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January – June 2020

How coaching aligns the psychological contract

How coaching can strengthen the relationship between millennials and employers

By Chantelle Solomon and Prof Salomé Van Coller-Peter

  • AUG 2020
15 minutes to read

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Millennials: changing the face and pace of work

Every new generation of workers brings fresh perspectives and skill sets to organisations. This infusion of new blood can be energising, but it can also present challenges – particularly when looking for a comfortable fit between older and younger workers whose life experiences, attitudes and professional expectations differ.

Millennials (born between the early 1980s and the late 1990s), also known as Generation Y, will soon outnumber their Generation X predecessors (born between 1965 and 1980) in the global workforce. In fact, it is predicted that Gen Y will make up 75% of the global workforce by 2025. Once referred to as the leaders of tomorrow, millennials have become the leaders of today. Organisations are under pressure to find ways to productively meld younger, millennial mind-sets with more traditional corporate values and work methods.

Organisations are under pressure to find ways to productively meld younger, millennial mind-sets with more traditional corporate values and work methods.

During millennials’ formative years, the world was more prosperous than it is today. Also, the internet was coming into its own, which explains the ease with which millennials adapt to the latest digital devices and technologies. While often viewed as innovative, adaptable and confident, millennials have also been labelled entitled, demanding and emotionally shallow. It has been suggested that over-protective parenting and the pressure to measure up to unrealistic standards of success (often inspired by social media) have left many millennials with underlying anxieties and an inability to cope with stress or failure. Millennials expected to get “good” jobs and live a good life. Parents and teachers set the expectation for millennials that if you work hard, then you will be successful when you grow up. Additionally, they pushed education. That is why millennials are the most educated generation yet, which further elevates their expectations when they start working.

It has even been postulated that millennials have lower self-esteem than earlier generations and require constant reassurance. Influenced by the power and speed of technology, they also tend to be impatient and in need of instant gratification. Easy access to real-time information via YouTube, Facebook and Twitter, for example, helps to feed this need. As a result, millennials are often considered ‘tough to manage’.

Millennials are known for their technological shrewdness and ability to use technology to enhance their efficiency and productivity in the workplace.

Common characteristics of millennials

Millennials constitute the largest segment of the global workforce today. Although one should not generalise too much, millennials tend to have some common characteristics.

  • Millennials are smart when it comes to technology. Having grown up with the internet, millennials are more comfortable with technology than many of their older peers. This generation could not conceive of life without digital devices and online services. Millennials are known for their technological shrewdness and ability to use technology to enhance their efficiency and productivity in the workplace. The downside of millennials’ technological proficiency is that they prefer to communicate electronically rather than face to face, often at the expense of personal relationships.
  • Millennials are used to disruption and change. Although millennials grew up in a comparatively prosperous era, they have nevertheless experienced periods of disruption and uncertainty, including the fall of the Berlin Wall, the bursting of the dot-com bubble in the early 2000s, the bombing of New York’s Twin Towers in 2001 and the subsequent war on terror, and the global financial crisis in 2008-2009 and its lingering aftereffects. They have also witnessed the collapse of major corporations (such as Enron, Arthur Andersen and Barings Bank) in the wake of unethical leadership, which has robbed scores of hard-working people of their jobs and livelihoods. In many ways, these events have taught millennials to anticipate and accept change, and to be adaptable. However, they have also made them less trusting of, and less loyal towards, their organisations.
  • Millennials are ambitious and achievement-oriented. Millennials are known to value meaningful, challenging and varied work. They expect their superiors to set high standards and to provide clear direction, but they also want the flexibility to do some things their own way and to learn by trial and error. Millennials seek self-actualisation and a progressive career path, supported by appropriate training and development. They take responsibility for managing their own careers and building skills that will enhance their employability.

Millennials understand the value of a healthy work‒life balance. One could say that they work to live, not live to work.

  • Millennials need support and recognition at work. Despite their assertiveness, millennials need their superiors to provide guidance and regular feedback, as well as recognition for good work. Some would say that they require constant reassurance, which could reflect a cosseted upbringing. They also thrive in teams, where colleagues support and cooperate with one another. Like previous generations, millennials view their salary package as an important indicator of their perceived worth, but they also prize assorted perks and bonuses.
  • Millennials are prone to job-hopping. Millennials have a reputation for hopping from one job to the next, particularly in emerging markets. They often decide to move on after working for an organisation for only a few years, seeking new professional challenges and more attractive remuneration packages. A short tenure can be disruptive and costly to an organisation, particularly if large sums have been spent on employees’ training and development. Currently, the Covid-19 pandemic has a significant impact on young workers as they struggle to find jobs and to pay for their accommodation, healthcare, education and childcare.
  • Millennials value a good work-life balance. Millennials understand the value of a healthy work-life balance. One could say that they work to live, not live to work. They often prioritise family over work and value flexible work schedules that allow them to balance their professional and personal commitments. Such an attitude might be mistaken for a lack of commitment or loyalty towards the organisation. Yet, it might actually encourage better results from the employees in question, and longer tenures.

Can coaching help to forge greater alignment in the psychological contract?

The expectations of employers and employees regarding their reciprocal obligations in the employment relationship form the core of their ‘psychological contract’. For example, employees are expected to perform to a high standard and manage their time efficiently; in return, employers are expected to provide employees with support, fair remuneration and opportunities for personal advancement. In short, there should be mutually beneficial outcomes for the parties.

A psychological contract in the work environment is more likely to be successful if there is alignment between an employer’s and employee’s expectations regarding job scope and content, quality of outputs, professional development, rewards and job security. The greater the alignment in their psychological contract, the more harmonious and productive their relationship is likely to be, to the benefit of the individuals concerned and the organisation as a whole. Conversely, a lack of alignment or mutual fulfilment could disrupt the working relationship and negatively affect an employee’s performance.

Achieving mutuality in psychological contracts can be difficult, particularly when employees’ and employers’ world views are shaped by different forms of upbringing and life experiences.

Achieving mutuality in psychological contracts can be difficult, particularly when employees’ and employers’ world views are shaped by different forms of upbringing and life experiences. Professional coaching could play an important role here. Coaching helps people to recognise their particular strengths, weaknesses and latent talents that need nurturing. It also teaches people to acknowledge the importance of diverse views and capabilities, and how employees can find their particular niche in an organisational context.

Although extensive research has been conducted on the consequences of breaches of psychological contracts, much less attention has been given to how psychological contracts are established and maintained over time, while almost no research has been done on the benefits (or otherwise) of coaching millennials. The study on which this article is based sets out to address this research gap by investigating how coaching might help to align the psychological contract between young millennial professionals (YMPs) and the organisations for which they work.

The study sample comprised a selection of YMPs who had undergone coaching in their organisations (‘coachee participants’) and individuals who had been their coaches (‘coach participants’). The coachee participants were all under the age of 30 and had either just entered corporate life or were already building their careers in various organisations. Most of the coach participants were professionals with their own consultancies. Interviews were conducted with the coachee and coach participants to establish whether and/or to what extent the coaching experience had contributed to a better alignment in the psychological contract between the coachee participants and their organisations.

What the study revealed

The coachee participants reported that they had benefited from the coaching in three key respects:

  • Enhanced awareness. They said they had acquired deeper self-awareness, a greater sense of personal responsibility and accountability, and a more realistic sense of the value they brought to their organisations. They came to recognise both their strengths and the areas needing improvement, how their behaviour influenced their personal interactions at work, and what they wanted from their lives and careers. The coaching imbued in them a clearer sense of purpose which, they said, would help them plan their careers with greater precision. One coachee participant came to the realisation that the organisation (and the world, for that matter) did not owe them anything; rather, they themselves had to demonstrate their worth and add value.
  • Improved confidence. They also said they had become more confident, which made it easier to ask for help or to challenge decisions or instructions. Their new-found confidence also enabled them to speak up about what they expected of the organisation in terms of their immediate working environment and longer-term career prospects.

Coaching has the potential to positively influence millennials’ perceptions of themselves, their value to the organisation and their prospects of professional success.

  • Enhanced ability and motivation to engage in tough conversation. Engaging in conversations to establish or review an employer‒employee psychological contract can be challenging as it might reveal the parties’ conflicting aspirations and expectations. Yet it is for this reason that such conversations are crucial. The coaching had helped some coachee participants approach tough conversations with greater confidence and conviction, which in turn had led to more mutually beneficial outcomes. Regular communication was seen to be useful in defusing potentially contentious encounters between coachee participants and their superiors.

A win-win for millennials and their organisations

Coaching has the potential to positively influence millennials’ perceptions of themselves, their value to the organisation and their prospects of professional success. Such revelations might persuade them to stay longer in their jobs and to strive for stronger and more enduring partnerships with peers and superiors alike.

Importantly, the study has shown that coaching helps today’s employees and their employers find themselves and each other, and that generation gaps can be bridged more easily than many would think.

  • Find the original article here: Solomon, C. & Van Coller-Peter, S. (2019). How coaching aligns the psychological contract between the young millennial professional and the organisation. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 17(0), a1146. https://doi.org/10.4102/sajhrm.v17i0.1146
  • Prof Salomé van Coller-Peter lectures in Management Coaching and Managing Transformation at USB.
  • Chantelle Solomon is an MPhil in Management Coaching alumnus of USB.

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