Changing Social Contract Between Employee & Employer

Changing Social contract between employer &Employee Dr Amit Kumar singh Lecturer, Department of management Mizoram University,Aizawl

The balance of economic efficiency and social equity is the burning issue in the employment relations. By meeting the employment needs of employer, generating profits to establish and maintain economic efficiency; whilst maintain a balance with the employee and creating social equity that benefits the worker so that he can find and enjoys healthy living. Globalization has affected these issues by creating certain economic factor that disallow or allows various employment issues. Economist Edward Lee(1996) studies the effect of globalization and finds that in industrialized countries an average of almost 70%of workers are employed in service sector , most of which consist of non-tradable activities. As a result, works are forced to become more skilled and develop sought after trades, or find other means of survival. Ultimately this is a result of change and trends of employment, an evolving work force and globalization that is represented by a more skilled and increasing highly diverse labor force that are growing in non-standard form of employment. Due to the affect of economic liberalization careers are changing rapidly, especially in knowledge based organizations where the measure of actual works performed by the employee is difficult therefore, established norms for long term employment in a single firm with career opportunities become under serious challenge. Some authors have suggested that the implicit social & employment contract of post word war period is breaking down

and it is being replaced by a much less clear, less mutual and less binding set of mutual expectations between employee and employer (eg.Kochan1997). Other Scholars note the “fraying” of the psychological contract that used to bind employees and employers together. Conception of social or employment contract seems to require updating for at least two reasons. First, if there ever was an implicit “employment contract” it is changing dramatically .Secondly this requires a new conception of the employment relationship ,which is more fluid, more adaptable to different life stages and needs ,and more variable than the traditional conception s found in current Industrial Relations employment contracts are written agreements between an employer and an employee that detail the work place duties and responsibilities of the employee and the compensation that the employer provides in return. Employment/ Social contracts typically lay out the wages, bonuses, vacations medical leaves, stock options and other benefits and compensations that the employee receives for fulfilling his obligations to the employer. These obligations are also specified in the contract, as is the duration of the employer – employee arrangement, the authority of the employee, ownership of intellectual property and dispute resolution mechanism, and these agreements also includes termination provisions, and they may also include post- employment confidentiality , non-compete ,and non –solicitation clauses. Some business experts, however contend that employment contract can have negative impact on long-term business health. According to this point of view, employment contracts undercut employee trust , loyalty and dedication toward employers because they are seen as cold and impersonal documents that send on “everyone needs to look out for oneself “message .The new employment contract inherently de-motivates employee sprit ,and over the long run .will sub optimize organizational

performance ,becoming a self destructive business society . Critics contend that the emotional detachment that accompanies employment contracts will lead to increased turnover in important positions ,especially since demographic trends and the ascendancy of the information based economy are expected to increase the competition for experienced workers in the early part of the twenty first century. Old Social Contract (1)Job Security:- Under the old employment contract employees expectations were more on long stable career and employment relationship that they observes what acts are available to present the employees of industrial establishment from having “different contracts of employment with different workmen employed by them under the same roof and performing similar duties.” The Act requires the employer to lay down precisely the terms and conditions of employment with regard to discharge ,misconduct ,disciplinary action ,dismissal ,leave and holidays ,hours of work and redressed against unfair treatment and so forth. (2)Life Career with one Employer:- Under the philosophy of old social contract employees are expected to pursue a careering the organization that are mainly related to the time that they spend in the organization .A life time career path exist in the organization . In return of this career commitment, employees have tenure; that is they will be retained even if they “burn out” or if their skills becomes obsolete. (3)Stable Positions/Job Assignments:- It refers to the degree to which the jobs or positions within the organization are standardized. If a job is highly formalized, the job incumbent has a minimum amount of discretion over what is to be done, when it is to be done and how he/she would do it . Employees can be expected to always handle the same input in exactly the same way, resulting in a constant and uniform output. In old social

contracts there are explicate Job descriptions organizational rules and clearly defined procedures.

,

lots

of

(4)Loyalty to employer:- The code of discipline has came to be accepted not only by the organization but by the employers that their members will not engage or cause other employees to engage in any union activity during the working hour nor they discourage unfair labor practices such as negligence of duty, careless operations, damage of property, interference with or disturbance to normal work and in subordinations ,and will always take prompt action to implement awards, agreement, settlements and decisions. (5)Paternalism:- Paternalism refers to the establishment of fundamental virtue of Ren (benevolence) within the originations. Under such influence ,the concept of ‘work place is family’ is wide spread among organizations . It requires organization to look after the interest of fellow employees, while employees have high commitment to the origination. The outcome of such contracts can be reflected in management and individual behaviors such as – employee security, compensation and reward schemes, training and development system from the management aspects and high commitment, self discipline and blurred time boundary between work and leisure and so on from the employee aspect .The eventual goal of such effort is to achieve a peaceful and orderly work place. (6)Employ Sense of employment: - In the employment process Job description contains the entitlement of jobs that clearly reflects the authorities and responsibilities associated with that entitlement it also dignifies the employee that holds the post and it create a sense what the organization expects from the employee. (7)Stable, Rising Income:- A potent objective of legislation on wages is the regulation and fixation of quantum of wages.

Although prior to state intervention in the field wages, it was accepted that free contract between the individual employee and their employer would result in fixation of such wage rates which would satisfy both. Strong Public opinion, however gradually forced the state to adopt legislation for fixation of wages in industries. (8)Job Related Skill Training: - In old social contract companies that attempt to employ only people who already have needed skills, Place very less emphasis on training. The employee in this method learns to master the operations involved on actual job situation under the supervision of his immediate boss .It is necessary here to make sure that supervisor who is importing training is trained and motivated to be good trainer. New Social Contracts (1)Few Tenure Arrangements:- Under the new social contract ,restructuring and downsizing have changed the relationship between employees and employers .But organizations can address the effect of displacement and fulfill their responsibilities in the new environment . For one things there has never been any portability in pensions, or very little, meaning that you could not take a pension if you want to grow larger. Situation arises in which employees have 4 years in one placed and 8 years in another’s. Portability is also an issue for health care ,and there are similar challenges. (2)Fewer life careers :- Tung (1998) Suggest that ‘boundary less’ careers are becoming the pattern for international assignees –as with other ‘high demand’ professional s. A boundary less career assumes that individual will move from one company to another to peruse the best opportunities for their own professional development. Recently authors have suggested that professionals may accept the global assignment s to gain the additional skills and experience that they perceive to be valuable for their

advancement in their career not in their company .Data from the U.S. suggest that in early 1970s a manager works for one or two companies in his or her entire career. The U.S. managers of today are more likely to hold 7 to 10 jobs in their life time. (3)Temporary Project Assignment:- Project assignment identifies the important task required on the global assignment and the type of cross cultural knowledge and skills needed to perform those tasks effectively .As for as the assignment analysis of each type of global assignment is concerned , caligiuri provides a broad range of tasks that are carried out by each type of assignee and identifies the general level of cross –cultural knowledge and skills required to successfully complete. It clearly indicates that new assignment is a job context not a job description. (4)Loyalty to self:- Under the new social contract the employee is more oriented towards the activities and attributes that serves to strengthen the employees self esteem , self confidence , selfcontrol, self awareness, self regulated and mental hygiene. (5) Relationship for Less Warm Familial:- New social contract minimizes the degree fundamental virtue of ‘Ren’. Under such influence the concept of Paternalism vanishes , and individual becomes more responsible for activities and attributes that serves to strengthen the expatriates self-esteem & self confidance.

(6) Personal Responsibility for Ones own Career &Job:-The repatriation ‘problem’ may be very strategic concern for MNCs ,organizations should expect some natural attrition –as they would with any other ‘high demand’ professionals. Harvey (1982) found that many returns may have better career opportunities in MNCs other than the company that sent them on the global assignments . He suggested that in such cases, many repatriates

would be likely to leave for both ‘Motivational and Monetary reasons’. As with other individual career decisions rather than staying individual may chose to leave for a better job offer elsewhere and not perceive the organizational exit as a negative job move. (7)Pay that reflects contributions:- Employees pay should be a function of the services that he would render to the organization in future .What service he will provide in different service states and the value of service states may be the determinant of pay. Under new social contract pay should not be time bound but is based on the actual potential and performance of the employee in accordance with organizational objective. (8) Learning Opportunities:-Individual can also learn by what happens to other people and just by being told about something, as well as by direct experiences. So far example , much of what we have learned comes from watching models –Parents , teachers , peers , motion picture ,bosses and so forth.

Expectations from new Social Contract (A)Employer’s expectations1- Best performance by the employees. 2- Commitment to the organization. 3- Participation in developmental activities. 4- Willingness to improve the organization and himself. 5- Ethical or honest behavior (B)Employees Expectations1-Fair Pay and Benefits

2-Sequrity 3-Respect 4-Opportunities for growth 5-Access to timely information 6-Safe and healthy work place (c) Joint-expectations1-Partnering replaces Partnership 2-Employees are Value- added resources, not merely cost to be cut 3-Employer and Employee must focus on customer needs and desires ReferencesHorzing (2004), International Human Resource Management, SAGE Publication New Delhi. Robbins, (1999) Organizational Behavior, PHI New Delhi Butler, Timothy and James. (1999) “Job Sculpting: The Art of Retaining your best People”. Howard Business Review. LeeE,(1996) “ Globalization and Employment” International Labor Review, Vol135 No.5, pp 485-98. Terry (1996), Principles of Management , A.I.T.B.S. New Delhi. Arthur M.B. and D.M. Rousseau.ed. The Boundryless Career. Oxford University Press.