Final answer:
The psychological contract refers to the perceived obligations that employees believe their employers owe them. It is a subjective belief system that defines the mutual expectations between the employee and the employer.
Step-by-step explanation:
When you accept a job, you'll be asked to review and sign an employment contract. This is a legal agreement between you and your employer that outlines the terms and conditions of your employment. It includes information such as salary, job responsibilities, benefits, and termination. The psychological contract refers to the perceived obligations that employees believe their employers owe them. It is a subjective belief system that defines the mutual expectations between the employee and the employer.
The psychological contract is not about how employees should be paid, but rather about the expectations that employees have regarding job security, career development, work-life balance, and the treatment they receive from their employer. It is based on the exchange relationship between the employee and the employer, where the employee provides their skills and efforts, and in return, the employer provides certain rewards and benefits.
For example, an employee might expect fair treatment, opportunities for advancement, and a supportive work environment from their employer. If these expectations are met, the employee is likely to have a positive psychological contract and higher job satisfaction. On the other hand, if the employer fails to fulfill these obligations, the employee may feel betrayed and disengaged, leading to lower job satisfaction and productivity.