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Towards a flexible labor market in the Netherlands

An exploration on the match of new human resource concepts with Dutch society

MSc thesis of Joost Baljon (s1477579)

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Introduction

Human capital is an important asset to organizations. The way human resources are managed is vital to business performance and continuity. In my master’s program International Financial Management, several courses have been about managing culture, change, trust and resources. All these factors are brought together in this research on the fit of new human resource concepts with the Netherlands: under changing circumstances, does the Netherlands have a culture (with enough trust and confidence), in which new human resource concepts fit in and bring benefits to all parties involved?

The research started with two personal notions:

1) the responsibility for employability in the Netherlands lies to a relatively large extent with the employer; and

2) both economical and societal forces require all parties involved in the labor market (employers, employees, government) to change the way they previously thought about careers and (the bases of) social security.

The first notion is rather subjective. It stems from sequential observations that often when there is news about a group of workers losing employment, both employees and government claim that the former employer is responsible for making the workers employable by retraining them; or compensating them for their weak position on the labor market. In my belief, companies should be focusing on adding value and continuity; and employees should be concerned with (increasing) their attractiveness to these companies.

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First a summary will be provided of human resources: what are these resources; how do human resources ‘work’ within work organizations; what is their strategic importance; and how can this human resources strategy be aligned with a company’s general strategy? This review will be based on the opening chapter of the book “The strategic managing of human resources” (Leopold & Harris, 2005), titled: “Organizations, strategies and human resourcing” (Watson, 2005).

After this broad introduction, the concept ‘Flexible citizenship’ will be explored to introduce a new perspective on who we are, and where we belong to. Although these philosophic questions are not addressed directly, they are partially ‘answered’ by the provision of the concept of (multiple) flexible citizenship(s). Unlike in today’s society where people are citizen of one or at most two nations, under flexible citizenship people become citizen of the organization(s) they feel mostly related to. This new perspective on citizenship is a logical step towards the two concepts on careers, all being based on the development of individuals’ needs and preferences.

The concepts i-deals and Kaleidoscope careers will be explained next. Specifically, the circumstances under which they are most likely to become a success are identified. Then, a selection of relevant articles explaining the Dutch situation are reviewed and tested for the presence of a good ‘breeding ground’ for i-deals and Kaleidoscope careers in the Netherlands.

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Table of Content

Introduction ... 2

Chapter 1: Human resources ... 6

Situating HRM in its historical and political-economic context ... 6

HR, people and work organizations ... 7

Managing organizations strategically ... 8

Managing HR strategically ... 9

Choices and circumstances in the shaping of HR strategies ... 10

Chapter 2: Flexible citizenship ... 12

Inadequate nation-states and new concepts ... 12

Traditional citizenship ... 12

Generalized citizenship ... 13

The functioning of the new citizenship system ... 14

Consequences of the new concept of citizenship ... 14

Claimed disadvantages ... 15

Others on citizenship: Liquid modern times ... 15

Chapter 3: I-deals ... 16

Definition ... 16

I-deals in practice ... 17

Contexts of i-deals ... 17

The content of i-deals ... 18

Coworkers’ response to i-deals ... 19

Win-win? ... 19

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Chapter 4: Kaleidoscope careers ... 20

Differences in career patterns ... 21

The ABC Model of Kaleidoscope Careers ... 21

Authenticity, Balance and Challenge ... 21

Men and balance ... 23

Challenge and the Kaleidoscope career portfolio for men versus women ... 25

Relevance for the Netherlands ... 25

Research methodology ... 26

Results ... 27

Trust... 27

Women & the labor market ... 31

Work through the life course ... 34

Flexible labor market ... 36

Conclusion ... 38

Discussion ... 43

Limitations and suggestions for further research ... 44

Acknowledgements ... 45

References ... 46

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Chapter 1: Human resources

Human resources of course is not a new concept. In any period of time, human resources were used for purposes like collecting food, bringing up children, and so on. As an illustration, if we take a look at what human resources consisted of in pre-historic time (the Stone age), we come to the following:

 Pair of hands for simple labour  Hunting skills

 Knowledge/experience, expertise, leadership  Women (physical): bearing children/reproduction

 Women (abstract): personal qualities enhancing cooperative spirit of family, leading to liking and trusting.

The point is that ‘human resources’ is not just a newly invented 21th century concept, made up by managers and scientists. This is common sense, since human resources are relevant to any type of organization: now or in the past. An anthropological perspective helps to define our terms in a way that assists us in analyzing and understanding the managerial processes with which we are concerned.

The point from making a comparison with past is that it is better to focus on human capacities as human resources than on humans themselves, which would be unethical & unrealistic. Human resources, in the context of modern work organizations, are thus most usefully seen as human capacities necessary for task performance and the continuation of the organization into the future:

Human resources are the efforts, knowledge, capabilities and committed behaviors which people contribute to a work organization as part of an employment exchange (or more temporary contractual arrangement) and which are managerially utilized to carry out work tasks and enable the organization to continue in existence.

Situating HRM in its historical and political-economic context

In the past, human resources were used to fulfill the purposes of (some of) their members (the elite at the expense of slaves). In modern times, we do this in a way which is characteristic of the industrial capitalist type of society and political economy which has emerged in the past few centuries.

Human resources in modern times are market-based: supply and demand are being matched, work organizations and workers bargain over rewards and incentives. However, workers are not solely looking for monetary rewards. Social aspects have become increasingly an important factor for workers to choose their working environment by. Another change is that roles are now assigned on the basis of competence and quality. Previously, roles were divided on birth (social class) or acclaimed ‘higher’ powers. The switch to our effective and efficient use of human resources can best be described as a bureaucratization (Weber, 1978).

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competencies that should give competitive advantage. Companies therefore have a strong focus on

talent management (Ashton and Morton, 2005; Tansley et al., 2007)

Emerging globalization and increased competition have led to resource-based view (RBV) of the firm. In this view, external competitive strategies are being based on internal characteristics of a company. Barney (1991, 1992) stated it as follows: human recourses and non-human resources need to stay rare, inimitable and non-substitutable, ‘adding value’ to business activities. A resource based perspective helps us appreciate socially complex resources as creativity, trust and capacity to make effective choices and changes in behavior.

There are also difficulties with this RBV approach:

 Companies are not freestanding entities. There exists no even or level playing field. Societies are complex and full of differences. Inequalities still exist, which forms a threshold to the development of trust and commitment.

 Not all organizations are capitalist firms looking for competitive advantage. Competition for human resources is universal, but human resource capacity is not always developed in order to out compete others in same industry.

 There is doubt on whether the RBV helps to understand what actually happens when strategies are made in work organizations. It is not clear who shapes human resource strategies or how ‘strategy-making’ takes place, let alone if the RBV plays a role in this process.

Research on the ‘black box’ of strategy making is covered in the next part. A ‘strategy as practice perspective’ (micro, activity-based) is adopted. This perspective is put in a ‘macro’ structural and ‘global’ framework. The characteristics of people involved in strategy making is considered and the point will be made that human beings cannot themselves be managed.

HR, people and work organizations

The impossibility of ‘managing people’

It is important not to separate people’s work capacities from their humanity. An organizational worker is more than a bundle of capabilities, but with a life and priorities beyond his/her organizational involvement. The managing of HR is essentially problematic. ‘Managing people’ therefore is an impossibility.

People are assertive, adaptable social beings with emergent identities who, with varying degrees of ‘power’, negotiate their roles and rewards & benefits with the employing organization. Modern people ask ‘why should I?’. People fight to maintain a degree of human autonomy and self-respect, however great the power exerted over them.

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Work organizations as negotiated orders

Organizations are more than bunches of individuals. In order to understand the complexities of how organizations work in practice, the ‘black-box’ of system and group thinking needs to be looked into. Every organization has its own social order, impacting or even determining the thoughts and opinions of the people that form the organization.

Part of the evolution of the human species as a whole has been the development of a capacity for cooperative effort. This has led to great developments and achievements. Important, too has been the development of skills to assert peoples independence of others, to resist power and to pursue sectional interests.

All of these matters are key concerns of strategic human resourcing. And it is helpful to locate our understanding of human resource work within an understanding of work organizations as

negotiated orders, recognizing that the differences of class, power, gender and ethnic differences

prevailing in society at large (Watson, 2008). To see work organizations as negotiated orders is to recognize that they involve continually emergent patterns of activity and understanding that arise

from the interplay of individual and group interests, ideas, initiatives and reactions – these interests and differences reflecting patterns of power and inequality applying in the society and economy of which the organization is a part.

In order to be able to manage, managers will need to win the consent of the employees and reward their compliance. This takes us towards a particular conception of strategic management: a ‘processual’ view that recognizes the centrality of exchange relationships between organizations and various constituencies both inside and outside them.

Managing organizations strategically

Strategies as patterns that emerge over time

Strategies can be best understood as the outcomes of ongoing organizational processes involving a range of contributors. It is more useful to utilize a concept of strategies as realized patterns rather than to treat strategies as managerial plans. A ‘processual’ view of strategy sees it as the pattern

emerging over time in an organization as actions (of both a planned and unplanned nature) that are carried out to enable the organization as a whole to carry on into the future.

Thus, strategic choices or managerial decisions have:

 a corporate dimension: relate to the whole organization as opposed simply to a part of it;  a long-term implication (Boxall and Purcell, 2002)

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Integrating HR with broader strategies is a ‘highly complex and iterative process, much dependent on the interplay and resources of different stakeholders’ (Legge, 1995: 135).

Strategy-making in practice

In order to understand how long-term changes to ‘whole organizations’ come about, we need to look at the managerial politics of the organization, at the various values and interests of the people responsible for shaping the organization, instead of looking for wholly ‘rational’ plans. Many factors should be worked out together in order to draw sensible and representative conclusions.

Managing HR strategically

The nature of HR strategies

HR strategy is defined as: the general direction followed by an organization in how it secures,

develops, retains and, from time to time, dispenses with the human resources it requires to carry out work tasks in a way that ensures that it continues successfully into the long term. Following,

‘strategic human resourcing’ is the establishing of principles and the shaping of practices whereby

the human resources which an organization, seen as a corporate whole, requires to carry out work tasks that enable it to continue successfully into the long term.

Human resourcing as essentially strategic

Earlier was noted that to think about an organization strategically is to think about the whole

organization and about the organization’s long-term future. Strategic HR management is essentially strategic (Watson and Watson, 1999) for two reasons:

 Whereas functional/operational/line managers have to focus on local or departmental performance, HR management must consider the whole organization.

 Whereas functional/operational/line managers have to focus on immediate or short-term performance, HR management has to look at the long term.

Strategic HR must be corporate and long term, for example:  to avoid internal conflicts over perceived unfairness;  to develop skills for the future as well as the present;

 to keep the organization as an employer ‘in line’ with the law and public perceptions. HR strategy as mistress and servant of corporate strategy

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Choices and circumstances in the shaping of HR strategies

‘HRM best practices’ vs. ‘HR practices appropriate to organizational circumstances’

The acclaimed single way to successfully deal with HR issues is to adopt high involvement practices, regardless of an organization’s circumstances. Concurrent best practices, according to Wood and de Menezes, are work enrichment and flexible work practices; skill acquisition; and motivational (incentive) practices.

Other HRM best practices:

 HR issues are the concern of all managers

 HR considerations are part of all strategic-level deliberations

 A strong culture, with high levels of worker involvement and consultation, encourages high employee commitment to the organization and its continuous improvement

 High trust relations and team working practices make close supervision and strict hierarchies unnecessary

 Employees undertake continually to develop their skills to achieve both personal ‘growth’ and task flexibility

Different types of HR strategy might work in different employment or business circumstances. Alternative to following a (single) best practice, is ‘contingency thinking’: fitting or matching HR strategy and circumstances.

 Depending on which of the three key strategic options (Porter, 1980) a business follows.  Depending on organization’s life cycle stage

 Depending on strategic configuration

Important to note here, is that contingencies do not determine the strategy. It is the strategy shaping people, taking into consideration an organization’s contingencies, that ultimately choose a strategy.

Choices and contingencies in HR strategy-making

The basic choice to be made about HR strategy can most usefully be understood as one between a

low commitment (‘hire and fire’) and a high commitment (‘best practice’) set of policies and

practices.

The key question that determines which strategy is best suitable: are employees a major source of strategic uncertainty for the employing organization? Are ‘best practices’ required to keep personnel within the company?

Final notes on HRM

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Besides this perspective on human resources and the manageability of them, it has been made clear that HRM strategy needs to match with the general strategy of an organization. The ‘black-box’ of strategy making has partly been revealed, by in fact showing that strategy is shaped by humans, who take group, contingency and personal circumstances into consideration with their strategy making. Finally, some best practices and considerations were shared for fitting the (winning) HRM strategy with a specific organization.

Since human resources are personalized, it logically follows to look into people’s drivers and needs. In other words: what motivates people in life and in work? For this, Maslow’s hierarchy of needs is considered and applied to human resources and professional careers. Knowing people’s needs and adapting to these may be the key to get access to and effectively ‘manage’ human resources. Maslow distinguishes five key needs that have a well-known order. In the next figure, these needs are shown from bottom to top, supplemented by some key words that fall into these categories.

To some extent, working life can provide in all these needs:

In order to fulfill some of the physiological needs, financial resources earned by labor of course come in handy. However, in most societies, even the unemployed and needing have access to the things that fulfill their physiological needs. The income surplus of labor therefore, if any, helps fulfilling needs in the other four categories.

As with unemployment comes uncertainty, the feeling of insecurity and unsafe; employment helps developing and maintaining a feeling of safety. Not mentioned in the key words in the pyramid but relevant nonetheless, social security as in having relatively fixed living environment both privately and professionally adds to the feeling of safety. So besides the safety of employment and resources, also socially work may provide safety.

In love and belonging, it is important for people to feel loved and appreciated by the people with whom they identify. A dictionary definition of belonging is: to be in the relation of a member,

adherent, inhabitant, etc. (usually followed by to). The reference group/organization that usually

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important to determine where people feel they (have the need to) belong to. To illustrate and deepen this theme, the following chapter is dedicated to all levels, types and combinations of organizations people actually may feel they belong to. This is very much in line with this research, because it illustrates the diversity in people, and maybe even within individuals through time. It marks the importance (and difficulty) for employers to make work and professional life cohere with people’s needs from the perspective of belonging.

Esteem and self-actualization can also be provided, or at least facilitated, by working life. People like to be themselves and to feel successful in the things they do. They like to be respected by others and to grow both as a person and as a professional. In chapter four, these needs make up a large part of the basis for a new career model. Challenge, success and growth become more and more important for people in work, or perhaps they become important for more people. Since these needs are not only to be fulfilled with work and in professional life, balance between professional and private life is also an important factor that contributes to the ideal fulfillment of all needs. Now this research continues with a chapter on Flexible Citizenship (Frey, 2001), marking a change in the way people perceive citizenship. It coheres with a more general development of changing interests of humans that has an impact on human resources management.

Chapter 2: Flexible citizenship

Inadequate nation-states and new concepts

Contemporary developments impact the role of government. The need for government is declining in our market ‘age’: privatization, tax competition resulting in declining tax rates. At the same time, governments have to regulate these developments, in that sense making governments more important.

So government is still important. But the existing institutionalized relationship between individuals and government has difficulties in coping with the problems and needs of a global world. Mobile persons do not fit with exclusive citizenship, to one nation. People for instance often identify more with lower levels of government.

This is why a new concept of citizenship was suggested by Frey (2001): ‘Citizenship: Organizational and Marginal (COM)’. The concept is organizational in the sense that individuals can become citizens of all sorts of organizations, instead of being limited to citizenship of one state. It is marginal since individuals can hold citizenship temporarily, they may hold multiple citizenships at the same time and even partial citizenship (restricted to some functions only) is proposed and discussed.

Traditional citizenship

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Three notions about the implications of this definition:

 Monopolistic relationship between individual and particular state/nation.  Citizens have both rights and obligations (volonté général).

 Relationship between individual and state goes beyond the exchange of public services in return for taxes paid. The citizen ‘owes allegiance’ to the state, meaning the relationship is partly non-functional. It assumes/requires intrinsic motivation of citizens, loyalty and the sharing of an identity.

The traditional view of citizenship is based on the notion that it provides a sense of belonging. It follows that citizenship is to some extent exclusive and depends on social closure. Membership means little if there are no boundaries for a citizen to belong to.

Generalized citizenship

The existing, quite strict concept of citizenship could be generalized by including the following four extensions:

1. Temporary citizenship

When someone temporarily works and/or lives in another country than his/her homeland, that individual should be able to choose to become a citizen of that particular country for a predetermined period. In this situation, it would not make sense for the individual to obtain a general citizenship for that country.

2. Multiple citizenship

People that work and/or live in multiple countries at a time, should be able to divide their citizenship accordingly between these two countries. When 60% of the time is spent in one country and 40% in the other, the citizenship (and for instance: vote count) should also be divided 0,6 – 0,4.

3. Partial citizenship

This type of citizenship refers to individuals being citizenship of different countries with respect to different particular functions. If one of the nations would hold a vote, only if the individual is citizen to that country with respect to that function, he/she would be entitled to a vote.

4. Citizenship in various types of organizations

a) Levels of government (county, province, EU, etc). Being a citizen of the province Utrecht does not mean that this individual is exempted from paying national taxes, but only to the taxes for public goods that he/she consumes and not for instance for the costs of new infrastructure in Groningen.

b) Governmental sub-organizations, for instance for people that hold a governmental position in a different country than their own nation. These people can limit their citizenship in the other country to the governmental sub-organization such as the army or a political body.

c) Quasi-governmental organizations (universities, hospitals, etc)

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The functioning of the new citizenship system

Citizenship: Organizational and Marginal (COM) is based on voluntary contracts between individuals and organizations. It is essential that an organization’s members/citizens are intrinsically motivated to support their organization. Without loyalty and some form of allegiance, when peoples actions are simply the outcome of egoistic cost-benefit calculations, this system could not function. Therefore, the conditions need to be such that people abstain from free-riding and selfish behavior. As field studies and laboratory studies have shown, this somewhat idealistic situation can become a reality with social control and the general rules that are dictated in the voluntary contracts that each member will have signed.

Social scientists share the view that intrinsic motivation is an indispensable resource for a well-functioning society. COM serves to strengthen this intrinsic motivation: it is based on a shared belief in good intentions and mutual trust between citizens and the organization’s leaders.

Consequences of the new concept of citizenship

A) Opening up more flexible solutions

The current concept of Citizenship does not fit with many people’s perception of belonging. The COM concept offers a solution to this in making citizenship a more flexible concept in which people can choose the type, level and number of organizations the become a member to.

B) Allowing multiple identifications - On a regional level

- To the EU or NATO - To academic society

- To a church or other religious denomination - To a sports club

- To an action group - To one’s firm

C) Fostering willingness to contribute to public goods

A logical question with this new concept of citizenship, is whether people would be as much inclined to pay their taxes. Would it lead to an evasion gamble? Apparently not, as it turns out that most people (95%) pay taxes due, even though rationally the chance of getting caught when cheating and getting a penalty is less costly than simply paying taxes due. Due to stronger identification, citizens are less inclined to show free-rider behavior.

D) Better preference fulfillment

With COM comes broader choice for people in organizations. On their turn, organizations can impose conditions on membership. People can consider the different conditions and make a choice that suits their preferences better than in the current system of citizenship. E) Greater efficiency of public activities

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Claimed disadvantages

1) Citizenship is not needed

One could argue that the private market offers all that people need. This argument does however not consider the suggestion that intrinsically motivated citizens together may offer more quality, due to less free riding.

2) The new concept of citizenship has high transaction costs

With more choice comes more transaction costs. Although this is true, strict citizenship will prohibit countries from benefiting from the opportunities globalization is increasingly offering.

3) The new system of citizenship is unfeasible

In today’s world already there are examples of more flexible citizenship, such as multiple passports, arrangements for diplomats and citizenships of condominiums (a member funded community with staff in which people live and can enjoy a variety of social services). So it can be actualized. But it does not have to be for everyone: people that feel most comfortable with their current citizenship can stay put and nothing will change for them. 4) The new system of citizenship will be politically opposed

It is likely that the ones in power will oppose COM, since it affects their power and stature. However, if time passes and the need for more flexible citizenship increases among people, politicians themselves may be opposed by the public opinion and reconcile.

Others on citizenship: Liquid modern times

The in age long retired sociologist Zigmunt Bauman (born 1925) has as well written on the subject of ‘citizenship’, but then from a more relational and societal perspective. In 2007 he published the work ‘Liquid modern time’ in which he gives a pessimistic view on the strength of today’s relationships. Liquid, as opposed to solid, refers to a condition in which social forms/structures can no longer keep their shape for long enough to solidify. More concrete, Bauman observes that human relationships have become fragile and less sustainable. Relationships are walked away from easily when confronted with the earliest problems.

Politically, international politics is overtaking responsibilities from local governments even though this makes it more difficult to act on local circumstances and developments. Bauman shows little faith in the market forces and private initiatives that should fill the resulting gap.

Social security is another endangered institute, since solidarity and community have increasingly become frail and admitted to be temporary. Competitiveness has increased at the expense of collaboration and ‘society’ is considered to be a network instead of a (fixed and dominant) structure.

Many more developments pointing to an increasing indifference, individual attitude, and superficiality (short-term orientation) follow in Bauman’s description of present society as compared to before.

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enjoy the social security of belonging to something (shared) and working for the conservation and quality of that organization or society. One difference is that COM tries to ‘solve’ a problem by offering the flexibility that to some extent is the cause of the negative developments observed by Bauman. While Bauman considers this flexibility a threat to (shared) values and a stable society, COM embraces the ‘alternatives’ a flexible world has to offer for world citizens. Advocates of COM, when confronted with the observations of Bauman, would probably argue that in the multi organizational and multi citizenship they presume, solidarity and strong social structures will return but then perhaps on a different than national level. This remains to be seen.

As for the scope of this research, the main thing to take out from these views is that although people’s core needs may not change over time, in changing times and under changed circumstances, the way in which peoples’ needs are to be fulfilled changes too. Next chapter introduces a new concept in human resources that, just like COM, tries to open up to flexible solutions for the challenges and desires of today’s society.

Chapter 3: I-deals

Idiosyncratic employment arrangements are special terms of employment negotiated between individual workers and their employers that satisfy both parties’ needs. Idiosyncratic deals, or I-deals, are intended and designed to be ideal for each party.

Until recently, only some exceptional individuals (like top executives and movie stars) have been able to negotiate such deals, with distinct employment conditions. Apart for these ‘happy few’, it was not common for the average worker to have a customized contract. This is because traditional models of employment assume homogeneity in employment contracts among workers in the same organizational positions (e.g., Kleinman, 1997; Mitchell, 1989; Muchinsky, 2003). Contemporary organizations however, are under pressure to innovate and adjust to change and increased complexity. At the same time, workers have heightened expectations for a voice on matters affecting them at work (Freeman & Rogers, 1999). This opens up opportunities for more than the happy few to negotiate I-deals.

In the upcoming section, an outline will be provided on 1) the context of i-deals; 2) the content and consequences of i-deals for both workers and employer; and 3) the impact of workers’ i-deals on their coworkers, taken from Rousseau (2006).

Definition

I-deals refer to voluntary, personalized agreements of a non-standard nature negotiated between individual employees and their employers regarding terms that benefit each party.

Characteristics of I-deals are that they are: - Individually negotiated - Heterogeneous

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With i-deals, employees have a hand in creating or negotiating some aspect of their employment. They are most likely to arise under conditions of symmetric power between employer and employee, as opposed to the more traditional asymmetry favoring the employer.

I-deals have the potential to impact how coworkers assess the fairness of their own treatment relative to the recipient of the i-deal. Some individualistic employment arrangements can be viewed positively or neutral by coworkers, such as differences in tasks or duties. Others, such as (differences in) salary, may be viewed negatively by coworkers. This can undermine cooperation and trust.

An i-deal conveys potentially divergent messages to workers, depending on whether they are its principals or third parties. This may be the case if coworkers do not know the specific details, but from the outside it seems as if the employer is favoring one worker over the other.

I-deals are not the same as favoritism or cronyism. Those preferential arrangements are based on relational factors such as personal friendships. They are not always designed to be in the best interest of the company, whereas i-deals are.

I-deals in practice

Several research has been conducted addressing heterogeneity in conditions of employment. Research on idiosyncratic jobs has focused on organizational factors impacting an idiosyncratic job’s creation, growth and downfall. It turned out that especially in start-up firms many idiosyncratic jobs exist. Employees here have a great deal of influence on their role and employment conditions (Levesque, 2001). This is no surprise, given that with start-ups, contracts and job descriptions are less standardized and formalized. Following, it is no surprise either, that idiosyncratic jobs tend to die over time: standardization takes place and the ones with the original, idiosyncratic jobs, may leave the company (Miner, 1987). Still, even within mature firms with highly formalized contracts, idiosyncratic jobs exist. They are obtained by persons with distinct capabilities that are valued by the firm (Miner, 1987).

Hochshild (1997) noted that high-status professionals and otherwise highly valued workers are more successful at negotiating contract terms that protect their work-family balance and provide them with workplace flexibility, than their colleagues. In essence, these are i-deal as well. Perlow (1997) concluded that workplace flexibility however, often leads to a reduction in performance rating. This is due to the fact that this ‘flex-working’ does not conform with the standard work practices. So it seems to be a dilemma: flexibility is convenient, however it might be negative for ones career.

Contexts of i-deals

Some circumstances can have substantial influence on the bargaining between employer and employee. Three of these circumstances are highlighted here: the strategic value of workers to their organizations, the timing of i-deals, and the implications of repeated bargaining.

Strategic Value

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recognition of human capital’s contribution to a firm’s competitive advantage (Leana & Rousseau, 2000) have opened more doors to negotiating i-deals in lieu of accepting standardized offers. A firm’s receptiveness to i-deals reflects its strategic needs. Over time, these i-deals may become institutionalized.

Timing of i-deals

Not everybody that prefers a nonstandard contract, tries to make an i-deal. Only if a person beliefs he/she can successfully negotiate such a deal will do so. So beliefs regarding what is negotiable is essential.

I-deals can be made when one starts working for a company (ex-ante), or when one is already working for a company (ex-post). Ex-ante i-deals are more likely to occur when someone has skills that are scarce, in a ‘hot’ labor market (Cappelli, 2000). For these workers, the i-deal is a reflection of their market value.

Ex-post arrangements on the other hand are more an indication of the quality of one’s employment relationship. When someone has already worked for a company for some time, he/she may have given the employer credible information that was not available ex-ante, but does say something about that person’s value to the company. This may be form the basis of an ex-post i-deal.

Workers are inclined to negotiate employment terms ex post rather than ex ante for a number of reasons. The previously discussed ‘credible information exchange’ that occurs during employment is one. Second, the built up relationship may make the employee feel more comfortable making special requests. Third, an i-deal may be offered to reward one’s track record and loyalty. Fourth, the employee may use insider knowledge (for instance internal job openings) to negotiate an i-deal. Repeated bargaining

During lengthy employment with a firm, a particular employee may repeatedly negotiate a variety of idiosyncratic features as his/her personal needs and organizational contributions change over time. However, often this means an employee is negotiating increase in pay without a reciprocal increase in the worker’s contributions to the firm. Repeated bargaining can lead to diminishing marginal returns for each party when i-deals are perceived habitual. Furthermore, it may cause damage to the employee’s personal reputation, threatening to create the impression that he/she is a ‘player’ motivated primarily by the thrill of ‘gaming the system’. Organizations may be reluctant to offer i-deals repeatedly for fear of being manipulated.

The content of i-deals

I-deals may contain many different and diverse resources, such as pay, travel expenses, but also mentoring, development and personal support. Foa and Foa (1975) classify these with a number of categories. They propose that there are the following six types of resources:

 Money  Service  Status

 Goods  Information  Love

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Firms choose compensation bundles (Bloom and Milkovich, 1996) to attract, motivate and retain workers, including resources from all different classifications. Next to concrete resources (pay), they offer nonmonetary and particularistic resource. These particularistic resources form an invisible wage structure. Examples are higher-quality employee-supervisor relations, and a greater job scope (Graen and Scandura, 1987). Particularistic resources lack fixed metrics, making their exchange difficult to standardize or to govern by rules. As such, employers and managers may find it easier to offer particularistic i-deals than concrete ones, especially those involving pay and benefits.

It is to be expected that concrete resources are negotiated for mostly ex ante; and particularistic mostly ex post. This is due to the fact that for negotiating particularistic resources, is is a pre if the employee has contextual knowledge and information about the firm which it acquires when already employed. Information about salary and benefits information on the other hand is more publicly shared among job seekers.

Coworkers’ response to i-deals

When an i-deal has been made, both the employer and employee think it is a fair arrangement. This does not automatically apply to the employee’s coworkers. They may question the fairness of the deal, given that they view it from a different perspective. The coworkers do not have the same information as do the principals of the i-deal. If this information is not shared, through rumor and innuendo, coworkers may come to think that the i-deal is unfair. Next, key considerations in assessing the fairness of an i-deal will be outlined:

 Opportunity for choice: if coworkers do have, or believe to have, the same possibilities in acquiring equally desirable outcomes, they will judge the i-deal to be more fair than when they do not have equal opportunities.

 Market factors: if a new colleague is hired in a time of a ‘hot’ market, it is more accepted that he/she negotiates and receives an deal, than if an existing colleague negotiates an i-deal (ex post). So market factors are perceived to be a fair reason for an ex ante i-i-deal, than for an ex post i-deal.

Win-win?

Under some circumstances, one’s gain can at least partially be some other one’s loss. Especially in resource-constrained situations, this can be the case. When this occurs, the individual that receives the i-deal may need to actively manage its relations with colleagues to improve their perception of fairness. In practice, the ones who receive i-deals tend to downplay the differences with colleagues in order to avoid their coworkers noticing and becoming bothered by their nonconformity (Clark, 1998).

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Implications of i-deals

Among the research implications, it is suggested that more research is done on the role of coworkers in making the i-deal possible, or perhaps having an influence on the content of the i-deal. Another suggestion is that the interplay of the three parties (employer, employee, coworkers) is explored more in-dept. Unfortunately, there is little discussion on under which (broader than within-company) circumstances, it is likely that i-deals arise. This is the focus of my research: does the concept of i-deals fit with the Dutch society? In order to answer this question, the circumstances under which i-deals become a success have to be determined. In this case, they will be extracted from the ‘founder’ of the concept as brought forward in the article. The central crucial factors that determine whether i-deals become successful are:

1. Equality of power during negotiations, or the perception of the balance of power of the employee.

2. Degree of jealousy with coworkers off a colleague with preferential arrangement. 3. Level of trust between employer and employee

4. Desire and necessity of i-deals

To broaden the scope of the research, another concept will be explored and later taken along in the research of The Netherlands as a (successful) breeding ground for these concepts. This concept is the Kaleidoscopic career, or Kaleidoscopic model. First, the concept will be explored in a review of the book by Mainiero & Sullivan, called “The opt-out revolt” (2006). Following, also for this concept the crucial, make or break, factors and circumstances will be determined and tested for the Dutch situation.

Chapter 4: Kaleidoscope careers

For years and years, the dominating perspective on careers was that people, and most certainly men, should constantly strive for climbing the corporate ladder. Up was the only way. In recent years, a shift has been made in the type of career people desire. Many are pursuing career paths that fit well with their lives, their families and their interest. At the same time, corporations have not adjusted enough to these changing preferences. As a result, many employees have left these companies for more flexible work options. You could say they opted-out of the standard 7 a.m. to 9 p.m. rat race in exchange for a different ‘successful’ career with success being redefined. Instead of striving for linear upward careers, these people are now working to live. When paying attention to this issue, the press has often named this development ‘the opt-out revolution’. Here it is claimed however, that it is not a revolution but a revolt: individuals are rising up against unreasonable corporate demands.

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explanation for this revolt goes beyond the need for family and work life balance. Based on an extensive five-year study, the term revolt is argued for by pointing out that besides demanding a better balanced work/private life, people are revolting against organizations that do not permit them to be true to themselves, or do not provide challenging work. A complex interplay among issues of authenticity, balance and challenge forms the basis for this workplace revolt.

The opt-out revolt points out the need for a new business model that allows workers the flexibility to work at home and provides off-ramps and on-ramps to attract and retain talent in the years to come. It also calls for a deeper examination and reformulation of the basic fabric of corporate culture so that individuals are provided work that is not only challenging but personally meaningful. Work, as defined by the parameters from the twentieth-century manufacturing model, no longer works for everyone.

Differences in career patterns

For men, the prospect of a linear career within the same firm or industry is still highly valued. For women, a ‘career’ – usually defined as a series of interrupted jobs, transitions, and shifts – cannot be separated from a larger understanding of their lifestyle priorities. Where men compartmentalize work and family, women tend to integrate both work and family to the extent it is possible.

With Kaleidoscopic careers, men and women define their careers on their own terms. Their careers permit them to work outside of corporate boundaries, very different from what has been seen in the past. Due to the effect of globalization, technology & other factors, the old, company-based job security has come to an end. It has been replaced by job security that resides in the individual. The Kaleidoscope metaphor lies in the following: Like a kaleidoscope that produces changing patterns when the tube is rotated & the glass chips fall into new arrangements, people shift the different patterns of careers, rotating different aspects of their lives to rearrange roles & relationships.

The ABC Model of Kaleidoscope Careers

The model rests on three pillars, or parameters. They are Authenticity, Balance and Challenge (ABC). They reflect the reasons why many woman and some men are deviating from the old linear career path and instead follow a path that converges with their needs for their lives, families and themselves. Continuing on the kaleidoscope metaphor, every parameter represents a color. At different point in people’s lives, the parameters intersect at different points. Depending on which parameter (color), is valued the strongest, the kaleidoscope reflects this by showing this color more intensively and lessen the intensity of the other two. As during ones lifetime one parameter (color) becomes more predominant, this color intensifies while the others become less intense.

Authenticity, Balance and Challenge

The three parameters in the model of Kaleidoscope careers need some further consideration. Each different major need will shortly be discussed here.

Authenticity

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take on different forms, each different but all reflecting a need for authenticity in life or in one’s career:

1. A longing for purpose 2. A hunger for spiritual growth 3. A need to follow one’s own path 4. A desire for an unrealized dream 5. A force for overcoming a crisis

With this in mind, being successful in one’s career is more than earning enough to drive a comfortable car, live in a luxurious villa and going on expensive holidays. Admitted, these things are enjoyable. Part of the enjoyment however, is the external exposure of being successful measured by the going standard of success. The need for authenticity can make somebody ‘successful’ be unhappy, while people who have a more internal view on success may be less successful to the outside world, but happier in the end. I will not go into detail on the need for authenticity in the different life stages, but it should be mentioned that the need for authenticity becomes stronger with age. And between genders, women on average have a stronger desire for authenticity than men do. Both these differences however seem to be diminishing with new generations.

Corporate authenticity and the kaleidoscope career

A false conclusion would be that work and authenticity are opposites, or that they cannot match. In the modern business world, hierarchy is still quite strong and hard work is often appreciated over someone delivering results, but not at the expense of a balanced life. From this perspective, it is hard to be successful, appreciated and still manage to be true to one’s self, or to be one’s true self in business. Another mistake would be to conclude that this is in the best interest of the employer. Authentic people, or people that strive for authenticity, have many qualities that workaholic career junkies may lack. To name some, they are self-aware, open to continuous learning, more honest, and more helpful to others. Authentic leaders may cause a snowball-effect, inspiring others and making them more willing and motivated to help accomplish their firms’ missions.(p.184) Finally, companies that hire well-rounded people and support them in their quest for authenticity, will most likely experience a lower employee turnover rate.

Balance

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Five different strategies (mostly used by women) for dealing with work and family struggles can be distinguished:

1. Adjusting

Balance shifts to the forefront of the kaleidoscope in this model if family demands increase. Already the case in the US, but increasingly so in the Netherlands, women are sandwiched between the needs of their children and their parents. Close to 25 percent of American households takes care of someone with the age of 50+, and this number is expected to increase as the baby boomer generation ages.

As women are still making earning less than men, they sooner lower their career aspirations to be able to meet the demands of their families. Instead of opting out totally, most women decide to rotate the kaleidoscope of their careers to balance work and private life.

2. Consecutive

A second approach frequently used by women to find balance, is to drop out of the workforce temporarily. These women reenter when they again are able to meet the requirements of their (former) jobs. So instead of lowering their professional ambitions, they choose to leave for a while and then try to catch up later when the demands of their families allow them to.

3. Concurrent

Mostly couples use the concurrent approach to balance work & private life. These people try to juggle their way through the day, combining and interchanging work & family continuously. Very often these couples make use of new technology to work remotely while parenting or between family duties. Sometimes this approach provides balance, but other times the system crashes and everything falls apart. This have it all and do it all approach sounds ideal, but it most likely only works for dual workers that both have the possibility to work remotely.

4. Alternating

In this approach, couples take turns in working and staying at home taking care of the family. While one is providing an income, the other makes sure the family needs are met. After a while, the roles are rotated. This works best if both are self-employed, since otherwise it will be difficult to manage workloads.

5. Synergistic

There are some jobs that lend themselves to combine work and family so that each enriches the other. The key item here is that these jobs are flexible in the sense that the workload can be adjusted without giving up or harming one’s career. The idea is that because a person is leading a balanced life, he or she will be better in work. With flexible workplaces, synergism can be realized.

Men and balance

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men’s careers progress, their need for balance might increase but this is very often only when the responsibilities for providing are over and they are facing retirement.

Younger men (Gen X and Gen Y, born between 1961-2000) are different in their need (or preference) for balance compared to the baby boom generation. Where baby boomers would increase the number of working hours after having a child, younger men are more likely to decrease their work hours. Plus, they spend more time on household duties on workdays than they used to. Some companies have started facilitating men’s need for a balanced work and family life. However, it will be crucial whether this will become a success, on if these balancers will be the ones promoted and rewarded or whether it will be the continuously working ones.

Challenge

The final pillar in the kaleidoscope model is challenge. An explanation on how the drive for challenge for women and men changes over time will be provided on the basis of five categories. These categories represent the major ways in which women and men are searching for challenge in their careers:

1) For gaining motivation

Mostly exhibited early in the career. Working is seen as a battle or a trial of strength. People seeking challenge for gaining motivation are driven by competitive forces more than monetary returns. This is closely related to workaholism.

2) For obtaining validation

In order to become a seasoned manager and to clime the corporate ladder, very often the resolution of a challenge or problem is a key learning. Challenges and experiences like these allow for personal reflection and mark the building of self-confidence (Morgan McCall221). Other confidence-building experiences are working with people in other areas of the business, handling politics and strategic thinking. This forms one’s work identity, making people self-aware and understanding themselves, which advances one’s career.

3) For developing and growing

During stretched assignments, people may be challenged to do work beyond their comfortable skill set. These challenges may seem frightening at first, but probably turn out to be fulfilling in the end. When someone is in a dead-end job, he or she may look for opportunities to make the job challenging by redesigning the job. In this case, challenge improves motivation and leads to both better performance and professional growth & development.

4) For having an impact

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5) For establishing expertise

Other people may find challenge in acquiring expertise in order to become the go-to person in their field or section. Expertise may help them keep their job during reorganizations and if their expertise is transferable, they will be flexible in their choice of employment. The downside in this kind of (need for) challenge is that in a quickly changing environment, it may be difficult and time consuming to keep up expertise. On top of that, age is a dominant factor in the demand for an expert: young people are assumed to be more up to date, flexible en energetic and therefore preferred over their older peers. So specific expertise may lose its (employability) value over time, making it difficult for older experts to survive when business is downsized or for older freelancers to keep receiving assignments.

Challenge and the Kaleidoscope career portfolio for men versus women

Together, men and women start their careers desiring challenge, growth and learning. But the Kaleidoscope career portfolio of men and women sharply diverges in midcareer. Men keep pursuing their corporate careers, while women often back out of corporate careers to (re)find balance. This difference is exhibited partly because of natural causes. Basic biology rules that women have a different and shorter fertility period than men. At some point, often in a woman’s end twenties/early thirties, women choose to opt out from working. Their professional challenge has not changed, but their need for a shift in balance towards family life has emerged. After some years when they try to return to the workforce, it turns out that the men received and keep on receiving the challenging assignments and promotions. This lack of challenging work may force women to work with less fulfillment and pleasure, to opt out for good, or to start up their own business.

Relevance for the Netherlands

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Research methodology

Earlier, four factors have been extracted that should be researched in order to determine the relevance and ‘fit’ for i-deals in The Netherlands. The Kaleidoscope model has added a perspective to this issue, stressing the change in professional and personal needs during one’s career.

The central question is: do these concepts apply to the Dutch situation? The method of choice has been a literature research. In order to conduct a research on whether the Netherlands is or could be a good breeding ground for the concepts, the literature research was conducted at the Dutch Social and Economic Council (SER). This advisory body is formed by representatives of employers, (labor) unions and independent experts. Together they advise the parliament on social-economic policy. The SER has an extensive library, containing the source papers, articles and books their advices are based on.

The search strategy was to scan the database for several keywords related to the topic of research. The database was conducted twice. The keywords were: ‘i-deals’; ‘individual labor contracts’; ‘trust between employer and employee’; ‘transitional labor market’; ‘work + life course’; ‘maternity leave + reintegration’; ‘flexible labor market’; ‘new way of working (het nieuwe werken)’; ‘flexible working’.

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Results

Trust

When it comes to the topic of this research, several kinds of trust are relevant. A general definition on trust: trust is the confidence in the reliability of a person or system, regarding a given set of outcomes or events, where that confidence expresses a faith in the probity or love of another, or in the correctness of abstract principles (Giddens, 1990). It follows that there are all kinds of trust. Interpersonal trust, the trust one person has in another person, is one kind. Inter organizational trust is another, the trust one organization has in another organization. Trust in oneself – self-confidence, speaks for itself. Especially interpersonal trust and self-confidence are important requirements for i-deals to come about.

When it comes to flexibility in work and in the labor market, people might become uncertain and feel insecure. Uncertain about how one’s (professional) life will change with this increased flexibility. Feelings of insecurity on one’s potential to find another job, since flexibility may mean people more frequently change jobs, voluntarily or not. Obviously, trust is key in making labor and the labor market more flexible. It is even required, in the sense that the chances of adoption of i-deals and kaleidoscope careers are strongly dependent on the different levels of trust. This is brought forward and elaborated upon in several articles in the library of the Social Economical Council.

The labor market in time of recession

In “The labor market in time of recession”, Wilthagen and Tros (2004) introduce a system called ‘flexicurity’. A flexible labor market and flexible contracts like i-deals, demand flexibility from the players on the labor market. This flexibility brings uncertainty. People are to cope with this uncertainty by ensuring continuous investment in their employability, ensuring that they can combine work and care (for children or elderly) and ensuring that their employer can and will facilitate a transition to another job. Trust is essential in this system. Employees should have confidence in themselves and their possibilities on the labor market. They need to trust their employer to invest in them, in their employability and schooling. On the other side, the employer needs to trust that it pays to invest in their employees’ employability: even if one employee, in who the employer has invested in terms of schooling, leaves, another will come and take his/her place. Supporting such a transitional labor system is not just a matter for the government. Unions and employers should also support the system and will benefit when the labor force is well equipped for change in work and career paths.

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certainty of work in return for (belief in) increased protection from a better functioning labor market. Timing-wise, it seems likely that employees would be less willing to make this switch in times of a recession than in times of a booming economy.

Management by trust: towards self-management and innovative behavior

Dutch research institute TNO performed a research on ‘Self-management, management on the basis of trust and new HRM’ in the period 2006-2010. Their motto was: ‘the thicker the trust, the thinner the collective labor agreement’, as extensive collective agreements signal little trust from employees to employers, or a general belief that individual workers are less equipped to negotiate a good deal. This research was, just as the concepts i-deals and kaleidoscope careers, driven by the notion of changing labor relationships. The article’s point put short: in order to remain competitive, it is necessary to innovate. Now with the term innovation, it is commonly only associated with

technical innovation. However, besides technical innovation, social innovation is important. Social

innovation aims for renewals of the labor organization in order to fully benefit from competencies aimed at improving business performance and development of talent (Taskforce Sociale Innovatie, 2005). Business policy aimed at rules and fixed procedures, leaves little room for innovative behavior. New labor relationships, based on mutual trust between employer and employee, have a positive effect on the entrepreneurship of employees. The old style ‘management by control’ should therefore be replaced by ‘management by trust and commitment’. More room for talent, less rules and new labor relationships, are all crucial factors for social innovation to occur. Especially leadership and self-managing behavior develop well in an atmosphere of cooperation, communication and dialogue, where trust arises and grows.

Changes in the labor market are not solely market mechanism driven. It is true that the market mechanism means that in an ageing society as in The Netherlands, where (young) labor is becoming scarce, this will have its effect on the labor market. The market is also influenced by changing demands of organizations and output markets, also market mechanism consequences. Besides all these supply and demand developments, employees set different and more diverse perks than some decades ago. This has led to more flexible and part time working, individual arrangements (i-deals) and a strong increase in self-employed professionals. One might even question the sustainability of the dominance of the (standardized) labor contract (CAO), which would be in line with i-deals and kaleidoscope careers as well. Supply is becoming a less homogeneous factor. The micro-economical equation labor wages (supply) = marginal return on labor (demand) does not fully grasp the full motivation for working. The rule that offering the highest wages attracts the best labor force does not necessarily apply. All this can also be called social innovation. Employees standing up for themselves as individuals is a form of democratization of the workplace, since they present themselves as more equal to their employers. It is a new way of interaction in the business sphere, expressed in the human interactions.

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management courses, etc.) to turn from a paternalistic-directive management style to one in which innovation would indeed occur. After experimenting with matrix structures, their CEO chose to split the business into autonomous units. The gains in flexibility, dynamics and target drive more than compensated the loss in (economies of) scale. What is key here, is that sometimes it is necessary to say goodbye to methods that worked well in the past and adopt a new strategy that ensures continuity through innovation. Smart trust (Covey, 2006) stands between unconditional (blind) trust and suspicion and as a result has hard and soft sides. With the soft side of having more freedom, comes the hard side of responsibility of showing entrepreneurial behavior. Creating smart trust does often require stepping down from management by control and towards self-management. With Semco, this did not only lead to (positive) development, but also selection. ‘Voice’ and ‘exit’ have become the only possibilities with Semco. Compliance in the indifferent or passive sense does not exist, while loyalty does. In this way companies can choose their employees, and not just the other way around. In the Netherlands they have a saying: each company will get the managers and personnel it deserves. This shows a difficulty for ‘differently organizing’ in the Netherlands: ‘compliance’ is dominant and companies that actively and selectively choose personnel instead of trying to earn people’s willingness to choose to come work for them, is seen as less common. In the empirical model of the TNO paper on self-management, the reasoned order of matters is that if employees offer more room for entrepreneurial spirit and innovativeness, employees can and will utilize this space and trust and show improved performance. Thus, it is the firm that can shape its population (employees) by changing the circumstances.

Two merits from self-management are highlighted: 1) I-deals

Previously extensively discussed, so the definition and explanation will be left out here. Complementary to this, it is argued that with the combination of self-management and i-deals, because work and private circumstances (life) for each individual worker can change over time, self-management in the case of i-deals continuously ensures the individual’s optimal dedication. 2) Innovative working behavior

Other than I-deals, innovative working behavior refers to the spontaneous willingness of employees to bring change in and to work. Examples are improving work methods, communication with colleagues and in the development of new products and/or services. In other words, employees take a larger stance in crafting their own job. Wrzesniewski and Dutton (2001) referred to this job crafting: the degree to which employees craft their job to their own views. This aspect of self-management does not aim at changing the labor circumstances, but at changing the actual labor (content).

Good employer- and employeeship

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significantly positive effect on (good) employership. Good employership results in higher contribution of an employee to labor productivity of his/her team and benefits employee’s health. The future of the labor relationship – an essay on reciprocal risk management

In modern economies, employers and employees are at more risk. According to the flexicurity theorem, people best deal with risk by taking risk. Risk averseness is, or risk avoidance, is a bad way to concurrent risk. This is somewhat of a paradox. The security you get from flexicurity is based on optimal and continuous and preliminary adjustment to change. In general, The Netherlands are relatively, or even too risk averse. This enforces the claim on The Netherlands to become more risk taking.

The so called Flexicurity approach is defined as follows:

“a policy strategy that attempts, synchronically and in a deliberate way, to enhance the flexibility of labor markets, the work organization and labor relations on the one hand, and to enhance security – employment security and social security – notably for weaker groups in and outside the labor market on the other hand.” (Wilthagen)

The European Commission, that took over the above mentioned definition, distinguished four components of flexicurity:

1) Contractual arrangements have to be available/in place that offer both employers and employees enough flexibility to shape their labor agreement to their needs. It is to be avoided that too many contract shapes arise. The contract shapes need to connect sufficiently to facilitate transfers.

2) Changing jobs and transfers from unemployment/inactivity to a job are to be supported by an active labor market policy.

3) Continuous employability is to be facilitated by systems for continuous (lifelong) learning.

4) During absence on the labor market, all employees have to be supported by modern social security frameworks that at the same time facilitate mobility to and transactions on the labor market.

Besides these ‘system requirements’, the commission claims that the existence of a good and productive social dialogue is required.

In its core, the system does not protect jobs, it protects mobility and provides transition security. The Danish have adopted the system to a large extent. The question arises whether The Netherlands should follow Denmark in their labor market policy. In Denmark, employees are not insecure on their dynamic labor market, although yearly one third of the workforce changes jobs, against 17% in The Netherlands. This could be a sign of evidence that flexicurity works.

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