People In Organizations

People in Organizations

Psychological Contracts: A person's set of expectations regarding what he or she will contribute to the organization and what the organization will, in return, provide to the individual. They are similar to legal contracts, but the terms are not clearly negotiated.

Contributions: Ways in which the employee benefits the organization

For example: effort, ability, loyalty, skills, time, and competencies

Inducements: Ways in which being part of the organization benefits the employee, sometimes tangible, sometimes not

For example: pay, job security, benefits, career opportunities, status, promotion opportunities

* If this contract is mutually accepted between the employee and the organization, both parties will try to continue it.

* If one or both is unsatisfied, a change will be initiated

* If employee is unsatisfied he/she may ask for pay raise or promotion, put forth less effort, or seek another job.

* If the organization is unsatisfied, the employee can be trained to improve his/her skills, transferred to another job, or dismissed.

Complications of the Psychological contract:

* Frequency of downsizing removes job assurance

* Increased globalization of business - different inducements are valued in different cultures

* International temporary managerial job placements - upon returning, old company may be very different

The Person-Job Fit: the extent to which the contributions made by the individual match the