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The formation of the contract

Psychological contract formation is a process whereby the employer and the employee or prospective employee develop and refine their mental maps of one another. According to the outline of phases of psychological contract formation, the contracting process begins before the employment itself, and develops throughout the course of employment.  As the employment relationship grows the psychological contract also grows and is reinforced over time. However, the psychological contract is effective only if it is consented to on a voluntary basis. It is also useful in revealing what incentives workers may expect to receive in return for their employment. There are two types of contracts depending on the nature. These are relational psychological contracts and transactional psychological contracts.

• Transactional psychological contract: focuses more on the explicit elements of the contract without accounting much for intrinsic qualities of workers. These are more common in organizations with authoritative management styles and hierarchal control. Transactional contracts are found to be “related to careerism, lack of trust in employer, and greater resistance to change.” They tend to be shorter term in nature.
  • Some scholars consider McGregor's Theory X to be closely related to transactional employer-employee relationships or authoritarian management, which are bound by transactional psychological contracts that aim to keep people working for extrinsic reasons and maintain the status quo.
• Relational psychological contract: stresses interdependence of the organization and level of social exchange. These psychological contracts tend to be longer term in nature.
  • McGregor’s Theory Y is seen in participative management that emphasizes leadership and has similarities with relational psychological contracts in their common emphasis on commitment and belief in the intrinsic values of people to want to work for something beyond than monetary reasons. Relational contracts are found to be associated with trust and increased acceptance of change.

The content of psychological contracts varies widely depending on several factors including management style as discussed earlier. It also depends on the type of profession and differs widely based on stage in career; for example, between graduates and managers. Denise Rousseau is credited with outlining these 5 phases of contract formation:

1. Pre-employment-  The initial expectations of the employee form through professional norms and societal beliefs that may be influenced by information gathered about the organization and how certain occupations are portrayed by the media.
2. Recruitment- The first instance of two-way communication involving promise exchanges between employer and prospective employee during the recruiting process.
3. Early socialization- Promise exchanges continue with both parties actively continuing their search for information about one another through multiple sources.
4. Later experiences- The promise exchange and search for information processes slow down as the employee is no longer considered new. There may be changes to the psychological contract introduced at this stage.
5. Evaluation- The existing psychological contract is evaluated and possibly revised and it is determined whether revision is needed. Incentives and costs of change impact revision.

The article for psychological contract definitely needs some work. There are (almost) no citations on the information past the introductory paragraph. The quotation in the introductory paragraph needs to be taken out and instead the material should be rewritten in our own words and the source of the information cited. There is another lengthy direct quote in the History portion that needs the same thing done. There is some grammatical error to be edited. A sentence in the History portion begins with "But." The reference to work-life balance might be considered off topic so that needs to be reviewed. The first sentence under formation of the contract is a fragment. Second sentence begins with "But." There is one citation under the section "The employment relationship develops" about a study in Canada. There is definitely some good material in this section, but it needs more citation, grammatical work, and additional information to be complete. The last section, "Breach" is lacking citation and is fairly brief. All in all, this article is definitely a fixer upper. We may also want to restructure the entire article. The subsections could be improved with some more order and organization. The current subtitles are somewhat confusing. The big thing here will be citing information and adding more information of our own to the page. The current information is written in a neutral perspective and the 5 sources already used appear to be credible secondary sources. Natashaliu1993 (talk) 11:47, 12 October 2016 (UTC)

ANNOTATED BIBLIOGRAPHY

Gautier, Chantal. The Psychology of Work. : Kogan Page, 2015. Chapter 7: Motivation and Engagement. ProQuest Ebook Central. Web. 14 October 2016. This chapter covers the topic of motivation and engagement. It introduces the concept of psychological contract and discusses the issues that come up when the terms of the psychological contract are breached. Psychological contract is divided into two types-- relational and transactional. It is related to the theory of social exchange in that it lays out the beliefs regarding the terms of an exchange between an organization and an individual. The psychological contract must be voluntary. It begins in the early stages of selection and recruitment and is built through clear understandings of the expectations of both parties involved. In the case of unmet promises within the psychological contract, restructuring may be required.

George, Christeen. Psychological Contract : Managing and Developing Professional Groups. Maidenhead, GB: Open University Press, 2010. Chapter 1: Introducing the psychological contract. ProQuest ebrary. Web. 14 October 2016. This chapter analyzes the psychological contract particularly in reference to the careers of professional workers. It examines the formations and changes of psychological contracts over time. The psychological contract is identified and there is some overview of the history and distinctions among different types. The psychological contract is binding and it guarantees that the employer-employee relationship. It is noted that there are problems in defining the psychological contract and explains the two broad approaches to finding a definition-- classic (by Herriot in 1995) and within the mind of the employee. Several references to other scholars who have studied and described the psychological contract are named. This chapter looks at the psychological contract from the many different perspectives of these scholars.

Guest, David E. "Is the Psychological Contract Worth Taking Seriously?" Journal of Organizational Behavior 19 (1998): 649-64. JStor. Web. 14 October 2016. The article is a critique of the psychological contract. It notes that there are many issues with the concept and the way it is constructed. It claims that the problems of violating the problems of psychological contract are overstated because organizations can not provide the promise of traditional organizational careers and job security. However, the author offers an alternative way to retain the theory by altering the research agenda and presenting a new theory. He also claims that it is a hypothetical construct rather than a theory or measure. There are suggestions for how to retain the construct amidst the changing work environment.

Rousseau, Denise M. "The 'Problem' of the Psychological Contract Considered." Journal of Organizational Behavior 19 (1998): 665-71. JStor. Web. 14 October 2016. This article is a response to David Guest’s previous article critiquing psychological balance. It directly addresses some common misunderstandings regarding psychological contracts. The author opens by defining the term and reminds readers that the perception of mutuality rather than mutuality in itself is the core of the psychological contract. Therefore, it is differentiated from a legal contract. In fact, a psychological contract can take place in a countless variety of situations. The author also points out that the psychological theory is neither a theory or a measure. Rather, it is a construct, and constructs, by definition, are unobservable. She then goes on to present a good amount of supporting evidence for her claims. Rousseau does agree with Guest on the need to establish boundaries on the psychological contract.

Turnley, William H., and Daniel C. Feldman. "Re-Examining the Effects of Psychological Contract Violations: Unmet Expectations and Job Dissatisfaction as Mediators." Journal of Organizational Behavior 21.1 (2000): 25-42. JStor. Web. 14 October 2016. The article is the result of a research study into the relationships between psychological contract violations and three types of negative employee behavior. Those negative behaviors are intention to quit, neglect of in-role job duties, and organizational citizenship behaviors. It examines the roles of unmet expectations and dissatisfaction in the job on this relationship. It finds that there is a mediating link between those components and the relationship between psychological contract violations and the three types of negative employee behavior. It points out that the topic has been covered well in theoretical terms but empirical research on it is fairly recent. Violations of the psychological contract are both common and directly associated with several negative outcomes. The paper lays out the theory, method, results, discussion, and conclusion of the study.

I will add more citations and factual information to the article. I will expand more on the background of the formation of the psychological contract. I will also overlook the entire article editing process and make changes as necessary. Natashaliu1993 (talk) 03:01, 5 November 2016 (UTC)