Employee Voice, Human Resource Practices, and Quit Rates: Evidence from the Telecommunications Industry

In this paper, we examine the predictors of aggregate quit rates at the establishment level. We draw on strategic human resource and industrial relations theory to identify the sets of employee voice mechanisms and human resource practices that are likely to predict quit rates. With respect to alternative voice mechanisms, we find that union representation significantly predicts lower quit rates after controlling for compensation and a wide range of other human resource practices that may be affected by collective bargaining. Direct participation via offline problem-solving groups and self-directed teams is significantly negatively related to quit rates,but non-union dispute resolution procedures are not. In addition, higher relative wages and internal promotion policies significantly predict lower quit rates, while contingent staffing, electronic monitoring, and variable pay predict significantly higher rates

Examining the Incidence of Downsizing and Its Effect on Establishment Performance

The interest in examining job security and job stability has been driven in part by the phenomenon of downsizing. The distinctiveness of downsizing, as opposed to more traditional layoffs, is that the job cuts do not necessarily appear to be driven by shortfalls in demand but instead appear to be driven by the search for operating efficiencies. Despite the interest in downsizing, there has been essentially no serious investigation into its causes. I distinguish downsizing from job cuts associated with shortfalls in demand and find that employment and management practices over which employers have control, such as severance pay and profit sharing, are important predictors of subsequent downsizing and more general job losses. Surprisingly, excess operating capacity is not necessarily related to more general job losses at the establishment level. I also examine the relationship between both job losses associated with shortfalls in demand and downsizing and subsequent financial performance. The results suggest, among other things, that downsizing reduces labor costs per employee but also sales per employee. Job cuts associated with excess capacity appear to be somewhat more successful at improving sales per employee than is downsizing.

Abstracts : Policy Research working paper series - numbers 2754 - 2802

This paper contains abstracts of Policy Research working paper series, numbers 2754 - 2802.Environmental Economics&Policies,Health Economics&Finance,Health Monitoring&Evaluation,Poverty Assessment,Economic Theory&Research

New Evidence on the Link between Technological Change and Employment: Extending the Neo-Classical Paradigm

A burgeoning literature on "skill-biased" technological change (SBTC) reveals that investment in information and communications technology (ICT) is associated with workforce reductions and an increase in the demand for highly educated workers. Based on extensions of the neo-classical paradigm, researchers have also come to realize that the implementation of a new technology is often accompanied by organizational change. Two edited volumes by Marco Vivarelli, Mario Pianta, Pascal Petit, and Luc Soete provide important new evidence on the policy implications of these trends. We review these volumes and other recent studies and also provide new evidence on the relationship between technological change and organizational change, based on a comprehensive dataset of Italian manufacturing firms.

The American Customer Satisfaction Index: Nature, Purpose, and Findings

The American Customer Satisfaction Index (ACSI) is a new type of market-based performance measure for firms, industries, economic sectors, and national economies. The authors discuss the nature and purpose of ACSI and explain the theory underlying the ACSI model, the nation-wide survey methodology used to collect the data, and the econometric approach employed to estimate the indices. They also illustrate the use of ACSI in conducting benchmarking studies, both cross-sectionally and over time. The authors find customer satisfaction to be greater for goods than for services and, in turn, greater for services than for government agencies, as well as find cause for concern in the observation that customer satisfaction in the United States is declining, primarily because of decreasing satisfaction with services. The authors estimate the model for the seven major economic sectors for which data are collected. Highlights of the findings include that (1) customization is more important than reliability in determining customer satisfaction, (2) customer expectations play a greater role in sectors in which variance in production and consumption is relatively low, and (3) customer satisfaction is more quality-driven than value- or price-driven. The authors conclude with a discussion of the implications of ACSI for public policymakers, managers, consumers, and marketing in general

Skill-Biased Technological Change: Evidence from a Firm-Level Survey

Siegel provides evidence that technology adoption is associated with downsizing, skill upgrading, greater employee empowerment, and a widening wage gap. Unlike previous studies that use industry-level data, Siegel collected firm-level data on technology usage and labor composition which enable him to link the magnitude of labor market outcomes for six classes of workers to the types of technologies implemented.https://research.upjohn.org/up_press/1065/thumbnail.jp

Management Jobs in the Insurance Industry: Organizational Deskilling and Rising Pay Inequality

The attention of both the research community and the popular press has begun to shift from a traditional focus on production jobs and toward management positions in part because of a perception that a fundamental change is underway in the management ranks. Unlike the temporary layoffs of production workers that were historically driven by business cycles, the changes in management job security seem to be permanent and, in large measure, driven by development inside the firm. The most important of these forces appear to be changes in the structure of management and in the organization of work processes. The authors use a unique set of data to examine the structure of management jobs among a sample of companies and observe how those jobs have changed over time. They examine changes in the skill requirements of jobs by functional area and by level in the organization, changes in the "shape" of the organization chart - the distribution of employees across management job titles - and changes in compensation for these jobs. The data were obtained from Hay Associates, and it included the internal organization of management jobs for 11 life insurance companies. The authors see a sharp expansion in the proportion of line workers, absolute declines in the number of top management positions, and only modest growth in the number of middle managers and supervisors. As a result the organization chart has changed dramatically in these companies, becoming considerably flatter. The "span of control" has increased for every level of the organization and especially for first level management. If the widening of the supervisory span of control resulted from taking decision making and responsibility from supervisors and pushing it down to line workers, it does not seem to have increased the average skill requirements of the exempt line workers. Skill requirements for the other levels rose over the period, especially for top management positions. Overall, the average level of skill in the sample fell substantially between 1986 and 1992 (even though skills rose in two of the four levels) because of a sharp shift in the distribution of employment away from management and toward line positions. The authors suggest that the best description of these patterns is that they represent upskilling of individual jobs and deskilling of organizations. Regarding compensation, none of the levels experienced increases in skill that were statically significant, but top managers received a large (28 percent) increase in pay, middle managers received a modest (10 percent) increase, and the lower two levels received virtually no increases. One conclusion is that earnings inequality is increasing substantially inside these firms in a manner that is not attributable to any increase in skill, and the dividing line for that growth in inequality is no longer exempt/nonexempt but supervisor/manager. A possible explanation for the rising inequality in compensation is that it helps offset change in the probability of promotion. The fact that the span of control is increasing and organizational chart flattening means that the probability of the average worker being promoted is declining. The decline in the probability of promotion might reduce the incentives to work hard. Increases in the compensation of top jobs increase the return to securing a promotion and may offset some of the effect produced by the decline in the probability of promotion. Another explanation is that top mangers are in "better positions to legislate their own pay increases." If true, this sample may actually underrepresent the true extent of income inequality because it consists of companies using an external consultant to help set compensation where internal consistency is an important characteristic of the pay system. These results suggest that "management" as a career will remain attractive, albeit less certain in terms of promotion prospects. Shifts to team-based approaches and the elimination of functional designations would suggest a greater need for generalists than specialists. As technology such as expert systems reduces the need for large units of "experts," the manger's skill will be in recognizing when an expert needs to be called. Leadership skills and the ability to adapt to a changing environment are two qualities that will be sought in the future. Fortunately, these skills will also be useful to team members who are not selected for promotion to mangers. Increasing income inequality may lead to distrust within the organization, though this may be offset by the technical tracks that allow highly skilled non-managers to earn equivalent levels of pay. The fact that insurance companies are relatively unique in facing no major industry-specific shocks from the outside environment suggests that these results should translate well to organizations in other industries.

Spanning the boundaries of work: Workplace participation, political efficacy, and political involvement

Based on the political spillover theory, this study examines the boundary-spanning aspect of workplace participation—the association between participation at work and in politics. A telephone survey was conducted using a regional probability sample. Results indicate that decision involvement at work is positively associated with political voting while work community participation is positively associated with involvement in local communities and political party and campaign activities. The study reveals that internal political efficacy mediates the relationship between job autonomy and political participation

Spanning the boundaries of work: Workplace participation, political efficacy, and political involvement

Based on the political spillover theory, this study examines the boundary-spanning aspect of workplace participation—the association between participation at work and in politics. A telephone survey was conducted using a regional probability sample. Results indicate that decision involvement at work is positively associated with political voting while work community participation is positively associated with involvement in local communities and political party and campaign activities. The study reveals that internal political efficacy mediates the relationship between job autonomy and political participation

Globalization and Workers in Developing Countries

Stories on the positive and negative effects of globalization on workers in developing countries abound. But a comprehensive picture is missing and many of the stories are ideologically charged. This paper reviews the academic literature on the subject, including several studies currently under way, and derives the complications for public policy. First, it deals with the effects of openness to trade, foreign direct investment and financial crisis on averages wages. Second, it discusses the impact of exposure to world markets on the dispersion of wages by occupation, skill and gender. Third, it describes the pattern of job destruction and job creation associated with globalization. Because these two processes are not synchronized, the fourth issue addressed is the impact an unemployment rates. Fifth, the paper reviews the labor market policies that can be used to offset the adverse impacts of globalization on employment and labor earnings. Finally, it discusses how the international community could encourage developing countries to adopt sound labor market policies in the context of globalization.