What: The traditional workplace psychological contract between employers and employees is broken, requiring a fundamental shift from justice-based to care-based management approaches.

Why it is important: This breakdown threatens organisational effectiveness as companies struggle to balance return-to-office mandates with employee expectations, potentially damaging productivity and retention.

The article examines the growing disconnect between employers and employees over workplace policies, particularly return-to-office mandates. Using examples like Amazon's five-day requirement and Dell's promotion restrictions, it illustrates how traditional approaches to workplace policies are failing. The core issue isn't just about where work happens, but rather a fundamental misalignment in how fairness is understood: employers focus on universal rules (ethics of justice) while employees increasingly expect personalised consideration of their circumstances (ethics of care).

The text proposes that organisations need to move beyond rigid, one-size-fits-all policies toward more flexible, care-based approaches that consider individual contexts and relationships. This shift requires managers to develop deeper understanding of their employees' needs and circumstances, creating psychological contracts based on mutual trust rather than strict rules. The article suggests practical steps for implementing this approach, including fostering relational proximity, maintaining transparent principles, and practicing attentive adaptability.

IADS Notes: Recent retail industry developments illustrate this evolving workplace dynamic. In November 2024, Walmart demonstrated a care-based approach by establishing a 500-child capacity childcare centre to support return-to-office policies. This contrasts with traditional approaches that triggered significant resistance, as seen in March 2025 when 51% of retail employees reported planning to leave their positions. The industry's transformation is further evidenced by M&S's £95 million investment in retail pay and benefits in March 2025, and John Lewis's shift from annual to monthly employee support. These changes reflect growing recognition that successful retail operations require personalised, care-based approaches to employee relations, particularly as the February 2025 RMS Social Retail Barometer showed only 30% of employees believe companies act on their feedback

The workplace psychological contract is broken. Here’s how to fix it.