Psychological Contract between Individual and Organization

March 20, 2020

The relation between the individual and the organization is necessarily interactive, developing itself by mutual influence and mutual negotiation to establish a viable psychological contract.

Such contract is essential in the required agreement to the organizational transformation journey throughout the time, being molded in the relation of interests between the parts.

From one hand, the organization has interest in the required individual capacities for the accomplishment of the expected results. From the other hand, the person has interests, combining necessities (money, prestige, security, self-accomplishment), expectations (professional conditions of work, experiences, sense of belonging) and aspirations (career, power, success).

The fulfillment of the necessities, expectations and aspirations of the individual by the group and the central phenomena of social psychology on the group pressure for conformity create, exactly, the identity of the individual with such group and mold his interactions to produce the group result and to solve the internal or external problems faced together throughout the time.

It is not possible to understand the psychological dynamics if we only look at the motivations of the individual or at organizational characteristics or practices. The self-centered individual behavior in searching for his necessities, expectations and aspirations coexists with the organizational search for the group cohesion on an excellent common intention for all the individual-member.

Both interact in a complex way, demanding scientific theories and framework that can deal with interdependent systems and phenomena.

[Part of my book ANTHESIS]


Daniel Motta is the Founder and CEO of BMI Blue Management Institute, a leading niche consulting firm. He is a global thought leader focused on culture, strategy and leadership. He has a PhD in Economics, MSc in Financial Economics and BA in Economics. He is also an OPMer from Harvard Business School. He is the Managing Director of USA-based VC company White Fox Capital and the Senior Tupinambá Maverick of bossa&etc. He was a co-founder of Brazilian Society of Finance. He currently serves NGO UNIBES as Strategic Planning Principal. He is the author of the best selling books Essential Leadership and book Anthesis. He also has three articles published by Harvard Business Review. He is a Board Member of MASP.