UK: IM Sounding Board - Working in a short-term culture.

UK: IM Sounding Board - Working in a short-term culture. - Since the industrial revolution every decade has had its unique defining characteristics. Innovation, for example, epitomised the '60s. Against a background of post-war turbulence and the horrors

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Last Updated: 31 Aug 2010

Since the industrial revolution every decade has had its unique defining characteristics. Innovation, for example, epitomised the '60s. Against a background of post-war turbulence and the horrors of Vietnam, it was a decade of change in which people tested the boundaries of what was possible. It was an era that embraced new technology and led then prime minister Harold Wilson to proclaim that the 'white heat of technology' was about to transform our lives to produce a leisure age of 20-hour weeks.

The '70s was a period of industrial strife and conflict - a battleground for power between employer and employee. This industrial confrontation was highlighted by Studs Terkel in his highly acclaimed book of that period, Working. 'Work,' Terkel spelt out, 'is by its very nature about violence - to the spirit as well as the body. It is about ulcers as well as accidents, about shouting matches as well as fistfights, about nervous breakdowns as well as "kicking the dog around". It is, above all, about daily humiliations.

To survive the day is triumph enough for the walking wounded among the great many of us.'

Out of the turmoil of the '70s came the enterprise culture of the '80s, a period of industrial transformation brought about by privatisations, mergers and acquisitions, process re-engineering, strategic alliances and the like.

Unfortunately, what followed this buoyant free-market culture was the deep recession of the late '80s and early '90s.

With recession came the first signs of one of the most profound changes to working life since the industrial revolution: the beginning of the break in the psychological contract between employer and employee. In this new world of work, employers no longer offer reasonably permanent employment in return for work well done. The recession has caused organisations to downsize, delayer, flatten or 'right size'. The advent of such severe job cutting, even in the face of 'jobs well done', has produced the inevitable consequences of job insecurity and constant change. Indeed, the 1995 International Survey Research (ISR) study of 400 companies in 17 countries employing over eight million workers throughout Europe, found that UK employee satisfaction with employment security had dramatically dropped from 70% in 1985 to only 48% by 1995 (one of the biggest declines in Europe).

In addition to downsizing and all its nefarious consequences, the logical extension of the privatisation of the public sector has been the privatisation of the private sector and a growth in out-sourcing. The development of outsourcing further erodes the relationship between employer and employee because it leads inexorably toward a more insidious work environment in which the short-term contract, freelance culture or what employers euphemistically refer to as 'the flexible workforce', reigns supreme. The psychological contract between employer and employee in terms of reasonably permanent employment for work well done is now seriously at risk of being broken.

The impact of these trends is reflected in the recent Institute of Management/UMIST Quality of Working Life survey (a survey of 5,000 UK managers which will be conducted each year for the next five years). This survey reveals that 61% of the managers surveyed have undergone a major restructuring such as downsizing or outsourcing in the past year. As a result of these changes, nearly two-thirds feel less secure in their jobs and are experiencing lower morale. More worrying, however, is the fact that nearly half of these managers indicate a significant decline in motivation and loyalty to their employers (only 7% expressed increased loyalty).

This study's second major finding points to worrying changes in working patterns, contract hours, evening and weekend working. The survey shows that 82% of UK managers regularly work more than 40 hours a week, while 38% report working more than 50 hours a week and 41% always, or often, work at weekends. Moreover, this situation occurs at a time when two out of three families in the UK are two-earner relationships and the UK divorce rate is one of the highest in the EU.

Third, this research reveals that managers view poor communication and concerns about their future employability as prime causes of their insecurity.

As many as 60% of managers feel they are kept in the dark about their organisation's future strategies, while 48% say their biggest worry is financial security and employability in the wider job market. Due to the increase in outsourcing and their intrinsic job insecurity, 89% of managers say they will need to develop new skills (for example, IT and financial management) over the next five years. This search for new skills is doubtless a response to the view that, in future, they will be required to sell their services to organisations on a short-term contract basis.

Will the psychological contract between employer and employee continue to be undermined by outsourcing, downsizing and the growth of short-term contract cultures? And what will be the future consequences for individuals, their families and organisations?

As these work trends are unlikely to reverse, it is increasingly important that senior executives consider the following questions. Is job security good for business? Is a culture of long working hours really effective? Can organisations demand commitment from employees when they themselves are failing to commit to their employees ? How will less committed organisations retain key personnel? As we create more flexible or virtual organisations, how will they manage this newly dispersed workforce given the communication difficulties already apparent in existing corporate structures? What will be the consequences for the two-earner family of the changing nature of work?

As we approach the new millennium, I hope senior executives reflect on such questions. As they do so, they might bear in mind Terkel's conclusions on the nature of work: 'Work is about a search for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor, in short, for a sort of life rather than a Monday through Friday sort of dying.'

CARY COOPER

Professor of organisational psychology and pro vice-chancellor UMIST and Companion of the IM

'It is extremely important for senior executives to begin to think through the answers to some of the following questions: Is job security good for business? Can organisations demand commitment from employees when they themselves fail to commit to their employees? How will less committed organisations retain key personnel?'.

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