Creating Psychological and Legal Contracts Through HRM Practices: A Strength of Signals Perspective

We integrate the concept of signaling theory to propose that organizations create psychological and legal contracts through their human resource management practices (HRM). Focusing on the strength of the signal generated by HRM practices, we develop a framework for contract creation. Specifically, we define and outline how weak signals generate psychological contracts and strong signals develop legally binding contracts. We provide several examples of HRM hiring practices, the weak and strong signals which they emit and the psychological and legal contracts which they create. Our key contribution is to provide a precise model for understanding the distinction between a psychological and legal contract.     

Can excess bring success? CEO compensation and the psychological contract

Strategic human resource management involves creating and maintaining employee skills as well as encouraging employees to perform at their maximum. Both require developing the appropriate psychological contract between the organization and the employee [Human Resource Management Review 8 (1998) 265]. This is no less true for the chief executive officer (CEO), who plays a major role in creating organizational culture. Trust is a critical component in the success of HR activities [Research Management Review 7 (1997) 389], yet the HR literature is relatively silent about how to encourage CEOs to perform trust-generating behaviors. Research on psychological contracts suggests that in order to encourage trust-based behavior, it is necessary to foster a relational psychological contract with employees [Rousseau, D. M., & McLean Parks, J. (1993). The contracts of individuals and organizations. In L. L. Cummings & B. M. Staw (Eds.), Research in Organizational Behavior (pp. 1–43). Greenwich, CT: JAI Press]. However, the generally recommended CEO compensation practice (pay-for-performance) often risks violating the CEO's relational psychological contract. Conversely, the practice of providing golden parachutes (much criticized in the press) helps uphold the CEO's relational psychological contract. Implications are discussed.     

Psychological contracts in the workplace—a lawyer's view

This article contrasts the formation and enforcement of legal contracts with the formation and enforcement of psychological contracts. The author has held a variety of legal and managerial positions with a major industrial corporation.     

Dynamic and customer-oriented workplaces: implications for HRM practice and research

Changes in competitive environments are resulting in changes to the nature of work. We present job structure changes and a heightened customer orientation as two primary examples of changes that necessitate adaptation of human resource management (HRM) practices. The level of success in light of these organizational changes will largely be determined by how effectively people are managed in the new organizational environments. HRM practices that adapt to the new organizational conditions can add tremendously to the business and be a key to long-term competitiveness. We examine the implications of these changes for HRM practice and research, with particular attention to psychological contracts, job analysis, selection, and performance appraisal. The thrust of the article is to identify and describe research directions that have the potential for contributing to the future relevance and success of HRM.     

Balancing psychological contracts: Validation of a typology

In this study, a psychological contract typology based on both content and exchange balance was developed. Content was defined along the transactional-relational dimension. Balance was assessed by comparing employees' perceptions on the number of employees' obligations relative to employer's obligations. Furthermore, the typology was related to type of employment contract (temporary versus permanent) as perhaps the most important antecedent of psychological contracts, and to various psychological consequences (job satisfaction, life satisfaction, organizational commitment, and psychological contract violation). Results were based on Belgian and German data (N = 1267). Latent Class Analyses suggested four psychological contract types which are clearly distinct with regard to content terms and exchange balance: mutual high obligations, employee over-obligation, employee under-obligation and mutual low obligations. Temporary workers were more likely to hold psychological contracts with few employer obligations, such as the mutual low obligations and the employee over-obligation type. Finally, the mutual high obligations type was most beneficial in terms of psychological outcomes. Implications for future research are discussed.     

Mothers' psychological contracts: Does supervisor breach explain intention to leave the organization?

Recent evidence suggests mothers with infants are leaving the workforce (Cohany & Sok, 2007; Johnson, 2007), but research has not yet clarified why mothers make such a decision. The current research proposes that mothers form psychological contracts including content related to family that supervisors do not fulfill, resulting in intention to leave the organization. In a study of first‐time mothers, participants reported experiencing contract breach. Findings also suggested supervisors may have an opportunity to control the outcomes of breach and retain mothers by effectively managing perceptions of fair treatment (i.e., interactional justice). This is the first empirical research to indicate that mothers' intentions to leave depend on fulfillment of their psychological contracts related to family and fair treatment from their supervisor.     

Promoting Effective Psychological Contracts Through Leadership: The Missing Link Between HR Strategy and Performance

This article offers line managers and HR professionals an actionable, research‐based framework for developing psychological contracts with employees that suit their organizational and human resource (HR) strategy. Leadership styles supporting the firm's HR strategy are key to making psychological contracts that benefit both the firm and its members. When managers' styles are out of sync with HR strategy, this mismatch can lead to poorer performance through ineffective and unfulfilled psychological contracts with workers.     

Understanding expatriate manager performance: Effects of governance environments on work relationships in relation-based economies

Evidence shows that the majority of Western expatriate managers fail in their job assignments in developing countries. To go beyond attributions of expatriate failure to “cultural differences” this article responds to calls for a theoretical basis for understanding expatriate performance by using a recently developed framework of rule-based and relation-based governance environments to examine how the macro-environment of a country's governance system affects the creation of effective working relationships between executive level expatriate managers and Host Country Nationals (HCNs) on the executive's management team. Based on cross-cultural psychological contract research [Rousseau, D.M., Schalk, R. (2000). Psychological contracts in employment: Cross-national perspectives. Thousand Oaks, CA: Sage.] and the premise that expatriate performance is largely a function of the ability to manage discrepancies between the rule-based expectations of the Western MNC culture and the relation-based expectations of local employees, we develop research propositions to promote future HR research designed to examine the effect of the governance environment on the working relationships between American managers and Chinese HCNs. Implications for future HR efforts to improve the performance of expatriate managers in relation-based societies are also discussed.     

Organisationales Commitment und seine Einflussfaktoren: Eine qualitative Metaanalyse

It is a result from increasing individualism and the ongoing deregulation of formal and psychological work contracts that organizational commitment has become one of the key concepts in management research and practice. There is growing empirical research not only on the effects of commitment on organizational performance, but also on its personal, organizational and contextual antecedents. In this literature review the state of the art in commitment-related research is presented and discussed. We refer to the grounding work of Meyer and Allen (1991) and their distinction between affective, normative, and continuance commitment. The paper is based on three meta-analyses and an additional systematic review of 61 empirical studies. They provide evidence for the fact that there is a shift from demographic to differential personality factors in research. Affective commitment and normative commitment can be explained by individual differences (e.g., self-efficacy and trustfulness), work environment (e.g., transformational leadership and controllability), and organisational characteristics (e.g., supporting human resources policy and interpersonal, distributive, and procedural justice). Continuance commitment has been found negatively correlated with affective and normative commitment. Significant antecedents are the same work-related factors as for the two other forms of commitment, but the coefficients are inverse. Contrary to former results, national culture has no effect neither on the link between other antecedents and commitment, nor on commitment itself.     

Challenges to the psychological contract in Hong Kong

This study investigates empirically the psychological contract of a sample of 205 Hong Kong junior and senior managers. It determines the perceptions of factors that employers and employees see as relevant to the employment relationship, and then analyses perceptions of and attitudes towards recent changes in the Hong Kong business environment. In addition to exploring the nature and content of manager's psychological contracts in Hong Kong, the study explores how contracts are related to and affected by both the external environment and internal management practices. A survey questionnaire is used to measure the promises and commitments perceived to have been made by organizations, and the obligations that employees perceive they owe to their employer. In addition, the actual policies and practices of the employing organizations are determined. The impact of the HRM climate of the employing organizations (actual policies and practices) and the attitudes, expectations and feelings of organizational members about ongoing changes in the business and management environment on this exchange relationship are isolated. The study makes two contributions to the psychological contract literature: it examines the relevance of a psychological contract approach in a nonWestern geographical region; and it moves the concept of HRM preferences more centrally into the psychological contracting literature. This enables a better understanding of the construct in relation to the comparative management literature. The content of the psychological contract is shown to be multi-dimensional. Perceptions of organizational commitments and promises focus around four judgements: an intrinsically satisfying and challenging environment; a secure and rewarding job; equity; and supportive leadership. By Western standards the employee side of the employment relationship 'deal' is more one-sided. The proportion of managers who believe employees are strongly obligated to do certain things for their employers is very high. The study examines the factors that predict employees' psychological contracts. Actual HRM practices are shown to predict perceived commitments and obligations, and the strength of obligation is related to perceived promises and commitments. In contrast to the emphasis on the internal cognitive and individualized conception of the psychological contract in much of the literature, this study indicates that this decontextualizes psychological contracts. The true nature of a psychological contract is shown to be an exchange relationship firmly linked to a culture's reciprocity norms.     

Exercise as a Means of Reducing Perceptions of Work‐Family Conflict: A Test of the Roles of Self‐Efficacy and Psychological Strain

Prior research suggests that exercise has positive benefits for individuals and the organizations they work for. Using the literature related to social cognitive theory and exercise, the present study hypothesizes and tests the effects of exercise on two directions of work‐family conflict: work interference with family (WIF) and family interference with work (FIW). Using a sample of 476 working adults, we found that exercise was both positively related to self‐efficacy for managing work‐family conflict and negatively related to reported psychological strain, which in turn were related to reductions in work‐family conflict. Model fit for the data support our contention that exercise indirectly influences work‐family conflict via its direct impact on increased self‐efficacy and reduced psychological strain. © 2014 Wiley Periodicals, Inc.     

Projective testing: Historical foundations and uses for human resources management

The use of projective psychological measures has intrigued scientists and the general public for nearly a century. In the following, we provide the historical and conceptual foundations for a variety of projective measures and review empirical research using them in application to areas relevant to human resource management (HRM). From these reviews, we argue that the slowing of projectives research in HRM applications over the past two decades does not appear to be warranted given these findings. Based on this historical account, we note two major barriers to the use of these measures in HRM. The first is the lack of an HRM-centric literature on projectives, as most research has drawn on theories and measures designed in the context of abnormal attributes. Secondly, subgroups of researchers have historically become mired in what we call philosophical deadlock, wherein the evidence provided by one group does not address the concerns of another and vice versa. We humbly provide some suggestions and hint at future directions for projective measurement in HRM.     

The relationship of leader psychological capital and follower psychological capital,job engagement and job performance: a multilevel mediating perspective

Building on the body of positive organizational behavior research, this study examines the relationships between leader psychological capital, follower psychological capital, job engagement and job performance (task performance and contextual performance). Data were collected in three phases from multiple sources involving 60 leaders and 319 followers from a large telecom company in Taiwan. Hierarchical linear modeling results revealed that leaders' psychological capital was positively related to their job engagement through the mediation of followers' psychological capital. Furthermore, the results indicated that job engagement mediates the relationship between followers' psychological capital and their job performance (task performance and contextual performance). We discuss the implications and limitations of these findings and directions for future research.     

Contract enforcement in the early transition of an unstable economy

How were contracts among firms enforced in the early phase of a transition economy when firms lacked experience with commercial contracts or legal procedures? What were their views of their new business environment? We interviewed a sample of Bulgarian firms, including private, state-owned and cooperative firms in 1994. Consistent with Williamson's [Williamson, O., 1994. Institutions of economic development and reform. In: Bruno, M., Pleskovic, B. (Eds.), Proceedings of the World Bank Annual Bank Conference on Development Economics, World Bank, Washington, DC, pp. 171–197] theories, complex contracts were quite limited, sometimes implying the breakdown of important markets, but we also found that even spot-market contracts had severe problems of bilateral dependency. Having been “burned” in previous transactions, firms were very cautious in dealing with new potential trading partners and tried to work closely with trustworthy counterparts. These results are consistent with Klein et al. [Klein, B., Crawford, R., Alchian, A., 1978. Vertical integration, appropriable rents, and the competitive contracting process. J. Law Econ. 21, 297–326] theory.     

An analysis of employment relationships in Asia using psychological contract theory: A review and research agenda

Psychological contract theory is increasingly gaining traction as a means of examining the linkages (black box) between Human Resource Management (HRM) and performance. This paper systematically reviews the existing psychological contract research conducted in Asia over the period from 1998-2019. It takes an important step towards building an understanding of psychological contract theory in Asia while also making a critical contribution to the broad domains of HRM and employment relationship. In our review of 96 articles, we consider the two dominant themes that capture the psychological contract evaluation and content in Asia and highlight the theoretical, methodological and contextual gaps in the literature. We also offer specific guidance in the form of potential future research directions and conclude by discussing theoretical and practical implications of the analysis.     

Normative commitment in the workplace: A theoretical analysis and re-conceptualization

Among the components of the Meyer and Allen's [Meyer, J. P., & Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1, 64?89] three-component model of organizational commitment, normative commitment (NC) has received the least attention. It is sometimes dismissed as a redundant construct that bears many similarities to affective commitment and does not explain work behaviors beyond other components. In this review, we seek to re-establish the theoretical and practical significance of NC. We argue that NC has a dual nature and that it manifests itself differently depending on the strength of other components in an employee's commitment profile. NC can be experienced either as a moral duty or a sense of indebtedness, each having different implications for work behavior. Drawing on theories of perceived organizational support, motivation, psychological contracts, leadership, and culture, the paper justifies the distinction between two “faces” of NC, delineates organizational factors that could promote a more positive interpretation of NC, and proposes an agenda for future research.     

平台企业网约工心理契约的潜在类别与群体差异

为探讨平台企业与网约工之间的关系属性,基于心理契约理论及相关研究,开发了互联网平台企业网约工心理契约的结构化问卷。以网约车司机和网约配送员为调研对象,在15个城市获取367个样本数据,采用潜在类别分析技术(LCA)对平台企业网约工心理契约的潜在类型进行细分,分析平台企业网约工的心理契约差异。结果发现,网约工心理契约分为3种类型:低期望型、高期望型和随机期望型。3种心理契约类型在文化程度、工作类型、工作平台和工作感受4个指标上存在统计学上的显著差异。研究建议:平台企业要关注网约工的心理诉求,根据网约工的心理契约类型采取多元化雇佣模式;网约工要认识到网约工作的风险,做好经济契约和心理契约管理;政府部门要督促平台企业履行雇主责任与社会责任,保障网约工的基本劳动权益。     

Test validation from a conceptual and legal perspective: Issues and trends

A little-explored issue in the psychological and legal literature involves test validation. This article discusses issues of test validation from both psychological and legal perspectives. Areas of inconsistency are noted and probable future directions are high-lighted.     

The impact of disability-assistance animals on the psychological health of workplaces: A systematic review

This study presents a systematic review of the impact of disability-assistance animals in the workplace. While the importance of establishing workplace diversity initiatives is widely established, there is little thought as to how organizations can support it beyond legal compliance with anti-discrimination laws. This paper adopts an innovative approach to analysing diversity, combining business, psychology and law literature to identify the positive and negative implications of disability assistance animals in the workplace. The literature review reveals three benefits to having assistance animals in the workplace: it positively affects disability support; it improves the productivity and psychological health of employees; and it increases workplace attractiveness. However, because these positive effects may be moderated by individual preferences, we acknowledge potential negative effects, such as allergies, phobias and disruptions when animals are introduced to a workplace. We conclude by presenting a framework to guide future research, and analysing the practical and theoretical implications of assistance animals in the workplace.