Psychological Contracts in Organizations: Understanding Written                    and Unwritten Agreements

Rousseau, Denise M.

doi:10.4135/9781452231594

Cited by 3,111 publications

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“…But such intrinsic motivation is undermined if individuals feel unfairly treated or feel exploited, as the conditions of distributive justice are disregarded (Osterloh 2005). At the same time, loyalty to superiors and the firm as a whole is reduced, as the literature on psychological contracts (Rousseau 1995) and Organizational Citizenship Behavior (OCB) impressively shows (Organ & Ryan 1995). To ensure that distributive fairness can be exercised, the respective authorities able to judge who has contributed what to the body of firmspecific knowledge must be represented in the top decision making unit, the board.…”

Section: Providing Incentives For Knowledge Investorsmentioning

confidence: 99%

Shareholders Should Welcome Employees as Directors

Osterloh

Frey

2005

SSRN Journal

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The most influential theory of corporate governance, principal agency theory, does not take into consideration that the key task of modern corporations is to generate and transfer firm-specific knowledge. It proposes that, in order to overcome the widespread corporate scandals, the interests of top management and directors should be increasingly aligned to shareholder interests by making the board more responsible to shareholders, and strengthening the monitoring of top management by independent outside directors. Corporate governance reform needs to go in another direction altogether. Firm-specific knowledge investments are, like financial investments, not ex ante contractible, leaving investors open to exploitation by shareholders. Employees therefore refuse to make firm-specific investments. To gain a sustainable competitive advantage, there must be an incentive to undertake such firm-specific investments. Three proposals are advanced to deal with this conflict: (1) The board should rely more on insiders. (2) The insiders should be elected by those employees of the firm making firm-specific knowledge investments.(3) The board should be chaired by a neutral person. These proposals have major advantages: they provide incentives for knowledge investors; they countervail the dominance of executives; they encourage intrinsic work motivation and loyalty to the firm by strengthening distributive and procedural justice, and they ensure diversity on the board while lowering transaction costs. These proposals for reforming the board may help to overcome the crisis corporate governance is in. At the same time, they connect agency theory with the knowledge-based theory of the firm.(243 words)

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Section: Providing Incentives For Knowledge Investorsmentioning

confidence: 99%

Shareholders Should Welcome Employees as Directors

Osterloh

Frey

2005

SSRN Journal

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“…The same is largely true of another employee-focused body of work on employment relationships À research on psychological contracts, individual perceptions concerning the obligations employers have to the employee (i.e., promises regarding pay, advancement, job security, and other valued resources) and that the employee has to the employer (i.e., expected contributions in the form of hard work, loyalty, and commitment) (Rousseau, 1995). Psychological contract research centers on individual employees' beliefs regarding what they are owed and owe in return and how they respond when their employer has failed to meet its obligations (i.e., breached the terms of the psychological contract; Robinson, 1996).…”

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confidence: 99%

Employee Maintenance: Examining Employment Relationships from the Perspective of Managerial Leaders

Tepper¹,

Simon²

2015

Research in Personnel and Human Resources Management

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“…Thus, the psychological contracts that employers create with their employees can mix transactional and relational features in a myriad ways (Rousseau, 1995). Relational obligations generally include non-competitive resources, such as safe working environments and healthcare benefits.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…An integration of the psychological contract and network literatures is potentially valuable because it enables a focus on the effects of patterns of informal relationships and social cues on the employment relationship from a psychological contract perspective. Rousseau (1995) defined the psychological contract as 'an individual's belief regarding the terms and conditions of a reciprocal exchange relationship between the focal person and another party' (p. 9). Rousseau's (1995) definition highlights that promises of future behaviour by the organisation are contingent upon some action by the individual.…”

Section: Introductionmentioning

confidence: 99%

“…Rousseau (1995) defined the psychological contract as 'an individual's belief regarding the terms and conditions of a reciprocal exchange relationship between the focal person and another party' (p. 9). Rousseau's (1995) definition highlights that promises of future behaviour by the organisation are contingent upon some action by the individual. Although the organisation is perceived as making these promises, these reciprocal obligations are, according to Rousseau, defined by the individual, not the organisation.…”

Section: Introductionmentioning

confidence: 99%

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Psychological contract breach and turnover intention: the moderating effects of social status and local ties

Heffernan

Rochford

2017

The Irish Journal of Management

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The aim of this study is to examine whether social networks reduce the effects of psychological contract breach on an employee’s intention to leave the organisation. This paper focusses on two particular elements of the social network in an organisation: (1) social status and (2) local ties/connectedness. Using a sample of 242 responses from officers in the Irish Defence Forces, the results provide empirical evidence of the impact of psychological contract breach on officer turnover intentions. The results also demonstrate that perceptions of social networks moderate the relationship between psychological contract breach and turnover intentions through social status. Contrary to expectations, strong connectedness with senior officers was also found to be a moderator but not in the direction that was hypothesised. The theoretical and practical implications of these results are discussed.

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Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements

Cited by 3,111 publications

References 0 publications

Shareholders Should Welcome Employees as Directors

Shareholders Should Welcome Employees as Directors

Employee Maintenance: Examining Employment Relationships from the Perspective of Managerial Leaders

Psychological contract breach and turnover intention: the moderating effects of social status and local ties

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