Psychological contracts are the beliefs, perceptions, and informal obligations between an employer and an employee. Such contracts have long been conceived of as targeting a person, but with the emergence of algorithmic-enabled forms of employment in a gig economy, that is changing. Digital labor platforms act as technological intermediaries that connect customers with service-providing, independent freelancers on demand to carry out short-term tasks.

In this context, in a new article, researchers explored whether a worker can create a psychological contract with a non-human agent in the form of an algorithm that mediates their relationship with an organization. The article, by researchers at Carnegie Mellon University, the University College of Cork, and the University of Limerick, appears in Human Resource Management Journal.

“Addressing how psychological contracts emerge and the cognitive processes they activate among app workers is fundamental to understanding digitalized working relationships,” explains Denise M. Rousseau, professor of organizational behavior and public policy at Carnegie Mellon’s Heinz College, who coauthored the article. “The implications of this question compel a fresh look at the features of psychological contract theory and its assumptions.”

In their conceptual review, the authors propose expanding psychological contract theory to include a party that has until now been omitted: non-human agents in the form of an algorithm. In their work, they analyzed research on gig working relationships, where the idea of a worker-algorithm psychological contract is most pertinent.

Specifically, they focused on two basic questions: How does a psychological contract with the target party emerge? And why does a worker develop such a contract with the target party? Their article also draws on scholarship related to theory of mind, which sheds light on the innate capacities people have to understand their actions and those of other parties with respect to beliefs, goals, desires, and intentions.

The authors also explored how likely it is that app workers form a psychological contract with the algorithm itself. People tend to anthropomorphize entities with which they interact, from their pets to the cars they drive. Based on this tendency, the authors suggest that theory of mind can form on the part of a worker, who then attributes human qualities (e.g., thoughts, motives) to the algorithm that governs their employment arrangements. When workers conceive of the other party as having thoughts or motives, it can expand the array of resources they exchange, adding to the employment arrangement such socioemotional resources as respect and loyalty.

Although algorithmically mediated employment exchanges are new, psychological contract theory can help chart a path toward understanding an array of employment relationships beyond the conventional individual‐employer set-up, the authors suggest.

“When individuals provide services to customers through the mediation of a digital platform, a new party enters the work arrangement: the algorithm that governs the exchange and is shaped by those who contribute to its functioning,” says Ultan Sherman, senior lecturer in organizational behavior and human resource management at the University College Cork’s Cork University Business School, who coauthored the article.

“Understanding how workers make sense of their relationship with an algorithm and the likely expectations and demands they make of this new organizational party can help human resources function better predict workers’ behavior over time.”