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11 Cards in this Set

  • Front
  • Back
legal contract
Unless there is an explicit written contract—collective bargaining agreement of an executive contract, most employment “contracts” are assumed to be “employee at will” and implied contract where some terms are spelled out but most are not!
social contract
We have basic “social”/cultural expectations—reciprocity and fairness. We learn the details of the terms when we join the “group”. Often the terms are not explicit.
psychological contract
This is what we perceive as the terms of exchange. I also perceive that the employer sees it the same way.
employment at will
- Based on old British common law
- Employee or employer can terminate relationship anytime for any reason
- In U.S., contract is this unless otherwise stated or state legislated
"Old" Social Contract Employer Provided
-Promotions and career for life with one firm
- Training, incr. comp, health, pension, paid vacation
- Job security
- Is this attractive?
"Old" Social Contract Employee Provided
- Cooperation and loyalty
- Effort and productivity
- Specific knowledge and skills
Assumptions of "Old" Social Contract
- High profitability
- Growth
- Mutual trust
- Long-term relationship
- Mutual benefits
- Which industries can meet these assumptions?
"New" Social Contract Employee Provides
- Management of own career across firms
- Development of own skills
- Commitment
- Effort
- Productivity
- Doesn’t this like self-employment or contingent work to you?
"New" Social Contract Employer Provides
- Challenging paid work
- Help with “employability” skills and career outside the company
- Work contingent on company’s profitability
- Pay contingent on performance-individual and firm
- Portable benefits
Benefits of "Old" Social Contract to Employer
- Skilled productive work force
- Hard to imitate because uniquely skilled and not easy to find in the market place
- Flexibility in the long-term—work force would change if required to because trusting relationship
Costs of "Old" Social Contract to Employer
- Inflexible in the short-term
- Costly in the short-term—wages could be higher than market
- Costly in the long-term—benefits could be higher than market