Psychological Contracts and Shared Mental Models - what are they?

You may well ask.

A psychological contract and shared mental model are fundamental elements of organizational life, shaping how employees understand their roles, responsibilities, and relationships within the workplace. Although not formally documented, they create strong, often subconscious, expectations that employees rely on to navigate their work environment.

In any change initiative, the psychological contract and shared mental models are foundational elements that shape employees’ experiences and responses. When disrupted, they can create friction, resistance, and even turnover. By acknowledging these psychological elements, communicating openly, and offering support throughout the transition, Change Managers can mitigate the fallout and facilitate a smoother change process.

Through validation, transparency, involvement, and resilience-building, Change Managers can help employees maintain a positive, adaptable relationship with their organization, even in the face of significant change. Addressing these psychological dimensions with care and attention can ultimately lead to higher levels of engagement, reduced resistance, and a stronger alignment with organizational goals.

PSYCHOLOGICAL CONTRACT

The psychological contract refers to the unspoken, informal agreements and expectations between an employer and employee. Coined by organizational psychologist Denise Rousseau, it encompasses the perceived promises and obligations that employees believe exist between them and their organization. For example, an employee might expect job security, opportunities for advancement, respect, and recognition, while the organization might expect loyalty, productivity, and alignment with company values.

Psychological contracts are formed through everyday experiences, socialization, and personal values. They are highly subjective, unique to each individual, and can evolve over time. Unlike formal contracts, the psychological contract is not a tangible document; it exists in the mind of the employee and is influenced by the organization’s culture, leadership behaviors, and policies.

When organizational change occurs—whether restructuring, digital transformation, or process changes—psychological contracts can be threatened, especially if the change alters key elements like job stability, role clarity, or career progression. This perceived breach or violation can lead to distrust, disengagement, or even the intention to leave the organization.

SHARED MENTAL MODEL

A shared mental model is a collective understanding among team members about how tasks should be approached, how roles should interact, and how goals are achieved. Rooted in cognitive psychology, shared mental models streamline collaboration by creating a common understanding of processes, priorities, and objectives. They allow team members to anticipate one another’s actions, reducing miscommunication and enhancing coordination.

 Shared mental models are often formed through social interactions, training, and experience within the team. They are particularly valuable in high-performing teams, where each member knows their role and how it fits into the larger organizational mission. However, these models are tacit and evolve organically; they are neither formally defined nor easily adjusted.

When a change disrupts a shared mental model—such as a shift to a cross-functional team approach or an introduction of a new digital platform—it can disorient employees, as they suddenly lose the familiar mental framework that guided their work. This loss can lead to feelings of confusion, stress, or resistance as employees struggle to adapt to the new way of working.

Managing the Fallout of Psychological Contract Breaches and Shared Mental Model Disruptions

As Change Managers, addressing the disruption of these psychological elements is critical for minimizing resistance and fostering successful adaptation. Here’s how we can manage the fallout:

When employees perceive a change as a threat to their psychological contract, they may feel betrayed or devalued. It’s essential to acknowledge these feelings, validate their concerns, and communicate openly about the reasons behind the change. A simple recognition of employees' emotional responses can reduce the sense of alienation that often accompanies change.

For shared mental models, proactive communication is equally important. Recognize that employees are adjusting to new ways of working and acknowledge the challenge of transitioning from old, ingrained models to new ones. By validating their experience, Change Managers can create a supportive environment that encourages employees to engage with the change. 

Transparency is essential in preventing misunderstandings about organizational change. Employees are less likely to feel that their psychological contract has been violated if they understand the “why” behind changes. Offering clear, consistent updates about the purpose, process, and intended outcomes of the change helps employees see that the organization is committed to fulfilling its promises, even if the methods or environments are shifting.

When managing a shift in shared mental models, it’s crucial to involve employees early in the conversation. Solicit their feedback, provide opportunities for them to voice concerns, and explain how their input will shape the future of the team’s working model. Open communication can foster a sense of ownership and reduce the risk of resistance.

If possible, reframe the change as an extension of the psychological contract rather than a breach of it. Emphasize how the change aligns with existing values or fulfills promises the organization has made, such as improving employee experience, creating growth opportunities, or enhancing job security in the long term. This reframing can help employees see the change as an evolution of their relationship with the organization rather than a disruption.

To help employees adapt to a shift in shared mental models, invest in training programs that clarify new processes, roles, and objectives. Provide hands-on sessions where team members can practice new skills and familiarize themselves with new tools. This training should be ongoing, allowing employees to adjust incrementally.

In addition to training, foster team-building activities that reinforce the new mental models. Encourage collaboration and discussion about how the new way of working impacts team dynamics and work quality. By involving employees in the development of a new shared mental model, Change Managers can reduce anxiety and facilitate smoother integration.

Offer clear channels for employees to provide feedback throughout the change process. When employees feel heard, they are more likely to see the organization as supportive and responsive to their concerns, which can mitigate perceptions of psychological contract breach. Use surveys, focus groups, or one-on-one discussions to gather insights and show employees that their feedback matters.

For shared mental models, allow space for continuous improvement by encouraging employees to suggest ways to optimize the new model. Creating a culture of adaptability can ease the transition and empower employees to view the change as a positive evolution rather than a disruptive overhaul. 

Change can be emotionally taxing, especially when it disrupts long-standing expectations and mental models. Encourage resilience by promoting well-being initiatives and reminding employees of available resources like counseling, peer support, or mental health services. Addressing the emotional impact of change head-on fosters a supportive work environment, reducing turnover intentions and enhancing engagement.

Leaders play a critical role in managing the psychological contract and shared mental model shifts. Ensure that leaders model adaptive behaviors and communicate optimism about the change. Their actions set the tone for employees, demonstrating that adapting to change is a shared responsibility and that the organization’s commitment to its people remains intact.

Leaders should also act as cultural ambassadors, reinforcing the values that underpin the psychological contract and helping employees navigate the evolving shared mental models. Their visible support and active participation in the change process can reinforce trust and encourage alignment across teams.

DID THIS PIQUE YOUR INTEREST?

I hope so ...