The concept of a psychological contract refers to the unwritten expectations and beliefs that exist between an employer and an employee. These expectations can be influenced by various factors, such as organizational culture, job security, and compensation. The psychological contract can be considered a two-way street, where the employer and employee both have expectations that they believe are reasonable and achievable.
There are three main types of psychological contracts that exist between employers and employees. They are relational, transactional, and balanced.
Relational Psychological Contract
This type of psychological contract is based on the belief that an employee will receive long-term job security and career development opportunities in exchange for their loyalty and commitment to the organization. The employer is expected to provide a positive work environment, opportunities for growth and learning, and a clear path for career advancement. The employee, in turn, is expected to remain committed to the organization, be self-motivated, and contribute to the success of the company.
Transactional Psychological Contract
This type of psychological contract is based on the belief that an employee will receive specific rewards and benefits in exchange for their job performance. The employer is expected to provide compensation, benefits, and job security, while the employee is expected to perform their job duties to the best of their abilities. The relationship between the employer and employee is seen as a temporary exchange, with the focus being on the completion of tasks and achieving specific goals.
Balanced Psychological Contract
This type of psychological contract is a combination of the relational and transactional contracts. The employer is expected to provide long-term job security and career development opportunities, as well as specific rewards and benefits for job performance. The employee is expected to remain loyal and committed to the organization, while also performing their job duties to the best of their abilities. This contract is seen as a balanced exchange, where both the employer and employee are contributing to the success of the organization.
In conclusion, understanding the different types of psychological contracts is important for employers and employees to effectively communicate and collaborate. Both parties need to have a clear understanding of their expectations and the expectations of the other party. A balanced psychological contract is considered to be the most effective, as it combines the benefits of both relational and transactional contracts. Ultimately, a strong psychological contract can lead to increased job satisfaction, motivation, and overall success for both the employer and employee.