Importance of a Positive Psychological Contract
Knowledgeable and
skilled workers seems to have a wide range of choice on what they are willing
to do. Therefore, the organizations can only retain employees if they are
committed to the organization and employers.
This type of involvement cannot be gained through traditional hierarchy
which is based on employment contract. This is where the psychological contract
plays a crucial role. The breach in psychological contract will result in
adverse outcomes such as lack of trust on employer, lack of enthusiasm and
intentions to quit job. (Flood et al., 2001)
Psychological contract
motivates the employees to work with their heart and soul towards the
organization (Savarimuthu and Rachael, 2017). Armstrong (2010) explains that
developing a positive and balanced psychological contract provides an enduring
and a friendly relationship between the employer and employees. Furthermore, Guest et al (1996)
explains that a positive psychological contract is strongly connected to high obligation
to the organization, greater employee satisfaction and high employee relation.
Developing a positive
psychological contract will create a reciprocal trust between the organization
and the employees (Armstrong and Taylor, 2014). Armstrong (2010) explains that
a positive and balanced psychological contract will provide an ongoing and a
pleasant connection between the organization and employees. Psychological
contract focuses on satisfying the needs of the employees. This will result an increase
in the employee commitment and attachment towards the organization resulting in
an extra concern and willingness by the employees to achieve the organizational
goals (Rhoades, Eisenberger and Armeli, 2001). As per the given diagram positive psychological contract is crucial for an employee to retain in an organization and to be committed to the given organization.
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| Figure 1.0 - Hypothesized relationships between organizational processes, psychological contract, commitment and intent to remain (Source: Flood et al., 2001, p.1154) |
References
Armstrong, M. (2010) Armstrong’s
essential Human resource management practice: A guide to people management.
1st ed. United States, Kogan Page.
Armstrong,M and Taylor,
S. (2014) Armstrong’s handbook of human resource management practice.13th
ed. United Kingdom, Ashford colour press.
Flood, P. C.,
Turner,T., Ramamoorthy,N and Pearson,J. (2001) Causes and consequences of
psychological contracts among knowledge workers in the high technology and financial
services industries. The International Journal of Human
Resource Management, 12(7), pp.1152- 1165.
Guest, D., Conway, N
and Briner, T. (1996) The State of the Psychological Contract in Employment, 1st ed. IPD, London
Rhoades, L.,
Eisenberger, R and Armeli, S. (2001). Effective commitment to the organization:
The contribution of perceived organizational support. Journal of Applied
Psychology, 86(5), p.825.
Savarimuthu, A and
Rachael,A, J. (2017) Psychological contract - a conceptual framework. International
Journal of Management, 8(5), pp.101-108
Psychological tests use systematic and standardized procedures to measure differences in individual characteristics such as intelligence and personality. They enable selectors to gain a greater understanding of candidates to help in predicting the extent to which they will be successful in a job. Psychological tests are measuring instruments, which is why they are often referred to as psychometric tests. ‘Psychometric’ literally means mental measurement. For selection purposes, the main types of tests are those used for measuring intelligence and ability and those concerned with assessing personality characteristics.(Armstrong, 2009)
ReplyDeleteOn the basis of their research, Guest and Conway (2002) emphasize that communication is very important in shaping the psychological contract in the recruitment and induction stage when the employer making promises and commitment on such matters of learning and development opportunities, avoid of unreasonable demanding of employees, feedback on performance, work/life balance, fair treatment, employment security and safe working environment.
ReplyDeleteThat is correct, in the Journal of Management and Marketing Research under the topic “Understanding the importance of the employee/employer psychological contract”, Yarbrough explains the following,
DeleteAt the time of recruitment HR manager gets the first opportunity to communicate and to build a healthy psychological contract with the employee. Increasing the communication with employees and lengthening the recruitment process before appointment will help to communicate and understand the expectation of both parties.
Employers who wish to build a positive psychological contract with its employees will use communication as tool. For an example- the organization “Lego” uses feedback and communication as a strategic plan to understand their stakeholder’s needs and expectation.
Employment relations are based on psychological contract. Leaders should know the employees needs and has to provide them. Need to have a proper employee relationship, and understand their values. The greater employee satisfaction the greater their relation, and this will make them feel committed to their work with their whole heart. (Jackie, C 2002)
ReplyDeleteReference:
Jackie, C (2002), Consequences of The Psychological Contract for The Employment Relationship. Journal of management studies, 33(7), pp.903-930
Agreed, as mentioned above Psychological contract motivates the employees to work with their heart and soul towards the organization. Further, This will result in employee being more attached and committed to the organization and will motivate them to go an extra mile to achieve organizational goals. (Savarimuthu and Rachael, 2017).
DeleteAccording to psychological contract theory, individual or in organizational context employees have a cognitive process or thinking structure about their exchange relationships in the organizations. It is basically the obligations in between the employee and the employer. Therefore it is a need now a days to have a connection or match or balance between both the parties expectations. As mentioned there should be a match between what employee provides, and what employer provides. Both of their expectations should meet in order to go for a goal as a team. When there is a mismatch between these two, it causes employee turnover (Samantha, Denise and Maria, 2015).
ReplyDeleteReference
Samantha, D.M., Denise, M. R. and Maria, T. (2015) Psychological Contract Theory. Sage Publications, 1(1), pp. 2-7.