practices. First, psychological contracts, more particularly the promises and com-
mitments made by the organization and its agents, provide a goal structure that can
help to motivate and direct behavior. Second, psychological contracts might
operate through a system of social exchange, based on what Gouldner ( 1960 )
termed the norm of reciprocity. Third, they may operate through a form of equity
theory, reXected in a balanced psychological contract. Where there is a balance
between the promises and obligations of employer and employee, it would be
predicted that the outcomes will be more positive than when there is imbalance.
Conway and Briner note that the evidence relating to each of these explanations
about how the psychological contract inXuences outcomes is relatively limited.
However, there is an extensive literature in support of the positive impact of goal-
setting (Locke and Latham 1990 ). There is rather more psychological contract
research relating to social exchange. The results are somewhat mixed but generally
support the view that a positive oVer, manifested in promises from the employer,
will be reciprocated by more promises on the part of the employee as well as
commitment and motivation to meet the promises and obligations (Conway and
Coyle-Shapiro 2004 ). The one key study that addresses issues of equity or balance
(Shore and Barksdale 1998 ), albeit conducted within an explicitly social exchange
framework, does show that where there is a balance, whether it is based on high or
low levels of reciprocal promises and commitments, then the outcomes for em-
ployees are more positive.
The promises and obligations that form the core of the psychological contract
are likely to be shaped by a variety of factors, including the organization’s human
resource practices. These will be communicated initially though the information
provided during the recruitment and selection process, including, in some cases,
more or less realistic job previews. They will be reinforced and perhaps modiWed
through further processes of socialization (de Vos et al. 2003 ), social information-
processing (Salancik and PfeVer 1978 ), and various forms of communication
(Guest and Conway 2002 b). Guest and Conway explored the ways in which
organizations sought to communicate the psychological contract and which pro-
cesses were rated most eVective by HR managers. They found three broad types of
communication, covering communication around the process of recruitment,
communication from the top of the organization, including mission statements
and broad general promises, and local communication that was more job and
person related. Perhaps not surprisingly, communication and promises associated
with local communication of the psychological contract were rated most eVective
and those coming from the top of the organization were least eVective in managing
the psychological contract and the employment relationship.
We noted earlier that the impact of HR practices and the way in which the
organization seeks to communicate the deal are likely to be at least partly a
function of the characteristics of the workers who form part of the exchange.
Conway and Briner ( 2005 ) review the evidence about individual characteristics
136 d a v i d e. g u e s t