Engstrom Case Analysis

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In addition to positive reinforcements and punishments, another root cause contributing to the decline at Engstrom is the absence of psychological contract between Bent and his employees. “The psychological contract defines the conditions of each employee’s psychological involvement, both contributions and expectations.” (88) In other words, when accepting a job, employees agree to contribute loyalty, imagination, and commitment, and in return they expect more than just the financial benefits. In fact, each and every employee seeks job security, equal opportunity, and fulfilling connections with co-workers while first working for a company. (Newstrom) Therefore, when psychological contact is not reached and the employees’ expectations are

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