Introduction
An organisation is composed of people and they have the power to make or break it. If they feel associated and motivated, people can go an extra mile to see the organisation succeed. Alternatively, if they feel alienated and ignored, they will completely detach themselves. So, managing the human resource is very important for any company. The case of Wheeler Motor Services Ltd is one such example. The objective of this paper is to act as a management consultant, and provide consultation and advice for Richard Wheeler so that he can make difficult decisions that will in turn contain the situation immediately.
The paper is divided into four sections. The first section explains the integration of a psychological contract in the company amidst the negative feedback and other challenges. The second section of the paper emphasises upon the effective communication strategies that can be used by the two leaders. The third section debates the importance of establishing a performance appraisal and recognition system to retain employees. The fourth section concludes the paper with consultation and advice on the said matter.
Integrating Psychological Contract
Psychological contract is an unwritten and informal contract between an employer and its employees that thrives on mutual beliefs and implicit obligations. It is different from a formal contract where the roles and responsibilities of employer and employee are laid down in a piece of paper and signed by both the parties. Such contracts can be more effective than the formal contracts in affecting employees’ behaviour, their motivation and organisational commitment (Personnel Resources, 2007).
The case of Wheeler Motors is a classic case of breach of psychological contract. While psychological contract can be more powerful than formal contract in motivating employees, its breach can lead to low employee morale, negative workplace behaviour and employee turnover. As the contract is psychological, it can be made or violated by employers’ actions and the promises made by them at different interaction points like during meetings, recruitment and appraisals (Personnel Resources, 2007).
In this case, multiple issues during the transition phase (when Richard Wheeler handed over the baton to Peter Jones and Steve Wheeler) lead to violation of the psychological contract. First, inconsistency in communication because of the lack of coordination between the two leaders led to chaos and confusion in the team. The two leaders had clash of ideologies and there was conflict between them, which permeated down the level of employees and made them jittery about their job security and work culture. Second, the displayed insensitivity by extending the work timings and forcing employees to work on their sick days is sending a wrong signal among employees. They are feeling less aligned to organization and feeling more alienated.
Second, the leaders need to work in a cooperative manner. It is high time the leaders realize that they cannot work as per their whims and fancies.
Communication Strategy
Based on channels used, the communication can be broadly classified into verbal and non-verbal. Verbal communication involves and includes communication through speech and in writing. Psychological contract breach when there is misunderstanding between two parties primarily due to miscommunication or lack of it. One of the key features of Human Resource department is to engage the employees through both formal and informal communications. Since HR was not present in Wheeler motors, the communication has to be taken up by seniors or managers. The communication with employees can broadly be classified into 3 stages; First when the employee is first hired and new to the place. Second is communication related and during day to day work duties. Thirdly, future oriented communication such as found in planning and research (Guest and Conway (2002). In order for both formal and informal communication to be effective both initially when employees are first hired, then ongoing daily activities and longer term communication mechanisms are implemented, Wheeler Motors should adopt the following communication best practices.
First, attention should be directed into “Direction Giving Language” (Mayfield & Mayfield, 2002, p. 93). This involves providing the employees with a clear direction in terms of feedback and that the communication is structured so as to maximize employee potential as depicted in Table 1 below.
Direction Giving Language
1. Do I provide my worker’s with positive feedback when they do a good job in performing organizationally relevant tasks?
2. Do I provide my workers with feedback on how to improve their performance when they are not performing at the desired level?
3. Do I clearly explain to my workers what is expected from them in their job duties?
4. Do I provide my workers with the relevant organizational information that they need in order to perform their jobs?
5. Do I tailor my performance feedback communication to maximize each worker’s understanding?
6. Do I use the communication media that are most effective for providing performance direction and feedback?
7. Do I tailor my performance communication so it is most suitable for a given task?
Empathetic Language
1. Do I spend time talking with my workers about non-work related issues?
2. Do I give feedback to my workers in ways that validate their own feelings?
3. Do I talk to my workers about how to better deal with their colleagues in the workplace?
4. Do I let my workers know when I have had relevant experiences similar to their own?
5. Do I show my workers that I am willing to listen to their concerns?
6. Do I use the most appropriate media for expressing my ideas and feelings?
7. Do I show more or less empathy as is appropriate for a given situation?
Meaning-Making Language
1. Do I tell my workers about organizational opportunities for them?
2. Do I tell my workers stories about people who have been successful in the organization?
3. Do I tell my workers stories about people who have failed in the organization?
4. Do I provide new hires with information about the organization’s culture?
5. Do I tell my workers what they need to do to fit in to the organization’s culture?
6. Do I tell established workers about how to succeed in my organization’s culture?
7. Do I provide workers with cultural information that is relevant for their jobs?
Extracted from Mayfield, J., & Mayfield, M. (2002). Leader communication strategies critical paths to improving employee commitment. American Business Review, 20(2), 93.
It is clear from Table 1 that Wheeler Motors management should show leadership qualities by communicating in such a way so as to provide a positive working environment in which communication is a two way street and as such invites employee feedback regarding how both Wheeler Motors management and their workforce can construct a positive working relationship that encourages both parties to strive towards optimal organizational performance. Empathetic Language allows the communication to be conducted in which both parties recognize each other’s challenges and work together with a measure of understanding and appreciation of the different roles played within the operational environment; such should enable all personnel to cooperate and coordinate duties.
This in turn will facilitate the integration of both corporate organizational culture and societal values as evident within the local communities in which the employees live. Recognizing and understanding both cultures will enable all parties to construct meaning not only to the general day to day administrative and management duties but also to establish meaning regarding to the challenges that exist in both the corporate culture and local community cultures. Mutual understanding can allow the communication process to expand so that both parties can freely exchange ideas that will in turn provide solutions to problematic issues that exist within Wheeler Motors and also such issues that are experienced by the employees within their daily lifestyles.
Employee Retention: Appraisals and Employee Performance Reward
Employee retention is a critical component of corporate operational efficiency as the continual recruitment and training of new personnel is both time consuming and costly. According to Mayer and Davis (1999) an acceptable appraisal system that is consensually seen as beneficial to both the company and employees will lead to the enhancement of trust by the employees in the Wheeler Motors management. This trust is also facilitated by the employees’ perceptions that the management possesses the ability to communicate effectively in terms of regular appraisals and that management is seen to initiate incentives to the workers rewarding them for pre-determined and mutually agreed to operational performance. The ability of management to honor pre-determined performance objectives will engender employee perceptions of management integrity and empathy.
The linkage of employee performance to reward expectations can motivate the employees to target the development of skills and competencies which in turn should be supported by management in terms of the provision of training and additional education. Furthermore, management personnel should be fully knowledgeable pertaining to the training content and objectives so that they can supply back-up and supportive mechanisms. Included in such training should be the capability to identify problems and construct relevant and suitable practical based solutions. This alliance between management and employees should incorporate a system that defines and measures employee performance (Mayer & Davis, 1999).
Another aspect of employee appraisal and reward is the recognition by the workforce that management not only target such best appraisal and reward practices to enhance profitability but also that management personnel genuinely care for their employees welfare. Their study suggests that should the employees perceive such management goodwill and empathy then they in turn will be encouraged to eliminate waste and inefficiency and target the increase of company profits resulting in a ‘win win’ for all stakeholders within Wheeler Motors. Moreover, such strategic coordination between parties will enable employees to achieve “greater potential for growth and advancement in the company” (p. 126).
In addition, effort should be directed by all participants in the appraisal and reward process to ensure that the measurement of performance is accurate and consistent; such will allow the development of confidence especially within the workforce. An accurate measurement mechanism will in turn lead to employee acceptance in terms of its validity and credibility. The reward system should be designed so as to offer tangible and relatively short and longer term objectives to be rewarded with tangible incentives such as money or career advancement. The rewards should be realistically designed so as to be achievable and that management policies and objectives should not just be theoretical but also “walk the talk” (Mayer & Davis, 1999, p. 126).
Perceptions by Wheeler Motors employees that management has their best interests at heart with the implementation of practical appraisal and reward programs impacts should not only promote a more efficient and profitable working environment but also engender three different factors of trustworthiness which relate to the management’s ability to honor consensual commitments, management empathy and benevolence, and also their integrity (Mayer & Davis, 1999, p. 126).
According to Janssen (2001) both management and employees have obligations in terms of how mutual perceptions. Based on the research study findings, the researcher notes that management should be seen as enacting a measure of fairness in how they assess employee performance; this in part by how management measure job demands and challenges and how performance objectives factor in such job related challenges to the reward programs. The research also found that should management be perceived as fair in all its dealings job satisfaction relative to the perceived fairness will also be experienced by the employees suggesting that employee job satisfaction is directly linked to the levels of fairness offered by management.
The research found that management behavior was broken down into specific categories comprising of “informing, consulting, planning and organizing, problem solving, clarifying, monitoring, motivating, recognizing, supporting, conflict management, end team building, networking, delegating, rewarding, and mentoring” (p. 1039). However, these different categories of behavior can be allocated different levels of importance depending on what levels of management is tasked with such behaviors. All these actions are assumed to be practically viable within a company such as Wheeler Motors should management possess the capacity to fairly balance the effort needed to complete any given job with an appropriate level of reward or compensation. Job satisfaction can also be enhanced by the development of valuable knowledge gained from many years of challenges and successes. The acquisition of knowledge by both the employees and management personnel can in turn create a superior working environment and value system.
Janssen (2001) also found that job satisfaction applies equally to managers as it does to employees as management’s ability to maintain a fair and equitable measurement of job effort versus job reward contributed to management personnel job satisfaction; thereby that there is a relationship which directly links employee job satisfaction to that of management job satisfaction. These job demands can be viewed twofold. First as quantitative in that it measures the “degree to which employees are required to work fast and hard and have much work to do in a short time, or permanently have a great deal of work to do” (Janssen, 2001, p. 1040). On the other hand, job demands that are qualitative in nature pertain to job demands tasks and duties that are not so clearly defined or may be operationally conflicting. Both quantitative and qualitative forms of job demands contribute to the accumulation of knowledge and corporate resources and as such can provide a measure of job satisfaction when the challenges posed by these different job demands are tackled and solved.
Conclusion and Recommendations
This essay is tasked with the provision of advice and recommendations regarding what course Richard Wheeler should take at this juncture of the company’s growth. It is recommended that the retention of Wheeler Motors employees should be regarded as a critical factor in determining the company’s future profitability and growth. The conflicting management styles depicted by Steve Wheeler and Peter Jones have the capacity to split employee loyalty between the younger employees and those who have been in long term employment. Such a scenario has the potential to weaken efforts to implement a fair and equitable system that rewards workers according to merit based performance rather than reward employees based on historical factors such as the length of time in employment.
Moreover, a two tiered reward system based on length of service is detrimental to implementing procedures and process and noted earlier in this case study as both the ability to construct effective communication systems and assessment and reward programs would be compromised by old and outdated strategies that currently exist in Wheeler Motors. Moreover, splitting the company up into two different entities and run by two different management teams may compromise and damage the potential of both business entities as it may be found that there is a significant degree of interdependence within different parts of the existing corporate structure. This case study suggests that Peter Jones is either asked to leave or allocated a less senior position so that the company can remain under one management team with Steve Wheeler as the CEO, so that all the aforementioned ideas are implemented and allowed to deliver an efficient and harmonious working environment.
Research suggests that human resources or capital is a vital asset in this era of rapid technological advancement as recruitment and training costs are a significant investment by any company so as to ensure competitiveness and growth (Rainlall, 2004). Moreover, intellectual property in the form of knowledge is becoming a growing significant part of a company’s asset base and staff turnover can lead to valuable hard-won knowledge and expertise being lost to competitors. Therefore, the management of Wheeler Motors should remain intact rather than be divided and a management team headed by Steve Wheeler utilizing some or all of the earlier suggestions can lead to the construction of a management infrastructure that is both human resources and knowledge orientated.
According to Rainlall (2004) the management of knowledge is the “process of creating, capturing and using knowledge to enhance organizational performance” (p. 53). Therefore, Wheeler Motors can maximize current assets in the form of human resources and knowledge by unifying both employees and management personnel to cooperate and design procedures and programs that are both fair and sustainable. The Wheeler Motors reward systems should be designed to facilitate the aspirations and needs of all the employees regardless of age and other demographics.
The proper understanding and efficient implementation of the psychological contract, communication strategy and employee appraisal and reward programs can create more opportunities to divert and expand the business using both the human resources and knowledge base. It is recommended that effort should be directed at the implementation of a new vision and direction by all Wheeler Motors personnel so that common goals and consensually based decisions are planned and implemented in order that the whole company can take on earlier noted communication and employee compensation programs. It is recommended that in a spirit of goodwill to the employees and a strategy designed around long term sustainability, a culture of learning and training should be set in place so that the whole corporate infrastructure is strengthened. While the threat of trained valuable employees leaving for alternative employment exists, the opportunities and potential growth offered by a better trained workforce should in balance still be considered a viable and sustainable preposition.
References
Guest, D. E., & Conway, N. (2002). Communicating the psychological contract: an employer perspective. Human resource management journal, 12(2), 22-38.
Janssen, O. (2001). Fairness perceptions as a moderator in the curvilinear relationships between job demands, and job performance and job satisfaction. Academy of management journal, 44(5), 1039-1050.
Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of applied psychology, 84(1), 123.
Mayfield, J., & Mayfield, M. (2002). Leader communication strategies critical paths to improving employee commitment. American Business Review, 20(2), 89.
Personnel Resources (2007). News and Articles: The Psychological Contract, what is it and how can it be managed? Personnel Resources, New Zealand.
Rainlall, S. (2004). A review of employee motivation theories and their implications for employee retention within organizations. The journal of American academy of business, 9, 21-26.
