Question

Both microsoft and its employees can gain from the new evaluation system if employees are more loyal in return for positive support from the company. this can be called a?

Answer 1

The correct answer is- that it can be called as relational contract.

A relational contract is one in which the effect is based on the parties' trust relationship. The contract's explicit terms are an outline of the implicit terms and understandings that govern the parties' behavior.

Some features of relational contracts are-

• They represent parties' long-term relationships.
• They require an equal commitment from both parties.
• They necessitate a great deal of communication and collaboration.

Relational contracts are very important when it comes to retaining value over time and assisting in the maintenance of good contracting relationships. They are concerned with the long-term relationship between parties rather than just the transactional exchange. Although building trust can be difficult at first, relational contracts ultimately keep both parties happy by assisting in the creation of both tangible and intangible deals — and 'win-win' situations — that reduce operational costs. This goes a long way toward establishing long-term business relationships and mutual trust.

Learn more about contracts here:

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