What is Psychological Contract

The reciprocal exchange relationship that is perceived to exist between employees and their organizations.

The relationship and expectations between an employer and employee regarding behaviour and treatment.

It is defined as an official and non-written contract that can affect the occupational behavior of the occupation and the employer regarding the expectations, perceived commitments, and obligations between the employer and the workplace in organizations.

These often incorporate the implicit perceptions and expectations of employees regarding what they will be offered by their employers (tangible and intangible benefits, working conditions, remuneration) and have access to (e.g., in terms of autonomy, resources, support, privacy).

A mental model held by a group member of the perceived obligations they owe the group and the obligations they perceive the group owes them.

The mutual beliefs, perceptions, and informal obligations between an employer and an employee

The expectations, convictions, goals, and duties of an individual as seen by the employer and the employee.

The perceived exchange relationship of the underlying beliefs of the obligations and inducements between employer and employee.

The perceptions, assumptions, expectations, and behaviors that are considered to come in place between employees and employers in a work-related relationship. The psychological contract is implicit and mediated by social, cultural, and economic forces rather than by legal ones. The contract is recognized as informal in nature but is considered mutual, reciprocal, binding on both parties, and potentially subject to breach.

The implicit contract between an individual and an organization that unilaterally represents the individual’s beliefs with respect to the relationship between the individual and the organization. It is important to understand that this is a unilateral agreement. The organization has no direct knowledge of this agreement. It is purely defined in the mind of the individual. And often, the individual is not consciously aware of the elements of the psychological contract. A typical example is “I expect the organization to value and reward my hard work based on the impact it has.” There are many examples of such “agreements” that each of us has with organizations to which we belong.

It is the employee’s expectations about his/her labor relationships (i.e. mutual obligations, values, expectations and aspirations) that operate over and above the formal contract of employment.

The psychological contract is the unwritten set of expectations of both employee and employer at the time of employment contract.

Perceptions of reciprocal expectations and obligations implied in the employment relationship.

It is an unrecorded contract that factually means a psychological contract between employer and employees without any formal letter contained anticipations.