6 December 1999 Getting Employment Relationships Right – Lincoln researchers look at the 'psychological contract'

Employment contracts are not solely matters of law, they also involve interpersonal relationships and researchers at Lincoln University say that recognising the importance of this "extra dimension" is essential to employer/employee harmony.

Employment contracts contain "psychological contracts" which cover the expectations and perceived obligations in relationships which run parallel with the legal obligations between parties but without explicit sanctions for enforceability, says Dr Rupert Tipples, Senior Lecturer in Employment Relations, at Lincoln University.

"Some academics call them 'silent contracts' because they are there influencing your behaviour even though you may not be aware of it."

"For example, an employee of yours breaks a piece of machinery and does not tell you until you find the breakage yourself. What should your course of action be? Or, you are employed by a husband and wife team and one partner suggests a job which needs doing at the same time as the other partner suggests something else, more urgent. Workplace tension rises. What can be done?

"These sort of situations are typical of breakdowns occurring in 'psychological contracts'," says Dr Tipples.

Over the past 18 months Dr Tipples and agricultural science honours student Maria Hoogeveen, have been exploring what makes up the expectations and perceived obligations of 'psychological contracts' within the dairy farming industry.

The work is a first for New Zealand's farming sector and, using a survey team of Lincoln students, they have done it by asking dairy farm employers and employees throughout the country to recollect critical incidents where employers and employees exceeded their expectations of each other in either an unexpectedly good or bad way.

Sixty-nine usable interviews generated 579 critical incidents involving employer or employee expectations or perceived obligations. These were then classified into categories with importance ranked by number of incidents.

The data showed that the major category with dairy employees related to the working environment. This was a large category (41% of all incidents) so the data was reanalysed and two similarly sized sub-categories were identified – work environment issues relating to long hours, days off and leave (referred to as "time" issues) and "other" environmental issues such as early mornings and late nights, accommodation, location etc.

Examples of the types of incidents recorded were –

Good treatment by employer –

 Environment Time:

"Employee wanted time off during silage season so boss put silage making on hold for the weekend so employee could have time off."

Environment General:

"Buying you extra wet weather gear."

Poor treatment by employer –

Environment Time:

"Employee being expected to get the cows in the morning and afternoon, seven days a week, being given off only two hours a week and one weekend a month."

Environment General:

"No contract; boss kept changing things."

"Seasonal pressures led to aggression in the workplace. Uneven financial inflow can bring about stress."

Other categories of incidents implying employer obligations included issues of pay and recognition. The major categories implying employee obligations related to loyalty, hours and property issues.

"To have good employment relationships, employers and employees need to have, from the outset, mutually understood and agreed expectations about the prospective employment," says Dr Tipples.

"The time to achieve this is at the time of recruitment, and some of the most important issues which they could discuss and reach mutual understanding on should relate to the work environment, whether time issues or 'others'.

"Psychological contracts are fundamental to the employment relationship. You must have sound psychological contracts for successful employment relationships. Dairy production staff and staff managers often have differing views on the obligations of each to the other. However, with greater mutual understanding and awareness from the outset, employment relationships can be made to work better.

"This can be achieved by making sure that a thorough discussion takes place, with as much thinking and understanding of mutual expectations as possible, when a new job is set up or when an established job goes through a major change."

Lincoln University's research suggests that discussion and thinking should concentrate on the work environment, as it is a problem area. Dr Tipples says that –

• Employers should provide an adequate environment to work and live in, in terms of accommodation, the hours worked and time off.

• Employers need to explain clearly to the employee the nature of the job from the outset. It is in the employer's own interests to provide the prospective future employee with all the information needed to have well rounded expectations and to make an informed decision about whether they want to work in that situation.

This can be achieved with the help of a good job description and written employment contract. The hours, time off provisions, responsibilities and duties should all be stated. As part of the job description the employee should be informed of the difficulties and distasteful aspects of the job such as the cold, the early mornings, the slurry and the smells.

At this stage a candidate who is not prepared to tolerate the conditions will pull out of the selection process while one accepting the job will do so with their eyes open to its problems and will be less likely to leave because they meet something unexpected.

• There needs to be on-going communication between the employer and employee, with regular reviewing of the relationship between them – the key being talking to each other at all times. The expectations of the employer and employee are likely to change with time so it is important to discuss these changes and adjust the relationship and contracts where appropriate.

Footnote:

A discussion paper on this whole topic has been prepared, particularly for dairy farmers and dairy farm staff, and it is obtainable from –

Dr Rupert Tipples, Applied Management & Computing Division, PO Box 84, Lincoln University, Canterbury, New Zealand

A fuller research report will be available from the Applied Management & Computing Division later.

Table and graphs attached below.

Ian Collins, Journalist, Lincoln University, Canterbury, New Zealand