1. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.1 Objectives  Explain the concept of employment systems and the ways in which different employment systems can be defined.  Present an analysis of the factors that determine the type of employment system that an organisation operates.  Show how changes in these factors have influenced trends in employment systems in the late twentieth and early twenty-first centuries.  Present a critical appraisal of current ideas concerning the future of employment systems and their implications for HRM.

2. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.2 Key themes The nature of labour markets and employment systems Influences on employment systems Contemporary changes in employment The future of employment systems and the implications for HRM

3. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.3 The defining dimensions of labour market types External–internal –extent of reliance on external or internal recruitment Unstructured–structured –extent to which there are clearly defined boundaries to the labour market Competitively–institutionally regulated –terms and conditions determined by market competition or formal institutional regulation

4. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.4 Types of labour market Open external labour market –external, unstructured, competitively regulated Structured occupational labour market –external, structured, institutionally regulated Internal labour market –internal, structured, institutionally regulated

5. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.5 Figure 4.2 Influences on the development of employment systems

6. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.6 Labour requirements, internalisation and externalisation Need for stable workforce Nature of skill required Cost of direct control Responsible autonomy High Organisation- specific High Internalised system Low Transferable Low Externalised system

7. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.7 Organisational constraints, internalisation and externalisation Size of org. Financial & managerial resources Hierarchy Product market power Large Tall High - monopoly/ oligopoly Internalised system Small Flat Low - atomistic competition Externalised system

8. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.8 Worker pressure, internalisation and externalisation Workforce stability Work-group Cohesion Unionorg. Union focus High Strong Company/ workplace Internalised system Low Weak Occupation/ labour market Externalised system

9. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.9 Labour market environment, internalisation and externalisation Labour supply Vocational training system Collective bargaining structure Access to disadvantaged groups Scarce Organisation- specific Single employer Limited access Internalised system Abundant General Multi-employer Easy access Externalised system

10. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.10 Contemporary changes in employment Workforce reductions –‘downsizing’ and ‘delayering’ Wider use of ‘nonstandard’ labour –part-time, temporary, fixed-term, freelance Spread of ‘contracting out’ More variable pay systems –individual performance-related pay

11. Human Resource Management, 4th Edition © Pearson Education Limited 2004 OHT 4.11 A map of factors underlying contemporary changes in employment Wider institutional environment – financial deregulation, international mobility of capital, globalisation, growing domination of MNCs in world markets, increased emphasis on ‘shareholder value’ Labour market environment – unemployment, workforce reductions, government policies to promote labour flexibility and limit trade union power Organisational constraints – smaller, flatter, fewer internal promotion chances. Increased short-term financial pressures Employers’ labour requirements – transferable skills, flexibility Workers’ pressure and influence – decline in union membership, recognition and influence; pressure on workers to comply with management demands to protect jobs Organisation’s employment system – smaller workforces, weaker commitment to long-term employment security, increased use of nonstandard workers, devolution of responsibility, requiring task flexibility and more broadly defined job roles, individualised pay systems, weakened internal labour market structures