Once people have joined an organization, be it via a recruitment process, voluntarism or even deployment the organization and leaders must create the conditions for continued high performance whilst permitting individuals to meet their own needs through their membership of the organization. Both sides need to get something out of it - and it is not only the physiological needs (remember Maslow's Hierarchy of needs last week?) like pay and conditions of service - Edgar Schein referred to these additional needs as the basis for a 'psychological contract ' between organization and member.
The psychological contract implies the existence of an unwritten set of expectations between manager and employee. Schein observes that 'some of the strongest feelings leading to labor unrest, strikes and employee turnover have to do with violations of the psychological contract, even though the public negotiations are often over more explicit issues of pay and work hours etc'
On the organizations side there is an expectation of loyalty, adding value and doing ones best for the organization. The psychological contract changes over time as the employee (member) and the organization's needs change - employees move from seeking development and growth, through reward and recognition to security and stability. Whilst the organizations needs change from high energy when it is growing, loyalty when under threat and steady support when in stable times.
Remember as well that the needs and expectations of both parties are constantly changing thus making the psychological contract a dynamic one constantly but often sub-consciously being renegotiated.
Can you spot any unwritten expectations between you and your followers, members or employees?
Till next week
Key take-outs:
- The psychological contract refers to the unwritten expectations of organizations and members
- Leaders need to ensure the contract is fulfilled or will face strong demands
- The psychological contract is dynamic and changes with needs
- The psychological contract is a powerful determiner of behavior in organizations.