Psychological Contracts at Different Levels: The Cross-Level and Comparative Multilevel Effects of Team Psychological Contract Fulfillment
BY Lyonel Laulié
How much compensation should I receive for my daily tasks, how many days off per year can I expect, what should be my regular work schedule, and other employment commitments are common components of formal written employment contracts. Written contracts play a crucial role in the employer-employee relationship by clearly defining key aspects of the job and providing a framework for resolving potential disputes. However, written contracts often fail to encompass all the promises and responsibilities inherent in an employment agreement. Employment commitments may extend to specific work arrangements, conditions of treatment, long-term resolution strategies, professional development opportunities, communication protocols, and more. Over time, employees form beliefs about reciprocal obligations with their employer, encapsulated in what is known as the 'psychological contract,' a concept extensively studied in management sciences to elucidate employee behaviors and reactions when they perceive their employment promises have been met or breached.
Yet, psychological contracts are not solely individual perceptions. Rather than viewing individuals as isolated entities forming unique psychological contracts with their employers, this article explores the concept of team psychological contracts—the collective beliefs shared by multiple team members regarding the organization's obligations to the team as a whole. Shared perceptions of what the team has been promised to emerge as team members undergo similar experiences and collectively articulate their views, fostering common understandings. Organizations indeed create obligations that may differ from team to team, encompassing promises made to all members, rather than to any specific individual. Examples of such team promises include hiring additional team members to manage heavy workloads or providing resources/information beneficial to all team members and their coordination.
In a study involving 504 individuals across sixty-nine retail organization teams, conducted over two time periods, several insights about team psychological contracts were uncovered. Firstly, it was confirmed that individuals can clearly distinguish between organizational obligations to themselves and those to their teams, supporting the existence of both individual and team psychological contracts. Secondly, the study examined whether team perceptions of psychological contract fulfillment (Team PCF) can influence emotional dynamics within their teams. Notably, fulfilling promises to the team fosters environments characterized by calmness and reduces the prevalence of negative emotions such as tension. Thirdly, it was found that team PCF alters important outcomes such as increased team engagement and reduced turnover rates through emotional climates.
These findings suggest that organizational communications regarding rewards and desired behaviors should be tailored to their specific targets, whether workgroups or individual employees. Messages aimed at teams and individual employees need not be identical. Cooperation and team-oriented goals may be more effectively promoted at the team level, while opportunities for personal growth and advancement may be better suited to individual employees. Recognizing the existence of different contracts across various levels can enhance the effectiveness of communicated policies and practices.
Social influence within work groups is a powerful source of information regarding the organization’s commitments—and whether it is seen to keep them. Corporate actions, like investing in new equipment to improve productivity, can be interpreted as commitments to the team regarding its future, and lead to beliefs regarding requisite team outcomes to secure that future. The contagious nature of social information reinforces the value of redundancy in messaging and the utility of collective public communication tactics (e.g., all-hands meetings).
Article details
Psychological Contracts at Different Levels: The Cross-Level and Comparative Multilevel Effects of Team Psychological Contract Fulfillment
Lyonel Laulié, Amanuel G. Tekleab & Denise M. Rousseau
DOI: 10.1177/10596011231203365
First Pubslished: September 28, 2023
Group & Organization Management
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