Psychological Contract Fulfillment Social Exchange Theory: Understanding the Relationship Between Employee Expectations and Organizational Performance
In today`s work environment, employees are looking for more than just a job that pays the bills. They want to feel valued, respected, and fulfilled. To achieve this, organizations need to understand the psychological contract between employees and themselves. In this article, we will explore the psychological contract fulfillment social exchange theory and how it applies to the workplace.
What is the Psychological Contract?
The psychological contract is an unwritten set of expectations and obligations that exist between an employee and their employer. These expectations are not explicitly stated but are implied and understood by both parties. The psychological contract includes factors such as job security, career advancement opportunities, fair compensation, and work-life balance.
When the employer fails to meet these implicit expectations, it can lead to employee dissatisfaction, reduced productivity, and high turnover rates. To prevent this, organizations need to understand the social exchange theory.
Social Exchange Theory
Social exchange theory is a sociological concept that describes the relationship between two parties who engage in a transaction. This theory suggests that individuals will only engage in a transaction if they feel that it is beneficial to them. When one party feels that they are not getting enough from the transaction, they may become dissatisfied, which can damage the relationship.
In the workplace, this theory applies to the psychological contract between employees and employers. If employees feel that they are not receiving enough benefits from the relationship, they may be more likely to leave for a better offer elsewhere. On the other hand, if the employer provides employees with the benefits they desire, such as career growth opportunities and a supportive work environment, employees are more likely to stay with the company long-term.
Psychological Contract Fulfillment
Psychological contract fulfillment involves the satisfaction of the implicit expectations between employees and employers. When the organization meets the expectations of the employee, they will feel more committed to their work and the organization. This, in turn, can lead to increased productivity, reduced turnover rates, and improved organizational performance.
To achieve psychological contract fulfillment, organizations can take a few steps. First, it is essential to communicate effectively with employees and be transparent about what is expected of them. Second, organizations should provide employees with the tools and resources needed to perform their job effectively. And finally, organizations should recognize and reward employees for their achievements to promote job satisfaction.
Conclusion
In conclusion, the psychological contract is the unwritten set of expectations and obligations that exist between an employee and their employer. Social exchange theory suggests that employees will only engage in a transaction if they feel that it is beneficial to them. When the employer meets the expectations of the employee, it leads to psychological contract fulfillment, which can benefit the organization in the long run. Therefore, it is essential for organizations to understand the social exchange theory and the psychological contract to achieve organizational success.