Conclusion - The Final Touch

The Final Touch 

Human resource management is concerned with all aspects of how employees are recruited and managed in an organization. Human resources are the valuable and profit creating resources in an organization (Armstrong, 2008). Therefore, building a proper employment relationship is very much important (Ahmed et al., 2016).  This cannot be only done through employment contract. Employment contract can recruit an employee and give them a legal bond but it cannot retain the employee. This kind of employment relationship is built through psychological contract (Savarimuthu and Rachael, 2017). It is the key strategy of HRM to make the employee stay committed to the organization and to make the employee work with his heart and soul. In addition, it makes the employee go an extra mile to achieve organizational objective (Anggraenil , Dwiatmnadja and Yuniawan, 2017).

Psychological contract is explained to be the unwritten, informal contract that exists in the mind of employee and employer having expectations and promises as the base. It is important to fulfil the employee expectations in order to build a trust and to make the employee stay in the organization (Armstrong, 2010).  Violation of employment contract will impact the organization negatively in every way. Employee’s commitment and dedication towards the organization will fail, productivity will decrease, employee will be dissatisfied and employee will have intentions to leave the organization (Kataria, 2015). Recruiting and training new employee who suitable for the position will cost the organization. Therefore, it is very much important to build and maintain a positive psychological contract and to retain the employees in the organization. Building a psychological contract starts at the very initial stage of recruiting. It is very much important to express both parties’ expectations. This could be done through continuous communication during recruitment and induction stage (Tomprou and Nkolaou, 2011).

Source: https://www.hrexchangenetwork.com/learning/articles/the-psychological-contract-relevance-for-our-every

In conclusion, psychological contract shapes the behavior of the employee and employer and helps the management to manage the staffs effectively. The mutual understanding and communication of expectation will pave the way for positive psychological contract. It is very much important to act in good faith, respecting and sharing equal concern between employee and employer in order to build a positive psychological contract (Savarimuthu and Rachael, 2017).Human resource management is concerned with all aspects of how employees are recruited and managed in an organization. Human resources are the valuable and profit creating resources in an organization (Armstrong, 2008). Therefore, building a proper employment relationship is very much important (Ahmed et al., 2016).  This cannot be only done through employment contract. Employment contract can recruit an employee and give them a legal bond but it cannot retain the employee. This kind of employment relationship is built through psychological contract (Savarimuthu and Rachael, 2017). It is the key strategy of HRM to make the employee stay committed to the organization and to make the employee work with his heart and soul. In addition, it makes the employee go an extra mile to achieve organizational objective (Anggraenil , Dwiatmnadja and Yuniawan, 2017).

References

Ahmed,E., D’Netto,B., Chelliah,J and Fein,E. (2016) Psychological contract breach: consequences of unkept promises of permanent employment. Contemporary Management research, 12(2), pp. 183- 212

Anggraenil,A ., Dwiatmnadja,C and Yuniawan,A.  (2017) the role of psychological contract on employee commitment and organisational citizenship behaviour: A study of Indonesian young entrepreneurs in management action. SA Journal of Industrial Psychology, 43(1), pp. 1-9 [online]. Available at < https://doi.org > (Accessed on 20^th April 2019)

Armstrong, M (2008) strategic human resource management: a guide to action. 4^th ed. London, Kogan Page.

Armstrong, M. (2010) Armstrong’s essential Human resource management practice: A guide to people management. 1^st ed. United States, Kogan Page.

Kataria,H. (2015) Impact of psychological contract on employee-employer relationship and organizational performance. The International Journal of Business & Management, 3(8), pp. 234-240

Savarimuthu, A and Rachael,A, J. (2017) Psychological contract - a conceptual framework. International Journal of Management, 8(5), pp.101-108

Tomprou,M and Nikolaou,L. (2011) A model of psychological contract creation upon organizational entry. Career Development International, 16(4), pp. 343-357.