(MN7181) People and Organisation: Principles and Practice in Global Contexts - Blog 04 Employee Relations and Psychological Contracts.

Employee relations and psychological contracts

Employer-Employee Expectation

In according to (Armstrong,2017) In any organization employees have a different type of expectations from his employer such as treat them reasonably, fairly, and consistency base on justice, providing good working conditions, health and safe environment, job security and recognition for their job. Not only them but also employer have some expectations from his employees such as well perform their duties and task, respect to organization policy and procedures, maintain trust and honesty and etc..

As per the (Henderson,2017) If an employer feels that employees performance are not satisfied he has the right to take appropriate actions against it and on the other hand if an employee feels that his expectations are not met he has the right to peruse for grievances.

Understanding the expectations of both parties create good employee-employer relations within the organization. The meaning of employee relations can be understood better with using different definitions explained by different scholars about Employee relations.

Gennard and Judge (2002) define Employee relations is a study of rules, regulations, and agreements which help to manage individuals and as collective groups.

Institute of Personnel Development (IPD) defines employee relations as ”that part of personnel; management that enables competent managers through the development of institutions, policies, and procedures to reconcile within acceptable limits to the organization, the interest of employers as buyers of labor service and the employees as suppliers of labour services."

The psychological contracts

In Human Resource Management the term 'the Psychological Contract' refers to the actual - but unwritten expectations of an employee towards the employer. The Psychological Contract represents, the obligations, rewards, rights, etc., that an employee believes he is 'owed' by his employer, in return for the employee's work loyalty.

Gennard and Judge (2002), discussed the psychological contract and employees’ and employers’ interests and suggest that, in addition to rewards representing the monetary and extrinsic aspect of the relationship, following expectations expect by employees.

• Job Security.
• Social relations.
• Potential for training and development.
• Treated as a human rather than as a commodity.
• Job satisfaction, empowerment, personal and work-life balance, working conditions.
• Fair and consistent treatment.                                                                                                                        

'Iceberg' model for psychological contracts.

Iceberg model is a helpful tool to explain some of the crucial aspects within Psychological Contracts theory.

The left side of iceberg = employee inputs /employer needs

The right side of iceberg = rewards given by employer/employee needs
Above the water level: factors mostly visible factors agreed by both sides.
Work / Pay = visible written employment contract.
Black arrows = mostly clear market influences on the pay and work.
Red arrows = iceberg rises with maturity, experience, success etc., (invisible perceived factors into the visible agreed contract).
Below the water level: factors mostly hidden, or not agreed.
The left side of iceberg = examples of expectations - informal, perceived and unwritten.
The right side of iceberg = rewards examples and employee's expectations.
Blue arrows = influences on employee and employer mostly invisible / misunderstood by another side.

The employee, employer relations heavily depend on how far both parties understood their mutual expectations and if the employee unable to fulfill their expectations it adversely affects to the organization in different ways such as de-motivation, increases absenteeism and turnover, increase conflicts and finally reduce organization effectiveness and goal accomplishment.

References:

Armstrong, 2017. Armstrong’s Handbook of Human Resource Management Practice. London: Kogan Page.

The Institute of Personnel and Development (IPD)

Gennard and Judge (2002) Edinburgh Business School

Gennard, J and Judge, G (2002) Employee Relations. London, CIPD.

Rousseau, D.M. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Thousand Oaks, CA: Sage Publications.