Improve Employee Engagement with Organizational Caring and the Psychological Contract
In our research, we have many clients that ask their employees whether they agree with this statement: “This organization cares about its employees.” While most organizations find themselves in an acceptable range, some are given an answer that is loud and resounding; “No, you don’t care about us.”
What happens when employees stop believing their organization cares about them? What should leaders do in this situation? Can something be done to reverse things? The key to answering this question is to understand what caring looks like from an organizational perspective.
When we talk about care within a team or between associates, we are talking about personal empathy, small acts of support and kindness, and bonding at an interpersonal level. Care at the organizational level, however, is shown much differently. In our view, organizational care is best demonstrated when an organization honors its Psychological Contract with its employees, and care evaporates when the organization takes actions that undermine employee trust.
The Psychological Contract is the unwritten, implicit set of expectations and obligations that define the terms of what it means to belong to an organization. The Psychological Contract anchors the employee to the organization and helps them understand, even if implicitly, why they are there, why they matter, and why they belong.
An organization’s Psychological Contract can be broken down into four common archetypes, although there are countless variations of the Psychological Contract:
Work as a Family
In this context, employees bond with each other and with the organization as if the workplace is a family dedicated to a common cause. Values and behaviors such as loyalty and sacrifice are highly prized, and the organization is fully invested in giving its employees a place where their personal and work lives blend. Belonging is at a premium. The Employer sets the mission, but employees become fully invested due to a strong sense of family. The employer achieves its mission through a group of highly motivated employees. Work as a family is most often seen in smaller organizations, as it requires tremendous effort the more employees an organization hires.
Work as a Transaction
The employer and employee need each other. The employer needs employee effort, and employees see the employer as way to gain resources to accomplish their personal goals. Work-life and home-life are kept separate. In this situation, the employer defines the mission, and employees are okay with whatever – as long as the transaction is fair. The employer is happy when effort is obtained, and the employee is happy when the paycheck is deposited. The employer uses its employees to succeed at its goals and priorities.
Work as a Scorecard
This archetype views the relationship as transactional, but both parties take the give-and-take nature of the relationship to the extreme. This scenario is characterized by employers competing for talent, always looking for the latest and greatest ways to attract and retain the best talent. Talented employees have a personal brand and are free agents that move around, seeking to maximize their resumes and bank accounts. Both sides are climbing the ladder, seeking even better opportunities. Yet, loyalty is thin. In this archetype, the employer sets the mission, but the employee also cares about the mission because it reflects upon their personal brand. In sum, the employer incentivizes its employees in order to succeed at its mission.
Work as a Partnership
The overall mission is important to both the employer and the employee. There is alignment between employer and employee, and they view each other as partners in achieving a set of common goals. Trust must be high between both parties, and both the employer and employees must pull their weight. When working well, this scenario finds the employer achieving its mission with its employees, and employees see their employer as a place and a path towards achieving their goals. There is strong alignment between employer and employees.
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Which Approach is Best?
The foundation to the Psychological Contract is that both parties have a good sense of what the contract means and both parties strive to honor their side of the bargain. There is not necessarily a right or wrong archetype or variation on the Psychological Contract to be chosen. The most important consideration is that an organization must be true to the archetype that actually exists. The quickest way to violate trust and to receive low caring scores is to talk as if the Psychological Contract is built upon one archetype but behave according to the rules of another. For example, you can’t promote a family brand, but behave entirely on a transactional basis.
Breaches in the Psychological Contract happen when one party, either the employer or the employees, breaches its commitments. When employees breach the Psychological Contract, results are less dramatic. An employee leaves for a better fit, or the organization forces a separation, but the effects are felt only on a case-by-case basis. When the organization, however, breaches the Psychological Contract, consequences are more acute and widespread; large swaths of employees disengage and look for other opportunities.
Evidence of org-level breaches often involve the following behaviors, which signify low trust:
One way to address organizational breaches is to look at things through the lens of trust – knowing that care and trust are highly correlated, if not representative of the same idea. Charles Green developed a trust quotient or trust equation, which he described as follows:
When organizations attempt to recover caring, my advice is to focus on the trust question by doing the following:
1. Remember that engagement, satisfaction, and happiness depend less on the conditions in which one works and more on whether expectations are aligned and met.
2. Your organization isn’t real, your people are. People, not legal entities, get things done. Organizations are what we call a legal fiction; they are simply a name-branded intellectual exercise.
3. Understand and faithfully honor your Psychological Contract. There are six pillars to any strong Psychological Contract:
If leaders follow these six pillars within their Psychological Contract, the rest will take care of itself. Employees will feel valued and cared for, and trust will become a free-flowing lubricant to help get things done.