PERSONAL/INDIVIDUAL
In the areas of both organization and management theory (a division of the Academy of Management) and organization development and change (another division of the Academy) Lawrence and Lorsch (1967 and 1969, respectively) contributed theoretically and practically to our thinking and application with their notion of “interface.” They concentrated on what they considered to be the three primary interfaces: the organization-environment interface, group-to- group interface, and the individual-and-organization interface.
As noted already these three interfaces plus interpersonal comprise the four parts of this chapter beginning with the individual-organization level and interface.Lawrence and Lorsch (1969) address this person-organization interface in broad terms as the degree of congruence between the organization’s goals and those of the individual employee. For our purposes in this chapter we need to be more specific and therefore focus on the psychological contract between the organization (management) and the individual employee. One of the first to address this idea was Argyris (1960). The idea “of a psychological contract implies that there is an unwritten set of expectations operating at all times between every member of an organization and the various managers and others in that organization... expectations about such things as salary or pay rate, working hours, benefits and privileges that go with the job, guarantees not to be fired unexpectedly, and so on” (Schein, 1980; pp. 22-23). The psychological contract, broadly considered, has been about job security. The implicit message has been one that loyalty and satisfactory work performance on the part of the individual will link to a promise on the part of the organization not to fire one unexpectedly and for the most part not to fire anyone at all. In other words, be loyal to the organization, perform satisfactorily and you keep your job until retirement.
This implicit agreement was an important, albeit unwritten, expectation for many years especially in the business-industrial world. This agreement is no longer the same with its replacement being rather vague and therefore providing the basis for anxiety and conflicted feelings on the part of individual employees.The change in the psychological contract has been a consequence of downsizing, mergers and acquisitions, and, as mentioned earlier, the more rapid rate of change. With downsizing people are “laid off,” with mergers and acquisitions people become “redundant” and half have to go, and with more change in general, individual jobs and the people who hold them change as well. It is now clear that to expect a job until retirement is a relic of the past. In fact some corporations such as General Electric make it clear to new hires that they should not expect to be with GE for all or even a majority of their working life. What is the more current psychological contract if one exists at all?
Again we need to bear in mind that the psychological contract is a set of unwritten rules and what has not changed that much regarding one’s expectations are such things as rate and amount of pay (usually what the labor market trends dictate) and a reasonable amount of clarity about what the job is and requires in terms of performance. Most everything else regarding expectations has changed, even the content and amount of fringe benefits. The most significant change is, of course, the relative lack of job security.
The internal conflict for today’s employee is whether to work hard and be loyal all the while knowing that the organization’s management is not likely to be loyal in return.
While not entirely clear, there does appear to be a trend in the direction of providing for employees opportunities for training and development, that is, to enhance one’s skills and abilities, to learn new ones, and to be reimbursed for tuition payments at local colleges and universities in order to advance oneself with an academic certificate or degree. In other words, the implicit agreement is something like management’s stating, “Give us your brainpower, abilities, and hard work and we will give you in return a decent, competitive salary perhaps with additional incentives for high performance plus opportunities to improve your work skills via training and development opportunities.” In a sense, job security has been replaced with opportunities to learn and improve oneself. This trend regarding the new psychological contract is by no means true for all organizations, maybe not even for most, but is likely to continue and spread as the competition for talent grows.
The antidote for this special case of individual, personal conflict is constantly to (a) seek opportunities for lifelong learning and (b) keep one’s resume up to date.