A STUDY ON RECRUITMENT PROCESS OF FLEXIBLE MANPOWER.docx

8/18/2019 A STUDY ON RECRUITMENT PROCESS OF FLEXIBLE MANPOWER.docx

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“A STUDY ON RECRUITMENT PROCESS OF FLEXIBLE

MANPOWER”

PROJECT REPORT

A Report Submitted For the Partial Fulfilment of a Study of HR Process and

Attrition Analysis for the Degree of Master of Business Administration Human

Resource Management in Pondicherry University

Submitted By

Nme ! M"# SAND$YA# S

E%&'(me%t %' ! )*+,-.),,)

MBA /$RM0 ! $um% Re"'u&1e M%2eme%t

U%de& t3e 2uid%1e '4 ! DR#LAWERENCE /P&'4e""'& '4 L'y'( C'((e2e0

ACADEMIC SESSION ! *)+, 5 *)+6

Di&e1t'& '4 Di"t%1e Edu1ti'%

P'%di13e&&y U%i7e&"ity

Pudu13e&&y 6)8)+,


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BONAFIDE CERTIFICATE '4 t3e 9uide

his is to certify that the Pro!ect "or# “A STUDY ON RECRUITMENT

PROCESS OF FLEXIBLE MANPOWER ” is a bonafide $or# of

M"#SAND$YA# S/E%&'( N'# )*+,-.),,)0 %arried out in Partial Fulfillment for

the a$ard of degree of MBA $RM &Master of Business Administration Human

Resource Management' of Pondicherry University under my guidance( his pro!ect

$or# is original and not submitted earlier for the a$ard of any degree ) diploma or

associateship of any other University ) *nstitution

Si2%tu&e '4 t3e 9uide

9uide:" Se(

+ame of the ,uide-

Place- %hennai

Date-


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Stude%t" De1(&ti'%

*. M"#SAND$YA# S hereby declare that the Pro!ect "or# “A STUDY ON

RECRUITMENT PROCESS OF FLEXIBLE MANPOWER ” is

original $or# done by me and submitted to the Pondicherry University

in partial fulfilment of re/uirement for the a$ard of Master of Business

Administration in Human Resource Management is a record of original

$or# done by me under the supervision of DR#LAWERENCE /P&'4e""'&

'4 L'y'( C'((e2e0

E%&'(me%t N'! )*+,-.),,)

Dte!

Si2%tu&e '4 t3e "tude%t


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AC;NOWLED9EMENT

0Ac#no$ledgement is an art. one can $rite glib stan1as $ithout meaning a $ord.

on the other hand one can ma#e a simple e2pression of gratitude3

* ta#e the opportunity to e2press my gratitude to all of them $ho in some or other

$ay helped me to accomplish this challenging pro!ect in Syntel Private 4td.

%hennai( +o amount of $ritten e2pression is sufficient to sho$ my deepest sense

of gratitude to them(

* am e2tremely than#ful and pay my gratitude to our DR#LAWERENCE

/P&'4e""'& '4 L'y'( C'((e2e0and my faculty guide ,U*DA+%5 PULC

TWINNIN9 PRO9RAM < LOYOLA COLLE9E < C$ENNAI 5 6)) )-, for

their valuable guidance and support on completion of this pro!ect in its presently(

A special appreciative 0han# you3 in accorded to all staff of Syntel Private 4td.

%hennai for their positive support(

* also ac#no$ledge $ith a deep sense of reverence. my gratitude to$ards my

parents and member of my family. $ho has al$ays supported me morally as $ell

as economically(

At last but not least gratitude goes to all of my friends $ho directly or indirectly

helped me to complete this pro!ect report(


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INDEX

Ab"t&1t

I%t&'du1ti'%

)+# F(e=ibi(ity! A% i%t&'du1ti'%

+#+ F'&m" '4 4(e=ibi(ity %d m&>et "e2me%tti'%

+#* F(e=ib(e ?'&>i%2 i% t3e WERS dt

+#- Em@('yee 1'7e&2e

+#,Em@('yme%t 4(e=ibi(ity %d 1'mmitme%t

+#8 P&e41e

+#6 P&e(imi%&y C'%"ide&ti'%"

)*# Re@i&b(e Item Sy"tem /RIS0

*#+ Set '4 P&'du1ti'% M13i%e"!

*#* Fee( t3e 4'&1e '4 4(e=ib(e m%@'?e&!

*#- Em@('yme%t 4(e=ibi(ity %d 1'mmitme%t!

*#, F(e=ib(e M%@'?e& P(%%i%2 /FMP0

*#8 F(e=ib(e ?'&>i%2 1&'"" t3e '&2%iti'%

)-# Em@('yee ?e((bei%2 %d ?'&>(i4e b(%1e

-#+ O&2%iti'%( 1'mmitme%t

-#* Tem ?'&>i%2

-#- Rete%ti'% %d &e1&uitme%t

-#, I%di&e1t Im@1t '% Pe&4'&m%1e

-#8 O&2%iti'%( 1'mmitme%t


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),# Informal vs formal exible working

,#+ Careers

,#*Work-life balance

,#- Control of a Repairable Item System

,#,Extent of employer/employeemismatch

,#8 Cost inimi!ation"

)8# Relevant #iterat$re

8#+#imite% anpower

8#* &ariable anpower

8#- Sim$lation Experiment

8#,anpower 'lanning an% Cycle-timeRe%$ction

8#8 (e)nition of part-time work

)6#Concl$sion

)# *++E,RES

)# .I.#I0R*'12


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Ab"t&1t

Fle2ible manufacturing systems can be seen as the latest stage in the

automation of small batch production( he prevailing manpo$er

approach to these systems is characteri1ed by a hierarchical and highly

speciali1ed !ob structure( An alternative is to have a homogenous !ob

structure on an advanced s#ill level( he latter approach increases

problems and costs of implementation processes6 ho$ever. it may ensure

higher utili1ation times. more fle2ibility. and better /uality in the longrun( rends in small batch and process manufacturing. the labour mar#et.

and union policies provide opportunities for the alternative approach(

he demand for ,as 4ift Mandrels &,4M' in the oil and gas industry is

e2pected to increase over the ne2t fe$ years. re/uiring Schlumberger7s

,4M assembly line to increase their manufacturing capacity( ,iven the

labour8intensive nature of Schlumberger7s ,4M assembly line. other

than implementing citi1ens and purchasing more e/uipment. it is

important to also consider manpo$er issues( his research analyses

manpo$er management issues in the ,4M assembly line to meet the

pro!ected increase in customer demand over the ne2t three years( A

detailed time study $as conducted to understand and characteri1e all

processes in the assembly line. before manpo$er plans $ere dra$n up

for each year till 9:;


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Fle2ibility to optimi1e the rate of utili1ation. human performance and

$ell8being( By clustering processes together. the labour utili1ation rate

can be increased to more than ninety percent( A ne$ position of grinders

has also been proposed to assist in various grinding operations. in order

to reduce the cycle times of processes. to help $or#ers gain better focus

in their $or# and to reduce the cost of labour(


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I%t&'du1ti'%

>ne of the most important discussions on the 5R &employment

relationship' is the issue of fle2ibility in the labour force( hrough

substantial research numerous arguments arose regarding changes in the

past types of employment( "hereas once !ob security $as e2changed for

commitment. currently organi1ations demand from their employees?

fle2ibility. multiple s#ills and high levels of performance( *n return.

further from monetary re$ards. there are opportunities for training anddevelopment so that people could increase their s#ills and competencies

thus ma#ing themselves more mar#etable( *n this paper. $e e2amine the

issue of employment fle2ibility and its role in organi1ational life( he

focus is particularly in the relationship of fle2ibility and employee

commitment( >ur ob!ective is to assess $hether the route to

implementing fle2ibility has led to the alienation of employees from

organi1ations and to the decrease of commitment levels to$ards their

employers(

"e start by introducing the concept of fle2ibility in the organi1ation and

its specific conte2t $ith regards to the labour force and the competitive

ne$ climate( "e define the labour mar#ets and $hat hiring mechanisms

are available for organi1ations and even more. the po$er management

can e2ercise in its relationship $ith the labour force( At this stage. $e

highlight the specific types of employment fle2ibility and e2amine the


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various theories to$ards achieving it in practice( *n order to comprehend

the effects of labour fle2ibility in employee commitment. $e introduce

the concept of the psychological contract $hich in essence describes the

implicit agreement bet$een employees and the organi1ation $ith regards

to their reciprocal obligations and perceived e2pectations( As

commitment is directly tied to the P% &psychological contract' $e

e2amine the negative impact fle2ibility can have as a perceived violation

of the P%(

52tending that. follo$s a revie$ of the state of employee commitment

$ith regards to the efforts of infusing fle2ibility to assess if indeed there

is a deterioration of commitment in favour of fle2ibility or as some

evidence suggests there can be a compromise bet$een the t$o( he last

part deals $ith possible suggestions for managers to consider in order to

pursuit fle2ibility $ithout th$arting completely labour forcecommitment( *n the conclusion. there is a recapping of the main points

of the paper and some concluding thoughts(


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+#F(e=ibi(ity! A% i%t&'du1ti'%

4iterature suggests that in the ;@:s and ;@@:s ma!or changes occurred

in the $or#place and in the relationship bet$een organi1ations and

employees( *n the past. employees e2pected to remain in their !obs for a

lengthy period of time and en!oyed a relative level of security( >n the

other hand. $or# patterns $ere designed and distributed by supervisors

and the role of employees $as restricted in the narro$ tas#s assigned to

them( During the last t$o decades of the 9:th century. internationalcompetition. domestic competitive pressures. technological changes and

ma!or financial events made organi1ations to see# greater fle2ibility

and productivity as $ell as ne$ strategies focused on speed.

responsiveness to changing mar#et conditions and innovationC(have

induced organi1ations to eliminate !obs not !ust in the factory floor as

often as in the past but also among those $ho have traditionally been

offered a long8term career $ithin the organi1ation

he massive restructuring forced organi1ations and employees to

renegotiate their relationship as ne$ variables arose( As figure ; depicts.

in the past employees operated in a climate of stability. $ith loyalty and

commitment to organi1ation being re$arded in the long8term( here

$ere shared responsibilities. opportunities for promotion and salary

increase on a steady basis and there $ere more guarantees of future

development in the organi1ation( *n the ne$ situation. it is re/uired that


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the $or#force $ill be able to produce immediate results. employees are

no$ !udged $ith performance8oriented criteria and there is little security

in maintaining a lengthy time of employment( =ob security has been

substituted by the call for training and development in order to ma#e

employees enhance their abilities thus permitting them to become more

mar#etable in light of the shift from permanent to fle2ible

employment(

Undoubtedly. this interpretation appears considerably pessimistic and

depicts employment fle2ibility as a negative concept( Another dimension

is offered by the need discerned from the ;@:s. as policy ma#ers along

$ith organi1ations considered the inability of the past system of

employment to ensure the viability of organi1ations and in e2tension of

their employees( Furthermore. 5uropean firms faced stringent pressures

due to international competition. increased unemployment and the needto reduce labour costs( $o important proposals to cope $ith these

pressures $ere the socalled lo$8road. $hich entailed competing on

prices. cutting $ages and decreasing the overall social benefits of

employees( >n the other end. the high road $as based on promoting

/uality. pursuing innovation $hilst investing to the enhancement of the

labour force(

Another conceptuali1ation of the latter frame$or# is the shift from

Fordism to a Post8Fordism regime( Fordism. describes a situation


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focusing on mass production and distribution of products in a stable

mar#et $ith standard terms in the employment relationship( >n the other

hand. Post Fordism describes a situation $here organi1ations have to

cope $ith constant change( At this level. firms are losing their stability

in the mar#etplace as technological advancement s$eeps a$ay the old

rules of competition along $ith the introduction of globali1ation and

uncertainty(

*n the 5uropean conte2t. due to the multitude of institutions. national

authorities. trade unions and social orientation of the member states. the

lo$8road seemed not applicable( *nstead. the road of technical

innovation $ith emphasis on technological advancements.

telecommunications and computing appeared more appropriate( >nce

again. it $as necessary for employees to cope $ith these ne$ conditions.

along $ith cultivating the #no$ledge and abilities to meet organi1ationaland business demands( he $eight of all these considerations brought

forth the need for labour mar#et fle2ibility for organi1ations and

employees ali#e( By fle2ibility of course numerous concepts can be

included even in the confines of employment fle2ibility that is discussed

here( For e2ample. organi1ations might $ish to promote fle2ibility in

their labour through the enhancement of the /uality and competencies of

their employees( 5/ually. $e could recogni1e employment fle2ibility

$hen management ma#es use of the e2ternal labour mar#et to face

internal shortages or deficiencies in the necessary amount of $or#force(


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At this stage. it is essential to mention some influential factors that affect

labour fle2ibility( Primarily. $e should analyse the term labour mar#et

and its practical lin#age to organi1ations( he simplest and most

important use of the labour mar#et is as the source for organi1ations to

hire employees( Brea#ing it do$n into specific categories. $e can

discern three main types of labour mar#ets

Ty@e" '4 (b'u& m&>et"

•

Unstructured. casual labour mar#ets also #no$n as spot mar#et

• Structured occupational labour mar#ets $hich are e2ternal to the

firm

• Structured and administered labour mar#ets $hich are internal to

the firm

%asual labour mar#ets describe competitive labour conditions $here

employees are selected according to demand fluctuations and $ages are

determined based on supply and demand( here are no barriers to entry

for employees and no collective representation in the form of trade

unions( >ccupational labour mar#et describes a pool of s#illed

employees $ho are sought from organi1ations often through trade

unions and professional bodies and especially $hen temporary increases

in demand occur( Both casual and occupational labour mar#ets represent


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the overall e2ternal labour mar#et for organi1ations in the sense that.

hiring is done from an e2ternal pool of $or#ers(

>n the other hand. administered labour mar#ets are sources ofemployment created to fill vacancies internally in the organi1ation( he

design of tas#s and the re$arding system is different from the e2ternal

labour mar#et arrangements as promotion possibilities and salaries tend

to be higher and unaffected by changes in the e2ternal mar#et( >f

course. organi1ations can adopt a combination of internal and e2ternal

labour mar#ets promoting individuals internally for specific tas#s $hilst

hiring e2ternally for other duties( he e2istence of both internali1ed an

e2ternal labour mar#et is considered to have an effect on the

determination of $ages and $or#ing conditions( *n essence. both themes

are set mostly by employers and occupational groups directly rather than

the forces of supply and demand as theory suggests( *n other $ords.there can be a bias in favour of some individuals and groups and to the

disadvantage of others( Such possibility is described as labour mar#et

segmentation and it underlies several aspects in relation to employment

fle2ibility and commitment as it $ill be e2amined later( *n this conte2t.

At#inson &;@E' suggested a division of employees into t$o main

groups. core and peripheral $or#ers(

%ore $or#ers. are s#illed employees participating in decision8ma#ing.

en!oying significant opportunities for training and development and are


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relatively $ell8paid and secure( >n the other hand. peripheral $or#ers

are lo$ paid. en!oy little security in their !ob and their degree of

autonomy inside the organi1ation is limited( 52ploiting core and

peripheral labour management. an organi1ation $ould be able to brea#

the rigidities associated $ith the traditional labour mar#et segmentation.

reducing thus the privileges and standard benefits employees $ere

supposed to receive( %onse/uently. on one side. organi1ation could

reduce employment costs but also cause the decline of the influence

employees have through collective representation in the form of trade

unions( *n this $ay. management is infusing a fle2ible model in the

organi1ation(

he above conditions reflect the subtlety of the topic and as such

defining employment fle2ibility can be comple2( For our use. $e $ill

e2amine four main types of fle2ibility as suggested by At#inson &;@E'(

• Functional fle2ibility- *t allo$s employees to combine s#ills and

competencies in order to increase their mobility across the various

channels of production( Functional fle2ibility relies on e2tensive

training and thus it is li#ely to be pursued $hen there is no longer a

stable relationship bet$een employees and the organi1ation(

• +umerical fle2ibility- *t refers to the possibility of the organi1ation

to adapt the number of its labour on a short8notice. increasing or

decreasing it as it sees fit arying employee numbers can be


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achieved by hiring temporary agency $or#ers and employing

people on fi2ed8term contracts( +umerical fle2ibility is often

related $ith limited employment security rights(

• emporal fle2ibility- *t refers to shifting $or#ing hours so as to

meet production demands( his can include things such as $or#ing

overtime and spreading the $or#ing hours unevenly over a period

of time depending on fluctuations in production( Part8time

employment also might be used by the organi1ation to face even

tougher pea#s in demand(

• Financial fle2ibility- *t is lin#ed $ith efforts on behalf of the

organi1ation to reduce labour costs in order to protect profitability(

o be applied. it re/uires partial use of temporal fle2ibility along

$ith of cost savings that come from using through the ad!ustment

of $age levels to reflect performance on individual. group or

organi1ational levels(

"e can combine the forms of employment fle2ibility and labour mar#et

segmentation as table 9 illustrates

+#+ F'&m" '4 4(e=ibi(ity %d m&>et "e2me%tti'%

Functional fle2ibility Supplied by core $or#ers $hose s#ills are vital

to the organi1ation( hey $ould en!oy high remuneration. greater

possibilities for development and benefits( *t $ould provide the


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administrative focus for the internal labour mar#et( +umerical fle2ibility

Supplied by peripheral $or#ers mainly in lesser positions as their

s#ills $ould be transferable bet$een organi1ations( his category of

employees is more easily replaceable and hired according to the needs of

the corporation(

Financial and temporal fle2ibilities could be achieved through a

combination of policies applied to both groups of $or#ers &e(g(

annuali1ed hours for core $or#ers and part8time agreements for

peripheral employees'(

he ma!ority of arguments on employment fle2ibility have received

significant criti/ues about their actual application( he main problem

$ith the fle2ible firm model is that it presumes the liberty of

management to shape the employment system according to its $ishes( *t

does not account for the lac# of resolution often met at the managerial

level to underta#e such long8term strategic planning and the effort it

entails( *n spite of its $ea#nesses. the model offers a clear categori1ation

of the different #inds of fle2ibility and an indication of the approach

organi1ations have ta#en to$ards achieving a fle2ible model( As

empirical research in the UG suggests. management has been pursuingnumerical fle2ibility rather than the other alternatives(

*n simple terms. the tendency in the UG the last fe$ years has been to

e2ternali1e employment and marginali1e the internal employment


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structures( >rgani1ations. all the more select fi2ed8term and temporary

employees opposed to direct employment( his is part of an effort to

decrease costs associated $ith $ages and social benefits thus

minimi1ing the overall cost of labour( his picture depicts the general

deterioration of secure employment conditions $hich is no$ substituted

by the demands from employees to e2ploit $hat opportunities are

offered from crossfunctional $or#. group8$or# and other related

pro!ects in order to gain an advanced level of training and #no$ledge(

hrough these opportunities. employees should try to augment their

s#ills and competencies to ma#e themselves more employable and thus

facilitating their potential transition to another organi1ation( 5ven the

concept of the high road that proclaims the use of the #no$ledge8

economy and is supposed to lead to the creation of a sophisticated

$or#force through the transfer of competition from cost8minimi1ation to

the development of superior products. often diverges from its roots( As

globali1ation rises further. organi1ations reali1e that it is becoming

increasingly difficult to reduce costs $hilst maintaining a high standard

of /uality(

F(e=ib(e ?'&>i%2 &&%2eme%t ue"ti'%" i% WERS

Samples of appro2imately 9 employees in each of the 9;@;

establishments $ere as#ed to fill in a /uestionnaire( he response rate to

this employee survey $as IEJ( he /uestionnaire covered $hether their


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employer made any of si2 family8friendly provisions available to them.

namely-

K Parental leave &non8statutory since survey before the Statutory

provision'6

K =ob sharing6

K "or#ing at or from home during normal $or#ing hours6

K "or#place or other nursery or help $ith child care6

K Scheme for time off for emergencies &paid or unpaid coded'6 and

K Fle2i time(

5mployers $ere as#ed $hether they offered only their non8managerialemployees an entitlement to any of the list of provisions( 5mployees

from the full range of occupation titles $ere included in the employee

samples(

+#* F(e=ib(e ?'&>i%2 i% t3e WERS dt#

E=te%t '4 em@('ye& @&'7i"i'%


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>n the e2tent of offering non8managerial employees entitlement to

fle2ible $or#ing arrangements. "5RS employers gave the follo$ing

responses for ;@@-

"here there $as earlier data for comparison the "5RS data found slight

increases since ;@@I &Forth et al. ;@@' but neither fle2time. !ob sharing.

parental leave or childcare services $ere either $idely or universally

available in ;@@

+#- Em@('yee 1'7e&2e

"5RS employee responses on their access to fle2ible $or#ing

arrangements are displayed in able ;( Public sector employers $ere. on

the $hole. more generous in all aspects of fle2ible employment benefits.

including the provision of childcare subsidies( *n all respects $omen

beneficiaries outnumbered the men( Ho$ever. almost a half &EIJ' of all

employees did not receive any access to such fle2ibility(

he "5RS data allo$ed us to investigate the determinants of

employees? perceptions of their access to fle2ible $or#ing arrangements(

A range of employee and employer characteristics $ere used as potential

e2planatory variables through logistic regression models and the full set

of results are reported in D5 and Smith &9::;'( >verlapping


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analysis of this issue using the same data set is also no$ available in

Budd and Mumford &9::;'(9 he results of modelling the determinantsof employees believing they had access to various types of family8

friendly provisions found that employees? perceptions $ere associated

$ith a mi2ture of-

• the constraints of the !ob6

• the gender of the $or#er &females more li#ely'6

• the child care responsibilities &parents more li#ely'6

• traditional values as reflected in gender $or#ing groups6

• the potential for fle2ibility in the !ob $ithout particular

arrangements being needed &higher occupations less li#ely in some

cases'6 and

• some cherry pic#ing. giving additional fringe benefits to

particularly valued $or#ers


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>verall. the conclusions from the analyses of De2 and Smith &9::;'

agree $ith those of Budd and Mumford &9::;'6 that individual

characteristics captured most of the variation in employees? beliefs about

their access to this set of fle2ible $or#ing arrangements(

Ho$ever. the e2act determinants varied according to $hich of the

fle2ible provisions $as under consideration a point that Budd and

Mumford do not stress(E he nature of the $or# $as particularly

relevant to $hether employees had access to $or#ing at or from home

and $hether they had fle2time( Many types of !ob are not suited to being

done partly or $holly at home( hose $or#ing in craft !obs are also

regularly less li#ely to have access to these types of fle2ible $or#ing

arrangements. but this is often in association $ith a $holly male

$or#ing environment( *t might mean that traditional values and their

associated $or#ing arrangements are part of the e2planation(

he case of emergency leave is interesting in that the $or#ers $ith

access to leave $ere those less li#ely to get access to the other types of

provision( Professionals and managers did not have specific leave

provision. perhaps because they already have sufficient fle2ibility in

their !obs to cope $ith emergencies(

he cherry pic#ing /uestion gained some support from the fact that

$or#ers $ith recent training. those $ith degrees and sometimes $ith


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longer !ob duration $ere often more li#ely to have access to these

arrangements(

here have been some recent multivariate analyses of 5U and USsources of employees reported in 5vans &9::;' and Bardoel et al &;@@@'(

5vans concluded that the findings for the 5U corresponded to those

found in Australia and the UG6 namely

that public sector firms. or those $ith e/ual opportunities policies had

the most advantages6 permanent and long tenure employees $ere moreli#ely to report family leave benefits. as $ere professional $or#ers

&e2cept for sic# leave'( %raft. elementary. plant and machine $or#ers all

reported having access to relatively fe$ family8friendly arrangements(

his finding overlaps $ith the US study solely of female $or#ers by D5

itch and Huffman &9:::'( Until the availability of the "5RS data there

$ere hardly any British multivariate studies to e2plain $hich employees

had fle2ible $or#ing arrangements because of the lac# of suitable data(

+#, Em@('yme%t 4(e=ibi(ity %d 1'mmitme%t

Based on the earlier analysis. employment fle2ibility presents a tendency

to cause feelings of uncertainty and insecurity to employees( +aturally

there are differences among countries and social conte2ts but the voice

that there are no more !obs for life is increasing( Undoubtedly. this is

bound to have adverse effects on employees and trigger negative

reactions( he latter is further accentuated as trade union po$er declines


25/104

and other forms of collective representation become marginali1ed( >ne

of the most prominent feature employees bring into the 5R is the sense

of commitment to the organi1ation $hich is not possible to remain

unaffected in the general environment of instability(

he first /uestion that needs to be as#ed is ho$ employee commitment

is borne inside the employment relationship( he most fre/uent tool to

describe the 5R and eventually leads to commitment is the

psychological contract( "e can describe it as individuals beliefs.

shaped by the organi1ation. regarding the terms of an e2change

relationship bet$een the individual employee and the organi1ation( *n

simple $ords. employees offer to the organi1ation their labour. s#ills.

loyalty etc( and in return they perceive the organi1ation must comply

$ith a set of obligations such as financial re$ards. employment benefits.

!ob security etc( Similarly. the organi1ation anticipates that employees$ill perform at high levels. $ill be loyal to the company and $ill $or#

to achieve the organi1ations goals(

he psychological contract in not in a $ritten format as standard

employment contracts( +evertheless. it encompasses a much $ider vie$

of the employment relationship as it loo#s at the reality of the situationas perceived by the parties and may be more influential than the formal

contract in affecting ho$ employees behave from day8to8day ; (>ne

important observation about the P% is that. since it is based on the


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perceived opinions of employees and considering the large amount of

individuals in the labour force it can be highly sub!ective(

,uest and %on$ay &9::E' provide a useful model of the psychologicalcontract $hich begins from its antecedents( At this level. the P% includes

individual characteristics. the organi1ational climate and specific HR

policies( he combination of these factors produces the content of the

psychological contract based on trust and fairness employees feel

to$ards the organi1ation as it is fulfilling its part of the bargain( he

outcome depends on the feelings of employees( *f the P% is positive.

then there is an increase on $or# satisfaction and commitment $hich

leads to a positive influence on performance( 5/ually. if employees feel

that someho$ the P% is violated than it is li#ely it $ill have adverse

effects on performance( *t is evident that the same changes that gave rise

to employment fle2ibility described earlier also shifted the state of theemployment relationship( his is precisely $hy. the psychological

contract is a vital tool to gauge employee reactions in the changes

occurring in the $or#place( 5/ually. it allo$s comprehending ho$

commitment levels have been affected from the entire process(

"ith the changes in the conte2t of the P% and the renegotiated 5R. it isli#ely that some employees might feel that the organi1ation is failing to

meet its obligations and vie$ their e2pectations not met( his could

affect their overall loyalty and performance to$ards the company( he


27/104

latter phenomenon is often termed as a violation or breach of the

psychological contract &Rousseau. ;@@'( "e should point that it is

possible to distinct among the various degrees of intensity that violation

of the P% ta#es( *t is possible for employees to be a$are of their

employer7s inability to meet e2pectations or that parts of the contract

have not been fulfilled timely and thus the reaction might be mild in

light of a perceived breach( >n the other side. a violation produces a

much stronger and emotional response( he effects of P% violation are

strongly dependent on the emotional response it triggers to employees(

Due to the sub!ective nature of employees7 e2pectations. the reactions in

the event of a violation or breach could differ. leaving a portion of the

employees $ith a strong sense of in!ustice from the organisation and

another portion feeling less damaged( Ho$ $ill employees perceive a

violation of their P% $ill also be dependent on personal factors such as

age. education and past e2periences. possible combinations that

altogether could create differential comprehensions about the

employment relationship and to the degree a breach or violation is

perceivedL

he aftermath of a violation in the psychological contract therefore is

strongly associated $ith the loss of trust and commitment to the

organisation( As employees feel pressured under the ne$ demands that

arise and the disruption of the agreement $ith their employer. loyalty to

the organi1ation is put under pressure( >rgani1ations for their part try to


28/104

redesign the $or#place through a variety of methods( hese

methodologies can range from redundancies to delaying and

decentralising structure eventually to run their businesses $ith half the

human effort(. half the person space and in half the production timeC

they believe the drive for fle2ibility $ill also provide $or#ers $ith a

sense of empo$ermentC transition to a lean production $ill lead to a

$in8$in situation(

he problem is. as mentioned earlier that even the high8road approach

often diverges from theory $hen applied practically( Unfortunately. it

becomes focused again on cost8cutting and promoting labour fle2ibility

$ith little attention paid to employees( Recapping. on one end is the

disruption of the old psychological contract as perceived by employees

and on the other end. the promises for employability and increased s#ills

in return for increased performance and commitment he latter is oftenth$arted by the inability of the system itself. the un$illingness of

management to pursue such long8term strategies and the negative

feelings of employees to$ards this climate of change(

W3t i" 3@@e%i%2 ?it3 4(e=ibi(ity

*nsofar. theory suggests that the ma!ority of efforts to introduce and

establish employment fle2ibility are primarily driven by the motive to

secure organisational interests. $ith little attention paid to the core of the

$or#force and conse/uently to the overall levels of commitment( he


29/104

problem is that for any fle2ibility system to $or#. commitment is an

inherent part( >n the other side. the change in the employment

relationship is li#ely to cause feelings of insecurity. stress and scepticism

among the lines of employees $hich may produce negative reactions

and have adverse effects on the levels of commitment to$ards

employers( he /uestion no$ becomes ho$ can the t$o pictures come

togetherL *s fle2ibility $on on the e2pense of employees and the

reaction of the $or#force is such that cannot influence the course of the

situationL>r there is a middle path to reconcile the t$o parties(

Undoubtedly. accounting for the competitive pressures in the

mar#etplace fle2ibility has made its $ay as an essential tool( he various

approaches organi1ations have adopted on the path to labour fle2ibility.

to a certain e2tend provide some benefits $ith regards to the fulfilment

of organi1ational goals( More specifically as Hudson &9::9' reports. in asurvey $ith a sample of fourteen organi1ations $here managers $ere

as#ed to comment on the effects that redundancies and restructuring had

on productivity and costs . nine out of fourteen stated that there $as an

increase on productivity and t$elve that cost reduction $as significantly

favourable( But is this situation definiteL %an organi1ations build

fle2ibility that revolves around their o$n interestsL Another aspect is

that the drive for fle2ibility is ta#en too far. the result could be a lose8

lose situation $herein employees lose health and $ell8being $hilst the


30/104

organi1ation loses essential competencies. capacities for innovation and

long8term competitiveness

Broadly spea#ing. employment fle2ibility has been earned to a degree onthe e2pense of employee commitment( +evertheless. in spite of all the

massive changes in the $or#place. some perceptions in the labour force

are still vibrant( he need to feel a relative level of stability is still /uite

strong in spite of all the discussions and e2amples of restructuring and

redundancies( An interpretation of this is that commitment to$ards

employers is not yet e2tinct but because the $or#place is in the process

of the ma!or changes. the turbulence that has been created as an effect

altered the balance of the old type of employment relationship based on

commitment in e2change for security( Furthermore. the approach that

employment fle2ibility can elicit commitment in the conte2t of involving

employees more in the decision8ma#ing and by offering them morechallenging $or# designs that could augment their s#ills. is debatable( *n

theory. such a principles it operational but as literature suggests. internal

and e2ternal inefficiencies often lead to overcapitali1ation of the human

capital in organi1ations hence adversely affecting levels of commitment(

*t is important to note that this theme although accurate. it is sub!ect to agenerali1ation( here are significant differences from conte2t to conte2t

that $ill influence both employment fle2ibility and commitment( For

e2ample. there are differences bet$een 5uropean and American


31/104

organi1ations through the e2istence of more rigidity in the 5U $ith the

presence of more regulation. more trade unions and an increased call for

employee protection( %ontrary. in the U(S organi1ational structures are

flatter and regulation $ith regards to employment is more rela2ed( Also.

employee reactions as sho$n can vary( he emotional response from a

breach to violation in the psychological contract can differ and as a

result the levels of trust and commitment can also vary from individual

to individual( For e2ample. middle8aged employees are li#ely to have

different perceptions and ability to ad!ust than graduates

52amining the above frame$or# on more practical terms. managers are

mostly afraid about decreases in performance. loss of organisational

citi1enship and the creation of a pessimistic climate in the $or#force(

Simultaneously. the decline of commitment might undermine the very

ob!ectives that fle2ibility $as set to achieve as it $ill impede $ith theorgani1ation7s effort to capitali1e on its intangible assets in an era $hen

human talent and s#ills are a #ey competitive driver( *n spite of the

negative indications. research conducted by the %*PD &9::' suggests

that surprisingly. in the UG contrary to common beliefs employees are

not so fearful about losing their !obs and that commitment levels have

remained relatively stable( >f course. these arguments are sub!ect to

further scrutiny but undeniably present a milder picture. it can also be an

indication that steps can be ta#en to improve the overall picture(

Providing guarantees of !ob security is indeed difficult but measures can


32/104

be adopted to limit the sense of insecurity in employee lines( ,uest

&9:::' suggests for e2ample corporate policies of avoiding compulsory

redundancies as a solution to alleviate the negative sentiments

For their part. HR departments should ensure that the various training

schemes and involvement programs unfold in a pace of partnership $ith

employees( 5/ually. the programs should truly provide opportunities for

development and enhancement of employees7 competencies( his $ould

allo$ not only for people to ma#e themselves more mar#etable but

also to strengthen their bond $ith the organi1ation( Using this method.

HR practitioners could assist in the overall empo$erment of employee

commitment( *n order for any of these measures to ta#e effect it is

necessary to ma#e changes in relevant management practices.from

senior to line management( Starting from the top of the

hierarchicalladder. management should underta#e and ensure theviability of such plans through investment on long8term basis and by

avoiding instances of sacrificing commitment and greater benefits in

favour of short8term cost reductions(

*n the overall redesign of management practices. important is the role of

line managers the ones $ho are the direct lin# bet$een employees andthe organisation( 5/ually they often are the ones $ith authority to deal

directly $ith the $or#ers on most of the daily operations of the

company( %onse/uently. ho$ line managers behave plays a ma!or part in


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motivating positively or negatively the levels of employee commitment(

Summing up. management has to provide a positive leadership outloo#

that $ill inspire trust and a spirit of co8operation in the labour force in

order to facilitate its ad!ustment in the ne$ climate and not feed their

negative sentiments(

+#8 P&e41e

; dedicate this dissertation to the memory of Hans ,eert1 $ho initiated

this research pro!ect and persuaded me to underta#e the research( *t is$ith deep respect ; remember his eff orts to maintain control over the

pro!ect. despite his fatal disease( Army ; remind his everlasting sense of

humour $hich he used as a po$erful tool to ma#e his point( He is sadly

missed( For all of his support. $hen Hans died. and his contribution to

the research * $ould li#e to e2press my gratitude to Bo ,its( Bo proved

to be a critical But valuable discussion partner( hese discussions have

made an improvement to the /uality and the content of this dissertation

; ac#no$ledge "ill Bertrand and ony %horister. the supervisors of this

pro!ect. for their valuable input in the pro!ect( ; especially appreciate the

freedom that "ill offers to Ph(D( students for developing their o$n

ideas. even $hen this process may ta#e /uite some time( ony. though

he !oined in fairly late. became heavily involved( His help also improved

the 5nglish language in this dissertation a great deal( ; than# Peter

Sander and Fran# van der Dun Schouten. $ho completed the committee.


34/104

for their valuable comments( +ot being a mathematician * appreciate the

help that * received in the formulation of the mathematical Models( For

this ; ac#no$ledge especially *vo Adan and =os verity( Goo#sHumber?s

; ac#no$ledge for the development of the simulation program used in

this study(

*n my research * $or#ed together $ith the management of G4M7s repair

facility for the overhaul of !et8engines. %FI( ; li#e to than# G4M for

their interest in my research( >n a part time basis ; $or#ed together $ith

consultancy firm Ri!nconsult( ogether $e developed a trade8off model

to support management in the control of field service organi1ations( As a

result of this cooperation ; gained better understanding in the practical

aspects of management problems( * than# Ri!nconsult. and especially

Maarten "in#les. for the pleasant cooperation. the valuable $or#ing

e2perience and. not unimportantly. the delicious meals(

Paul Stoop. my roommate. became a true friend( ; admire him for his

patience $ith un$illing personal computers( his /uality helped me to

turn my ideas into a nice document( >ur departure from the 5indhoven

University of echnology $ill result in a dramatic drop in the sales for

apple pastry( ; than# family. friends and ac/uaintances for theircontinuous support( Finally ; call the attention to my girlfriend Barbara(

She is the living proof that the investment in my education in Mannheim

$as $ell spent(


35/104

+#6 P&e(imi%&y C'%"ide&ti'%"

*n the beginning of this century. organi1ations gave relatively little

attention to the $ishes of the customer $ith respect to the products theymanufactured and sold( Products $ere manufactured in a small variety in

large /uantities on production e/uipment $hich by today7s standards $as

uncomplicated( he organi1ation of the production process had a

functional orientation. the different process steps $ere decoupled by

means of buffers( Products had long life cycles and $ere delivered to

customers from stoc#(

Since those days the mar#et is becoming more dynamic and demanding(

>rgani1ations must compete for the favours of the customer( o $in the

customer over. the organi1ations are producing and selling their products

in more varieties. $ith short life cycles. at moderate prices and $ith a

high /uality( For many products. delivery from stoc# of a vast product

variety is not economical anymore since it results in unacceptable stoc#

costs( he broad variety as $ell the short product life cycles re/uire

advanced production e/uipment and techni/ues( *n this changing

environment a revolution from Nproduction to stoc#N to Nproduction on

orderN has ta#en place and the competitive measures of short andreliable lead times are becoming important( he organi1ation of the

production process has changed to a product oriented one $ith the

process steps tightly coupled( he products may be manufactured in


36/104

small batches. according to the principles of N!ust in time productionN( *n

this case the interruption of a process step can immediately result in a

late delivery to the customer( *n such an environment a sudden stoppage

of the production process due to failing production e/uipment $ill be

costly and the need for prevention of a sudden standstill of production is

apparent(

An approach to deal $ith a sudden stoppage is avoidance( Avoidance

means either NeliminationN or Nma#ing unplanned stoppage plannedN(

5limination. to some e2tent. is accomplished by means of modification(

Ma#ing stoppage planned is more and more accomplished $ith the help

of condition based maintenance concepts( Such concepts prescribe that

inspection is carried out in planned time intervals( he necessary

maintenance activities are generally only #no$n after inspection and

therefore they cannot al$ays be e2ecuted in the planned time intervals(

+e2t to a reduction in the number of unplanned production standstills it

is also important to minimi1e their duration( As a result of this $e are

noticing in some industries a development to$ards a component

replacement strategy( his strategy re/uires a modular structure of the

production e/uipment( During maintenance of the productione/uipment.

he failed components are replaced by identical hut serviceable

components from stoc#( A failed component is either disposed of or


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repaired( *n the latter case $e term it a repairable item( he repairable

items often represent a fair share of the investment in spare components(

Studies of Sherbroo#and ,erard?ssho$ that they account for more than

:J. by value. of the total investment for spare components(

A repairable item that has failed is sent off for repair in a speciali1ed

repair facility( he capacity of such a repair facility is limited. $hich

means that at certain points in time the demand for repair capacity can

e2ceed the available repair capacity. causing the failed items to /ueue(

Repair capacity consists of tools. machines and repair men( he repair

capacity provided by repair men $e term Nmanpo$erN( %ommonly the

manpo$er is the most costly form of capacity and. therefore. the most

limited( After repair the item is stoc#ed to support future replacements(

he system of limited capacity and stoc#s. through $hich there is a flo$

of repairable items. $e term a Repairable *tem System &R*S'( ypically.the flo$ of repairable items through a R*S has a circular character(

Failures and repairs ta#e turns. but the repairable item itself remains in

the system( he number of items is. more or less. constant and purchased

ahead( his constant number of repairable items $e term the Ninitial

Stoc#N( he management of a R*S can basically invest in manpo$er and

in initial stoc# to meet the demand for repairable items( %learly. the

probability that demand can be filled immediately increases $ith the

investment in initial stoc# and manpo$er( unis probability $e term the

Nfill probabilityN( Both. decisions regarding the investment in initial


38/104

stoc# and manpo$er should be coordinated. in order to obtain a re/uired

fill probability at minimum costs(

Due to tightening customer re/uirements. demand is becomingincreasingly irregular( Repair men are confronted $ith rapid variations

in the number of failed components( *n reaction to these variations it

$ould be convenient if the management of a R*S $ould have the means

to vary the manpo$er level in time( he manpo$er variations that can

be employed in reaction to the variations in the number of failed

components $e term the Nmanpo$er fle2ibilityN( Manpo$er fle2ibility.

to some e2tent. can be imposed by the management of the R*S. for

instance by actively ad!usting the $or#ing day lengths of the repair men(

*n that case $e tal# of Fle2ible Manpo$er Planning &FMP'( he repair

men become a fle2ible manpo$er( Due to loosening restrictions by both

governments and unions the use of FMP has become a popular politicalissue in 5urope( "hen the use of FMP is effective. it should be

controlled together $ith the initial stoc# and the manpo$er(

he considerations regarding initial stoc# manpo$er and FMP should be

part of a broader frame$or# for the %ontrol of R*Ss( lt appears that.

from a production and operations management point of vie$. the use ofMP in R*Ss and the frame$or# for the control of R*Ss are little studied

sofa( *n this dissertation $e address these topics(

De4i%iti'%"#


39/104

A repairable item is-

Na subassembly. technically and economically repairable. that can fulfil

its function in all production e/uipment of a specific #ind(N

52amples of repairable items are $idely available in practice i(e( po$er

supplies. pumps. mounted printed circuit boards. $eapon systems. !et

engines. et cetera( From the e2amples it is clear that there are

considerable differences in both the si1e and the comple2ity of a

repairable item. e(g( compare a mounted printed circuit board to a !etengine( A !et engine corresponds $ith a ma!or investment and for

economic reasons it is considered important that not only the aircraft.

but also the !et engine is restored as /uic#ly as possible( Similar to the

restoration of the aircraft. also the !et engine is restored by means of

component replacement( Such a component. e(g( a turbine. again can be

a repairable item( A repairable item containing other repairable items is

termed a multi8indenture repairable item( *t is termed a single8indenture

repairable8item other$ise(

*# Re@i&b(e Item Sy"tem /RIS0

R*Ss have been studied under a variety of names( "e mention

Nechni/ue for Recoverable *tem %ontrol 0Reparable *tem *nventory

SystemN and NRepairable *nventory SystemN( he aspect of Ninventory

&initial stoc#'N is emphasi1ed in all these( "e li#e to stress that ne2t to

the initial stoc# many other aspects of a R*S can be the sub!ect of study(


40/104

herefore $e introduce the more general term Repairable *tem System

&R*S' and define it as-

NA collection of one or more repair levels and one or more stoc# phases 8each repair level $ith one or more repair departments $ith limited

manpo$er. and each stoc# phase $ith one or more stoc# locations 8

through $hich there is a flo$ of a. more or less. constant number of

repairable items. all in order to support one or more sets of identical

machinesN(

An e2ample of a &comple2' R*S. facilitating a set of machines. is

depicted( he #ey $ords in the above definition are further e2plained(

*#+ Set '4 P&'du1ti'% M13i%e"!


41/104

5ach repairable item should facilitate a number of machines of the same

#ind( Such a group of identical machines $e term a set A set can be. for

instance. a number of copiers or a number of aircraft( he set&s' of

machines are supported by the R*S( hey do not form part of the R*S(

Re@i& Le7e(" %d De@&tme%t"!

After inspection of a multi8indenture repairable8item. the failed

repairable parts are released from the item and sent off to a

hierarchically lo$er repair facility for repair( Such repair facility $eterm a Nlo$er repair levelN( he corresponding R*S $e term a NR*S $ith

multiple repair levelsN( A R*S for the repair of a single8indenture

repairable8item is a NR*S $ith a single repair levelN( A repair level

consists of one or more organi1ational units. each unit containing tools.

machines and repair men( >ne such unit is responsible for the repair of

one or more repairable items( "e term such a unit a Nrepair departmentN(

Limited M%@'?e&!

he capacity of a R*S depends on the availability of tools. machines and

repair men( All factors can be limited. that is the demand temporarily

e2ceeds the availability( *n our study $e restrict ourselves to the R*Ss

$here the capacity of the repair men is the factor $hich is most limited(

Such R*S $e term a NR*S $ith limited manpo$erN( "e remar# that all

R*Ss. observed by us in practice. have limited manpo$er(


42/104

*#*Fee( t3e 4'&1e '4 4(e=ib(e m%@'?e&!

As many industries brace for the difficult times ahead. $ith a looming

oil shoc# and vigorous competition from lo$8cost countries in sluggish5uropean economies. several companies go for lean as the #ey to turn

difficult mar#et conditions into competitive advantage( *ndeed.

historically. lean companies have often thrived in economic do$nturns.

!ust as. originally. oyota gained notice by its une2pected $eathering of

the ;@E oil crisis( %urrently. oyota is e2panding aggressively

$orld$ide and continues to gain mar#et share. vying to become the

$orld?s number one automotive manufacturer(

4ean programme managers tend to complain that lean is difficult in

periods of volume decrease because factory productivity gains are hard

to get in plants set up to produce at high levels of demand- not so( *n

fact. the very definition of productivity gains in the oyota Production

System is to be able to remain e/ually productive at different levels of

demand( For instance. most people $ould thin# of a production line

$here ;: $or#ers ma#e ;:: parts a day $hich. as a result of

improvement. no$ ma#es ;9: as a 9:J productivity improvement( +ot

in lean his is an actual improvement if. and only if. customer demandhas increased by the same 9:J( *f not. this increase of production is

nothing more than overproduction. the number one $aste. and main

crime in lean production(


43/104

4ean see#s the total elimination of $aste. as a $ay to improve the

response to customer needs in terms of lead time. /uality and cost( *n the

lean perspective. profits can be found in the $ay manufacturers ma#e

things- every customer matters. every part counts( he reduction of man8

hours in every operation is done by eliminating the no$ famous seven

$astes- $aste of overproduction O producing too much or too soon6

$aste of $aiting for parts to arrive or for a machine to finish a cycle6

$aste of conveyance O any conveyance is essentially $aste and should

be #ept to a minimum6 $aste in processing O $hen processing does not

go smoothly and re/uires e2tra $or#6 $aste of inventory O any more

than the minimum to get the !ob done6 $aste of motion O any motion

$hich does not contribute directly to value8added6 $aste of correction O

any repair is $aste(

he most blatant $aste in most factories is the first one. the $aste ofoverproduction( Most industrial operations are designed to function at

optimal speed. in the mista#en belief that this guarantees the return on

investment of the capital e2pended in the e/uipment( >bviously. the

more parts a machine produces. the /uic#er it pays for itself. rightL

Possibly. but only if the parts are needed by the ne2t process. and

ultimately by the customer( Unfortunately. this is rarely the case( *n the

automotive industry. for instance. most of the e/uipment is designed

according to the $ildly optimistic predictions of automotive

manufacturers. $ho believe that their latest creation $ill ta#e the entire


44/104

mar#et. and are systematically optimistic in their mar#eting outloo#(

%onse/uently. many industrial machines are able to function at an

optimal speed. $hich is largely greater than real demand(

O7e&time %d '7e&4('?!

Functional fle2ibility- *t allo$s employees to combine s#ills and

competencies in order to increase their mobility across the various

channels of production( Functional fle2ibility relies on e2tensive training

and thus it is li#ely to be pursued $hen there is no longer a stablerelationship bet$een employees and the organi1ation(

+umerical fle2ibility- *t refers to the possibility of the organi1ation to

adapt the number of its labour on a short8notice. increasing or decreasing

it as it sees fit arying employee numbers can be achieved by hiring

temporary agency $or#ers and employing people on fi2ed8term

contracts( +umerical fle2ibility is often related $ith limited employment

security rights(

emporal fle2ibility- *t refers to shifting $or#ing hours so as to meet

production demands( his can include things such as $or#ing overtime

and spreading the $or#ing hours unevenly over a period of time

depending on fluctuations in production( Part8time employment also

might be used by the organi1ation to face even tougher pea#s in demand(


45/104

Financial fle2ibility- *t is lin#ed $ith efforts on behalf of the

organi1ation to reduce labour costs in order to protect profitability( o be

applied. it re/uires partial use of temporal fle2ibility along $ith of cost

savings that come from using through the ad!ustment of $age levels to

reflect performance on individual. group or organi1ational levels(

*n simple terms. the tendency in the UG the last fe$ years has been to

e2ternali1e employment and marginali1e the internal employment

structures( >rgani1ations. all the more select fi2ed8term and temporary

employees opposed to direct employment( his is part of an effort to

decrease costs associated $ith $ages and social benefits thus

minimi1ing the overall cost of labour( his picture depicts the general

deterioration of secure employment conditions $hich is no$ substituted

by the demands from employees to e2ploit $hat opportunities are

offered from cross functional $or#. group8$or# and other related pro!ects in order to gain an advanced level of training and #no$ledge(

hrough these opportunities. employees should try to augment their

s#ills and competencies to ma#e themselves more employable and thus

facilitating their potential transition to another organi1ation( 5ven the

concept of the high road that proclaims the use of the #no$ledge8

economy and is supposed to lead to the creation of a sophisticated

$or#force through the transfer of competition from cost8minimi1ation to

the development of superior products. often diverges from its roots( As

globali1ation rises further. organi1ations reali1e that it is becoming


46/104

increasingly difficult to reduce costs $hilst maintaining a high standard

of /uality

*#- Em@('yme%t 4(e=ibi(ity %d 1'mmitme%t!

Based on the earlier analysis. employment fle2ibility presents a tendency

to cause feelings of uncertainty and insecurity to employees( +aturally

there are differences among countries and social conte2ts &e(g( 5U and

the U(S(A' but the voice that there are no more !obs for life is

increasing( Undoubtedly. this is bound to have adverse effects onemployees and trigger negative reactions( he latter is further

accentuated as trade union po$er declines and other forms of collective

representation become marginali1ed( >ne of the most prominent feature

employees bring into the 5R is the sense of commitment to the

organi1ation $hich is not possible to remain unaffected in the general

environment of instability(

he first /uestion that needs to be as#ed is ho$ employee commitment

is borne inside the employment relationship( he most fre/uent tool to

describe the 5R and eventually leads to commitment is the

psychological contract( "e can describe it as individuals beliefs.

shaped by the organi1ation. regarding the terms of an e2change

relationship bet$een the individual employee and the organi1ation *n

simple $ords. employees offer to the organi1ation their labour. s#ills.

loyalty etc( and in return they perceive the organi1ation must comply to


47/104

a set of obligations such as financial re$ards. employment benefits. !ob

security etc( Similarly. the organi1ation anticipates that employees $ill

perform at high levels. $ill be loyal to the company and $ill $or# to

achieve the organi1ations goals

he psychological contract in not in a $ritten format as standard

employment contracts &%*PD. 9::


48/104

that someho$ the P% is violated than it is li#ely it $ill have adverse

effects on performance( *t is evident that the same changes that gave rise

to employment fle2ibility described earlier also shifted the state of the

employment relationship( his is precisely $hy. the psychological

contract is a vital tool to gauge employee reactions in the changes

occurring in the $or#place( 5/ually. it allo$s comprehending ho$

commitment levels have been affected from the entire process $ith the

changes in the conte2t of the P% and the renegotiated 5R. it is li#ely that

some employees might feel that the organi1ation is failing to meet its

obligations and vie$ their e2pectations not met( his could affect their

overall loyalty and performance to$ards the company( he latter

phenomenon is often termed as a violation or breach of the

psychological contract &Rousseau. ;@@'( "e should point that it is

possible to distinct among the various degrees of intensity that violation

of the P% ta#es( *t is possible for employees to be a$are of their

employer7s inability to meet e2pectations or that parts of the contract

have not been fulfilled timely and thus the reaction might be mild in

light of a perceived breach( >n the other side. a violation produces a

much stronger and emotional response &Morison and Robinson. ;@@'(

he effects of P% violation are strongly dependent on the emotionalresponse it triggers to employees( Due to the sub!ective nature of

employees7 e2pectations. the reactions in the event of a violation or

breach could differ. leaving a portion of the employees $ith a strong


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sense of in!ustice from the organisation and another portion feeling less

damaged &Deer. *verson Q "alsh. 9::


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$ith little attention paid to employees( Recapping. on one end is the

disruption of the old psychological contract as perceived by employees

and on the other end. the promises for employability and increased s#ills

in return for increased performance and commitment he latter is often

th$arted by the inability of the system itself. the un$illingness of

management to pursue such long8term strategies and the negative

feelings of employees to$ards this climate of change(

St'1> L'1ti'%"!

*n order to accomplish a /uic# replacement of failed items. their

serviceable counterparts are often stoc#ed nearby the set&s' of

production machines( *f these sets are scattered. e(g( copiers. the stoc#s

$ith serviceable items are also li#ely scattered( Such R*S $e term a

NR*S $ith multiple stoc# locationsN( *f these stoc# locations are supplied

by a common stoc# location $e term it a NR*S $ith multiple stoc#

phases and multiple stoc# locationsN( A R*S $ith a single stoc# location

for the repairable items. for instance a R*S facilitating a blast 8 female.

$e term a NR*S $ith a single stoc# locationN(

C'%"t%t Numbe& '4 Re@i&b(e Item" /I%iti(G St'1>0!

52cept for some failed components that are disposed off during

replacement or repair. the repairable items once purchased never leave a

R*S( he disposal is generally very small. i(e( not more than J annually

and therefore is assumed negligible in our study(


51/104

*#, F(e=ib(e M%@'?e& P(%%i%2 /FMP0

"e define fle2ible manpo$er planning &FMP' as-

Nhe instrument that directs all measures to accomplish variations in the

manpo$er on the short term( he instrument is under the authority of the

manager and can be applied $ith a short lead time N(

According to. the attributes of FMP are lead time and authority( N4ead8

timeN is the time bet$een announcement and implementation of a

measure and NauthorityN refers to the command that bas the po$er to

initiate a measure. the manager or the repair man( FMP in our study is

used in response to an irregular demand patter on the short term( Hence.

$e are interested in those measures $ith a short lead time that can be

initiated by the manager( here are four such measures(

&;' subcontracting.

&9' repair men leasing.

&


52/104

leasing is often not a suitable option for R*Ss( he use of overtime is

probably initiated by the manager. but in practice nearly al$ays accepted

by the repair men because of the good financial compensation( *t is. in

general. an e2pensive measure of FMP( A variable $or#ing day means

that the number of hours on a particular day is permitted to deviate. in

either direction. from the number of $or#ing hours on a standard

$or#ing day( unis measure. yet little studied in R*Ss. is the sub!ect of

our research( *n this dissertation $e use FMP as a synonym for the

application of variable $or#ing days(

Psychological effects associated $ith variations in the day length $e

assume negligible( *n other $ords. $e assume that FMP affects the

output level of the repair men proportionally $ith the day length( Further

research. outside the scope of this thesis. must sho$ $hether this

assumption is valid(

FMP. $hen not properly controlled. could result in the use of e2tra

manpo$er. i(e( structural overtime( o disentangle the use of Ne2tra

manpo$erN from the use of Nvariable manpo$erN in this study. $e

impose the re/uirement that the use of FMP may not result in e2tra

manpo$er on the long term(

Ab'ut t3e Re"e&13

his report details the findings of the t$o8year research pro!ect

conducted by %ranfield School of Management; and "or#ing Families


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into the impact of fle2ible $or#ing practices on employee performance(

Seven leading companies too# part in the research- %entrica6 %iti6

GPM,6 4ehman Brothers6 Microsoft6 Pfi1er6 and the Defence Aerospace

business in Rolls Royce(

hree main approaches to data collection $ere used- staff surveys. semi8

structured intervie$s and focus groups of sta#eholders $ithin each

organi1ation( 5mployees $ere invited to respond to the survey through

an internet lin# $hich ensured confidentiality and


54/104

organi1ation. challenges of managing fle2ible $or#ers. career

progression and company support for fle2ible $or#ing( Focus groups

involved a further I: participants $ho $ere sta#eholders in fle2ible

$or#ing from different departments or divisions $ithin each

organi1ation(

*#8 F(e=ib(e ?'&>i%2 1&'"" t3e '&2%i"ti'%

isible employee( %larity $ith regard to the positive effects of fle2ible

$or#ing on performance should enable organisations to address any poc#ets of resistance. and to encourage ne$ thin#ing about the most

effective $ays to $or#( ,reater cultural acceptance is apparent $hen

larger numbers of staff from all levels and departments describe their

$or#ing pattern as fle2ible. $hether formally $ith an agreed contractual

change or informally through agreement $ith their manager(

-# Em@('yee ?e((bei%2%d ?'&>(i4e b(%1e

he positive $or#8life balance effects of fle2ible $or#ingare probably

the best #no$n and most fre/uently citedadvantages( Aiming for a

greater balance bet$een demandsfrom $ithin and outside the $or#place

is often the driver forindividuals to see# such arrangements( he

interplay bet$eenemployee $ellbeing. $or#8life balance and

performancebrings into play factors such as organisational commitment.

enthusiasm. energy and satisfaction( he findings support theintuitive

e2pectation that the employee $ho is better able to integrate $or# and


55/104

non8$or# $ill e2perience enhanced$ellbeing( *ndirectly. this positive

association impacts onperformance. $ith employees in a sense

repaying? theirorganisation $ith improved levels of motivation and

drive(

Some employees $ho had become accustomed to $or#ingfle2ibly

e2pressed un$illingness to move bac# to a moretraditional pattern.

lin#ing their fle2ible arrangement to reducedpressure and stress( here

$as abundant evidence ofindividuals adapting their $or#ing

arrangement over time tomeet both changing !ob demands and evolving

demands fromthe home. and great value $as placed on the personal

controlto meet needs from both domains $hich $as afforded by their

fle2ible $or#ing pattern( So fle2ibility is highly valued. but does not

remain static over time(Stress is lin#ed to $ellbeing and $or#8life

balance. and herethe picture is less clear( Fle2ible $or#ing could be seenas apositive measure $hich helped reduce $or#place stress through

reducing hours. cutting do$n on commuting time and minimising $or#

overload( Ho$ever. it could also be asource of stress. if a reduction in

hours meant that employeesstruggled to achieve ob!ectives $hich had

not beenappropriately reduced to match such a change( his

reinforcesthe message that fle2ible $or#ing needs to be $ell designed

tosucceed. particularly in the case of reduced hours $or# $herethe

re/uired tas#s of the role should reflect the hours available(


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"herefle2ible $or#ing is genuinely available to all employees$ithin an

organisation. it is perceived as more acceptable than$hen used only by a

limited group of employees( his isirrespective of $hether or not

organisational policy says thatfle2ible $or#ing is available for all( he

gap bet$een the rhetoricof policy and the reality of the types of

employees $ho actuallyta#e up fle2ible $or#ing can be indicative of the

culture of theorganisation( >ften fle2ibility for all? translated into a

large ofma!ority of parents of young children &particularly

mothers'$or#ing in fle2ible $ays( his reinforces stereotypical vie$s of

$hat it means to be a fle2ible $or#er( here $as nothingunusual

identified in the barriers to a genuine fle2ible $or#ingculture-

managerial resistance6 a lac# of role models. especiallysenior men6 an

un$illingness to go against the grain?6 $ell8founded suspicions that

career prospects $ould be harmed6an over8complicated application

procedure("here fle2ible $or#ing is more successfully ingrained in

theculture there is an emphasis on outcomes rather than beingvisible and

available in office hours?( 5mbedding a fle2ible$or#ing culture results

in increased numbers of people$or#ing fle2ibly outside of the traditional

groups( echnologyis a #ey enabler. $ith ease of communication valued

abovephysical location. helping to undercut presenters(

5mbedding a fle2ible $or#ing culture $ithin an organisation isdifficult.

and can. to some e2tent. be aided or hindered by thesector in $hich the

company operates and the type of $or# itdoes( Ho$ever. the similarities


57/104

bet$een organisations $illout$eigh the differences especially in large

organisations(Many roles and teams $ill have functions $hich are

broadlye/ual( *n addition. other factors that drive employees to

see#fle2ibility. such as the desire for $or#8life balance or caring

responsibilities. remain constant( 52amining the barriers to cultural

change in some organisations. and the successfulembedding of a fle2ible

culture in others sho$s some generalpoints $hich may be of benefit(

*dentifying poc#ets ofresistance is useful. and devising strategies to

combat themmay be helpful. such as the provision of support to

managersof staff $ith fle2ible $or#ing patterns( >rganisations also

needto embrace and invest in technology and training to allo$ themto

ma2imise the benefits of remote $or#ing. and this includesthe provision

of appropriate support(

-#+ O&2%i"ti'%( 1'mmitme%the research $as able to identify that fle2ible $or#ers $ere more

committed to the organi1ation than non8fle2ible $or#ers( his is

important. not least because it challenges the assumption that fle2ible

$or#ing arrangements such as part8time hours or remote $or#ing are a

sign of reduced commitment( Such an assumption can be damaging to

careers and to effective management. and suggests that factors other than

performance may be in play $hen evaluating the $or# of fle2ible

employees( here is a conse/uent ris# of undervaluing the contributions

of fle2ible $or#ers( *t is imperative that organi1ations recogni1e and


58/104

value the enhanced commitment levels amongst fle2ible $or#ers. and

develop $ays of translating this into tangible benefits for everyone

concerned(

As noted in the summary and in a later section of the report. some

respondents reflected that there $as scope for more training to be

offered in relation to fle2ible $or#ing( Both employees and their

managers agreed on this point $ith some employees loo#ing for

guidance on issues such as the technical aspects of remote $or#ing.

$hile managers $ould $elcome training in dealing $ith and managing

fle2ible $or#ers both individually and $ithin the team environment( et.

as the research identified. there are large numbers of employees $ith an

informal fle2ible arrangement. $hich may ma#e formal? training more

difficult to achieve(

For fle2ible $or#ing to be seen as more than !ust an add8on. a revie$ of

the goals and methods of HR policies is desirable(

*n essence. this means that policies need to be revie$ed in the conte2t of

all employees. $hatever their $or#ing arrangements. to ensure that

people are managed effectively( his is particularly important for issuessuch as career progression. supervision and face time?( For e2ample.

evidence suggests that employees $ho are less visible in the $or#place

may suffer in terms of promotion and the allocation to prestigious


59/104

pro!ects although policies may not e2plicitly specify visibility as a

necessary criteria for success( he #ey issue is to establish policies

$hich do not inadvertently hinder fle2ible $or#ing practices. but rather

to support them(

-#* Tem ?'&>i%2

he ma!ority of respondents felt that fle2ible $or#ing had no impact on

the performance of teams $ithin the organi1ation( he positive impact

on team effectiveness reported $as lo$er than in the cases of /uantity

and /uality of $or#( More respondents felt there $as a positive rather

than negative effect. but the proportions $ere less than for /uality and

/uantity of $or#(


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*t $as felt that teams had to be able to meet their ob!ectives first. $hile

accommodating individual needs for fle2ibility $herever possible

0he need to address fle2ible $or#ing as a team. to ensure the

productivity of the team. remains high and all deliverables are met( *t is

not !ust about focusing on the individual needs of the team. but also the

on the aims and ob!ectives that they are there to fulfil(3

5mployee co8operation is vital to team $or#ing. $ith a dialogue to deal

$ith the implications of people $or#ing in different $ays-

Managers ac#no$ledged that co8operation $as vital. and $ere mindful

of potential bac#lash against fle2ible $or#ers if colleagues felt that they

$ere pic#ing up $or# left undone by those $ith fle2ible arrangements-

0here is a potential for conflict $hereby the $ider team feels that so8

and8so is leaving at because of their fle2ible $or#ing arrangements.

and yet $e?re having to stay until or @ o?cloc# to get this pro!ect

finished- and so there is that $hole #ind of tension that can arise(3

%oncerns $ere raised about isolation. both from fle2ible and non8

fle2ible $or#ers-

0* came in at si2 and * didn?t see anyone from my team until ;:(


61/104

e2pect them to be to assuage any concerns about being a team player-

0our communication has to be e2cellent. because you?ve got to be

telling your team e2actly $hat you thin#- $hen things must be delivered.

so you can meet deadlines. so that they #no$ if you?re going to be out if

certain things come up and ho$ they need to be handled(3

-#- Rete%ti'% %d &e1&uitme%t

>verall it $as $ell understood that one of the main aims of fle2ible

$or#ing policies $as to assist $ith the recruitment and the retention of

#ey staff $ith varied s#ills( Fle2ible $or#ing. allo$ing employees to

attend to other concerns outside the $or#place. $as highly valued by

employees-

0>ne of the reasons * stay $ith the organi1ation is the fact that *?ve got

that fle2ibility( *t enables me to meet family commitments. $hether it?s

the #ids or $hether it?s my $ife(3 here $as also a recognition that

fle2ible $or#ing signaled a more adult relationship bet$een the

employer and employee- 0"e?ve got fle2ibility in all senses of the $ord

and it?s one of the things $hich #eeps meC everybody came here

because you?re treated li#e an adult but at the end of the day it?s $hat

#eeps people here( he thought that *?d have to go and do a !ob that *

have to be in the office for eight thirty and everyone $ill disappear at(Epm in the evening. * don?t #no$ ho$ *?d $or# in that culture( * thin#

*?d find that very hard(3


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*n addition. there $as evidence that fle2ible $or#ing $as a #ey factor

for $omen returning to $or# after maternity leave. as $ell as being

attractive to ne$ recruits to the organi1ation(

-#, I%di&e1t Im@1t '% Pe&4'&m%1e

*ndirect factors $hich have an impact on performance are !ob

satisfaction. organi1ational commitment and the level of stress

e2perienced(

52isting research on the lin# bet$een people and performance found

that these factors areoften greater $hen people have a degree of choice

over ho$ and $here they do their !ob(

Policies such as fle2ible $or#ing encourage positive attitudes to$ards

$or# and theorgani1ation. leading to discretionary behavior $hich

ma#es people $or# harder. resultingin improvements in performance(

>verall there $as a positive relationship bet$een $or#ing fle2ibly and

both $or#8life balanceand organi1ational commitment( *n addition. for

reduced8hours $or#ers there $as a positiverelationship $ith $or#

facilitation and satisfaction $ith pay(

-#8 O&2%iti'%( 1'mmitme%t

High levels of commitment $ere identified by those $ho themselves

$or#ed fle2ibly. and this $as supported by colleagues and managers-0*?ve seen nothing but improved commitment from the individuals $ho

have been offered and are currently occupied either $or#ing from home.

career brea#s. reduced hours. compressed hours and the multitude of


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$ays $e offer that(3 0* guess. more motivated but also /uite grateful in

some respects. that they?ve accommodated that( So * guess O it sounds a

bit cheesy O but it $ould increase loyalty to an organi1ation(3

St&e""

he overall impact of fle2ible $or#ing on stress can be seen belo$

he opportunity afforded by fle2ible $or#ing for a better $or#8life

balance $as seen by many respondents as a $ay of avoiding or

dispersing stress-

0* thin# stress levels are do$n( * thin# that in some respects * consider

myself /uite fortunate that * have a team that has embraced fle2ible

$or#ing in the spirit in $h

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