The psychological contract and implied contractual terms

Abstract

PurposeFor longer than most people would think, over 40 years, organisational psychologists have been defining and characterising the employment relationship in terms of the psychological contract. Across the same period, judges have through their decisions in legal cases been setting down implied terms that apply to all contracts of employment. Accompanying this development certain commentators, drawn from both academic and practitioner backgrounds have been analysing these terms in considerable detail. The purpose of this paper is to analyse the nature and importance of the concept of the psychological contract and consider its application in the context of the most important implied terms in the contract of employment.Design/methodology/approachThis article was written from a review of the secondary sources of the two disciplines covered. It was only possible to give an overview of the key areas and their influence and given that these two areas had not been analysed together before there was little material available to refer to. The underlying question is how complimentary and compatible are these concepts? This is fully considered through analysis of the effect of their combination in explaining or de‐limiting the employment relationship and the contract of employment.FindingsIt is contended that as both these contracts have in some respects a common purpose it seems an opportune time to reflect on their role and their potential, if any, for combined utilisation in the workplace.Originality/valueIt is contended that this research is important as it analyses the nature and impact of two different contractual models that characterise and regulate the employment relationship. These models are drawn from two separate disciplines and as far as this commentator is aware this is the first time this specific form of analysis has been undertaken.

‘You try to be a fair employer’: Regulation and employment relationships in medium-sized firms

“…This however, misrepresents how formal employment contracts operate in practice (Cullinane and Dundon, 2006;Guest, 1998) where they are infused with an informality that is largely unrecognised. This can take the form of (mis)interpretations, implied terms around fair treatment or in relation to common law rules based around sectoral norms (Middlemiss, 2011). This may be especially important with low-status employees in relatively informal, non-unionised SMEs lacking awareness of their rights (Arrowsmith et al, 2003), where understanding may be derived directly from employers, second-hand interpretations and broader socio-historical discourses, such as those around health and safety or part-time working (Barrett et al, 2014;Cullinane and Dundon, 2006;Middlemiss, 2011).…”

“…This can take the form of (mis)interpretations, implied terms around fair treatment or in relation to common law rules based around sectoral norms (Middlemiss, 2011). This may be especially important with low-status employees in relatively informal, non-unionised SMEs lacking awareness of their rights (Arrowsmith et al, 2003), where understanding may be derived directly from employers, second-hand interpretations and broader socio-historical discourses, such as those around health and safety or part-time working (Barrett et al, 2014;Cullinane and Dundon, 2006;Middlemiss, 2011). As a result, managers and employees can come to fill in the gaps they perceive in the ambiguities of policies and HR guidance (Dick, 2010), constructing more specific obligations and expectations.…”

Effects of Psychological Contract Breach, Ethical Leadership and Supervisors’ Fairness on Employees’ Performance and Wellbeing

“…Psychological contract breach refers to an employee"s cognitive perception that she or he has not received everything that was promised formally or informally by the organization (Morrison & Robinson, 1997). In the last two decades, organizational researchers have increasingly become interested in psychological contracts, mainly due to its negative impact on employees and on organization (Conway & Briner, 2005;Middlemiss, 2011). Psychological contract breach is related to a range of undesirable employee attitudes and behaviours.…”

“…There is an emerging literature in organisational theory which recognises the importance of employees" psychological contracts (Middlemiss, 2011;Rousseau, 1989) and how psychological contract breach (PCB) would have significant consequences at the individual, group, and organisational levels. Indeed, recent studies suggest that psychological contract breach is related to job satisfaction, job neglect, organisational citizenship behaviours, intention to leave and employee wellbeing (Conway & Briner, 2005;Middlemiss, 2011). Another stream of research has focused on ethical leadership behaviour, and how it enhances employee attitudes, behaviour and wellbeing (Brown, Trevino, & Harrison, 2005).…”

Linking Abusive Supervision to Employees’ OCBs and Turnover Intentions: The role of a Psychological Contract Breach and Perceived Organisational Support

“…Several aspects of the employment relationship are unwritten or are not formally established between the employee and the employer (Middlemiss, 2011;Rousseau, 1989). The unwritten or informal aspects of the employment relationship can be based on employees' perceptions and interpretations of the communications regarding promises made by the employer (Rousseau, 1989(Rousseau, , 1995.…”