The Global Economy and the New Employee-Employer Relationship

The Global Economy and the New Employee-Employer Relationship

The new global economy has forced a reorganizing of the American workplace. In times past the workplace provided job security, training and internal employee development to improve employee performance and commitment. The new revolution in employee-employer relationships has allowed companies to reduce costs, increase flexibility, and generally improve performance. But where the old structure protected employees, new ones emphasize downsizing, part time or contingent workers, outsourcing, and compensation based on individual merit and overall organizational performance. These new organizations shift much of the risk of the company from stakeholders to employees and increase the demands on workers while reducing their compensation. Therefore employees have been penalized for the restructuring of the American workplace.

There are three distinct periods of the American workplace: industrial, post-industrial and contemporary. The Industrial was the period before WWII. The Post-Industrial was prevalent for most of the 20th century, and the contemporary emerged during the late 1980’s and 1990’s.

During the industrial period, training was informal and occurred on the job. Foreman had primary control over the workers. The fear of being fired was the primary source of worker control. There was no job security. The Post-industrial period was a product or partly in reaction to the growing union movement, partly from efforts by management to increase productivity on the heels of WWI. During this period there was a clear distinction between the interests of shareholders and those of management. Clear distinction between the work of management and the work of labor. Managers did the "thinking work," labor did the physical or mechanical work. Employment decisions were based on pre-established, objectives such as seniority, years of training, etc, rather than on individual merit. Unskilled workers were hired to work in the factories; recent college graduates for management. Factory workers started with simple task and gradually learned more difficult ones; young managers had more explicit training programs and job rotation. Large corporations might have training departments. Promotion tended to follow training schedules, one could move up as one learned to handle more complex assignments. There were often "fast tracks" for employees with special relationships or with highly desirable qualities. Organizational structures were organized by function. Decision-making power was at the top and had to flow through too many levels. There was a sense of job security, based on a seniority system.