Sunday 22 June 2014

What's the contract?

This week, a friend of mine who is a senior teacher has just managed to find a suitable new job, after quite a search. He had not wanted to leave his last school, but his job fell foul of a reorganisation.

Another friend has just left a senior job in a charity, which he had only started earlier this year.  I am not clear on the details yet, but gather it was a political issue, rather than anything to do with competence or performance.

In both cases, these were senior and successful people, who could reasonably have assumed to have some job security.  Both are also the main wage-earners for their families.

Which raises the interesting question: what is the (implicit) contract governing employment these days.

There used to be an understanding that normally, if you were competent and worked well, you could be fairly secure in a job, at least with a large organisation.

Peter Block writes about this in an interesting way, in The Empowered Manager.  He contrasts two types of implicit contract, which he characterises as the Patriarchal and the Entrepreneurial.

The Patriarchal Contract: This contract assumes that the organisation or boss knows best.  Therefore obedience is at a premium, with an associated denial of self-expression.  Moreover, we are expected to make sacrifices for unnamed future rewards, and believe (or pretend to believe) that this is just.

The Entrepreneurial Contract: The essential difference in the entrepreneurial contract is a fundamental shift of attitudes about people.  The Entrepreneurial Contract is based on the belief that the most trustworthy source of authority comes from the individual, rather than from the boss.  The primary purpose of the leadership is to enable people to give of their best in the service of a joint vision.  

He teases out the implications of each in interesting ways.   For example, the idea of sacrifice for unnamed future rewards leads to resentment and cynicism.  The implicit reward is often ‘if you work hard you will have a promotion/job for life.’  However no organisation can guarantee that, and as they lay people off, they violate that bargain, causing deep resentment.

In fairness, I should say that both of the friends I referred to at the start of this post are unlikely to harbour resentment and cynicism, as they are too sensible and focused on moving on.  However, that does not mean that their treatment was just; and also the fact that they will not harbour resentment and cynicism does not mean that others who have witnessed their experiences will not.  Organisations are finally catching up with the fact that their treatment of one person who exits the organisation sends strong messages which are most certainly read by those who remain.

So it is worth reflecting: if you are a boss, what is the implicit contract you have with your people?  Is it just and honest?  Can you honour it?  Or should you consider a more explicit contract, that is more just and honest?

And as an employee: what assumptions are you making about your contract? What do you think is expected of you?  Is it just and honest? Can both you and your employer honour it?   Or should you consider a more explicit contract, that is more just and honest?...


  1. Very interesting post.

    My guess is that attempts to make the contract explicit will not help as much as you might hope. A boss who has a patriarchal view of your contract is quite unlikely to be able to admit it, even at the point at which they dismiss you for breaching the implicit contract.

    I'd argue that a better solution for the employee would be to figure out a way to diagnose whether your contract is patriarchal or entrepreneurial.

  2. I have added some guides to diagnosis, here and here