How to Build a Viable Psychological Contract with Millennials


I am writing this post at the request of a Millennial.

With all the discussions about culture and engagement — he would like me to answer one powerful question: “How do we (young employees) establish a meaningful psychological contract with an employer, when we distrust organizations in general?”

Wow. That hurts.

For someone like me, who would like every single contributor to have a meaningful tenure, this hits hard. His candid question is the result of a myriad of elements that may have formed a deep rift in the career equation for an entire generation of contributors. (By the way, if you haven’t read my other posts on the topic, find an introduction to psychological contracts start here.)

It is expected.

In some cases, well-deserved.

However, it remains ominous.

Millenials have watched in horror as the economy collapsed in late 2000’s. They watched as college graduates struggled to find work — and how they are still struggling to make headway salary wise because of that collapse.  They’ve watched as their parents were mistreated and in many instances, cast aside by the very organizations they had come to trust. To make matters worse, according to Pew, Millenials are saddled with more student debt than other generations. They trust less and have fewer attachments to traditional institutions.

Strike one, two and three.

Sticking with this thread, if individuals do not trust employers to look out for their career or personal well being — with whom (or what) is the psychological contract formed? The answer unfortunately is this: “The contract is with myself. I am out for me”.

Yes, depending on yourself (knowing yourself for example) is admirable. However, something precious is lost when we cannot identify and ultimately give something of ourselves to the organizations with which we affiliate. If we fail to trust the organization, we do not share. If we do not share freely, we protect our ideas. If protect our ideas, we limit progress and innovation.

It seems that we have some work to do, if we expect a healthy psychological contract to be built.

There is a way forward.

Here are a few places to start.

  • Recruit with clarity. From the job descriptions we share, to the career paths we might offer — organizations must operate in manner that is honest and complete. Recruitment practices should be allowed to reflect a communicate strategy that improves applicant fit and engagement. Organizations should focus on smart HR Tech solutions to accomplish this. (See how J & J is harnessing HR Tech to accomplish this here.)
  • Offer stability. Psychological contracts are not a one-way street; they must work in both directions. If you manage a Millennial, discuss not only what they bring, but what the organization might bring to their developing career paths. (Read about constructing Tours of Duty in The Alliance: Managing Talent in the Networked Age) What will they learn? What role models will you provide? Remember, they may remain insecure about their future career paths.
  • Build community. Nothing builds confidence in an employer, like the knowledge there is an entire within-organization community to support you and your career. Encourage both building and participating in internal networks that engage contributors.

What is your organization doing? Share it here.

Dr. Marla Gottschalk is an Industrial/Organizational Psychologist. She is a charter member of the LinkedIn Influencer Program. Her thoughts on work life have appeared in various outlets including Talent Zoo, Forbes, Quartz and The Huffington Post.

2 thoughts on “How to Build a Viable Psychological Contract with Millennials

  1. I am a retired Lean Coordinator and Six Sigma Black Belt, who has witnessed just about every kind of culture known to mankind within organizations. I can say with all sincerity, that the organizations with a common language have higher retention, high morale, fewer accidents and greater sustainability to improvements than those that maintain “us versus them” culture. Talk with them. Listen to them. Respond positively. Don’t be afraid to laugh with them.


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