Companies and employees are often acutely aware of the terms of their written employment contracts. The roles, responsibilities, working hours and salaries are clearly laid out for all to see. What is often overlooked, however, is that there is a second, hidden, contract within the employment relationship. This is known as the psychological contract. The psychological contract refers to the often implied, unwritten mutual expectations, beliefs and obligations between employee and employer. For example, an employee may take on additional work in the expectation that it will help to advance their career, or an organisation might expect employees to be more flexible in their working patterns during peak times.
Whilst hidden, the psychological contract plays a very important role in motivation, job satisfaction and fulfilment in one’s work. However, a key challenge is that there isn’t a definitive list of what expectations and obligations employees and employers may have within their psychological contracts, as each is unique to the individuals involved.
For some there might be expectations around job security, for others it could be having their ideas taken seriously by the organisation and yet others may have expectations around training and development opportunities. When these expectations and obligations are being fulfilled it can result in high levels of engagement and satisfaction within work. When they’re broken however it can lead to disengagement, unhappiness and increase the intention to quit.
Given their hidden nature, how can employees and employers navigate the world of psychological contracts to create positive and fulfilling work environments? Firstly, employees and employers should ask reflective questions of themselves to explore what expectations they may have unconsciously created outside of the formal written contract. For example, if my organisation stopped offering continuing professional development courses would this make me more or less happy and why?
Answers to questions such as these can help to make those expectations more tangible and less hidden. Human resources management and psychology in the workplace can be the keys to bring employer and employees together, clarifying expectations and responsibilities with shared goals in mind.
Communication is also key. For managers it’s important to have holistic conversations that enable them to get a sense of an individual’s current experiences at work, their aspirations and unique motivators. For employees, it’s important to not only reflect on the expectations that they may have but then communicate these to the organisation in a constructive and proactive way.
We all have unique knowledge and experiences that shape who we are and what we want from our work. Being mindful and reflecting upon these experiences can help us to identify what motivates us, what can cause us to disengage and what we can potentially target to make our existing role even more satisfying.
August 23, 2022
Firms need a better understanding of their psychological contract with employees
by Anthony Thompson • Comment, Workplace
Whilst hidden, the psychological contract plays a very important role in motivation, job satisfaction and fulfilment in one’s work. However, a key challenge is that there isn’t a definitive list of what expectations and obligations employees and employers may have within their psychological contracts, as each is unique to the individuals involved.
For some there might be expectations around job security, for others it could be having their ideas taken seriously by the organisation and yet others may have expectations around training and development opportunities. When these expectations and obligations are being fulfilled it can result in high levels of engagement and satisfaction within work. When they’re broken however it can lead to disengagement, unhappiness and increase the intention to quit.
Given their hidden nature, how can employees and employers navigate the world of psychological contracts to create positive and fulfilling work environments? Firstly, employees and employers should ask reflective questions of themselves to explore what expectations they may have unconsciously created outside of the formal written contract. For example, if my organisation stopped offering continuing professional development courses would this make me more or less happy and why?
Answers to questions such as these can help to make those expectations more tangible and less hidden. Human resources management and psychology in the workplace can be the keys to bring employer and employees together, clarifying expectations and responsibilities with shared goals in mind.
Communication is also key. For managers it’s important to have holistic conversations that enable them to get a sense of an individual’s current experiences at work, their aspirations and unique motivators. For employees, it’s important to not only reflect on the expectations that they may have but then communicate these to the organisation in a constructive and proactive way.
We all have unique knowledge and experiences that shape who we are and what we want from our work. Being mindful and reflecting upon these experiences can help us to identify what motivates us, what can cause us to disengage and what we can potentially target to make our existing role even more satisfying.
Anthony Thompson, Programme Leader for Postgraduate Psychology at Arden University