A lot of things to ponder about in Nadya Zhexembayeva’s article, « Constant Change Is Rewriting the Psychological Contract with Employees. » (Harrvard Business Review). Accelerated change is probably the name of the game for the years to come, but that will mean new ways of setting a moral and psychological contract between management and their teams.
Zhexembayeva discusses the concept of the « psychological contract, » originally introduced by Chris Argyris and further defined by Denise Rousseau, as an unwritten set of expectations between the employee and their manager. This contract includes informal arrangements, mutual beliefs, common ground, and perceptions between the two parties, highlighting the « fairness or balance » perceived by the employee around what they put into the job and how they are treated in return. Reflecting on recent data, it’s evident that employee dissatisfaction is growing due to the constant state of change.
According to Gartner, employees’ willingness to support enterprise change collapsed from 74% in 2016 to just 43% in 2022. Additionally, Gallup’s « State of the Workforce 2024 » report indicates that while 23% of employees are thriving and fully engaged at work, 62% are « quiet quitting, » and 15% are « loudly quitting, » directly harming the organization in its human roots. These statistics suggest that the existing psychological contract, which assumes employees will support a big push for change in exchange for stability, is outdated.
In today’s fast-paced environment, where continuous reinvention is the norm, this contract no longer holds. The Accenture 2024 Pulse of Change Index shows a 183% increase in the rate of change affecting businesses since 2019, underscoring the need for organizations to transition from sporadic change projects to a continuous reinvention process.
For me it’s clear that the old contract of supporting a one-time transformation for a period of stability is no longer feasible. Instead, we must engage in an honest dialogue with our teams, continuously renegotiating this contract to reflect the reality of perpetual change. This involves regularly sharing data that speaks to the fast-moving, hyper-disruptive world, using this information to develop new rules and agreements around change as a continuous process, and finding ways to make this process engaging and beneficial for every team member.
It requires stellar communication skills, and honest open management rituals for open discussion, skill transfer, and decision-making. This continuous effort will help build a culture of trust, perseverance and cooperation, ensuring that our teams remain engaged and motivated despite the constant change.
To thrive in this perpetually turbulent world, we all need to allocate time and resources to continuous reinvention and reconnection.