I had a
discussion with a manager recently which might be of interest to you.
“In the
last couple of months I noticed something happening with my staff”; he said.
“The mood is sombre. Absenteeism has gone up and in the past we didn’t have any
problems with people staying at home sick. There is also less commitment. What
is happening?” I looked at him as his clear eyes stared at me in confusion. I
asked:”Did you go through any big changes in the company recently?” “Yes,
unfortunately we had to close down one department and had to make some people
redundant. It was a hard thing to do but it didn’t make economic sense to keep
going on as we were. Some of the people who we had to let go were with us for
20 years. It made a huge impact on the place, but I think we have moved on from
that and that people are glad that they still have a job.”
I
explained to him that what might have happened was that the psychological
contract between employees and company was seen to be broken. His reply was
that he didn’t know he had a psychological contract with his people.
A
psychological contract is what employees and employers believe are the terms
and conditions between them. These beliefs are not written down but are
expectations between staff and management over what they thought they could
expect from each other regarding being employed by his company. You might not
be fully aware what these beliefs and expectations exactly are but they are set
in the mind of your staff and if then something happens what they did think was
going to take place the psychological contract is broken and the symptoms
mentioned at the start might occur.
Probably
making staff redundant, who were employed here for more than 20 years changed
the expectation that staff had lifelong employment with the company. When they
realised that this was no longer the case they recognised that this could
happen to them as well and a strong belief they had regarding the company was
gone. As a result their attitude towards the company changed.
Over the
last number of years the psychological contract between staff and companies has
taken a hammering in companies. During the recession Life-long employment is no
longer the norm. What companies now offer is a job and in a lot of cases for
less money than before. Promotions are few and rare. Annual wage increases are
rare and this can even include a reduction in wages as well. Recession fatigue
has set in.
These
companies are not just doing this to spite their workers but because
competition has increased, money is scarce and the market demands that
companies become flexible and agile to react to changing market demands.
If the
psychological contract has changed in your company and employees are reacting
in the manner described then you need to take action to prevent this from
further escalating. It is important to establish if there is still a matter of
trust between management and employees, because if the trust is gone then it
will take some time to re-establish trust. Furthermore it is important to
communicate what staff members can expect from the company, if they give their
commitment what they can expect in return. Listening to staff members and find
out what they regard as important at work. Of course wages and benefits are
still important but also training to learn new skills. This can be training on
the job as long as employees have a reasonable chance to make it on their own
if the company can’t support them any longer.
But above
all employees expect that management treat them with fairness and respect even
during this economic crisis and at the end of their employment.
