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Shouldn’t HR be able to recruit their own people?

Mindset Group - Tuesday, May 11, 2010

By Aaron Dodd, Operations Director

A couple of days ago a Twitter acquaintance of mine Ellison Bloomfield posted in her blog the rhetorical question; shouldn’t an internal HR department have the skills and knowledge to be able to recruit their own people?

Good question. Even though it was rhetorical, I’m going to answer it anyway as it’s a pet topic of mine. My view is this; recruitment AND selection are very specialised competencies within the overall scope of human resources management.

Not all HR Managers will have the necessary skills, commercial knowledge or time to be able to effectively do one or both. Often, particularly with senior executive search assignments, it will also be next to impossible to carry out the assignment appropriately via internal resources. Many companies have recognised this. Some bigger blue-chip companies even have specialised external recruiters sitting full time in their offices sourcing candidates (the RPO model). Some companies have specialised Recruitment Managers sitting within their HR teams. These examples are recognition enough of the specialised nature of recruitment and selection.

So what are these specialised skills?

Dictionary.com defines recruiting as; (the activity) to engage in finding and attracting employees, new members, students, athletes, etc. This is a very broad definition, and I draw distinction between “recruitment” and “sourcing”. Sourcing is the most difficult skill to acquire within the scope of recruitment activities. I’ve always held that anyone can recruit. In the traditional sense, recruitment is about drafting an advert and getting it out there on job boards, newspapers etc, wherever it will be seen (hopefully). Using this methodology certainly has a luck component. The success or otherwise of the advert will also largely depend on the language and marketing skills of the person writing it.

This form of recruitment is also largely a passive activity as an ad is posted and then one sits back and wait for the applicants. Sourcing however, is a much more active approach that involves detailed detective work, networking, market and/or industry knowledge, intuition, guile, time and persistence. A good sourcer (or researcher as they are often known) will uncover passive candidates and other potentials who are NOT out actively looking for roles. This is executive search methodology. These are difficult to acquire skills almost always outside of the scope of generalist HR personnel. At Mindset, it is the skill of our researchers in uncovering this so-called hidden talent that has made us so successful. Our researchers are one of the reasons why we are regularly engaged by HR Managers to find talent for their organisations.

The other and most important part of the process is selection. This is the choice of candidate (if any) from the available pool of talent that has been sourced by advertising or research.

In her blog Ellison goes on to ask; how well can a recruiter with an agency really know a position? Or, for that matter the personalities of the people in the team or the style the manager wants. Again this is a good question.

A skilled and competent selection consultant (this is distinct to a recruiter) will have taken the time to meet with and understand the often multiple stakeholders in the role. They will understand the company and its business as well as the internal and external issues that the company faces in order to achieve its goals. The more assignments a consultant carries out with a client the better they will know it and the more value he or she will create for their client. Further, if a consultant is a specialist in a field, say engineering or finance, they will often always be better at determining technical skills and experience than a generalist HR practitioner.

A company is only as good as the talent it is capable of attracting and retaining. As such, a skilled and commercially astute recruitment/search and selection partner will become a vital trusted advisor to a client. Their skills in attracting talent to the organisation can often have a positive strategic impact second only to the product or service that the client actually delivers.

And that is why so many companies turn to recruiters rather than their HR personnel to find them their people; their strategic advantage.

Life’s too Short to be a Drone.

Mindset Group - Thursday, April 15, 2010

By Aaron Dodd, Operations Director

The other day I took a call from a young HR practitioner enquiring about a position with Mindset as an HR consultant. She is a graduate with a good couple of years experience at officer level in public service and an SME. She was disillusioned with her current role feeling that it was too administrative, lacked intellectual challenge and wasn’t strategic enough. It was clear she had a real passion for HR and true belief in what good “HR” can do for a business and ultimately its bottom line.

Unfortunately we weren’t able to offer her a role, but her predicament is all too common. Many people study HR at University/TAFEs for either the wrong reason or because the profession has been misrepresented to them. After a couple of years in the “real” commercial world it dawns on them that they could well have made the wrong career choice. They then fall into one of three categories;

  1. Those that give in to the system and become administrative drones, often becoming increasingly bitter and institutionalised over time.
  2. Those that fight on valiantly against the forces of evil to try to effect change in their organisations and realise their dream of what HR should be for the business. Some will succeed, most won’t. Those that do succeed will go on to have stellar Director level careers. It’s a tough gig and I tip my hat to those who have beaten the system and made it.
  3. Those that leave the profession completely.
When I talk about “the wrong reason” to go into HR, the most common ones that I hear when I ask HR people why they did it are “I love people” or “I love talking to people” or “I love helping people”. For HR to be relevant and a vital part of the commercial world these practitioners need to understand that their role is to muster their available human resources to deliver the business strategy effectively and efficiently so as to deliver the best possible bottom line for the company. HR people must remember that they are their company’s advocate NOT the staff’s.

By “misrepresentation” I mean that they have been sold a pup by academics. Many HR academics that I have met know the theory intimately, have a passion for the subject, but lack real world experience and thus have a totally deluded understanding of how HR is perceived by most decision-making business executives. They are akin to Catholic priests giving marital advice.

So why couldn’t I help out my young HR practitioner? Through no fault of her own, she simply needs more commercial experience. A successful consultant is a salesperson. It is no use having the theory and the ability to deliver if you cannot win the assignments in the first place. To be a successful salesperson selling HR consulting services requires a broad and thorough understanding of business, finance, commercial issues and strategy. Being able to engage with a Managing Director or CFO at this level so as to be able to quickly and succinctly identify their BUSINESS issues and present AND CLOSE an HR solution is paramount. Then, and only then, will your HR delivery skills come into play.

So for HR people who are looking to move into HR consulting or make yourself more relevant to the/any business, I urge you to develop your business skills and your networks (not with other HR people, but with business people). Learn to sell. Leave HR for a while. Work in other disciplines (particularly sales). Gain experience. Don’t waste your time with administration-oriented HR diplomas, study business, do an MBA.

Whatever you do, don’t take the first option. Life’s too short to be a drone.

Go Home on Time Day – seriously not taken seriously

Mindset Group - Friday, December 04, 2009

National ‘Go home on time day’ occurred last Wednesday (25th of November), and while the day managed to grab some great pre-event support from workers and employers, on the day it wasn’t taken so seriously.

The pre-event press – which included coverage on major Fairfax news websites including The Sydney Morning Herald, The Age and The Brisbane Times - quite clearly discussed the ‘overworked’ sentiments held by Australian workers from every industry.

And The Australia Institute, the event’s organiser, didn’t just have worker sentiment on their side. A report they released pre-event showed that on average a full time Australian employee works 70 minutes of unpaid overtime a day, which adds up to 2.14 billion hours, or $72 billion, in unpaid work every year – which equates to 6% of our economy.

Josh Fear, report co-author said, “Ultimately, managers and business owners have a responsibility to create an environment in which employees can work reasonable hours without risking their career, their health or their relationships.” 

And so employees made the pledge to “Go Home On Time” on November 25th collecting a ‘leave pass’ from the site – 20,000 employees in total.

However, post-event articles which appeared on The Sydney Morning Herald and HR industry publication Human Resources Leader showed the follow-through figures don’t look quite so good. 

A follow-up survey conducted the following day with 2,400 pledged participants showed that only 55% left work on time.  

The most common reasons cited by the 45% who didn’t keep their promise were: 
• having too much to do (68%), 
• colleagues were working late (11%), 
• forgot to go home on time (7%) and 
• the boss made them stay late (7%).

Clearly the results show Australia hasn’t quite learned to take the concept of going home on time seriously.

Inadequate leadership the real cause of the GFC?

Mindset Group - Wednesday, November 18, 2009

The Human Resources Leader has reported that inadequate business models and failed leadership were major factors leading to the global financial crisis.  In order to prevent this process from recurring again, questions have been raised about the fundamentals of leadership and how they must change.

What is HR’s role in changing leadership?
According to Harvard Professor Bill George and the CEO of Lloyds International David Smith,  the HR department should be central in building a long-term leadership culture in a sustainable environment.

It is the human resources department’s job to build the leadership today – and for the future – he says, and to build the culture of the company. However George also says that the CEO needs to be the real chief human resources officer and that there is no substitution for face-to-face interaction.

“They should take the leadership role, they can’t just del egate this like they would to an accountant on how to keep the books,” he says. “The CEO must be the role model that he or she wants reflected in the organisation. And then that person must be out and about with the people at all levels and not just dealing with people at a board level,” says George.

Smith says that HR practitioners need to influence the discussions that take place, have lasting influence on the commercial terms of the business and be part and parcel of the top team.

“HR [practitioners], in a very sophisticated way, have tentacles into all the decisions of the business and I think that must be made clear to everybody,” says Smith. 

“If one accepts the theory that the world has changed on the back of the GFC – maybe not forever, but certainly in the medium term – I think the way that we design our com pensation schemes, our incentive schemes and the way we motivate and lead people will be different. And I think that thought leadership in part should be led by our HR col leagues,” he says.

Proactive, says Smith, is an essential word in the process for HR, as is strategy. He says that the role of HR isn’t just about responding to people’s queries, but is a much more proactive role.

“It’s about taking that step forward, – thinking about where we’ve come from, thinking about where we want to go and [how to] influence leaders across all levels of the business.”

What can be done now?
Now is the best time for HR departments and executives to turn leadership on its head and make steps forward to being leaders of the future. This will not mean going back to previous practices, George says, but developing new strategies and a whole new mindset as to what it means to lead a company.

First, he says, leaders need to develop themselves as leaders and this comes from experience. He emphasises the importance of dealing with a crisis as one of the best lessons in leadership.

“There is no better test,” he says. “You can do all the simulation you want, you can do all the case studies, you can analyse how other leaders did – but there’s nothing that substitutes doing it yourself.”

George advocates that HR leaders take the top potential leaders of the future and get them involved in line assignments where they have to face a crisis and perform. He believes it is only through this that they can make mistakes and learn.

He remains adamant that all good leaders will demonstrate the ability to plan ahead while formulating policy that is positive now. “We should promote leaders who have that long-term view of the world, long-term vision and are willing to make that long term commitment and not trying to make quick-fix solutions,” he says. “If we have leaders who are just looking for a quick fix we’re going to be right back in this problem in five years.”

Questions raised about current HR practices in SMEs

Mindset Group - Wednesday, November 04, 2009

James Thomson from Smart Company has written a great article about the findings of a survey conducted by compliance and governance firm CompliSpace. The survey shows that Australian SMEs have not done enough to understand the effects the final phase of the Fair Work Act will have on business. 

The survey claims that 47% of organisations with 50-200 employees believe that management does not have a good understanding of the key changes to be introduced in the final phase of the Fair Work Act, including the introduction of the National Employment Standard and the Modern Awards.

The survey raises questions about current HR practices in SMEs.

Specifically, the survey found:
- 44% of respondents do not maintain copies of the relevant awards and/or agreements that apply to their organisation.
- 26% of respondents do not have an effective internal communication platform to provide all staff with easy access to current company policies and procedures.
- 33% of respondents do not adequately maintain an up-to-date suite of policies and procedures that deal with general conditions of employment.

The best way to protect yourself is by ensuring you have up-to-date, clear and concise paperwork including documented workplace policies and written records of staff dealings.  This can be a time consuming process, if you take the time now you will avoid difficulties in the future. 

Perhaps it’s them not us? Generation Y may have it right?

Mindset Group - Wednesday, September 23, 2009

By Aaron Dodd, Operations Director at the Mindset Group.

Much has been written of late about the “personality” of so-called Generation Y. They are a much maligned generation. My generation (X) seems to see them as disloyal, lacking in perseverance, short attention spans, seeking instant gratification etc. From an HR perspective there has been much written about how to attract, motivate and retain them in the workforce. Before the GFC these articles were everywhere. We see them less now, but the perceived issue will return as Western economies recover.

I sit on my son’s High School curriculum committee as a parent representative. There are student representatives also on the committee. The young adults I have met there are well-spoken, hard-working and have a strong moral sense to them. They show respect to their teachers and peers alike. Clearly many of the negative comments about Generation Y as a whole are stereotypes. However like many stereotypes, there is a grain of truth to them.

It is true that Generation Y tend not to have the ingrained company loyalty that my generation have. They are more forthright and blunt in their statements if they disagree with a policy or management decision. Generation Y is also much more likely to make an employment decision (or unemployment decision) based on environmental concerns or fit with organisational culture. In short if they don’t like how they or their peers are treated or the way their employer treats their community or the environment they will leave.

Many Generation Y do not suffer from affluenza the way my generation does. They are not motivated by the big McMansions, the European car in the drive and the overseas holidays. As many of my Generation X friends, peers and colleagues mid-life crises can attest, money doesn’t make you happy.

I argue that perhaps it’s we who are wrong? Misguided loyalty means many of us have worked for years for long hours for poor pay in crappy conditions on the promise that one day we’ll get that promotion and that the company will always look after us. This is a notion that must be cast away. The fact that Generation Ys have the confidence to look us in the eye and say “No I’m not putting up with this” is the correct attitude. Generation Y’s focus on the environment; in fact their focus on fixing the mess that my generation’s afflueza created is laudable.

So as employers, before we write off Generation Y, perhaps we should take a long hard look at our values, how we treat our employees and the effect that our businesses and lifestyles have on those around us. All of us will probably be found wanting in some areas. One thing is for sure, Generation Y may not have our lifestyle, but they and their families and communities will likely be richer for it. 

Where HR can add the most value

Mindset Group - Wednesday, August 26, 2009

The HR leader and Libby Sartain have reported that CEO’s now rank HR as one of the functions that adds the most value to their organisation. CEO’s commented that people issues, such as finding and keeping the right talent and building a high-performance culture, are at the top of the corporate strategic agenda as keys to sustainable competitive advantage. By focusing on HR you can easily add value to any organisation.

Where HR can add the most value
Start the culture conversation at all levels. One way to accomplish this is to conduct a cultural assessment or audit of your organisation through employee surveys, focus groups or interviews. Review your organisational history, leadership styles, HR programming and industry practices to determine what currently drives and reinforces the culture. Finally, what is your customer experience? What cultural elements are obvious to customers? Is culture aligned with business strategy? Where are the disconnects? What needs to change? This can be the basis for healthy discussion at team meetings and employee chat sessions.

Develop a business case for cultural change. Why is the change needed? How will desired changes in culture support the business strategy?

Work with the senior leadership team to determine the desired culture. Core values, desired behaviours and shared vision are essential for a positive culture change effort to succeed. Every leader must embrace the need to change, or it won’t happen. Senior leaders must make new behaviours their way of life to reinforce desired change.

Develop an agenda or action plan for enhancing the culture or bringing about change. Start with the highest priorities and work on the toughest issues. For your culture to become self replicating, the way things are done will have to reinforce the core values and the culture.

Communicate what needs to change and why. Solicit input from people. Once the needed changes and process for change is defined, tell people what is expected. What are the rewards for changing, and the consequences for more of the same.

Change the organisational structure to enable change. Find new ways to accomplish work tasks. Use teams for one-time projects. Broaden roles and responsibilities.

Acquire talent based on cultural fit. Identify the characteristics of people who exhibit those behaviours that you’ve identified as desirable. The people who fit and thrive in your culture will perpetuate that culture in everything they do. If you have to choose between the candidate who has better skills or knowledge but doesn’t fit, and a candidate who is slightly less qualified but fits culturally, choose the slightly less qualified person and provide the necessary training or on-the-job experience. Get rid of those who don’t fit in the culture.

Redesign your on-boarding process. Make sure that every new hire knows what it will take to fit in, and understands the cultural imperatives. Talk about the ways of working that lead to success and those that will derail careers. Create legendary stories of successes and failures.

Create cultural messages. Be sure that every meeting, every training program, every communication to people includes cultural messaging and reinforces the values, mission, traditions and practices.

Involve everyone. Southwest Airlines has a culture committee, but there are many ways to get people involved. Try focus groups around topics. Form cross functional teams. Call random groups of employees together for monthly breakfast or lunch meetings. Engage the help and support of a group of passionate, committed people to identify cultural disconnects and recommend remedies.

Build an internal brand that supports the external brand. Make a promise to deliver a consistent employee experience. Be sure that your employees know the differentiating elements in their experience in the organisation that will enhance their work lives and careers. Begin to create an employer of choice reputation internally and externally.

Recognise and reward results. Your recognition and rewards should support the culture that you are working to reinforce.

Cultivate leaders who promote your culture. Develop excellent leaders who will propel the culture down the ranks. Identify high potential leaders and promote them. Invest in leadership development programs. Be sure content reinforces cultural messages. Keep the good ones, and get rid of those who are unable to pass the culture on.

Make it interesting and fun. Create contests, activities that enhance the culture. Decorate the office in inspiring ways. Celebrations and events can reinforce the message.

Use HR tools. Something as mundane as the annual benefits enrolment can be a source of key cultural messages. Every training class should reinforce the basic behaviours and values that reinforce the culture. Performance review forms should measure cultural fit, as well as, job performance.

No one should be locked out of the efforts to build a high-performance culture. Culture has to become the DNA that forms the building blocks over everything else. So the entire organisation must have a role in keeping it alive. Work with corporate communications, advertising, and marketing to capture the culture messages and tout these internally and externally. Let product management see that new product development manifests the cultural values in the way it responds to the marketplace demand for quality and service. Work with your legal department to demonstrate the company culture by developing ethical standards and a code of conduct that is not just in compliance but also the right thing to do.

And remember that no, one department can force corporate culture on to the rest of the company. You must achieve buy-in from everyone, from the CEO all the way down. This way you play it safe and also to win!

Leadership Today

Mindset Group - Thursday, August 06, 2009

Professor Susen Varghese from SIES College of Management Studies shares her views on leadership in today’s modern society and how to ensure leadership is effective.

Peter F Drucker once said “Leaders grow, they are not made”

Leadership today has become a very multi meaning term. Professionals from various disciplines have defined ‘Leadership’ in different ways. Paradigm shifts in the cultures of organisations and the consistent parallel and horizontal development of companies have raised the need to look at leadership in a new angle.

A strong company is the one that has leaders spread all across the company, not just at the top. The business world today needs both good leaders and good managers. However, because of the rapid change occurring in the industry today, a company needs far more leaders, not more managers.

Appointing the right Leader
Time after time again, businesses put the wrong person in charge. Unintentionally, they reward a "don't rock the boat" mentality. Conformity and status quo are the first steps leading down the staircase of a business disaster. Good leaders develop through a never ending process of self-study, education, training, and experience.

As correctly quoted by Ray Croc “The quality of a leader is reflected in the standards they set for themselves”. Effective leadership arises out of groups, organisations and communities that have built trust, and learned to collaborate and make decisions and solve problems constructively.

Successful Leadership
True leadership is about taking people to a place they wouldn't go to by themselves. Good leaders don't merely supervise; they create a sense of purpose and direction for those they lead.

Organisations can only build great leaders in an environment that nurtures and supports that development. If they don’t have such an environment, they need to change their culture to create one. But organizations cannot change their culture without good leadership.

Leaders need to "be present" and being literally; physically present is the fundamental meaning of that term. We're always surprised at how many leaders we encounter who spend most their time in their offices or on "executive row."

They seldom show themselves to those they lead. It has been over twenty years that the groundbreaking book ‘In Search of Excellence’ pointed out the virtues of "Management by Walking Around." Mayor Giuliani certainly demonstrated the wisdom of that practice.

But being present means more than just physical presence, important as that is. It means being present in the moment - focused totally and completely on what is happening right here and right now. It means, when you're with people, giving them your full attention, so that they will feel recognized and motivated. When you're not present to the people you lead, it weakens their willingness to commit.

Being present also means being flexible, able to deal spontaneously with rapid change. Think of being present as a focused but flexible dance with the world in which the leader can instantly change step or tempo as the music changes.

Using effective leadership to avoid Employee burnout and high staff turnover
Good leadership is also instrumental in avoiding employee burnout and reducing staff turnover. James Bradley lately pointed out that “Burnout is no longer the acknowledged domain of the highly pressured lawyer or doctor, but a condition that can hit anyone at any time in their career if they are faced with high productivity expectations in a hostile and unsupportive environment”. The key then, is a business philosophy that values its people and invests to nourish and support development through professional training, coaching and mentoring. Problems only arise when this is not set in place as a positive encouraging mechanism, but instead is used as a whip by ill-equipped management. It needs to inspire people, raise morale and restore a sense of purpose and self-worth, naturally leading to best performance.

As Natalie Calvert, MD, Calcom Group points out “Positivity and optimism in the workplace encourage tolerance and balanced judgement, and inspirational leadership enables access to those positive qualities that build our self-respect and contentment - the ultimate preventative medicine for burnout”.

Tips to achieve effective leadership
Thus, the ‘leader today’ requires to stick to certain must do’s in order to be effective, successful and sustaining in this ever changing corporate governance. These essentials can be listed as:-

01. Being there.

02. Always remember, Communication is the key.

03. Instilling optimism while staying grounded to reality.

04. Tell the hard truths.

05. Minimize status differences and insist on courtesy and mutual respect.

06. Master conflict. Deal with anger in small doses and engage dissidents.

07. Take care of yourself: Maintain your stamina and let go of guilt.

08. Reinforce the team message constantly.

09. Find something to celebrate and something to laugh about.

10. Have the courage to take big risks, and more.

11. Foster a spirit of tenacious creativity. Never give up—there’s always another move.

Global Mindset Survey Results May 2009

Mindset Group - Wednesday, July 29, 2009

rogenSi have released their May survey results aiming to help organisations understand the impact of the financial crisis on the mindset of the global workforce.

Introduction
There can be no doubt that the financial crisis of the last 12 months has impacted on the mindset of the global workforce. This survey specifically focused on the mindset of exceptional performance. This is not to deny the critical importance of knowledge, skills and process, but it is ultimately the mindset of team members that drives their energy and resourcefulness.

A significant challenge leaders currently face is to deliver exceptional results in a very difficult climate, whilst simultaneously maintaining employee engagement and morale. Whether their focus and concerns are at the survival end or the accelerated growth end of the performance spectrum, these times provide needs and opportunities like few before.

The study revealed:
    • Employees believe in themselves, but not necessarily the leadership;
    • There are mixed levels of ‘change readiness’ across age groups; and,
    • Client facing sales teams have been the most impacted by the current challenges.

These findings are a clear ‘call-to-action’ for global leaders. Employees report high levels of self-belief, but are experiencing equally high levels of disengagement. Obviously, left unchecked this will progressively impact on business performance. Leaders need to creatively connect with and inspire their people at a deeper and more meaningful level.

Overview of the results
According to the authors, leaders must "harness" this positive employee self-belief - before it wanes - by "engaging their people more creatively and purposefully".

They must "connect with and inspire" workers at "a deeper and more meaningful level".

And "time is of the essence", they say. Leaders must "radically change the level and nature of their connection with their teams". "Incremental improvements in leadership connection and impact are unlikely to be sufficient to even maintain the motivational status quo."

Leaders, they say, must:

    * communicate the business plan to all employees, and keep talking to them to ensure they understand, accept and are committed to the strategy;
    * emphasise the process of how success will be achieved, and de-emphasise results. Results are a manifestation of many factors, including those that can't be controlled. "Put the focus on what we can control and commit to execution excellence";
    * measure the behavioural expectations of employees, and provide regular feedback on the achievement of these standards;
    * use the power of the team by looking for opportunities to involve employees in the planning, execution and celebration of goals;
    * link business-specific issues to general motivation and emotional wellbeing; and
    * provide employees with meaningful, rewarding and challenging work. "People want to know they are making a difference and feel recognised for their achievements."

In short, leaders must continue to apply the same strategies required in "good times" to drive "exceptional performance", but deliver "more" of them and "with a higher level of quality", the authors say.

To continue reading Global Mindset Survey Results May 2009

Psychological contract with workers key to success in era of change

Mindset Group - Tuesday, July 21, 2009

HR Daily discusses the importance of forming successful employer/employee relationships.  

In an era of constant change, an employer's capacity to adapt, succeed or survive hinges on the quality of employer/employee relationships, or the "psychological contract", according to a corporate psychologist.

"The psychological contract defines the 'essence' of the employment relationship," says Colin Beames in his book, Transforming Organisational Human Capital.

"It serves to bind individuals and organisations together and regulate their behaviour, making possible the achievement of organisational goals."

And it's a "powerful determinant", he says, of the behaviour and attitudes of workers.

"The quality of these employer/employee relationships... significantly impacts on both performance and retention."

Employees, Beames says, are more willing to accept change - such as downsizing, restructuring or the implementation of new initiatives - if their relationships with their employers are "healthy".

How the psychological contract is formed
Every relationship has a psychological contract, Beames says.

In business, he says, it can be defined as the set of expectations - based on stated or implied promises and understandings - that operate between employers and their staff. It is neither a written nor legal document, but "nevertheless 'real'".

The contract is established from the moment the organisation "promotes itself" (in a job advertisement, for instance) and develops progressively through every phase of the employment relationship, Beames says.

It is formed through what is written (from job ads through to HR policies), said or unsaid (by managers and colleagues), implied and observed, and is influenced by:

  • the salary package;
  • other financial and non-financial benefits;
  • job security and career development;
  • recognition of ontribution;
  • workplace safety;
  • the resources and training provided;
  • managerial support; and
  • promotion opportunities.

The "health" of the psychological contract, Beames says, depends on the employee's perception of the "delivery of the deal".

If they feel that their expectations aren't being met, he says, they're likely to become disengaged.

The cost of getting it wrong
Beames notes that while employers can increase the job satisfaction and engagement of workers by making and keeping promises, they can't be expected to fulfil every expectation.

There must be a "trade-off", or balance, he says, between meeting employee expectations and achieving business goals.

It is essential, therefore, that the psychological contract, or workforce strategy, is consciously linked to the business strategy, he says. A failure to do so can lead to excessive turnover.

For example, if the psychological contract places too much emphasis on remuneration based on short-term performance in an industry that relies on the development of long-term client relationships, those relationships will suffer and output will be restricted.

If employee salaries are stymied as a result, Beames says, talented workers are likely to leave and pursue other opportunities.

But even if workers manage to achieve outstanding results in these circumstances there is still a big chance they'll flee, he notes.

When a psychological contract is built almost entirely on short-term economic factors, he says, attachment tends to be tenuous.

Recruitment phase critical
The responsibility for managing the psychological contract is spread between executives, HR personnel and line managers, Beames says.

How they engage with the recruitment process, he says, is particularly critical.

"It is important that candidates are moved... from one part of the recruitment and selection process to the next, without them uncoupling or disengaging," he says.

Managers, he says, must maintain intermittent contact with recruits and provide them with regular debriefs and updates.

"The goal is to unite parties into a longer term relationship," he says. "However, the relationship is fragile in these early stages, and simple violations of the script or conventions are sufficient to terminate it."

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