Psychological Contracts in Local Government

Abstract

Psychological contracts are agreements between managers and individual workers that aim to increase worker commitment and alignment with the needs of the organization. Psychological contracts clarify expectations,addr ess ambiguity, and attempt to ensure a reasonable balance between expectations (what one gets) and contributions (what one gives). Based on a national survey,this study finds that in about one half of U.S. citiesmostmanagers believe they have a psychological contract of some sort and that in about one fifth of cities,these understandings meet amore stringent definition of such contracts. Respondents report that utilizing the notion of psychological contracts improves understanding and agreement about employees’ and managers’ responsibilities and also increases openness in communication. Psychological contracts are associated with the use of performance enhancement strategies,and some respondents report that they increase loyalty and trust as well.