The Psychological Contract – a vital ingredient of performance.
The Psychological Contract is an unwritten, often covert, contract that individuals ‘establish’ between themselves and their employers based on a self-perceived set of obligations the person feels the employer should fulfil towards him or her.
Employees who feel they are fairly treated at work have attitudes that assist their performance and resilience against challenging events and behaviours that may occur in the workplace.
However if an individual feels the obligations are not being fulfilled, they will dis-engage, under-perform, and may leave. The fracture often arises when the person feels unfairly treated by the employer.
The Psychological Contract has, arguably, more significance in relation to personal performance than a formal contract.
Preventing a fracture in the Psychological Contract
The prevention of a fracture of the Psychological Contract relies on individuals revealing their ingredients of the contract. People may find it difficult to articulate the obligations that the employer should fulfil. If this happens, the leader/manager should try to express what they feel those obligations might be, so that the employee can build confidence to agree or disagree with the leader/manager’s observations.
The onus is placed on the leader/manager of a team.
He or she should create the working environment that provokes their team to feel psychologically safe – feeling they will receive no ‘comeback’ if they openly critique, comment, observe and make adverse comments about how the team, its leader/manager and other members function.
In this way, or any other way to provoke openness, the individual contents of the Psychological Contract will be revealed, enabling the leader/manager to adjust their own behaviour to mitigate risk of the contract being broken.
The steps to be taken to create such a working environment include:
* Step 1 – transform managers into leaders
* Step 2 – create the time to act as a leader
* Step 3 – establish mutual expectations
* Step 4 – reinforce the mutual expectations
* Step 5 – talk openly about the Psychological Contract and each person’s personal ingredients.
To find out more, download Derek’s paper about the Psychological Contract.
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Derek Mowbray and the MAS Team