psychological contract and sucess by charles handy

The psychological contract

• A psychological contract is a set of unwritten expectations that exist between individual employees and their employers. This contract concerns the perceptions of both parties to the employment relationship, organization and individual, of the reciprocal promises and obligations implied in that relationship.
• A psychological contract is a system of beliefs that contain the actions employees believe are expected of them and what response they expect in return from their employer and vice versa the actions employers believe are expected of them and what response they expect in return from their employees.

Jagoda Mrzygłocka-Chojnacka PhD

• The psychological contract underpins the employment relationship.

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Employees may expect:
• to be treated fairly
• to be able to use their skills
• to be rewarded in accordance with their contribution.
• to know what is expected of them
• to be given feedback on how they are doing.
Employers may expect employees:
• to do their best on behalf of the organization – ‘to put themselves out for the company’ • to be committed to its values,
• to be compliant and loyal, and
• to enhance the image of the organization with its customers and suppliers.

Jagoda Mrzygłocka-Chojnacka PhD

The psychological contract

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The psychological contract and the employment relationship

It may provide some indication of the answers to the two fundamental employment relationship questions:
• What can I reasonably expect from the organization?
• What should I reasonably be expected to contribute in return?

Jagoda Mrzygłocka-Chojnacka PhD

The psychological contract and the employment relationship
The psychological contract is seen as a metaphor that helps us make sense of our experience. The psychological contract is a way of interpreting the state of the employment relationship.

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The psychological contract and the employment relationship

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how they are treated in terms of fairness, equity and consistency; security of employment; scope to demonstrate competence; career expectations and the opportunity to develop skills; involvement and influence; trust in the management of the organization to keep their promises.

From the employer’s point of view, the psychological contract covers such aspects of the employment relationship as competence, effort, compliance, commitment and loyalty Jagoda Mrzygłocka-Chojnacka PhD

The aspects of the employment relationship covered by the psychological contact will include from the employee’s point of view:

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A psychological contract creates some emotions and attitudes which form and control behaviour. A balanced psychological contract is necessary for a continuing, harmonious relationship between the employee and the organization. However, the violation of the psychological contract can signal to the participants that the parties no longer shared a common set of values or goals.
The concept draws attention to the fact that employee/employer expectations take the form of unarticulated assumptions. Disappointments on the part of management as well as employees may therefore be inevitable. These disappointments can be reduced if management notice that one of their key roles is to manage expectations, which means clarifying what they believe employees should achieve, what competences they should have and what values they should uphold. And this is a matter not just of articulating these requirements but of discussing and agreeing them with individuals and teams.

Jagoda Mrzygłocka-Chojnacka PhD

The significance of the psychological contract

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Changes to the psychological contract
To

Imposed relationship

Mutual relationship

Permanent employment relationship

Variable employment relationship

Focus on promotion

Focus on lateral career development

Meeting job requirements

Add value

Emphasis on job security and loyalty to the company Emphasis on employability and loyalty to own career skills Training provided by the organization

Opportunities for self-managed learning

Jagoda Mrzygłocka-Chojnacka PhD

From

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Essentially we can define this new contract in follows:
There is no job security. The employee will be employed as long as he or she adds value to the organization, and is personally responsible for finding new ways to add value. In return, the employee has the right to demand interesting and important work, has the freedom and resources to perform it well, receives pay that reflects his or her contribution, and gets the experience and training needed to be employable here or else where.

Jagoda Mrzygłocka-Chojnacka PhD

The new psychological contract is emerging.
It is more situational and short-term and each of the parties is much less dependent on the other for survival and growth.

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How psychological contracts develop

But it is worth to take seriously psychological contract, because it is strongly linked to higher commitment to the organization, higher employee satisfaction and better employment relations.
A positive psychological contract also facilitates the use of HRM tools. Makes them more effective and understanding to all interested sites: HR professionals, employees and employers. It is also important for building high-involvement climate in the organization. Jagoda Mrzygłocka-Chojnacka PhD

Psychological contract is not a simple relationship. It evolves over time and can be multi-faceted. 8

Developing psychological contract
The steps needed to develop a positive psychological contract are shown below:

2. Communicate and agree expectations as part of the continuing dialogue that is implicit in good performance management practices.
3. Adopt a policy of transparency on company policies and procedures and on management’s proposals and decisions as they affect people.
4. Generally treat people as stakeholders, based on consensus and cooperation rather than control and pressure.

Jagoda Mrzygłocka-Chojnacka PhD

1. Define expectations during recruitment and induction/ inclusive programmes.

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The recruitment and induction stage, communication is most effective if it is personal and job-related. Top-down communication is less important. A positive psychological contract can only be achieved if management keeps its word – if it does not affect the terms of the contract.

Jagoda Mrzygłocka-Chojnacka PhD

We should emphasize the role of communication in shaping the psychological contract, especially at the recruitment and induction stage when promises and commitments can be made by employers on such matters as interesting work, learning and development opportunities, not to make unreasonable demands on employees, feedback on performance, fair treatment, work/life balance, a security and a safe working environment.

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HRM and organizational behaviour

Organizational behavior is concerned with the study of the structure, functioning and performance of organizations, and the behavior of groups and individuals within them
To emphasize a basic set of concepts and to provide analytical tools that will enable HR specialists to diagnose organizational behavior and to take appropriate actions we should concentrate on three notions: individual motivation, employee engagement and commitment. This notion are sometimes confused.

Jagoda Mrzygłocka-Chojnacka PhD

Organizational behavior is concerned with the study of the structure, functioning and performance of organizations, and the behavior of groups and individuals within them.

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HRM and organizational behavior

Employee engagement takes place when people at work are interested in and positive, even excited, about their jobs and are prepared to get them done to the best of their ability. Organizational commitment is the strength of an individual’s identification with, and involvement in a particular organization.
Thus, motivation could be regarded as task-oriented, engagement could be seen as job-oriented and commitment seen as organization-oriented.

Jagoda Mrzygłocka-Chojnacka PhD

Motivation is the strength and direction of behavior and the factors that influence people to behave in certain ways in carrying out their work.

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• People act and use their roles within complex systems called organizations. The study of organizational behavior focuses on people within the context of their organizations – analyzing and understanding what they do, how they do it and the factors that affect their behavior. The aim is to provide the basis for developing HR policies and practices which will lead to improved organizational capability.
• Organizational behaviour is the term used to describe how people act within their organizations, individually or in groups, and how organizations function, in terms of their structure, processes and culture.

Jagoda Mrzygłocka-Chojnacka PhD

HRM and organizational behavior

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Characteristics of organizational behavior it is a way of thinking about individuals, groups and organizations.

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it is multidisciplinary – it uses principles, models, theories and methods from other disciplines.

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it is a distinctly humanistic orientation – people and their attitudes, perceptions, learning capacities, feelings and goals are of major importance.

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it is performance-orientated – it deals with the factors affecting performance and how it can be improved. 5.

it is point out to use of scientific method is important in studying variables and relationships.

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it is applications-orientated in the sense of being concerned with providing useful answers to questions which arise when managing organizations.

Jagoda Mrzygłocka-Chojnacka PhD

1.

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Factors affecting organizational behaviour
1. The characteristics of people at work – individual differences, attitudes, personality, attributions, orientation and the roles they play.

3. The process of employee engagement.
4. The process of organizational commitment
5. How organizations function.

Jagoda Mrzygłocka-Chojnacka PhD

2. How people are motivated.

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6. Organizational culture

Implications for HR specialists of the scope organizational behavior

Individual differences
When designing jobs, preparing learning and development programmes, assessing and counselling staff, developing reward systems and dealing with problems, it is necessary to remember that all people are different. What fulfils one person may not fulfil another.
Abilities, aptitudes and intelligence are different and it is necessary to take particular care in fitting the right people to the right jobs and giving them the right training.
Personalities, attitudes and emotions also are different. It is important to focus on how to manage diversity. This should take account of individual differences, which will include any issues arising from the employment of women, people from different ethnic groups, those with disabilities and older people.

Jagoda Mrzygłocka-Chojnacka PhD

To manage people effectively, it is necessary to take into account the factors that affect how they behave at work. This means understanding the significance of individual differences, the characteristics of people that explain how they act and the types of behavior that feature in organizational life.

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Implications for HR specialists of the scope organizational behavior

Personality should not be judged or measured in simple terms of stereotyped traits.
People are complex and they change, and account has to be taken of this. The problem for
HR specialists and managers in general is that, while they have to accept and understand these differences and take full account of them. There is always a limit to the extent to which an organization that relies on collective effort to achieve its goals can adjust itself to the specific needs of individuals. But the organization has to appreciate that the pressures it places on people can result in stress and therefore can become counter-productive

Jagoda Mrzygłocka-Chojnacka PhD

Judgements on personality

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Perceptions and attributions
• We tend to see things from our own frame of reference when we ascribe motives to other people and attempt to establish the causes of their behavior. We must be careful not to makes implistic judgments about causality (ie what has motivated someone’s behavior) – for our-selves as well as in respect of others – especially when we are assessing performance.
Self-efficacy
• In operating performance management and reward systems and providing training we must try to develop self-belief – the confidence people have in their own abilities and capacity to perform well
Orientation theory
• The significance of orientation theory is that it stresses the importance of the effect of environmental factors on the motivation to work.

Jagoda Mrzygłocka-Chojnacka PhD

Implications for HR specialists of the scope organizational behavior

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Role theory
• Role theory helps us to understand the need to clarify with individuals what is expected of them in behavioural terms and to ensure when designing jobs that they do not contain any incompatible elements. We must also be aware of the potential for role conflict so that steps can be taken to minimize stress.
Bounded rationality
• Don’t expect everyone to behave rationally, especially when confronted with change.
Use techniques of communication and involvement to overcome irrational reactions.

Jagoda Mrzygłocka-Chojnacka PhD

Implications for HR specialists of the scope organizational behavior

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