‘‘Psychological contract’ is defined as the implied obligations of parties in the employment relationship. ’ Rousseau (1995) A psychological contract measures employee performance, attitudes and the well being of employees. It has proved to be an important aspect of a work place. It looks at the seriousness of situations by both employers and employees by looking at the effect it has on worker behavioural patterns. The process of forming a psychological contract is simply when in the selection process, along with the job descriptions, interviews give out an outline of what is to be expected by prospective employees.
When selected the new employees would have to then look at what was discussed during selection process and see if it meets expectations. At the final stages of the selection process there is a firm agreement on the employment contract. An explicit written contract is signed, at the same time immediately an implicit and unwritten but equally important contract is generated. This is known as the psychological contract. The psychological contract may have Strategic implications as individuals want to know whether or not employee interests are taken in to consideration and that too with respect.
One may be that seeing the economic state by the effects of recession and high levels of un- employability the economic growth has come to a halt and people becoming redundant with employees are often less willing to move jobs, preferring their current job security to career development elsewhere. Staffs are also more interested in the long-term viability of their employers however with this implication it is likely to unbalance the psychological contract in favour of employers.
Management styles is an implication due to various styles of management allowing to adopt these different styles, by giving opportunities to receive feedback on the flow of performance which is then interpreted by employees. Employers need make it clear to the new workforce what they can expect from their job. With the managers’ tendency to pay more attention on positive aspects and failing to elaborate on the negative notes, it gives employees a sense of knowledge and can distinguish what is being asked from them.
Failure in doing so will resolve in weakened employee trust. This is defined as Managing expectations. Difference in behaviour depends on the type of contract available such as the new ‘transactional’ contract would entail starting and finish a job on time and complete all tasks allocated to them whereas on the other hand and a old ‘Paternalistic’ contract as opposed to a transactional as in being flexible with working hours and being interested in extra events and being able to provide additional help to colleagues when needed.
A Psychological contract changes over a period of time. At the start of the contract when the employee is fairly new their contract would start off as transactional with limited tasks however over time the contract evolves and more employee and employer interactions with a strong relationship, therefore the contract becomes paternalistic. Breach of contract can cause a problem from one or both parties. It is usually when an employee feels that their needs or expectations have not been met, then the employee experiences psychological contract breach.
However with a breach of contract it shows that an agreement has been cancelled as it creates a sense of discrepancy in the social exchange relationship. Psychological contract violation is similar to a psychological contract breach however it differs as it focuses on the emotions and its effect. According to Rousseau (1995) changes have been made to the psychological contract, it has evolved over three stages being the Emerging phase, bureaucratic phase and adhocracy phase. Emerging phase having occurred in the 18th Century and was considered by a central work place with high level of control by owners.
Bureaucratic phase in the 1930s characterized by internal labour market, the hierarchy within the organisation controlled employee behaviour, where the contract was paternalistic this is where the company look after their employees where in return they offer life time employment and in return employee loyalty is given. Where the Adhocracy phase has recently been taken up and still exists in major organisations, organisations such as Apple are boundary-less organisations that move straight forward with varied employer and employee relations, as different
psychological contracts are managed for different groups of people. With the changes occurring in organisations it is clear that organisations feel that they can no longer fulfil the ‘contract’, with the levels of change it shows that future is unpredictable, therefore individual needs are being put aside. Therefore Career management is vital to an organisation and individual. Due to changes occurring relates to the contractual obligations and changes occurring within the organisation.
Organisation career management (OCM) means that the practices and policies established by an organisation are put in place in order to improve career success of their employees and by sharing general features to understand career opportunities available for employees and the employees that deserve these opportunities, therefore programmes being generated such as workshops to monitor employees. On the other hand individual career management is when an individual raise their hopes, and career goals through ICM.
Career management and planning therefore requires individuals to develop their aims by using certain methods in using ways of self reflection and setting goals with other examples used, to assist with enhancing ones career. Benefits of career management would be to have a sense of clear direction towards career, or then raised levels of confidence and improved motivation, Growing knowledge and skills to better ones performance, and the ability to increase flexibility applied to work and everyday life.
In order to strengthen the ‘contract’ one needs to consider how to build the psychological contract during recruitment, and how to respect an individual if there in the first week in their new position, giving that the realisation of the psychological contract being highly individual and subjective. Therefore it changes on the circumstances concerning personal matters or matters in professional terms.
Preparing line managers to use the right resources in order to build up the psychological contract for each individual in their team would be one other point. Also if an individual feels that the agreement is being broken, then employers should act fast to mend any flaws occurred. To have an understanding of minute breaches are made on a day to day basis having gone unnoticed. Word Count: 1059 BIBLIOGRAPHY Arnold, J. (1997) Managing Careers into the 21st Century. Paul Chapman Publishing: London
Bloisi, W (2007), An Introduction to Human Resource Management, Maidenhead, Berkshire: McGraw – Hill Education Addy, N. 2009 Lecture Notes: Week 2: The changing nature of careers [found] on date 19/03/09 Addy, N. 2009 Lecture Notes: Week 5: Individual career Management [found] on date 19/03/09 Trade secrets: Protecting the psychological contract [Online www] http://www. personneltoday. com/articles/2006/11/21/38212/trade-secrets-protecting-the-psychological-contract. html(March 19th 2009)