Managing Human Resource: Types of Employment Contracts

This article discusses the different types of employment contracts in human resource management, including permanent full time, part time, zero hour casual, and fixed term temporary contracts. It explores the advantages and disadvantages of each contract type for both employers and employees. The article also highlights how different companies use a mix of these contractual modes.

MANAGING HUMAN
RESOURCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK1.............................................................................................................................................3
Permanent full time contracts......................................................................................................3
Permanent part time contract.......................................................................................................4
Zero hour casual contract.............................................................................................................5
Fixed term temporary contract.....................................................................................................6
TASK 2............................................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Human resource management is a strategic approach to the effective management of
employees in a company which helps them to win in marketplace and derive competitive
advantage of the same. This helps in maximising performance of employees by the way of
serving strategic objectives of employers. This is concerned with systems, policies, regulations
with primary concerns with management of employees. Employment contract is contract which
is used in labour laws to attribute various right and responsibilities between various parties to
business operation and there bargaining power. It is basically between employer and employee of
any company which defines contract of service by employees to its employers in regards with
compensation which can be said as salary for the time being it serves. Present report will address
to different types of contract of employments such as permanent full time, part time and others
with its advantages and disadvantages to both employer and employees and will demonstrate
how different companies use mix of different contractual modes.
MAIN BODY
TASK1
Permanent full time contracts
Permanent full time contract is defined as contract which are unlike fixed term or casual
term which will remain valid until either of both the parties that is employer and employees
chooses to end their relationship which can be by varied means. It helps in assuming some
employees that this contracts are valid for years in between 1-5 years but lays down the
expectation on basis of grounds that states that contract will get renewed and company accounts
to follow the same. This contracts are also termed as indefinite contracts. Companies and
employers tend to invest their valuable resources in permanent employees by actively recruiting
and hiring top talent, integrating and training them for the managing operations of company and
by offering benefits that are highly substantial. It is being generally said that full time employees
work for hours varying from 35-40 hours a week (Work,2017).
Permanent full type contract possess various advantages and disadvantages for both
employer as well as employees some of which are it helps employees in career development
opportunities which shows employees that this isn’t just a job but a career for themselves which
also in turn helps employer of the company not to put extra efforts and burn cash by recruiting

and hiring employees that do not stick around, where it is better for business invest in employees
who can contribute in making future of company. It helps in keeping top talented people on the
basis of long term which helps employees to learn and develop new skills and grow their career
which in turn helps employers to determine productivity out of employees to perform
challenging task for in dynamic situations. It also helps in providing job security where in worse
scenario people are losing jobs it ensures employees a sense of safety for job and stability of
having permanent job which is highly attractive to people. It relaxes and not lead to stress in
minds of people which guide them to practically and emotionally invest their efforts to serve for
company and helps employers to achieve common desired goals of company. It also results in
increasing employment engagement which boost up there morale and helps in determining
satisfaction in performing their role (Arestis, Ferreiro, Gómez, 2020).
Disadvantage of permanent full time contract is it is of greater liability in nature where
although it provides clarity by outlining various terms of agreement, it make bot the parties liable
for greater damages if they violate upon the conditions of serving the contract in unfavourable
manner. It states that employer and employees need to be very careful on terms of contract which
are hard for them to meet upon. It is of disadvantage as it accounts to more of administrative
work such as health policies, various plans given by employer to its employees which is time
consuming and requires lot of efforts which ensures managing of employees which contributes
towards the growth of organisation as well as human resource department.
Permanent part time contract
This are the contract between employer and employees of company where employees tend
to work for fewer number of hours as supposed to full time employees. . It lays down number of
hours this employees are scheduled to work per week which is clearly mentioned in terms of
contract and also lays down various option of earning more by doing overtime when and if they
want it to do depends upon there flexibility. This allows part time employees to hold position as
of permanent employees as contract lays down as many of the things that are same in nature and
relatively matching with full time contract. It states that employees work for ongoing and regular
hours, but fewer them employees who are working for full time. This employment lays down
more flexible schedule for employees to work according to their availability, commitment and
comfort level which also allows them to continuously look for opportunity outside without
wasting majority of time on performing a particular job. Generally it lays down that part time

employees work for less than 38 hours a week who are ensures with regular entitlements such as
various kinds of leaves such as casual leave, sick leaves and various other which depends on
hours they work which is same with compensation policy (Perry, 2018).
Advantage of part time employment contract it helps in bringing great deal of flexibility in
terms of business dynamics where situation keeps on changing which can be taken as examples
such as when crisis in business come, it is very hard for employer to hire full time employees and
manage their needs as they account to continuous payment to work they do which is hard for
company to pay, where in part time employees are more required to meet the needs of company
as and when they come which not serves as building loads for employer in carrying business
operation and helps employees to work with their comfort level
Disadvantage of this type of contract is it leads to difficulty in measuring working hours and
performance of employees as there pattern of work keeps on changing according to their
commitment level which also turn out to be difficult in coordinating and scheduling various
project and meetings as they work according to their own time which leads to creation of
confusion and misunderstanding which leads to decrease in productivity of both employer and
employees resulting in conflicts at workplace & building unfavourable environment which does
not accounts to foster growth of business (Bruttel, Baumann, Dütsch, 2018).
Zero hour casual contract
This contract refers to agreement stating that employer is not obligated to provide its
employees with minimum number of hours. It is contract where business is not obliged to
employees to any particular set of hours to work. It is a casual contract between individual and
business where one agrees to work for business on led down and stated terms. This type of
contract has become most prominent and preferred choices of organisation as they help in
removing up the cost which is involved in hiring and recruiting permanent full time employees.
A company when enters into casual contract document various terms of contract such as place of
work, employment status, fair compensation and various others. It helps companies in providing
up with clarity and serving as immediate solution for resolving any kind of conflict or dispute at
low cost. It can lays opportunities for individual to take and explore their career in field of self-
development ad freelancing. This are contracts where in company hires employees on basis of
per project which helps companies to deal with various specific knowledge and skills which
match up various flaws and errors of particular projects (Ahammad, 2017). This contracts are

highly suitable when there is uncertainty in workflow as to their changing demands and
unpredictability with staffing levels which serves as extensively innovative and creative and
retail industries to take into consideration freelancing talents from different part of globe. This
contracts are highly useful when there is high demand in catering, hospitality sector which are
used to organise seasonal work, special events which can generate heavy demand and with
various occasions and festivals. It allows huge flexibility to professional employees not to stick
to one and serve different employers and enhance their skills and knowledge for which they can
be highly paid depending upon the work and need of employer which they want to get
accomplished and helps in matching with updating trends in current market scenario. This are
suitable for individual who want to start their own thing and who are highly uncertain about their
business future performance which cannot ensure smooth functioning of their business
operations.
Advantage of this type of contract is it helps in working flexibility of individuals which
allows them to meet up with their other commitments which in turn helps employer of contract to
get there work done with innovation and creativity as individuals are highly focused and
committed in delivering results which helps and meet up with needs and wants of employers
(Charlton, 2020).
Disadvantage of this contract is it does not account to fixed monthly income and job
security which is derived from full time employment. This is suitable when there is high demand
but it does not remain same all time as demand fluctuates where in case of low demand it leads
to hardships of individuals to earn money and support their living.
Fixed term temporary contract
It is an employment contract where employees are hired by employers for specific time
period. This employment fixes in pay-outs and payments in advance and which cannot be altered
till the term of contract expires. In often case it is for years but can be renewed after the term
expires on the grounds that lays various skills and qualification possessed by employees which
match with the requirement of company. This are not given on routine jobs, given as jobs which
are temporary in nature. This are contract which are signed by parties for specific period of time.
For example in companies sometime professional are hired for specific period of time to
complete a specific task. This contract are for specific duration which are agreed and set upon in
advance. It is used for specific task, purpose and for predetermined duration where the end date

is known at starting day. Like any other contract it do have provisions where employer can
terminate its employees on violation of term of contract before the due date. Employees under
this enjoys the same rights as permanent employees does where other factors such as
compensation, holidays depends upon how long the contract is. It states that how well individual
perform their job role which can lead to company accounting and considering same for full time
employment (de Matos, Parent, 2016).
Advantages of fixed term employment is productive utilisation of time of individual which
generates income level and which accounts to real search of jobs where they lies in opportunity
that individuals may be converted in full time employees which in turn helps employer to reduce
efforts in terms of saving time and cost on various job portal, social media platforms in search
for recruiting and hiring top talents. It also helps in gaining experience for applying and to get
hired for new job role where they can perform more efficiently and productively as they have
acquired relevant knowledge, skill and talent to meet up with the challenges in their new job role
which will foster and built there career at relevant pace which will helps employer with no
efforts to train employees and derive results.
Disadvantage of this contract is it reports to employment which is not being respected, which is
being varied from corporate and organisation culture in which employees are working. Its
biggest disadvantage is that individuals may not find contract of fixed term as attractive as
permanent full time as it leads to non- filling up of vacancies which leads to delay in business
operations affecting it sales revenue and profitability (Schumann, Kuchinke, 2020).
TASK 2
There are various approaches and practices which shows why and how different organisation
uses different contractual model which are stated as below-
Samsung hire employees on the basis of full time basis to serve its long term projects which
takes many years to complete which supports development and growth of company. Samsung
hires full time contractual employees to support its day to day functioning of business operations
which leads to innovation and creativity in workplace which can be sold and communicated in
target market that support smooth functioning of business operation and by hiring top talented
permanent employees it helps in getting an edge over competitors and winning in marketplace
which serves as meeting customer wants and needs to support business dynamics (McVicar, 2016
). Company accounts to permanent employees to support its business operations where it attracts

diversity of employees who share their ideas, view, thought and others which is contributes
towards the success and growth of the company more effectively as it strengthens decision
making in company more precisely. It leads to long term employees involved in culture of
company, which helps in developing skills in accordance with company which helps them in
determining better performance for acquiring position in company which ensures continuous
compensation and determine job security for employees that helps in determining their focus and
commitment which leads to profits of company (Högberg, Strandh, Baranowska-Rataj 2019). By
hiring full time employees company ensures in meeting risk which are challenging in nature and
leads company with position to perform efficiently and serve the needs and wants of the society.
For a company its main and most valuable resource are its employees who helps in achieving
success for the company where Samsung accounts to hire and recruit employees on permanent
basis as they contribute in achieving common desired goals of company which leads to be at
position where its competitors will find it hard to defeat and acquire subsequent market share.
Samsung also accounts to follow Zero hour contractual employees as it serve as flexibility
which helps company to respond fast to varied means of business fluctuation in needs and
demands of its potential customers where it can also lead to deal with situation that are unknown.
Samsung uses Zero hour contract to meet up needs of covering various events such as
promotional activities of launching its products and services such as new mobile edition, TV’s,
refrigerators and various others which hires independent individual’s ad freelancers who work on
their own and helps in deriving result and contributes towards success of promotional events. It
is used by company in order to match up with the absence of permanent employees who have
gone through long term leaves which can be on varied ground such as illness, vacations,
marriage and various others where by hiring zero hours contractual employees they ensures that
it does not affect day to day business operations which can serve as replacement of existing
employees, till the time being existing employees do not join back the company. It relates to
cheaper source of hiring employees where frim can utilise resources more efficiently and give
opportunities to invest in other things (Okur-Berberoglu, 2019).
Morrison accounts to fixed term contractual employment where it employs individual
who work for completion of given task and project which will be terminated as and when the
project or task completed. It covers job where funding is done to complete a specific project
which is seasonal in nature and not continuous in nature. This helps Morrison to get work done

on specific time. It helps in ensuring company with easier and faster completion with specific
goals achievement and lays down great strategy for employer of company to see the performance
of employees, if done excellent may lead to permanent position in the company which will also
lead Morrison to reduce its effort in terms of saving lot of efforts in term of time and cost. It
helps in optimum utilisation of resources at given point of time which derives completion of
specific business task that contribute in success of company. It is highly viable for Morrison in
period when there is high demand of business products and services and is on pick where it
requires employees who can perform their roles and responsibilities in regards with the project,
task allocated to them which leads to efficiency and effectiveness of business operations that
gain and wins in marketplace (Svalund, Berglund, 2018).
Morrison also accounts and employs part time employees as it helps company to save lot
of cost in terms of benefit and salary which are being provided to full time employees. Company
hires part time employees to ensure flexibility of working hours where individual can meet up
with their other commitments as a result helps in getting diversity of employees which provide
wide variety of decision making that leads to success of company (Dillender, Heinrich, Houseman,
2020). By employing part time employees company ensures its expansion where it extends
opening hours of its stores all across the areas of business operation, which includes opening for
late hours, weekends that helps in boosting sales of company and accounts to profitability. This
helps in safely testing the process which ensures smooth functioning of day to day business
operation. By this company accounts to unemployment and meeting up with needs of college
going students , old age people who are not looking for full time employment which ensures
serving their needs and on contrary to which company operations are carried on to meet its
common desired goals (Piwowar-Sulej, Bąk-Grabowska, 2020).
CONCLUSION
From the above report it is being understood that for every company its most valuable
resources are its employees who serves as foundation for the success of the company which
needs to satisfy as it boost up sales and revenue of company. It is being understood that there are
vide variety of employment contract which lays down various term and conditions of working
between employee and employer whereby every party is abide to follow the same for ensuring
smooth functioning of business operations. It made to understand what full time employment is

where employees devote majority of time serving organisation, part time employment that works
on flexibility and devotes less time as compared to full time employees. It also laid to the
understanding what are Zero hours based contract and fixed term casual contract that benefit in
achieving goals. Lastly laid to understanding how and why companies opt for different
contractual modes of employment to succeed in marketplace.

REFERENCES
Books and journals
Ahammad, T., and et.al. 2017. FUTURE IN ZERO HOUR CONTRACTS: WORLD PERSPECTIVE.
Arestis, P., Ferreiro, J. and Gómez, C., 2020. Quality of employment and employment protection. Effects
of employment protection on temporary and permanent employment. Structural Change and
Economic Dynamics.
Bruttel, O., Baumann, A. and Dütsch, M., 2018. The new German statutory minimum wage in comparative
perspective: Employment effects and other adjustment channels. European Journal of Industrial
Relations. 24(2). pp.145-162.
Charlton, E., 2020. The zero-hour city: writing London in the end times. GeoHumanities, pp.1-15.
de Matos, A.D. and Parent, D., 2016. Which firms create fixed-term employment? Evidence from
Portugal. Labour Economics, 41. pp.348-362.
Dillender, M., Heinrich, C.J. and Houseman, S., 2020. Effects of the Affordable Care Act on part-time
employment: Early evidence. Journal of Human Resources, pp.0718-9623R2.
Högberg, B., Strandh, M. and Baranowska-Rataj, A., 2019. Transitions from temporary employment to
permanent employment among young adults: The role of labour law and education
systems. Journal of Sociology,.55(4). pp.689-707.
McVicar, D., and et.al. 2016. Work‐related training and the probability of transitioning from non‐permanent
to permanent employment. British Journal of Industrial Relations. 54(3). pp.623-646.
Okur-Berberoglu, E., 2019. Evaluation of Zero Hour Contracts within Ecoliteracy in New Zealand
(NZ). International Electronic Journal of Environmental Education.9(2). pp.73-80.
Perry, H., 2018. An investigation into the effects of permanent and non permanent contracts on employee
well being and employment insecurity (Doctoral dissertation, Dublin, National College of
Ireland).
Piwowar-Sulej, K. and Bąk-Grabowska, D., 2020. Non-Permanent Employment and Employees’ Health in
the Context of Sustainable HRM with a Focus on Poland. Social Sciences. 9(7). p.117.
Schumann, P. and Kuchinke, L., 2020. Do (n’t) Worry, It’s Temporary: The Effects of Fixed-Term
Employment on Affective Well-Being. Journal of Happiness Studies. 21(7). pp.2557-2582.
Svalund, J. and Berglund, T., 2018. Fixed-term employment in Norway and Sweden: A pathway to labour
market marginalization?. European Journal of Industrial Relations. 24(3). pp.261-277.
Work, N.S., 2017. 14 How DoWe Feel and Behave When We’re Not Permanent Full-Time Employees?
The Case of the Diverse Forms of. An Introduction to Work and Organizational Psychology: An
International Perspective, p.258.
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