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The Psychological Contract and Good Employment Relations David Guest Kings College, London University of London.

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Presentation on theme: "The Psychological Contract and Good Employment Relations David Guest Kings College, London University of London."— Presentation transcript:

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2 The Psychological Contract and Good Employment Relations David Guest Kings College, London University of London

3 Features of Contemporary Employment Relations Unions sometimes marginalised at the workplace despite legislation Rise in individualism/individual negotiation Greater concern for individual employment rights – equal opportunities Blurring of boundaries of work eg location Management increasingly in control Emphasis on human resource management Persisting issues of trust and fairness

4 Some Reasons for Change in Employment Relations Workplaces getting smaller Flexibility and fragmentation of the workforce Pervasiveness and urgency of change Feminisation of workforce and growing interest in issues such as work-life balance Influence of American culture/individualism at work

5 Rousseaus Framework Old IRNew IR Idiosyncratic Positional Standard

6 The Need for a New Conceptual Framework The traditional collective model is less relevant in many workplaces Need a model that can accommodate rise in individualism and flexibility Need a model that can address core issues in the employment relationship of trust, exchange and control The psychological contract can meet these requirements

7 Reasons for Interest in the Psychological Contract Breakdown of the traditional deal – A career in return for loyalty – A fair days work for a fair days pay – Loss of professional autonomy Individualisation of the employment relationship Organizational change and violation Search for new ways of managing employment relations to meet the interests and concerns of both employees and the organisation

8 What is the psychological contract? The Transactional Deal The Implicit Deal The Inferred Deal

9 Defining the Psychological Contract The state of the psychological contract is concerned with whether the promises and obligations have been met, whether they are fair and their implications for trust. The perceptions of both parties to the employment relationship, organization and individual, of the reciprocal promises and obligations implied in that relationship

10 The Psychological Contract Framework The Good Employer The High Quality Workplace The Deal Satisfied And Productive Workers

11 The Deal Employer Delivers on Promises Employees Deliver on Promises Fairness Trust Commitment Well-Being Performance

12 Framework for applying the psychological contract to the employment relationship Contextual and Background Factors Policy and Practice State of the Psychological Contract Outcomes Individual: Age Gender Education Level in organisation Type of work Hours worked Employment contract Ethnicity Tenure Income Organizational: Sector Size Ownership Business strategy Union recognition HR policy and practices Leadership/ Climate Employment relations Quality of workplace Reciprocal promises and obligations Delivery of the deal Fairness Trust Attitudinal Consequences: Organizational commitment Work satisfaction Work-life balance Job security Motivation Stress Behavioural Consequences: Attendance Intention to stay/quit Job performance OCB Psychological Contract

13 The Good Employer Employee Partnership Flexible Employment Practices Climate of Positive Organisational Support Progressive Human Resource Practices The Good Employer High Quality Workplace

14 The High Quality Workplace Reasonable demands/manageable workload Some personal control over work Support from supervisors and colleagues Positive relationships at work A reasonably clear role Involvement in changes affecting you

15 The State of the Psychological Contract Overall, to what extent has the organisation kept its promises and commitment to you ? % fully45 partly49 not at all 6

16 The State of the Psychological Contract Do you feel fairly paid for the work you do? % Yes, definitely30 Yes, probably30 No, probably not19 No, definitely not21

17 The State of the Psychological Contract To what extent do you trust your senior management to look after your best interests? % A lot25 Somewhat34 Only a little23 Not at all18

18 Exploring the Links High quality workplace Effective supervisory leadership Number of promises State of the psychological contract Human Resource Management Flexible Practices

19 Exploring the Links cont… State of the psychological contract Job satisfaction Loyalty to supervisor Organisational Citizenship Excitement Intention to quit Organisational commitment Work-life balance Life satisfaction

20 The Employers Perspective Survey of 1306 senior UK HR managers 36% said they used the psychological contract concept to help them manage employment relations Senior managers acknowledge that the exchange is not always fair – and favours the employer Union recognition associated by managers with a range of negative outcomes. More of a hindrance than a help

21 The Policy Challenges Consider actively managing the psychological contract as a means of maintaining effective employment relations Recognise it is a two-way deal Address the outer context of human resource management and employment relations policy Address the inner core of the deal at the local level


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