Businesses are into a phase of creative disassembly where reinvention and adjustments are constant. Hundreds of thousands of jobs are being shed by Lockheed Martin, Chevron, Sam’s Club, Wells Fargo Bank, HP, Starbucks etc. and the state, counties and cities. Even solid world class institutions like the University of California Berkeley under the leadership of Chancellor Birgeneau & Provost Breslauer are firing employees, staff, faculty and part-time lecturers through “Operational Excellence (OE) initiative”: last year 600 were fired, this year 300.
Yet many employees, professionals and faculty cling to old assumptions about one of the most critical relationship of all: the implied, unwritten contract between employer and employee.
Until recently, loyalty was the cornerstone of that relationship. Employers promised work security and a steady progress up the hierarchy in return for employees fitting in, accepting lower wages, performing in prescribed ways and sticking around. Longevity was a sign of employer-employee relations; turnover was a sign of dysfunction.
None of these assumptions apply today. Organizations can no longer guarantee work and careers, even if they want to. Senior managements paralyzed themselves with an attachment to “success brings success’ rather than “success brings failure’ and are now forced to break the implied contract with their employees – a contract nurtured by management that the future can be controlled.
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Jettisoned employees are finding that their hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.
What kind of a contract can employers and employees make with each other?
The central idea is both simple and powerful: the job or position is a shared situation. Employers and employees face market and financial conditions together, and the longevity of the partnership depends on how well the for-profit or not-for-profit continues to meet the needs of customers and constituencies.
Neither employer nor employee has a future obligation to the other. Organizations train people. Employees develop the kind of security they really need – skills, knowledge and capabilities that enhance future employability. The partnership can be dissolved without either party considering the other a traitor.
Let there be light!