Friday, April 22, 2016

Everything you need to know about the employment relationship in one tweet

At the end of March, #ModernCollectiveNouns was a trending hashtag on Twitter. Here are some examples I saw:

A clutch of car mechanics.
A fraud of bankers.
A Kardashian of crap.
An avalanche of skiers.

My (ultra-academic) contribution to this was the following:

A market of economists. A unity of HR people. A plurality of industrial relationists. An alienation of Marxists.











My tweet probably didn't make much sense to most people, but students and other scholars should recognize this as capturing what I assert are the four key frames of references (or ideologies) on the employment relationship. I repeatedly return to these four frames of reference in my teaching and writing because they provide essential insights by revealing the roots of different views on labor unions, HR practices, and the like.

The first model of the employment relationship is derived from mainstream (neoclassical) economic thought and rests on a view of rational agents pursuing their individual self-interest in economic markets (because of the importance of self-interest, I label this the “egoist” model). Labor is viewed as a commodity, and only differs from other commodities in its tendency to avoid exerting full work effort (“shirking”). As labor markets are generally seen as perfectly competitive, they are embraced as the primary driver of the employment relationship. Under these assumptions, the egoist employment relationship is characterized by employees and organizations engaging in voluntary, mutually-beneficial economic transactions to buy and sell units of labor based on what the labor market will allow (and therefore outcomes are seen as fair), and abuses are prevented by labor market competition. HR practices largely implement what the market dictates, and unions interfere with the ideal operation of competitive markets.

In contrast, the unitarist model of the employment relationship views employees as psychological rather than economic actors. This model is most closely associated with scholarship in industrial/organizational psychology, organizational behavior, and human resource management such that the egoist model’s material economic interests are de-emphasized in favor of psychological interests such as satisfaction and esteem. Moreover, economic markets are seen as imperfectly competitive so profit-maximizing employers can choose their strategies for pursuing their organizational goals. And in the unitarist employment relationship, the optimal organizational strategies are those that align the interests of organizations and employees because a key assumption is that organizations and employees share a unity of all of their interests; thus, the label “unitarist” employment relationship. For example, jobs that are designed to be fulfilling will be rewarding to the employees, and the private or public sector organization will also benefit because these employees will be productive. High-road or high-commitment human resource management strategies are therefore key, unions are seen as unnecessary and as adding unproductive conflict.

An alternative perspective, the pluralist model, rejects the egoist model’s view of labor as a commodity traded in perfectly-competitive markets; rather, employees are viewed as human beings entitled to key standards and rights consistent with human dignity and citizenship. The pluralist model also rejects the unitarist view of largely shared organization-employee interests; rather, organizations and employees are seen as having a mixture of common and conflicting interests. That is, the pluralist employment relationship rests on a belief of a plurality of legitimate but sometimes-conflicting interests in the employment relationship. The classic example of conflicting interests is higher wages versus higher profits. These assumptions mean that institutional interventions are needed to better balance the bargaining power inequalities generated by imperfect labor markets, and to protect workers when organizations prioritize their own interests. Hence the important of industrial relations institutions such as labor unions and labor legislation to supplement high-road HR strategies.

The fourth and final alternative model of the employment relationship reflects radical, heterodox, and feminist scholarship in sociology, economics, and industrial relations is therefore labeled the critical employment relationship. Like the unitarist and pluralist models, this model sees labor as more than a commodity and also sees labor markets as imperfectly competitive. But where the critical perspective differs is in its emphasis on sharp conflicts of interests and unequal power dynamics between competing groups. Marxist and related perspectives focus on unequal power relations between workers and organizations, feminist perspectives focus on unequal power relations between men and women, and critical race perspectives focus on segregation and control along racial lines. In all of these critical perspectives, the employment relationship is seen as one piece of a larger socio-politico-economic system throughout which elites are able to perpetuate or reproduce their dominance, albeit with some accommodation of the interests of the weaker party in order to foster compliance and consent.

Returning to the #ModernCollectiveNouns hashtag, a friend of mine responded with "a propaganda of HR managers." Provocative! But for those who understand the competing frames of reference, this reflects an important critique from a pluralist or critical frame.

OK, maybe this isn't all that you need to know about the employment relationship, but it's an essential foundation. And maybe my #ModernCollectiveNouns tweet will help you remember this foundation.

If you want to see more applications of this framework, take a look at some of my earlier blog postings, such as:
Or for a more academic treatment, see my book chapter titled "The Employment Relationship" with Devasheesh Bhave from the Sage Handbook of Human Resource Management

26 comments:

  1. Thank you for the post and sharing the chapter. Very helpful.

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  2. Very Very Informative and Interesting, covering all the aspects of the relevant subjects which may be used any time by the aspiring candidates.

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  3. What a great way to interpret the different dimensions of employment relationships, from the perceived employer / organizations unification to the Marxist, feminist and socio-politico-economic view. Very interesting and eye opening.

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  4. The four ideologies are explained in a very engaging and realistic way. One argument builds on the previous one quite fittingly.

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  5. Quite some deep explanations into employment relationship perspectives. You made it very easy to understand. The write up states out each point clearly. Thank you for this educational piece.

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  7. Thanks Professor for helping understand the different school of thoughts in the employment relationship.

    Regina Ujomu

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  8. You make so many great points here that I read your article a couple of times. Your views are in accordance with my own for the most part. This is great content for your readers.

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  10. I read the article twice, I really enjoyed it. Your statement of "Marxist and related perspectives focus on unequal power relations between workers and organizations, feminist perspectives focus on unequal power relations between men and women, and critical race perspectives focus on segregation and control along racial lines." Strong and moving words.

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  11. Very helpful in gaining knowledge

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  12. Very helpful in gaining knowledge

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  13. This comment has been removed by the author.

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  14. it is best that worker and employer are trying to work together and accommodate each other

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  15. This is quite enlightening. Big kudos to Prof

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