A psychological contract is a double sided sense of responsibility, beliefs and a common way of thinking between an employer and his or her worker. Here, all the modes of operation are correctly stipulated and strictly followed for the benefit of the organization. It can be easily defined as a to-do and a don’ts list for the employer and worker, to help them in working harmoniously towards a common goal.

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This Contract may not be available in a written and signed document, but in spite of that, it is very binding. After doing his or her part of the employee will develop expectations that the employer will do the same. This leaves the employer with a moral obligation of doing what he or she might have said or promised during the time of employment. A positive psychological contract results in good performance while a negative one can lead to failure as the employee may feel oppressed, this will cause de-motivation which will in turn lead to low output. Autocracy and mistreatment of workers should be avoided at all cost.

The psychological contract can be renegotiated if the two parties agree to do so. This can because one of the parties feels disadvantaged by the other. In a renegotiation the employer has a higher bargaining power if he or she is negotiating from the cover of an existing trade union. For a healthy renegotiation, is always best to revisit the existing contract and make possible changes, this means that it can be subjected to both additions and subtractions. It is important to note that, despite the fact that a psychological contract is a contract between an individual and the employer; the other people in the organization are bound to respect it. This includes the manager, the supervisor, the human resource manager and other workers (DuBrin, 2013).

Group thinking is a tendency where by individuals of like mind or who share something in common joins to form a common ideology. In a group think, all individual ideas and opinions are incorporated together in order to make one umbrella idea.  In a group think, all individual interests are suspended in order to pursue group interest. Because of these, most of the decisions reached through group think are bound to have mistakes; this is because the individuals affected don’t follow the right procedure in making a decision.

This phenomenon can get dangerous if it develops to a state where the individual in the group is too obsessed to think for himself. In this situation, the individual tends to view any other individual out of the group as less important. However, group thinking can be of good benefit when done with good motives. It can serve to bring solidarity among people in tragic situations. The dynamics of groupthink are very separable, in an organization group think should not be encouraged because individual experience and ability cannot be utilized. In most cases it might result to a bystander effect among workers.

Theory X and Theory Y were propounded by Douglas McGregor in 1960. They are based on human motivation. They try to analyze the motivation behind employees’ actions at the workplace. The two theories are largely based on what the managers have on the people they manage and not on how the people behave (Cole, 2004). They are based on attitudes rather than attributes. Theory X provides a clear explanation of Frederick Winslow Taylor’s principles of scientific management. The theory proposes that because employees are generally unmotivated and dislike work, they have to be constantly monitored and motivated. Management has to be authoritarian for the achievement of organizational objectives.

In Frederick’s principles of scientific management, the emphasis is on a type of management that ensures maximum satisfaction for both the employer and employee. Taylor suggested that the reasons why most workers underperformed are because they did not yet see how they benefited from the situation. The management was supposed to motivate and provide means for making the employees strive to achieve self actualization while at the same time delivering results at the work place.

Theory X implies a self-fulfilling prophecy as its enforcement is supposed to make only the company succeed and little or no concern is shown towards the employees. Theory Y, on the other hand, offers manager and workers the opportunity for collaboration. The management style is participative as employees are involved decision making, but they retain the power to implement those decisions and take full responsibility for those decisions.

Diversity is the state of having individual coming from different backgrounds, religions, race ideologies and political divide in one place. Managing diversity is the coordination of these diverse people in an organization for the attainment of specific goals (Schein, 2010). In recent times, organizations especially those that have a global outreach in their production, sales or operations, have to incorporate people from diverse backgrounds into their workforce. There are cases where the incorporation of diversity is necessary for organizations that want to create a dynamic image of diversity. Staffing departments of organizations have had to widen their criteria of recruitment to accommodate diversity, either as a requirement of the jurisdiction of operation of an organization or for the improvement of a company’s image.