A psychological contract refers to the unwritten expectations, beliefs, and perceptions that exist between an employer and an employee regarding their mutual obligations, rights, and responsibilities in the workplace. It encompasses the implicit understanding of what employees expect from their employment relationship and what the employer expects in return.

Example

An employee expects fair treatment, opportunities for growth, and a supportive work environment from their employer, while the employer expects the employee to meet performance targets, adhere to company policies, and contribute to the organization's success.