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Upholding the Psychological Contract Through HR and IT Collaboration

August 09, 2021 Employee Experience
Julie Develin
By Julie Develin

The question of how to best offer a modern employee experience involves many moving parts. Benchmarking data, current trends, future needs and the state of the company are just a few of the “normal” things for organizations to think through.

But human resources and business professionals can go beyond the ordinary to truly ensure that their employee experience is current, aligned and competitive by considering how people, processes and technology can work together to foster the experience that today’s employees seek, and tomorrow’s employees will expect.

After all, so much in our lives is based on the unique expectations we have. This is especially true at work.

The Psychological Contract: A Complicated and Evolving Relationship

Human resources professionals often discuss how systems and processes at a company work best when they are aligned and in sync with a company’s mission, vision, values and goals. What we sometimes fail to leverage, however, is the impact different departments have when they collaborate and strategize to advance the employee experience and improve the exchange relationship between the employer and the employee.

There’s a term for this exchange relationship: The Psychological Contract.

At a very basic level, the psychological contract can be described as an employer hiring an employee, and that employee then performing work for the employer. In other words, the employer will give an employee a job, and in exchange that employee will arrive on time and complete their work to an acceptable level. The employer will then provide a paycheck for the work performed. It’s reciprocal.

In this example, the psychological contract is fulfilled when expectations on both sides are met.

But it goes much deeper than that. The psychological contract is complicated and ever-evolving based on many, many factors. It is easy to think of an exchange relationship in the world of work as being one that mostly involves only the transfer of money. And yes, the economic exchange between the employer and employee is a big part of the psychological contract connection. But it’s not the only part. Relational components, along with the transactional components, are also at work in this exchange relationship.

Where does technology fit into this exchange? And more importantly, are we paying attention to our technology at work, and how what we provide (or fail to provide) to our employees affects the exchange relationship?

Related Article: How the CIO and CHRO Will Rethink Employee Experience Together

HRs & IT Should Align Tech to Modernize the Employee Experience

While the benefits of human resources and IT alignment are plenty, consider the impact of a simple transaction that happens almost every day in an organization: time-off requests. Many organizations still handle time-off requests manually, or semi-manually by using spreadsheets and other often unreliable means of documentation. Frequently, managers must review time-off requests by hand, which leads to a number of problems that may get in the way of the employee experience companies seek to provide. Furthermore, delays, errors or confusion during this process will definitely not meet employee expectations.

Continuing with the same time-off example, consider if employees request time off for the week ahead. For those still working under manual processes, by that point it is probably too late for a manager to ensure the request will be approved, or even reviewed, in a timely manner. On the flip side, if employees request time-off for six months ahead, they may need to wait months to see if that request is approved.

All of this matters. Remember, our expectations at work have been shaped by our experiences outside of work. Our experiences with easy-to-use technology as consumers have formed our expectations in many other facets of our lives. In a world of on-demand, instant gratification where we can buy big-ticket items with the click of a button, employees do not want to wait to receive approval on things that affect their lives, such as time-off requests.

Employers can be unsuccessful in their quest to uphold the psychological contract should processes fail to align with expectations. In the examples above, the employee upholds their end of the psychological contract by asking for time-off in the way they were trained to do. The employer fails to uphold their end of the deal due to the poor processes which lead to a lack of follow-up. The result? A breach of expectations that can snowball into a poor employee experience.

CHROs & IT: Work Together to Foster Teamwork and Connections

We can look at the other pillars of HR processes to determine how HR and IT working together to uphold the psychological contract. Perhaps it seems too simple to mention the importance of effective communication in business, but it's a reality that cannot be denied. Now more than ever, a strategic and transparent communication plan is vital for companies and employees. Communication tools such as Teams have become staples of business, especially since the shutdown.

When considering the things businesses should retain after disruption has subsided, effective communication plans with multiple channels of messaging will remain a necessity. HR and IT can, and should, work together to determine the best path for mass communication based on unique organizational needs that will meet employee expectations.

Last year, organizations that couldn’t easily communicate messages to their employees quickly realized that ineffective, one-way, underutilized and antiquated communication systems were not ideal in the face of a crisis. A host of problems can arise from poor (or a total lack of) communication plans:

  • Less physical safety due to employees being unaware of or not following policies.
  • Psychological safety being put in jeopardy because employees see their environment as unsafe or wonder about job security.
  • Gossip and rumors spreading and impacting engagement thanks to a lack of clear, regular updates from leadership.

Communications is another area where HR and IT can truly work together to impact positive changes in the workplace and advance company culture in the right direction through transparency, easy to use tools, and resources for employees and managers alike. Their alignment on areas like this will uphold the psychological contract at work and strengthens business outcomes.

Related Article: 4 Ways Tech Is Helping to Fuel HR's Rebirth

Together, HR & IT Can Solve Problems of All Sizes

The experience organizations provide their workers during periods of disruption is just as important — if not more so — than the one they provide in periods of stability. Business continuity, and ultimately business success, depend in part on HR's and IT's alignment to uphold employee expectations. Working together, HR and IT become stronger. And when they gain strength, so too does the company’s people processes, business outcomes and bottom line. 

Today’s work landscape makes it more important than ever for companies to get ahead — and stay ahead — of trends permeating the world of work across the globe. The combination of people processes and technology working in sync can prove to be a valuable force in helping companies create a competitive advantage. While challenges are plentiful, opportunities abound if we seize them.

About the Author

Julie is a Sr. Partner, HCM Advisory for UKG (Ultimate Kronos Group), and an adjunct professor and co-coordinator of the HRM graduate program at McDaniel College, a school from which she also holds a master’s degree in HRD.

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