1. Chapter 1
The
Psychological
Contract
and
Commitment

2. Objectives
Define the psychological contract and discuss the obligations of the contract currently in place
Explain the importance of the psychological contract and what happens when it is violated
Explain the benefits of committed employees and what employers can do to foster commitment
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
1 -1

3. …Objectives
Describe external influences that affect workplace expectations
Explain the self-fulfilling prophecy and how managers can apply this concept
Explain the pinch model
Make a psychological contract with your professor
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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4. Mental Maps - Defined
Our images, assumptions, and stories about every aspect of the world, which determine what we see and how we act.
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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5. Psychological Contract - Defined
An individual’s beliefs, shaped
by the organization, regarding
the terms and conditions of a
reciprocal exchange
agreement between individuals
and their organization
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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6. Social Exchange Theory - Defined
People enter into relationships in which not only economic, but also social obligations play a role
People are most comfortable when the exchange is balanced
Psychological Contract
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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7. Importance of Psychological Contracts
Link individuals to organizations
Reflect the trust that is a fundamental feature of the employment relationship
Motivate individuals to fulfill their obligations (if they believe the other party will do the same)
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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8. Psychological Vs. Employee Contract
Psychological Contracts
Dynamic relationship
defining employees’
psychological
involvement with
employer
Reflects perceptions of
expectations
Interpretations may not
be similar
Employee Contracts
Formal contract that specifies agreements such as hours and type of work in return for compensation and benefits
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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9. Sources of Experienced Violation
Inadvertent
Disruption
Breach of
contract
Able and willing (divergent
interpretations made in good
faith)
Willing but unable (inability
to fulfill contract)
Able but unwilling (reneging)
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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10. Consequences of Broken Contracts
Causes
Outrage, shock, resentment, anger
Decreased trust and good faith
Decreased job satisfaction
Decreased productivity
Decreased attendance
Turnover
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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11. Realistic Job Previews - Defined
RJPs are a recruitment technique that
give accurate information about job
duties, and especially about the major
sources of job satisfaction and
dissatisfaction prior to
organizational entry
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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12. Employee Commitment - Defined
Emotional attachment to, involvement in, and identification with organization
Strong belief in and acceptance of organization’s goals and values
Willingness to exert considerable effort on behalf of organization
Strong desire to remain in organization
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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13. Advantages of Committed Employees
Higher performance
Higher job satisfaction
Adapt better to unforeseen circumstances
Better attendance records
Stay with the company longer
More organizational citizenship behavior
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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14. Organizational Citizenship - Defined
OCB refers to discretionary contributions that are organizationally related, but are neither explicitly required nor contractually rewarded by the organization, yet contribute to its effective functioning
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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15. Workplace Incivility - Defined
Low intensity deviant behavior that violates
workplace norms for mutual respect; it may
or may not be intended to harm the target
Work effort
Productivity
Motivation
Creativity
Helping behaviors
OCB
Causes
decreased
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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16. Business-Related Changes Impacting Psychological Contracts
Technological change
Rate of change in the business environment
Global economy
Changing economic conditions
Uncertainty for workers
Demands for performance, flexibility and innovation
Reengineering
Downsizing
Mergers & acquisitions
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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17. Job-Related Changes Impacting Psychological Contracts
Outsourcing, off-shoring, subcontracting of work
Contingent and temporary employment for peripheral employees
Fewer full-time jobs and core employees
Relatively low union representation
Less job security
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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18. External Factors that Impact Psychological Contracts
Demographics
Swings in employment
Nomadic nature of the workforce
Changing complexion of the workforce
Changing value trends
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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19. Projected Year 2012 Workforce
47% Women
65% White non-Hispanics
15% Hispanics
12% African Americans
6% Asians
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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20. A Nomadic Work Force
13 different jobs in the career of the average high school or college graduate
10.2 different jobs from ages 18-38
Only a third (31%) of workers
25 and up have worked 10 years
with the same employer
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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21. Value Changes Affecting the Workplace
Shifting breadwinner and parenting roles
What else?
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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22. Generations at Work
Baby Boomers ( ) - self-fulfillment at work; fought against hierarchical authority; demand a voice in work decisions; work is central to lives; significant loyalty to corporate employers
Gen X ( ) - Work less central and family; nonwork activities more important; identity less tied to work; less expectations of organizations and career stability
Gen Y ( ) – prefer fun environment and teamwork; flexible work hours; looking for work with significance; idealistic
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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23. Cultural Differences in Psychological Contracts
Promises
Intention can equal follow through
Uncertainty/fate can reduce binding aspect
Zone of negotiability
Variation in type of employee conditions open for negotiation
Group identity
How “we” and “they” are defined influences trust/promise making
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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24. Self-Fulfilling Prophecy - Defined
People perform in accordance with a rater’s expectations of them
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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25. The Pinch Model
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26. What’s Your Decision?
Which decision have you made about your workplace? About this course?
Join
Participate
How do you get employees to participate?
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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27. Responses to Violation
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