Literature Review On Flexible Work Practices

Literature Review On Flexible Work Practices This literature review will attempt to appraise and analyse previous works conducted in the field of flexible work practices and work-life balance and its impact on employees. Theories such as Atkinsons flexible firm model (1984), Handys Shamrock organisation concept (1985), psychological contract and Border theory will be used to support this writing. Flexible Work Practices The origin of flexible work practices can be traced back to the 1970s when organizations in Europe experienced challenges as a result of globalization, growth of the product market, advanced technology, and a demand for reduction in the cost of labor (Sarantinos 2007). In response to this, the policy makers recommended two different ways (the low road and the high road) of managing the situation (EPOC, 1999). The`low-road` involves price competition, reduction in earnings and other benefits that were designed for the employees. In contrast, the `high road` includes technical innovation, quality endorsement and the development of the work force. Due to the social orientation of the regulatory authorities and the large number of organizations, the high road was considered to be more appropriate. Employees were however expected to cope with these developments, and this can be regarded as the starting point or the foundation of flexibility for both the employer and the employees (EPOC, 1 999). According to Rose (2008) flexibility is mostly analyzed from the perspective of revolution within the structure of employment relationship and it aids in conforming rapidly to changes in the world of technology and market opportunity. Piore (1998 cited in Rose 2008) argues that flexibility enables the workforce to be multi-skilled and it also promotes a cordial relationship between workers and management towards achieving the organizational goals and objectives. In addition, Dyer (1998) states that the ability to increase workers competencies and involvement will lead to a reduction in the level of absenteeism and increase employee satisfaction as well as the organizational productivity. Furthermore, Armstrong (2006) maintains that flexibility helps in preserving a sense of balance between work and other activities outside work. In a research conducted on Human Resource specialists from 585 organisations in United Kingdom, CIPD (2005) found a rise in the number of employees making us e of flexible contract of employment. However, Pollert (1991 cited in Creagh and Brewster 1998) suggest that drawbacks such as reduced training and development, high job insecurity and low wage should be considered while adopting these practices. It can be argued that there is no widely acceptable definition of the term flexibility in spite of its possible benefits. According to Blyton and Morris (1992: 2), flexibility is defined as the adaptability or responsiveness to pressure and it is generally represented as the opposite of rigidity. Similarly, Bucki and Pesqueux (2000) describe flexibility as the ability to vary according to needs thereby reflecting the ability to stay operational in changing conditions. Furthermore, Benner (2002: 14) states that flexibility refers to the ability to change or react to changes with little penalty in time effort, cost or performance. In addition, (Smith 1989: 203 cited in Legge 2005: 178) defined flexibility as labour market and labour process restructuring to increased versatility in design and greater adaptability of new technology in production. Again, Pilbeam and Corbridge (2006: 104) posit that flexibility is the ability of an organisation to adapt the size, composition, responsivene ss and cost of the people inputs required to achieve organizational objectives. From the above definitions, it is important to note that flexibility is influenced by changes in the economic situation, increased competition, labour market volatility and changes in the world of technology. Wilson et al (2008) explains that different meaning could be ascribed to the term flexibility. According to the author, flexibility can be identified with high commitment work practices and it includes career development, team work, and multi skilling. Presumably, these practices should increase employee satisfaction and motivation and ultimately an increase in the firms competitive advantage. On the contrary, some organizations adopt flexible practices which involve the use of low-priced casual workers for the purpose of meeting changes in customers demand and generating performance benefit. EEF (2009) also maintains that the word flexibility can be analysed from two perspectives. For the employees, flexibility is often used to depict the right to demand for work practices such as home-working, term-time working, part-time working, flexitime and job sharing, annual or compressed hours. Thus, flexibility helps in creating a wide range of motivating jobs and a better working condition for the employees (Dyer 1998). From the employers point of view, flexibility is often used as an abbreviation of the flexible labour markets. It enables the employer to regulate the way work is done in order to meet up with changes in demand (EEF 2009). Thus, flexibility ensures that the organisation remains globally competitive. According to (Bouchikhi and Kimberly cited in Mullins 2007), one of the major challenges that organisations encounter within the flexible labour market is an understanding of individuals wants; and the need to support employee-driven flexibility. Furthermore, Pilbeam and Corbridge (2006) analyzed the term flexibility from two contexts. The first is from the employers viewpoint and it is concerned with the managements pursuit of workers flexibility in order to increase profitability and maximize efficiency. The second aspect is seen from an employees perspective and it is generally addressed by means of rearranging or restructuring of the patterns of work. The study of flexibility from the employees perspective remains the focus of this write-up as it involves the endorsement of flexible working practices to improve work-life balance. Several writers such as (Blyton and Morris 1992; Atkinson 1984; Bramham 1994; Sparrow and Marchington 1998 cited Pilbeam and Corbridge 2006, Lewis et al 2003; Torrington et al 2008; Armstrong 2006; Legge 2005; Dyer 1998) have attempted to identify the different types of flexibility which exists in the workplace. They include functional, numerical, financial geographical, temporal, skills and structural flexibility. Functional flexibility affords management the ability to quickly re-assign workers between different tasks based on jobs requirements (Sisson and Storey 2003). Furthermore, Dyer (1998) maintains that such movement enhances on-the-job training and it also increases employees satisfaction and productivity. Functional flexibility is associated with the core workforce within the Atkinson model (Lewis et al 2003). Atkinson argues that the core workforce is expected to apply their skills across a wide range of tasks in order to contribute significantly to the achievement of organisational success (Marchington and Wilkinson 2008). According to Torrington et al (2008), the rationale behind functional flexibility is to enable employees acquire the skills needed to embark on different assignments, thus ensuring versatility within the work place. However, Legge (2005) argues that functional flexibility is about work amplification and managements ability to exert control over the work force. Nev ertheless, functional flexibility increases employees competencies and ensures a quick response to demand (Mabey et al 1998). Numerical flexibility is the firms ability to increase and reduce the number of work force in response to fluctuations in the demand for product or services (Armstrong 2006). Price (2006) maintains that there is difficulty in achieving this form of flexibility with the core workforce; and Blyton and Morris (1991) conclude that numerical flexibility can be achieved through the use of the peripheral employees within the Atkinsons model. Working practices which incorporates elements of numerical flexibility includes part-time employment, self employment, short-term contracts, job sharing, homework, and agency temps. (Dyer 1998). According to Sparrow and Marchington (1998), numerical flexibility increases employees empowerment because if gives an opportunity for individuals to define their own job. Legge (2005: 178) however argues that one of the reasons why organizations adopt numerical flexibility is to suppress the permanency of employment relationship; thereby making employee redunda ncy an acceptable practice within the employment relationship. (Conclude with statistics) Financial flexibility is the ability of an organization to regulate employment overheads by allocating labour costs to substantiate the supply of and demand for labour so as to increase profitability. It includes payment in relation to performance and the use of local market rates in establishing the cost of labour. To be applied, it requires the utilisation of temporal flexibility as well as the application of non- consolidated bonus pay and non- pensionable payment to steer clear of any expense that encourages a rise in cost (Pilbeam and Corbridge 2006). In addition, financial flexibility supports the implementation of functional and numerical flexibility (Dyer 1998). Temporal flexibility has to do with the arrangement of working hours so as to meet up with production demands. Its aim is to maximise productive time and minimise unproductive time. However, Muller-Camen (2008) argues that the aim of temporal flexibility is to reduce the payment of overtime premium, even though it helps in coping with high customer demand. Geographical flexibility involves the ability of organisation to engage the employee in distant working and it is achieved through better use of technology. To be applied, the employee requires access to organisations facilities from home usually for specific occasion or as situation demands. Arguably, geographical flexibility ensures job security and it enhances efficiency in the execution of work (Stredwick 2000). Forms of flexibility are flexible time, part-time working, overtime, job rotation, shifting, compressed hour, annualised hour, term time Two influential frameworks that address flexibility at the organisational level include Atkinsons (1984) flexible firm model and Handy (1985) shamrock organisation. The flexible firm model was developed by Atkinson in 1984 and it is useful in evaluating the general concept of flexibility (Stredwick 2000). The model contains all the various forms of flexibility discussed above and it also recognises some of the consequences of the flexible work force. Atkinsons (1984) flexible firm Atkinson reinforces an optimist view to flexibility, he argues that economic recession and technological changes have encouraged employers to make their firm more flexible thereby increasing productivity (Rose 2008). Atkinson believes that flexibility addresses the rigidities associated with the rules of employment established under scientific organisation designs where management control over workers was used to increase productivity (Dyer 1998). Atkinsons flexible firm model provides a framework based on breaking internal hierarchical labour markets by creating a core and a periphery workforce; and the author further argues that the flexible firm has a variety of ways of meeting the need of human resources (Torrington et al 2008). The core work force is made up of highly skilled workers (such as management, technical staff and other professionals) who are considered critical to organisational success by their ability to sustain the organisations competitive advantage (Pilbeam and Corbridge 2006). They are highly regarded by the employer, well paid and they are involved in the firms decision making (Torrington et al 2008). In addition, they tend to have development and career opportunities in order to secure their long-term commitment to the organisations. In return, these employees are expected to be functionally flexible by applying their skills across a wide range of tasks in order to contribute significantly to the achievement of organisational success (Marchington and Wilkinson 2008). Whittington (1991 cited in Dyer 1998) however challenge the benefits associated with the core workforce and argues that improved working conditions and better pay is achieved through work intensification. In addition, Ursell (1991 cited in Dyer 1998) maintain that the scope of decision making associated with the core workforce is likely to be very limited and found that budgets, performance appraisals and selection techniques are being used to both monitor and control the extent of autonomy given to the core work force. The peripheral workforce is characterised by low wages, low job security with little or no autonomy in their work Dyer (1998) and are subdivided into several segments. The first group is known as the first peripheral. Employees in this group are drawn from the secondary labour market and they have skills and knowledge profile which is general rather than specific to the core business of the organisation (Pilbeam and Corbridge 2006). They are employed on contracts with some degree of permanence. They are important but not critical to organisation success as their skills and knowledge will normally be readily available in external labour market. Consequently, they cannot expect similar degrees of security as their colleagues from the core even if they display some functional flexibility (Marchington and Wilkinson 2008). Instead of having a career, these group of employees only have job (Pilbeam and Corbridge 2006). They can be regarded as labour on call providing a buffer stock of reso urces enabling the organisation to expand and contract organically Rose (2008); hence they are seen as numerically flexible. Marchington and Wilkinson (2008) however argue against categorising all workers in this group as peripherals because some part time workers are critical to the success of the business given their close contact with customers and their contribution to business goals. Examples include administrative, secretarial, sales, production and supervisory staff. The second peripheral group comprises individuals who find it hard to break into internal labour market and whose employment experiences tend to be precarious, with little realistic prospect of employment security (Marchington and Wilkinson 2008). They consist of beck and call workers (such as caterers, cleaners or assembly workers) characterized by casual, zero hours or core hours contract of employment (Pilbeam and Corbridge 2006). They have a limited contract of employment (either short term or part time) and they enjoy even less security (Torrington et al 2008). In addition, they have relatively restricted reward package and they can easily be replaced. They provide dynamic forms of numerical and financial flexibility and they can be said to have work rather than jobs or career. Examples include cleaners, drivers, caterers etc. Beyond the peripheral group are those individuals who are clearly external to the host organisation but employed by another employer or in self employment (Marchington and Wilkinson 2008). This group also includes labour provided through contracts for services and the sub-contracting of work to other organisations. Workers supplied through agencies also fit into this category (Pilbeam and Corbridge 2006). In contrast to the first and second peripheral, this group also include elite portfolio workers who possess skills for which there is high demand. They provide work on a paid for result or consultancy basis, and where the correspondingly high rewards compensate for any lack of employment security or regularity (Pilbeam and Corbridge 2006). Examples include information technology providers, teachers and lecturers, interim managers or even chief executives. Critiques of the flexible firm model The flexible firm model has been criticised as not been backed up by facts Muller-Camen (2008); and (Legge 2005; Torrington 2008) highlights the vagueness in the model as to whether the model is a description of trends or a prescription of the future. Sarantinos (2007) however claims that the model maintains clarity in classifying the different kind of flexibility and it highlights the methods which organisation are adopting in order to achieve a flexible model. Nonetheless, Dyer (1998) maintains that the notion that organizations have pursued flexibility by introducing core and periphery labor management strategies has been disputed. According to the author, rather than flexibility representing a fundamental shift in the way work is organized, it is more about intensifying the control of capital over labor by using new management techniques. In a research conducted on a group of scientists, Whittington (1991) found that market pressure had forced the research staff (who theoreticall y fall into the core category) to work harder and to respond rapidly to shifting client needs. Subsequently, (Ursell 1991; Smith 1991) argues that although the flexible firm model may use different tactics, the goal of flexible firms is the same as that of management under the Fordist model that of achieving management control over committed workers and utilizing the knowledge of the employee in the pursuit of profit. In addition, the status of the periphery workforce as opposed to the core is also challenged. According to Lewis et al (2003), the flexible firm analyses have a tendency to trigger different feelings among the employees especially the classification of employees into core and peripherals. Furthermore, (Geary 1992 cited in Pilbeam and Corbridge 2006) argues that the division of employee into peripherals perpetuates inequality and contradicts the main maxim of human resource management which is to value and develop employees as the organisations major asset. Similarly, Torrington et al (2008) maintains that this division is incompatible with the best practice approaches to HRM which seek to increase peoples management and development in order to achieve the goals of the organisation. Besides, Torrington et al (2008) also argues that this could lead to a negative effect on employees psychological contract, which according to Lewis et al (2003) is a tool used in analysing the employment relationship that exists between the employer and the employee. HANDY SHAMROCK PSYCHOLOGICAL CONTRACT There have been major changes in the economy (as discussed above) over the last few decades leaving employees with different requirements from work. In addition, employees level of education has greatly improved with an increased knowledge of their preferences, and the ideas they develop exceeds that of the former generation (Stredwick and Ellis 2002). This changes have resulted into a transition from traditional contracts (where the employee perceives that the employer guarantees a job for life in response to their allegiance), to contracts where employees loyalty is dependent on a rise in earnings and increased training (Smithson and Lewis 2003). Such changes have been summarised as a move from relational contracts, depending upon reciprocal trust and commitment, to the one that is transactional, based upon negotiation and short term economic exchange (Herriot and Pemberton 1995 cited in Lewis et al 2003). Arguably, these changes affect employees attitudes and behaviour; and the psychological contract is considered to be a relevant tool in understanding and managing these changes (Conway and Briner 2005). This is because the psychological contract evaluates the individual aspect of employment relationship and this appears to be associated with flexibility advancement (Guest 2004). In addition, psychological contract presents a peculiar insight into the effect of flexible work practices (Guest 2004). It is a concept which has the capacity to explain the transformation that people goes through in the employment relationship (Arnold 1996). The term psychological contract was first used by Argyris in 1960 to explain the relationship which exists between a group of employees and their foreman (Coyle-Sharpiro 2000); though Conway and Briner (2005) argue that Argyris work was not subjected to theoretical analysis. According to Guest (2006), the psychological contract is the perception of both parties to the employment relationship, organization and individual of the reciprocal promises and obligations implied in that relationship. Another definition that focuses more on the employee is by Rousseau (1995). The author defined psychological contract as an individuals beliefs shaped by the organisation, regarding the terms of an exchange agreement between individuals and their organisation. Guest (1998) however argues that Rousseaus definition of the psychological contract is defective because it focuses on employee alone and he stresses the fact that the contract is the perception of both parties to employment relationship. C IPD (2003) further explains that the psychological contract is unlike the formal contract of employment and it is largely unwritten. It focuses on each partys perception of the employment relationship, it involves sincerity, reciprocated trust, and a duty of care; and it is more effective compared to the written contract in affecting employees behaviour (Stredwick and Ellis 2003). Coyle-Shapiro (2000) argues that the content of the psychological contract is influenced by employees view of the employment relationship. A positive psychological contract is directly related to job fulfilment and commitment which ultimately will result in an increase on performance. Similarly, a reduction on performance is likely to occur when the psychological contract is negative. With the introduction of flexible work practices, some employees (especially the peripherals) might assume that the organization has failed in developing their potentials thus reneging on its obligations. In an investigation conducted on some workers in a Swedish hospital, and result shows that individuals on flexible employment demonstrated higher levels of jobs insecurity and reduced organisational commitment (Sverke et al 2000). Arguably workers on flexible contracts are mostly associated with low benefits and they enjoy less opportunity towards training and development (Atkinson 1984). Consequently, they experience job dissatisfaction, mental discomfort and a negative life outside of work Guest (2004); leading to a reduction in loyalty and poor performance regarding organizations objectives. This is known as the violation or breach of the psychological contract (Rousseau 1995). (Morrinson and Robinson 1997 cited in Conway and Briner 2005) however argue that there is a distinction between breach and violation of the psychological contract. Subsequently, Kramer (2006) refers to a breach of the psychological contract as the perception held by someone in a relationship that another person in the relationship has failed to perform the promised obligations; and violation is referred to as the intense emotional reactions that comes with breaches (Morrinson and Robinson 1997 cited in Conway and Briner 2005). According to Conway and Briner (2005), the main way of understanding how the psychological contract affects employees reaction is when breach occurs. Employees who perceive breaches in the psychological contract think about their relationship with the organisation from a negative point of view, and demonstrate increase intention to quit the organisation (Robinson and Rousseau 1994). Similarly, Cortvriend (2004) found that violation is positively related to employee de-motivation, negative attitudes towards the job and withdrawal from the organisation. Furthermore, (Robinson and Morrison 1995 cited in Arnold 1996) found that employees who perceive a violation in their psychological contract usually report negative organizational citizenship behaviour (OCB). OCB is defined as a readiness to contribute beyond literal contractual obligations (Organ 1988: 22 cited in Coyle-Shapiro). Based on the above discussion, flexibility is directly related to perception of job insecurity and a breach of employees psychological contract; as a result, flexibility is portrayed as an unconstructive theory. Guest (2004) however stresses that this should not be used as a global conclusion. Consequently, Marler et al (2002) emphasis the fact that different employees consent to flexible employment for different reasons; hence they should not be treated the same way. Furthermore, Guest (2004) attempted to differentiate between workers on the margin of employment and knowledge worker whose contract of employment is by choice. Workers on the margin of employment are those whose competencies are low and those with poor bargaining power thus they experience unfavourable treatment from employers. As a result, they suffer increase job insecurity and reduced opportunity for training and development. On the other hand, knowledge workers are those who incline towards flexibility and whose em ployment contract is by choice (Capelli 1991). They consist of temporary workers, part-time or even self employed. These workers embrace flexible work practices and they have the capacity to move between employments as they desire. In contrast to general assumptions, workers who choose flexible contract enjoy higher job satisfaction and they suffer no insecurity in their employment. In a general research conducted by the IPD into the present disposition of the psychological contract, findings revealed that the psychological contract was in an improved condition than expected (Stredwick and Ellis 2003). 81% of participants affirmed that their employers were fair in dealing with them, and 72% believed that their organisation will honour its undertakings and obligations (Stredwick and Ellis 2003). Guest and Conway (1999) however attempted to assess the state of psychological contracts of core employees with the peripherals and found that a better state of psychological contract was reported by the peripherals. However, Dyer (1998) argues that the reason for this is because the peripheral workers exhibit more of transactional relationship and they tend to respond more quickly to changes in the composition of the psychological contract with changes in their pay. This argument can be supported by a survey conducted in the American aerospace industry with a sample of 1 99 employees on permanent contract and 24 employees on flexible contract (Pearce and Randel 1998). Pay differentials exists within the work place with employees on flexible contract earning more than those on permanent contract. Results show little or no difference in perceived job security, performance and job satisfaction between temporary and permanent workers. In a survey carried out for the UK Department of Education and Employment on 607 workers who enjoy flexible work practices (Tremlett and Collins 1999), 68% mentioned choice of work, reduction in workload and an improved work-life balance as some advantages of flexibility. Conversely, 79% mentioned the negative aspects of flexibility as job insecurity, difficulty in working as a team, reduced benefits and treatment lower than that of permanent workers. However, (Pearce and Randell 1998) argues that the perceived effect of flexible work practice can best be determined by employees career preference; that is, whether the choice of flexible contract was intentional or not. In the UK survey reported by Tremlett and Collins (1999), 147 out of 607 did not want a permanent job. As the main reason for this, they cited not wanting the commitment that goes with permanent employment (21%), the loss of freedom to choose the work they wanted to do (19%), being too old (18%) and general lack of int erest in permanent employment (18%). WORK-LIFE BALANCE Work-life balance initiative was developed as a result of changes within the work force involving an increase in the number of women, ageing population (author); and increased understanding of the importance of employees management to organisational success (Maxwell 2005). The rapid growth of this practice was supported by government legislation which introduced the right to request flexible working also known as family friendly policy (CIPD 2010). This right was initially available for parents with children below six years of age or with disabled children below the age of eighteen years. However, there is an ongoing consideration to extend the right to parents with children under the age of sixteen years (Pitt 2009). The aim of this policy is to ensure that skills and experience needed to sustain the economy is readily available by allowing parents (especially mothers) balance work with other family responsibilities. However (Lea 2001 cited in Torrington et al 2008) argues that this policy could prevent women with family responsibilities from being hired thereby hindering womens employment prospect. Nevertheless, Manfredi and Holliday (2004) maintain that the practice impacts positively on womens career path. Another reason for the growth of family friendly policy is an increase in the number of aged people. According to Manfredi and Holliday (2004), the population is ageing thereby leading to a rise in caring responsibilities for elderly parents in addition to child care responsibilities. This however, led to carers of some specified group of adults becoming eligible for this right from April 2007. As a result of growing recognition of employees in sustaining competitive advantage, this right was further developed into work-life balance policies to include employees without family responsibilities and who desire to benefit from flexible work practices for personal reasons (Fleetwood 2007). This arguably will reduce the risk of alienation and ensure that all employees are seen as business investments and valuable assets (Maxwell 2005). According to Work foundation (2003b) work-life balance is defined as the ability of employees to achieve a satisfactory equilibrium between work and non work activities such as caring responsibilities and some other interests. Similarly, employers for work-life balance also defined WLB as about people having a measure of control over when, where and how they work leading them to enjoy an optimal quality of life. Furthermore, DTI (2005) defined work-life balance as being about adjusting working patterns regardless of age, race or gender, so everyone can find a rhythm to help them combine work with other responsibilities or aspiration. In addition, Heckerson and Laser (2006: 27) define work-life balance as a state whereby the needs and requirements of work are weighed together to create an equitable share of time that allows for work to be completed and a professionals private life to get attention. The concept of work-life balance is based on employees capability to synchronize respon sibilities at work and other interests outside work without causing conflict. According to IDS (2008a), work-life balance involves the availability of flexible work practices developed to enable employees participate in activities outside work in addition to fulfilling their job responsibilities; thus it is designed to promote flexibility (Maxwell 2005). Fleetwood (2007) argue that there is an inextricable link between the practices associated with work-life balance and that of flexible working. The author however stresses the differences between employee flexibility (employer unfriendly) and employer flexibility (employee unfriendly); and further states that employer and employees flexibility should not be used interchangeably because the former constrains work-life balance, while the latter enhances work-life balance. Work-life balance practices that make up employee flexibility are working time arrangements (such as home working, part tim