Individualism in organisations. Does employment contract innovation make a difference?
| DOI | https://doi.org/10.1108/01425450310501298 |
| Published date | 01 December 2003 |
| Pages | 536-556 |
| Date | 01 December 2003 |
| Author | David E. Morgan,Rachid Zeffane |
| Subject Matter | HR & organizational behaviour |
Individualism in organisations
Does employment contract innovation
make a difference?
David E. Morgan
School of Industrial Relations and Organisational Behaviour,
University of New South Wales, Sydney, Australia, and
Rachid Zeffane
Newcastle Business School, University of Newcastle, Callaghan, Australia
Keywords Individual behaviour, Employees relations, Human resource management,
Organizational performance, Job commitment
Abstract A shift from collectivism to individualism in managing employees is identified in
employment studies. Developments in Australia have reflected this change, accompanied by
claimed organisation benefits. This paper examines an empirical data set to examine such claims
on key dimensions in the employment relation. The analysis points to few differences in views
between employees working under individual contracts and those not. Moreover the factors
generating concern over individual and firm performance among employees differed little between
the two groups. Traditional work factors underpinned attitudes for both. The differences that
emerge from organisation size, union membership and gender appear to be inconsistent with the
claims of individualism. The data point to the importance of general employee concerns – job
satisfaction and perceived management style – in generating employee commitment and loyalty.
The findings have implications for the nature of employee relations and management, which are
discussed in light of their theoretical and practical ramifications.
1. Introduction
The direct management of employees is increasingly seen as a key component
in two employment domains: the micro-practices of employer-employee
relations characteristic of human resource management (HRM), and the
macro-policy domain centred on the decollectivisation of industrial relations. In
both domains, change is driven by the belief that direct employee management
will improve organisational performance. For organisational management, it
will provide several key gains: improve operational and financial performance,
and eliminate of the need for union presence. Indeed direct relations are seen as
a substitute for union representation. For public policy makers, the challenge
has been twofold: first, to weaken the role of collective “third party”
representation in national labour relations systems. Second, to craft procedures
ensuring direct relations are seen as fair and reasonable. While these domains
changed at different rates within and across countries (Coates, 2000), terms
such as the “new industrial relations” (Bassett, 1986), the “end of institutional
industrial relations” (Purcell, 1993), “high performance systems” (Appelbaum
et al., 2000; Godard and Delaney, 2000), “high commitment management
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ER
25,6
536
Received June 2003
Accepted July 2003
Employee Relations
Vol. 25 No. 6, 2003
pp. 536-556
qMCB UP Limited
0142-5455
DOI 10.1108/01425450310501298
practices” (Cully et al., 1999), and the “transformation of industrial relations”
(Wooden, 2000) attest to significant change in the character and logic of many
labour management systems. The result has been a process of individualisation
of the employment relations generally.
Greater emphasis on direct management of employees is a feature of the
Australian industrial relations system under the conservative Liberal-National
coalition Federal government. Elected in 1996 the Coalition outstripped public
debate and management practice as it moved beyond the 1980s focus on
decentralisation (Blandy and Niland, 1986); the early 1990s emphasis on
improvement in workplace flexibility and productivity, through the “lower the
centre of gravity” of enterprise-based bargaining and its critics (e.g. BCA
Industrial Relations Study Commission, 1989a; Curtain and Mathews, 1990;
Sloan, 1993; Stewart, 1992; Morgan, 1994); and the Federal Labour government
(1983-1996) 1990s policy innovation centred on collectivist decentralisation,
rather than individualisation. As the pressures of global competition grew
through the 1980s and 1990s the logic of contractualist labour relations based
on local enterprise bargaining led to emphatic calls for more emphasis on
individualism.
Management practice in many ways was already moving to
individualisation by 1996. Survey research indicated that organisations
quickly adopted the HRM label. By 1990, 31 per cent of large workplaces used
the label for specialist managers, rising to 60 per cent five years later
(Morehead et al., 1997, pp. 84, 423). More important was greater “structuring” of
employee management from the late 1980s, as more workplaces gained
specialist employee managers. Enterprise-based bargaining, and award (i.e.
labour contract) restructuring, saw management respond with a range of HR
policies and practices increasingly centred on the management of individual
employees. Techniques such as performance evaluation, communication,
involvement and performance pay steadily spread (Morehead et al., 1997), as
they did in Britain from the later 1980s to the mid-1990s (Cully et al., 1999,
pp. 80-82). By this time most Australian managers reported they preferred to
deal with employees directly, rather than via a union (Morehead et al., 1997,
p. 136).
Crucially, business rhetoric and conceptual emphasis reflected the emphasis
on individualism, rather than decentralisation. In short, the logic of direct
relations fully emerged through the early 1990s in public policy debates, and
was manifest in new calls for individualist and contractualist regulation of
employment. It culminated in the provision for individual employment
contracts – called Australian Workplace Agreements (AWA) – under the
Workplace Relations Act 1996 (McCallum, 1997; (Chin, 1997) introduced by the
Coalition soon after its election. A key rationale for this employment innovation
was that the quality of individualised relations and their accompanying
Individualism in
organisations
537
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