relationship between the psychological contract and employee motivation

Topics: Motivation, Psychology, Employment Pages: 5 (1460 words) Published: April 17, 2013
School of Management (PG)

ü Is there a clearly identifiable relationship between the psychological contract and employee motivation?

At present, due to the dynamic changes in the organisations, the psychologists have interpreted the psychological contract in various views. In addition, it is possible that psychological contract is one of the significant factors for the organisations because it creates the sense of exchanging values and beliefs between employees and employers. Besides, employee motivation could be enhanced by exchanging the obligations between individuals and organisations. This essay will describe that there are strongly relationships between psychological contract and employee motivation.

Psychological contract has been defined in different views over a period of times. At the early stage, the concept of psychological contract is to comprehend exchange the ‘role of subjective’ and ‘interaction’ between individuals and organisations (Argyris,1960;Levinson et al.,1962; Schein,1965,1978). Another interpretation of psychological contract focuses on the exchanging between the individual’s belief and promissory or reciprocal obligations in the organisations (Rousseau,1995). This theory tends to understand the needs of individual employee rather than organisations. However, Guest (1998) argued that ‘employer perspective’ should be included in the psychological contract because it can help employees and employers have clearly understanding on the mutual obligations as a ‘two-way exchange’ (Guest,2004). In addition, ‘contractual’ needs to be concerned on both parties, not only employees (Boxall and Purcell,2003). Thus, psychological contract can be described as “sets of expectations about reciprocal arrangements and exchanges” (Sparrow,1996). As a result, employee expects to obtain the balance between perceived obligations, such as pay and career development, and work performance (Westwood et al.,2001).

It can be said that motivation is an important aspect to enhance the employee’s performance. It can be influential from internal, such as ability, emotion, beliefs and values, and external factors such as specific task or job, social factors and implicit and explicit rewards (Mitchell and Daniels,2003). However, some motivation tools such as compensation systems may cause the negative effects to their organisations. For example, pay can make employees to have a short term commitment and it may cause deterioration of employee’s performance when employees feel their performance is not relate with their pay (Herzberg,2003). Furthermore, employee motivation is very sensitive and can be changed in different situations and times (Westwood,1992:288). So, the employee motivation seems to be relying on the uniqueness of employee base on their perceptions (ibid). Moreover, there are various motivation theories such as needs, equity, and two-factor theory which can help to enhance or deteriorate employee’s performance. Hence, employee motivation could be enhanced by implementing rewards such as financial benefits, achievements and social benefits to create the employee commitment.

In term of analysis, this essay has been discovered that there is an intense relationship between psychological contract and employee motivation. Robinson and Morrison (1995) argued that “theoretically and empirically, the psychological contract has been linked to employee motivation, job satisfaction, citizenship behaviour and organisational commitment and turnover”. As this essay mention about psychological contract which is about exchanging the expectation and obligations (Sparrow,1996). There are two clearly aspects which psychological contract has strong linkage with the employee motivation.

Firstly, the two obligations which are transactional and relational psychological contracts can be linked with the two-factor theory. As regards transactional psychological contract, it is base on the ‘economic’ issue...

References: Adams, J. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology. New York: Academic Press.

Argyris, C. (1960). Understanding Organisational Behaviour. Homewood, IL: Doresy.

Boxall, P. and Purcell, J. (2003). Strategy and Human Resource Management. Basingstoke: Palgrave Macmillan.

Greenberg, J. (1990). “Employee theft as a reaction to underpayment inequity: The hidden cost of pay cut”. Journal of Applied Psychology, 75, pp.561-568.

Guest, D. (1998). “Is the psychological contract worth taking seriously?”. Journal of Organisational Behaviour, 19, pp.649-664.

Guest, D. (2004). “The psychology of the employment relationship: an analysis based on the psychological contract”. Applied Psychology, 53, pp.541-555.

Herzberg, F., Mausner, B. and Snyderman, B. (1959). The motivation to work. New York: Wiley.

Herzberg, F. (2003). “One more time: How do you motivate employees?”. Harvard Business Review. pp.3-11.

Levinson, H., Price, C.R., Munden, K.J. and Solley, C.M. (1962). Men, Management and Mental Health. Cambridge, MA: Harvard University Press.

Mitchell, T. And Daniels, D. (2003). Motivation. In W. Norman, D. Ilgen and R. Klimoski (Eds.), Handbook of psychology. New York: Wiley.

Robinson, S.L. and Morrison, E.W. (1995) “Psychological Contracts and Organisation Citizenship Behaviour: The Effect of Unfulfilled obligations on Civic Virtue Behaviour”. Journal of Organisational Behaviour, 16, pp.289-98.
Rousseau, D.M
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