Changing Nature Of The Psychological Contract Management Essay

Changing Nature Of The Psychological Contract Management turn upThe mutual expectations people invite from one another in a relationship of employer employees are comm nevertheless referred to as a mental conjure. The content of these charters corporation be changed over time and stomach affect the behavior of the two. The origins of these mental contracts go beyond thousands of years back. Amidah (1998) was one of the initial writers who used the term mental contract as the mutual understanding between employees and their employers.The psychological contract between employers and employees related to origin security has been facing changes due to the economic carry out grading. The increasing rates of short term and contractual employment cod forced employees to seek ego actualization sort of psychological contracts.The changing nature of psychological contracts of generation Y has certain implications on organisations which gather in al modes been interested in ha ving manpower attached to the transcriptional goals and objectives.According to recent literature, psychological contract is an individuals beliefs necessary to perform loading that may exist between the employee and the organization (Lester, Turnleyet.al. 2002). Individuals perception and expectations from the organization in terms of receiving benefits, wages and opportunities against the services provided to the organization by the employee used to form the foundation of any psychological contract (Lester, Turnley et.al. 2002). The inherent perceptual nature of the psychological contract between employers and employees may pick up contrasting implication about obligations of the contract (Lester and Kickul, 2001).Nowadays companies are more focused on the acquirement of corporate goals and profit margins while noticing stock merchandise prices because of the competitive crinkle environment all around the world (De Meuse, Bergmann et. Al., 2001). This is because of the fact that the world has seen the problem of corporate downsizing, restructuring and mergers since 1980s and 1990s (De Meuse, Bergmann et. al 2001).This current scenario of doing business has absolutely changed the nature of employee and employer contract and the demand of this relationship. In the past, these psychological contracts were of long term where employees were committed with an organization where they continued to learn as well as they got high job ranking but now the psychology of the contract has seen changing nature because of the availability of short term employment with upscale engagement for technical and professionals workers (Smithson and Lewis, 2000, Lester and Kickul, 2001). Hiring of high skilled professional(s) for a specific task completion is one of the emerging trends in the business community (Lester and Kickul, 2001) and consequent termination of the lag with the attainment of work objectives. This phenomena has made the modern workplace a source of stress and extra work load and job insecurity and decreased commitment to organisational goals and objectives in return (De Meuse, Bergmann et. al).The take of personal growth, development of transferable skills, networking opportunities and career management for immediate job has been gaining potential among professionals due to the current scenarios of job insecurity (De Meuse, Bergmann et.al., 2001, Lester and Kickul, 2001).The changing environment of employment has considered another driver of the change in nature of psychological contracts of generation Y. The previous employees to employer psychological contracts were relational in nature and their specific features were trust, respect and loyalty between the employee and the employer, but, this new insecure job environment has randomly changed the nature of the psychological contract from relational to transactional nature.This transactional veer has been defined by De Meuse and Begmann et.al (2001) as an explicit or an implicit promise having the capacity of maintaining in make-up about monetary remuneration available to employee against his services to the organization. This annual change in nature of the psychological contract was predicted by Rousseau and Parks in a research conducted during 1993 with an explanation of change in the nature of contract from relational to transactional in case of occurrence of any violation of the contract.However, it is important to maintain the equilibrium of trust between the employee and the employer either in relational psychological contract or in transactional psychological contract, but, in the present situation of job insecurity it is hard to have any trust on the employer or employee. Therefore, the lack of job security has brought the concentration of employees to acquire transferable skills and techniques and contracts of transactional type (De Meuse, Bergmann et al).Impacts of the changing nature of the psychological contract of generation Y on organizations With the emergence of new markets, competitors and technologies have been increasingly changing the behavior of organizations towards the hiring of skilled and well trained employees at every level of the organization (Lester and Kickul, 2001). Businesses of today are only selecting skillful employees for short term periods to make their projects accomplished by utilizing the skills and expertise of professionals (Lester and Kickul, 2001). It is because of the use of new technologies in business processes and to get a competitive frame in in the market. To achieve this desired level, organizations have to keep track of professionals and motivated and committed workforce to efficiently achieve their goals.It has been studied that the changing nature of psychological contracts is because of the reducing commitment of employees due to job insecurity and enhanced competition faced by todays employers (Bunderson 2001, Lester and Kickul, 2001). However, high level of commitment and sati sfaction is enjoyed by employees who have long term psychological contract as per studies conducted during 1998.There are certain measures that should be taken by the organization to retain and motivate their employees flush on the presence of economic pressure and new organizational structure (Lester and Kickul, 2001). The level can be achieved by just understanding the elements of psychological contracts as well as the fact that it is an evolving and continually changing contract and organizations have the right of making a choice regarding an employee to get committed and motivated workforce and employment.According to Maslows hierarchy theory, the highest need for humans is self-actualization. Lester and Kickul (2001) states that todayemployees arebecoming increasingly aware of the non-monetary rewards which the firms are willing to providein exchange for their skills. It entails that employees have now reached at a certain point in time where theyre able to seek out the self-a ctualization.Self-esteem or self actualization is the highest need of humans as stated by Maslows hierarchy theory. Employees are increasingly getting awareness of the behavior of organizations of giving non-monetary rewards to employees against the skills of professionals and technical persons (Lester, Kickul, 2001). This is the time when it can be suggested that employees are gradually heeding towards the state of self actualization.Stalker (2000) stated that successful companies of the day are keeping balance between the needs of the employee and the needs of the organization. To achieve this, companies are needed to maintain a balance between their efforts and time investment. Managers are responsible to achieve this balance while keeping the workforce committed and motivated (Lester, Turnleyet, al., 2002).It is a fact that nowadays job insecurity has made psychological contracts a dynamic and evolving one and can be handled by the organization by just understanding the causes of changes and timely changes in the contract according to the needs and demand of the sources (Lester and Kickul, 2001). Lester and Kickul (2001) shows that aproactive approach to the psychological contracts can get down employees intentions to leave since their needs can be fulfilled by the organization.The other step that can be an effective support to minimize the gap of the psychological contract is communication. Better and timely communication between the contracting bodies can reduce the conflict and can reduce the gap of psychological contracts (Lester and Kickul, 2001). Open have management techniques are an effective communication tool between the organization and employees and help in the formation of an effective communication frameworkfor the organizations.Successful organizations are requisite to startworking on the psychological contract before the hiring of the employee. The organizations publications, audience processes, contract negotiation and orientation pro cesses are some of the ways that can help organizations to make bump changes in the psychological contract and keep it up to date (Niehoff and Paul 2001).Organizations literature and publications create the first impression of all the values espoused by the employers.The interview process then helps in establishing the image of the organization for potential employees (Niehoff, Paul, 2001), while promoting expectationsranging from the tangiblessuch as pay and benefits,to the intangibles such astreatment of employees or peak of empowerment etc (Niehoff, Paul, 2001). As suggested by Niehoff and Paul (2001), byproviding Realistic Job Previews like Cisco Systems(Lester and Kickul, 2001), candidates can be given a realistic and make believe view of the actual expectations of the work hours, duties and performance levels(Niehoff and Paul, 2001).The negotiation process (after an offer is made to a candidate)provides a furtheropportunity to clarify the specific detail regarding the expe ctations of both parties(Niehoff, Paul, 2001). Finally, the orientation program gives an opportunity to re-enforce the psychological contract which has been formed. Once all of these are in line with each other and also in line with the companys expectations, the company can form a contract that is expected to be clearly understood by both parties and has less chances of being breached. closeChanged psychological contract is the demand of the modern economic environment. It is the demand of both the organization and employees. The psychological contracts of generation Y are more transactional and related to self actualization. This change in the nature of the contract has been considered by the management of an organization and employees with the increasing demand of giving more time and effort in the formation of the psychological contract acceptable to the organization and employees.As it has been seen that psychological contracts are formed on the basis of trust, but it can be s trengthened by the two following factorsInternal factorsExternal factorsInternal factors can be the individuals perception that can be the outcome of his or her cultural behavior, but foreign factors include situations that how organizations are shaping their policies in the interest of employees and how much they are acknowledging the perceived obligations according to the formal contract of employment with those professionals or skilled technicians. These measures can be used to determine the commitment of employees to the organizational goals and objectives and any violations can lead to the job satisfaction depletions actions. However, the choice to be in the employment contract can be up to individual employee. The long lasting employer to employee relationship can only be possible if there is a strong build up up credibility between employer and employee. This credibility can give the contract more and more reliance and can be effective to build up a long lasting relationsh ip. Psychological contract will remain strong till the time they remain in favor of the employees orientation towards spirit and can be the source of strong commitment of individuals to be or not to be part of an organization. But with the change and any amendments in organizational structure, strategy and the job role, the individual can shift to new works and job roles and this new work role can be the source of burst return on relationship (ROR) than on return on investment (ROI). Strong and reliable psychological contract can provide the organization with a healthy and fruitful relationship between the employee and employer that would be helpful in the sustainability of the organization. Whatsoever it can be better concluded in a way that the changing nature of the psychological contract of generation Y is only the result of changing nature of job environment and increasing insecurity to jobs, therefore, employees have transformed their interest from signing relational contrac t to transactional contract. This transformation of contract nature has caused the organization to bear the loss of committed and loyal workforce for a long period of time on one hand while getting the benefit of having highly skilled professionals for the completion of their project within a short period of time.