Prequalification

Financial
Character Experience
Strength

Credit
Equipment
History

Banking
Relationships
 Contract Failure Risks
Low profit Onerous
margins contracts

Slow
collections RISK Unreasonable
owners

Insufficient High
Capital Materials
prices

Shortage of qualified,
skilled workers
 Contract Failure Risks
Inadequate New
Management Owner

RISK
Change in
Over
Scope of
Expansion
Work

Sub Materials
Failure Shortages

Inclement
Weather
 Reasons for Contracts Failure

Accounting
Change in
Problems
Leadership

Material/
Scope of
Equipment
Business
Shortages Labor
Difficulties
Unrealistic
Growth Lack of
Experience
Failure
Accounting Issues
 Inadequate cost tracking
systems

 Estimating or procurement
problems

 Underinsured

 Improper accounting
practices
Management Issues
 Leadership changes

 No continuity plan when key

person dies or becomes
disabled
 Personnel Issues

 Key staff leave company

 Character issues
Performance Issues
 Unrealistic growth

 Change in type or scope

of work

 Poor project selection

 Onerous owners

 Unsettled claims &

change orders
Unrealistic Growth

Increase in Shorter
Backlog Work Lead Time

Unrealistic
Growth
 Factors Beyond Control
Economic
Downturn Inflation

Weather Site
Delays Failure Conditions

Labor Materials
Difficulties Shortages
Ineffective Financial Management
System

 Tight cash flow

 Slow receivables

 Past due bills

 Vendors demanding cash

 Poor Project Management
 Inadequate supervision

 Not getting best prices

 Projects behind schedule

 Claims

 Litigation
No Comprehensive
Business Plan
 No contingency plans

 No“road map”

 No goals

 No objectives
Poor Estimating & Job Cost
Reporting
 Revenue & margins
decrease

 Continued operating losses

 Loss of bonding capacity

 Bid jobs too low

 Communication Problems
 Disputes between contractor and owner

 Poor communication to management

Loss of Loyal Customers
 Decreasing reputation for
company’s ability to
perform contracts on
time & within budget
What is the psychological
contract?
The The The
Transactional Implicit Inferred
Deal Deal Deal
Defining the Psychological
Contract
“The perceptions of both parties to the
employment relationship, organization
and individual, of the reciprocal promises
and obligations implied in that relationship”

The state of the psychological contract is

concerned with whether the promises and
obligations have been met, whether they
are fair and their implications for trust.
 The Psychological
Contract Framework

The Good
Employer Satisfied
And
The
The High Productive
Deal
Quality Workers
Workplace
 The Deal

Employer Employees
Delivers on Deliver on
Promises Promises

Fairness
Trust
Commitment
Well-Being
Performance
 Framework for applying the psychological
contract to the employment relationship
Contextual
and Policy State of the
and Psychological Outcomes
Background Contract Psychological
Factors Practice Contract
Attitudinal
Individual: Consequences:
Age Organizational
Gender commitment
Education Work satisfaction
Level in HR policy and Work-life balance
organisation practices Job security
Type of work Motivation
Reciprocal Delivery
Hours worked Leadership/ Trust Stress
promises and of the deal
Employment Climate
obligations
contract
Employment Fairness Behavioural
Ethnicity
relations Consequences:
Tenure
Income Attendance
Quality of Intention to stay/quit
Organizational: workplace Job performance
Sector OCB
Size
Ownership
Business strategy
Union recognition
 The Good Employer
Progressive Human
Resource
Practices
Climate of Positive
Organisational
The High
Support
Good Quality
Employer Workplace
Flexible
Employment
Practices

Employee
Partnership
 The High Quality
Workplace
 Reasonable demands/manageable workload
 Some personal control over work
 Support from supervisors and colleagues
 Positive relationships at work
 A reasonably clear role
 Involvement in changes affecting you
 The State of the Psychological
Contract
Overall, to what extent has the organisation kept its promises
and commitment to you?
 The State of the Psychological
Contract
Do you feel fairly paid for the work you do?
 The State of the Psychological
Contract
To what extent do you trust your senior management to look
after your best interests?
 The Policy Challenges
 Consider actively managing the psychological
contract as a means of maintaining effective
employment relations
 Recognise it is a two-way deal
 Address the outer context of human resource
management and employment relations policy
 Address the inner core of “the deal” at the local
level