Sense and sensibility in psychological contracting: a multi-phasic perspective

Abstract

Purpose: Drawing on management and psychology literature, this article develops a process model of psychological contracting rooted in individual sensemaking. Research propositions address the variety of reactions that PC holders may have to PC experiences, potential moderators affecting these outcomes, and the processes for iterative sensemaking. Design/methodology/approach: Frameworks for formation and compliance sensemaking are combined with behavioral outcomes grounded in the exit, voice, loyalty, and neglect (EVLN) model to explain the attitudes and behaviors these contracts engender. Special emphasis is placed on identifying the personal and contextual factors that shape promise-compliance perceptions and the actions that are likely to follow. Findings: This conceptual article presents a personal sensemaking model for psychological contracting. Research limitations/implications: Detailed analyses are needed of the proposed granularity of psychological contract (PC) sensemaking using stronger qualitative designs (e.g. event sampling, ethnographies). Other priorities include determining (1) how extracted cues and meaning are affected by culture, (2) how technology (i.e. algorithmic management) impacts sensemaking tendencies, and (3) whether union engagement for PC repair creates separate PCs in rank-and-file members stemming from perceived or actual representational promises. Practical implications: Managers must broaden their frame of reference when tracking and interpreting the set of events, policies, and practices that impact employment to better understand how they are likely to be perceived by PC-holders. More tailored discussions are needed regarding contract expectations and the events that can influence them to help shape the sensemaking process, particularly in the context of organizational change. Information surrounding past contracts should be solicited as well when hiring and onboarding new members of the firm. Originality/value: This is the first work to conceptualize psychological contracts as multi-phased, iterative sensemaking. It also addresses the dynamics and consequences of promise fulfillment, a neglected facet in previous research.