Work – Psychological contract
Leadership – The Psychological Contract At Work
This post discusses the theory of psychological contracts in the workplace and in the wider world outside work.
‘The Psychological Contract’ is increasingly relevant in workplace relationships.
The idea of Psychological Contract first emerged in the 1960s and it was widely discussed, particularly in the work of organizational and behavioral theorists Chris Argyris and Edgar Schein.
Many other experts have contributed ideas on the subject since then, and they continue to do so, either specifically focusing on the Psychological Contract, or approaching it from a particular or new perspective. The Psychological Contract means many things to different people – it is open to a range of interpretations and theoretical studies.
Usually, the Psychological Contract refers to the relationship between an employer and their employees, and it relates to their concerns and their mutual expectations of that relationship, in terms of what each will put in and receive.
The Psychological Contract is usually seen from the standpoint or expectations of employees, although to understand it properly means you need to see it from both sides.
At its simplest, at work, the Psychological Contract is about fairness or balance. What can reasonably be expected! How will the employee be treated by the employer? What will the employee put into the job? What will be the reward?
The closer you look at the real nature of the contract in any particular organization, the more complicated it becomes; there will be unwritten “rules” and “expectations” on both sides.
The whole thing becomes more complicated when the organization is in change or when the outside environment intrudes – such as in times of recession when the employer’s ability to reward may be limited.
Of course, the theory and principles of the Psychological Contract can also be applied beyond the employment situation to human relationships, wider society and certainly in the world of politics between leaders and those led.
The concept of the Psychological Contract is still continuing to develop and it certainly is not recognized in all organizations. It is even less well understood in the world outside work.
But respect, compassion, trust, empathy, fairness and objectivity – qualities that characterize the Psychological Contract, are worth the regard and respect of all of us, inside work and out.