Non-Psychological Contract vs. Psychological Contract

Attribute	Non-Psychological Contract	Psychological Contract
Definition	Explicit, formal agreement between employer and employee	Implicit, unwritten expectations and obligations between employer and employee
Enforceability	Legally binding	Not legally binding
Flexibility	Less flexible	More flexible
Communication	More structured communication	Relies on trust and understanding
Termination	May require legal action to terminate	Can be terminated more easily

Definition

The Non-Psychological Contract refers to the formal, written agreement between an employer and an employee that outlines the terms and conditions of their working relationship. This contract typically includes details such as salary, benefits, working hours, and job responsibilities. On the other hand, the Psychological Contract is the unwritten, implicit expectations and obligations that exist between an employer and an employee. These expectations are based on mutual trust, respect, and understanding.

Flexibility

One key difference between the Non-Psychological Contract and the Psychological Contract is the level of flexibility. The Non-Psychological Contract is rigid and legally binding, with little room for negotiation or change once it is signed. In contrast, the Psychological Contract is more flexible and can evolve over time as the relationship between the employer and employee develops. This flexibility allows for a more dynamic and responsive working relationship.

Enforceability

Another important distinction between the two types of contracts is enforceability. The Non-Psychological Contract is enforceable by law, meaning that both parties are legally obligated to adhere to the terms and conditions outlined in the contract. If either party breaches the contract, they can be held liable in a court of law. On the other hand, the Psychological Contract is not legally enforceable, as it is based on mutual expectations and trust rather than formal agreements. This can make it more challenging to address breaches of the Psychological Contract.

Communication

Communication is a crucial aspect of both the Non-Psychological Contract and the Psychological Contract. In the Non-Psychological Contract, communication is primarily focused on ensuring that both parties understand and agree to the terms of the contract. This communication is typically formal and documented to avoid misunderstandings. In contrast, communication in the Psychological Contract is more informal and ongoing, as it involves building and maintaining trust, understanding, and mutual expectations between the employer and employee.

Mutuality

Mutuality is a key principle in both the Non-Psychological Contract and the Psychological Contract. In the Non-Psychological Contract, mutuality refers to the equal exchange of value between the employer and employee. Both parties agree to fulfill their obligations as outlined in the contract in exchange for certain benefits, such as salary and job security. Similarly, in the Psychological Contract, mutuality is based on the mutual understanding and respect between the employer and employee. Both parties are expected to uphold their end of the unwritten agreement to maintain a positive working relationship.

Longevity

The longevity of the Non-Psychological Contract and the Psychological Contract also differs. The Non-Psychological Contract is typically fixed for a specific period, such as a year, and may be renegotiated or renewed at the end of the term. In contrast, the Psychological Contract is more fluid and can last for the duration of the employee's tenure with the organization. This long-term nature of the Psychological Contract allows for a deeper and more meaningful relationship to develop between the employer and employee.

Impact on Employee Engagement

Both the Non-Psychological Contract and the Psychological Contract can have a significant impact on employee engagement. A well-defined and fair Non-Psychological Contract can provide employees with a sense of security and stability, leading to higher levels of job satisfaction and commitment. On the other hand, a strong Psychological Contract based on trust, respect, and mutual understanding can foster a positive work environment and enhance employee motivation and loyalty. Ultimately, a combination of both types of contracts can contribute to a more engaged and productive workforce.