Psychological contracts and change

Abstract The concept of psychological contracts is not new, but its popularity among managers is relatively recent. As with most interpersonal structures, we don't know we need it until it is gone. The massive amount of organizational change that took place in the 1980s left damaged relationships in its wake. Implementing changes while discounting human needs played havoc with psychological contracts. Organizations lost something they had taken for granted. As leaders realized they didn't just need more efficient processes and technology in order to compete, but also needed motivated people, psychological contracts became an important topic. Unfortunately the concept was often used as just another technique to try to force people to become what their leaders thought they should be. Psychological contracts aren't very useful for that kind of work. They are much better as a tool for understanding the human needs and problems in an organization—including the needs of the change agents and leaders.