The Importance of a Strong Psychological Contract

Motivation is a difficult concept to wrap one’s head around. What can motivate a person this week may not motivate the same person next week. There are as many theories as there are management gurus.

There are however some axioms that seem to be universal:

1.    No one can be motivated.

2.    And yet everyone is motivated.

3.    People do things for their reasons - not someone else’s.

The manager’s responsibility and the organization’s desire is to create an environment where the employee’s motivation is aligned to the needs of the organization.

Relationships of any kind, survive on the strength of its psychological contract. If it is strong, both parties overlook small differences, forgive minor faults, seek common ground, and build a strong synergistic relationship. This is as much true between an employee, and the organization in which he/she is working. The formal contract merely explains the job and terms of employment. The Psychological contract provides the “why” of a person wanting to work in a particular organization or with a particular manager.

Great companies treat their employees in a fair manner!
Great managers choose to treat team members as people!
Great professionals understand that a rolling stone gathers no moss!

The organization is tasked with treating all its employees in a fair manner. It must create an environment in which the employees do not feel short changed. Employees join an organization on the basis of the promise made by the company at the time of employment. These promises include the terms of employment, the context of the employment, and of course the kind of job promised to the employee. Misalignment in any of these can lead to a weakening of the Psychological contract. The employee must feel that the organization is treating them fairly vis-à-vis their peers in the company, the industry, and of course the job contract.

The manager too is tasked with the responsibility of strengthening the Psychological contract and aligning motivation. Managers tend to look at their team members as resources. Unless this mental model changes, it is difficult to create an environment in which team members feel motivated and want to contribute their discretionary effort. A resource is something that one uses till end-of-life, or till it is consumed. After this, it gets replaced. Obviously, employees ought not to belong to this category. People are thinking, feeling contributors. If they get the feeling that they are easily replaceable, that is the way they will behave. They need to feel that they are making a difference and know how they are making the difference. Managers must be continuously talking to their team members telling them why they are not mere spokes in a wheel – but the primary drivers of the company’s success.

On the other hand, it takes two to clap. It is therefore equally important for the employee to do his/her part in strengthening a relationship. There are very few jobs and job-contexts that are made to order. Every job has its pros and cons. It is easy to find many faults if the employee is intent on finding them. Every team, project, and company has both good periods and not so good periods. It is only possible to build a career if the employee sticks with the organization through thick and thin. Understand that any negative situation is temporary. A bad manager, a lower-than-expected increment, a missed promotion, or a boring project can all be extremely troubling. Jumping ship does not guarantee that the next place will be any better. It is more important to continue to build one’s competence and brand. This is how professionals build careers.

Strong Psychological contracts create a win-win-win for the employee, the manager and the organization. It is each one’s responsibility to make sure this happens. It is not an easy adventure - but an adventure worth travelling.