Unfinished Sympathy

UNIVERSITEIT TWENTE Unfinished Sympathy INDUCEMENTS AND EXPECTATIONS OF CLIENT COMPANIES TOWARDS THE TEMP AGENCY WORKERS THEY ARE USING STEPHANIE BRUMM 28.08.2009 ENSCHEDE UNFINISHED SYMPATHY 1 Introduction ____________________________________________________________5 1.1 Motivation and problem outline ______________________________________________ 5 1.2 Societal relevance of the issue ________________________________________________ 6 1.3 Scientific relevance and objective _____________________________________________ 7 1.4 Composition ______________________________________________________________ 8 2 Theoretical Background___________________________________________________9 2.1 Definition of flexible work ___________________________________________________ 9 2.2 Social exchange theory and the psychological contract (PC) ______________________ 10 2.3 Employee-organization-relationship as proposed by Tsui et al. (1997)______________ 11 2.4 Employee-organization-relationship and temp agency work______________________ 12 2.5 Expectations and inducements of the client organization_________________________ 12 3 Methodolgy ____________________________________________________________14 3.1 Participants ______________________________________________________________ 14 3.2 Methods_________________________________________________________________ 15 3.3 Investigating and analyzing inducements and expectations_______________________ 16 3.4 Data collection and analysis ________________________________________________ 18 4 Description of Cases _____________________________________________________19 4.1 Company backgrounds ____________________________________________________ 19 4.1.1 Company 1___________________________________________________________________ 19 4.1.2 Company 2___________________________________________________________________ 19 4.1.3 Company 3___________________________________________________________________ 20 4.1.4 Company 4___________________________________________________________________ 20 4.1.5 Company 5___________________________________________________________________ 21 4.2 Respondents _____________________________________________________________ 21 5 Results of the Interviews__________________________________________________22 5.1 HRM practices for temp agency workers and permanent workers ________________ 22 5.1.1 Staffing _____________________________________________________________________ 22 5.1.2 Selection ____________________________________________________________________ 23 5.1.3 Salary and financial bonuses _____________________________________________________ 24 5.1.4 Financial benefits______________________________________________________________ 26 5.1.5 Work content _________________________________________________________________ 26 5.1.6 Work environment _____________________________________________________________ 27 5.1.7 Development and promotion _____________________________________________________ 28 5.1.8 Industrial relations _____________________________________________________________ 29 5.1.9 Expectations__________________________________________________________________ 30 5.2 Results of the questionnaire ________________________________________________ 31 5.3 Inferences from the results to the theory of Tsui et al (1997)______________________ 32 6 Discussion, limitations and suggestions _____________________________________34 7 References_____________________________________________________________37 8 Appendix ______________________________________________________________41 8.1 Interview schedule and questionnaire in Dutch ________________________________ 41 8.2 Interview and questionnaire in German ______________________________________ 45 8.3 Tables __________________________________________________________________ 49 2 UNFINISHED SYMPATHY Abstract This thesis tries to explore the inducements a client organization offers and the expectations this organization holds towards their used temp agency workers. Inducements and expectations combined are defining parts of the theory of Tsui et al. (1997) en Tsui & Wu (2005. The conclusion, which follows from the ‘employee-organization relationship’ theory, is that client organizations either have a quasi-spot contract or an underinvestment approach towards the temp agency workers they are using. According to Tsui & Wu (2005) the other approaches, mutual investment and overinvestment, are not used with respect to temp agency workers. Those claims are being under investigation in this thesis with the help of semi-structured interviews and a short questionnaire. Five different German companies took part in this study and provided the possibility to conduct 9 interviews with human resource managers and supervisors. The analysis of the interviews and the questionnaire led to the conclusion that most client companies indeed do use the quasi-spot contract or the underinvestment approach towards their temp agency workers. But contradicting information was found in one company where the mutual investment and the overinvestment approach were used. The conclusions for the theory of Tsui et al. (1997) are twofold: On one hand the proposed approaches were found. On the other hand it seems fair to conclude that not every client company treats their temp agency workers in the same way. 3 UNFINISHED SYMPATHY Samenvatting Dit onderzoek bestudeerd het perspectief van de inlener ten aanzien van uitzendkrachten. Het inlenerspersepectief is gekenmerkt door verschillende maten van investeringen en verschillende soorten van verwachtingen. Investeringen en verwachtingen zijn gezamelijk de determinatieve componenten van de ‘employee-organization relationship’ theorie van Tsui et al. (1997) en Tsui & Wu (2005). De ‘employee-organization relationship’ theorie laat zien dat inleners ten aanzien van uitzendkrachten een quasi-spot contract of een underinvestment benadering aangaan en nooit een mutual investment of overinvestment benadering (Tsui & Wu, 2005). Met behulp van semi-gestructureerde interviews en een vragenlijst is deze bewering getoetst. In vijf Duitse bedrijven zijn negen interviews afgenomen en aansluitend geanalyseerd. De resultaten laten zien dat deze bedrijven vooral een quasi-spot contract en underinvestment benadering hanteren, terwijl alleen bij een bedrijf mutual investment en overinvestment is gebruikt. Uit deze onderzoeksresultaten valt te concluderen dat de beweringen van Tsui et al. (1997) en Tsui & Wu (2005) ten deele bevestigt en ten deele niet kunnen worden bevestigd. 4 UNFINISHED SYMPATHY 1 Introduction Temporary work is a form of atypical work where the employee will leave the employer after a certain; fixed amount of time has passed. Temporary workers face different working conditions in different companies: work may be part- or full-time, benefits might be given or not, work may be qualified or unskilled. Some temporary workers apply for jobs on their own, but some temporary workers are employed by a temporary work agency. Temporary agency work is a special form of temporary work based on a triangular relationship between the temp agency worker, a client organization and a temporary work agency. The temporary work agency employs the temp agency worker and makes the workforce of this worker available to a client organization, which is in need of workforce. The temp agency worker then fulfils his/her assignment within the client organization, which is responsible for supervision of the tem agency worker (Eurociett, 2009). 1.1 Motivation and problem outline In 1972 the „Gesetz zur Arbeitnehmerüberlassung“ (manpower provision act) was put into action in the Federal Republic of Germany. The aforementioned law enabled on one hand flexible work and on the other hand regulations to secure standards were put in place. It seems that agency work is not as new as many believe nowadays and different views of flexibility have a long-standing tradition. For decades temp agency workers served as the cheap modern day version of the slave. This picture was painted not only by trade unions. In 1985 the infamous book “Ganz Unten” was published in Germany where the author Günter Wallraff described his experiences with flexible work, including temporary agency work. He described how temp agency workers were literally seen as being “letzter Dreck” (“ultimate filth”) and were treaded as being the low paid slaves for the dirtiest and most dangerous work. According to statistics published by the Bundesagentur für Arbeit (2009) the overall amount of temp agency work in Germany is steadily increasing over the last five years. At the end of the year 2003 a total number of 269000 people had work contracts with temporary work agencies, while in 2008 this number has risen up to 710000. In this period the ratio of temp agency work in comparison to the overall working population in Germany showed an increase from 1.0% to 1.6 %. Although the German numbers may sound staggering, other European countries such as the Netherlands (2.8%) and the UK (4.5%) have a considerably higher percentage of temp agency workers (Eurociett, 2009). Nevertheless those statistics reveal that 5 UNFINISHED SYMPATHY the area of temp agency work should be of great concern as is it involves a number of people both within Germany and the European Union, which should not be seen as marginal. Guest (2004) stated that the increasing number of temporary employment arrangements, including temp agency work and other related temporary arrangements, is one of the most spectacular and important developments

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