Case Study: A Psychological Contract

Case Study: A Psychological Contract

The COVID-19 Pandemic has evidently altered the very way of life and work and the thought of layoffs is also lurking in the minds of employees. However, in the recent past, the large-scale layoffs that were undertaken by Deutsche Bank, Wells Fargo, Verizon Wireless and many others at different instances was viewed more as a company's struggle rather than a life changing human disaster.






It was 2 PM on a sultry Delhi afternoon. Anish desperately needed to get away from the glare of his monitor. He got up and headed towards the pantry to get himself some coffee. Standing near the vending machine, he absent-mindedly looked at two interns talking at the water cooler adjacent to the pantry. They were engaged in an animated discussion making plans for the weekend. This provided Anish with a déjà vu moment and he went down memory lane.




Anish had planned to utilise the weekend to the fullest with his wife Shalini and his kids. The hotel booking had been done. It was an extended weekend with Monday being a closed holiday. Skipping breakfast was an automatic choice as he was getting late for office. And by the time he managed to reach office, manoeuvring all the traffic, he was twenty minutes late. His boss, Dilip, was standing near the reception of TBC Ltd. Anish apologised for the delay, but Dilip left in a hurry without saying a word.


Maybe he’s stressed about the project. There was tremendous pressure from the clients to finish it within the coming week, a confused Anish thought. Will talk to him about it to figure something out.


Thinking over and brushing off the odd behaviour from an otherwise jolly Dilip, Anish reached his cubicle. He took off the laptop bag from his shoulder and sat on the chair. Within a minute, Rakesh, his colleague, knocked at the door. He conveyed to him that Vikram, the HR Manager, had asked them to come to the conference room. He had no clue about the agenda for the sudden meeting.


The conference room seemed more crowded than ever. There were about forty people.


Vikram had already begun talking about the economic turndown, the need to contain costs, the necessity to take tough calls and so on. Anish’s heart sank. What was this about? Was Vikram talking about laying off employees?


By the time Vikram concluded his address with, “I am sorry, but we have no other option,” Anish had missed most of what Vikram had said. He was perspiring profusely. And the world suddenly seemed to have turned upside down.


Of the 200 employees who had either been asked to quit or face dismissal, only a few had been called into the conference room. It was also demanded that the employees mention that they have resigned ‘voluntarily’. They were being provided with a two month severance package along with a month’s salary for every year of completed service.


Anish had been a star performer, and Dilip had been vocal about it on multiple occasions in the past. The layoff was therefore unexpected and shocking.


How can I be laid off, has there been a mistake? How will I manage all the expenses? What would I tell my parents and Shalini? The kids?


When he tried to meet Dilip, he was told that the latter was in an urgent meeting and would not be able to meet him. Hence, he sent several messages to Dilip on WhatsApp.


12: 30 pm: Hi. I have been trying to reach you to discuss my case. Vikram addressed some of us and told us that today would be our last day in office. How can this be? Please discuss my performance with him. On what grounds have I been handed over the pink slip? Please tell Vikram to reconsider the facts.


4:30 pm: Dilip, I need to talk to you. Please ping once free


9:00 pm: You’d have reached home by now. Can I call?


For days, there was no reply. Anish was dejected.


This was now an extended weekend with neither a plan for the present nor the seemingly dark future. Dilip avoided him on most days. A few days later, Anish received a reply from him. Sorry Anish, am helpless. I can put in a word for you in case you need a strong reference in your job search. Good luck.


Anish’s immediate instinct was to call him, but the delay had already left a bitter taste in his mouth. The least that Dilip could have done was to have sympathised with him rather than ignoring him. He was lonely on his last day at TBC. Most of his colleagues had been relieved from their duties.


Post his layoff, life was an emotional and physiological struggle. Sleep eluded him for several nights. After battling for around six months as if possessed, he finally landed a job in a smaller company as a makeshift arrangement. He was neither happy with the salary nor the work culture, but had to settle for a lower grade and an average package.


Two years passed. TBC Ltd., on its part, had global expansion plans, and Anish’s ex-boss Dilip had been given the task of recruiting competent candidates for the purpose. Teams had to be raised quickly. The rising attrition, coupled with immense competition for the best had made sourcing difficult across the industry. Every time Dilip asked the line managers for an update on staffing, they had a new list of candidates and excuses.


He fumed one day. I’m sick and tired of raking my grey cells for solutions. What if we had our exemployees with us, they could have managed it better!


This sudden outburst gave him one eureka moment. He could have the recruiters approach the past employees who were suitable for the new roles. Anish, and some others like him, were contacted at his behest.


The day Anish was contacted, he was in a contemplative mood. The first call he had received in the morning was a cold call from a bank executive for a personal loan. He politely said no and smirked mentally, there was a time when I needed it but wasn’t considered eligible. Today when I don’t need it, these guys are following up every second day.


As he sipped coffee leaning against the windowpane, there was another phone call that took him completely by surprise. The recruiter at the other end wanted him to join back TBC Ltd., the same organisation that had left him to fend for himself two years ago.


The offer was attractive, both in terms of designation and compensation. The additional truth was that Anish was considering a switch from the present company for some time. After a lot of deliberation, he decided to take up the offer. He soon started working closely with Dilip again. The first year of the job was full of multiple learning avenues and opportunities for growth. As time passed, he was given more responsibilities and thereafter, earned a promotion as well.


Just when Anish thought he had re-settled well at TBC, he got a call from a head hunter one evening. She had come across his profile via an executive search site and wanted to discuss a job opportunity suitable for him. He was offered the position of Vice President and a hefty joining bonus within ten days of joining.


By the time the conversation was over, he was in deep thought.


Anish had been working together with Dilip on a project. He thought of professional ethics and his own commitment to the project. Could he leave midway? There was no denying that he had been given a second chance in a company in which he had loved working. Then and now. Should he ignore that?


It was a restless night. He closed his eyes for a while and woke up with a start an hour later. The conference room, Vikram’s speech, Dilip’s enigmatic behaviour, his shame and frustrations, the social stigma- all the nightmares flooded back to haunt him at once. He was in a dilemma now.


He had presumed that he had recovered from that bad phase, but clearly had not! After many years, the haunting memories sucker punched him that night.


At 3 AM, he finally got up from his bed and started typing his resignation letter. His mind advised him against it while the heart saidgo ahead. There was no right or wrong for him at that moment.


Case Study by Dr. Sonal Shree, Assistant Professor, SIBM Pune, a constituent of Symbiosis International University. Her academic assignments are in the areas of Human Resource Management and Organizational Behaviour. Her research interests are interdisciplinary and include Recruitment, Learning and development, Positive Psychology and Arts based Interventions in management. She has professional certifications, including HRM (XLRI, India); Instructional Design (ISET, USA); The Science of Happiness at Work (Berkley Institute of Well Being, USA).




 Analysis by Ravi Mishra, Senior Vice President-HR for Global Epoxy Business, Aditya Birla Group


Anish’s conscience was right when he finally decided to type out the resignation letter at 3 AM on that fateful morning. At times, the premise of judgement cannot be drawn without considering and analysing factors without engaging one’s gut feelings. Anish is right when he prescribes; “There was no right or wrong.” He had gone through turbulent times 10 years ago, which led to the creation of delusion and dilemma in his mind and conflicted with ethics and personal morality.


As an HR professional, I can feel the pain and dejection experienced by Anish during his first stint in TBC Ltd. Why did Dilip not respond to Anish’s WhatsApp messages for days - are we professionals the metaphorical pawns on a chessboard? Organisations today talk about culture, ethics, values and importance of employees in glittering words at various forums. Is this a mere rhetoric similar to building a sandcastle on a beach?


Also, it is worth contemplating how Vikram would have responded if he had been in Anish’s shoes. One also needs to imagine the trauma experienced by an employee’s wife and family upon hearing that her husband or father had been terminated for no fault of his. They will henceforth have no faith in the institution of trust. There definitely could have been other alternatives other than calling out the names of the employees on that day.


And I always question the authenticity of an organisation where the engineer has no knowledge of engineering, and the HR professional has no understanding of the value of human resources and its impact.


Whenever there is a downturn in the economy, the simplest thing that comes to the mind of a business leader is to reduce the headcount. When leaders meet in board rooms they talk about strategy, robust plans for mitigation, unforeseen challenges, crisis and risks. But usually, I find a single panic button to handle all such eventualities i.e. reduce the headcount.


Vikram, the HR Manager, may well have called for a town hall meeting with employees at the senior level and shared with them the challenges the company is going through in terms of financial and economic downturn. He could also invite suggestions from employees to deal with the downturn. In addition, the top rung employees could offer to take a pay cut for a year, with the rider that the company would pay back the amount along with the prevailing rate of interest within 3 years, once the company returns to profit. The company can brainstorm and navigate various other options to capitalise on human power of creativity and blue ocean strategies.


How can we leverage an organisation on the basis of the employees’ bonding and their ownership with it? Why does HR ignore the value of relationship and psychological bonding? Millions of people across the world have sacrificed everything on a single call of their leaders, which reflects the power of contract-based on emotions and truthfulness.


Anish’s story may be fictional, but it is not uncommon to witness employees going through such trauma in organisations like TBC. At the same time, I have seen many HR leaders who have made a difference and have set the footprint to avoid the repetition of an incident that Anish had to undergo. Further, like IBM, the debacle in fact enabled the organisation to bounce back against the crisis with the support of high performing employees. Organisations like TBC must learn how to build the block based on the strong foundation of the bond between employees and organisations.



Analysis by Pramod Tripathi, Assistant General Manager-HR, Bajaj Energy Limited




“A bend in the road is not the end of the road ... Unless you fail to make the turn” – Helen Keller


Before analysing the situation in which Anish is presently in, it would be justified to examine the situation within TBC Ltd.– its state of affairs and the mindset of Dilip and Anish. In 2010, Anish, an efficient performer, had been thinking over his weekend plans with his family when he was summoned to the office meeting. He was left shattered when the company’s rationalisation plans were announced, and later, his boss Dilip did not rise up to the occasion to support him. However, he failed to take the company’s financial position into account, which was an essential element for such a measure.


Anish re-joined TBC Ltd. when the company was looking to expand globally. This adds credence to the faith imposed on Anish’s performance by TBC Ltd. and also by his boss Dilip. Also, since TBC Ltd. had recorded good growth, Anish was offered a good position and provided with a handsome package. At the point in time when he received a call from an Executive Search Firm for the position of VP with a huge joining bonus, he had been working on a prestigious project along with Dilip. Here, Anish’s professional ethics come into play, landing him in a state of quandary, since he was in love with the work culture at TBC Ltd.


When he received the offer for the role of VP, Anish was probably thinking that his career had deadended and hence seized the opportunity to rise to a higher level. His conscious is bound to question him over his wisdom to resign. Moreover, it is prudent for Anish to carefully contemplate the twists and turns in his journey in a hitherto unknown company.


Anish also needs to bear in mind aspects related to employee loyalty and the company’s expectations from him before submitting his resignation to the Management at TBC Ltd. He needs to analyse and acknowledge that the circumstances may have changed, learn the new laws of the land to survive, and so on. There are bound to be characteristic changes in terms of culture and processes, and Anish must not be disenchanted if he finds it vastly different in the new company than what it was at TBC Ltd. He needs to be prepared to inject new ideas and make some tough decisions right away. On the other hand, if things in the new organisation are appealing in terms of work culture, he must get reacquainted with the company, engage in dialogue with people, rather than going in all guns blazing.


At this point of time, Anish has developed a new perspective and approach about TBC Ltd., and maybe exploring a new opportunity in terms of money and position with a different set of eyes. He has pondered tirelessly to decide whether he needs to resign or not, but his apprehension is finely tuned to do so. Conceivably, the one other thing that may have really struck Anish’s mind is to continue at TBC Ltd. or come back with a higher status. He, however, needs to avoid gratuitous criticisms over his decision.


0/3000 Free Article Left >Subscribe