DEVELOPING AND MAINTAINING A POSITIVE PSYCHOLOGICAL CONTRACT

As Guest et al(1996) point out: ‘Apositive psychological contract is worth taking seriously because it is strongly linked to higher commitment to the organization, higher employee satisfaction and better employment relations. Again this reinforces the benefits of pursuing a set of progressive HRM practices.’ They also emphasize the importance of a high-involvement climate and suggest in particular that HRM practices such as the provision of opportunities for learning, training and development, focus on job security, promotion and careers, minimizing status differentials, fair reward systems and comprehensive communication and involvement processes will all contribute to a positive psychological contract.



Steps taken to manage the employment relationship as specified in Chapter 15 will also help to form a positive psychological contract. These include:

● defining expectations during recruitment and induction programmes; 

● communicating and agreeing expectations as part of the continuing dialogue implicit in good performance management practices; 

● adopting a policy of transparency on company policies and procedures and on management’s proposals and decisions as they affect people; 

● generally treating people as stakeholders, relying on consensus and cooperation rather than control and coercion.