Meaning ● Psychological Contract Evolution in the context of Small and Medium-sized Businesses (SMBs) describes the dynamic adjustments to unspoken agreements between employers and employees, especially pertinent during periods of growth, automation implementation, and technological advancement. These contracts, though unwritten, influence employee motivation, commitment, and productivity. As SMBs grow, legacy psychological contracts predicated on personal relationships and manual processes often become strained. Automation initiatives necessitate workforce reskilling, impacting job security perceptions and trust. The successful implementation of new technologies demands that SMB leadership proactively manage employee expectations, clearly communicating how roles will evolve and offering opportunities for professional development. Therefore, a failure to address this evolution can lead to decreased morale, increased turnover, and resistance to change, ultimately hindering the SMB’s ability to scale efficiently and compete effectively. Adapting to this requires constant feedback loops and responsive management.
