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Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. - book reviews
Administrative Science Quarterly, March, 1998 by Jone L. Pearce
Many hundreds of scholarly books are published in the fields that compose organizational science every year, yet only a handful make it onto our bookshelves, and only a miniscule proportion of these show up on required reading lists for our doctoral students. What is it that makes those few books more valuable? Rarely is it that they provide a "new idea," certainly it is not that they put familiar concepts in boxes linked by arrows, nor do they get there by concluding that people should be more thoughtful in their organizational dealings. More often, books become valuable because they provide us with clarity at a key moment in a scholarly debate. Even better is a book that can make us proud of our intellectual corner by lucidly explaining matters. Rousseau's book does this and, therefore, has as fair a chance as I have seen to become a required-reading classic. It is not just me that thinks so: this book received the 1996 George R. Terry Book Award from the Academy of Management.
In this book, Rousseau analyzes and elaborates on the psychological contract - a popular metaphor used to describe an employee's relationship with his or her organization. Like all good metaphors, this one has provided insights into how employees' informal expectations are established and has helped direct attention to important organizational issues. Nevertheless, it is imperfect. After all, one "side" to the agreement is a fictional person (the organization), and so it has been unclear who (among the many) could commit it to deals with employees, or even whether "it" recognizes that it has made certain deals with employees. Rousseau did not dodge the difficult questions in the use of this metaphor but, rather, confronted and explored them, providing a richer and more useful conceptualization of the psychological contracts concept than we have had to date.
The introduction begins by addressing the paradoxes and challenges associated with the idea of psychological contracts. Rousseau addresses dilemmas like the following: contracts are voluntary commitments to limit one's future actions, and psychological contracts are necessarily open-ended and need to be flexible enough to accommodate change without breaking. She follows this, in chapter 1, with theory building by drawing on work in social psychology to explain the distinctions between the vantage points of the parties to the contract and the outside observers and among normative, implied, and social contracts. She uses specifics not only to illustrate her points but to elaborate on the complexity of her undertaking. For example, in the first chapter, she discusses the problem of the blurring of implied contracts with more general cultural beliefs and refers to a telephone survey in which the majority of respondents replied "no" when asked if organizations had the right to terminate employees without cause, despite the fact their local law supported "employment at-will" (giving that right to employers). She shows by example that employers and potential employees can enter into employment relationships with dramatically opposing views of one another's rights. Illustrations like this throughout the book not only serve to ground the arguments, they also provide a useful subtext on the ambiguity and disappointment involved in employees' psychological contracts.
The first three chapters provide an unprecedented intellectual foundation for understanding the metaphor of psychological contracts. In the second chapter, she discusses why people would bind themselves by agreements to future constraints ("Contract Making"), and in the third ("The Contract Makers"), she grapples with how the different reports, statements, and actions of organizational representatives contribute to employees' perceptions of the psychological contract. These three chapters are the intelligent discussions of employment relationships as contracts that we (and our students) need. What the author has done is all too rare: used the book-length format to thoroughly analyze and discuss complex intellectual issues.
Although the book is intended for a scholarly audience, it also uses the contract metaphor to address several current practical problems. Chapters 5 ("Violating the Contract") and 6 ("Changing the Contract") provide advice on problems human resource managers face - how an increase in performance pressures on employees in formerly sleepy organizations can be seen as a contract violation for longer-tenured employees, and what organizations can do to rewrite contracts to minimize opposition and resentment among employees. This is not to say that the book has no limitations, but those there are primarily stem from the limitations of the contract metaphor. To develop a coherent account of psychological contracts, Rousseau decided to focus on psychological contracts as understood by a given employee. By placing the deal so thoroughly in the employee's mind, she has tended to treat any differences in perceptions between the organization's representatives and the employee as faults of the organization - either the organization's representatives changed the deal to take advantage of their greater power in the relationship, or they haven't communicated their own expectations clearly enough. Yet, clearly, employees have their own preferences, and these are not always benign for others in the workplace. While employers' making unilateral changes in the terms of long-tenured employees' contracts in a way that is disadvantageous to them is a visible social problem, that doesn't mean that the organization is at fault anytime an employee doesn't get what he or she wants.
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