It also defines the obligations and rights of an employer towards an employee hence safeguarding rights and preventing violation of duties from both parties.
Apart from the written contract there is also a formation of a psychological contract between the employer and the employee that represents their mutual beliefs and perceptions. It describes the promises and expectations of each of the parties during the time of recruitment. Feldhiem (1999)3 reflects these two strands by dividing the psychological contract into:
Kate: She is the head house keeper and is quoted as "unfaunfamiliar with her new duties such as budgeting, training and discipline ". The smooth functioning of her department seems to be suffering due to this. She is not successful in appropriately training and guiding her staff as a consequence of which they are not familiar with her way of work.
Harriet -Elspeth's assistant : Elspeth states that "good standards of casual staff are hard to find". If her statement is not influenced by personal bias, this is an indication that the recruitment process of the hotel is sub- standard and proper giudlines are not set for the employees. Harriet is not notified that it is not within her authoritative scope to "borrow" staff without notice. This prevents the smooth flow of hotel functions because crew( who again are not specific and sure of their job profiles) are not available at places where they are needed resulting in low turn over and uneven distribution of labor.
The principle statement should be handed over to the employee within two months for job commencement. It essentially contains all the terms and conditions upon which the employment relationship has been formed which means all terms and conditions are agreeable to both employer and the employee. It plays a pivotal role in the regulation of human resources as well as sorting out legal issues which might arise in the course of the contract.
The principle statement should clearly cite the employees exact job profile and all the tasks that come under his or her responsibility. It should also mention any extra tasks, which the employee is expected to do at times which might be paid/unpaid for. The salaries, incentives, deductions and addition allowances (where ever they are applicable) should be mentioned. The working hours and compensation for overtime should be specified along with number of paid holidays and sick leaves.
The employee should be provided with all the rules, regulations and principles of the concerned organization to ensure discipline and also the terms and conditions for termination, grievance procedures and legal action. Specifying health and insurance coverage conditions is also important.
Apart from the