Schwartz and Porath could have been writing about Amazon where “workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are ‘unreasonably high’ . . . [Amazon] is conducting a little-known experiment in how far it can push white-collar workers, redrawing the boundaries of what is acceptable” (Kantor and Streitfeld, 2015).
Amazon is tough on the white-collar employees at its Seattle headquarters, and even tougher on the blue-collar workers who move its goods.
Amazon came under “re in 2011 when workers in an eastern Pennsylvania warehouse toiled in more than 100-degree heat with ambulances waiting outside,
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taking away laborers as they fell. After an investigation by the local newspaper, the company installed air-conditioning (Kantor and Streitfeld, 2015).
Amazon is not alone. Apple’s design and technological savvy have captured the affection and loyalty of consumers around the globe, but the company has earned lower marks for treatment of the offshore workers who make its products. In 2012, the huge success of products like the iPad and iPhone was great news for Apple but not so good for the Chinese employees who made them. Long hours, low pay, and intense pressure to ramp up production triggered strikes and a worker riot that shut one plant down for a day. Apple’s products were cutting edge, but its people management evoked centuries-old images of sacri”cing people for pro”ts and reinforced popular stereotypes of bosses as heartless and insensitive (Amar, 2004; Duhigg and Barboza, 2012).
But not all companies view employees as merely a means to the greater end of pro”ts, as a contrasting case illustrates:
Early one March afternoon, three electricians who worked for Nucor Corporation got bad news. In Hickman, Arkansas, the company’s steel mill was dead in the water because its electric grid had failed. All three employees dropped what they were doing to head for Arkansas. One drove from Indiana, arriving at 9 PM that night. The other two !ew from North Carolina to Memphis, then drove 2 more hours, arriving after midnight. All three camped out at the plant and worked 20-hour shifts with local staff to get the grid back up.
The electricians volunteered—they didn’t need a boss to tell them that Nucor had to get the mill back on line. Their herculean effort was a big help to the company but brought them no immediate “nancial reward, even though their initiative helped Hickman post a quarterly record for tons of steel shipped (Byrnes and Arndt, 2006).
At Nucor, this story is not particularly unusual:
In an industry as Rust Belt as they come, Nucor has nurtured one of the most dynamic and engaged workforces around. Its nonunion employees don’t see themselves as worker bees waiting for instructions from above. Nucor’s !attened hierarchy and emphasis on pushing power to the front line have given its employees the mindset of owner-operators. It’s a pro”table formula: Nucor’s 387% return to shareholders over the past “ve years soundly bests almost all other companies in the Standard & Poor’s 500-stock index (Byrnes and Arndt, 2006, p. 58).
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What’s in it for the workers? Their base pay is nothing special—it’s below the industry average. But when Nucor has a good year, as it often does, they get big bonuses, based on their own output and the company’s success. That’s one reason electricianswould grab a plane to help jump-start a plant inArkansas. It’s alsowhy anewplantmanager atNucor can expect supportive calls from experienced colleagues who want to help out. At Nucor, work is more than a job. It’s about pride. Employees enjoy seeing their names listed on the covers of corporate publications, including the annual report. They’re proud that their company, which turns scrap metal into steel, is the world’s largest recycler. And they’re exhilarated when they can draw on their intelligence and creativity to demonstrate that American workers can still compete.
Companies like Nucor are too rare. In the context of strikes and boycotts across China protesting “inhumane” management practices at Walmart in late 2016, a company spokesperson offered the usual boilerplate, “Our employees are our most valuable asset” (Hernández, 2016). Most companies claim to value their people, but fewer live up to those words. In practice, employees are often treated as pawns to be moved where needed and sacri”ced when necessary.
In this chapter, we focus on the human side of organizations. We start by summarizing the assumptions underlying the human resource view. Next, we examine how people’s needs are either satis”ed or frustrated at work. Then we look at today’s changing employment contract and its impact on both people and organizations.
HUMAN RESOURCE ASSUMPTIONS Amazon and Nucor represent different stances in a perennial debate about the relationship between people and organizations. One side sees individuals as objects or tools, important not so much in themselves as in what they can do for the organization. The opposing camp holds that the needs of individuals and organizations can be aligned, engaging people’s talent and energy while pro”ting the enterprise. This debate has intensi”ed with globaliza- tion and the growth in size and power of modern institutions. Can people “nd freedom and dignity in a world dominated by economic !uctuations and a push for cost reduction and short-term results? Answers are not easy. They require a sensitive understanding of people and their symbiotic relationship with organizations.
The human resource frame evolved from early work of pioneers like Mary Parker Follett (1918) and Elton Mayo (1933, 1945), who questioned a deeply held managerial assumption that employees had no right beyond a paycheck, and their duty was to work hard and follow orders. Pioneers of the human resource frame criticized this view on two grounds: It was unjust, and it was bad psychology. They argued that people’s skills, attitudes, energy, and
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commitment are vital resources that can make or break an enterprise. The human resource frame is built on core assumptions that highlight this linkage:
• Organizations exist to serve human needs rather than the converse.
• People and organizations need each other. Organizations need ideas, energy, and talent; people need careers, salaries, and opportunities.
• When the “t between individual and system is poor, one or both suffer. Individuals are exploited or exploit the organization—or both become victims.
• A good “t bene”ts both. Individuals “nd meaningful and satisfying work, and organi- zations get the talent and energy they need to succeed.
Organizations ask, “How do we “nd and retain people with the skills and attitudes to do the work?” Workers want to know, “How well will this place work for me?” These two questions are closely related, because “”t” is a function of at least three things: how well an organization responds to individual desires for useful work; how well jobs let employees express their skills and sense of self; and how well work ful”lls individual “nancial and lifestyle needs (Cable and DeRue, 2002).
Human Needs The concept of need is controversial—at least in someacademic circles. Some theorists argue that the idea is too vague andethereal.Others say that people’s needs are so variable and in!uencedby their surroundings that the concept offers little help in explaining behavior (Salancik and Pfeffer, 1977). Goal-setting theory (Locke and Latham, 2002, 2004) suggests that managers do better to emphasize speci”c performance goals than to worry about employees’ psychic needs. Econ- omists like Jensen andMeckling (1994) argue that people’s willingness to trade off one thing for another (time for money or sleep for entertainment) disproves the idea of need.
Despite this academic skepticism, needs are a central element in everyday psychology. Parents worry about the needs of their children, politicians promise to meet the needs of constituents, and managers make an effort to understand the needs of workers. That’s how Wegmans, a grocery chain that perennially ranks high on Fortune magazine’s list of best places to work (number two in 2017), states its philosophy: “We set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind. We also believe that we can achieve our goal only if we ful”ll the needs of our own people” (Wegmans, 2016).
Common sense tells us that needs are important because we all have them. But identifying what needs we have—long term or at any given time—is more elusive. A
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horticultural analogy may help clarify. A gardener knows that every plant has speci”c requirements. The right combination of temperature, moisture, soil, and sunlight allows a plant to grow and !ourish. Plants do their best to get what they need. They orient leaves sunward to get more light and sink roots deeper in search of water. A plant’s capabilities generally increase with maturity. Highly vulnerable seedlings become more self-suf”cient as they grow (better able to fend off insects and competition from other plants). These capabilities decline as a plant nears the end of its life cycle.
Human needs are similar. Conditions or elements in the environment allow people to survive and grow. Basic needs for oxygen, water, and food are clear; the idea of universal psychic needs is more controversial. A genetic, or “nature,” perspective posits that certain psychological needs are essential to being human (Lawrence and Nohria, 2001; Maslow, 1954; McClelland, 1985; Pink, 2009; White, 1960). A “nurture” view, in contrast, suggests that people are so shaped by environment, socialization, and culture that it is fruitless to talk about common psychic needs.
In extreme forms, both nature and nurture arguments are misleading. You don’t need an advanced degree in psychology to recognize that people are capable of enormous amounts of learning and adaptation. Just about any parent with more than one child knows that many psychological characteristics, such as temperament, are present at birth.
Most scholars see human behavior as resulting from the interplay between heredity and environment. Genes initially determine potential and predispositions. Research has identi- “ed connections between genetic patterns and behavioral tendencies such as antisocial behavior. But learning profoundly modi”es innate directives, and research in behavioral genetics regularly concludes that genes and environment interact in complex ways to determine how people act (Baker, 2004).
The nature-nurture seesaw suggests a more useful way to think about human needs. A need can be de”ned as a genetic predisposition to prefer some experiences over others. Needs energize and guide behavior and vary in potency at different times. We enjoy the company of others, for example, yet we sometimes want to be alone. Because genetic instructions cannot anticipate all situations, both the form and the expression of each person’s inborn needs are signi”cantly tailored by experiences after birth.
WORK AND MOTIVATION: A BRIEF TOUR Why do people do one thing rather than another? Why, for example, do they work hard, or not hard, or not at all? Despite decades of research, answers remain contested and elusive, but we can brie!y summarize some of the major ideas in an ongoing dialogue.
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An old formula (Maier, 1967) tells us that Performance = Ability ! Motivation. If you have both talent and desire, you’ll do well. Theories of motivation seek to explain the desire part of that formula. One of the oldest views, still popular among many managers and economists, is that the primary thing people care about is money: they do what they believe will get them more of it. Playing a hit man in the 2012 “lm Killing Them Softly, Brad Pitt summarizes this view with the observation, “America isn’t a country. It’s a business. Now give me my money.” Money is a powerful incentive, and focusing on “nancial rewards simpli”es the motivation problem—just offer people money for doing what you want. But the classic highwayman’s demand—“Your money or your life!”—reminds us that money isn’t the only thing people care about and is not always the most important thing. Managers and organizations that focus only on money will miss other opportunities to motivate. But what else is important beyond money?
A number of theorists have developed models of workplace motivation, and some of the better-known examples are summarized in Exhibit 6.1. Each model develops its own list of the things that people want, and no item appears on every list. But there is broad agreement that people want things that go beyond money, such as doing good work, getting better at what they do, bonding with other people, and “nding meaning and purpose. There is also alignment with a distinction that was central to Herzberg’s (1966) “two-factor” theory. Herzberg argued that extrinsic factors, like working conditions and company policies, can make people unhappy but don’t really motivate them to be more productive. He insisted that the things that motivate are intrinsic to the work itself—things like achievement, responsibility, and recognition for work well done. All these theories converge on the view that motivating people requires understanding and responding to the range of needs they bring to the workplace.
Maslow’s Hierarchy of Needs One of the oldest and most in!uential of the models in Exhibit 6.1 was developed by the existential psychologist AbrahamMaslow (1954). He started with the notion that people are motivated by a variety of wants, some more fundamental than others. The desire for food dominates the lives of the chronically hungry, but people move on to other things when they have enough to eat. Maslow grouped human needs into “ve basic categories, arrayed in a hierarchy from lowest to highest (Exhibit 6.2).
In Maslow’s view, basic needs for physical well-being and safety are “prepotent”; they have to be satis”ed “rst. Once lower needs are ful”lled, individuals move up to social needs (for belongingness, love, and inclusion) and ego needs (for esteem, respect, and recognition). At the top of the hierarchy is self-actualization—developing to one’s fullest
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Exhibit 6.1. Models of Motivation at Work.
Author(s) Needs/Motives at Work
Maslow (1943, 1954) Hierarchy of needs (physiological, safety, love/ belonging, esteem, self-actualization)
Herzberg, Mausner, and Snyderman (1959); Herzberg (1966)
Two-factor theory:
Motivators/satis!ers: achievement, recognition, work itself, responsibility, advancement, pay
McClelland (1961)
Hygiene factors/dissatis!ers: company policies, supervision, interpersonal relationships, working conditions, pay Three needs: achievement, power, af!liation
Hackman and Oldham (1980) Three critical psychological states: meaningfulness of work, responsibility for outcomes, knowledge of results
