Psychological Contract And Social Exchange Theory

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Psychological Contract Research on the psychological contract originates from March and Simon’s (1958) social exchange theory (SET), that is best known through the work of Blau (1964). SET and its reciprocal inducement are important principles in explaining both the psychological contract and the OCB concepts (Lub et al., 2011; Robinson & Morrison, 1995; Rousseau, 1993). SET posits that there is an exchange between individuals and the organization on two levels: the social and the economic exchange. On the economic level, tangible and financial aspects are usually clearly stated, while the intangible socio-emotional aspects of the social level are less clearly agreed upon. General expectations of a future return on the social level cannot be bargained or judged upon from either the employee’s or the employer’s side (Blau, 1964). Therefore, reciprocity (Gouldner, 1960) is the norm that individuals indulge to react positively to favorable treatment by the organization, or vice versa (Blau, 1964; Gouldner, 1960). According to Rousseau (1995, p. 9), a psychological contract is defined as “individual beliefs, shaped by the organization, regarding terms of an exchange agreement between individuals and their organization”. It describes the mutual obligations between an employee and its organization (Rousseau, 1995). These mutual and independent obligations refer to the promises an individual employee has made to their organization, and what they believe the organization has
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