PSYCHOLOGICAL CONTRACTING is the psycho-dynamic concept where there exists a tacit understanding between the employer and employee that goes beyond salary in exchange for performance.

Here both parties “agree” to care for each other and to be supportive, engaged and mindful of the others needs. For the employer this means they can trust their employees implicitly with managing the company resources, brand and reputation and for the employee this means knowing (both implicitly and explicitly) that their employer cares for them in both their professional and personal needs or challenges and will be there for them beyond formal contractual obligations.

This tacit contract seems so much more difficult to establish and/or maintain in todays organisation. But if you want to develop, transform or shape your organisation culture you need to understand how this dynamic works and use it for the powerful resource that it is.

Norm Murray

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