Impact of Psychological Contract on Employee-Employer Relationship and Organizational Performance

Abstract

The primary purpose of this paper is to found a relationship between psychological contract and employee-employer relationship. A deep literature has done from the past few decades on psychological contract: how it is related to employees' beliefs and perceptions, violation of psychological contract and how violation affects employees' attitude and behavior. As the world is changing because of downsizing, layoffs, mergers and acquisitions and outsourcing an organization cannot survive only by having good technology or with good training and development programs but an organization have to focus on one thing that cannot be copy by other organization. The question is what that thing is? It is called employee-employer relationship. Organizations now, implement new ways to improve the employee-employer relationship. In this paper stress is on the concept of employee-employer relationship and the impact of psychological contract on employee employer relationship is highlighted   and also the various strategies that an organization can adopt for improving their employee-employer relationship.