With many organisations opting for a hybrid work model, the unwritten rules and beliefs between employers and employees need to be rebuilt to reflect this new dynamic. Developed by organisational behaviour specialist Denise Rousseau, these implied expectations are known as a psychological contract. “The term psychological contract refers to an individual's belief about the terms and conditions of a reciprocal exchange agreement between the focal person and another party,” notes Rousseau. “Key issues here include the belief that a promise has been made and a consideration offered in exchange for it, binding the parties to some set of reciprocal obligations.”
In the traditional office-based mode of work, the psychological contract is primarily shaped by the interplay of loyalty and job security. Employees believe that if they demonstrate commitment, hard work and obedience to company cultures and norms, the employer in turn will provide them with continued employment, decent wages, fair working conditions, and opportunities for career growth. These expectations and hopes however are never written down or explicitly communicated.
A psychological contract emerges when an individual perceives that behaviours demonstrated and contributions made oblige an organisation to reciprocate. These perceptions can be formed in myriad ways. These can include situations where an employee expects the privilege of a lenient start time because they regularly work late or skip lunches to meet tight deadlines. Or the expectation that they will be allowed to run personal errands during office hours because they took on the extra duties of a sick colleague. Or the anticipation of a promotion because they overheard a colleague mention that they’ve moved up the ladder in line with their lengthened tenure of employment.
Many of these are casually picked up, implied anecdotally or subtly insinuated in everyday informal interactions. The prevalence of hybrid and fully remote work policies creates new ways that psychological contracts can be built and breached.
The first charm offensive
Published in the SA Journal of Human Resource Management (SAJHRM), a study, “Psychological contract inducements and expectations conveyed to potential employees on organisations’ websites”, highlights how strategies to positively position an organisation online facilitate the formation of a psychological contract. A website, as a form of organisational text, conveys a fair number of inducements and expectations, reveals the study: “Extrinsic inducements are benefits that are objectively observable, such as benefits, pay, promotion, job security, and a safe working environment. Intrinsic inducements, on the contrary, refer to those elements implied or nested within the elements of the job offered. Intrinsic inducements include challenging and meaningful work, impact of work, and feelings of achievement.”
In their analysis of top-listed organisations on the Johannesburg Stock Exchange, the inducements most commonly published online were organisational policies, career development, and job content, followed by social atmosphere and financial rewards.
Employers use their websites to attract candidates through inducements and entice job seekers to apply for vacancies. These websites, however, also shape how potential employees perceive a company. For remote workers, this initial engagement may have significant impact as there are fewer opportunities for these perceptions to be corrected by in-person interactions and experiences. The data they draw on to build their hopes, beliefs and impressions of employment will be virtual and not based on many real-life engagements.
To counter this, the researchers note that management should be sensitive to what their different forms of online content communicate to potential employees, and how this might impact the psychological contact. “From a job seeker’s perspective, this information may already form part of the basis upon which the future psychological contract may be built. These sources of information act as signal messages that determine employer attractiveness to job seekers. Information conveyed may implicitly initiate the foundational formation of the employer-employee psychological contract.”
To identify and better manage this relationship before it begins, the researchers advise organisations to be aware that the expectations set online need to be honoured and reflected in the subsequent employer-employee relationship, particularly if it is mostly virtual. “Knowledge in this regard may prove beneficial to the entire employee life cycle from recruitment to termination.” Breach or violation of these inducements and expectations may lead to adverse effects.
Keeping the chemistry
Information about an organisation may initially be acquired online, but once an employee is recruited, the data inputs expand in scope. Their perception will now be influenced by professional norms, early socialisation initiatives and interactions with their managers and colleagues. During this formative stage, the psychological contract may be evaluated and then revised or entrenched.
Stressors unique to the remote working environment will influence the inflection of a psychological contract. One of the most common challenges is blurred boundaries that create work-life conflict. When an employee finishes work at an office, they leave a physical space. They engage in actions or rituals that signal an end, such as shutting down a computer and saying goodbye to colleagues. “These provide a physical and psychological boundary which doesn’t exist with remote work,” says Johannesburg-based industrial psychologist Nadira Mahomed.
Having most engagements with colleagues take place online can create digital fatigue for remote workers. “There is a pressure to be available and online, especially as being online is sometimes equated with working. Most employees tend to move from one meeting to another. In an office space, for example, an employee might need to walk to a meeting venue. This micro-space provides necessary cognitive breaks. These micro-transitions function like hygiene factors: you don't notice them until they're gone. Their existence does not necessarily improve well-being, but remove them and well-being is negatively affected. Remote work does not offer these micro-spaces and being constantly online leads to fatigue.”
Remote interactions also strip away cues such as body language and tone, and ambient social signals. All these aid interpretation and connection. Without them, the likelihood of miscommunication and interpersonal stress increases.
Loneliness and feelings of isolation are also heightened among remote workers because of limited physical interaction and opportunities for even small moments of connection. Walking from the office to the boardroom with colleagues, waiting together for the kettle to boil, running commentary on the food from the cafeteria: these moments of social interaction help employees feel connected. “But more than that, they are also about visibility,” highlights Mahomed. “Remote employees may feel less seen or feel overlooked.”
These mental and emotional states impact the psychological contract between employees and employers. Irrespective of their geographical set-up, common employee expectations include recognition, supportive leadership, flexibility, respect and rewards. Remote work can make many of these more challenging for employers to deliver; and consequently, can make employees feel like the psychological contract has been breached.
Repair when there’s been a rift
Trust is one of the sentiments most directly affected when employees feel a violation of the psychological contract. The confidence, expectations, and even hopes they might once have held may now feel misplaced. Instead, feelings of doubt and mistrust may heighten. Because online communication often lacks context and nonverbal cues, these burgeoning emotions can be aggravated when they are not noticed by a manager. Mahomed explains that in virtual environments, “employees may be less likely to speak up, flag problems, or ask for help when interactions are formal and scheduled, reducing psychological safety”.
Scheduling meeting durations to have a time buffer for casual conversations can enable managers to pick up clues and cues when employees are starting to feel disengaged. The in-person version of this is the informal chats that take place while people are arriving in the boardroom, or as they are packing up their belongings after a meeting. Virtual meetings tend to have a hard start and finish, with awkward silences rather than congenial chatter at the start or conclusion.
Given the absence of natural ending rituals that a physical work space provides, Mahomed suggests that leaders can help by modelling and encouraging these. “A good option is a shared end-of-day message or logging-off note, for example. This can also create a natural, low-pressure way for leaders to notice, out of care rather than oversight, when an employee may be consistently overworking.”
Autonomy is one of the implied expectations held by employees. However, managers may struggle to trust that employees are working when this is not physically visible. Rather than resorting to tracking keystrokes or hours logged, leaders can reform a damaged psychological contract by clarifying measures of productivity. If managers are only focusing on visibility, then that could be construed as surveillance. Focusing on outcomes may put less pressure on employees to be visible online, and on managers to measure or manage time. “Task and relational leadership are not mutually exclusive – both have been found to have positive impact in virtual environments. Effective leaders integrate both. Leaders must clearly define expectations – clarify outputs and timelines to determine what success looks like. When leaders are transparent about why they're monitoring or checking in, it reduces the perception of surveillance. Framing check-ins as supportive rather than evaluative matters,” says Mahomed.
Consider conducting an online content audit
Based on existing measures of the psychological contract, the following facets were used by researchers in the SAJHRM study on online content. Assess your organisation's material to ensure that perception and reality line up for both potential and existing employees.
Inducements used to attract potential employees:
- Work-life balance: Concern for employees, as well as offering flexible working hours
- Organisational policies: Fair and equitable treatment of employees and feedback on performance
- Career development: Opportunities for promotion and skills development
- Job content: A job in which employees can make decisions by themselves (and also a job with responsibilities)
- Social atmosphere: Good atmosphere at work and good cooperation between colleagues
- Financial rewards: Attractive salary and performance-related rewards
What organisations may expect employees to contribute:
- Ethical behaviour: To protect confidential information about the organisation and the organisation’s image
- Employability: To build skills to increase value to the organisation, and to take personal initiative to attend additional training courses
- Flexibility: To volunteer to do tasks that are strictly no part of the job if necessary, and to work extra hours to complete the job
- Loyalty: To not support competitors and to remain with the organisation for at least some years
- Extra-role behaviour: To assist colleagues in their work and to share information with colleagues
Gallery
