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Could Psychological Contracts Doom Your Global Mobility Program?

October 31, 2014 12:17:00 PM EDT | By: Michelle Dopps

uncertainity sign small 071113 resized 600As companies gain more business globally, demand for international assignments (expatriates) increases.Companies must carefully hire or assign employees who best match the job assignment and who can adapt to new cultures. There are both risks and rewards for the company and employees who are selected for these assignments, which often creates a psychological contract.

Many global companies have become all too familiar with the term “psychological contract.” In this case, psychological contract is an individual’s interpretation of a reciprocal agreement between both the company and the employee; the individual’s belief is that the company will fulfill its obligations in return for their contributions to the company. When informal promises are made during the negotiations and preparations of an assignment, the psychological contract can become very risky.

For example, stating the employee’s career path will accelerate upon repatriation of the assignment may not be entirely truthful – many expatriates actually leave their job within the first year of repatriation. On the flip side, the main psychological risk for the company is placing trust in an employee to remain loyal while in another country since they are, in essence, an investment of the company.   

While on assignment (or not), extensive travel can lead to physical exhaustion and culture shock for most travelers. These factors, along with the stress of the job, can lead to psychological and physical illness. This stress that comes with international travel can be overwhelming and has even been compared to individuals going through divorce or dealing with a life altering illness; therefore, it is important for companies to take the necessary steps to ensure success for their international travelers. They must help ease the financial and psychological burdens of international travel by adding creative stress mechanisms to their policies and processes. Creating a plan for repatriation prior to their departure will also help employees and their families ease into international travel.

Selecting the right people for international travel and creating effective policies and processes are crucial and can save thousands of dollars. By developing a strong candidate assessment program and aligning relocation benefits with the relevant training and support, you will create successful international travelers – a win for your company. 

Here are a few steps companies can take now: 

  • Clearly state assignment objectives and repatriation plan prior to employee’s departure.
  • Provide employee with a work sponsor in both the host location upon arrival and in the home country upon their repatriation. This will ensure your employee stays up-to-date with what is happening in his home country office and will reduce stress upon re-entry back into the home country office.
  • Schedule reviews quarterly with home country management and the employee to keep lines of communication open so their manager is aware of their accomplishments while on assignment.
  • Carefully monitor your company’s expatriates (and make adjustments when necessary) throughout the course of their assignment.
  • Start repatriation discussions with expatriates at least six months prior to their departure back to their home country to ensure a seamless transition back to the home country. 

Overall, clearly stating the assignment objectives and keeping the lines of communication open are two critical elements companies can easily develop to help capitalize on their investment.  In addition, creating policies and processes to address the key challenges such as culture shock, employee alienation and dealing with family stress can be extremely beneficial to both the employee and the company in avoiding the perceived disappointments of the psychological contract.      

For information or questions about this blog post please contact Pam Buchanan, Lexicon Consulting Services, +1-904-858-1255 ext. 1979 or via email at pbuchanan@lexiconrelocation.com. 

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Topics: employee satisfaction, psychological contract, global mobility, employee relocation, international assignments

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