The Employer-Employee Relationship: Things Have Really Changed!

In the early industrial era when Americans migrated in large numbers to urban areas for factory work, employees worked very long hours under grim, even dangerous conditions. There were also no protections for child laborers. This reality lasted through much of the 19th century and into the early 20th century. While factory wages were higher than other alternatives, it was punishing work in which the company, in many ways, “owned” the employee.

There was a brief period of American history, roughly post-depression through about 1980, in which at least a couple of generations experienced the ability to work for one or two employers for most of their lives, with relatively safe conditions and 40 hour work weeks, for a living wage, then retire in a home they likely owned. They were also able to provide advantages to their children that allowed millions of Americans to experience a more prosperous life than their parents. This was possible for several reasons. Unions played a significant role in ensuring safer conditions and living wages and benefits for moderately skilled workers. Social programs such as social security and Medicare kept millions of elderly out of poverty. And a slower pace of change allowed companies to do roughly the same work in roughly the same way for decades. This, in turn, facilitated long term relationships between employers and employees that supported an unwritten social contract. The employee worked hard, learned new skills over time, became more valuable, and the employer made an informal commitment to steadily improving wages and job security.

During this same period, management had a somewhat different “contract,” but similar benefits. In return for accepting longer and less predictable hours as “salaried” employees, managers generally enjoyed higher compensation, better benefits, and higher status within their organizations. However, even for management, there were much more clear boundaries between work and private life than there are now. There were no laptop computers, smart phones, tablets, etc. Vacations generally meant completely leaving the workplace behind, usually with zero contact for up to two full weeks. Weekends were generally fully disconnected from the workplace and managers rarely took work home with them. Hourly workers never took work home with them.

Fast-forward to the 1980s and several things began to change in substantial ways. Unions began a precipitous decline. “Globalization” began to put downward pressure on wages. The pace of change within organizations, related to technology and the competitive landscape, made it impossible for employees to do the same work in the same way for more than several years, let alone decades. These disruptions combined, or more accurately, conspired, to weaken the social contract between employers and employees. Today, several decades later, the contract has been obliterated. We are now in an economy in which all employees, hourly and management, are generally seen as “expendable,” and in which organizations, broadly speaking, feel no obligation or loyalty to the individuals that make the organization’s work and survival possible. What this means is that although it is still in one’s own interest to act professionally in terms of meeting obligations, doing one’s best work, representing one’s organization well, it would be a naïve mistake to think that, with rare exception, sacrificing for one’s employer will be “repaid” with job security or deferential treatment in tough times. While this phenomenon is more prevalent in the U.S., it is also becoming more common in other regions of the world as well.

Similarly, unlike the clear line that used to exist between work and private life, organizations now typically see no line whatsoever and claim some level of ownership over all of an employee’s time (it tends to be even worse for managers). In what amounts to a kind of bait and switch, employers spend several hundred dollars on smart phones and tablets at “no cost” to the employee, then get tens or hundreds of thousands of dollars of your “off the clock” time in return. Again, this dynamic is more pronounced in American and Western contexts, but it exists at some level in most global contexts.

And this has happened at the same time that smart phones work essentially anywhere, any time, domestically and internationally. One cannot even escape wi-fi at 35,000 feet in an airplane anymore!

The ultimate irony is that even as we work more hours and have less space between our work and private lives, we are actually becoming less productive overall and certainly less creative. How is that possible?

The short answer is that not only is there not a correlation between working longer hours and being more productive, recent research shows that the opposite is actually true. This is palpably ironic for both employees and the organizations they work for. See a lengthy post on this topic here.

While this new state of affairs can be stressful for employees, who seem to be working harder, with less work-life balance at the same time employer loyalty and job security are becoming ever more rare, it also provides a kind of freedom in which employees are also less tied to employers and thus more free to pursue new opportunities. Change can be difficult, but it is also a catalyst for growth and the flip side of less job security is more professional options. Another potential benefit is the fact that people generally realize faster upward mobility by moving from one organization to another than waiting for opportunities in one organization.

As leaders, we can actually take advantage of the current reality by identifying employees who bring the greatest value, have the best attitudes, integrity, etc. and find ways to support and reward those individuals. We frankly want longevity in our best people. The fact is that organizations today are often driven by short-term thinking, fear of failure, and limited innovation because of a reticence to take risks when times are hard. However, that same reality also provides opportunity to stand out in the crowd for leaders who care about others, take a long view, and embrace risk!

Post Script:

While all of my posts and articles are based at some level on my own experience over 35 years in the workplace, I rarely share specific personal stories. In this particular post, however, I think it is helpful to make an exception. The reality is that you can do the right thing as a leader and still pay a heavy price. You can focus on quality or sustainability or transformational change and be penalized or even fired by a boss or a board who does not care about those things. Due to your own sense of integrity you might prioritize compliance or legality or ethicality over financial imperatives when those who employ you are more “flexible” in their own interpretations of right and wrong. You may care about human beings and thus make decisions that value people over process or short-term financial gain. Fortunately, in most cases, when you do the right or smart or compassionate thing, you will be respected and rewarded, but not always. I have been separated from organizations for doing the things noted above when those things were not reflective of the value systems of my employer. However, just as a good leader takes the long view in terms of performance outcomes, over a professional lifetime, taking the long view in terms of your own integrity is also the right thing to do. In 25 years in management positions, I have been rewarded and benefitted from doing the right thing far more often than I have been penalized. In the end, none of us want our legacy to be how many people we fired or laid off rather than how many we coached and saved, or how many short term profit or sales goals we exceeded while sacrificing quality or the survival of the organization. I have seen short-term, unethical thinking literally destroy a healthy organization, wiping out thousands of jobs, stranding tens of thousands of customers, and wiping out hundreds of millions of dollars in equity. I have seen greed overrule compassion and brilliant strategy sacrificed to ego. And I have personally paid a price for challenging the status quo, but I have also been inspired by servant leaders and experienced the joy of leading a team through transformational change to achieve things they never thought possible. In the end, we will not be judged by our wealth or our status or our conquests, but by the good we have done, and that is a legacy for which we should be willing to occasionally sacrifice our own well being.

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