Tài liệu Corporate Reputations, Branding and People Management 15 docx

Breach and violation of psychological contracts Like legal contracts, psychological contracts can be breached or violated if employees feel that the significant terms have been broken, o

■ They arise from beliefs and perceptions of obligations

that, in the case of employees, are what they believe

they are entitled to as a consequence of perceived prom-ises, either explicit or implicit, made by the employer

(Conway and Briner, 2005) In that sense, a psycho-logical contract is more than just a set of expectations that can arise in the absence of a promise Only expec-tations relating to perceived promises are entitled to be considered as part of the psychological contract Just what these promises look like in practice and how they arise are illustrated in Box 4.2 You can see how these promises relate to official communications of the orga-nizational identity and to leadership and governance

create obligations

‘Promises’ arising from spoken and written communications:

■ strategic documents, employer commitments to certain courses of action, mission and values statements, agreements, pledges, speeches

■ corporate brand values, ethics statements and social responsibility policies, e.g the kinds of statements on social responsibility and safety made by companies such as BP and Shell, the client companies of the offshore drilling contractors

■ employer branding/employer of choice policies (see Chapter 6)

■ financial statements or employer reporting statements

■ statements made on application forms, etc., by employees, and employers’ advertisements, websites, etc., e.g GE’s ecoimagination, the drilling contractors’ promotional materials to employees

‘Promises’ arising out of behaviour and actions of leaders and managers:

■ observations of senior leadership, management or employee actions, e.g how managers and employees act in relation to one another in treating each other with respect (see Box 4.1 for the perceptions of how employees saw management style)

■ interactions with senior leaders, managers or employee representa-tives, such as how recruiters behave during the interview process, or

as in the Offshore drilling case in Box 4.1, custom and practice on standing men down during slack periods, or retaining people who had been ‘good employees’ in the past

Breach and violation of psychological

contracts

Like legal contracts, psychological contracts can be breached or violated if employees feel that the significant terms have been broken, or that perceived obligations are unmet The distinction between breach and violation is largely one of degree; breaches are treated as minor, usually short term and less significant, whereas violations are seen as more serious, more long term and significant in terms of outcomes As an example, you might want to reflect for a moment on whether employees in our off-shore drilling industry survey saw elements of their psycholog-ical contracts with the companies as met, breached or violated, and what actions might help repair any damage

It is to the violation of psychological contracts that many researchers attribute major breakdowns in employee relations,

or failures in organizational change programmes For example, violation of psychological contracts has been used to explain

Loyalty or silence

Non-response or willingness to

endure unfavourable circumstances, perhaps because

there are no better alternatives

Exit strategy

Voluntary termination of the relationship by leaving for another job or exiting labour market altogether

Exercise voice

‘Speaking up to power’ by

ignoring or defying bosses,

taking actions or expressing

comments, threats, etc Or

attempts to build/rebuild trust

relationships

Neglect

May reflect passive negligence, active destruction through

‘political’ behaviour or sabotage Or expressed through cynicism towards management

promises

Passive

Active

Figure 4.2

Range of employee responses to psychological contract violation (based

on Turnley and Feldman, 1998; Sutton, 2002, and others)

strike action and rises in absenteeism and employee turnover;

at the same time, violation has been used to explain rising lev-els of cynicism about never-ending ‘programmes’ of organiza-tional change and lack of trust in managers to ‘walk the talk’

(Pate et al., 2000).

One way of thinking about employee responses to contract violation is to distinguish between active and passive ‘actions’ on the one hand and positive and negative ‘actions’ on the other (see Figure 4.2) Note how apparent loyalty or silence by employ-ees may occur as a response to management actions that breach,

or even violate, expectations regarding promises In one sense, this can be treated as a positive response to changes managers may make in the psychological contract because they have built

up a store of trust and a reputation for integrity in the past But

it may also be seen as negative because employees endure what they perceive as unfair treatment as they are unable to foresee alternatives to their current employment When the employ-ment situation changes, however, they are very likely to adopt an exit strategy if the breaches continue, as frequently happened in the North Sea offshore drilling industry A further implication of this framework is that managers should do all they can to encourage employees to ‘speak up to power’, rather than sup-press discontent Robert Sutton (2001) in an excellent account

of ‘weird ideas that really work’ promoted the notion that innov-ating organizations should hire people that make them feel uncomfortable and encourage others to ignore and defy their superiors By encouraging such actions, managers are not only able to encourage innovation but can rebuild trust where it has been broken, an essential component of employment relations This rebuilding of trust through sharing control with employee representatives is one of the main justifications for encouraging new forms of partnership agreements with trade unions One of the consequences of not doing so is the risk of employees adopt-ing a negative, ‘neglect’ strategy, or even resortadopt-ing to sabotage (Pfeffer, 2005)

Predicting why and what happens when leadership and management actions that, through design, accident or miscal-culation, lead to breaches being treated as violations has been

studied by Conway and Briner (2002) and others (Martin et al.,

1998) They point to four characteristics of perceived promises

that can have a major impact on employee responses to breach

or violation They are:

■ the degree of explicitness of a perceived promise – the more explicit the promise, e.g communicating in mis-sion statements, ‘people are our most important asset’; the greater the sense of injustice and the more active – positively or negatively – the employee response

■ attributions of personal responsibility for contract breach or violation – the more personally responsible a leadership team or individual managers’ reputations are held to be for the perceived breach, the more intense will be employees’ reactions, especially in trusting them

to act in employees’ best interests in the future

■ the unexpectedness or infrequency of the breach – the more unexpected or infrequent the breach/violation (a break with past behaviour), the more intense or active the response will be from employees; again this relates to what we learned about expectations of lead-ership in Chapter 3 in the cases of HP and Agilent, and Hurricane Katrina

■ the degree of importance the party attaches to the goal

or relationship breached – the greater the attachment

to the goal/relationship that is breached, the more likely it will be treated as a significant violation and, hence, provoke a negative response, for example the Hurricane Katrina case

Types of psychological contract

Though psychological contracts are individual in nature, result-ing in as many contracts in an organization as there are employ-ees, psychologists have tried to classify some of their more general features Three such classifications have emerged in the extensive research in this area (e.g Rousseau, 1995; Thompson and Bunderson, 2003) These are set out in Table 4.3 and reflect changes taking place in organizations and the wider economy During the 1990s in the USA, it was argued that the traditional, relational contracts that many, mostly white-collar, employees

held with their employers – based on commitment in return for job security and career prospects – could no longer be sustained because of increased global competition Consequently, it was suggested that this traditional, relational contract was being

Table 4.3

Different types of psychological contracts

Dimension Transactional Relational Ideological

Organizational Degree of job To provide a career Demonstrate credible

obligations security, safe with training and commitment to a

work and a education, promo- valued cause

‘fair day’s pay’ tion opportunities,

interesting work and long term employ-ment prospects

Individual ‘A fair day’s Go beyond contract Participate fully in

work and demon- mission/cause by strating high being a good commitment and organizational identification with and societal citizen organization

between self and employee share same organization passion/cause

Based on beliefs Self-interested, Socialized employee, Principled

about human instrumental who is collectively involvement

nature, which worker who oriented and finds

Characteristics Black and white Grey areas which Grey (negotiable) but

moral ‘hot-buttons’

to violation organization ment and revert to a organizational

transactional exchange dissent

Basis of Compliance and Identification with Work as a calling

attachment to focus on the job organization and

organizations

Source: Based on Thompson and Bunderson, 2003, p 575

replaced by a more transactional contract; this time, however, one with a slight twist on the model highlighted in Table 4.3 Organizations recognized that they could no longer offer stable employment to all, nor could they guarantee careers to all, even though they wished to retain the benefits of relational contract-ing from employees workcontract-ing ‘beyond contract’ and showcontract-ing high levels of commitment and identification as long as they remained

in employment As a result, the notion of employability came into

common usage: employers sought temporary commitment from employees as long as they remained in the job, but offered in return the opportunity to employees for self-development and

to hone their skills on interesting and demanding projects This employment proposition, which was a form of ‘come and work for us, learn and do enjoyable work’, was attractive to many mobile, knowledge-based employees in high-tech, computing and software development, and in the creative industries, such as arts, media, science and some managerial jobs, because it made them more employable for their next job (Cappelli, 1999; Florida, 2002) In effect, their career paths became boundaryless, because they moved in and out of organizations and even occupations This notion of employability, however, was much less widespread than much of the literature would have had you believe, espe-cially outside the ‘new economy’ organizations based in the American high-tech conurbations of the San Jose Valley, Cambridge and Raleigh–Durham, and the research-based, ‘cre-ative’ cities, such as San Francisco, Boston, Austin, San Diego, Seattle and Minneapolis Nevertheless, according to the excellent book by Richard Florida (2005) on the ‘Flight of the Creative Class’, there is reason to believe that these new careers are likely

to be realized in the near future in the conurbations of countries such as Finland, Sweden, the UK, France, Germany, India and others noted for their high-tech and creative centres, perhaps at the expense of the aforementioned American regions

Many organizations, however, are seeking through their repu-tations and branding statements to go beyond even relational contracts and create ideological relationships with individual employees Most mission-driven organizations aim to captivate employees by having them believe that they are working for a greater or higher-level purpose, even in those basic industries such as retailing For example, Wal-Mart, the world’s largest

retailer, tries to engage employees by convincing them that they have the opportunity to ‘give ordinary folks the chance to buy the same things as rich people’ Tesco, which we examine in Chapter 6, is another, albeit with a more sophisticated, seg-mented approach to HR However, it should be obvious to most readers that ideological contracts are more likely to be found amongst higher-level professionals in occupations with a sense

of vocation, such as medicine, teaching, religion and even poli-tics, or in voluntary organizations such as Save the Children or Cancer Research

The nature of psychological contracts

From an HR manager’s point of view it is clearly useful to gain insights into employee perceptions of perceived promises because they have extremely important consequences for under-standing the effectiveness of people management strategies and management actions Table 4.4 shows the relationship between

Table 4.4

Inputs, content and outputs of the psychological contract

Key factors that shape The content of Key outcomes

psychological contracts psychological contracts

Employee characteristics Perceptions of fair treatment Employee behaviour and and expectations of by the organization attitudes, including

commitment, employee citizenship behaviour (‘going the extra mile’)

Organizational Trust in management to do

characteristics the best for employees

The employment value The extent to which Employee performance, proposition and HR policies employees perceive to have including work effort, and practices on recruit- been promised is actually absenteeism, leaving, etc ment, career development, delivered

training, rewards,

employ-ment security, etc

Source: Based on Martin et al., 1998; Guest and Conway, 2002; CIPD (2003a)

what some researchers have found to be the important factors that shape psychological contracts, the key components or con-tent of psychological contracts themselves and positive and neg-ative outcomes associated with the way in which psychological contracts are managed

What most employees appear to expect from employers and what they regard as the most important employer obligations have been identified by a number of researchers (see Herriot

et al., 1997; Sparrow and Cooper, 2003; CIPD, 2004) These items

are often used in surveys to determine the health of psychological contracts in organizations (Box 4.3)

of psychological contracts

■ To provide an adequate procedure for induction into the job and training to make people more effective and safe

■ To ensure that the procedures for selection, appraisal, promotion and layoffs are fair

■ To provide justice, fairness and consistency in the application of important rules and on discipline and dismissal

■ To provide equitable treatment on pay and rewards in relation to market circumstances and to be fair in the allocation of non-pay benefits to individuals and groups

■ To provide interesting work where possible

■ To provide fair pay for taking on responsibility in the job

■ To provide career development and support for employees to learn new skills

■ To allow people reasonable time off and flexibility to meet family and personal needs

■ To consult and communicate effectively on matters affecting employees

■ To allow employees reasonable autonomy in how they do their jobs

■ To act in a personally supportive way to employees

■ To recognize loyalty and reward special contributions

■ To provide a safe and friendly work environment

■ To do what they can to provide employment security

■ For managers to act in such a manner that they keep promises and commitments and do their best for employees

Employers, on the other hand, seem to expect that employ-ees will work extra hours when needed, take on work outside their responsibilities when circumstances dictate, look for better ways of undertaking the job and suggest improvements,

be flexible, save costs and adapt to changes in the work environment

Psychological contracts and trust

Permeating nearly all discussions of psychological contracts is

the notion of trust (Rousseau, 1995; Herriot, 2001; Pate et al.,

2003), and ours is no different Trust is one of those ideas that are progressively accepted as a key to unlocking good employ-ment relations and organizational design, especially in the light of developments in new, networked forms of organization (see Chapter 9) Indeed, in Table 4.4, we have defined it in terms

of the strength of trust that an employee has in management to

‘do the best for employees’, though this is a rather circular and weak definition So, in line with our view that definitions are important, let’s look at trust for a moment to tease out its essen-tial features

One of the best attempts to provide a formal definition sets out four themes of how trust is viewed and used, all of which have important practical implications for psychological

con-tracting and engaging employees (Bhattacharya et al., 1998).

Drawing on earlier views of trust as involving the expectations

we hold about managers’ or leaders’ motives when placed in risky situations, they set out the following characteristics:

■ Trust becomes an issue in employment relationships in

uncertain and risk-laden situations, for example, where

employees are subject to capricious leaders, during downturns in economic activity, or where there are no rules regarding governance or action

■ Trust is based on a reasonable expectation of

organiza-tions providing something important to employees since they need some idea of how much they can trust

managers to deliver what is important, for example, the content of items in the psychological contract in Box 4.3 such as career development

■ Trusting someone must involve an important expecta-tion, as we have already made clear in our approach to

psychological contracts Employees have to value what

is being promised or (not) delivered We also have to

be able to account for the strength of that expectation, in

the sense that we can say that in approximately 90%

of similar situations, employees in a company might reasonably expect managers to deliver what has been promised

■ Finally, to trust and be able to trust is good: we use it in

the positive sense that we can trust our organizations to deliver, not in the negative sense that ‘HR managers can always be trusted to foul up around here’

Measuring and managing psychological

contracts

The implications of these features of trust combined with other elements of psychological contracting should be rela-tively clear If we accept the points raised by the previous discussion, managing the individual–organizational relation-ship through effective psychological contracting requires HR

to provide answers to the three questions, and regularly meas-ure how well the organization has addressed all or some of the commonly used content items of psychological contracts (Box 4.3) Consequently, one of our main points in this book is that

we believe that most organizations would want to know, or, indeed, need to know: (a) what individual employees feel they

are entitled to expect from their employers (E ) arising from

promises made to them; (b) relatively speaking, the rating

of these expectations in terms of their importance/value to

individual employees (Ve); and (c), whether they see these values expectations being delivered (D) In simple algebraic

terms, HR should attempt to measure the gap between what