Apsychological contractrefers to the informal and unwritten set of expectations that exists between an employee and the employer. According toHuman Resource Management, 16th Editionby Gary Dessler, psychological contracts include beliefs about job security, career development, fairness, recognition, and mutual obligations that are not formally stated in employment contracts.

Dessler emphasizes that psychological contracts develop over time through communication, organizational culture, and managerial behavior. When employees believe these unwritten expectations are fulfilled, trust and commitment increase. When they are violated, employees may experience dissatisfaction, reduced engagement, or withdrawal behaviors.

Psychological contracts are not formal legal agreements, nor are they created through counseling sessions. While shared values and positive environments may influence them, their defining characteristic is that they areunwritten expectationsgoverning the employment relationship. Therefore, the correct answer isthey consist of the unwritten expectations of the employment relationship.

Source:

Gary Dessler,Human Resource Management, 16th Edition, Chapter on Employee Engagement and Organizational Culture