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Contractual Models in Human Resource Management

  • 11 Pages
  • Published On: 21-11-2023

Introduction

Managing human resource in the organisations is one of the crucial functions of the business firms, where the corporate businesses are trying to strengthen their employee base in long run. It is important for all the organisations in the recent years to manage the employees in a systematic approach though continuous motivation and rewards so that it would be possible to retain the experienced staff in long run and achieve the business success critically. The aim of the study is to analyse different contracts in human resource management such as permanent full time, permanent part time as well as zero hours casual contracts and fixed term contracts, which are beneficial in the workplace to specify the type of employees in the workplace. Through this study, it is possible to evaluate the advantages and disadvantages of the different types of the contractual models in the business firms, where the organisations try to protect the employment rules and create values for them to strengthen the employee base and maximise their performance. In the second part of the study, there would be discussion of different organisational practices, where the business firms are trying to develop different employment contracts in the workplace to provide employment opportunity to the employees.

2. Types of contractual models

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Employment contracts are of different types as per the job style, duration of the project, workplace culture and organisational activities, where the business leader offer different employment contracts to the employees for their employment. As per the duration of the job, business activities and job type, there are mainly four types of contracts which are permanent full time, permanent part time as well as zero hours casual contracts and fixed term contracts. Though the discussion, it is possible to demonstrate the advantages and disadvantages of each type of employment contracts in the workplace.

2.1 Permanent full-time contracts

Permanent full time contract is the practice working ordinary hours in the organisation and it is a full time job offered by the business leader to the employee. The minimum working hours is 38 hours per week, and the employees must work at the workplace. There are certain benefits of getting full time permanent where the employee rights are fulfilled at the workplace. The employees can get career development opportunities in terms of full term employment contracts where the leaders are able to arrange the training and development program for the employees which in turn help them to enhance their capabilities (Nankervis et al., 2019). It is easier for the employees to achieve career objectives as well as there is job security for the permanent full term employees, where the leaders provide employment contract for managing their activities. Income security is there where the employees can be satisfied and fulfil their basic needs successfully. The working activities can be enhanced rather than job hunting and it is also easier to obtain credit. These are the major benefits of full time permanent job, where the employees are getting support and continuous motivation from the organisational leaders. The organisations try to provide full term contract to strengthen their employee base and maximise the organisational objectives in long run. Additionally, the full term employment contract is effective for the staff members to fulfil their physiological needs, job security need, and the need of self actualisation and self esteem at the organisations (Mullenix, 2017). Good corporate culture and friendly atmosphere to work will also be provided to the full term employees to enhance their working activities and manage performance successfully. UK government executed The Working Time Regulations 1998 to maintain the working time of the full time employees.

On the other hand, there are certain disadvantages of full term employment contract such as high cost of managing employees and reduced ability. It hampers the organisational leadership style to lead the employees towards achieving the future success. Over the period of time, the employees are getting bored at the workplace and their performance is being deteriorated with their age, and it in turn hampers the organisational performance due to lack of productivity of the employees. Reduced ability and increasing cost of employee management are the major disadvantages for the employers in the recent years where the employers are not willing to provide permanent full term job contract to the employees. Lack of job security is also there though it is full term contract, where the employer can fire the employee due to reduced productivity and any other unethical issues at the workplace. Static professional opportunity is one of the major disadvantages for the employees, where they cannot have good scope to enhance their personal skill and professional abilities in long run (Dhanapal et al., 2017). Lack of flexibility is also another disadvantage which may hamper the workplace culture. Though there are several disadvantages of full term employment contract, it is beneficial for both the employees and employers to maintain commitment and maximise the organisational productivity and performance in long run. The employers are trying to provide the scope of full term contract to the employees in order to enhance their capabilities and performance so that they can achieve the organisational success.

2.2 Permanent part-time contracts

Permanent part-time contracts are the practice of hiring the employees in the organisation, who are working in daily hours at the workplace, but less than the full time workers. The Permanent part-time contracts employees can get the same benefits as the full time employees, but the compensation and benefits are given on the basis on the individual performance. For example, working 19 hours per week is related to getting half of the salary of the full term workers who are working 38 hours per week. The benefits of the Permanent part-time contracts are such as getting the payments on time according to the Fair Work Commission and apart from that, there is the scope of working maximum ordinary hours as per the requirements of the employers as well as the willingness of the employees (Arnow-Richman, 2016). The Permanent part-time contracted employees also get personal leave and annual leave which are mandatory for the employees to get motivated and work hard. It is also beneficial for the employers where they try to encourage the staff and retain them for long run. Getting good corporate culture and friendly working atmosphere is possible under the Permanent part-time contract. The request for flexible working arrangements is also maintained efficiently for the Permanent part-time employees where the employers are able to satisfy the staff and retain them for long run. The employees also can get suitable workplace to perform better and contribute efficiently to achieve the organisational objectives. The Minimum Wages Act 1948; Payment of Wages Act 1936; Payment of Bonus Act 1965; and Equal Remuneration Act, 1976 are also executed in the organisation to support the employees with their remunerations and benefits.

However, there are some disadvantages which are such as under staffing at times at the workplace which may deteriorate the interest of the staff to work harder. It may create difficulties in scheduling meeting and coordinates the projects as well as it may also create issues in measuring the working hours and productivity of the staff who are part timers. The Permanent part-time contracts also have negative impacts on the performance of the employees as well as the income and benefits, where sometimes the employees are not getting fair opportunity to work more and gain more rewards at the workplace (Braganza et al., 2020). It also may affect the employee’s career development negatively, where they do not get suitable opportunity to achieve the career objectives. Though there are certain disadvantages, the Permanent part-time employees are able to perform better and they try to work harder in order to gain higher in long run. Their productivity and performance can be enhanced where the employers focus on managing them through providing fair rewards and flexible working hours. In the recent years, there are many employers who are willing to increase the numbers of Permanent part-time employees in the organisational workplace for enhancing the performance and productivity of the business activities and secure future sustainable development.

2.3 Zero-hours’ casual contracts

Zero-hours’ casual contract is related to casual employees who are employed in the workplace on an irregular basis with no set of routine. They have no guarantee of ongoing employment and there is high uncertainty about the job position and security. These kinds of employees are known as causal employees who are working on regular basis and they are employed for getting the incentives or performance related pay as per their performance and productivity in the organisation. The employees are generally contacted regularly and asked to work when there is availability of the tasks. The employees are also free to refuse the tasks at any time as per their understanding and time management (De Cuyper and Isaksson, 2017). The major benefits of the Zero-hours’ casual contracts are such as the employees get compensations and benefits as per the individual performance, sick leave and casual leave, where the casual employees may take leave as per their priorities and requirements. There is flexible working time and good cooperative behaviour where the employers and employees try to communicate and collaborate to enhance the organisational performance which is the ultimate goal of the employers. Hence, the biggest advantage of the casual employees is flexibility, where the employees can choose the working hours as well as they can contribute quickly and efficiently to the business activities.

Engage the employees with the organisational activities through the casual employment contract and the employers try to utilise the casual employees to take sudden decision of the business such as the increase in demand in the market. zero hour contract or casual employment contract is hereby beneficial for the employers to hire the employees in a contractual basis for a particular task or project and it is also advantageous for the employees to gain extra benefits and earn higher by working individually in the organisation. There are also certain disadvantages such as no fixed income, uncertainty in job security and secure source of income and missing out benefits. Working in zero hour contract is disadvantageous for the employees, where sometime they do not get the opportunity to wok due to lack of project or job activities in the market where there is huge loss for the employees as they cannot earn higher (Dau-Schmidt, Finkin and Covington, 2016). On the other hand, there is missing out of benefits which are another major disadvantage of zero hour contracts which means missing out the benefits of full time payment or employment contract in the organisations. Lack of job security and sustainable source of income are also other drawbacks of the zero hour employment contract or casual employees, where the employees do not have secured source of income. Payment of Bonus Act 1965 is suitable to support the casual employees where they can get higher as per their performance.

2.4 Fixed-term’ temporary contracts

Fixed-term temporary contract is when the employers are willing to hire the employees for a specific period of time. For temporary purposes, or some urgent need of the organisation and projects, the employers are trying to hire the employees on a Fixed-term’ temporary contracts basis, so that the employees have limited period of time for that particular job. The major advantages of Fixed-term’ temporary contracts are such as the employees can earn more, get more interest in working efficiently, they can avoid long term contracts and get flexibility in working efficiently. These are the major benefits, where the employees can earn higher and also get flexibility to work within a particular period of time. The organisations in the recent years also hire such employees on a Fixed-term’ temporary contracts on order to fulfil short term organisational goal as well as enhance the overall performance for achieving the future success. As per disadvantages of Fixed-term’ temporary contracts, there is no such fixed income source and long term commitment in the organisation for the employees. Minimum Wages Act 1948; and Payment of Wages Act 1936 are efficiently implemented in the workplace in order to support the employees and give them equal scope to earn higher. Through flexibility of Fixed-term’ temporary contracts are there, there is lack of job security and organisational commitment towards the employees under this contract (Bodie, 2019). The employers are beneficial where they hire such employees in order to manage their organisational activities and fulfil the organisational objectives by hiring the employees on a fixed term contractual basis.

3. Examples of practice

In the recent era of globalisation, there are many organisations that are efficient in hiring the employees in different contractual basis. The employment contacts are hereby effective for the organisations to hire the right employees in the workplace as per the job availability, requirements of the organisation and employees capabilities. For example, the famous retail firms Tesco and Sainsbury’s mainly focus on hiring permanent full term employment contracts in order to retain the efficient employees for long run. The organisations are successful to manage their retail operations in the UK and they try to manage good corporate culture and ethical practice in hiring the employees. The permanent full term employment contracts are hereby beneficial to hire the employees after effective screening and testing of the employees. The organisations also arrange training and development program for the staff to improve their understanding about the working practice at the workplace. Good corporate culture with harmony and freedom to work, good communication and internal cooperation among the employees and partnership working practice are also beneficial for the retail firms to manage their operations and lead the employees towards achieving the future success. In this regard the organisations also restructure the salary and provide compensation and benefits to the full time employees to secure their job position and create values for them by fulfilling their basic needs. The organisations are also efficient to manage the staff and retain them for long run.

Permanent part time employment contracts are there where the organisations try to hire the Part time employees in order to enhance the organisational productivity and performance. For example, the university student abroad is working in the library or restaurant as a part time job to earn and utilise the money for their learning and development. The students get scholarship in the university abroad, and for example, there are many students in London who are coming from international countries (Noe et al., 2017). They try to work as part time workers in the restaurants or ion other sectors such as retail or as librarian. This provides them a scope to earn higher and utilise the money for their studies in long run. This is one of the major practices where the restaurants in the UK utilise part time workers and give them incentives as per their performance. There is structured salary as well as the permanent leave ad sick leave approved for the employees and this further motivate the part time workers in the UK to give their full capabilities and fulfil the organisational objectives successfully.

For the zero hour employment contracts, there are many organisations who hire the employees as a casual employment contract. For example, the newspaper company and magazine hire the creative writers for developing innovative content for their news papers or magazine. It is also another important activity, where the news paper companies are willing to hire the employees as a zero hour employment contract or casual workers where the employers are efficient to give the benefits and performance related pay to the employees which is dependent on the employees performance and working capabilities. For example, The Guardian hires such casual employees for managing their creative content and maintains good ethical code of conduct to run the organisation successfully, there are also part time workers who are working in the news paper or magazine to cover the certain stories and develop creative content. Hereby The Guardian is efficient to hire the employees on full time and part time employment contract as well as casual employment contract to manage their operations and ensure business excellence. In the recent pandemic era of COVID 19, there are huge numbers of employees working as freelancing and it is also known as casual employees, and the contribution of the freelancers in the economy’s growth is also higher in the recent years.

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Fixed-term temporary contract is also another important employment contract in the recent years where the employers are willing to hire the employees within a specific period of time. The restaurants or online retail firms are hiring the employees as Fixed-term temporary contracts. The retail firms such as Tesco and Sainsbury’s higher the distributors as Fixed-term temporary contracts during the Christmas and New Year festival, where there is high demand of the consumers for their quality products and services. This is also another efficient practice, where the retail firms are hiring both the full time and casual employees in the organisation for managing their operations. It is helpful to maintain the supply chain and distribution network where the distributors are working efficiently and they are contacted for a certain period of time to manage their operations during peak season (Bratton and Gold, 2017). On the other hand, there are some famous restaurants in the UK which are hiring the fixed term staff at the restaurants during the festive season, where the numbers of customers coming to the restaurants is high and it is mandatory for the hospitality manager to handle the clients efficiently. Hiring the staff members, waitress and chef at the restaurants during festive season is one of the great practices, where the employers are trying to hire them at a fixed term contractual basis for a certain period of time.

4. Conclusion

The employment contracts are effective where the UK government provide suitable structure to maintain employment ethics. There is structured salary and benefits and compensation provided to the employees as per their performance and employment contract. The Working Time Regulations 1998 is also there to protect the employees and give them effective wages as per their performance. In the recent years, the organisations try to focus on different employment contracts for better management and retaining the efficient staff to maximise the organisational objectives.

Reference List

Arnow-Richman, R., 2016. Modifying At-Will Employment Contracts. BCL Rev., 57, p.427.

Bodie, M.T., 2019. Taking Employment Contracts Seriously. Seton Hall L. Rev., 50, p.1261.

Braganza, A., Chen, W., Canhoto, A. and Sap, S., 2020. Productive employment and decent work: The impact of AI adoption on psychological contracts, job engagement and employee trust. Journal of Business Research.

Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. London: Palgrave.

Dau-Schmidt, K.G., Finkin, M. and Covington, R., 2016. Legal protection for the individual employee. London: West Academic.

De Cuyper, N. and Isaksson, K., 2017. Employment contracts and well-being among European workers. London: Routledge.

Dhanapal, S., Nair, H.L.N., Kanapathy, J. and Laidey, N.M., 2017. Employment Contracts: An Exploration on the Balance of Powers Between Employers and Employees Through a Linguistic Analysis. Advanced Science Letters, 23(1), pp.184-189.

Mullenix, L.S., 2017. Class Action Waivers in Employment Contracts: The Clash between the National Labor Relations Act and the Federal Arbitration Act: Ernst & Young LLP v. Morris, EPIC Systems Corp. v. Lewis, and NLRB v. Murphy Oil USA (16-300)(16-285)(16-307). Preview US Sup. Ct. Cas., 45, p.13.

Nankervis, A., Baird, M., Coffey, J. and Shields, J., 2019. Human resource management. Boston: Cengage.

Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.


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