Psychological contract (PC) has emerged as a construct to deal with complex relationship between the employees and employers (Pate, 2006). The research in the area of PC has grown significantly due to its link with favorable organizational outcomes. PC refers to the expectations which employee and employer have from each other and what they owe to each other. The traditional PC between the employee and employer is breaking. In a fiercely competitive environment employer is no longer obliged to provide lifelong job security, guaranteed pay increases, and assured career opportunities (Singh, 1998; Herriot et al., 1997). The old PC is altered and both employee and employer are equally concerned about the new PC (Rousseau,1995; Welch & Hood, 1992). The new PC has resulted in emergence of new factors and outcomes. A healthy employee-employer relationship has become fundamental aspect for survival of the organization. The examination of its factors is necessary in order to understand and predict the consequences of PC. There are various individual and organizational factors which influence PC. Therefore, there is need for comprehensive framework to understand the PC to take it to another level in the current era.