A psychological contract refers to an unwritten agreement in which an employee and employer develop expectations about their mutual relationship. These expectations form when an individual perceives that his or her contributions obligate the organization to reciprocate (or vice versa), and it is the individual’s unilateral belief in the obligation of reciprocity that constitutes the contract in their perception of expectations and outcomes.

This belief is predicated on the perception that a promise has been made such as a promotion or compensation, and a consideration is perceived in exchange for it, binding the parties to some set of reciprocal obligations. For example, in training and organizational learning, employees may formulate a degree of expectations for taking night classes, earning Continuing Education Units (CEUs), and professional certifications as a basis for reciprocity from their employer for a raise or a promotion. From the employer’s perspective, employee continual improvement could be viewed as reciprocity for maintaining they’re jobs skills and as an expectation of contribution to the success of the organization.

Unfortunately, in terms of reciprocity, there is a fine line between the employee and organization’s perceptions. From the employee’s perspective, their contributions toward continual improvement constitutes a contract of obligation by the organization to reciprocate either in a transactional (economic) or relational (status) nature. However, from the organization’s perspective, any initiative on the employee’s part toward continual improvement is an expectation that reciprocates as a contribution to the greater good of the organization. That fine line between obligation and expectation is an opportunity for both the employee and organization to reconcile their perceptions of a psychological contract toward a mutual benefit. Otherwise that fine line will widen into a chasm of unattainable obligations and expectations.

The concepts of continual improvement through the vehicle of training and education are a common example of how employee and organizational psychological contracts are formulated. As an educator and educational consultant, I have witnessed many examples of how obligations versus expectations as a fine line can be erased or as a chasm fall into the abyss. It is all in the details or a lack thereof.

When I was on the employee side of the line or chasm, I saw many examples of organizational training programs, that were mutually beneficial as well as mutually exclusive. A mutually beneficial example was an organization that had a pay/bonus scale based on your years of experience plus education level related to high school, two-year degree, four-year degree, graduate degree, CEUs, and professional certifications that were applicable to your position. There were very little opportunities to formulate obligations or expectations as these were well delineated in the organization’s HR policies and programs. Thus you were eligible to attain a certain level of achievement and the company and employee could reciprocate with specificity.

On the other hand, was an organization that had an entire separate division called the University of Excellence, dedicated to the continuing education and improvement of its employees. It was quite impressive to say the least with its own modern contemporary campus and training facilities. The problem was, there was no inherent strategy as to which courses one should take that would improve their skills or suffice an organizational obligation of reciprocation. Each employee only had an annual objective of hours of classes they had to take. Consequently, an engineer could take a class in nature photography and an admin assistant could take a class in Advanced Fiber Optics. Can you imagine the psychological contracts that formulated out of that training strategy? It made no sense.

Both organizations that I referred to are (were) Fortune 100 companies. The former still is and the latter is not. Is that because of the fine line or chasm of a psychological contract? No, because as a training consultant, I still see examples of both in organizations that are quite successful regardless of training program strategies. However, there are lessons to be learned from these examples on the reconciliation of the obligations versus the expectations of organizational learning programs.

First and foremost is as the old adage goes, the devil is on the details. As in the first example, there were specifics defining the obligations and expectation of the employee and the organization. The path to attainment was well defined and at each step both the employee and the organization were well aware of the obligations and expectations. In addition, if an employee was comfortable at their present position they knew exactly where they stood with no preconceived notions of reciprocation from the company.

Secondly, continual improvement through training and education programs should be viewed as an opportunity rather than a benefit. To me mutually beneficial to the employee and organization, the latitude as to what is applicable to one’s job and that job’s role in the organization needs specificity. Nature photography is a fun hobby but may be mutually exclusive from the expectations of one’s role in the organization.

Avoiding the chasm of a psychological contract helps both the employee and the organization do a better job of making a mutually beneficial use of its human talent and resources. It’s just not a state of mind.