For understanding the employment relationship, the attention has been paid by researchers to psychological contract. This chapter provides an overview about the development of psychological contracts highlighting the definition and contribution of different authors. The authors further reviewed antecedents and consequences of psychological contracts. Using social exchange theory, undetermined obligations make the social relationships which create psychological contracts. Psychological contract results in high work engagement, organizational commitment, and job satisfaction. Furthermore, the authors reviewed employee-based brand equity, its antecedents and consequences, and how psychological contracts result in enhanced employee-based brand equity.
TopIntroduction
In today’s era of competition and technological development, organizations are going through frequent structural changes which can also result in changing employment relationship. These changes have drawn the interest of scholars to different types of employment relationship and psychological contracts (Delcampo, 2007). As organizations make changes through downsizing, outsourcing and restructuring, a new employment association is made which creates psychological contract. The literature on psychological contracts help in understanding the nature of work agreements and work environment (Rousseau & Tijoriwala, 1998). It serves as a central paradigm for analyzing and understanding exchange relationships. The work of Argyris (1960), Levinson (1962) and Schein (1965) can used for the development of psychological contract who introduced this term. It can be defined as ‘the expectations of an individual concerning the settings of a reciprocal contract between two parties.’ It can also referred as the reciprocal conventions between employee and employer about the exchange relationship (Rousseau, 1989). It is unwritten and more subjective and hence not shared by the parties involved in the exchange than a legal contract. It is a mental model of the obligations between two parties in which organization fulfill its promises and in return employees perform their duties well (Rousseau, 1998).
Psychological contracts can impact on attitude and behavior of organizational members. It can result in enhanced employee’s commitment to the organization, their organizational citizenship behavior (OCB) (Robinson & Morrison, 2014), their in-role performance, job satisfaction and it will decrease their job stress, employee deviant behavior at workplace and turnover intentions. These outcomes of psychological contracts are related to social exchange theory (Blau, 1964). If employees feel that they are getting more than promised, they will restore equity and involve in more positive behaviors at workplace (Ryan, 2011). If the organization is helpful and supportive then employee felt obligation to involve in positive behavior such as employee based brand equity.
To explain the relationship between psychological contracts and its consequences including employee based brand equity, the social exchange theory can serve as an effective mechanism. Psychological contracts increase employee based brand equity because employees feel to respond positive behavior of the organization and by involving in positive behavior, the employee increase his chance of being treated good in future by the organization (Deepa & Baral, 2020). Psychological contract create employment relationship between employee and employer to fulfill the brand promise. When organization fulfill its promise then this exchange relationship exists. Furthermore, psychological contracts is seen to predict brand related attitude and behavior such as employee based brand equity. When organization fulfill its promises, the brand equity of employees will be increased. This chapter investigates the antecedents and consequences of psychological contracts. This chapter also studies the antecedents and consequences of EBBE and finally it discusses how psychological contracts result in enhanced brand equity using the lens of social exchange theory.