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 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.