Chapter 32 the Psychological Contract 409 career expectations and the opportunity to develop skills; involvement and influence; trust in the management of the organization to keep their promises. From the employer's point of view, the psychological contract covers such aspects of the employment re- lationship as competence, effort, compliance, commit- ment and loyalty. The research conducted by Guest and Conway (2002: 22) led to the conclusion that: The management of the psychological contract is a core task of management and acknowledged as such by many senior HR and employment relations managers, and shows that it has a positive association with a range of outcomes within the employment relationship and is a useful way of conceptualizing that relationship. Because of these factors, and because a psycho- logical contract is essentially implicit, it is likely to develop in an unplanned way with unforeseen consequences. Anything that management does or is perceived as doing that affects the interests of employees will modify the psychological contract. Similarly, the actual or perceived behaviour of employees, individually or collectively, will affect an employer's concept of the contract. Developing and maintaining a positive psychological contract As Guest et al (1996: v) explained: `A positive psy- chological contract is worth taking seriously because it is strongly linked to higher commitment to the organization, higher employee satisfaction and better employment relations. Again this reinforces the benefits of pursuing a set of progressive HRM practices.' They also emphasized the importance of a high-involvement climate and suggest in particu- lar that HRM practices such as the provision of opportunities for learning, training and develop- ment, focus on job security, promotion and careers, minimizing status differentials, fair reward systems and comprehensive communication and involve- ment processes will all contribute to a positive psy- chological contract. The steps required to develop such a contract are: 1 Define expectations during recruitment and induction programmes. 2 Communicate and agree expectations as part of the continuing dialogue implicit in good performance management practices. 3 Adopt a policy of transparency on company policies and procedures and on management's proposals and decisions as they affect people. 4 Generally treat people as stakeholders, relying on consensus and cooperation rather than control and coercion. On the basis of their research, Guest and Conway (2002) emphasized the importance of communications in shaping the psychological contract, especially at How psychological contracts develop Psychological contracts are not developed by means of a single transaction; they evolve over time and can be multi-faceted. There are many contract makers who exert influence over the whole duration of an employee's involvement with an organization. Spindler (1994: 326) observed that: Every day we create relationships by means other than formal contracts ... As individuals form relationships they necessarily bring their accumulated experience and developed personalities with them. In ways unknown to them what they expect from the relationship reflects the sum total of their conscious and unconscious learning to date. the problem with psychological contracts The problem with psychological contracts is that employees are often unclear about what they want from the organization or what they can contribute to it. Some employers are equally unclear about what they expect from their employees.