Traditional Model of Employment - Case Study Example

Traditional model of employment Globalization and liberalization have led to increased competition in every sector. The US economy has undergone industrial restructuring from manufacturing to services in recent decades. This led to a bifurcation of the US labor force into bad jobs and good jobs. The human capital theory which took shape in 1960 was based on the premise that people’s learning capacities are comparable to other natural resources involved in the capitalist production process (Hong & Pandey, 2007). When this resource is effectively utilized the results are profitable both for the enterprise and the society as a whole. This implies that employment opportunities are directly connected to education. It was also felt that work related employee training enhanced his chances of better jobs. An employer typically matched a worker to a position picking among multiple applicants. Individuals competed against one another for job opportunities based on relatively lower costs of being trained to fill whatever post was being considered. Employers used background characteristics like continuous labor force participation to indicate expected training costs. They then ranked and hired those that attracted lower training costs. The workers worked 40 hours a week and received insurance and social security benefits. This used to be the traditional model of employment but the situation has undergone a drastic change in the past two decades. Causes of change The US corporations were confronted with a squeeze in profitability. Increased international competition, domestic market saturation and global over capacity led to restructuring of the workforce in the name of flexibility (Peck, 2002). Free trade and technology have reshaped the global economy. They have formed a solid foundation for growth and prosperity but at the same time it poses a great challenge – restructuring of workforce. Traditional employment patterns are changing and the reasons are many. Technical changes in the US economy, increasing flexibility of the US labor market, decline in the manufacturing sector, deindustrialization, changes in control system, flexible/insecure employment conditions, high-technology and trade-sensitive employment conditions (Peck, 2002), a marked growth of so-called atypical forms of employment like working from home, self-employment, temporary or part-time work, casual agency work or contracting (Allan, 2000) and broad industrial structural change have led to changes in the traditional patterns of employment. There was also a roll-back in the social wage and labor organization and all of these led to restructuring of the US labor market. This paper will however concentrate on the changes in employment patterns caused due to the entry of women and the youth in the labor market resulting in more causal and part-time employment. It will also discuss the impact that flexible working pattern has on both the employers and the workers. Flexibility, work-life balance Employees have been seeking something beyond the traditional 9-5 view of employment in their effort to maintain a work-life balance to accommodate family and other requirements. The issue of balance becomes difficult according to Wilson, Polzer-Debruyne, Chen and Fernandes (2007), when the “work” in the work-life balance is a series of rotating or shifts that result in discontinuities between workers and the rest of their life. The idea of flexible work schedule has gained momentum with increase in the women workforce, changes in family structure and an ageing population (Lewis & Smithson, 2001). Employers have responded by applying different forms of working-time flexibility to enable employees to manage multiple roles. The shift from the full time employment can be attributed to various factors like cyclical, demographical and structural factors like the economic cycle, the growth of the female and youth in the working sector and the expansion of the service sector (Allan, 2002). At the same time, changes in the business policies and the need to achieve greater flexibility in organizational structures have caused a change in the structure of employment. Market uncertainties, competitive pressures, new technologies and a more deregulated market force organizations to look beyond the traditional form of employment. Traditionally work and family were united as whole but in the industrialized societies work and private life became separate. Now the extended family is a rare phenomenon and people all over are seeking to reduce the separation between family and work. All are attempting to achieve a better balance between working life, family obligations, leisure and socializing (Papalexandris & Kramar, 1997). Policies have thus been specifically designed to attain this work-life balance. The government also supports such initiatives as there are perceived benefits to the employer as well. The youth labor market has undergone transformation as there is a rising participation of students in full-time education that opts for part-time work. Most often students start working during their teens due to financial reasons or for funding their studies (Lucas & Ralston, 1997). This is also the result of broken homes or single-parent families. There are more young female workers than male workers. Women comprise 40 percent of the labor market and majority of them are mothers of dependent children. This has not resulted in a decrease in the male labor market nor has there been an increase in the number of men returning home for childrearing or housekeeping (Drago, Pirretti & Scutella, n.d.). Family forms have become diverse with more incidences of divorce, non-marriage partnerships, and single-parenthood casing more women to seek part-time employment. Hence women continue to shoulder the bulk of unpaid care giving which makes it necessary for them to seek part-time employment. In the traditional model of employment the bread-wining men could take advantage of the seniority of their position and those who took time off to attend to care giving responsibilities lost out on the positions of seniority. Trade unions fought against the emergence of part-time employment as they considered this a threat to the breadwinner model of employment and therefore the men, who comprised the vast majority of the work force. The unions attempted to make the part-time employment unattractive to the employees. Advantages/disadvantages to the employee of shift in the traditional model The employee benefits through changes that have been brought about in the employment relationships particularly working in flexible shifts and as temporary workers. They are able to manage a work-life balance and execute their family responsibilities. This has become especially important in the wake of more women joining the workforce. It helps them to combine work life with family care responsibilities and minimize work-family conflict and other negative outcomes (Lewis & Smithson, 2001). Hence temporary employment contracts have become common in the younger generation and the youth seeks state intervention and support. The concept of shift helps people have non-standard working hours. Flexible working hours provides economic necessities and choices to the individual (Wilson, Polzer-Debruyne, Chen & Fernandes, 2007). It helps the individuals as they take time off mid-week to pursue leisure activities or household assignments. At the same time, the body demands regular rest at night. Inflexible work schedules are leading to longer working hours leading to heightened stress and emotional exhaustion (Hughes & Bozionelos, 2007). Work-life balance leads to increase in sick leave which is costly to the employer. Healthcare insurance is linked to full time employment but due to the shift to casual, part-time employment 50 million US citizens have no health insurance (Drago, Pirretti & Scutella, n.d). Advantages/disadvantages to the employer This concept of temporary workers benefits the organizations. In the context of globalization employers are seeking flexible labor forces thereby transferring the risk from the organization to the employees by being non-permanent, contingent employment contracts, and undermining rights and expectations (Lewis & Smithson, 2001). Flexible working hours provides temporal flexibility to the organization. Shift work enables the organization to be active round the clock especially as corporations have global operations (Wilson, Polzer-Debruyne, Chen & Fernandes, 2007). It also benefits many sectors like the healthcare, police, electricity and transport or in high technology industries like the steel, power plants and now the IT sector. The entertainment industry also benefits with shift work. Organizations demand higher performance and commitment from their employees which means working longer hours and prioritizing work over personal life (Hughes & Bozionelos, 2007). Employers gain in contractual jobs like when they require highly specialized contractors for short term projects. It is also beneficial when employers need to retain skilled in lowly paid precarious jobs for longer period of time (Allan). It also gives the employers the option to lay off workers when business activity recedes and rehire the same personnel when activity increases. This is particularly helpful in the hospitality sector which is seasonal business. Employers experience cost savings by utilizing non-standard forms of employment. Employers gain b y better productivity as workers experience less fatigue due to part-time employment and hence are able to exert greater effort during their period of engagement (Allan, 2000). The workers have to be given fewer fringe benefits or salary increments and in some cases the employers can even avoid superannuation benefits. Regulations for full-time employees lead to a relatively high fixed costs which include training, healthcare insurance, and pensions (Drago, Pirretti & Scutella, n.d). With full-time workers it is beneficial for the organization to pay extra for longer hours of work to the regular employees than hiring part-time workers. By employing the younger workforce, employers can manage demand more economically as they can employ the students or younger workforce during weekends or high season. Students are also available to provide full time cover on Saturdays or for those on summer leave. Student fit the criteria where employers look for casual workers which help them avoid costs. The younger work force can be found in the hotel segment and the retail sector for these reasons. Another reasons why employers prefer part time workers as students is because they bring is particular attributes to the job like intelligence, personality, they are more articulate and have better communication abilities (Lucas & Ralston, 1997). The workers have less time commitment and less psychological commitment which can lead to problems in motivation, communication, confidentiality and turnover (Allan). Instead of one set of workforce, now there are different groups of workforce each with a different kind of commitment to the organization, a different contractual arrangement and a different set of expectations (Papalexandris & Kramar, 1997). These have to be managed in different ways. Skill retention problems are also likely to develop as the non-standard work force may not be fully integrated into the human resource training systems. All these can lead to deterioration in quality standards. There are chances that full-time employees are hostile to part-time workers as they consider them as threat to their jobs. The difference between the two groups of employees can undermine team work and cooperation. Other disadvantages to the organization include higher administrative costs when more staff has to be employed on part time basis. It requires higher record maintenance, payroll calculation, supervision, training and recruitment (Allan). These costs keep escalating as the turnover of casual part time workers is generally higher than the standard workers. Conclusion The traditional model of employment has undergone a shift but it is not always for the benefit. While certain benefits have been enjoyed by both the employer and the employee, trying to maintain flexible work schedules has its own negative impact. The organization benefits by reaching out to worldwide customers round the clock but it is costly for them as well as people call sick very often. It may help the individuals to fulfill their duties towards the family, but it does lead to physical and emotional stress and with prolonged irregularity the physical health is affected. The human body is tuned to follow the regular 9-5 schedule at work and such changes have a negative impact. Policies too have been modified to accommodate the changing patterns of employment. The non-standard models of employment are advantageous and disadvantageous both for the employer as well as the employees. More women have come into the workforce due to single-parent families and the students opt for work while pursuing full time studies. The employers gain die to cost benefits in employing part-time or casual workers but there remains the lack of commitment on the part of the employees. Nevertheless, restructuring of employment have become unavoidable in the face of competitive pressures and newer technology. References: Alla, C., (2002), The hidden organizational costs of using non-standard employment, Personnel Review, Vol. 29, No. 2 pp. 186-206 Drago, R., Pirretti, A., & Scutella, R., (n.d.), Work and Family Directions in the USA and Australia: A Policy Research Agenda, Journal of Industrial Relations, Vol. 49 No. 1 Hong, P. Y. P., & Pandey, S., (2007), Human capital as structural vulnerability of US poverty, Equal Opportunities International Vol. 26 No. 1, 2007 pp. 18-43 Hughes, J., & Bozionelos, N., (2007), Work-life balance as source of job dissatisfaction and withdrawal attitudes, Personnel Review Vol. 36 No. 1, 2007 pp. 145-154 Lewis, S., & Smithson, J., (2001), Sense of entitlement to support for the reconciliation of employment and life, Human Relations 2001; 54; 1455 Lucas, R., & Ralston, L., (1997), Youth, gender and part-time employment, Employee Relations, Vol. 19 No. 1, 1997, pp. 51-66. Papalexandris, N., & Kramar, R., (1997), Flexible working patterns: towards reconciliation of family and work, Employee Relations, Vol. 19 No. 6, 1997, pp. 581-595. Peck, J., (2002), Labor, zapped/growth, restored? Three moments of neoliberal restructuring in the American Labor Market, Journal of Economic Geography, 2, pp. 179-220 Wilson, M. G., Polzer-Debruyne, A., Chen, S., & Fernandes, S., (2007), Shift work interventions for reduced work-family conflict, Employee Relations Vol. 29 No. 2, 2007 pp. 162-177 Read More