The significance of employee skill in flexible work organizations

Abstract

Pressures for flexibility among enterprise employees have been explained in previous studies to be largely the result of exogenous factors driven by market pressures for improved product variety, quality and service. This paper derives new insights into the concept of flexibility based on the premise that manufacturing systems based on traditional hierarchical control have significantly given way to enterprise practices that stress a direct connection between employee skill enhancement, market outcomes and rewards. Through an analysis of the 1998 Workplace Employee Relations Survey (WER98) the study provides a more substantive explanation of the variables associated with flexibility, which have become significant in the transition process towards modern enterprise practices. Flexibility is demonstrated to be not only market driven but also dependent on endogenous factors directly promoted by management that stress workforce participation, collaborative working and multifaceted skills development. We provide empirical support for these arguments from an analysis of WERS98.

Keywords:

• Employee skill
• flexibility
• participation
• WERS98

Acknowledgements

The authors acknowledge the Department of Trade and Industry; the Economic and Social Research Council; the Advisory, Conciliation and Arbitration Service; and the Policy Studies Institute as the originators of the 1998 Workplace Employee Relations Survey data, and the Data Archive at the University of Essex as the distributor of the data. For helpful comments, the authors thank Peter Abell, Roderick Martin and Stephen Roth.

Notes

1 These can also be explained by low-powered incentives as analysed by Williamson (1985).