Psychological Contract Definition

The psychological contract is an unwritten agreement between an employer and an employee that outlines the expectations, rights and responsibilities of both parties. It is based on the premise that employees are more likely to be committed to an organization if they feel that their needs are being met.

The psychological contract can be thought of as a two-way street, with both the employer and the employee having certain obligations. For example, the employer might provide training and development opportunities, while the employee is expected to perform to the best of their abilities. If either party does not uphold their end of the bargain, it can lead to feelings of betrayal and resentment.

It is important to note that the psychological contract is not a legally binding document. However, it can still have a powerful impact on how employees feel about their job and their company. A strong psychological contract can foster a sense of loyalty and commitment, while a weak or nonexistent contract can lead to disengagement and turnover.