A company's success depends in many ways on employee retention. High employee retention has a positive impact on a company's productivity, success, and image. The "Psychological Contract" between employer and employee makes a decisive contribution to employee retention.
What is the Psychological Contract?
The Psychological Contract is an informal, unwritten agreement between employer and employee that outlines mutual expectations, promises, and obligations. Unlike the formal employment contract, which is usually put in writing and governs the legal duties and conditions of employment, the unspoken contract deals with the emotional and psychological aspects of the working relationship.
The contract is shaped by implicit assumptions based on personal values, beliefs, and expectations. It is about what employers and employees expect from one another, how they perceive their cooperation, and what kind of support and recognition they hope to receive.
PERSENTIS distinguishes between emotional, calculative, and growth factors and breaks down precisely how high the respective need is – and to what extent it is met.
The Importance of the Psychological Contract for Employee Retention
Mutual adherence to the Psychological Contract is essential for a long-term and positive bond between employer and employee. When employees feel treated fairly in their working relationship and their needs are met, trust, satisfaction, and engagement are created. In return, motivated and satisfied employees are more willing to remain loyal to the company in the long term and give their best.
PERSENTIS is a powerful tool for strengthening employee retention and engagement based on the psychological contract. By understanding and respecting each other's expectations and obligations, employers and employees build a positive working relationship defined by trust, satisfaction, motivation, and loyalty. Companies that consciously cultivate the psychological contract will benefit in the long term from loyal and highly engaged employees.
