KEY POINTS:
When employers and employees enter an employment agreement they are committing to a lot more than just what is written in the job contract.
There is also the psychological contract, says psychologist Sara Chatwin.
"General managers are often very stretched. I don't think they're equipped all the time to deal with the ins and outs, the permutations of the psychological contract," she says.
"Perhaps they didn't come on board with their communications skills as honed as they could be."
The psychological contract includes all those little expectations that don't make it on to paper. Chatwin says the psychological contract needs to be taken seriously and is often misinterpreted on both sides.
"Because people are different and they view things differently, the expectations are not clearly defined enough for both parties," Chatwin says.
If the expectations aren't met on both sides, tensions over different perceptions start to build up over time.
"The employer is often left feeling cheated and the employee is often left feeling overloaded."
Chatwin says it is important to confront the situation early on and not let things build up.
"Often a person gets into the job and it goes really well for a period of time, but then something changes. Something snaps. Or perhaps after a period of time an employer expects a different level of functioning," Chatwin says.
It's the employer who bears most of the responsibility for the psychological contract. Chatwin says employers need to be precise about what's expected and what's offered.
"As an employer, you have to be very clear in your own mind exactly what you want out of a role. To a certain extent, you're writing the rules for somebody else to take up."
Dr Helena Cooper Thomas, senior lecturer in the department of psychology at the University of Auckland, has researched the psychological contract and also says employers need to lead the discussion early on in the process.
"Employees might not want to have that discussion in the negotiation stages. Often I think it has got to be the organisation that leads those kinds of discussions," she says.
Explicit discussions around the nuances of the employment agreement are essential to prevent any erroneous expectations.
Often, people can overstep the line simply because they didn't know there was a line, Cooper Thomas says. But bringing up your daycare needs during the interview process could be awkward.
Flexibility is one element of the psychological contract which is a key issue these days.
"There might be discussions around, 'OK, you have to be here around these core hours. But we're really flexible if you need to start late or you have to finish early because of some commitments. You can make the time up on other days'," Cooper Thomas says.
Cooper Thomas researched several elements of the psychological contract by interviewing workers in New Zealand. "I looked at what people thought their employer was obliged to provide for them and then what the employer actually provided."
There were six elements where employees felt their employers were falling down on the job:
* Clear job responsibilities.
* Job training.
* Opportunities to develop new skills.
* A reasonable workload.
* A good rate of pay.
* Recognition of success.
Cooper Thomas says these things, which should be the basic parts of good management, were simply not happening.
"There is research showing that actually the effect of recognition for success or for achieving things is much more effective as a motivator than pay."
But recognition for success is something which often slips through the cracks.
Cooper Thomas says the reason managers focus more on the negative than the positive is not because they don't want to praise workers. It's just what attracts their attention.
"If something goes horribly wrong then you absolutely have to deal with it. But if everything is ticking along nicely then you could stop and say, 'That's great'. But if you don't have to, then you can do other things that are more pressing."
Employees might also miss out on praise because a manager is too removed from the frontline to know exactly what actions by which employees made a project successful.
"They might not break it down into its parts. It might not be that easy to break down," Cooper Thomas says.
But employees themselves also admit they aren't holding up their end of the psychological contract, either.
When Cooper Thomas asked employees to review their own obligations under the psychological contract, she discovered three areas where employees admitted at least slightly underperforming:
* Performing the job reliably.
* Delivering good-quality work.
* Following company policies and procedures.
"Those are things which you'd think people should be doing as part of their roles," Cooper Thomas says.
For employers, a stable psychological contract revolves around treating people respectfully, communicating and allocating rewards fairly. Employers can even keep the contract intact when dismissing someone.
"If there is some rational basis for getting rid of people, they might not like the decision, but if they can see that it's been made fairly, then they'll be happier with it and they're less likely to have the psychological contract broken."
When a breach of the contract is perceived, things can go downhill quite quickly. Expect these:
* An initial negative reaction
* Anger and sense of betrayal.
* Frustration.
* Decreased loyalty.
* Lower job satisfaction.
* Higher intentions of leaving.
* Less discretionary effort.
"It really affects performance. It's like, 'If you're going to treat me like that, then I'm just going to do my job and nothing more'."
Regardless of what's written in a formal employment agreement, the psychological contract remains a pivotal element in the relationship.
"Ultimately, the more you've got written down in your contract, the safer you are but you also want a certain degree of trust."
* Contact David Maida at:
www.DavidMaida.com
