Psychological Contract in Modern Organizations: Rebuilding Employee Trust and Engagement Frameworks
Gheorghe H. Popescu1, Milos Poliak2, Cristian Florin Ciurlău3, Joanna Szydło4, Mădălina Dragomir5, and Daniela Staicu5ABSTRACT. This research explores the changing features of the psychological contracts in modern organizations and devises strategies for rebuilding employee trust and engagement in the aftermath of a global pandemic. Through a systematic review of recent literature, this study finds key gaps to the maintenance of psychological contracts and offers solutions for improving relations between employers and employees. The study results show that psychological contracts were significantly disrupted during COVID-19. This research confirms that there are cascading organizational benefits for fulfilling psychological contracts that comprise a greater employee commitment, customer satisfaction, and better organizational performance. Psychological transformational leadership greatly improves the health of the psychological contract. Furthermore, strong psychological contracts are significantly enhanced by the commitments made toward organizational culture and social responsibility activities. This research adds to the body of knowledge by creating a cohesive strategy for managing the psychological contract that incorporates the features of social responsibility and modern technology, as well as the quality of workplace environment and leadership training. Organizations that aim to restore employee trust and engagement in complex and volatile business environments, thereby improving competitiveness and sustainability, can do so by implementing these strategies.
JEL codes: E24; J21; J54; J64
Keywords: psychological contract; employee engagement; organizational trust; leadership; workplace environment; algorithmic management
How to cite: Popescu, G. H., Poliak, M., Ciurlău, C. F., Szydło, J., Dragomir, M., and Staicu, D. (2024). “Psychological Contract in Modern Organizations: Rebuilding Employee Trust and Engagement Frameworks,” Journal of Self-Governance and Management Economics 12(1): 67–89. doi: 10.22381/jsme12120244.
Received 9 June 2024 • Received in revised form 26 June 2024
Accepted 28 June 2024 • Available online 10 July 2024
