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Psychological contract formation is a process whereby the employer and the employee or prospective employee develop and refine their mental maps of one another. According to the outline of phases of psychological contract formation, the contracting process begins before the employment itself and develops throughout the course of employment.
Perceived psychological contract violation (PPCV) is a construct that regards employees’ feelings of disappointment (ranging from minor frustration to betrayal) arising from their belief that their organization has broken its psychological contract of work-related promises, [1] and is generally thought to be the organization's contribution to a negative reciprocity dynamic, as employees tend ...
Employees often create a set of expectations about their workplace; people tend to make psychological contracts with their organizations. When his or her expectations are not met, the employee may "perceive a psychological contract breach by their employers". [2]
At the heart of realistic job previews are the employee exchange or psychological contract between employer and employee. [2] By being hired after use of the RJP, the employee enters the contract aware of what the organization will provide to them (pay, hours, schedule flexibility, culture, etc.) as well as what will be expected from them (late hours, stress, customer interaction, high urgency ...
Implied contract: In some situations a court might find an implied contract of employment that restricts the employer's ability to terminate an employee without cause. For example, the terms of an employee manual may support an employee's claim that the employer must follow a defined disciplinary process prior to termination.
When employees perceive that they are receiving fair treatment in comparison to their coworkers, they perceive more support. The equity theory says that employees feel entitled to what they are given as workers based on their inputs to the job. Therefore, fairness can be perceived even if the rewards differ in size, based on employee rank.