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It is inevitable that in the economic world, change is synonymous with acquisition. Acquisitions are events that destabilize the psychology of many employees and as a result can lead to decreased productivity (Turnley & Feldman, 1998). If the acquisitions fail, then the result is very evident as shown by the negative and defensive emotions of employees. As a result, many workers are engulfed by feelings of sadness, loss, anger, powerlessness, and at times depression.

Argyris (1960) coined the concept of psychological contract. This term refers to an employees' belief on the terms and conditions that prevail in a reciprocated exchange covenant with the employer. In cases like takeovers, it is common for many employees to feel that their employer has violated the psychological contract. This always leads to a less job satisfaction and the motivation and performance of an employee stops to be based on promised inducements. It is important to note that since the fundamentals of psychological contracts are trust, any violation of that automatically leads to decreased levels of commitment and less organizational behavior.


Leadership plays a key role in restoration of the trustworthiness of an employee. Employee perceptions can be avoided if the managers can recognize uncertainties, anxieties and other negative emotions. The trustworthiness of the employees should first be evaluated before embarking on any means or restoring that trust. This evaluation will give the organization a starting point and the real status of issues.

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In cases of violation of this contract, for instance during a takeover, the organization is supposed to take immediate action. Communication plays a great function in reducing uncertainty and leads to increased trustworthiness (Turnley & Feldman, 1998). The acquiring firm should give the employers information that will make their uncertainty levels tolerable. Frequent communications shows an organizations dedication to the concern of the employees and the need to re-establish trustworthiness.

Before and after a takeover, the employee's perceptions about the management and its trustworthiness are enhanced by active communication. Honest communication shapes employee perceptions on the integrity of the management. Lack of or the presence of integrity can lead to presence or absence of trust. This will reduce tension and stress among employees.

During a takeover, there is the integration process, employee relations develop between new employees and the retained employees. Elevated levels of anxiety among the new relations can lead to the emergence of groups in the workplace. The management should use leadership skills to promote cohesion between the two groups and this will increase the senses of trustworthiness (Turnley & Feldman, 1998). Development of interpersonal relations will affect the perceptions that the employees have towards each other and their employer.

Since acquisitions are associated with change and on the same note, they are synonymous with uncertainty (Turnley & Feldman, 1998). Poor communication between the employers and the employees can lead to decreased levels of the employee's perception of the trustworthiness of the management. These levels of uncertainty can lead to decreased production and in the end, hurt business.

Organizations should instill the value of tolerance to change in their employees. For some workers, change equals uncertainty, loss, and this makes them to feel helpless and hopeless while for other persons, it is challenging and exciting. Employees who have high levels of tolerance would be maintained because they can be able to establish trustworthiness in the new management (Turnley & Feldman, 1998). The new management should also take time to integrate the acquired employees into their working system. All these factors are extremely in determining the establishment of the psychological contract. It is important to note that in the case of a takeover, tolerance to change and communication play a key role in building trustworthiness. Employee relations strengthen over time and they are the cornerstone of building trust in the new management. The outcome will be the renewed trust, which is the basis of establishing psychological contract.

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