Developing a Positive Psychological Contract

Developing a positive psychological contract is considered as a talent management strategy (Armstrong, 2008). Employee commitment, employee satisfaction and employment relationships are strongly connected to the psychological contract. Therefore, it is very much important and should be given priority. HRM practices such as providing training, job security measures, career development, communication and fair reward system will contribute to positive psychological contract.

As Armstrong (2010) there are few steps which can be used to develop a positive psychological contract. Such as:

•   Explaining what is expected at the recruitment and induction stage.
• Continuous communication with employees which helps to understand expectations.
•   Maintaining transparency regarding organizational policy and management decisions.
• Rather than controlling, treating employees as stakeholders and involving them in decision making. 

 Figure 1.0 – Development of Individual Psychological Contract (Source: Rousseau, 1989, p.125)

A belief that exchange of met expectations will act as an indicator to the development of a psychological contract (Rousseau, 1989). 

       References

Armstrong, M (2008) strategic human resource management: a guide to action. 4^th ed. London, Kogan Page.

Armstrong, M. (2010) Armstrong’s essential Human resource management practice: A guide to people management. 1^st ed. United States, Kogan Page.

Rousseau, D, M (1989) Psychological and implied contracts in organizations. Employee Responsibilities and Rights Journal, 2(2), pp. 121-138.