M06HRM-Leading, Managing and developing People Essay

M06HRM-Leading, Managing and developing People - Essay Example A psychological contract is a critical component of the employer and the worker relationship. Employment contracts involve an agreement that the parties involved pledge to adhere to thus forming the basis of their engagement. According to Kotler, psychological contract is that implicit agreement between an employee and the organisation that he/she is supposed to work for that outlines the expectations of all the parties involved. The expectations may depict a match or mismatch of expectation since in other situations one party may be expecting much from the other and vice versa (Rousseau, 2005). Conversely, the expectations of both sides may match in that they may be anticipating the same outcomes, for instance, the employer may be expecting quality work from the employee, on the other hand, the employee plans for a good pay for quality work done. In this particular case, the expectations from both sides are congruent and thus the psychological contract established will be consistent with the reality on the ground (Petersitzke, 2009). The basis on which psychological contracts are founded depends on the obligation of the concerned parties like in the case of Tiger Cars Ltd the employees had the duty to work for a certain number of hours as their contract with the company was time-bound, hence they quantity of work done would be determined by the number of hours worked and not the duration of stay at the enterprise. On the other hand, the management of Tiger Cars Ltd had the obligation of providing adequate training to the employees to enhance their quality of service as well as providing an equitable pay that proportionately reflect the services rendered (Rousseau, 2005). The type of a psychological contract that existed between Tiger Cars Ltd and its employees was transactional in nature since money was the primary incentive for the agreement. Given the fact that the contract of workers with the company was