Assigment 1 on Human resource management

A psychological contract underpins the employment relationship and is viewed as a set of unwritten expectations that exist between employees and their employers. It is generally accepted that a psychological contract is concerned with an individual's subjective beliefs, shaped by the organization, regarding the terms of an exchange relationship between the individual employee and the organization. A psychological contract governs the continuing development of the employment relationship which evolves over time, with the expectations of the parties taking the form of unarticulated assumptions that calls for discussion and agreement with individuals and teams. This paper provides an overview of the concept of psychological contract with the authors also reviewing literature concerning the effect that human resource management practices have on psychological contract in the context of modern organizations. 1. Concept of Psychological Contract According to Guest (2007), a psychological contract is concerned with the perceptions of both parties to the employment relationship, organization and individual, of the reciprocal promises and obligations implied in that relationship. It a system of beliefs that encompasses the actions that employees believe is expected of them and what response they expect in return from their employer and, reciprocally, the actions employers believe are expected of them and what response they expect from their employees. It is the beliefs based upon promise expressed or implied regarding an exchange agreement between an individual and, in organizations, the employing firms and its agents. These beliefs transcend the written and explicit provisions of the formal employment contract (Rousseau, 2004). Knights et al., (2005) defines a psychological contract as a set of individual beliefs or perception regarding reciprocal obligations between the employee and the organization. Some of these obligations are recorded in the form of a written formal contract; largely they are implied and not openly discussed. For example, the employee has expectations in the areas of promotion, pay, training, job security, career development, and support with personal problems. In return, the employer expects the employee to be willing to work extra hours, be loyal, volunteer to do non-required tasks, give advance notice when quitting, be willing to accept transfer, to refuse to support competitors, to protect company information, and to spend a minimum of two years with the organization. These obligations are perceived promises that both parties believe have been made and accepted by both parties. However the employees understanding of the employment relationship may be different from that of the organization. It is this perceptual and idiosyncratic nature of the psychological contract that distinguishes it from other forms of contracts.

2008

This paper argues that, in combination, management leadership styles (transactional versus relational) and human resource management practices (flexibility versus commitment) play an important role in formulating the orientation and content of the psychological contract. The paper presents a theoretical framework of how this occurs, drawing upon and integrating prior research to develop a typology of psychological contract obligations based on a two-by-two matrix, with leadership style and HRM systems on opposing axes. The resultant obligations are termed as partnership, paternalistic, market-based and dynamic. Implications are discussed from the viewpoint of both individuals and organizations. Crucially, the paper posits that a failure to match leadership styles and human resource (HR) practices may lead to mismatched expectations between employees and employers. This may have negative consequences for an organization's performance as, under the psychological contract, a breach of perceived obligations to employees by employers can have consequences for employee attitudes and behaviors. 12 studies on culture suggest that leadership styles of American and Japanese companies are quite distinct and different. It may also be interesting to study how such differences in leadership and HRM practices of firms operating in the same industry affect the perceived obligations and employee attitudes. In our belief, the use of global measures of psychological contracts may not be adequate to fully understand the nature, content, and dynamics of this very useful concept.

Psychological contracts are individual beliefs in reciprocal obligations between employees and employers. In a sample of 224 graduating MBA students who had recently accepted job offers, beliefs regarding employment obligations were investigated. Two types of obligation were demonstrated empirically: transactional obligations of high pay and career advancement in exchange for hard work and relational obligations exchanging job security for loyalty and a minimum length of stay. These types of obligations are connected with two forms of legal contracts: transactional and relational. Relational contract obligations for employers correlated with employee expected length of stay with the firm. Transactional contract obligations were associated with careerist motive on the part of new recruits. The relationship between these and other motives of new hires was also investigated.

2019

The minimum criteria regarding the qualifications and competencies of lecturers in conducting education require psychological contracts, organizational culture and the strategy of Human Resources (HR) that are used as the basis for work relationships. The main objective of this research is to examine psychological contracts in improving HR strategies with organizational culture as a mediator variable. The method used in this research is kind of descriptive with a quantitative approach and use explanatory surveys. The research target was lecturers at several universities in Jambi Province. The data collection method used is by providing a structured questionnaire aimed at the sample respondents. The analysis tool used in this study is Partial Least Square (PLS) and the software used is smart-PLS. The research hypothesis provides strong support towards the view of psychological contracts has a positive and significant influence in improving HR strategies, psychological contracts have ...

2020

As the globalization pressures the companies to expand multi-nationally, the human resource management (HRM) issues are becoming more challenging with cultural factors involved. A growing literature emphasizes that HRM play important part in the success of MNCs. Then what are the HR practices that attracts local staff? What is the belief of local staff that MNCs will provide to them? This research uses the concept of psychological contract to search the answers of above questions by investigating the dynamics of local staffs working for MNCs in Korea. The qualitative methods by conducting in-depth interviews from 9 local staffs and organizing focus group meetings at the Korean subsidiaries of oversea are executed to analyze the psychological aspects of the workers. The performance base rewards and its home country cultures were one of several factors that influenced psychological contract. The change of contract and causes of psychological contract violation is also examined. Recomm...

2020

The minimum criteria regarding the qualifications and competencies of lecturers in conducting education require psychological contracts, organizational culture and the strategy of Human Resources (HR) that are used as the basis for work relationships. The main objective of this research is to examine psychological contracts in improving HR strategies with organizational culture as mediating variable. The method used in this research is kind of descriptive with quantitative approach and uses explanatory surveys. The research target was lecturers at several universities in Jambi Province. The data collection method used is by providing a structured questionnaire aimed at the sample respondents. The analysis tool used in this study is Partial Least Square (PLS) and the software is smart-PLS. The research hypothesis provides strong support towards the view of psychological contracts that have a positive and significant influence in improving HR strategies, as well as it has also a posit...

2013

Employment relationships are an increasingly important topic in management research in Japan (Inagami and Whittaker, 2005). The psychological contract lies at the core of this issue (Morishima, 1996; Hattori, 2010). A psychological contract constitutes “an individual’s belief regarding the terms and conditions of a reciprocal exchange agreement between the focal person and another party” (Rousseau, 1989, p. 123). It is fundamental in regulating the employee-employer relationship because it influences an employee’s effort on behalf of the employer (Rousseau, 1995; Lee, Liu, Rousseau, Hui, and Chen et al., 2011) as well as their reactions to organizational change and an employer’s contract breach (Conway and Briner, 2005). In particular, many researchers conceive psychological contract breach as the most compelling linkage between the psychological contract and the employee’s attitudes and behaviors. One consistent finding in the body of such research is that psychological contract br...

Journal of Management Studies, 2000

Originally published in Journal of management studies, 37 (7). pp. 903-930

Human Resource Management Journal, 2002

The concept of the psychological contract, with its focus on the exchange of perc e i v e d p romises and commitments, is increasingly used as a framework to study the employment relationship. Yet re s e a rch has predominantly focused on employee views and has largely neglected the organisational perspective and the management of the psychological contract. This article begins to re d ress the balance by reporting a study, based on a survey of 1,306 senior HR managers, that explores the management of the psychological contract and in particular the role of organisational communication. T h ree distinct and relevant aspects of organisational communication are identified, concerned with initial entry, day-to-day work and more future-oriented, top-down communication. Effective use of these forms of communication is associated with what managers judge to be a clearer and less frequently breached set of org a n i s a t i o n a l p romises and commitments, as well as with a fairer exchange and a more positive impact of policies and practices on employee attitudes and behaviour. The ® ndings are discussed within the context of the wider literature on psychological contracts, o rganisational culture and HRM. The study con® rms that the psychological contract offers managers a useful framework within which to consider and manage the employment relationship. C o n t a c t: David E. Guest, Management Centre, King's College London, 150 S t a m f o rd Street, London SE1 9NN. Email: david.guest@kcl.ac.uk focus on the management of the contract and the communication processes associated with this neglects the two-way re c i p rocal exchange that lies at the heart of the concept. The same neglect is of course apparent in the bulk of the published re s e a rch that ignore s the employer's perspective. The aim of this article is not to explore the full range of issues associated with the psychological contract but to begin to re d ress the imbalance in the re s e a rch by focusing on its management and, in particular, on the core issue of how communication contributes to its successful management.

2016

Psychological contracts are a popular framework for exploring contemporary employment relationships, yet understanding of how contracts develop remains limited. This longitudinal research identified and integrated socialisation processes known to influence psychological contract development. The results suggested that newcomers developed a psychological contract from a socially constructed, interactive, and adaptive process.