Psychological contracts in organizations: understanding written and unwritten agreements PDF
Preview Psychological contracts in organizations: understanding written and unwritten agreements
Psychological .Contracts Orgafuzations To Edward F. Rousseau, cable splicer, coach and poet Denise M. Rousseau Psychological .Contracts OrgGiuzations Understanding Written and Unwritten Agreements @SAGE Publications -#.. International Educational andProfessional Publisher Thousand Oaks London New Delhi Copyright © 1995by Sage Publications, Inc. All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher. For information address: • SAGE Publications, Inc. 2455 Teller Road Thousand Oaks, California 91320 SAGE Publications Ltd. 6 Bonhill Street London EC2A 4PU United Kingdom SAGE Publications India Pvt. Ltd. M·32 Market Greater Kailash I New Delhi 110 048 India Printed in the United States of America Library of Congress Cataloging-in-Publication Data Rousseau, Denise M. Psychological contracts in organizations: Understanding written and unwritten agreements I Denise M. Rousseau. p. em. Includes bibliographical references and index. ISBN 0-8039-7104-4 (alk. paper).-ISBN 0-8039-7105-2 (pbk. alk. paper) 1. Organizational behavior. 2. Contracts-Psychological aspects. 3. Commitment (Psychology) 4. Industrial relations. I. Title. HD58.7.R68 1995 I58.7-dc20 95-11730 This book is printed on acid-free paper. 95 96 97 98 99 10 9 8 7 6 5 4 3 2 Sage Production Editor: Gillian Dickens Ventura Designer: Danielle Dillahunt Contents Acknowledgments ix Introduction xi 1. Contracting: A Modern Dilemma 1 Why Contracts Aren't Well Understood 2 What We Know About Contracts and What We Need to Know 5 Basic Types of Contracts 6 Illustrating Several Types of Contracts: The Letter 14 The Features That Make a Promissory Contract 16 Promises 16 Limited Frames of Reference 18 Mutuality andAcceptance 20 Implications 21 2. Contract Making 23 Why Do People Keep Promises? 24 How Organizations Use Promise-Keeping Mechanisms: An Example From General Electric 26 The Contract as a "Mental Model" 27 A Theory of Psychological Contracting 34 External Factors 36 Messages 36 Social Cues 39 Encoding 40 Individual Predispositions 43 Decoding 44 Creating a Normative Contract 46 Creating an Implied Contract 52 Conclusion 54 3. Tbe Contract Makers 5S Who Made the Contract? 56 "The Deal That Wasn't" S6 Three Years Later: "The Deal That Came About" 58 Types of Contract Makers: Principals and Agents 60 People: PrimaryContract Makers 63 Structural Signals: Secondary Contract Makers 69 Personnel Handbooks and Manuals 72 Internal Career Ladders and Titles 73 Compensation Practices 75 Performance Reviews 76 Disconnection: When Human and Administrative Contract Makers Disagree 82 Employees as Contract Makers 83 The "Real" Contract 85 How to Make or Not Make a Contract: Illustration 86 Conclusions 88 4. Contemporary Contracts 90 Features of Contracts 91 A Brief History of Employment Relations and Contract Fortns 93 A 2 x 2 Model of Contemporary Contracts 97 PublicAccounting'sTransactionalContract 99 Inland Oil's Braof "No Guarantees" 99 LakesideCompany's Relational Contract 101 General Electric's Balanced Contract 102 Mapping Contemporary Contracts to Particular Types of Employment Relationships 103 Long-Term Insiders (Core Employees) 105 Short-Term Insiders (Careerists) 106 Long-Term Outsiders (Pooled Workers) 107 Short-Term Outsiders(Temporaries and Independent Contractors) 107 SomeFloatingEmployment Arrangements 109 MissingWorkersRevisited:TheCaseofPart-Timers 109 Implications 110 5. Violating the Contract 111 What Is Contract Violation? 112 How Contract Violation Occurs: A Model 115 Contract-Outcome Discrepancy 118 Changing the Meaning of a Loss: The Function of Remediation and Credible Explanation 120 Procedural Justice 128 When Is Violation Most Likely? 133 What Features Create Resistance to Violation? 133 When a Contract Is Violated 134 Typesof Responses 134 Violation Isn't the End of the Contract 139 Summary 140 6. Changing the Contract 141 Forms of Contract Change 142 Internal Change: Drift 142 PracticalImplications of Drift 151 External Change 152 Accommodation: Adjustments Within the Existing Contract 153 Conclusion 160 Transformation 160 Challenging the Contract: Creating Legitimacy and Felt Need for Change 163 Preparation for Reframing: Loss Reduction Strategies 167 Transition Structures 170 Contract Generation: Creating a New Schema 172 Contract Testing and Reliance: Promoting New Contract Acceptance 175 Successful Transformation 177 Conclusion 177 7. Business Strategy and Contracts 180 Conceptual Framework 181 Types of Organizational and Human Resource Strategies 183 Employment Contracts and Customer Relationships: Contracts in Parallel? 193 Conclusion 197 8. Trends in the New Social Contract 202 Shifts in Meaning 203 Traditional Social Contracts and Change 204 Contracts in Transition: The Threats to Contracting 211 Out of Transition: Trends to New Contracting 216 Changing the Rules: New Criteria for Fairness 218 Restoring Voluntariness: New Contract Making 221 Implications 223 References 225 Index 236 About the Author 242 Acknowledgments Many friends and colleagues provided thought-provoking feedback on various versions ofthis book: Jean Bartunek, Max Bazerman, Joe Baumann, Art Brief, Martin Greller, Richard Guzzo, Jean Hirsch, Paul Hirsch, Wayne Kriemelmeyer,DavidMessick,DonPrentiss,BenSchneider,Cathy Tinsley,and Kim Wade-Benzoni. Katie Schonk, who edited the manuscript, deserves par ticular recognition for her ability to tease out confounded concepts and errant constructions. Carole McCoy saw it through to final product. Thank you all very much. My family was especially supportive, despite living with this book for several years. My thanks to my husband, Paul, and daughters, Heather and Jessica.
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