The CHANGING EMPLOYMENT CONTRACT

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The CHANGING EMPLOYMENT CONTRACT
Since the 1970s, the increasing U.S. integration
into dependence on the global economy has been
accompanied by a serious erosion in American
employees social psychological attachments to
their firms
Many large corporations downsized and
restructured to create more flexible workforces
with less lifetime job security, fewer benefits,
and reduced pensions. Professional, white-collar
blue-collar jobs are all now greatly exposed to
the vagaries of external labor market forces.
These trends are captured in falling job tenure,
rising contingent labor force, and the transition
from a traditional to a new employment contract
linking employees employers
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Labor Markets Transformed
After World War II, labor and business supposedly
struck a deal to eliminate massive strikes in
exchange for stable, full-time jobs steadily
rising incomes. This system collapsed in a
generation.
Labor economists Peter Cappelli Paul Osterman
analyzed the labor market transformations of the
1980-90s that created todays job insecurities.
They identified converging workplace changes that
severely weakened mutual loyalty and commitment
between employers and their employees.

• Market-driven employment skills and people
  highly mobile poachable
• Firms invest less in training workers from fear
  of likely departure
• To stay competitive, companies hire outside
  short-term consultants
• Temporary staffing outsourcing shifts power
  from workers to bosses

Cappelli, Peter. 1999. The New Deal at Work
Managing the Market-Driven Workforce. Cambridge,
MA Harvard Business School Press. Osterman,
Paul. 2000. Securing Prosperity The American
Labor Market How It Has Changed and What to Do
about It. Princeton, NJ Princeton University
Press.
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Increasingly Contingent Labor Force
Part-time employees (lt35 hrs/week) have
indefinite job duration, but retain some job
rights and benefits similar to FTEs Doubled
1957-1997 from 12 to 25 of U.S. labor force
Contingent (nontraditional) workers lack
implicit or explicit contract for ongoing
employment (BLS)
Fastest increasing labor force segment broad
definition 9.9 in 1997 (12.5M)
Some orgs see an emerging of a 2-tiered
workforce, pitting insecure younger employees
against older workers with greater job security
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The Traditional Employment Contract
EXTERNAL LABOR MARKET
 
 
FIRM BOUNDARY
                                       
Commitment, Loyalty, Longevity
EMPLOYER
EMPLOYEE
Job Security Implicit Lifetime
Employment Generous Fringe Benefits
Internal Career Promotions Job Skills
Training
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The New Deal at Work
EXTERNAL LABOR MARKET Contingent employees
Outsourcing Joint ventures Mid-level
hires
   
 
 
                                       
FIRM BOUNDARY
Intense short-term effort hustling
EMPLOYER
EMPLOYEE
Employability Project-length tenure
Internal job reassignments Skills useful
elsewhere
External contacts Job networking Skill
training by community colleges,
commercial vendors
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High Performance Workplace Practices
Many mass-production org, such as auto assembly
plants but also many hi-tech service
companies have implemented a diversity of high
performance workplace practices (HPWP)
sociotechinical systems

• Just-in-Time delivery Quality Circles
• Self-managed work teams
• Cross-training in skills job rotation
  practices
• Efficient physical work-flow designs
• Information technology statistical process
  control
• Total Quality Management (TQM) other fads
• Incentive pay profit-sharing group pay pay
  for skills

PARADOX Why has the HPWP penetration been so
limited inside many organizations, despite
evidence of substantial productivity gains?
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Teams Worker Autonomy or Tyranny?
Self-managing teams might overcome the mind/hand
split that generates Marxian worker alienation
Teams allegedly foster autonomy and empowerment,
participation in creative problem-solving, higher
worker commitment and morale thus greater
production efficiency corporate profits
But are teams also a sophisticated tool for
indirect management control coercion in the
workplace?
Because team members identify with co-workers
internalize the teams self-enforcing norms, they
are locked inside an iron cage of peer-pressured
authority (concertive control) James Barkers
ethnography of ISE Communications restructured
teams shows how members self-monitored their
performances and punished violators of the team
norms (peer pressures changed Sharons persistent
tardiness)
Barker, James R. 1993. Tightening the Iron Cage
Concertive Control in Self-Managing Teams.
Administrative Science Quarterly
38408-37.  Barker, James R. 1999. The Discipline
of Teamwork Participation and Concertive
Control. Thousand Oaks, CA Sage.