Emerging innovations in geographically extreme teleworking: The unfolding dynamics of the psychological contract

Teleworking is becoming a persistent feature of contemporary work arrangements, placing strain on the psychological contract between employees and employers. This paper examines how innovation helps managers to sustain employment relationships under prolonged geographical, temporal, and social isolation. Drawing on a year-long case of an employee engaged in geographically extreme teleworking, we show that innovation operates not merely as adaptation but as a relational mechanism for preventing and repairing contract disruptions over time. We identify four psychological contract phases – burgeoning, intensification, conflict, and reshaping – each associated with distinct types of innovation. We show that contract strain often originates in employees’ interaction with sustained structural separation rather than organizational failure. We translate these insights into a manager-ready playbook to support sustainable geographically extreme teleworking arrangements.