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Rousseau Denise

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Rousseau Denise
Changing the deal while keeping the people

Effectively changing a psychological contract depends on two things: how similar is the proposed change to the current contract? And how good is the relationship between employee and employer?

When good-faith relationship exists, changes are more likely to be accepted as part of the existing contract because parties are not looking for contract violations and trust creates willingness to be flexible. Improving the employment relationship is a necessary first step in contract change.

Changing the Contract

There are two ways to change the psychological contract, accommodation and transformation.

Accommodations modify, clarify, substitute, or expand terms within the context of the existing contract so that people feel the old deal continues despite changes. However, to be effective, there must be a good relationship between the company and its members.

Transformations are radical surgery. It means that new mindsets replace old ones. The purpose of contract transformation is the creation of a new contract that it is hoped engenders commitment. Two circumstances in which people become open to new information are when they are newcomers to the organization or when a disruption occurs which they cannot ignore. It is quite common to find newcomers and veterans working side by side holding different psychological contracts.

Transformation Stages

Stage 1: Challenging the old contract. It takes a good reason to change a contract and keep people. A core issue in the management of contract change involves how the change is framed. Effective communication of externally validated reasons for the change. Shift in the nature of the business, especially those not directly under organizational control, can create severe costs to either party of continuing the contract. Transformation failures are often

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