Q)

The role of Psychological Contracts in organization

towards the employee’s job-satisfaction.
INTRODUCTION:
Psychological Contrast is an exchange agreement between employee
and employer and it deals with the relationship gaining attention and
consideration. In a business world it is vital for employers to develop
stable and effective relationships with their employees. The concept of
the psychological contract focuses on the underlying processes
regarding expectations within the employee-employer relationship. It
has become more important than ever to ensure healthy and
progressive relationships

PSYCHOLO between employers and

their employees. The

GICAL increase in global

competition shows how an

CONTRAC
economic fluctuation has
created a feeling of
uncertainty for employers

T
ASSIGNMENT 2
and their employees.

SUBMITTED TO: MIRZAHASSAN ASGHAR BAIG Â

SUBJECT: ORGANIZATIONAL BEHAVIOUR

M.ABDULLAH
ID:30352
Maintaining a strong psychological contract towards an
employee’s satisfaction
Fairness and equity are important aspects of the psychological contract.
They need to be maintained in order to sustain a strong and healthy
psychological contract. It is the employer’s responsibility to try to
maintain the employment relationship and to spot any problems that is
harming employee’s satisfaction. It is easier to maintain the
psychological contract than to repair it following a rude outcome. With
company’s expectations increasing flexibility and agility from their staff,
a key aspect of maintaining relationships is that the psychological
contract is upheld. The need for adaptability may run counter to how
things have been done before, and so changes in the needs of the
company may be perceived as based on the contract. Proactively
managing employees’ expectations therefore becomes an ongoing and
an important process.

EMPLOYER VIEWS ON INCREASING JOB SATISFACTION

FOR THE EMPLOYEE THROUGH PSYCHOLOGICAL
CONTRAST:
WORKING CONDITIONS:
An employer should make great conditions for the employees in order
to cope up with the ever changing and evolving environment and to
achieve success and remain in competition. In order to increase
productivity and job commitment of employees, the business must
satisfy the needs of its employees by providing good working
conditions. Good working conditions automatically increases the
productivity that is expected from the employee and when the
employee is motivated with such working conditions his performance
has a big impact on the organizations success and his own satisfaction.

ENCOURAGEMENT BY WORDS AND GESTURES:

Hand gestures and words are considered to be a vital reason for the
employee’s job satisfaction. It basically motivates an employee to do
better job with his work and consider it as a positive relationship.
Words and gestures is a great way to show your gratitude and
appreciation towards an employee as a part of his good performance
towards his work. For example: thumbs up or by saying good job.

EQUAL JUSTICE:
Employee’s perception of fairness in the workplace is very important
for them to stay focused and for their satisfaction in the work place.
The employer should give equal justice to all the employees and should
not follow tenure. In some organizations many give respect to seniors
such as giving them less work and providing them with many facilities
such as a private office with 24/7 AC so this kind of behavior basically
demotivates an employee and increases the chances of turnover from
the organization.

GIVE REWARDS ON GOOD PERFORMANCE

Managers should use the concept of rewarding the employees as a way
of recognizing, rewarding and motivating them as a thankful gift for
them on their performance. It is also a way of showing their
encouragement and with this kind of act the employees should feel like
being treated well and are satisfied with their job. Giving rewards is a
way of recognizing as a well-timed acknowledgement to a person or
team which praises their effort or behavior. Whether they have
performed outstandingly or helped to achieve one of the organization’s
goals, they will have clearly gone above and beyond normal
expectations.

SOCIAL INTERACTION WITH THE EMPLOYEES:

Social interactions plays a big part in the essential role in wellbeing,
which in turn has a positive impact on employee engagement.
Organizations with higher levels of employee engagement indicated
lower business costs, improved and indicates a great performance
outcomes, lower staff turnover and absenteeism, fewer safety incidents
and most importantly it increases employee’s satisfaction towards the
organization. Social interaction with the employee can lower their
stress and overcome their burden which can create a clear mind of
moving forward and create a positive impact on their health.

ADVANCEMENT OPPORTUNITIES:
Advancement opportunities is a great way of satisfaction for the
employees as when employees who are demotivated, bored or are just
unhappy with their jobs they lose interest in work, and their
performance declines gradually. Satisfaction through advancement or
employee recognition can cure it. It is basically opens up an opportunity
for the employees to show their skills in a new role in the organization.
NEGATIVE IMPACT OF PSYCHOLOGICAL CONTRAST
TOWARDS EMPLOYEE JOB SATISFACTION
INCONSISTENT
An employee cannot expect rewards every time as when he performs
well as the rules are not written anywhere or authorized by anyone and
the employee does not have any proof to show and expect from his
manager to makes it difficult for an employee to stay consistently
motivated and satisfied towards his work and can cause an employee to
leave the organization because of his dissatisfaction.

NOT WRITTEN ON PAPER

The psychological contract is not a physical contract; it’s not
documented in any way. This makes it very difficult to execute. And for
a reason it cannot be considered as an actual contrast so by saying that
the employees cannot have a permanent and a good outcome out of it.
An employee cannot expect anything to happen that isn’t written on a
piece of paper which can demotivates him.

BROKEN PROMISES
Sometimes in an organization the manager promises his employees if
they performance well they will be gifted with something such as
bonuses but the promises are not fulfilled always which can also be
known as broken promises and the employee cannot do anything about
it as the promises are not written anywhere. For example: promised
increases were not fulfilled. A promised promotion doesn't happen in
the expected timeframe. Type of work, important responsibilities of the
employee were misrepresented. These kind of acts basically make an
employee helpless to leave his work.

REFERENCES:

https://www.hrexchangenetwork.com/employeeengagement/articles/
psychological-contract-the-pros-and-cons

https://the-conflictexpert.com/2019/03/03/psychological-contracts-
and-disputes/