Psychological Contract Analysis

When an individual decides to work for another individual or an organization in exchange for compensation for the service rendered, an employer-employee relationship is established. This relationship is accompanied or strengthened by mutual agreement between the two parties, such as a fair day’s work, benefits and perks. It is where psychological contract substantiate.As Guest (2004) stated, psychological contract is the perception of both parties, organization and individual that comprises of assumed promises and obligations entailed in the employer-employee relationship. It is bonded with what employees believed the organization expects from them and what they will get in return.Concerns to an exchange agreement between an individual and in organizations, the employing firms and its agents are constructs that was based according to a promised expressed or implied. Therefore, employees form perceptions of employer obligations and the extent to which their employer honors or fulfills its obligations, when they perceive that the organization does not fulfill its obligations, psychological contract breach takes place (Bal, De Lange, Jansen & Van Der Velde, 2013).Commitment

Much is known about the power of the norm of reciprocity to elicit behavior in social exchanges (Cialdini& Goldstein, 2004). On the contrary, Keysar, Converse, Wang and Epley (2008) demonstrate that social exchange is based largely on the meaning of social actions, rather than on the objective value of those actions. Negative actions of taking are reciprocated more selfishly while positive action of giving are reciprocated in similar measures. Thus, norms of reciprocity should embolden positive behavior but should strongly discourage negative behavior for there is an inherent asymmetry between reciprocity to giving versus