T.N. Krishnan.

This research paper speaks about employee relations Indian organizations with the
help of psychological contracts. Psychological contract has great value in workplace outcomes.
Employee relations has been studied in many western countries but in India it is still very hard. India
has three different kinds of economies with respect to employee relations. Formal, informal and
organized service sector like IT. Liberalization in India made private players have a major role in the
Indian economy and both central and state governments disinvested their roles in the economy.
Also with increasing competition there has been advancement in technology that improve the
efficiency. Also there is a team based work system that is implemented which requires higher skills in
the workforce. A psychological contract coincidentally relates to voluntary work having some degree
of personal freedom, and social stability. Hence its fulfillment depends on the individuals choice.
Hence its the responsibility of both the employee and the employer to keep their confidence in each
other and uphold their commitments. The research looks at the emerging trend of engaging
employees in India at the individual level than at a collective level. With increasing participation in
unions there is an increasing role of psychological contract too in managing the employee relations.
It also speaks about variations in the HR systems and the trust that has effect on employee relations.
Adoption of HR system an organization has is directly related to employee relations. Higher trust in
the organization creates an environment that doesn't erupt with the breach and violation in
psychological contract. Hence one can say the linkage between HR system an organization adopts
and the trust it fosters effects the employee relations. It is like if there is a breach or violation of
psychological contract the trust and HR system an organization has will open doors for
communication and also make employees understand the situation as to why a breach occurred and
make attempts with collective bargaining to resolve them.