Psychological contracts are a good way of thinking when it comes to the exchange or relationship between an organization and employees. Psychological contracts refer to the perception an employee has when it comes to his or her exchange relationship with the organization; the outcomes promised by the organization and the contribution an employee is obliged to make (Pp 4) Organizations can play an active and important role in shaping their members' Psychological Contracts. This is because there are outcomes that are part and parcel of employees' psychological contracts and thus central when it comes to the exchange of relationships with their employees.one such outcome is career opportunities not only to the job an individual holds currently but the job one expects to advance into over the course of their career. Career opportunities include getting promotions, having the opportunity of working in the kind of work one wants to do, receiving experience that is relevant to ones career and being exposed to people who can help one in the advancement of their career. When managers want to use career opportunities as a tool for motivating employees they should understand that careers are how people progress through them thus they can be managed by...

Therefore through providing career opportunities for employees' organizations play an important role in shaping psychological contracts of employees (Pp 21)
An area that has a great influence in the motivation of employees is the distribution of the outcomes such as their pay, benefits, and promotions. Pay is a useful tool when it comes to the motivation of employees to perform highly and at the same time give them motivation to continue working in the organization in line with the Maslow's hierarchy of needs motivation theory since each person is striving to get to the higher level of life hence changing the needs through acquiring or being able to acquire some needs previously thought not possible, a fact that can only be actualized through having money (College of the Redwoods, 2013). Therefore, pay is a very crucial aspect of psychological contracts. And thus forms a key component of the exchange of relationships between the employees and the organization. Pay in an organization can be based on different terms. This includes a merit pay plan. This is a pay plan that is based on the performance of employees. This plan is now increasingly being used to motivate, attract and retain employees in…