Pay for Performance and the Psychological Contract

Copyright © 2001-2005 by Ethan Winning

 

The Psychological Contract: As far as I know, the origin of the psychological contract is rooted somewhere in the early Twentieth Century, perhaps even earlier. You don't hear much about it today, but it exists in law, labor relations, and in fact as the basis for almost all employment. It is called the "psychological "contract" because, (1) it is not a written contract, but more implied, and (2) it truly exists or at least was understood to exist in the minds of those in the employer-employee relationship.

So what is it? Simply, the psychological contract "states" that the employee will work hard andproduce (or meet expectations) so long as the employer pays a decent wage and provides some benefits. The employer, on the other side of the coin, will pay a decent wage and provide benefits so long as the employee works hard and meets expectations.

The basis for this contract would appear to be productivity or the expecta

 

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All Rights Reserved. Copyright © 1998 E .A. Winning Associates. Updated