The legal contract of employment offers a limited understanding of the employment relationship. However, the psychological contract describes the relationship between employers and workers and influences how people behave from day to day. Unlike the legal contract of employment signed by employers and workers, it’s not tangible.
At its core, the psychological contract is built on the everyday actions and statements made by one party and how they are perceived and interpreted by the other.
This factsheet explores the psychological contract within the context of the employment relationship, ways that managers can support the psychological contract and its impact on broader organisation strategy. The factsheet also considers the role of HR in managing the psychological contract.
This factsheet was last updated by Rebecca Peters: Research Adviser, CIPD
Rebecca has a master’s degree in Occupational Psychology from Kingston University, where she conducted research on Prison Officers’ resilience and coping strategies. She joined the CIPD's Research team in 2019, specialising in the area of health and well-being at work as both a practitioner and a researcher.
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