Conceptualisation of Psychological Contract: Definitions, Typologies and Measurement

Abstract

Background: Psychological contracts, and particularly the honouring of these contracts – are central to employee behaviour and organisational success. The interest of academics and practitioners in this construct is therefore understandable. However, due to the immense amount of information on the topic, a comprehensive review of the literature is necessary. Aim: The aim of this article is to present a critical review on the conceptualisation of the psychological contract, distilling and operationalising the concept, to ensure that debate and future research are linked to a dominant body of knowledge. Setting: Present literature on psychological contracts is fragmented as no conceptual standardisation exists. Method: A comprehensive literature review was conducted to obtain a large quantum of conceptualisations of the construct and evaluate these for breadth of adoption, consensus, and operationalisation. Results: After reviewing reputable sources published between 1960 and 2020, a standard definition proposed, the most recognised typologies specified, and sound measures identified. It was found that Rousseau’s (1995) definition and typologies (transactional and relational contracts) are still widely used, and that the measuring scale for transactional and relational contracts by Millward and Hopkins (1998) demonstrates good psychometric properties and broadly utilised. Conclusion: Since its inception, several amended definitions, typologies, and measurement of the psychological contract have been presented. Nonetheless, the original conceptualisations still seem to prevail. Managerial implications: Researchers and practitioners are now aware of the most widely adopted definitions, typologies and measuring instruments relating to psychological contract and these should guide them in future discussions and research in the field.