Leading, Managing and Developing People - Essay Example

LEADING, MANAGING AND DEVELOPING PEOPLE By Introduction Employment contracts are important components of the employer and employee agreement. Thus, psychological contracts (PC) like any other contract are important in helping to stipulate the responsibilities and duties of employers and employees. However, it is important to note to note that the obligations of parties in psychological contracts are determined by different factors, which form the basis of the contract. The paper examines, the impact of psychological contracts on the recruitment strategy of Tiger Ltd and its overall implications on the workers and arising HR issues in the Tiger Ltd based on PC. A psychological contract is a critical component of the employer and the worker relationship. Implications of Psychological Contract (PC) and Staff Employment Strategy at Tiger Cars Ltd Employment contracts involve an agreement that the parties involved pledge to adhere to thus forming the basis of their engagement. According to Kotler, psychological contract is that implicit agreement between an employee and the organisation that he/she is supposed to work for that outlines the expectations of all the parties involved. The expectations may depict a match or mismatch of expectation since in other situations one party may be expecting much from the other and vice versa (Rousseau, 2005). Conversely, the expectations of both sides may match in that they may be anticipating the same outcomes, for instance, the employer may be expecting quality work from the employee, on the other hand, the employee plans for a good pay for quality work done. In this particular case, the expectations from both sides are congruent and thus the psychological contract established will be consistent with the reality on the ground (Petersitzke, 2009). The basis on which psychological contracts are founded depends on the obligation of the concerned parties like in the case of Tiger Cars Ltd the employees had the duty to work for a certain number of hours as their contract with the company was time-bound, hence they quantity of work done would be determined by the number of hours worked and not the duration of stay at the enterprise. On the other hand, the management of Tiger Cars Ltd had the obligation of providing adequate training to the employees to enhance their quality of service as well as providing an equitable pay that proportionately reflect the services rendered (Rousseau, 2005). The type of a psychological contract that existed between Tiger Cars Ltd and its employees was transactional in nature since money was the primary incentive for the agreement. Given the fact that the contract of workers with the company was time bound, their relationship characterized by low levels of emotional attachment as the employees knew beforehand that within a certain period their services to the company would be rendered redundant. Essentially, it was an exchange programme in which services were provided in exchange for compensation; the employer did not invest much in the employees since the duration of their contract was limited, thus would not be finically viable to take the approach (Conway and Briner, 2005). Implications of a Psychological Contract and Staff Employment Strategy Tiger Cars Ltd had the strategy of going lean in its operations; this meant that the number of employees on a permanent contract was minimized while a significant number of workers were kept on contract basis. The firm aimed at utilizing the least amount of capital to gain massive resources but the implication of their strategy on a psychological contract of the employees was not as expected. For instance, since a significant number of workers were on contract basis in various projects it is prudent to note that only money was the primary incentive that motivated that relationship. They offered services expecting financial gains in return and nothing beyond that (Noe, 2013). Service quality of the image of the organisation in the market was not an issue for the employees since the kind of contract they engaged their employer did not allow for emotional attachment to take shape. The individual initiatives that employees make in long-term employment did not exist in this situation as the employee’s services would only be recognised for a particular task based on which their compensation would be made (Rousseau, 2005).The responsibility that is often placed on employees vanished as their expectation in this case was only payment for the amount of work done. On the other and the employer wanted a certain quantity of work is done within a certain period of time in return it compensates for the services rendered. In essence, the kind of relationship that the two entities created was not holistic in nature, and it would have considerable effects on the overall performance of the company (Guest and Conway, 2001). Tiger Cars Ltd management had the challenge of dealing with a changing trend in psychological contracts. Initially, the company maintained a time-limited contract with its employees this was meant to ensure they only hired employees whose services the company perceived to be necessary. In this situation, the kind of a psychological contract that both parties had was value based. Workers were discharging services expecting payment while the employer expected certain amount of work to be done in return to pay the workers. The moment the firm was absorbed by an international company the psychological contracts seemed to change since both parties had different expectations (Wellin, 2007). For instance, the company had a growth strategy whereby it aimed to expand its operation into a major car manufacturer so as to venture into other emerging markets. In line with the strategy, the firm’s management expected the employees to provide specializes services that would enable the organisation to achieve its growth strategy (George, 2009). On the other hand the employees expected to be absorbed by the company on permanent basis so as to aid it in achieving its business objective since a permanent contract would give them more obligations and responsibilities towards the success of the company. The manner in which changes in psychological contracts are managed will influence on how well the expectations of the parties involved are put under control and that will eventually affect the overall performance of the organisation (Wellin, 2007). The management style that is in place at Tiger Cars Ltd will have the duty to manage the expectations of the employees once the takeover is expected. The workers’ expectations are set to increase once the company has been taken over by an international organisation since growth in operations will translate to increased expectation on the part of employees. Cases where there is a disjoint between the workers’ expectation of what is on the ground in reality; it is prudent that the job morale of the employees will be diminished thus affecting the general performance of the firm (Petersitzke, 2009). The organisation will have the obligation to ensure that it manages the expectations of the workers with changes happening in the company to avoid a situation where dissatisfaction arises from among the workers. Initially, the kind of a psychological contract that existed between the two parties was based on mutual benefit with fairness in the equation (Kiazad, 2010). The new organisation that has taken over operations at Tiger Cars Ltd is not bound by the agreements made prior thus it mat effect changes that do not focus on fairness thus upsetting the employees’ attitudes towards work. The right channels of communication ought to have been utilized to communicate the changes to the employees to prepare them psychologically for the impending changes. It would ease the anticipation as the workers would have knowledge of what kind of changes that are expected in the company once the take-over is implemented (Petersitzke, 2009). HR Issues in the Context PC that may Impact Expansion Plan in Long-Run Psychological contract is something natured over time, and it is mainly based on the trust and attitudes of those involved. Failure to properly manage psychological contract may culminate to bigger issues in the human resource department that may jeopardize service delivery from the workers. In the case of Tiger Cars Ltd it is prudent that in the long run the attitudes of employees will grow from bad to worse unless the organisation’s management decides to re-evaluate the agreement between the two parties now that the firm has expanded its operations. Efficient human resource management should encourage employee relation so as to get to know the grievances and problems that its employees are undergoing. Organisations should freely allow its members to join trade organisation because it is through such forums that they will effectively get to hear and solve the problems of the employees without victimizing anyone. Organisations through their human resource departments should step up sensitisation campaigns to educate its employees on the need for tolerance and embracing diversity in the workplace (Noe, 2013). Negative attitudes will lead to a decline in the job morale thus impacting service delivery (Noe, 2013). Poor performance from the employees means that the operations of the company will be inhibited thus the business objectives of the firm will not be achieved. Generally this will be an inhibiting factor to the company since it will not execute its expansion strategy actually due to lack of goodwill from the employees given the fact that their expectations in their psychological contract surpasses the reality on the ground. The mismatch between the two situations will leave workers dissatisfied since they perceive they deserve more than what they are receiving hence killing job morale (Kiazad, 2010). The mismatch of expectations between the employer and its workers is yet another situation that is likely going to cause a standstill in the future (Wellin, 2007). Psychological contract is mainly based on obligations and expectations between the parties involved. Each party has a duty to play and in return will expect something. If the expectation of the parties involved is not consistent, it is evident that one may perceive being short-changed in the process. It implies that maybe one party is fulfilling its obligation but is not receiving enough reward based on quantity of service rendered. The likely aftermath of the standstill is a conflict between the parties. It may take place in a form of a go slow or a workers strike that will paralyze operation in the organisation. The situation will hold until a compromise to chant a way to sort the contentious issue that led to the conflict (Noe, 2013). Organisations do hire people from various backgrounds employees have the duty to embrace each other and develop good working relations to enhance teamwork for the sake of the group. Research has shown that diversity is among the factors that increase success in organisations, by pooling together a number of employees with different knowledge levels, skills and talent the organisation will leverage from this variety in the process of achieving its objectives (Wellin, 2007). The international organisation that is taking over operations at Tiger Cars Ltd has an expansion strategy that would see it increase the volume of cars manufactured and at the same time expand its sales to other regions in the world. To achieve any strategy in an organisation, the personnel must be incorporated due to the fact that this is the entity that will transform strategy into a reality (George, 2009). In this particular case, if the expectations of the employees are not met they will develop less interest towards the objectives of the organisation. The body will go on to lose financially since the investment that they may have committed to the expansion project will not give a yield to the expected results (Conway and Briner, 2005). Psychological contracts are reciprocal based as each party expects something in return. If one party will be committed to its obligation, but the other one is not reciprocating then the latter, will be dissatisfied and even provoke renegotiation of the contract. At times when the situation is non-negotiable one party has to walk away. High turnover of workers is a human resource issue that will likely face the organisation (Noe, 2013). Furthermore the kind of relationship that existed between the organisation and workers was contract based for a limited amount of time there would be no emotional involvement in the termination since the organisation has not invested much in those workers. To avert a crisis, the firm will recruit new employees to take the vacant positions. However, it is worth noting that any organisation has both short term and long term business objectives that it strives to achieve. These goals are incorporated with the organisation’s personnel to ensure they take personal initiative to make them. The constant change of staff means, there will be no team congruence in the organisation and the workers will be less committed to goal attainment. It will be difficult for the organisation to attain its expansion strategy as there is no goodwill and commitment from the personnel towards the firm’s objectives (Wellin, 2007). That notwithstanding the human resource department will find it hectic to continually look for the competent workers to fill the vacancies that have been left by discontent employees. Generally the organisation will have a negative rapport since the disgruntled employees will take an adverse image of the firm to the external world thus prevent potential workers from being associated with it (Petersitzke, 2009). Recommendations for Efficient Management of PC and Commitment Required to Enable the Tiger Cars Ltd Expansion Plan Managing psychological contract is critical for any firm since it is this element that will give it a competitive advantage over other market rivals. Managing expectations is the initial step in psychological contract management. Psychological contracts are mainly based on expectations. The parties involved have their individual hope in that contract. Thus, it is prudent for management of the organisation to ensure that a match between what the workers are expecting and what the firm is giving back as a reward. If expectation congruence is maintained, then the contract will run smoothly since all the aspirations of each entity are being met in real life situation. Therefore Tiger Cars Ltd management should focus on adjusting the rewards they give the employees to a level that meets their expectation or rather that is close to their expectation since it is pretty hard to fully satisfy human beings (George, 2009). By going an extra mile, the personnel are expecting the management to recognise their efforts and thus reciprocate in the manner that they are rewarded (Wellin, 2007). It is always discouraging when management does not return their obligation to what has been achieved by the employees. Thus it is prudent for the management to be keen on the working trends of employees and whenever they notice an extra effort they should reciprocate through rewards and bonuses to motivate them further and in the long run the objectives of the firm will be achieved (Kiazad, 2010). Performance management is a program that is driven to first promote the right behaviour and values among the employees. Morals are supreme to any element when it comes to work ethics. If the good morals are not initiated in an organisation, the overall performance will not be impacted even with deployment of state of the art technology. Thus by cultivating ideal values in the workforce performance management as a business strategy, is set to be a winning strategy for ensuring any given firm rises to success in any particular business discipline (Noe, 2013). However, performance management cannot exist in isolation; any meaningful business strategy that will bring positive result to an organisation has to be integrated with other aspects to ensure overall success is achieved. In the case of performance management over the years the process was done manually with the use of spread sheets but with advancement of technology and better the whole program; computer programs have been developed that seeks to better the experience of performance management process and yield the required advantaged off it. The impact of performance management is not only limited to retention of talent and skills but also spreads across other aspects of the organisation’s performance in terms of production, finance and customer satisfaction (Wellin, 2007). The organisation should implement a future-oriented communication strategy that ensures the workers have prior information of the future plans of the company. This will ensure that before any changes take effect the employees are prepared psychologically, thus learn to adjust their attitudes and expectations accordingly. The decision will reduce instances of conflict between workers and the organisational management because the employees will be psychologically to prepared to accept any new challenges occasioned by the change being introduced in the organisation (Noe, 2013). Conclusion Ultimately, it is evident that PC is a critical element of the employee recruitment strategy. Thus, organisations should be able to manage the expectations of the workers in the organisation to be able to create a competitive edge by ensuring workers are motivated and rewarded appropriately for their services. This can also enable the organisation minimise o reduce staff turnover and thus, enabling it to retain the best talent and skills in the organisation that is critical for creating a competitive advantage in the company. Bibliography Conway, N., & Briner, R. B., 2005. Understanding psychological contracts at work: a critical evaluation of theory and research. Oxford [u.a.], Oxford Univ. Press. George, C., 2009. The psychological contract: managing and developing professional groups. Maidenhead, Berkshire, McGraw Hill Open University Press. Guest, D., & Conway, N., 2001. Public and private sector perspectives on the psychological contract: results of the 2001 CIPD survey. London, Chartered Institute of Personnel and Development. Kiazad, K., 2010. 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