Page 104 - E2 Integrated Workbook STUDENT 2018

Chapter 7

Diversity and equity

5.1 Psychological contract

Globalisation has changed the nature of companies in many ways. In terms of staff, it
has meant:

 the end of the ‘job for life’ ideal

 a move from employee’s effort due to loyalty to the company towards effort
expecting appropriate rewards

 employees willing to look outside of the company for advancement
opportunities.

Obtaining employee commitment is often seen as the key to competitive
performance, but due to the above, commitment from employees is becoming more
difficult for companies to obtain.

Rosseau and Greller looked into the relationship between what the employees
believed was expected of them and what they expected in return from the employer.
They called this the psychological contract. They defined three types of
psychological contract.

 Coercive – employees feel forced to contribute and view rewards as
inadequate.

 Calculative – employee acts voluntarily and works in exchange for an
identifiable set of rewards.

 Cooperative – employees contribute more than would normally be expected
from them. They actively seek to contribute further to the achievement of
company goals.

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