What is an emotional contract? According to Adrian Furnham, author of The Talented Manager, “The psychological contract is essentially concerned with a set of expectations and obligations. Employees come to believe […] that they are being offered various things, such as: security of employment; promotion prospects and opportunities; training and development programmes; help and care in times of trouble; and being treated fairly and with dignity. And employees usually offer something in return: a soft form of conformity and obedience: obeying the rules and abiding by the requirements of the job and the instructions of supervisors. They also offer loyalty by staying on in the job, perhaps when they have had attractive offers from elsewhere. And, linked to this, they offer commitment”.
The emotional contract refers to an unwritten agreement between employer and employee that is concerned with meeting the non-performance goals of both. While your employment contract may set out the terms for attendance and conduct at work, for salary and holiday entitlement; the emotional contract refers to much more conceptual things: satisfaction, happiness and being valued.
We are very goal driven at work. We set performance goals to measure against and, if we are good managers, discuss goals and achievements with our teams in regular review meetings. An emotional contract, though, goes beyond these measurements and concerns itself with our emotional goals. As an organisation, we want our employees to give us their full focus and attention during work hours, we want them to prioritise their work and go the extra mile, show initiative and grow the business objectives. From an employee perspective, our teams want to feel valued, listened to, given opportunities to shine and to be treated fairly above all.
With an emotional contract being such an intangible concept, how can an effective leader create one with impact? The key is to lead with your own actions, to strike first with trust and forward-thinking ideas, in a way that inspires loyalty and hard work in your staff.
Ways you can cement the emotional contract as a manager:
Give feedback – even if it is negative
Studies have shown that one thing that kills enthusiasm in employees is a lack of feedback. Even negative feedback, an idea deemed impracticable, is preferable to silence. If your employees approach you with ideas, make sure you make time to offer feedback, even if it is constructive as they will want to come back with further ideas and questions. Your silence will inspire them to stop trying. After all, you haven’t been listening.
It’s easy to delegate small, boring tasks to our teams, and we all know that delegation is key for our own productivity; but are you challenging the talent in your team? Let go of an exciting project or idea and delegate it to a member of your team who is hungry for the opportunity to shine. Not only do you display trust, you are nurturing their talent, which in turn inspires loyalty.
Be flexible, but fair
The work to life balance can be a mess sometimes, and we encourage our employees to give their all to our ventures. To really ensure the keeping of an emotional contract, you need to create a culture where employees are not punished for wanting time with their family or their outside work hobbies. The last thing you need is to burn your talented employees out, to the point where they go and seek new opportunities.
If you take one thing away from this article, make it this: the emotional contract is an unwritten, living agreement that is easily damaged or broken. When that happens, it can and does give people the strength and motivation to leave your organisation. And staff turnover is a drain on time, resources and money. It is highly inefficient to constantly have to recruit and replace people for roles. Investing your time and commitment in the happiness of your workforce can have a huge long-term pay off.