Characteristics of the psychological contract
According to Rousseau (1989, p. 123), the psychological contract represents one’s belief that a promise has been made and the consideration offered in exchange for it binds the parties “to some sort of reciprocal obligations”. This suggests the psychological contract involves perceived explicit and implicit promises by an employer. George (2010) argues that psychological contract is characterized by a subjective perception that differs between people. This means it is not only individual but also unique. The model of contract violation proposed by Morrison and Robinson (1997) proposes multiple conditions that may cause people to perceive that psychological contract has been breached. The model identifies reneging, which relates to when agents of an organization recognize an obligation to act in a given way but fail to meet the obligation. A particular strength of the model is that it shows a key characteristic of the psychological contract from a workers’ perspective in that many employees perceive their employer has reneged and failed to live up to previous promises. In connection, the theory of social exchange (Thibaut and Kelley, 1959) offers the foundation for characteristics of psychological contract by proposing a cognitive model in which exchanges reciprocally impact the employee-employer relationship.