Management

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ANSWER

The Essence of Human Relations Skills in Contract Management

Introduction

A legally binding agreement between two or more parties is referred to as a contract. Contract management entails the procedures of managing a contract development, implementation, and analysis to maximize financial and operational performance in an organization while lowering financial risks (Sammons, 2017). Organizations have encountered increased pressure to improve company performance and lower costs in contracts. Contract management is considered a time-consuming business component that facilitates the need for an automated and efficient settlement system. However, contract management is important and requires personnel with adequate human relations skills to ensure that the company remains competitive in the ever-changing business world (Arraiza-Monteux and Henschel, 2013). The objective of this research paper is to illustrate the essence of human relations skills in contract management. Effective human relation skills are essential in developing and maintaining productive business relationships with third parties in the contract. Dealing with different stakeholders and contract representatives from different disciplines demands effective human relation skills such as communication, negotiation, organization, conflict resolution, and multitasking skills.

Contract managers are responsible for executing and managing contracts. To ensure smooth operations in a contract from drafting to execution, the contract managers need to have skills in relationship management, communication, organization, negotiation, and conflict management (Sammons, 2017). All these are relevant human relation skills in the contract life cycle. Organizations rely on contract management to negotiate conditions and terms in contracts as well as ensure compliance with conditions, agreeing on any amendments that may arise during execution. Contract management ensures that both parties in a contract achieve their obligations and agreed outcomes effectively (Sammons, 2017).

Definition of the Topic

Contract management is considered as the process of efficiently managing the implementation of contact to ensure effective and efficient delivery of the contracted outcomes (Sammons, 2017). When a contract management team is established the team leader is appointed to manage the team. Managing relationships is one of the major skills for contract managers. This entails understanding the various types of relationships and realizing how much resources and time is need to handle and communicate each relationship. The typical contract management relationships are between the contractors, borrower, client, employer, purchase, and consultants. Contract managers need to have human relation skills to deal with all parties in a contract.

Contract management is a key point of contact between the third parties and the business. This is because they ensure approval, timely review of any variations, and outstanding day to day contract management through technical and human relation skills. Contract managers have to possess operational, technical, and human relation skills to effectively manage a contract. Contract management skills are often overlooked and undervalued. Most firms have relied on legal teams while handling contract management issues. However, equipping contract managers with human relation skills enable them to effectively manage the contract management functions which streamline the contract procurement process, increase the speed of projects, and smooth relationships between parties (Sammons, 2017).

The capability of an individual to establish such contracts with partners, customers, employees, and vendors entirely depends on contract management skills. Along with credentials and education, contract managers require solid human relation skills that are key in every organization. Human relation skills entail dealing with psychological variables to increase the efficiency of a contract (Sammons, 2017). The contract manager can obtain cooperation through an effective human relations approach. Contracts have a great impact on the expenses and revenue of a firm. Therefore, contract management skills are very crucial to facilitate a positive influence on the profitability of a business. When the parties decided to get into a contract, they are investing their resources, time, and effort. Therefore, poor contract management can result in companies missing big opportunities, bearing huge fines, and breaking vital relationships.

When a company gets into a contract, this illustrates a commitment to collaborating with other parties for a specific period. The success of a contract depends on the ability of the parties to maintain a harmonious and cordial relationship. All relationships within a contract require effective human relation skills to enable the contract managers to compromise with different parties. This is because people have varying priorities and ideas but the best way to ensure an effective relationship to engage in a fair compromise.

Human relation skills are skills required in interpersonal and group interactions (Lussier, 2012). From a managerial perspective, human relation skills are essential in the development of communication systems and channels that enable building and strengthening relationships. The key human relation skills that help contract managers develop and uphold effective relationships include stress management, communication, empathy, and conflict resolution.

Explanation of the Topic

Human relations entail interactions of groups, people, relationships, and conflicts. These are related to attitudes, beliefs, and behaviors that influence work outcomes. Communication is one of the important human relation skills which is used to manage progressive correlation (Spitzberg and Cupach, 2011). Ideally, communication is the fundamental of human relationships. This is because the ability of an individual to communicate effectively, pass a message clearly, and listen within an intention to critically understand the perception of the individual builds a strong relationship. Human relation skills enable good services from suppliers, smooth contract delivery as well as inspiring innovative contract. Human relation skills enable the contract manager to bridge between the supplier and the business through influencing smarts, negotiation, effective communication, and the ability to manage and inspire change. Third parties, employees, and customers can freely engage with the contract manager and willingly share their ideas, views, and feelings.

Contract managers require human relation skills that enable them to manage communication and working relationships with different parties. The importance of contract management is to ensure that consistent quality is maintained throughout the contract. This means developing an effective relationship with the suppliers and ensuring good service delivery, and maximizing value for stakeholders and end-users. Human relation skills are considered as interpersonal skills that are used in accomplishing goals by relying on human resources (Arraiza-Monteux and Henschel, 2013). These are a set of skills that involves the ability to understand human behavior to effectively communicate with others as well as motivate personnel to accomplish their goals.

Being sensitive to employee needs, empowering subordinates, and offering positive feedbacks are among necessary human relation skills. Human relation skills are used to create better relationships. Successful contract managers have advanced their expertise in human relations. Human relation skills focus on the human resource aspect of contract management. Human relations are considered as people skills in contract management. This is the aspect that many individuals need to have to build a better relationship. Being able to negotiate with individuals, to talk with another person, and being able to sell the contract.

The ability to relate well with stakeholders in a contract as well as employees from different departments makes it possible for a contract manager to coordinate efforts thus making the contract successful. Considerably, the contract manager needs to win the support of different parties to facilitate the success of the contract. Therefore, human relation skills influence how the contract managers deal with different parties involved in the contract. These include friendly skills such as listening, effective communication, and good interaction which lead to openness in operations. During contract execution, employees freely communicate with the contract manager which improves the level of satisfaction and genuine responses. Human relation skills enable the manager to cooperate with all departments and connect the operations with the third parties to facilitate the success of the contract.

Defense of the Topic

Contract management is among the biggest responsibilities in all businesses. Efficiently managing a contract has a direct positive effect on the performance of the firm, the relationship with third parties, and the reputation of the organization. One of the most vital skills that every contract manager should have is human relations. Human relations involves the ability to interact effectively with people (Arraiza-Monteux and Henschel, 2013). The link between human relations skills and contract management is strategic. Both are key to every work done during the contract as they represent people. Human relation skills are essential to the contract managers as their role entails managing and negotiating with different parties in a contract. Considerably, the inability of a contract manager to establish a rapport with the contract parties leads to conflicts, increased cost than required while executing contracts. The proficiency of a contract manager in human relations enables them to be outstanding in performing their duties as required. Communication and working relationships with the service providers are supported by human relation skills.

Relationship management

Throughout the life cycle of a contract, it is important to manage the relationship with the parties. Human relation skills enable engagement and development of trust which creates mutually supportive relationships. Human relation skills are among the basic skills that contract managers require to manage all the phases of the contract life cycle efficiently. Human relation skills such as the ability to handle conflicts can enable create better relationships.  For instance, having good listening skills is an important aspect of human relations. This is because the internal stakeholders and suppliers in a contract will have concerns and things to say about the operations within a contract. An effective contract manager can closely listen to what is said and not said and effectively respond to maintain a positive relationship (Arraiza-Monteux and Henschel, 2013). Considering the wide range of parties who are involved in contract activities, good listening is a major element in establishing inclusive and smooth working relationships.

Effective human relations skills are essential in maintaining a productive contract relationship. Attention and communication from the contract managers typically lead to employee satisfaction and a high level of productivity. Human relation skills facilitate the ability to work as a team or in groups. The skills also increase opportunities for understanding among different parties which fosters sincere and open communication. Ideally, establishing an attitude of respect to the employees as human beings may lead to positive working conditions as well as loyalty towards the firm’s contract. With regards to Hawthorne theory-building relationships is one of the important factors that influence productivity. Considerably, employees are likely to offer quality results when they feel recognized or treated with respect contributing to the contract’s success.

Collaboration

Collaboration is another key element of human relation skills that maintains a positive relationship in a contract. A collaborative mindset shows the willingness of an individual to engage with different people that are involved in a certain contract. Successful contract managers have to rely on feedback from suppliers for contract amendments to offer a good supportive relationship with the different parties. Therefore, human relation skills are essential in contract management since they develop and maintain good collaboration with the different stakeholders involved in a contract.

Conflict Resolution

Human relation skills have enhanced the ability of contract managers to resolve conflicts. Human relations are linked to the way individuals prevent, anticipate, and resolve conflicts. Being thorough and closely aligned with attention to detail ensures good risk management. Contract managers are thorough in understanding the problem and finding a middle ground that will suit all parties. Human relation skills enable contract managers to build company loyalty. Ideally, when employees are treated well and with respect, they are likely to maintain their business relationship. Effective human relation establishes a sense of value and trust which builds an environment where employees and other stakeholders feel like part of the contract.

Given the complexity and long-term nature of contracts, it is common for disputes and disagreements to occur during contract management. Ideally, disputes have the potential of damaging relations between the firm and third parties. Human relation skills enable contract managers to escape costly conflict resolution in contract management. A contract consists of individuals with varying personality types, goals, and perceptions which can make a universal agreement challenging or impossible to achieve. Effective conflict resolution demands human relation skills that help to solve problems in a comfortable manner (Armstrong and Taylor, 2020). For instance, when a conflict arises, the contract manager can take personal perspectives into account which makes each feel understood. Through conflict resolution skills, the contract manager can work with all parties to bring a solution where everyone can comfortably move forward. A contract manager with conflict management skills will listen to the opinions of different parties and their disagreements to help them in working out the conflict. The ability to work well without conflict and tension stems from good conflict management skills.

Negotiation

Strong negotiation skills are essential in maintaining pace amid parties while reaching an agreement (Armstrong and Taylor, 2020). Ideally, negotiations happen regularly in a contract due to different stakeholders with opposing viewpoints. Agreeing and negotiating on contract terms to ensure that both parties are involved in reaching a final agreement is a component of contract management. While negotiating with third parties, contract managers greatly rely on other human relation skills such as effective speaking, listening, dealing with challenging situations, and decision making to result in a formal agreement. Ideally, human relation skills such as effective speaking enable the contract managers to effectively communicate change and convince the third parties to adapt to the changes. Human relation skills such as effective communication promote feelings of goodwill between the firm and third parties in a contract. For instance, adapting and mirroring one’s language to the stakeholders can be effective during negotiations.

Communication

Communication as a human relation skill holds a significant position in contract management. Ideally, managing and improving contract management is a challenging task. Once a contract has been awarded, there are various tasks from evaluating the initial needs to connecting different departments within the firm and monitoring performance that have to be achieved. This requires multiple people and different departments to get involved. There are too many people contributing to the success of the contract but fail to communicate with one another which influences the success of the contract from the start.

Effective communication in a contract is an ongoing process in contract management. Open lines of communication are vital for the contract manager in managing individuals (Arraiza-Monteux and Henschel, 2013). This is because effective communication enables all the stakeholders to be on the same page, valued, and motivated in their roles. For instance, contract managers should adopt a language depending on the situation. For instance, modifying formality and word choice depending on the kind of stakeholders. An important communication technique includes evaluating the person’s approach since an individual is likely to respond well to those similar to them (Armstrong and Taylor, 2020). Matching the tone of voice and reaching a common interest are great ways to connect. Additionally, understanding body language enables is an important skill since some people convey emotions through their body language. Understanding body language enables one to understand someone else perspective and judgment.

Multitasking

Contract managers face countless questions, tasks, and issues on daily basis. This is because they are responsible for the success of the contract and the team. Contract managers spend a lot of time checking with their team while ensuring things are running smoothly. Multitasking is an efficient human relation skill that enables the contract managers to manage competing and multiple priorities without missing deadlines.

Organization

Organization is considered as one of the most essential human relation skills that impact all work areas. To effectively manage a contract, there is a need to maintain a highly organized workflow process. Staying organized is an essential part of efficient workflow and time management in a contract. Contract managers have to work efficiently to manage time and tackle multiple sensitive priorities through an organized process. The skill of organization is essential in human relations since it promotes the success and productivity of a contract.

Empathy and Stress Management

Empathy and stress management attract the interest of other parties since these skills show genuine interest. Considerably, a contract manager who is interested in the feelings and struggles of others effectively relates to other parties. These skills are essential in building a strong relationship since they play a big role in eliminating strains in the field of work. For instance, being able to handle stress, apply coping mechanisms, and general calm when under pressure are essential in maintaining teamwork.

Conclusion

Contract management is essential for every company since it enables administrative integrity. A firm can easily lose the contract benefits due to poor contract management. Contract managers need to understand the importance of human relation skills in contract management. Human relation skills such as communication, negotiation, multitasking, empathy and stress management, conflict resolution are essential not only for customers and suppliers but also to facilitate the necessary processes and interactions internally. Human relation skills play a significant role in contract management from planning to implementation. They help in negations, building, and managing relationships, resolving contracts since they are core in human relations and interaction in the competitive business world. For instance, contract managers rely on negotiation skills to negotiate contracts for companies. They build relationships with third parties through effective communication which enables common understanding to reduce significant losses. Without effective human relations in a contract, challenges that sabotage the contracts may arise. Therefore, contract managers need to learn how to support and collaborate with different stakeholders through human relations skills.

References

Armstrong, M., & Taylor, S. (2020). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.

Arraiza-Monteux, M., & Henschel, R. F. (2013). The competencies of a contract manager need a process perspective. Retrieved from https://www2.iaccm.com/resources/?id=7308

Lussier, R. (2012). Human relations in organizations: Applications and skill-building. McGraw-Hill Higher Education.

Sammons, P. (2017). Contract Management: Core Business Competence. Kogan Page Publishers.

Spitzberg, B. H., & Cupach, W. R. (2011). Interpersonal skills. The Sage handbook of interpersonal communication, 4, 481527.