After starting a new job, we sign a contract. In that contract, all the working conditions, such as responsibilities and salary are established, among other issues. But this kind of contract is not related to what we call psychological contract. It’s a well-known term in the human resources field. Let´s quickly review what it is about.
What is a Psychological Contract?
When a company hires an employee, he/she arrives with particular and personal expectations, which are different for each person. On the other hand, also the company has certain expectations about the employee that is being hired. So, the psychological contract includes mutual beliefs, informal arrangements, and perceptions between the two parties. Promises over promotion or salary increases, for example, may form part of it.
At the beginning, during the recruitment process, each part will get to know some of the other’s party expectations, and when the candidate is hired there is an implicit agreement in which each party hopes to achieve their goals and benefit from the relationship.
The Importance of the Leader’s Role
This agreement is not static: it changes and evolves constantly. People’s expectations and organizational needs vary as time goes by, so this implicit agreement must be constantly renewed.
In that respect, the leader’s role is crucial because they should be sensitive enough to interpret and clarify their collaborator’s aspirations. Some employees, because of their personalities, won’t explicitly express them, but they will be showing their needs with attitudes and actions throughout their careers.
Besides, leaders should also provide information about what the company is expecting of them and the role they are developing. In this way, communication must be a two-way process, transparent, and honest.
Confidence Is a Must
If we want to generate commitment in our employees, it is essential that they perceive that the organization has fulfilled its promises and commitments, provided fair treatment and, in that way, created confidence. In any relationship, the loss of confidence is really difficult to revert.
When the psychological contract is broken, the employer and employee lose. That transparent thread that links them is cut, the employee feels cheated on, frustrated, unmotivated. Probably, he will desire to leave the company, and start looking for another job. This will logically influence his/her behavior, attitude and therefore, his/her performance.
So, if we want to avoid having a frustrated and low-performer team, it is key to honor promises and commitments. Avoid generating expectations that we will not be able to meet. And above all, give constant feedback. Because “confidence requires a thousand acts to be gained, but it can be lost by only one.”
What do we do at Intraway?
At Intraway we have this in mind, so we have implemented some instances to listen to our employees and their needs.
The third stage of the performance review process has a key importance. During this part of the process, leaders and collaborators schedule meetings to discuss the last semester’s performance and goals achieved and establish new ones for the next semester. This meeting contributes to enhancing the interpersonal relationship between them, and gives them the chance to openly talk about desires and expectations, and where they are in meeting those expectations.
On the other hand, the Human Resources department has implemented monthly “integrational breakfasts” in which people from different areas are invited. The objective is to be closer to people, know our employees better, understand how they are in the company, and answer doubts. That information is very helpful; we analyze it and then take actions to make each day a better day for Intraway’s members.