The factors that contribute to the ultimate success of a business are well known to most entrepreneurs and Business Advisors. However Psychology introduces the importance of the need to balance the the unwritten needs of employees with the needs of the company. As psychologists we explore the complexities of what happens when perceived reality of working for a company do not match an employee’s unwritten needs also know as the psychological contract.
Seldom written or explicit, these unwritten needs may only become evident when they are no longer being met or they are violated. In more buoyant times this would mean that an employee would leave the company. However, in the current economic situation, many employees are faced with limited alternatives and stay in their job but may call in sick, or be present but show no drive or motivation to complete work. If you recognise this in your team take action
The nature of the boss-subordinate relationship is clearly a central feature of the psychological contract. Good people-management practices are the basis for a positive psychological contract and this means managers having to deal with the ‘soft. Stuff’.
Successful companies use a simple formula of Caring, Communicating, Listening, Knowing and Rewarding. They understand the importance of the psychological contract, defined as the perceptions of the employee and the employer have of what their mutual obligations are towards each other’. Often informal and imprecise: based on inference or from actions in the past, as well as those spoken the psychological contract is based on the situation as perceived by the parties it is often more influential than the formal contract.
Caring – demonstrating genuine concern for individuals working in the organisation.
Communicating – really talking about what the company is hoping to achieve.
Listening – hearing not only the words but also what lies behind the words.
Knowing – the individuals who work for you, their families, personal wishes, desires and ambitions.
Rewarding – money is not always necessary; a genuine thank you or public recognition can raise morale.
An awareness and proper management of the psychological contract can and will deliver hard, bottom-line results and improved business performance.