COVID-19 and its impact on the psychological contract of employers and employees

Abstract

COVID-19 has disturbed employment relationships. Twenty employers and 20 employees were interviewed to gain early insights into how the pandemic affected their psychological contract. Results suggested that both parties had divergent expectations of what each party should expect in the current scenario, and both reported intense, often negative, emotions about their current state. While no specific breaches of explicit promises were reported, employees reported violation of implicit beliefs relating to their needs for security. In addition, both parties’ expectations differed about their future PC. Employees expected a deal that considers needs for security whereas employers emphasized business continuity by minimizing costs. Such incongruent current and future obligations between the parties suggest trust will be required to negotiate the employment relationship through the crisis. HRM practitioners will have a definite role to play by providing and initiating arrangements that will reconcile both parties’ needs to ensure stable employment relationships for mutual benefits.