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The psychological contract is an unwritten agreement defined as “the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other". Denise Rousseau, a university professor of Organizational Behavior, talks about the individual's schema of the employment relationship developed early in life through family, school, peer group… and on which the psychological contract is grounded. Therefore, the socialization period is important in terms of organizational influences in shaping an individual's psychological contract. In addition to the individual dispositions, organizational influences include human contract makers such as recruiters and managers and structural contract makers which are the HR management practices. Concerning the psychological contract items, they are categorized in terms of two underlying dimensions: transactional contracts that contain tangible exchanges and relational contracts that contain tangible and intangible exchanges. According to Rousseau, relational employer obligations are associated to the relational employee obligations, and the transactional employer obligations are associated to the transactional employee obligations. Thus, it is all a matter of defining the potential resources to be exchanged and the nature of those resources. When the organization fails to fulfill its obligations, employees experience contract breach that leads to a contract violation including feelings of betrayal and disappointment that increase intentions to leave the organization. Phi Management Group recommends reading Denise M. Rousseau's book titled “Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements" to expand awareness about this important matter.
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