Another current issue is the changing nature of careers. HRM can benefit employees and organizations by responding to recent changes in the relationship between employers and employees and new ways of working such as telecommuting, job sharing, outsourcing, and virtual teams.
1. THE CHANGING SOCIAL CONTRACT
In the old social contract between organization and employee, the employee could contrib- ute ability, education, loyalty, and commitment and expect in return that the company would provide wages and benefits, work, advancement, and training throughout the em- ployee’s working life. But volatile changes in the environment have disrupted this contract. As many organizations downsized, significant numbers of employees were eliminated. Employees who are left may feel little stability. In a fast-moving company, a person is hired and assigned to a project. The project changes over time, as do the person’s tasks. Then the person is assigned to another project and then to still another.
These new projects require working with different groups and leaders and schedules, and people may be working in a virtual environment, where they rarely see their colleagues face to face.23 Careers no longer progress up a vertical hierarchy but move across jobs horizontally. In many of today’s companies, everyone is expected to be a self- motivated worker, with excellent interpersonal relationships, who is continuously acquiring new skills.
Exhibit 9.3 lists some elements of the new social contract. The new contract is based on the concept of employability rather than lifetime employment. Individuals manage their own careers; the organization no longer takes care of them or guarantees employment. Companies agree to pay somewhat higher wages and invest in creative training and devel- opment opportunities so that people will be more employable when the company no longer needs their services. Employees take more responsibility and control in their jobs, becom- ing partners in business improvement rather than cogs in a machine. In return, the organi- zation provides challenging work assignments as well as information and resources to enable people to continually learn new skills. The new contract can provide many opportu- nities for employees to be more involved and express new aspects of themselves.
However, many employees are not prepared for new levels of cooperation or responsibil- ity on the job. In addition, some companies take the new approach as an excuse to treat employees as economic factors to be used when needed and then let go. This attitude leads to a decline in morale and commitment in organizations, as well as a decline in perfor- mance. Studies in the United States and China found lower employee and firm perfor- mance and decreased commitment in companies where the interaction between employer and employee is treated as a contract-like economic exchange rather than a genuine human and social relationship.24 In general, it is harder than it was in the past to gain an employee’s full commitment and enthusiasm. One study found that even though most workers feel they are contributing to their companies’ success, they are increasingly skeptical that their hard work is being fully recognized and appreciated.25 Some companies find it hard to keep good workers because of diminished employee trust.
An important challenge for HRM is revising performance evaluation, training, compen- sation, and reward practices to be compatible with the new social contract. In addition, smart organizations contribute to employees’ long-term success by offering extensive profes- sional training and development opportunities, career information and assessment, and career coaching.26 These programs help to preserve trust and enhance the organization’s social capital. Even when employees are let go or voluntarily leave, they often maintain feelings of goodwill toward the company. Some- times people leave because stress is too great.
2. HR ISSUES IN THE NEW WORKPLACE
The rapid change and turbulence in today’s business environment bring significant new challenges for HRM. Some important current issues are becoming an employer of choice, responding to the increasing use of teams and project management, addressing the needs of temporary em- ployees and virtual workers, acknowledging growing employee demands for work-life balance, and humanely managing downsizing.
3. BECOMING AN EMPLOYER OF CHOICE
The old social contract may be broken for good, but today’s best compa- nies recognize the importance of treating people right and thinking for the long term rather than looking for quick fixes based on an economic exchange relationship with employees. An employer of choice is a company that is highly attractive to potential employees because of HR practices that focus not just on tangible benefits such as pay and profit sharing but also on intangibles (such as work/life balance, a trust-based work climate, and a healthy corporate culture), and that embraces a long-term view to solving immediate problems.27 To engage people and spur high commit- ment and performance, an employer of choice chooses a carefully balanced set of HR strategies, policies, and practices that are tailored to the organi- zation’s own unique goals and needs. Motek Software, for example, has a strict 9 a.m. to 5 p.m. policy and gives employees a full month of vacation each year. Founder and CEO Ann Price wants the best and brightest IT workers, and she doesn’t want them to burn out and leave after a couple of years. The consulting and training firm, IHS Help Desk, on the other hand, doesn’t expect people to stay more than a couple of years. People work long hours, but IHS keeps them motivated and builds social capital by offering plenty of training and career develop- ment opportunities.28
Teams and Projects. The advent of teams and project management is a major trend in today’s workplace. People who used to work alone on the shop floor, in the adver- tising department, or in middle management are now thrown into teams and succeed as part of a group. Each member of the team acts like a manager, becoming responsible for quality standards, scheduling, and even hiring and firing other team members. With the emphasis on projects, the distinctions between job categories and descriptions are collaps- ing. Many of today’s workers straddle functional and departmental boundaries and handle multiple tasks and responsibilities.29
Temporary Employees. In the opening years of the twenty-first century, the largest employer in the United States was a temporary employment agency, Manpower Inc.30 Temporary agencies grew rapidly during the 1990s, and early 2000s, and millions of employees today are in temporary firm placements. People in these temporary jobs do everything from data entry, to project management, to becoming the interim CEO. Although in the past, most temporary workers were in clerical and manufacturing posi- tions, in recent years, demand has grown for professionals, particularly financial analysts, interim managers, information technology specialists, accountants, product managers, and operations experts.31 Contingent workers are people who work for an organization but not on a permanent or full-time basis. These workers include temporary placements, con-tracted professionals, leased employees, or part-time workers. One estimate is that contin- gent workers make up at least 25 percent of the U.S. workforce.32 The use of contingent workers means reduced payroll and benefit costs, as well as increased flexibility for both employers and employees.
Technology. Related trends are virtual teams and telecommuting. Some virtual teams are made up entirely of people who are hired on a project-by-project basis. Team members are geographically or organizationally dispersed and rarely meet face to face, doing their work instead through advanced information technologies and collaborative software. Telecommuting means using computers and telecommunications equip- ment to do work without going to an office. TeleService Resources has more than 25 telephone agents who work entirely from home, using state-of-the-art call-center technology that provides seamless interaction with TSR’s Dallas–Fort Worth call center.33 Millions of people in the United States and Europe telecommute on a regular or occasional basis.34 Wireless Internet devices, laptops, cell phones, and fax machines make it possible for people to work just about anywhere. A growing aspect of this phenomenon is called extreme telecommuting, which means that people live and work in countries far away from the organization’s physical location. For example, Paolo Concini works from his home in Bali, Indonesia, even though his company’s offices are located in China and Europe.35
Work/Life Balance. Telecommuting is one way organizations are helping employees lead more balanced lives. By working part of the time from home, for example, parents can avoid some of the conflicts they often feel in coordinating their work and fam- ily responsibilities. Flexible scheduling for regular employees is also important in today’s workplace. Approximately 27 percent of the U.S. workforce has flexible hours. When and where an employee does the job is becoming less important. In addition, broad work/life balance initiatives play a critical role in retention strategy, partly in response to the shift in expectations among young employees.36
Typically, Gen Y employees work smart and work hard on the job, but they refuse to let work be their whole life. Unlike their parents, who placed a high priority on career, Gen Y workers expect the job to accommodate their personal lives.37
Many managers recognize that individuals may have personal needs that require special attention. Some HR responses include benefits such as on-site gym facilities and childcare, assistance with arranging childcare and eldercare, and paid leaves or sabbaticals. Work-life bal- ance is often necessary in the dating process, as shown in the Spotlight on Collaboration box.
Downsizing. In some cases, organizations have more people than they need and have to let some employees go. Downsizing, which refers to an intentional, planned reduction in the size of a company’s workforce, is a reality for many of today’s companies. In the first three years of the twenty-first century, for example, employers cut some 2.7 million jobs.38
Some researchers found that massive downsizing often failed to achieve the intended benefits and, in some cases, significantly harmed the organization.39 Unless HRM departments effectively and humanely manage the downsizing process, layoffs can lead to decreased morale and performance. Managers can smooth the downsizing process by regularly com- municating with employees and providing them with as much information as possible, providing assistance to workers who will lose their jobs, and using training and develop- ment to help address the emotional needs of remaining employees to enable them to cope with new or additional responsibilities.40
These various issues present many challenges for organizations and HRM, such as new ways of recruiting and compensation that address the interests and needs of contingent and virtual workers, new training methods that help people work cross-functionally, or new ways to retain valuable employees. All of these concerns are taken into consideration as HR managers work toward the three primary HR goals described earlier: attracting, develop- ing, and maintaining an effective workforce.
Source: Daft Richard L., Marcic Dorothy (2009), Understanding Management, South-Western College Pub; 8th edition.