Psychological Contracts With Purpose: A Review and Path Forward

ABSTRACT This review advances the understanding of psychological contracts (PCs) that include third‐party beneficiaries and transcend self‐interested goals, which we term “PCs with purpose.” PC theory has challenged the assumption that social exchange relies solely on balanced rewards and inducements, highlighting that individuals may wish to contribute beyond the traditional give‐and‐take. Consequently, scholarly attention to ideological currency has grown, coinciding with the increasing prominence of purpose in management research and practice. Existing research on PCs in volunteering, the public sector, and nonprofit organizations offers additional insights into contexts where purpose is integral to organizational mission. Yet despite its relevance for employees and organizations, there is little consensus on how purpose should be systematically incorporated into PC literature. This review clarifies the role of purpose in the employee‐employer exchange as captured across the disparate strands of PC research. We develop a comprehensive framework of existing research, identify key challenges, and offer directions for addressing them. In doing so, the review provides new theoretical directions and a rich research agenda for advancing the understanding of PCs with purpose. We argue that foregrounding purpose in PCs will future‐proof the framework's relevance for understanding the employment relationship among employees who strive to make a difference through their work.