A. How the employer – employee relationship is changing? 2 1) The psychological contract3 2) Traditional psychological contract3 3) Transforming the psychological contract4 B – Why the employer – employee relationship is changing? 4 1) Diverse Workforce4 2) Competition in the Business Environment5 3) Structure of Organization Change5 4) Technological changes6 QUESTION 26 A- Analyse critically the rationales that Facebook and McKinsey & Company emphasizes on offering different kind benefits to its employees. 7 1) Different types of employees7 2) Employee’s satisfaction and company’s performance7 ) Public image8 4) Efficiency, effectiveness and productivity8 5) Retaining talents9 B- Discuss to what extent that Facebook & McKinsey has to be responsible to its employee’ wellbeing9 1) Health9 2) Safety10 3) Welfare10 CONCLUSION11 REFERENCES12 QUESTION 1: It is notable trend that relationship between employers and employees are changing? Critically evaluate and discuss what likely reasons of this change. According to Mathis and Jackson (2012) the relationship between managers and their employees must be handled efficiently if both the employees and the organization are to prosper together.
Whether or not some of the workers are represented by union, activities related with employee health, safety, and security must be addressed in all organizations. To facilitate good employee relations, employee’s right must be addressed. It is important to develop, communicate, and update Human Resource Management policies and rules that managers and employees alike know what is expected. In some businesses, union and management relation must be addressed as well. A. How the employer – employee relationship is changing?
For over the past ten years, research done by Rodriguez, Green and Ree (2011), has shown that, the relationship between employers and employees has changed. According to Haniph (2012), the relationship is changing because the psychological contract has been broken. Apart from that, according to the International Labour Conference Provisional Record (2006), the employment relationship, it is stated in the report that the relationship takes the form of a “psychological contract” that describes what employee expect from the employment relationship.
It includes the traditional version; organization expects their employees to contribute time, effort, skills, abilities and loyalty exchange for job security and opportunity for promotion. Today modern company’s needs are constantly changing. Organizations now require top performance and longer working hours but cannot provide job security. While, employees are looking for flexible working schedules, comfortable working conditions, greater autonomy, opportunities for training and development and performance related financial incentives.
For Human Resource Management, the changes require planning for flexible staffing levels. 1) The psychological contract According to Mathis and Jackson (2012), the long term economic health of most organizations depends on the effort of employees with the appropriate knowledge, skills and abilities. The concept that has been useful in the discussion of the employee’s relationship with the organizations is that of a psychological contract, which refers to the unwritten expectation that employers and employees have about the nature of their work relationship.
Miles and Nathan (2011), “Bloomberg Business week”, stated that both tangible items (such as wages, benefits, employee productivity, and attendance) and intangible items (such as loyalty, fair treatment, and job security) are encompassed by psychological contract between employers and employees. Many employers may try to communicate their expectations through employee handbooks and policy manuals, but those materials are only part of the total “contractual” relationship. 2) Traditional psychological contract
According to Balle (2010), in the good “old days, employees exchanged their efforts and capabilities for a secure job that offered rising wages, comprehensive benefits, and career progression within organization. Due to this fact, organizations have downsized and lay off workers who have given long and loyal service. A rising number of employees question whether they should be loyal to their employees. According to Jackson (2011), there are two general forces pushing for changes in organization and hence in the psychological contract of developed countries, such as the U. S.
A, France, Germany, Australia, and Japan. However, Jones (2012) pointed out that, one force is globalization and maintaining international competitiveness in the business environment. Nevertheless, Haniph (2010) stated that the second force is technology, which is driving changes in many industries. 3) Transforming the psychological contract According to leadership consultant Miles (2012), the transformation in the psychological contract mirrors and evolution have moved from employing individuals just to perform tasks, to employing individuals who are expected to produce results.
In addition of just paying them to follow orders and put in time, employers are expecting employees to utilize their skill and capabilities to accomplish organizational results. According to, Baker and McKenzie (2010), it is stated that in a competitive environment, many organization do not prosper over long term. Those that do prosper need on-going contribution from the Human resources management in the organization to succeed over time.
Therefore, the relationship between employers and employees has changed in the past years due to the following reason stated: diverse workforce, competition in business environment, technology and structure in the organization change (centralization and decentralization). B – Why the employer – employee relationship is changing? 1) Diverse Workforce The first reason, why employer and employee relationship is changing is because of diverse workforce. Nowadays the inflow of women into workforce has major social and economic consequences. According to the United Stated
Department of labour’s Bureau of Labour Statistics, from the year 2010 to 2013, the percentage of women working in the workforce rose from 43% to 57%. It is predicted by United Stated Department of labour’s Bureau of Labour Statistic that 63% of all women of working age, and over 80% of women from 24 to 40 years old, will be working or looking for work by 2020. According to Roosevelt Institute Thomas (2010), the faster growing segments of population are minority racial and ethnic; groups especially Hispanics, African Americans and Asian Americans. By 2020, about 30% of the United States population will be from such group.
For instance, minority individuals make up majority of the population in cities, at least 200,000 in California, Texas, and Florida. In addition, the age distribution has change as well, and the average age of workforce is now considerably than before. Moreover employees have different expectation about roles in the workplace and different work values. 2) Competition in the Business Environment The second, reason of why employer and employee relationship is changing, is because employers need talented employees to compete in the market industry with other competitors.
According to Perris (2012), today, management has become a complex concept. It includes many aspects that were not considered before in traditional management. In traditional management, employees used to follow the instructions of employers without question. Besides that, today, the whole concept of management has experienced a change as a result of the third changes that take place around the world, and more prominently, in the business environment. Management today, not only includes managing people, but also involves the management of capital, resources, and more importantly the environment.
In this context, managing employer- employee relations becomes a challenge to any employer. 3) Structure of Organization Change The third reason, of why employer and employee relationship is changing is because of the change in the organization structure. In the business environment, there are two types of organization: centralized organizations and decentralized organizations. Centralized organizations are organizations that decision making is made by the top management. On the other hand, decentralized organizations are organizations where decision making is done by both top management and lower management together.
According to Riley (2012), the choice between centralized or decentralized is not a choice. Most large businesses necessarily involve a degree of centralization when it starts to operate from several locations or it adds new business unit market. In addition, Jim Riley pointed out that decentralization companies are good because top management and lower management can make decisions together. However, centralized organizations can be good for big companies. Despite that, flexibility in organizations can be good for small business. The relationship is changing because many companies are centralizing their decision making.
When companies are centralizing their decision making process, it will be difficult to employees to develop their creativity skills. Employees nowadays need more flexibility for them to operate efficiently. That is why relationship between employers and employees is changing. 4) Technological changes Furthermore, the last reason of why employers and employees relationship is changing because of the change in technology. The most significant changes in technology in the past 10 years include: the internet distribution, the multimedia: TV, computers, phones and other portable devices.
According to Professor Wilkinson (2012), the new technologies have expanded the industry’s market through new distribution platforms, creating additional revenue streams, increasing employment and changing the occupational mix. These innovations have changed the relationship between employers and employees. The way technology was 10 years ago, is not the way technology is today. Technology has developed so much in comparison to the past 10 years. For instance, employees nowadays can do work from home without going to work. This process in business is called telecommuting.
Employees do work from home and send the work to their companies through email. Employer and employee relationship is changing because of the innovations in the technology industry. Apart from that, the relationship employers and employee is changing due to less interaction between employers and employees. Since the technology started changing the relationship is becoming less than before. QUESTION 2 According to Glassdoor – online jobs and career community, Facebook and McKinsey & Company was raking as the top companies to work for in 2013.
To achieve this awards, both companies has offers many benefits to their employees. The second part of this assignment is the analysis about the rationales that those companies emphasize on providing different kinds of benefits to the employees. Then, the extension that they have to be responsible to their employees’ wellbeing will be discussed. A- Analyse critically the rationales that Facebook and McKinsey & Company emphasizes on offering different kind benefits to its employees. 1) Different types of employees
In a company, there are many employees with different roles, backgrounds and needs. For example, McKinsey & Company has around 17,000 employees in 100 offices around the world (McKinsey & Company 2013). At the same time, Facebook Company is operated with 1000 to 5000 employees (Glassdoor 2013). Therefore, each company have to provide different of benefits for them. As investment on employees is costly; so, the company has to make it work effectively. A few kinds of benefits are not suitable for all.
For example, some employees prefer extra money instead of free trip with company. In addition, employees who have young children do not want to work overtime. By providing different kinds of benefits to employees, Facebook and McKinsey & Company want to cater employees’ needs. As the result, they can receive a better performance. 2) Employee’s satisfaction and company’s performance Facebook and McKinsey & Company offer different kinds benefits to their employee because they want to achieve employee’s satisfaction and good performance.
Normally, shareholders can prefer to financial statements or ratios to clarify the status of the organization. However, the financial statement and ratios do not show the productivity, employee attitudes or innovation (Cheng et al. 2010). Especially for long-term investors, they put pressure on managers to care about their workforce as investing to keep employees satisfied because it will drive far more shareholder value than returning it all to investors immediately (Holzer 2007). Therefore, shareholders now start to consider employee’s satisfaction to make nvestment decision. In addition; potential investors will be able to make more informed investment decisions based on companies’ investments in human capital (Pedrotty 2011). As Facebook and McKinsey & Company went public, they have to provide variety kinds benefits to employee in order to build the shareholder’s confidence. 3) Public image Employees play a critical role in development of company’s public image. In particular, job satisfaction is important to create customer satisfaction which leads to employer’s reputation (Pushpendra 2011).
According to Global Web Index (2012, cited in Kosner 2013), Facebook is now the first largest social network in terms of active users following by Google+ and YouTube. Therefore, enhancing the public image is very important as it attracts more users as well as business opportunities to Facebook. When Facebook gets the highest rating in term of best place to work, its reputation becomes better. The same thing for McKinsey & Company, the most famous consulting house, different kinds of benefits to employees contribute to the public image.
Reputation requires many years to build; so, all the companies have to maintain it. Then, employees reflect the company’s image. 4) Efficiency, effectiveness and productivity According to Currall et al. (2005), the productivity of an organization is measured in terms the performance of its workforce. At the same time, better performance of the workforce is the result of level of job satisfaction (Alfonso 2000). It means the employee satisfaction in related to the productivity and efficiency of the company. For example, McKinsey & Company serve different clients in various industries and functional areas.
Their associates have the roles to develop a broad toolkit of problem-solving skills, leadership capabilities and foundational knowledge that they can apply to each new client engagement (McKinsey & Company 2013). Therefore, the productivity and effectiveness of employees is very important. Since McKinsey & Company and Facebook focus on service and human capital, offering different kind of benefits for employees helps those companies to increase their performance. When the employees are satisfied, they will do their best for the best of company. 5) Retaining talents
Recent surveys even indicate that the attraction and retention of talent is the top concern for more than 60% of employers (Mancesti 2012). In addition, companies with high employee retention rates also enjoy high customer satisfaction levels, consistent sales growth, positive morale, and deep institutional knowledge (Shauf 2003. For a social network company as Facebook, offering various kinds of benefits for their staffs is very important because the company always need more ideals from the employees. So, Facebook needs many talents in information technology as well as their competitors.
Therefore, Facebook have to make their staff satisfied or not, talented employees will leave companies, either to join competitors or to set-up their own firms. In addition, McKinsey & Company have offered more flexible work schedules for women, guidance for mothers since they found that many women leave or switch to part-time work when they have children (Kwod 2013). McKinsey & Company wants to retain the female employees as well as encourage them turn back to work. B- Discuss to what extent that Facebook & McKinsey has to be responsible to its employee’ wellbeing 1) Health
Employers of any organization have to protect health and well-being of all workers who engaged in the organization. Organization such as Facebook & McKinsey try to create an organizational cultural that promotes healthy lifestyles (Liz Noelcke 2012). For that fact Facebook and McKinsey try to inspire their employees by Offering in-house exercise facilities like gym memberships, aerobics class and yoga class. This facility is to assists employee to reduce the weight, sleep better and also reduce level of cholesterol and blood pressure.
Besides that they also offer financial incentives like gift cards, prizes and cash to medical saving accounts or health reimbursements accounts to employee who participate these coaches program (Edward B. Scott 2012). There are three sections first is a confidential screening for health benchmarks like body mass index, glucose, cholesterol levels and blood pressure level. Next is an online health-risk questionnaire that includes questionnaire about family medical history, stress levels and sleeping patterns. Lastly is one-on-one session with a coach every six months.
Moreover, health screening is to raise employees’ awareness on how significance and important health checkup for them such as comprehensive blood and urine test, mammography and x-rays (Pri De Langen 2012). Additionally, these facilities are to encourage employee to improve their health and be better lifestyles and also promote healthier industrial relations. As a result it reduced stress and other work-related illness and the productivity of the company and reduce employee turnover absenteeism of the employees also increase the company performance. 2) Safety
Safety is one of important element in the organization because it is concerned how the organization exposure and decreasing the accident occur in the organization. Therefore, big organization such as Facebook & McKinsey adopting program like safety raffle which to ensure employee safety in the organization. They will design a period of time to employees for the raffle it could be a month or more after safety training begin. Managers or supervisors will monitor all the employees and who are taking the proper way of safety precautions such as lifting a heavy box correctly, the employee earns a ticket to be put in the raffle.
At the end of a predetermined time, a drawing takes place, and the winning employee gets a prize (J. Mariah Brown 2013). Besides that Facebook & McKinsey also adopting another program called workplace safety committee which to ensure the safety all the employees in the workplace. This program is to investigate and monitoring all equipment, tool and environment is under safe condition and harmless. For example, safety committee will explore inspect to all of the part in the organization every of each month such equipment, devices, material and etc (Workplace Health and Safety Committee 2011).
As a result, it reduces injuries and prevents accident or dangerous situation and condition occurring in the organization. 3) Welfare Employee’s welfare is another important aspect employers should concerned in the organization because it is referring to employees comfort, intellectual, social as well as improvement (International Labour Organization 2013). In addition, welfare also assists in keeping the inspiration, morale, enthusiasm, and motivation of the workforce high which to keep the workers for longer period.
Employee welfare offers by employer to their employee for their betterment includes numerous of services, benefits as well as amenities offered in the organization (Aviva 2010). The welfare can be any kind of form such as medical insurance or staff counselling service. For example, Employee Assistance Program is a service that offered by employers to consult their workers regarding individual matters such as bereavement, family issues, illness, substance, misuse, or work related issue such as bullying and assault, harassment, work challenges.
Furthermore, Staff counselling service is to help giving advices or consultation, clarifies, identify explore and developing strategies to solve those issue that affect employee well-being (Employee Assistance Service 2013). In addition, Facebook & McKinsey objective of this program is to provide consultation and encouragement to their employee and also to ensure employee’s welfare and wellness in the organization.
As a result employees become loyalty toward the organization because they believed that the organization taking good care of their employees and also its increase employee self-confidence in the organization staff who feel valued CONCLUSION Today business world are becoming more competitive than before so changes organizations from traditional to transformational leadership bring the organization into more effective and flexible in the organization and able to compete in the business world.
In addition, benefits and wellbeing are becoming important aspect in the organization as business worlds are becoming very competitive, so one of Facebook & McKinsey strategy to compete in the business is retaining high quality and talented employee and also taking care employee wellbeing which can help to improve employee productivity and company performance as its raise employee self-confident and self-esteem. 3104 words) REFERENCES Alfonso, S. (2005). Well-being at Work: A Cross-national Analysis of the Levels and Determinants of Job Satisfaction. The Journal of Socio-Economics.. Vol. 29, No. 6, pp. 517–538. Aviva 2010, “Helping to Improve Employee Wellbeing” Journal of UK Health vol. 24, no 2, pp. 2-3. Balle, L. (2010) . Facts on the Relationship between Employee & Manager. [Online]. Retrieved from: