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Mind over matter: Why work is more than work

The psychological contract can build our new work world if we get it right on all sides

Lockdown sent much of the UK home to work, and there were more problems raised by that sudden upheaval than figuring out how best to set up a laptop on the kitchen table - the core relationships that guide our working lives are at risk.

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"The nature of work is changing and that's prompting people to think about how to redefine not only their work roles, but the nature of their relationships with co-workers and supervisors," says Blaine Landis, assistant professor at UCL's School of Management.

To address that, managers need to reconsider their psychological contract with employees, ensuring it evolves to keep pace with the way we work. When an employee begins a new role, they'll be given a written contract with pay and benefits, job expectations, and other key aspects such as hours and conduct. However, there will also be unwritten but understood rules around individual expectations, behaviour, engagement and more.

This is called the psychological contract. It's an idea dating back to the 1960s, when academic Chris Argyis first used the term to describe the unwritten, implicit relationship between workers and their bosses. Though it has since been expanded on by others, including management researcher Denise Rousseau in her 1989 seminal paper. The psychological contract is now often encompassed in newer management concepts like the employer/employee value proposition and employee engagement.

"Although the terminology may have evolved, the psychological contract is still an essential part of the employment relationship – and the basis of this contract is trust," says Rick Kershaw, chief people officer at Peakon.

Trust is everything

"Employees have constantly evolving expectations, and vice versa. This unspoken agreement forms the basis of a company's culture and growth strategy," Kershaw adds. "It motivates employees to perform at their very best, working for the betterment of the business. Employers reciprocate this by providing opportunities for growth and learning."

Nikolaos Lygkonis, founder and CEO at PeopleGoal, notes that the psychological contract can include the culture of a company, whether a manager is results driven or values guided, and even external factors, such as the wider economic environment or societal shifts. "For example, the #blacklivesmatter and #metoo campaigns had an impact on the employee...

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