A formal contract between two people details what both parties expect and are responsible for with their exchange. This establishes the context and standard for work and provides protection when standards are not met or promises kept. The equivalent in the Australian Army is the Oath or Affirmation that compels soldiers to discharge their duties lawfully, loyally and faithfully. This obligation is accepted voluntarily and underpins a soldier’s acceptance of these requirements in exchange for pay and conditions; therefore, entering a contract.

Serving the nation as a soldier attracts people with varying motivations. For many, an attraction to the physical and intellectual aspects, teamwork, challenges, travel and family connection are examples that motivate people to enlist. Relying on a selection process, Army recruits from the community, giving a kaleidoscopic view of what society provides the military rank and file. Accepting this acknowledges the differences in individuals’ knowledge, perceptions and expectations of what Army is and does. This is the framework from where psychological contracts emerge and change throughout a career. This article will introduce the notion of psychological contracts and how they differ from formal agreements.

Psychological Contracts   

According to Rousseau (1989), a psychological contract is the belief each person has about an organisation, which determines his/her contributions they think they owe the employer or organisation in return for pay, rewards or employment conditions. Rousseau highlights the interplay of personal beliefs and what a person feels. He connects these elements to explain how individuals privately determine their commitment to an organisation based on how much they value the reciprocated return from the employer (either understood, perceived or promised). These may be tangible (like pay and entitlements) or intangible returns (like informal recognition, access to flexible work arrangements or career opportunities) in exchange for work.

A psychological contract is not kept on file or used as an evidentiary reference. The informal, unwritten set of expectations reside in the mind of each person, as determined through individual interpretation. Soldiers draw their context and frame their expectations before they enlist and throughout their service based on how Government, Army and leaders:

  • Advertise employment options during recruiting campaigns
  • Employ the force
  • Communicate purpose
  • Describe pay and benefits
  • Recognise performance
  • Apply discipline
  • Resource units

Additionally, how community perceives Army adds to the soldiers’ contextualisation and builds expectations of what should be received in exchange for work. Framing continues during a soldier’s career, causing psychological contracts to be reshaped over time. For example, introducing initiatives or additional roles and tasks where more is expected from individuals, may create a greater expectation for higher rewards. In contrast, failing to deliver on what individuals expect in return for work could lead to deterioration of performance, regardless of promised reward.

Levinson et al. (1962) emphasise a psychological contract is an individual’s expectation that is usually not known to others, including the employer. In contrast, organisations do not have psychological contracts with people, as organisations do not have emotions or a mind to develop expectations. Rather, interactions between soldiers and their leaders (on behalf of the organisation) create the dynamic that elicits what soldiers think Army wants and gives. Similarly influenced, leaders have their own psychological contracts that motivate them to perform, serve and lead. Whilst expected that persons in positions of leadership provide stewardship of the profession, they are not immune to having their own beliefs and perceptions of the organisation. So, how can psychological contracts be aligned with what Army is and offers?

Informing Psychological Contracts

Communicating to improve knowledge and build trust is central to setting reasonable expectations. The nature of human behaviour, as it is influenced by its environment, is a reminder to not expect every person to foster the same beliefs. Regardless, the weight of responsibility to provide clarity through communication rests with the leadership to ensure mutual expectations of soldiers and Army are clear. Frequent, informed engagements will clarify context as soldiers interpret information and leaders define boundaries.

This next section reflects on the enlistment oath or affirmation to discharge duties lawfully, loyally and faithfully. Firstly, acting lawfully is definable but when ethical conflict or other choices arise, human behaviour can stray from organisational values. Left unchecked, individuals’ psychological contracts that relate to acting lawfully can change and impact on organisational culture. Kaptein (2011) observes the importance of leaders displaying role-model behaviour and the expectance of employees meeting standards that are concrete, comprehensive and understandable. Importantly, Kaptein reinforces it is not enough to just punish unethical behaviour, but rewarding correct and exemplary behaviour attracts the types of performance expected. Measured against Rousseau’s definition, where a person’s commitment to Defence Values is not strong, or consequences of a breach are minimal, he/she will make choices that satisfy his/her own perceptions and needs. This will especially be the case if work conditions and rewards are not compelling to keep behaviour at the required standard.

Secondly, discharging soldierly duties loyally and faithfully (emotive conditions that differ between people) is less definable and presents a greater risk of straying from the intended outcome. Recruiting from across society attracts wide views of what is loyal and faithful behaviour. Notwithstanding, the benefits of a broad cross section of society reassures organisations that a diverse workforce is a positive outcome. However, the perception of a volunteer candidate of what loyal and faithful behaviour is (noting the absence of corresponding definitions) allows soldiers to determine this element of their psychological contracts with no frame of reference. However, leaders actively providing a narrative and personal example of these qualities will contribute to a service-before-self culture that will allow soldiers to frame loyal and faithful duty. To consolidate this desired outcome, the reciprocating return to soldiers must be worthwhile and relevant.

Vroom’s (1964) Expectancy Theory describes the fulfilment of a person at work occurs when his/her effort is recognised with a reward (tangible or intangible) that he/she values. This cursory explanation may appear to disregard those soldiers who are content with prescribed benefits, but this basic human behaviour underpins goal setting and commitment. Army relies on its leaders, as the current stewards of the profession, to monitor the pulse of the organisation and understand the needs and views of its people. Pairing this sense-making (Weick, 1995) with the Army context, leaders should be conscious of psychological contracts and create opportunity to understand the soldiers in their teams. To ignore the existence of psychological contracts would be naive and as Rousseau (1989) emphasises, human behaviour expects things in return for work. This is a powerful realisation and when considered by leaders, they can:

  • Establish agreed work standards
  • Identify boundaries
  • Assist soldiers in determining goals
  • Be innovative to identify suitable reward and recognition
  • Communicate frequently
  • Continually monitor work outcomes
  • Watch for changes in performance, morale and commitment


Soldiers are not wrong to have perceptions and expectations of what Army should provide in return for work. Anticipating this, mindful leaders who communicate consistently and honestly will support the organisational outcome of a motivated workforce where expectations are humble, realistic and in line with Defence Values. In the minds of each soldier, their informal, unwritten psychological contracts with Army are binding. The reciprocated return for their effort is repaid with trust; or trust is lost when the return does not meet expectations. Motivating individuals and teams has always been a test for leaders. Even more so when soldiers have unspoken perceptions that may or may not be accurate.