The primary concern of organisations is to ensure effective performance through employees, normally done through the Human Resource Management (HRM) function of the organisation, where it becomes the responsibility of HRM to introduce effective policies and methods to achieve goals, and also carry out employee performance appraisals for further improvement (McKenna and Beech, 2008).Unlike a physical contract of employment which can be seen and signed by both employees and employers, the psychological contract is a more subtle, even invisible set of expectations of rights and privileges, and obligations that employees and organisations have from each other, which are not part of a written agreement, but still impose a significant amount of influence on people’s behaviour (McKenna and Beech, 2008. Lester and Kickul, 2001. Guest, 1998). Rousseau (2001) as cited in McKenna and Beech (2008), takes a more one-sided approach in his definition of the psychological contract when he says that it “concerns the expectations, right and obligations employees believe to exist between them and the organisation” (Pg 42). Research suggests that organisations can only achieve their objectives through co-ordinated efforts of their members and that it is management’s responsibility to achieve this through other people, where people, unlike physical assets, are not owned by organisations, and bring with them a complexity of perceptions, feelings and attitudes towards the organisation, management styles, their own responsibilities (work roles), and working conditions (Guest, 1998, and Patterson et al, 1998 cited in McKenna and Beech, 2008). The authors argue that these factors are normally embedded in the individual’s psyche, and form part of the psychological contract.Research also suggests that the human factor of organisations, where human behaviour is influenced by different social, cultural, and individual factors, must be taken into account whilst managing people, as these factors play important roles in how the individuals form their perceptions, which means they are vital in understanding how people form their psychological contracts (McKenna and Beech, 2008). e

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