Trust and the Role of the Psychological Contract in Contemporary Employment Relations

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The traditional collective system of employment relations that dominated much of the twentieth century appears to be less viable in the twenty-first century. In its place we see the individualisation of the employment relationship. In the context of contemporary employment relations, the psychological contract provides a useful analytic framework. Relevant evidence is reviewed showing that trust is central to the psychological contract and has been studied as an antecedent, a correlate and a consequence. The chapter builds on the argument of Fox that much of employment relations is beyond formal contract and therefore susceptible to analysis using the psychological contract. It is demonstrated that this analysis can be conducted at the individual, group and unit/organizational levels, with trust playing a central role, and as such it provides useful insights into contemporary employment relations.