The Psychological

Contract
“The psychological contract is not a written document between
a person and the organization; An implied understanding of
mutual contributions between a person and his/her organization”
Types of Psychological Contract
 It is a continuum ranging from transitional,
transactional and relational.
 A transitional contract is based on specific

obligations and short time frames.

 The transactional contract uses financial

resources as the primary means of exchange.

They are focused self-interest.
 A relational contract is characterized by

longterm relationship development.

Examples of Psychological Contract
 plan relocation
 increased reliance on temporary workers
 downsizing and layoffs
 demographic diversity,
 foreign competition
Psychological Contract Violations
 The perception of the person that his or her
firm has failed to fulfill or has reneged (break
out) one or more obligations.
 A violation by an employer may affect not

only the beliefs of the person but also what

he or she feels obligated to provide or
contribute to the organization
Violations
 Job security.
 Child care benefits
 Job feedback
 Merit-based pay raises
 Computer training
 Promotion