Psychological contract: is it still an important organizational phenomenon?

Abstract

[Abstract]: Current business environments are testing the relevance of the traditional psychological contract between employees and organisations. Commitment, previously the cornerstone of many psychological contracts, is diminishing in importance as organisations pursue increasingly transactional relationships with employees and as employees move towards ‘protean’ careers. The question of whether these more self-serving organisational and personal strategies diminish the importance of the ‘psychological contract’ is addressed. The paper concludes, firstly, that such contracts continue to make an important contribution to organisational relationships but that organisations must seek ways of adjusting the terms of such contracts to meet the needs of an increasingly mobile and protean workforce. A second conclusion is that the psychological contract can play an important part in creating the ‘agile’ enterprise.