1. PowerPoint Presentation by Charlie Cook Copyright © 2005 South-Western. All rights reserved. Module 7 Workforce Management: Employment Relationships in Changing Organizations

2. Copyright © 2005 South-Western. All rights reserved.7–2 Overview Old model of employment:  Bounded, hierarchical, fixed, homogeneous, and local New model of employment:  Networked, flat, flexible, diverse, and global Overview

3. Copyright © 2005 South-Western. All rights reserved.7–3 Overview (cont’d) As organizations move from bounded to networked  Plus: Opportunities arise for collaboration with new colleagues across boundaries  Minus: Careers will involve a patchwork of jobs in different organizations  Question: How can managers maintain loyalty between employees and companies and between employees and teams as memberships are in flux? Overview

4. Copyright © 2005 South-Western. All rights reserved.7–4 Overview (cont’d) As organizations move from hierarchical to flat  Plus: More employees at all levels have access to decision-critical information  Minus: Fewer vertical promotion paths and confusion about what “career success” means  Question: How can managers motivate employees without the traditional promise of promotions? Overview

5. Copyright © 2005 South-Western. All rights reserved.7–5 Overview (cont’d) As organizations move from fixed to flexible  Plus: Employees have a range of ways to organize the time and space in which they work  Minus: It may be difficult to coordinate the efforts of employees working under different arrangements  Question: How can managers balance flexibility and coordination? Overview

6. Copyright © 2005 South-Western. All rights reserved.7–6 Overview (cont’d) As organizations move from homogeneous to diverse  Plus: A range of new approaches to work will be stimulated as new groups are included  Minus: Differences may breed contests between groups  Question: How can managers be responsive to diverse constituencies in ways that respect differences but are also fair and consistent? Overview

7. Copyright © 2005 South-Western. All rights reserved.7–7 Overview (cont’d) As organizations move from local to global  Plus: New ways to include multiple stakeholders will be added to the menu  Minus: Range of choices will make it more challenging to present any one choice as legitimate  Question: How can managers learn from different global examples? Overview

8. Copyright © 2005 South-Western. All rights reserved.7–8 “Old” Versus “New” Employment Relationship From World War II through the 1970s  Sustained period of shared prosperity  Many employees worked in “internal labor markets”  Long-term employment with one employer  Internal advancement up a company job ladder  Well-defined jobs linked in a progression that defined a career  Individual compensation based on merit, seniority From the mid-1970s to the mid-1990s  Productivity growth slowed  Real wages stagnated  Restructuring produced significant white-collar layoffs Class Note: Managing a Changing Workforce in Turbulent Times

9. Copyright © 2005 South-Western. All rights reserved.7–9 “Old” Versus “New” Employment Relationship (cont’d) Today more jobs are filled by turning to the external market rather than promoting from within The new employment relationship is “market mediated” rather than an internal labor market process Class Note: Managing a Changing Workforce in Turbulent Times

10. Copyright © 2005 South-Western. All rights reserved.7–10 “Old” Versus “New” Employment Relationship (cont’d) Employment security  From the 1950s to the 1970s, U.S. employees and employers expected employment relationship to be long term  During the 1980s, this “implicit contract” changed; large companies began to lay off employees as part of restructuring efforts  At the same time, these companies were also hiring new employees Class Note: Managing a Changing Workforce in Turbulent Times

11. Copyright © 2005 South-Western. All rights reserved.7–11 “Old” Versus “New” Employment Relationship (cont’d) Reasons for restructuring and reorganizing:  Globalization and international competition  Changing technologies  Easier to hire new workers than retrain employees  The wage bill was the first to be cut  Getting rid of “dead wood”  Competition prompted companies to do more with fewer people  Declining union power  Subcontractors, temporary workers, outsourcing Class Note: Managing a Changing Workforce in Turbulent Times

12. Copyright © 2005 South-Western. All rights reserved.7–12 “Old” Versus “New” Employment Relationship (cont’d) Advancement  Traditionally, employees spent a career advancing within a company  Flattening of job ladders resulted in fewer or different types of advancement  Lateral advancement or advancement up the levels of a skill set are now common Class Note: Managing a Changing Workforce in Turbulent Times

13. Copyright © 2005 South-Western. All rights reserved.7–13 “Old” Versus “New” Employment Relationship (cont’d) Jobs and compensation:  Traditional organization chart with strict hierarchical links has been replaced by a web of interconnecting tasks and relationships  Individual jobs are increasingly multiskilled  Employees are encouraged to cross-train and learn a variety of tasks to allow for job rotation  Compensation systems need to shift from individual incentives tied to specific job titles to rewards for learning new skills and working effectively in teams Class Note: Managing a Changing Workforce in Turbulent Times

14. Copyright © 2005 South-Western. All rights reserved.7–14 Figure 7.1 Changes in the Distribution of the U.S. Labor Force by Subgroup, 1994–2005 (number in thousands, percent in parentheses) * Does not add up to zero due to rounding error. Source: From Judith Friedman and Nancy DiTomaso, “Myths About Diversity; What Managers Need to Know About Changes in the U.S. Labor Force.” Copyright © 1996, by The Regents of the University of California. Reprinted from the California Management Review, vol. 38, no. 4. By permission of the Regents. Class Note: Managing a Changing Workforce in Turbulent Times

15. Copyright © 2005 South-Western. All rights reserved.7–15 Flexibility Demand for flexibility in work often traced to entrance of women into paid workforce Rise of women into higher organizational positions prompted new dialogues on balancing work and family Dialogue expanded from “women’s issue” to include:  Parental leave time  Flexible time arrangements for caring for parents or ill family members Class Note: Managing a Changing Workforce in Turbulent Times

16. Copyright © 2005 South-Western. All rights reserved.7–16 Flexibility (cont’d) Flexibility choices:  Flexible space  Telecommuting, virtual offices  Flexible time and allocation of tasks  Flex time, part-time work, job sharing  Flexible career paths  Challenge is to overcome fear that flexible work arrangements will damage career opportunities  Flexible workforce size and firm boundaries  Reliance on temporary workers may result in loss of employee loyalty and commitment Class Note: Managing a Changing Workforce in Turbulent Times

17. Copyright © 2005 South-Western. All rights reserved.7–17 Human Assets and 21 st Century Organizational Forms Labor costs are normally the largest variable cost in most firms, so employee costs are tightly controlled When employees leave, they may take significant portions of a firm’s assets (knowledge and clients) with them Organizations need to find ways to retain critical knowledge workers Class Note: Managing a Changing Workforce in Turbulent Times

18. Copyright © 2005 South-Western. All rights reserved.7–18 Figure 7.2 Contrasting Assumptions in Twentieth- and Twenty-First-Century Organizations Source: Thomas A. Kochan, Wanda Orlikowski, and Joel Cutcher Gershenfeld, “Beyond McGregor’s Theory Y: Human Capital and Knowledge Work in the 21st Century Organization,” MIT Sloan School of Management, 2002. Class Note: Managing a Changing Workforce in Turbulent Times

19. Copyright © 2005 South-Western. All rights reserved.7–19 The Evolving Focus of Strategy The Press: Building Competitive Advantage Through People

20. Copyright © 2005 South-Western. All rights reserved.7–20 The Evolving Role of Human Resources The Press: Building Competitive Advantage Through People