Managing Employee Relations In A Challenging Work Environment

Psychological Contracts

The case study reveals the fact that the concerned company had been suffering from profuse loss and had been close to bankruptcy at certain point of time. It is evident from the case study that the C.E.O of the company believed in maintaining the workforce in a non hostile way, which had been unsuccessful to some extent. As the HR of the company we had been trying our best to reduce the workforce in a conducing and a non hostile way, but till now it was not of much use.

On this context it is essential to understand the psychological contract between the proprietor and the employees.  

Theory:Psychological contracts involve the mutual trust and expectation that is generated between the employer and the employee regarding the practices and the policies in their organization. Psychological contract affects the attitude often employee towards the job, the commitment of the employees and ultimately the productivity of the company (Bal et al).

A psychological contract is formed between the employees and the employers by the mutual trust and cooperation.

A psychological contract is breached or changed when an employee perceives that his or her organization has failed to fulfill the obligations or the promises that has been made. Psychological contracts are generally breached by sudden termination from the job, even after serving the company for a long time, lack of appraisals, unreasonable salary deduction and other behavioral factor (Bal et al).

Lack of psychological trusts is weakening the employee and the employer bond and the commitment of the employee to the company, which may lead to the loss of productivity of the company (Rothwell, William  et al).

It is evident form the case study that   Junior Mr. Adams wanted to run the company in a cost oriented way, such as by reducing the company’s workforce by sending the older employees to early retirements.

The company’s employees might be resentful about the fact that they are not being served with what they were being promised and their job is at stake.

Before cutting down the force work it is necessary to inform the older employees regarding the condition of the company such that they understand the gravity of the situation.  The employees are the foundation of any company; hence instead of curtailing their increment it is necessary to look for an alternative way of cost containment.

Theory: Hard Hr management involves treating of employees just as sources of business and in mainly business centered. Soft HR management on the other side treats the employees as the most important resources of the business and is generally treated as individual entities (Armstrong, Michael, and Stephen Taylor).

Certain organizations need to be managed strong handedly, especially those suffering g from higher absenteeism and low staff turnover (Rayton et al.). The hard approach can generate a more cost effective work force. The soft HR management on the other hand can motivate the employees and help to establish the psychological contract between the employees (Armstrong, Michael, and Stephen Taylor).

• Employees have limited control over their working life.
• Lack of motivation.

• Managers often provide control of the working life to the employees.
• Managers motivate the workers for innovative ideas.

Hard vs. Soft HRM

The employees can be motivated by talking to them openly and by creating a conducing environment for the workers such that they can come up with new ideas regarding the professional growth. It can be accomplished by conducting small interactive or thanksgiving sessions.

Theory:Self determination among the employees can bring about motivation, job satisfaction and the organizational commitment. Rewards and recognitions can increase the overall motivation among the employees. Extrinsic reward changes an individual’s concept towards the work (Cho et al.). Employees getting appraisals and reward according to their contribution to the work make them more motivated and committed towards the work.  

As an HR I would be able to implement rewards and incentives in terms of productivity or attendance. Gift cards can be introduced as complementary gifts for the employees as per his or her contribution. This would motivate the old workers and thus would reduce the need of new workers. The reward system should cover the areas like compensation, recognition, benefits and appreciation.

Reward types such as annual bonus, long term incentives, and competency based pay, team based pay, profit sharing, and group incentives can be introduced.

Case example

It would be better to choose supported self- development as the model of career management.

As said by (Conwey et al.), all-inclusive approaches can be more sustainable for a company as it can be better to invest equally among all the employees.

It is not always about best fit and not best practice. An organization might not want to put all of their eggs in one basket. What is right for one company might serve wrong for the others. Hence for a company the sweet spot would be somewhere in the between, because it is about best fit and not practice (Rayton et al.).  

The case study already reveals the fact that reduction in the work force can generate discontent among the employees that can directly hamper the productivity. Thus, it is advisable to focus more on inter-professional development of the employees, such that they can cater to the company. This can be enhanced by professional training and introducing impressive incentive or appraisals.

References

Armstrong, Michael, and Stephen Taylor. Armstrong’s handbook of human resource management practice. Kogan Page Publishers, 2014.

Bal, P. Matthijs, Dorien TAM Kooij, and Simon B. De Jong. “How do developmental and accommodative HRM enhance employee engagement and commitment? The role of psychological contract and SOC strategies.” Journal of Management Studies 50.4 (2013): 545-572.

Cho, Yoon Jik, and James L. Perry. “Intrinsic motivation and employee attitudes: Role of managerial trustworthiness, goal directedness, and extrinsic reward expectancy.” Review of Public Personnel Administration 32.4 (2012): 382-406.

Conway, Neil, and Jacqueline A?M. Coyle?Shapiro. “The reciprocal relationship between psychological contract fulfilment and employee performance and the moderating role of perceived organizational support and tenure.” Journal of occupational and Organizational Psychology 85.2 (2012): 277-299.

Rayton, Bruce A., and Zeynep Y. Yalabik. “Work engagement, psychological contract breach and job satisfaction.” The International Journal of Human Resource Management 25.17 (2014): 2382-2400.

Rothwell, William J., et al. Career Planning and Succession Management: Developing Your Organization’s Talent—for Today and Tomorrow: Developing Your Organization’s Talent—for Today and Tomorrow. ABC-CLIO, 2015.