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Article
Creating Psychological and Legal Contracts through HRM Practices: A Strength of Signals Perspective
Employee Responsibilities and Rights Journal (2011)
  • Patricia G Martinez, Dr., Loyola Marymount University
Abstract

We integrate the concept of signaling theory to propose that organizations create psychological and legal contracts through their human resource management practices (HRM). Focusing on the strength of the signal generated by HRM practices, we develop a framework for contract creation. Specifically, we define and outline how weak signals generate psychological contracts and strong signals develop legally binding contracts. We provide several examples of HRM hiring practices, the weak and strong signals which they emit and the psychological and legal contracts which they create. Our key contribution is to provide a precise model for understanding the distinction between a psychological and legal contract.

Keywords
  • psychological contracts,
  • legal contracts,
  • signaling theory
Publication Date
2011
Citation Information
Patricia G Martinez. "Creating Psychological and Legal Contracts through HRM Practices: A Strength of Signals Perspective" Employee Responsibilities and Rights Journal Vol. 23 Iss. 3 (2011)
Available at: http://works.bepress.com/patricia_g_martinez/1/