Neil Conway, senior lecturer in organisational psychology, Birkbeck, University of London: In an ideal world, organisations would only make promises they can keep. However, organisations live in an uncertain world, faced with such things as fluctuating markets, increasing levels of competition and pressures to reduce production costs. They also face a ‘war for talent’, so might be tempted into making extravagant promises to potential new recruits or [as a way of keeping] valued existing staff.
Managers face a dilemma as to how to manage psychological contracts: should they under-promise when negotiating psychological contracts so they can later over-fulfil on those and enhance motivation and satisfaction? Or, should they over-promise at the negotiation stage and attract the best staff even though they increase the chances of later breaching those promises, and subsequent dissatisfaction and turnover?
The psychological contra ct refers to the explicit and implicit promises an employee and their employer make to each other and has become arguably the main academic concept for understanding the relationship. It is a key driver of employee wellbeing, workplace attitudes and behaviour.
Evidence shows that promises motivate employees and provide them with a sense of destiny within their organisation. Staff feel very uninspired by organisations that refuse to make any promises, or those that dissemble when an employee seeks commitment from them. Interestingly, research shows that over-fulfilling promises has a negligible effect on employee attitudes and behaviour. While it is very important to deliver on promises, there is little to be gained from over-fulfilling promises in influencing an employee’s attitude and behaviour.
Breaking promises is a likely outcome of over-promising and many studies show how this breach detrimentally affects employees’ attitudes and behaviours, such as leading to reduced commitment towards the organisation and making employees reluctant to go the extra mile. Furthermore, the detrimental effects of the breach go over and above any possible beneficial effects from making the initial promise.
The solution to this dilemma is, therefore, to try to set realistic promises. This is likely to be aided by employee and employer self-awareness, regularly monitoring the agreement, and both parties acknowledging re-negotiation is inevitable, should either become aware they are deviating from the initial agreement or find that external circumstances now force them to shift the arrangement.
Dr Neil Conway, senior lecturer in organisational psychology, Birkbeck, University of London