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The Psychological Contract; a big deal?
Cyril van de Ven.
Behavioural Sciences Service Centre
Ministry of Defence
The Hague, The Netherlands
cphw.vd.ven@mindef.nl

INTRODUCTION
Recruiting and retaining sufficient qualified personnel has become increasingly
challenging for many NATO countries. In trying to counter this issue an HFM task group was
formed. The main objective of the TG isto foster a true understanding of the mechanisms that
influence recruitment and retention outcomes. In order to achieve this goal, a generic military
model will be developed. This model will be based on empirical evidence acquired within the
framework of resources available to the TG.
Concerning the psychological contract there appeared little to no empirical military
data available. Aliterature research is conducted to get a better understanding of the role of
the psychological contract in recruitment and retention. The following is a summary of the
main findings of this review.
BRIEF HISTORY
The concept of a ‘psychological contract’ was introduced in 1960 by Argyris. Over the
next five years the new concept got much attention from various researches. It received littleattention thereafter until the 1990’s. The economic downturn led to the restructuring,
downsizing, mergers and takeovers in many organisations. That was accompanied by changes
in how personnel felt and acted towards their employers. The psychological contract helped
explain those changes and, therefore regained attention (Van den Brande, 1999).
In the early definitions of the concept, besidesexpectations from the indivudual the
expectations of the organisation were incorparated as well. In 1989 Rousseau stated that these
expectations are difficult to comprehend as a whole. They can be seen more like a multiple
collective of diverse and differing expectations held by a set of actors (Anderson & Schalk,
1998). Therefore Rousseau (1989) presented a narrower definition with the perspectiveof the
individual as the central element.
Psychological contracts are defined as the beliefs individuals hold regarding the terms and
conditions of the exchange agreement between themselves and their organisations.
This takes the employees’ ideas about what they expect from the organisation and
what they feel they owe to the organisation into account. In addition to the individual aspect,Rousseau also emphasises the obligatory nature of the psychological contract.
FUNCTION
The function of the psychological contract is reduction of insecurity. Inasmuch as all
possible aspects of the employment relationship cannot be addressed in a formal, written
contract, the psychological contract fills the gaps in the relationship. Furthermore, the
psychological contract shapes behaviour.Employees weigh their obligations towards the

organisation against the obligations of the organisation towards them and adjusts their
behaviour on the basis of critical outcomes. Finally, the psychological contract gives
employees a feeling of influence on what happens to them in the organisation (McFarlane
Shore and Tetrick, 1994, summarised in Anderson and Schalk, 1998).
BASIS
Becausepsychological contracts involve employee beliefs about the reciprocal
obligations between themselves and their employers, they can be viewed as the foundation of
employment relationships (Rousseau, 1995; Shore & Tetrick, 1994). But how do these beliefs
originate? Turnley and Feldman (1999) state that individuals generally form the expectations
from two sources: their interactions withorganisational representatives and their perceptions
of the organisation’s culture. During “anticipatory socialisation,” organisational agents
(recruiters, human resource managers) make specific promises to employees about what they
can expect from the organisation (Feldman, 1976; Van Maanen, 1976). Second, employees’
perceptions of their organisation’s culture and standard operating procedures also...