A Co-Evolutionary Model of Newcomers’ Psychological Contract Formation: The Role of Social Networks

Abstract

The psychological contract, the perceived mutual obligations between employer and employee, is a critical construct for understanding employment relationships and how their management informs employees’ attitudes and behaviors. Extensive work has focused on the outcomes of the contract’s operation, but there remains a paucity of research examining its formation and the role of ‘others’, within and outside the organization, in the development process. While important work has drawn on social network theorizing to explore how social interactions shape contract perceptions, the relationships posited remain largely uni- directional, highlighting another overarching limitation in the contract literature: a lack of dynamic theorizing. To address these gaps, our conceptual paper adopts a process-based lens to calibrate a co-evolutionary model of contract formation that explicates the reciprocal relationship between newcomers’ social networks and their psychological contract development. Grounded in a structuration perspective (Giddens, 1976), we draw on a range of dynamic theories to move the contract literature beyond examining static relationships to comprehensively theorize contracting as a process co-evolving with social network development in early socialization stages. We conclude by highlighting the theoretical and practical implications of our model.