How to Create a Psychological Contract with New Hires During Training


shaking hands“New hire perceptions of their own and their employer’s obligations: A study of psychological contracts,” written by Denise M. Rousseau, was published in the Journal of Organizational Behavior back in 1990. Prof. Rousseau, who taught at Northwestern University’s Kellogg School of Management at the time, might not have realized that her article would come to be held in high esteem by training developers. But it has. Today, she is a Professor at Carnegie-Mellon University’s Heinz College and Tepper School of Business.

Today, let’s consider how some of her insights can be applied to creating much more effective training programs for new hires.

First, What Is a Psychological Contract?

It is an unspoken agreement between an employee and an employer. It hinges on what Prof. Rousseau terms “individual beliefs in reciprocal obligations between employees and employers.”

In her article, Prof. Rousseau notes that there are two components in the contract:

  • Employee-focused obligations, or specific things that company is agreeing to provide, such as job security and competitive pay.
  • Employer-focused obligations, or things that the employee is expected to provide, such as hard work, the ability to master and use new skills, and loyalty to the company.

Prof. Rousseau doesn’t deeply explore the question of training design in her article. Yet here are some strategies that we know can help you forge a durable psychological contract with your employees during onboarding and training.

First, Find out What Your New Hires Bring to the Contract

Prof. Rousseau notes that asking questions like these can help assess a new employee’s commitment to meeting his or her end of the commitment to your organization . . .

  • Interest in working for your company – Did your new employee specifically set out to get a job with you, or was your job just one of many that he or she would have considered taking? To assess this factor, you can ask employees to respond to statements like, “I specifically set out to get a job with this organization” or, “I really wanted a job with your company.”
  • Careerism – Does your new employee intend to stay with you for the long haul, or to change employers frequently during his or her career? To assess this factor, you can ask employees to respond to statements like, “I do not expect to change organizations often during my career” or, “I expect to work for a variety of different organizations during my career.”
  • Obligations – What specifically does your new hire believe that he or she will be required to provide? In general, open-ended questions like, “What do you believe you are expected to deliver to our company?” work best to assess this factor.

Second, Bring Hidden Expectations into the Open and Seal the Contract

The operative strategy is to openly explore both ends of the contract during training, by discussing what you intend to offer, and what the employee should:

  • During training and orientation, speak openly about what the contract will be. Instead of allowing new hires to make assumptions about their future in your company, for example, state openly that they can have a secure future with you, provided that they meet certain specific expectations.
  • Train people to perform the specific skills that will allow them to succeed. It is more effective to define and teach those skills than it is to let employees either discover them or not – in effect, to “sink or swim.”
  • During training or orientation, clearly explain how your organization will conduct reviews, award bonuses, and decide who will advance. When you define your commitment to the contract, you invite your new hires to do the same.
  • Jointly create a personal development plan for every employee in your organization. This strategy is strongly recommended by our founder Evan Hackel, who writes about it in his new book Ingaging Leadership. When you sit down with every employee to create a personal development plan that outlines where he or she can go in your company – and what he or she needs to do in order to get there – you build the kind of psychological contract that Prof. Rousseau describes.

The Result? Training that Improves Everything

Employee satisfaction and retention improve. So does your company’s ability to build the kind of employee engagement that gets things done. It starts with designing training that wins the hearts and minds of employees.