Examine how the written and the psychological contract impact the employee relationship at Nestle.

Examine how the written and the psychological contract impact the employee relationship.Please provide examples.
PLease use my guide and include citation.
Introduce the term employment relationship – citation. It is the framework under which employers and
employees come together to work towards the achievement of the organisation’s strategic objectives. A
positively framed relationship will result in interdependencies between employer and employee, whereas a
negatively framed relationship will be driven by mistrust and hostility.
Outline the major benefit of the positive employment relationship to businesses. Eg. a strong
employer–employee relationship will leads to greater employee engagement, levels of productivity, reduced
conflict between management and staff; and a more committed workforce.
Outline that the employment relationship is influenced (positively or negatively) by both the employment
(written) contract and the psychological contract – citation.
Define the employment contract and its contribution to the formal employment relationship between employer
and employee – citation.
Make a judgement or opinion on the written contract defining the employment relationship in your selected
company. Support with evidence.
Also indicate that the employment relationship is influenced by the psychological contract. Define the
psychological contract – citation.
Make a judgement or assessment on the psychological contract in defining the employment relationship in your
company. Support with evidence – positive or negative.
Outline that there are major differences between the employment contract and psychological contract in
shaping the employment relationship in your company. Some differences include:
o WC is legal binding and written whereas the PC is not legally binding and unwritten
o WC is formal and less likely to change whereas the PC is less formal and more likely to change.
o WC formed at the beginning of the employment relationship whereas the PC is throughout
Paragraph 2 – 180 words, 3 citations (Discussion of legally binding differences)
Introduce that the written contractual aspects of the employment relationship are regulated by law, confer
statutory rights and determine contractual arrangements under which the employee will work – citation
Make a judgement on how the contractual aspects are carried out in your selected company. Justify your
response. For example:
o WCs are given to all staff in your company upon entry: temporary, contract, permanent
o Executed by the HR dept, legal officer etc.
o It is a formal process which represents the summative activity of recruitment and selection
o It outlines job position, duties, working hours, length of probation, leave, date of first performance
appraisals, vacation days when confirmed, salary etc.
Provide an advantage of the WC to your selected company. For example, it allows the company to outline staff
expectations in the position and both parties to negotiate about the terms and conditions of the employment
relationship very early. In this way, expectations are made clear.
Conversely, indicate that the psychological contract is also evident between the employer and staff in your
company: where it is less formal and unwritten, unlike the employment contract.
Make a judgement on the type of the psychological contract which exists in your selected company. Justify
your response. For example:
o It could be a case that a positive PC exists between the employer and employee resulting in employee
commitment, reduce workplace conflict with management, workplace harmony, greater employee and
business productivity.
o The PC maybe a negative case in your organisation as the expectations of both parties in the
employment relationship are not being satisfied in the employment relationship. This results in
demotivated staff, lack of commitment, declined employee productivity and even high labour turnover
etc.
Indicate with the PC being unwritten and informal in your selected company, management can use people
management strategies (HR) to shape a positive PC towards a positive ER in the company through:
o Providing learning and development opportunities
o Mentoring and coaching staff
o Providing job security
o Creating a positive working environment and work culture
o Using competitive rewards which value employees work
o Treating employees fairly and with respect
Provide a benefit of these strategies when used by management to create or maintain a positive PC: For
example, greater employee motivation, productivity and employee retention.Paragraph 3 – 180 words, 3 citations (discussion of the formality between the written contract and the PC)
Introduce that the employment contract in your organisation is a formal agreement between the employer and
employee which changes less frequently and negotiated upon at the employee’s entry in the company – citation
Outline the employment contract formally outlines the employer’s expectations of the employee in the job
position.
Make a judgement on the tendency of employment contract to change. Provide company evidence to support
eg. negotiated collecting bargaining agreement, less prone to changes when compared to the PC.
Outline reasons why the employment contract can change.
o For example, HR professionals, the employer or through the collective bargaining processes change the
employer expectations in the contract or may attempt to do so.
o Through the statement “any other related duties in your job descriiption” employers may try to get
employees to do additional duties (due to changes in business conditions) which may be met with
employee reluctance. This can alter the employment relationship in an adverse way where employees
can lose their commitment to business outcomes and may even leave the organisation (labour turnover)
Indicate that different to the employment contract, the psychological contract in your business is prone to
change more frequently than the employment contract.
Outline reasons that may cause the psychological contract to change in your company:
o Changes in the business conditions may bring about reduced benefits, tighter policies, results-based
working. The impact to the employment relationship may include – loss of employee enthusiasm for the
job, reduced commitment, increase employee antagonism.
o Leadership secrecy – the perception that leaders are withholding information that staff should know
about. The impact may include to the employment relationship – loss of employee enthusiasm for the
job, commitment, increase employee antagonism.
o Changes in leadership style (from democratic to autocratic) brought about by new managers in the
business. The impact may include – loss of employee enthusiasm for the job, reduced commitment,
increase employee antagonism.
Outline a solution strategy the company can undertake to maintain a positive psychological contract eg.
meeting employee expectations for pay, job security, training.
Discuss the business outcomes to your selected company of maintaining a positive contract eg. increase
employee commitment towards business goals etc.
Paragraph 4 – 160 words, 2 citations (wrap up the discussion)
Summarise the benefits to your organisation of maintaining a positive employment relationship between
management and staff. For example, increase productivity, reduced workplace conflicts, greater employee
engagement, increase employee retention etc. (See Chap. 4)
Provide examples of ways your organisation can improve the employment relationship in your organisation.
Consider the following (See Section 3.3 and Chap 4 in the study guide)
o Providing opportunities for employee voice via (will reinforce the positive psychological contract)
Upward problem solving (attitude surveys, two way communication, suggestion schemes, digital
media)
Representative collaboration (work councils, joint consultations, employee forums)
o Using strategies to promote employee wellbeing (will reinforce the positive psychological contract)
( anti stress policy, employee counselling, work private life balance etc)
o Using social media to communicate and engage staff – cite Linacre 2017 journal article. Will also re-in
force.
Link the above strategies to the employment contract and psychological contract of the company.
Resources:
Employment contract: https://www.youtube.com/watch?v=r4K1chisYIw
Psychological contract: https://www.youtube.com/watch?v=Q29LKjk74k4
https://www.businessballs.com/building-relationships/the-psychological-contract/
https://www.charliehr.com/blog/what-is-the-psychologicalcontract/#:~:text=An%20employment%20contract%20deals%20with,they%20might%20receive%20in%20r
eturn.
https://www.businessballs.com/building-relationships/the-psychological-contract/