The Social Contract Driving Organizational Sustainability

What will allow the modern organization to thrive going forward? I believe the key driver of organizational sustainability is the strength of the social, or psychological, contract that develops between an employer and its employees. This often unstated and undervalued doctrine fuels not only employee commitment, but also an organization. The power of this social contract is fundamental and far-reaching — with an ability to shape attitudes and direct key behaviors that can lead to success.

Over time, this type of social contract has evolved significantly. The 1956 best seller The Organization Man depicts a qualitatively different social contract within organizations, as compared to those developing today. In that previous world of work, where organizations had the luxury of offering security and a predictable future, employee commitment was essentially derived from — and exchanged for — long-term employment. Today, these promises are not often made. As such, the operating social contract becomes dependent on other organizational attributes that might prove valuable.

What are some of the components that could influence the evolved social contract between employers and employees today?

  • Shared vision. Today’s employees wish to feel a part of an organization’s journey and have a “transparent view” of its mission and goals. Employees crave a more active role in shaping success and sustainability, no longer acting as passive “passengers.”
  • Meaningful work. Static job descriptions will do little to foster engagement and commitment, whereas dynamic roles that allow some level of employee input are optimal. Roles that allow flexibility (See Google’s 70-20-10 Model) could foster challenge, creativity and innovation.
  • Embracing risk and failure. Engaging in “calculated” risk has been traditionally accepted within organizations, but embracing risk with the notion that failure is acceptable, is a far different story. This process could create a psychological “cushion” for potential innovators, allowing employees to feel freer to pursue creative endeavors.
  • Ending the feedback “embargo.” Information is power — and there is power in transparent performance feedback. Utilizing feedback effectively within organizations could greatly enhance the strength of the psychological contract between employees and employers.
  • Encouraging “the collective.” Today’s employees want to be part of the organization’s DNA, and play an integral role in shaping culture. Culture should develop organically from within and emanate from employees, nurturing success and long-term sustainability.

What other components will help sustain organizations going forward? Let me know.

Editor’s note:  Dr. Marla Gottschalk will be a guest on the December 3rd #TChat Show, which consists of the #TChat radio portion from 7-7:30 p.m. ET, followed by the #TChat Twitter chat from 7:30-8 p.m. ET. Check out the #TChat Preview for more details on this week’s show, during which we will celebrate the four-year anniversary of #TChat and discuss the future of the employee-employer relationship. Please join us!

About the Author: Dr. Marla Gottschalk is an Industrial/Organizational Psychologist, consultant and blogger who specializes in workplace success strategies and organizational change. Her views on workplace topics have appeared in The Wall Street Journal, American Express Open Forum, CareerBuilder, CBS Money Watch, Deskmag and other outlets worldwide.

photo credit: paul bica via photopin cc

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