THE ROLE OF PSYCHOLOGICAL CONTRACTS IN HUMAN RESOURCE MANAGEMENT AND ORGANIZATIONAL DEVELOPMENT
Keywords:
psychological contract, employee commitment, organizational culture, human resource management, employee engagement, relational contract, transactional contract, contract breach, employee retention, organizational performance.Abstract
The psychological contract has become an important concept in human resource management because of its influence on employee attitudes, behaviour, and organizational outcomes. Unlike a formal employment contract, it represents the implicit expectations and obligations that employees and employers hold about each other, and it rests on trust, fairness, and long-term social exchange. The aim of this paper is to establish how the type of psychological contract adopted by an organization relates to employee commitment, engagement, and retention, and to identify the human resource practices that strengthen that contract. The study was designed as an integrative literature review. Twenty-three scholarly sources published between 1960 and 2016 were selected against explicit inclusion criteria, coded by construct, driver, and direction of effect, and synthesised thematically. The results show that the literature distinguishes three operative types of contract: transactional, relational, and balanced. Relational contracts are consistently associated with higher engagement and lower turnover intention, whereas transactional contracts are associated with weaker commitment and a higher incidence of deviant behaviour. Cultural orientation emerges as the strongest contextual variable: collectivist settings favour relational contracts, individualist settings favour transactional ones. Breach of the contract reduces motivation, satisfaction, and commitment, and shifts employee attention towards monetary return. The paper concludes that organizations in collectivist environments, including Uzbekistan, should build relational contracts through transparent recruitment, fair policies, structured development pathways, and continuous dialogue. The contribution of the work lies in linking contract type, cultural context, and human resource practice within a single scheme applicable to organizational diagnosis.
Downloads
References
1. Alcover, C. M., Rico, R., Turnley, W. H., & Bolino, M. C. (2016). Understanding the changing nature of psychological contracts in 21st century organizations. Organizational Psychology Review, 7(1).
2. Argyris, C. (1960). Understanding organizational behavior. Homewood, IL: Dorsey Press.
3. Arshad, R. (2016). Psychological contract violation and turnover intention: Do cultural values matter? Journal of Managerial Psychology, 31(1).
4. Bal, P. M., Kooij, D. T. A. M., & De Jong, S. B. (2013). How do developmental and accommodative HRM enhance employee engagement and commitment? The role of psychological contract and SOC strategies. Journal of Management Studies, 50(4).
5. Blau, P. M. (1964). Exchange and power in social life. New York, NY: Wiley.
6. Conway, N., & Briner, R. B. (2005). Understanding psychological contracts at work: A critical evaluation of theory and research. Oxford: Oxford University Press.
7. Coyle-Shapiro, J., & Kessler, I. (2000). Consequences of the psychological contract for the employment relationship: A large scale survey. Journal of Management Studies, 37(7).
8. De Vos, A., Buyens, D., & Schalk, R. (2003). Psychological contract development during organizational socialization: Adaptation to reality and the role of reciprocity. Journal of Organizational Behavior, 24(5).
9. Freese, C., & Schalk, R. (2008). How to measure the psychological contract? A critical criteria-based review of measures. South African Journal of Psychology, 38(2).
10. Guest, D. E. (2004). The psychology of the employment relationship: An analysis based on the psychological contract. Applied Psychology, 53(4), 541–555.
11. Guest, D. E., Conway, N., & Briner, R. (1996). The state of the psychological contract in employment. London: Institute of Personnel and Development.
12. Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions and organizations across nations (2nd ed.). Thousand Oaks, CA: Sage.
13. Khoreva, V., & van Zalk, M. (2016). Antecedents of work engagement among high potential employees. Career Development International, 21(5).
14. Levinson, H., Price, C. R., Munden, K. J., Mandl, H. J., & Solley, C. M. (1962). Men, management, and mental health. Cambridge, MA: Harvard University Press.
15. Mai, K. M., Ellis, A. P. J., Christian, J. S., & Porter, C. O. L. H. (2016). Examining the effects of turnover intentions on organizational citizenship behaviors and deviance behaviors: A psychological contract approach. Journal of Applied Psychology, 101(8).
16. Morrison, E. W., & Robinson, S. L. (1997). When employees feel betrayed: A model of how psychological contract violation develops. Academy of Management Review, 22(1).
17. Robinson, S. L., & Rousseau, D. M. (1994). Violating the psychological contract: Not the exception but the norm. Journal of Organizational Behavior, 15(3).
18. Rousseau, D. M. (1989). Psychological and implied contracts in organizations. Employee Responsibilities and Rights Journal, 2(2).
19. Rousseau, D. M. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Thousand Oaks, CA: Sage.
20. Rousseau, D. M., & Schalk, R. (Eds.). (2000). Psychological contracts in employment: Cross-national perspectives. Thousand Oaks, CA: Sage.
21. Schein, E. H. (1980). Organizational psychology (3rd ed.). Englewood Cliffs, NJ: Prentice-Hall.
22. Suazo, M. M., Martinez, P. G., & Sandoval, R. (2009). Creating psychological and legal contracts through human resource practices: A signaling theory perspective. Human Resource Management Review, 19(2).
23. Thomas, D. C., Au, K., & Ravlin, E. C. (2003). Cultural variation and the psychological contract. Journal of Organizational Behavior, 24(5).
24. Turnley, W. H., & Feldman, D. C. (1999). The impact of psychological contract violations on exit, voice, loyalty, and neglect. Human Relations, 52(7).
25. Zhao, H., Wayne, S. J., Glibkowski, B. C., & Bravo, J. (2007). The impact of psychological contract breach on work-related outcomes: A meta-analysis. Personnel Psychology, 60(3).
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
License Terms of our Journal
