Employee Engagement in the Evolving Psychological Contract: Purpose and Flexibility at Work
- Trish Attah
- 4 days ago
- 3 min read
Reimagining the Psychological Contract: Why Purpose, Flexibility, and Values Now Drive Employee Engagement
The traditional psychological contract, the unspoken agreement between employers and employees founded on job security and long-term tenure is undergoing a seismic shift. In CIPD’s recent Podcast episode 221, host Nigel Cassidy catches up with our Founder, Trish Hewitt, to explore how employee expectations now emphasise values alignment, purpose-driven roles, and flexibility, and what happens when these evolving needs go unmet.
What is the psychological contract?
The psychological contract refers to the unwritten set of expectations between an employer and an employee. Unlike a formal employment contract, it isn’t captured in legal documents—it lives in perceptions, assumptions, and mutual beliefs about the working relationship.
This unspoken contract is powerful because it shapes how employees feel about their work. When expectations are met, trust deepens and engagement flourishes. But when employees perceive a breach such as promises of flexibility not materialising or opportunities being withheld trust erodes quickly, leading to disengagement, reduced productivity, and even higher turnover.
In short: the psychological contract is the invisible glue that holds workplace relationships together. Understanding and managing it is essential for creating a healthy, motivated, and engaged workforce.
What’s Changed—and Why It Matters
From Security to Significance
Historically, employees accepted loyalty in exchange for stability and long-term career paths. Today, that exchange has evolved: individuals want their work to reflect personal values and contribute to something meaningful beyond a pay check.
Flexibility Isn’t Optional
Rigid schedules and outdated workplace models no longer cut it. Whether it’s remote work, flexible hours, or personalised work arrangements, modern professionals expect adaptability and organisations that resist this shift risk disengagement.
When Promises Break—Even Unspoken Ones
A psychological contract breach occurs when employee expectations, though informal, feel violated. These breaches, perceived or real, can undermine trust and demotivate teams. Without intentional effort to align expectations and deliver on them, engagement can swiftly erode.
Insights from the Podcast Guests
Trish Hewitt, Founder & MD at Haylo HR, emphasised that today’s employees seek roles that align with their personal values rather than just organisational strategy.
Nelli Rowsell, People Manager at Advantage Smollan, discussed how even minor perceived breaches, like inflexibility or reduced autonomy, can significantly impact overall engagement and morale.
Why This Matters for Your Organisation
Employee engagement has a proven correlation with productivity, retention, and overall business performance. Engaged employees go beyond compliance—they advocate, innovate, and boost organisational reputation.
Yet, when promises, whether explicit or implied, don't align with reality, engagement suffers. A futuristic, flexible, values-driven workplace isn’t just a nice-to-have; it’s fundamental to sustaining motivation and loyalty.
Actionable Strategies: Rebuilding Trust in the Workplace
Strategy | What You Can Do |
Clarify Expectations Early | Discuss values, flexibility needs, and mutual goals during onboarding and early conversations. |
Encourage Regular Check-Ins | These help align evolving expectations and uncover potential gaps before they widen. |
Promote Purpose and Values Alignment | Ensure organizational values are communicated clearly and embodied consistently—especially in leadership. |
Build Flexibility into Culture | Flexible scheduling, work-from-home options, or autonomy in project delivery can reinforce trust and respect. |
Respond to Perceived Breaches Proactively | Acknowledge concerns openly, communicate transparently, and collaborate on solutions to rebuild mutual trust. |
The psychological contract has shifted. Security isn’t enough. Employees now seek purpose, values alignment, and flexibility. When these expectations aren’t met, engagement falters—and with it, performance and loyalty.
By recognising and responding to these evolving needs, HR professionals and leaders can foster a workplace built on trust, shared purpose, and sustained engagement.
Listen Now
Listen to the full podcast here- https://soundcloud.com/cipd/podcast-221-employee-engagement-and-the-evolving-psychological-contract
Check out another CIPD episode featuring our Founder here- https://soundcloud.com/cipd/hr-people-pod-ep-16-us-uk-business-relations-ai-agents-snitch-tagging?utm_source=www.cipd.org&utm_campaign=wtshare&utm_medium=widget&utm_content=https%253A%252F%252Fsoundcloud.com%252Fcipd%252Fhr-people-pod-ep-16-us-uk-business-relations-ai-agents-snitch-tagging
Check out all the CIPD podcast episodes here- https://www.cipd.org/uk/knowledge/podcasts/hr-people-pod/
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Disclaimer
All information within the post is provided for guidance only; always seek your own legal advice.
The information with this post was correct at the time of publishing, August 2025 but may be subject to change.