C/HR/179. The psychological Contract

This essay is written to present the argument for the importance of the psychological contract in terms of the employment relationship and the problems that arise when there is a violation of this contract. Theorists have discussed whether this contract is a socially construed, part of labour relations, the need for a common interest and purpose or the un-written section of the employment contract. Dunlopian theorists believe that the employment relationship is formed through the business the organisation is in, and not through the management style that is used. Other theorists disagree with some of the content of this argument; they believe the psychological contract is not industry specific; it is individual to each employee/employer relationship. Therefore all organisations construct their own contract of employment both written, spoken and they parts that are accepted without being communicated. The paper concludes on the importance of the contract, and the negative effect of any violations. Common interest amongst the players is vital to keep the psychological contract in tact, and build a relation ship of trust and respect.