State of the Psychological Contract and Its Impact on Employee Engagement - Essay Example

?Casestudy Table of Contents Casestudy Table of Contents 2 Task 3 Task 2 7 References 10 Bibliography 10 Task To examine the of the psychological contract and its impact on employee engagement for the recent recruits on the graduate development scheme Psychological contract as defined by Guest and Conway (2002) is the set of unwritten and the reciprocal based expectations that occur in between the individual working as an employee in an organization and the employer. It also includes the perception of the employer and his/her employee as well as their mutual obligations directed towards each other. The aspect of psychological contract is a complex phenomenon in the context of employee and employer relationships that goes beyond the reveals of the terms mentioned in the job contract. This aspect is very subjective and the expectations and objectives along with their ever changing nature make them very ambiguous and prone to conflicts and misinterpretations (Petersitzke, 2009, p.26). This has made the concept of psychological contract the root cause of mistrust between employers and the employees. Psychological contract is a phenomenon that induces at the very onset of a relationship between an employer and an employee. Psychological contract often forms the basis of employee associations and emergence of faiths and beliefs of an individual (Wilton, 2010, p.37). Figure 1: Psychological Contract and the effect on Organization (Source: Wilton, 2010, p.37) The figure above clearly shows the components as well as the influence on the areas of organization with regards to the aspect of psychological contracts. The psychological contract elements like fairness, deal delivery and trust are largely linked to the broader aspects of demographic factors like age, experience as well as organizational aspects like industry segment or the organization, size of the company, years of existence as well as location of the enterprise help in development of organizational aspects like HR policies, and other organizational aspect that involve in the day to day activities of running the organization. The outcome of these aspects reflects the influence of the aspect of psychological contract and its effects on the attitude and behaviours of the employees of an organization. The aspect of psychological contract and its linkage with economic and monetary aspects including rewards and compensation has been a matter of debate for academic and other circles. Authors like Schein state that psychological contracts and its effects are only prominent in case of non tangible aspects and hence rewards and monetary compensation do not influence the aspect of psychological contract in an organization and vice versa. However certain authors often refute this claim and state a direct linkage with aspect like compensation and psychological contracts (Makin, Cooper & Cox, 1996, p.5). The case study in the present analysis reveals a case of psychological contracts and its influence. On one hand it is seen that the initial reception to the trainees was good and it induced a lot of motivation on the part of the employees. This include the corporate sponsored lunch and dining at various plush hotels, blackberry set for office work etc. Moreover the rigorous and tough recruitment process was also motivating to the extent that employees started to believe of a path breaking successful stint at the organization and were hopeful of getting a profile that would add value to their careers. They also hoped that the rigorous process and the following events would essentially mean a tenure that would provide them with considerable responsibility that would add to their learning curve and would enrich the value addition process. In this case the process of psychological contract can be seen to have evolved much before the actual stint at the organization. It also reveals that these aspects were essentially not a part of the formal contract between the employee and the employer. However these aspects had a crucial linkage with the morale and motivation of the employees that was very high due to aspects that were purely psychological in nature. This is in a very close agreement with the views of authors like Wilton (2010) who have stated that psychological contract extends beyond the domain of contractual terms and agreements and that it begins in an informal manner and has a significant outcome on the morale and responsibilities of an individual and his/her relationship with the employers. On the other hand it was observed that during the actual job stint at the organization, the employees found that the actual job responsibilities were in total contrast with that of the expectation of the employees. They found the tasks to be less of responsibility and more of routine jobs that added no significant value to their learning’s and their career objectives remained unfulfilled. In spite of the fact that monetary rewards and compensation were still intact and in accordance with the terms stated in the contract, psychological traits largely led to de motivation among the employees. This largely proves the works of academicians who have clearly argued that monetary compensation does not have any significant linkage with the aspect of psychological contract between and employer and an employee. Authors like Rousseau (1995) have shared a belief that the aspect of monetary rewards and benefits that is weighted in terms of an employee’s performance has induced the aspect of performance as a factor that is linked to the aspect of psychological contract between an employee and employer (Rousseau, 1995, p.76). The case highlighted in the graduate development program also is in tune with the theory of psychological contract and is reflected in the works of Leimeister (2010) who has stated that economic and contractual aspect are not linked to the aspect of psychological contract. The author stated that mutual obligations and behavioural traits largely mattered in case of psychological contracts. This aspect was also evident from the case study as it reflected that the attitude and behaviour of the organization towards the interns had an effect on the psychological aspects. A good behaviour and a positive attitude was very much responsible for the development of a positive attitude among the employees during the initial stage, however this attitude largely changed once the interns joined the organization. In spite of monetary terms and conditions as well as legal contractual elements being as expected, the change in behavioural attitude largely induced a negative sentiment among the newly joined interns. This contrast largely shows the aspect of psychological contract and the wide implications that can be associated with this aspect (Leimeister, 2010, p.26). Business organizations must ensure that other than agreement terms and conditions, behavioural traits and other aspects that determine contractual agreements must also be in a manner that it tends to promote a positive attitude among the employees of the organization. This can help ensure better organizational efficiency considering the fact that a motivated and satisfied employee is an ultimate asset to any organization and the success of an organization in the turbulent and highly competitive business environment. This is in tune with the findings of a research conducted by Guest & Conway (2004) who after conducting statistical analysis on data collected from surveys have found that although psychological contracts do not influence motivation in a major manner however, the key factors that they identified influenced motivation were largely and strongly correlated to the aspects that affect contractual agreements. This shows that although in an indirect manner the aspect of psychological contracts had a considerable effect on the aspect of motivation among the employees which was again reflected in the case of graduate interns thus showing the urgent need for business organizations to ensure better policies that tend to boost the morale of the employees and generate organizational excellence helping in creation of sustainable competitive advantage for an organization in the long run (Guest & Conway, 2004, p.35). Task 2 To make recommendation for changes, providing justification for your proposals The analysis of the case of graduate interns at the advertisement agency, it appears that there are certain flaws in the organization’s strategy and perception towards the aspect of psychological contracts and the behavioural aspects associated with the interns recruited into the organization. Firstly the organization must ensure that the expectations of the interns with regards to the career development are in agreement with the perception of the new interns. This includes creating job roles that provide greater responsibility to the interns, so that they can help enrich their experience and meet the challenges. This can help in generating a positive attitude among the interns towards the organization that would help them associate their tasks as responsibilities and not routine tasks. This would be in tune with the principles of job motivation that directly correlates the aspect of greater responsibility with increased motivation levels in the organization and also in improving the aspect of psychological contracts that exists in between the employer and the employee (Evans, 1998, p.183). Secondly the company must also have a proper training and development program in place that would help induce greater practical learning among the new interns. This would also have a positive effect on the psychological aspects of the new trainees that would help improve upon the aspect of psychological contract. The training programs must be designed in a way that would help hone up the creative skills of the interns. Case studies and management games can help inculcate a proper training for the new recruits. In addition to this interns should be asked to take up challenging real life issues at the organization. Team work should be encouraged that would help in better training and also improving upon the psychological aspects of the new employees. These would not only help generate better training but would also boost up the morale. A successful on the job training with real time examples can help make the interns more comfortable to handle the challenges of the turbulent and fluctuating business environment. It would also go about a long way in ensuring greater satisfaction leading to organizational excellence (Qi, 2011, p.115). Finally the attitude of supervisors as well as workplace conditions needs to be improved as these have a direct influence on the psychological aspects of an employee. The office space should be hygienic and should help promote a feel good effect among the employees. Supervisors and seniors need to have a more responsible attitude towards the interns. Seniors should be assigned to each of the interns and should act as mentors and motivators. They should have an open attitude towards the juniors and should act as a guiding and motivating force rather than acting as supervisors. These aspects would help develop greater job satisfaction that would help generate long term sustainable competitive advantage for the organization. References Evans, L. (1998). Teacher morale, job satisfaction, and motivation. SAGE. Guest, D. & Conway, N. (2004). Employee well-being and the psychological contract: a report for the CIPD. CIPD Publishing. Leimeister, S. (2010). IT Outsourcing Governance: Client Types and Their Management Strategies. Gabler Verlag. Makin, P.J., Cooper, C.L. & Cox, C. (1996). Organizations and the psychological contract: managing people at work. Wiley-Blackwell. Petersitzke, M. (2009). Supervisor Psychological Contracts Management. Gabler Verlag. Rousseau, D.M. (1995). Psychological contracts in organizations: understanding written and unwritten agreements. SAGE. Qi, L. (2011). Communications in computer and information science. Springer. Wilton, N. (2010). An Introduction to Human Resource Management. SAGE Publications Ltd. Bibliography Barling, J. & Cooper, C.L. (2008). The SAGE Handbook of Organizational Behavior: Micro approaches. SAGE Publications Ltd. Greenhaus, J.H., Callanan, G.A. & Godshalk, V.M. (2009). Career Management. SAGE. Read More