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Psychological Contract Theory
When employees join organizations, an employment agreement is often made between the organization and the employee. The terms of this employment agreement include what the employee will do and what the employee will receive, and what the organization will do and what the organization will receive in return. When these employment agreements are written down, they are called legal contracts. However, when these exchange agreements are unwritten, they are called psychological contracts. Just as in legal contracts, in psychological contracts, employees expect to receive things from their organization in exchange for actions that they perform or contributions that they make to their company. Employees tend to form ...
