Skip to 0 minutes and 7 seconds Every good relationship is based on trust, and a shared understanding of what each party expects from the other. In the context of the workplace, this unspoken understanding of expectations between employer and employee forms what we call a “psychological contract”. Often these expectations are taken for granted, but they form foundation on which the relationship is built, so it can be beneficial to deepen your awareness of your psychological contracts. Psychological contracts are two-way; both parties must uphold their end for the relationship to flourish. They are grounded in a mutual awareness of individual obligations, as well as a dynamic of reciprocity. Strong employer-employee relationships signify the fulfilment of the psychological contract, and when the contract is breached, we will see relational breakdown.
Skip to 0 minutes and 57 seconds We will return to this again later, but for now the key takeaway is to understand that, as a manager, upholding psychological contracts within your team is paramount to ensuring effective working relationships and creating an environment of trust, respect and fairness. Psychological contracts, like all relationships, need to be nurtured to protect and evolve them. Throughout this topic we are going to explore the history and nature of psychological contracts as well as consider some of the challenges faced, such as accounting for diversity within psychological contracts and contract breaches.