Area of Research
For the past few decades, employment in Britain has been marked by a search for greater flexibility in the availability and the use of labour. In recent years, however, there has been mounting concern at the effects of this trend and an application that the corollary of a flexible labour market may be an insecure workforce, vulnerable to exploitation. (www.hrmguide.co.uk)
The law governing the relationship between an employer and an employee has become increasingly complex over the last 50 (fifty) years, with more provisions being gradually introduced. An immensely complex and highly-debated topic is Labour market flexibility, where it is argued that regulation and consequent rigidity of the job market act against growth and should be minimised, meaning to cut worker protection rights and social benefits. The chosen area of research to be explored within this paper is exploring the theories of flexible management and what impact this has had upon recent employment legislation. European labour markets face the challenge of combining greater flexibility with the need to maximise security for all. The drive for flexibility in the labour market has given rise to increasingly diverse contractual forms of employment, which can differ significantly from the standard contractual model in terms of the degree of employment and income security and relative stability of the associated working and living conditions. There are two main subjects addressed within this paper these are the theories of flexible management and recent employment legislation. This paper used existing academic literature which assisted in putting forward the flexible management theories which have been derived from several researches. This paper also aims to find the correlation between recent employment legislation and flexible management theories.
Introduction/Abstract
Against a background of increasing competition, diminishing operating profits, redundancies, business closures and mergers, and an ever higher degree of uncertainty, organisations need to have the ability to adapt to fluctuations in demand and to changes in their environment in order to be successful or even to survive. This pressing need to adapt has led organisations to be flexible in as many aspects as possible, including the search for flexibility in their production methods, their access to and availability of financial resources, the design and organisation of work.(Albizu,1997, pg.11) Specifically in the labour aspects, this ability to adapt is achieved through different forms of what is broadly defined as labour flexibility, according to the so-called managerialist stream of theoretical work on flexibility typified by the work of Atkinson (1984, 1985a, 1985b, 1987). Due to the financial positions that individuals are facing today there is a growing number of employees whom want to work more flexible, in order to achieve that balance with their jobs and social life or parental duties. Although there are some businesses that attempt to achieve that balance. However this is not at the requests of the employees in the way which will greatly favour the business, but at no interests to the employees.
Aim and Objectives
The aims and objectives of this dissertation are to explore the different forms of several methods of flexible management (working practices) and the impact this has had on recent legislation. Although there has been strong arguments that labour flexibility can lead to a greater financial success through the reduction in labour costs and the ability to use labour resources more efficiently. What I aim to present within this dissertation is the existing literature, put forward by a number of academic writers that present arguments that support the statement and those academics whom criticise the findings. What I also aim to explore, is the impact of recent employment legislation surrounding the theories of flexible management. Three influential frameworks that address flexibility at an organisational level include Atkinson's (1984) flexible firm mode, Piore and Sabel's (1984) flexible specialisation, and the lean production model that was developed in Toyota, Japan. And how much of an influence these methods have has on recent employment legislation.
Parameters of research
There are many ways in which one can be able to gather and collect information, with the most obvious and common way of research would be to search on the internet. The internet has been developing at a speed which is ever increasing and expanding, with a vast amount of information available. However this alone would not be a sufficient way of research in order to provide relevant information to display arguments, which include a range of information. By researching several companies managerial strategies which involved flexible techniques this gave me ideas as to how businesses are committed to involve theories based on flexibility within their organisation. An HRM Guide which publishes articles and news releases about human resources surveys based on employment law published an article on the Reasons to be flexible by Clive Sexton on 27th June 2008. The article read that a number of growing employees want to work more flexibly in order to achieve a better balance between their jobs and the rest of their lives. But while a growing number of organisations are trying to accommodate their employee's requests, they are doing it not out of altruism but for good business reason. Benefits range from increased motivation, productivity and retention, to better customer service and considerable reductions in both costs and CO2. The article continued by stating findings that in companies such as DSGI, BT, Lloyds TSB and First Direct, which have been strong pioneers of flexible working, flexibility for front-line staff and management levels are managed quite differently. The firms provided an array of different flexible working options, including term time or school hours working, evening or night working; compressed hours, home working and rolling shifts, and attempt accommodate the needs of front-line staff as far as possible by scheduling them in against the requirements of the business on a weekly, monthly or quarterly basis. In these leading companies, flexible working is communicated as a benefit for all staff, not just working mothers, and take up is the same among both men and women. “Communicating successful flexible working is enormously important too.” Stated Melissa Godfrey senior management at Lloyds TSB. Working more flexible doesn't mean working less hard, it often means just the opposite. BT research shows that the average productivity of an individual working from home is twenty percent higher than when they are in the office.
Case laws have been a significant source of research within this dissertation as to how the law has been interpreted in court. Journals that include recent case law enlighten how different academic writers have perceived the changes in the law and the adverse effect that it has on businesses.
The use of Employment law and Human Resource Management text books, gave a broad overview of what I've aimed to look into, which was then narrowed down. The use of the World Wide Web also assisted in keeping up to date with any recent and current issues that may be affecting the business world.
Newspaper articles more or less contributed towards the same method the internet was use to help with the research. ACAS is an organisation used by businesses for employment relations issues and also assists people in keeping up with the new legislation. The use of University lecturing handbooks was a great source of material for research.
The concept of flexibility
Atkinson's flexible firm model provides a framework based on breaking internal hierarchical labour markets by creating a ‘core' and a ‘periphery' workforce. The core workforce is said to be made up of highly skilled workers who are able to participate in decision making and are directly employed by an organisation. The peripheral workforce is characterised by low wages, low job security and having little or no autonomy in their work. The flexible firm model addresses the rigidities associated with the rules of employment established under scientific organisation designs. Bureaucratic and Tayloristic organisational structures were designed to increase productivity and management control over workers by establishing rules and procedures, designing jobs in a scientific way, and separating conception from the execution of work thus placing all knowledge of the job with management (Bartok and Martin, 1991). Atkinson identified three forms of flexibility, first is the Functional flexibility, this allows management to move workers around jobs and tasks as the needs calls. Functional flexibility is associated with the ‘core' workforce within this model and job security is exchanged for employee versatility. Secondly, is the Numerical flexibility is associated with the ‘peripheral' workforce within the flexible firm model. Numerical flexible allows management to match the need for workers with the number employed and this can be achieved through the use of a variety of short-term employment arrangements. And finally the financial flexibility, this allows the cost of labour, as indicated by hourly rates and contract prices, to reflect the supply of, and demand for, labour. Thus financial flexibility supports the implementation of functional and numerical flexibility. In the ‘Second Industrial divide', Piore and Sable (1984) argue that the world has come to a trajectory in the system of production. Despite a period of post-war wealth Piore and Sable (1984) maintain that a crisis has developed in the mass production and mass consumption economy and those five external factors that have contributed to this crisis. The five factors include the social unrest of the 1960s and 1970s and the introduction of floating exchange rates, the first oil shock and the Russian Wheat Deal, the second shock of the 1970s and the high interest rates, world recession and the debt crisis. The combining effect of these five influences has introduced price uncertainty and intensified price competition in the world market, thus creating uncertainty in mass consumption. Piore and Sable suggest that organisations need to move away from the mass production or mass consumption economy towards smaller production cycles based on flexible specialisation and a focus on niche markets (Braver man, R.Labour and Monopoly Capital, Routeledge, 1974). Flexible specialisation has four characteristics, although flexible specialisations weakens the power of labour, Piore and Sable (1984) maintain that in the long term working conditions and wages will improve. Additionally, they argue that a new craft culture is created under flexible specialisation, and skills of workers will increase to include conception and execution of tasks. Many of the underlying assumptions of flexible specialisation have been criticised as being too simplistic. Nolan and O'Donnell (1991) however enlighten the view that in order for flexible specialisation to achieve high wages and improved working conditions, such production systems will require high profits. The Lean production system was developed in the Toyota Car Company in Japan. ‘The lean production models basically argue that increased quality, productivity and flexibility can be achieved by making better use of employees' (Braver man, R.Labour and Monopoly Capital, Routeledge, pg.207, 1974).
Recent employment legislation
Over the past 40(forty) years, there has been a transformation in Employment Law. Until 1963, the rights of employees were contained almost exclusively within an individual contract of employment with very little statutory intervention other than in the areas of Health and Safety and the payment of wages. (Employment law 5th Edition pg.218, 2008, Deborah J Lockton). However 1963 saw the introduction of the Contracts of Employment Act which introduced minimum notice periods and the right to written particulars and since then various pieces of legislation have given employment protection rights which are enforced through the tribunals rather than the ordinary courts. Many of the rights such as the right not to be unfairly dismissed and the right to redundancy payments. However, in addition to these major rights are a variety of despair able individual rights which were created by the Employment Protection Act 1975 and the Employment Relations Act 1999 and which can now also be found in the Employment Rights Act 1996. It is these rights that can be found to have been said to have taken effect by flexible management theories
Background of topic
The 1970s saw New Zealand enter a period of high and sustained unemployment and experience high interest rates that slowed the economic growth. The oil shocks of the 1970s, changing markets, increased competition from Asia and the development of the European Community have all been known as factors contributing to the crisis that had been developed in New Zealand. Work practices and the regulated New Zealand economy increasingly became criticised as being too inflexible to meet the challenges of the 1980s and beyond. At the macroeconomic level, Keynesian policies that had been introduced during the post-war period were increasingly viewed as contributing to this crisis. As Bertram (1993) states “a neo-classical revival in the Western economies saw Governments advised to step back from the attempt to secure the aims of the post-war era, full employment, growth and collective responsibility for social welfare”. Deregulation, decreased in government spending and anti-flationary policy, according to the New Right, would enable market flexibility that in the medium term would encourage real economic growth leading to a higher sustained standard of living for society (Bertram 1993). The Labour Government in 1984 preceded a process of deregulating the New Zealand economy. The short-term cost of these measures was thought to include possible temporary unemployment but this would be said to be overstated if labour was priced above the “market rate”. According to 1984 Treasury briefing papers this stated that ‘workers needed to respond flexibly in a dynamic economy, and if wages could not move according to the market price, unemployment levels would (Kelsey, 1995). However, the 1984 Treasury Briefing papers also states, ‘ in a dynamic market natural unemployment levels are to be expected as a large number of new jobs are being opened, at the same time many old jobs are being closed'' (Treasury Briefing Papers, 1984, cited, in Kelsey, 1995, Pg.173). In order to allow employers and employees flexibility at the firm level, the labour markets would need to be deregulated. This however was achieved with the introduction of the Employment Contracts Acts 1991 by the recently elected National Government at the time (Kelsey, 1995). Contracts of employment is primary legal instrument that regulates employment relationships, the nature and content of contract of employment determined by applying (a) principles of common law and (b) statutory elements. According to its supporters, the Employment Contracts Act would enable employers and employees to discuss mutually beneficial employment contracts that reflected market reality, enabling enterprise level bargaining, reward productivity and training. This however encouraged more responsible union activity, and in the medium term lead to higher living standards (Kelsey 1995). Effectively, employers had managed to achieve micro level flexibility that would enable work practices to respond to the changing economic situation.
Summary of the existing thinking on this area of research
Behavioural scientists have also supported the notion of flexibility in work practices, according to Cappelli and Rogovsky (1994); specialised jobs based on scientific management do not meet the psychological needs of workers. Opportunities to widen skill bases and increase worker participation in decision making will not only help improve employee satisfaction, but will also help improve organisational productivity in the sense that due to decreased absenteeism it will improve flexibility, and on the whole employee ability to contribute to workplace improvement. Regardless of the request for the increase of flexibility at the workplace level, there has yet to be a comprehensive theory that helps explain emerging patterns of flexibility, or to predict what is likely to occur in the near future. Building on the work of Cooke et al, (1989), Blyton and Morris (1991) suggest that five broad trends are occurring in the re-organisation of industry that indicates forms of flexibility.
The current academic writing and debates
The modernisation of labour law constitutes a key element for the success of the adaptability of workers and enterprises. As the Commission's 2006 Annual Progress Report on Growth and Job emphasises that ‘The drive for flexibility in the labour market has given rise to increasingly diverse contractual forms of employment, which can differ significantly from the standard contractual model in terms of the degree of employment and income security and relative stability of the associated working and living conditions'. This is also familiar in the Atkinson's 1984 flexible firm model ‘periphical workforce'.
Findings
A study by Shirly Dex and Fiona Schiebl of the Judge Institute on Management, Cambridge University, examined the ways in which small and medium-sized enterprises, with fewer than five hundred employees, offer their employees flexibility in hours (reduced hours, term-time only working), start and finish times, and time off for personal and caring emergencies. This study found that in comparisons between similar organisations with and without flexible working arrangements indicated that flexibility, in principle, cold be incorporated into workplace environments without disrupting productivity or employee morale. It was possible to address the needs of clients whilst allowing employees more flexible working arrangements especially by using new technology. Multi-skilled teams and systems of employees accruing credit for flexibility had helped employers to offer flexibility. In Principle the study found that these practices were transferable to organisations with similar types of work that did not offer flexible arrangements. The study finally concluded that ‘a lack of time significantly hindered small employers from changing their working arrangements.
Another research which was reported by the Industrial Society indicates that flexible working patterns can help to reduce absenteeism. Managing attendance, the industrial Society's recent survey report on absence, shows that absence rates fell from an average of eight days per employee to 6.5 days during the last 18 months among almost 300 firms surveyed. HR specialists form 292 organisations were surveyed, including Boots the Chemist, Inland Revenue, London Underground, Norfolk Probation Service, Sheffield City Council and Vauxhall. See Appendix
Legal issues/ Significance of these issues
In April 2003, the U.K Government enacted legislation to help parents cope with work while caring for children. Parents with children under six years old or disabled children under the age of eighteen, have the right to work flexibility and employers have the statutory duty to consider these request seriously. (www.hrsdc.ga.ca)
One of the main benefits of this employment legislation is with the aim of working flexibility for your employee gives them the chance to fit other commitments and activities around work and make better use of their free time. Flexible working is particularly helpful for employees who have young or disabled children. Recent proposed employment legislation is the flexible working which took effect on 1st April 2009 the main purpose of this legislation is to extend the right to request flexible working to parents with children up to the age of sixteen. However, whilst such employees have the statutory right to request flexible working, those without the right may find flexible working very helpful too. Key findings from the work and life report 2008 found that the majority of respondents offer flexible working or alternative leave arrangements to all employees; only sixteen percent of respondents cited a desire to be legally compliant as a reason for managing their employee's flexibility. Nevertheless, there are limitations on what employers alone can achieve. Employer's ability to meet their objectives while offering flexible working to their staff. Offering staffs greater flexibility further regulation is unlikely to deliver a net benefit for employers and employees which are also found in the Lean production system. The broad assumption fundamental to flexibility is contrary to Braverman's (1974) thesis of a general trend towards the degradation of the labour process under capitalism; there is now a new role for enhanced skills which confer on key skill-flexible workers a cardinal role in the form of production and a core position in the workforce. However, despite the trends in reorganisation since identified by Blyton and Morris, 1991. Hyman 1991 suggest that the flexibility debate ought to be viewed with sceptism. Rather than flexibility representing a fundamental shift in the way work is organised. Many however believe that it is more about intensifying the control of capital over labour by using new management techniques (Hyman, 1991, Pollert, 1991, Smith, 1991).
Critical Analysis
Mass production structures have been criticised as being too rigid to respond to increased global competition and to increasingly sophisticated consumers demanding differentiated products. Furthermore, job designs associated with mass production have been criticised for deskilling workers which leads to high worker dissatisfaction, rendering workers unable to make decisions about how they perform their jobs. And for creating a workforce that is not able to respond to the requirements associated with the demands of new work practices. As a result calls for increased flexibility at the organisation level have been made by employer and employee groups. Flexibility promises to provide the competitive edge needed in an increasingly global market, and employees with increased participation, more interesting jobs, stable employment, and better wages and work conditions. Moreover, there still seems to be many unresolved issues relating to the flexibility debate.
What are the advantages/disadvantages of any developments?
Matthews (1994) discusses the advantages from implementing lean production system as arising from functional flexibility within the production process allowing for quick response to customer needs, being able to get things right the first time thus decreasing wastage, increased worker skill and participation allowing quick and effective on the job decisions, and the ability to change rapidly to market demand due to adaptable technology and small batch production. The success associated with the Japanese car industry has in part been attributing to lean production and attempts have been made to adopt ‘japanisation' in the USA and other countries.
Conclusion
Flexibility has led organisations to be flexible in many aspects as possible. Flexibility also promises consumers high quality and differentiated products. The findings from the study by Shirley Dex and Fiona Schiebl of the Judge Institute of Management, Cambridge University found that flexibility promises organisations the ability to become competitive in an increasingly global economy. Intriguing findings included within this paper are the influential correlation of the frameworks that address flexibility at the organisational level. Atkinson's (1984) flexible firm, main model had made an impact to recent employment legislation is the Functional flexibility which is associated with the ‘core' workforce within this model and job security is exchanged for employee versatility. The theories of flexible management has had an impact on employment, this was found in the recent study by business communications provider Inter-Tel, which identified positive reasons for applying to work flexibly. The issue of flexible management is good business sense and has made an impact on the current law (Employment Law), with the employment legislation of flexible working which took effect on 1st April 2009. The finding from research reported by the industrial society indicates that flexible working can help to reduce absenteeism. The survey showed that absence rates fell from an average of eight days per employee to 6.5 days during the last 18 months among almost 300 firms the surveyed. Some of the assumptions embedded in the flexible firm model have been criticised, however the impact of the flexible management has been used within employment law which is evident throughout this research paper. (www.hrmguide.co.uk)
