The document discusses the psychological contract, which refers to an individual's beliefs about the reciprocal obligations between an employee and employer. It involves a balance of how an employee is treated and what they contribute. Key aspects of an effective psychological contract include mutual transparency, aligned expectations, and mutual fairness. As a leader, it is important to take responsibility for defining the contract, being transparent about expectations and facts, aligning expectations on both sides, and ensuring fairness. Both employees and employers can be negatively impacted if the psychological contract remains implicit rather than being made explicit through open communication.

1. The Psychological Contract
Be a transparent leader.

2. Who am I
Nicolò Pignatelli
Director of Engineering
tw: @nicolopigna
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question anytime

3. What is a
Psychological
Contract?

4. A definition
Psychological contracts are an
individual’s belief in the
reciprocal obligation between
employees and the organization.
A balance between how the
employee is treated by the
employer and what the employee
puts into the job.

5. Example #1: annual salary raise

6. Example #2: overtime work

7. Three key
concepts
1. Mutual transparency
2. Expectation alignment
3. Mutual fairness
The goal of a Psychological Contract
is to deal with ambiguous work
situations not covered by the formal
written contract.

8. Leadership &
Psychological
Contract

9. As a Leader, it’s your responsibility to...

10. ...do the hard
job
You are the role proponent. As
such you hold information about
contractual offer and company
needs.
Feel responsible when it comes to
start talking about and defining the
Contract. No one else will do it for
you.

11. ...be transparent
Transparency helps to kick-start
a virtuous circle within the
Psychological Contract.
The employee will trust and be open
towards the employer.
Making the employee aware of facts
will enable her to objectively judge
the Psychological Contract.

12. ...align
expectations
The employee has the right to
know what the company is
expecting from her.
Setting expectations right on both
sides enables quality
communication and ultimately
boosts productivity.
It also avoids misunderstandings
about roles and responsibilities.

13. ...be fair
The employee must feel safe in
accepting the Psychological
Contract.
It’s tempting to distort facts in the
hope that people will absorb the
problem when it looms larger than
promised.
Acknowledge that people have right
to know and complain.
Simply be objective and honest.

14. Your goal is to remove from the
employee any doubt that he’s not
doing the right thing.

15. Different seniority (self awareness)
requires different Contract negotiation.

16. It’s there, whether you want it or not

17. Make the
implicit explicit
Avoid talking about it doesn’t
mean you don’t have a Contract.
It actually means you have two
of them.
You end up with two similar but
different Contracts where you hold
one version, the employee holds
another.
One part doesn’t know how the
other’s Contract “looks like”.

18. With an implicit Contract you avoid
some friction earlier only to face
greater troubles later

19. Who’s affected
by an implicit
Contract?
Both parts are.
In the long run, the misalignment will
cause the employee to be unhappy
and the employer to experience
degraded work output at a constant
cost.

20. Ok, understood.
Now what can I
practically do?

21. #1. Already start defining the Contract
during the interview and onboarding
processes

22. #2. Avoid defining roles and
expectations by contractual job title

23. #3. Do not assume seniority is related
to years of experience

24. #4. Keep reviewing the Contract,
especially when roles change

25. #5. Do not assume people know what’s
in your head

26. #6. If you are in doubt whether
something is trivial to say explicitly, say
it anyway.

27. #7. Do not leave any violation of the
Psychological Contract unchecked

28. #8. Use personal maps to explore
expectations

30. Thank you. References
businessballs.com - the psychological
contract
sigma assessment systems -
psychological contracts in practice
jurgen appelo - management 3.0