Thursday, July 13, 2006

New American Workplace

Excerpt from the book: The New American Workplace (Palgrave Macmillian) by James O'Toole and Edward E. Lawler III.

Executive Summary

"According to O'Toole and Lawler, as local retailers disappear from Main Street and old-line manufacturing companies downsize, they are being replaced by three emerging types of organizations:
1.) low-cost operators (like Wal-Mart),
2.) global competitor corporations (like Microsoft)
3.) high-involvement companies (like WL Gore).

These differ radically in terms of their business models, labor productivity and working conditions."

"Low-cost operators hire retirees, young workers and students, less-educated workers with few options, immigrants with limited English-language skills and those who are unable or unwilling to take jobs requiring more responsibility. Employees in these organizations are paid close to the minimum wage, receive few, if any, benefits, have no job security and are given only the amount of training needed to do jobs that have been designed to be simple and easy to learn."

"Global competitor organizations are enormous in terms of both size and geographic reach but they offer little stability for employees. Despite this, these organizations are often considered the "glamour companies" of the age, and employees in them enjoy the highest pay found in corporations anywhere in the world. Many are hired on a contractual basis, creating relationships that are more transactional than loyalty-based. "

"High-involvement companies can be found in many, if not most, industries and offer workers challenging and enriched jobs, a say in the management of their own tasks and a commitment to low turnover and few layoffs. They promote mainly from within, offering clearly defined career paths and extensive training and development opportunities. They are relatively egalitarian workplaces with few distinctions between managers and workers, both of whom typically share in stock ownership and profits. "

Our Comments
In our opinion, high involvement creates the most value.
Some of the best companies nurture high involvement by developing a culture of partnership.
1.) They use management practices that educate, enable, empower and engage their employees.
2.) They manage employee expectations by clearly communicating their roles, rights, responsibilities and rewards.
3.) They are dedicated to fulfilling customer expectations of commitment, cost, care and culture.