May 26, 2025

The psychological contract in the face of the need for meaning

Jean-Yves Mercier

In a constantly changing world, business management must adapt to numerous challenges. Among these, the question of the meaning of work arises acutely. On the one hand, companies are constantly being challenged on their societal, climate and governance commitments. Without always knowing what to put in place beyond specific actions aimed at inclusion or their environmental responsibility. On the other hand, employees are disengaging. Absences at work are at their highest, on average 2 weeks per person in 2023 in 2023 in Switzerland [1]. 42% of French people under 35 are considering leaving their job, which no longer makes sense for them. [2].

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This notion of meaning at work has of course been catalyzed by everyone's experience with the Covid pandemic, enough has been said. But it was already emerging before. Businesses are constantly changing strategies, technologies, and cultures. Individuals live in a world where the points of reference become blurred and clash, leading everyone to redefine their own norms of behavior based on their own beliefs. The meeting is no longer guaranteed. It can only result from the clarity of the psychological contract between companies and their employees.

Why? Globalization and hyperconnectivity have profoundly transformed working methods. These changes are generating value crises, innovations, and a revision of management methods. To navigate this context, businesses need to adjust their strategies and clarify the psychological contracts they establish with their employees. But they often go about it the wrong way. It is enough to see how policies for the inclusion of genders or younger generations are carried out with a patriarchal and conservative spirit. The only term inclusion is an example, where we should talk about benefiting from diversity.

Understanding the psychological contract offered by the company is therefore essential to harmonize mutual expectations and thus promote a work environment that is both productive and fulfilling. Let's explore the different types of contracts and their impact on contemporary management.

Types of Psychological Contracts

1. The Hedonism-Security-Progress Contract

For large multinationals, as for the State, the intrinsic aim of the activity is to ensure a dominant position. To guarantee its market shares in the case of the company, to increase its profitability and to have sufficient lobbying power to defend its interests. To maintain the sustainability of the sovereign framework in the case of the State, balance its budget and offer some equality of treatment to citizens. Achieving this requires controlling your environment, by establishing unavoidable rules and standards. But also by orienting the actions of its employees, so that despite their number, they contribute to ensuring the application of these standards and the dominant position of the institution.

The proposed psychological contract is then based on an exchange of security and progress, against the acceptance of the established working environment and collective goals. Management levers include often attractive remuneration, strong values, and opportunities for personal and professional development. It is also where all the notions of caring management or well-being at work spread. Not necessarily that they are more developed in practice than they are elsewhere. But to symbolically underline the proposed contract: the establishment of a feeling of protection and support, in exchange for a certain allegiance to the values and actions the company undertakes. This offer will suit employees who need a clear and stable framework to thrive, and who consider that systems can only evolve step by step. It will not be suitable for those who, for example, will object to the fact that in 2021, TotalEnergies received certification from the certification body. Ecovadis the gold medal for integrating the environment, human rights and ethics into its management system.

2. The Autonomy-Initiative-Development Contract

For small and medium-sized enterprises (SMEs), the challenge is different. It is not a question of guaranteeing a dominant position, but a market niche. To do this, the challenge is to know how to invest in the right place. Financing capacities are limited, the challenges are multiple and uncertain: new technologies, choices of geographic expansion, opportunities for innovation in terms of products and services. While executive intuition plays a role, it cannot be the only asset to be implemented. This is most often done by launching pilot projects in various directions, and by investing more heavily in those that are starting to work. We proceed by trial and error, by a kind of natural selection. And to achieve this, we need employees who are able to innovate as well as to take risks.

Here, the psychological contract emphasizes autonomy, freedom of initiative and the potential for employees to develop their own ideas, in exchange for the risk inherent in a natural selection of talent. Some will succeed, others will not. This is where we see new types of organizations flourish, agile, holacratic, opal or in autonomous teams to take up the main trends. Responsibility is delegated, employees are encouraged to excel and actively contribute to the growth of the company. It is an almost Darwinian type of contract, which offers wide room for manoeuvre but sanctions the result without real protection. It will suit those who have an entrepreneurial spirit, a taste for uncertainty and for exploring their own ideas. It will disempower others.

3. The Strong Team Experience Contract

Finally, for very small businesses (VSEs), the challenge is often that of survival. Whether it is a start-up that must break through from an original idea. Of a craftsman facing new technologies that are changing his profession. Or of a store facing regulatory changes in opening hours and in the passage of time on its street. The only possible protection here lies in the ability of the manager to sense the opportunities as well as the risks, to have an intuition of the decision to be taken, and to implement it quickly with his team.

The psychological contract offered to employees is then based on a strong experience within a team, almost a family, in exchange for constant adaptation to the decisions of the entrepreneur. Small businesses value instant mobilization and collective responsibility around the changes required, with the entrepreneur at the center of the dynamic. This model, which could be compared to that of a commando, promotes a sense of belonging despite uncertainty. It is suitable for those who need a strong leader, a mentor, to deal with the vagaries of their business and the emotions that go with them.

Self-Leadership: The Keystone for Clarity of Needs

Businesses are rarely clear about their expectations. How many entrepreneurs are on the defensive instead of constantly adapting? How many SMEs are embracing the trend of caring management when they now require risk-taking with no real guarantee? How many multinationals or public organizations promote the initiative when they constrain it in a rigid framework? Businesses are run by human beings, who face the same loss of bearings as each of their employees. Management methods and societal trends end up diluting the concrete reality of collective action. Managers and employees end up forgetting that work is not only a place to live, but also the operationalization of a contract. Its classic dimension — time versus money — is certainly no longer sufficient. But its psychological dimension is nonetheless that of an exchange of needs.

For these psychological contracts to work, it is crucial for employees to clarify their own needs and expectations, but also the value they are ready to bring to the collective. That is the essence of self-leadership. This personal awareness allows employees to better understand what they are looking for in their work and what they are prepared to give in return. In this way, they can avoid misunderstandings, ensuring a better match between their aspirations and the type of corporate culture that will suit them. At a time when reference points and institutions are being questioned, one cannot at the same time expect an answer. Because whoever it is, we will question it. It is not a question of imagining a utopian world, but of choosing among possible worlds. And that is everyone's responsibility.

Where do you start?

When they grow up, children often test their parents. To validate the framework posed by their education, to understand it, to appropriate it in their own way. Employees are not children, although sometimes they can act like children. And businesses can become one, when their leaders react almost angrily to resistance to change. Between adults, there is co-responsibility. The question of meaning at work can only be answered satisfactorily if companies and their employees are clear about their respective expectations. Psychological contracts play a central role in this dynamic, laying the foundations for a balanced and rewarding working relationship. By investing in self-leadership, businesses and individuals can build work environments where everyone finds meaning and satisfaction, thus contributing to the overall performance of the organization as well as to the development of individuals. Everyone has a responsibility for this, both the employees for themselves and the companies in their commitment to this mutual clarification. There is no point in sending the ball back to each other. It is up to each party of the contract to take the initiative.

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