Understanding and Managing Organizations – Assessment Questions
Q. What is a psychological contract? Critically analyse to what extent is it significant in the management and engagement of people within organisations?
The psychological contract refers to the relationship between an employer and their employees, focusing on the mutual expectations of inputs and outcomes. The contract is normally written from the view point of the employee, but even representation of both parties is important for the contract to function correctly. Michael Armstrong suggested that “…the employment relationship consists of a unique combination of beliefs held by an individual and his employer about what they expect of one another..." (10th Ed., 2006). In layman’s …show more content…
You can clearly see how the relationships work between the employer, their employees and the market they focus on. It shows how the psychological contract is more than just an agreement between employer and employee, but between their market also.
The main use of the psychological contract is to help satisfy the employee that they will be treated with the fairness and respect they feel that they deserve in return for honest labour. When the employee feels that their employer is not respecting this contract, it can lead to a quite tangible drop in performance and the same is true the other way round. If the employer utilises the ideology of a psychological contract, allowing their employees to feel they are being treated fairly, it can allow positive attitudes to thrive and, as a consequence, lead to increased levels of productivity. The British Council of Offices did a survey and found that 60% of people said that more interesting office space led to them being more productive (The Guardian, 2013). This is a similar method off increasing productivity as the psychological contract aims for. Effectively, the organisation improves productivity levels by making the employee feel valued, and motivated to work for your company, rather than just doing enough to slip under the radar, viewing the job solely as a method of monetary
Q. What is a psychological contract? Critically analyse to what extent is it significant in the management and engagement of people within organisations?
The psychological contract refers to the relationship between an employer and their employees, focusing on the mutual expectations of inputs and outcomes. The contract is normally written from the view point of the employee, but even representation of both parties is important for the contract to function correctly. Michael Armstrong suggested that “…the employment relationship consists of a unique combination of beliefs held by an individual and his employer about what they expect of one another..." (10th Ed., 2006). In layman’s …show more content…
You can clearly see how the relationships work between the employer, their employees and the market they focus on. It shows how the psychological contract is more than just an agreement between employer and employee, but between their market also.
The main use of the psychological contract is to help satisfy the employee that they will be treated with the fairness and respect they feel that they deserve in return for honest labour. When the employee feels that their employer is not respecting this contract, it can lead to a quite tangible drop in performance and the same is true the other way round. If the employer utilises the ideology of a psychological contract, allowing their employees to feel they are being treated fairly, it can allow positive attitudes to thrive and, as a consequence, lead to increased levels of productivity. The British Council of Offices did a survey and found that 60% of people said that more interesting office space led to them being more productive (The Guardian, 2013). This is a similar method off increasing productivity as the psychological contract aims for. Effectively, the organisation improves productivity levels by making the employee feel valued, and motivated to work for your company, rather than just doing enough to slip under the radar, viewing the job solely as a method of monetary