Employee Resourcing

This essay is going to give my views and opinions on how working practices and patterns have changed and the impact these changes have had on the employment relationship. There many areas one could have examined when discussing the employment relationship, perhaps beginning with Taylor and scientific management to work life balance, but for the purpose of this essay, I’m going to begin by briefly looking at some early patterns such as the human relations movement to more current practices like flexible working.

EARLY PATTERNS & PRACTICES

The human relations movement dominated management thinking until the 1950’s and it can be argued that it was a significant influence on the development of modern HRM. The human relations movement promoted the benefits to morale and productivity of a paternalistic style of management in which the worker was to be seen more as a member of the family than as a mere factor of production. Amongst the outcomes were a move to more social facilities surrounding work, the appointment of personnel or welfare officers whose function was to look after the well-being of the labour force, and a move to greater communication and consultation between the management and the factory floor. The importance of human relationships in the workplace as a key factor in the efficiency and motivation of staff could not be overstated along with the significance of hidden informal structures of power and influence at work. It was made clear that regarding organisations as machines did not achieve the best results and that management should respond to human needs. This particular aspect of human relations was developed further by Abraham Maslow who proposed a hierarchy of needs.

The human relations movement is a ‘soft’ approach to human resource management. This approach rests on the values that see no essential conflict between the interests and needs of the organisation on the one hand, and those of individuals on the other. This approach again identifies workers are motivated by more than economic incentives. People are creative and can benefit from involvement in the participative management process. The uniqueness of the human resource must be recognised and cannot be treated like any other resource; after all, people have feelings and emotions.

This period of the human relations movement produced some influential theories. As already pointed out earlier, Maslow’s hierarchy of needs identified five categories of needs:

I. Physical

II. Safety

III. Social

IV. Esteem

V. Self-actualisation

As impressive as this theory may have been, he did not believe that this could be fully satisfied. People will always strive to develop further and achieve more. This may have led to the belief of the possibility to redesign jobs in order to meet a fuller range of human motivational needs.

JOB REDESIGN

Job redesign looks at how the tasks required within a production process should be subdivided. The key decisions were to get away from high division of labour and move towards a complete unit of work and a move from close supervision to self-checking. The job redesign movement occurred predominantly in the 1960’s and 1970’s. There were a number of crucial factors that directed the movement and these elements account for the way working practices and patterns have changed. Elements such as job enlargement which is simply increasing the number of tasks and possibly responsibilities involved in a job.

An example of job enlargement is job enrichment, which is the attempt to motivate workers by giving them the opportunity to use their abilities. Employees should be given a range of tasks at different levels of ability which may go beyond their experience to date. Employees work should not be fragmented in repetitive tasks but a complete unit of work. Feedback may be given so the employee immediately knows how they are performing. Frederick Herzberg’s theories are linked with job enrichment. He conducted research in the late 1950’s which led him to develop the two-factor theory. These were maintenance or hygiene factors, the dissatisfiers, and motivational factors, the source of satisfaction. His theory was widely used but did have its flaws; research was conducted from a sample of only accountants and engineers. But the benefits are there for all to see particularly with growth and self-actualisation, which is at the top of Maslow’s hierarchy of needs. On the other hand, some individuals may not want job enrichment and it has been said that enriching tasks should be added to a job only when an employee showed readiness for new responsibilities.

As understanding human/employee needs was being developed further, it was becoming apparent that it is much more difficult to recognise jobs to suit individual needs. Nevertheless, it was still appropriate to take into account the needs of the job holders as a group when designing jobs. Hackman and Oldham did so with their Job Characteristics Model. This model suggests that core job characteristics produce favourable psychological reactions leading to beneficial work and personal outcomes. They also state that the strength of the outcome will depend upon the Growth Need Strength (GNS) of the employees, those with high GNS are more likely to react positively to enriched jobs than those with low GNS. This model is one sided as it demonstrates how to enrich jobs to suit high GNS employees but not how to design jobs which would be satisfying to those with low GNS.

THE JAPANESE WAY

During the 1980’s there was a fascination by both the USA and the UK with the effects of Japanese success. Many organisations adopted Japanese style management methods known as ‘Japanisation’, often referred to as Toyotaism (because Toyota and Nissan are different as are Ford and Rover. An example of the Japanese way is Kaizen- continuous improvement. Kaizen groups would meet up regularly to discuss problems and solutions enabling them to improve productivity and efficiency at a continuous steady rate, whereas western firms would invest heavily in improving productivity every so often.

Another example is quality circles which is another group that meets up regularly to identify quality problems, consider alternative solutions and recommend a suitable outcome to management. It acted as a form of consultation and job enrichment as no manager can understand production problems as fully as the shop-floor worker making their knowledge an immeasurable untapped asset for the firm. Just as crucial, workers appreciate the opportunity to demonstrate their knowledge and talents in a problem-solving environment. Quality control was very important as previously work would be checked by quality inspectors, this method enabled employees to check their own quality conforming to Herzbergs view of the importance of personal responsibility and self-checking.

There are other components are included in this Japanese way, most noticeably, lean production. Lean production does literally mean no waste and has really replaced mass production. These production methods include just in time which minimises the costs of holding stocks of raw materials, components, work in progress and finished goods. Cell production counteracts high division of labour and can operate as autonomous work groups involving the team deciding for itself how the work should be carried out and distributed amongst members

FLEXIBLE WORKING

The next major movement which really took off in the 1990’s is flexible working. There are a number of valid reasons of why flexible working patterns have emerged in recent years, availability of workers, increasing worker aspirations, increasing customer demands, technological changes and response to competition amongst others. For flexible working to succeed, both staff and management need to accept that rigid demarcation lines lead to inefficiency and that flexibility is preferable for long-term success. Flexibility does mean the ability and willingness to change methods of working; this relies on a workforce that is not too resistant to change. It can be achieved in a number of different ways, Blyton and Morris identified four types:

1. Numerical – employers respond to increases in demand by taking on temporary workers or relying on subcontractors. Regular peaks in demand or needs to extend opening hours are met by employing part-time workers. Numerical flexibility allows businesses greater control over labour costs and minimizes the need for permanent full-time workers who have to be paid regardless of the work available.

2. Wage – performance related pay is a bonus or salary increase awarded in line with employees achievements over a range of criteria.

3. Temporal – flexible daily, weekly or annualised hours. This is most commonly administered as flexitime, an employment contract that allows staff to complete their agreed hours of work at times that suit the employee. This can give a greater sense of control to workers who have repetitive jobs and helps parents with young children.

4. Functional – employees need greater functional flexibility or more commonly known, they need to be multi-skilled so they can work effectively across a wide range of tasks. This is necessary if demarcation barriers are to be broken down and the scope of jobs is to be enlarged. It does have short-term benefits, like covering for absent colleagues, being able to spot any problems before they become serious and actually being able to correct the faults. Perhaps most important are the long-term benefits; promoted shop-floor workers will have far wider knowledge of areas they are now managing. Multi-skilled workforces are more adaptable to changing working practices and wider responsibilities and expertise may help to improve motivation.

There are some sceptics who will argue that multi-skilling is just a buzz word and a continuation or another modern way of looking at job redesign. These are valid arguments but flexibility examines such an extensive area and multi-skilling is just one aspect of it. Changes in information and communications technology have also led to greater flexibility in the location of work. Traditional home working still exists but the growth is in telephone or computer based employment. Adhocracy is another type of flexibility and simply covers things like overtime, redundancies and casual work. There are a few other theorists who give their opinions on flexibility such as Armstrong, Atkinson and Handy with the Age of Unreason in 1989 and the future of work- increasing multi-skilling.

LAW AND REGULATORS

Flexibility has also been impacted by law, Sunday Trading Act 1984 allows employees to opt in or out. The move to personal contracts and the Wages Act 1986 ensures that employees have to give their permission before deductions can generally be made from their pay. State organisations exist including the Advisory Conciliation and Arbitration (ACAS), the Central Arbitration Committee, Employment Tribunals and Employment Appeal Tribunal. Management organisations include Employers’ Associations, Union of Industrial Employers’ Confederations of Europe (UNICE) and the Confederation of British Industry. There are employee organisations such as Trade Unions and International Confederation of Free Trade Unions (ICFTU).

There are many practices of flexibility, some have already been mentioned and others’ can be categorised into the types of flexibility previously discussed. Part-time, term-time working, job-sharing, flexitime, teleworking, zero hour contract, outsourcing, multisite working, students/casual, consultants, temporary workers and fixed time contracts amongst others all come under the belt of flexibility. From the point of view of the employee, there is a higher quality of working life, greater job satisfaction through variety of work, job security and material wealth. On top of that, they are benefiting from the erosion of rigid specialisation, inflexible working week and the micro division of labour. From the organisations point of view, they are able to recruit and retain staff, follow legislation, meet employees’ needs and offer a cost effective, efficient way of utilising labour resource.

There are few drawbacks when it comes to flexibility, organisations have to assess how much time and effort to spend on training, there may be stress all round, waste, conflict and some dispute that it returns us to scientific management. Some of the benefits anticipated from an increased use of part-time and temporary workers are off set by higher labour turnover, approx. 22% of part-time workers left their jobs in Britain in 1997, compared to 16% of full-time workers. I put forward that flexibility has strongly contributed to the creation of relatively low productivity and therefore low wage jobs. But overall, it’s unambiguous the benefits outweigh the pitfalls. Statistics indicate that most part-time working is viewed largely as complementary to other roles such as parenting or studying. Part-time and temporary working also provides opportunity for gradual retirement, allowing a greater choice for elderly workers. Flexitime has also proved popular as workers can adjust hours to minimise travelling time or fit in with their other activities. Greater functional flexibility has often been associated with increased provision of training and a more varied and stimulating workplace.

PSYCHOLOGICAL CONTRACT

Perhaps one of the most important factors of today’s working employment relationship is the psychological contract particularly when discussing flexibility and what it means to both the employer and employee. The concept first surfaced in the work of Schein (1970) who suggested that the individual ‘has a variety of expectations of the organisation and that the organisation has a variety of expectations of him. These expectations not only cover how much work is to be performed for how much pay but also involve the whole pattern of tights, privileges and obligations between the worker and the organisation.’

The ideology of a contract has changed from employees working hard, remaining loyal and doing what they are told to do; in return the employer rewarded them with security, a career, paid them fairly, looked after them and provided quite interesting work. In recent times, the demands and rewards are still there but ever changing particularly with less job security. In the context of flexibility the boundaries are now much wider with employee needs to satisfy the psychological contract. But with options such as outsourcing and temporary workers, there is the greater need for both parties to communicate and understand exactly what is wanted from each other. Herriot and Pemberton (1995) set out a model with four stages in trying to enhance the quality of the psychological contract:

I. INFORM – ensure that employees are quite clear about what the organisation wants and needs to meet its business goals, particularly those goals for which flexible working is essential. The employer also needs to be informed about what its employees are looking for, generally through attitude surveys.

II. NEGOTIATE – discuss the various styles of working on offer with employees outlining both the benefits and drawbacks with employees having time to consider all of the options.

III. MONITOR – monitoring progress is essential in ensuring the psychological contract is still on track with neither side taking an unfair advantage, particularly as new ways of working are experimental.

IV. RENEGOTIATE OR EXIT – employers should accept that many employees are happy to see their current post in their own minds as a temporary one, despite its officially permanent nature, and may be planning to move own. Such a move should therefore not be seen as a betrayal but as a natural progression by which mutual benefit has been achieved.

These four stages should be considered by the employers particularly with the concepts of flexibility and working practices in general constantly evolving. The employment relationship seems to be increasingly more important, but has the emphasis of the psychological contract been significant or fashionable? With employers’ unable to promise unambiguous job security, pay increases and promotion opportunities, it goes hand in hand with employees’ lack of loyalty and commitment.

This is down to global competitive pressures, continuous change and the intensified hunt of cost cutting measures making it detrimental to the employment relationship with neither the employee nor organisation directly at fault. This leads me to point out that the employment relationship has a few key components that go beyond the psychological contract. The employment relationship involves a legal relationship; employers are required by law to give employees a contract of employment. There is the economic relationship where employees make their contribution to achieving the organisations goal in return; they receive some level of remuneration. The social relationship needs to be considered because employees attend a workplace where they interact with other employees and with managers.

CONCLUSION

As demonstrated in this essay, the employment relationship has been impacted by any change in working practices and patterns. If we consider the consequences of more flexible working for the employment relationship we can begin to explain the benefits and costs. More flexibility for employers often translates into increased uncertainty of employment and consequently of income for employees. This produces higher quit rates as workers seek more regular employment and also a greater reluctance to undertake training which is only relevant to their current employment. Training may only be attractive if it increases earning power in the future but the individual’s future may lie with a different employer. In turn, higher turnover reduces the benefits to employers of training. Firms’ training costs are compensated by the higher future productivity of the trained worker, but a higher quit rate reduces the length of time firms receive those benefits of productivity. Greater flexibility may reduce the amount of training specific to a job and encourage employers to simplify the production process in favour of lower-skilled workers.

When firms do take advantage of new technology and managerial practices such as total quality management (TQM), to create high quality, more flexible and specialised production they require a cooperative workforce. Multi-skilling and TQM give individual workers more decision-making powers and generate information for workers that may not be available to managers. Managers have to rely on workers volunteering important information if appropriate production decision-making is to be maintained.

This implies that HRM policies which encourage such cooperation should be favoured; cooperation requires mutual trust that neither party will exploit short-run situations to further their own interests. Workers need to be convinced that if they do cooperate, the higher efficiency results will not threaten their employment prospects. There is a fundamental conflict between the need to create cooperation which requires a workforce to be confident that it shares a long-term relationship with employers and some aspects of flexible working. Greater numerical flexibility, achieved through replacing permanent full-time employees does not seem likely to promote cooperation and training. It is therefore unlikely to lead to increased competitiveness in the more technological and capital intensive sectors of manufacturing, such as pharmaceuticals, and the more information intensive sectors of services such as banking and business services.