![]() The younger employees who are still single would pay less attention to retirement issues and focus on themselves. More elderly employees are concerned about retirement planning after their career. When the employee has worked for more than two years, their expectations become different and needs change. When an employee starts working after graduating from the university, his or her expectations are different. Psychological contracts change over time considering the fact that the needs and expectations of employees and their organisations also change over time (Conway et al, 2005). Although there has been a major shift from psychological to formal contracts, psychological contracts continue to exist in HRM today. This gesture is not included in the formal contracts. For instance, when an employee loses a close one, many employers will make an effort to attend the funeral or even offer a cheque to support the individual to meet the funeral costs especially for deceased immediate family members. This is because although employees sign contracts today, both the employer and employees have expectations outside the formal contracts which govern their relationships. Meanwhile the concept of psychological contract owes its origin to the human resource management (HRM) field and it has become an important concept in the practice of human resource management. This led to the proliferation of trade unions which sought to protect the interests of employees. ![]() A growth in the volume of commercial activities made it difficult for early organisations to come up with tailor made contracts for each individual employee (Coyle?Shapiro & Shore, 2007). It is quite different to written contracts that are more formal and acceptable in the court of law for the fact that they are printed on paper and can be reviewed by third parties. The term psychological contract can be used to describe a combination of mutual beliefs and informal obligations that exist between an employee and an employer. An improvement in the general level of education and literacy rates has resulted in a shift from informal to formal contracts (Cullinane & Dundon, 2006). Psychological contracts can be defined as the informal and unwritten agreement between organisations and employees (Conway et al, 2005).
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