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S&S is a Real Estate company that manages a vast range of properties, the company has a nationwide portfolio and their main office is based in London. The company has been struggling to recruit staff and most of the staff that the company recruits only tend to stay in the company for a short period of time, normally one or two years before moving on.
There could be several factors that could be influencing the staff in the S&S Real Estate to stay in the company for a short period of time. I am going to do a report where I will be analysing and investigating factors that could be the cause of that.
I have joined S&S Real Estate , and I am currently working in the department of human resources and was asked to investigate and identify managing people issues that could be causing the staff only stay in S&S Real Estate for a short period of time before moving on. I was assigned to prepare a report and evaluate theories that would help to deal with these problems.
According to the problem that the company presented to me I was able to find some issues that might be the ones causing the staff to leave the company after a short period of time.
These are some of the issues that I was able to identify according to the information that was given to me by the company:
- Organizational Structure
- Psychological contract
- Work environment
From these issues, I am only going to talk about the organizational structure, psychological contract and the work environment which I think are the main issues with S&S Real Estate and I am going to see how the company can remediate these issues. As a believe these issues are inhibiting the company to develop and reach its best potential.
What is the Psychological contract?
The psychological contract it’s a contract that refers to the unwritten expectations that:
Employees have about their work position and also the support they will get from the employer. E.g. conditions of employment, opportunities for promotion within the company, the culture of work in S&S Real Estate (Epigeum.com, 2019).
Employers have about the effects of the organization that will be generated according to the efforts of the employee, including the hours they work, effort and contribution, quality of their performance (Epigeum.com, 2019).
The psychological contract is focuses more between the relationships between the employer and employee, it works on the base of mutual responsibilities and these are not strictly guaranteed to be fulfilled by the employer unlike the employment contract.
- Hours worked by employee
- Good Performance
- Good Results
- Safe and healthy workplace
- Training/development and job opportunities
- Work–life balance
- Self-care and well-being
- Financial benefits
- Autonomy and control of position
Why is it important to fulfil the psychological contract?
It is important for S&S Real Estate to fulfil the psychological contract in order to keep their staff motivated to keep working for the company, in the psychological contract one of the normal expectations from the employee is the work environment which I am going to talk about in 2.2.
The relationship between employer and employee can be negatively affected if it is felt that there has been a breach in the psychological contract. When the employee has a reason to believe that the employer has not fulfilled its obligations then, the psychological contract has been breached.
A breach in the psychological contract can make the employee less motivated to work and affect their performance at work and in some serious cases the breach in the psychological contract can lead the employee to leave the job.
That is why is important for S&S to fulfil the expectations of their employees and that might be one of the causes that might be leading the employees to leave he company, they may feel that they are not getting what they were expecting from the employer.
How can S&S fulfil the Psychological Contract?
In order to fulfil the psychological contract, it is important for S&S Real Estate to look at the following factors:
Transparent and open communication: In order to fulfil the psychological contract is important to have a transparent and open communication, every employee needs to feel valued. It is important that there is a healthy relationship between the employer and the employee, and it is also important that they have a open and transparent communication this will permit the employee to feel that what they say is valued and that they are being listened. Employees feel happy and motivated when they know that they are contributing for the company they work for. (Targetstudy.com, 2019)
Building Trust: It is important to build trust to keep the smooth working of a company. The employer should trust the employee that anything they do will benefit the company and the employees should also trust the employer that they are committed to give them the best possible career. Trust is very important to maintain a good relationship between the employer and the employee so creating an environment of trust it’s an important factor to take into account to create a good working environment. (Targetstudy.com, 2019)
Opportunities for promotion: Promotion is a very good way to give the workers of the company more responsibility, but it is also a good way to boost the employee motivation and attitude. Doing this will result in higher productivity and also will prevent the company from losing their valuable employees. Allowing the employees to progress also gives them the opportunity to gain more experience.
Work environment is a term that refers to the workplace where employees do their work, some companies nowadays have adapted to remote work which gives the employees the opportunity of working from the comfort of their homes. Not all employees are given that opportunity, so it is essential that S&S provide a good environment of work for the employee, because that is something that will make the employee want to stay in the company.
Good work environment is part of the Psychological contract, which means it is one of the expectations that the employee has from part of the employer. It is important that the employer create a good environment of work for the employees in order to keep them happy and motivated to do their work.
One of the issues that S&S have is that they have a small office, which means that they are not able to accommodate many people in their main office in London.
So, the company needs to look at different options that will allow the organization to recruit more staff.
These are the following options that the company could implement in order to recruit more staff:
Implement remote working
Open new offices
These are the options that I think the company should look at and implement one of them.
The company also should look at the environment of work that they are providing for their employees in terms of meeting their social needs.
According to Mayo’s theory on motivational management he believed that the employees are not only concerned with the money and the physical environment, but they could be more motivated by making sure they met their employees’ social needs. He introduced the Human Relation School of thought, this focused on managers demonstrating more interest on their employees work and making sure they listened to them and they also realized that workers worked better and enjoyed more to work when working in groups.
Mayo did some experiments on at Hawthorne Factory, he isolated two groups of workers and studied how the changing in factors such as lighting and working conditions affected their productivity levels. He expected the productivity of work to change if the lighting conditions and conditions of work worsen but instead, they improve or remained the same. He came to the conclusion that what creates better productivity is the communications between managers and workers, attention given to the employees and working in groups.
These are the following aspects that S&S should take into consideration to provide a good work environment:
Positive Reinforcement: The employees need acknowledgement, appreciation and gratitude in order to be motivated, they want to feel that they are doing a good job. The employer should make sure they give attention to each employee. Praised and rewards are also a good way to encourage the employees to work better.
Team spirit: It is essential that at the place of work the employees are able to depend on their colleagues when we need help, it is important to create a good team spirit at work in order to achieve business targets. The employees should develop a good relationship between them in order to keep them motivated and enjoy work. It is substantial to create an environment where they feel that they are part of a family, because this will help them to feel valued and that they belong there. As result the employees will feel the want to be at work, workers will ten d to be less late to work, team will work well together, and they will help whoever is facing a problem doing their work. (Targetstudy.com, 2019)
Another issue that would like to talk about that could be influencing the staff to leave S&S Real Estate and also could be causing managing issues is the organizational structure adapted by the company. The organisational structure is the approach taken by the organization to define methods of communication, Policies of the company, authority and also responsibilities. The organizational structure will determine how the leadership is spread through the organization as well as the way that the information flows. Organizations can normally adapt to a flat structure or hierarchical structure. In the case of S&S Real State the company adapts a flat structure which is the type of organization structure with few levels of management between the management and the staff. A Flat organisation structure focuses in supervising their employees less while promoting their involvement in the decision-making processes of the company because the interactions are mainly among employees, the decisions are more often to be made by the group of employees, rather that the manager.
The advantages of a flat structure are:
- Staff have more levels of responsibility in the organization which means they are able to feel more often the what it is to be in charge.
- There is less layers of management which improves the speed of communication and coordination between staff.
- Less levels of management which promotes better decision-making process between staff.
The disadvantages of a flat structure are:
- Employees don’t have a specific manager to report to, which can generate confusion among staff.
- Flat structured companies may limit the promotion within the company which means it’s hard to progress in the company because the management positions are very limited this type of business structure and this leads to a lot of the employees to look out for new jobs instead of staying in the company.
- In a flat organizational structure is also hard to find a work-life balance, the employees find themselves always connected to work.
It is not bad to adapt to a Flat Organizational structure but in order to expand S&S Real Estate it would be much more beneficial for the company if they adapted to a Hierarchical structure , because it is a structure with more layers of command and more organized in terms of communication within the organization.
Max Weber Bureaucracy theory
Max Weber believed that bureaucracy was one of the most efficient ways to structure a company, Max Weber also thought that Bureaucracy was better than the other structures, he said that in a bureaucratic organization everyone was treated equally, and the division of work was better described for each employee.
The advantages of a hierarchical structure
- Authority and responsibility are clear awell defined as there is a manager for each department of the company
- There is opportunity for progression within the company which motivates the employees
- Employees can get specialized and develop knowledge in their own field of work.
The disadvantages of a hierarchical structure
- Communication between different department may be less effective
- Bureaucracy can slow down decision making
- It may be hard for the company to adapt and change
- Departments can make decisions that will only benefit their team rather than the company as a whole
In conclusion I think that these are the issues that S&S Real Estate should pay attention and make sure that they implement changes in order to remediate this issues , is a very important and it’s essential for company to make sure they fulfil their part in order keep employees always happy and motivated to come to work, fulfilling the psychological contract will allow the employees to work better and also produce better work for the company. Proving the employees, a good work environment is important in order make employees happy with their work and make them feel valued. And finally, the implementation of an organizational structure that will help the company to expand and also improve the communication within the company. Adapting to a different organization structure will also give more opportunities for employees to progress within the company which is one of the reasons for employees to leave the company.
After talking about the issues that may be affecting the company in terms of their people management, I am now going to talk through some ways of how S&S Real Estate could implement some change in order to overcome this issue.
S&S Real Estate could implement a theory Y management style. Theory Y management style is a participative style of management, this theory of management believes that managers that have an optimistic and positive opinion about their staff and use a decentralized and participative management style encourages a collaborative and trust-based relationship between management and employees. Theory Y managers encourage their staff to develop skills and give them suggestions for improvement. This theory believes that its better to encourage the employees to be responsible for their own work and rather than keep controlling the staff and monitoring all the time which contradicts Elton mayo theory, that states that employees work better when being monitored.
If S&S implements the theory Y style of management , their employees will be happy to work on their own initiative, they will be self-motivated to complete their tasks, and they will also fell that psychological contract is being fulfilled because theory Y management cares about their staff.
In order to keep the employees happy in the company and make sure they stay in the company for longer periods of time , S&S Real Estate could adapt to a hierarchical organizational structure , which would be a process that would take some time, but would be possible and would most likely be very good for the expansion of the company, this change would very likely motivate the employees of the company by offering them opportunities of promotion as S&S Real Estate would expand their layers of management. This type of structure is the kind of structure that is usually used big companies and as S&S is a company looking to expand, I think this structure will be very good. I think this structure will be good for the staff because they will feel more orientated as the company will be more divided and each department will have its own manager to report to.
Give employees opportunities to progress
If the company changes to a hierarchical structure they will be able give their employees, the opportunity to grow within the company and that will motivate the employee to stay in the company. This is an
Another change that the company could implement in order to fix the issue with their work environment is to give the employees the opportunity to work remotely, this would be a very good way to keep their employees and I think that this would definitely make them want stay in the company for longer , as not ,any companies have adapted to that kind of work yet . And it is a good way of motivating employees to work.
How does Remote working works
Remote working is a type of working method that enables the employees of the company to work outside of the usual office environment, this type of work believes that work does not need to be done in a specific place to be done successfully.
Instead of making the workers commute to the workplace every day they can do their work where they want and still execute their projects and the work needed.
By adapting thy type of work method S&S will not only be improving the work environment of their employees but they will be also fixing he issue that their office is too small to recruit more staff.
If the company thinks that adapting to remote work method is not a good option , the company could also think about opening more offices in London , this would be beneficial for the company because they would be expanding the company .
- Targetstudy.com. (2019). Good Working Environment | Importance | How to Create One. [online] Available at: https://targetstudy.com/articles/importance-of-good-working-environment.html [Accessed 6 Nov. 2019].
- Li, M., Zhang, Q., Zhang, J. and Li, Y. (n.d.). Proceedings of 2015 2nd International Conference on Industrial Economics System and Industrial Security Engineering.
- Epigeum.com. (2019). Psychological contracts. [online] Available at: https://www.epigeum.com/downloads/ulm_accessible/us/03_culture/html/course_files/uc_1_70.html [Accessed 11 Dec. 2019].
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