Psychological contract; what does it mean? Do we need to take it seriously?

Do you hear business jargon thrown around the office daily and wonder if it really is necessary to take note of what it truly means? This might be because your colleagues are trying to make themselves feel important by baffling everyone with bull**** or it might just be that its more entertaining to say the initials of a phrase and watch the blank faces stare back at you around the room. Regardless, jargon seems to be an important factor of working life.

Ready for some more jargon? The psychological contract. What is it? Where did it come from? Who invented more jargon? Do we need to write a jargon dictionary to keep track of it all? It isn’t always on the top of the list when it comes to things to consider in the workplace, this may be due to its intangibility or the fact that people don’t know what this particularly refers to.

The psychological contract involves everyone… even you. Yes, you.

You might know it as something else, like an unspoken agreement between you and your team or even between you and your line management. It lies in the culture and work ethic of every organisation and within its people. It is the expectation you have of your team and their expectation of you.

It sounds simple but this is where it gets tricky.

Having a solid, understood psychological contract can be difficult to attain for many reasons. A sound psychological contract will be an agreement that aligns the needs of the business and of the individual. Easy right? Not really. The psychological contract is ever changing. It is all of the extra bits and bobs that employees are expected to do at work but that aren’t in the employee contract. For example, you work overtime as it’s an expectation of your line manager? Psychological contract. You expect your team to come in early when there’s a big project due? Psychological contract. If your employees feel their side of the bargain is looking a little slim; they could feel they have been taken advantage of and this leads to low morale and high turnover.

How do you manage this?

In simple terms, have regular meetings with your team to let them know your expectations and asking their expectations in return is best practice, this way, there is never any misalignment between what you and your employees think. And if you want to be a great manager… reward your team for going above and beyond in their work so their side of the psychological contract is more than accounted for.

All in all…

Reward + good morale + employee voice = high productivity!

Happy Friday!!!!


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Psychological Contract

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