Pay Attention to the Psychological Contract

A psychological contract refers to the unwritten, intangible set of expectations, beliefs, and obligations that define the relationship between an employer and an employee. Unlike a formal employment contract, which is legally binding and outlines specific duties, responsibilities, and compensation, a psychological contract encompasses the informal and often unspoken aspects of the employment relationship.

Key Characteristics of a Psychological Contract

Unwritten and Intangible: Psychological contracts are not documented formally. They are based on mutual perceptions and understandings that develop through interactions and experiences over time.
Mutual Expectations: These contracts involve what each party expects from the other. For example, an employee might expect job security, opportunities for growth, and fair treatment, while an employer might expect loyalty, hard work, and a willingness to go above and beyond.
Dynamic and Evolving: The terms of a psychological contract can change over time as the needs and circumstances of both the employee and employer evolve. What is considered fair and balanced at one stage of an employee’s career might change as their personal and professional priorities shift.
Relational and Transactional Elements: Psychological contracts can be categorized into relational and transactional. Relational contracts are long-term and based on mutual trust and loyalty, while transactional contracts are short-term and focus on specific exchanges of labor for rewards.

Importance of Psychological Contracts

Employee Engagement and Motivation: A well-balanced psychological contract can increase employee engagement, motivation, and job satisfaction. Employees who feel their expectations are being met are more likely to be committed to their organization and perform better.
Organizational Performance: Organizations that manage psychological contracts effectively can benefit from improved performance and lower turnover rates. Employees who perceive their psychological contract as fair are likelier to stay with the company and contribute positively to its goals.
Trust and Fairness: The psychological contract is crucial for building trust between employees and employers. When employees feel that their employer is keeping its informal promises, it fosters a sense of fairness and mutual respect.

Breach of Psychological Contracts

A breach occurs when one party perceives that the other has failed to fulfill its obligations. This can lead to feelings of betrayal, decreased job satisfaction, and reduced organizational commitment. Common consequences of a breached psychological contract include increased turnover, lower productivity, and higher levels of employee disengagement.

Examples of Psychological Contracts

Promotion Expectations: An employee might be verbally promised a promotion after completing specific training. If this promotion does not materialize, the employee may feel that the psychological contract has been breached.
Work-Life Balance: An organization might have an unwritten rule that employees can leave early on Fridays. Employees might feel that their psychological contract has been violated if a new manager enforces strict hours.
Job Security: Employees might expect job security in exchange for their loyalty and hard work. If the company undergoes layoffs without clear communication, it can lead to a breach of the psychological contract.

Managing Psychological Contracts

Communicate Clearly: Regular and transparent communication helps align expectations and reduces misunderstandings.
Foster Trust: Building a culture of trust and fairness can help maintain a positive psychological contract.
Adapt to Changes: Recognize that employees’ needs and expectations change over time and be willing to adapt accordingly.

Yes, psychological contracts change over time, and there are several ways this can occur:

Organizational changes: Major organizational shifts, such as restructuring, mergers, or leadership changes, can alter the implicit expectations and obligations between employees and employers. For example, a company that previously emphasized job security may shift towards a more flexible workforce, changing the psychological contract around long-term employment.
Societal and economic changes: Broader societal trends and economic conditions can influence psychological contracts. The COVID-19 pandemic, for instance, dramatically shifted expectations around remote work and work-life balance for many employees and employers.
Career progression: As employees advance, their expectations and perceived obligations often evolve. An entry-level employee might prioritize learning opportunities, while a more experienced worker may expect greater autonomy and decision-making power.
Generational differences: Different generations often have varying expectations about work. Younger generations may emphasize work-life balance and purpose-driven work more than older generations.
Technological advancements: The rapid pace of technological change can alter how work is performed and what skills are valued, shifting the psychological contract.
Personal life changes: Major life events for employees (e.g., starting a family or approaching retirement) can change their priorities and expectations from work.
Ongoing experiences and interactions: Day-to-day experiences and interactions between employees and employers continuously shape and refine the psychological contract.
Explicit renegotiation: In some cases, employers and employees may openly discuss and revise their mutual expectations, especially during performance reviews or when job roles change significantly.

It’s important to note that these changes in psychological contracts can sometimes lead to perceived breaches if not properly managed or communicated. Organizations and employees need to be aware of these potential shifts and work to maintain alignment in their mutual expectations over time. Regular communication, transparency, and flexibility are crucial to adapting psychological contracts as circumstances change.

Psychological contracts are under constant assault in most workplaces. Just look at all the tension around returning to work, quitting quietly, and whatever the new term de-jour is. We have entered an era in which continuous reinvention is the only way to manage continuous turbulence. This means that, when it comes to the psychological contract, we are (inadvertently) lying to our employees everywhere. Gone are the days when “you support this one-time transformation, and things will return to normal for a few years.” Now is the time for honest dialogue and explicit re-negotiation. We must allocate some of our time and resources to perpetual reinvention to survive and thrive in the perpetually turbulent world. That is the new normal. And psychological contracts are under a lot of tension. Plan to deal with that.

The Lack of Objectivity in Quality Management

ICH Q9(r1) can be reviewed as a revision that addresses long-standing issues of subjectivity in risk management. Subjectivity is a widespread problem throughout the quality sphere, posing significant challenges because it introduces personal biases, emotions, and opinions into decision-making processes that should ideally be driven by objective data and facts.

Inconsistent Decision-Making: Subjective decision-making can lead to inconsistencies because different individuals may have varying opinions and biases. This inconsistency can result in unpredictable outcomes and make it challenging to establish standardized processes. For example, one manager might prioritize customer satisfaction based on personal experiences, while another might focus on cost-cutting, leading to conflicting strategies within the same organization.
Bias and Emotional Influence: Subjectivity often involves emotional influence, which can cloud judgment and lead to decisions not in the organization’s best interest. For instance, a business owner might make decisions based on a personal attachment to a product or service rather than its market performance or profitability. This emotional bias can prevent the business from making necessary changes or investments, ultimately harming its growth and sustainability.
Risk Management Issues: In risk assessments, subjectivity can significantly impact the identification and evaluation of risks. Subjective assessments may overlook critical risks or overemphasize less significant ones, leading to inadequate risk management strategies. Objective, data-driven risk assessments are essential to accurately identify and mitigate potential threats to the business. See ICHQ9(r1).
Difficulty in Measuring Performance: Subjective criteria are often more complicated to quantify and measure, making it challenging to track performance and progress accurately. Objective metrics, such as key performance indicators (KPIs), provide clear, measurable data that can be used to assess the effectiveness of business processes and make informed decisions.
Potential for Misalignment: Subjective decision-making can lead to misalignment between business goals and outcomes. For example, if subjective opinions drive project management decisions, the project may deviate from its original scope, timeline, or budget, resulting in unmet objectives and dissatisfied stakeholders.
Impact on Team Dynamics: Subjectivity can also affect team dynamics and morale. Decisions perceived as biased or unfair can lead to dissatisfaction and conflict among team members. Objective decision-making, based on transparent criteria and data, helps build trust and ensures that all team members are aligned with the business’s goals.

Every organization I’ve been in has a huge problem with subjectivity, and I’m confident in asserting none of us are doing enough to deal with the lack of objectivity, and we mostly rely on our intuition instead of on objective guidelines that will create unambiguous, holistic, and
universally usable models.

Understand the Decisions We Make

Every day, we make many decisions, sometimes without even noticing it. These decisions fall into four categories:

Acceptances: It is a binary choice between accepting or rejecting;
Choices: Opting for a subset from a group of alternatives;
Constructions: Creating an ideal solution given accessible resources;
Evaluations: Here, commitments back up the statements of worth to act

These decisions can be simple or complex, with manifold criteria and several perspectives. Decision-making is the process of choosing an option among manifold alternatives.

The Fallacy of Expert Immunity is a Major Source of Subjectivity

There is a widely incorrect belief that experts are impartial and immune to biases. However, the truth is that no one is immune to bias, not even experts. In many ways, experts are more susceptible to certain biases. The very making of expertise creates and underpins many of the biases. For example, experience and training make experts engage in more selective attention, use chunking and schemas (typical activities and their sequence), and rely on heuristics and expectations arising from past base rate experiences, utilizing a whole range of top-down cognitive processes that create a priori assumptions and expectations.

These cognitive processes often enable experts to make quick and accurate decisions. However, these mechanisms also create bias that can lead them in the wrong direction. Regardless of the utilities (and vulnerability) of such cognitive processing in experts, they do not make experts immune from bias, and indeed, expertise and experience may actually increase (or even cause) certain biases. Experts across domains are subject to cognitive vulnerabilities.

Even when experts are made aware of and acknowledge their biases, they nevertheless think they can overcome them by mere willpower. This is the illusion of control. Combating and countering these biases requires taking specific steps—willpower alone is inadequate to deal with the various manifestations of bias.

In fact, trying to deal with bias through the illusion of control may actually increase the bias due to “ironic processing” or “ironic rebound.” Hence, trying to minimize bias by willpower makes you think of it more and increases its effect. This is similar to a judge instructing jurors to disregard specific evidence. By doing so, the judge makes the jurors notice this evidence even more.

Such fallacies’ beliefs prevent dealing with biases because they dismiss their powers and existence. We need to acknowledge the impact of biases and understand their sources to take appropriate measures when needed and when possible to combat their effects.

Fallacy	Incorrect Belief
Ethical Issues	It only happens to corrupt and unscrupulous individuals, an issue of morals and personal integrity, a question of personal character.
Bad Apples	It only happens to corrupt and unscrupulous individuals. It is an issue of morals and personal integrity, a question of personal character.
Expert Immunity	Experts are impartial and are not affected because bias does not impact competent experts doing their job with integrity.
Technological Protection	Using technology, instrumentation, automation, or artificial intelligence guarantees protection from human biases.
Blind Spot	Other experts are affected by bias, but not me. I am not biased; it is the other experts who are biased.
Illusion of Control	I am aware that bias impacts me, and therefore, I can control and counter its affect. I can overcome bias by mere willpower.

Six Fallacies that Increase Subjectivity

Mitigating Subjectivity

There are four basic strategies to mitigate the impact of subjectivity.

Data-Driven Decision Making

Utilize data and analytics to inform decisions, reducing reliance on personal opinions and biases.

Establish clear metrics with key performance indicators (KPI), key behavior indicators (KBI), and key risk indicators (KRI) that are aligned with objectives.
Implement robust data collection and analysis systems to gather relevant, high-quality data.
Use data visualization tools to present information in an easily digestible format.
Train employees on data literacy and interpretation to ensure proper use of data insights.
Regularly review and update data sources to maintain relevance and accuracy.

Standardized Processes

Implement standardized processes and procedures to ensure consistency and fairness in decision-making.

Document and formalize decision-making procedures across the organization.
Create standardized templates, checklists, and rubrics for evaluating options and making decisions.
Implement a consistent review and approval process for major decisions.
Regularly audit and update standardized processes to ensure they remain effective and relevant.

Education, Training, and Awareness

Educate and train employees and managers on the importance of objective decision-making and recognizing and minimizing personal biases.

Conduct regular training sessions on cognitive biases and their impact on decision-making.
Provide resources and tools to help employees recognize and mitigate their own biases.
Encourage a culture of open discussion and constructive challenge to promote diverse perspectives.
Implement mentoring programs to share knowledge and best practices for objective decision-making.

Digital Tools

Leverage digital tools and software to automate and streamline processes, reducing the potential for subjective influence. The last two is still more aspiration than reality.

Implement workflow management tools to ensure consistent application of standardized processes.
Use collaboration platforms to facilitate transparent and inclusive decision-making processes.
Adopt decision support systems that use algorithms and machine learning to provide recommendations based on data analysis.
Leverage artificial intelligence and predictive analytics to identify patterns and trends that may not be apparent to human decision-makers.

Compassionate Accountability

Compassionate accountability involves maintaining a balance between showing empathy and understanding toward employees while holding them responsible for their tasks and performance. This approach fosters a supportive yet results-driven work environment.

Key Principles

Clear Expectations: Establishing clear expectations is foundational. Ensure that each team member understands their role, responsibilities, and goals. This clarity fosters a sense of direction and purpose, promoting accountability.

Compassionate Coaching: Provide frequent, low-impact coaching and feedback to help team members overcome challenges and grow. This approach allows leaders to offer support without taking away the team members’ ownership of responsibility.

Psychological Safety: Create an environment where team members feel safe taking risks, admitting mistakes, and learning from them. This fosters a culture of trust and collaboration, ultimately leading to better business outcomes.

Empathy and Understanding: Understand each team member’s unique needs, challenges, and aspirations. Use one-on-one meetings to build rapport and tailor your management approach to accommodate individual differences.

Constructive Feedback: Provide feedback constructively, focusing on growth rather than blame. This promotes a learning mindset and helps employees see mistakes as opportunities for development.

Lead by Example: Demonstrate the values and behaviors you expect from your team. In your actions, model compassion and accountability, showing that these qualities are not mutually exclusive but complementary.

Practical Strategies

Setting Clear Expectations

Communicate Goals and Roles: Clearly communicate goals, roles, and responsibilities to prevent misunderstandings and ensure that everyone knows what is expected of them.
Transparent Communication: Be transparent about the challenges and obstacles the team might face. Work together to brainstorm solutions and anticipate challenges.

Providing Support and Feedback

Regular Check-ins: Conduct regular check-ins to understand your team members’ challenges and provide timely feedback. This helps in addressing issues before they escalate.
Celebrate Efforts and Results: Recognize and celebrate both efforts and results. This helps maintain motivation and reinforce positive behaviors.

Fostering a Collaborative Environment

Encourage Collaboration: Foster a culture of collaboration and support among team members. Encourage them to help each other and share knowledge.
Joint Accountability: Create an environment of joint accountability where team members can rely on each other for help and show care for one another instead of blaming.

Balancing Compassion and Accountability

Empathy as a Foundation: Use empathy to understand your team’s strengths and guide them toward growth. Empathy helps build trust and makes difficult conversations easier.
Accountability with Compassion: Hold team members accountable in a way that demonstrates care and support. This involves being honest about performance issues while providing the necessary support to overcome them.

Continuous Improvement

Reflect and Adapt: Continuously reflect on your approach’s outcomes and adapt as necessary. Seek feedback from your team and be open to making changes that enhance compassion and accountability.

Embrace Change

As leaders, embracing change, both the ones we foster and change that stems from other places within and without our organizations, is critical. By embracing change ourselves, we lead by example and demonstrate the behaviors and mindset they expect from their teams. This can create a ripple effect, encouraging others to adopt a similar attitude toward change.

Understanding the Importance of Change

Recognize the Necessity of Change: Change is inevitable and essential for growth and improvement. Leaders who embrace change are more adaptable and capable of handling various challenges.
View Change as an Opportunity: Change opens doors to new opportunities, skills, and knowledge. It fosters innovation and can lead to excellence by pushing leaders and their teams out of their comfort zones.

Developing Key Leadership Skills

Adaptability: Being adaptable allows leaders to act quickly, face conflicts head-on, and learn from failures. This skill is pivotal in managing and leading change successfully.
Visionary Thinking: Setting a clear direction and purpose for the future helps inspire others to embrace change. Visionary leaders can motivate their teams by outlining long-term strategies and goals.
Communication and Influencing: Effective communication is crucial during times of change. Leaders should clearly articulate what changes are occurring, why they are necessary, and how they will be implemented. Listening with empathy and being transparent helps build trust and engagement.
Emotional Intelligence: It is essential to manage one’s emotions and respond well to others’ emotions. Recognizing and acknowledging others’ feelings can help mitigate stress and resistance to change.
Resilience and Persistence: Change can be challenging and unpredictable. Resilient leaders can bounce back from obstacles and remain focused on desired outcomes. Persistence helps sustain momentum throughout the change process.

Practical Steps to Embrace Change

Build a Support System: Don’t go it alone. Seek support from mentors, peers, and team members. Encourage your employees to do the same.
Create a Clear Vision and Plan: Establish and communicate a vision for the change early on. Develop a comprehensive change management plan that includes clear communication channels and methods to monitor progress.
Model Expected Behaviors: Demonstrate the behaviors you expect from your team. Show a willingness to try new things, ask questions, and share insights about the change process.
Engage and Support Employees: Regularly share information about the status and impact of the change. Show empathy and provide opportunities for employees to voice their concerns and successes.
Recognize and Celebrate Successes: Acknowledge and celebrate small victories along the way. This helps maintain motivation and reinforces positive behaviors.
Be Patient and Understanding: Understand that some employees may adapt more quickly than others. Provide ongoing support and check-ins to ensure everyone is coping well with the change.

Leading by Example

Embrace a Proactive Attitude: Be proactive rather than reactive. Seek out new opportunities and challenges, and constantly look for ways to improve and innovate.
Show Humility and Openness: Foster trust and psychological safety by being humble, authentic, and open. This enables your team to reach their full potential and navigate changes effectively.
Encourage Leadership at All Levels: Empower your team members to take on leadership roles and make decisions. This helps build a change-ready culture where everyone is involved in the process.

Encouraging your team to embrace change involves clear communication, active involvement, and supportive leadership.

Understand and Address Resistance

Identify the Root Causes of Resistance: Understand why team members might resist change. Common reasons include fear of the unknown, lack of trust, loss of control, and attachment to the status quo. You can address these issues more effectively by listening to their concerns and empathizing with their emotions.
Communicate the Vision and Benefits: Explain why the change is necessary, the expected outcomes, and how it will benefit the team and the organization. Use stories, examples, and testimonials to illustrate the benefits and inspire the team.

Involve and Empower Your Team

Encourage Participation: Involve team members in the decision-making process. Seek their input, feedback, and suggestions on implementing the change. This will help them feel valued and give them a sense of ownership over the change process.
Provide Training and Support: Offer training and resources to help team members adjust to the change and ensure they have the skills and knowledge to succeed in the new environment.
Create a Supportive Environment: Foster a culture of open communication where team members feel comfortable sharing their ideas and concerns. This can help build trust and reduce resistance.

Communicate Effectively

Be Clear and Transparent: Communicate clearly and consistently about the change. Explain the change’s purpose, scope, and impact and how it aligns with the organization’s vision and goals.
Tailor Your Communication: Different stakeholders may react and be concerned about the change. Tailor your communication to address their specific needs and interests.
Use Multiple Channels: Use various communication methods to reach all team members. This can include team meetings, one-on-one sessions, emails, and interactive platforms.

Foster a Change-Ready Culture

Promote a Culture of Continuous Improvement: Encourage a mindset of adaptability and continuous learning. This helps team members see change as a natural part of growth and improvement.
Build Trust and Collaboration: Foster a culture of trust and collaboration where team members feel supported and valued. This can help reduce resistance and increase engagement with the change process.

Build Wonder in the Organization

A sense of wonder significantly enhances critical thinking by fostering curiosity, creativity, and deeper engagement with the subject matter.

Curiosity and Inquiry: Wonder naturally leads to curiosity, prompting individuals to ask questions and seek answers. This inquisitive mindset is a cornerstone of critical thinking, as it drives the exploration of new ideas and the examination of existing knowledge.
Engagement and Motivation: Experiencing awe and wonder can make learning more engaging and enjoyable. This emotional engagement motivates individuals to delve deeper into subjects, enhancing their understanding and retention of information.
Creativity and Imagination: Wonder stimulates the imagination, allowing individuals to think beyond conventional boundaries and explore new possibilities. This creative thinking is essential for problem-solving and innovation. Critical thinking involves analyzing information and synthesizing new ideas, which is facilitated by a sense of wonder.
Empathy and Perspective-Taking: Wonder can also foster empathy by encouraging individuals to see the world from different perspectives. This empathetic understanding is crucial for critical thinking, allowing for a more comprehensive and nuanced analysis of issues.
Mindfulness and Reflection: Engaging with wonder often involves mindfulness and reflection, which are essential for critical thinking. Taking time to contemplate and reflect on experiences allows individuals to process information more thoroughly and develop well-reasoned conclusions. This reflective practice helps shift perspectives and integrate new knowledge.

Photo by Magda Ehlers: https://www.pexels.com/photo/brown-monkey-photo-767197/

Building a sense of wonder in the workplace involves creating an environment that encourages curiosity, creativity, and engagement.

1. Encourage Curiosity and Open-Mindedness

Ask Open-Ended Questions: Encourage open-ended questions that stimulate thinking and discussion to promote a culture where employees feel comfortable asking questions and exploring new ideas.
Vocalize Thoughts: Create an environment where employees are encouraged to share their thoughts and ideas openly, without fear of judgment. This helps in fostering a culture of curiosity and innovation.

2. Foster a Positive and Supportive Environment

Effective Communication: Ensure that communication within the organization is open and transparent. This builds trust and collaboration among team members, essential for a positive work environment.
Recognition and Rewards: Acknowledge and celebrate achievements. This boosts morale and encourages employees to continue exploring and innovating.

3. Create Opportunities for Exploration and Learning

Professional Development: Offer opportunities for continuous learning and professional growth. This can include training sessions, workshops, and access to educational resources.
Encourage Experimentation: Allow employees to experiment with new ideas and projects. The freedom to explore can lead to innovative solutions and a greater sense of wonder.

4. Incorporate Sensory Experiences

Engage the Senses: Create a work environment that stimulates the senses. This can include visual displays and frequent and deliberate time on the front line. Engaging the senses can enhance well-being and foster a sense of wonder.
Mindful Practices: Encourage mindfulness practices such as meditation or nature walks. These activities can help employees stay present and appreciate the beauty and complexity of their surroundings.

5. Promote a Culture of Reflection and Feedback

Reflective Space: Provide spaces where employees can reflect and think deeply about their work. This can be a quiet room or a designated area for contemplation.
Feedback Mechanisms: Implement regular feedback sessions where employees can discuss their experiences and insights. This helps continuous improvement and fosters a culture of learning and wonder.

6. Lead by Example

Leadership Engagement: Leaders should model a sense of wonder by being curious, open-minded, and engaged. When leaders demonstrate these qualities, it sets a tone for the entire organization.
Beginner’s Mindset: Encourage leaders and employees to adopt a beginner’s mindset, approach problems and opportunities with fresh eyes, and be open to new possibilities.