When I resigned from the civil service I had (and still have) a strong sense of injustice at the way I had been treated, and this is what led me to write my blog.  Not only does it help me to make some sort of sense of what happened, but I hope that in some small way I can help others going through similar experiences.

Today I would like to have a look at the relationship between management and employees, which is of major importance in any organisation in relation to employee morale and productivity .

The legal contract of employment is in written form and sets out the standard terms and conditions of employment within an organisation.  It lists the legal duties and responsibilities of both employer and employee.  The terms and conditions of the employment contract are generally legally enforceable in the courts.

In contrast, the psychological contract is not in written form.  Instead, it relates to the perceptions of the employee and employer as to what is expected of each of them to fulfill their part of the bargain and what may be expected from the employment relationship.  It relates to how the employee is treated by the employer and what the employee puts into the job.

Qualities like respect, objectivity, fairness, trust, compassion and confidentiality characterise the psychological contract.  Although it is not strictly enforceable in law, the courts may be influenced by a view of the underlying relationship between employer and employee, particularly in the case of a long-term employee.

It is a generally accepted fact that employees are the most important resource any employer has.  The employees’ feelings and attitudes about themselves, their relationship with their employer and their behaviour towards the employer are extremely significant.   If employers focus on helping their employees to feel happy, productive and valued, this leads to a positive view of the psychological contract which has many beneficial consequences: job satisfaction, retention of valued employees and increased productivity. [If an employee thinks they are doing well at their job, it adds to their self-confidence and they are more likely to excel.  If they think they are not doing well, they can become disheartened and lose confidence in their ability to be effective in their job, which has implications for productivity, effectiveness and efficiency.  Also, if an employee has a positive attitude to the psychological contract, he or she is more likely to “go that extra mile” if asked to do so by the employer, eg stay late to finish a task.]

Autocratic leaders are less likely to recognise the significance of the psychological contract and the advantages of strengthening it, and this can become an organisational weakness.   There is likely to be a lack of leadership transparency, possibly through fear, insecurity or a prevailing harsh, rigid culture.   It is then difficult for employees to trust the organisation, and this can lead to gossip, rumour and misinformation which can have a negative effect on the organisation as a whole.  In my view this neatly describes aspects of the organisation I worked for.

Very sad examples of the disconnect within the ranks of the organisation occur when colleagues suffer from long-term or terminal illnesses and their sick pay runs out. Their contracts may be terminated so that they can claim benefit.  Sometimes a flexible, empathetic and creative approach can be much more supportive and lead to a far better employer-employee relationship.

In my own case, the psychological contract was severely weakened by the whole bullying situation and slow management response in enabling me to move away from him.  When after a couple of years I was returned to the same room as the bullying manager, my expressions of unhappiness at being left in that room were ignored.  This, coupled with hearing my final manager gossiping about issues personal to me and my family after he had contacted a relative without feeling constrained to ask for my permission, dealt the death blow to the psychological contract for me.  What little trust I had left in this organisation was by then totally destroyed: I had been seen as a hardworking, effective employee who was presumably valuable to the organisation!  [It seems ludicrous now that it would have been so simple for management to sort out some of these issues at the time.]

The interesting fact is that such “unhealthy” organisations can be hugely improved without too much difficulty. Some thought and effort can lead to barriers being broken down and thus dramatically improved results.

This idea can strike fear into the hearts of rigid, authoritarian managers!  However, more enlightened, modern leadership which is open and transparent can lead to trust and respect from the employees towards the employer. Also, employee awareness of the true facts can overcome the constant gossip and misinformation.  Both of these factors lead to a far healthier psychological contract.  Sickness levels can be reduced and the retention of employees increased.  This would then obviate the need to spend money on recruitment and training of new employees, so who is the loser?  It’s a win-win situation!

Of course, there are times when the authoritarian approach is appropriate (eg in disciplinary-type situations) but, as a management style employed day to day, it becomes destructive and divisive.  After all, even senior managers are employees, as the tax payer is technically the owner of such an organisation.

I apologise if this and the last post read like essays on management studies, my excuse is that I am qualified to teach this subject and factors which affect the culture of  such organisations are of great interest to me!

NEXT POST:  BREACHES OF TRUST AND CONFIDENTIALITY