Chris Motors Limited - Psychological Contract - Case Study Example

Psychological contract Introduction Shore & Tetrick (1994) Organisations can be defined as collections of interrelated and interactions of both non-human resources and human resources working together to achieve a specific common goal or goals. Organisational behaviour (OB) on the other hand it is a form of an interdisciplinary field build by a number of sciences that are behavioural driven. Such behavioural sciences include sociology, psychology and anthropology it is also said to be study and knowledge application pertaining groups act, individuals, peoples organisations. To achieve this, OB uses system approach. The OB main mission is practice and administrative theory application to the management’s pressing difficulties. The OB’s purpose is explained by building a unquestionable relationship. The purpose is arrived at if it achieves the social, organisational and human objectives. In summative form OB includes teams, leadership, change as well as human behaviour. Sparrow & Hiltrop (1997). As a business grows larger, wider and in complexity, it works towards keeping pace with the business environment. New strategic initiatives have shown to bring in challenges to a business. Due to this fact, the employees and the organisations do face several challenges. Employees on the other hand need to acquire new set of behaviour if the upcoming challenges will be incorporated successfully. The human resource, therefore, is endorsed with the responsibility of initiating the definitions of the. The initiative for an employee to change or not comes from his/her interpretation of employer’s HR practices interpretations. Such interpretation in turn affects behaviour of the employee in alterations of perceptions of individually held psychological contract see figure1 Figure1: how the employee’s psychological contract and strategy are related Psychological contract Shore, & Tetrick, (1994) is not specifically defined and was analysed to carry several defining terminologies. These include dynamic, psychological distance, interdependent, expectations drawn from the past and unspoken expectations. Psychological contracts are usually involved with problems underlying among the human beings. This definition applies to all persons regardless to whether is a group of persons or individuals. PC is quite different from legal contract in that during contract breaching there are different procedures followed. The grieved party for example in this case the employee and especially the old ones may seek enforcement in the court in legal contract. However, it is not the same case using the psychological contract. To this regard the party aggrieved may only choose to withdraw its relationship or withhold its contributions. Drawn from the past seasons the PC has shown to be quite complex. This has led to questioning of its validity. However, its validity can only be achieved by first understanding the function the PC participates in either a mean or lean organisation. Pshychological contract function The behaviour regulations and bonding of the organisations and the individuals involved, life of the organisation is explained by psychological contract. (Robinson, Kraatz &Rousseau,1994). The sustainance of the employer and employee relationship as time goes by Shore, & Tetrick, (1994) PC plays a greater role during the restructuring of the organisation especially in events of risk and uncertainty. It also enables smooth functioning of human life Sparrow & Hiltrop, 1997). Just as hygiene factors act so is the psychological contract. Poor contract are usually quite demotivating while good contract, however, not always are they motivators, they are more likely to bring out great performance rather than the demotivators. In addition, demotivators, results in high levels of absenteeism, and reduced job commitment. This is shown by the way the old employee feels from Chris motors limited as it is indicated by the reduced concern of Steve on the older employees and his need to have them replaced by the young pool. Their difference in opinions as the directors’ i.e. Steve and Paul of the company still posses fear to the employee in general pertaining the future’s job survival. Two tasks are accomplishable using the psychological contract. They include helping in prediction of the returns the workers possibly will acquire from their effort and time investment in a given organisation. On the other hand, employers use the PC to forecast the expected returns they will obtain from the employee effort Sparrow & Hiltrop, 1997). The ability of either party in a given organisation to predict outcomes contributes to relationship in an employment organisation. This is usually created by the PC. In addition prediction aids in boosting motivation. Prediction, therefore, results to interdependence as well as fulfilling unspoken expectations. Motivations in this regard will accrue from the employees if is able to foresee desired outcomes from the input he/she makes (Vroom, 1964). In order control stress which is also a factor that is predictable from Chris motors limited, following the current situation in the company, PC remain the main tool. This is because; PC brings in a sense of control, trust and understanding among the interdependent parties Shore, & Tetrick, (1994). Trust, loyalty, credibility, reliability & predictability they do strengthen one another. These factors, moreover, they are vital in building an organisation- employee harmonious relationship. Hence the application of these virtues by Paul is quite encouraging. Therefore, predictability as indicated by (Shore & Tetrick, 1994) gives employees the strength towards their destiny influence. This is because they are part and parcel of the organisations contract. They should therefore being left at liberty to carry their obligations or not. The Chris motors limited need also to be dynamic. This will ensure it incorporates changes as they come. The changes may result from the employee for example who is sick or even death etc. on the other hand the employee should be able to embrace new changes in the organisation with positive hearts. This will ensure there is growth in the organisation as well as mutual respect among the party. Steve and Paul should sit and agree on one common move towards the company’s success. This will be necessitated by analysing the advantages and disadvantaged of each plan on their table. If they follow this path the employees will also remain united and all work together towards achieving this objective. In addition this will build up a good relationship as indicated by the figure on the HR practices and employees link towards psychological contract. In addition, the psychological distance from the employee and the employer will be minimised since they will all be feeling wanting each other for success of the organisation. Motivational gaps in Chris motors limited Motivation can be said to be the stimulus vroom, 1964, that encourages somebody to do something out of will and whole hearted. In Chris motors limited, however, there are gaps existing among the overseers of the company and the employees leading to the split of the employees. This has not only affected the morale of the employee but also the progress of the company. These gaps existing can be analysed using theories of organisation and management. Classical theory Classical theory focuses on the formal perceptions related to workplace efficiency and management. Taylor’s scientific approach is found under this theory. Taylors approach, emphasis that mutual trust between employees and management increases output. In addition, Webber’s bureaucratic approach falls under this theory too, and it gives an explanation on the procedures, rules, hierarchy and impartial importance of personnel decision (Richard & Daft, 2009). This theory, however, has not been effectively employed in this company. This is because the old and new the employees have already split it into two. On the other hand the leadership of Steve where he looks forward to sack the old and experienced employee has as well contributed to resignation. In addition, Steve perceives the decline of Paul to embrace his idea as not driven towards the growth and maintenance of pace of business competition but to be cornered within the organization. Therefore, the personnel decision also has no room of implementation in this company. While we are also not told about the education level of Paul, it is likely that he is less learned that Steve. This may as well contribute to feeling of insecurity and hence be the reason why he does not need other additional business ideas from Steve employed. The Neo-classical theory The Neo-classical theory looks at the worthiness of a person in an organization. Theories under this category use the workers as functional piece of the organization; however, they disregard individuality and factors of human nature. Neo-classical theory relates workers and their social elements in place of work. It believes that productivity increases depending on the morale of the employees (Richard & Daft, 2009). To achieve this, manager or the head of a particular department have to maintain close relationships with the employees at a bit personal level. Also there should be a procedure to reward and recognize performance by different employees. This factor lacks totally in Chris motors limited. This is shown by the fact that Steve and Paul each operates on his own. The employee also have differed mentality about their well being and job security in the company. They therefore prefer going out and looking for jobs outside where they are assured of their job security. The morale of the employee is quite down. The experienced and old employees are likely to lose their job in presence of Steve. While the young learnt pool are likely not to be employed as per Paul. There is no coordination between the two principalities. The Modern theory Modern theory is further split up to several approaches; socio-technical approach, situational or contingency approach and the systems approach. a) Situational or contingency approach states that all situations and organizations do not have universal guidelines. It also emphasizes that before determining the best organizational approach, environmental factors need to be put in considerations. Such factors to consider should include economic circumstances, technical, political, legal or social Miller (2008). As per this approach, the most productive organization has the ability to adapt to its environment. Looking into this approach the expansion of the company should not really berated as per other competitors of the company as Paul is doing. Rather it should show its outstanding autonomy even if it embraces the idea of Steve to employ new forms of business. b) Socio-technical approach is a modern theory that looks into three organizational elements i.e. the workers, consumers and tools. The workers form the social system while consumers who make up the external environment do consume the services and the product produced by a particular organization. The resources, tools, and knowledge they are essential and are needed to do the job, therefore, making work easier. For any organization to succeed and achieve highest productivity, these three systems remain vital. Chris motors limited should bear in mind that the way the treat the employee does not only affect them directly but also the consumers taste will also be affected. They are therefore likely to lose more customers due to this fact. c) The systems approach is a modern organization theory, and it breaks structure into subsystems that are mutually dependent. These systems are connected through decision making, balance and communication. Each system includes physical environment, behavior patterns, the roles and individual employees. This approach combines the neo-classical and classical theory elements (Miller (2008). The systems approach looks into the organizational structure, the employees and how it should adapt to a particular environment. This theory has not been employed in this case. This is because not even one of directors is ready to give up his running policy or sit down and talk on how to consolidated and embrace the ideas they both have. In addition, no where the involvement of employees in decision making has been captured that means decision has only be done by the two sources of origin. Traditional theory Traditional organizational theory was taken from bureaucratic-style structure and was established in the late 19th century it calls for one bureaucratic head managing several bureaucracies. The organizational head takes the central authoritative role of presiding over other managers who are below him. Managerial duties and responsibilities can be broken down to controlling, staffing, organizing and planning. This type of organizational structure, however, does not actually credited motivations, and human skills to increase production in workforce. Employees are less valued as people, who have managerial skill or have an ability to offer self- govern input as shown by Steve in case where he disregards the ideas of the experienced and old staff. The business strategy and direction are always given from the top, and the manager carries them out (Richard & Daft, 2009). Open system theory Open system theory unlike traditional organizational structure which does not; take into account human factors in workforce like motivation and emotions open system acknowledges these factors. Companies and institutions acknowledge employees driving force of cultural and social motivators as they increase productivity at all managerial levels. In this theory, businesses does not work autonomously they involve facilities, subsidiaries, divisions and labor. It does not have a single overseer manager but includes other managers in charge of different operations as a result it recognizes motivation of its member (Miller, 2008). This theory gives more importance to outsource facilities and managers increased power in business operations. Moreover, it embraces the ideology that every company, industry and institution remains unique and requires unique system to tackle its needs. This is a fact lacking in Chris motors limited. The employees are always waiting to be directed. They do not have say in the company. The leaders are also divided in action and planning. Paul does not want the company to reach other opportunities also. Every leader is a boss and no common objectives as per the organizations Ashton. (2004). Communication channels Communication is passing and receiving of feedback through channels of communication. Communication becomes effective if the message passed by a specific individual (encoder) reaches the other party. In addition, it should be understood as the encoder of the message wants it comprehended. The decoder, then, should be in a position to take action or reply the message accordingly. In Chris Motors Limited, the mode of communication employed remains to be of vital impact to the future life of the company. In this case, communication mechanism employed will need to be both the directors and employee favorable Miller (2008). The employee should have a chance of reaching their directors smoothly as well timely. They should also be provided with a room to pass their opinions regarding the running of the company without being coursed. On the other hand, Paul and Steve need to employ a strategy of communication where the future of the company remains their common goal in their move Ashton (2004). Therefore it would be more advisable for this company to employ certain communication mechanism as follows: Partnership and coalition As a consultant I will advocate for this mechanism for application in Chris motors limited. This is strategy involves recruiting in place other organizations. These organizations need to have the heart of the wellbeing of Chris motors limited progress in them. Then Chris motors limited will let the recruited organization their needs, position as company and their cause. These form of joint initiative formed by focused groups inform of a coalition for in many organizations have shown a positive progress. The strategy also leads to effective influence and credibility gain with legislators. The coalition, however, might be a bit challenging since most of the time it calls for related organizations. These organizations on the other hand may be likely to be the competitors of Chris motors limited. However, the impact brought forth is much great at the end of the day. Publications This involves any form of information derived from primary source. Chris motors limited will be called upon to pass their information through a print form. These will ensure all the progresses and plans the company is undertaking reaches the majority of persons within and without. This is advisable because many a times other media do have shortened span to attention. In additions publications is usually attractive especially the graphs. It also passes the message to the point. Letters-to-the-editor and op-eds This strategy provides readers with a forum to express their views. The op-eds are usually the column of the quest. This column is usually on the opposite of editorials’ own paper. The Chris motors limited employees will have a chance to call the editorial page and briefly explain their ideas. The employees will also be able to send their message not only to the directors of the company but also other members they would wish to put some influence in them. The column can also be used as a discussion and passing judgment on specific issues. Telephone tree This involves network establishment of with critical persons. These persons should be reachable and willing to pick up their phone calls when alerted by any of the companies’ affiliates. The telephone tree is advocated because it is cheap, easy and fast mode of passing and receiving message. It remains crucial since very important information can be reached to the preferred persons and action taken immediately. This can either be top-down communication or down-top communication. Podcasts These are form of audio files. They are updated regularly. They are in turn posted to the websites or blogs. The main attention is given to their design such that they attract people reading them and remain appealing. This form of communication will be advisable for Chris motors limited because of their numerous unique opportunities. One of them being that, users can connect with one another either using mp3 player or iPods. Those who as well may not reach the pages of the web during the day can download the podcast and listen to it other times even when going for the job. Unofficial communication channel Unofficial communication channel encompasses the interpersonal form of passing message or data. This form of communication is utilized day in and day out running of businesses. It involves passing information such as minutes of previous meeting, memorandums, procedures and policy revision. Because of the unofficial nature of these channels it is accompanied by gossip, politics, news and shows especially on TV. This form is preferable in Chris motors limited. This is because it will reduce the feeling of having a boss with you. Rather each party is endowed with freedom to express his feeling most likely developed during the intrapersonal level of communication. However, this channel may arise issues of none compatibility with one another, they are necessary to help in the analysis and understanding the kind of employees one has and his relationship with them. The employers should also be keen not to respond to false information due to fragility of these channels. However, the channel is highly recommended following the split up in this company. Online communication Social communication has become common recently. Many people prefer posting their ideas online sites. Such sites involve the Facebook, twitter, and other social sites. Some members will raise comments as per their workplace climate. On the same others may as well comment on their employer. In this forum there is word exchange among active persons in the social networking. While some of the comments may not give a positive respond, other do and as well offer opinions of what they think is a solution to the issue at hand. The employer can also post his message there. The employee who may not see the message in other posting like newspapers and magazines will find it here instead. In conclusion, psychological contract is an agreement between the human resource and the employee. Their successful daily work and progression calls for implementation of projects and plans and utilization of varied resources figure1. Chris motors limited company lacks the coordination between the spearheading principalities. This has led to motivation reduction. The effectiveness of any organization requires daily communication and hence different communication are advisable in this company. The channels should give room for the employee to express his or her feelings. The employer should also be able to pass his message to his staff with ease. The message should in turn be understood and interpreted by the receiver accordingly. References Ashton DN. (2004). The impact of organizational structure and practice on learning in the workplace. Academy of management learning and education, vol.8, pp.43-53 Miller K. (2008). Organizational communication: approaches and processes. Retrieved from http://www.ehow.com/list_6811366_theories-organizational-structure.html, November 1, 2012 Richard L. & Daft (2009). Organization theory and design. Retrieved from http://www.ehow.com/list_6811366_theories-organizational-structure.html, November 1, 2012 Robinson SL, Kraatz SM & Rousseau MD (1994), Changing obligations and psychological contract, academy of management journal, 37, 137-151 Shore, L M, & Tetrick, L E (1994), The Psychological Contract as an Explanatory Framework in the Employment Relationship. In C. Cooper, & D. M. Rousseau (Eds), Trends in Organisational Behaviour. New York: Wiley. Sparrow PR & Hiltrop JM (1997). Redefining field of European human resource management. A battle between national mindsets and forces of business transition. Humana resource management 36(2), 201-219 Vroom VH 1964, Work and motivation, John Wiley, New York Read More