Is the psychological contract (PC) inappropriate for understanding the employment relationship (ER)?

Is the psychological contract (PC) inappropriate for understanding the employment relationship (ER)?

ER is grounded in Industrial Relations (IR) which has intellectual roots in the UK as

far back as1887 (Kaufman, 2008). In comparison, the PC is grounded within the

realms of social exchange theory and was only introduced in the 1960s (Cullinane

and Dundon, 2006). Therefore, the ER is significantly older than the PC and it

stands to reason that its construct lies elsewhere, such as in IR and forms of

employee management (Kaufman, 2008).

The ER is about people interacting with one another, pursuing objectives, reaching

agreements, engaging in cooperative and conflictual behaviour and centres on the

collective aspects (Blyton and Turnbull, 2004). Whereas the PC is about the

expectations and assumptions that parties bring to the ER and centres on the

individual aspects (Blyton and Turnbull, 2004). The motto ‘united we stand; divided

we fall’ (Wikipedia, 2009) could be applied to ER and the maxim of ‘divide and rule’

(Wikipedia, 2009) could be applied to the PC. However, it could be argued that

these are opposite sides of the same coin and that both should be represented in

the ER as ‘the management of employees, both individually and collectively,

remains a central feature of organisation life’ (Blyton and Turnbull, 2004).

It is said that the ER is governed to a considerable extent by the PC; that it may

help answer two of the fundamental ER questions of what an individual could

expect from their employer and what an individual should contribute in return; that

the PC covers aspects of ER from the employee’s point of view (e.g. trust, fairness,

equity, consistency etc) and employer’s point of view (e.g. commitment,

competence, effort, compliance and loyalty) (Armstrong, 2004). The PC is

considered implicit and dynamic, to govern the continuing development of the ER,

which in itself is constantly evolving (Armstrong, 2004). Consequently, it is unlikely

that the PC and therefore the ER will ever be fully understood by employee and

employer (Armstrong, 2004).


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