PSYCHOLOGICAL CONTRACTS

Why is it that an occasional employee doesn't live up to our initial expectations? His performance started out very good but he soon became lethargic. After a few months he abruptly quit (or he got fired!) and we lost what should have been a good employee. He was doing his job and we were treating him well. What went wrong? Maybe the "psychological contract" was broken.

Whenever we hire an employee we usually state in a written contract what the employee is to do and the wages and benefits we pay. This is usually done in a job description or a letter of appointment.

But at the same time another contract is created - an unspoken, unwritten contract made up of what our new employee expects from us, and what we expect from the employee. But these expectations are rarely discussed. They are so obvious that we assume the other party knows. This contract stays at the psychological level - a psychological contract.

After several months, although the mutual obligations of the written contract have been fulfilled, the employee (or the supervisor) begins to feel that the psychological contract has been broken. Expectations are not being met. The employee feels he has been let down. Apparently betrayed by the supervisor, the employee quits. But the supervisor was not even aware of what these unfulfilled expectations were!

Common expectations from new employees might be: to be treated like an adult; to be allowed to learn from mistakes; to be promoted quickly for hard work; and to make significant decisions. These are rarely discussed during the selection process. They are only assumed. Then after six months of insignificant paperwork and the occasional chastisement, the employee feels cheated. Whether the initial expectations were realistic or not, the employee sours and eventually quits because the psychological contract was broken.

The solution is to be aware of what each new employee is expecting from us. Clear the air at the outset and specify what the mutual expectations are.

If the employee's expectations are not realistic, deal with that immediately. Don't invest six months in a new employee only to lose him because of a misunderstanding. Make sure he's aware of all your expectations too! The job description often doesn't contain them all.

SOME PRIVILEGES DISAPPEAR WHEN YOU'RE AT THE TOP

This article emphasizes the critical importance that "playing the appropriate role" has for any business owner, in particular knowing employee expectations and which "values" must accompany leadership.

During the 1980's recession I had a young executive assistant working for me who was wise beyond his years. He gave me some of that precious unfiltered feedback we always want from our employees but so rarely get. It was sage advice, just as pertinent today, and it has haunted my conscience and influenced my consulting practice ever since.

One morning during that cash flow collapse, I slinked into work, grumbling about our financial woes, and generally acting defeated, demoralized and dejected. "Hey staff, give me sympathy!"

My assistant took me aside, I presumed either to commiserate with me or to pick up my spirits. Instead, what he said to me still rings in my ears today. "Hey Boss, " he protested, "You can't act that way. You can't be down in the mouth, acting depressed and hopeless. Sorry. You lost that privilege when you took over the company. We take our lead from you and when you're low, how can you expect us to be otherwise."

"I lost the privilege" of letting my feelings show, especially feeling down. And of course he was absolutely right. Whether I liked it or not, my staff looked to me as their role model and the embodiment of the business' spirit.

"Letting it all hang out" and putting one's emotional cards on the table are indeed privileges that must be left behind when assuming leadership. The behavior of any business' management is immensely critical. The spirit and resulting productivity of a business can be quickly influenced (perhaps infected is a better word) by the actions, mood and demeanor of the top person. Off the cuff words, failure to actively follow policies, insensitive rebuffs of staff and any form of negativism can start to cut the heart out of an organization.

I've never forgotten that young man's wise advice. I never imagined that knowing which privileges you have to lose when becoming a manager, especially an owner/operator, can be more important than knowing which ones you expect to get.

STAYING ON TOP

Climbing to the top of the executive ladder and staying there requires skill, temperament, intelligence and luck. I've observed and worked with leaders representing a broad spectrum of capability and eventual success. Here's what made the best ones successful.

[1] Model management behavior to your immediate subordinates. Double standards are unhealthy. The way you want your managers and supervisors to behave has to be the way you behave.

[2] Communicate specific performance expectations to all your staff. For example, if you, "let them do their own thing" or "use their own best judgment" you may have to settle for what you don't want. The belief that specific direction to management constrains individual freedom and initiative is wrong. If you want to give someone freedom to act, then define the limits to that freedom.

[3] Don't tolerate incompetence anywhere in your organization. Tolerating incompetence is a well-documented symptom of organizational decline. Hold your people accountable for the performance you expect.

[4] Put procedures in place so that the process of directing the work force is systematic, orderly, managed and not left to chance. By systematizing the process of direction, you can influence how all people in your organization behave and perform.

[5] Work hard and use gentle relentless pressure. Research shows that maintaining a healthy management climate requires a high and continuous energy output. A proactive leader can improve the probability of organizational success, whereas a laissez-faire approach is likely to cause the organization's demise.

[6] Know when to make decisions - avoid excessive consensus and compromise. Poor leaders avoid decisions if the consequences might upset someone. They defer the responsibility for tough decisions to others.

[7] Learn to use interpersonal skills for coaching your immediate subordinates (management and non-management) and for enforcing your organization's standards of performance.

[8] Manage your executives and your senior management. Executives require direction, coaching and support - they're people too. If you don't have a good control over what your top people do, they can pull your organization apart. A good leader must be more than an aloof figurehead.

[9] Don't play favorites. Not only be objective and fair in all your actions, but also be seen to be that way. In addition you must ensure the equitable treatment of all employees throughout your organization by the rest of management.

[10] Control the communication process - the bloodstream of your organization. But be aware that this process must flow not only from the top down, but also from the very bottom up. Communication blockages should be systematically routed out and eliminated.

These all seem like common sense principles. Maybe so, but it's only the winning executives who make them high priority - to stay on top.

HOW EXECUTIVES INFLUENCE SUPERVISORS

Poor supervision by your front line supervisors may be related more to the performance of the organization's executives than to the skills of the supervisors. When this is so, all the supervisory training in the world won't improve supervisors. As executives we often forget that our behavior is frequently perceived by our employees to be a consequence of their behavior. For example, what we do, our actions and how we respond to the activities of our lower level managers and supervisors, will encourage or discourage their future actions and give strong messages on how to behave.

Recently, a police force conducted a survey of non-performing police officers - patrolmen who wouldn't do their jobs, and who resisted all attempts to raise their performance to an acceptable level. Senior police executives considered that the problem was caused by weak corporals and sergeants who didn't care! According to the police executive, the solution was to increase supervisory training for these front line officers.

But the facts were quite different. Historically, and consistently, senior officers rarely supported the attempts of corporals and sergeants to exert discipline or enforce standards.

Lower level supervisors were given no authority to enforce performance and senior management avoided making enforcement decisions. As a consequence, non-performing, and at times potentially dangerous members of the police force were shuffled around, appeased, and their refusal to do the job was condoned. Bureaucratic red tape, indecision and political expediency stonewalled attempts to keep members of the force in line. This indecision and refusal to act by the executive taught the corporals and sergeants that they must live with non-performance and that they shouldn't make waves.

Because the senior officers refused to manage, the lower level officers worked under great personal stress, torn between an intense loyalty to an organization they loved and the realization that they were powerless to preserve the organization's reputation of excellence. Their senior officers taught them to be helpless.

As an executive, whenever you see poor performing managers in your organization, stop and consider whether these employees are the problem, or whether they are symptoms of the problem. Why does your organization let this non-performance exist? You might or might not be the cause of the problem, but most definitely you are a major part of the solution.

From: Robert H. Kent, The Mansis System: Common Sense Management For Everyone, Winnipeg: Pragma Press, 1996, pp. 2.20 - 2.25.

MANAGEMENT BY DROPPING HINTS

There's a common management style I'm discovering among presidents and senior executives. I call it management by dropping hints. I hear executives saying things like, "I don't understand why Smigelski's not doing her job - I've dropped enough hints". Or, "Why doesn't Frigelbum take the hint? I want him to give me a once-a-month written report on client calls so that I'll know exactly how successful he is compared to previous months. Whenever I ask him how his calls are going he says everything is fine, but I know for a fact he is making fewer calls." The president feels it's a personal affront to have to verbalize expectations.

Presidents who manage by dropping hints sometimes devise little tests to see if their executives can read their minds. And they present these tests to people for whom they're prepared to pay $60,000.00 to $90,000.00 a year!

Why do managers manage by dropping hints? Perhaps it's due to personality traits, or possibly these managers have never seen managing done any differently so they think that that's the way to do it. Or maybe it's just not clear in their minds what they want subordinates to do.

Other managers may take too much for granted and assume too much. They may assume what's common sense for them (given their goals and objectives) is common sense for the other person. Or, managers may be so involved in what they perceive to be their own problems that they feel they don't have enough time to be telling other people what to do.

As a manager though, you should separate your employee's ability to do the job from her ability to read your mind. It's a shame that so many employees fail at their jobs not because they couldn't do the job, but because they couldn't read the boss' mind. Give your employees a clear indication of what you expect from them and if they don't know what to do, tell them.

From: Robert H. Kent, 25 Steps to maximize productivity, Winnipeg: Pragma Press, 1994, p. 14.

See also: Robert H. Kent and Gordon Simpson, Chicken Stew For Management, Winnipeg: Pragma Press, 1997, for an excellent collection of short articles on leadership and managing performance.

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