Week 1 – Read The big Squeeze on Workers Case in the text. In a Microsoft WORD formatted paper
provided a case summary and in narrative format answer the questions at the end of the case. Do not
simply list the question and answer them, but build them into a case analysis narrative format. The
paper is to be a minimum of 250 words, not counting title page and references. Ensure you use
references to support your statements of fact. Due date: Sunday 4/01/2018. Value: 75 points
Real Case: The Big Squeeze on Workers On his recent family vacation in Arizona, Peter Spina spent
much of his time camped out under a palm tree while his kids splashed around in the Scottsdale
Princess Hotel’s luxurious pool. Spina wasn’t lounging. He was working—hammering out deals on his
cell phone in a mad dash to break new accounts at Vulcan Ventures Inc., where he’s publisher of The
Sporting News. Spina says the downturn has forced him to work even longer hours than he did during
the boom—about 15% more. Ditto for his sales force. Whereas once he had lots of bonus money to
throw around, he now tries to make up for the tough slog by bringing popsicles to the office on hot
days. The added hustling is one reason his team has racked up revenue gains of 46% this year in an
abysmal ad market. “They’re working longer and harder,” says Spina. Much has been made of the
recent upsurge in productivity. Although recessions usually bring slides in this efficiency measure,
technology has made the economy more productive than ever before. But tell that to white-collar
workers, and you’re likely to hear that the gains have come on their backs. Rather than bring relief,
layoff survivors say, the downturn has only socked it to them more. They complain about managing
the orphaned workloads of downsized colleagues, scouring new avenues for business, and fighting for
high-profile posts so if the ax falls, it won’t hit them. “What we’re discovering is that in this early stage
of recovery, not only are companies making people work harder, but, believe me, some people want
to,” says J.P. Morgan Chase & Co. senior economist James E. Glassman. “They’re trying to protect their
job security.” That gripping desperation is easy for companies to use in their favor. Mike Hewitt,
director of client services at consulting firm Aquent, says he and his staff have been bending over
backwards to meet with clients who don’t have any work for them so the company can get a jump on
future business and be ready to roll when the rebound kicks in. But it’s not just fear that’s motivating
today’s work- place. A number of other structural changes are also helping bosses to extract
maximum productivity from their ranks. From the increased use of temps, to the reclassification of
hourly workers into salaried employees ineligible for overtime pay, to the rise in variable pay that
puts part of workers’ paychecks at risk, companies are now able to get more out of less. It’s hard to
say just how much more, given the state of statistical record-keeping. The Bureau of Labor Statistics
says overall weekly hours worked have dropped—in part due to manufacturers slashing hours. But
economists say it’s impossible to draw an accurate picture from the BLS data. They note that the data
is flawed because it often builds in an assumption that all levels of employees work 35 hours a
week—managers and hourly staff alike. To which many economists reply: Come on. Morgan Stanley
Dean Witter & Co. chief economist Stephen Roach, for example, believes the BLS numbers understate
the number of hours worked, therefore overstating productivity. Still, whatever the numbers say,
there’s no doubt that right now employees feel they have little choice but to accept the grueling
loads. Despite some evidence of a rebound, the job market in many quarters is still weak. Job cuts are
no longer a last resort in hard times but an ongoing tool for matching supply with demand. This is one
reason some economists predict a replay, at least initially, of the early-1990s jobless recovery. Rather

than scoop up more permanent hires at the first whiff of demand, economists say CEOs are likely to
be leery, especially with economic data so mixed. Many have bad memories of boom time hiring
binges in which they took on mediocre people just to fill slots and then wound up having to pay weeks
of costly severance. Instead, economists say CEOs are likely to focus first on extracting even more
from their existing ranks until demand reaches a breaking point. The big question now, asks Mary
Hammershock, vice-president for human resources for Silicon Valley’s Blue Martini Software, is “how
much longer can you get people to do this when the upside has gone away?” Already, companies are
looking first to bring in con- tract workers that they can quickly tap and zap without paying any
benefits or severance. In fact, the temps have been the fastest growing sector of employment. And
they aren’t accounted for as regular employees. This helps companies that use a lot of them, like Cisco
Systems Inc., to drive up revenue per employee. The growing use of the just-in-time workforce is not
the only means by which companies are priming the productivity pump. Workers complain that many
employers are taking advantage of outdated labor laws by misclassifying them as salaried-exempt so
they can skirt overtime pay. Already, Wal-Mart Stores, Taco Bell, Starbucks, and U-Haul, among
others, have been slapped with class actions. In the case of General Dynamics Corp., this resulted in a
$100 million award that is now on appeal. At Farmer’s Insurance, employees got $90 million. Some
employers are so worried about the issue that they are now doing wage-and-hour audits. Another
potential productivity enhancer: incentive pay, which enables bosses to motivate people to work
harder during tough times to make up for lost wages. General Electric Co. will soon start factoring
customer performance into employee pay, putting an even greater chunk of compensation at risk.
Under this system, if a customer’s business suffers, so does the GE employee’s paycheck. Yet even as
they push existing employees, companies also have to think about what’s down the road—the likely
return of tight labor markets and a replay of the 1990s’ battle for talent. Demographers and labor
experts note that the recession merely masked the deep skills shortages lurking within the labor
force. “It will be even worse than it was in 2000,” predicts Texas Instruments Inc. Chairman, CEO, and
President Tom Engibous. Introduction to Organizational Behavior: An Evidence-Based Approach 29
Like many CEOs, Engibous faces the tough job of balancing the need to juice profits right now with the
longer term goal of cultivating his choice employees. That’s why he has launched a “re-recruiting
initiative” at TI, asking workers what they need—days off, new assignments, a different boss—to keep
them satisfied right now. For companies that squeeze too hard, it probably already is too late.
1. Do you agree or disagree with the feeling of many downsizing survivors that increased productivity
“comes on their backs”? What does this mean and how does this have implications for managing
these employees?
2. What impact can employing temporary, just-in-time workers have for employers? For existing full-
time employees? For the temporary workers?
3. On balance, on the basis of this case, do you believe the challenges facing the management of
human resources will be easier or more difficult in the near future? Why?