Contract of Employment and the Psychological Contract - Essay Example

PEOPLE MANAGEMENT People Management Question1- Psychological Contract Compare and contrast the differences between the Contract of Employment and the Psychological Contract. Employment is considered to be a relationship existing between two parties: an employer and an employee. The agreement between the two parties is usually on contract and serves to meet the interests of both parties at the end of the association. The type of employment differs from one case to another depending on the nature of the job and the terms of agreement between the two parties involved. In this case, we seek to examine two types of employment: the contract of employment and psychological contract. It is evident that the two categories of employment are both considered forms of relationships established between an employer and an employee. Being contracts, they have a limited specified time. There is no aspect of security as the contract can be terminated any time with as less as one day’s notice- demonstrating its lack of security and sustainability (Bokert & Hahn 2015). Some have a specific task being undertaken and when accomplished, the employment seizes until further notice. Being recalled back to work is not a guarantee as the employer may recruit different set of employees depending on previous performance and the relationship established. Consequently, psychological contract can be defined as a mutual relationship existing between an employer and their employees and is based on informal agreement between the two concerned parties. Contract employment on the other hand, is considered as employment with clear terms and conditions that dictate the nature of the position offered including roles and responsibilities as well as salary paid (Epstein 2015). The psychological contract is established via informal arrangements and the conditions of work are determined on mutual grounds-between the employer and employee. There is no abiding documentation that governs work ethics, employee safety and among other requirements as stipulated in the labour laws (AL-Husan, et al. 2014). For employment contract, there is a clear formal documentation governing the employment; for instance, the employer is obligated to protect the employee from harm while in the course of duty and compensate them accordingly in case of loss or damage. These expectations have been clearly stipulated in the employment contract that has been signed by both parties. A psychological contract is aimed at establishing fairness and balance where employees get better terms whenever they please their employers through effective work delivery and the demonstration of great commitment to the organization. The employer reciprocates by improving their conditions at the workplace or extending their contracts. Employment contract is governed by the agreed upon terms and conditions of service and every decision made has to be in line with the consent and agreement that was first made (Liu 2015). In essence, an organization is comprised of a diverse type of labor at their different levels mandated to do different tasks under defined employment terms. The bigger an organization is, the more diverse its workforce becomes; with diverse roles but all geared towards achieving the same goals and visions set by the organization (Liu 2015). Question 2. There are a number of factors that influences the transfer of HR practices across a multinational company. Explain these factors. In light of globalisation in the current market economy, it has become evident that HRM departments are slowly evolving in terms of their roles and responsibilities in the organizational and corporate sectors. As construed by Edwards, Marginson and Ferner (2013), in conventional business practice, the HRM department was known simply for carrying out interviews and staffing the organization among other basic roles. This has since changed and the policies and practices have become crucial facets of co-coordinating and controlling international operations. The department is currently facing an uphill task when it comes to the implementation of global strategies owing to the significant differences in culture and institutional frameworks in their various areas of operation. This section serves to provide an in-depth analysis into the interplay of various organisational factors from both internal and external markets that affects the transfer of HRM practices across the globe Some of the factors that influence the transfer of HR practices across a multinational company include: Cultural Approach This is considered as people’s ways of life and encompasses beliefs, practices and norms upheld by a defined group of people in the population (Clark, & Lengnick-Hall 2012). The diverse nature of culture tends to have a direct effect on multinational corporations and its operations. In order for MNC to attain a successful business venture, there is need for the organization to adapt its practices in line with the culture in their area of operation rather than applying standard practices from the mother company to its subsidiaries (Clark, & Lengnick-Hall 2012). The MNC will have to identify themselves with the local practices in their new business environment that is significantly different from that at home and hence the HR policies and practices need to change concurrently and reflect the new environment for the organisation to compete favourably in the host nation (Kwiatkowski & Włodarczyk 2014). Comparative institutional Approach The institutions governing the labour market and various business systems are significantly different across world. These factors may essentially cause multiple restrictions for multinational corporations during internal adaptation on foreign land. These factors have a significant effect on the general performance and flexibility aspects of a business operating in a new environment owing to the fact that the institutional policies of the country of operation (host nation) will influence the implementation of HR policies and practices. Subsequently, the presence of a dominant effect from the mother state will significantly influence the decisions on the transfer of HR policies and practices (Kwiatkowski & Włodarczyk 2014). Structural approach Under the structural approach, the transfer of HR policies and practice is essentially influenced by the role that the subsidiary plays within the multinational corporation, the extension of inter-unit dependence, the nature of internal and external networks where the company branches are located among other structural characteristics (Eulenburg, et al., 2015). The subsidiaries whose operational structure and systems are integrated within MNC and implement strategies formulated from the head office are more adaptable and act as great receptors in as far as the transfer of policies and practices in concerned. On the other hand, companies with a central structure and designed to address the needs of the local market have been found to experience less pressure in the transfer of practices and policies from the country of origin. In essence, the general nature of the structural approach and operation of the subsidiary has a direct effect on the transfer of HR policies and strategies. In conclusion, the factors mentioned above have been known to have a significant effect on the transfer of HR policies and strategies for a multinational corporation owing to the impact they have on their day-to-day operations. When operating a MNC, there is need to undertake an extensive market survey and get to understand the various dynamics of the market as well as other variables that come into play. These facets help assess market viability in terms of a successful business venture. Some regions have policies and regulations that may essentially incapacitate the operations and delivery of services for a foreign investor while others have structures that differ significantly from the country of origin hence affecting the seamless transfer of policies and practices into their system (Tempel & Walgenbach 2012). This essentially slows down operations and hampers productivity. Question3- Learning and development Many organizations adopt the four stage systematic training model. Describe the four stages individually, detailing how they may be undertaken It is evident that training is one of the most crucial investments that an organization can make to guarantee sustainability as well as increase their productivity. Having a trained workforce essentially works to build capacity, depth and a level of professionalism in the employees. It is believed to be an expensive venture for an organization to undertake but when properly executed, its returns are far much higher. The organization gains a competitive edge over its competitors by being relevant to the current; promoting innovation and research and ultimately delivering quality goods and services that meets consumer’s expectations. The system model designed for systematic training consists of four phases that are introduced to the workforce to make remarkable improvements. The steps involved in the System Model of training are: Step 1: Establishing a Need Analysis At this stage, the organisation undertakes a survey in order to identify the areas that are lacking and in dire need for training. Data is collected, observations made, and interviews done to the various departments in order to justify for the need to invest in training the workforce (Gaffney, et al. 2015). The analysis also seeks to determine the possible impact that the training may have on changing the areas that score poor from the surveys conducted. Step 2: Designing of Training Models and Programs In this step, the organization goes on to design programs that are aimed at finding remedies to the workplace challenges identified in step 1. There is need for identification of the job descriptions and roles for various employees and use it as guidelines to gauge their performance and ultimately identify the areas that are lacking and need improvement. A program can then be designed with a focus on areas that need improvement (Spencer-Smith, & Klingberg 2015). Step 3: Delivering the Designed Training Program This stage is characterized by the implementation of the designed program to the concerned parties. With a reliable team of trainers, and the employees selected for the program, training can commence. It is important to identify the most effective approach to deliver the training based on the nature of the training program and the skills being enforced. It could be one-on-one training, on-job training, group training, seminars and workshops as well as other methods as recommended by the training officers (Spencer-Smith, & Klingberg 2015). For the training to be a success and have a lasting impression on the organization, there is need to have the right group of professional experts in organizational training to execute the program. The trainers need to have an in-depth understanding of the nature of the working environment and exhibit an exceptional track record on their previous training sessions (Spencer-Smith, & Klingberg 2015). This will ensure that the execution of the program proceeds seamlessly and employees get to fully participate in the trainings. Step 4: Evaluating the Training Program This is the final step of the strategic training tool that serves to assess and determine the efficiency of the implemented program. There are many methods used to gauge the performance of the training program and these include; undertaking pre-and post- surveys of customers’ feedback cards, undertaking a cost/benefit analysis evaluation, and measuring output levels and quality of services offered. Indicators such as remarkable increases in profit margins and customers’ satisfaction espouses the productivity of training programs. The evaluation is undoubtedly the most important step in the whole training process as it serves to determine if the objective of the program was met at the end of the session as well as the performance of the trainer is delivering to expectation (Chadli, et al. 2015). The evaluation report is hence very resourceful and can be used by the organization the next time they need training. The results will determine whether to retain the trainers and the programs used or have a different team undertake the training in a new fashion, depending on the previous performance as documented in the report In conclusion, the need to train employees cannot be wished away and organizations that undertake regular training programs have been able to maintain their positions at the helm of their respective industries. It is evident that without training, it is almost impossible to keep up with the market in this current dynamic economy. For this reason, implementing regular training sessions needs to be an organizational culture that is supported right from the top management down. 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