Just imagine that I am working at Canada Life Insurance as a Risk manager
Greer (2001) describes the growing use of contingent workers who, unlike permanent and core employees, usually have only a short-term affiliation with the organization. These workers include “temporaries, subcontracted workers, part-time workers, consultants, life-of-the-project workers, and leased employees” . The contingent workforce is particularly common in unbundled or network organizations where non-core activities or activities outside the expertise of the firm are outsourced.
Similarly, Handy (1993) contends that the future will see more Shamrock organizations, modelled on the three leaf clover. The three leaves of the Shamrock represent the following:
- A core workforce—These are managers, technicians, professionals, and skilled workers who are essential to the organization. They are well paid and well looked after. They are expected to do whatever is needed to complete essential tasks and keep the organization together. They are expensive, so there are not many of them.
- A contractual fringe—In the 1980s large organizations began to shed support staff (e.g., cleaning, printing, delivery, legal staff, nurses, etc.) who were frequently expensive and underemployed. Companies are now contracting out more and more of what they used to do in-house.
- A flexible labour force—Organizations are no longer storing workers so they will be able to cope with peak periods without overtime. However, they do not want to overload core workers when there is pressure to get things done. It ischeaper, if less convenient, to hire occasional help, part-time employees, or temporary employees at lower rates.
The extreme is the virtual organization which has a small head office staff with almost all activities contracted out. Handy cites an example of a German manufacturer of garden equipment who subcontracted manufacturing, design,accounting and finance, and franchised the sales operation. He then closed his office and now operates out of his Mercedes with a cell phone.
Please discuss the following questions with your colleagues.
- In your area of work, which tasks could be done by outsiders (either other organizations or individuals)? What would be the advantages and disadvantages of contracting out such tasks?
- What would it be like to manage in a Shamrock organization—to be holding the leaves together?
- If you were to move into the contingent workforce, what impact would it have on your personal life? What advantages or difficulties would such a change create for you?
- Are contingent work and Shamrock organizations where we should be headed? What are the implications of this approach to HRM for demographics, global competition, and the economy? If more and more organizations move toward the Shamrock structure, what do you think will be the implications for society? Is this move for better or for worse?
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