Oxford University Press Southern Africa 2008 All rights

© Oxford University Press Southern Africa, 2008. All rights reserved. Chapter 5 Managing flexible patterns of work for competitive advantage © Oxford University Press Southern Africa, 2008. All rights reserved.

© Oxford University Press Southern Africa, 2008. All rights reserved. Learning outcomes After reading this chapter you should be able to: • define the concept of flexibility • distinguish between the different types of flexibility • list ten organisational/management practices organisations can use to determine whether they are ready for flex work • discuss the flexible firm model • discuss the changing dynamics of the workplace and its impact on new forms of flexibility

© Oxford University Press Southern Africa, 2008. All rights reserved. Chapter Content • Opening case: Managing diversity for competitive advantage at Deloitte & Touche • Introduction • Concept of flexibility • Types of flexible patterns of work (advantages and disadvantages) • Organisational readiness • Flexible firm model • Changing dynamics of the workplace • Impact of new forms of flexibility

© Oxford University Press Southern Africa, 2008. All rights reserved. What is flexibility? • ability of the organisation to adapt the size, composition, responsiveness and cost of the people inputs required to achieve organisational objectives

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility • Functional flexibility = management's ability to deploy and redeploy particular sections of the workforce on a wide range of tasks, in response to market demand, as and when required • Numerical flexibility = quantitative approach to the utilisation of the workforce

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility • Work-time flexibility or internal numerical flexibility = further process of adjusting the 'quantity and timing of labour input without modifying the number of employees' • Job sharing = where one job (often full-time) is split between two (or more) employees

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility • Distancing = relates to the outsourcing of activities that may include core and non-core activities • Financial flexibility = a compensation system designed to facilitate the development of flexible patterns of work, in particular numerical and functional flexibility

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility • Procedural flexibility = the central tenet in the development of flexible patterns of work, particularly in the highly regulated labour markets • Regulatory flexibility = a process to encourage and facilitate the establishment, development or relocation of enterprises through the relaxation, amendment or exempting of public policy

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility • Mobility/location flexibility = involves a change in the nature of work, or a career change with the same employer • Cognitive flexibility = the mental frame of reference required to effectively perform in the job and the level of cognitive skill required • Organisational flexibility = a structural response to the development of flexible patterns of work

© Oxford University Press Southern Africa, 2008. All rights reserved. Organisational readiness for flex work • policy - Are there specific policy and strategy statements approved and communicated by top management that endorse flex work as a component of the employment relationship? • employee commitment - How deeply are employees committed to the success of the organisation's mission and high achievement in their own jobs? • management commitment - Do the actions of management as well as their communications to employees reinforce management's support for flex work?

© Oxford University Press Southern Africa, 2008. All rights reserved. Organisational readiness for flex work • workforce planning - How good is the organisation at forecasting projects, deadlines, production quotas and workloads, at scheduling workforce needs and at allocating resources? • technology - Are information technology and communication systems in place to support flex work in smooth, efficient, consistent ways? • training and orientation - How effective are training content and delivery mechanisms for meeting the ongoing needs of flex workers?

© Oxford University Press Southern Africa, 2008. All rights reserved. Organisational readiness for flex work • teamwork - To what extent is work done in teams, and is there sufficient coordination to ensure coverage and to compensate for having team members on different schedules? • performance management - Are there methods for performance measurement, employee appraisal, and staff development that are equivalent, if not identical for flex workers and others?

© Oxford University Press Southern Africa, 2008. All rights reserved. Organisational readiness for flex work • decision making - Who holds decision rights and makes key decisions in the course of everyday work? • communication & information dissemination How effective are the means, media and frequency of communication of everyday business information and are those processes robust enough to keep flex workers in the loop?

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexibility and organisational design • increasing use of multiple forms of flexible patterns of work, to facilitate more timely responses to the competitive forces of the market • required the parallel development of organisational structures to facilitate these • provides management with the template to adjust and utilise the available human resources in a flexible manner in response to changing demands • flexible firm model/core-periphery model

Flexible firm model

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexible firm model • provides competitive advantage through the restructuring of the employment relationship • based on a break with unitary and hierarchical labour markets and organisation of internal means of allocating labour, in order to create a core workforce and a cluster of peripheral employment relations • redefines the organisation into two broad segments: – core – periphery

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexible firm model core made up of a permanent, highlyskilled group of employees with internal career peripheral workforce associated with organisation's development of qualitative/numerical flexibility (undertaking of important, but not vital day-to-day activities ) • development of the flexible firm model reactive to the demands of the market, rather than a new-found strategic view of management towards the organisation of its human resources

© Oxford University Press Southern Africa, 2008. All rights reserved. Flexible firm model • implies a distinctive strategy on the part of management in developing more efficient and effective labour utilisation • criticised for its promotion of variation in terms and conditions of employment within organisations • provide a framework for analysis, insight and explanation with respect to the development of new patterns of work

© Oxford University Press Southern Africa, 2008. All rights reserved. Changing dynamics of flexibility • new workers - the changing dynamics of the flexible core worker – need to attract, retain and develop key employees for the core activities and develop a stable supply of workers for the periphery – new 'core' workers in the emerging 'knowledge' economy increasingly own the means of production - knowledge which attracts large rewards – ‘gold collar workers’ • understand what motivates them • think differently, behave differently and have needs differently to the traditional employee • self-focused and less interested in the traditional benefits of employment (job security and working conditions) • manage their own careers

© Oxford University Press Southern Africa, 2008. All rights reserved. Changing dynamics of flexibility • new organisations - the changing dynamics of the flexible organisation – organisational design – accepting and accommodating the movement of human resources into and out of the firm – providers of new information – encouraging 'core' staff to leave to develop themselves and allow new talent into the core organisation developing a hybrid of the core-periphery model – management of 'distributed knowledge systems' or networks – team-based workforce – management's ability to derive competitive advantage from continually developing and exploiting both its knowledge stock and knowledge flows

© Oxford University Press Southern Africa, 2008. All rights reserved. Changing dynamics of flexibility • new perspectives - flexible workers need flexible managers – role and development of management is overlooked – new capabilities can only be developed where management understands this and has the skills and knowledge to create such an environment – employer of choice – management acts as the catalyst in the through flow of staff to enable the organisation to continually regenerate its knowledge base – invest resources in employees to ensure they continue to develop their knowledge, skills and ability to ensure the organisation develops sustained competitive advantage through their human resources

Advantages and disadvantages of flexible patterns of work Employer’s perspective: • Advantages Disadvantages • • enable employers to match organisational resources more closely with customer/product demand reduce fixed costs aid recruitment & retention increase productivity reduce absence & turnover • • • increased training costs higher direct costs a more complex administration communication difficulties management of the flexible workforce

Advantages and disadvantages of flexible patterns of work Employee’s perspective: Advantages • • the ability to combine work with outside interests greater job satisfaction improved motivation less tiredness Disadvantages • • • unequal treatment in terms of pay & benefits reduced career opportunities limited training opportunities the 'psychological contract' is challenged increased job insecurity increased stress