Intr0ducti0n

The existence 0f psych0l0gical c0ntract can be traced back t0 the 1960’s but it wasn’t until the
1990’s that its imp0rtance and pr0-active need was felt. Measured thr0ugh the perspective 0f
the empl0yee, psych0l0gical c0ntract 0ffers the empl0yers a framew0rk f0r m0nit0ring the
attitude and pri0rities 0f empl0yees 0n vari0us dimensi0ns. It is 0ften stated by researches that
“Psych0l0gical c0ntracts are an individual’s beliefs regarding recipr0cal 0bligati0ns. Such
beliefs bec0me c0ntractual in nature when the individual believes that she 0r he 0wes his/her
empl0yer certain c0ntributi0ns in exchange f0r certain incentives”. The pers0n behind the
c0ncept 0f psych0l0gical c0ntract, David M. R0usseau, states in his 1995 w0rk titled
‘Psych0l0gical c0ntracts in 0rganizati0ns: Understanding written and unwritten agreements’
that the nature 0f psych0l0gical c0ntracts is subjective t0 percepti0n which differs fr0m
individual t0 individual. This als0 causes the nature 0f psych0l0gical c0ntract t0 be dynamic
i.e. 0ver the peri0d 0f time, depending up0n the relati0nship between the empl0yee and the
empl0yer, it changes. At the r00t 0f any psych0l0gical c0ntract are the expectati0ns 0f a
p0sitive 0utc0me by the empl0yee as well as the empl0yer, as the effect 0f their perf0rmance
0f mutual 0bligati0ns. Despite the individualistic and unique nature 0f a psych0l0gical c0ntract,

maj0rly tw0 types 0f psych0l0gical c0ntracts have been 0bserved by researchers: transacti0nal
and relati0nal.

The 1998 w0rk ‘The Psych0l0gical C0ntract in Retr0spect and Pr0spect’ by Anders0n and
Schalk, pr0vides ample evidence, thr0ugh interacti0ns with empl0yees that psych0l0gical
c0ntracts is an explanat0ry n0ti0n. The further state that “… it has an impressively high validity
and every0ne agrees that it exists as m0st empl0yees are able t0 describe the c0ntent 0f their
c0ntract”. This can be underst00d simply by the fact that when an empl0yee carries 0ut an
acti0n with the expectati0n fr0m the empl0yer t0 recipr0cate 0n the same and vice versa, a
psych0l0gical c0ntract emerges. R0usseau in his w0rks state that the belief that recipr0city will
0ccur, can be a precurs0r t0 psych0l0gical c0ntracts.
Definiti0n

The psych0l0gical c0ntract refers t0 the unwritten set 0f expectati0ns 0f the empl0yment
relati0nship as distinct fr0m the f0rmal, c0dified empl0yment c0ntract. Taken t0gether, the
psych0l0gical c0ntract and the empl0yment c0ntract define the empl0yer-empl0yee
relati0nship.1

Belief Example
Pr0mise “I will get reward because
that was the deal”
0bligati0n “I sh0uld get reward because
I w0rked hard”
Expectati0n “I am likely t0 get the reward
as that’s happened
0ccasi0nally in the past”

Transacti0nal C0ntract

Transacti0nal c0ntracts are sh0rt term c0ntracts that last 0nly until the agreed peri0d 0f
c0ntract. Under a transacti0nal c0ntract, an individual’s identity is said t0 be derived fr0m their
unique skills and c0mpetencies, th0se 0n which the exchange relati0nship itself is based. F0r
transacti0nal 0riented empl0yees, the 0rganizati0n is simply the place where individuals d0
their w0rk and invest little em0ti0nal attachment 0r c0mmitment t0 the 0rganizati0n. It is the
place where they seek immediate rewards 0ut 0f the empl0yment situati0n, such as pay and
credentials

Relati0nal C0ntract

Relati0nal c0ntracts are br0ader, m0re am0rph0us, 0pen ended and subjectively underst00d by
the parties t0 the exchange. They are c0ncerned with the exchange 0f pers0nal, s0ci0em0ti0nal,
and value based, as well as ec0n0mic res0urces and they exist 0ver a peri0d 0f time. w0rkplaces
have bec0me increasingly fragmented because 0f newer and m0re flexible f0rms 0f
empl0yment. At the same time, managers have bec0me increasingly int0lerant 0f time-
c0nsuming and sluggish pr0cesses 0f neg0tiati0n under c0nventi0nal empl0yment relati0ns

1
Retrieved fr0m https://www.hrz0ne.c0m/hr-gl0ssary/what-is-a-psych0l0gical-c0ntract as on 20th
September, 2020
systems. C0nsequentially, pr0mises and deals which are made in g00d faith 0ne day are quickly
br0ken due t0 a range 0f market imperatives. With the decline in c0llective bargaining and the
rise in s0-called individualist values am0ngst the w0rkf0rce, inf0rmal arrangements are
bec0ming m0re significant in the w0rkplace. As a result, the ‘traditi0nal’ empl0yment relati0ns
literature is argued t0 be 0ut 0f t0uch with the changing c0ntext 0f the w0rld 0f w0rk.

Imp0rtance

A psych0l0gical c0ntract exists, in n0 f0rmal medium 0f c0mmunicati0n and is a c0ncept 0f

mutual 0bligati0n. This c0ntract gives rise, in the minds 0f the empl0yees, t0 the n0ti0n that
their expectati0ns are agreed up0n. H0wever, when the expectati0ns 0f empl0yees are n0t
fulfilled, this is c0nsidered t0 be a breach 0f the c0ntract by the empl0yee 0r vice versa. The
underlying cause f0r this breach are the assumpti0ns and c0mmunicati0n gaps in a w0rkplace
c0mmunicati0n between the parties 0f a psych0l0gical c0ntract. It is 0nly when such
assumpti0ns are revealed, and the gaps in c0mmunicati0ns bridged, the true nature and
intenti0ns 0f a psych0l0gical c0ntract are revealed t0 the parties. When such hindrances are
n0t 0verc0me, it leads t0 further breach 0f the c0ntract. The percepti0n 0f vi0lati0n 0f the
psych0l0gical c0ntract by the empl0yee makes him/her l00se trust in the 0rganizati0n. This
shall lead t0 the empl0yees altering the psych0l0gical c0ntract with the feeling that they are
n0t getting much 0ut the relati0nship and subsequently, the empl0yees shall l0wer their eff0rts.

P0ssible c0nsequences 0f a vi0lati0n 0f the PC include empl0yee dissatisfacti0n, dem0tivati0n,

withdrawal, and underperf0rmance, which might lead the empl0yee t0 think ab0ut leaving the
0rganizati0n. 0n the 0ther hand, when empl0yees feel that the PC has been fulfilled and that
the empl0yer is ‘sticking t0 their part 0f the deal,’ the results are increased perf0rmance, j0b
satisfacti0n, and l0yalty t0wards the 0rganizati0n.2

All these fact0rs make it highly imperative t0 understand the imp0rtance 0f psych0l0gical
c0ntract in the m0dern era.

2
Retrieved fr0m https://www.hrexchangenetw0rk.c0m/learning/articles/the-psych0l0gical-c0ntract-
relevance-f0r-0ur-every as 0n 20th September, 2020.
F0r this purp0se, this research attempts t0 c0nduct a literature review and c0mparative analysis
the f0ll0wing tw0 papers 0n the research area 0f ‘psych0l0gical c0ntract’.

Paper 1:

Title: Expl0ring psych0l0gical c0ntract c0ntents in India: The empl0yee and empl0yer
perspective

Auth0r: Upasana A. Agarwal, Shivganesh Bhargava

This paper published in the J0urnal 0f Indian Business Research, examines the c0ntents 0f
psych0l0gical c0ntracts in the empl0yer-empl0yee relati0nship. The paper studies the c0ntents
as perceived by the tw0 parties in the c0ntract. A study is c0nducted by the auth0rs t0 elicit
fr0m individuals their percepti0ns regarding 0rganizati0n 0bligati0ns. The papers analyses all
these aspects in the c0ntext 0f the Indian w0rkplace scenari0. It rec0mmends the Indian
recruiters t0 c0nsider aspects apart fr0m c0mpensati0n in the empl0yee-empl0yer relati0nship.
The need f0r a supp0rtive w0rk culture in India is highlighted by the paper al0ng with the idea
0f devel0pment in the relati0nal aspects 0f the j0b.

Paper 2:

Title: The Effects 0f Psych0l0gical C0ntract Breach 0n J0b 0utc0mes

Auth0r: Nich0le Sim0ne Ball0u

The paper examined the effects 0f psych0l0gical c0ntract breach 0n attitudinal and behavi0ural
j0b 0utc0mes including j0b satisfacti0n, intenti0n t0 remain with 0ne’s 0rganizati0n, perceived
supp0rt, and 0rganizati0nal behavi0ur. The paper highlights the significant impact 0f vi0lati0n
0f the psych0l0gical c0ntract 0n the vari0us fact0rs in the empl0yer-empl0yee relati0nship.
The paper has als0 examined whether the effect 0f the psych0l0gical c0ntract breach 0n the
j0b 0utc0mes varied based 0n the type 0f psych0l0gical c0ntract an empl0yee had i.e.
transacti0nal 0r relati0nal.
0bjectives 0f the Study

- T0 analyse the imp0rtance 0f psych0l0gical c0ntract in the c0ntemp0rary era.

- T0 analyse the p0sitive and negative aspects 0f psych0l0gical c0ntract 0n the empl0yer-
empl0yee relati0nship.

Significance 0f the study

The true sc0pe 0f the psych0l0gical c0ntact 0nly bec0mes apparent t0 b0th parties when a
specific behavi0ur reveals the assumpti0ns. When empl0yees feel that the psych0l0gical
c0ntract has been vi0lated, they l0se trust in the 0rganizati0n and adjust the psych0l0gical
c0ntract acc0rding t0 their experiences. In this case, empl0yees feel they d0 n0t get much 0ut
0f the business relati0nship, they will l0wer their eff0rts c0rresp0ndingly. P0ssible
c0nsequences 0f a vi0lati0n 0f the psych0l0gical c0ntract include empl0yee dissatisfacti0n,
dem0tivati0n, withdrawal, and underperf0rmance, which might lead the empl0yee t0 think
ab0ut leaving the 0rganizati0n. 0n the 0ther hand, when empl0yees feel that the psych0l0gical
c0ntract has been fulfilled and that the empl0yer is ‘sticking t0 their part 0f the deal,’ the results
are increased perf0rmance, j0b satisfacti0n, and l0yalty t0wards the 0rganizati0n. Thus this
study shall aid in identifying the extent 0f the impact 0f psych0l0gical c0ntract and the c0ntents
inv0lved in it.

Research Meth0d0l0gy

The paper analyses tw0 papers 0n the t0pic 0f ‘psych0l0gical c0ntract’. A pr0per literature
review shall be c0nducted f0r these papers and then analysed. After a review 0f b0th the papers,
a c0mparative evaluati0n shall be d0ne between the tw0, highlighting the key aspects 0f b0th
the papers in c0ntext 0f ‘psych0l0gical c0ntract’.

Limitati0ns 0f the study

The research carries 0ut a literature review 0f 0nly tw0 research papers and n0t any 0ther
res0urce. Thus the analysis, findings and c0nclusi0ns drawn shall be in c0ntext 0f these tw0
papers 0nly. The sc0pe 0f the research is limited 0nly t0 the tw0 papers reviewed and d0es n0t
extend bey0nd that.
Literature Review

Paper 1: Expl0ring psych0l0gical c0ntract c0ntents in India: The empl0yee and empl0yer
perspective

The paper initiates the discussi0n by emphasizing up0n the imp0rtance 0f psych0l0gical
c0ntracts in the field 0f human res0urce devel0pment and management. It g0es 0n t0 define
the c0ncept with derivati0ns fr0m the past researches and further draws attenti0n t0 the c0ntents
0f psych0l0gical c0ntract.

Acc0rding t0 the auth0rs, the eff0rts t0 examine psych0l0gical c0ntract’s c0ntents, i.e. what
psych0l0gical c0ntract actually c0mprise 0f, have been meagre. Further, 0f the limited studies
examining psych0l0gical c0ntents have been c0nducted in the west, leaving Asian c0untries
under-represented. Imp0rtantly, literature pr0vides evidence that the empl0yee and empl0yers
0ften have different percepti0ns regarding what 0rganizati0ns 0we t0 them. In this backgr0und,

the paper examines the percepti0ns 0f the tw0 parties, empl0yee and empl0yer and differences
if any, regarding 0rganizati0nal 0bligati0ns.

Examining psych0l0gical c0ntract 0f empl0yees in Indian c0ntext is b0th timely and significant
in the present ec0n0mic scenari0. India als0 has the advantage 0f a trained and relatively
inexpensive human capital. H0wever, with increasing changes in the ec0n0mic and
dem0graphic envir0nment, attracting and retaining the best talent has emerged as 0ne 0f issues
0f strategic imp0rtance f0r Indian 0rganizati0ns.

In 0rder t0 understand the psych0l0gical c0ntract c0ntents in India, the auth0rs carried a study
where the gr0ups 0f empl0yee interviewed were rand0m as well as c0nvenient samples.
Rand0m, in the sense that certain 0rganizati0ns were appr0ached and the sample p0pulati0n
was decided based 0n representati0n 0f pe0ple at vari0us levels as well as gender. Few 0thers
were appr0ached by the researcher in c0urse 0f daily life and w0rk, hence c0nvenient samples.
This study was aimed at eliciting expectati0ns regarding 0rganizati0nal 0bligati0ns. The 0ther
study c0nducted by the paper was designed t0 identify the c0re fact0rs 0f psych0l0gical
c0ntract. five additi0nal c0ntents like family-like culture, supp0rtive c0-w0rkers,
appr0achability 0f superi0rs, 0wnership by the superi0rs when there is an h0nest mistake, and
c0ncern/inv0lvement 0f the superi0rs in w0rk and n0n-w0rk spheres 0f the empl0yees, have
n0t been explicitly studied in the past. T0 c0nfirm the relevance and suitability 0f these
c0ntents, human res0urce managers 0f s0me 0rganizati0ns were c0ntacted wh0 c0nfirmed
these new items as imp0rtant expectati0ns 0f empl0yee in India. After making required changes
in the questi0nnaire, a large-scale survey was c0nducted t0 empirically validate and get fact0r
structure 0f the c0ntents 0f psych0l0gical c0ntract in India.

The 0bjective 0f the paper was t0 expl0re psych0l0gical c0ntract c0ntents 0f empl0yees in
India. The findings 0f the study 1 and 2 are c0ns0nant with existing literature. Suggestively
Indian empl0yees in the study sample are br0adly similar t0 their western c0unterparts in terms
0f their expectati0ns fr0m their 0rganizati0ns. Nevertheless, certain aspects 0f the study can be

viewed in the light 0f br0ader Indian culture. The results 0f the study revealed that empl0yees
ascribe great imp0rtance t0 pe0ple in auth0rity and c0nsidered their empl0yers and immediate
supervis0rs as pr0vider and caregiver 0f their needs and interests. In terms 0f the relative
imp0rtance 0f psych0l0gical c0ntract, it was f0und that empl0yees primarily expect the
0rganizati0n t0 pr0vide them 0pp0rtunities f0r gr0wth and devel0pment 0pp0rtunities and
w0rk culture f0ll0wed by salary, benefits and res0urce availability. These findings are
particularly interesting because it has been c0nventi0nally believed that extrinsic fact0rs are
far m0re imp0rtant in m0tivating Indian empl0yees than intrinsic measures such as rec0gniti0n
and aut0n0my.

The study revealed differences in the empl0yee and empl0yer percepti0ns regarding
0rganizati0nal 0bligati0ns. While, gr0wth and devel0pmental 0pp0rtunities and supp0rtive
w0rk culture emerged as m0st imp0rtant 0rganizati0nal 0bligati0ns as perceived by the
empl0yees, empl0yers 0n the 0ther hand believed that firms are primarily 0bliged t0 pr0vide
its empl0yees with j0b and res0urce supp0rt al0ng with salary and benefits. It was als0 f0und
that certain fact0rs were specific t0 each gr0up. F0r instance “equity” emerged as an
independent fact0r in case 0f empl0yer representatives but n0t empl0yees. Similarly, “w0rking
c0nditi0ns and res0urce supp0rt” emerged as independent fact0rs in case 0f empl0yees but n0t
empl0yers. Als0, empl0yee representatives perceived “gr0wth” and “devel0pmental”
0pp0rtunities as tw0 different fact0rs. These results suggest that while empl0yers c0nsider
maintaining an equitable and fair 0rganizati0n as their prime 0bligati0n, f0r empl0yee’s gr0wth
and devel0pment 0pp0rtunities are 0f c0ncern. It seems that 0rganizati0ns in India are still
guided by their traditi0nal c0nceptualizati0n 0f empl0yment relati0nship. In terms 0f n0minal
classificati0n, while empl0yees sh0wed inclinati0n t0wards relati0nal c0ntents, the empl0yer
representatives perceived balanced and transacti0nal c0ntents as prime 0rganizati0nal
0bligati0ns t0wards its empl0yees. As a practical implicati0n, the study suggests that in India,
recruiters need t0 g0 far bey0nd the discussi0ns 0n c0mpensati0n and f0cus 0n relati0nal
aspects 0f j0b such as the j0b c0ntent and avenues f0r career gr0wth. 0pp0rtunity t0 c0nstantly
upgrade skills seems t0 be a g00d retenti0n mechanism that 0rganizati0ns c0uld empl0y. Since
empl0yees in India have high need f0r psych0l0gical supp0rt, managers and 0rganizati0n
sh0uld strive t0 devel0p supp0rtive w0rk culture. Creating a family-0riented w0rk envir0nment
will n0t 0nly m0tivate empl0yees g0 bey0nd the call 0f their duty but als0 help in reducing
empl0yee’s tendency t0 react if expectati0ns are n0t met. The results 0f the study suggests that
there is inc0ngruity between empl0yee and empl0yer percepti0ns regarding 0rganizati0nal
0bligati0ns. As unmet expectati0ns result in breach 0f trust and have seri0us implicati0ns 0n
the w0rking relati0nship, it is crucial that 0rganizati0ns live up t0 their pr0mises and av0id
incidences 0f breach.

Literature Review

Paper 2: The Effects 0f Psych0l0gical C0ntract Breach 0n J0b 0utc0mes

An attitudinal j0b 0utc0me 0f psych0l0gical c0ntract breach that has n0t been widely
researched in the literature is perceived 0rganizati0nal supp0rt. Perceived 0rganizati0nal
supp0rt is defined as the extent t0 which empl0yees believe their 0rganizati0n values their
c0ntributi0ns and cares ab0ut their well-being. Examining perceived 0rganizati0nal supp0rt
fr0m an 0rganizati0nal standp0int is imp0rtant because research has sh0wn that when
empl0yees perceive that their 0rganizati0n supp0rts them, they are m0re likely t0 expect that
their extra eff0rts t0ward meeting 0rganizati0nal g0als will be rewarded. 0rganizati0nal
citizenship behavi0ur is 0ne 0f the t0p researched behavi0ural j0b 0utc0mes 0f psych0l0gical
c0ntract breach. 0rganizati0nal citizenship behavi0ur is defined as behavi0urs that are
beneficial t0 the 0rganizati0n, discreti0nary, and n0t included in empl0yees’ f0rmal j0b
descripti0ns. 0nce empl0yees feel that a psych0l0gical c0ntract has n0t been fulfilled, they may
bec0me less satisfied with their j0bs, may experience c0gnitive manipulati0n 0f the perceived
inequities, and may change their behavi0urs by decreasing the am0unt 0f extra-r0le behavi0urs
they perf0rm.

There is a limited b0dy 0f existing research that has examined the p0ssibility that changes in
empl0yees’ attitudes and behavi0urs when a psych0l0gical c0ntract breach has 0ccurred may
vary as a functi0n 0f whether they have a transacti0nal 0r relati0nal psych0l0gical c0ntract.
Transacti0nal psych0l0gical c0ntracts are based 0n financial fact0rs, whereas relati0nal
psych0l0gical c0ntracts are based 0n s0ci0em0ti0nal fact0rs. Because transacti0nal and
relati0nal psych0l0gical c0ntracts vary in what they can be based 0n, empl0yees’ reacti0ns t0
a perceived c0ntract breach may vary based 0n the type 0f c0ntract the empl0yee has.
empl0yees generally expect transacti0nal rewards (e.g., c0mpetitive c0mpensati0n) as a
b0tt0m-line 0bligati0n 0f their 0rganizati0n. In c0ntrast, relati0nal rewards tend t0 be viewed
as extra, n0n-required inducements by empl0yees. This w0uld lead 0ne t0 predict that the
breach 0f a transacti0nal psych0l0gical c0ntract w0uld elicit m0re intense negative attitudes
than the breach 0f a relati0nal psych0l0gical c0ntract. By understanding the 0utc0mes 0f a
psych0l0gical c0ntract breach, 0rganizati0ns may be able t0 better understand h0w t0 av0id
breaching empl0yees’ psych0l0gical c0ntracts and impr0ve j0b 0utc0mes. With that being said,
the purp0se 0f this research is t0 examine the relati0nship between psych0l0gical c0ntract
breach and j0b 0utc0mes including j0b satisfacti0n, intenti0n t0 remain with the 0rganizati0n,
perceived 0rganizati0nal supp0rt, and 0rganizati0nal citizenship behavi0urs.

Psych0l0gical c0ntract breach was measured using a 26-item self-rep0rt scale. These items
c0nsisted 0f 0bligati0ns empl0yees may have had explicitly 0r implicitly c0mmunicated t0
them when they were hired by their current 0rganizati0n. Examples 0f these 0bligati0ns
included c0mpetitive salary, health care benefits, adequate equipment t0 perf0rm 0ne’s j0b,
challenging and interesting w0rk, j0b training, 0pp0rtunities f0r pr0m0ti0n and advancement,
and increasing resp0nsibilities. Empl0yees fr0m a variety 0f 0rganizati0ns in Calif0rnia were
emailed and asked t0 participate in the present study thr0ugh filling 0ut an an0nym0us 0nline
survey. The survey link was als0 made accessible t0 individuals 0nline via the researcher’s
s0cial netw0rking t00ls.

The present study als0 examined whether the effect 0f psych0l0gical c0ntract breach 0n these
j0b 0utc0mes varied based 0n the type 0f psych0l0gical c0ntract an empl0yee had (i.e.,
transacti0nal 0r relati0nal). The findings 0f this study indicated that empl0yees wh0 perceived
a breach 0f their psych0l0gical c0ntract experienced l0wer j0b satisfacti0n, a l0wer intenti0n
t0 remain with their current 0rganizati0n, and were less likely t0 perceive that their 0rganizati0n
supp0rted them. The effect 0f a psych0l0gical c0ntract breach was n0t directly related t0
0rganizati0nal citizenship behavi0urs; h0wever, as will be discussed next, this effect was
m0derated by psych0l0gical c0ntract type. The present study’s findings supp0rted and
expanded 0n the findings 0f previ0us research. In terms 0f direct effects, psych0l0gical c0ntract
breach was ass0ciated with a decrease in j0b satisfacti0n, a l0wer intenti0n t0 remain with
0ne’s 0rganizati0n, a decrease in perceived 0rganizati0nal supp0rt, and l0wer levels 0f
0rganizati0nal citizenship behavi0urs. These findings were c0nsistent with pri0r research.
C0mparative Analysis

B0th the papers studied f0r the purp0se 0f this research c0ntain exemplary insights 0n their
t0pics 0f research and vari0us c0nclusi0ns can be derived fr0m b0th the researches
individually. Alth0ugh 0n a c0mm0n theme 0f ‘psych0l0gical c0ntract’, b0th the studies have
certain unique perspectives and specific area 0f analysis.

While the first paper aims at finding the c0ntents inv0lved in a psych0l0gical c0ntract, the
sec0nd study tries t0 analyse the impact 0f c0ntract vi0lati0n. This differing perspective 0f
researches h0wever align t0wards the same g0al 0f strengthening the empl0yee-empl0yer
relati0nship. B0th the areas 0f research have pragmatic implicati0ns f0r the field 0f human
res0urce devel0pment.

Apart fr0m its 0bjective 0f identifying the c0ntents 0f the psych0l0gical c0ntract, the first paper
als0 aims at c0ntextualising the research fr0m the Indian w0rkplace scenari0. The reas0n
behind this is the lack 0f pri0r research and literature in the area. The mixed meth0d0l0gy
design clearly makes the study rich. The c0ntents 0f psych0l0gical c0ntract were generated
using qualitative appr0ach (critical incidence technique) that was further validated thr0ugh a
survey questi0nnaire. Sec0nd, the extant literature is limited by primarily f0cusing 0n
empl0yee side 0f the deal. In this paper the c0ntents 0f psych0l0gical c0ntract as perceived by
b0th, the empl0yees as well as their empl0yer were examined. Thus this paper brings
rev0luti0nary insights in the s0uth-east Asian perspective 0f Indian w0rkplace and the r0le 0f
psych0l0gical c0ntract in the same. H0wever, it als0 had its 0wn limitati0ns. First, the
qualitative analysis represents human interpretati0n 0f the themes that emerged fr0m the
critical incidences and n0 s0ftware package has been used f0r analysis. Sec0nd, the study
examined 0nly 0rganizati0nal 0bligati0ns as perceived by empl0yee and their 0rganizati0nal
representatives. Future studies c0uld inc0rp0rate the mutuality 0f b0th the parties regarding
empl0yee’s 0bligati0ns t0wards the 0rganizati0n. Third, the study was c0nducted in Indian
private sect0r but it did n0t represent all industries in the sect0r. As psych0l0gical c0ntract vary
due t0 influence 0f gender, past w0rk experiences, type 0f sect0r (public and private) and tenure
as well as individual and 0rganizati0nal fact0rs, future studies c0uld address this limitati0n

The sec0nd paper’s uniqueness is that it examined psych0l0gical c0ntract type as a m0derat0r.
This pr0vides insight int0 whether the breach 0f a psych0l0gical c0ntract affects j0b 0utc0mes
depending 0n the type 0f psych0l0gical c0ntract an empl0yee has. Specifically, this all0ws
0rganizati0ns t0 prepare f0r when a breach 0f empl0yees’ psych0l0gical c0ntracts is
unav0idable. 0ne limitati0n t0 this study was the large am0unt 0f participants wh0 were
categ0rized int0 the relati0nal psych0l0gical c0ntract categ0ry. 0ne reas0n f0r this finding may
be that empl0yees are w0rking in 0rganizati0ns that they have a p0sitive c0nnecti0n with and
feel l0yal t0. An0ther explanati0n f0r this c0uld be that participants may have answered s0me
questi0ns in a s0cially desirable manner. Due t0 the skewness 0f the distributi0n 0f
psych0l0gical c0ntract types, extra measures were used t0 make the distributi0n m0re even.
Specifically, instead 0f dividing the sample such that th0se participants with higher sc0res 0n
0ne psych0l0gical c0ntract type scale were placed int0 that gr0up, participants als0 had t0 have

a difference between the tw0 scale sc0res greater than 1.00. This may have caused the tw0
psych0l0gical c0ntract type gr0ups t0 be very similar. This limitati0n may have been av0ided
by c0llecting m0re resp0nses all0wing f0r a larger p00l 0f data t0 w0rk with. An0ther way t0
av0id this limitati0n may be t0 rew0rd the psych0l0gical c0ntract type items such that
empl0yees d0 n0t feel a need t0 answer in a s0cially desirable manner.

C0nclusi0n

In c0nclusi0n, psych0l0gical c0ntract shapes the behavi0ur 0f the parties and als0 aids the
management t0 effectively manage their empl0yees. Being s0, psych0l0gical c0ntract turns 0ut
t0 be advantage0us f0r b0th the empl0yers and the empl0yees. F0r a psych0l0gical c0ntract t0
be fulfilled, and ascertaining vibrant and effective empl0yees, the c0mmunicati0n 0f
expectati0ns between either 0f the parties plays an imp0rtant r0le. Tracing the sustainability
and c0nsistency 0f preserving a c0ntract implies 0n acting in g00d faith, respecting and sharing
equal c0ncern f0r each 0ther’s interests. This lies as an 0bvi0us requirement in a relati0nship.
Saying thus, blind faith w0n’t d0 as there has t0 be a pr0per and sufficient understanding 0f the
nature 0f the business, its strategy, market c0nditi0ns and financial indicat0rs. Empl0yer and
empl0yee will have t0 create g00d intenti0ns, c0nfidence and feelings 0f attachment in the
minds 0f each 0ther which will in return strengthen their b0nd and als0 influence 0n h0w they
intend t0 behave and recipr0cate their mutuality t0wards each 0ther.
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