable with a psychological contract can have big implications for the employment relationship moving forward.
The first traces of the psychological contract are formed in the very first stages of the interview and hiring process. The employer and employee will generally communicate to each other how they expect future relationships. In many cases, the employer can explain the type of work the person can expect and can mention the unwritten benefits that come with the job.
Once a person starts working for a company, they may find that the real psychological contract is very different from the perception they were given in the interview. For example, the employer may have said that everyone in a company had to pull their weight, but once the person starts working, it may become apparent that some people are not making their fair share, and the company may allow it without punishment. These experiences usually change the person’s perception of the terms of the psychological contract and, in these cases, the perception often becomes reality.
Other changes to the psychological contract are also likely to occur due to business alterations. For example, if a company switches to a different product, that process usually changes many people’s jobs in various ways. As companies change, the contract will evolve normally. Eventually, the changes can become large enough to make the employee or employer dissatisfied with the entire relationship.
A psychological contract can exist in other types of relationships as well. For example, two friends might be in a relationship with a variety of underlying psychological expectations about certain things they will provide for each other. When these mutually beneficial ties are broken, it is possible for a friendship built along these lines to suffer greatly.
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