Understanding Psychological Contract:Long-Term Investment for Business Sustainability

Business sustainability is the body of knowledge which include knowledge of proven traditional practices that are widely applied, along with knowledge of innovative and advanced practices yet that has seen only 0f limited use. Sustainable businesses take a long-term view of profitability. For this the one more important concept emerges in HRM is of Psychological contract. This paper describes the psychological contract at the workplace, which results from the successful execution of work by collaborative efforts. The purpose of the study is to understand the importance of psychological contract in organization for both employer as well as employee and its implication in managing sustainable business. Structured questionnaire is used to collect information regarding employee’s attitude towards their work profile and their organization from the selected private sector companies of Lucknow region. Each response has been measured on ‘Five-Point Likert Scale’ and the interpretation has been done on the basis of ranking method. Study reveals that when employees’ expectations were fulfilled it tends to create relational contract and which ultimately results in high work performance. This will became a significant factor of sustainable business. Findings of this study can be used for maintaining healthy relationship with the employees which becomes long term investment for a sustainable business. The scope of this paper can be extended to explore and analyze the workplace effectiveness empirically.