PSYCHOLOGICAL CONTRACT BETWEEN IBM AND EMPLOYEES 1

Case Report -Psychological contract between IBM and its employees

Student’s Name

Institution
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Description of the relationship between IBM and its employees in terms of a psychological

contract.

A psychological contract represents the expectations that exist between the employer and

the employees such that there is positive interaction in an environment that supports mutual

understanding and achievement of common goals (Poulose and Sudarsan, 2018). It is not usually

a formal or written document, but could best exist in the minds of both the employer and the

employee, supporting the mental well-being of all the parties. Significant contents of

psychological contracts include mutual expectations, beliefs, and informal obligations existing

between the employee and the employer and are described as follows.

Mutual expectations
Rapid changes in the globalized workplace have transformed the way employees expect

to be treated. The key areas where employees expect employers to help them achieve a balance

with work-related duties could be summarized into how, where, when, people need to work.

Such areas are continually changing. To understand such changes and needs, IBM has been

committed to conducting surveys that lead to the discovery of work/life issues affecting

employees. A survey that involved more than 25000 employees across 48 countries reveals that

work-life balance is a universal problem among the employees of IBM (“Case Study”). In

attempts to ensure that employees can achieve quality work-life balance, the company runs

several work-life programs. For example, the company finances child care and elder care and

facilities in cities where its employees stay, offer flexible working schedules that allow willing

employees to work from home among other programs.

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When employees work without worries about private lives, they give the best to the

employer. Such an idea is what has pushed IBM to focus on integrating work and private lives,

such that the two concepts no longer work as incompatible aims. Personal commitments of

employees could hinder employee productivity if expectations are not met. As such, IBM has

taken the responsibility of ensuring that all employees have time for their families, communities

and personal interests. This enhances the satisfaction of employees, which positively influences

their productivity. In that case, the key expectation of the employer is achieved (productivity),

and the employees live quality lives as per their expectations.

Beliefs
There has been a traditional belief that work and individual needs of an employee are

competing priorities, operating in a manner that a gain in one area translates to a loss in another

area (Isaacs, 2016). Employees on the other side believe that their ability to deliver on their

duties at the workplace is affected by other life matters which require attention. As a way of

harmonizing the beliefs between employees and the employer, IBM has changed its belief that

work and life matters are no longer competing concepts, but could be integrated for the better of

both the company and employees. Commitment is now on a new model that shifts focus from

work-life balancing issues to work-life integration. This has been achieved through the creation

of a flexible working environment that is based on the philosophy that an increase in flexibility

leads to a decrease in difficulties that employees face while balancing personal lives with work

(Isaacs, 2016).

Mutual obligations
Mutual obligations refer to the duties that employees and employers are obliged to

exchange for the benefit of both parties (Poulose and Sudarsan, 2018). Such obligations exist in
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the minds of the parties as well as in a formal agreement where each party should strive to

achieve a common ground of understanding. It is known that employees are hired and allocated

formal duties which they must efficiently fulfill. The employer is on the contrary, obliged to

create a suitable working environment for the employees. A critical area of focus for this report

is the goals of work-life integration for quality work-life balance. IBM has set up a supportive

working environment such that employees can influence their workload and schedules. At the

moment, approximately half of the company’s employees are supervised away from traditional

offices. The power to influence their work builds the employees’ capability in managing their

time, thus increasing their productivity.

In conclusion, work-life integration is a key aspect when it comes to work-life balance.

This is a rapidly changing idea, in the globalized world. IBM has responded appropriately to the

issues raised by employees concerning the maintenance of a balance between work and life

(“Case Study”). As noted in the given case study, several work-life integration programs have

been put in place to ensure that employees need not worry about their personal lives while at

work. In a scenario whereby there is effective work life balance, the staff is likely going to be

more productive than in a situation whereby there is less work-life balance. As such, IBM gets

the best from the employees and the employees get their desired working environment that

supports their personal lives such as time for family, community and personal interests.
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Bibliography

Case Study: Beyond Work-Life Balance at IBM

Isaacs, D. (2016). Work-life balance. Journal of Paediatrics and Child Health, 52(1), pp.5-6.

Poulose, S. and Sudarsan, N., 2018. Work life balance: A conceptual review. IJAME. Available

at http://www.managementjournal.info/index.php/IJAME/article/view/324