Psychological contracting: is it still a valid concept?

In dynamic change environments the concept of the psychological contracts is tested as organisations pursue more transactional relationships with their employees and as employees are encouraged to pursue protean careers. With such increased emphasis on self-serving personal and organisational strategies, one may question whether a ‘psychological contract’ continues to serve a useful purpose in establishing effective relationships between organisations and their employees. This paper reviews the literature in respect to the function of the psychological contract and the changes taking place within the content of such contracts. It is argued that the investigation and maintenance of such contracts still makes an important contribution to organisational relationships. . This paper is based on part of the literature review undertaken for my PhD topic “Restructuring and the Psychological Contract in the Australian Banking Industry”