Messing with corporate heads? Psychological contracts and leadership integrity

Abstract

Purpose – The purpose of the paper is to present a model of leadership fulfiling the need of our times: The leadership psychological contract (LPC). In the current socio-economic environment of uncertainty and unprecedented change, both business environments and the community at large are marked by leadership crises. This instability makes an understanding of the relational aspects impacting the relationship between leaders and their constituencies both important and urgent. Now, more than ever before, extraordinary leadership is required. The psychological contract (PC) is recognised as one of the most emergent areas in organisational research. Its contribution to the leadership domain, however, is as yet undiscovered. Design/methodology/approach – This paper addresses this deficiency by integrating contemporary leadership and PC literature. This paper also addresses criticisms raised in the leadership literature in the past 25 years relating to the scarce leadership research conducted at the unit/team level, despite the rhetoric that the main aim of leadership is in the collaborative domain, as well as the impact of leaders on emotional constructs and motivational or ‘extra-role’ behaviours. Findings – The LPC is a predictive model that comprises three dependent variables (fulfillment of expectations, trust and fairness) – which constitute the health of the contract or the leader’s integrity/credibility, and four dependent variables (affective commitment, satisfaction, discretionary effort and innovation), which constitute the ‘consequences of the contract’ or the leader’s impact. The LPC model complements previous models of transformational leadership and leader–member exchange theory and addresses various criticisms and recommendations made in literature. Originality/value – Frameworks such as authentic leadership, ethical leadership, moral leadership, spirituality and leadership each emphasise positive leader – follower relations. Taking into account the LPC and incorporating it into theory and practice should allow researchers to predict leadership effectiveness more completely and effectually than existing positive leadership approaches. The LPC model aims to enhance and refresh the value of effective and ethical leadership approaches that are emerging in response to the current socioeconomic landscape and leadership crises.

A systematic review of leader credibility: its murky framework needs clarity

“…In addition, we found that leader credibility surfaced in peer-reviewed journals representing a wide range of disciplines: public administration (Grasse et al 2014 ; Gabris et al 2001 ), business strategy (Salicru and Chelliah 2014 ), economics (Komai and Stegeman 2010 ), business management (Chun et al 2014 ; Kouzes and Posner 2005 ), sports management (Swanson and Kent 2014 ), political science (Myerson 2008 ; Van Zuydam and Hendriks 2018 ), medical and health services (Davidhizar 2007 ; Loh et al 2016 ), education (Bolkan and Goodboy 2009 ; Holland 1997 ), and psychology (Sweeney et al 2009 ). Empirical research has explored relationships between leader credibility and various outcomes, such as leader self-awareness (Grasse et al 2014 ), subordinate burnout (Gabris and Ihrke 1996 ), managerial innovation (Gabris et al 1999 ), motivating language (Holmes and Parker 2017 ), subordinates’ perceived cost of seeking feedback (Chun et al 2014 ), and affective well-being at work (Rego and Pina e Cunha 2012 ).…”

Leadership style and psychological contract

“…Leaders contribute to the psychological conditions experienced by employees in the workplace. Salicru and Chelliah (2014) stated that transformational leadership applies a relational contract, whereas transactional leadership focuses on the monetary features of the relationship. A transformational leadership style is focused on the needs of others rather than self-interest, expectations are clearer and the vision is understood (Lee Whittington & Galpin, 2010).…”

“…Leaders can play a significant role in the psychological conditions that influence employee attitudes and performance (Erkutlu & Chafra, 2013; Philipp & Lopez, 2013). Whilst the relationship is important, “no contemporary approach to leadership has explicitly considered using the psychological contract as a framework to fully understand this leader-follower relationship” (Salicru & Chelliah, 2014, p. 39). Leaders can develop a diverse range of relationships with differing degrees of support and perceived trust.…”

Exploring grassroots innovation phenomenon through the lived experience of an Indian grassroots innovator

“…Psychological contracts are beliefs or perceptions that are ongoing, dynamic and implicit in human nature, based on the principle of reciprocity and exchange. Psychological contracts that are primarily driven by the economic exchange are transactional in nature, whereas those driven by socio-emotional aspects are relational in nature and the exchanges that are driven by principle or cause, not limited to self-interest, are ideological in nature (Salicru and Chelliah, 2014;Thompson and Bunderson, 2003). It is therefore a useful guide for contractarian ethics (Donaldson and Dunfee, 1994) which is also central to the literature of grassroots communities being exploited under the neoclassical and utilitarian approach.…”