The Psychological Contract in the Workplace: Employee Retention through Contractual Loyalty

The success of a company depends in many ways on the loyalty of its employees. A high level of employee loyalty has a positive impact on a company's productivity, success and image. The "psychological contract" between employer and employee makes a decisive contribution to employee retention.

What is the psychological contract?

The psychological contract is an informal, non-written contract between employer and employee that describes mutual expectations, promises and obligations. Unlike the formal employment contract, which is usually set out in writing and regulates the legal obligations and conditions of employment, the silent contract deals with the emotional and psychological aspects of the working relationship.

The contract is characterized by implicit assumptions based on personal values, beliefs and expectations. It is about what employers and employees expect from each other, how they perceive the cooperation and what kind of support and recognition they hope for.

PERSENTIS distinguishes between emotional, calculative and growth factors and breaks down exactly how high the respective need is - and to what extent it is fulfilled.

The importance of the psychological contract for employee retention

Mutual compliance with the psychological contract is essential for a long-term and positive relationship between employer and employee. When employees feel they are treated fairly in the working relationship and their needs are met, trust, satisfaction and commitment are created. In turn, motivated and satisfied employees are more likely to remain loyal to the company in the long term and give their best.

PERSENTIS is a powerful tool to strengthen employee retention and engagement based on the psychological contract. By understanding and respecting each other's expectations and obligations, employers and employees create a positive working relationship characterized by trust, satisfaction, motivation and loyalty. Companies that consciously cultivate the psychological contract will benefit from loyal and highly committed employees in the long term.