A psychological contract refers to the unwritten set of expectations and obligations
that exist between an employer and an employee. Unlike a formal, legal employment
contract, which outlines explicit terms and conditions of employment, a
psychological contract is more implicit and based on the perceived mutual
obligations and expectations between the two parties.
Key elements of a psychological contract include:
1. Mutual expectations: Both the employer and the employee have
expectations of each other, often relating to issues such as job security, career
development, work-life balance, and the overall work environment.
2. Perceived promises: Employees may perceive promises from employers
regarding career advancement, training opportunities, fair treatment, and
other aspects of their employment.
3. Reciprocity: There is an implied sense of give-and-take. Employees contribute
their skills, time, and effort, expecting in return fair treatment, recognition, and
opportunities for growth.
Why it matters:
1. Employee Engagement: A positive and fulfilled psychological contract
contributes to higher levels of employee engagement. When employees feel
that their expectations are met, they are more likely to be committed to their
work and the organization.
2. Retention: Understanding and managing the psychological contract can
impact employee retention. When organizations fulfill their promises and
create a positive work environment, employees are more likely to stay with the
company.
3. Productivity and Performance: A positive psychological contract can
enhance employee motivation, morale, and job satisfaction, leading to
improved performance and productivity.
4. Organizational Reputation: A positive psychological contract contributes to
a positive organizational reputation. Satisfied employees are more likely to
speak positively about their workplace, which can be beneficial for attracting
top talent.
5. Conflict Resolution: Awareness of the psychological contract can help in
resolving conflicts. When there is a mismatch between perceived promises
and actual experiences, addressing these discrepancies can help prevent
misunderstandings and disputes.
It's important for both employers and employees to be aware of the psychological
contract and to communicate openly to ensure that expectations are clear and
realistic. Periodic reviews and discussions about career development, performance
feedback, and changes in organizational policies can help maintain a positive
psychological contract over time.
• fairness and transparency in the workplace are foundational elements for building a
positive organizational culture, fostering employee well-being, and promoting long-
term success for both employees and the organization. It establishes a mutual
understanding of expectations and contributes to a harmonious work environment.
• recognizing and rewarding employees in diverse ways not only
boosts morale but also contributes to employee engagement,
satisfaction, and retention. It reinforces the idea that employees are
valued contributors to the organization's success.
• when both the employer and employee share common values, mores, and a vision
for growth, it creates a symbiotic relationship where the success of one party
contributes to the success of the other. This alignment can lead to a positive work
culture, increased productivity, and long-term success for both the individual and the
organization.
• Building a sense of community among peers is essential for creating a positive and
collaborative work environment. A strong sense of community fosters mutual
support, open communication, and a shared sense of purpose. organizations can
promote a positive peer-to-peer dynamic, strengthen interpersonal relationships, and
create a supportive community that enhances both individual and team performance.
• "Corporate mobility" refers to the ability of employees to move within an
organization, often across different roles, departments, or even geographical
locations. "Promotion," on the other hand, specifically denotes the advancement of
an employee to a higher position or rank within the organization. Both corporate
mobility and promotions are important aspects of talent management and career
development within a company.
• Expanding one's skill set through training is a valuable and common approach
for personal and professional development. Example: Technology Skill
Expansion
Alex works as a project manager in a consulting firm that specializes in marketing
strategies for clients. Over time, Alex recognizes the increasing importance of data
analysis and digital marketing in the industry. However, Alex's current skill set is more
focused on traditional project management methodologies.
• "Humane treatment" in the workplace refers to the fair, respectful, and considerate
treatment of employees by employers and colleagues. It involves creating a work
environment that prioritizes the well-being, dignity, and rights of individuals.
• Establishing an effective work/life balance and ensuring that the voices and
suggestions of employees are heard by management are crucial aspects of
promoting a healthy workplace culture.
• Recognizing and rewarding impact and performance is essential for motivating and
retaining employees, fostering a positive work culture, and driving organizational
success.
• Flexibility on tasks and processes is a key component of creating an adaptive and
empowering work environment. It allows employees to tailor their approaches to
meet the demands of their roles, enhances job satisfaction, and contributes to overall
organizational agility.
COMPLIANCE
Compliance, in a general sense, refers to the act of adhering to established rules,
regulations, laws, standards, or guidelines. It is the state of being in accordance with
prescribed requirements, and it is applicable in various contexts, including legal,
regulatory, ethical, or industry-specific frameworks.
Ex.
A Philippine-based e-commerce company, XYZ Online Marketplace, operates
a platform that facilitates online transactions between buyers and sellers. Given the
sensitivity of personal information involved in online transactions, the company
prioritizes compliance with the Data Privacy Act (DPA) to protect the privacy and
rights of its customers.
