1877-0428 © 2010 Published by Elsevier Ltd.
Procedia Social and Behavioral Sciences 5 (2010) 185–189
vailable online at www.sciencedirect.com
On the new social and psychological contracts from the Czech
Iva Kirovovaa *
aVSB-TU Ostrava, Fculty of Economics, Sokolska 33, 701 21 Ostrava 1, Czech Republic
Received January 1, 2010; revised February 11, 2010; accepted March 12, 2010
The Czech transformation from a socialist to a democratic state is interconnected with the transition to post-industrialism that
began after 1989. Organizational and work design changes resulted in new demands upon employees and the emergence of a new
psychological contract. These new requirements are in opposition to the prevailing social and traditional psychological contracts,
which are influenced by both the socialist era and Czech national values. New challenges demand cooperation between relevant
governmental policies, organizational strategies, HR practices, accompanied by changes in the educational system.
© 2010 Elsevier Ltd. All rights reserved.
Keywords: social contract, traditional psychological contract, new psychological contract, Czech transformation, national values
Czech society has recently undergone a series of political, legislative, and economic transformations that have led
to societal transformations as well. From 1948 until the end of 1989 Czechoslovakia was a closed society governed
by members of the communist party. Working life during this socialist period was not nearly as challenging for
employees as it is today. In the state-run planned economy of that time, all adults were obligated to work by law and
unemployment was unknown. Entrepreneurial activities were officially forbidden. All information sources and the
mass media were censored and there was no free access to information. A dissident minority experienced great
problems in their working lives and careers, with some being persecuted and imprisoned, but the majority of citizens
enjoyed job security. These brief comments illustrate the background of the changes that began with the Velvet
Czech society has in fact undergone two significant transformations that took place at the same time and were
closely interconnected. The first is the transformation from a socialist system to a democratic state, and the second
involves the transition to post-industrialism. It has been difficult to distinguish between these two types of
transformations because of the fact that they have taken place simultaneously. In addition, it was only at the
beginning of the 1990s that scholars or practitioners even in developed countries began publishing data relevant to
* Iva Kirovova, Tel.: +420 –59-699 248
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186 Iva Kirovova / Procedia Social and Behavioral Sciences 5 (2010) 185–189
the transition to post-industrialism and the process of globalization. Czech citizens have welcomed the changes that
have taken place and the new opportunities that have been created, and they have begun to adapt to the new
Czech organizations also had to adapt to operating under new conditions and have undergone a series of
fundamental changes. Most organizations were privatized. Some closed or went bankrupt because of problematic
privatization processes or inexperience with a market economy, while new organizations were also established. The
majority of organizations also gradually underwent organizational restructuring involving downsizing and
rightsizing. These processes have been interconnected with job redesign, but also with the new phenomena in the
Czech context of decreased job security and unemployment. Some individuals view themselves as lost in the new
circumstances, and their previous experiences are irrelevant to the new conditions. Nostalgia for the previous era is
obvious in some social groups, but a greater degree of individual activity and responsibility concerning one's life
and career is in general required.
2. Traditional social and psychological contract in Czech context
The concepts of psychological and social contracts – both traditional and new types – are not widely known in
the Czech context, and this is true for both scholars and practitioners. There are a number of interpretations for this
state of affairs. Certain of them are connected with the transitional society and economy, but they are in general
associated with the previous socialist era, when there was very limited access to foreign information sources. This
was particularly the case in respect to the social sciences, which were under strong ideological pressure. It was very
difficult during the socialist period to have contacts with foreign scholars and access to professional literature was
restricted. Access to information sources is clearly improved today. Many universities have on-line access to foreign
e-journals, many foreign textbooks have been translated, and there are opportunities for the exchange of information
and experience, but it has proven difficult to rectify some of the effects of the longstanding restriction to the larger
Regardless of the fact that little attention has been paid to the issues of psychological and social contracts, the
latter exist implicitly within Czech society and in employer-employee relations. Their influence on employee
behavior is evident, although individuals are typically unaware of their existence. Employees have and express their
expectations concerning job security, upward mobility, professional development, and so forth, while employers
expect specific types of behavior from their employees, such as responsibility, loyalty, and performance.
Psychological contracts, which represent a set of mutual expectations, promises, and responsibilities involving
employers and employees (Rousseau, 1990; Mullins, 2002; Kirovova, 2005), are in fact an important element in
employment relationships. Rousseau (1990) emphasizes that promissory characteristics of the psychological contract
referring to future behavior are contingent upon certain reciprocal activities involving the partners in the contract,
that is, employees and employers. The psychological contract serves to predict the various “rewards” employees
may expect as well as the results which employers can obtain from their employees. In addition, both employees and
employers have the responsibility to fulfill their obligations and promises. One very important aspect of the
psychological contract is its balance and reciprocity. While a perceived reciprocity leads to positive outcomes for
both employees and employers, a perceived imbalance can generate various problems both for employers, such as a
lower level of loyalty or decreased performance, and for employees, such as fewer opportunities for development
Traditional psychological contracts are relevant to the industrial era, which was characterized by mechanistic
types of organizations with vertical organizational structures, very narrow job descriptions, high levels of
standardization, and primarily one-way communication flows from the top of the organization down (Mullins,
2002). Employment contracts were normally permanent at that time. Employees did not often change work positions
or organizations because employers typically relied on the seniority principle for promotions. Because the external
socioeconomic context was usually stable or predictable, both employers and employees regarded organizations as
stable and employees enjoyed a high degree of job security.
Traditional psychological contracts are of two types, relational and transactional. Porter and Lawler's motivation
theory and Adams' equity theory cast a useful light on the transactional aspects of the psychological contract, which
involve monetary exchange. Perhaps the most important characteristics of the relational aspects of such contracts,
which comprise the dominant type, are the “offer” of job security and the probability of gradual promotion in
Iva Kirovova / Procedia Social and Behavioral Sciences 5 (2010) 185–189 187
exchange for employee loyalty and compliance. Iles (1997) refers to this type of contract as parent-child dependence
insofar as organizations paternalistically take responsibility for the career development of their employees.
Although scholars have concentrated their research on various aspects of the traditional psychological contract in
economically developed countries, primarily the UK, the US, Canada, and Australia, similarities can be found in
other cultures and societies as well. For example, some of its main characteristics are analogous to the psychological
contract that prevailed during the socialist period in Czechoslovakia, albeit with specific differences relating to the
legal obligation to work in the latter. Promotions were based on the seniority principle coupled to party membership
and party approval, and employee activity was not encouraged (unless it pertained to the governing ideology).
Generally speaking, the prevailing attitudes, beliefs, and expectations within Czech society relevant to work life,
work contracts, job security, and promotions were in fact congruent with the traditional psychological contract. Such
dominant attitudes are, in turn, included in the concept of social contract.
Edwards and Karau (2007) argue that the social contract, which is influenced by such sets of factors as public
opinion, the educational system, ideologies, media, organizations, and so forth, illustrates the general types of norms
and assumptions that society regards as appropriate in respect to employment relations in general. Furthermore,
while “…the psychological contract is developed at the individual level…”, focusing upon particular interactions
and relations between employee and employer, “…the social contract is developed at the societal level …”(Edwards
& Karau, 2007, p. 68). The social contract is thus “a macrocontract” in relation to a psychological contract, and it
has a great impact on the latter. The two are, in fact, often congruent.
For example, the social contract within Czechoslovak society during the socialist period was congruent with the
traditional psychological contract. It is important to note that Hofstede's theory indicates the main characteristics of
traditional social and psychological contracts were also largely congruent with Czech national values. This is
illustrated by the specific values on such indices as power distance, uncertainty avoidance, masculinity,
individualism-collectivism, and short-term orientation (Kolman, Noordderhaven, Hofstede, & Dienes, 2003). These
values in fact foster the traditional psychological contract because of the lower level of activity and individual
responsibility that follow from them. These same characteristics were also reinforced by the socialist governments.
3. The emergence of the new psychological contract on the background of the social contract
Fundamental changes have taken place throughout the world in the last 30 years during the transition to post-
industrialism. The pace of change and the broad spectrum of interrelated contextual factors associated with
globalization and the implementation of ICT technologies have forced organizations to undertake large-scale
restructuring, downsizing, flattening, and so forth. Such radical change has also influenced organizational and work
design, transforming basic aspects of working life. Amundson (2006) discusses many of the most significant
changes that have affected the psychological contract, including a greater pressure for productivity, a greater
reliance on temporary or contract positions, a greater need for self-employment, the need for continuous learning, an
increased emphasis on interpersonal skills and networking, and fewer opportunities for promotion.
These changes are relevant to all groups of employees, including managerial levels as well as graduates entering
the labor market. The concepts of transformational and visionary leadership, together with the demands upon
employees for creativity, activity, responsibility, and continuous professional and personal development, address
contemporary requirements and challenges.
Organizational transformation has led to the emergence of a new psychological contract that provides for
employability, not job security (Iles, 1997). The relationship between employers and employees has also changed
into an adult-adult partnership. But although career management is now primarily an employee responsibility, with
organizations playing a secondary role, organizations still need to prepare and manage opportunities for work
assignments and activities together with possibilities for employee development and growth. Because of flattening
and downsizing, however, organizations can no longer promise career advancement on the same scale as during the
industrial era. One could thus remark that the career ladder has been replaced by a career lattice that includes
multidirectional career paths and career changes. Moreover, organizations need to stimulate and facilitate employee
employability if they wish to be competitive. In addition, because of the growing number of termed contracts and
frequent changes in work positions or organizations, the new psychological contract has mainly transactional
188 Iva Kirovova / Procedia Social and Behavioral Sciences 5 (2010) 185–189
Employees often perceive such changes as violations of the psychological contract (Atkinson, 2002), which
frequently results in negative employee attitudes and responses, including worsened job performance. Employee
satisfaction also decreases as their loyalty to the organization weakens. All of the various responses to violations of
psychological contract that have been identified have a significant impact upon organizational competitiveness and
development and employee well-being, work satisfaction, and career development. Negative organizational
citizenship on the part of employees can even result in the loss of their jobs.
Both research and practice indicate that various problems emerge from changing work conditions and the
development of the new psychological contract. Iles (1997) observes that such changes may lead to labor conflict,
particularly in continental Europe, where there is a higher level of statutory job protection than in Anglo-Saxon
countries. Empirical studies in fact reveal problems with the emergence of the new psychological countries in
developed countries in general. Not all employees welcome the new psychological contract and the concept of
employability. Such problems regarding the acceptance of the new psychological contract most likely stem from the
existing social contract insofar as the two are apparently in opposition to each other. For example, the social contract
reports about prevailing values, expectations, and beliefs in society, thereby influencing psychological contracts, but
changes in core values, expectations, and stereotypes in society involve longitudinal process over time. Employers
must pay attention to such radical changes if they are concerned with having successful and productive relationships
with their employees. The fact that the implementation of the new psychological contract in organizations is
primarily the responsibility of management and human resource specialists is itself a controversial issue.
During last two decades a new psychological contract has gradually been introduced in the Czech context, with
significant transformations taking place in respect to all variables in societal, organizational, work, and individual
lives. The globalized economy has also brought about similar changes in organizational and work, with
organizations now requiring activity, multiskilling, responsibility, and so forth, from employees.
In 2009 four focused groups were formed to investigate these and related issues, and problems were clearly
revealed in this regard. Two groups were composed of MA students in management studies and two of part-time
MBA students. The questions discussed concerned organizational transformation, changes in work design, changing
requirements for employees and graduates, and the new psychological contract. The responses revealed the
existence of substantial differences between organizational rhetoric and the actual circumstances, including a
prevailing autocratic style and employer expectations of compliance even as they stated their demands for employee
creativity and activity. The respondents referred to the employee dissatisfaction and demotivation that arose from
such a situation, and spoke of violations of both the psychological and social contracts. However, the majority of
respondents also expected career advancement in a way typical more of the career ladder that characterized the
industrial era, including expectations that organizations would have primary responsibility for career development.
But not only are problems associated with adapting to changing organizational and work life not unusual in the
Czech context, they are in fact consistent with previous socialist experience and organizational approaches. Czech
employees during that period became accustomed to permanent jobs contracts and job security, which comprise
attitudes and expectations reinforced by Czech national values. Against this background, today's changes in
organizational requirements and in the labor market are often regarded as weaknesses of the political system, not as
features of the global socioeconomic environment. There are even certain social groups who express nostalgia for
socialism, longing for job security and a lower level of individual responsibility.
In general, the social contract in Czech society corresponds more closely to the traditional psychological contract
than to the new type that has emerged. It is likely that one can expect more significant difficulties in the Czech
context in respect to changing organizational and work demands than in developed countries because of the
specifically Czech historical and cultural background. These contextual factors influence many aspects of Czech
society today, including political life.
The processes of transformation in organizations have led to significant changes in organizational and work
design, including changes in organizational requirements for employees. A new psychological contract has thereby
been implicitly and increasingly introduced even if the concept of psychological contract is not widely known or
Iva Kirovova / Procedia Social and Behavioral Sciences 5 (2010) 185–189 189
However, acceptance of the new psychological contract without changes in the social contract is very
problematic. Contemporary requirements concerning employee employability, individual responsibility, and
proactivity need to be facilitated by appropriate governmental policies, appropriate organizational strategies, HR
practices focusing on employee career development, and relevant changes in the educational system. One must also
take into account specific national values. Rapid change concerning social and psychological contracts is difficult to
anticipate even though globalization processes have had a clear impact on young generations. Greater differentiation
between social and psychological contracts is in fact likely in the future in light of the data obtained from the MA
and MBA student focus groups.
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