Positive People HR Consulting
Chanel Finnigan August 2, 2023 No Comments

Do you remember your first job? Things were simple, weren’t they?  You work, your boss pays you. No need for flexible work, wellbeing strategies, recognition plans. Today the equation is far more complex, and we all have to shift our thinking.

While technically, employment is based on an employment agreement, it is also very much centred around a psychological contract.

psychological contract refers to the unwritten mutual expectations and obligations between an employer and an employee. It is based on the perceptions of what each party owes the other in terms of contributions, rewards, work commitment and delivery, as well as attitude and shared values. It is much more than what is in the job description.

The psychological contract is essentially the progeny of the organisational culture. It reflects the behavioural and attitudinal vibe that exists within the organisation. Whilst it is linked to the expectations established in the employment agreement, it operates at a much deeper level, is organisationally unique, is more nuanced and really aims to establish a hand in glove fit between employee and organisation.

To have a truly successful employment relationship, both parties need to understand, agree and be aligned on the expectations that arise from the psychological contract.  

The needs of employees and their expectations of work have evolved significantly in the past few years. We have seen the increase in flexibility, the need for meaningful work, and the increased importance and protection of personal time and space. Generation Z has also entered the workforce, and this generation has never known a time without a smartphone, social media or an airpod in their ear.

However, to be successful, and irrespective of the way the world of work changes, you and your employees still need to share common values.

You might need to shift your expectations as much as your employees need to shift theirs. If you are to get what you need from them, they also need to get what they want from you.

So how do you do this?

Starting at the beginning of the employment relationship is essential and will set things up for success from day 1.

  1. Ensure that your organisational culture is well articulated and outlines the organisational vibe and expectations beyond what the employment documentation does – A Company-wide commitment to the organisational culture gives it credibility, so be prepared to involve your team in fine-tuning what it is. It should reflect a win-win outcome. This will ensure the commitment endures and underpins everyone’s success.
  1. Build the psychological contract into the recruitment process – Most job ads have a list of what you require, and what your business will provide to the new employee. Does anyone read this? Are these just words for attraction’s sake? Make sure these are meaningful and relevant statements and discuss this at interview stage. Having a real two-way conversation about the Company culture at the recruitment stage will help establish fit and commitment. Ask what flexibility means to the candidate. Does this align with your organisation’s view on it? Discuss your organisational values and ask candidates what their values are and what they mean in real work related terms. Let them tell you. This will help you to work out whether a psychological contract could be formed with a candidate.
  1. Discuss again during the on-boarding phase – At the recruitment stage these discussions are theoretical. The on-boarding is where the practical elements of the psychological contract start. For example, if you have work from home options that also includes attendance at a Monday morning meeting every week, tell them and start this from day 1. This builds habits and reinforces the employee’s part of the bargain.
  1. Make sure you always meet your organisational promises – It is very easy to list what you expect from your team. But what about the promises you have made to them? If you don’t follow through with your own organisational commitments, you have broken the psychological contract. Why should they keep their promises if you don’t?
  1. Reinforce the psychological contract – Too often we let unacceptable behaviour occur multiple times before the issue is addressed. By this time it can have become a habit and through your acceptance of the behaviour it can become the norm. Early intervention and a reminder of the commitments they have made is the easiest way to correct things before they become a big problem and the relationship breaks down.
  1. Be consistent – As leaders, on some days we are well prepared to discuss matters with our team and on others we are not. Not addressing issues in a timely way creates uncertainty in the employment relationship and can muddy expectations of each other. To be successful consistency is key.

A successful employment relationship is interdependent, is built on trust, involves common understanding and requires good communication.

As leaders, recognising the shifting employment landscape, adapting to it and being clear with your team on your expectations will go a long way towards helping your business get the best from your people. Deliberately building a psychological contract is a critical element of this.

Positive People have over 25 years helping businesses establish positive and productive teams. Call us now on 09 445 1077. We are here to help.

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