Relationship of The Parties

Relationship of the paties underlying Psychological Contract

Having a good relationship with employees is very important for any organization to motive employees, increase performances as well as develop its business.

Rousseau, (2001) emphasizes the psychological contract is “an important framework for understanding the employment relationship”. Psychological contract can be known as the relationship between employee and employer that is considered to be “foundation of employee relation” (Robinson and Rousseau, 1994; Morrison and Robinson, 1997).

Psychological contract likes a heart of relationship of the parties which is about the mutual expectations and fulfillments of the parties (Michael, 2012). It is a subject to change the relationship of the parties (Anderson & Schalk, 1998). The kind of relationship between the parties can have the impact on the psychological contract (De Campos, 1994). Robinson & Morrison (1995); Homan (1961) explained psychological contract is about the terms of social exchange relationship between employee and employer which is combination of “each party engages in with the beliefs that other party will reciprocate these behavior in one way or another”.

According to Bal et al. (2008); Gakovic & Tetrick (2003), psychological contract is consistently linked with the organization commitment and career commitment which are seen as an “array obligations”. Obligations could be seen as a currency of exchange for psychological contract (Robinson and Rousseau, 1994). The relationship of psychological contract is “component onto performance behavior” from the psychological contract promises (John & Julia, 2015).

Therefore in order to build a good relationship, the parties have to ensure to meet the expectations of other part. According to the research and literature review, in oder to manage and ensure the expectations of the parties for psychological contract, the employer and employee has to create the mutual trust or faith for each other by keeping the promises and filling the expectations.

The research shows that employees try their best to complete the given job, and take responsibility for what they have done, improve and develop themselves. The employees also be happy with their given job without request or complaint, and willing to accept their mistakes and try to fix these problems

Meanwhile, employers provide good working conditions, polices to support employees, recognize employee’s performances, communicate with employees to hear the feedback and solve the problems, provide fair opportunities for employees to improve and develop themselves and promotion.

Furthermore, the research shows that the expectations of the parties can change and develop over time which has the same perspective of Schalk & Roe (2007). Therefore, to ensure the expectations fulfillment, there are some meetings which allows employers and employees to communicate that makes them understand each other and add more terms or agreements into psychological contract. By doing this, the company and employees can make sure they meet the expectations of other.

The relationship is turning to good or bad that depends on how the employer and employee can fill the expectations for each other. If the relationship is poor it will effect on the performance, behavior and attitude of employees that decreases productivity and company’s image. If the relationship is good it will bring many benefits for company and employees such as the faith, good attitude and behavior at work, more responsibility, high productivity, low turnover rate and high job satisfaction.

Pyschological Contract

Relationship of the paties underlying Psychological Contract