What Is a Psychological Contract?

"Psychological contract" is a term proposed by the famous American management psychologist Professor EH Schein. He believes that the psychological contract is "a kind of cooperation between an individual's dedication and the organization's desire and the organization's ability to respond to the individual's desired harvest." (Effective Management of Occupation, by Shi En, Sanlian Bookstore June 1992) Although it is not a tangible contract, it does exert the influence of a tangible contract. His meaning can be described as a state: Although the conditions for the growth of the company and the development of employees are not specified in a contract, and because it is dynamically changing, it cannot be specified, but the company and employees can still Find the "focal points" of the decision, as regulated by the same contract.

Psychological contract research is a hot topic emerging in the fields of human resources, organizational behavior and psychology. With the advent of the era of the knowledge economy, due to the effects of globalization of competition, corporate organizational adjustments (strategic alliances, business outsourcing, flat organization), staff downsizing, organizational change, and other global circumstances, some contradictions in labor relations have emerged. Harmonious labor relations are the foundation of a harmonious society, and building harmonious labor relations has become one of the important topics in today's society.

British psychologists believe that in the process of corporate organizational structure adjustment and employment relationship changes, psychological contract is the most sensitive and most central factor reflecting this change. Many organizational behavior experts generally believe that psychological contract has an important impact on the attitude and behavior of the organization. In order to effectively adjust and control organizational behavior, make the organization efficient, employee satisfaction high, and build a harmonious labor relationship, researching the psychological contract in the organization can be an effective way ^[1]

(1) Uncertainty

(2) Dynamic

(3) Two-way

(4) Concealment

"Psychological contract" is an implicit contract that exists between employees and the company, and its core is employee satisfaction.

Generally speaking, the psychological contract contains the following seven aspects of expectations: a good working environment, a match between tasks and professional orientation, safety and belonging, compensation, value recognition, training and development opportunities, promotion.

The main body of the psychological contract is the psychological state of employees in the enterprise, and the three basic concepts used to measure the psychological state of employees in the enterprise are job satisfaction, work participation, and organizational commitment. In organizations such as enterprises that are dominated by economic activities, the job satisfaction of employees is the focus and key of corporate psychological contract management. The purpose of psychological contract management is to achieve employees 'job satisfaction through human resource management, and then to achieve employees' strong sense of belonging to the organization and a high degree of investment in work. Therefore, if an enterprise wants to achieve the most effective allocation of human resources, it must fully intervene in the EAR cycle of the psychological contract and realize the expectations of employees by affecting the EAR cycle. The so-called EAR cycle refers to the process of establishing psychological contract (Establishing (E stage)), adjusting (Adjusting (A stage)) and realizing (Realization (R stage)).

Psychological contract is a multidisciplinary term involving law, economics, management, and psychology. Many theories can explain its characteristics and essence. These theories include: the law of contract law in law, the cost-transaction theory of economics, the theory of social exchange in sociology and the theory of expectation in psychology, the theory of equity, and the theory of cognitive graphics.

In the "beautiful past", employees in an enterprise use their efforts and capabilities to exchange for a guaranteed job position. This guaranteed position provides employees with increasing wages, comprehensive benefits and Continuous promotion. But now, because companies have to lay off employees who have given them long-term and loyal services when implementing staff reductions, more and more employees are beginning to wonder whether they should continue to be loyal to the company.

In developed countries, such as the United States, France, Germany, Australia, and Japan, there are two forces that drive changes within the enterprise and cause changes in the psychological contract. One kind of force comes from the globalization of the economy. This process requires companies to improve their international competitiveness, which makes many companies face much greater pressure than before. The other kind of force is technological progress, which forces companies to carry out various aspects. Adjustment.

Changes in the psychological contract reflect an evolutionary process in which the company's human resources strategy changes, from hiring people who can just complete the task to gradually hiring those who are expected to produce specific results People. More and more companies expect employees to use their own technology and talents to achieve various results for the company, instead of just asking for money to hire people to follow the company's instructions and complete designated tasks on time.

In a competitive environment, many companies have failed to survive for long. Those companies that really survive need to rely on the continuous contributions of their employees to maintain their success and achieve further success.

In the operation model of employees and enterprises shown in the figure above, the characteristics of employees and job titles are used as the starting point, and then the related ways that lead to job satisfaction and corporate identity are shown. At the same time, various business results of the enterprise will eventually be affected. These results (productivity, quality and service) can reflect the achievement of the company's overall goals to a certain extent.

The establishment of an enterprise's "psychological contract" must be based on scientific career management. As an economic organization, the growth and development of an enterprise are always in a dynamic development process. In this process, the physical and psychological state of the enterprise's human resources are in a constantly changing process. How to ensure that the human resources of an enterprise can effectively serve the development of the enterprise for a long time, so that people's hearts will not be dispersed as the company changes and grows. This is the goal of human resource management. The company can reach and maintain a dynamic balance with employees. "Psychological contract" is a vivid manifestation of this goal state. Career management is a new discipline developed from the theory and practice of human resource management in the United States in the past ten years.

The so-called career, according to Douglas Hall, an expert on organizational behavior in the United States, refers to a series of activities and behaviors that are included in a person's life work experience. Organizational career development is the result of a combination of organizational career management and personal career planning activities. Combining personal career planning and organizational career management, through the organization's career development system to achieve a balance between the organization's human resources needs and personal career needs, can create a highly efficient working environment. Marx believes that everything that people strive for is related to his interests. Staff training combined with career design is a good way to strengthen staff achievement and job satisfaction, as well as loyalty to the company, and prevent brain drain.

Achieving and maintaining a "psychological contract" requires a people-oriented corporate culture. A healthy and up-to-date corporate culture can create an enterprising, enterprising, harmonious, and equal corporate atmosphere and corporate spirit in the enterprise, create a strong spiritual pillar for all employees, and form an indestructible community of life. People-oriented modern corporate culture means that the cultural values of modern enterprises should be built on the cornerstone that pays attention to the ability of people to give full play to it. All business management activities of an enterprise revolve around how to properly exert people's ability. The ability here refers to the ability that is beneficial to the reasonable survival and development, social and professional activities, and social development of business people. The essence of the spirit is to encourage employees to make full use of their capabilities to make more contributions to the company and achieve personal social value. Modern enterprise theory holds that employees give their work freedom and rights to corporate arrangements because they believe that companies can realize their aspirations and provide developments that are symmetrical to their work performance. Otherwise, this balance cannot be maintained. Building a people-oriented corporate culture, realizing people's best and best use of them, and effectively developing the capabilities and potential of employees, will undoubtedly create a good atmosphere and space for reaching and maintaining a "psychological contract", and enhance their enthusiasm and belief for hard work Inspire companies and employees to abide by their respective "commitments" implied by the "contract." Therefore, the construction of such a corporate culture requires that companies and their managers provide good institutional guarantee, effective mechanisms, correct policies, and a relaxed corporate atmosphere for the development of employees' capabilities. In other words, it requires the establishment of a capability development as a value Oriented corporate economic system and its operating mechanism; each enterprise employee is also required to maximize the ability to properly play the leading goal of their own value pursuit, and actively work to this end. Under this culture, corporate leaders and employees are united in one place, so that the business philosophy can be implemented, consensus can be established, the company's mission can be implemented, and the ideal combination of people and things can be achieved.

Establishing a "psychological contract" recognizes the specific needs of employees and effective incentives. The forms of motivation are divided into spiritual and material. Spiritual motivation is used to meet "psychological needs" and material motivation is used to meet "physical needs". Since matter is the basis and basic conditions for human existence, clothing, food and shelter are the most basic material needs of human beings. In this sense, material interests have eternal significance for human beings and are an eternal pursuit. At the same time, modern theory of mind believes that human behavior is a controllable system. With the help of psychological methods, it researches and analyzes human behavior, and gives affirmation and encouragement, so that behaviors that are conducive to production and society are socially recognized. Recognize that the purpose of directional control is strengthened so that it can maintain its motivation and promote the maintenance and development of these behaviors.

Flexible psychological contract management often produces more results with less effort. With the advent of the era of knowledge economy, the rigid management brought by the original pyramid management has begun to be flexible. The reason for this is that under the conditions of the knowledge economy era, the relationship between employers and employees will undergo a revolutionary change. This is the material reason for the shift of human resource management from rigidity to softening. The original coercion and order became more and more difficult to work, the maintenance of authority became more and more difficult to rely on power, and the "contractual relationship" between labor and management became more and more like "covenant relationship". Flexible management is essentially a "people-centric" management that requires a "flexible" approach to manage and develop human resources. In modern market economy, to satisfy customers (external God), enterprises must first take employees (internal God) satisfaction as the basis and conditions. The flexible management of human resources is a decentralized management based on the premise of respecting the personality independence and personal dignity of the majority of employees and improving the centripetal force, cohesion and belonging of the enterprise to the company. The biggest feature of flexible management is that it mainly does not rely on external forces (such as giving orders from superiors), but on the liberation of human nature, equal power, and democratic management. It stimulates the inner potential, initiative, and creative spirit of each employee from the heart. So that they can truly feel comfortable and spare no effort to continuously develop new and excellent performance for enterprises, and become a source of strength for enterprises to obtain competitive advantages in the global fierce market competition. Professor Zheng Qixu, who has thoroughly studied flexible management, summarizes the characteristics of flexible management as follows: internal is more important than external, psychological is more important than physics, physical education is more important than speech, positive is more important than negation, motivation is more important than control, pragmatism is more important than fiction. Obviously, after the flexibility of human resource management, managers attach more importance to the enthusiasm and creativity of employees, and more attention to the initiative and self-discipline of employees.