Breach of psychological contract: impact on workforce motivation and organizational sustainability

What is it about?

Psychological contract is different from traditional employment contract. It contains un-written terms and conditions of employment. Psychological contract are categorized into two types namely 1) transactional contract and 2) relational contract. The former focuses on short term gains and inclined more towards material benefits. The latter focuses on long term relationships with employer/organization based upon mutual respect and benefits. A breach of this contract can have a negative impact on workforce motivation and organizational performance. It may lead to closure of an organization.

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