Employment Relationships: Are you meeting the Psychological contract with your employees?

Everyone has heard of the written contract; clearly set out guidelines detailing the expectations of both employer and employee when it comes to aspects such as hours, pay, working conditions etc. These are classed as the explicit expectations placed on both Employer and Employee.

But what about the implicit terms?

These are aspects that are not in writing and make up the Psychological contract; which is a person’s belief about the mutual obligations that exist between and Employer and Employee. For example, an Employee may expect training, progression opportunities, and a positive working environment and in return the employer would expect loyalty, commitment, and effort.

It is rare that companies break the written contract as due to employment legislation and law surrounding them it is evident when a breach happens. Companies will avoid breaking the written contract as it can have damaging effects on their reputation and bring about severe financial consequences as a result.

The Psychological contact however is easier to breach and forms the basis of why most of our candidates use us to source them new employment. It is not governed by law and often when things are not set in stone they are harder to reinforce. In most cases, the Psychological contracts are never discussed openly as the communication mechanisms are not in place to do so comfortably.

It is important for a business to look at this type of contact within their business and to the extent that they are fulfilling it, as if broken it can ultimately have far-reaching consequences in the workplace. Businesses have reported that when they have breached the Psychological contract it has resulted in lowered levels of trust, job satisfaction, performance, and reduced employee engagement. Some extremes have seen employees move from a more relational view on the employment to that of a more transactional one which results in shift in the employee’s behaviour in terms of dedication and effort.

Determine the state of the Psychological contract

Carry out anonymous surveys with your employees to determine what their expectations are and if they feel that they are being met.

A business would also benefit in being more transparent and opening the lines of communication for employees to step forward and speak about what they are satisfied and dissatisfied with.

How to avoid broken promises

Look at what is being communicated as part of the Employer Branding by the company and whether this message is being lived up to. Are all the managers and leaders within the business onboard with any initiatives that make up the employer branding?

Ensure that you are aligning employees work with their strengths and that they are working to move forward in that direction. There is nothing worse that the realisation that the promotion you were after is not available based on your competence in that area.

Provide feedback and recognition. Adequate feedback concerning performance is an essential component to work life and can help elucidate aspects of the employee-employer contract. Furthermore, we often recognise organisational goals, but often fail to do the same for individual contributions. As a result, an erosion of the contract can occur.