THE STATE OF THE PSYCHOLOGICAL CONTRACT

But the dire warnings about the state of the psychological contract referred to above were not borne out by three research projects commissioned by the Institute of Personnel and Development. The research conducted by Guest et al(1996) established that the psychological contract (defined in terms of workers’  judgements of fairness, trust and organizational delivery of ‘the deal’) was in better shape than many pundits suggest. A follow-up survey (Guest and Conway, 1997) found that a very high proportion of employees (90 per cent) believe that on balance they are fairly treated by their employers and 79 per cent say they trust management ‘a lot’ or ‘somewhat’ to keep its promises. Job security is not a major concern – 86 per cent feel very or fairly secure in their jobs. Amajority (62 per cent) believe that management and workers are on the same side and only 18 per cent disagree. However, job satisfaction was only moderate (38 per cent express high satisfaction, but 22 per cent express low satisfaction), although commitment to the organization was high (49 per cent felt ‘a lot’ and 36 per cent ‘some’ loyalty to their organization).

Afurther survey (Guest and Conway, 1998) established that:

● there had been no significant changes in attitudes and behaviour since the previous survey; 

● workers continue to believe that they are fairly treated – 67 per cent report fair treatment by management and 64 per cent say that they get a fair day’s pay for a fair day’s work; 

● the number of progressive HRM practices in place is the key determinant of whether workers believe they are fairly treated, because they exert a major influence on work attitudes; 

● people report that home is for relaxation, work is for challenge; 

● feelings of security remain high – 88 per cent felt very or fairly secure in their jobs; 

● people still expect a career – 60 per cent believe that their employer has made a career promise and of these, 65 per cent think that management has largely kept its promise (these feelings are more prevalent amongst younger workers).

The overall conclusion of the researchers in 1998 was that ‘the psychological contract is very healthy’. On the whole, management is seen as fair, trustworthy and likely to keep its promises. The key influences on a healthy psychological contract are the use of progressive human resource practices, scope for direct participation at work and working in a smaller organization.