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Chapter 1 The Psychological Contract and Commitment

Chapter 1 The Psychological Contract and Commitment. Objectives. Define the psychological contract and discuss the obligations of the contract currently in place Explain the importance of the psychological contract and what happens when it is violated

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Chapter 1 The Psychological Contract and Commitment

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  1. Chapter 1 The Psychological Contract and Commitment

  2. Objectives • Define the psychological contract and discuss the obligations of the contract currently in place • Explain the importance of the psychological contract and what happens when it is violated • Explain the benefits of committed employees and what employers can do to foster commitment 1 -1 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  3. …Objectives • Describe external influences that affect workplace expectations • Explain the self-fulfilling prophecy and how managers can apply this concept • Explain the pinch model • Make a psychological contract with your professor 1 -2 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  4. Mental Maps - Defined Our images, assumptions, and stories about every aspect of the world, which determine what we see and how we act. 1 -3 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  5. Psychological Contract - Defined An individual’s beliefs, shaped by the organization, regarding the terms and conditions of a reciprocal exchange agreement between individuals and their organization 1 -4 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  6. Social Exchange Theory - Defined • People enter into relationships in which not only economic, but also social obligations play a role • People are most comfortable when the exchange is balanced Psychological Contract 1 -5 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  7. Importance of Psychological Contracts • Link individuals to organizations • Reflect the trust that is a fundamental feature of the employment relationship • Motivate individuals to fulfill their obligations (if they believe the other party will do the same) 1 -6 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  8. Psychological Contracts Dynamic relationship defining employees’ psychological involvement with employer Reflects perceptions of expectations Interpretations may not be similar Employee Contracts Formal contract that specifies agreements such as hours and type of work in return for compensation and benefits Psychological Vs. Employee Contract 1 -7 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  9. Inadvertent Disruption Breach of contract Able and willing (divergent interpretations made in good faith) Willing but unable (inability to fulfill contract) Able but unwilling (reneging) Sources of Experienced Violation 1 -8 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  10. Consequences of Broken Contracts • Outrage, shock, resentment, anger • Decreased trust and good faith • Decreased job satisfaction • Decreased productivity • Decreased attendance • Turnover Causes 1 -9 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  11. Realistic Job Previews - Defined RJPs are a recruitment technique that give accurate information about job duties, and especially about the major sources of job satisfaction and dissatisfaction prior to organizational entry 1 -10 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  12. Employee Commitment - Defined • Emotional attachment to, involvement in, and identification with organization • Strong belief in and acceptance of organization’s goals and values • Willingness to exert considerable effort on behalf of organization • Strong desire to remain in organization 1 -11 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  13. Advantages of Committed Employees • Higher performance • Higher job satisfaction • Adapt better to unforeseen circumstances • Better attendance records • Stay with the company longer • More organizational citizenship behavior 1 -12 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  14. Organizational Citizenship - Defined OCB refers to discretionary contributions that are organizationally related, but are neither explicitly required nor contractually rewarded by the organization, yet contribute to its effective functioning 1 -13 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  15. Workplace Incivility - Defined Low intensity deviant behavior that violates workplace norms for mutual respect; it may or may not be intended to harm the target • Work effort • Productivity • Motivation • Creativity • Helping behaviors • OCB Causes decreased 1 -14 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  16. Technological change Rate of change in the business environment Global economy Changing economic conditions Uncertainty for workers Demands for performance, flexibility and innovation Reengineering Downsizing Mergers & acquisitions Business-Related Changes Impacting Psychological Contracts 1 -15 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  17. Job-Related Changes Impacting Psychological Contracts • Outsourcing, off-shoring, subcontracting of work • Contingent and temporary employment for peripheral employees • Fewer full-time jobs and core employees • Relatively low union representation • Less job security 1 -16 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  18. External Factors that Impact Psychological Contracts • Demographics • Swings in employment • Nomadic nature of the workforce • Changing complexion of the workforce • Changing value trends 1 -17 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  19. Projected Year 2012 Workforce 47% Women 65% White non-Hispanics 15% Hispanics 12% African Americans 6% Asians 1 -18 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  20. A Nomadic Work Force • 13 different jobs in the career of the average high school or college graduate • 10.2 different jobs from ages 18-38 • Only a third (31%) of workers 25 and up have worked 10 years with the same employer 1 -19 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  21. Value Changes Affecting the Workplace • Shifting breadwinner and parenting roles What else? 1 -20 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  22. Generations at Work • Baby Boomers (1946-1964) - self-fulfillment at work; fought against hierarchical authority; demand a voice in work decisions; work is central to lives; significant loyalty to corporate employers • Gen X (1965-1976) - Work less central and family; nonwork activities more important; identity less tied to work; less expectations of organizations and career stability • Gen Y (1976-2001) – prefer fun environment and teamwork; flexible work hours; looking for work with significance; idealistic 1 -21 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  23. Cultural Differences in Psychological Contracts • Promises • Intention can equal follow through • Uncertainty/fate can reduce binding aspect • Zone of negotiability • Variation in type of employee conditions open for negotiation • Group identity • How “we” and “they” are defined influences trust/promise making 1 -22 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  24. People perform in accordance with a rater’s expectations of them Self-Fulfilling Prophecy - Defined 1 -23 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  25. The Pinch Model 1 -24 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  26. What’s Your Decision? Which decision have you made about your workplace? About this course? • Join • Participate How do you get employees to participate? 1 -25 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  27. Responses to Violation 1 -26 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

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