Relationship between Employee and Employer


The Relationship bettwen the Business and Employee is changing. Change is the measure of success for individuals and the organisations, by Change it is referred to anything from change of working conditions, way to communicate, technological changes, anything that is different from the previous way of doing things, and is done for the betterment of both the people and the organisation is change.

Employee and Employer Relationship

Jobs are Changing

Meaning and Means of the Jobs have changed considerably, traditional ways may not work today, Employment is more than a job consisting of tasks and reporting procedures, it is more holistic, with sharing of responsibilities, both relating directly to the job and off the job responsibilities, an employer failing to understand that Employee have his personal needs and has to strike a work life balance would fail to get the best out of his worker. Employment consists of two sets of contracts: legal and psychological.

Psychological and Legal Contracts

Setting out the terms and conditions of employment between the individual and organisation form the basis for the legal contract. A psychological contract, in contrast, is a metaphor used to describe a set of unwritten and unspoken set of expectations between the individual and the organisation. These unwritten rules might include that employee will work hard to make best use of his abilities for effective and efficient results, whereas the employer will make sure that employee get a better working environment, respect, flexibility to perform the job.

Jobs are no longer for life, but are strict contract between the employer and employee where both have this unwritten agreement of gaining benefits from each other, as soon as one sees that the other is of not much benefit, or they can have more advantage by hiring/serving another employee/employer, there is change. This means individuals no longer have to have long-term contracts and organisations are not guaranteed to have employees that will stay loyal and committed. Traditionally organisational commitment is the ultimate norm but nowadays an employee can walk out of the door with his/her intellectual assets after a couple of months’ notice and start working for the competitor organisation.

Employee Performance drives from employee commitment, motivation and job satisfaction as the three of them are interrelated and dependent on each other. However, mutual trust, commitment and the bond between the individual and the organisation is no longer strong. Instead of relying on traditional methods of improving and developing commitment, there is a need to find new ways to build an effective bond between the individual and the organisation. And these new ways include recognising the talent of the individual, providing right compensation for work, providing good work environment and culture to name a few.

Role of HRM in Employee and Organisation Relationship

Human resource management (HRM) is the process of managing the organization's workforce to achieve business objectives. HRM involves recruiting, compensating, designing work, assigning roles and responsibilities, guiding and motivating employees, boosting morale, developing relationships, providing safety and welfare, and handling employee grievances and conflicts.

One of the key aspects of HRM is employee relationship management (ERM), which focuses on building strong, positive relationships between employees and their managers, as well as among coworkers. ERM can benefit the organization in various ways, such as:

  • - Boosting employee morale and satisfaction
  • - Increasing productivity and performance
  • - Encouraging leadership skill development
  • - Reducing turnover and absenteeism
  • - Enhancing innovation and creativity
  • - Improving customer service and loyalty
  • - Fostering a culture of diversity and inclusion

How HRM can improve employee and organisation relationship

HRM can play an important role in improving employee and organisation relationship by adopting formal policies and procedures, as well as conducting activities that allow employees to work with each other and with managers. Some of the ways HRM can do this are:

- Building cross-functional teams: Cross-functional teams are composed of employees from different departments who work together on a common goal. This can help employees learn new skills, collaborate, communicate, and understand each other's perspectives. It can also foster innovation and problem-solving by bringing together diverse expertise and viewpoints.

- Encouraging social interactions: Social interactions can help employees build rapport, trust, and friendship with each other. HRM can facilitate social interactions by organizing events such as team lunches, happy hours, outings, games, or celebrations. These events can also help employees relax, have fun, and reduce stress.

- Providing feedback and recognition: Feedback and recognition are essential for employee motivation, engagement, and development. HRM can provide feedback and recognition by conducting regular performance reviews, giving constructive criticism, praising achievements, rewarding excellence, or celebrating milestones. Feedback and recognition can help employees feel valued, appreciated, and supported by their managers and peers.

- Offering professional development programs: Professional development programs can help employees enhance their skills, knowledge, and competencies. HRM can offer professional development programs by providing training courses, workshops, seminars, webinars, or online resources. Professional development programs can also help employees advance their careers, increase their confidence, and achieve their goals.

- Implementing mentorship programs: Mentorship programs can help employees learn from experienced professionals who can guide them, advise them, and inspire them. HRM can implement mentorship programs by matching mentors and mentees based on their interests, needs, and goals. Mentorship programs can also help employees develop leadership skills, network with others, and access opportunities.

- Promoting diversity initiatives: Diversity initiatives can help employees respect and appreciate the differences among themselves in terms of culture, ethnicity, gender, age, religion, disability, or sexual orientation.

HRM can promote diversity initiatives by creating policies that ensure equal opportunity and non-discrimination, conducting awareness campaigns or workshops on diversity issues, or celebrating diversity events or festivals. Diversity initiatives can also help employees foster a sense of belonging, inclusion, and harmony in the workplace.

HRM plays a vital role in employee and organisation relationship by managing the workforce to achieve business objectives. HRM can improve employee and organisation relationship by implementing ERM policies and procedures that focus on building strong bonds between employees and managers as well as among coworkers. ERM can benefit the organization in various ways such as boosting morale, increasing productivity, encouraging leadership, reducing turnover, enhancing innovation, improving customer service, and fostering diversity.

Human Resource Management could be vital in building the relationship. Vital for the organisations is to see employees as an assets that would help generate profits if are invested in, Employees expect employers to invest in training and development and in return the organisations expect employees to be flexible, creative and productive.

Organisations not only have to match the organisational needs, but also the values of its employees. The responsibility of the employment of psychological contract is mostly given to the HR function because HRM forms set of policies and procedures that govern the nature of work and regulate the relationship between the employee and the organisation.


A Handbook of Human Resource Management Practice by Michael Armstrong.