psychological contract presentation

15
The Psychological Contract What on earth is that?

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An introduction to psychological contracts and how they can hurt or improve your organisation. This explains that the PC is about the emotional rather than the contractual relationship.

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Page 1: Psychological contract presentation

The Psychological Contract

What on earth is that?

Page 2: Psychological contract presentation

Copyright New Dimensions 2011

The Psychological Contract:

• Term first used in the 1960’s• This is not another name for a contract of

employment• It represents the emotional relationship

between employee and employer• Focuses on What employee expects in return

for their loyalty and commitment at work• Mostly it goes unnoticed• Only really comes to the fore when there is

conflict at work and relations between employee and employer is strained

Page 3: Psychological contract presentation

Copyright New Dimensions 2011

‘…there is conflict at work and relations between employee and employer is strained…’

Page 4: Psychological contract presentation

Copyright New Dimensions 2011

A very current topic:

• Currently the UK is experiencing significant job cuts in the public sector

• The public sector tends to have very strong PC’s

• Key to this has always been the strong sense of job security local government work has offered

• The current redundancy round has blown a serious hole in this belief

• This has diminished trust and badly impacted on PC’s

• … but have employers noticed???

Page 5: Psychological contract presentation

Copyright New Dimensions 2011

Loss of job security has diminished employees trust and badly impacted on PC’s

Page 6: Psychological contract presentation

Copyright New Dimensions 2011

Loss of trust – so what?:

• Reduced good will• Anti management rhetoric builds• Attitudes become entrenched• Conflicts become very bitter• … basically life becomes tough!

Page 7: Psychological contract presentation

Copyright New Dimensions 2011

Loss of trust – so what (2)?:

• It can make managing redundancies much more difficult and angst filled!

• People recognise they have much to lose and can be motivated to ‘fight for their rights’

• Disputes can become very involved and highly emotionally charged

Page 8: Psychological contract presentation

Copyright New Dimensions 2011

What about the survivors?:

• In downsizing / redundancy situations considerable effort is made to deal with individuals chosen for redundancy

• Critically the feelings of those who ‘survive’ the process is often ignored; we just assume the will be happy to remain employed.

• Not so!!!

Page 9: Psychological contract presentation

Copyright New Dimensions 2011

Of course the survivors will be happy – wont they?

Page 10: Psychological contract presentation

Copyright New Dimensions 2011

Unhappy survivors - so what?:

• Feelings of guilt and loss can lead to poor morale and reduced efficiency

• Survivors can often prove to be very resistant to change

• Very disgruntled survivors may act as blockers to change and progress

• Failure to address this issue may have a significant adverse impact on any change programme.

Page 11: Psychological contract presentation

Copyright New Dimensions 2011

Post Change – employees can adopt a number of roles:

Page 12: Psychological contract presentation

Copyright New Dimensions 2011

Post Change roles - remember?:

• Roles need not be static – you can act to move people’s attitude

• Focus needs to be on moving people from the negative bottom quadrants to the positive top.

• Oddly people’s positions can move best to the diagonal opposite

• Start with your senior people first –don’t assume your managers are fully engaged!

Page 13: Psychological contract presentation

Copyright New Dimensions 2011

Replace the old deal with a new deal?:

• Post change survivors can feel displaced due to loss of office, colleagues and importantly key benefits such as job security.

• Recognise the loss and rebuild moral and trust and where possible offer a new deal (replace job security with something new like enhanced marketability)

• Whatever you do, do it before you implement any change programmes

Page 14: Psychological contract presentation

Copyright New Dimensions 2011

Replace old deal with a new deal:

Page 15: Psychological contract presentation

Copyright New Dimensions 2011

Is the Psychological Contract impacting on your change programme?

If you would like further help or support on any of these change issues please contact us on: [email protected]

or follow us on-line at: www.newdimensions-sw.co.uk

You may also find our other presentations helpful:

People Through Change - http://ow.ly/5QnOjManaging problem people at work - http://ow.ly/5QnC1Working SMARTer not HARDer - http://ow.ly/5QnYX