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Pay, Careers, and Changing Employment Relationships

Due to increased pressure on organizations to make constant and rapid changes, they at times forced to change the employment relationship and the psychological contract. So what is psychological contract? Morrison and Robinson (1997) describes psychobiological contract as the employee’s perspective of what they ought to give their organizations or what their organizations ought to give them.

Hislop (2003) adds that the positive environment that enables knowledge to be shared in an organization is what can be termed as psychological contract between the worker and his/her employer. Psychological contact thus forms the foundation of trust, when employees believe in their employers they are likely to offer their services in anticipation of future reward In this current climate of rapid changes organizations are now forced to continuously manage, renegotiate and change the terms given in the employment contract.

Thus, downsizing for example can be seen as a breach of psychological contract from the employee perception. Others aspects like lack of official socialization mechanism, where employee has little interaction with the organization, and lack of communication from the organization to the employees in changes or issues, are known to cause perceived breach of psychological contract from the employee.

Another very important aspect is trust, human

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relations are founded on trust thus, if this trust is broken by the organization, the employee will feel that the psychological contract has been broken, it’s so hard to repair lost trust. When an employee feels that his/her psychological contract has been breached it will result in negative violation feelings, that includes low morale, the employee losses trust in the organization and his/her performance drops. In many cases, the employee may opt to leave the organization for another one.

References Hislop, D. (2003): Linking human resource management and knowledge management via commitment; a review and research agenda. ” Employee Relations 25(2): 197-201 Morrison, E and Robinson, L (1997): When employees feel betrayed: a model of how psychological contract violation develops; Academy of Management Review 22(1): 228-248 Raja, U and Johns, et al. (2004): The impact of personality on psychological contracts;Academy of Management Journal 47(3): 358

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