The changing psychological contract: challenges and implications for HRM, organisations and employees

Introduction Organisations and their employees face ongoing challenges in the form of new strategic initiatives designed to keep pace in an increasingly complex business environment. In order for these challenges to be successfully met, new behaviours are required on the part of employees (Sims 1994). Defining these new behaviours is initiated through the organisation's human resource (HR) practices (Rousseau & Wade-Benzoni 1994). However, actual change in individual employees' behaviour is determined by interpreting their employers' HR practices. Such interpretation affects employee behaviour by altering perceptions of the terms of the individually held psychological contract (figure 1).