What's your psychological contract?

What's your psychological contract?

Have you ever heard of the term 'psychological contract'? It represents the definition of your working relationship with your employees. It is the unwritten values that you abide by which influences the way in which your products or services arrive at your customers' door. It is not like a contract of employment as it is not tangible, however, it is, you could say, of equal importance if not more so.


You may have heard of Maslow and his 'Hierarchy of Needs' in his 1943 paper "A Theory of Human Motivation" in Psychological Review.  What Maslow created was a concept that employees have a pyramid of needs which starts from the base upwards, which are what motivate them to work.   In the majority of cases, this starts with Physiological and the need for money in order to provide for food, shelter etc..  In Maslow's theory, he stated that once the initial needs are met surrounding the Physiological needs, the individual will then move on to Safety needs and so on and so forth as demonstrated in the diagram below.


So why is this of significance or relevance to you as an employer?  Well if you don't know what motivates your employees and their needs are not met then this will manifest in a number of ways:

  • they may leave and go and work for your competitors
  • they may take excessive amounts of sick leave
  • they may have the universal condition known as 'presenteeism' - the lights are on but nobody is in!  They are there but not there!  Attention to detail goes out of the window!  They make sloppy mistakes.


So why should you worry?  Here's why:

  • they may leave and go and work for your competitors - your employee may have a unique skill set, they may be damned good at their job, your customers may have a very good working relationship with them, you pose the risk of losing not just a damned good employee but a customer who pays you thousands of pounds.
  • they may take excessive amounts of sick leave - who covers the work whilst they are off sick?  this could cause frustration with your existing employees as they are having to do extra work with little return.  Customer orders may not arrive on time.  Your customers may get frustrated and start looking elsewhere and you pose the risk of not only having a deeply demotivated workforce but a disgruntled customer which could cause reputational damage as well as the loss of a good customer.
  • they may have the universal condition known as 'presenteeism' - the lights are on but nobody is in - well for starters if an individual isn't focussed on what they are doing they could make serious mistakes.  A customer receives the wrong order.  A customer receives the wrong invoice.  The customer could get frustrated and decide that enough is enough and start looking elsewhere.


I think that it's probably fair to say that there's a common thread in all of the above which highlights the importance of not only knowing and understanding what motivates your employees but also the impact that this could have on the 'bottom line' which could be huge!!

Yes, we are in extremely difficult times, which is why it is so important to make sure that you are motivating your teams. 

So how do you do this?  Here's our top 4 tips:

Tip 1 - Keep it Brief - Make sure that you have regular communications with your employees to update them on key developments in the business.

Tip 2 - Appraisal Time - Have a robust appraisal process in place so that you can align individual goals to your organisation's goals, give feedback and really get to know what motivates your individual team members 'one size does not fit all'.

Tip 3 - Reward & Recognise - Once you know what motivates your teams make sure you follow through with tokens of appreciation to motivate your teams and it doesn't have to cost a lot.  It could be as simple as a 'thank you' or a bonus.

Tip 4 - Engage with your teams - Employee engagement surveys can be a fantastic way of getting feedback about how your employees are feeling and to enable you to address any areas of improvement before it's too late.


If you would like to talk to us about how we could help you to develop your 'Psychological Contract' with  your teams whether that's virtual team builds, employee engagement surveys, HR policies etc. then please get in touch.  


Don't forget if you're not reaping the rewards of our brilliant Cloud based HR software (HR Pulse), please feel free to contact sue@evergreenhr.co.uk or call 07951 356700 for a friendly and informative chat.

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