What Is a Psychological Contract between Employer and Employee

As a professional, I have written this article on the topic “what is a psychological contract between employer and employee” that will provide a comprehensive understanding of the concept.

The psychological contract is a mutually agreed set of expectations, beliefs, and obligations between an employer and an employee. It is a set of unwritten and implicit rules that govern the relationship between an employee and an employer. The psychological contract is not legally binding and is based on trust, mutual respect, and understanding.

The psychological contract is an essential concept that affects the performance, satisfaction, and loyalty of employees. It is based on human nature and shapes the relationship between the employer and the employee. It is a dynamic concept that evolves over time and is influenced by various factors such as job tenure, organizational changes, and work-life balance.

An employer can create a positive psychological contract by providing a supportive work environment, offering opportunities for growth and development, and recognizing the contributions of employees. The employer must also communicate openly and honestly with employees, show empathy and understanding, and provide fair compensation and benefits.

On the other hand, if an employer violates the psychological contract, it can lead to dissatisfaction, disengagement, and turnover. Violating the psychological contract can happen in various ways, such as failing to provide promised training or development opportunities, ignoring employee feedback, or failing to provide work-life balance.

Employees, too, have a role in creating a positive psychological contract. They should be honest, respectful, and communicate effectively with their employer. They should also fulfill their obligations, meet performance expectations, and show dedication and loyalty to their employer.

In conclusion, a psychological contract is a crucial aspect of the relationship between an employer and employee. It is an unwritten set of expectations, beliefs, and obligations that determine the level of trust, mutual respect, and understanding between them. Creating a positive psychological contract requires open communication, mutual respect, and fulfilling obligations on both sides. Employers who fail to uphold their part of the psychological contract can affect employee engagement, satisfaction, and retention. Therefore, it is essential for both the employer and employee to work towards maintaining a positive and healthy psychological contract.