Nicky Machin, who combines her part-time role as a member of the HR Advantage admin team with her studies towards becoming a qualified chiropractor, offers this insight into the real deal between employer and employee.
In addition to the written employment contract that sets out the precise conditions of employment, there is also a further psychological contract which exists between every employee and their employer. The CIPD definition of the psychological contract is 'the perceptions of two parties, the employee and employer, regarding their obligations towards each other'. As such, the psychological contract can set the dynamics of the relationship between the employee and employer, and so encouraging a positive contract can have a significant effect on the working environment.
Psychological contracts initially involved the belief in an organisation providing a job for life and therefore security for the employee and in return, employees were expected to remain loyal and work hard. In the current work environment, it is no longer possible for employers to guarantee a job for life, and so the psychological contract has evolved to emphasise fair pay and opportunities for training and development. Employees are still expected to be loyal to the company, however employers are aware of the importance of work-life balance to their employees and the psychological contract now reflects this. Employers can also expect professional behaviour and confidentiality from their employees.
The psychological contract is built up through perceptions by both the employee and the employer and as such the obligations described can be imprecise and may be inferred from management behaviours, past events or statements made during the recruitment process or performance appraisals. In fact the whole recruitment process involves setting out the basis for the psychological contract, as the interviewer and applicant discuss what they can offer each other. The way in which employees interpret the communications and actions of the organisation will determine how they build up their own view of the psychological contract, and every individual employee will have their own 'obligations' that are important to them. Therefore it is important that all staff, particularly managers are aware of how what they say can change employees view of the contract. For example if a manager mentions the possibility of a payrise during a performance review and the employee doesn't receive this or any communication from the manager relating to why this hasn't happened, then they might feel disgruntled as an obligation that was created by the organisation hasn't been met.
A breach of the psychological contract may not carry the same legal implications as a breach of an employment contract, however it can lead to bad feeling from one or more employees and may potentially cause resignations. When the psychological contract is breached it leaves a feeling of broken trust, either from the employee or the employer. Once breached, it is difficult to rebuild the psychological contract, especially as it varies with every employee and is constantly evolving.
Employers need to be aware of the psychological contract within their workforce and how they can positively influence it and prevent perceived breaches in order to keep their employees happy and loyal. Time is often spent on keeping employment contracts legal and up-to-date, but little consideration is given to the psychological contract, which can affect morale and motivation within the company.
For more advice about creating a positive working environment, please contact Nicky at
nicky@hradvanatge.co.uk or any member of the HR Advantage team.
