What is social contract theory? It’s an ancient philosophical theory that a person’s moral and political obligations depend upon a contract or agreement with other individuals in society. This contract or agreement can be written in the form of laws, or it can be unspoken and agreed upon, like accepted customs or social norms.
The concept of social contract theory goes as far back as Plato in The Republic and Crito, but gained traction with modern philosophers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. Sound like a total snooze fest? It’s not — especially when you consider what this means for society and our workplaces.
Social contracts in society
Another way of describing social contract theory is that individuals in a society agree to surrender some of their freedoms to authority, either to feel safe, maintain social order, or protect their other rights. It sounds kind of spooky, but these types of social contracts exist all around us.
In the United States, the people elect representatives to run the government. When someone is wronged, the legal system is expected to handle the situation. Our social contract puts faith in the legal system and government, which means that we can’t seek revenge or retaliate without getting in trouble ourselves.
So what does this ancient philosophical theory mean when applied to the workplace?
At your company, a social contract already exists: your employees agree to give up their time in order to work and contribute to the company’s goals. In exchange, they are given compensation and benefits. But a social contract goes beyond finances. Employees don’t just want compensation.
They want to be respected. They want opportunities to learn and move up into leadership. They want to do meaningful work and enjoy working with other people in the company.
Likewise, managers don’t just want employees to complete the work they’re paid for. They want employees who are engaged, who are easy to work with, who will go above and beyond when necessary. These things usually aren’t outlined in employee handbooks, though. That’s where a better social contract at work comes into play. A boss and an employee can work to improve the other’s experience, too.
There are several ways you can use social contracts to build a better company, from the employee level through leadership and across the organization as a whole.
Create a better culture to engage employees
Have you ever worked in a role where your day-to-day tasks seemed… meaningless? Or you weren’t sure how your work impacted your team or the company in general?
Many employees aged 18 to 34 wish they had more insight into how their work impacts the bottom line. When you’re spending much of the day away from your home and loved ones, you want to know that your time is being spent serving a greater purpose. That’s where a better social contract can help.
Go beyond the paycheck and benefits you give to employees. Create a culture of open communication and engagement. Let each employee understand how their role fits into the company overall. Show that you value and care for your employees, not only for the work they do, but for their commitment.
Their drive to succeed. The ideas they contribute to make the company better. Their passion that aligns with the company’s mission. When your employees feel appreciated, they’ll want to stick with your company long-term.
Build a better employee team
Social contracts can also be used to encourage better teamwork. Everyone in an employee team agrees to follow the rules of a social contract so they can complete their work more efficiently.
Rather than have a supervisor micromanage an employee team, try using a social contract as a set of “team rules.” It can guide an employee team’s behavior, work performance, and expectations. It can keep everyone accountable, but also give team members some freedom to work the way they choose, as long as it produces results.
Some examples of team rules might include:
- Respect each team member’s unique skills and preferences
- Ask for help and help out when you can
- Embrace challenges
- Write it down
- Celebrate our wins
- Communicate, communicate, communicate
Each team’s social contract might be different but in general, these rules encourage better collaboration and good work performance. If someone starts to stray from the rules, the team members can suggest corrections. That way, a supervisor or manager doesn’t need to step in unless absolutely necessary.
Improve the community
A social contract can be between an employee and their manager, a manager and their team of employees, or an employee and the company as a whole. However, social contracts can go even further. What about social contracts that exist between a company and the community in which they operate? Or between a company and the world?
Social contracts like these often involve corporate social responsibility and corporate governance. Corporate social responsibility is a business practice that has positive social, economic, and environmental impacts. And corporate governance makes sure that a company follows through on their intentions.
Corporate social responsibility, or CSR, has been getting a lot of attention lately. Consumers, employees, and stakeholders take a company’s CSR into account when buying products, supporting an organization, or choosing a place to work.
In fact, nearly 90% of consumers said they’d purchase a company’s product if the company supported an issue they care about. About 75% would refuse to buy from a company if the company supported an issue contrary to their own beliefs. That’s one reason why it’s important for businesses to look at the social contracts they have with society.
Are you giving back and reinvesting in communities that support your business? Are you partnering with a nonprofit that shares a similar mission as yours? Are your employees able to volunteer their skills to local schools, facilities, or nonprofits? Are your offices and operations as environmentally-friendly as they can be?
A thoughtful social contract is not only good for business and public image, but you’ll make a positive impact on the community or the world.
Your company will thrive through better social contracts
Social contracts between a company and its employees, an employee and their manager, and a company and its communities can shape an organization for the better. Employees want more than just fair compensation for their work. They want to feel that they have a purpose and that their work is meaningful.
Employee teams want to have the power and freedom to work independently and govern themselves. Social contracts can improve commitment and engagement, but it can also improve business practices in general. Your company will be more sustainable in the long run with social contracts in place.