The Psychological Contract and Paranoia Analysis

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The Psychological Contract and Paranoia
The Psychological Contract advances the relationship between employees and employers by focusing on mutual expectations of inputs and outcomes. From employees' standpoint, the Psychological Contract is characterized by trust, compassion, fairness, objectivity, and compassion. However, Kramer's article "When Paranoia Makes sense" questions the idea of building trust at the workplace as advanced by the Psychological Contract. Kramer uses the attacks of 9/11 and the loss that Enron's employees incurred to show how trusting people in power hurt employees. Interestingly, even managers who promote the Psychological Contract at the workplace can experience losses if they trust employees too much. This revelation is presented by Kramer, who indicates that "eight out of ten executives reported having made a major mis...