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Flexibility or stability at labour market

The freedom of market is based on the premise of selfish rational flexible behaviour, including the eagerness of employees to build a portfolio career in an inter-sectoral open organisation, achieving a high income, job satisfaction, personal autonomy and a good work-life balance. In the labour market, the trend to more flexible forms of employment has inevitably led to the rise of a variety of innovative forms of contract.

The arguments are[8]:

¨ employees are better able to dovetail work with other life commitments (e.g. through term-time working)

¨ they gain wider experience, improve their skills, develop their "employability" and commercial "edge" by working on a variety of limited term contracts in a variety of employment situations.

But, the reality does not match the theory:

· developing forms of contract lead to chaos, organisations are unable to keep track of the variety of contract being used

· the range of employment contracts among people working together leads to low perceptions of fairness and low trust, or to a poor "psychological" responsibility and to opportunism

· the attempt to achieve performance gains through a cost-reduction strategy is backfiring at high cost to both employer and employee, as this is linked to lower commitment and possibly to lower effort

· human resource specialists are responding not to the evidence of organisational psychologists and other researchers but to imperatives of cost and fashion which are often imposed on them by the boardroom.

The economists see the transaction costs, and the managers – the decreasing productivity and quality, and by consequence, less trust of clients.

Trust

Any action in social life is based on the trust – “firm belief in the reliability, truth, ability, or strength of someone or something”[9]. “The explicit or implicit definition of trust is: the trustor (A) trusts the trustee (B) if A accepts relational risk, e.g. vulnerability to (active or passive) opportunistic actions of B, but expects that B will not in fact engage in such behaviour”[10]. Trust means stability in activity – the enterprise should be sure, that the real behaviour of the employees and the managers, the investors, the suppliers, at least, the lawyers would meet its expectations.

Usually, the organisation is thought as built on mutual trust among all involved actors, and the market is perceived as needing only the freedom of concluding contracts. But indeed, the free business action needs also trust in judicial system.

The trust is the expectation that a partner will not engage in opportunistic behaviour, even in the face of opportunities and incentives for opportunism[11].

Trust is close to the concept of the "psychological contract", or the "set of unwritten reciprocal expectations between the individual employee and the organisation"[12]. The use of fixed term contracts is claimed to have a negative impact on the psychological contract, albeit an indirect one. This is because of a connection between permanent contracts, HR practices and a positive psychological contract and greater organisational commitment. Give employees a job for life, and isolate them from external competition for promotion, and they are less likely to leave the organisation. This improves the organisations competitiveness, or enables individuals to maximise their potential.



So, obvious argument of the organisation’s advantages in comparison with the market, is the use of the trust as a complex set of motivating factors for better productivity.

Trust and control

Normally, the trust exists to decrease the transaction costs linked to the control the covenanted actions. Control is defined as any instrument or condition that may mitigate relational risk, and the interpretation of market – organisation comparison lets put the control more on the side of market, because inside the organisation all the management system is intended to motivate the organisations’ members to execute their duties.

 

Fig. 2. Control as the notion of the risks’ decreasing tool.

The grey zone of the ‘control’ at the schema (fig. 2) means, that in reality the total controlling is too expensive in time, money, human capabilities.

And even in a system with high level of control, there are the lacunary spaces, the gaps, where only the trust assures the efficient interaction.


Date: 2016-03-03; view: 794


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