Human resource management is a strategic method to an effective administration of individuals in an organization such that they assist their business gain a competitive advantage. This is mainly developed and designed to increase their staff members’ performance in the service of the workers’ strategic goals. The report is based on analyzing the four types of contractual model which includes permanent full-time, permanent part-time, zero-hours casual, and fixed-term temporary contracts. These models help in the role of employees in the company and how they perform work for reaching desired goals and targets. Along with this, it also understands that how two different organizations use such contractual approaches and maintain it in a better manner. It is required for the company is to evaluate the model which can help in identifying how the employees perform their work in different job contracts.
Definition, explanation, and analysis of the four types of contractual models
Contractual models are the models in which both parties are involved in some benefits and obligations towards each other. There is a reasonable extent which is expected to be achieved by both parties with common interests in the relationship parameters without having identical interests (Ahmad, 2015). The contractual models are implemented between two or more parties and involve the execution of common motives for achieving profits and benefits. There are various kinds of contractual models such as permanent full-time contracts, permanent part-time contracts, zero-hours casual contracts, and fixed-term temporary contracts.
Permanent full-time contracts are the contracts in which the employees work on the regular or ordinary hours in the organization which is being defined in the contract terms and conditions. This is an ordinary kind of contract which is generally used for hiring the permanent employee who will work as per the designated job profile in the company in ordinary hours which is defined as around 38 hours of work per week. The permanent full-time contracts are beneficial for the employees as the end of the employment is not predetermined in these contracts (Chatterjee, 2016). The employees get subsidized health care, holidays, retirement plans, paid vacations, sick time along with additional wages. These types of contracts are very commonly used in various organizations for hiring full-time employees for daily working operations in the organization. The employee can resign from these contracts whenever they want by noticing for 3 months or paying for the contractual fees. These are very flexible and generally applied contracts with terms and conditions to follow the rules and regulations of the organization. The employees and organization both are benefitted from this kind of contractual model with the efforts of both parties are involved in the success of the contract.
Permanent part-time contracts are the contracts in which the employees work on the regular hours but lesser hours than the full-time workers in the organization. These types of contracts hire the employees who are permanent in the company but they work for a few hours rather than full hours of working. The part-time employees work for less than 38 hours in a week but they are permanent employees. This type of contract is similar in working and terms for the employees in any organization but they differ in terms of the working hours. Part-time employees work for lesser hours than full-time employees (Donate, et. al., 2016). The permanent part-time contracts are beneficial for the small companies and organizations which cannot afford a full-time employee for payment and benefits. The part-time employees can be hired on lower wages or salary in the organization who will work on ordinary hours with less payment. These kinds of contracts are very advantageous in the situations of adverse conditions in the market place for the organization where the company cannot pay for full-time employees. The part-timers get the various benefits according to the terms and conditions of the contract for vacations or paid leaves, etc.
Zero hours casual contract is another kind of contractual model in which the employer is not obliged for providing the minimum working hours for the employees. These contracts are also called casual contracts. The workers do not have any offered working hours from the employer due to the lacking of obligations for offering working hours. The business is mostly benefited from these kinds of contracts as this contract saves money for the employers. The business is not obligated to provide the benefits and perks for the workers as it offers for full-time employees (Harvey, et. al., 2015). This contract is very helpful and effective for raising or decreasing the working force according to the demand of the business organization. The zero hour casual contracts offer flexibility in working for workers to maintain life-work balance in their lives. The workers can adjust their working hours, time off work as their wish. But these contracts are not effective in providing the working needs in 30% of cases of contracts. The zero-hours contracts are trending currently in which the business gets benefits for choosing the working force according to the needs of the business.
The fixed-term temporary contracts are the kind of contracts in which the date of termination of the contract is predefined for employee and employer. There is no need for the termination of the contract from either party as it is fixed for its term to employ temporarily. The fixed-term temporary contract is the contract in which the employee is kind of permanent for a fixed period of employment in the organization. The employees are hired on a contractual basis for a limited period in the organization to provide their services for the company and in exchange, they receive their wages. The employees on the fixed term temporary contracts are provided with similar benefits and perks from the organization as the permanent employees are getting from the company (Jamali, et. al., 2015). The benefits of health care, pension, paid vacations, holidays are all provided for the fixed-term employees during the time of the contract. The organizations can hire the fixed term temporary employees on contract as per the needs of the organization for saving money on the permanent employees who are fixed for long periods in the organization until one of the parties terminates the contract. These are very important kind of contract which is used in many organizations for using the services of the employee for a fixed time.
Advantages and disadvantages of each contractual model
In an organization, a contract is important for their employees in which they can easily understand their work and perform tasks according to the need or requirements. There are various contractual approaches and models along with advantages and disadvantages are discussed as under:
Permanent full-time contract considered as both advantageous and unfavorable. It can provide a sense of security and also allows a company, but it can also discontinue the expansion, protect workers from learning new capabilities and experiencing current trades within an organization, that is one of the major reasons why people are altering job. Permanent full-time contracts have various advantages such as sick pay, holidays, job advancements, insurance benefits, fixed working hours and fixed salary or payment are some of the perks or advantages of the permanent full-time contracts in the business organization for the hiring of various employees or workers (Kianto, et. al., 2017). This type of contract comes with the various disadvantages which come along with the benefits such as the employees can get satisfied with the position and salary which restricts from further growth levels in market place becomes hard. The conditions for the advancements results as null for the employers and employee.
Permanent part-time contracts are the type of contracts that provides flexibility for working hours in the organization. The talented and valued employees can be gained who are not available for full-time jobs. Costs for labour can be reduced without reducing staff, busy times can be covered efficiently, provides flexibility, free time, and work-life balance for workers. It also works for enhancing commitment levels, morale in employees, and productivity of an organization by a reduction in the levels of tardiness and absenteeism in employees of the organization to focus on working criteria of the company to fulfil the assigned tasks efficiently (Liu, et. al., 2017). Every aspect has two faces similarly permanent part-time contracts has various disadvantages for the business as well as the employees. It can cause understaffing, create difficulty in coordinating projects or scheduling meetings with workers in the organization. The performance measurement becomes hasty using this contract type which can negatively impact the employee’s career advancement, income, or benefits. The part-time employees can be regarded as the less committed towards the organization by colleagues and can become a topic for supervision issues in the company for expected work. This contract creates issues in assigning the duties for the workers by the employers as becomes ineffective.
Zero hour casual contracts have various advantages or benefit such it provides flexibility for the business fluctuations in which the business needs more working staff during specific seasons. It provides growth for business according to the capacity which can do using the zero hour contract workers for mitigating the risks in business. It also provides quality of work, productivity, simplicity, affordability, and worker retention for business development as the choice of workers depends on the business requirements. Along with this, this contract type also has some disadvantages like the unpredictability of employer and workers. The business and employees cannot predict the work and worker availability according to their need for fulfilment (Manuti, et. al., 2017). This contract type also has a disadvantage for lack of control over the workers in the organizations as they are not permanent employees who will work according to the criteria of the company. The employer cannot restrict the worker from working for another employer even it’s a competitor for the company. These disadvantages impact the business operations of the company due to the zero hour casual contracts workers.
Fixed-term Temporary contracts are the generally used contracts that offer various pros and cons of the contract for business and workers. These contracts are very useful for the maternity leave or long term sick leave covering for the employees. This contract can offer for a specific task to be completed in employment. The seasonal works and handling of labor costs for the organization become easy in the application of this kind of contract for the hiring of employees for particular tasks. These are some advantages for the fixed term temporary contracts in the business world. this contract type also servers various disadvantages for the workers and business such as the recruitment process is hard for this contract based jobs as the workers not much interested in a job as much as permanent options (Marchington, et. al., 2016). This contract can become costly for the employer as if the employer terminates the contract early, then the employer needs to pay for the remaining time left on their contract in case of any misconduct of rules and regulations of the company. This contract is not very friendly for the relationship between the employer and the workers of the company to fulfil the needs of the company to achieve the expectation.
Two different organizations showing how and why they use different contractual approaches
There are two companies which are used contractual approaches for their employees and employers such as Tesco and NHS. Tesco is one of the leading retailing companies which offers a variety of goods and services to their customers and also satisfying their needs and wants in a better manner. They are maintained and manage the contractual contract which provides the legal position of the workers within an organization and how they are performing their job as per their contract or agreement developed (Palma, et. al., 2019). Permanent full-time contracts are used by Tesco in which they are given all the rights, roles, duties, and employment jobs to their employees and help them in developing a strong relationship with their co-workers. This contract implements in this company for such employees who are performing work on regular hours and are employed for paid wages or hourly rate. This agreement continues until the termination of the workers either by the manager and employee. Tesco also provides a variety of benefits to employees who are relying on this contract such as compensation, bonus, wages and so more.
The permanent part-time contracts have been used by Tesco in an organization where they are hiring such workers who will perform work regularly and ongoing hours, but also perform tasks at limited hours a week than some employees working for full time as well. In this workplace, part-time workers can have easy access to a similar privilege as the full time enduring staff members but based on pro-rata as per the working hours (Raeder, 2019). The employees, who are hired on a part-time contract, need to perform work for at least 38 hours each week. It has been also analyzed that most of the companies are prefer part-time employees as this provides advantages to the workers. Tesco also mainly use part-time agreement while hiring any candidate because this is less expensive and they need to pay a lower salary based on their working hours. But it is necessary for a firm is to hire efficient workers who have the ability and skills to perform a great job and achieving potential goals properly (Tung, 2016). Along with this, the company can pay fewer amounts based on their working performance in this type of contracted workers as this is affordable to firm to hire skilled and experienced employees.
Another is a zero-hours casual contract which is also used by Tesco in which employees are working for the firm but the business does not guarantee them any permanent hours or upcoming tasks. This contract enables the company to appoint employees without giving any guarantee to the providing work when there is the availability of work, the company can be contacted otherwise they do not need them. Moreover, this is a very flexible working structure and contract in which workers also feel free and properly perform their work. This means employees are required by the organization when there is work and they are also performing work on an hourly basis (Rodríguez-Sánchez, et. al., 2020). Fixed-term’ temporary contracts are used by Tesco where employers are hiring a candidate for a specific period and this contract is not considered as routine jobs. This is provided to such workers who perform temporary jobs.
Another company is NHS which is an international healthcare organization that provides the best health services and facilities to the people. This firm also uses different contractual models or approaches while hiring employees who are best suitable for their organization’s job role. Permanent full-time contracts used in the NHS organization in which employees are employed to perform work on an hourly basis and it is required for the company is to set working hours of staff members, position, roles, and holiday entitlements. It is required for a firm to focus on its business operations and its functions where such contracted workers are performing their best work to reach with desired goals (Shamim, et. al., 2016). The permanent part-time contract is also used by NHS in which they provide and assured entitlements that include annual leave, sick leave and carers leave as per the working hours. The company needs to provide and allow employees to perform the same role and tasks in the workplace. Zero hours casual agreement can also be used in NHS where they provide similar duties and rights to the employees as compared with the other permanent worker’s rest of the working days or shifts. This contractual model is appropriate for the company as they offer flexibility for both the workers and managers and they are freely performed their tasks. These contracts enable managers to pay for employees when they are required. Fixed-term contracts are used in NHS in which they are appointed staff or volunteers on paid salary whenever they need them and this is considered as a flexible job in which workers only need when there is work in the workplace. Besides this, NHS uses this agreement when they have huge work for the end date and temporary workers have the flexibility to do such tasks and complete it within the deadline (Stone, et. al., 2015). All these contractual models are used by such companies for hiring employees on different contracts in a better manner. It is required for a firm to appoint skilled and capable workers who can easily perform and finish entire tasks before the deadline. In addition to this, the four contractual approaches used for maintaining and managing employees’ roles and rights within an organization and how the companies use such models effectively.
The report concludes the contractual models of various kinds are described for the involvement of the hiring process. The contractual models’ advantages and disadvantages are described in the report for the analysis of the conditions which are pursued in the conditions for the organization to deal with the various kinds of contractual employees and employers. The report also discusses the organizations which are using the various contractual models or approaches for the hiring or recruitment of the employees to fulfill the needs of the organization to achieve the goals and objectives in the marketplace. The report discusses the analysis of the conditions in the contractual models in the organizations.
Ahmad, S., 2015. Green human resource management: Policies and practices. Cogent business & management, 2(1), p.1030817.
Chatterjee, S.R., 2016. Human resource management in India:‘Where from’and ‘where to?’. Strategic Human Resource Management at Tertiary Level, 49.
Donate, M.J., Peña, I. and Sanchez de Pablo, J.D., 2016. HRM practices for human and social capital development: effects on innovation capabilities. The International Journal of Human Resource Management, 27(9), pp.928-953.
Harvey, C.P. and Allard, M., 2015. Understanding and managing diversity: Readings, cases, and exercises. Pearson.
Jamali, D.R., El Dirani, A.M. and Harwood, I.A., 2015. Exploring human resource management roles in corporate social responsibility: The CSR‐HRM co‐creation model. Business Ethics: A European Review, 24(2), pp.125-143.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management practices, intellectual capital and innovation. Journal of Business Research, 81, pp.11-20.
Liu, D., Gong, Y., Zhou, J. and Huang, J.C., 2017. Human resource systems, employee creativity, and firm innovation: The moderating role of firm ownership. Academy of Management Journal, 60(3), pp.1164-1188.
Manuti, A., Impedovo, M.A. and De Palma, P.D., 2017. Managing social and human capital in organizations. Journal of Workplace Learning.
Marchington, M., Wilkinson, A., Donnelly, R. and Kynighou, A., 2016. Human resource management at work. Kogan Page Publishers.
Palma, F.E., Fantinato, M., Rafferty, L. and Hung, P.C., 2019. Managing Scope, Stakeholders and Human Resources in Cyber-Physical System Development. In ICEIS (2) (pp. 36-47).
Raeder, S., 2019. The role of human resource management practices in managing organizational change. Gruppe. Interaktion. Organisation. Zeitschrift für Angewandte Organisationspsychologie (GIO), 50(2), pp.169-191.
Rodríguez-Sánchez, J.L., Mercado-Caruso, N. and Viloria, A., 2020. Managing human resources resistance to organizational change in the context of innovation. In Marketing and Smart Technologies (pp. 330-340). Springer, Singapore.
Shamim, S., Cang, S., Yu, H. and Li, Y., 2016, July. Management approaches for Industry 4.0: A human resource management perspective. In 2016 IEEE Congress on Evolutionary Computation (CEC) (pp. 5309-5316). IEEE.
Stone, D.L. and Deadrick, D.L., 2015. Challenges and opportunities affecting the future of human resource management. Human Resource Management Review, 25(2), pp.139-145.
Tung, R.L., 2016. New perspectives on human resource management in a global context. Journal of World Business, 51(1), pp.142-152.