To be effective, performance and reward management systems should encourage employees to demonstrate consistently those types of work behaviour and results that are deemed necessary to support the organisation's strategic objectives and desired corporate culture. More so than other human resource practices, performance and reward management systems also exist to shape and reshape employee work behaviour in ways desired by the organisation. Yet, as the examples of performance and reward system dysfunction noted in the Introduction attest, establishing and maintaining the desired association between performance and reward practices, on the one hand, and behavioural outcomes, on the other, is no simple matter. Performance and reward practices sometimes go badly awry, eliciting not the wanted work behaviour but, rather, systemic misbehaviour. The means to avoiding such unfortunate behavioural consequences lie not in the behaviour itself but in understanding and influencing the factors that help to shape work behaviour – and, above all else, this requires close consideration of employee work attitudes and what has come to be known as the employee ‘psychological contract’.

In this chapter, we explore the complex links between employee attitudes and behaviour. Drawing on the concept of the employee-centred ‘psychological contract’, the chapter also presents a basic employee-centred framework for better understanding and influencing employee attitudes and behaviour in ways beneficial to both the organisation and the employees themselves.