Psychological Contracts Case Study - Should I Stay or Should I go?

Jack Jones was a senior IT analysis for a leading national food company. Jack had been with the company for over 30 years beginning work at the company initially as a summer casual whilst completing his university degree. On completion of his biology degree he took up a full-time position with the organisation head office, working initially in the food hygiene section. However, over the years Jim undertook a variety of position as he moved up through the organisation. With little experience in the area, Jack joined the IT section as it expanded and rose to the position of senior analyst quickly. As a result of his skills and knowledge of the companys new IT systems, and his communication skills, he was approached by senior management to help set up the system in other states where they were still working on manual arrangements that relied on the tacit knowledge of the senior logistics people. Whilst this worked at a local level the increasing need to manage the systems and logistics nationally meant that these local systems had to be integrated into the new system.

An initial discussion with the consultants who helped design and install the current system indicated that they would charge over $250 000 to train and develop the staff in the other states. The company bulked at the cost and in a meeting of senior management it was suggest that Jack be seconded to the other two plants and spend a week in each helping train the logistic and IT staff in the new system. The senior logistics manager called Jack to his office to ask him to undertake the role, pointing out that, it would provide an opportunity to broaden his skill base and would reflect well in his next performance appraisal. In addition the senior logistics manager indicated that his work would be reflected in his end of year bonus 10% of the saving (estimated at $150 000) the company could make that year with the successful implementation of the system.

Jack readily took the opportunity and in the two weeks successfully implemented the system despite the initial resistance at the two site. His success was attributed to his communication skills and knowledge of the system from an operators perspective. These attributes gave him standing with the IT people that this wasnt just another consultant pushing their product. Jack work 13 hour days to ensure he work across both shifts at the plants. On his return his manager said little but pointed to the backlog of work that had accrued whilst he was away. However, he knew with the new systems in place the backlog and integration problems would be quickly eliminated, and after all he had his bonus to look forward to.

At the end of the year Jack sat down with his manager to undertake his performance appraisal. As the meeting progressed to its conclusion, Jack was increasing concerned that the issue of his inter-state work was not raised and when he raised it his manager said that the work he did was not his concern. When Jack asked about the cost-saving and his bonus, his manager said that his agreeing to go interstate and help had in fact caused major problems and backlogs in his home plant and he should be happy he was getting the same bonus as everyone else considering the problems he had caused.

Jack Left the meeting stunned as he had expected to be commended for his work and get some indication of his bonus. Jack went back to his office and thought about the situation. That night he updated his CV and the next day sent it to three recruitment agencies specialising in IT work. As he waited for the recruitment companies to respond to him he worked his required hours rather than the hours of unpaid overtime he use to undertake and spent that time networking for a new position.

Written by Peter Holland and James Wood

Question

What type of psychological contract did Jack have with his organisation prior to the performance management? explain