CHANGE MANAGEMENT

Compare the models by Schein (1965) about understanding human dimension of change in an
organization. Justify the application of any one or more of these dimensions to a change program of
your choice to an organization.

A psychological contract is a set of unwritten expectations that exist between individual

employees and their employers. As Guest (2007) noted, it is concerned with: The perceptions of
both parties to the employment relationship, organization and individual, of the reciprocal
promises and obligations implied in that relationship. A psychological contract is a system of
beliefs that encompasses the actions employees believe are expected of them and what response
they expect in return from their employer and, reciprocally, the actions employers believe are
expected of them and what response they expect in return from their employees.

The concept of the psychological contract is commonly traced back to the early work of Argyris
(1957) and to social exchange theory (Blau, 1964). The latter explains social change and stability
as a process of negotiated exchanges between parties. However, the key developments leading to
its current use as an analytical framework were provided mainly by Schein (1965), who
explained that: The notion of a psychological contract implies that there is an unwritten set of
expectations operating at all times between every member of an organization and the various
managers and others in that organization. This denition was amplied by Rousseau and Wade-
Benzoni (1994) as follows: Psychological contracts, Rousseau and Wade-Benzoni (1994)
Psychological contracts refer to beliefs that individuals hold regarding promises made, accepted
and relied upon between themselves and another. (In the case of organizations, these parties
include an employee, client, manager, and/ or organization as a whole.) Because psychological
contracts represent how people interpret promises and commitments, both parties in the same
employment relationship (employer and employee) can have different views regarding specic
terms.
Employees may expect to be treated fairly as human beings, to be provided with work that uses
their abilities, to be rewarded equitably in accordance with their contribution, to be able to
display competence, to have opportunities for further growth, to know what is expected of them
and to be given feedback (preferably positive) on how they are doing. Employers may expect
employees to do their best on behalf of the organization to put themselves out for the
company to be fully committed to its values, to be compliant and loyal, and to enhance the
image of the organization with its customers and suppliers. Sometimes these assumptions are
justied often they are not. Mutual misunderstandings can cause friction and stress and lead to
recriminations and poor performance, or to a termination of the employment relationship.

As described by Guest et al (1996), The aspects of the employment relationship covered by the
psychological contact will include from the employees point of view:

how they are treated in terms of fairness, equity and consistency;

security of employment;
scope to demonstrate competence;
career expectations and the opportunity to develop skills;
involvement and inuence;
trust in the management of the organization to keep their promises.

From the employers point of view, the psychological contract covers such aspects of the
employment relationship as competence, effort, compliance, commitment and loyalty.

Changes

There is no job security. The employee will be employed as long as he or she adds value to the
organization, and is personally responsible for nding new ways to add value. In return, the
employee has the right to demand interesting and important work, has the freedom and resources
to perform it well, receives pay that reects his or her contribution, and gets the experience and
training needed to be employable here or elsewhere

A positive psychological contract is worth taking seriously because it is strongly linked to higher
commitment to the organization, higher employee satisfaction and better employment relations.
Again this reinforces the benets of pursuing a set of progressive HRM practices.
Every organization develops an internal culture based on its operational success, what I will call
the "operator culture." But every organization also has in its various functions the designers and
technocrats who drive the core technologies of the organization. I will call this the "engineering
culture" and note that their fundamental reference group is their world wide occupational
community. Every organization also has its executive management, the CEO and his or her
immediate subordinates, what I will call the "executive culture." CEO's because of the nature of
their jobs and the structure of the capital markets also constitute a worldwide occupational
community in the sense that they have common problems that are unique to the CEO role.

These three cultures are often out of alignment with each other, and it is this lack of alignment
that causes the failures of organizational learning as the below examples will show. This will
raise this question of whether we have misconceived the initial problem by focusing on
organizational learning when, in fact, it is the executive and engineering communities that must
begin their own learning process if 21st century challenges are to be met.

Example 3. A company decided to introduce automatic machine tools into their production
process (Thomas, 1994). The idea originated with the engineers who saw an opportunity to do
some "real engineering." The engineers and the vendors developed a proposal based on technical
elegance but found that middle management would not push the proposal up to executive
management unless it was rewritten to show how it would reduce costs by cutting labor. No
accurate figures were available so the team more or less invented a set of numbers to justify the
purchase of the expensive new machines. As the proposal worked its way up the hierarchy, the
union got wind of the project and insisted that they would not go along unless management
guaranteed that no jobs would be lost and that all the present operators would be retrained. This
not only delayed the project but, when the machines were finally installed, the production
process proved to be much less effective and much more costly than had been promised in the
proposal. The engineers were highly disappointed that their elegant solution had, from their point
of view, been subverted and that all the operators that were to have been replaced had merely
been retrained and kept on jobs that the engineers considered superfluous.

Culture is what a group learns over a period of time as that group solves its problems of survival
in an external environment and its problems of internal integration. Such learning is
simultaneously a behavioral, cognitive, and an emotional process.
A culture is a set of basic silent assumptions about how the world is and ought to be that is
shared by a set of people and determines their perceptions, thoughts, feelings and, to some
degree, their overt behavior (Schein, 1992). Culture manifests itself at three levels, the level of
the deep tacit assumptions that are the essence of the culture, the level of espoused values which
often reflect what a group wishes to be ideally and the way it wants to present itself publicly ,
and the day to day behavior which represents a complex compromise between the espoused
values, the deeper assumptions and the immediate requirements of the situation.

References

Argyris, C (1957) Personality and Organization, Harper & Row, New York Blau, P (1964)
Exchange and power in social life, Wiley, New York

Guest, D (2007) HRM: Towards a new psychological contract, in (eds) P Boxall, J Purcell and P
Wright, Oxford Handbook of Human Resource Management, Oxford University Press, Oxford

Guest, D E and Conway, N (1998) Fairness at Work and the Psychological Contract, IPD,
London

Guest, D E and Conway, N (2002) Communicating the psychological contract: an employee

perspective, Human Resource Management Journal, 12 (2), pp 2239 Guest, D E, Conway, N
and Briner, T (1996) The State of the Psychological Contract in Employment, IPD, London