A transactional psychological contract is a mutual understanding between an employer and an employee that outlines the expectations and obligations of each party in a professional relationship. This contract is based on the exchange of tangible and intangible benefits, such as salary, benefits, and opportunities for advancement, in return for an employee's effort and commitment to their work.
The transactional psychological contract is distinct from the traditional psychological contract, which is based on a more holistic and long-term view of the employer-employee relationship and emphasizes mutual trust, loyalty, and mutual support. In contrast, the transactional psychological contract is more focused on the immediate exchange of benefits and obligations and is often more transactional in nature.
One of the key features of a transactional psychological contract is the explicit or implicit agreement between the employer and employee about what each party will receive in return for their contributions. For example, an employer may offer a higher salary or additional benefits in exchange for an employee's increased productivity or expertise. Similarly, an employee may agree to work extra hours or take on additional responsibilities in exchange for opportunities for advancement or other rewards.
While the transactional psychological contract can be beneficial for both parties in the short term, it can also lead to problems if the expectations of either party are not met. For example, if an employee feels that they are not receiving the benefits or opportunities that they were promised, they may become disengaged or even leave the organization. Similarly, if an employer feels that an employee is not meeting their obligations or meeting the expectations set out in the contract, they may be more likely to terminate the employee or reduce their benefits.
To maintain a healthy and productive working relationship, it is important for both parties to regularly review and communicate about the terms of the transactional psychological contract. This can help to ensure that both parties are meeting their obligations and receiving the benefits that they were promised, and can help to prevent misunderstandings or conflicts from arising.
Overall, the transactional psychological contract is a useful tool for establishing clear expectations and obligations between an employer and employee, and can help to foster a productive and mutually beneficial working relationship. However, it is important for both parties to regularly review and communicate about the terms of the contract to ensure that it is meeting the needs and expectations of both parties.
Psychological Contract Breach
It also depends on the type of profession and differs widely based on stage in career; for example, between graduates and managers. Anger, quitting, and lower performance, particularly in terms of discretionary contributions such as citizenship behavior, are the more overt manifestations of psychological contract violation. It is about systems and how decisions are made in the workplace. He is being paid at the rate that he agreed to and the company has no legal obligation to promote him or offer him more challenging work — but there has certainly been a breach of the psychological contract. He notices that Ben fulfills all of the tangible requirements of his contract. Lexington, MA: Lexington Books. The map followed by the parties is the development of an individualized career path that makes only reasonable demands on the employee, with adequate support from managers and co-workers, for a level of remuneration that is demonstrably fair for a person of that age, educational background, and experience.
Psychological Contracts: Types & Expectations
Although a more transactional approach offers employers greater flexibility, this comes at a cost in terms of commitment. How can psychological contract breach be reduced? Psychological Contract: Managing and Developing Professional Groups. What is relationship contracting? Psychological contracts are the unspoken, unwritten agreements and expectations between an employer and their employee that go beyond the written contract. The latter refers to an ongoing expectation by an employer from an employee, such as loyalty to the company; there is no end point for demonstrating this expectation, but the understanding is that loyalty increases the chances of the employee being elevated or rewarded, whether that be personalized business cards, pay raises, a bigger office, tenure, a promotion, or becoming a partner at a firm. People expect what they expect and understand the results are capped. Training Journal, Aug 2000: 10.
Relational & Transactional Psychological Contracts Research Paper Essay Example
Workers with relational contracts are more likely to willingly work overtime, whether paid or not, to help coworkers on the job, and to support organizational changes their employer deems necessary. The same applies to an expectation of "excellence" of the employee by the employer. Relational contracts Psychological contracts are essentially relational. A relational psychological contract takes much more investment from both sides. Journal of Organizational Behavior, 15, 245-259. Exchange theory: this describes how the employee invests and contributes to their work in return for a particular reward or outcome Expectancy theory: this explains how the employees expectations affects their motivation and performance. Additionally, Cai and Knuth 2008 pointed out that inverse relations are one of the ideas that.
