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New Employee Onboarding–
Psychological Contracts and Ethical
Perspectives
Abstract
Purpose – This paper clarifies the importance of Human Resource Professionals (HRPs)
improving the onboarding and assimilation of new employees and explains why this important
task is so essential as part of the psychological contract between employers and those new
organization members.
Design/methodology/approach – This paper is a conceptual paper that identifies a problem
based upon findings in the management literature, explains the nature of psychological
contracts and ethical duties, and identifies action steps for improving the new employee
onboarding process.
Findings – The paper identifies a ten.-step model for improving employee onboarding and
explains why HRPs and those who oversee them need to reexamine their assimilation of new
organization members.
Originality/value – This paper contributes to the management literature by addressing a major
problem that is poorly managed in many organizations. The mismanagement of this important
onboarding process undermines organization effectiveness, decreases trust, and violates the
psychological contract held by new employees about the organization’s duties owed to them.
Key Words: Employee Onboarding, Employee Assimilation, New Employee Orientation,
Psychological Contract, Duties of Human Resource Professionals.
1
New Employee Onboarding–
Psychological Contracts and Ethical
Perspectives
Assimilating new employees into an organization is an important task of Human
Resource Professionals (HRPs) and an essential element of their responsibilities as
technical experts in their discipline (Huselid, et al., 2009, pp 196-199). Ineffective
onboarding destroys benefits achieved by hiring talented employees and increases the
likelihood that the hard work spent in recruiting and selecting those employees will be
wasted (Smart, 2012). Because many organizations view their onboarding process as
an expense rather than an investment, they adopt a short-sighted approach to the
process. The predictable result from this false economy is that the transition into the
organization for new employees will be painful--leading to potential underperformance,
minimizing the organization’s capability to fully utilize the skills and abilities of these new
employees.
The purposes of this paper are 1) to identify why improving this important Human
Resource Management (HRM) function greatly benefits those new employees and the
organization itself, 2) to clarify the ethical obligations implicit in new employee
onboarding, and 3) to provide top managers and HRPs with a model for improving the
new employee onboarding process that meets the ethical expectations and
psychological contracts of incoming employees. The paper begins with a brief
explanation of the onboarding process and the nature of the psychological contract that
exist between an organization and its employees. Building upon a model introduced by
2
the University of Michigan ethics scholar, Larue Hosmer, it then presents twelve ethical
perspectives that identify how employees perceive the nature of their onboarding
process. The paper then introduces a ten-step model for conducting a top quality
onboarding process, identifying how each of those steps honors the ethical expectations
of the psychological contracts of new employees. The paper concludes with the
contributions of this paper.
The Onboarding Process
Onboarding is the process of introducing a new employee into his or her new job;
acquainting that employee with the organization’s goals, values, rules and policies, and
processes; and socializing the employee into an organizational culture (Watkins, 2016).
Wanous and Reichers (2000) explained that the new employee orientation process
occurs while employees are under a tremendous amount of stress. The typical new
employee onboarding process provides employees with a volume of information that is
overwhelming, impractical, and impossible for new employees to incorporate within a
short period of time. In compiling research about the state of the art of employee
onboarding, Srimannarayana (2016) noted that some organizations included too many
complex tasks and information for employees to realistically digest while other
organizations offered too few items that fail to adequately prepare employees.
Bauer (2010) has explained that an effective onboarding process included four
critical building blocks to improve performance, inoculate against turnover, and increase
job satisfaction:
3
•Compliance: This building block is the lowest level of onboarding and includes
reviewing or teaching employees about basic legal and policy-related rules and
regulations associated with working in the new organization.
•Clarification: This key function ensures that employees understand their new
jobs and all its related expectations. Frequently, this function is poorly handled
and lacks specificity.
•Culture: Providing employees with a sense of formal and informal organizational
norms is often overlooked because members of the organization assume that the
organization’s values, assumptions, and norms are easily understood.
•Connection: This key activity refers to creating vital interpersonal relationships
and explaining information networks essential for employees to perform
successfully.
Unfortunately, Acevedo and Yancey (2010, 349) concluded that most organizations do a
mediocre job of assimilating new employees and, few organizations utilize its full scope
or potential.
Bauer (2010) explained that effective onboarding has short-term and long-term
benefits for both the new employee and the organization, noting that employees
effectively assimilated into an organization have greater job satisfaction and
organizational commitment, higher retention rates, lower time to productivity, and have
greater success in achieving customer satisfaction with their work. In contrast, poor
onboarding leads to lower employee satisfaction, higher turnover, increased costs,
lower productivity, and decreased customer satisfaction. Holton (2001, 73) noted in his
study of factors associated with onboarding that “(t)he most important tactic (for
effective onboarding) was allowing new employees to fully utilize their skills and
abilities.” Unfortunately, most organizations focus on establishing managerial control
systems rather than on building commitment and empowering employees (cf. Pfeffer,
1998).
4
Onboarding and the Psychological Contract
The employment relationship is inherently an interpersonal relationship with
profound ethical implications associated with HRM (Hosmer, 1987). That relationship is
based upon social exchange theory in which the employer pays money to the employee
in exchange for his or her services (Cropanzano & Mitchell, 2005). The expectations in
this relationship frame the psychological contract that exists between the two parties – a
contract that is typically unwritten and that rarely perfectly coincides but reflects the
reciprocal obligations of the parties (Rousseau, 1995; Robinson & Rousseau, 1994).
Consistent with expectancy theory, new employees are also concerned about 1) how
they will benefit as an organization member, and 2) whether it is feasible for them to
obtain promised outcomes (Shea-Van Fossen & Vredenburgh, 2014). The implied
psychological contract between employers and employees has evolved over the past
several decades (Pfeffer, 1998), but a growing body of evidence confirms that
employers who create relationships with employees based upon high trust create
organizational cultures in which employees exhibit increased extra-role behavior, are
more creative and innovative, and more profitable than employees in comparable
organizations (cf. Beer, 2009).
Well qualified employees who add the greatest value, or create the most
organizational wealth, for their employers expect to be treated with dignity and
respect; given the opportunity to advance in their organizations; be treated as valued
“owners and partners” in improving the organization; and valued as “Yous,” or as unique
individuals, rather than as “Its,” or fungible commodities with no individual identity
(Buber, 1996; Covey, 2004; Block, 2013). Although some employees are highly
5
committed and inherently dedicated to giving extra-mile performance, even in the face
of poor treatment and ineffective leadership (Organ, et al., 2005), research evidence
documents that employers who treat employees with high trust, who demonstrate a
personalized approach to employees as valued partners reap the rewards of better
quality, improved employee performance, and increased employee satisfaction (Pfeffer,
1998; Paine, 2003; Smith, et al., 2016).
Louis (1980) examined the problem of employee dissatisfaction with the new
employee entry process more than thirty-five years ago, yet new employees continue to
be surprised by the inadequacies of many organizations’ onboarding systems (Lawson,
2015, Ch. 5). Although the expectations of incoming employees about the perceived
duties owed to them in the onboarding process may vary, employees feel betrayed
when those duties are breached – with an inevitable decrease in organization
commitment (Morrison & Robinson, 1997). A realistic job preview reduces surprises,
clarifies supervisor expectations, provides an opportunity for employees to ask
questions about desired outcomes, and clarifies the psychological contract (Tekleab et
al, 2013).
Hosmer (1995) explained that trust and ethical expectations are closely related
and derived from well-accepted philosophical foundations. Table 1 presents twelve
ethical perspectives, a brief summary of each perspective, and a summary of how new
employees perceive onboarding duties owed to them.
==== Insert Table 1 about Here ===
6
Each ethical perspective confirms that it is in the best interests of an employer
and their employees for the onboarding process to occur effectively and with high
quality (cf. Hosmer, 1995). New employees typically perceive that they are an excellent
onboarding process as part of the psychological contract owed to them (DeVos, et al.,
2005; Klein & Weaver, 2000). The evidence also confirms that effective onboarding
serves all stakeholders, benefiting organization both long-term and short-term (Bauer,
2010).
A Ten-Step Model for Quality Onboarding
HRPs who incorporate highly effective onboarding programs honor the
psychological contract expectations of their new employees and fulfill their strategic role
as ethical stewards (Huselid, et al., 2009;). The following is a ten-step model for quality
onboarding, including steps prior to the actual arrival of a new employee.
1. Establish the Relationship Online Immediately after Hiring. Typically, the
decision to hire an employee occurs well before the employee actually begins
work. Initiating an online relationship enables an organization to create an
immediate personalized relationship with a new employee--a well-recognized
element of effective leadership (Kouzes & Posner, 2012, Ch. 1) and an
opportunity for an employee to learn a great deal about the organization.
2. Appoint a Trained Mentor-Coach for Each New Employee – The evidence
indicates the quality of mentoring for new employees can make a significant
contribution to employee socialization and learning (Ragins, et al., 2000).
Mentoring can be highly effective at helping employees to improve employee
work attitudes, engagement, and extra-role behavior (Van Dyne & Pierce, 2004).
3. Focus the Onboarding on Relationships and Networks – Assisting new
employees to create relationships with key organization personnel can shorten
the socialization and assimilation process. Sharing information with key
organization personnel about the employee’s qualifications and assisting the
7
employee to become familiar with the organization’s values communicates to the
incoming employee that (s)he is an important contributor to the organization’s
success (Brown, 2007; Rousseau, 1990). The relationship with the supervisor
and the natural work group are both essential elements in this transition (Parker,
et al., 2013).
4. Prepare a Well-Developed and Complete New Employee Orientation
Booklet – Integrating the many diverse pieces of information that new
employees needs in relocating; acquainting the employee with the community
and organization culture; identifying the organization’s values, mission, and
history; explaining employee benefits and policies; completing required paper
work and documentation; and identifying key job tasks in contributing to the
organization’s ability to create value enables a new employee to obtain this
critical information and is consistent with employee psychological contract
expectations (Sutton & Griffin, 2004). Providing that information in one location
also facilitates an employee’s ability to share that information with a significant
other.
5. Prepare Physical Location, Office, and Staffing Support Prior to
Onboarding – A properly equipped office and appropriate staffing support
enable an employee to get off to the best possible start. Initiating those actions
prior to a new employee’s arrival demonstrates that the organization has carefully
thought through the new employee’s assimilation (cf. Marks, 2007).
6. Assist in Transitional Logistics – Recognizing that a new hire may have had to
relocate, sell or buy a home, arrange for schooling for children, and/or make
other stressful transitions of significant proportion, reaching out to new
employees to assist them in those time consuming tasks communicates that an
employer is aware of the need for work-family balance and is committed to the
employee’s welfare (Dewe, et al., 2010).
7. Clarify and Affirm Priorities and Expectations – Immediately upon the new
employee’s arrival to the organization, the employee’s supervisor should meet
with the new employee to clarify job responsibilities, key outcomes, and the
employee role with the entire work group; identify key resources and the role of
the supervisor; and listen carefully to the employee’s personal goals and job-
related concerns. Creating a high trust relationship with the new employee is
facilitated by such a meeting in addition to building employee commitment
(Leana & Van Buren, 1999).
8
8. Engage, Empower, and Appreciate the Employee – Employees actively
engaged as owners and partners in an organization are more likely to contribute
creative ideas, add organizational value, and improve organization productivity
(Adkins, 2016; Smith, et al., 2016; Beer, 2009; Saks, 2006;). Building employee
self-efficacy and confidence reduces employee stress, facilitates assimilation into
the organization, and enhances employee performance (Peterson, et al., 2011).
9. Involve Upline in Onboarding Training and Orientation – Actively involving
Top Management Team members and supervisors in the new employee
orientation process–particularly in explaining organizational values and cultural
factors–communicates to employees that organizational leaders are committed to
those values and that they are prepared to perform according to the values that
they espouse (Schein, 2010; Kouzes & Posner, 2012).
10. Create an Ongoing Coaching Process – As part of the new employee
orientation, both the mentor and supervisor should identify the resources
available to assist the employee to become a highly productive contributor and
the checkpoints that will be used to help the new employee to be assimilated into
the organization to achieve time-targeted performance results (Bachkirova, et al.,
2011).
Each of these ten steps communicates to the new employee that (s)he is a priority of the
organization. This ten-step process communicates, “We value you and want you to succeed.
We care about your success, and we have carefully thought through our responsibility to
bringing you on board successfully so that you can have a great experience in our
company.” In the words of DePree (2004, Ch. 1), this approach to the onboarding process and
to helping the employee to succeed honors the “covenantal” obligation of leaders to be “a
servant and a debtor” committed to each employee’s well-being and success. That
psychological contract expectation of being valued as a person is the desired hope of new
employees as they transition into organizations. Although all ten of these recommended steps
9
might not always be practical in every situation, this model provides a guideline which has
applicability for many organizations in a variety of disciplines.
Caldwell and colleagues (2015) have provided a Virtuous Continuum of ethical conduct
for leaders and organizations for evaluating performance outcomes and ethical duties. That
continuum, indicated as Diagram 1, suggests that the responsibility of organizations and leaders
is to optimize value creation and organizational wealth by pursuing the best intetests of all
stakeholders.
==== Insert Diagram One about here ====
Similarly, Cameron (2011) has explained that virtuous leadership is also “responsible
leadership” and the obligation of leaders to those whom they serve. A growing body of evidence
confirms that honoring this virtuous responsibility creates organizational wealth, greater
commitment, improved customer service, and better quality (Cameron & Spreitzer, 2012; Beer,
2009; Pfeffer, 1998).
Contributions of the Paper
Like many practical HRM issues, onboarding of employees is a profoundly ethical
process with implications for the psychological contract between the employer and employee
(Hosmer, 1987). This paper makes five significant contributions.
1) It identifies the nature of onboarding new employees as an ethical and practical
opportunity to improve the relationship between new employees and their
organizations. The responsibilities of HRPs and immediate supervisors in assimilating
new employees honors “covenantal” obligations that benefit organizations and the
individuals working for them
10
2) It identifies the ethical nature of onboarding in comparison with twelve highly
regarded ethical perspectives and as a key element of psychological contracts. By
elaborating on the ethical nature of the onboarding process, this paper integrates those
ethical perspectives with the expectations of employees directly impacts their trust,
commitment, and willingness to engage in value-creating behaviors.
3) It confirms the value of a Virtuous Continuum approach to examining the current
practices of onboarding for HRPs. Honoring duties owed to stakeholders and
optimizing value creation are responsibilities of HRPs and supervisors and the Virtuous
Continuum is a useful criterion for evaluating an organization’s onboarding process
(Caldwell, et al., 2014).
4) It identifies a ten-step model for onboarding with each step identifying how each
onboarding activity strengthens the ability of an organization to honor ethical and
psychological contract expectations of employees. The specifics of this proposed
model comply with best practices for onboarding in HRM (Bauer, 2010) while meshing
with ethically-related assumptions about the psychological contract (Rousseau, 1990).
5) It provides an opportunity for practitioners and scholars to increase their dialogue
in promoting the discussion of ethics in practice. The link between academicians
and practitioners is often weak and scholars are frequently criticized for being impractical
(Van Buren & Greenwood, 2013; Caldwell, 2014). This paper bridges that gap and
provides an opportunity for scholars and HRPs to work together to improve the
onboarding process.
Conclusion
Although organizations depend greatly upon the ability of their employees to add value
and improve organizational creativity (Christensen, 2011; Beer, 2009), they often overlook the
11
importance of helping employees to succeed (Pfeffer, 1998). Van Buren and Greenwood (2013,
716) have noted the importance of “involvement of business ethics scholarship in debates about
important ethical issues in employment practices.” By addressing the ethical implications of
onboarding and assimilation in the psychological contract that exists between new employees
and their organizations, this paper furthers that purpose while providing specific suggestions for
improving a key HRM process.
As HRPs improve the onboarding and assimilation process for new employees, they
enhance each employee’s reason for wanting to connect as invested partners in the success of
the organization, the work group, and the supervisor with whom they work (Yamkovenko &
Hatala, 2015). By improving onboarding and new employee assimilation, HRPs and
organization leaders honor the psychological contracts and ethical assumptions of employees’
and create an organizational culture that generates greater long-term wealth while serving the
needs of their work force (Caldwell, et al., 2011).
12
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Table 1: Twelve Ethical Perspectives and Their Ethical Implications for Onboarding
Ethical
Perspective
Basic Summary Organizationa
l Impacts
Employee Perceptions and
Ethical Implications
Self-Interest
(Protagoras)
Society benefits when we
pursue self-interest
without encroaching on
others’ rights.
Seeks to optimize
long-term wealth
creation.
Excellent onboarding and quality training
enable new employees to quickly become
contributors in creating organizational
wealth or value (cf. Caldwell & Hansen,
2010)
Utilitarian Benefit
(Bentham & Mills)
A law or act is “right” if it
leads to more net social
benefits than harms.
Recognizes the
need to identify
costs, benefits, and
impacts of choices.
The Return on Investment of onboarding
saves an organization money in the long-
run and increases commitment (Pfeffer,
1998)
Personal Virtues
(Plato & Aristotle)
Standards must be
adopted to govern
relationships and
articulate virtuous
behaviors.
Organizations must
govern according
to correct
principles and
virtues.
Creating an excellent onboarding process
is congruent with the virtuous obligations
that leaders owe to others (DePree, 2004)
Religious
Injunction (St.
Augustine)
Compassion and kindness
must accompany honesty,
truthfulness, and
temperance.
Honoring
relationships
equates with
interpersonal
respect and
kindness.
Treating employees as valued “Yous”
rather than as “Its” honors the obligations
of Religious Injunction (Buber, 1996).
Ethic of
Government
Regulation
(Hobbes & Locke)
“Live by both the letter
and the spirit of the law in
honoring duties owed to
others, but remember that
the law by itself is a
minimal moral standard.”
Complying with the
letter and spirt of
the law builds trust
and increases
personal
commitment.
Treating new hires as valued partners and
with a concern for their best interests is
not a legal obligation but complies with the
spirit of the implied contract between the
parties and is an important means of
building trust (cf. Caldwell & Clapham,
2003).
Universal Rules
(Kant)
Inspired rules govern
action, resulting in the
greater good for society.
Universal rules and
values impact
organizations and
leaders.
Kantian rules mandate that individuals are
treated as valued ends rather than as
means to ends (Kant & Wood, 2001).
Individual Rights
(Rousseau and
Jefferson)
An articulated list of
protected rights ensures
individual freedom and
protects individuals.
Organizations are
obligated to honor
duties owed to
individual
members.
Employees are likely to view organizations
as owing them a complex series of
“covenantal” duties and rights (Covey,
1992).
Economic
Efficiency (Adam
Smith)
Seek the maximum output
of needed goods and the
maximization of profits.
Acknowledges the
importance of
wealth creation and
value.
Onboarding is win-win benefit that
maximizes value creation (cf. Bauer, 2010).
Distributive
Justice (Rawls)
Avoid taking any actions
that harms the least of us
in any way.
Organizations owe
individuals fair
treatment at all
times.
Ineffective onboarding actually harms
employees who are under great stress and
impedes their ability to succeed (Acevedo
& Yancey, 2010).
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Contributing
Liberty (Nozich)
Avoid actions that
interfere with others’ self-
fulfillment and
development.
Acknowledges the
obligation to assist
employees to
become excellent.
Poor onboarding conflicts with the Ethic of
Contributing Liberty because it
undermines the effectiveness of new
employees (Bauer, 2010).
Ethic of Self-
Actualization
(Maslow)
Seek to fulfill one’s
highest potential and to
maximize one’s ability to
contribute to creating a
better world.
Recognizes that
fulfilling one’s
potential serves all
stakeholders.
The Ethic of Self-Actualization is best
served by empowering new employees and
helping them to succeed (Smart, 2012).
Ethic of Care
(Gilligan)
Emphasizes the
importance of creating
caring relationships and
honoring responsibilities
to those with whom
relationships exist.
Focuses on the
importance of each
person and helping
them to honor their
responsibilities.
The Ethic of Care enables new employees
to honor their responsibilities to others. It
is also a duty owed to them which
demonstrates that the organization cares
about their welfare (cf. Cameron, 2011).
Hosmer, 1995
Diagram 1: The Virtuous Continuum as an Ethical Framework for Leaders and
Organizations
Caldwell, Hasan & Smith, 2015
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