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People development & the psychological contract

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Expert Opinion
February 9, 2022
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5/5 - (1 vote)

Organisations have found themselves in a new landscape following the pandemic, and people development is more critical than ever. There is an increasing need for businesses to support their staff physically, mentally and remotely. This requirement has been a massive wake up call to leaders.

If someone in the workplace is unwell (mentally or physically), if someone doesn’t have the right tools for their role, or doesn’t have the opportunities to contribute properly, they will likely be less productive. More importantly, their health and wellbeing will suffer.

Remote-working is commonplace, and it is now vital that employer and employee show complete commitment to the two-way contract of empathetic connection and expectations.

What to expect when you’re managing expectations

From a manager’s perspective, there can be significant challenges in meeting the developmental expectations of employees. Understanding what employees are expecting and, conversely, what is expected from them is fundamental to developing people in the workplace.

We should consider the relationship between the organisation and its employees, particularly those that go beyond the formal contract of employment parameters to the informal contract of expectations.

People development & the psychological contract

The concept of a psychological contract was first developed in the 1960s by organisational and behavioural theorists Chris Argyris and Edgar Schein. The crux of their theory is that a contract exists between employer and employees, whereby both have expectations of the other and, crucially, each has obligations to fulfil. An employee might expect a degree of responsibility and recognition, while the employer has expectations of loyalty and effort.

If these expectations are unrealistic (either positive or negative) or unfulfilled, this can affect the employees’ motivation, commitment and overall contribution. The challenge for managers is balancing the organisation’s and individual’s requirements while maintaining a fair and equitable approach to distributing development opportunities among team members. Further complexities can arise with the issue of career progression within the organisation, whereby we might have to select people for development in preparation for career progression. With all this in mind, it’s no surprise to learn that conflict can often arise.

What are the benefits?

The benefits to the individual include:

  • Learning new skills
  • Refreshing existing skills
  • Developing enthusiasm to become more effective at work
  • Overcoming problems and discovering better ways of doing things
  • Enhancing prospects for progression
  • Better wellbeing
  • Sustaining motivation and satisfaction gained from recognition and achievement in training and development.

Benefits for the organisation include:

  • Enhanced efficiency and effectiveness
  • Maintenance of skill levels
  • Increased revenue through the application of knowledge and skills
  • Improved commitment to the organisation
  • Having people suitable for promotion (succession planning)
  • Increasing capacity for greater output
  • Improved staff retention
  • Improved image of the organisation, making it easier to attract new talent
  • New possibilities through the application of new technologies and methods

Finding a work/life balance

Employees can only successfully undertake personal development when they enjoy a healthy work/life balance. Complete dedication to work can be detrimental to an employee’s health and is unsustainable in the long run.

Studies have shown that workers who can maintain a good work/life balance are more likely to engage positively in personal and organisational development. Therefore, a good work/life balance benefits the organisation, leading to increased staff loyalty, morale, commitment, and motivation. This, in turn, reduces staff turnover and recruitment costs.

Work/life balance is not just about managing time at work. It’s about creating a positive working environment that can contribute to a healthy and balanced personal life whilst meeting the organisation’s requirements.

The importance of direction and cultural alliance

People learn best when they participate in activities or learning that are perceived to be helpful in real-life scenario’s (work) and are culturally relevant. In other words, off the shelf learning may be insightful but does not have the same impact as specifically designed learning. 

To improve the levels of impact, ROI and delivery capacity, we look to digital or e-learning. E-learning increases retention rates by 25-60%, while retention rates of face-to-face training can be a much lower 8-10%. The difference in retention rates is reflective of the now relatively ubiquitous hybrid way of working. Organisations can improve impact and interaction with their staff while collating truly insightful data to understand trends and live time feedback.

Statistics from various sources and provided during our client conversations have shown staggering improvement indicators:

  • Participants can learn nearly five times more material through e-learning without long periods spent in workshops.
  • 42% of companies have said that bespoke e-learning has increased revenue.
  • Using the correct e-learning, companies can increase 18% in employee engagement.
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