Meaning
Organizational culture and individual commitment often occupy the space between formal job descriptions and actual daily performance. The psychological contract defines the beliefs an individual holds about the mutual loyalty between themselves and an organization. It remains intact only as long as both parties perceive that the exchange of effort and reward is being honored.
Implicit Expectation
Expectations are rarely written into a legal document but are felt immediately when they are violated. The psychological contract of an employee might include an expectation of mentorship in exchange for extra hours.
Reciprocity Norm
Norms of exchange dictate that a specific level of contribution deserves a corresponding return in status or security. Because the psychological contract is subjective, the perception of equity carries greater weight than the literal terms of the deal. If one side feels they are giving more than they get, the bond begins to dissolve.
This dissolution often leads to a withdrawal of effort or a search for a new role.
Relational Trust
Trust provides the foundation for continued cooperation without the need for expensive monitoring systems. The psychological contract of a partnership relies on the belief that the other party will act in good faith.
