Has the psychological contract between employers and employees been broken?The psychological contract is made up of those implicit agreements between employers and workers that do not make it onto paper and are seldom even verbalized. Tenants of the psychological contract include the "mutual beliefs, perceptions and obligations" between the employer and worker.An example of an implicit agreement is the employee's expectation of job security in exchange for hard work and loyalty. For many workers today, that psychological contract has been broken.
For others, the psychological contract has been rewritten. For years, organizational scholars have been preparing us for a shift from relational-based to transactional-based psychological contracts. The transactional contract is based on monetary remuneration in exchange for agreed upon performance standards over a period of time. This working arrangement is more familiar to the contract worker, or portfolio careerist.
For people managers, the evolving role of the psychological contract underscores the need for clearer communications on the nature of employment. When the tenants of the psychological contract are broken trust is broken. The betrayal of trust in the workplace is contributing to higher employee turnover. Deloitte LLP’s fourth annual Ethics & Workplace Survey has found that one-third of employed Americans plan to move on when the economy picks up. The top reasons cited for looking for a new job include a loss of trust (48 percent) and a lack of transparent communications (46 percent).
Whether or not employees have the luxury of changing jobs, the large negative effect of a breach in the psychological contract on productivity is evident. Based on the Deloitte study, due contract breaches, at least one sixth of the workforce is demoralized enough to not want to work for their present employer. Negative outcomes of a breach include lack of work satisfaction and motivation and an increase in stress, according to presentations by psychological contract expert David Guest of King's College, University of London. Other behavioural consequences include a decrease in attendance and job performance.
To uphold the psychological contract, Dr. Guest recommends that employees provide:
"•reasonable demands/manageable workload,
•some personal control over work,
•support from supervisors and colleagues,
•positive relationships at work,
•a reasonably clear role, and
•involvement in changes affecting you."
