The Erosion of the Psychological Contract
In industrial-organizational psychology, the "psychological contract" represents the unwritten set of expectations between an employee and an employer. It operates on the principle of reciprocity—an employee invests effort, loyalty, and skill, expecting in return not just a paycheck, but recognition, growth, and financial progression. When a professional faces four consecutive years without a salary increase, this contract isn't just strained; it is fundamentally ruptured. From a behavioral perspective, a multi-year freeze on raises can lead to Learned Helplessness . Originally identified by Martin Seligman, this state occurs when an individual repeatedly faces a negative situation from which they cannot seem to escape, regardless of their effort. In 2021, an employee might respond to a "no increase" policy with increased productivity, hoping to "earn" a raise the following year. However, by 2024, if the outcome remains unchanged despite the effort, ...