PART 1 UNDERSTANDING YOURSELF AND OTHER PEOPLE AT WORK
Chapter 1 The Psychological Contract and Commitment
A. Define the psychological contract and discuss the obligations of the contract currently in place.
The psychological contract is an individual's beliefs, shaped by the organization,
regarding the terms and conditions of a reciprocal exchange agreement between
individuals and their organization.
Social exchange theory states that people enter into relationships in which both
economic and social obligations play a role and that they are most comfortable when
exchanges are balanced.
B. Explain the importance of the psychological contract and what happens when it is violated.
Psychological contracts are important because they link individuals to organizations,
reflect the trust that is a fundamental feature of the employment relationship, and
motivate individuals to fulfill their obligationsif they believe the other party will do the
Psychological contracts differ from employment contracts because they are dynamic
and perceptual; thus, the parties involved do not always share the same interpretation
of the contract.
When psychological contracts are violated, people respond emotionally with moral
outrage, shock, indignation, betrayal, resentment, and anger. Violated contracts also
result in decreased employee satisfaction, performance, commitment, discretionary
behavior to help the organization, and intentions to remain with the organization.
The use of realistic job previews (RJPs), a recruitment technique that gives accurate
information about job duties, and especially about the major sources of job satisfaction
and dissatisfaction prior to organizational entry, results in less turnover.
C. Explain the benefits of committed employees and what employers can do to foster commitment.
Commitment is defined as
(a) emotional attachment to, identification with, and involvement in the
(b) strong belief in, and acceptance of, the organization's goals and values;
(c) a willingness to exert considerable effort on behalf of the organization; and
(d) a strong desire to remain in the organization.
Committed employees have higher performance, greater ability to adapt to unforeseen
circumstances, higher attendance, longer job tenure, and more organizational citizenship
Employers can foster commitment by clarifying and communicating the organization's
mission, guaranteeing organizational justice, creating a sense of community, and
supporting employee development.
Organizational citizenship behavior (OCB) is defined as discretionary contributions that are organizationally related but are neither explicitly required nor contractually
rewarded by the organization, yet nevertheless contribute to its effective functioning.
Workplace incivility is defined as lowintensity deviant behavior that violates workplace
norms for mutual respect; it may or may not be intended to harm the target. It causes
decreased work effort, time on the job, productivity, performance, motivation,
creativity, and helping behaviors. If incivility is not curbed, decreased job satisfaction
and organizational loyalty and increased turnover result.
D. Describe external influences that affect workplace expectations.
External influences, such as adapting to a global economy, economic and employment
conditions, demographics, and societal change, affect workplace expectations and
The diverse nature of the U.S. workforce will increase according to predictions for the
year 2012. Women will make up 47 percent of the workforce. White nonHispanics
will constitute 65 percent, Hispanics, 15 percent, African Americans, 12 percent, and
Asians, 6 percent. Due to their higher birth rates, Hispanics will overtake African
Americans as the second largest ethnic group around 2006.
E. Explain the selffulfilling prophecy and how managers can apply this concept.
The phenomenon of the selffulfilling prophecy occurs when people perform in
accordance with a rater's expectations of them. Managers with high expectations of
employees are more likely to have their expectations met.
F. Explain the pinch model.
The pinch model illustrates how to manage the psychological contract and avoid major
disruptions by heeding early warning signs that expectations have changed and need to
In approaching any new organization, people make two classes of decisions: a decision
to join and a decision to participate. Good managers and leaders are skilled at gaining
Vignette: Creating a Great Place to Work
WORK ENVIRONMENT AND ITS IMPACT
since most people spend the majority of their waking hours at work, they perfer a good
the quality of the workplace impacts directly on issues of customer service and productivity.
the best workplaces tend to have higher productivity and profitability as well as better
the best workplaces typically have much lower staff turnover than their competitors.
organizations with great workplaces deliver better service and products is because of higher
CREATING A "GREAT PLACE TO WORK"
a great place to work is one where employees trust the people they work for, have pride in
what they do and enjoy the people they work with.
aspects of trust between employees and management
what employees think about management believability, competence, and
integrity. (can they believe what management tells them.) respect
what employees think management thinks about them. While the first aspect of
trust revolves around how employees perceive the management's credibility, it is
equally important that employees feel that the management shows them respect.
management goes out of its way to be believable by doing the following:
Sharing information broadly;
share information about such matters as daily sales results from each store.
Accessibility to employees;
top executives meet with ordinary employees whenever possible. (this
humanizes them and removes us vs. them mentality)
Willingness to answer hard questions; and
ensure that employees have regular opportunities to get straight answers to
difficult questions. (emphasis on twoway communication is what distinguishes
the best employers.)
Delivering on promises;
employees do not believe management, unless they follow through on what
has been said will be done.
management shows employees that they have their best interests at heart by:
Showing recognition and appreciation
methods of singling out those who deserve special recognition.
Demonstrating personal concern
employees are concerned with how they will be treated when faced with a
personal event of significance an illness, a death in the family, births, and so
The Knowledge Base
A positive relationship with employees is a competitive advantage.
trust is a crucial factor in the employeeemployer relationship.
when individuals join an organization, they form an unwritten, implicit or (less frequently)
explicit, psychological contract with the organization.
Psychological contracts (defined) an individual's beliefs, shaped by the organization,
regarding the terms and conditions of a reciprocal exchange agreement between individuals
and their organization; the mutual expectations employees and employers have of each other.
the psychological contract is based on people's perception that they have been promised a
future return for their contributions, creating an obligation to reciprocate.
social exchange theory argues that people enter into relationships in which not only
economic but also social obligations play a role and that people are most comfortable when
the exchange is balanced.
psychological contracts differ from employment contracts because
1. they focus on a dynamic relationship that defines the employees' psychological
involvement with their employer.
2. they reflect each party's perception of the expectations involved, which means their
interpretations may not be similar.
Note: employees are generally more likely than supervisors to perceive that employers have not lived up to thei