Psychological Contracts: they’ll make or break your Organisational Culture
Written by Prina Shah: Helping you to optimise your organisational cultures and develop emotionally intelligent leaders
Have you heard of the concept of a psychological contract? When sharing it with my Coachees, many have the light bulb moment as it conveys their feelings regarding their workplace.
The psychological contract can be of enormous benefit or huge detriment to the organisational culture. Before we get into detail, let’s uncover what a psychological contract is.
The Definition
The concept of the psychological contract was originally developed by Denise Rousseau. Rousseau is an H. J. Heinz II University Professor of Organizational Behavior and Public Policy at Carnegie Mellon University.
Unlike a formal, employee contract, a psychological contract is a covert, implied, unwritten set of hopes that the employee has. Each one of us will have a different psychological contract to our workplace. It includes values, mutual beliefs, common ground and expectations between the employer and employee. It is unwritten, often in the mind of the employee. And it is always evolving (as we evolve.)
The link of psychological contracts and your organisational culture is immense.
It is the glue that binds the employee to your purpose, vision, mission, values and all the good stuff. An employee with a positive psychological contract will be:
· More agile (as your organisation changes, so will the employee.)
· More loyal (they won’t be job hunting.)
· More productive (they know what they have to do and how they fit in to the bigger picture.)
· More customer focused (they know the bottom line.)
As opposed to an employee with a negative psychological contract, who will more likely be:
· Disengaged / unproductive
· Negative / toxic
· Looking for work elsewhere
· Less open to internal change
· Negatively impacting your bottom line
Employers:
Which type of employee do you think is better for your employee brand? Have you read reviews of your company on Glassdoor or Seek (Aus.)
For those of you who want to work on your psychological contract with your current workplace, I recommend this to my Coachees, try it out for yourself:
· List the great things about your workplace
· List the frustrations you have with your workplace; what areas do they fall into? (Leadership, Communication, Autonomy, Flexibility, Teamwork, Career Progression, Mission/Vision/Values, Environment, Executive, the Culture.)
· Now before you make any decisions— take it further and address the things that are breaking the psychological contract, try this activity before you decide to quit your job.
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