[Get Answer ]-Organizational Behavior Assignment 1

Question Description

CASE INCIDENT 2 Era of the DisposableWorker?

The great global recession has claimedmany victims. In many countries, unemployment is at near-historic highs, andeven those who have managed to keep their jobs have often been asked to acceptreduced work hours or pay cuts. Another consequence of the current business andeconomic environment is an increase in the number of individuals employed on atemporary or contingent basis.

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The statistics on U.S. temporary workersare grim. Many, like single mother Tammy Smith, have no health insurance, noretirement benefits, no vacation, no severance, and no access to unemploymentinsurance. Increases in layoffs mean that many jobs formerly considered safehave become “temporary” in the sense that they could disappear at any time withlittle warning. Forecasts suggest that the next 5 to 10 years will be similar,with small pay increases, worse working conditions, and low levels of jobsecurity. As Peter Cappelli of the University of Pennsylvania’s Wharton Schoolnotes, “Employers are trying to get rid of all fixed costs. First they did itwith employment benefits. Now they’re doing it with the jobs themselves.Everything is variable.” We might suppose these corporate actions are largelytaking place in an era of diminishing profitability. However, data from thefinancial sector is not consistent with this explanation. Among Fortune 500companies, 2009 saw the second-largest jump in corporate earnings in the list’s56-year history. Moreover, many of these gains do not appear to be the resultof increases in revenue. Rather, they reflect dramatic decreases in laborcosts. One equity market researcher noted, “The largest part of the gain camefrom lower payrolls rather than the sluggish rise in sales …” Wages also roseonly slightly during this period of rapidly increasing corporate profitability.

Some observers suggest the very nature ofcorporate profit monitoring is to blame for the discrepancy between corporateprofitability and outcomes for workers. Some have noted that teachers whoseevaluations are based on standardized test scores tend to “teach to the test,”to the detriment of other areas of learning. In the same way, when a company isjudged primarily by the single metric of a stock price, executives naturallytry their best to increase this number, possibly to the detriment of otherconcerns like employee well-being or corporate culture. On the other hand,others defend corporate actions that increase the degree to which they cantreat labor flexibly, noting that in an increasingly competitive globalmarketplace, it might be necessary to sacrifice some jobs to save theorganization as a whole.

The issues of how executives makedecisions about workforce allocation, how job security and corporate loyaltyinfluence employee behavior, and how emotional reactions come to surround theseissues are all core components of organizational behavior research.



To what extent can individual businessdecisions (as opposed to economic forces) explain deterioration in workingconditions for many workers?


Do business organizations have aresponsibility to ensure that employees have secure jobs with good 3536workingconditions, or is their primary responsibility to shareholders?


What alternative measures oforganizational performance, besides share prices, do you think might change thefocus of business leaders?


What do you think the likely impact of thegrowth of temporary employment relationships will be for employee attitudes andbehaviors? How would you develop a measurement system to evaluate the impact ofcorporate downsizing and temporary job assignments on employees?

Sources: Based on P. Coy, M. Conlin, andM. Herbst, “The Disposable Worker,” Bloomberg Businessweek (January 7, 2010),www.businessweek.com; S. Tully, “Fortune 500: Profits Bounce Back,” Fortune(May 3, 2010), pp. 140–144; D. Ariely, “You Are What You Measure,” HarvardBusiness Review (June 2010), p. 38.

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