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WelcomeModule 2Psychological ContractNature of Work   mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
Business ProblemScenarioThe organization:   – Needs a qualified, talented person for a position   – Advertises and recruit...
Business ProblemDiscussion Questions1. What are the business concerns related to this scenario?2. What are the implication...
TurnoverNot all turnover is bad…• Dysfunctional turnover:   When talented, experienced, knowledgeable, productive, well-  ...
Nature of Work   mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
how work has changed since the 1980s             up to 1980s                      after 1980s              work teams     ...
HRM practices and Psychological Contract   mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
Whats Psychological contract  Psychological Contract first emerged in the 1960s, notably in the work of  organizational an...
Psychological Contract refers to the relationship between an employerand its employees, and specifically concerns mutual e...
Psychological Contract represents….the obligations, rights, rewards, etc., that an employee believeshe/she is owed by his/...
Michael ArmstrongsHuman Resource Management Practice (10th Ed., 2006)"...the employment relationship consists of a unique ...
Edgar Scheins 1965, definitionPsychological Contract, as being (somewhat more vaguely) animplication that: "...there is an...
Wikipedia (April 2010) on Psychological Contract"A psychological contract represents the mutual beliefs,perceptions, and i...
Terms associated•   Organizational citizenship behavior (OCB)•   Engagement•   Involvement•   Association•   Affiliation  ...
Factors for Psychological Contract    –   Culture    –   Management    –   People around    –   Disciplined workplace    –...
Psychological Contract offers•   a way to interpret and improve the relationship between employer and    employees, with c...
Open to different interpretations• There are a series of mutual obligations on both sides (which include,  crucially, inta...
employees feelings and attitudes act on two levelstreatment at workhow they see themselves and their relationship with the...
The composition of organizations is determined byAttraction:    – People are attracted to organizations whose attributes a...
Employer Attractiveness Dimensions• Interest Value: The extent to which an individual is attracted to an  employer because...
What makes employees STAY?or what makes increased Psychological contract     mm.bagali@jainuniversity.ac.in    /   sanbag@...
What makes employees STAY?•   Advancement opportunities•   Constituent attachment (co-workers, boss, employees)•   Extrins...
HRM Systems and Psychological contract    mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
HRM Systems•   individual employee motivation and management•   motivation and management of workgroups and departments•  ...
Where can we find lack of Psychological contracts•   Absenteeism•   Tardiness•   Poor attitude/insubordination•   Poor tas...
Employer Branding  mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
Employer Branding: What is It? Why Do We Need to Do It?“internally and externally promoting a clear view of what makes a f...
Employer Branding ResearchA strong employer brand is related to:    – Pride of individuals expected from being organizatio...
Goals for/of Employer Branding• Establish an image of the employment experience• Create synergy with consumer brand:   – A...
Five Steps to Building an Employer Brand1.   Understand your organization2.   Create a compelling brand promise that mirro...
Ideal HR Practices  – Performance Management  – Performance Appraisal  – Training and development  – Compensation and bene...
• Leadership• Reward system• Participation  mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com
Retention: What Makes Employees Stay?mm.bagali@jainuniversity.ac.in   /   sanbag@rediffmail.com   33
Google• #1 on Fortune’s 100 Best Places to Work in 2007 and 2008• Known for little bureaucracy• Hire smarts; less emphasis...
Embeddedness Theory of RetentionPremise: The more embedded an employee is in the organization, the less   likely they will...
mm.bagali@jainuniversity.ac.in       /    sanbag@rediffmail.commm.bagali@jainuniversity.ac.in    /       sanbag@rediffmail...
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MM Bagali, HR, MBA, HRM, HRD, Research .....HR module 2

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MM Bagali, HR, MBA, HRM, HRD, Research

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MM Bagali, HR, MBA, HRM, HRD, Research .....HR module 2

  1. 1. WelcomeModule 2Psychological ContractNature of Work mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  2. 2. Business ProblemScenarioThe organization: – Needs a qualified, talented person for a position – Advertises and recruits for the position – Hires someone for the positionThe employee: – Is trained and socialized – Experiences a learning curve – Becomes productive – Leaves the organization mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com2
  3. 3. Business ProblemDiscussion Questions1. What are the business concerns related to this scenario?2. What are the implications of these costs to employers in terms of recruiting and retaining employees? mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com3
  4. 4. TurnoverNot all turnover is bad…• Dysfunctional turnover: When talented, experienced, knowledgeable, productive, well- networked, high-potential employees leave the organization• Functional turnover: When disruptive or poor-performing employees leave the organization mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com4
  5. 5. Nature of Work mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  6. 6. how work has changed since the 1980s up to 1980s after 1980s work teams virtual teams factory/office working home/mobile-working line management matrix management customer service call centers in-house services outsourcing and off-shoring job for life job for 2 years a lifes work a career for 10 ( or 5 )years onsite services online services few employee rights many employee rights low employee awareness high employee awareness employees isolated employees connected reliable pensions unreliable pensions
  7. 7. HRM practices and Psychological Contract mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  8. 8. Whats Psychological contract Psychological Contract first emerged in the 1960s, notably in the work of organizational and behavioral theorists Chris Argyris and Edgar Schein mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  9. 9. Psychological Contract refers to the relationship between an employerand its employees, and specifically concerns mutual expectations ofinputs and outcomes – feelings of employees – Reaction of Employee – Behavior of Employee – how the employee is treated by the employer – what the employee puts into the job mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  10. 10. Psychological Contract represents….the obligations, rights, rewards, etc., that an employee believeshe/she is owed by his/her employer, in return for the employeeswork and loyaltyThe notionnotion of relationship or trust or understanding mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  11. 11. Michael ArmstrongsHuman Resource Management Practice (10th Ed., 2006)"...the employment relationship consists of a unique combination of beliefs held by an individual and his employer about what they expect of one another..." mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  12. 12. Edgar Scheins 1965, definitionPsychological Contract, as being (somewhat more vaguely) animplication that: "...there is an unwritten set of expectationsoperating at all times between every member of an organizationand the various managers and others in that organization..." mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  13. 13. Wikipedia (April 2010) on Psychological Contract"A psychological contract represents the mutual beliefs,perceptions, and informal obligations between an employer and anemployee”. mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  14. 14. Terms associated• Organizational citizenship behavior (OCB)• Engagement• Involvement• Association• Affiliation mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  15. 15. Factors for Psychological Contract – Culture – Management – People around – Disciplined workplace – Governance mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  16. 16. Psychological Contract offers• a way to interpret and improve the relationship between employer and employees, with consideration of: – formal written terms or contract of employment - pay, hours, holidays, conditions, duties and responsibilities, etc – (potentially any or all) other aspects of the work - job interest, management, development, satisfaction, advancement, etc – what the employee brings to the job or puts into the job - effort, time, loyalty, innovation, results, etc – the employing organizations performance and situation - market success, financial strength, or lack of (seen as a sort of ability to reward, or constraint to reward) – the state of the job market and economy (for example, alternative job or career options, availability of replacement staff) mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  17. 17. Open to different interpretations• There are a series of mutual obligations on both sides (which include, crucially, intangible factors that can be impossible to measure conventionally)• It is a relationship between an employer on one side, and on the other side an employee and/or employees (which by implication distorts the notion of a formal contract between two fixed specified parties)• subject to the perceptions of the two sides (which adds further complexities, because perceptions are very changeable• Psychological Contract is almost never written or formalized, which makes it inherently difficult to manage, and especially difficult for employees and managers and executives and shareholders to relate mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  18. 18. employees feelings and attitudes act on two levelstreatment at workhow they see themselves and their relationship with the employer,and their behavior towards the employer mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  19. 19. The composition of organizations is determined byAttraction: – People are attracted to organizations whose attributes are congruent with their own personal characteristics (e.g., values, personality)Selection: – Organizations select applicants with attributes it desires (influenced by organizational founders)Attrition: – People will leave organization if they don’t fit. mm.bagali@jainuniversity.ac.in19©SHRM 2008 / sanbag@rediffmail.com
  20. 20. Employer Attractiveness Dimensions• Interest Value: The extent to which an individual is attracted to an employer because of the excitement and creativity of the work environment• Social Value: Attraction based on a collegial work environment with good team atmosphere• Economic Value: Attraction based on salary and benefits• Development Value: Based on recognition of work and career-enhancing opportunities• Application Value: The employee’s ability to apply what they have learned to teach others and interact with customers in a way that is positive and humanitarian. mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com 20
  21. 21. What makes employees STAY?or what makes increased Psychological contract mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  22. 22. What makes employees STAY?• Advancement opportunities• Constituent attachment (co-workers, boss, employees)• Extrinsic rewards (pay, bonus)• Flexible work arrangements• Investment in the organization• Job satisfaction• Lack of alternatives• Location• Non-work influences• Organizational commitment• Organizational justice• Organizational prestige mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  23. 23. HRM Systems and Psychological contract mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  24. 24. HRM Systems• individual employee motivation and management• motivation and management of workgroups and departments• entire workforce motivation and management• review of grading, management hierarchy,• recruitment and selection and induction• training and development• assessment of leadership - vision, style, capability• assessment of traditional workplace terms and conditions, contracts, etc• organizational communications• organizational philosophy and culture mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  25. 25. Where can we find lack of Psychological contracts• Absenteeism• Tardiness• Poor attitude/insubordination• Poor task performance• Poor contextual performance• Lack of willingness• Postponement mm.bagali@jainuniversity.ac.in25 / sanbag@rediffmail.com
  26. 26. Employer Branding mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  27. 27. Employer Branding: What is It? Why Do We Need to Do It?“internally and externally promoting a clear view of what makes a firmdifferent and desirable as an employer.” (Lievens, 2007) mm.bagali@jainuniversity.ac.in27 / sanbag@rediffmail.com
  28. 28. Employer Branding ResearchA strong employer brand is related to: – Pride of individuals expected from being organizational members (Cable & Turban, 2003) – Applicant pool quantity and quality (Collins & Han, 2004) – Stable and positive workforce attitudes and organizational performance compared to broader market (Fulmer, Gerhart, & Scott, 2003) mm.bagali@jainuniversity.ac.in28©SHRM 2008 / sanbag@rediffmail.com
  29. 29. Goals for/of Employer Branding• Establish an image of the employment experience• Create synergy with consumer brand: – Align promise to customer with promise to employees• Clearly state “what’s in it for me” to potential applicants• Entice the right candidates to apply for the job. mm.bagali@jainuniversity.ac.in29©SHRM 2008 / sanbag@rediffmail.com
  30. 30. Five Steps to Building an Employer Brand1. Understand your organization2. Create a compelling brand promise that mirrors your customer brand promise. Articulate your value proposition for employees3. Develop standards to measure the fulfillment of the brand promise4. Align all people practices to support and reinforce the brand promise5. Execute and measure mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com30
  31. 31. Ideal HR Practices – Performance Management – Performance Appraisal – Training and development – Compensation and benefits – Employee Relations – Learning Environment mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  32. 32. • Leadership• Reward system• Participation mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  33. 33. Retention: What Makes Employees Stay?mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com 33
  34. 34. Google• #1 on Fortune’s 100 Best Places to Work in 2007 and 2008• Known for little bureaucracy• Hire smarts; less emphasis on experience• Good ideas are implemented, regardless of who they came from• What is it like to work at Google? mm.bagali@jainuniversity.ac.in34©SHRM 2008 / sanbag@rediffmail.com
  35. 35. Embeddedness Theory of RetentionPremise: The more embedded an employee is in the organization, the less likely they will actually leave.Embeddedness factors include: – Fit: • With organization--working conditions, culture. • With community--affordable housing, commute, pace, etc. – Links (connections): • To people and projects in organization. • With the community. – Sacrifice: What would I have to give up? • From organization (benefits, flexibility, tuition, perks). • Community (schools, neighborhoods, friends). mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com
  36. 36. mm.bagali@jainuniversity.ac.in / sanbag@rediffmail.commm.bagali@jainuniversity.ac.in / sanbag@rediffmail.com

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