How do you understand the concept of the psychological contract, and how has this concept evolved and changed throughout the years to reflect recent changes in organisational life?
The psychological contract encompasses the implicit expectations and responsibilities shared between employers and employees. Unlike formal contracts, the psychological contract is not a tangible document but a subjective agreement that shapes the employment relationship. This concept encompasses mutual beliefs, perceptions, and informal arrangements, influencing employee engagement, satisfaction, and organisational commitment (Rousseau, 1989).
Historically, the psychological contract was characterised by job security and long-term employment in exchange for loyalty and consistent performance (Milward & Hopkins, 1998). However, the evolution of organisational life, marked by rapid technological advancements, globalisation, and changing workforce demographics, has transformed this concept significantly.
In contemporary organisations, the psychological contract reflects a shift towards flexibility, employability, and personal development. As the gig economy expands and freelance roles and temporary contracts become more prevalent, people are increasingly pursuing diverse career paths and ongoing educational opportunities over the security of a long-term employment arrangement (Conway & Briner, 2006). Employers, in turn, expect high levels of adaptability, innovation, and a proactive approach to professional development.
Alterations in the psychological contract introduce a mix of potential difficulties and advantages. On one hand, it can lead to uncertainty and job insecurity, potentially causing strain on employee well-being and organisational loyalty (Rousseau, 2001). On the other hand, it affords employees greater autonomy and the chance to craft a more personalised career path that aligns with their evolving aspirations.
References
- Conway, N., & Briner, R.B. (2006). Understanding psychological contracts at work: A critical evaluation of theory and research. Oxford University Press.
- Millward, L.J., & Hopkins, L.J. (1998). Psychological contracts, organisational and job commitment. Journal of Applied Social Psychology, 28(16), 1530—1556. https://doi.org/10.1111/j.1559-1816.1998.tb01689.x
- Rousseau, D.M. (2001). Schema, promise and mutuality: The building blocks of the psychological contract. Journal of Occupational and Organisational Psychology, 74(4), 511—541. https://doi.org/10.1348/096317901167505
- Rousseau, D.M. (1989). Psychological and implied contracts in organisations. Employee Responsibilities and Rights Journal, 2(2), 121—139. https://doi.org/10.1007/BF01384942
What does the balance issue mean today to individuals and organisations, and how can an organisation benefit from employing work-life practices?
The balance issue, commonly called work-life balance, pertains to an individual’s ability to manage work and personal life responsibilities to minimise stress and enhance overall well-being. For individuals, achieving this balance is increasingly challenging in today’s fast-paced, digitally connected world, where the boundaries between work and personal life are often blurred (Kossek & Lautsch, 2017). For organisations, the balance issue signifies the need to create environments that support employees in harmonising their work and life commitments, which can lead to many benefits.
From an organisational perspective, implementing work-life practices can yield significant advantages. Firstly, it can enhance employee satisfaction and well-being, intrinsically linked to improved productivity and performance. Many studies suggest that workers who perceive their employer as supportive of their work-life balance are often more engaged and motivated, potentially resulting in improved work performance (Allen et al., 2013).
Secondly, work-life practices are instrumental in talent attraction and retention. In an era where skilled workers are in high demand, the ability to offer flexible working arrangements can be a decisive factor for potential employees (Eikhof et al., 2007). Moreover, offering such benefits can reduce turnover rates, which is economically beneficial for organisations as the costs of recruiting and training new employees are substantial.
However, the practical application of these practices takes time and effort. Organisations must navigate the complexities of individuals' needs while ensuring that business objectives are met (Bourke, 2016). This requires a strategic approach, often involving redesigning jobs, flexible working policies, and encouraging a culture that acknowledges and esteems the value of personal time, which can be resource-intensive and require a shift in organisational mindset.
References
- Allen, T.D., Johnson, R.C., Kiburz, K.M., & Shockley, K.M. (2013). Work-family conflict and flexible work arrangements: Deconstructing flexibility. Personnel Psychology, 66(2), 345—376. https://doi.org/10.1111/peps.12012
- Bourke, J. (2016). Six signature traits of inclusive leadership. Deloitte. https://www2.deloitte.com/us/en/insights/topics/talent/six-signature-traits-of-inclusive-leadership.html
- Eikhof, D.R., Warhurst, C., & Haunschild, A. (2007). Introduction: What work, what life, what balance: Critical reflections on the work‐life balance debate. Employee Relations, 29(4), 325—333. https://doi.org/10.1108/01425450710839452
- Kossek, E.E., & Lautsch, B.A. (2017). Work-life flexibility for whom? Occupational status and work-life inequality in upper, middle, and lower-level jobs. Academy of Management Annals, 12(1), 1—76. http://dx.doi.org/10.5465/annals.2016.0059
