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Dimensions of Employment Relationship and how can trust develop

Illustrate the dimensions of employment relationship. How can trust between employers and employees be developed in an organization?

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Question asked by sanjaya_paudel

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angel profile image
Angel Paudel

Employment relationship happens when someone performs a certain work or provide service under certain conditions for remuneration. This relation occurs between an employee and the employer. This is very key to organization’s success as the employee are considered as the most valuable asset to any organization ("Economics of the employment relationship", 1990). A bad relationship thus often means that the employee won’t deliver as he/she should and might ultimately revolt or leave the job, hampering organization performance and objectives. However, if the relationship is good, the employee will feel motivated and often deliver on promises contributing towards organization’s objectives fully.

The dimension of employment relation consists of four key elements as in parties, substance, structure and operation as per Kessler and Undy (Kessler & Undy, 1996). Parties consist of managers, employee and employee’s representatives. Whereas substance consists of individual and collective needs. Individual consists of job position/title, reward, career path, communication and culture of the organization while collective needs includes of joint agreement and joint machinery. An example for this can be that in an organization with just one restroom, there’s a call saying a separate restroom is required for female staff; which everyone agreed upon. So, that form of agreement is called as joint agreement and actioned upon. The other component of employment relation is structure which consists of a set of rules and guidelines. They also include informal understanding like expectation and assumptions. The other component within the employment relation dimension is operations which demonstrates how the organization functions and includes of level, process and style of managers and organization.

In an organization, to develop a high trust environment, the manager must be able to show what’s expected from the employees in his/her actions as well. For example, if the manages wants all the staff to be on time, he/she himself/herself can’t show up hours late every single day. The manager must be able to set an example and then influence his/her sub-ordinates to follow the same. The management style is key for trust to build in an organization. And, if the manager sets a bad example and just gives order or shows anger on the employee’s that won’t work. The manager must demonstrate patience, understanding and leadership capability. The trust only builds up when the organization works on what’s promised and don’t divert here and there often. Also, the manager must act in fair balanced way for the employee’s to feel the trust.


Economics of the employment relationship. (1990). Journal Of Macroeconomics , 12 (1), 158. dx.doi.org/10.1016/0164-0704(90)90...

Kessler, S., & Undy, R. (1996). The New Employment Relationship: Examining the psychological contract. London: Institute of Personnel and Development.

shantamilan profile image

The employer hires the employee to undertake certain tasks in his organization for which they are reimbursed. The relationship developed between the two for the objective at hand can be termed as employment relationship.

“The starting point of employment relationship is an undertaking by an employee to provide skill and effort to the employer in return for which the employer provides the employee with a salary or a wage (the pay work bargain). (Armstrong, 2012, p. 402)”

Keslar and Undy, 1996 (extracted from Armstrong 2012) proposed the dimensions of the employee relationship as follows

  1. Parties: Employment relationship is formed between the managers, the employees and the employee representative or the trade unions. This relation can be both formal and informal. Although managers mange the employee, the employees have certain rights given by the labour law which the trade unions are ready to exercise if not followed. So the relationship between the parties are more of a balancing act.

  2. Substance: The employee relationship is based on the substance such as job, reward, career, communication, culture, joint agreement and joint machinery. The relationship between the employee and employer is formed around these substance. For example the employee have a set performance job standard whose evaluation is what the reward is based. Similarly the relationship is strengthened by the organization culture and communication.

  3. Structure: The relationship must have a certain level of boundaries for both the parties. The relationship may have written structures or structures that are implied. Thus formal rules, procedures, informal understanding, expectation and assumptions fall under the structure.

  4. Operation: The last dimension of the employee relationship is the operation. The level of employee, process and style of work defines the relationship between the employees. The manager and the employees are at different level and so their working process and style are also differently catered.

Trust is not an easy thing to gain especial between an employee and the employer and yet it is the one thing that defines the teamwork and relationship without which there is higher chances of business failure. Trust can is a two way street and so both the employee and the employer must contribute. It can also be said that it is a psychological contract. “In its most direct instrumental form, trust is viewed as the expectation that specific others will reciprocate trusting behaviour. (Kramer & Tyler, 1996)” Some ways in which trust could be developed are

Model the way: As a leader the employer must not only sharing his views and giving decision and commands while not doing anything. To build trust the leader must work along with the employee showing the way. For example in the army the commander sleeps, eats and fights with his juniors. A strong trust is built so much so that they are willing to give their life for the other.

Leadership strategy: A servant leadership strategy can do wonders for trust building between an employer and the employee. When the employer has a service oriented leadership good trust is built between the two.

Shared Vision: When the leader has a vision that is shared by the employees a mutual trust is developed. The employee follow the employer based on the vision that they believe in.

Challenging the process: Employers should be someone they look up to. Leaders set examples by challenging the status quo. This enables the employees to follow in the footsteps of the leader fostering trust among them.

These are some ways in which trust can be developed between an employee and employer.



Kramer, R. M., & Tyler, T. R. (1996). Trust in Organizations. New Delhi: Sage Publication Inc.

sachitabhattarai profile image

Employee Relationship has provided a fundamental element of studies in industrial relations, human resource management and employment relations. According to Office (2005), “ The employment relationship refers to the relationship between a person called an ‘employee’ (frequently referred to as a worker) and an ‘employer’ for whom the ‘employee’ performs the work under certain conditions in return for remuneration.”

Dimensions of employment relationship

Employers and Employees are the part of an organization. The dimensions of employment relationship describes how employers and employee work together. They come together because they have common needs and can only be fulfilled when they help each other. As stated by Haidar Employment relationship helps to create correspondent rights and obligations between the employee and the employer. The employment relationship has been, and continues to be, the main vehicle through which workers gain access to the rights and benefits associated with employment in the areas of labor law and social security (Office, 2005).

The employee’s dimensions can be either legal or Psychological. Legal relationship includes written agreement and contract between the employer and employee. This contract contains a certain code of conduct, policies and procedures which should be consider while making decisions. In this, employment contributions and representation is limited. The ILO Country Office for Nepal together with the Bureau of Employers’ Activities (ACT/EMP) has been actively working to protect the employers’ concerns for employment promotion and better industrial relations in Nepal (Organization, n.d.).

Today employees are seen as the main resource of the organization. Psychological relationship includes understanding the thoughts and feelings of employees. Respect, trust, humanism, compassion, empathy, and fairness are the intriguer part of Psychological contract. When the psychological contract is broken, the employee tendency to leave the firm grows and their commitment towards the organization fall.

In Psychological contract, employer and employee demonstrate certain behavior towards each other:
a. Transactional Contracts
Transactional contracts is more like authoritative management style and hierarchical control. The employer does not involve the employees in the decision making process or seek for suggestions from them

b. Relational Psychological Contract
These contracts are more like participative management where leadership and intrinsic values of the people are valued.

Trust between Employees and Employers

The trust between the employees and the employers can be foster by committing the legal and psychological contract by both the employee and the firm. Besides that, there are certain factors that maintain the trust between an employer and employee.

  1. Developing skills of employees
    The trust between the employees and employers can be built by providing training regarding interpersonal skills.

  2. Provide information to the staff
    When the staffs are informed about the day-to-day activities of the firm, the employee will feel them to be the part of the organization and work towards the vision.

  3. Listen effectively
    We all have the habit of speaking more than listening. By cultivating the habit of listening both the employee and employer will get to know more about each other as a result this will increase the understanding between them.

  4. Be Respectful to each other
    The simple way to increase trust is respect. The members of the organization must show respect towards each other’s profession and contributions.

  5. Lead with Integrity
    By keeping and sharing the thoughts and words, both the employee and employer can demonstrate trust amongst each other.

  6. Work Smarter
    Delegation of task is important to build trust among the staffs in the workplace. If you want something in a right way, one must have to do it themselves first.

Haidar, A. (n.d.). Defining the Employment Relationship. 267-268.
Office, I. L. (2005). The Employment Relationship. Geneva: ILO.
Organization, I. L. (n.d.). ILO in Nepal. Retrieved from Workers and Employers Organizations in Nepal: ilo.org/kathmandu/areasofwork/work...

dipadhungana profile image

Employment relationship describes how employees and employers work together. It is the contract that expresses certain assumptions and expectations about what the employers and employees have to offer and what are they willing to deliver. It may or may not be in the written format (Armstrong, 2012).

International Labor Organization (ILO) has defined employment relationship as the legal link between employers and employees that exists when a person performs work or services under certain conditions in return for remuneration.

The dimensions of an employment relationship includes:

People: The people component of employment relationship consists of the managers, employees and employees’ representatives. The relationship of an individual with the managers and colleagues has significant impact in the work performance. Some people feel connected and come to work every day for the team and the company. The focal persons and labor unions within the organization also contributes in the employment relationship. The more one feel connected with the people in the organization, the better is the employment relationship.

Substance: Substance consists of the individual and collective components. Job rewards, career, communication, culture, joint agreement and joint machinery are the constituents of this dimension. The employment relationship is fostered if the job matches the ultimate aim of the employees, the rewards are associated with performance, there is multilateral communication within the organization, there are consultative committees and the decisions are taken collectively.

Structure: The structure consists of the formal rules and procedures along with the informal understandings, expectations and assumptions. The rules and regulations are there to facilitate and address fairness. The management of employee relationship is generally done through the organization’s formal and informal employment practices. These practices shape the interactions between the people working in the organization and help in creating the climate that is acceptable to all parties.

Operation: The level, process and style of the organization plays important role in employment relationship. If the operations of organization facilitates the climate of mutual trust, openness and maintenance of harmonious relationships, the employment relationship is stronger and positive.

Trust is a cultural norm that is an outcome of good management. It is not about managing people or processes but is related with the relationship and mutual support amongst the people. A climate of trust is an important element in positive employment relationship. Trust is developed by mutual understanding of expectations of the employers and employees.

In order to develop trust between employers and employees in an organization, the management should be honest with people and live its core values. The organizational system should be transparent and the employees should have their say in major organizational decisions. In addition to this, sharing information, spending time with the colleagues, showing concern for the problems and aspirations of employees and listening to the employees without being judgemental helps in developing trust. The employer needs to articulate and frequently repeat the common goals that everyone in the organization is striving to achieve, shared values that are important and larger purpose of which everyone is a part of to create a climate of trust. The relationship between employer and employee is the foundation of trust so making sure that everyone knows they are interdependent with one another is very important (Kouzes & Posner, 2012). Treating people as the greatest asset and maintaining fair, equitable and consistent organizational procedure helps in developing and maintaining the trust.


Armstrong, M. (2012). Armstrong’s Handbook on Human Resource Management Practice. London: Kogan Page.

Kouzes, J. M., & Posner, B. Z. (2012). The Leadership Challenge. San Francisco: A Wiley Brand.