Employee wellbeing: the importance of psychological contracts

Over the past 18 months, many business owners have realised their responsibility for their employee’s wellbeing – beyond their job security and physical safety.

As a result, mental health concerns remain high on the agenda for many employers.

However, the focus on supporting the mental health of teams is not a new concept. In fact, in 2018/19, work-related stress, depression and anxiety accounted for 54% of working days lost – a number which has likely grown amid COVID-19.

Although mental health is a key reason for workplace absences, employers still struggle to understand how to best support their employees’ wellbeing and minimise stress at work.  

The solution is simpler than many may think – it’s about a creating positive culture and allowing for open communication.

The importance of a workplace culture

Your culture is essentially ‘the way we do things around here’ or your code of conduct.  

So, how can you articulate your business’ culture?

It’s challenging to change the culture of a company. However, it’s an intrinsic part of your business’ activities – not just employee wellbeing. Creating a positive and unique culture is a crucial part of your marketing efforts too. As Peter Drucker said: “Culture eats strategy for breakfast.”

Employee wellbeing - business meeting fist bump

How to capture a workplace culture

The key for capturing your businesses culture lies in your corporate ‘DNA’, which finds the answers to three deceptively simple questions:

  • WHY are we in business? (your vision) – this clarifies exactly what you want to achieve in your business – what’s the purpose? What’s the end goal?. This should resonate with your team and give them clear direction and purpose in their role.


  • HOW do we do things differently? (your mission) – this is what sets you apart from competitors and how you do things better than them. Your team should pride themselves on this difference.


  • HOW do we do things our way? (your values) – values set the code of conduct for your culture. They clearly explain the attitudes and behaviours you expect from everyone in your team and everyone you work with.


A powerful ‘DNA’ will create consistency across all of your communications – from what your marketing is saying externally to what you’re telling your team internally. 

                                 Beyond communications: the psychological contract

Hand in a circle on the grass

Once created and articulated, your DNA can act as a ‘psychological contract’ – setting out the attitudes and behaviours your leaders expect from their teams at work.

From their very first day, your team members should be introduced to your ‘DNA’ – your ‘why’ and your competitive advantage. Combined with the set of values you’ve created, they lay the foundations for which they can apply their talent and effort.

How can you improve employee wellbeing with your business culture?

Your vision, mission and values (or your DNA) are powerful tools for creating a positive culture that takes care of your team’s mental wellbeing at work and promotes a positive internal communication strategy. Here’s how:

  • It sets clear expectations – your DNA is a psychological contract – it tells your team what is expected of them. Team members who have a clear understanding of what is expected of them are likely to feel less stressed about their future in the business.


  • Use in performance reviews – refer to your DNA in regular performance reviews. You could ask your team members to tell you stories of times they have demonstrated a particular value, for example. Equally, you could give examples of when you’ve seen them displaying a particular value.


  • Encourage feedback on the DNA – encourage your team to share their thoughts on your DNA – where they can see it working, as well as areas they have identified that require improvement. This ensures the DNA is relevant and resonates with your team, as well as showing them their opinions are valued.
Cartoon characters sitting on speech bubbles

For advice on how you can support your employee wellbeing by creating a positive workplace culture which supports your team’s wellbeing, get in touch


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