The Employment Relationship; Problems and Perspectives - Essay Example

Running head: The Employment Relationship; Problems and Perspectives The Employment Relationship; Problems and Perspectives [The name of the writer appears here] [The name of institution appears here] Introduction Individuals search until an acceptable job is found. The reason there is a period of search is that finding a job involves gathering information about which employers are hiring at what wage rates in the job(s) for which one qualifies. Search is sometimes engaged in by those already holding jobs, to keep abreast of job opportunities and going wages. Thus, the potential for turnover is always present in the employment relationship, and is likely to be on the minds of both employee and employer. Stigler (1961) pioneered thinking on the central role played by the information-gathering of job search, and this view has provided an important modification to the neoclassical model of how labor markets function. The information-gathering of search can be accomplished in several ways. According to one recent survey, the share of searchers using various methods was as follows: 16% using tips from friends and relatives, 78% going to an establishment where they hoped an opening existed, 24% going to state employment agencies, 6% going to private agencies, and 35% responding to newspaper advertisements. Of course, finding and accepting a job often involves more than ascertaining the wage, making application, and showing up for work. Searchers may also consider nonpecuniary features of jobs as well as fringe benefits, mobility prospects, and the probable wage trajectory before agreeing to the employment relationship. Employment typically is a relationship that will endure for at least some time period. It is this intertemporality which helps to make search important and expensive, and job-taking a more than casual event. Just as one shops more carefully for a home than for a pound of hamburger, and just as the interest rates individuals are currently paying on their home mortgages reflect past market conditions as much as current conditions, so too with jobs. Individuals search for jobs because they know that the ensuing employment is likely to last some time, and their current employment situation reflects past as well as current market conditions. The fact that most jobs are found only after at least some search explains the existence of what economists call "frictional" unemployment ( Flanagan et al., 1984: 584-85). At any one time there will be some people searching for a job, even if there are enough jobs to go around in the economy. During the period of search, individuals are counted as unemployed (unless they are searching while holding another job). The length of time an individual will stay unemployed is related to his or her "reservation wage," the minimum wage that will be accepted. Of course "wage" must be understood to summarize all aspects of the job, not just take-home pay. Once this "wage" is understood to include fringe benefits, working conditions, opportunities for advancement, and so on, we see that the notion of a reservation wage is just the economist's shorthand for "acceptable job." Searchers keep on looking until they are offered a job at or above their reservation wage. Of course, they set the level of this wage as high as they think they can find within a reasonable period of time--yet they are under some pressure to be realistic. The extent of this pressure depends upon the magnitude and duration of unemployment insurance and other sources of income while they are searching. It also depends upon family circumstances. If their search experience suggests they have been unrealistic about the wage level available to them, or if they are living on savings which are running low, individuals adjust their reservation wages downward (Lippman and McCall, 1976). On the other hand, the longer one plans to hold the next job, the higher it pays to set one's reservation wage. This is because the costs of search--including wages foregone while searching--are more apt to be paid back, and with interest, if the better job one is holding out for is of long duration. With the national unemployment rate above 5%, as it has been since the early 1970s, one might expect that only workers have to search, and that employers can just sit back and choose. Indeed, the level of effort required on each side of the market does vary with the unemployment rate. However, even in a "buyer's market," selecting one applicant to hire requires the information-gathering we have called search. Employers screen prospective workers because labor is not homogenous. But, just like prospective employees, employers have imperfect information. They wish to predict which potential employees will be the most productive, stay with the employer long enough to repay the costs of hiring and training, have the lowest reservation wage, and be otherwise cooperative. Imperfect information on each of these scores leads employers to think of workers in terms of identifiable groups whose desirability can to some extent be predicted from group membership. Using educational credentials to make these predictions is an example of a screening strategy that is probabilistic and, thus, "statistical." An employer requiring a high school or college diploma for entrance into a particular job may base this requirement on the observation that, on average, school dropouts make less productive workers. This is a statistical generalization that may be true "on average" but will always be in error for some individual cases. Yet, despite some of the individually incorrect decisions it generates, this screening device makes sense for some employers, since it is prohibitively expensive to develop a screening device capable of detecting the unusually productive high school dropout or the unusually unproductive college graduate. It is the lack of information about potential employees' future behavior, coupled with the costs of acquiring such information, that leads employers to categorize applicants according to group memberships that are almost costlessly observable, and to base hiring decisions on the "averages" they have observed for these groups. Such a statistically based screening process may use other easily discernible group memberships, for example sex or race, to categorize applicants. In this case the screening process is called "statistical discrimination" by most sociologists and economists (Lewin and England, 1982). The process is called "discrimination" because an ascriptive criterion (such as race or sex) is explicitly used to make the hiring decision. The process is "statistical" in the sense that decisions are based on approximately correct group productivity averages, rather than on dislike for group members or erroneous perceptions of average group productivity. The search costs that would be entailed in developing more direct productivity measures help explain the popularity of statistical discrimination. Nonetheless, the use of a worker's sex, race, religion, or national origin to determine that individual's treatment in any employment context was outlawed by Title VII of the Civil Rights Act of 1964. A motto in common use during the development of Nissan UK was ‘from us and them to just us’. The implication, of course, was that employees began to identify with the organization to the extent that control was exercised entirely by themselves. This assumes that the success of the business was as salient a value within their own self-concept as it was in the interests of top management. Or, at the least, it assumes that even if this was not true of everyone, then those for whom business success was highly salient would ensure that the rest of their colleagues acted as though it was for them too (Garraghan, & Stewart, 1992). Whilst one does hear people in large organizations use ‘we’, this is much more likely to refer to their work team or to their business unit than to the organization itself. Rather, they tend to use the word ‘the organization’ as though they are speaking of a person. ‘The organization did this or said that’, they say. They are normally referring to the organization’s top management, or less probably, to its representative in the form of their local manager. But the situation is complex. Local management may be willing and committed agents of top management. They may be complying through fear of punishment. They may pay mere lip service to top management’s policies whilst pursuing their own agenda. Or they may actively subvert them. Thus ‘the organization’ may be giving out contradictory messages, and ‘them’ may mean different things at different times. Of course, in some organizations there is only ‘me’ or ‘us’. If people are self-employed, or work in a mutually owned co-operative, or in a ‘fourth wave’ organization of self-managing professionals, then there is no ‘them’, no ‘other’, with whom to have an employment relationship. Even in these cases, however, demanding clients may play the psychological role of demanding employers. The client contract manager, having screwed down the contract to a tight specification, may look over one’s self-employed shoulder in just as controlling a manner as one’s line manager of yore. Again, in small family-based organizations, there may be only ‘us’. Even when the family organization becomes medium-sized, it may work within a network of similar organizations which are so tied to each other by mutual obligation and trust that the collective ‘us’ does not imply an ‘other’ (Granrose, Chua, 1996). On the other hand, if you are an employee of a family firm but not a family member, then ‘them’ immediately becomes a likely category of use. One can be as much at the mercy of an immediate head of the family as dependent upon a distant group of executives. In these cases it is likely to be a matter of ‘me and them’, or ‘me and him (or her)’. In larger organizations, ‘us’ and ‘them’ become the usual categories (Kelly, & Kelly, 1991). The attempt to depict large organizations as only consisting of ‘us’ ignores both the realities of power and also the recognition of those realities by employees. It is the size of large organizations which allows ‘me’ to become ‘us’; there are many potential allies against ‘them’. What is more, there are many possible different definitions of who ‘us’ represents. These definitions may embody those elements of the self which employees feel that ‘they’ have ignored. So, for example, ‘we’ may be my work group upon whom ‘they’ up there regularly dump from a great height. Or it may be my project team, who have been given impossible deadlines and inadequate resources. Or my local branch, whom ‘they’ never even visit, let alone value. Or my union, which represents people like me against people like ‘them’. Or my women’s or ethnic minority group, whom ‘they’ discriminate against. Or my occupational group, which supports ‘our’ professional standards against the erosion caused by ‘their’ constant pressures for cost cutting. All of these categories can comprise ‘us’. They are likely to do so if the elements of employees’ selves which the categories represent are ignored in the conduct of the employment relationship. The vast preponderance of attention has been paid to one direction of the process of the employment relationship rather than to the other. What has primarily concerned us is how organizations can socialize employees so that they fit well into the organization and the job. In other words, commentators and researchers have been concerned with helping ‘them’ to create an organization in which there is no ‘them’ and ‘us’, but rather a generalized ‘us’, defined in the way ‘they’ see fit. What has concerned employees just as much, however, is how they can have some impact upon the organization so that it takes more account of their own needs and identities as they perceive them. Socialization occurs both at the organizational and at the job levels of analysis. At the organizational level, socialization is a usually conscious effort to enhance new employees’ adoption of the officially sponsored values, goals and culture of the organization. At the job level, more and more attention is being paid to assisting the learning of the tasks and duties of the job and to fitting the employee to it (Anderson, & Ostroff, 1998). Variety of models of the development of organizational socialization have been proposed. Most of them suggest three stages: an information-gaining and sense-making stage; a stage of accommodating one’s prior expectations to the experience of the realities; and the development of longer-term acceptance and commitment. It is quite clear that the process of socialization cannot consist merely of the compliant acceptance of what one is told. Evidence demonstrates that employees have to have an attitudinal and affective response to the organization if they are to be committed enough to go the extra mile. They have either to identify with it or else internalize its values (O’Reilly, & Chatman, 1986). Organizations can foster such commitment if they invest in employees 10 and support them. Thus positive results of socialization are contingent upon organizational support and employee personal change. Yet such personal change as is necessary for the individual to fit into the organizational culture may be incompatible with their existing selves. In particular, new value priorities may clash with strongly held values or ideologies; or a very salient element of the self may be devalued; or self-esteem may be threatened. Some socialization procedures, coyly labeled ‘divestiture’, actively seek to change radically the employee’s self. They use such methods as initiation rituals, endurance of physical hardship, group bonding and removal from all contact with one’s previous existence, to impose new elements of the self. However, in most organizations other than the military, a far more subtle process occurs, so subtle that it certainly cannot be termed conscious socialization. It has been characterized as the Attraction Selection Attrition process (Schneider, 1987), and results in the snuggest of fits between employees and organizations. Individuals are naturally attracted to occupations and organizations which they believe demonstrate a congruence with their selves. The representatives of that organization then select from amongst these already self-selected applicants those who are most like themselves. As these newly appointed employees are socialized into the organization, there is a degree of attrition amongst those who realize that their selves and their new colleagues are incompatible. The outcome is a very good socialization and fit indeed! One may even mistake certain organizations for sets of clones. The evidence clearly shows that even within accountancy, a profession noted for its stereo-typical membership, different firms are distinguished from each other by the sets of value priorities held by their members. They stay longer in the firm as a consequence. Of our eight metaphors for the employment relationship, Crusade best expresses the divestiture face of socialization, Club the snug fit. But whatever the metaphor, the fact remains that the relationship is usually dominated by the organizational partner. It is the organization which makes the running in the relationship and seeks to socialize other selves into its own culture. As the Attraction Selection Attrition model suggests, individuals can at least decide whether they wish to enter (although many have to go after any job which they think they have a chance of getting). But the situation is not entirely one-sided. Many would argue that the current restructuring, fluidity and ambiguity within many organizations offers far more opportunity for individual employees, and groups of them, to exercise power in the employment relationship. If there are fewer middle managers; if roles are constantly changing and are ill-defined; if people are selected for the roles that they might play rather than for job vacancies; if structural change is constantly occurring: then there is a vacuum which the individual can fill. Furthermore, if messages from top management as to what is expected are mutually contradictory, then employees can choose to hear the message which suits them better, or otherwise exploit the contradiction. The same applies if there is a single message but it is an ambiguous one. Individuals can create roles to better suit their selves. They can use the situation to enhance their curriculum vitae and gain training and development. They can organize in their own way in their local situation without being found out. They can, in fact, enact organization themselves, thereby becoming ‘the organization’ as far as they are concerned. Of course, some are more individually suited to taking these bold unilateral initiatives than others. Those who think in ways independent of the contextual constraints and who attribute outcomes to themselves rather than to their situation are strong candidates. So are those with a high need for power and autonomy, those for whom work is a central element of their selves, and those who especially value creativity, challenge, and entrepreneurship as their ‘career anchors’. However, individual resilience and determination is not the only thing that can bring a degree of power and influence to individuals. In the corporate chaos it becomes easier to create groups of people tied together by shared elements of the self that they wish to enhance: occupational, gender, ethnic or special interest groups, for example. The networks of influence that such groups can exercise across the organization by sharing and using information can be powerful indeed. Control may be gained by employees over their outcomes: their pay, for example, or their contracts, but usually only if they have strong labour market power or union representation. It may also be gained over their actions: how they behave at work, how they carry out their tasks. And their power may derive from information about what is likely to happen, which enables them to prepare for organizational events. Even when these forms of control are unattainable, employees can still assert their power by ‘misbehaving’, demonstrating that they can still choose not to conform completely to what ‘they’ have decided is right and proper. A sense of self-esteem and autonomy is maintained somehow (Schneider, 1987). Control may also be exercised by defining for oneself a subjective career in which one can make progress despite the fact that one’s ‘objective’ career (i.e. that defined as desirable by ‘them’) may languish. To the extent that individuals have met their own needs, such a career can in a sense be independent of the fact that they have been compelled to meet the organization’s needs. For example, people have succeeded in adding skills to their C.V. which were not immediately vital to the organization: IT professionals learn another system despite its lack of applicability to their current work. These examples of individual influence and control, however, are interestingly selected. They focus upon employee needs which are mostly consistent with, or at the least, not actively hostile to, organizational needs. It is as though commentators limit the elements of the employee’s self to those which result in ‘win-win outcomes’. For example, the story of the individual’s learning coincides with the story of the organization’s innovation. There are many other elements of the self, however, which are likely to be incompatible with organizational needs. It is worth pursuing the topic of ‘organizational misbehavior’ at greater length in order to make this point more clearly. There has always been a wide range of ‘misbehavior’ in organizations, from time wasting, absenteeism, slowing down the rate of working, pilfering and sabotage through to subversive humor and overt sexuality. The earlier examples in this list may be attributed to a rational attempt to diminish or compensate for the intensification of work pressure. The later ones are only explicable in other ways, however. In particular, they may be seen as techniques for affirming elements of employees’ selves which are not taken into account by management. Clowning is a way of actively subverting management’s seriousness, thereby demonstrating that there are other things in life that are more important than work. Satire indicates that the satirist is not such a fool as to be taken in by the latest management rhetoric or fad. Displays of bawdy humor indicate that people are really male or really female, not desiccated units of production; or else they draw attention to the fact that someone is going to get married. 21 And note that all of this ‘misbehavior’ is social in its nature: the audience has to laugh at the clown or the satirist. It is definitely ‘us’ getting one over ‘them’. Conclusion The final element of the employment relationship is ‘the organization’. From the employee’s perspective, this term normally refers to the senior management of the organization. The employment relationship has typically been considered from the organization’s perspective or, more rarely, from the employees’. As far as the organization (top management) is concerned, the socialization and compliance of employees are crucial. Many succeed in creating organizations that are so well socialized as to consist of conformist clones. When the relationship is viewed from the employee’s perspective, we discover that employees find ways of influencing the relationship so as to affirm their selves. When it is examined as a dynamic ongoing process of events in real time, it becomes clear that it will only be facilitated by dialogue. Dialogue is contrasted with rhetoric, in that dialogue entails the discovery of the other’s feelings and the revealing of one’s own, thereby enabling the selves of the parties to become clearer to each other. Rhetoric seeks to influence the other’s perceptions and feelings. Whilst accounts of the past and talk about the future are important elements of dialogue, its most powerful use relates to present experience, where emotions are most prominent. Reference: Anderson, N.R. and Ostroff, C. (1998) Selection as socialisation. In N. Anderson and P. Herriot (eds) International Handbook of Selection and Assessment. Chichester: Wiley. Flanagan R. J., Smith R. S., and Ehrenberg R. G. 1984 Labor Economics and Labor Relations. Glenview, III.: Scott, Foresman and Company. Garraghan, P. and Stewart, P. (1992) The Nissan Enigma: Flexibility at Work in a Local Economy. London: Mansell. Granrose, C.S. and Chua, B.L. (1996) Global boundaryless careers: lessons from Chinese family businesses. In M.B. Arthur and D.M. Rousseau (eds) The Boundaryless Career. New York: Oxford University Press. Kelly, J. and Kelly, C. (1991) Them and us: social psychology and the new industrial relations. British Journal of Industrial Relations, 29, 1, 25-48. Lewin Peter and England Paula 1982 "Reconceptualizing statistical discrimination." Presented at the Annual Meetings of the Southwestern Social Science Association. Lippman Steven and McCall John J. 1976 "The economics of job search: A survey." Economic Inquiry 14, 155-189. O’Reilly, C. and Chatman, J. (1986) Organisational commitment and psychological attachment: the effects of compliance, identification, and internalisation on pro-social behaviour. Journal of Applied Psychology, 71, 3, 492-499. Schneider, B. (1987) The people make the place. Personnel Psychology, 40, 437-453. Stigler George 1961 "The economics of information." Journal of Political Economy 69, 213-225. Read More