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Method in the Madness
by Tricia Jack, MPA, CPPA
Several years ago, on my first
day in a new job, my manager spent some time with me talking about my expectations.
She asked me how I liked to work, how I liked to be managed and what I wanted
to get from the job. She told me about her expectations as a manager. I’d never
had a manager be so direct before and at the time I thought this a little odd.
It was only later that I realized that, like Lord Polonius in Shakespeare’s Hamlet, “Though this be madness, yet
there is method in it.”
My take on this interaction is that my new manager was
establishing a psychological contract with me. The “psychological contract” is a term coined by Chris Argyris in
1960. In the management and organizational behavior arena, that’s old, but it’s
not outdated, because the concept is still very much alive in workplaces today.
The psychological contract refers to a reciprocal perception
between the employee and the employer about what is “expected” and what is
“owed.” The key word is “perception,” because a psychological contract is not
written. Thus the contract can vary greatly from employee to employee, even
among those doing the same or similar jobs.
Psychological contracts are not expectations, although they can help to form
expectations. Rather they are beliefs about what employees should receive based
on what they perceive that their employer offers them. For example, the manager
or organization is expected to treat the individual fairly, provide a safe
working environment and the employee is expected to complete tasks on time and
with a positive attitude.
In today’s economy this contract, based on mutual trust, is becoming
increasingly important. If an employee perceives that the organization or
manager has failed to fulfill one or more of the “contractual obligations,”
trust is broken down, and this can have a negative effect on the psychological
contract as a whole. When managers are personally responsible for breaches this
is especially true: for example, when promised training or a promotion opportunity
is not delivered. But even when external factors come into play, such as reductions
in force because of economic conditions, managers may still take some blame.
When difficult situations such as budget cuts come, leaders must work to
improve the trust and perhaps renegotiate the psychological contract. Thinking
of this as a strategic measure is helpful. If people are truly perceived to be the valuable “bottom line” of an
organization, their needs and expectations should be integrated into planning.
According to the Chartered Institute of Personnel and Development (CIPD) in
the UK[1],
the psychological contract can have implications for organizational strategy in
a number of areas, for example:
- Process fairness:
People want to know that their interests will be taken into account when
important decisions are made; they would like to be treated with respect;
they are more likely to be satisfied with their job if they are consulted
about change.
- Communications:
People want to know what is going on, especially when there is rapid
change. Two-way communication, both formal and informal, is essential as a
method of building trust.
- Management style: Managers may have to adjust
their ideas about what management is, so that they can draw on the
strategic knowledge in employees' heads and listen to their ideas.
- Managing expectations: Managers may have a tendency to emphasize
positive messages and play down more negative ones but employees can
usually distinguish rhetoric from reality. Managing expectations, particularly
when bad news is anticipated, will increase the chances of establishing a
realistic psychological contract.
- Measuring employee
attitudes: Employers
should monitor employee attitudes on a regular basis as a means of
identifying where action may be needed to improve performance. But
employers should only undertake surveys of employee attitudes if they are
ready to act on the results.
According to CIPD, “Breach of the psychological contract can seriously
damage the employment relationship. It won’t always be possible to avoid a
breach but employees are more likely to be forgiving where managers explain
what has gone wrong and how they intend to deal with it.”[2]
It may be worthwhile to spend some time figuring out just what the
psychological contract means to you and your team. On the surface this may seem
like a pointless, “pink and fluffy” management task, but there is method in the
madness.
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