SHR012-6: Flexible Working & Psychological Contract Report

This report delves into the concepts of flexible working and the psychological contract, examining their significance in modern business environments. It defines flexible working, exploring various arrangements like telecommuting and remote working, and emphasizes its role in enhancing work-life balance, employee motivation, and productivity. The report also analyzes the psychological contract, detailing its types (transactional, relational, transitional, and balanced) and its influence on employee expectations, trust, and loyalty. The discussion section provides a case study of Oman Construction Company, highlighting its flexible working policies and the implementation of psychological contracts to foster employee satisfaction and commitment. The report concludes that a flexible work environment is crucial for boosting company efficiency, and recommends integrating flexible working hours and psychological contracts to attract skilled employees and reduce job turnover. The report also suggests involving employees in decision-making processes to minimize contract breaches and foster a positive work environment.

Running Head: Management
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Flexible Working & the Psychological Contract
8/21/2019

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Contents
Introduction.................................................................................................................................................2
Literature Review........................................................................................................................................2
Discussion...................................................................................................................................................3
Conclusion...................................................................................................................................................4
Recommendation.........................................................................................................................................5
References...................................................................................................................................................6

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Introduction
The report is prepared in regards to the flexible working and the Psychological contract as they
are main factors for being the success of the business. Both are the concept is different and their
definition will be explained in this report by the different authors. Flexible working is the
working pattern where the employees have lots of freedom as they can work according to their
choice and given the work as their agreed time of framework (Timms, et al., 2015). The
psychological contract is the concept where the employment relationship between the managers,
employees and the individuals are exchanged through the set of the expectation and promises.
The aim of this report is to define flexible working and their types and to analyses the theory of
the psychological contract and its effect. The main purpose of this report is to implement the
psychological contract and the flexible working in the company so that success can be achieved.
Literature Review
According to the author (Guest, et al., 2016), flexible working is needed in every organization so
that the employees can be felt free and they give their best performances. As per the author if the
employees ate getting the flexible working at the working place then a better work-life balance
can be maintained. The employees do not feel any kind of stress at the flexible working
environment and they work with full of motivation. Flexible working also enhances greater
productivity and motivation and helps in building a good relationship among the employees.
As per the author, there are several types of flexible work arrangements it is important to choose
the right one for better flexibility. Telecommunicating is the type of flexible working in which
jobs are performed by the employees only at the part of the time. In these types of flexibility,
employees can come semi-regularly and they worked as the full-time position (Putnam et al.,
2014). In this process the employees do not have to work regularly in office but if manager needs
their existence then they can quickly call them or talk them at the live position. Another type of
flexible working is the remote working in which employees can work from anywhere around the
world and they do not have to come office regularly.
As per the author (Festing and Schäfer, 2014), the psychological contract is the contract between
the employer and employee which represents the perception, mutual trust, and informal

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obligation. It is the relationship between both of them where the mutual expectations are
unwritten. It is the contract which forms belief when any agreement is exchanged and helps in
building the relationship at the working place. The employee has some expectation when they
are recruited in the organization.
In the reviews of the author, there are four types of Psychological contract is there which are
Relational, Transactional, Transitional and the Balanced. In transactional contract the work is
exchanged in the lieu of money for the short period of time. The relational contract is the ones
which are based on mutual trust and loyalty and it is the long term employment where the
remuneration comes from upper management (CIPD, 2016). The transitional contract reflects the
changes in the socio-economic and the organizational context and establishes the contradiction
agreement. The balanced psychological contract helps in developing the skills and career
development. In the organization employees feel very insecure so this contract helps in reducing
the insecurity. It helps in building the employment relationship in the organization as it fills the
gap in the employment relationship.
Discussion
Oman Construction Company is one of the famous construction companies which have attracted
many employees across the world due to its flexibility. The biggest privilege for the company is
flexible working as it gives the employees the freedom to do the work as per their wish. The
company has given the choice to the employees that they can come to the office whenever they
want but they have to complete their 8 hours shift from their effective time. It also gives the
employees the opportunity to shift their working at any time whenever they want. But for that
they have to work at the weekends or do the overtime to compensate their holiday (Coyle‐
Shapiro and Kessler, 2017).
The gate of the office is open 24*7 which gives the opportunity to the employees to works at
night also when any emergency occupies at day. The flexibility in the company is fulfilling as
per the needs and demands of the employees which helps in enhancing the satisfaction and
faithfulness of the employee (Lee, et al., 2009). At the same time, Oman Construction Company
also makes the psychological contract with their employees so that the relationship can build
with them and the trust and loyalty can be maintained. The expectation of the employees and the

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organization can be known by this contract. The employees of this company have a higher level
of expectation from the company. When any issues arise in the organization then employees
expect to be to take relevant decisions. If there are any violation and the breach of the contract
then it results in the high risk and trust and loyalty between the employer and employee also
broken.
There are several benefits of the flexible working on the company such as it attracts more skilled
and higher level of employees in the company and give a diversified workforce. The cost of
recruitment is reduced and due to flexible environment employees are sustained for long term.
The morality and satisfaction level of the employee gets increased (Thompson, et al., 2015).
Flexible working also helps the employees of the company to engage and commit towards the
goals of the company. By making the psychological contract with the employees the company
can increase the role and values with the company. The expectation of the employees can be
gained by a psychological contract which gives the job advancement and security in exchange
with the hard-working and the loyalty of the employees. If any employees break the contract of
the mutual promises then they are obliged and the performance of the company gets affected.
Conclusion
From the above report, it is concluded that flexible environment is very essential at the
workplace so that the productivity and the efficiency of the company can be increased. There are
various types of flexible working which are explained in this report. Due to the flexible working
morality and satisfaction level of the employee gets increased. Flexible working also helps the
employees of the company to engage and commit towards the goals of the company. The
psychological contract is the contract at the time of recruitment of the employees in which the
expectations and the obligations of the employees are set. If any changes in the organization
occur then it leads to the change in the behavior of the employees and their attitudes. If there are
the breach and violation of nay psychological contract then the employees’ perception towards
work changes. Oman Construction Company is implementing the flexible working environment
which helps the employees to attract towards the company and also gives better productivity.
The cost of recruitment is reduced and due to flexible environment employees are sustained for
long term so company also maintains flexible working.

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Recommendation
 The talented and the skilled employees in the company can attract when there are flexible
working hours in the company. The working hours should be of 8 hours and it should be
convenient for all the employees so that maximum number of the employees can work in
the company (Shagvaliyeva and Yazdanifard, 2014).
 The psychological contract must be taken and the time of the recruitment so that
expectation and obligation of the employees can be understood. When the loyalty of the
employees is highly ranked then also it should be taken into consideration.
 While taking any effective decisions and the issues which are related to the work
environment of the employees, the employees should be involved in the process so that
the chances of violation and the breach of the contract can be declined.
 The cost of the employment will be reduced and the possibility of the job turnover will be
lower when there is an effective flexible working at the organization (Baruch and
Bozionelos, 2010). So departments of the organization should offer a wide range of
flexibility.


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References
Baruch, Y. and Bozionelos, N. (2010). “Career issues”, in Zedeck, S. (Ed), APA Handbook of
Industrial and Organizational Psychology, Vol. 2, American Psychological Associaition,
Washington, DC, pp. 67-113.
CIPD. (2015) Zero-hours and short-hours contracts in the UK:employer and employee
perspectives. London: Chartered Institute of Personnel and Development.
CIPD. (2016) Employee outlook:focus on commuting and flexible working. London: Chartered
Institute of Personnel and Development.
Coyle‐Shapiro, J. and Kessler, I., (2017) Consequences of the psychological contract for the
employment relationship: A large scale survey. Journal of management studies, 37(7), pp.903-
930.
Festing, M. and Schäfer, L., (2014) Generational challenges to talent management: A framework
for talent retention based on the psychological-contract perspective. Journal of World
Business, 49(2), pp.262-271.
Guest, D., (2014) Flexible employment contracts, the psychological contract and employee
outcomes: an analysis and review of the evidence. International Journal of Management
Reviews, 5(1), pp.1-19.
Guest, D.E., (2016) Trust and the role of the psychological contract in contemporary
employment relations. In Building trust and constructive conflict management in
organizations(pp. 137-149). Springer, Cham.
Lee, C-C., Wu, C-C., and Lee, W. (2009),”Factors that infulance employees’ organizational
identity after M&A; The acquired perspective”, African Journal of Business Management, Vol. 3
No. 11, pp.695-704.
Putnam, L.L., Myers, K.K. and Gailliard, B.M., (2014) Examining the tensions in workplace
flexibility and exploring options for new directions. Human Relations, 67(4), pp.413-440.

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Shagvaliyeva, S. and Yazdanifard, R., (2014) Impact of flexible working hours on work-life
balance. American Journal of Industrial and Business Management, 4(1), p.20.
Thompson, R.J., Payne, S.C. and Taylor, A.B., (2015) Applicant attraction to flexible work
arrangements: Separating the influence of flextime and flexplace. Journal of Occupational and
Organizational Psychology, 88(4), pp.726-749.
Timms, C., Brough, P., O'Driscoll, M., Kalliath, T., Siu, O.L., Sit, C. and Lo, D., 2015. Flexible
work arrangements, work engagement, turnover intentions and psychological health. Asia Pacific
Journal of Human Resources, 53(1), pp.83-103.