1. How can managers use recommendations derived from need theories to motivate temporary employees? Discuss.
2. To what extent can managers use Herzberg's two-factor theory to motivate temporary workers? Explain your ideas for applying this theory.
3. To what extent is the growing use of temporary workers consistent with both equity and expectancy theory? Explain.
4. What are the key lessons learned from this case? Discuss.
You know American workers are in bad shape when a low-paying, no-benefits job is considered a sweet deal. Their situation isn't likely to improve soon; some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That's because this [2008-2009] recession's unusual ferocity has accelerated trends-including offshoring, automation, the decline of labor unions' influence, new management techniques, and regulatory changes-that already had been eroding worker's economic standing.
The forecast for the next 5 to 10 years: more of the same, with paltry pay gains, worsening working conditions, and little job security. Right on up to the C-suite, more jobs will be freelance and temporary, and even seemingly permanent positions will be at greater risk....
Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School, says the brutal recession has prompted more companies to create just-in-time labor forces that can be turned on and off like a spigot. "Employers are trying to get rid of all fixed costs," Cappelli says. "First they did it with employee benefits. Now they're doing it with the jobs themselves. Everything is variable."... Diminishing job security is also widening the gap between the highest- and lowest-paid workers.
At the top, people with sought-after skills can earn more by jumping from assignment to assignment than they can by sticking with one company. But for the least educated, who have no special skills to sell, the new deal for labor offers nothing but downside. Employers prize flexibility, of course. But if they aren't careful they can wind up with an alienated, dispirited workforce. A Conference Board survey released January 5 [2010] found that only 45% of workers surveyed were satisfied with their jobs, the lowest in 22 years of polling. Poor morale can devastate performance...
The trend toward a perma-temp world had been developing for years. Bosses are no longer rewarded based on how many people they supervise, so they have less incentive to hang on to staff. Instead the increasing use of bonuses tied to short term profit performance gives managers and incentive to slash labor costs. The Iowa Policy Project, a nonpartisan think tank, estimates that 26% of the U.S. workforce had jobs in 2005 that were in one way or another "nonstandard." That includes independent contractors, temps, part-timers, and freelancers. Of those, 73% had no access to a retirement plan from their employer, and 61% had no health insurance from their employer, the Iowa group said.
Temp employment in the U.S. fluctuates wildly, by design. The whole purpose of bringing on workers who are employed by temporary staffing firms such as Manpower, Adecco, and Kelly Services is that they're easy to shuck off when unneeded. While the number of temps fell sharply during the recent recession, the ranks of involuntary part-timers soared. The tally of Americans working part-time for economic reasons-that is, because full-time work is unavailable-has doubled since the recession began, to 9.2 million....
Boeing typifies the companies that are taking advantage of flexibility. In 2009, it cut 1,500 contingent workers from its commercial division. Says spokesman Jim Proulx: "The first imperative was to reduce all of the contract and contingent labor that we possibly could to shield our regular employees from those layoffs." Boeing says less than 3% of its workforce is contingent. It has also reduced its dependence on costly permanent staff in the U.S. by making new hires abroad. Last March [2009 ] it announced a research and development center in Bangalore, that will "coordinate the work of more than 1,500 technologists, including 100 advanced technology researchers, from across India." Bill Dugovich, a spokesman for Boeing's white-collar union in the U.S., the SPEEA, complains that the Indian workers "are basically contract labor." For years Microsoft has been an avid user of temporary-staffing firms such as Volt Information Sciences for a variety of short-term projects, including writing chunks of software, say Microsoft spokesman Lou Gellos. "Our contingent workforce fluctuates wildly depending on the different projects that are going on," Gellos says." Somebody does just part of a project. They're experts in it. Boom, boom, they're finished." Temps are especially appealing to companies in cyclical industries. "We have been able to get really good talent. Off the charts," says Jeff Barrett, CEO of Eggrock, a manufacturer of pre-built bathrooms based in Littleton, Massachusetts. It has brought on dozens of plumbers, electricians, and administrative workers through Manpower to handle a spike in orders....
The world of temporary work used to be the domain of sneaker-footed admins. No longer. Last year, Kelly Services placed more than 100 people including lawyers and scientists-in interim stints that paid more than $250,000 a year. At the forefront of the "leadership on demand "movement in the U.S. is the Business Talent Group, whose roster of 1,000 executives has done jobs at companies like mobile-phone content provider Fox Mobile, healthcare company Health ways, and private equity firm Carlyle Group. BTG says its client demand rose 50% in 2009.
Sydney Reiner, of Southern California, has had five assignments in five years as interim chief marketing officer at companies like Coffee Bean & Tea Leaf and Godiva Chocolatier. "I got a call from Godiva on a Wednesday asking if I could be on a plane to Japan on Saturday," says Reiner. "I was." For the past two months, she's been the interim chief marketing officer at beverage maker POM
Wonderful. Reiner prefers the challenge of working in short, adrenaline-packed chunks. But . . . the University of Chicago MBA has no access to employer-sponsored health insurance and other benefits. Says Reiner: "To some extent I end up working as hard as a permanent employee, without a Jot of the benefits."...
At the bottom of the ladder, workers are so powerless that simply getting the minimum wage they're entitled to can be a struggle. A study released in September [2009] and financed by the Ford, Joyce, Haynes, and Russell Sage Foundations found that low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage. It followed a Government Accountability Office report from March 2009 that found that poor oversight by the Labor Dept.'s Wage and Hour Div. leaves low-wage workers "vulnerable to wage theft." Some companies have been fined for misclassifying employees as freelancers and then denying them benefits. Meanwhile, the George W. Bush Administration made it easier for people earning as little as $23,600 a year not to be covered by overtime-pay rules.
Workers hired for temporary or contract work face a higher risk of developing mental health problems like depression, according to research presented in 2009 by Amelie Quesnel-Vallee of McGill University. A lack of job security and health-care benefits, as well as social ties to the rest of the workforce, increase stress levels for temps and contractors.... The situation is especially difficult for young people, many of whom haven't been able to get a first foot on the career ladder. The percentage of people 16 to 24 who have jobs has plummeted by 13 percentage points since the beginning of 2000, while the share of workers 55 and over who have jobs has edged up over that period, despite the recession. Some young people are so desperate to get a start, they're working for free as semi-permanent interns....
When employment in the U.S. eventually recovers, it's likely to be because American workers swallow hard and accept lower pay. That has been the pattern for decades now: Shockingly, pay for production and nonsupervisory workers-80% of the private workforce-is 9% lower than it was in 1973, adjusted for inflation....
Look far enough into the future and it's possible to see better times ahead for labor. A decade from now the retirement on the baby boom generation could cause labor shortages and hand some bargaining power back to younger workers, says Robert Mellman, a senior economist at JPMorgan Chase Bank. If that happens, woe unto employers. A survey in 2009 by the benefits consultant now known as Towers Watson found that top-performing employees will be ready to jump ship as soon as a better offer comes along. Says Wharton's Cappelli: "The idea of loyalty-'I will stick with you and you will reward me'-that is effectively gone."