All entries for Friday 20 February 2009

February 20, 2009

Human Resource Management Lesson 7 exercise

Question 1: What implicit expectations do you and the employees you manage/work with have of your employer?

The mutual beliefs, perceptions, and informal obligations between an employer and an employee in an employment relationship form what is called the psychological contract. This has been defined by Herriot (1998;106) as “the beliefs of each of the parties to the employment relationship, the individual and the organisation, as to what their mutual obligations are”

These implicit expectations contained in the psychological contact can vary depending on the nature of the employment relationship. If the relationship is short-term and narrowly defined, there will be less implicit expectations than in a long-term contract which is in nature more open-ended and diffuse. The psychological contract is more important in the long-term relationships, therefore a breach on it could lead to demotivation issues.

Given that the psychological contract has many to do with motivation, In the picture below I have mapped against the Maslow Pyramid (Maslow, 1943) a number of different expectations that, in my opinion, the employees has in an employment relationship.


Some expectations are difficult to situate in a particular pyramid level. For example, can be argued that “training” is really a “Self-Actualisation” activity or that “ensure fair treatment by managers” is in the “Belonging” level” and not in the “Self-Esteem” level. In any case, what is important here is to identify the expectations and the corresponding pyramid level affected in case the expectation is not fulfiled by the employer (psychological contract breach).

On the other side of the psychological contract we have the employee’s obligations to the organisation. Among others I can think on the following:

* Flexibility. For example, volunteer to perform activities that fall outside my job description

* Put additional effort (extra hours) if needed

* Adhere to the company policies and procedures

* Achieve excellence in performing the job

* Proactivity in developing new skills

* Honesty and Trust

Question 2: Analyse how and why these expectations might be different from the implicit expectations in another organization with which you are familiar.

The implicit expectations can vary between different industries or even different teams within the same company. Clearly, the expectations of a white-collar worker in the IT industry will differ from a blue-collar worker. While pay is important for everybody, this will probably be more important for a supermarket cashier than for a consultant, while the latter can have career development as one significant implicit expectation from the employment relationship.

The nature of the work itself can alter the expectations. For a worker in a construction industry, workplace safety could be a significant expectation being irrelevant for a database Administrator.

Question 3: How convincing do you find the idea of the psychological contract as a theoretical framework for understanding the employment relationship?

I think that the psychological contract it’s a representation on what happens in the workplace that highlights important but often neglected features. It’s a framework for addressing “soft” issues about managing performance and motivation, that focus on people.

I think that modern management has to pay attention to those “soft” HRM issues. In my opinion, the contribution that the employees make to the firms can no longer be extracted by fear or by some of the “old” levers that the managers had relied on, specially in some industries like IT. In a highly competitive environment like the one that we face, commitment is more important than ever.

Although the psychological contract does not give a detailed model or framework of employee relations, it offers important clues about how to maintain employee commitment. With the decline of trade unions as agents of workers voice, the focus is in the relation between the organisation and the employees as individuals.

The psychological contract framework, consisting on a set of mutual obligations, is very imprecise but provide some clues to the managers to address “day to day” issues in people management. Neglecting the existence of the psychological contract, can lead to a failure in fulfilling employee’s expectations that can damage the relationship, the motivation, the commitment and finally, the business results.


Herriot, P. "The Role of HRM funtion in building a new proposition for staff", Human Resource Management: The new agenda. London Financial Times/Pitman. 1998.

Maslow, A. "A theory of human motivation", Psychological Review, Vol 50, 1943. pp370-396

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