Psychological Contract - History

History

As commercial organizations grew in size and complexity, there was a tendency to standardize rather than individualize the treatment of labor. Trade unions emerged to offer protection to ever larger groups of employees. The result was collective bargaining to define pay and conditions by reference to grades across industries and trades, and in public service. More recently, unions have lost some of their significance, leaving employees in more direct control. But societies have developed expectations of a better work-life balance, reinforced by legislation, and employers have found it in their own best interests to develop practices that respect equal opportunities and employment rights through professionalized human resource services because:

• the workforce has become more feminized;
• the workforce is better educated, less deferential to authority and less likely to remain loyal;
• the workforce is required to be more flexible to meet new challenges quickly and effectively, but this need to change can be a source of insecurity;
• the use of temporary workers as well as outsourcing of projects and whole business functions also changes workers' expectations as to what they want to get out of their psychological contracts (e.g., transferable skills now vs. life-time employment before); and
• automation has both empowered a greater percentage of the workforce and allowed the emergence of teleworking which fragments the old social orders of a single location workplace and generates greater freedom and flexibility in an ever increasing global workforce.