Understanding The Psychological Contract

Psychological Safety has almost become a cottage industry; especially for change management consultants the past 20+ years.

Much of that heightened awareness can be traced to Dr. Amy Edmondson’s research and work which produced her bestseller “The Fearless Organization”.

However, the term psychological safety is not that new; having made its debut back in 1965.?

It was originally coined by Edgar H. Schein and Warren G. Bennis (fellow Bronx kid, BTW) in their book,?“Personal and Organizational Change Through Group Methods: The Laboratory Approach”.

“…they defined psychological safety as a climate "which encourages provisional tries and which tolerates failure without retaliation, renunciation, or guilt."?

Regarding the "provisional tries" comment, you can draw a straight line from organizations imbued with psychological safety to innovation.

That is, one half of the Peter Drucker maxim:

"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

Warren Bennis was a giant in management and leadership theory, and probably someone any leader should know more about.

His early work on psychological safety was further developed by Dr. Denise Rousseau?into something called the “psychological contract”.

Dr. Rousseau - and her psychological contract - is another person and theory that the C-Suite should know more about, IMO.

So, briefly, what are the principles of the psychological contract?

"A psychological contract...represents the mutual beliefs, perceptions, and informal obligations between an employer and an employee."

It is an agreement that is unwritten but understood.

It outlines "...the expectations, beliefs, ambitions, and obligations that characterize the relationship between employer and employee.?From day one, it influences how employees behave."

A psychological contract flourishes when nurtured with trust, communication, and fairness by conscientious leaders and managers who are lifelong learners with a "beginner's mindset".

Employees need to trust that their organization will keep its promises and treat them fairly.?

Similarly, leaders must summon their trust in employees and communicate openly, ensuring transparency and clarity in expectations.

I have learned through direct experience over the past 20+ years that you can have a Michael Porter inspired strategy, and execute flawlessly, but, your company will still fail if your employees are not managed by leaders who get the "psychological contract" and "psychological safety" at its most basic level.

"He who does not trust enough, Will not be trusted."

~Lao Tzu

#management #leadership #psychologicalsafety