Attracting and retaining competent staff is vital for companies to stay competitive. Ans De Vos and Dirk Buyens report on how to take the uncertainties out of employment contracts to benefit both parties
When an individual and an organisation sign an employment contract, it involves uncertainties for both parties. In this sense, the psychological contract is like a 'blind date'. 'Blind' because both parties, even with the existence of sophisticated selection procedures, can never fully predict the future or the behaviour of the other party. For this blind date to result in a satisfying employment relationship that is characterised by reciprocal commitments, more attention has to be paid to the expectations that newcomers approach their new employer.
What's the psychological contract?
This is based on explicit and implicit promises made by organisational agents to the employee (recruiter, sup-ervisor, and colleagues, for example,) and by the employee to these organisational agents. The psychological contract is conceived as an employee's mental model about the contributions he or she is expected to make to the organisation and the inducements he or she can expect of the organisation in return.
The psychological contract is an important motivator for employees. Numerous studies have shown that employees who believe they have a positive psychological contract with their organisation are willing to invest more of themselves and are less inclined to leave the company. In contrast, employees who experience their psychological contract negatively (for example, the perception that promises have not been met or that there is an imbalance between personal contributions and inducements received) are more likely to leave the organisation and reduce their contributions.
The psychological contract also comprises the promises employees believe to have made to their employer relating to their own contributions. More specifically, we consider the following types of employee promises: performance, flexibility, respect, loyalty, and employability. The dimensions of the psychological contract are:
- Job content - a challenging and interesting job (a job in which employees can use their capacities; challenging tasks)
- Career development (possibilities for development or promotion within the organisation)
- Social atmosphere - an agreeable a