Leadership perspectives have evolved over time through various schools of thought, such as Great Man, trait, behavioural, situational, contingency and transactional theories.  

More recent transformational leadership models include: positive, servant, moral, spiritual, authentic, ethical and adaptive leadership.

The current accepted view is that leadership is a relationship between leaders and their followers – terminology that changes according to each context.

The ultimate goal of leaders is to positively influence and empower their followers; to coordinate and mobilise collective action towards the achievement of common goals.

We currently face an ever-changing socio-economic environment, arguably characterised by uncertainty and leadership crises in both business and the community at large. From this perspective – and while preserving the best of each of the approaches mentioned above – I offer a relevant and fresh relational leadership model for our times.

This model is based on the concept the psychological contract (PC) – a set of mutual ‘unspoken’ and ‘unwritten’ expectations, or perceived obligations, which govern all human relationships.

The Leadership Psychological Contract

The Leadership Psychological Contract (LPC) refers to the set of unwritten expectations and practices that help leaders to connect with, and positively influence, their stakeholders so together they can achieve extraordinary outcomes.

The LPC has four components that predict each other and work like a chain reaction:

    1. The ‘Deal’ – Your Leadership Promise;
    2. The Delivery of the ‘Deal’ – Your Credibility;
    3. Your Leadership Impact – The Consequence of Your Contract; and
    4. Results – Extraordinary Performance and Outcomes.

1. The ‘Deal’ – Your Leadership Promise

The deal refers to the expectations (explicit and implicit) your stakeholders have of you. To them, such expectations constitute your ‘leadership promise’, or the nature of the ‘deal’ you have ‘silently signed’ with them. It’s what they except you to deliver.

While this ‘deal’ is unwritten, it’s extremely powerful, pervasive and constantly changing. It contains your explicit or implicit promises, principles and espoused values, and your actual behaviours in action.

2. The Delivery of the ‘Deal’ – Your Credibility

This second component refers to your followers’ or stakeholders’ belief of whether you have delivered the ‘deal’– your promise or obligations – or not. They assess this based on your actions, compared to their expectations.

Unmet expectations translate into a breach or violation of your contract – LPC.  This in turn translates into low levels of: trust, commitment, satisfaction, effort, innovation and performance. Contrastingly, met expectations yield the opposite effect.

How successfully you have delivered the deal determines your credibility, which is formed by your followers’ levels of trust in you; whether they believe you are honest, reliable, competent and fair.


Trust means your stakeholders are willing to be vulnerable with you and lower their guard. They believe you consistently act in good faith, protect their interests and stand for their cause. They will only trust you if they believe you “walk your talk” or “put your money where your mouth is”. This is achieved by having consistently delivered what said (or they believed you said) you were going to deliver, and demonstrated competency while doing so.


Fairness relates to whether your followers believe you make decision in a fair and impartial manner, don’t blame others when things go wrong, or play favourites with team members.

3. Your Leadership Impact – the Consequence of Your Contract

Your leadership impact refers to the consequences your contract has on your followers or stakeholders. You can measure this impact using four critical dimensions, which are reflected in you followers. The first two (commitment and satisfaction) are emotional dimensions, and the second two (discretionary effort and innovation) are behaviours.


This type of commitment is affective in nature, as refers to your followers’ positive emotional response to you as their leader, with your cause, and pursuit of common goals. Followers who are committed identify with your values, principles, purpose and goals, and actively want to follow you.


Satisfaction is also an emotional state and reflects your followers’ overall sense of contentment working with you and their environment. It’s both an outcome and a motivator. Satisfied followers look forward to working with you and wish to stay within your team/organisation.

Discretionary Effort

Discretionary effort refers to your followers’ extra levels of performance. In this case, they go beyond their call of duty by exceeding the normal demands, requirements or expectations of their role.


In this context, innovation refers to innovative behaviour. This relates to followers’ orientation towards change and is associated with the likelihood of your team members generating and/or adopting new ideas and practices. It also relates to their higher levels of creative thinking, and drive to implement new ideas.

Together, these four dimensions form what is popularly referred to as ‘employee engagement’.

Now, imagine what it would be like leading a team or organisation in which the members all score very highly in each of these dimensions. Imagine what they would be capable of achieving.

4. Results – Extraordinary Performance and Outcomes

This fourth and final component refers to extraordinary performance results, as opposed to what is average or expected. They’re also referred to as ‘breakthrough performance’ or ‘game breaking’ results and relate to accomplishing results that are unprecedented.


To learn more about the Leadership Psychological Contract (LPC), contact Sebastian Salicru on: sss@pts.net.au or 61+413 777 591 to arrange a survey which will assess your leadership impact, and provide a written report with your results.

Sebastian is a Business Psychologist who takes leaders and their teams to new levels in a globalised world where hyper-complexity is the new normal. He advises and coaches CEOs, and other senior Executives, on building the leadership capability to succeed in the increasingly demanding global economy. You can find more of his posts at PTS blog.