Psychological Learning Contracts
Richard Hall, Associate Professor in Work and Organisational Studies, University of Sydney
Dr Hall wrote two papers for the then TAFE ICVET, as a contribution to workforce development discussions. Full papers.
What is a psychological learning contract? Why should it interest me? Richard Hall’s two papers were prepared as a contribution to workforce development discussions. The papers provide a lens for seeing the workplace as a manager, as an employee, and also as a teacher.
Its not just pay for hours we expect is it? And there is a lot more that our organisations expect from us too. What happens when employees, or perhaps students, believe that an unwritten contract has been breached? We all know that in times of organisational change, employee motivation is the first thing to suffer. One of the many reasons for this is that the change can affect the implied understanding between an employee and their organization. How can employers, or even teachers, manage psychological contracts?
What is a psychological contract?
A psychological contract is the implicit understanding of the mutual obligations owed by an employee and their employing organisation to one another.
Psychological contracts are being continually ‘re-written’ with interaction. They are based on:
- beliefs/perceptions – different people can have different ideas on what the contract entails
- perceived agreement - employees and managers may disagree as to its content
- an exchange – a promise to behave in a certain way provided the other party gives something as ‘part of the deal’
Terms in psychological contracts include matters such as organisational support, employee loyalty and flexibility and the employee’s organisational citizenship behaviour.
How have they changed?
Workplaces and expectations have changed dramatically. In the past, employees could expect to get a degree of job security, training, development, seniority and guaranteed pay increases, reasonably extensive benefits and career pathways, in exchange for working set hours according to defined job descriptions.
Employees now are expected to work more intensively across a broader range of tasks, using a greater variety of skills that they need to have already acquired, with greater accountability and high performance in exchange for pay without job security.
Contemporary work has a fundamental contradiction. Employers seek increased productivity and performance from employees through increasing their commitment. But in seeking to drive down costs, the strategy of labour flexibility results in harsher working conditions for most employees. Richard Hall refers to this as the incompatibility of flexibility and commitment.
Managing the psychological contract
Well-managed psychological contracts can contribute positively to employee motivation and performance. However, if an employee feels the organisation ‘fails to meet its side of the deal’, the consequences can involve lower levels of job satisfaction, higher quit rates and lowered job performance.
To better manage psychological contracts:
- Make the terms explicit to lessen chance of breaches from misunderstanding. This can mean
- open discussions between management and employees about expectations and perceptions of promises and obligations.
- a role for ‘realistic job previews’, comprehensive induction programs, wide-ranging performance and development meetings and regular feedback.
A note of caution: leaving some aspects of the employment relationship unstated may leave room to move and deal with diversity. Explicitly stating rules can result in management assertion over employee expectations.
- Manage change and employee resistance through:
- Communicating the need for change
- Communicating the vision of where the organisation is headed
- Involving those affected in the change process
- training and resources
- Negotiating with resistors
- Using reward systems to encourage changed behaviours
- Using explicit or implicit coercion.
The lessons for managers are spelt out. How can we apply these principles as teachers? It could benefit to reflect on the implicit expectations we and our students have of each other. And on managing situations where those contracts may be breached.
If you want to read more about the psychological contracts perspective, Richard Hall’s articles can be found on our site at:
Psychological Contracts: an introduction
Psychological Contracts: why do they matter?