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Journal of European Industrial TrainingEmerald Article: Reviewing the relationship between human resource practices and psychological contract and their impact on employee attitude and behaviours: A conceptual modelUpasana Aggarwal, Shivganesh Bhargava

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Reviewing the relationshipbetween human resource

practices and psychologicalcontract and their impact on

employee attitude and behavioursA conceptual model

Upasana Aggarwal and Shivganesh BhargavaShailesh J. Mehta School of Management, Indian Institute of Technology,

Bombay, India

Abstract

Purpose – The purpose of this paper is to review and synthesise literature on the role of humanresource practices (HRP) in shaping employee psychological contract (PC). Based on this review, aconceptual framework for examining the relationship between HRP and PC and their impact onemployee attitudes as well as behaviour has been put forward for further examination.

Design/methodological/approach – An extensive review of the literature, examining the role ofHRP in influencing PC of employees, between the periods 1972 to 2007 has been conducted. Adoptingthe multi-level approach, the paper discusses the role of individual variable (PC) and organisationalvariable (HRP) on employee attitudes and behaviours.

Findings – The review brings to fore the following: the role of business and employment relationshipstrategy on HRP; the relationship between HRP and organisation culture as well as employeesattitudes and behaviours; the relationship between HRP on and employee’s psychological contract;and the moderating effect of those conceptions on employee attitudes and behaviours relationship.

Practical implications – HRP and PC influence employee attitudes and behaviours as well as havea bearing on organisational effectiveness. Suggestively, as a policy implication, firms need to craft andeffectively communicate their HR toolkit based on their employment relationship and businessstrategies.

Originality/value – The main contribution of this paper is that it synthesises the researchexamining the impact of HRP on PC. Adopting a meso theory, the paper integrates both organisationaland individual level variables and proposes a conceptual model.

Keywords Psychological contracts, Human resource management, Employee attitudes,Employee behaviour

Paper type Conceptual paper

IntroductionIn response to changes in the nature of employment and work, a large body ofliterature focusing on exchange relationships between employees and theirorganisation has emerged in the past two decades. Among the various employment

The current issue and full text archive of this journal is available at

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The authors would like to thank Professor James C. Hayton for his valuable inputs and criticalcomments given during the conceptualisation of this paper.

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Received 14 April 2008Revised 23 July 2008Accepted 31 August 2008

Journal of European IndustrialTrainingVol. 33 No. 1, 2009pp. 4-31q Emerald Group Publishing Limited0309-0590DOI 10.1108/03090590910924351

relationship constructs that have emerged, research on psychological contract hasblossomed. Psychological contract (PC) characterises the employee-employerrelationship and emphasises organisations attainment of favourable outcomes byunderstanding employee’s expectations. Simply put, psychological contract refers towhat an employee owes to the organisation and what can be expected fromorganisation in return.

The need to be competitive has resulted in organisations introducing severalmeasures for financial control (Coyle-Shapiro and Kessler, 2000). Amongst variouschanges introduced, benefits provided in the traditional exchange relationship such aslife long job security, guaranteed pay increases and assured career opportunities havebeen withdrawn (Singh, 1998). In the employment scenario that has emerged, employeesno longer gain secure jobs in return for offering loyalty, but instead exchange flexibilityand hard work for simply having a job. These changes have resulted in altering thetraditional fabric of employee-employer relationship based on the edifice of trust, loyaltycommitment and long-term relationship (Herriot et al., 1997). Furthermore, whilstorganisations are cutting corners in order to survive this fiercely competitiveenvironment, they continue to need members who are supportive of organisational goals(Angle and Perry, 1981). Positive employee behaviours that go beyond delineated rolerequirements (Katz and Kahn, 1978) are considered essential for organisational survival(Fukuyama, 1995). Clearly, the nature of employee-organisation relation has changed inthe past one decade and both parties are concerned about the direction in which it ismoving (Rousseau, 1995; Welch and Hood, 1992). PC has been put forward as anexplanatory framework for examining and understanding these changes in the dyadicnature of the employment relationship (Shore and Tetrick, 1994).

Psychological contract presents an opportunity to examine the fundamental aspectof organisational life, the employee-employer relationship. Interest in understandingthe psychological contracts of employee has blossomed due to its potential to describe,understand and predict the consequences of changes occurring in the employmentrelationship. PC as a construct offers an account of the reasons for difficulties inemployment relationship currently being experienced by organisations and itsimplications on individual and organisational behaviour.

Psychological contracts are by definition perceptual and idiosyncratic. Thereforeeven if the organisation offered the same deal to every employee, their reactions willvary. PC of employees is formed as a result of interaction of various macro and microvariables (Coyle-Shapiro and Neuman, 2004). Although an employee brings to the tablea set of possible future relationships (McFarlane et al., 1994; Robinson, 1996), they aresubject to change through an interactive influence of individual and organisationalfactors that often begins during recruitment (Rousseau, 1990). Individual factorsexamined in the literature that shape PC are personality and disposition (Raja et al.,2004; Shapiro and Neuman, 2004; Ho et al., 2004).

Studies affirm the crucial role of organisational variables such as human resourcepractices on influencing employee conception of psychological contract andorganisational outcomes (Kotter, 1973; Sims, 1994; Rousseau, 1990; Singh, 1998;Sims, 1994; Lester and Kickul, 2001; Hiltrop, 1995; Baker, 1985; King, 2000; Vos et al.,2003; Martin et al., 1998; Grant, 1999; Freese and Schalk, 1996; Guest, 1998; Rousseau,1995). Further HR practices and psychological contract are related to the businessstrategy of an organisation (Rousseau and Wade-Benzoni, 1994). Resultantly, based on

HRP andpsychological

contract

5

the business strategic decisions (defender, prospector, analyser and responsive)organisations make related choices in HR practices that subsequently result inpsychological contract of employees. Simply put, business strategy and employmentstrategy influence the HR practices which in turn determines psychological contract ofemployees.

One of the most potent organisational factors influencing the psychological contractof employees is human resource practices. Although there have been impressivenumber of studies discussing the impact of specific HR practice (viz. training, rewards,career management) on PC of employees, strangely however, there has been no effort tosystematically synthesise the links between these constructs various (HR practices andthe PC).

To better understand the influence of HR practices on employee’s conception ofemployment relationship, the prime purpose of this paper is to review and synthesisethe role of various this organisational variable (HR practices) on psychological contractof employees. The papers draws from and integrates different streams of literature –business strategy at contextual level, psychological contract at individual level, humanresource practices at organisational level and suggests a cohesive multi-levelframework. Paper begins with a discussion on the role of business strategy on theemployment strategy and on the choice of HR practices.

The paper begins with a discussion of business and employment strategy and itsimplications on HR practices. This is followed by an overview of research trends inhuman resource management and the role of human resource practice on thepsychological contract of employees. Literature on various human resource practicesthat can contribute to psychological contract of employees is subsequently reviewed.The methodology as well as an overview of the findings of the review is presented.Adopting the much advocated meso approach (House et al., 1995; Kozlowski and Klein,2000), paper conceptually illuminates the link between macro-variable human resourcepractice and micro-variable psychological contract and concludes by proposing aconceptual model.

Business and employment relationship strategyBusiness strategy influences the employment strategy of the organisation. Broadly,business strategies can be classified as -innovative prospector strategy, the qualityenhancer strategy and cost-defender strategy (Ostoff et al., 2000; Porter, 1980; Milesand Snow, 1984). Based on these strategic goals, an organisation can have two types ofemployment strategies (Hannah and Iverson, 2004). One based on a primarily “hard”transactional, economic approach to management of employees, and the second basedon a more “soft” and relational approach. A transaction approach, usually adapted byan organisation with cost-defender strategy, is primarily concerned with inducingemployees to make hard, quantifiable contributions. A transaction employmentstrategy emphasises human resource practices that involve monitoring of employeesperformance levels, quantifying the performance of employees in as objective way asfar as possible, and linking their performance appraisals and their compensation tothose quantified levels of performance. Alternatively, soft components, described asbeing a part of social exchange (Blau, 1964), are non-monetisable in nature and hard tomeasure and include practices such as job security and providing employees withsufficient power and responsibility (Robinson, 1996).

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Business and employment relationship strategy will have an impact organisationschoice of human resource practices. Organisations employing cost-defender strategyfocus on operational excellence, efficient use of assets and production at relatively lowcost. A transaction employment strategy is most suitable for organisations employingcost-defender strategy. HR practices suggested useful for fostering behaviours suitablefor organisations with such strategy include relatively fixed and stable jobdescriptions, career paths that encourage specialisation and result orientedperformance appraisal system, compensation at par with market levels andminimum levels of employee training and development (Schuler and Jackson, 1995).In contrast, organisations employing innovative prospector strategy seek out newmarkets and produce new and innovative good quality products at reasonable prices.Flexibility and adaptability are key employee attributes required for a climate ofinnovation to foster. If employers want their employees to provide both hard and softcontributions, for example, they “want employees to both work hard and to be loyal,then they should ensure that they provide hard and soft inducements, as in case oforganisations fostering innovative or quality-enhancer strategy”. “One way thatorganisations can implement this is by implementing high-performance work systems”(Hannah and Iverson, 2004, p. 346) which results in soft contributions in return fromtheir employees. HR practices that promote flexibility in the workforce and giveauthority and control – such as training, practices of promotion, use of contingent payand job enrichment are encouraged. Finally, firms employing quality enhancerstrategy focus on continuous improvement and producing high quality goods andservices and create a climate of service. HR practices that are consistent with suchstrategy includes continuous training and developing high quality orientation inemployees through appropriate selection and reward system (Schneider et al., 1995).Long-tenured employees are more capable of delivering value to customers, therebyincreasing customer loyalty and profitability (Reichheld, 1996). Therefore HR practicessuch as job security that result in increasing organisational commitment should also beguaranteed.

HR practices and employee attitudes and behaviours – an overviewOne of the critical challenges facing work organisations today is to manage thechanging employment relationships. Human resource management’s growingimportance to the organisation stems largely from environmental changes andemerging organisational needs (Becker and Gerhart, 1996). HR practices have theirimpact through two primary means. First, HR practices shape employee skills,attitudes and behaviours that in turn influence organisational performance (Arthur,1994; Huselid, 1995). Second, HR practices impact firm performance by creatingstructural and operational efficiencies. HR system has been associated with lowerturnover rates (Guthrie, 2001), higher employee earnings in steel and apparel industries(Bailey et al., 2001) and increased productivity and financial performance (Huselid,1995). At employee level, strong HR system has been associated with increased jobsatisfaction (Berg, 1999) and decreased employee fatigue (Godard, 2001) andoccupational injuries (Barling et al., 2003). Thus research establishes that humanresource policies influence organisational performance as well as employee attitudesand has bearing on organisational effectiveness. Further, it is also believed that HRpractices can influence employee conception of employment relationship, by


contract

7

influencing their perceptions of the nature and depth of their relationship with theorganisation. Employee conception of employment relationship (PC) in turn influenceswork force attitudes and thus has bearing on organisational outcomes. Building on thispremise, in the following section we elaborate how HR practices can contribute toshaping of employee perceptions of the exchange relationship.

It is believed that traditionally research on HR has been conducted throughgathering data from individuals and drawing organisational level inferences based onindividual level results. Certain other studies have adopted an organisation-levelapproach and empirically tested the linkages between HR practices and firmperformance (Arthur, 1994; Huselid, 1995; Wood and de Menezes, 1998; Ichniowskiet al., 1997; MacDuffie, 1995) and then extrapolated the results of organisationaleffectiveness on individual-level attitudes and behaviours. However it is important tonote that relationship at one level of aggregation does not necessarily reflect similartrends at the other level (Allen et al., 2003). It is wrong to presume that if HR practiceshave positive impact on individual-level outcomes, it will concomitantly result inorganisational effectiveness too. Literature has described such an assumption aserroneous and an “ecological fallacy” (Robinson, 1950).

Although studies have examined the impact of HR practices on organisationalperformance and employee attitudes and behaviours, extant literature is silent on itsimpact on individual level phenomena. As argued by Ostroff et al. (2000):

It is impossible to fully understand how the HR system influences firm performance withoutconsidering mechanisms through which the influence occurs (like climate, culture andemployee attributes) (p. 256).

In order to assess the “mechanism” responsible for the relationship between HRpractices and employee attitudes and behaviours (Delery and Doty, 1996), the paperexamines the relationship between HR and an individual construct – psychologicalcontract.

Research on psychological contract – an overviewScholars have long realised that in order for employers to get desired contributionsfrom their employees, they must provide appropriate inducements (March and Simon,1958; Schein, 1965). Satisfied and well adjusted employees, work willingly towardsorganisational objectives and respond flexibly to organisational problems (Ostroff,1992; Likert, 1961; Argyris, 1964). However it has never been easy for employers toknow what employees expect and which kinds of inducements will influenceemployees to make desired contributions. Management of expectations is critical forsurvival of any relationship. The importance of expectations in shaping psychologicalcontract has been substantially discussed in the literature in the works of Rousseau(1990, 1995) along with a number of co-authors (Robinson et al., 1994; Rousseau andGreller, 1994; Rousseau and McLean Parks, 1993). PC has been defined as employee’spromissory expectations regarding the working relationship. Argyris (1960) can becredited with coining and first utilising the concept and terminology of PC by using theconcept “psychological contract framework” to describe the relationship betweenemployees and foreman in a factory. Although early research viewed PC asunconscious assumption regarding employment relationship (Argyris, 1960; Levinsonet al., 1962) recent work has focused attention on individual’s beliefs regarding the

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nature of an agreement resulting from promises exchanged between an individual andan employer. Initiated by Rousseau’s seminal work (Rousseau, 1990), PC over a periodof time has acquired the status of a scientific construct which is used for understandingthe promissory expectations in a working relationship (Millward and Brewerton, 2000;Guest, 1998).

PC is idiosyncratic in nature, which means that individuals vary in terms of therelationship that they perceive with their organisation. The conceptualisation of the PCis embedded in theories of social schemas (Ho, 1999; Morrison and Robinson, 1997;Rousseau, 1995; Shore and Tetrick, 1994). A schema is defined as a cognitive structurethat represents organised knowledge about a given stimulus – person or situation – aswell as rules that direct information processing (Fiske and Taylor, 1984). Rousseau(2001, p. 512) theorised that employees PC, over time takes “the form of a mental modelor schemata, which like most other schemas, is relatively stable and durable.” And likeother enduring schemas, an employee’s PC plays an important role in how employeesinterpret and react to the world around them. PC provides employees with an image orconception of their employment: as an exchange of promised inducements andcontributions. For example, the employer conveys an obligation, “we would expect youto have doubled the profit figures before you could be promoted”. An employee willview this obligation as a part of his or her psychological contract and will considerpromotion as an organisational inducement in return for his efforts. This conceptionthen serves as a reference point for the interpretation of organisational events.

PC has implications on employee attitudes and behaviours as well as organisationalperformance. While the fulfilment of contracts is related to attitudes such as jobsatisfaction (Robinson et al., 1994; Tekleab and Taylor, 2003; Pate et al., 2003; Guzzoand Noonan, 1994), organisational commitment (Lester et al., 2002; Turnley andFeldman, 2002), organisational citizenship behaviour (Turnley et al., 2003; Robinsonsand Morrison, 1995; Pate et al., 2003), organisational performance (Johnson andO’Leary-Kelly, 2003) and innovative behaviour (Ramamoorthy et al., 2005), the failureof the organisation to live up to the promises made results in negative attitudes andbehaviours such as intention to quit (Lester and Kickul, 2001) and low citizenshipbehaviour (Robinsons and Morrison, 1995; Robinson, 1996). Organisations failure tohonour their promised inducements (e.g. pay, promotion, interesting work) in return forwhat employees contribute to the firm (e.g. skills, efforts, loyalty) may be construed aslack of fairness (Guest, 1998; Herriot and Pamberton, 1995).

Organisations affect individual attitudes and behaviours (House et al., 1995). PC isdeveloped through an interactive process and is influenced and shaped by variousorganisational processes (Rousseau, 1990; Tsui et al., 1997). Human resource practicesare proposed as one of the most potent factors determining the nature and state ofpsychological contract (Guest, 1998; Rousseau and Greller, 1994). In fact, Pate (2005) inher model identified human resource systems as a key workplace characteristicoperating at meso level. It is believed that HR practices send “strong messages toindividuals regarding what the organisation expects of them and what they can expectin return” (Rousseau, 1995, p. 162) and are thus indicative of organisation intentions.HR practices communicate promises and future intents in the name of the organisationthrough hiring practices, reward practices and developmental activities. Individualscommonly view these promises as forms of contracts, as enduring mental schemas andact according to the commitments conveyed and behaviours cued (Rousseau, 1995).


contract

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Given the impact of human resource practices on employee’s perception of exchangerelationship, it was felt that an analysis of the literature trend is warranted. In thefollowing section, a review of HRP on fostering PC of employees is discussed. Such adiscussion would also set a stage for multi-level examination of PC-HRP.

MethodologyIn order to assess the body of literature on psychological contract (PC), an informationsearch was made on three computerised databases (Proquest, Emerald and EBSCO)together covering the majority of the published literature in organisational andmanagement research. The key words used for this search were employmentrelationship, psychological contract, promissory expectations, human resourcemanagement and human resource practices. There were approximately 180 studiesreferring to psychological contracts in the period 1972 to 2007. In the year 1994 twojournals Human Resource Management and Human Resource Management Journalcovered the topic of employment relationships and psychological contracts. There werealso special issues on the topic published in European Journal of Work andOrganisational Psychology (1996) and Journal of Organizational Behavior (1998, 2003).In accordance with the objective to review conceptual and empirical research thataddresses the role and impact of HRM in fostering psychological contracts, wefocussed on theoretical and empirical studies based on their titles and abstract. Papersthat specifically addressed HR practices and psychological contract were chosen forthe review. Studies specifically focusing or referring to the role/impact of humanresource practices and psychological contract were approximately 40 in number andmajority of them were published between 1994 and 2004. A list of articles referred forthis review is provided in the Appendix (Table AI).

Overview of findingsStudies examining the impact of human resource on psychological contract of employeessuggest the critical role of HRP in influencing employee expectations. The basic tenet ofthe papers reviewed is that organisation’s human resource practices (HRP) can changethe psychological contract status and influence work related outcomes. Guzzo andNoonan (1994), whose work can be defined as the foundation for many studiesexamining the relationship between HRM-PC, suggest that HRM policies and practicesare the “events” that employees in organisation interpret . . . “much of the informationemployees rely on to assess the extent to which their psychological contracts are fulfilledcomes from HR practices of the employer. How employees interpret and make sense ofHR practices affect their psychological contract with their employer, and, ultimately,their commitment to that employer. Employee loyalty, acceptance of organisational goalsand values and willingness to stick with the firm reflects, to an appreciable degree, theimpact of HR practices” (Guzzo and Noonan, 1994, p. 452).

Studies examining the employee-organisation relationship have been carried out inmyriad range of industries from textile, banks, ship industry to airlines and consumerelectronics. The sample population constituted of full-time working employee (Vos et al.,2003; Pathak et al., 2005; Freese and Schalk, 1996; Singh, 1998; Grant, 1999), part-timeMBA students (Rousseau, 1990; Baker, 1985; Lester and Kickul, 2001) as well as alumni(King, 2000; Kotter, 1973). Most of the studies have adopted the survey methodologywith only few studies (Kotter, 1973; Grant, 1999; Martin et al., 1998) combining survey

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with grounded ethnographic as well as case research to make the description “thick”(Geertz, 1975). Further studies are primarily cross-sectional in nature, the need to havelongitudinal studies recognised (Grant, 1999, Martin et al., 1998). In terms of researchsetting, most of the studies have been conducted in the US or the UK.

The studies vary with respect to the level of engagement (individual ororganisation) and nature (explicit or implicit) of the contract. Resultantly, the reviewedstudies reflect varying overtones of the concept of psychological contract. WhileRousseau (1990) gives emphasis on individual’s (employees) perception regardingmutual obligations and commitments, the advocates of a broad, multi-level approach tothe concept emphasise the need to consider the changing expectations and obligationsof “both” the organisation and the employee in framing PC (Guest and Conway, 2002;Herriot and Pamberton, 1995). Further, while few studies believe that psychologicalcontract is explicit as well as implicit in nature (Baker, 1985; Lucero and Allen, 1994;Singh, 1998; Rousseau, 1989; King, 2000; Lester and Kickul, 2001; Vos et al., 2003;Rousseau, 1990; Freese and Schalk, 1996; Stiles et al., 1997; Hiltrop, 1995; Sims, 1994;Grant, 1999) others studies consider PC to be implicit, unofficial and unwrittenpromises (Kotter, 1973; Singh, 1998; Schein, 1980). Majority of the studies have adaptedRousseau’s (1989) conceptualisation of PC (e.g. King, 2000; Lester and Kickul, 2001; Voset al., 2003; Rousseau, 1990; Freese and Schalk, 1996; Stiles et al., 1997). Based on thenature of promise and level of engagement, various definitions of PC used in thereviewed studies can be categorised as PC as a set of implicit agreement, PC as implicitas well as explicit agreement, and PC including two parties. The categorisation anddefinitions of PC are provided in Table I.

Addressing the subjective nature of PC, studies have empirically examined thedifferences in employee’s promissory expectations across various dimensions.Literature suggests that employees vary in expectations, interpretation and

Category DefinitionStudies that have used theconceptualisation

PC as implicit agreement A set of unwritten and unofficialexpectations between anindividual and his organisation

Kotter (1973), Singh (1998),Schein (1980)

PC as implicit as well asexplicit agreement

Psychological contract is the sumtotal of all written and unwritten,spoken and unspokenexpectations of the employer andthe employee, held by theindividual employee that specifieswhat the individual and theorganisation expect to give andreceive in the workingrelationship

Baker (1985), Lucero and Allen(1994), Singh (1998), Rousseau(1989), King (2000), Lester andKickul (2001), Vos et al. (2003),Rousseau (1990), Freese andSchalk (1996), Stiles et al. (1997),Hiltrop (1995), Sims (1994), Grant(1999)

PC is implicit and explicitagreement held by both theparties

The perception of both the partiesto the employmentrelationship-organisation andindividual-of the reciprocalpromises and obligations impliedin that relationship

Guest and Conway (2002), Pathaket al. (2005)

Table I.Developments of

definitions


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assessment of PC. Two employees may read, interpret and react quite differently insimilar situation due to moderating affects of factors like gender (e.g. Singh, 1998;King, 2000; Freese and Schalk, 1996), work status – supervisory/non-supervisory, andwhite/blue collared (e.g. Kotter, 1973; King, 2000; Guest and Conway, 2002),employment category-full time and part time (e.g. Freese and Schalk, 1996),hierarchical levels (e.g. Grant, 1999; Lester and Kickul, 2001; Freese and Schalk, 1996;Winter and Jackson, 2006), occupational differences (e.g. Lester and Kickul, 2001),employees age (Blancero et al., 2007; Herriot et al., 1997), length of service and size oforganisation (Herriot et al., 1997) were found to play an important role in influencingemployees expectations of psychological contract. The following paragraph illustrateshow the role of these factors on employees promissory expectations.

Singh (1998) proposed that past experiences of employees impact employeeattitudes at work. Employees who experience layoff are more likely to look out forself-interests rather than for interests, goals, and objectives of their future employers.In a study by Freese and Schalk (1996) gender differences with respect to personneldevelopment were found. Male employees were more dissatisfied with opportunitiesfor personnel development than female employees. Further, there were differences alsoamong various work-groups of the same gender. Female part-time employees differedsignificantly from female full-time employees with respect to the experiencedopportunities for personnel development. Another study (Martin et al., 1998), founddifferences in expectations or need of training as a function of their employmentcategory – white vis-a-vis blue collared. It was found that while blue collaredemployee’s expectations of training was shaped by their desire to remain employablewith the current organisation, white-collared employees viewed training as a means ofmaking oneself more marketable outside the company. In a study by Blancero et al.(2007) on the Hispanic population of the US, it was found that there was a significantdifference in perceived fairness due to age. There was a linear trend of fairness score byage, i.e. as the Hispanic population got older they reported lower levels of fairness ofpsychological contract. Similarly Winter and Jackson (2006) suggest the role ofhierarchical levels by illustrating that although managers and employees sharedsimilar responses to the state of PC, nonetheless, they attributed different causes tothese states. Managers tended to construct rational explanations and emphasis onresource constraint, whilst employees constructed emotional explanations andattributed this situation to an unfair, uncaring or distant management.

In terms of the theoretical foundations, the studies examining the impact of HRP onPC are based on the conceptual foundation of social exchange theory (SET) (Blau, 1964),equity (Adams, 1965), and expectancy theory (Vroom, 1964). SET maintains thatemployment is an exchange of material and socio-emotional benefits and both employeesand employer enter into relationships with others to maximise their benefits (Blau, 1964).Norm of reciprocity, which is the basic tenet of SET, rests on the caveats that “when oneparty benefits another, an obligation is generated” (Gouldner, 1960, p. 174). Thereforewhen organisations provide employees with what was promised and valued byemployees, latter reciprocate by forming positive attitudes and behaviours (in terms ofcommitment, job satisfaction, no intent to leave the organisation and prosaicallybehaviours) that aid an organisational to achieve its goals. Certain studies also drawfrom expectancy (Vroom, 1964) that suggests that individuals expect that theirperformance should result in outcomes which possesses a positive valence for the

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employees. Based on equity theory (Adams, 1965) studies also suggest that perceivedinequity in work related employment promises results in alteration of attitudes andbehaviours (e.g. Baker, 1985; Rousseau, 1990; Sims, 1994; Grant, 1999; Freese and Schalk,1996; Kotter, 1973; King, 2000; Lester and Kickul, 2001; Stiles et al., 1997; Martin et al.,1998; Singh, 1998; Grant, 1999; Guest and Conway, 2002). Table II providescategorisation of studies based on the foundational theories of the reviewed studies.

Impact of human resource practices on psychological contractGuzzo and Noonan (1994) have defined HR practice as communication from employerto employee. Studies suggest that organisational communication can play a critical rolein shaping as well as evaluating psychological contract of employees. Studies(Robinson and Morrison, 2000; Herriot and Pamberton, 1995; Stiles et al., 1997;Rousseau, 1995; Turnley and Feldman, 1999; Guest and Conway, 2002; Morrison andRobinson, 1997) confirm the role of effective organisational communication in shapingemployee perceptions. Broadly, literature on PC suggests that organisationalcommunication should be carried out in three phases:

(1) Initial introduction, which commences with the process of recruitment.

(2) Ongoing interaction through formal means such as performance appraisal,training.

(3) Finally communication with employees over time in relation to the job andpersonal issues such as workload, development, work-life balance and careerprospects will lead to a more explicit and potentially more effectivepsychological contract.

It was found that effective job related and recruitment-based communication wasfound to be associated with less perceived breach of psychological contract.

Guest and Conway (2002) draw an interesting parallel between culture the means ofcommunication using typology of Martin (1992). The authors suggest that anorganisation may choose the type of communication system based on its culture. Forinstance, organisations holding a “integrationist”, “differentiation” and “fragmented”

Foundation theories Studies

Rousseau’s (1995) social exchange theoryAn employee’s beliefs about the reciprocalemployer and employee obligations being part oftheir employment deals

Though implicit, but most studies examining thePC-HRM relationship adapt a social exchangeframework. However SET has been explicitlyused in the study by Vos et al. (2003)

Adam’s (1965) equity theoryEmployees evaluate the exchange relationship interms of a ratio between effort spent (input) andreward received (output) at work

Lester and Kickul (2001), Kotter (1973), Guzzo andNoonan (1994), Stiles et al. (1997), Martin et al.(1998), Lucero and Allen (1994), Hiltrop (1995)

Vroom’s (1964) expectancy theoryIndividuals have a variety of goals and theyexpect a positive correlation between efforts andperformance. Favourable performance shouldresult in outcomes which possesses a positivevalence for the employees

Baker (1985), Sims (1994), Grant (1999), Freese andSchalk (1996), Rousseau (1990), Kotter (1973),King (2000), Lester and Kickul (2001), Stiles et al.(1997), Martin et al. (1998), Singh (1998), Guest andConway (2002)

Table II.Foundational theories of

reviewed studies


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culture should encourage top-down communication . . . and laissez faire approach topsychological contract respectively.

The literature elaborates how various HR policies from recruitment (Sims, 1994;Rousseau and Greller, 1994), training (Sims, 1994), compensation (Rousseau andGreller, 1994), benefits (Lucero and Allen, 1994) and employee handbooks(Schmedemann and McLean Parks, 1994; Rousseau and Greller, 1994) can encouragethe interpretation and formation of positive psychological contact. Based on the review,HRM practices can be broadly classified into hard or soft inducements. In the followingparagraphs we elaborate on how each of these practices has an impact prior to andthen throughout an employees’ tenure in the organisation on formation, elaborationand interpretations of a psychological contact.

Recruitment and selectionEmployee’s relationship with the organisation commences with the recruitmentprocess (Rousseau, 2001). The initial schemas that employees have when they beginthe recruitment process will influence how they react if their expectations are not met.This stage of employee-organisation relationship can significantly influenceemployee’s conception of employment relationship. Therefore if recruitment processis managed well, it may significantly influence employee’s attitudes and behaviours(Kotter, 1973). As an employee joins an organisation with a belief that the latter willlive up to the promises made to them, in case employers fail to do so, the employeesperceive their PC has been violated and may react in ways that may go against theinterests of the employer (Morrison and Robinson, 1997). Therefore the recruitmentprocess may be partly responsible for this mismatch. When expectations andcontributions of each party (employees and the organisation) match with what theother party had expected, stronger employment relationships follow. On the otherhand, unmet expectations are associated with lower performance (Robinson, 1996).

However, the review suggests that recruiters often tend to present jobs infavourable terms in order to increase the number of employees hired (Sims, 1994).Studies (e.g. Sims, 1994; Freese and Schalk, 1996; Baker, 1985; Hiltrop, 1985; Guzzo andNoonan, 1994) illustrate the importance of providing employees with realistic jobpreviews (RJP) during their entry stages. RJP is defined as a process “intended toprovide new or potential organisation members with accurate expectations of job andorganisation” (Meglino et al., 1998, p. 259). It is suggested that RJP can shape employeeperceptions about exchange agreements (Rousseau and Greller, 1994) and lead to initialperception about the climate. Many studies have assessed the role of RJP’s inenhancing new employee’s adaptation to the job and the organisation. Employees whodo not agree with the perceived terms of exchange and who do not believe that theclimate will be a good fit, will be less likely to accept job if one is offered. RJP ensuresthat new comers have accurate expectation from their new job and employer and thusavoid experience of having unrealistic expectations. Sims (1994) notes four reasons forproviding RJP. First, a job candidate may self-select not to take a job if they considerthe job will not be personally satisfying. Second, knowing all aspects of job, if anemployee still selects it, they become committed to their decision. Third, RJP help loweremployee expectations, which will in turn reduce the gap between expectation andreality. Fourth, employees cope better with situations that they expect than if they aresurprised.

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Learning and developmentIn the new employment era, employability replaces employment security (Singh, 1998;Coyle-Shapiro and Kessler, 2000). In such a scenario, when employees no longer expecttheir employer to guarantee a job or provide an assured career path, training anddevelopment opportunities have become an extremely important aspect of anemployment relationship, perhaps the best promise employers can give to their staff(Kanter, 1994). The study by Martin et al. (1998) proved that training and developmenthave become a very valued part of employee’s psychological contract. Employees oforganisations which are perceived to violate their obligations with regards toproviding skills and career development are found to be less satisfied with their jobs(Robinson and Rousseau, 1994).

Training and career development have emerged as a characteristic dimension ofboth transactional and relational contract (Robinson et al., 1994; Lester and Kickul,2001). Regardless of how long an employee may intend to stay with the organisation,they place a premium on training and development opportunities. Organisations thatare responsive to such growth needs of their employees will attract better talent intoday’s tight labour market. Thus training acts as inducements for employees tomaintain their commitment to the organisation.

The training programmes also help employers to define changing expectations andcurrent fit. Studies suggest that training also influences employee conception ofemployment relationship. New work experiences, interesting assignments, expensiveskill based training in line with firm’s business objectives and a planned career, signalan organisations intention to foster a long-term employment relationship. Systematictraining and development will enhance commitment by giving talented employees theopportunity to develop their skills and to achieve positions of greater challenge andresponsibility, both within as well as outside the organisation. Employee’sexpectations from the employment can also significantly influence the type and kindof training and career development that a firm provides. Employee looking at a longtenure with the organisation will expect to be provided with training that meets bothpersonnel and professional needs. Process of training and development has to ensurethat employees become more employable, both externally and internally. However,employees viewing relationship from short-term perspective will not expect firm’sinvestment in terms of skill-based training.

Although training has emerged to be an important part of employees psychologicalcontract, however, empirical studies (Robinson and Rousseau, 1994) suggest thatemployees often feel let down on the training and career development aspects. Assuggested by Martin et al. (1998), this could be perhaps because of increasing financialpressures which results in firms’ lack of willingness to invest in resources that maysubsequently have to be released. Employers concern of a firm specific training needsto be matched with individual needs for external employability if the psychologicalcontract is to be seen fair by employees.

HRM personnel must spend more time discussing with trainees and theirsupervisors the objectives of training Suggestively, HRM professionals can influencethe attitudes not only by giving the required training to its employees, but also byinvolving them in the need assessment phase and/or by giving them a realisticpreview-a synopsis of what benefits they can expect from the training programme andhow it fits their career plan (Sims, 1994).


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Rewards managementReward management is an important inducement of the exchange process betweenemployers and employees (Gerhart and Milkovich, 1992). Rewards have beenrecognised as an important element of the psychological contract defining therelationship between employers and employees (Lucero and Allen, 1994). Reward andremuneration packages that are in congruence with employees’ expectations,encourages them to serve beyond their job description, gain professional expertise,and cultivate core competencies across functional groupings (Hiltrop, 1995).Appropriate reward management system motivates employees to apply skills andabilities and encourage them to work harder and improve work processes.

Compensation can be direct and financial in nature such as wages and bonuses orindirect benefits such as health and life insurance, employee assistance plans and so on.Studies on the compensation have identified “pay” and “pay for performance” asimportant employer obligations (Rousseau, 1990; Robinson, 1996).The review suggeststhat compensations and benefits that employers provide for employees can have a majorimpact on their conception of employment relationships (Rousseau and Ho, 2000). Thetype of compensation may signals the type of employment relationship. Based on twodimensions, durations (short-term or long-term) and type of compensation (specific vsunspecified), Rousseau and Ho (2000) matched compensation system to employeepsychological contract. Based on these two dimensions, the authors have identified fourtypes of relationships: short-term relationships with specific measures of performance,short-term relationships with unspecified measures of performance, long-termrelationships with specified measures of performance, and finally long-termrelationships with unspecified measures of performance.

Organisations can design the compensation system based on the type ofemployment relationship that they want to maintain. For instance, firms that want toestablish a long-term relationship with specified performance measures should comeup compensation structure which invests in employees in terms of firms’ specificskill-based training, wherein an organisation will invest in the employee in terms ofexpensive skill-based training, flexible benefit systems and blend of short-term andlong term incentives. Alternatively, organisations with long-term and unspecificperformance measures, will base their compensation on seniority and alsoinstitutionalise rewards like tenure-based bonus, retirement bonus etc. for long-termemployees. Alternatively, organisations with short-term employment strategy willencourage short-term rewards for performance such as sales commission ornon-financial rewards such a free tour to the countryside, a branded pen set or freelunch for family at a restaurant on achievement of sales target.

Employee’s conception of their employment relationship will also influence theirexpectations of the type of compensation. For instance an employee working onshort-term job with specified performance indicators would be more likely to expectcompensation based on short-term performance, like sales commission. While anemployee looking for a long-term relationship with the organisation will expect thefirm to invest in skill-based training, assured career and financial growth, and mayreact negatively if this expectation is not met. Involving employees in benefitsplanning and decision making is suggested to be an important tool for preventingperceived violations of PC (Lucero and Allen, 1994). Thus the review illustrates howbenefits and compensation can influence employee conception of psychological

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contract and can be used as a signalling mechanism to establish certain kinds ofemployment relationships.

Performance managementPerformance appraisal (PA) process involves employers setting performancestandards and providing employees with feedback about their level of performance.The contract making features of performance management include the understandingof job role, the fair, timely and accurate evaluation of performance, the fair distributionof pay and development opportunities and the provision of feedback to employees(Rousseau and Greller, 1994). Among various HR practices, performance managementprocesses, in particular has been identified to play a key role in determiningemployee-employer expectations (Lester and Kickul, 2001; Truss et al., 1997; King,2000). In fact studies view that the biggest issue and the greatest contribution HR canmake in the changing employment scenario are in the area of evaluation and appraisal(King, 2000).

The competitive environment has brought performance management to centrestage, by specifying the new performance requirements of employees as the result ofstrategic change, and the rewards they will receive upon their fulfilment (Truss et al.,1997). PA can influence employment relationship in a number of ways. Lester andKickul (2001) suggest that organisations can enhance their ability to fulfil the PCobligations by targeting highly valued PC areas during their job reviews. Aftergathering information about employees’ most valued outcomes early in the process,employees can specifically address what the candidate can expect in that area ofemployment relationship. When an employer gives feedback to the employee abouthis/her performance, it signals to the employee whether or not they are providingcontribution to the employment relationship. Based on the strategic needs anorganisation may choose between evaluation or development oriented appraisals(Boswell and Boudreau, 2000). Appraisal discussions also provide employers thechance to ask whether their employees are satisfied with the inducements provided andremedy the situation if necessary. Appraisals therefore are used as a stage in thecontract making process to ensure that parties, the employees and employers arefulfilling their psychological contracts towards each other.

Robinson and Rousseau (1994) note that a common problem with performanceappraisal system is the lack of a “line of sight” between positive PA and other humanresource practices. Appraisals must be followed up with appropriate compensationand training strategy. For instance developmental appraisal aligned with long-termand specific/unspecific performance measures, career management and skill-basedtraining will result in stronger employment relations. HR practices if not be congruencesend conflicting messages to the employees and may also result in raising issues offairness of inducements and perceived injustice in the employment relationship. Thusappraisals have been identified as an opportunity to indicate employees about theirresponsibilities towards the organisations as well as a signal for organisations toinfluence employees about their conception about the employment relationship.

Organisational cultureManaging employee expectations is an important task in organisations. Much of theresponsibility is placed on human resource professionals to set the desired tone


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through policies and procedures (King, 2000). HR policies such as compensation andbenefits systems, career paths, appraisal and training processes all send structuralsignals about the contract. Interactions with recruiters, managers, co-workers andmentors, called as human contract makers, can also contribute to the development of apsychological contract (Rousseau, 1995). Besides the human and structural contractmakers, literature also illuminates the role of organisational culture in influencingemployee’s conception of employment relationship.

PC is based on individual’s perceptions and is idiosyncratic in nature. Psychologicalcontract are exchange agreements between employees and employers. They representbeliefs that individuals hold about promises made, accepted relied on between themselvesand the organisation. Perceptions of what the organisation is like, in terms of its routines,practices, procedures and rewards come from individuals. However, when individuals inthe organisation agree to share their perceptions, organisation culture emerges. Culture isdescribed as a shared pattern of assumptions, values, beliefs and behaviours amongemployees (Schein, 1985; Turner, 1990). Organisational culture is a summary or sharedperception that people attach to work setting (Schneider and Reichers, 1983).

HR practices can play an important role in orchestrating the culture of anorganisation. HR practices represent a set of salient and universal practices that cancreate the foundation for particular form organisational climate to develop (Ostroffet al., 2000; Schneider, 1990). HR practices like realistic job previews, developmentalappraisal which captures employee expectations and identification of training needs inconsultation with the employees, results in formation of progressive organisationalculture which talks with people, not at them. Importantly, the climate or cultureperceptions of organisation also shape individual inferences about what theorganisation is like. Furthermore, organisational culture leads to the construction ofa “normative” psychological contract, which is shared by the members of theorganisation (Rousseau, 1995).

Suggestively, there are linkages between HR practices, individual andorganisational as well as normative culture of an organisation. Human resourcepractices influence individual employee’s perceptions regarding what the organisationis like. HR practices can be instrumental in creating the culture of an organisation.Organisational culture in turn influences individual as well as group level perceptions.Perceptions at group level are referred as normative contracts.

Proposing a conceptual modelPsychological contract is an individual construct, subjective in nature. Research hastended to emphasise that PC focuses on individual characteristics that affect individualreactions and have implications on organisational performance. However, individuals inorganisations do not exit in vacuum. They are nested within departments, occupationalgroups and organisations. Extant literature on PC neglects a systematic integration ofthe contextual and organisational factors that may significantly constrain or alter theeffects of individual differences that lead to collective responses (Kozlowski and Klein,2000). As pointed out by Tetrick (2004), research on the construct (PC), to date, has notexplicitly examined the potential effects of these dependencies.

Similarly, research on HR practices has established how organisational practicescan have an impact on organisational performance. The macro perspective adopted forexamining the relationship between HR perspective and organisational outcomes, but

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has neglected how individual behaviour and perceptions may affect and result ininteractions that may give raise to higher-level phenomena (Ostroff et al., 2000). Afterall, macro factors such as human resource practices also emerge from individual-levelconstructs. Similarly, as discussed, research on psychological contract has notsystematically examined the role of contextual factors that can significantly constrainthe effects of individual differences that lead to collective responses.

Absence of an integrative approach examining the relationship between theindividual construct PC and organisational construct, HR Practices, is not surprising,given that past three decades of research on organisational phenomena is characterisedby a “split along the two extremes in macro-micro continuum” (Staw and Sutton, 1992;Schneider et al., 1995). On the one hand, there is micro focus which aims to understandindividual level issues such as motivation, performance and attitudes, often studiedwithout regard to individual organisational context in which these processes occur. Onthe other hand, macro perspective aims at understanding organisational levelphenomena such as structure, strategy, culture and effectiveness and the linkagesamong these factors with little regard given to the human processes in organisation.The macro perspective assumes that given a particular set of situational constraintsand demographics, there are substantial regularities in social behaviour and thatpeople will behave alike. Similarly, although extant literature on psychologicalcontract has examined the relationship of a macro-level variable like human resourcepractices on the micro-level variable PC of employees, however there has been no effortto examine the links between these constructs at a meso level.

Lately however, there has been growing consensus among scholars that neitherindividual-level nor macro perspective alone can account for organisational behaviour.Micro-level phenomena are embedded in macro contexts and macro level phenomena areoften emerge through the interaction and dynamics of lower-level elements. Literature onhuman resource practices as well as emerging literature on psychological contract ofemployees, expressly acknowledge the need to adopt an integrative approach tounderstanding the social exchanges in employment relationship. House et al. (1995)suggest need for a meso theory that captures both the macro as well as micro-levelvariables. The basic premise of meso theory is that organisational behaviour is a result ofboth person and situation and thus study of organisational or group-level processesshould be simultaneously conducted (Kozlowski and Klein, 2000).

In the light of the above discussion and in response to the literature call for adoptinga multilevel approach to better understand the organisational phenomena (Tetrick,2004; Kozlowski and Klein, 2000), we propose a meso approach to understandinglinkages between HR practices, PC and employee attitudes and behaviours. Figure 1places the individual level construct – psychological contract and organisationalconstruct – human resource practices within a conceptual framework that derives ourdiscussion of the linkages between HR practices, PC, employee attitudes andbehaviours as well as firm performance.

Starting with upper left of Figure 1:. Organisational strategy influences employment strategy and both in turn have

an impact on HR practices that an organisation chooses to implement.. HR practices are the means through which organisation signals its intentions

about the exchange relationship and results in formation of psychologicalcontract.


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. Employees conception of employment relationship or PC can influence the HRpractices of a firm.

. HR practices also shape culture of an organisation that if shared across ofemployees of the same organisation, results in normative contracts.Organisational culture also shapes and is shaped by psychological contract ofemployees.

. Further, as established in the literature, both, HR practices as well as PCinfluence attitudes and behaviours of employees and influence organisationalperformance.

To summarise, HR practices influence PC at individual level as well as culture andnormative contracts at organisational level. The dashed arrows in Figure 1 indicate themulti-level nature of these constructs, symbolising how organisational-level constructsare emerging from individual-level constructs. It is important to mention that theconceptual model that is emerging from the literature review is in congruence with onesuggested by Ostroff et al. (2000). While these authors have examined the multi-levelapproach linking HR systems and firm performance, our study has addressesmulti-level relationships in the domain of employee-employer relationship.

Managerial implicationsRousseau (1995) described the process by which organisational policies and practicesinfluence employee’s psychological contracts as “contract making”. In the contractmaking process, when employees believe that their employers have promised toprovide them with some inducements, that belief becomes a part of employees PC(Rousseau, 2001). It is important to note that perceptual interpretations of HR practicesare likely to remain stable, and employees are unlikely to consider them activelyregularly unless change in practices is made. Thus employers should be aware of theimpact of their human resource policies on employee’s expectations and on theirintended contributions. As a policy implication for the organisation, since HR practicescan influence employee conception of employment relationship which in turn

Figure 1.A model of relationshipbetween HR practices andpsychological contract andtheir impact on employeeattitudes and behaviours

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influences organisational performance, firms need to judiciously craft their HR toolkitsbased on their employment relationship strategies and business strategies. The reviewalso suggests that involvement of employees in performance appraisal, training needidentification and compensation strategy can go a long way in fostering strongemployment relationship.

Further, it is to be noted that a strong HR system results in shared perceptions andcontract expectations as a result of clear and direct signals to employees about norms,expectations and what organisations is like. A weak HR system on the other hand resultsin idiosyncratic perceptions of climate and contracts within an organisation, which willproduce wide variability in perceptions of climate and contracts within the organisations(Ostroff et al., 2000). This will subsequently result in wide variability in attitudes andhuman capital development within an organisation, diminishing the relationship toorganisational performance. Another implication for policy makers is that based onbusiness and employment strategies, organisations should focus on effectivelycommunicating to employees what they can reasonably expect in terms oforganisational inducements. This communication should be initiated during therecruitment process and continue once the individual joins the organisation. Establishinga norm of communication will help in two ways. First, when expectations andcontributions of employees match what organisations desire, it will result in a goodperson-organisation fit and stronger employment relationships would follow. Secondly,it will also allow the employer to provide explanations when its ability to fulfil PCobligations is negatively impacted by factors that are beyond its control (Morrison andRobinson, 1997; Rousseau, 1995). Culture of an organisation is a strong medium ofcommunication and if managed well it can effectively, therefore human resourcepersonnel should endeavour to build a progressive culture which effectivelycommunicate the employees how the organisation is trying to meet their multiple needs.

The focus of this paper was to examine the relationship between HR and PC andtheir impact on employee attitudes and behaviours. Organisational culture hasemerged to be an important macro factor that has a relationship with micro-level PC aswell as HR practices. Although, the crucial role of organisational culture wasdiscernible from the review, however further discussion on the same was beyond thescope of this paper. In order to advance our understanding in this area, further researchshould also be conducted on examining the linkages between organisational culture,HR, PC as well as employee attitudes. Impact of other organisational factors such asstructure and strategy on exchange relationship also need to be assessed. Furthermore,empirical studies should be conducted to validate the linkages proposed. We alsosuggest the need of longitudinal studies to test the causal linkages proposed in thismodel. Further most of the studies reviewed have been conducted either in the US orthe UK. A deeper study of the construct across population and over time will berequired to gain greater validity and help in theory building.

ConclusionThe nature of employment relationship has been the subject of considerable debate inthe literature. Researches till date have either focussed on individual level of analysis,while making inferences about macro-effects of employment relationship or have notgiven attention to employment relationship and its implications on individuals. Thisreview integrates together the literature on PC and HR practices and elucidates the role


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of organisation level construct – human resource practices in shaping individual levelconstruct such as psychological contract. Bringing out the multi-level nature ofconstructs, the paper views the impact of both the micro-variable and macro-variableson employee attitudes and behaviours.

From the review it is clearly emerging that HRM practices are viewed by employeesas a “personalised” commitment to them by the organisation, which is thenreciprocated back by the employees through positive attitudes and behaviours (Tsuiet al., 1997). Based on the motivational processes of Social exchange and norm ofreciprocity, the relationship among HRP, employee conception of employmentrelationship and organisational outcomes has been suggested. Positive, beneficialactions directed at employees by the organisation and/or its representatives contributeto the establishment of high-quality exchange relationships that create obligations foremployees to reciprocate in positive beneficial ways (Settoon et al., 1996). Central to thediscussion of the paper is the argument that HR systems have impact on individualand collective attitudes and behaviours of employees, largely by moderating individualconception of their employment relationship. To conclude, the human resource policiesin congruence with business and employment strategies influence employeepsychological contract that has bearing on firm performance.

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Further reading

Barlett, F.C. (1932), Remembering: A Study in Experimental and Social Psychology, CambridgeUniversity Press, Cambridge.

Colarelli, S.M. and Stumpf, S.A. (1990), “Compatibility and conflict among outcomes oforganiztional entry strategies: mechanistic and social systems perspectives”, BehaviouralScience, Vol. 35, pp. 1-10.

Ho, V.T. (2000), “Responses to psychological contract breach: does personality matter?”, paperpresented at the Annual Meeting of the Academy of Management, Toronto.

Hom, P.W., Griffeth, R.W. and Palich, L.E. (1999), “Revisiting met expectations as a reason whyrealistic job previews work”, Personnel Psychology, Vol. 52, pp. 97-112.

Homans, G. (1961), “Social behavior as exchange”, American Journal of Sociology, Vol. 63,pp. 597-606.

Kozlowski, S.W.J., Gully, S.M., McHugh, P.P., Salas, E. and Cannon-Bowers, J.A. (1996),“A dynamic theory of leadership and team effectiveness: developmental and taskcontingent leader roles”, Research in Personnel and Human Resource Management, Vol. 14,JAI Press, Greenwich, CT, pp. 253-305.

Lord, R.G. and Foti, R.J. (1986), “Schema theories, information processing and organizationalbehaviours”, in Sims, H.P Jr and Gioia, D.A. (Eds), The Thinking Organization, Meaningsof Occupational Work, Lexington Books, Lexington, MA, pp. 20-48.

Meglino, B.M., DeNisi, A.S. and Ravlin, E.C. (1993), “Effects of previous job exposure andsubsequent job status on the functioning of a realistic job preview”, Personnel Psychology,Vol. 46, pp. 803-22.

Moss Kanter, R. (1994), “Change in global economy: an interview with Rosabeth Moss Kanter”,European Management Journal, Vol. 12 No. 1, pp. 1-9.

Pierce, J., Kostova, T. and Dirks, K.T. (2001), “Towards a theory of psychological ownership inorganizations”, Academy of Management Review, Vol. 26, pp. 298-310.

Rousseau, D.M. and Schalk, R. (2000), Psychological Contracts in Employment: Cross-NationalPerspective, Sage, London.

Tekleab, A.G., Takeuchi, R. and Taylor, M.S. (2005), “Extending the chain of relationshipsamong organizational justice, social exchange, and employee reactions: the role of contractviolations”, Academy of Management Journal, Vol. 48 No. 1, p. 146.

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Appendix

1973 “The Psychological contract: Managing the joining-up process”, by Kotter, J., CaliforniaManagement Review, Vol. 15, pp. 91-99

1985 “The unwritten contract: job perceptions” by Baker, H., Personnel Journal, Vol. 64, pp. 36-411990 “New hire perceptions of their own and their employer’s obligations: a study of

psychological”, by Rousseau D.M., Journal of Organizational Behavior, Vol. 11, pp. 389-4001993 “Newcomers information seeking: exploring types, modes, sources and outcomes”, by

Morrison, E., Academy of Management Journal, Vol. 36 No. 3, 557-5891994 “Changing obligations and the psychological contract: a longitudinal study” by Robinson,

S., Kraatz, M. and Rousseau, D., Academy of Management Journal, Vol. 37, pp. 137-1521994 “Human resource practices as communications and the psychological contract”, by Guzzo,

R. and Noonan, K., Human Resource Management, Vol. 33 No. 3, pp. 44-721994 “Expatriate managers and the psychological contract”, by Guzzo, R. and Noonan, K.,

Journal of Applied Psychology, Vol. 79 No. 4, pp. 617-6261994 “Human resource management’s role in clarifying the new psychological contract”, by

Sims, R., Human Resource Management, Vol. 33 No. 3, pp. 373-3831994 “ Employee benefits: a growing source of psychological contract violations”, by Lucero, M.

and Allen, R., Human Resource Management Journal, Vol. 33 No. 3, pp. 425-4461994 “Expatriate managers and the psychological contract”, by Guzzo, R., Noonan, K., and

Elron, E., Journal of Applied Psychology, Vol. 79 No. 4, pp. 617-6261994 “Till death us part: changing work relationships in 1990s”, by Kidder, D.L. and Parks, J.M.,

Journal of Organizational Behavior, pp. 111-1361994 “The new employment contract”, by Kissler, G.D., Human Resource Management, Vol. 33

No. 3, pp. 335-3521994 “Linking strategy and human resource practices: how employee and customer contracts

are created”, by Rousseau, D. and Wade-Benzoni, K. Human Resource ManagementJournal, Vol. 33 No. 3, pp. 463-489

1994 “Human resource practices: Administrative contract makers”, by Rousseau, D.M. andGreller, M.M., Human Resource Management, Vol. 33 No. 3, pp. 372-382

1994 “The psychological contract as an explanatory framework in employment relationship”,by Shore, L.M. and Tetrick, L.E. (1994), Journal of Organizational Behavior, pp. 91-109

1995 “The changing psychological contract: The human resource challenge of the 1990s” byHiltrop, J.E., European Management Journal, Vol. 13 No. 3, pp. 286-275

1996 “Transitions in the psychological contract: some evidence from the banking sector”, bySparrow, P.R., Human Resource Management Journal, Vol. 6 No. 4, p. 75

1996 “Implications of differences in psychological contracts for human resource management”by Freese, C. and Schalk, R., European Journal of Work and Organizational Psychology,Vol. 5 No. 4, pp. 501-509

1996 “Careers and the psychological contract: understanding the European context”, bySparrow, P.R., European Journal of Work and Organizational Psychology, Vol. 5 No. 4, p.479

1997 “Alternative approaches to the employee-organization relationship: does investment inemployees pay off?”, by Tsui, A.S., Pearce, J.L., Porter, L.W. and Tripoli, A.M., Academy ofManagement Journal, Vol. 40, pp. 1089-1119

1997 “Performance management and the psychological contract” by P. Stiles, Gratton, Truss,Hope-Hailey, McGovern, Human Resource Management Journal, Vol. 7 No. 1, p. 57

1997 “Psychological contracts and new deals”, by Hendry, J., Human Resource ManagementJournal, Vol. 7 No. 1, p. 38

1998 “Reappraising psychological contract”, by Sparrow, P.R., International Studies ofManagement and Organization, Vol. 28, pp. 30-63

(continued )

Table AI.A list of articles referred

for this review


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1998 “Linking job security and career development in a new psychological contract”, by Martin,Harry Staines, Judy Pate, Human Resource Management Journal, Vol. 8 No. 3, p. 20

1998 “Redefining psychological contracts with the US workforce: a critical task for strategichuman resource management planners in the 1990s, by Singh, R., Human ResourceManagement, Vol. 37, pp. 61-69

1999 “HRM, rhetoric and the psychological contract: a case of ‘easier said than done’” by Grant,D., International Journal of Human Resource Management, Vol. 10 No. 2, pp. 327-350

1998 “The changes in newcomer’s psychological contracts during organizational socialization: astudy of recruits entering the British Army”, by Thomas, H. and Anderson, N., Journal ofOrganizational Behavior, Vol. 19, pp. 745-767

1999 “The new employment contract” by Gary D. Kissler, Human Resource Management,Vol. 33 No. 3, p. 335

1999 “Antecedents and consequences of relational components of the new psychologicalcontract”, by Cavanaugh, M. and Noe, R., Journal of Organizational Behaviour, Vol. 20,pp. 323-340

2000 “White-collar reactions to job insecurity and the role of psychological contract:implications for human resource management”, by King, J.E. Human ResourceManagement, Vol. 39 No. 1, pp. 79-91

2000 “The nature of the new employment relationship: a content analysis of the practitioner andacademic literatures” by Mark V. Roehling, M.A. Cavanaugh, L.M. Moynihan, W.R.Boswell, Human Resource Management, Vol. 39 No. 4, p. 305

2001 “Psychological contracts in the 21st century: what employees value most and how wellorganizations are responding to these expectations”, by Lester, S.W., and Kickul, J.,Human Resource Planning, Vol. 24, pp. 10-21

2001 “Psychological contracts in the 21st century: an examination of what employees valuemost and how organizations are responding to these expectations”, by Lester and Kickul,Human Resource Planning, Vol. 24 No. 1

2002 “Communicating psychological contract: an employer perspective”, by Guest, D.E. andConway, N., Human Resource Management Journal, Vol. 12, pp. 22-38

2003 “Psychological contract development during organizational socialization: adaptation toreality and the role of reciprocity”, by Vos, A.D, Buyens, D. and Schalk, R. (2003), Journalof Organizational Behavior, Vol. 24 No. 5, pp. 537-559

2003 “The impact of psychological contract violation on employee attitudes and behaviour”, byJudy Pate, Graeme Martin, Jim McGoldrick, Employee Relations, Vol. 25 No. 6, p. 557

2003 “Psychological contracting: processes of contract formation during interviews betweennannies and their ‘employers”, by Purvis, Lynne J. Miliward, Cropley, Mark, Journal ofOccupational & Organizational Psychology, Vol. 76 No. 2, p. 213

2003 “Editorial new developments in the employee-organization relationship”,Lynn M. Shore, Jacqueline A.-M. Coyle-Shapiro, Journal of Organizational Behavior, Vol. 24No. 5, p. 443

2003 “The employment relationship in the UK public sector: a psychological contractperspective”, by Coyle-Shapiro, J. and Kessler, Journal of Public Administration Researchand Theory, Vol. 13 No. 2, pp. 213-230

2005 “The changing contours of the psychological contract: unpacking context andcircumstances of breach” by Pate, J., Journal of European Industrial Training, Vol. 30,pp. 32-47

2005 “Managing the career deal: the psychological contract as a framework for understandingcareer management, organizational commitment and work behavior” by Jane Sturges, NeilConway, David Guest, Andreas Liefooghe, Journal of Organizational Behavior, Vol. 26No. 7, p. 821

2006 “The changing contours of the psychological contract: unpacking context andcircumstances of breach”, by Pate, J., Journal of European Industrial Training, Vol. 30,pp. 32-47Table AI.

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About the authorsUpasana Aggarwal is a doctoral student at Indian Institute of Technology (IIT), Bombay, India.She is working in the area of employment relationship with specific focus on psychologicalcontract and employee engagement. Other research interests include employee engagement,psychological ownership and organisation culture.

Shivganesh Bhargava is Professor of Organisational Behavior and Human ResourceManagement at Indian Institute of Management, Bombay. His major international researchpublications are in the Journal of Experimental Social Psychology, Journal of Social Psychology,and International Journal of Human Resource Management and Development and book fromResponse (Sage) Publications. Research, teaching, and consulting/training interest areas arecompetency assessment and talent development including giftedness, performance management,entrepreneurship development including creativity and innovation, emotional intelligence, valuebased leadership, organisational health, management of family and career, human resourceplanning including outsourcing and call centres, managing knowledge managers, managementof human service organisations: NGOs, and reward management. Shivganesh Bhargava is thecorresponding author and can be contacted at: [email protected]


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