HRM and the External Environment - Essay Example

Flexibility has lead towards the development of new types of employment which significantly differ from the past types of employment such as very short term contract jobs, work at home, outsourcing various assignments etc. Today’s organizations demand flexibility at workplace, various skills, ability to work in different environment and cultures on different assignments, proficiency and high level performance at work place from their employees while the past organizational structure demanded commitment from the employees in exchange of job security (Claydon and Collin, 2005).

For achieving high level of functional flexibility, in addition to the high compensation packages organization provide their employees with the opportunities of developing their skills by conducting training programs. This allows the employees to enhance their competencies in various skills and become more marketable (Claydon, 2004). This essay focuses on the increasing flexibility at work place and its impact on the employment relationship and the psychological contract, a social contract between the organization and the employee.

It will try to reveal if the implementation of flexibility on the organizational level has led towards the alteration of employment relationship or the reduction of level of commitment towards the organization. It starts with the introduction of flexibility and the flexible firm model proposed by Atkinson (1984) with special emphasize on the labour force and 21st century competitive climate in the markets. The different theories and mechanism adapted by the organizations in order to achieve flexibility and the role of human resource management in utilizing the human resources of the organization to improve financial performance will be discussed in order to comprehend the impact of flexibility on the employment relationship, especially the employee commitment towards the employer and psychological contract which are essential concepts in the employment relationship.

Work Force Flexibility It was the 1980’s when crucial changes took place in the work place and employment relationship, the relationship between the employer and the employees. Osterman (2001) revealed that the past employment culture promised extreme job securities and the employees enjoyed relatively longer job periods. In contrast, the decision making process was wholly dependent on the supervisors; the employees had limited role in the organization and was restricted to successfully accomplish the task assigned to them.

The trend changed during the last two decades of the twentieth century, the increased pressure of domestic competition and international competition, advances in the technologies, important financial change etc compelled the business organizations to look for the augmented flexibility in order to enhance the yield, rapid responsiveness to changing markets situations and innovation. The business organization have adapted the strategies to eradicate the permanent jobs not only for the periphery group of work force but also for the core group,