Psychological Contract: Transactional, Rational, And Balance

First and foremost, the psychological contract refers to the relationship between the parties, and specifically concerns mutual expectations of inputs and outcomes. In other word, psychological contracts are a set of ‘promises’ or ‘expectations’ that are exchanged among the parties in an employment relationship. These parties include employers, managers, individual employees and their work colleagues. However, relationship between husband and wife, parents and children or among siblings can also be defined as psychological contract. This means that, psychological contact can be found in formal relationship and informal relationship. For formal contracts of employment, they are often tacit or implicit. They tend to be invisible, assumed, unspoken, informal or at best …show more content…
Otherwise, psychological contract also can be understood as a ‘deal’ between employer and employee concerning ‘the perception of the two parties, employer and employee, of what their mutual obligations are towards each other.
There are four type of psychological contract which is Transactional, Rational, Transitional, and Balance. Transactional is known as a specific performance contingency. The transactional contract is present when employment agreement is of short-term or limited duration. It mainly focused on exchange in work of lieu of money. Usually this contract for employees who are hired for short term contract such us part time workers. As an example of deal ‘If you perform at a high level for as long as we need you, we will provide you with exciting work and opportunities