Why ‘i-deals’ may not be idyllic for managing hybrid work
The last 18 months have provided a fascinating insight into the psychology of the workplace and one topic currently at the centre of discussion is what the return to the workplace will look like. There have been some very outspoken views about what some organisations think about this, while a survey of the 50 biggest UK employers suggested that ‘hybrid working’ or a more flexible approach to the future of the workplace will be embraced. Our own ‘Work After Lockdown’ research reported that 73% of those surveyed wanted to blend the flexibility and autonomy they have experienced whilst working from home, alongside the communality and social support received when in an office environment.
What is clear is that organisations still need to be able to adapt, function and respond to the changing external circumstances over which they have little, if any control. This requires ‘good management’, to drive growth and draw out the talents of the workforce in what could still be difficult times ahead. However, how this transition will be managed and what the impact of any new ways of working will have on the psychological contracts of employees have been missing from discussions about hybrid working; even though there is an accumulation of evidence showing the importance of managers for both the productivity and wellbeing of the workforce.
One lens through which the employment relationship can be viewed is the psychological contract — the perceptions of both the individual and the organisation of the reciprocal promises and obligations implied in that relationship. How managers communicate the psychological contract, whilst balancing its content is important in its success, and maintaining a positive psychological contract is a core task of managers, especially if they want to reduce the negative implications of contract breach (including reduced employee trust, productivity and wellbeing).
Professor David Guest, a major proponent of the psychological contract has previously discussed a number of factors that could affect the viability of the ‘traditional employment relationship’, providing challenges for management attempting to co-ordinate workplace activities and ensuring that psychological contracts based on trust are maintained. These factors included the increase in flexibility and the fragmentation of the workforce, which the introduction of hybrid working could cause.
If hybrid working becomes commonplace, managers may find themselves having to make idiosyncratic deals (i-deals), where special conditions of employment are offered to individual workers, differing to those of their co-workers based on individual situations. I-deals create the opportunity for flexibility that many employees are now valuing and could be more frequently used to improve the attraction and retention of key staff, motivate employees, and enhance employee wellbeing. As such, they could be viewed as an ‘ideal’ resource for managing people (Rousseau et al., 2016), where a more standard employment relationship falls short in meeting individual needs.
As the i-deal may become more appealing for organisations when considering the transition to returning to the workplace, some aspects may not be as idyllic as they first seem, with potential consequences for managers and the i-dealer that will need to be resolved. For example:
- I-deals can provide managers with a greater challenge for managing complexity. If each employee has negotiated their individual i-deal to suit their working arrangement, this could result in a greater opportunity for contract breach and violation (resulting in negative implications for organisational behaviour, productivity and wellbeing).
- There are issues related to trust (an important component of the psychological contract), and what may appear as a sensible agreement for one employee may be reflected as favouritism by others.
- As such, there could be an increased perception of unfairness or inconsistency from co-workers regarding the idiosyncratic nature of another employee’s deal, especially if it could have unforeseen negative consequences for their role or workload.
- Managers may also have to manage the organisational climate in which the i-deals are made and developed.
- Hybrid working could lead to the ‘out of sight, out of mind’ phenomena that managers and employees need to be aware of ensuring that the working arrangement does not lead to individual efforts not being recognised, and those more frequently out of the office not being overlooked for progression or promotion.
- Management effort around communication and staff updates may have to increase, so individuals, co-workers and teams all receive the same information, ensuring nobody feels marginalised.
- Managers must ensure that teams still function across the work-home boundaries and work is completed to acceptable standards, ensuring performance management and development reviews are conducted, and feedback regularly provided.
- Managers may have to justify the agreed i-deals to others, possibly having to re-negotiate i-deals, or find themselves opening the door to more employees wishing to negotiate i-deals (and undertake the subsequent administrative work).
This is in addition to all the responsibilities that line managers already undertake, further squeezing an already ‘squeezed-middle’.
However, there are some ways i-deals could be managed if hybrid working patterns are to become the established norm:
- Make the i-deal explicit — the deal’s details should be clearly documented, including the terms, commitments, roles and expectations that have been agreed. This will help if another employee wants a similar arrangement.
- Co-worker and team concerns need to be factored into any decision making, especially if there’s a risk of increased workloads. Attention should be given to co-worker concerns, reducing fears of perceived inequities and unfairness.
- Re-visit the i-deal — if hybrid working and i-deals are new to an organisation, then it is sensible to trial the process. It could be broadened out to other employees to assess if they are working as they are intended. These reviews should include co-workers to identify issues that need to be addressed.
- Consider including trade unions about transitioning to more flexible policies (including i-deals), so staff views are involved in any decision making.
- Train managers to have these conversations with employees, developing communication plans and organisational policies so the process is fair for all staff. Managers may also require training in effective performance management and collaboration across hybrid teams.
Whatever comes next for the workforce and workplace, in the post-covid recovery and the return to the workplace it is clear that how this is managed is of great importance and both psychological and legal contracts may have to be adapted to respond to these external changes. The introduction of hybrid work and the development of i-deals could be a management nightmare unless core management practices are successfully trained, implemented and applied in the workforce. Organisations must realise the importance of line managers and adopt training and development programmes, ensuring managers have the skills and experience to adapt to changes in the workforce and workplace. The sooner this happens the better it will be for the manager, the employee and the organisation. If i-deals are to be idyllic, then ideally organisations have to have ideal managers in place for them to be successful.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.