Employment Contracts, the Psychological Contract and Employee Outcomes: an Analysis and Review of the Evidence

There has been growing interest in the impact of flexible employment contracts on workers affected by them. In the light of assumptions that such workers are significantly disadvantaged, European-wide legislation has been introduced to ensure that they are treated similarly to permanent employees. The evidence on the impact of flexible employment contracts on employees’ attitudes and behaviour is reviewed within the framework of the psychological contract. The body of research is limited but is sufficient to challenge the assumption that workers on flexible contracts are invariably disadvantaged. Those on contract of choice, in particular knowledge workers who may be pursuing boundaryless careers are especially likely to report positive outcomes. The evidence also indicates that a framework that incorporates the psychological contract provides additional value in explaining variations in outcomes. * This review was initially prepared as a background paper for a project on “Employment Contracts, the Psychological Contract and Employee Well-Being” funded by SALTSA, the Swedish Trade Union organization. I would like to acknowledge the significant input of other colleagues who formed part of the SALTSA project, namely Kerstin Isaksson (Sweden), Rita Claus and Hans De Witte (Belgium), Moshe Krausz (Israel) Gisela Mohr (Germany), Jose Maria Peiro (Spain), Rene Schalk (The Netherlands). I would also like to thank Michael Clinton of King’s College, London, for his helpful input. There is a wider literature on the subject in the native language literature of each of these countries which is not included in this review. The same group are now collaborating on a project funded by the European Union with the same title. † DAVID GUEST, The Management Centre, School of Social Science & Public Policy, King's College, University of London, Franklin-Wilkins Building, 150 Stamford Street, London SE1 9NN, United Kingdom. Tel/Fax: +44-(0)20-7848 4252, Email: [email protected]