Layoff

Abstract: Publisher Summary The chapter presents a discussion on the theory of equalizing differences. The theory of equalizing differences refers to observed wage differentials required to equalize the total monetary and nonmonetary advantages or disadvantages among work activities and among workers themselves. On the conceptual level, it can make legitimate claim to be the fundamental (long-run) market equilibrium construct in labor economics. Its empirical importance lies in contributing useful understanding to the determinants of the structure of wages in the economy and for making inferences about preferences and technology from observed wage data. Measurable job attributes on which compensating wage differentials have been shown to arise empirically include (1) onerous working conditions, such as risks to life and health, exposure to pollution, and so forth; (2) intercity and interregional wage differences associated with differences in climate, crime, pollution, and crowding; (3) special work-time scheduling and related requirements, including shift work, inflexible work schedules, and possible risks of layoff and subsequent unemployment; and (4) the composition of pay packages, including vacations, pensions, and other fringe benefits as substitutes for direct cash wage payments. Another important class of problems identifies work environments with investment rather than with consumption. Market equilibrium is defined by equality between demand and supply for workers on each type of job.

Abstract: High Performance Work Organizations (HPWOs) took root in the early 1990s but then faced an environment of organizational turmoil and restructuring. This paper, drawing on a second-round survey of employers that replicated and extended a 1992 survey, addresses two questions: whether HPWO practices continued to spread, and whether their productivity and quality gains redounded to employees' benefit. The results show that HPWO practices continued to diffuse at a rapid rate between the 1992 and 1997 survey dates, although more slowly for self-managed teams than for other practices. With regard to the second question, however, the author finds that adoption of HPWO practices in 1992 was associated with increased layoff rates in subsequent years and no compensation gains. In addition, HPWO practices are linked to employment reorganization, such as reductions in contingent and managerial employment.

Abstract: Joel Brockner Columbia University Tom R. Tyler University of California, Berkeley Rochelle Cooper-Schneider Columbia University The influence of individuals' prior commitment to an institution on their reactions to the perceived fairness of decisions rendered by the institution was examined in two different field settings. The first study examined how layoff survivors' work attitudes and behaviors after the layoff changed as a function of (1) their level of organizational commitment prior to the layoff and (2) their perceptions of the fairness of the decision rule used to keep certain employees and lay off others. In the second study, we explored how citizens' commitment to legal authorities changed as a function of their initial level of commitment and their perceptions of how fairly they were treated in their recent encounters with legal authorities. Consistent results emerged across these two settings: The most negative reactions were exhibited by those who previously felt highly committed but who felt that they were treated unfairly by the institution. Theoretical and practical implications are discussed.

Abstract: The field study reported here explored the relationship between the job insecurity associated with a layoff and the work effort of employees who survived it. The relationship took the form of an in...