The Psychological Contract

1
The Psychological Contract
2
Objectives

• Define and understand the importance of the
  psychological contract
• Examine the influences that affect workplace
  expectations
• Examine generational work expectations
• Work on a psychological contract with your
  professor

3
PSYCHOLOGICAL CONTRACT

• The psychological contract is individual beliefs
  or perceptions regarding the terms of exchange
  between the individual and organization.

4
PSYCHOLOGICAL CONTRACT

• The perceptual and dynamic nature of the contract
  makes it common that a violation will occur

5
Types of Violations

• Inadvertent divergent interpretations
• Disruption impossible to fulfill the contract,
  despite willingness to do so
• Breach of Contract One side refuses to fulfill
  the contract

6
Contract Makers Violations
7
Broken Contracts
Consequence

• Outrage, shock, resentment, anger
• Decreased trust and good faith
• Decreased job satisfaction
• Decreased productivity
• Decreased attendance
• Decreased commitment
• Turnover

8
RESPONSES TO VIOLATIONS

• Personality Characteristics
• Equity Sensitives monitor exchange
  relationships carefully and are more likely to
  perceive an imbalance in the relationship
• Beneficients are more willing to let others
  come out ahead in the exchange relationship

9
RESPONSES TO VIOLATIONS
Constructive Destructive
Active Voice Exit/Destruction
Passive Loyalty/Silence Neglect/Silence
10
Exit

• When attempts to fix the situation have failed
• When the relationship is transactional
• When another job is available
• When the relationship has been brief
• When other people are also exiting

11
Voice

• When a positive relationship and trust exists
• When there are methods for voice
• When other people use voice
• When people believe they can influence the other
  party.

12
Others

• Silence When there is strong loyalty to the
  company
• Neglect or Destruction When there are no other
  options available to express dissatisfaction

13
Managing the Psychological Contract
Provide realistic job expectations
Have frequent discussions of expectations
Check employee understanding
Give feedback
Be sensitive to individual differences
Check for changes in expectations
14
The Generationswho they are how they think

• Each generation is a product of historical events
  that shape their values and views of the world
• Emotional memories shape feelings about
  institutions, authority, materialism, family and
  careers

15
The Silent Generation (1922-1945)

• The depression, WWII, Holocaust
• The most traditional working fathers, at home
  mothers, traditional work ethic
• Highly disciplined, hard working, much sacrifice,
  loyal to their employer (employer loyal to them).
  
• A source of much tacit information

16
Baby Boomers (1946-1964)

• Product of the end of war baby boom and a
  consistent increase in birth rates until 1964
• A time of affluence, opportunity
• Self-absorbed, free love, social issues, civil
  rights
• Educated, competitive, focused on personal
  accomplishment
• 1. lots of jobs, able to drop out and come back
  2. less jobs 3. disadvantaged, high competition,
  going no-where fast (boiled frogs)
• Want pensions, health care and to be left alone

17
Generation X (1965-1976)

• Both parents working (latchkey kids), saw parents
  laid off, high divorce rate
• Not loyal to a company, pessimistic
• Independent and resilient
• Want immediate feedback and work to be fun
• Want transferable skills, most stressed out group

18
The Echo Generation/Generation Y (1977-2000)

• Babies of the Boomers who gave their children
  everything and rewarded them for anything
• Sense of entitlement, mostly interested in what
  will be given to them
• Self confident, multitaskers, want to be guided
  (have goals set for them), hard workers,
  technologically savvy
• want money, challenging work that matters,
  learning opportunities, harder to please, require
  more direction

19
Observations about Gen Y

• Offer choices expect state-of-the-art,
  cooperative scheduling , many choices with
  freedom to pursue them
• Want work-life balance
• Offer training opportunities (all generations)
  expect coaching and rewarding
• Offer an evolving workplace expect new
  motivational techniques relationship-intensive
  environment to be part of the decision making
  process

20
Concerns about Gen Y

• Every performance is excellent. Input (effort)
  is confused with output (achievement)
• Passion is replaced by standard of living (pay)
• Short-term time management is the priority.
  Getting to the next event has replaced getting
  the most out of the experience
• Short-term career outlooks