Do You Question The Importance Of The Psychological Contract?

As the world moves into the next phase of the pandemic, employees now expect their well-being and mental health to be taken seriously, as well as their circumstances. Flexible working conditions, work-life balance, and skills development are some of the hot topics being discussed and demanded, and, as such, a familiar concept reemerges: the psychological contract. 

But what exactly is a psychological contract?

Unlike a formal employee contract, a psychological contract is an unwritten set of expectations between the employee and the employer. It includes informal arrangements, mutual beliefs, common ground, and perceptions between the two parties. The concept was originally developed by Denise Rousseau, a professor of Organizational Behavior and Public Policy at Carnegie Mellon University, but it still is somewhat subjective, as it largely depends on the values and culture of each organization. 

What is usually discussed in a psychological contact?

The psychological contract between employer and employee will vary from place to place. However, there are a few standard topics that most employees talk about when renegotiating the terms of their psychological contract. These topics are generally related to: 


As people return to the office (or not), they quickly reach the conclusion that the 9 to 5 schedule just doesn’t work anymore. Flexibility now dominates the way we speak about the future of work, and it is, in fact, the top priority for most employees. And let’s not forget: employee flexibility goes beyond remote work - it also means more autonomy and trust.

Diversity, Equity, and Inclusion      

For many companies, diversity, equity, and inclusion (often referred to as DEI) have been a top priority for years. But since the pandemic, DEI initiatives have been in the spotlight, pushing organizations beyond mere representation. Now, companies are being asked to assess their processes and culture, as well as to provide equity of salary and opportunities for everyone within the organization.

Empathic Leadership

Empathy has always been a critical skill for leaders, but it is undoubtedly taking on a new level of meaning and priority since the pandemic. Now more than ever, employees are looking for their leaders to show compassion and care about their wellbeing and professional growth. As many studies suggest, empathetic leaders boost innovation, engagement, and employee retention, which is why this is an aptitude that companies must take into account. 

Consistent Communication        

A topic that goes hand in hand with the previous one. Communication has always been essential for workplace culture, but the pandemic has certainly boosted the need to maintain and strengthen connections between people and teams. Now, employees crave increased activity, information, and participatory actions. They want to feel heard, get more feedback, and have opportunities to grow. So when it comes to communication, rather than focusing on the channels and content, companies must focus on the people and their personal needs.

Safety and Respect

Despite the apparent loose connection that employees feel with their employer (especially in remote work scenarios) there is still an expectation that their employer will provide stability and security to some extent. Moreover, employees expect to be fairly rewarded for their work, and to have their boundaries respected.

All in all, the appearance of psychological contracts highlights just how important it is for managers to listen to employees and be willing to come together to find the best approach to working. As such, HR professionals must keep up to date with the new trends and needs of workers in this post-Covid era and design the best solutions to attract and retain talent.

Want to learn more about how customers succeed with talcura?

Get in touch with us.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.