Since Chris Argyris’s work in the 1960s into the psychological work contract, the assumption’s remained that it’s based on mutual exchange of beliefs and expectations of what employee and employer can expect from each other, given a contract only works with two parties agreeing to it. But have we seen a shift in the equilibrium of this contract, where the expectations of employees have really changed?
Since the industrial revolution, organisations dictated employees’ working arrangements which focused on driving greater productivity and performance. This reflected the imbalance of power, with employees reliant on their organisations to structure working arrangements to drive the best results. Employees signed up to this psychological contract, despite it representing an imbalance in favour of the employer. However, the pandemic stressed this equilibrium, which has led to many, reevaluating their relationship with their work.
While the pandemic has had a long-term impact on most generations in society, affecting everything from education to mental health, it could also be the cause of an evolution, changing the relationship with work. Whilst organisations were supported through furlough schemes and government grants, it was employees who took responsibility for keeping their organisations afloat by changing the way they worked. There wasn’t a ‘pandemic’ blueprint for organisations to cascade to employees to ensure businesses remained productive and profitable – employees took an unprecedented situation and found ways of dealing with it. In doing so, was probably the first time since the industrial revolution that employees had, and took, direct ownership of the success of the organisations they worked for – and it changed everything.
The pandemic has brought about a seismic shift in how we think about work which goes way beyond submitting requests for flexible working. We may be at the threshold of finally being able to realise a more balanced psychological work contract, driven by employees, with a different set of mutually agreed beliefs and expectations in how we work together, including employees and employers alike.
Many organisations are still stuck in a historical mindset that employees are only after financial reward and a nice manager who isn’t too demanding, yet this couldn’t be further from the truth. Gen Z will soon become the largest generation making up our workforce and whilst money is very important to them (since they are likely to be poorer than previous generations at work), many of them want work to be something that complements their life, and not something that provides financial compensation.
Some have argued that the generation gap is a myth, and before the pandemic this may have been the case, but when a generation has experienced such a paradigm shift to their lives, they bring a different mindset to their beliefs and expectations of how work can, and should be carried out.
It’s hard to see how many of them could contemplate going back to any other way of working, when the focus should always have been on outputs and outcomes, as opposed to hours worked. Other than manufacturing, where it was obvious and easy to measure productivity, organisations seemed to have become complacent in how they define and measure output and outcomes – their own productivity, and employees may have been the ones who paid the price for this ambiguity.
Organisations utilising employee engagement surveys, listening forums, and employee representative initiatives often launch these with the best of intentions, however, the historical underlying imbalance of power towards the employer has often prevented the formation of a more equitable relationship, despite such initiatives. The strain some organisations are currently experiencing with mounting pressure to challenge how work is carried out, whether from greater expectations of remote working, to questioning whether a four-day working week would drive greater productivity, shows the shift taking place to the long-standing equilibrium of the psychological work contract.
Future successful organisations will be those that can attract and retain the best talent, and it’s unlikely that the next generation of employees will be willing to relinquish their new-found courage to challenge how work is done.
Employees will be seeking a greater understanding of the outputs and outcomes required of their role and expecting organisations to put in the effort to define clear and specific measures, allowing them to understand how their value and success will be measured, no matter when, where, and how they choose to work.
Rather than resisting change, organisations need to consider how they can help shape it, by questioning and finding solutions to how they measure outputs and productivity, how they help employees feel respected and valued at work, and how they help bring the psychological contract, based on a new set of mutually agreed expectations and beliefs, to life.
By Amrit Sandhar, CEO and founder, &Evolve
Amrit Sandhar is the founder of &Evolve (previously The Engagement Coach) who has worked with many well-known UK brands including Asda, Dunelm, Chester Zoo and Network TV, to improve employee engagement and experience, to improve organisational productivity. With a passion for neuroscience and psychology to drive behavioural change, combined with his experience in employee engagement, he uses a data-driven approach to identify the issues organisations are struggling with and works with them to create solutions leading to drive sustainable change. Values-led with a passion for developing people, Amrit believes that it is highly engaged leaders who drive better business performance by getting the best out of their colleagues, which is conveyed by him and his team at https://www.and-evolve.com/ .
