The Broken Pyschological Contract: Job Insecurity and Coping

Unemployment rates began to rise in 2008, coinciding with the beginning of the Great Recession that began in December 2007. An elevated unemployment rate almost certainly affects the labor market in that both employees and employers are likely to have negative experiences during tough economic times...

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Bibliographic Details
Published in:Business perspectives (Memphis, Tenn.) Tenn.), 2010-10, Vol.20 (3), p.22
Main Authors: Keim, Courtney, Wilkinson, Amy
Format: Article
Language:English
Subjects:
Communication
Corporate culture
Economic conditions
Employees
Employers
Employment
Employment security
Guidelines
Labor market
Leadership
Organizational change
Recessions
Uncertainty
Unemployment
Workers
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Summary:Unemployment rates began to rise in 2008, coinciding with the beginning of the Great Recession that began in December 2007. An elevated unemployment rate almost certainly affects the labor market in that both employees and employers are likely to have negative experiences during tough economic times. These negative reactions can compromise the delicate balance that exists between an employee's hard work and efforts and an employer's offerings of security and pay, which can be thought of as the "psychological contract" that exists between employees and employers in an organization. This article examines the psychological contract and the resulting consequences of the contract being broken (job insecurity) and offers suggestions for lowering workers' job insecurity, especially during times of organizational change. Thus, even during rough economic times, organizations can continue to reassure and engage their workforce and in return have motivated, dedicated, and productive employees.
ISSN:0896-3703