The Psychological Contract: What is It and What Does it Mean?
A psychological contract is an unwritten set of expectations that exists between an employee and the manager. When most employees undergo the hiring process, managers may make promises to new employees such as, “You will be able to advance here without any problem.” Employees take these statements seriously and may think of such statements as promises for the future. Therefore, when these promises are broken, employees lose trust in his or her manager and the organization.
An employee’s feelings of self-worth may rest heavily on the psychological contract between the employee and the organization. Therefore, behaviors in the workplace rest heavily on the psychological contract. If an organization fails to take authority over the psychological contract, employees may be left feeling disappointed and ultimately motivation on the job will suffer. Employees may become disengaged and choose to leave the organization if he or she feels that promises have broken.
Organizations can become frustrated with employees if the work produced is not what is expected. Organizations too can be guilty of unwritten expectations. While these may not always be a problem, some employees need expectations clearly defined. When expectations, pay increases, and job descriptions are clearly outlined and documented from the beginning, the employee will know what to expect and avoid disappointment.
So, what should organizations do in regards to psychological contracts? Most importantly, organizations should work to motivate, encourage, and engage employees without making verbal promises. The organization should also establish itself as a strong authority figure from the beginning of an employee’s career. That is, the organization should enforce the contract to indicate that the organization has the ultimate power in the employee vs. employer relationship.
Psychological contracts change overtime based on organizational and employee needs. For changes to occur, both parties must accept the changes and stick to the changes. If large changes are made, the organization should document the changes.
What are your thoughts on the concept of a psychological contract? Do you think they exist?