Workplace Analysis of the Psychological Contract
The saying that mutual admiration within the workplace binds the workforce could be a pretext to harmonizing relationships between employees and employers. The mutual admiration could be working both ways of benefits, being beneficial to the result of work and the business endeavor. Thus, mutual admiration of workforce within the organizational setting of a workplace is perceived to tie the bond of commitment, reliability and trust, aside from the legal stipulations in a written contract of employment.
However, how a psychological contract does characterize the mutual values of consistency and guaranty between an employee and an employer? This basic question could be examined in the process of understanding the relationships and define the circumstances surrounding the situations in the workplace. This paper will discuss and analyze the psychological contract affecting the workplace, relating several issues being confronted by employees and employers.
Defining psychological contract and its effect It would be important first to know what psychological contract is all about. As defined by Psychologists Janet Smithson and Sue Lewis from the Department of Psychology and Speech Pathology at the Manchester Metropolitan University, understanding the “psychological contract” is referred to as the “meeting of expectations” where both employee and employer aspires (Arygris 1960; in Price, Munden & Solley 1962; in Smithson & Lewis 2003: pp. 1-2).
In layman’s definition, “meeting of expectations” could be exemplified by the performance of the employee towards work which is being expected by the employer to produce a quality, efficient and effective result. On the other hand, it is for the employer to provide the necessary wage and benefits, compensating the good result of performance of the employee. However, without meeting neither one nor any of the expectations could breach and defeat mutual concern. In which case, one of the results could be a defiance and conflict of interests, wherein work and labor related issues become a dilemma in the workplace.
Psychological contract in contemporary working environment With the rapidly increasing growth in numbers and sizes of profitable organizations, human resource management experts and scholars perceive the development of a “standardized” labor policy and procedures in workforce deployment. Correlated to this perception is the indicated inclination of management leadership to eventually acknowledge the reform through labor treaties, specifically in recognizing the collective bargaining agreement with labor unions.
However, “meeting of expectations” may still be a “one-sided” concern of the employer’s management due relevance of emerging diversified industries that may not totally materialize the “inclination” to reform the culture in a workplace. Kheeran Dharmawardena (2008) in his journal entitled: ‘The Changing Nature of the Psychological Contract and its Impact on Modern Organizations’, has examined the relevance of psychological contract from the early studies of several organizational experts.
Dharmawardena synthesized the findings that scarcity of employment and security of tenure patterns the good performance of employees (Bergmann et. al. 2001; in Lester & Kickul 2001; in Dharmawardena 2008: pp. 1-7). It may be analyzed that causal to the shortage of employment opportunities, the workforce retains the “showmanship” of performance, aspiring to achieve “job security” or long tenure of employment.
The aspiration itself relinquish the “no-no attitude”, wherein retaining good performance in the distinction of skills and acquirement of further learning from the workplace extends the “systems thinking” as a psychological contract to upholding the need of being employed. Acknowledging the above analyses has related the perception of Cyril van de Ven, (2004) who viewed that the intensive diversified industrial trends increases the effects of unpredictable organizational change.
Considering the unpredictability, most contemporary employers are decisive in achieving the sustainability of their organizations (especially the businesses that rely in the global supply chain) by acquiring the best possible workforce, workplace and market (Rousseau 1995; in Shore & Tetrick 1994; in van de Ven 2004: pp. 1-11). It shows that this typical ambition of contemporary employers is relative to “systems thinking” of the employees, having the psychological contract to securing the profitability and existent ability to do business.
In sum, the mutual concern of employee and employer attributes the psychological contract of sustaining the interest, in which narrates the desire or aspirations of the employment to co-exist in a secured and sustained working environment. Psychological contract and workplace issues This topical discussion features the subject matter pertaining to psychological contract and workplace issues. As an overview, the mutual aspect in sustaining overall organizational performance signifies the “oneness or belongingness” of membership to the organizational objective, referring to members and leadership.
However, the situation of dissatisfaction and question of confidence becomes the common issue that is dealt with, specifically in employee and employer relationship. Janice Anna Knights and Barbara Jean Kennedy (2005), in their journal ‘Psychological Contract Violation: Impacts on Job Satisfaction and Organizational Commitment Among Australian Senior Public Servants’, has cited the finding that dissatisfaction and loss of confidence are perennial issues dreadfully affecting the psychological contract.
According to Knights and Kennedy, the common violation to the value of satisfaction is being dismayed by the fact that what has been verbally promised is contradicted by lies. This can be exemplified by the failure of the organizational leadership in fulfilling the promise to the membership. Reflective of Knight’s and Kennedy’s ascription to psychological contract on that particular case of unfulfilled promises may not only result dissatisfaction or disappointment but a deliberate disparity that may lead to organizational collapse.
It may also relate the situation in a workplace where the employees were not able to achieve the promised benefits and due compensation of labor, in which the psychological contract to expect or aspire the viability of employment has failed. In most cases of labor disputes, the unfulfilled delivery of legally or lawfully mandated wages and benefits is claimed to violate the laborer’s rights. The violation may in itself affect the psychological contract of the employee, being unsecured or unguaranteed to achieve the source of livelihood.
Therefore, psychological contract extends the paranoia of defeated and unfulfilled envisioning for a beneficial workplace. In Cantisano et al. ’s (2007) journal, entitled: ‘Social Comparison and Perceived Breach of Psychological Contract: Their Effects on Burnout in a Multigroup Analysis’, has documented the prevalence of gross labor violations. Based on the exhibited data from the conducted study research, the responses of respondents ranging from lower-income to medium-income labor forces or employees suffer from “breach of psychological contract”.
To cite, employer denial to providing the necessary and just compensation [as required by law] infringe the common aspiration of the workforce to obtain the reasonable share of labor. As further cited, the effect on the “breach of psychological contract” has indicated the respondent’s extreme anxiety, such as (1) negative social judgment referring to employee-employer relationship, (2) emotionally exhausted for being violated and abused, (3) feeling of cynicism or skeptic that employers are exploitative, and (4) loss of self confidence and esteem (Van der Zee et al. 2000; in Cantisano et al. 007: p. 125). Empowering psychological contract In relation to the previous discussions, Brian P. Niehoff and Robert J. Paul (2001) of the electronic magazine Review of Business have proposed the enabling of policies that may be supplemented to the existing labor laws.
Accordingly, the 2001 data of incidence in committing labor-related violations has remarkably increased to an alarming 33,000 cases of labor malpractice pending before the investigation or proper promulgation of the National Labor Relations Board which piled up in ten years from 1991 (Niehoff & Paul 2001: pp. -2). Niehoff and Paul (2001) have emphasized that “loose promises” in the workplace in order to encourage or attract the attention of the workforce. It may validate the negative thinking [of the already cynical employees] that employment is no longer beneficial and insensible to the aspirations of the workforce to gain social equity and equal treatment of labor.
As cited, the disagreement point out to unreciprocated or unequalled performance of the employers to maintain the tenure of employment and sustainable income sourcing (Niehoff & Paul 2001: pp. 3-4). Indicative of Neihoff and Paul’s proposal could harness the psychological contract within the workplace. Upholding the “sensitivity” of the employer would mean to fulfill the promise by granting the just compensation and rectify indiscriminate treatment, and abdicate the flawed promises.
As cited, it may not only the conflict within the workplace that shall be settled but the whole process of the system, wherein workforce may only be survived by their “grim determination”, and the remainder of “self-belief” that contemplating on the issue could be the only way to obtain the psychological contract. However, the “culture of deceit” could be permanent or entangled in the protectionist character of employers, obviously protecting the business interest (Neihoff & Paul 2001: pp. 3-4).
Empowering the psychological contract can be objectively described in the organizational life of Pret a Manger, a leading sandwich biscuit company in the United Kingdom. In a contributed article of Psychologist Michael Wellin which was recently published by the electronic magazine Chief Executive Officer (CEO) of the SPG Media Limited, it quoted that: growing numbers of businesses apply the psychological contract convergent to forge organizational relationship between employees, the management and the company itself”.
Dr. Wellin pointed out that the “trade secret” of Pret a Manger is the continuing openness of thoughts and understanding the situation, character and culture of the organization, where employees and employers are aware and much sensitive in dealing with the issues that relates the psychological contract. Dr. Wellin has found the strong importance of organizational values of Pret a Manger in dealing with the “mutuality of efforts” of both employees and employers.
As cited, Pret a Manger has developed the organizational expectations by and between the employees and the management, such as follows in bulleted list below (Wellin 2008; in SPG Media Limited 2008: pp. 1-2): Management expectation on employee’s attitude towards work • Sensible hard work; • Prudently hilarious and easy to please; • Have the benefit of good life; • Work early to leave early. Employee’s expectation from Pret a Manger management • Fairly compensated according to individual performance and position; • Dynamic working environment of diverse workforce and skills; • Provide development-education and skills training; Promotion of managers among the internal regular employees. Based on the findings on empowering the psychological contract, it appears that retaining the “mutuality of efforts”, referring to meeting the expectations of employees and employers, could paved the way towards achieving a dynamic and reliable collaboration or synergy in the workplace. This extends the analysis that fulfilling the psychological contract of the workforce systematizes and mobilizes their natural desires to sustain the viable means of the workplace, in which therefore meeting the expectations or objectives of the leadership at a judicious manner.
It may also attribute the perception that the sensibility of an employer in upholding the employees expectations [as a psychological contract] could be considered as a social, moral and civic responsibility by promoting the rights and welfare of the labor force, wherein a more beneficial return will impart to the invested cost of values and as bonus to the margins of business profit. To further validate the analysis, it points out the situation that psychological contract eventually changes according to socio-economic, socio-cultural and socio-political changes.
This can be exemplified by the previous discussions on the development of labor forces and markets that have been attributed by the rapidly changing business and policy environment as a result of “social diversification of industries”, keeping abreast at the global landscape of production and supply of goods. In short, psychological contract emerges in the “social and economic status” of the labor force. As cited, psychological contract always retains in the unstable or stable economic and political condition which reciprocate a particular situation (Pascale 1997; in Sharpe 2001).
This can be exemplified by the prevailing global economic recession, in which the downturn of economies of highly developed and rich countries [like the US and some European countries] affects the domestic economies of undeveloped countries as a result of depleted purchasing power that as well decline the demand for labor market. Thus, the virtual effect of economic crises affects the “systems thinking” of the employees in a particular firm that may at anytime declare a bankruptcy and closes shop.
The psychological contract on the expected security of tenure in employment would be at the brink of eventual loss. It may be further analyzed that workplace is an “economic-driven” organization that exist and operate its venture within a calculated business risks. The only dynamism could be indicated by feasibility studies along with planning and market testing. In this particular condition, unpredictability and uncertainty of employment may pattern the psychological contract of workforce in a workplace. Findings and conclusion
This paper has found that psychological contract is characterized by the “social and economic values” pertaining to the mutual efforts and benefits of an employee and employer. In other words, there must be co-existing endeavor, agreements and appreciation to making effective, reliable and congruent the achievement of requirements and sharing of needs. However, the findings may have only analyzed the situational perception of a workplace, in which may needing the variations of reconsidering the overall “societal conditions”.
What has then highlighted in the result of examining and analyzing the empirical studies derived and depicted in this paper is the fact that psychological contract can only be achieved by a consistent and truthful fulfillment of expectations, reassuring mutual efforts of employee and employer. It may be then concluded that psychological contract can be sustained by making productive the economic condition of every countries, good governance and the advancement of policy support on workforce and workplace issues. Thus, psychological contract attributes the achievement of an economically secured family and socially progressive population.
