Psychological Contract of employees : challenges with the pandemic
If the right person at the right place still doesn't bring profits to your organization probably means the psychological contract with your employees might have gone wrong. Human nature is inter cooperative and they depend on each other as a unit. Within an organization, the bond between the employer and the employees is like what we experience within the family unit.
Psychological Contracts could be breached if the promised increments, promotions, training, and appraisals are not made. This may cause a bad impact on the organization. Employees would get negative emotions(Morrison, E., Robinson, S., 1997). They could become aggressive and feel betrayed or depressed. Loss of trust of the organization will reduce the commitment as well as the respect towards the organization. It would lower job satisfaction and reduce the well-being of the employees. It would also affect on willingness to work and to share ideas. Rousseau and Tirjorwala (1999) suggest, both qualitative and quantitive methods are important in research regarding PC in transition.
Global Context
The contextual environment of an organization makes it more difficult with the covid pandemic to retain a profitable workforce and it is a big challenge for an organization to maintain a healthy psychological contract with its employees. In this new era of downsizing, managers are supposed to do a lot of work with few employees. Most of the organizations around the world had to adapt to remote working. Employers and employees had a low level of communication, which caused a lesser understanding of the expectations of both parties. Employees in many sectors like manufacturing, agricultural, tourism, and service sectors had to go through unexpected pay cuts. Lots of employees lost their jobs including airline workers and still not confirmed the compensation. All these sudden decisions were made breaching the contracts. On the other hand, employers were unable to run their businesses like earlier and were not making profits. Campbel (2020) states that psychological contract is breached more than ever with severely limited chances for advancement, pension plans, health benefits, and retirement accounts.
To combat the difficulties it’s vital to understand the Psychological Contract of the employees and employers well. During the most the challenging last year 2020 certain companies have paid more attention to understanding their employee's Psychological contracts. Hilton ranked number one best companies to work for 2020 according to McGregor,(2020). CEO Chris Nasser says they have paid attention to new mothers. In addition to 12 week paid leaves for new mothers, they partnered with a Milk stork enabling the new mothers to carry or ship breast milk while on work. He says as a result of doing good things we are doing well”.They could generate US$ 7 billion in total revenue despite the COVID pandemic. The Cloud HR Software company reached US$ 11 billion and they have provided the employees unlimited paid time off and fully paid health care for their employees (Madden, 2021). Apple CEO Tim Cook says they have created an “Apple virtual town-hall meeting” to interact with its employees last year. Realizing the employee's desire they have decided to let employees work from home till June 2021. Apple has also added additional paid holidays (Business Today, 2020) In Srilanka Unilever says “We continue to introduce resources to train our managers to promote the mental and physical health of our employees” Unilever has introduced a 24/7 global access counselling for its employees (Uniliever, 2020). Sunday Observer revealed Nestle has expanded their health insurance benefits of the employees providing online consultation and home delivery medicine services to their employees.
Conclusion
Meeting unexpected expectations of the employees and the employers is the key factor to drive the organization to success. Someone can come up with the question why do we need to meet a psychological contract when there’s an actual contract signed between two parties and the compliance of the employee is met. Covid 19 pandemic evident both difficulties and importance of psychological contract as employees commitment builds with meeting the psychological contract. Du and Liu's (2021), findings reveal the psychological contract negatively affects the job but the insider status is positively affected during the covid 19 pandemics.
References
Campbel, J. (2020) Psychological Contract. Salem Press Encyclopedia, pp. 44-45.
Conway, N. (2015) Psychological Contract: Human Resource Management. London: Wiley and sons publications. Available at https://0-doi-org.emu.londonmet.ac.uk/10.1002/9781118785317.weom050099
Du, Y. and Liu, H. (2021) 'Analysis of the Influence of Psychological Contract on Employee Safety Behaviours against COVID-19', International Journal of Environmental Research and Public Health, 17(18), pp. 4-5. Available at http://da.doi.org/10.3390/ijerphh17186747
Madden, D. (2021) 'COVID-19 pandemic has got cost global tourism industry $935 billion, Forbes.McGregor, G. (2020) 'Best Companies to work for 2020', Fortune.Available at https://fortune.com(Accessed: 17th March 2021).
Morrison, E., Robinson, S., (1997) 'When employees feel betrayed: A model of how psychological contract violation develops', Academy of Management Review, New York: New York University, pp. 226-256.
Rousseau, D. and Tirjorwala, S. (1999) 'Psychological frameworks issues and recommendations',Journal of organizational behaviour, 26, pp. 12-14
PC is good but both parties need to have understand some negative impacts.
ReplyDeleteThis article gives best definition and good knowledge of Psychological Contract. But here I would like to point some negative points of PC.
Major negative points such as It is unstable, it is unwritten, it is covert and imprecise, it can shift.
Unstable – Based on the hidden expectations and assumption this may be different with person to person. Difficult to guess what employer and employee are expecting. Which can lead to misunderstanding and misjudgments. As an example, employer has increased 8% salary increment where employee has expected minimum 10% increment.
Unwritten – there is no written agreement since there is no legal contract for both parties. If one party fails to do what was expected there is no legal bound with this contract.
Covert – there are no open communication and verbal system with both parties. Many slang words developed since people want to communicate about. Both parties respond immediately without looking deep scenario.
Shift – Expectations change time to time and not constant. As an example, when the newcomer comes situation can change. This may damage both party relationship.
Whether you like it or not there is a psychological contract of every employer and employee. Human Resource professionals should understand the nature of it and maintain a positive relationship between employees. The solution for avoiding resolving violations is communicating the mutual expectations of both party involved (Hillmann, 2014).
DeleteReferences:
Hillmann, V. (2014) 'The Psychological Contract: Relevance for Our Everyday Business Operations', HR Exchange Network.
Available at: https://www.hrexchangenetwork.com/learning/articles/the-psychological-contract-relavance-for-our-every
Good Article. However the psychological contract is a very subjective concept which influences employee's beliefs and behavior within the workplace. From the recruitment stage of an employee's work to retirement or resignation, it can have a reflective effect on the attitudes and well-being of an individual. Although it is an unwritten contract it has a central role in work behavior by better specifying the dynamics of the employment relationship. It is clearly an important ingredient in the business relationship between employers and employees and can be a powerful determinant of workplace behavior and attitudes. The forces would gain a great deal when taking into consideration the psychosocial contract and its abundant implications.
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ReplyDeleteThe world of work is changing and expectations of employers and employees too. The psychological contract is defined as “an individual's beliefs concerning the obligations that exists between the employee and the organization”. Outside of your role definitions and contract what do employee expect from employer and what do they expects from employee? This is a key challenge for the leaders of today and also affects employees’ approach to work.
ReplyDeleteEarlier employee had a job for life, now employees are likely to have multiple jobs with role security decreasing with the outcome being a growth in the gig economy and contract roles. The psychological contract or expectations of an employees used to be career growth, competitive salaries and job stability. The employers expected in return loyalty and hard work. With the trend towards people being employed for a specific reason, achieving that task or project and then leaving – the old rules are thrown out the window.
It's time to think about the future of Work and Organizational Psychology (WOP). Many scholars have ideals, thoughts, frustrations, ideas, wishes, and feelings about how the field nshould develop, change, or pursue another path and important to bring together our voices, give the opportunity to have them heard, and jointly work on shaping the future of WOP.
Good Article.
ReplyDeletehowever the understanding of types of psychological contracts, makes it easier to find out the solutions to problems that arise. There are 4 types of psychological contract which including transactional, relational, balanced and transitional (Rousseau 1989).
Transactional psychological contract - short-term exchanges of employment agreements about specific performance terms (Rousseau, 2000). Relational psychological contract - long-term exchange in employment agreements and non-specific performance terms (Rousseau, 2000).
Balanced psychological contract - is about the agreements of the parties with long-term and specific performance terms. That socio-emotional and economic terms, conditions in exchange of agreements and relationship of the parties (Hui, Lee and Rousseau, 2004). Transitional psychological contract - is about the agreement of the parties with short-term exchange without specific performance terms (Rousseau, 2000).
with COVID-19, the psychological contract has a positive role in promoting employees’ safety behavior, while job burnout plays a weakened mediating role, and perceived insider status plays a strengthening mediating role. The psychological contract negatively affects job burnout but positively affects perceived insider status. Job burnout negatively affects employees’ safety behavior, but perceived insider status positively affects employees’ safety behavior. The results show that employees’ conscious participation in safety behavior plays an irreplaceable role in the prevention of COVID-19 and safety of work resumption.
ReplyDeleteFor workers at essential businesses where work-from-home is not possible, it is up to the HR departments to prioritize the health and safety of their workers. Businesses should make sure their practices are in line with recommendations from the CDC and consider nominating a workplace coordinator to manage office policy surrounding COVID-19. Keep employees safe and well by educating employees about transmission risks:
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