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America at Work

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

AMERICA AT WORK Edward E. Lawler III and James O Toole, 2006. Softcover reprint of the hardcover 1st edition 2006 978-1-4039-7297-2 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. 10010 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 www.shrm.org. ISBN 978-0-230-60680-7 ISBN 978-1-4039-8359-6 (ebook) DOI 10.1057/9781403983596 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.U5A485 2006 334.0973 dc22 2006041612 A catalogue record for this book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: August 2006 10987654321

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

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

List of Tables 1.1 Dimensions that might be Used for Characterizing the Degree to which Organizations are Communities 14 3.1 What Attracts Employees by Age 42 3.2 Working America 44 4.1 Summary of Demographic, Legal, and Social Trends Increasing Work-Family Tensions 54 4.2 Overview of U.S. Work-Family Laws and Policy Implications 63 5.1 Effects of Employee Involvement Practices on Wages 79 6.1 Changing Real Wage Distribution for Men and for Women 88 7.1 PISA 2003 Mean Scores in Mathematics OECD Countries 113 7.2 The Learning Contract 128 8.1 Developmental Tasks and Dialectical Dilemmas in Contemporary Careers 139 8.2 Career Management Dilemmas Related to Core Career Tasks 140 11.1 Job Tenure (in years) 198 12.1 Selectivity Questions 219 12.2 Human Capital Comparisons in 1980 and 2001 Samples 220 12.3 Descriptive Statistics for Top Executives, 1980 2001 Full Sample 221 14.1 Some Steps Employers Can Take to Enhance Employee Retention 253 15.1 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) 260 15.2 Drivers of Global Sourcing Decisions 262 15.3 Companies Adopting Major Offshore Business Models 264 15.4 Steps for Socially Responsible Offshoring 269 16.1 Percent of Workers with Shared Capitalism and Size of Stakes 281 16.2 Shared Capitalism versus No Shared Capitalism: Some Quality of Working Life Differences 283 16.3 Empowerment, Shared Capitalism, and Unwillingness to Intervene with a Shirker 286 16.4 Empowerment, Shared Capitalism, and Workers who Say They Are Very Likely to Leave their Company in the Next Year 287

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

List of Figures 6.1 Gender Differences in Part-Time Employment 102 7.1 Participation in Tuition Reimbursement and Voluntary Turnover, 1996 2000 129 8.1 Dialectical Dilemmas in Contemporary Careers 139 12.1 Median Tenure for Employed Men and Women 25 and Older, Selected Years, 1983 2000 217 12.2 Change in Median Years of Tenure, 1983 to 1998, Adult Men by Age 217 12.3 Tenure by Previous Job Title, 1980 and 2001 222 13.1 HRM Practices in Large Firms, Teams 229 13.2 HRM Practices in Large Firms, Incentive Pay 230 15.1 U.S. and Foreign Employment by Non-Bank U.S. Multinational Companies, 1988 2003 268

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 1973. 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