Sebastian Perrier

Although many processes and procedures might be written about what the human resources’ policies within a company are, peoples’ perceptions and cognitive frameworks are far more important than any written rule. So managing human resources is about managing ‘signals’ that will ultimately shape the company’s culture. If the company is sending signals consistent with the company’s policies and with people’s expectations, employees will feel identified with the company and will engage towards their objectives.

However, if the company is constantly sending contradictory messages which are inconsistent with its strategy and policies, employee loyalty and commitment will be damaged. Therefore, every action and decision taken by managers is seen and interpreted by the workforce; these signals and examples shape the organizational culture far beyond any written rule.

So why bother having any written manuals and rules? Is there a relationship between human resources practices and business performance? Why should managers bother to develop such procedures? If peoples’ behavior is a ‘black box’, where it is not possible to establish a direct relationship between processes and performance, why should managers bother writing manuals? Because empirical evidence shows that yes, there is a relationship between good human resources processes and organizational performance.

What will determine that someone will do a good job? What does ‘doing a good job’ means? Can managers develop an employment contract to answer to these questions? No!

The employment contract is different from every other contract because it is not possible to establish a direct relationship between what each party is to give. It is not like selling a product for an X amount of money. How much will the employee will give to the organization is subjective, it depends on personal discretions. The employment contract is a social relationship; each aspect of this relationship will never be able to be stipulated in a written contract.

Therefore, managing human resources is rather a balancing act than just writing contract. Reward, authority and control from the employer should be balanced with allowing the employee autonomy for creativity and personal interests. Managing human resources involves recognizing that there are potential zone of conflict of interests, and the process of managing people is a continuous act of barging and negotiations.

In this ‘balancing act’, employees interests have to be balanced with the organization’s goals. This relationship must be proactively managed and the basis to gain employees commitment; the key is to build trust. There will never be a direct relationship between the employment contract and employees behavior, this is why trust is needed to build in order to successfully meet both the organization’s and the employees interests. Employee management is about good communication and building trust.