The Review on Psychological Contract Theory

Psychological contract is a kind of informal understanding and contractual relations between employers and employees,and is also a kind of new perspective of human resource management,which has played a huge role in modern enterprise management activities.Psychological contract may improve the core competence and operation performance of modern enterprise through the incentives for staff loyalty.Psychological contract formation is a complex process,and is a multi-dimensional system structure.The breach of psychological contract would result in negative consequence for organization and employees,and give rise to deterioration of employment relationship.The research of psychological contract has acquired many achievements in China and promotes the level of theory and practice of behavioral economics.