The Great Resignation, the Lie Flat economy, the Great Reshuffle, the Great Rift—whatever you want to call it, the way human beings around the globe interact with their workplace has changed, permanently. The events of March 2020, when the COVID-19 pandemic hit the U.S. in force, inadvertently set workplace change in motion in unimaginable ways and at an unfathomable pace. The bottom line: The workplace has changed. Our country has changed. The world has changed. We have changed.
In a May 2021 Bloomberg interview, Dr. Anthony Klotz, a professor at Texas A&M University, coined the phrase “the Great Resignation.” He used the phrase to describe what he believed to be an inevitable workforce re-think about how and why we work. Klotz may have inadvertently set in motion the pandemic-within-the-pandemic, or as Ar- ran Stewart, co-founder of Job.com, noted in a recent article “the largest shift of human capital in our lifetime.”
The Workplace Psychological Contract
As leaders, managers, supervisors and even colleagues navigate the process of defining their workforce re-think and new organizational normal, one important consideration should be the workplace psychological contract. Originally named by Carnegie Mellon University Professor Denise Rousseau, 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.”
It is important to note that the workplace psychological con- tract is unique in that its primary components are not necessarily recorded anywhere.
Key aspects to the psychological contract include:
- The unspoken nature of the agreement.
- The contract’s linking the individual to the organization.
- The specific give and take between the individual and the organization.
- Representation of the trust between the two parties, which motivates the individual to fulfill their workplace obligations.
Common examples are performance feedback delivery, work- life harmony, overtime expectations, workplace norms and virtual meeting behavior, to name a few.
The pandemic unexpectedly caused a breach in the psycho- logical contracts between employees and their organizations. Individual responses to the breach have ranged from reexami- nation of personal goals to reconsideration of values to strategic job shift to purposeful change in life goals. Anecdotal examples include an individual in the corporate wellness industry who recognized an opportunity to begin her own consulting firm or the denim executive who decided her voice was more important than a large paycheck or the 20-something RN who decided to try travel nursing for a few years to pay off her student loans.
Examples of change in workforce perspectives, attitudes and behaviors are growing each day.
No job category or organization is immune to the effects of these changes or the basic need to reconsider the workplace psychological contract. This includes private organizations such as country clubs, university clubs, golf clubs and athletic clubs.
Excellence in Club Management Awards
I recently participated in the National Club Association (NCA) National Club Conference in Charleston, S.C., and was invited to attend the Excellence in Club Management® (ECM) Awards cere- mony and dinner. Each of the 2022 awardees emphasized specific processes within the unique clubs that are critical to their long- term success, before, during and after COVID-19. Individually, the awardee recommendations included embracing servant style lead- ership, reimagining core values through teamwork and a familiar suggestion from one of my favorite classic Harvard Business Re- view articles, “Hire for Attitude, Train for Skill.” Collectively, the award recipients highlighted the value of organizational culture that is adaptable, meaningful, creative and proactive.
The awardees also acknowledged the challenges of a “post- COVID” workplace such as labor shortages, the need to create a safe to speak communications environment, maintenance of an atmosphere of psychological safety and integration of core values based on connectivity/relatedness. Furthermore, the successful mitigation of the challenges described require basic awareness and open acknowledgement that there is a permanent shift in the psychological contract of every member of the organization, from the summer lifeguard to the general manager.
Steps to Forward Momentum
This is not an easy task. As noted by the 2022 ECM Awards recip- ients and other attendees at the conference, moving forward will require organizations to recognize, re-engage, refresh and rebuild. This process begins with the renegotiation of our psychological contracts. Here are a few thoughts to get started.
- Recognize. The first step is to acknowledge that there is a psychological contract between the employer and employee. Define it. Everyone should understand the importance of this unspoken agreement. Psychological contracts have been a part of academic literature for more than 40 years. It is time to become aware and embrace this important concept in our main- stream dialogue.
- Re-engage. Now that employees understand the nature of the psychological contract, create defined space to discuss the breach. It is important to create a safe space (as stated by ECM 2022 Awardee Steve Cummings) to discuss the solution process. It should be noted, however, that the breach might look different for each individual. The employee with the ongoing challenge with childcare is going to have very different needs than the individual who wants to remain in a remote environment and the individual who feels the lack of work-life harmony is unsustainable. Strive to work with each employee to understand their perception of the breach and then work to create mutually agreeable resolution.
- Refresh. The breach of a psychological contract can be exasper- ating. As highlighted at the National Club Conference, the effect on morale, motivation, integrity and attitude can be significant. Proactively integrate a fresh process to collaboratively review shared vision, organizational goals and strategic objectives to ensure alignment going forward. One example would be to establish a tiger team (specialists who are brought together to work on specific tasks) and ensure it is representative of all levels within the organization.
- Rebuild. The focus of rebuilding is establishing a foundation based on the alignment created in the refresh stage. This is about maintaining alignment while respecting the unwritten expectations unique to the newly established psychological contract. Rebuild embeds an organizational perspective that takes care of the psychological contract as a critical facet of the organization’s culture.
As noted in Former Waffle House President & COO Bert Thornton’s book, “Find an Old Gorilla,” “The most important resource a leader must acquire is a cadre of excellent people, the most critical asset.” In our current environment of pandemic inspired change, the renegotiation of your individual employees’ psychological contract is a top priority and the sustained maintenance of that psychological contract can become a new organizational core competence.
Dr. Victoria M Grady is Academic Director of the MSM Graduate Program and Associate Professor of Management/Organizational Behavior in the School of Business at George Mason University. She spoke at the 2022 National Club Conference in Charleston, S.C., in May.