Question

What is the psychological contract? Why are needs-based models of motivation controversial? What lessons should practicing managers draw from the literature in this area?

Answer 1

• The psychological contract refers to the unwritten set of expectations of the employment relationship as distinct from the formal, codified employment contract. Taken together, the psychological contract and the employment contract define the employer-employee relationship.
• Originally developed by organisational scholar Denise Rousseau, the psychological contract includes informal arrangements, mutual beliefs, common ground and perceptions between the two parties.
• The psychological contract develops and evolves constantly based on communication, or lack thereof, between the employee and the employer. Promises over promotion or salary increases, for example, may form part of the psychological contract.
• Managing expectations is a key behaviour for employers so that they don’t accidentally give employees the wrong perception of action which then doesn’t materialise. Employees should also manage expectations so that, for example, difficult situations or adverse personal circumstances that affect productivity aren’t seen by management as deviant.
• Perceived breaches of the psychological contract can severely damage the relationship between employer and employee, leading to disengagement, reduced productivity and in some cases workplace deviance. Fairness is a significant part of the psychological contract, bound up in equity theory – employees need to perceive that they’re being treated fairly to sustain a healthy psychological contract.
• Maslow’s model is hierarchical. The human brain at the base is driven by a basic instinct to survive with food drink and shelter. The second level is made up of the safety needs. The third level in Maslow’s model comprises the social needs like family, affection, relationships, work groups, and community. The fourth level comprises the ego-centric needs of achievement, responsibility, and reputation. And finally, at the top is self-actualization, personal growth and fulfillment.
• In reviews of research based on Maslow's theory, little evidence has been found for the ranking of needs that Maslow described, or even for the existence of a definite hierarchy at all.
• The problem with Maslow’s hierarchy is that none of these needs,starting with basic survival on up, are possible without social connection and collaboration.Our reliance on each other grows as societies became more complex, interconnected, and specialized. Connection is a prerequisite for survival, physically and emotionally.
• Needs are not hierarchical. Life is messier than that. Needs are, like most other things in nature, an interactive, dynamic system, but they are anchored in our ability to make social connections. Maslow's model needs rewiring so it matches our brains.
• Belongingness is the driving force of human behavior, not a third tier activity. The system of human needs from bottom to top, shelter, safety, sex, leadership, community, competence and trust, are dependent on our ability to connect with others. Belonging to a community provides the sense of security and agency that makes our brains happy and helps keep us safe.
• In 20th Century management, Maslow’s hierarchy of needs was helpful to a certain extent in pointing out to managers why traditional managment--hierarchical bureaucracy with managers acting as controllers of individuals,was unlikely to meet the psychological needs of employees. But it offered an unrealistic route to meeting those needs: ascension up the hierarchy of needs towards self-actualization. The truth is that not everyone wants or needs or is able to be a self-actualizing artist or leader.
• What it implies, and the experience of radical management confirms, is that getting work done by people working together in self-organizing teams can meet most people’s psychological needs without positing unrealistic goals of self-actualization as the be-all and end-all of life.

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