The Talent Development Programme - Term Paper Example

Analysis of a Company Using Psychological Theories Due to the economic crisis that was felt across the globe, several firms have had to take several steps to cushion their operations so as to prevent their collapse. Among these companies is a financial services firm which froze payments on pay-rises and overtime for all of its employees with exception of sales employees, froze all training programmes except for the Talent Development Programme and amended all employee objectives to be in line with the firm’s new aggressive financial targets. The company also changed the schedule of employee appraisals to twice a year from the previous once a year. Nine months after the implementation of these changes, a recent employee performance appraisal revealed that employee performance and motivation levels had decreased. This article will utilize the theory of psychological contract and the attribution theory to evaluate why the employees are experiencing the above mentioned changes. These will be followed by recommendations that the firm could apply in order to improve on this situation. Hypotheses A psychological contract could be defined as a set of promises and beliefs held by an individual employee about the terms of the exchange between the employee and his or her organization, or the agent of the organization (Wellin, 28). The psychological contract can be a complex concept since it is an unwritten rule that cannot be directly expressed in a tangible way. Nevertheless, there have been arguments to the effect that a breakdown of the psychological contract can result in poor performance of individual workers or of the organization as a whole (Anderson, 102). This can be caused by a reduction in levels of organization commitment, lack of motivation, absence and attendance problems and high levels of staff turnover, some of which the financial company is already experiencing. Being a psychological rather than a legal contract, a psychological contract refers to beliefs about the deal as opposed to what is contained in writing within the formal employment contract about the deal (Conway & Briner, 23). Breach is probably the most important idea in psychological contract theory since it is the main way of understanding how the psychological contact affects the feelings, attitudes and behaviours of employees. A breach of the psychological contract occurs when one party perceives that the other has failed to fulfil promised obligations. In this case, the financial organization’s freeze on pay-rises and overtime payments combined with the freeze in almost all training could have been perceived by the employees as being a breach in psychological contract. From the contractual perspective, employees and employers enter into an employment relationship with sets of expectations of reciprocal obligations that go beyond the formal, explicit agreements made during the hiring process. The core of the typical psychological contract of the industrial age organization member was the belief that the organization will provide job security and promotional opportunities in return for hard work and loyalty (Armstrong, 149). With the dissolution of the job boundary, the dismantling of internal labour market, and the movement towards a contingent workforce, it is precisely this aspect of the psychological contract that which is profoundly challenged in the post-industrial workplace. The cost cutting measures carried out by the company might have been necessary for the survival of the company but unfortunately, the company’s senior management did not properly communicate the necessity of the implementation of these changes to the employees. Some of these changes directly affect the income of the employees and therefore, if not properly implemented, can lead to the development of negative attitudes towards the workplace. Lack of proper communication induced a feeling of not being valued among the employees by the management and this in turn made them lose motivation for their jobs which directly affected their productivity as well (Worsam, 23). The workers decrease in employee motivation and performance can also be described using the attribution theory. Production and performance are closely related to motivation even though motivation may not be the only factor that influences them (Bruce, 38). Social psychologists have examined how people explain events or attribute causality. The reduction of productivity among the financial company’s workers can be attributed to lack of motivation which can be further attributed to the cut in payments and training opportunities. The attribution theory is not a theory of motivation but it is helpful in understanding change in motivation levels. There are three categories of characteristics from which the behaviour of these workers can be explained. The first characteristic states that failure or success of an individual can either be external or internal. Internal attribution is used in explaining a person’s behaviour in terms of characteristics that are internal to the individual, such as laziness, or some personality trait such as being friendly (Parrish, 124). External attributions, on the other hand are those factors that are outside the individual and over which they have no control, such as luck or the actions of powerful others. An interesting thing with attribution is that most people tend to attribute the behaviour of others to internal causes if the behaviour is negative (Berkowitz, 186). For instance, when a person is late for a meeting, people would attribute this to he or she being disorganized (internal cause) rather than because of the heavy traffic (external cause). In contrast, people attribute their own behaviour internally if it is positive. This crossover of attributions is referred to as the fundamental attribution error. For the case of this firm, the employee behaviour can be attributed to the external cost-cutting factors employed by the employers. The second characteristic of attribution is that the cause of failure or success may be either considered as unstable or stable. If the affected individuals believe the cause of their misfortunes is stable, then their reaction is likely to be similar when the same misfortune happens in a different occasion but if they perceive it to be unstable, they are likely to behave differently on another occasion (Kaplan & Saccuzzo, 472). From this second characteristic therefore, it can be said that the decrease in motivation and productivity among the employees is unlikely to change unless the pay freezes are unfrozen. Thirdly, the causes of failures or successes may either be uncontrollable or controllable. A factor that one believes that one can alter oneself should one wish to is referred to as a controllable factor while the factor that one perceives as one that cannot be altered with ease is referred to as being an uncontrollable factor (Crozier, 147). For this case, the changes going on within the financial firm come from the senior management and the mode of communication of these changes to the employees make them feel like the situation is uncontrollable and that there is very little they can do about the situation. This feeling of helplessness can be explained as being among the causes of the drop in motivation levels. The attribution theory’s fundamental principle regarding motivation is that an individual’s own attributions or perceptions regarding success of failure dictate the amount of effort that the said individual will apply on that activity should it happen in future (Cole, 43). The freeze on pay-rise can be seen as an external factor that triggered the fall in motivation levels among the employees. These cuts affected the employees negatively who perceived them as signs of failure by the management to keep their end of the bargain. The negativity caused the drop in efforts placed at the workplace and hence the productivity levels. This situation among the employees has not changed nine months on because the management is still affecting the pay-cuts. Recommendations As earlier mentioned in this article, the management did not employ good communication methods in passing down the decision to effect the changes to the employees. The senior management left the responsibility of communicating these changes to the middle management instead of employing direct communication to the employees. The importance of good communication within any organization can never be exaggerated. One way of keeping employee motivation levels high is to employ good communication strategies that would make the workforce feel appreciated by the organization (Dibble, 234). The global recession may have left the company in a tight spot leaving it with few options but to apply the changes it did. What the company management may have overlooked is the vital resource of employees. Effecting these changes should have been communicated to employees in a way to make them understand that the changes were necessary and that the management still regards them as being important to the company. The way information is communicated to the employees is therefore very important. Embracing change is not easy (Kelman, 22) especially if it comprises of the measures being applied by this financial services company now that the changes directly affect the employees negatively. The fist step the company could take in solving the production and motivation challenges is to find out why the workers are behaving the way they are and study how they are reacting to the changes. From the reaction of the employees, it is obvious that the employees are having a tough time adjusting to the changes and require empathy and support from the management. To better understand the employees, the management should try and view the situation from the workers’ perspective, in a process known as active listening (Dew, 41). When employees fell like their managers are genuinely interested in their perceptions and feelings, they are likely to be less defensive and more willing to share their fears and concerns. This more open relationship will not only provide useful information about the situation but will help the stage for joint problem solving to help the employees cope with the necessary changes. The workers could be reacting the way they are because they are uncertain about the workplace especially now that the changes have already lasted nine months. Lack of proper communication leaves the workers with inadequate information about why the changes have persisted and this creates a good environment for rumours and gossip which further fuels anxiety on the part of the workers (Flensch, 110). This anxiety could be part of the reasons for the drop in motivation levels. Effective communication about the changes to be effected and their likely results can reduce speculations and allay any unfounded fears. It could help the employees realistically prepare for the oncoming changes. However, communication is in addition one of the most frustrating aspects of managing changes at the workplace. Employees in any workplace constantly receive data about company operations, future plans as well as informal rumours about the workplace happenings. All managers in any organization must therefore think seriously about how to break through this stream of information. Among the strategies that this company could apply is to make communication of information more salient by communicating through a new of different channel. The managers may have explained the changes through e-mails and memos but it would have more effective to communicate the message through presentations and meetings in which even the senior managers are to be present. One of the oldest and most effective strategies of implementing changes within an organization is to try and involve as many workers as possible in the decision making process (Vogel, 175), especially for decisions involving freezing of pay and training. Participation of as many members as possible can both lead to the designing of high quality changes and coming up with ways that would help in overcoming any setbacks that may arise due to their implementation. All the employees should be accorded the opportunity to contribute to the implementation plan and the resultant to this will be a diversity of ideas and information on how to effect the changes without causing much damage to operations at the workplace. With these numerous ideas, it will be easier to identify any pitfalls and barriers to whatever changes the organization could be preparing to make. The involvement of all employees at the planning session will increase the likelihood of employee interests and needs being accounted for during the implementation process. Consequently, all the employees will be committed to the implementation of the necessary changes since they would have participated in the decision making process. Moreover, for individuals having a strong need for involvement, the act of participation itself can be motivating, leading to a greater application of efforts at the workplace to make these necessary changes work (Griffin & Moorhead, 85). Implementing such major changes at the workplace all at once can be difficult and can lead to negativity among the employees which can further affect the workplace environment just as observed in this organization. Freezing overtime and pay rise payments while at the same time implementing a freeze in training programs can heavily impact the employees and cause them to lose motivation for work. The sudden major changes could make the employees feel like they are being punished for their efforts at the workplace instead of being rewarded. To avoid such situations, the company could try and implement these changes in phases only moving to the next stage once the workers have adjusted to one stage (Lussier & Achua, 438). This mode of implementing changes is advantageous since it will be easy to monitor the reaction of workers to the changes and make any necessary alterations to the implementation plan when required. The close monitoring will enable the management notice any changes, be it motivational or productivity changes among the workers in good time and therefore take steps to address these changes in good time. Practical next steps The first practical step that the company management could adopt would be to study the situation with the aim of trying to understand why the employee production and motivation levels are decreasing. This, they could do by utilizing the two theories mentioned in the hypotheses section. The big changes that have been implemented are likely to have led to feelings of management breach of psychological contract among the employees. Employees at any workplace expect pay rises periodically and an opportunity to grow their careers within the organization (Budhwar, 271) and freezing any steps towards these expectations can be perceived as sending a message of no hope for growth within the company. This hopelessness can directly affect motivation and productivity levels. The attribution theory can also be applied in understanding employee behaviour. In this case, the drop in motivation and production levels can be directly attributed to the measures implemented in line with the organization’s aggressive financial targets. Once the current situation has been well understood, the company should make the necessary arrangements to facilitate an all inclusive plan that would boost motivation levels and productivity. As mentioned in the article, good communication strategies can make a difference between the failure and success of any plan. The new plan should therefore be well communicated to all employees and done in a way to make the employees feel like the company appreciates them and that the changes are necessary for the survival of the company. By encouraging everyone to contribute in finding a way out of the situation, the company management will give the employees the feeling that they too are part of the company and they will be more willing to participate in whatever agreements are made towards improving the company. Work Cited Anderson, Valerie. Research methods in human resource management. London: CIPD Publishing, 2004. Armstrong, Michael. A handbook of employee reward management and practice. London: Kogan Page Publishers, 2007. Berkowitz, Daniel. Cultural Meanings of News: A Text-Reader. London SAGE, 2010. Bruce, Anne. How to Motivate Every Employee: 24 Proven Tactics to Spark Productivity in the Workplace. New York: McGraw Hill Professional, 2006. Budwar, Pawan. Managing human resources in Asia-Pacific. 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