The Changing Employer-Employee Relationship and Implications on HRMOrganizations now operate in a rapidly changing world. Changes in consumer behavior, increased competitive pressure, technological advancements, as well as regulatory shifts in the last few decades have generally compelled organizations to adjust their strategies, objectives, policies, and actions in an attempt to enhance organizational efficiency and profitability (Freese, Schalk & Croon, 2011; Ulen, 2015; Abu-Doleh & Hammou, 2015). In fact, the ability to accommodate change has been marked as a vital ingredient of success in the constantly evolving operational environment (Wellin, 2007). Whereas its importance cannot be overemphasized, adapting to change has had a significant impact on the psychological contract, which essentially denotes the intangible employer-employee relationship, particularly exemplified by mutual expectations between the employer and the employee (Smissen, Schalk & Freese, 2013). The shifting psychological contract has consequently presented a significant challenge for organizations, specifically their human resource management (HRM) function. The challenge relates to maintaining and improving employee motivation, commitment, and job satisfaction, which tend to be crucial drivers of both individual organizational productivity and performance (Smissen, Schalk & Freese, 2013).
It is imperative for organizations to acknowledge the shifting psychological contract, and create new contracts that are favorable to both the employer and the employee. With reference to literature in the area of organizational behavior and HRM, this paper explores the changing employer-employee relationship and its implications on HRM. First, a comprehensive definition of the notion of psychological contract is offered. Attention is then paid to factors responsible for the changing employer-employee relationship, possible consequences of the new relationship, and the actions HRM can resort to, to create contracts that resonate with the modern work environment.
The Changing Employer-Employee Relationship and Implications on HRM
The notion of the psychological contract is not new. It has dominated organizational behavior HRM discourses since the 1960s (Wellin, 2007). Though there is no universally accepted definition, the notion generally denotes the unwritten agreement that define the relationship between an organization (employer) and its employee (Sims, 1994). It refers to the beliefs, perceptions, or expectations employers and employees perceive concerning their obligations to one another (Robinson, Kraatz & Rosseau, 1994). Essentially,...
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now