Redefining psychological contracts with the U.S. work force: A critical task for strategic human resource management planners in the 1990s

The well-publicized waves of layoffs in recent years have destroyed the long-standing psychological contract between employees and their employers which promised pay, promotion, and job security in exchange for worker skills, effort, and loyalty. This article provides empirical support for the transformational effect layoffs have had on psychological contracts and discusses the critical role human resource management must play in establishing and developing new contracts to guide future employment relationships between employers and employees. Implications for both academics and practitioners are provided. © 1998 John Wiley & Sons, Inc.     

Massenentlassungen – Rechtsvergleichende Analyse der Bedingungen in Europa und den USA

International corporations do mass layoffs preferably in countries with rather low employment protection regulations. This paper analyses and compares the different employment protection regulation regimes in the US, Germany, France, and UK with regard to their regulations of mass layoffs. Our study concludes that there is a larger degree of freedom of contract in the US, however, our analyses does not confirm the usual assumption that employees in the US are legally less protected from mass layoffs than in Europe.     

Worker Cooperatives and the Business Cycle: Are Cooperatives the Answer to Unemployment?

A bstract . The effects of the business cycle on organizational founding and failure rates In the complete population of worker cooperatives in Maritime Canada from 1900 to 1987 are examined. The empirical results, consistent with findings from previous research on worker cooperatives in the United States and Israel, indicate that cooperatives evolved independently of the business cycle. The findings, interpreted within a population ecology framework, challenge the popular argument that a growing cooperative sector is the answer to the problem of unemployment.     

Organizational Issues in Worker Ownership

Abstract . In the United States the issue of worker control is currently receiving increased attention. Nevertheless, before this view of work and the workplace can be successfully implemented, the standard (hierarchical) image of organizational order must be rethought. Communicative competence, as discussed by Jürgen Habermas, is offered as a theoretical alternative to social ontological realism for developing a workplace that is compatible with worker control. This theoretical shift is necessary to avoid organizational domination of the worker and to develop a workplace that embodies, instead of restricts, human action. For if human action does not orient the workplace, worker control does not exist.     

Temporary layoffs and split population models

This paper develops and estimates a split population model for the duration of temporary layoffs in the German labour market; the population being split according to whether a layoff is temporary or permanent. A flexible piecewise constant hazard is employed and the recall propensity is used to condition the duration of a temporary layoff. The distinction between factors that influence the recall propensity and factors that influence the duration of a temporary layoff is shown to be of empirical significance. The results of the paper are used to evaluate implicit contract and search theories of temporary layoffs. The paper suggests that implicit contracts can explain the behaviour of unemployed workers with high worker–firm attachment whilst search can explain the behaviour of workers with low worker–firm attachment. Copyright © 2004 John Wiley & Sons, Ltd.     

When is Contracting Preferable to Employment? An Exploration of Management and Worker Perspectives

abstract    Managers make choices regarding the types of employment structures that meet the needs of the firm, and workers make choices regarding the types of arrangement that meet their needs. Various streams of literature offer perspectives on why employment or contracting might be preferred but it is often the perspective of the firm that dominates the analysis. This kind of one-sidedness weakens our understanding of employment as a relationship . It lacks recognition of the importance of mutuality: of matching the needs of the worker with the needs of the business. This paper reports research investigating management decisions to use self-employed contractors or employees for particular jobs, and workers' decisions to seek or accept organizational employment or self-employment. Some 80 in-depth interviews were conducted with managers and workers across two industries (energy supply and engineering consultancy) with the intent of studying two groups of workers differing dramatically in skill levels. While largely confirming existing theory on the management conditions relevant to the contracting-out of work, the study identifies factors that make a contracting relationship more mutually beneficial, thus suggesting propositions for further research on worker preferences.     

三一“变相裁员”事件背后的企业社会责任思辨

企业社会责任由经济责任、法律责任、伦理责任、慈善责任四个层次构成,但最基本的社会责任还是经济责任。三一裁员本身并不是企业社会责任的缺失,采用"变相裁员"的方式才是缺乏企业社会责任的体现。三一需要增加战略决策的理性和周延并建立可预见收入与就业计划,在履行经济责任的基础上更好地履行其余的企业社会责任。     

The effects of mandatory employment arbitration systems on applicants' attraction to organizations

This study draws on organizational justice theory to investigate the effects of mandatory employment arbitration on organizational attraction. Specific attention is given to the characteristics of employment arbitration procedures that moderate the adverse effects these programs have on applicants' intentions to continue with the recruitment process. A total of 389 professional and executive MBA students read simulated employment brochures. Making employment arbitration mandatory was found to have a significant negative main effect on applicant attraction. This negative effect was mitigated when procedures afforded employees more due process considerations and when employees were given a just‐cause protection in return for giving up their right to sue. Finally, this negative effect was greater among minorities than nonminorities. © 2005 Wiley Periodicals, Inc.     

Institutions and preferences in settings of causal complexity: foreign institutional investors and corporate restructuring practices in France

In this article, we illustrate how the interaction between institutional arrangements and the presence of different categories of firm stakeholders with specific preferences provides important insights to understand the conditions under which corporate restructuring practices are introduced. Institutions shape the range of actors' strategic options and mediate the translation of the preferences of firm stakeholders into corporate policies. Nonetheless, strategic choice remains possible since firm stakeholders constitute subgroups with different interests and incentives that influence how they operate in an institutional framework. In particular, we examine under what conditions UK/US-based institutional investors and equity-based compensation incentives are associated with the implementation of asset divestitures and employee layoffs in France. We uncover three key findings. First, the presence of hedge funds and equity-based pay influence the likelihood of French companies undertaking asset divestitures. Second, the impact of hedge funds on employee layoffs is contingent on the ownership structure of firms. Third, layoffs in France are driven by inferior performance – a result that contrasts with the American experience whereby employee layoffs are also used as a strategic mechanism to deal with institutional investors in good times. Our findings demonstrate the importance of the institutional constraints of (national level) employment protection and the moderating effects of ownership structure (firm level) on the strategic and employment policies of French companies.     

Employment security at DEC: Sustaining values amid environmental change

This article, based on a case study of Digital Equipment Corporation, examines issues raised by efforts to stabilize employment. The specific case is a large program which restructured and reduced employment without resorting to layoffs. The article describes the DEC process, the key choices which underly the procedures, and provides data on the consequences for individuals and the firm. It then explores the implications of the DEC experience for the broad human resource principles and actions which must underlie any effort to stabilize employment.     

Understanding the Determinants of Who Gets Laid Off: Does Affective Organizational Commitment Matter?

Whereas prior research has focused on structural, demographic, and human capital factors to predict who gets laid off, the current study examines affective organizational commitment as an additional attribute related to an employee's layoff chances. Specifically, we investigate the relationship between affective organizational commitment and an individual's layoff chances, as well as whether this relationship differs between high and low performers. Event history analysis is conducted using survey data with matched personnel records from 3,057 employees across 563 Australian bank branches. After controlling for numerous predictors of layoffs, the results demonstrate that affective organizational commitment decreases the likelihood of an employee being laid off. Further, the effects of affective organizational commitment on an individual's layoff chances are greater for lower performers than higher performers. We discuss the implications of these findings for researchers and practitioners. © 2015 Wiley Periodicals, Inc.     

Layoff victim's employment relationship with a new employer in Korea: effects of unmet tenure expectations on trust and psychological contract

Existing studies of psychological contract have largely focused on the effects of contract breach on employees' attitudes and the contract itself involving the same employer. Given that both workforce mobility and downsizing activities are increasing, it is important to understand how individuals' past employment experiences shape their relationships with their employers. The present study focuses on the effect of prior layoffs on relationships with new employers. We posit that furloughed workers experience layoff as a breach of the psychological contract of job security they have entered into with their employer. Longitudinal data collected from individuals who were re-employed following a layoff revealed that unmet tenure expectations in an employment relationship result in reduced trust in a new employer, which in turn negatively impacts the quality of psychological contracts with the new employer. The results also show that the relationship between unmet tenure expectations and trust was moderated by individual attributions regarding the cause of the layoff. The present findings suggest that the negative impact of contract breach experienced with one organization may carry over to subsequent organizational contexts.     

International Union v. Johnson Controls: Resolving the dilemma between fetal protection policies and equal employment opportunities

This article examines the implications that theJohnson Controls decision is likely to have for organizational policies governing fetal protection in the workplace. A brief history of the evolution of legal theory regarding fetal protection policies and Title VII is provided. Particular attention is devoted to examining the appropriate analytical framework for such policies, the changing requirements for the employer's burden of proof, and the likely consequences of applying disparate treatment theory of discrimination over disparate impact theory in analyzing the facts of such cases. Additionally, this article raises some of the social issues that will result from the employer's responsibility to protect the unborn children of its employees and the rights of those employees to equal employment opportunities.     

The influence of organizational context on the managerial turnover–performance relationship

This study performs a comprehensive examination of organizational context in the relationship between managerial turnover and organizational performance. Using theoretical frameworks of human and social capital, we focus on the moderating roles of entity size, employment system, industry brand, and location. To test our hypotheses, we worked with the company records of a multinational fashion retail group with more than 4,000 stores grouped into eight different brands and 100,000 employees in more than 31 countries. To estimate the causal contextual effects of the relationship between voluntary managerial turnover and organizational performance, we designed a quasi-experiment using propensity score matching analysis. Our results show that the dysfunctional side of managerial turnover is significant for stores that are large, for stores managed under a primary employment system, for brands operating with higher levels of service orientation, and for countries with more restrictive employment protection legislation. We discuss the implications of these findings for practice and for future research.     

Excess worker turnover and fixed-term contracts: Causal evidence in a two-tier system

Portuguese firms engage in intense reallocation, most employers simultaneously hire and separate from workers, resulting in high excess worker turnover flows. These flows are constrained by the employment protection gap between open-ended and fixed-term contracts. We explore a reform that increased the employment protection of open-ended contracts and generated a quasi-experiment. The causal evidence points to an increase in the share and in the excess turnover of fixed-term contracts in treated firms. The excess turnover of open-ended contracts remained unchanged. This result is consistent with a high degree of substitution between open-ended and fixed-term contracts. At the firm level, we also show that excess turnover is quite heterogeneous and quantify its association with firm, match, and worker characteristics.     

How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological contract

This study aimed to investigate how mass layoffs impact surviving employees in organizations. More specifically, this study ascertained the relationships between mass layoffs and employee work behaviors. It was theorized that mass layoffs will be negatively related to employee performance and organizational citizenship behaviors (OCB) through its relationships with job insecurity and psychological contract breach. Moreover, it was expected that perceived manager support would buffer against the negative relations of contract breach with employee performance and OCB. A study among 615 employees in multiple Chilean organizations showed support for the hypotheses: job insecurity and psychological contract breach mediated the relationships between mass layoffs and employee performance and OCB. We also found moderating relationships of manager support, but the relations of breach with performance and OCB were particularly negative when manager support was high, indicating feelings of betrayal among high-support employees in response to contract breach. Moreover, the relation of contract breach with performance was positive for low-support employees, and non-significant for high-support employees. Our study advances understanding of the processes underlying how mass layoffs influence employee behavior in the workplace, through introducing the psychological contract as a way of understanding the relationships.     

Can employee ownership and human resource management policies clash in worker cooperatives? Lessons from a defunct cooperative

The article analyzes the interaction between employee ownership, HRM policies and practices, and HRM outcomes in what was the world's biggest industrial worker cooperative for decades, and now defunct, Fagor Electrodomésticos. Using longitudinal internal data and detailed interviews with key stakeholders, this paper sheds light on how employee ownership conditioned HRM policies. HRM outcomes—such as job satisfaction and absenteeism—are also analyzed over a long period of time. Chronic nepotism when recruiting new members, failures in the training policy, impoverished and Taylorist working systems, and reverse dominance hierarchies are analyzed as factors that increased free riding and caused low satisfaction and the disengagement of working members. This case study contributes to the literature on HRM and worker cooperatives as it provides some insights that are rarely found in that literature. It also provides guidance to worker cooperatives about increasing the fit between employee ownership and HRM policies and outcomes.     

Co‐Worker Exclusion and Employee Outcomes: An Investigation of the Moderating Roles of Perceived Organizational and Social Support

When does social support alleviate or exacerbate the effects of being excluded by colleagues in the workplace? This study integrates belongingness and social support theories to predict and demonstrate the differential effects of work‐related support (i.e., perceived organizational support; POS) and non‐work‐related support (i.e., family and social support; FSS) on employee reactions to co‐worker exclusion. Consistent with our predictions, we found that employees reporting high levels of co‐worker exclusion and high levels of perceived organizational support demonstrate higher levels of performance and increased levels of self‐worth than those reporting low levels of POS. Alternatively, support from family or friends intensified the negative relationship between co‐worker exclusion and self‐esteem and the positive relationship between co‐worker exclusion and job‐induced tension. Unexpectedly, FSS did not influence the supervisor‐rated task performance of excluded workers, nor did POS mitigate the relationship between co‐worker exclusion and job‐induced tension. Implications for theory, research, and practice are discussed.     

Organizational Prospects, Influence Costs, and Ownership Changes

We augment efficiency-based theories of ownership by including influence costs. Our principal conclusion is that the prospect of organizational decline and layoffs creates additional influence costs in multiunit organizations that would be absent if there was no prospect of layoffs and would be lessened or eliminated in focused organizations. This helps explain the tendency of firms to divest poorly performing units, as well as the pattern of sales of such units to firms already in businesses related to that of the divested unit.