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1 America at Work

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3 America at Work Choices and Challenges Edited by Edward E. Lawler III and James O Toole

4 AMERICA AT WORK Edward E. Lawler III and James O Toole, Softcover reprint of the hardcover 1st edition All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. First published in 2006 by PALGRAVE MACMILLAN 175 Fifth Avenue, New York, N.Y and Houndmills, Basingstoke, Hampshire, England RG21 6XS Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. The research for this book was supported by a grant from the Society for Human Resource Management. The Society for Human Resource Management (SHRM) is the world s largest association devoted to human resource management. Representing more than 200,000 individual members, the Society s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society s mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 550 affiliated chapters and members in more than 100 countries. Visit SHRM Online at ISBN ISBN (ebook) DOI / Library of Congress Cataloging-in-Publication Data America at work : choices and challenges / edited by James O Toole and Edward Lawler. p. cm. Includes bibliographical references and index. 1. Quality of work life United States. 2. Work Social aspects United States. 3. Career changes United States. I. O Toole, James. II. Lawler, Edward E. HD6957.U5A dc A catalogue record for this book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: August

5 Contents List of Tables List of Figures Foreword vii ix x Part 1 Quality of Worklife of Americans 1 Working Alone: Whatever Happened to the Idea of Organizations as Communities? 3 Jeffrey Pfeffer 2 The Transformation of Work in America: New Health Vulnerabilities for American Workers 23 Richard H. Price 3 Restoring Voice at Work and in Society 37 Thomas A. Kochan 4 Work and Family in America: Growing Tensions between Employment Policy and a Transformed Workforce 53 Ellen Ernst Kossek 5 The Effects of New Work Practices on Workers 73 Michael J. Handel and David I. Levine 6 Trends in Jobs and Wages in the U.S. Economy 87 Alec Levenson Part 2 Careers in the New American Workplace 7 Is Education the Answer? Trends in the Supply and Demand for Skills in the U.S. Workforce 111 David Finegold 8 Bringing Careers Back in...the Changing Landscape of Careers in American Corporations Today 131 Elizabeth F. Craig and Douglas T. Hall

6 vi CONTENTS 9 The Shifting Risk for the American Worker in the Contemporary Employment Contract 153 Denise M. Rousseau 10 Itinerant Professionals: Technical Contractors in a Knowledge Economy 173 Stephen R. Barley and Gideon Kunda 11 The Changing Employment Circumstances of Managers 193 Paul Osterman 12 Changing Career Paths and their Implications 211 Peter Cappelli Part 3 Organizational Effectiveness 13 The Value of Innovative Human Resource Management Practices 227 Kathryn Shaw 14 The Economic Impact of Employee Behaviors on Organizational Performance 241 Wayne F. Cascio 15 Global Sourcing of Talent: Implications for the U.S. Workforce 257 Fred K. Foulkes, Sushil Vachani, and Jennifer Zaslow 16 Shared Capitalism at Work: Impacts and Policy Options 275 Joseph Blasi, Douglas Kruse, and Richard B. Freeman About the Contributors 297 Notes 305 Combined References 311 Index 349

7 List of Tables 1.1 Dimensions that might be Used for Characterizing the Degree to which Organizations are Communities What Attracts Employees by Age Working America Summary of Demographic, Legal, and Social Trends Increasing Work-Family Tensions Overview of U.S. Work-Family Laws and Policy Implications Effects of Employee Involvement Practices on Wages Changing Real Wage Distribution for Men and for Women PISA 2003 Mean Scores in Mathematics OECD Countries The Learning Contract Developmental Tasks and Dialectical Dilemmas in Contemporary Careers Career Management Dilemmas Related to Core Career Tasks Job Tenure (in years) Selectivity Questions Human Capital Comparisons in 1980 and 2001 Samples Descriptive Statistics for Top Executives, Full Sample Some Steps Employers Can Take to Enhance Employee Retention R&D Performed Overseas by Majority-Owned Foreign Affiliates of U.S. Companies in Selected Economies: 1994 and 2000 (Millions of Current U.S. Dollars) Drivers of Global Sourcing Decisions Companies Adopting Major Offshore Business Models Steps for Socially Responsible Offshoring Percent of Workers with Shared Capitalism and Size of Stakes Shared Capitalism versus No Shared Capitalism: Some Quality of Working Life Differences Empowerment, Shared Capitalism, and Unwillingness to Intervene with a Shirker Empowerment, Shared Capitalism, and Workers who Say They Are Very Likely to Leave their Company in the Next Year 287

8 viii LIST OF TABLES Appendix I Appendix II Appendix III Demographic Characteristics of Shared Capitalism Workers vs. All Workers 292 Detailed Picture: Shared Capitalism/Empowerment and Unwillingness to Intervene with a Shirker 293 Detailed Picture: Shared Capitalism/Empowerment and Looking for a Job with another Employer 294

9 List of Figures 6.1 Gender Differences in Part-Time Employment Participation in Tuition Reimbursement and Voluntary Turnover, Dialectical Dilemmas in Contemporary Careers Median Tenure for Employed Men and Women 25 and Older, Selected Years, Change in Median Years of Tenure, 1983 to 1998, Adult Men by Age Tenure by Previous Job Title, 1980 and HRM Practices in Large Firms, Teams HRM Practices in Large Firms, Incentive Pay U.S. and Foreign Employment by Non-Bank U.S. Multinational Companies,

10 Foreword The chapters in this book were commissioned as resource papers for the 2006 New American Workplace project, an analysis of how jobs and careers in the United States have changed since the publication of the benchmark Work in America report in These chapters were written by outstanding scholars who have prepared overviews of the research in their diverse fields of expertise. The individual chapters stand as authoritative summaries of what is known about organizations, work, and workers and, as a collection, constitute a comprehensive look at how the workplace has evolved over three decades of incredible turbulence and change. 1 When we commissioned these papers, we hoped simply that they would provide us with the factual background we needed to write our companion book, The New American Workplace (Palgrave Macmillan, 2006) We are extremely pleased that the papers have exceeded our expectations. They not only proved to be of invaluable use to us, and in their own right, they make important contributions to research, theory, and practice. Without reservation, we commend them to the attention of business mangers, human resource professionals, government policymakers, scholars, and students. In fact, they are a must read for every American who employs workers, is a worker, plans to work, or is concerned about the future of work in America. Support for the writing of these papers was provided by the Society for Human Resource Management (SHRM), which gave the authors complete freedom to pursue their research interests and to state their opinions. Thus, the views in this volume do not necessarily represent the views of SHRM. The corporate sponsors of the Center for Effective Organizations also provided financial resources, and their continuing support makes it possible for the center s professional staff to do research and writing that influences both organizational theory and practice. We owe special thanks to the advisory panel that helped us to select the topics and authors of these papers: John Boudreau, Debra Cohen, Susan Cohen, Jay Conger, David Finegold, Alec Levenson, and Susan Mohrman. And we wish to acknowledge members of our Center s staff who made great contributions to manuscript preparation: Dan Canning, Arienne McCracken, and Anjelica Wright. Finally, we wish to acknowledge the expert copy editing of Catherine Dain, the noted author of mystery novels, who once again has proved that she is a Renaissance woman. Edward E. Lawler III James O Toole Los Angeles, California May 2006