Transparency 18.

Psychological Contract Defined

Beliefs about the terms and conditions of a

reciprocal exchange agreement between that
person and another party.

Inherently perceptual – both parties may have

different interpretations of the psychological
contract

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 Transparency 18.2

Transactional v. Relational Contracts

Transactional Relational
Contracts Contracts

Focus Economic &

Economic
socioemotional

Time-frame Closed-ended Open-ended

and short-term and indefinite

Stability Static Dynamic

Scope Narrow Pervasive

Tangibility Well-defined More subjective

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 Transparency 18.3

Three Types of Trust

Highest level of trust

Identification
Based on mutual understanding

Medium level of trust

Knowledge
Based on predictability

Minimal level of trust

Calculus
Based on sanctions

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 Transparency 18.4

Job Security versus Employability

Job Security Employability

• Lifetime job security • Limited job security

• Job are permanent • Jobs are temporary

• Company manages • Career self-

career management

• Low emphasis on skill • High emphasis on skill

development development

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 Transparency 18.5

Contingent Work Defined

Any job in which the individual

does not have an explicit or implicit
contract for long-term employment,
or minimum hours of work can vary
nonsystematically.

R. Kruyt, Vancouver Sun

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 Transparency 18.6

Types of Contingent Workers

High
(Transition to
Temporary
permanent
Temporaries
workforce)
Desire for
Permanent
Employment
Free
Transients
Agents

Low Ability to Get High

Permanent Employment

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 Transparency 18.7

Reasons for Contingent Work

 Provides more flexibility

 Contracting needed skills is faster than retraining
 Potentially reduces costs
 Lower pay, fewer benefits, less union power
 Easier to contract services
 Information technology supports free agents

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 Transparency 18.8

Contingent Work Force Issues

 Job satisfaction
 Mixed evidence that free agents and temporary
temporaries are more or less satisfied

 Job performance
 Transactional psychological contract
 Lower skills and experience
 But may be higher for free agents

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 Transparency 18.9

Organizational Socialization Defined

The process by which individuals learn

the values, expected behaviors, and
social knowledge necessary to assume
their roles in the organization.

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 Transparency 18.10

Stages of Socialization

Pre-Employment Encounter Role

Stage Stage Management

• Outsider • Newcomer • Insider

• Gathering • Testing • Changing roles

information expectations and behavior

• Forming • Resolving
psychological conflicts
contract

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 Transparency 18.11

Pre-employment Socialization Conflicts

Individual Organization
Attracts Attracts
Organization Individual
i ctA
nfl
Co
Conflict C Conflict D
Co
nf
lic
t B
Individual Organization
Selects Selects
Organization Individual

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 Transparency 18.12

Benefits of Realistic Job Previews

 Less turnover, higher job performance

 Less reality shock
 Vaccination effect
 Applicants self-select themselves
 Builds loyalty

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 Transparency 18.13

Holland’s Occupational Choice Theory

 Career success depends on fit between the

person and work environment
 Holland identifies six “themes”
 Represent work environment and personality
traits/interests

 High Differentiation
 Person is aligned with one theme, not mixed across
two or more themes

 High consistency
 Person’s preferences relate to similar themes
(adjacent themes in Holland’s hexagon)

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 Transparency 18.14

Lateral Career Development

 Career success defined as challenging work,

not number of steps up the hierarchy

 Reasons for lateral careers

 Career ladder still clogged with baby boomers
 More consistent with team-based organizations
 More consistent with shift from job status to
competencies

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 Transparency 18.15

Boundaryless Careers

 Idea that careers operate across company

and industry boundaries, not just in one
organization
 Reasons for boundaryless careers
 Downsizing forced job changes
 Employability psychological contract
 Job hopping viewed more favorably

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 Transparency 18.16

Dealing with Boundaryless Careers

 Provide more career opportunities within the

organization
 Try to build more loyalty
 Recognize that some job hopping is
inevitable and desirable
 keep track of former employees
 welcome back boomerangers

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 Transparency 18.17

Careers: Rules for the Road Ahead

 Understand your
needs and values
 Understand your
competencies
R. Harbison, © Christian Science Monitor
 Set career goals
 Maintain networks
 Get a mentor

McShane/ Von Glinow 2/e Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.