psychological contract

Definition

The unwritten expectations and obligations between employer and employee beyond the formal employment agreement. The real deal that nobody discusses until it's violated.

Example Usage

The psychological contract was shattered when the company eliminated remote work after promising flexibility during recruiting.

Origin

Coined by organizational psychologist Denise Rousseau in the 1990s, building on earlier work from the 1960s

Fun Fact

Violations of the psychological contract are among the top predictors of employee turnover, even more than compensation dissatisfaction.

Source: Organizational psychology and employment relationship theory

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