The Employment Relationship: Causes and Consequences of Modern Personnel Administration (Springer Studies in Work and Industry)

The Employment Relationship Causes and Consequences of Modern Personnel Administration

PLENUM STUDIES IN WORK A N D INDUSTRY Series Editors: Ivar Berg, University of Pennsylvania, Philadelphia, Pennsylvania a n d A r n e L. Kalleberg, University of North Carolina, Chapel Hill, North Carolina

WORK AND INDUSTRY Structures, Markets, and Processes Arne L. Kalleberg and Ivar Berg

Current Volumes in the Series: THE BUREAUCRATIC LABOR MARKET The Case of the Federal Civil Service Thomas A. DiPrete THE EMPLOYMENT RELATIONSHIP Causes and Consequences of Modern Personnel Administration William P. Bridges and Wayne J. Villemez ENRICHING BUSINESS ETHICS Edited by Clarence C. Walton ENSURING MINORITY SUCCESS IN CORPORATE MANAGEMENT Edited by Donna E. Thompson and Nancy DiTomaso INDUSTRIES, FIRMS, AND JOBS Sociological and Economic Approaches Edited by George Farkas and Paula England LABOR AND POLITICS IN THE U.S. POSTAL SERVICE Vern K. Baxter LIFE AND DEATH AT WORK Industrial Accidents as a Case of Socially Produced Error Tom Dwyer MATERNAL EMPLOYMENT AND CHILDREN'S DEVELOPMENT Longitudinal Research Edited by Adele Eskeles Gottfried and Allen W. Gottfried THE STATE AND THE LABOR MARKET Edited by Samuel Rosenberg WHEN STRIKES MAKE SENSE--AND WHY Lessons from Third Republic French Coal Miners Samuel Cohn

A ContinuationOrder Plan is availablefor this series. A continuationorder will bring deliveryof each new volumeimmediatelyupon publication.Volumesare billedonlyupon actual shipment.For further informationplease contact the publisher.

The Employment Relationship Causes and Consequences of Modern Personnel Administration William P. Bridges University of Illinois Chicago, Illinois

and

Wayne J. Villemez University of Connecticut Storrs, Connecticut

Plenum Press • New York and London

Library of Congress Cataloging in Publication Data Bridges, William P. The employment relationship: causes and consequences of modern personnel administration / William P. Bridges, Wayne J. ViUemez. p. cm.--(Plenum studies in work and industry) Includes bibliograpldcal references and index. ISBN 0-306-44744-4 1. Personnel management--Illinois--Chicago Metropolitan Area--Case studies. 2. Bureaucracy-Illinois--Chicago Metropolitan Area---Case studies. 3. Line and staff organization--Illinois--Chicago Metropolitan Area--Case studies. I. Villemez, Wayne J. II. Title. HI. Series. HF5549.2.USB75 1994 94-34950 658.3'009773'11---dc20 CIP

ISBN 0-306-44744-4

©1994 Plenum Press, New York A Division of Plenum Publishing Corporation 233 Spring Street, New York, N.Y. 10013 All rights reserved No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, microfilming, recording, or otherwise, without written permission from the Publisher Printed in the United States of America

Preface

In 1979, serious research was just beginning on the connections between stratification outcomes and organizations. Data suitable for investigating these connections were scarce, and the general wisdom was that they would remain scarce--since organizational case studies were seen as the only means of gathering linked individual and organizational data. The case study approach does allow one to link the two types of data, but gathering such data on more than a few organizations is prohibitively expensive and difficult, and having only a few organizations limits generalizability. To help solve this problem, we developed the idea of a survey of a random sample of several thousand employed individuals, followed by a second survey of their several thousand employing organizations. This method, we reasoned, would provide us with a generalizable, simple random sample of individuals, coupled with a weighted random sample of organizations (weighted, of course, by size of organization). An added benefit would be that these valuable data could be gathered by a survey organization for the price of two simple surveys. It was not an easy idea to sell. We developed it into a proposal to the National Science Foundation (NSF), and though the reviewers were otherwise sympathetic, they were almost unanimous in their contention that such a survey would not work because "obviously" the great majority of respondents would refuse to reveal exactly who their employers were. To counter this idea, we fielded a large pilot study (funded by the University of Illinois at Chicago Office of Social Science Research), the results of which demonstrated quite conclusively that not only were over 90% of respondents quite happy to identify their employer, but they just as freely provided the exact street address of that employer. Armed with this fact, w e returned to the NSF and were funded, and the survey finally got into the field in 1981. We have debated at some length the relative merits of a national sample versus one confined to a single large labor market. Given the

vi

Preface

uniqueness of the research design and the fact that nothing like it had ever been done before, we had no way of knowing exactly what sorts of methodological problems we might encounter. This concern tipped the balance to our choice of a more manageable single-labor-market study. Many years later, others successfully applied our method to a continuing national study (see, e.g., Spaeth, 1985; Spaeth, O'Rourke, Kalleberg, Knoke, & Marsden, 1993; Kalleberg, Knoke, Marsden, & Spaeth, 1993), and Parcel, Kaufman, and Jolly (1991) have recently concluded in a review article that our methodology is probably the most efficient means of gathering a matched sample of employers and workers. Once we had decided on a single labor market, our next two decisions were easy ones. We were both working in the middle of the Chicago SMSA, a very large labor market with an industrial structure that mirrored that of the United States. For a study of the Chicago labor market, the University of Illinois Survey Research Laboratory was an obvious choice; the other obvious choice, the National Opinion Research Center, was not interested in doing a local study. This book is not in any sense the culmination of this research project, but it is the largest product to date. We have published much from these data elsewhere, as have our students, and though we have both moved on to new projects, we expect other colleagues to continue using these data for many years. Like most large data sets, this one required many skilled hands to bring it in successfully. For their hard work, methodological acumen, and extraordinarily intelligent coping skills, we thank our students (now colleagues) who saw the project through to completion: Jack Beggs, the project straw boss; and Cathy Fladung and Sibylle Allendorf, his talented coworkers. We are also grateful to the University of Illinois's Survey Research Laboratory for its professionalism and expertise, which helped bring an untried methodology to a successful conclusion. James Zuiches, the NSF Sociology Program director who funded the project, was unfailing in his support and assistance throughout the three years of the original and supplementary grants. Our colleagues at the University of Illinois at Chicago and the then department head, John Johnstone, went far out of their way to accommodate our needs as the survey was done. As the manuscript took shape, Mildred Schwartz provided many useful editorial suggestions and gave generously of her time in reading and rereading several sections. Finally, we thank Arne Kalleberg for adamantly insisting that we write this book, and Eliot Werner of Plenum Publishing Corporation, for waiting patiently for it while we completed other things first. This project has been a fully collaborative effort from its beginnings,

Preface

vii

and this book is no exception. We have greatly enjoyed working in tandem over the past decade in what seems to us a very fruitful effort-although an effort complicated somewhat by the peripatetic inclinations of one of us. We do not attempt to disentangle our respective contributions to this book and simply list our names alphabetically. WILLIAM P. BRIDGES WAYNE J. VILLEMEZ

Contents

Chapter 1

Introduction Examining Bureaucratic E m p l o y m e n t Relations . . . . . . . . . . . . . . . . . S u m m a r y a n d Plan of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 5 25

Chapter 2

Assembling Data on Employment Relations

29

The Metropolitan E m p l o y e r Worker (MEWS) S u r v e y . . . . . . . . . . . E m p l o y e e Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E m p l o y e r Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O t h e r Data Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29 35 41 50

Chapter 3

The Elements of Bureaucratic Personnel Management

53

Theories of Bureaucratic Personnel M a n a g e m e n t . . . . . . . . . . . . . . . Empirical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54 60

Chapter 4

The Scope of Bureaucratic Management M e a s u r e m e n t Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary ...................................................

71 77 78 101

ix

x

Contents

Chapter 5

Higher-Level Effects on Bureaucratic Control and Due Process in Organizations: The Influence of State, Industry, Organization, and Job

103

Previous Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Measures a n d Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a r y a n d Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103 107 109 123

Chapter 6

Bureaucratic Structure and Attachment to Firms: Linkages to Potential M o b i l i t y in the Market

125

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hypotheses ................................................. Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125 130 136 140 158

Chapter 7

Employment Relations and Earnings

161

Previous Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analysis a n d Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161 164 175

Chapter 8

Conclusion

177

The The The The

178 180 183 189

Shape of Bureaucratic E m p l o y m e n t Relationships . . . . . . . . . . Scope of Bureaucratic E m p l o y m e n t Relationships . . . . . . . . . . C o n s e q u e n c e s of Bureaucratic E m p l o y m e n t Structures . . . . . . Future of Bureaucratic E m p l o y m e n t Relations . . . . . . . . . . . . . .

Appendixes

195

A. Screening Questionnaire, S t u d y #410: Jobs a n d Workers in a Metropolitan Labor Market . . . . . . . . . . . . . . . . . . . . . . . . . . .

197

Contents

xi

B. Employer-Identification Q u e s t i o n Sequence . . . . . . . . . . . . . . . . . C. A C o m p a r i s o n of Similar Data G a t h e r e d f r o m Workers a n d E m p l o y e r s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. C o n s t r u c t i o n of M e a s u r e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E. Classifying O c c u p a t i o n s as O r d e r l y External Markets . . . . . . . .

199 201 211 217

References

223

Index

231

Series Publications

243

1 Introduction

In the fall of 1988, the U.S. Congress passed a bill requiring that employers with more than 100 employees provide 60 days' advance notification to affected workers in the event of a major reduction in the plant's work force. The reaction of employers, of their associations, and, indeed, of a wide spectrum of American conservatives was quite predictable. For them, employment was seen as equivalent to any other kind of economic contract, and the imposition of a state-mandated notification requirement was perceived as one more example of unnecessary government interference in the operation of free markets. In opposing this legislation vigorously, and ultimately successfully, business leaders were carrying on a long ideological tradition of asserting the primacy of the "employment-at-will" doctrine. The essence of this doctrine is that, unlike serfs or indentured servants, workers in a capitalist economy are free to quit, and employers are free to discharge them, whenever and for whatever reason they choose. Of course, if the plant-closing law had gone into effect, employment relations would have changed dramatically for those American workers whose jobs were held on a purely employment-at-will basis. However, what the conservatives' arguments tended to gloss over in this debate is the fact that many employer-employee relationships in American society have already transcended this short-run, here-todaygone-tomorrow set of assumptions. Or as the legal scholar Ian MacNeil (1980) expressed it, "discrete contracting" has given way to "relational contracting" in the establishment of many employment relationships. Although there are many publicly visible examples of this shift, such as professional athletes' no-trade clauses and mulfiyear contracts, executives' "golden parachutes," and the experimentation of some unions and companies with Japanese-style "lifetime employment" systems, more subtle changes have also occurred as codified seniority systems, internal

2

Chapter 1

labor markets, and bureaucratic promotion practices have filtered through the occupational structure. Without debating the specifics of the 1988 plant-closing bill, it is clear that our evaluation of this, or any other legislation, depends on accurate knowledge of the kinds of social arrangements that employers and employees have fashioned in different industries and different firms. These employment relationships are the subject of this book. Our perspective on them is sociological; that is, we see them as providing a link between employees and their employers in which mutual rights and obligations are established. Furthermore, we assume that there are regularities in these relationships that express the properties of a larger system, and we follow the current sociological convention of referring to these regularities as social structure. Sociological rhetoric and everyday experience coalesce w h e n we recognize that the structure of employment relationships--the rules and norms and the legitimate expectations that develop about t h e m - - o f t e n put limits on the damage that could be done if free rein were given to the personal prejudices and individual quirks that each of us brings to our job. Thus, there will always be questions that our boss cannot ask and requests that he or she cannot expect us to satisfy, and from his or her point of view, there are excuses that we cannot hope will be accepted. Moreover, the basis of these protections is not in many instances our threat to quit or the bosses' willingness to fire, but a set of rules and procedures that have become established as organizational norms. To the extent that this has happened, the employment relationship has become bureaucratized. Our working definition of an employment relationship is the typical set of terms and conditions that regulate the exchange of labor for money between an employer and a given category of employees laboring under his or her auspices. Transcending the specific quantities of work and money (or other material benefits) agreed to by the employee and the employer, this employment relationship most often extends to other matters such as grievance procedures, expectations about promotion chances, and stipulations about procedures for making any change in the relationship that might be desired by either party. Defined in this manner, employment relationships are shown by our research to vary considerably among employers and among workers, but they are most often bureaucratically defined (rather than uniquely negotiated) relationships. Historians, economists, and other sociologists have written extensively about the emergence of institutional mechanisms that regulate employment relationships and that blunt the impact of raw market forces on employment decisions. However, much of their discussion has

Introduction

3

been motivated by purely theoretical, or even ideological, concerns. Neo-Marxists have portrayed these mechanisms as yet another system of capitalist labor control. Some sociologists and economists have attempted to explain their adoption according to market structure considerations (monopoly, oligopoly, etc.). Other economists have examined them from the viewpoint of understanding whether these practices enhance economic efficiency, both for individual firms and for the economy as a whole. Organizational theorists have suggested that both creeping bureaucracy and corporate imitation play an important role. Ironically, because these studies have emphasized sorting out institutional and historical causes, attention has been diverted from examining the workers and employers who are the key actors in the establishment of these employment structures. As a complement to these largely historical studies, which rely on aggregated and documentary data sources, we will survey the kinds of arrangements that exist, and who is affected by them: Do blacks and women, for example, have access to structured mobility systems and grievance procedures equal to the access enjoyed by white males? How do the expanding service industries compare to the manufacturing sector in the formalization of employee rights and responsibilities? We will also consider some possible effects of these institutionalized structures: To what extent are employees' pay and the causes of their pay molded by other aspects of their employment relationship? What about their job satisfaction? To what extent do employees who are sheltered from supply and demand forces become dependent on their current employers? Although answers to these and similar questions have direct relevance to the historical and ideological issues mentioned above, they are also of considerable importance in their own right. In answering these questions, we will build on what we believe is the most important insight generated by existing writing: Employment relationships are strongly influenced by organizational considerations. These considerations are relevant because employment ties usually connect individuals to organizations, not simply to other individuals, as in marital, filial, and friendship relationships. One implication is that continuity in employment relationships frequently assumes more importance than continuity in other commercial transactions. When employers are organizations, be they private corporations, government agencies, or nonprofit associations, they share in the characteristics of all groups. Thus, their interactions with workers and potential workers can be interpreted in terms of the concept of membership. Even though employing organizations are highly inconsistent in their treatment of employees as m e m b e r s - - a s the debate over plant-dosing legislation illustrates--it is

4

Chapter I

an unusual employing organization that never invokes the worker-asmember metaphor. With this ideological construct as a backdrop, it becomes more difficult for employers to act on a day-to-day basis as if their employees are only trading partners in a purely economic exchange. More important, the fact that employers are often organizations opens up the possibility that various aspects of the employment relationship become institutionalized as part of the operating procedure of the organization itself. This institutionalization can be illustrated by the principle of seniority, especially its application to the problem of rationing layoffs during economic cutbacks. Thus, Philip Selznick (1969) noted that seniority (1) has become a prevalent operating procedure in a large number of nonunion contexts and (2) has been "welcomed as a contribution to orderly management" even though it is an "important limitation on [managerial] discretion" (p. 88). He added that a "keen sense of professionalism in personnel relations may be compatible with a 'mechanical' procedure [seniority] w h e n the latter is an integral part of a rationalized system of personnel practice" (p. 89). What we would like to emphasize is that this kind of institutionalization, where one of m a n y possible solutions to what is essentially a market-based problem becomes transformed into a legally and culturally supported norm of procedure, is intimately associated with the advent of organizations--and large organizations--as principal employers. Many other aspects of employment relationships, not just seniority, have become institutionalized in this manner, a notion aptly encapsulated in the title of Sanford Jacoby's book, EmployingBureaucracy(1985). Here we extend his historical inquiry by exploring, in contemporary society, the prevalence of other aspects of bureaucratic employment relations, such as internal labor markets, the codification of employment rules and regulations, and the establishment of rights to due process in the administration of these rules. It is important to know where these relationships are most highly developed, and which types of workers and which types of employers are joined together in them. While "good jobs" are likely to be imbedded in these kinds of bureaucratic employment relationships, there has been little investigation of their consequences for individual workers, particularly in their relationships to external labor markets. Our research leads us to argue that bureaucratic employment relationships, with their emphasis on "internal" opportunity and organizationally grounded fairness, have the potential both for creating dependence and for liberating workers from the arbitrary whims of individual bosses and supervisors. By dependence, we mean a behavioral withdrawal from the outside market so that bureaucratically employed workers lose touch with alternative employ-

Introduction

5

ment possibilities in the outside world. Whether or not this dependence is accompanied by feelings of loyalty and psychological commitment to their current employers, workers are just as tied to their current situations. To summarize, employment relationships are a critical element in the experience of life in industrialized societies. Because employment in these societies typically involves the establishment of a social tie between an individual and an organization, the form these relationships take is unavoidably influenced by the organizational context in which they occur. Prototypical bureaucratic employers have bureaucratic personnel systems that include provisions for organizational "careers" (internal labor markets), along with mechanisms for ensuring due process and dispensing some measure of industrial justice. In their fully developed mode, these personnel administration systems have been described, only partly metaphorically, as "internal states" (see Burawoy, 1979). But it is unlikely that these practices are fully developed or implemented ubiquitously. For one thing, there are many small, nonbureaucratic employers w h o are largely immune from most of the forces that have encouraged the development of personnel systems (see Granovetter, 1984). For another, even in large organizational settings, there may be inconsistent adoption of bureaucratic personnel practices with regard not only to the type of practices that are implemented but also to the evenness of implementation across organizational subunits. Thus, we can anticipate that different types of workers will have different amounts of exposure to bureaucratic personnel management.

EXAMINING BUREAUCRATIC EMPLOYMENT RELATIONS

The central issues of this book are related directly or indirectly to the "stratification question": Who gets what and why? The stratification approach applies, first, because the practices and the protections that we are studying are inherently a "social reward," different in type from but parallel in importance to income and social prestige.1 Other things being equal, it is better to be in a job where one has good promotion prospects, the right to appeal the arbitrary decisions of one's superiors, and clearly stated expectations of rights and responsibilities. Although some studies a As David Stark (1986)insightfully pointed out, there may be more uncertainty in capitalist economies about job security than there is about income (the reverse being true in some socialisteconomies). From this possibility,he deduced that American internal labor markets are structured around the problem of rationing employment stability, whereas socialist ones are oriented around rationing income.

6

Chapter 1

have implicitly recognized these principles, these studies have often b e e n r a t h e r l i m i t e d i n scope. By e x a m i n i n g a r e p r e s e n t a t i v e s a m p l e of m e t r o p o l i t a n w o r k e r s a n d t h e i r e m p l o y e r s , w e s h a l l p r o v i d e a less bia s e d a n d m o r e c o m p r e h e n s i v e set of a n s w e r s t h a n o t h e r s h a v e offered. 2 By f o c u s i n g o n b u r e a u c r a t i c e m p l o y m e n t i n s t i t u t i o n s , o u r a n a l y s i s will b o t h b r o a d e n a n d d e e p e n t h e s t u d y of o r g a n i z a t i o n a l c o n t r i b u t i o n s to stratification. It will b e d e e p e n e d b e c a u s e , r a t h e r t h a n t a k i n g i n t e r n a l l a b o r m a r k e t s a n d o t h e r b u r e a u c r a t i c p e r s o n n e l practices as " g i v e n s , " w e will b e e x p l a i n i n g t h e i r d i s t r i b u t i o n a n d t h e i r i n t e n s i t y . It will b e b r o a d e n e d b e c a u s e w e will b e c o n s i d e r i n g t h e effects of t h e s e s t r u c t u r e s n o t o n l y o n w a g e s b u t o n o t h e r d i m e n s i o n s of i n d i v i d u a l o u t c o m e . 3 S i n c e t h e p r i m a r y f o c u s of this b o o k is o n t h e i n t e r f a c e b e t w e e n i n d i v i d u a l s a n d o r g a n i z a t i o n a l f o r m s , t h e l i t e r a t u r e o n t h e e m p l o y m e n t rela2 For example, Marcia Freedman's book Labor Markets: Segments and Shelters (1976) is based entirely on aggregate data and does not address consequences. 3 Despite our focus on individuals in their jobs, it is important to note at the outset that this book is not intended to be an argument for, or even an exemplar of, the individualist perspective. We do not choose to join that argument, but if we did, it would be on the structuralist side (see Pfeffer, 1982, pp. 18-23, for a summary of the argument in the organizational literature; see Stinchcombe, 1979, for a summary of the argument in the stratification literature). Although employment relationships are surely socially constructed phenomena, they are structural features that constrain individual behavior on both sides of the relationship (as do Marx's "relations of production"); they are neither emergent nor renegotiated in everyday interaction. Certain job configurations and bureaucratic structures produce, in the aggregate, higher or lower levels of monetary return for the personal investments of the occupants of the job and may be expected to produce higher or lower levels of satisfaction with the job, both of which may be expected to produce, in turn, higher or lower levels of tenure or, its converse, turnover. These simple examples suffice to make the point: Income level, job satisfaction, and quit or stay decisions are individual phenomena. Yet, we would not agree with Collins (1981) that statements regarding organizational effects on these phenomena are simply macrosummaries of microevents. Individuals come and go in the organization and in the job; levels of income and satisfaction and rates of turnover are most often more constant. Some jobs in some organizations are known to have high turnover, others to have high satisfaction, and still others to produce a high return on human capital--all regardless of the individuals in them. These are known characteristics of the jobs, not aggregations of accidental confluences of individuals of certain dispositions. They are structural phenomena, not individual phenomena, and do not depend in the aggregate on the idiosyncratic reactions of individuals. Unlike Mayhew (1980), we do concede that structural statements require certain implicit micro-level assumptions, but then microlevel theories themselves require assumptions regarding the constancy of certain biochemical reactions. We see little difference between the two sets of assumptions. So, statements about organizational effects on, say, job satisfaction levels are structural statements, just as are statements about the effect of "environmental uncertainty" on "organizational decentralization." In both cases, the actions of individuals are ultimately involved; in both cases, such actions are a stochastic given and are thus irrelevant.

Introduction

7

tionship is crucial. Although much of the extant literature in this area is historical and comparative, it is nonetheless a useful source of ideas for addressing our basic issues.

Previous Literature The major perspectives on bureaucratic management can be usefully categorized into three groups: the technical-rational perspective, the industrial-sectorial perspective, and the institutional perspective. In a focus on the employment relationship, three issues are critical in each of these perspectives: what they imply about the shape of bureaucratic management, the scope of bureaucratic management, and the consequences of bureaucratic management. By the shape of bureaucratic management, we mean the defining characteristics: the key elements of management isolated by this perspective and the interrelationships among these elements. The scope of bureaucratic management refers to the distribution of various bureaucratic elements of management structure: distribution by industry, by occupation, by firm or establishment characteristics, by level of technology, and by many other aspects. The different perspectives imply different distributions. The consequences of bureaucratic management for employees (at all levels) must be the major focus of any stratification study, and the different organizational perspectives, with their different predictions of shape and scope, lead to different predictions of the effects of management structures on worker attachment, reward patterns, distributional inequalities, worker satisfaction, and other aggregate individual outcomes.

The Technical-Rational Perspective Before what we call the technical-rational perspective, there was the merely "rational" perspective. Taylor's (1911) "scientific management" prescriptions, with their assumption of at least economically rational workers behaving rationally, are the earliest example of the perspective. Perhaps the best single example of this view, though, is Blau's emphasis (1964) on the interaction patterns of individuals as the key to organizational structure. Explaining the phenomenon by which normal "direct" exchange transactions between individuals become "indirect" exchange transactions in organizations, Blau noted: As long as subordinates obey the orders of a superior primarily because they are obligated to him for services he has rendered and favors he has done for them individually, he does not actually exer-

Chapter 1 cise authority over the subordinates, and there is a direct exchange between him and them . . . . The establishment of authority means that the normative constraints that originate among the subordinates themselves affect their compliance with the orders of the superior--and indirect exchanges now take the place of the former direct ones. The individual subordinate offers compliance to the superior in exchange for approval from his colleagues; the collectivity of subordinates enforces compliance with the superior's directives to repay its joint obligations to the superior; and the superior makes contributions to the collectivity in exchange for the selfenforced voluntary compliance of its members on which his authority rests. (p. 329) This exchange perspective clearly assumes that order depends on rational choices being made in the workplace; they are more benign than Hobbesian choices because compliance is being exchanged for approval rather than for life, but the model of humans is the same. Also the same is the conception of an organization as an aggregate of individuals; here, the core of a complex organization lies in the rationality-based interactions among individuals. Another clear, though very different, example of the early rational perspective can be found in the works of those usually characterized collectively as members of the " h u m a n relations" school. The origins of this school are usually traced to the work of Roethlisberger and Dickson (1939) and their classic report on research in the Hawthorne plant in Cicero that seemed to isolate important informal group structures. Others identified with this school include Rensis Likert (1961, 1967), Douglas McGregor (1960, 1967), and Chris Argyris (1960, 1964). The essential argument is that h u m a n relations (rather than just economic relations) are essential to a smoothly functioning organization. As Likert (1967) phrased it: The best performance, lowest costs, and the highest levels of earnings and of employee satisfaction occur when the drive for a sense of personal worth is used to create strong motivational forces to cooperate. (p. 75) Persons in organizations were driven by what Argyris (1960) termed a desire for self-actualization, and the overall point was that an organization can efficiently achieve its own self-actualization only if the individuals in it do so as well. This work has been criticized on both empirical and ideological g r o u n d s - - t h e latter because of its argument that workers who question organizational values need " a d j u s t m e n t " - - b u t its influence remains in the field.

Introduction

9

T h e general perspective of individual rational action, indeed, is pervasive in the field, many of its assumptions being more-or-less taken for granted. In an excellent summary and critique of the perspective, Pfeffer (1982, Chapter 2) identified several variants sharing the same basic assumptions. He pointed to "expectancy theory" (Vroom, 1964), which asserts that individuals act expecting (or considering the probability) that their action will lead to a valued outcome; to "goal theory" (Locke, 1968), which argues that individuals act to achieve personally derived goals; to "needs theory" (Alderfer, 1972; Maslow, 1993), which argues that individuals act to satisfy their needs; and to theories like that of his own (Pfeffer, 1981), which argue that people act to achieve power as well as to achieve other outcomes. The problems with all of these similar theories, Pfeffer (1982) noted, include: (1) Their presumption of the preexistence of purpose or intent; (2) their tendency to ignore the effects of context on behavior; (3) their use of individual-level constructs to build theories of collective or macrolevel behavior; (4) their heavy reliance on cognitive, information-processing assumptions about the causes of human activity; (5) their reliance on hypothetical constructs that reside largely in people's heads and thus that are problematic to observe and measure; and (6) their fundamentally tautological nature, which makes them somewhat theoretically suspect. (p. 42) Even more telling, perhaps, is the criticism of this perspective by Perrow (1986), who contended that, in the extensive research conducted by devotees of this school, we have learned "a great deal about psychology and social psychology, but little about organization per se" (p. 114). In part, he argued, this is because organizations cannot be explained by explaining the actions of individuals or groups within them, but more fundamentally, it is because what we think we have learned about psychology and social psychology from these studies is probably itself incorrect:

People in these fields no longer agree that such things as norms, values, and personality really exist or account for much; these concepts may only give a false sense of order to a world that both the academic and the person in the street desperately want to order. Sociology, too, is having some difficulty swallowing the simple, obvious proposition that attitudes predict behavior. (The proposition that morale predicts productivity is just one specification of this.) (Perrow, 1986, p. 115) Instead, Perrow noted, it may be that "organizations run backward," that is, that individuals socially construct a world that they genu-

10

Chapter 1

inely believe was there all along, a world actually moved by accidents and random events. If such is the case, it is small wonder that attitudes do not predict behavior because behavior precedes them in time. Perrow cited Karl Weick (1979) and March and Olsen (1976) for this counter to the rational model, but the idea far predates them. Perrow was referring to what Pareto called "sentiments," those rational after-the-fact explanations of nonrational behavior. Pareto (and then Parsons) moved from this argument to the necessity of lower-level explanations of behavior; Perrow inferred from the argument the necessity for higher-level explanations.

Expectations following from Rational Theories. Rational theories have straightforward implications for bureaucratic management effects. The shape of bureaucratic management should be everywhere the same because universal principles of organization govern efficiency considerations. The scope of bureaucratic management is relatively fixed. It should vary only by the size of the organization, and variation across industries, occupations, and firms or establishments should occur only to the extent that the size distribution of organizations varies across such units. As to the individual effects of bureaucratic management, most rational theories would see its overall effect as neutral. Changes necessitated by increased size that lead to decreased worker satisfaction (e.g., deskilling) would have to be balanced by changes that increase worker satisfaction (e.g., higher wages), or else worker productivity would decline. A search for consequences of bureaucratic management that began from this perspective would be essentially a search for the compensating mechanisms that organizations differing in various dimensions use to achieve optimal exchange relations with workers. As theories become more complex, however, their implications for employment relationships change. The preceding types of "rational" theories consider primarily the rationality of individual actors in organizations. Many other variations emphasize a higher level of analysis and dwell on the rational, goal-seeking behavior of whole organizations (whether treated as aggregations of interlocked individual actions or as actors in their own right). The notion that organizations have goals apart from the individuals in them (which, indeed, can determine the goals of those individuals) and act rationally to pursue those goals has informed the work of many organizational theorists, most of w h o m have accepted Simon's idea (1957) of "bounded rationality," a rationality that results not in choices that are optimal, but in choices that seem optimal given the environment and the political history of the organization. Actors are, in Simon's terms (1957), "intendedly rational, but only limitedly so"

Introduction

11

(p. xxiv). In organizational choice, that is, there is no simple m e a n s - e n d scheme; there are multiple ends (objectives), each with its value, and many possible paths to each end. The process of choosing the best path to the "best" objective is one that is circumstantially circumscribed. Theories of such processes require underlying explanations of h o w individually rational actions come to be aggregated to organizationally rational actions. None of the existing theories explain the aggregation procedure; some simply assume it, others argue that those organizations in which it does not occur do not survive, and still others argue that organizations, whatever the true reason, behave "as if" they were rational actors. The first group assumes what is to be demonstrated, the second group ignores noncompetitive markets and the public sector, and the third group casts out explanation, arguing for the value of prediction instead. If, indeed, there are rational organizations rationally pursuing their goals, one can assume that their internal organization is optimally structured to attain these goals, and that variations in goals and in the appropriate means to achieve them result in differences across organizations in job content, bureaucratic structure, and other relevant characteristics. This is not a radical notion, nor is it a very complex idea. Weber saw bureaucratization as an ideal type, and thus as something that would vary with historical and other circumstances. Discovering a conceptual dimension that effectively organizes these differences, however, has proved difficult for organizational theorists. Most early suggestions for an appropriate dimension have been interesting but not terribly useful. They have included sorting by the type of task involved (programmed vs. nonprogrammed) (March & Simon, 1958); sorting by the type of leadership (authoritarian, laissez-faire, or democratic) (Gouldner, 1954); sorting by the type of power used to gain compliance (coercive power, remunerative power, or normative power) (Etzioni, 1975); sorting by w h o benefits from the organization (members, clients, owners, or the public) (Blau & Scott, 1962); and many others.

Contingency Theory. The most promising research was stimulated by the work of Woodward (1958, 1965), w h o argued for technological type as a key organizing dimension, a focus that is one aspect of what has come to be called contingency theory. Hall (1987) summarized her work: Woodward's findings show that the nature of the technology vitally affected the management structures of the firms studied. The number of levels in the management hierarchy, the span of control of first-line supervisors, and the ratio of managers and supervisors to other personnel were all affected by the technology employed. Not only was structure affected, but the success or effectiveness of the

12

Chapter 1 organizations was related to the "fit" between the technology and structure. The successful firms of each type were those that had the appropriately structured technical systems. (pp. 105-106)

The most immediate implication of this approach is that one could expect the type of technology to help determine the nature of the employment relationship. Woodward's findings have been replicated for the United States (Zwerman, 1970), greatly extended and refined (see Perrow, 1986, pp. 140-146, for an excellent summary), and challenged and refuted (the Aston group found little support for the idea in its crude form; Mohr, 1971, found no empirical support for it in any f o r m - - a t least, in public organizations). The major problem comes in defining technology, a more serious problem than it seems at first glance, because there may be a variety of technological forms within the same organization. Hall (1962), for example, showed that different units of the same organization may have different structural forms. Perrow (1967) offered a still-popular typology based on the nature of the search process, the number of exceptions encountered in doing the work, and the nature of the raw material. The Aston group identified three types of technology-knowledge, materials, and operations technology--and then concentrated on the last in their research (see Hickson, Pugh, & Pheysey, 1969). Scott (1981) provided an extensive review of definitional attempts and constructed a typology of technology definitions by cross-classifying the three types just mentioned with processing stages (input, throughput, and output); all of the resulting nine cells describe a definition of technology, and all nine have work cited within them. Current thinking sees the type of technology as crucial to organizational form, but most likely in interaction with other factors. But it is not only technology that is assumed to have an effect on organizational structure, and thus indirectly on the bureaucratic employment relationship. The other two most cited contextual factors that are presumed to influence efficient organizational structure are the size of the organization and its competitive environment. Variations in these two, along with technology, are seen as the contingencies that determine the mode of organization; the central tenet of this approach is that the appropriate organizational design depends on the organization's context: "There is no one best way to organize" (Galbraith, 1973, p. 2). The idea of size as a determinant of organizational structure has probably generated more research than any other dimension. Blau has been one of the major figures in this research, investigating the relationship between size and differentiation and finding, to oversimplify somewhat,

Introduction

13

that with increasing size come increases in the number of levels, departments, and even job titles within an organization (see Blau, 1968, 1970, 1972, 1973, and a host of articles by Blau and various associates). The relationship between size and differentiation was found not to be linear because the rate of increase in differentiation declines with size. The Aston group also found size to be crucial to organizational structure, causing, among many other things, decreased concentration of authority and increased specialization and reliance on written records. Some have called the relationship into question (e.g., Argyris, 1972; Hall, Haas, & Johnson, 1967; Hall & Tittle, 1966), but it seems empirically established beyond doubt (see Kimberly, 1976, for a review of studies). Meyer (1972) found in a longitudinal study that size caused structural changes, a finding that adds weight to the argument of genuine causality. Pfeffer (1982), however, noted: If one assumes reasonably constant spans of control, the relationship between size and differentiation is mathematically true by definition. Thus, there is some concern that the effects of size on differentiation are not of great theoretical interest or importance. (pp. 149-150) Though the theoretical importance of the size component may be moot in organizational theory (and most would not agree that it is), it is clearly of crucial importance in the employment relationship because, of all the factors that affect that relationship, most have been found empirically to covary with size. Size has been found to affect differentiation, mechanisms of control, centralization, formalization, the size of the administrative structure, reliance on written records, job satisfaction, wages, return to education, and many other factors that clearly impinge on the employment relationship (see Kalleberg, Wallace, & Althauser, 1981; Stolzenberg, 1978; ViUemez & Bridges, 1988). The environment of organizations as a crucial variable has been noted on many occasions (e.g., Burns & Stalker, 1961), but it really became a central theoretical focus in 1967, with the publication of three major works that all made essentially the same argument (Lawrence & Lorsch, 1967; Perrow, 1967; Thompson, 1967). Burns and Stalker (1961) found that a more formalized structure was appropriate for organizations in a stable environment, whereas a more flexible, less formalized and centralized structure was optimal for organizations in less predictable environments. Subsequent work has expanded this basic notion, and the earliest focus was on environmental uncertainty. Duncan (1972) expanded the definition of uncertainty to two elements: "complexity" and "variability." The first refers to the number of elements that must be

14

Chapter 1

dealt with, the s e c o n d to the extent that these e l e m e n t s c h a n g e o v e r time. L a w r e n c e a n d Lorsch (1967) e x p a n d e d the definition d o w n w a r d , a r g u i n g that different units within the s a m e organization faced different e n v i r o n m e n t s . 4 T h e e n v i r o n m e n t a l - u n c e r t a i n t y c o n c e p t h a s b e e n red u c e d to its p r e s u m e d p r e c u r s o r s in a n u m b e r of w a y s , the m o s t w i d e l y accepted b e i n g that of Pfeffer (1982; Pfeffer & Leblebici, 1973; Pfeffer & Salancik, 1978). Pfeffer c o n t e n d e d that the r e l e v a n t d i m e n s i o n s of the organizational e n v i r o n m e n t w e r e the d e g r e e of c o n c e n t r a t i o n of resources, the relative scarcity of resources, a n d the d e g r e e to w h i c h t h o s e in the organizational field are interconnected. 5 O t h e r s h a v e e x p a n d e d a n d contracted the n u m b e r of e n v i r o n m e n t a l d i m e n s i o n s e v e n m o r e , a d d i n g further analytic detail. For e x a m p l e , Aldrich (1979) isolated six m a j o r d i m e n s i o n s : e n v i r o n m e n t a l capacity, h o m o g e n e i t y , stability, concentration, turbulence, a n d m a r k e t c o n s e n s u s . Dess a n d Beard (1984) collapsed these six to three; Hall (1987) cross-classified t h o s e t h r e e w i t h s e v e n o t h e r d i m e n s i o n s . A l t h o u g h c o n c e p t u a l clarity h a s p r o g r e s s e d (or not, d e p e n d i n g o n w h o m o n e reads), the essential p o i n t h a s r e m a i n e d the s a m e : Organizational e n v i r o n m e n t has a strong impact o n organizational structure a n d m u s t be t a k e n into account. If it is n o t s e e n as quite the essential d e t e r m i n a n t of structure it once w a s (in P e r r o w ' s w o r d s , if the w a v e of theorizing h a s lost its h a n d s o m e crest of frothy promise), organizational e n v i r o n m e n t is still r e g a r d e d as a n i m p o r t a n t influence.

Implications for the Employment Relationship T h o s e theories that w e h a v e t e r m e d merely rational i m p l i e d that the s h a p e of bureaucratic e m p l o y m e n t relations w o u l d be e v e r y w h e r e the s a m e , that their s c o p e w o u l d v a r y only b y the size of the organization, a n d that their c o n s e q u e n c e s w o u l d h a v e to be neutral. The technicalrational theories i m p l y m u c h m o r e variation. In these theories, it no longer necessarily follows that universal principles of o r g a n i z a t i o n gov4 That is, they pointed out that the subenvironment of a marketing unit was very different from the subenvironment of an R & D unit, which in turn was very different from the subenvironment of the production division. The most effective organizations, they found, were those that accomplished two things: (a) allowed each department to have its own different internal structure in accord with its subenvironment and (b) effectively coordinated and integrated these different substructures within a broader structure. s He argued that concentration reduces conflict, which in turn reduces uncertainty; that resource scarcity increases uncertainty by increasing conflict; and that interconnectedness increases uncertainty by increasing both interdependence and conflict. The obvious implication of Pfeffer's work is that research should focus on the causal precursors of uncertainty, like concentration, scarcity, and interconnectedness, rather than on the tooglobal concept of uncertainty itself.

Introduction

15

ern efficiency considerations. What is efficient is now contextually determined, and the shape of employment relations can be expected to vary across organizations with different technologies and environments. Similarly, the scope of those elements of management structure that define the employment relationship can no longer be expected to be fixed. They will be differentially distributed across the relevant contexts. As to the individual-level consequences that follow from this perspective, they have not been systematically explored, but no one has suggested any effect other than a neutral one. We argue below that a case could be made for individual consequences following from this perspective that are far from neutral--as other perspectives contend. While debate was raging over the issue of how (and whether) environments influenced organizations, there was little apparent interest in understanding how workers were affected by their employers' environments. The key word here is apparent, for the environmental argument was being made in a different way at the same time, though by researchers from a number of different traditions who did not call it an environmental argument and who made little reference to the organizational literature; some of them may have been unaware of the related research. For example, at the core of the segmented-labor-market theorists' arguments is a clearly environmental argument. As Baron (1984) put it: Institutionalists and Marxists suggest that firms' relations to their product markets and their control over industrial and political environments influence how work is organized and rewards distributed (Galbraith 1967, Averitt 1968, Bluestone 1970, O'Connor 1973, Friedman 1977, Edwards 1979, Berger & Piore 1981, Gordon et al. 1982). While the combination of factors stressed depends on the investigator's theoretical perspective, the expectation that good jobs are concentrated in "core" or monopolistic firms and industries is explained by some combination of the following attributes: technical mix; level of union and management interest in employment stability; ability to absorb higher labor costs due to market structure and demand schedules; growth, concentration, and change in organizational forms; differences in the quantity and quality of managerial activity; and economic and political relationships with the state and foreign markets. (p. 48) These are the studies reviewed below as examples of the workercontrol (or industrial-sectorial) perspective, but Baron was quite correct to characterize them as studies of the impact of organizational environments. They do not characterize themselves that way, but they clearly are, because the attributes stressed that differentiate sectors are ele-

16

Chapter 1

ments of organizational environments. The argument is simply narrowed, and it is assumed that organizations must adapt different means of worker control in response to differing environments. It is also true that at least one variant of the "institutionalist" theory to be discussed below is based on reasoning similar to that found in the organization-environment literature. Thus, despite the lack of explicit attention given to the labor implications of "environment" in this tradition, its premises have not gone unheeded. Furthermore, if these various sidetracks of organizational theory are followed to their own conclusions, one is no longer operating in a world that runs according to either technical or rational principles. For that reason, we defer our discussion of these theories until we consider another recent attempt to explain employment relationships from a more purely technical-rationalist stance. Though the theory to follow falls clearly in the "technicalrational" category, we discuss it separately and extensively because it is a large and sophisticated attempt to deal with employment relationships (though it does not use that terminology).

Transaction Cost Analysis. One of the best-known recent "rational organization" approaches is the transaction cost (or "market failure") analyses of Williamson (1975, 1981, 1985; Williamson & Ouchi, 1981). Seeking to explain w h y organizations exist at all, instead of all their functions simply being handled by the market, Williamson (1985) argued that some transactions can be handled more efficiently by an organization than by the market. He summarizes: Transaction cost economics maintains.., that organizational variety arises primarily in the service of transaction cost economizing. That approach is to be distinguished not merely from the technological approach to economic organization but also from power approaches, which ascribe nonstandard forms of organization to monopoly purposes or class interests . . . . Transactions, which differ in their attributes, are assigned to governance structures, which differ in their organizational costs and competencies. (pp. 387-388) The organization of work and of labor, that is, is governed by efficiency considerations, for labor market transactions, like all other transactions of organizations, have costs that can be minimized by effective organizational arrangements. Technology is important, as is the ownership of assets, but, Williamson maintained, neither separately determines economic organization, nor do they do so in interaction with each other. The transaction is the key unit of analysis. For an example of what he meant, consider the difference between this approach and the neoclassical approach to the most basic employment relationship. A worker

Introduction

17

w h o has assets ( h u m a n capital) to sell to an employer would, in the neoclassical model, sell t h e m in the marketplace where "faceless buyers a n d s e l l e r s . . , m e e t . . , for an instant to exchange standardized goods at equilibrium prices" (Ben-Porath, 1980, p. 4, quoted in Williamson, 1985, pp. 55-56). In the transaction cost model, the worker's sale of assets is neither instantaneous nor faceless; it takes place within an organizational structure, for such a transaction can be more cheaply a n d efficiently m a d e within such a structure t h a n in the marketplace. Out of this need for within-organization transactions grow different organizational structures with differing governance procedures. This need is h e i g h t e n e d by w h a t Williamson called asset specificity--in this particular context it could be called job- or firm-specific skills. Williamson (1985) noted: Specialized governance structures are more sensitively attuned to the governance needs of nonstandard transactions than are unspecialized structures, ceteris paribus. But specialized structures come at a great cost, and the question is whether the costs can be justified . . . . The benefits of specialized governance structures are greatest for transactions supported by considerable investment in transaction-specific assets . . . . More generally, the object is not to economize on transaction costs but to economize in both transaction and neoclassical production cost respects . . . . Human capital investments that are transaction-specific.., evolve during contract execution. Specialized training and learning-by-doing economies in production operations are illustrations. Except when such investments are transferable to alternative suppliers at low cost, which is rare, the benefits can be realized only so long as the relationship between the buyer and seller is maintained. (pp. 60-62) Williamson (1981, 1985) delineated four basic types of governance structures, keyed to two central dimensions: h u m a n capital specificity a n d w o r k - r e l a t i o n separability, the latter referring to the ease with which individual work output can be monitored. In the first case, where h u m a n capital is nonspecific a n d the work is easily monitored, there exists no special governance structure to sustain the e m p l o y m e n t relation; on dissatisfaction, it can be terminated by either party without serious costs being incurred (workers can move to other employers without loss of productivity, a n d employers can secure other workers without start-up costs). This e m p l o y m e n t relationship is called a "spot market" by Williamson. The second type, a "primitive team" market, occurs w h e n the worker assets are nonspecific, and individual output is difficult to meter with any precision. Individual team members can be

18

Chapter 1

replaced without cost on either side, but a supervisory role is required in this arrangement. The third and fourth types of employment relations both involve very specific human capital assets, a situation in which the relationship cannot be terminated without costs, usually to both sides. In the "obligational market," individual performance is easily monitored, so the only concern is protecting the relationship. Procedural safeguards and monetary incentives (such as severance pay) will protect the worker by discouraging dismissals; nonvested retirement and other benefits will protect the employer by discouraging quits. In the "relational team" market, assets are very specific and individual performance is difficult to monitor. Bureaucratic management devices become most complex under these circumstances. Williamson (1985) noted: The firm here will engage in considerable social conditioning to help assure that employees understand and are dedicated to the purposes of the firm, and employees will be provided with considerable job security, which gives them assurance against exploitation . . . . A sense that management and workers are "in this together" furthers all of those purposes. (p. 247) According to this perspective, we should expect to find bureaucratic management forms (both shape and scope) varying by the type of labor transaction required, that is, by the type of employment relationship mandated by the type of work. In a "spot market," neither workers nor employers are constrained to maintain the relationship, and we can expect to find no special bureaucratic management devices in place. In a "primitive-team" market, we can expect to find supervisory positions and should expect to find relatively high rewards associated with supervision, as it is a crucial link. In an "obligational market," there will be bureaucratic structures whose express purpose is to maintain the employment relationship, as well as structures that provide both sides with rewards for maintaining it and penalties for severing it. Worker control will not be at issue in these markets, only worker continuity. Bureaucratic management should come to full flower in the "relational-team" market, adding authority structures and other specific control devices to the maintenance devices. From this perspective, there can be expected differences in the shape of bureaucratic management across occupations and industries, as well as across occupations within the same organization, depending on the occupational labor markets and on the technology of the work. Individual consequences will vary as well. For example, supervisory positions should be best rewarded in "team" markets and should be most available (as a mobility possibility) in those markets where main-

Introduction

19

taining the relationship is crucial (only one of which is a team market). Another set of hypotheses that is consistent with this approach relates to the consequences of "mismatches," that is, situations where the governance structure is out of step with the requirements of the "transactional situation." For example, firms employing workers in non-asset-specific jobs (e.g., truck drivers) who nevertheless offer elaborate governance structures might be expected to compensate by paying lower wages. All in all, the effect of bureaucratic management should be largely benign because it will be in place only when needed to protect the interests of worker and employer. The consequences, that is, should be neutral, as the early rational theories implied. Not all scholars agree that the individual consequences of bureaucratic employment relationships will be largely neutral. We turn to the second of our broad perspectives, the industrial-sectorial perspective.

The Industrial-Sectorial Approach The industrial-sectorial (or worker-control) approach to organizational structure begins from a different premise, treating that structure as emerging not from a quest for efficiency in production, but from a quest to increase control over the workers. On the face of it, this may seem a precious, even silly, distinction, for if the efficiency (and thus the profitability) of production can be achieved by a more effective control of the workers (and it is clear that it can), then the seeking of such control should be just one more example of the quest for efficiency, and not a separate school of thought. Indeed, most major studies in the field grant that gains in control led to (and were engendered by the desire for) increased productivity and profitability. The differences between this perspective and that of the technicalrational one outlined above are not differences in substance but differences in focus and most especially in ideological reaction to the consequences of organizational change. To say this is not to trivialize those differences; they are substantial in some ways. To most in this school, worker control is a rational and obsessive concern of employers, so much so, in fact, that the whole of the historical transformation of work and of the employment relationship in the United States can be traced to the employer-worker conflict over work force control. Most who argue from this perspective adopt Marxian assumptions about the true sources of profit and capital accumulation: If such must come from the surplus value created by labor, then effective control of that labor will naturally be seen as crucial to any rational capitalist (e.g., Bluestone, Murphy, & Stevenson, 1973; Doeringer & Piore, 1971; Edwards, 1979; Gordon, 1972;

20

Chapter 1

Gordon, Edwards, & Reich, 1982; Harrison, 1972; Wachtel & Betsey, 1972). This perspective broadens the definition of efficiency, taking to heart Perrow's advice (1986): Beware of "efficiency" arguments that do not ask, "Efficient for whom, and at what costs to others?" Ask instead about "externalities," the social costs of organized activities that are not included in the price and are borne by those who benefit very indirectly, if at all, from the activity. (p. 278) The m e a n s - e n d efficiency at issue here results from what Useem (1982) aptly termed "classwide rationality," a phrase that captures the essence of this perspective. It argues not only that the goals of an organization are not necessarily those of all of its members, but that those goals can actually be antithetical to the desires of a whole class of organizational members. Drawing from Goldman (1980), Pfeffer (1982, pp. 163-164) summarized the control perspective as consisting of four basic steps. Because employers desire a labor force that can be controlled so that it will work toward the employers' interests and desire a labor force that is relatively inexpensive and powerless, (1) they select means of production that "deskill" workers as much as possible (see Braverman, 1974), and (2) they structure the employment relationship so that the owners' control over labor is as hidden as possible, but control over the workers and the managers is achieved. These two actions result in (3) resistance from workers, manifested as lack of motivation, absenteeism, turnover, and collective action, and (4) a cycle of continuing conflict and change caused by the underlying capital-labor conflict. Examining the same phenomena as others, those in the control school interpret them quite differently. For example, the internal labor market was seen by Williamson simply as a rational response to efficiency pressures. As Baron (1984, characterizing Williamson's thought) put it, "An employer's investment in long-term contracts is viewed as a rational response to turnover and costs, and any short-run disequilibria between marginal productivity and wages should cancel out throughout a worker's career with the firm" (p. 40). Edwards (1975, p. 7), on the other hand, saw the proliferation of the internal labor market in its various forms as a system "contrived and consciously designed" to perpetuate control over the work force. He saw the rise of bureaucratic management structures in the same context, arguing that the resulting legitimization of hierarchical authority structures in large firms made control of the work force less obtrusive and more acceptable (Edwards, 1979, p. 9).

Introduction

21

From this perspective, there emerged a subfield of research. Edwards suggested that the control differences between the large firms in the monopoly sector and the smaller ones in the competitive sector would be mirrored by differences in the labor markets serving the two sectors. Following up on this suggestion, a number of researchers examined labor market "dualism" or "segmentation" (e.g., Beck, Horan, & Tolbert, 1978; Bibb & Form, 1977), and found empirical evidence of employment relationship differences across the labor markets. Specifically, they found differences in the stability of employment, in the existence of internal labor markets, in the individual return to human capital, and in the extent of bureaucratic management. There have been many criticisms of these findings (e.g., Baron & Bielby, 1980; Hauser, 1980; Pfeffer & Ross, 1981; Zucker & Rosenstein, 1981), but the main effects persist and at least require an alternative interpretation. According to this approach, bureaucratic management structures should vary by industry and should have control of the work force as their primary function. Workers should be best off in those industries where their need for skill and training give them bargaining power, for the structure of work has been largely determined by the struggle between owners and labor over who gets to specify the employment relationship. Core industries were formed out of the unionization struggle: The emergent decay of the drive system of labor management accelerated in the 1930s, as workers were able to organize industrial unions that dramatically advanced their struggles to resist corporate control over the production process . . . . Corporations responded to this challenge from labor by pursuing the implications of some of their early explorations of new "internal labor market" structures and by encouraging an integration of the industrial unions into a new collective bargaining structure. This corporate initiative... established the foundation upon which the process of labor segmentation was established. (Gordon et al., 1982, p. 236) Bureaucratic management structures can thus be expected to be found primarily in core industries, and their particular structure should reflect the extent of union power and union cooptation within each particular industry. Although it has never been stated clearly, within the core sector one might be expected to find the same balancing of interests predicted by the exchange perspective (or, in the language of contemporary economics, "compensating differentials"; see England, Farkas, Kilbourne, & Dou, 1988; Filer, 1985; Jacobs & Steinberg, 1988). Even here, such effects may be found only among those occupying positions of privilege based on racial, gender, occupational, or union status. According to this perspective, then, both the shape and the scope of bureaucratic management should vary widely across different industrial

22

Chapter 1

sectors and should vary in accordance with the history of labor demand and unionization.

The Institutional Approach Both the technical-rational and the sectorial and control perspecfives "rest on the shaky ground of rationality" (Hall, 1987, p. 119). An approach that does not rest on this ground, and that argues instead that organizational structure owes as much to coercion and imitation as to rational or efficiency considerations, has come to be called the institutional approach. In its most recent manifestations, this theory argues that organizations act within the confines of a "field" of other organizations and are heavily influenced by this fact. An organizational field consists not only of organizations actually interacting or those competing with each other, but of the whole group of organizations that "in the aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products" (DiMaggio & Powell, 1983, p. 148). Organizations within the same field tend to model themselves on each other, not necessarily because the "field model" is the most efficient one, but because of outside regulatory influences, because of a desire to imitate the most legitimate and successful of their kind, because of normative pressures stemming from professionalization, or because of some combination of these three. Organizations, that is, tend to become institutions; this is an important transmogrification, as rational organizations will come and go or change as efficiency considerations change, but institutions are self-perpetuating and extremely protective of their existing structure. To speak of institutionalized organizations is "to speak of practices or procedures that are continued and transmitted without question, to speak of meanings that become typified and transmitted to newcomers in the organization and shared without thought or evaluation" (Pfeffer, 1982, p. 239). Economic theories predict the greatest success for those organizations that are most efficient and most effectively coordinated, but in institutional theory, as Zucker (1987) noted, efficiency and success do not necessarily covary: "Organizational conformity to the institutional environment simultaneously increases positive evaluation, resource flows, and therefore survival chances, and reduces efficiency" (Meyer & Rowan, 1977, quoted in Zucker, 1987, p. 445). This view of organizations and their adaptation to their environment began formally with Selznick's treatment (1957) of some organizations as institutions with a life that transcends the task for which they

Introduction

23

were created. He saw the strain toward institutionalization as resulting from a "quest for organizational immortality" (Pfeffer, 1982, p. 239) a n d as likely to lead to a deemphasis on (or even an a b a n d o n m e n t of) the original goals of the organization a n d the adoption of the goals of survival a n d growth instead. Meyer and Rowan (1977) a n d Zucker (1987) both defined institutionalization as a variable, that is, as something that an organization could have lower or higher levels of, but more significantly, as something which could also vary within an o r g a n i z a t i o n - - s o m e acts a n d structures could be institutionalized while others were based on efficiency considerations. As Pfeffer (1982) summarized: For institutionalized acts or institutionalized structures, there is a stable structure of interaction and definition of the situation which is not necessarily based on rational or instrumental considerations. For acts that are not institutionalized, there are more likely to be incentives or a rational calculus involved in understanding them, and the idea of emergent structure in the context of not yet consensually shared definitions and situational meanings is more relevant and applicable. Thus, the degree of institutionalization determines the extent to which rational versus emotional and nonrational bases of action predominate. (p. 240) The implications of this perspective for the e m p l o y m e n t relationship are plain. Bureaucratic m a n a g e m e n t structures can proliferate even where they are in neither employers' nor workers' interests. From this perspective, one w o u l d argue that all organizations within a specified organizational field should have the same bureaucratic "shape"; that the scope of bureaucratic m a n a g e m e n t forms is limited in extent by the imitative impulse; a n d that the consequences of bureaucratic managem e n t can be extremely negative for the worker (as well as the organization), but that t h e y will persist nonetheless. In some organizations, the imitated structure is efficient; in others, it is not. This leads to the prediction that similar structures m a y have positive consequences in one context a n d negative ones for the same worker in another.

Hybrid Approaches Like a n y classification scheme, the triumvirate of rational, workercontrol, and institutional theories is an imperfect ordering of w h a t various authors think about e m p l o y m e n t relationships. As we have seen, not only does the rational perspective bleed into the institutional a n d control approaches w h e n the concept of environment is recognized, but there are also some theories that adopt elements from each of the underlying perspectives. Two hybrid approaches that we will have occasion to

24

Chapter 1

refer to in subsequent chapters are an organizational governance model proposed by Selznick (1969) and an "industrial relations systems" model offered by Kochan, Katz, and McKersie (1986). Each, in its o w n way, reflects the concerns of all three basic perspectives. In spirit, Selznick's account of the development of industrial justice mechanisms most strongly resembles the institutional approach of recent organizational theory. That is, in the sociocultural environment of American liberal democracy, large organizations of all kinds (public, private, industrial, and service-providing) adopt quasi-legal mechanisms for ensuring fairness in the treatment of workers across a wide range of issues. What separates Selznick's account (1969) from the institutional approach is the idea that pressure for "procedural justice" may arise almost exclusively from an internal source--the link between bureaucratization and administration through rational rules: Thus the "legality" of bureaucratic authority does not necessarily derive from the public status of the agency or enterprise. It is founded in the internal life and order of the association . . . . The source of these attributes [rational-legal legitimacy and rule-governed decision making] is internal; the dynamic they create calls forth the ideals of legality. (p. 81) Nevertheless, Selznick's approach (1969) also parts company with that of the technical-rationalists. Because of its concern about legality, the bureaucracy necessarily places limits on unbridled rationality: The bureaucrat came upon the scene to enlarge the possibilities of free and rational manipulation of resources, including human resources. Yet his very commitment to legality must fetter managerial decision . . . . Vested rights and policy commitments are expected costs of rational-legal bureaucracy" (p. 94) Thus, in contrast to the transaction cost approach, Selznick's model predicts less within-organization heterogeneity in the adoption of bureaucratic managerial practices. However, in contrast to that of the more recent institutionalists, under his theory one might expect to find more within-industry variation in these matters and, in particular, withinindustry variation that is explained by a concomitant variation in organizational size. Perhaps the most integrated of all perspectives is that offered by Kochan et al. in The Transformation of American Industrial Relations (1986). Theirs is essentially a historicist argument that attempts to explain matters of personnel administration as being the result of a succession of "industrial relations systems." Of particular importance is the "New Deal system," which is currently in the process of being replaced by a

Introduction

25

new, more flexible, less unionized alternative. Kochan et al.'s model is based on the idea that managerial practices become institutionalized, but it also recognizes the environment in which institutionalization takes place as a changing one. They see at least two changes as being of fundamental importance since the early 1970s: (1) economic difficulties occasioned by the growth of foreign competition and (2) decreasing tolerance by the business community of labor unions in general. In response, at the level of employment relations, Kochan et al. expect fundamental changes in the face of bureaucratic personnel management where the older system can be displaced: The emphasis on uniformity in the workplace left little room for concern with individual employee differences in motivation and talent. Indeed the specification of collective rules was a reaction to the distrust workers and unions had for the way foremen and other managers had handled their discretionary power. More than anything else, the new nonunion model can be differentiated from the traditional union system by the attention it pays to individual employee concerns and its effort to provide employees with more discretion through the design of broader jobs. (p. 89) Although there is much to applaud in Kochan et al.'s approach, particularly its sensitivity to recent empirical developments, its heuristic value for our purposes is rather limited. Its major shortcoming is exactly the one that plagued an earlier generation of "industrial relations" literature. By default, it seems to assume exactly what we wish to make problematic, that the diffusion of any system--be it "New Deal" or otherwise--is extensive in terms of both the types of employers and the types of workers which are included. To be sure, Kochan et al.'s model is a fruitful source of some alternative hypotheses, particularly with regard to negative findings. Thus, the explanation for a lack of correlation between establishment size and "due process" may lie in the prevalence of alternative "human-resource-management" techniques. Nevertheless, this model does not deal directly with either the scope or the consequence issues at the heart of this book.

SUMMARY A N D PLAN OF THE BOOK

Like the larger society, the American workplace has become an arena in which individuals regularly press claims based on relatively abstract notions of "rights" and "opportunities." At work, however, the legitimacy of these claims rests not on principled appeals to a social charter or a constitution, but on the institutionalization of a variety of

26

Chapter 1

practices by personnel bureaucracies. As a result of the adoption of these practices and of the example that they set, employment relationships have been transformed from webs of personalistic ties into rule-bound transactions that both reflect and frustrate the operation of external markets. At least, this is the picture that would emerge if one distilled a consensus view from the numerous accounts of this process. Despite some recent, and largely historical, work on these developments, there are still unanswered questions. Although we n o w know more about the causes of bureaucratic personnel management (see Baron, Dobbin, & Devereaux-Jennings, 1986; Baron, Devereaux-Jennings, & Dobbin, 1988; Jacoby, 1985), it is still difficult to reconcile competing hypotheses without a further investigation of three key empirical areas. We have labeled these areas shape, scope, and consequences. It is also our belief that a complementary methodology, the analysis of a detailed cross-sectional survey, will go a long w a y toward filling in the gaps in our existing knowledge. Because the data we are analyzing are highly representative of a local labor market, because they offer observations from the vantage point of both workers and employers, and because they have greater depth of information than is usually found in employer-only surveys, they will shed light on many issues that have been hidden from other types of studies. Before we present a brief overview of the contents of each of the following chapters, one point should be stated. First, we have deferred the presentation of specific hypotheses about shape, scope, and consequences to the individual chapters themselves. This choice not only helps to preserve the interplay between theory and data as the empirical story unfolds, but it also prevents confusion between the broader goals of this book and the details of testing specific hypotheses. In Chapter 2, we describe in detail the design and procedures of the study that generated our data on bureaucratic employment practices. Included are discussions of sample size, representativeness, and response rates. Because this study generated a matched sample of workers and employers, special attention is given to evaluating two issues: (1) the comparability of the data obtained from these two divergent sources and (2) the possible selection biases that may have resulted from the fact that the employer data were obtained for a large, but nonexhaustive, subset of those responding to the employee survey. We turn our attention to the "shape" issue in Chapter 3. Each of the theoretical perspectives we have mentioned above contains some implicit hypotheses about the relationships among the due-process, the formalization, and the internal-labor-market mechanisms under scrutiny here. After discussing the implications of these various perspectives, we reveal the results of a

Introduction

27

confirmatory-type factor analysis that identifies five separate dimensions of bureaucratic management. Here, our procedures and goals resemble those first used in an article (Baron et al., 1988), and we produce findings that update and extend those obtained in that historical study. Chapters 4 and 5 are devoted to the clarifying issues related to the diffusion and adoption of bureaucratic personnel practices--what we define as the issue of scope. In Chapter 4, scope is considered from an individual point of view. That is, we develop and evaluate hypotheses about the relationship between a variety of individual characteristics and specific bureaucratic personnel practices. For example, there is considerable interest in comparing men and w o m e n with regard to both the quantity and the quality of their participation in internal labor markets (ILMs). Our analysis will make a twofold contribution to this line of inquiry. First, we attack the subject as a problem in "structural attainment." That is, we define ILMs as an objective, exogenously determined attribute of one's position in the workplace and evaluate h o w similar men and w o m e n are in both their chances and their means of entering internal labor markets. Second, because we have information on multiple job positions with each employer, we are able to define ILMs and their consequences on the basis of actual movement as well as structural predispositions. Thus, we can measure and compare the quantity of movement actually experienced by the individual men and w o m e n in this sample. The second scope chapter (Chapter 5) treats the topic from a "structural" point of view. That is, we ask how bureaucratic personnel practices are distributed according to organizational and industrial criteria. As we have already noted, different theories make different predictions about the extent of variation in these practices within and between organizational and industrial units. Closely related to these questions are uncertainties about which characteristics of firms, organizations, and industries predict the adoption of bureaucratic employment relationships. The answers here depend on understanding the role not only of size and of environment (in the general sense, as defined above), but also of job and subunit characteristics. Finally, this chapter addresses h o w demographic and structural distributions interrelate in determining the scope of bureaucratic employment relationships. Our discussion of consequence issues begins in Chapter 6, where we address the normative and attachment consequences of bureaucratic personnel management. Here, we focus both on satisfaction and on the stance that individuals assume toward the external market. The general theme of this analysis is "behavioral" d e p e n d e n c e - - a possible price that may be paid for the comforts of a stable relationship in a protected

28

Chapter 1

environment. Chapter 7 turns to the relationship between employment practices and individual earnings. A crucial concern in this area is whether there is evidence in favor of a "compensating-differentials" argument. That is, within the same markets, do workers make tradeoffs between higher earnings, better advancement prospects, and greater procedural justice? We realize, of course, that this study, too, is incomplete. It suffers from the limitations that afflict all cross-sectional surveys. It lacks greater depth on some topics than it has on others. But these are limitations that can be properly judged only when they are encountered in the path of our analysis. We begin d o w n that road now with a survey of the methods and materials at hand.

2 Assembling Data on Employment Relations Inherent in the employment relations perspective is the idea that data need to be gathered on structures, arrangements, and processes that are neither purely individual nor purely organizational. The premise of our investigation is that, to uncover underlying patterns in h o w these relationships are organized, one needs to consider not only individuals and their career experiences, but also organizations and their managerial policies. Thus, from the outset of the project, we knew that we wanted to survey both a representative sample of workers and a sample of their employers. It was also apparent that other large-scale structural units (e.g., occupations) were important contexts in which these individualto-firm relationships played themselves out. In this chapter, we describe h o w we gathered data on a sample of workers and their employers in a metropolitan labor market and h o w those data were supplemented with information from other relevant information sources.

THE METROPOLITAN EMPLOYER WORKER (MEWS) SURVEY

As other commentators have recently noted, several strategies may be followed for producing matched samples of workers and employers (Parcel et al., 1991). Our approach was to begin with a probability sample of employed persons, to identify the name and location of their employers, and to conduct a second survey of the employers caught in our initial dragnet. To our knowledge, then and now, this was the first use of the "bottom-up" sampling methodology in a large-scale survey of 29

30

Chapter 2

workers and work organizations. It has since been adopted by several others (Parcel et al., 1991; Spaeth, 1985; Spaeth et al., 1993). Early in the project, several decisions were made that had longlasting consequences for the success of the research. First, it was decided to contract out the sampling and interviewing phases of the study to the Survey Research Laboratory (SRL) of the University of Illinois. As a wellestablished survey institution, the SRL provided guidance throughout the data-gathering phase of the project. More important, it was willing to adopt what was at the time a rather unorthodox methodology, and it brought its previous experience to bear on finding creative solutions to problems that had rarely been encountered before in survey interviewing. Second, largely for financial reasons, it was decided that all of the employee interviewing would be carried out by telephone and that the same method would be used, as far as possible, in the employer phase of the project. This decision militated heavily in favor of the use of random-digit telephone dialing as the sampling method for choosing individual employee respondents. Although this method does introduce some potential biases into the design (see below, in "Employee Sample"), to choose another technique would have greatly reduced the size of both the employee and the employer samples because of the added expense (Groves & Kahn 1979; Thornberry & Massey 1988). Third, several initial limitations were imposed on the definition of the study population. Because one of the substantive foci of the project was how workers found jobs, we excluded self-employed workers from the study. Another restriction imposed was that respondents had to work at least 20 hours per week in a single job to be eligible for our sample. However, the most important population limitation was that all employee interviewing was limited to the then six-county Chicago Standard Metropolitan Statistical Area (SMSA). (Respondents who lived in the SMSA but who worked outside it were included in the study, however.) The main reason for restricting the geographic coverage of the project was not the expense of long-distance phone interviewing, but our judgment that the second (employer) phase of the project would be much more successful if restricted to the Chicago SMSA. Partly, we guessed--probably correctly--that interviewers identified with the University of Illinois would have better luck in gaining cooperation from area employers than they would from a nationwide sample. Many local businesses recruit management personnel from the university, and it does enjoy a fair measure of prestige among the population at large in the area. A second, and more vital, consideration was our anticipation that the process of finding employers would be more easily carried out in

31

Assembling Data on Employment Relations

Table 2.1. G e n e r a l E c o n o m i c C h a r a c t e r i s t i c s , C h i c a g o S M S A v e r s u s U n i t e d States A. Price and wage levels A.1. Consumer Price Index, August 1979 All urban areas of U.S. Chi-NW Indiana SCSA (1967 = 100)

221.1 218.1

A.2. Expenditures for family of four at intermediate budget level, A u t u m n 1979 Dollars Index All urban areas, U.S. $20,517 100 All metropolitan areas, U.S. $20,935 102 Chi-NW Indiana SCSA $20,564 100 A.3. Pay indices for selected occupations, Chicago SMSA (December 1978) Category Total Manufacturing Office clerical 105 101 Electronic data processing 102 98 Skilled maintenance 108 105 Unskilled plant 121 101 Base = 100 = Pay level in all 262 SMSAs A.4. Hours and earnings for production workers in manufacturing, Chicago SMSA, 1978 Chicago SMSA Total U.S. Average weekly hours 39.5 39.9 Average weekly earnings $319.16 $311.20 Average hourly earnings $ 8.08 $ 7.80 B. Other characteristics B.1. Annual growth rate in employment, 1970-1980 (in thousands) a Chicago Total U.S. Annual employment, 1970 3,015 70,664 Annual employment, 1980 3,261 90,657 Average growth rate (%) 0.7 2.5 B.2. Percentage of workers involved in work stoppages, 1980 Percent involved Chicago SMSA 1.5 Total U.S. 1.5 aFigures for the Chicago SMSA exclude agricultural workers and are from January of each year. Figures for United States include agricultural workers and are annual averages. Sources: U.S. Department of Labor, Bureau of Labor Statistics (1981). Handbookof Labor Statistics. (Washington, DC: U.S. Government Printing Office); U.S. Department of Labor, Bureau of Labor Statistics (1981). Employmentand Earnings, March 1981. (Washington, DC: U.S. Government Printing Office); U.S. Department of Labor, Bureau of Labor Statistics (1981). Employment and Earnings, June 1981. (Washington, DC: U.S. Government Printing Office); U.S. Department of Labor, Bureau of Labor Statistics (1981). Employment and Earnings, June 1971. (Washington, DC: U.S. Government Printing Office).

32

Chapter 2

Table 2.2. L a b o r Force C h a r a c t e r i s t i c s , C h i c a g o S M S A v e r s u s U n i t e d S t a t e s A. Sex by race by labor-force status, Chicago SMSA vs. U.S.

Employed (%) Male White Black Spanish Female White Black Spanish

Total (%)

Number of cases

Adult population (%)

76.5 55.7 74.9

4.4 11.0 8.7

19.1 33.3 16.3

100 100 100

1,937,578 430, 306 193,760

36.4 8.1 3.6

51.5 44.4 46.8

2.4 6.9 6.5

46.0 48.7 46.8

100 100 100

2,121,424 535,900 174,701

39.8 10.1 3.3

Number of cases

Adult population (%)

Employed (%) Male White Black Spanish Female White Black Spanish

Chicago SMSA Out of Unemployed labor force (%) (%)

United States (numbers in thousands) Out of Unemployed labor force Total (%) (%) (%)

70.3 57.6 71.0

4.6 8.1 6.6

25.1 34.4 22.4

100 100 100

66, 411 8,122 4,631

38.8 4.7 2.7

48.0 47.1 44.4

2.7 6.0 4.7

49.3 46.9 50.8

100 100 100

77,770 9,888 4,878

45.4 5.8 2.8

B. Occupation of employed persons, Chicago vs. U.S.

Executive, administration and managerial Professional specialty Technical, including health Sales Administrative, support/clerical Service Farm, forestry, fishing Precision products and craft Operatives and laborers Total Number

Chicago SMSA (%) 11.8 12.5 3.0 10.4 20.6 11.6 0.5 11.4 18.3 100.0 (3,239)

Urban U.S. (%) 11.2 13.2 3.3 10.6 18.7 13.3 1.1 11.9 16.7 100.0 (73,749)

Total U.S. (%) 10.4 12.3 3.1 10.0 17.3 12.9 2.9 12.9 18.3 100.0 (97,636)

Sources: U.S. Commerce Department, Bureau of the Census (1982). Census of Population and Housing: General Social and Economic Characteristics-Illinois. (Washington, DC: U.S. Government Printing Office); U.S. Commerce Department, Bureau of the Census (1982). Census of Population and Housing: General Social and EconomicCharacteristics-United States Summary (Washington, DC: U.S. Government Printing Office).

33

Assembling Data on Employment Relations

a geographic area with which we were familiar and that was at least somewhat limited in size. Again, we believe that this judgment was a sound one. To what extent would our results have differed if this research had been done on a nationally, rather then a locally, representative sample? Without redoing the study, one can never be sure of the extent of this sort of potential bias. Nevertheless, there is something to be learned by comparing the Chicago SMSA in 1980 to the nation as whole with regard to its economic, demographic, and industrial characteristics. The relevant figures are presented in Tables 2.1 through 2.3.

Table 2.3. E s t a b l i s h m e n t a n d I n d u s t r y D i s t r i b u t i o n s , Chicago SMSA versus United States Establishment size distribution, Chicago SMSA vs. U.S.

Number of employees 1-4 5-9 10-19 20-49 50-99 100-249 250-500 500-999 1,000 plus Total Number

Chicago SMSA (%)

U.S. (%)

50.6 19.1 13.4 9.6 3.9 2.3 0.7 0.3 0.2 100 (99,941)

54.3 19.8 12.4 8.3 2.9 1.6 0.4 0.2 0.1 100 (4,543,167)

Distribution of employment by industry group in Chicago SMSA and U.S.

Industry group Mining Construction Manufacturing Transportation Trade Finance, insurance, and real estate Services Government Total Number

Chicago SMSA (%)

U.S. (%)

0.2 3.2 25.3 6.2 23.0 6.8

1.2 4.9 22.2 5.6 22.8 5.8

20.2 15.1 100.0 (3,197)

19.9 17.6 100.0 (91,705)

Sources:U.S. Department of Labor, Bureau of Labor Statistics (1981). Employment and Earnings, June 1981 (Washington, DC: U.S. Government Printing Office); U.S. Commerce Department (1982); County Business Patterns 1980. Volume CPB 80-15 (Washington, DC: U.S. Government Printing Office).

34

Chapter 2

In its general economic standing, the Chicago SMSA appeared little different from the rest of the United States when our study was conducted. Perhaps the largest discrepancies, which appear in Table 2.1, were in the wage levels of blue-collar workers, especially in the nonmanufacturing sector. While manufacturing wages appeared to be slightly above average, "unskilled plant" workers in the general population enjoyed levels of compensation that were about 20% above average. A second, and probably not related, difference between the Chicago area and the United States generally was the much slower rate of labor force growth in the area during the 1970s. Although it is difficult to be definitive about such things, it is possible that this slower growth may have been associated with some weakness or slack in external labor markets. Whether this was so, and whether it would have affected the prevalence of internal labor markets in the metropolitan area are questions that need further attention. This slower growth did not seem to be associated with any greater docility in the Chicago labor force, as the proportion of workers involved in strikes and work stoppages was nearly identical to the national average. Table 2.2 compares the Chicago SMSA and the United States with regard to the composition of the adult population, the labor force status of various groups, and the occupational distribution of the employed population. In the last column of Table 2.2A, the data shown represent the percentage distribution of the adult population across sex, race, and Spanish-origin categories. (Note that these percentages do not add to 100% since Hispanic adults can be of any race.) Compared to the U.S. adult population, the Chicago area had relatively more minority group members of both sexes and fewer whites. Although it did not mirror the general population exactly, it is probably better to err on the side of studying an area that overrepresents than one that underrepresents minority group members. When looking at labor force status, one notes that whites in Chicago had higher rates of employment than whites elsewhere, while blacks had lower rates. (Hispanics resembled whites more than blacks in this instance.) If these two tendencies are combined, they probably tend to offset one another. That is, the lower employment rate of blacks in Chicago was applied to a relatively larger population base, the result being that the employedpopulation of the Chicago SMSA more closely represented the employed population of the country than that the overall population represented the corresponding national total. The occupation distributions presented in Table 2.2B also reveal a high degree of correspondence between the Chicago SMSA and the rest of the country. There was a slight tendency for Chicago to have relatively more administrative support workers and to have fewer service workers, but these differences are small enough to be ignored.

Assembling Data on EmploymentRelations

35

Table 2.4. Disposition of All Randomly

Dialed Phone Calls in MEWS Survey Disposition Eligible Interviewed Strong refusal Noncontact, unavailable,etc. Ineligible Screened Other Eligibilityunknown--refusal Nonresidential Disconnected or nonworking Noncontact Other Total Number

Percentage 31.1 3.7 1.5 21.6 .1 6.7 10.3 20.3 3.7 1.1 100.1 (8,717)

Looking at industrial and establishment characteristics shown in Table 2.3, we see that the Chicago area employed slightly fewer workers in mining, construction, and government and slightly more in manufacturing, finance, and services. These differences are so small, however, that it seems safe to accept Chicago as being quite industrially representative. The same similarity is also found with regard to the employment size distribution of the Chicago SMSA. Here, it is true that Chicago was somewhat unrepresentative insofar as it had relatively fewer small establishments and relatively more large ones, but the overall percentages are quite similar. We now turn to a consideration of our specific sampling procedures and how well the sample that they produced represents this particular metropolitan area. EMPLOYEE SAMPLE

As we have noted, we chose to draw a sample of employed persons by using random-digit dialing. All in all, 487 exchanges were selected from the "312" (458 exchanges) and "815" (29 exchanges) area codes (exchanges outside the Chicago SMSA found in the "815" area code were not used in the survey). Based on our pretest experience and existing SRL protocols, random combinations of four-digit numbers were sampled within these exchanges. Ultimately some 8,717 calls were made in April, May, and June 1981. Table 2.4 shows a breakdown of the disposition of these calls.

Chapter 2

36

Table 2.5. Response Rates of Screened

Eligible Respondents in MEWS Survey Disposition

Percentage

Interviewed Refused Unavailable Total

85.7 10.1 4.1 (3,164)

Several levels of distinction need to be made in examining this table. First, one needs to eliminate from consideration those calls that would not have resulted in an interview with an eligible respondent under any circumstances. This category includes nonresidential phones as well as disconnected or nonworking numbers. Noncontacts and "Eligibility Unknown--Refusal" are a somewhat different matter. The former includes those instances in which phones rang but were never answered (SRL protocols required seven callbacks in this situation), and the latter includes those instances in which the person answering the phone hung up before the interviewer could complete his or her introduction. Both of these types of outcomes may have been associated with households in which an eligible respondent was present but was unreachable, although there is no reason to think that all of them were. Moving beyond these categories, we encounter calls that resulted in respondents being classified as either "Eligible" or "Ineligible." The vast majority of both groups were respondents with w h o m the interviewers were able to complete the screening portion of the survey instrument. Other ineligibles consisted mostly of respondents w h o answered the phone and did not speak either English or Spanish (interviews were conducted in each language). Table 2.5 presents statistics on the refusal rate among the screened eligible population. By the standard criterion used in survey research, we calculate the response rate to be 85.7% of the screened eligible population. This rate compares quite favorably with the response rates of 67% and 52% achieved, respectively, by Parcel et al. (1991) and Spaeth (1985) w h e n they used a similar methodology, although with nonprofessional interviewers. To further interpret the statistics just presented, a brief examination of the "screening page" of the employee questionnaire is in order (Appendix 1). First, it should be noted that the within-household sampling methodology relied on a quasi-quota procedure and was not based on a complete household enumeration of all eligible workers in the household. In previous studies, the SRL had found that its success with this

Assembling Data on Employment Relations

37

Table 2.6. Effect of N o n r a n d o m Respondent Selection

within H o u s e h o l d s

Percentage male Mean age (years) Yearly earnings

Actual sample

Hypothetical sample (with random respondent selection within households)

58.4 38.0 $19,800

58.6 38.2 $19,800

p r o c e d u r e , a s k i n g f o r h a r d e r - t o - r e a c h r e s p o n d e n t s first, o f t e n p r o d u c e d r e s u l t s t h a t w e r e c o m p a r a b l e to h o u s e h o l d e n u m e r a t i o n , a n d t h a t c o u l d be produced at a lower cost per completed interview. During the course of the interview, the respondents were asked whether anyone else c o n t r i b u t e d to t h e f a m i l y i n c o m e . A l t h o u g h t h e a n s w e r s w e r e n o t a p e r fect i n d i c a t o r of w h o e l s e w a s e l i g i b l e for t h e s u r v e y i n t h e s e h o u s e h o l d s ( s o m e o t h e r s c o n t r i b u t e d to i n c o m e b y o w n i n g s t o c k , b y selfe m p l o y m e n t , o r b y w o r k i n g for f e w e r t h a n 20 h o u r s p e r w e e k ) , it is a f a i r l y r e a s o n a b l e a p p r o x i m a t i o n . Table 2.6 p r o v i d e s s o m e e s t i m a t e s of h o w o u r s a m p l e w o u l d h a v e c h a n g e d if, i n s t e a d of u s i n g t h e s a m p l i n g procedure outlined above, we had chosen randomly from among those l i s t e d a s i n c o m e c o n t r i b u t o r s i n t h e h o u s e h o l d . ~ W i t h i n t h e l i m i t s of t h e questions asked about other household members, this table shows that the quota procedure used in the MEWS sample did indeed produce a s a m p l e t h a t w a s q u i t e c l o s e to t h e o n e t h a t w o u l d h a v e b e e n o b t a i n e d if 1 Although we did not enumerate all wage earners per se in each household before selecting a respondent, several questions were asked that did allow us to estimate how the sample would have changed if a random selection had been made among various income contributors in the household. In the sequence of questions devoted to ascertaining individual and household income, respondents were asked how many persons besides themselves contributed to household income. The breakdown of responses was as follows: no other contributors, 1,450; one other contributor, 1,080; two other contributors, 110; three others, 34; four others, 14; and five or more others, 9. Working just with those respondents who said that one other person contributed (which would have given us access to about 67% of the total possible additional sample elements), we were able to identify the age and sex of the other contributors, who were wives or parents of the respondents who were actually selected. Eventually, we were able to do this for 954 of our original respondents. A new hypothetical sample was constructed by using all the original respondents from the one-earner and the three-or-more-earner households and a randomly chosen person from the two-earner households. Although this sample is admittedly not a perfect representation of what household enumeration would have obtained, it does provide a sense of how robust the original sampling procedures were.

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38

Table 2.7. C o m p a r a t i v e U n i v a r i a t e Statistics, 1981 M E W S S a m p l e v e r s u s 1980 C e n s u s 1980 Census Age in years Mean Median Persons in household Mean Median Wage and salary income Mean Median Years of school completed Mean Median Marital status (%) Married Widowed Divorced Separated Never married Sex (%) Male Female Place of birth (%) U.S. Outside U.S. Occupation group (%) Executive, administrative, and managerial Professional Technical Sales Administrative support Private household Service Farming, etc. Precision products, craft, and repair Operatives, laborers, etc. Race or Ethnicity (%) White Non-Hispanic Hispanic Black Non-Hispanic Hispanic

1981 MEWS

38.0 36.0

38.0 35.0

3.3 3.0

3.3 3.0

$15,500 $13,400

$19,400 $17,500

12.7 12.0

13.7 13.0

60.0 3.3 8.2 2.5 26.0

58.3 3.8 10.2 3.2 24.7

57.3 42.7

58.4 41.6

88.0 12.0

91.1 8.9

12.7 12.8 3.3 7.6 22.4 0.2 9.7 0.3 12.0 19.0

17.9 16.1 2.9 8.2 19.9 0.1 7.8 0.4 12.5 14.0

79.0 (75.3) (3.7) 15.0 (14.9) (0.1)

75.8

14.3

(continued)

Assembling Data on Employment Relations Table 2.7.

39

(Continued) 1980 Census

Asian

Non-Hispanic Hispanic Spanish Other Non-Hispanic Hispanic

2.3 (2.3) (0.0) 3.2 0.5 (0.2) (0.3)

1981 MEWS 1.7 5.2 0.3

complete household enumeration had been used to select a respondent within each household. The sample would have changed only slightly in terms of its age and gender composition. But how well did the sample actually represent the population that we had set out to capture? One w a y of answering this query is to compare our sample to the Public Use Samples of the 1980 census of Population and Housing. Of particular interest for this purpose are the 1% B samples from the census, which have the desirable properties of having a large number of observations, of identifying the variables that are needed to reconstruct our eligible population, and of identifying the Chicago SMSA as a separate geographic entity (U.S. Department of Commerce, Bureau of the Census, 1983). After imposing the sampling-frame limitations by excluding selfemployed workers and those employed fewer than 20 hours per week, one obtains a comparison sample of about 26,704 individuals, about 10 times the number in the MEWS sample itself. Table 2.7 presents a comparison of the univariate distributions of some key variables from the two samples. Age and household size had virtually identical distributions in the two samples. Moreover, the differences in sex, black versus nonblack race, and marital status are small enough to be considered negligible. Spanish origin was measured somewhat differently in the MEWS survey than in the decennial census. In the Chicago data, Spanish was provided to respondents as an option in the closed-end question that elicited the other racial responses. In the census, people of Spanish origin were largely identified through a separate "Spanish-origin" question, so that people of all races could claim Spanish roots. Nevertheless, some 3.2% of the census sample did volunteer Spanish as a response to the race item. The proportion of Spanish in our sample did fall between the value of 3.2% (the self-identified Spanish) and 7.3% (the sum of the relative frequencies of the various Spanish-origin groups within each racial category).

40

Chapter 2

Table 2.8. Comparative Regression Statistics, 1981 MEWS Sample and 1980 Census of Population 1 in 100 Public Use Sample, Chicago SMSA Dependent variable (income in 1979) a Independent variables

1980 Census

1981 MEWS

Race (Black = 1)

-2,180 (190) 9,110 (132) 1,120 (22.3) 225 (4.9) .317 20,585

-2,330 (533) 9,540 (379) 1,240 (71.0) 239 (15.0) .332 2,483

Gender (Male = 1) Years of education Age R Squared (adjusted) N ~Standard errors in parentheses.

Income, occupation, and years of education were substantially higher in the MEWS sample than in the census. Although the income difference appears to be especially large, this was in good measure due to inflation. When the 1981 MEWS data, which asked about 1980 income, are deflated to 1979 dollars, the reference point for the census income questions, one obtains a mean of $17,093. This is much closer to the census value of $15,500, and about half of the difference can be explained by inflation. Nevertheless, there were persistent differences in the two samples with regard to education and occupation that correspond to the remaining income differences. It seems safe to conclude that the MEWS sample had a slight tendency to overrepresent highersocioeconomic-status respondents. This tendency has been noted in previous literature on telephone interviewing. For example, Thornberry and Massey (1988) estimated that, w h e n one takes into account both the degree of noncoverage of households due to the absence of universal access to phones and the lack of response to telephone surveys in general, the expected response rates to telephone surveys in general range from 56% for those with less than high school education to 88% among those with more than high school education. We estimate that our rates of differential response were of roughly the same magnitude as those estimated by Thornberry and Massey. In large part, the consequences of this bias depend on h o w well the MEWS sample matched the census in terms of its multivariate charac-

Assembling Data on Employment Relations

41

teristics rather than its univariate characteristics. In other words, has the slightly higher proportion of higher-status persons in our sample thrown off our estimates of the key relationship under study? Table 2.8 compares the census and MEWS data w h e n each are used to predict respondents' incomes in a simple regression model. Because the census did not ask about work experience directly, age is used as a predictor variable in its place for both samples. With the exception of the coefficient for education, the MEWS coefficients are about 5% larger than the corresponding coefficients in the census sample (the education coefficient is about 10% larger). It is worth noting that because the signs, significance, and relative sizes of the coefficients are so similar for the two samples, one would probably reach the same substantive conclusions by examining results from either data set. On the basis of these tests we conclude that the MEWS data are quite representative of the population that they were intended to reflect. Where there are some discrepancies in univariate statistics, as in education, we are reasonably confident that the multivariate results are not affected very much. Having resolved the issue of the adequacy of the employee sample, we turn now to a consideration of the employer sample and its characteristics.

EMPLOYER SAMPLE

In constructing a set of procedures for locating and interviewing the employers of the individuals in our sample, we had to keep the purpose of these interviews clearly in focus. One of our two main goals was to gather information about the characteristics of each establishment and firm more reliably than could be done by simply asking the workers, a group that may not be terribly well informed about such matters. A second, and perhaps more important, aim was to find out information that pertained specifically to jobs within those organizations. We sought information about hiring, recruiting, and screening techniques; about the chances for mobility for each job; about the kinds of work rules and due-process arrangements that applied to each job; and about the training requirements for each position. To get information of the second variety, it was necessary to talk with someone who had detailed knowledge about the specific position in which each of our respondents worked. Thus, where we had a choice, we opted to have the SRL interviewers speak with people at lower levels of the organization w h o would have the most detailed knowledge about the specific positions in question. Often, this was a staff member in the personnel department or

Chapter 2

42

Table 2.9. Results of Attempts to Locate Employers

Disposition Respondent refused to identify employer Employer identified Located Not located Total

Number

Percentage

268 2,444 2,400 44 2,712

9.8 90.1 100.0 98.2 1.8 100.0

a first-line supervisor. In any event, the real unit of data collection for the second phase of this project was the "job within the organization." In those scattered instances where we had more than a single respondent from each establishment, we gathered data separately on each job that appeared in our sample. Before anyone could be interviewed, it was necessary to identify the establishment where each individual respondent was employed. The basic method for doing this was to augment the standard series of occupation and industry questions so that the necessary information would be revealed. Appendix B contains the segment of the MEWS questionnaire in which these responses were sought. Because the employee fieldwork extended over three months, arrangements were made with the SRL to immediately photocopy each of these pages from the completed questionnaires so that other project staff could begin the sometimes arduous task of tracking dow n the right establishments. The sources used were fairly standard ones (the appropriate metropolitan p ho n e directories and published directories of industrial and commercial businesses), but occasionally it was necessary to consult more esoteric documents, such as the registered list of Illinois corporations published by the state attorney general's office. Table 2.9 shows our level of success in eliciting and finding the employers of the 2,712 individual MEWS respondents. Overall, we believe that these results reveal considerable willingness of individuals to supply the names of their employers; only about 10% refused to comply with this request. Likewise, the number of employers wh o ultimately proved to be impossible to find was very modest, amounting to less than 2% of our total individual sample. 2 A brief 2 Again, comparisonswith other studies with similar methodologiesare informative. Parcel et al. (1991)reported a dropoffof 9% between their sample of interviewedemployees and a sample of supervisors who could be located. Assuming that this dropoff included attrition that resulted from employees'refusalto provide adequate informationand from

Assembling Data on Employment Relations

43

digression will illustrate that not all of the problems e n c o u n t e r e d h e r e resulted from lack of goodwill o n the part of our r e s p o n d e n t s . In the course of interviewing, the following colloquy was r e c o r d e d on one of the questionnaires: Q: A: Q: A: Q: A:

W h a t type of business or i n d u s t r y is this; that is, w h a t p r o d u c t is m a d e or w h a t service is given? It's the construction or, more, the destruction business. Is this mainly, manufacturing, wholesale trade, retail trade, a service, or something else? A b u n c h of us w o r k together gutting old a p a r t m e n t s and buildings. W h a t firm or c o m p a n y in the destruction business do y o u w o r k for? There's no real official name, but w e go u n d e r the "Burrito Brothers."

Given the informal nature of some segments of the u r b a n economy, it is not surprising that published p h o n e directories, or e v e n t e l e p h o n e books, are not a w h o l l y sufficient source for locating e m p l o y e r s or developing a sampling frame. In the next section, we address the question of w h e t h e r the unidentified or unlocated e m p l o y e r s a p p e a r e d to be a rand o m subset of the larger p o p u l a t i o n or instead a p p e a r e d to be biased in some fashion. The job a n d e m p l o y e r list c o r r e s p o n d i n g to the 2,400 individual r e s p o n d e n t s was r e d u c e d to 2,386 with the deletion of 14 m e m b e r s of the military w h o were included in the first wave of sampling. Furthermore, it was d e t e r m i n e d that some 66 individuals w e r e e m p l o y e d in identical jobs for the same employer, further reducing the effective sample size of jobs to 2,320. A n example of this sort of duplication was "letter carrier for the Chicago post office" or "elementary-school teacher for the Chicago public schools." Thus, in the section that follows w e n e e d to distinguish w h e t h e r the completion or refusals that w e discuss are being tallied b y the n u m b e r of jobs that were included or lost, or b y other sources, it can be compared to the 13% dropoff that we experienced at this stage. In a national study using a similar methodology, Spaeth et al. (1993) attempted to identify and interview the employers of respondents (and their spouses) sampled in the 1991 General Social Survey (GSS). Their experience was not dissimilar from Parcel's and her collaborators' or from our experience. Refusals to identify employers arose in about 12% of the GSS cases, and in an additional 5% of cases, information sufficient to locate the employers was not obtained.

Chapter 2

44

Table

2.10. Disposition of Employer Interviews in MEWS Study

Reason

Unavailable from employee survey Interviewed in employer survey Not interviewedin employer survey Refusal Noncontact Unavailable Out of business No new listing Other Total

Number 312 1,926 474

Percent of all c a s e s 11.5 71.0 17.4

351 24 10 9 18 62 2,712

Percent of employer cases

80.2 19.8 14.6 1.0 0.4 0.3 0.7 2.5

100.0

1,926

the n u mb er of persons included or lost. In Table 2.10 values are shown for the n u mb er of individual employees whose employer or job interviews met with various fates. About 71% of all employees w ho were interviewed in the first survey had employers who were interviewed in the second wave. Among those who had employers w ho were not interviewed, a substantial number (312) were in this category because an individual r e s p o n d e n t failed to provide the name of an employer or, in some instances, the name of one wh o could be found. Employer refusals accounted for another sizable share of missing employer data. However, it is worth pointing out that if the identified employers are taken as the point of comparison, less than 20% of these employers refused to be interviewed. Not surprisingly, a small number of employers had either relocated or gone out of business in the interval between the two surveys. If the completion rates shown in Table 2.4 are combined with those shown in Table 2.10, the combined completion rate for both waves of the survey is approximately 61%. Although this percentage is not as large as one might wish for, it is still within an acceptable range and provided an adequate base for proceeding. Finally, we consider the issue of what kinds of bias might have been introduced in the employer phase of our interviewing. That is, to what extent were the 71% of respondents whose employers provided data similar to the 29% whose employers did not. Relevant data for this comparison are provided in Tables 2.11 through 2.13. Considering first the patterns that are shown for different individual characteristics in Table 2.11, we see that male and female respondents divulged the names of their employers at about equal rates. However,

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45

Table 2.11 Employer Completion Rates by Worker Demographic Characteristics

Sex Female Male Race Nonblack Black Education HS or less Some college College or more Age group Under 25 25-34 35-44 45-54 55 and over Region of birth U.S. or Canada Northern or Western Europe Southern or Central Europe Latin America Other

Percent of respondents not identifying employer

Total N

Percent of identified employers not interviewed

N of employers

11.6 11.4

1,128 1,583

15.8 22.5

997 1,402

12.1 7.8

2,313 386

19.9 18.5

2,033 356

10.4 10.5 13.6

1,126 714 865

17.9 20.7 21.3

1,009 639 747

6.4 11.6 15.4 16.7 15.5

910 979 423 228 84

19.4 20.0 21.2 18.9 18.3

852 865 358 190 71

10.8 17.2

2,135 128

19.0 23.6

1,905 106

12.8

203

23.7

177

12.9 14.3

93 140

12.3 26.7

81 120

the e m p l o y e r s of female r e s p o n d e n t s were m o r e likely to be contacted a n d interviewed t h a n the e m p l o y e r s of males. In large part, this difference is explained b y s o m e other characteristics of male a n d female employees, such as the industries in w h i c h they w o r k e d , as w e shall see shortly. The results for race, education, a n d age are s o m e w h a t u n e x p e c t e d insofar as individual a n d e m p l o y e r nonresponses t e n d e d to be associated with h i g h e r status r e s p o n d e n t s rather t h a n lower-status ones. That is, y o u n g e r , black, a n d less-educated r e s p o n d e n t s w e r e m o r e likely t h a n older, nonblack, a n d better-educated people in the sample to identify a locatable employer. This same pattern also holds true with r e g a r d to e d u c a t i o n a n d e m p l o y e r refusals. S o m e w h a t ironically, the biases that

Chapter 2

46

Table 2.12 Employer Completion Rates by Worker Labor Market Characteristics

Percent of respondents not identifying employer Number of previous jobs None 2-3 3-4 5 or more Years of labor force experience 0-5 6-10 11 or more Occupation group Managerial, professional, technical Sales/clerical Skilled blue collar Other blue collar Farm

Total N

Percent of identified employers not interviewed

N of employers

7.8 10.2 11.3 13.9

408 489 942 839

19.9 21.0 18.5 20.2

376 439 836 722

7.2 12.4 16.6

1,185 635 821

19.8 18.0 21.0

1,100 556 685

12.0

998

20.5

878

11.5 10.9 9.8 8.3

758 339 590 12

19.2 21.5 18.2 9.1

671 302 532 11

w e n o t e d for individual-level r e s p o n s e s to the first w a v e of interviewing w e r e r e v e r s e d , at least partially, b y the p a t t e r n s of e m p l o y e r c o m pletion. While there are s o m e systematic differences according to res p o n d e n t s ' region of origin, t h e y do not f o r m a readily interpretable pattern. In Table 2.12, similar data on e m p l o y e r r e s p o n s e s are b r o k e n d o w n b y the labor m a r k e t characteristics of the individual r e s p o n d e n t . H e r e , there are s o m e s t r a i g h t f o r w a r d p a t t e r n s of individuals' willingness a n d ability to identify e m p l o y e r s , but there are no real differences in rates of e m p l o y e r s ' refusals. The regularities that do a p p e a r in the first c o l u m n are quite consistent w i t h those s h o w n in the p r e v i o u s table. T h a t is, r e s p o n d e n t s in higher-status o c c u p a t i o n s w e r e less likely to identify their e m p l o y e r s , as w e r e those w i t h m o r e years of labor force e x p e r i e n c e a n d t h o s e w h o h a d h a d a greater n u m b e r of p r e v i o u s e m p l o y e r s . O f course, w i t h o u t u n d e r t a k i n g a multivariate analysis, it is difficult to k n o w w h i c h of the effects s h o w n here, a n d in the p r e v i o u s table, are i n d e p e n d e n t of o n e another. Finally, w e e x a m i n e in Table 2.13 h o w r e s p o n d e n t s ' industrial a n d e s t a b l i s h m e n t affiliations w e r e associated w i t h the level of e m p l o y e r r e s p o n s e . P e r h a p s the m o s t dramatic result in a n y of these last three

Assembling Data on Employment Relations

47

Table 2.13 Employer Completion Rates by Worker Industry

and Establishment Characteristics

Industry group Other Construction Manufacturing, utility, commercial Trade Finance, service, public administration Government worker No Yes Establishment size 10 and under 11-50 51-250 251-500 Over 500

Percent of respondents not identifying employer

Total N

Percent of identified employers not interviewed

7.7 22.6 9.2

13 106 1,016

0.0 32.9 18.9

12 82 923

12.1 11.0

462 1,087

25.6 17.4

406 967

13.4 0.0

2,326 386

20.2 17.4

2,014 386

14.0 13.4 10.3 12.0 9.4

243 612 717 299 795

25.8 18.9 18.5 14.4 20.4

209 530 643 263 720

N of employers

tables is the h i g h rate of nondisclosure of e m p l o y e r s b y construction e m p l o y e e s a n d the equally high rate of refusal or n o n c o n t a c t a m o n g construction employers. 3 In part, this is a matter of the social organization of construction w o r k itself, and, in part, it m a y reflect s o m e cultural features of the industry. O n e aspect of construction w o r k with w h i c h o u r m e t h o d s were n o t well aligned is the fact that the e m p l o y e r ' s place of business a n d the actual place of e m p l o y m e n t are frequently separated b y large distances. It is not u n c o m m o n in large cities for the general contractor o n a large w o r k site to be situated in a different m e t r o p o l i t a n region. At the same time, the place of w o r k m a y meet m a n y of the usual criteria of being an o n g o i n g w o r k establishment. It exists in the same place for m o n t h s , or often years, at a time, a n d there is some decision m a k i n g r e g a r d i n g hiring a n d supervision at the location itself. A d d e d to these complexities are the further ambiguities associated with the exis3 In the study by Spaeth et al. (1993) mentioned in Footnote 2, there was also a tendency for workers in the "mining and construction" category to furnish fewer than expected completed employer interviews. While their overall completion rate for all employees was 50.8%, it was 42.7% in this category. (Figures recalculated from Spaeth et al., 1993, Table 4, p. 17.)

48

Chapter 2

tence of subcontracting relationships. When one asks what firm someone works for, and where she or he works, how the question should be answered is not completely obvious w h e n the employee in question has been sent by the union hiring hall to work for a subcontractor on a larger project u n d er the auspices of a completely different general contractor. Not only do these characteristics of construction work make it difficult for individual respondents to name their "employer," but they also make it hard for survey interviewers to locate and interview appropriate "establishment-level" respondents. Aside from these problems, the other noticeable industrial artifact is that employers of workers in the retail and wholesale trade were somewhat less compliant in furnishing interviews than other employers. This reduced compliance may be attributed not only to the small scale of some retail operations and their more transient existence, but also to the fact that many retail sites lack the luxury of a private enough place and a long en o u g h time for a proper interview to be conducted. 4 While Table 2.13 seems to indicate a high rate of disclosure among government employees, that particular piece of information is a complete artifact of the way in which we measured being a government employee: Our primary method was to rely on the responses to the question that asked for the name of the employer. Nevertheless, there were few differences in the rates of refusals among government and private-sector employers in the second wave of our interviewing. Finally, we may consider how employer size, as measured by the size of the workplace or establishment, affected our success. There was a consistent tendency for the employees of smaller places to be more reluctant to divulge the names of their employers. Perhaps these workers suspected that they would be more likely to "get into trouble" by discussing their jobs than those workers w h o felt more a n o n y m o u s in their larger, and perhaps less personal, work environments. O n the employer side, although it was more difficult to interview managers and owners in the smallest establishments, there were not m any differences among those establishments with over 10 employees. On balance, we believe that these results establish the general representativeness of the sample we gathered, particularly w h e n it is remembered that our goal was to generalize to a population of employed 4 Data from Table2.13 can be recalculatedto show the percentage distribution of employees with completed employer data across these industry categories. The results are as follows: other, .6%; construction, 2.8%; manufacturing, etc., 39.0%; trade, 15.8%; and finance, service,and public administration, 41.7%. With the exceptionof the shortfall in trade and a surplus in manufacturing, these figures compare very favorablywith the SMSA percentages shown in Table2.3.

Assembling Data on Employment Relations

49

individuals. In dealing with the attrition that did occur between the individual data-gathering phase and the completion of the employer interviews, there are at least two possible strategies of action. One is to use some formal estimation techniques that have been specifically developed for the problem of "sample selection bias" (Berk, 1983). The second is to combine the employee and employer surveys at the level of individual indicators, so that employer data are used when they are available, but w h e n they are not, employee data are used as supplementary indicators so that the larger number of cases can be preserved. This procedure can be illustrated for the measures of establishment and firm size that are used in the subsequent analysis. To understand these procedures, it is also important to know that we acquired additional information on the sampled work establishments through a commercial credit-rating vendor, Dun and Bradstreet Inc. Although this source of data proved to be rather incomplete (of the 2, 712 workers in our sample, only 62% were employed by establishments for which the commercial vendor had listings), it was, nevertheless, a useful supplement to the data obtained in our survey. Our final measure of establishment size was derived somewhat differently, depending on which sources of information were available for each case. The basic principle that underlies these decision paths is that where private-sector employer survey data were available, we regarded them as the best information available on establishment size. If, in the private sector, these employer responses were not available, then a regression formula was used to predict what the employer data would have been had the information been collected. The predictors in the regression equation are the establishment-size figures provided by the workers, and by Dun and Bradstreet if both were available. (The coefficients in the regression equations were estimated from that subset of cases where both employer and supplementary data were available.) For the public sector, employer data were more likely to be missing, so employeereported values were regarded as the best source of information. If they were also missing, then the Dun and Bradstreet information was used in the regression approach just described. Although the details are somewhat different, a similar kind of procedure was used to estimate the total company size of each firm in the sample. Although employee estimates could not be used in this instance, because the employees were not asked to provide this information, combinations of Dun and Bradstreet and employer-survey information were used to supplement one another. The more general point here is that decisions about missing data and resulting sample-selection problems are often best made on a case-by-case--or to be literal, a measure-

50

Chapter 2

by-measure--basis than by an abstract statistical algorithm. Thus, in the case of establishment size, at least one study (Parcel et al., 1991) showed that management-provided estimates of size are often superior to those provided by workers. Our procedures allowed us to incorporate this finding and to make full use of our complete sample by supplementing employer-provided information where it was necessary to do so. (A more general discussion of h o w our data gathered from employees compared to our parallel data gathered from employers appears in Appendix C).

O T H E R DATA S O U R C E S

Although firms and establishments are a very important context in which individuals live out their working lives, it is important to consider "how" one makes his or her living as well as "where" one does so. The convention of incorporating this kind of information is the concept of occupation. Although ordinary discourse tends to blur their meanings, the terms job and occupation are carefully distinguished in most empirical studies. The crux of the distinction is that occupation is taken to refer to those aspects of a work role that are recognized as common or equivalent across different employment settings. In contrast, jobs are regarded as particular, that is, what tasks one carries out at his or her place of work. Although both jobs and occupations were at issue in this study, our theoretical interests dictated that we investigate some aspects of the occupational context of work as well as its job context. Specifically, in Chapter 4, we consider h o w the pattern of withinoccupation mobility across firms affects employment relationships. To accomplish this task, we relied on data about occupational movement that were taken from a very different data source: the Current Population Survey (CPS, U.S. Department of Commerce, Bureau of the Census, 1985). Unlike the MEWS sample, the CPS is a nationwide, monthly survey of households and employed persons in the United States conducted by the Census Bureau for the Department of Labor. In January 1983, as part of its ongoing effort to monitor job training and job mobility, the bureau fielded a supplement to the CPS that asked a series of questions relating to individuals' recent occupational and employer mobility. The answers to these questions provided the basis for identifying occupations with more and less viable mobility prospects through a process that is described in detail in Appendix E. We believe it is safe to conclude that the information available to us about this metropolitan labor market is unique in its scope and depth.

Assembling Data on EmploymentRelations

51

Although the techniques that were used were somewhat controversial at the outset, they have become widely accepted as a standard tool of e m p lo y men t relations research. In the next chapter, we redirect attention to the theoretical issues raised in the first chapter, but we now investigate them using the data from the sources we have just described.

3 The Elements of Bureaucratic Personnel Management James Q. Wilson (1989, pp. 139-142) relates the tale of the rise and fall of PACE (the Professional and Administrative Career Examination) in the federal bureaucracy. This examination, developed over a five-year period by 24 research psychologists, was designed to identify those with the ability to become managers, so that civil service job ladders could stretch from the bottom of the hierarchy to near the top, and so mobility chains would be consistent and predictable. Federal agencies could either promote to managerial positions directly from within the agency or else choose new managers from the PACE list. In either case, the mobility chain was clear and consistent. In 1979, following a lawsuit brought on behalf of black and Hispanic workers (who tended to have subqualifying scores on PACE more often than white workers), the Carter administration entered into a consent decree that abolished PACE. After that, movement into the managerial ranks happened in several different ways. A few occupations had n e w tests developed, and mobility continued in the old way. But in most cases, either mobility was internal and based on agency head preference without test data, or it was a "Schedule B" appointment from outside, with no particular standards applied. About 10 years later, new clusters of tests were developed, but a college degree allowed exemption from them. There are now many avenues of movement to the managerial level, and the type of avenue varies considerably. Even in a bureaucracy as rigid as that of the federal government, the degree of protection offered to "protected" jobs varies from occupation to occupation and from agency to agency. And h o w it got to be that 53

54

Chapter 3

way has far more to do with outside events than with some internal rational dynamic driving the employment relationship. In contrast to the haphazardness that reigns in the everyday world of organizational administration, scholarly accounts of modern personnel management often convey a picture of a system of policies that coherently regulate aspects of organizational functioning as diverse as hiring, promotion, transfers, wage setting, supervision, layoffs, punishments, fringe benefits, work specification, and job performance. This portrayal of bureaucratic personnel management as a comprehensive system of organization or control that appears in contemporary writing is likely to be convincing, until one recognizes that the source of the alleged coherence of these policies lies not so much in real-world practices as in the different theories that underlie each author's views of modern personnel administration. In this chapter, we are concerned with these policy elements and their diversity. As a point of reference, we begin with some of the explanatory schemes that have been proposed to see how they have distinguished among the various provisions found in bureaucratic personnel environments. The larger question of whether these elements combine to form a system, or even an emergent system, depends, of course, on the kind of system one is looking for. Therefore, the second goal of this chapter is to analyze the strength, the pattern, and the nature of relationships among a selected set of bureaucratic elements, with the aim of detecting the empirical outlines of a system of bureaucratic personnel management.

THEORIES OF BUREAUCRATIC PERSONNEL MANAGEMENT

The three views of personnel management that see it as a unified development are the capitalist control model of Edwards, the organizational-governance model of Selznick, and the institutionalist model of Baron et al. A fourth account of bureaucratic personnel policies, Oliver Williamson's transaction cost model, recognizes the significance of the these same organizational practices. However, his theory regards these practices not as elements of a system, but as alternative means of "contractual governance," which arise in response to needs for temporal continuity in the relationship between employers and employees. Not surprisingly, each model incorporates a similar, although not completely overlapping, list of bureaucratic personnel practices. However, each model contains significantly different emphases; different elements are seen as reflecting the core institutions of bureaucratic management, and with different processes and logics are seen as giving rise

Bureaucratic Personnel Management

55

to its empirical consolidation as a social form. This is to be expected, as the four models follow different traditions, emerging, respectively, from what we called in the first chapter the industrial-sectorial approach (Edwards), the institutional approach (Selznick), the technical-rational approach (Williamson), and a hybrid approach (Baron and, to some extent, Selznick). In the capitalist control model, bureaucratic personnel systems ("bureaucratic control" in Edwards's lexicon) are viewed as the culmination of a series of control forms evolved since the beginning of the industrial revolution to deal with the problem of industrial management. Of critical importance in this model, and the related model of Burawoy, is the fact that industrial management in the West has invariably been situated within a capitalist context marked by structured conflict between workers and managers over the distribution of surplus value and over the nature of the employment relationship under which surplus value is realized. In the 20th century, what is crucial for any method of exercising capitalist power is that it address both the problem of immediate control (getting enough work out at the right cost) and the problem of long-run control (deflecting potential challenges to the capitalist system itself). With the increasing scale and concentration of capitalist enterprises, Marxist theorists see solutions to these problems as necessarily involving strategies of "hierarchicalization," "stratification," and "subdivision": creating more layers, more status divisions, and more little boxes within slightly larger boxes. Whether or not these organizational tactics create efficient systems of production, these theorists see them as reliable means of redirecting workers" attention from large, collective, and threatening issues to smaller, individual, and more manageable ones: problems of being in the right job classification, at the proper salary step, and in the correct evaluation category. And as an added feature, successful control strategies are frequently described as those that render managerial control as an impersonal, abstract force rather than as a willful and deliberate regime imposed and maintained by other people. Modern enterprise strives for a government by rules, not people. Thus, bureaucratic management, with one foot planted on the bedrock of impersonal rules and the other on the steady ground of specialized jurisdictions, becomes the organizational partner of corporate capitalism. Seen in this light, the central institutions of bureaucratic personnel management are classification schemes and rules that order production, mobility, rewards, and penalties according to impersonal criteria. In his account, Edwards attributes primary importance to wage administration schemes, job classifications systems (and their attendant formalized job

56

Chapter 3

descriptions and job instructions), and routinized methods of performance appraisal and evaluation. Although recognizing the empirical prevalence of due-process mechanisms--grievance procedures and seniority provisions--Marxist theories typically ascribe to them an ancillary, almost incidental role: The positive incentives, the relief from capricious supervision, the right to appeal grievances and bid for better jobs, the additional job security of seniority--all these make the day-to-day worklife of Polaroid's employees more liveable. They function as an elaborate system of bribes, and like all successful bribes, they are attractive. But they are also corrupting. (Edwards, 1979, p. 145) To describe these practices as "bribes" and as "corrupting" is revealing, for a bribe is indelibly tinged with personalism, and corruption is as abstract as a wink and a satchel of unmarked bills. In short, the Marxist view of these bureaucratic elements is that they represent a slightly disreputable side of the modern corporation rather than its public face of rationality, impersonality, and efficiency. Likewise, internal labor markets and systematic mobility, to the extent they are considered in some Marxist treatments of modern personnel management, are viewed as another mechanism of cooptation whose significance lies in their potential to distract workers rather than in their tendency to enhance workers' job security and improve their bargaining positions. (Burawoy, 1979, however, does recognize the potential that internal labor markets and job transfer schemes have for diluting supervisors' full exercise of authority.) A second perspective on personnel management is represented by what we are terming the bureaucratic-governance model of industrial relations. (Although it is equally appropriate to refer to it as the institutionalist model, doing so risks confusing this perspective with the next one we will discuss.) This viewpoint is expressed perhaps most fully in Philip Selznick's Law, Society, and Industrial Justice (1969). Here, the dynamic force that gives rise to a different style of personnel administration in contemporary organizations is the growth of bureaucracy as a means of administration. To simplify the argument somewhat, this model adopts the Weberian position that increases in the scope and scale of organizations of all types are accompanied by a steady trend toward the adoption of a bureaucratic form of administration. This is true primarily for reasons of technical efficiency, but also as a reflection of the "rationalization of all spheres of social life." More important to our purposes is what this model has to say about the effects of bureaucratic organization on employment relations in

Bureaucratic Personnel Management

57

m o d e r n enterprises. If "control" is the central theme of Marxist approaches to this topic, "governance" is the d o m i n a n t motif of the bureaucratic model. W h a t this term means is that there is an inevitable tendency for bureaucracies to establish themselves internally as private governments, with accompanying notions of "legality, .... citizenship," and, in the ideal case, "pluralistic participation.'1 True to its roots in the growth of bureaucracy, industrial governance is marked by its propensity to manage and dominate t h r o u g h the mediu m of formal a n d written rules. In contrast to the Edwards model, which emphasizes the conflict-reducing a n d conflict-dispelling functions of impersonal rules, the governance model emphasizes the limitations that written policies place on the unfettered exercise of managerial discretion. To the extent that such limits are real, they give substance to the construction of the employee's relationship with his or her employer as one based on a citizenship status as well as one of being a party to an atomistic contract. Like the Marxist model, the governance model explicitly recognizes that capitalist e m p l o y m e n t relationships are asymmetrical a n d subordinating. Precisely because e m p l o y m e n t relations are e m b e d d e d in a context of worker subordination, the portrayal of bureaucratic m a n a g e m e n t as a "quasi-legal" governance system highlights its tendencies to act as a countervailing force to unlimited managerial autonomy. The basis of these limitations is the worker's "membership right in a going concern" (Selznick, 1969, p. 67). By emphasizing that bureaucratic m a n a g e m e n t of necessity is an "authority'-based relationship, this model calls attention to the limits that the exercise of that authority places on the ruler as well as on the ruled (cf. Bendix, 1974). Therefore despite its emphasis on the bureaucratic roots of this form of industrial relations, the governance model puts something other t h a n detailed classification schemes at the center of its analytic universe. W h a t forms the axis of this system are two related pivot points: practices that create membership rights a n d statuses for workers a n d practices that restrict employers' discretion, especially with regard to worker membership and status. Thus, the core elements of bureaucratic personnel systems are formalized seniority rights, protection from arbitrary dismissal, a n d written rules pertaining to work behavior, discipline, a n d 1 Selznick (1969), although clearly ambivalent about the extent to which industrial justice requires industrial democracy,did assert that employee rights must be positive as well as negative: "In the special-purpose organization, the chances that a viable group life will emerge, sustained by 'natural' interests, are much more limited than in the more comprehensive community. . . . Thus pluralism has a limited worth as a guarantor of even minimal freedom in the special-purposeorganization. . . . This does not mean that internal pluralism can be entirely discounted" (p. 41).

58

Chapter 3

employee grievances. Internal-labor-market practices are of lesser importance in this model and matter largely insofar as they reinforce the idea that an enterprise's workers enjoy special membership rights not shared with outsiders. In other words, the governance model suggests that highly regimented job ladders are less essential than mechanisms that ensure preferential access to positions for insiders. Although structured mobility and pseudocareers are not necessarily seen as foreign by this approach, they are viewed as contributions to the overall system only to the extent that they further solidify the position of "workers-asmembers." Yet another view of bureaucratic personnel management is offered by the "neoinstitutionalists." This group adheres to the belief that many aspects of organizational structure arise less as solutions to purely technical problems and more as responses to a normative environment that prescribes certain practices and structures as "standard operating procedures." Although recognizing the press of many concrete historical circumstances, this theory locates the operant motivations in organizational leaders" tendency to behave ritually, ceremonially, and imitatively (DiMaggio & Powell, 1983; Meyer & Rowan, 1977). Baron, Dobbin et al. (1986) directly applied this model to the problem of the diffusion of bureaucratic personnel systems from the early 1940s onward. In solving problems of organizational administration and labor force control, the neoinstitutionalists stress that solutions are not chosen haphazardly but represent the influence of two groups that exert what may, for lack of a better term, be described as cultural authority. These groups are the federal government, which during World War II also had the legal authority to mandate specific employment outcomes, and the personnel administration profession, which had been an emergent force in American industry since the beginning of the century (see Jacoby, 1985). For our purposes, the institutionalists see the core of personnel administration as consisting not of one set of practices or another (control or governance), but of the institutional group themselves (i.e., the personnel department). In fact, Baron et al.'s study seems virtually indifferent to the choice of any one of a number of personnel practices as indicators in building its impressive empirical case: Centralized hiring, time-andmotion studies, service emblems, seniority provisions, and job evaluation are only many manifestations of a common underlying force--the adoption of the "system." In contrast to these three systems models of bureaucratic personnel practices, the transaction cost approach (Williamson, 1975, 1985) emphasizes the instrumental quality of the adoption of these mechanisms. Furthermore, the instrumentalities are seen as operating at a very imme-

Bureaucratic Personnel Management

59

diate level: protecting transaction-specific investments in h u m a n capital in particular jobs. Compared to the Marxist approach outlined above, failures to achieve appropriate regulation of employment relationships result not in the resurgence of a smoldering class struggle, but in declines of economic efficiency and squandered resources. This avowedly "microanalytic" approach also leaves room for considerable within-firm and within-establishment variability in personnel practice. In this model, the "word-processing" department of a steel mill is likely to confront a very different set of labor-market transaction problems than the "continuous-casting" department is, with the predicted result being that each unit will develop a unique package of institutional practices to deal with its unique problems. Although the contingent character of this approach makes any specification of relationships among parts of the personnel system a risky endeavor, several tentative observations can be suggested. First, the emphasis placed on relational continuity under the condition of a firm's specific investment in h u m a n capital means that internal-labor-market mechanisms play a central role in these situations because of their mutually obligational quality. Firms and workers both consent to enter a relationship in which organizational rules reinforce their joint condition of technically based dependence. Second, the model also stipulates that the ease of measuring and preplanning job performance also makes a difference in how employment relationships work themselves out. Even in the case where skills are firm-specific, if work performances are easily monitored at the individual level, employers will have less need of costly internal labor markets--the primary advantage of which is their capacity for building normative commitments--and can instead rely on detailed bureaucratic control supplemented by minimal due-process guarantees. What this reasoning suggests is the likelihood of a negative statistical relationship between bureaucratic work-regulation mechanisms and internal-labor-market mechanisms--especially mobility guarantees. In the next section, we examine our survey data with the aim of describing the overall distribution of these personnel practices among jobs and employers, and of deciphering, to a limited extent, the associations among the various dimensions of bureaucratic work administration. Of course, the issues raised in the preceding paragraph go considerably beyond these distributional questions, and we will defer the investigation of causes and consequences to subsequent chapters. There are two parts to the following analysis, First, we examine the weighted and unweighted frequencies of occurrence of various practices. That examination is followed by a two-level confirmatory analysis that evalu-

60

Chapter 3

ates the presence of various dimensions underlying our observed measures, and that, in turn, investigates whether and in what way these subdimensions can be accounted for by a single common latent factor that accounts for the association among them. Examination of this second-order structure should clarify several of the questions we have posed. The three "systems" models of bureaucratic personnel practice all suggest that a single, second-order factor should exist. What differentiates them is the strength of the relationship between this single higher-order factor and the various first-order factors. Thus, the Marxist model implies that the central institution of bureaucratic control is the structure of formalized controls over work activities. The institutional governance model, in contrast, stresses that due-process rights are crucial. Although we emphasize that these findings are not absolutely decisive with regard to these theories, the results begin to suggest which of them are more and less plausible.

EMPIRICAL RESULTS The Scope of Bureaucratic Personnel Management Information about various bureaucratic employment practices was collected in both the employer and the employee surveys described in Chapter 2. Appendix D provides the necessary details concerning the translation of specific questionnaire responses into the variables reported in Tables 3.1 and 3.2. In some instances, the recording of questionnaire answers produced variables having more than two simple " y e s " "no" response categories (see Appendix D). When this occurred, Table 3.1 shows percentages based on unambiguous "yes" responses. However, where more detailed statistical procedures were employed, as in Table 3.2, the full range of response categories are preserved. Table 3.1 displays the relative frequencies of a wide variety of bureaucratic personnel practices. Although the data we are examining do not provide estimates of two widespread features of these "systems" (the presence of wage classification plans and of seniority-based layoff mechanisms), they do provide reasonable coverage of the basic dimensions elaborated in the preceding discussion. The categories used to group these items were derived from the various theories discussed above. There are, of course, alternative sets of categories that might have been used to organize these items. In particular, two dimensions that were considered but rejected are (1) practices that create continuity in employer-employee relationships and (2) practices dependent on

Bureaucratic Personnel Management

61

T a b l e 3.1. F r e q u e n c y of Various B u r e a u c r a t i c P e r s o n n e l Practices i n C h i c a g o

Percent of workers Practices r e l a t e d . . . mostly to due process: 1. Employer must give reason for firing. 2. Reason for firing must be written. 3. Employer must give advance notice or severance pay. 4. Employee has grievance procedure. both to due process and bureaucratic work control: 5. All or most rules about employee conduct are written, a 6. Employees are given company handbooks, a 7. Employer has set penalties for rule violations, a mostly to bureaucratic work control: 8. Employee is given written performance evaluation. ~ 9. Employee is given written job description, a 10. Employee is given written job instructions. ~ to formalized personnel practices: 11. Hiring for job is centralized in personnel office, a 12. Firm has personnel department.a 13. Employer uses formal evaluation procedures in hiring. to exposure to labor market competition (ILM I): 14. Employee has had more than one job in company. 15. Inside hiring for current position (employee-reported). 16. Inside hiring for current position (employer-reported). a

Percent of establishments

All

Nonsupervisory

All

78.7

79.5

64.3

48.9

49.4

30.7

62.3

56.7

53.3

53.7

56.0

30.8

69.1

73.0

45.1

75.8

77.2

47.9

68.8

70.9

38.3

72.0

70.6

45.9

74.5

73.8

52.2

49.7

49.9

42.1

49.5

49.9

13.1

75.5

75.4

27.8

64.4

62.8

55.4

41.70

32.20

23.30

32.50

28.80

21.80

31.60

25.50

20.60

(continued)

Chapter 3

62

(Continued)

Table 3.1.

Percent of workers Practices r e l a t e d . . . to institutionalized mobility opportunities (ILM II): 17. Job is a stepping stone to a higher-level position in organization (employee-reported). 18. Chances of promotion to higher level position are 75% or greater (employer-reported). a 19. Job is part of a promotion ladder (employer-reported). a

Percent of establishments

All

Nonsupervisory

All

32.70

29.60

21.90

27.10

26.60

17.30

50.90

48.90

32.60

abased on responses from employer questionnaire.

written rules and procedures. In this scheme, the first group would include Items 1, 3, 4, and 14-19 (the internal-labor-market indicators), and the second would include Items 2, 5, 6, and 8-10. This alternative conceptualization is perhaps a better representation of the transaction cost approach with its emphasis on mechanisms that create relational continuity, but there are several reasons that tip the scales against it. For one, it assumes that internal-labor-market mechanisms and due-process guarantees are realizations of the same latent attribute of organizational policy, an assumption that overlooks other important causes of market sheltering, such as employee-interest-group politics. For another, the categories it provides are even less exhaustive than those presented in Table 3.1. Where, for example, do centralized hiring or "set penalties for rule violations" belong, not to mention the various indicators of formalized personnel practices? Finally, using the methods of confirmatory factor analysis, we have been able to verify statistically the particular scheme presented in Table 3.1, lending this approach the added weight of consistency with empirical observation. When we turn to the items themselves, Table 3.1 indicates that internal labor markets, mechanisms often regarded as central to the establishment of systematic internal governance, are among the least diffused of all aspects of personnel management. Thus, less than a third of the positions in this sample were regularly filled through inside hiring (according to both employer and employee reports), and structured promotion opportunities also seem to have been extended to less than a majority of all workers. Although the percentage of workers who en-

Bureaucratic Personnel Management

63

joyed either of these two internal-labor-market features would undoubtedly have been somewhat higher, a comparison with the presence of "due-process" features is instructive. On average, due-process rights seem to have been much more prevalent than internal-labor-market mechanisms. If employment-at-willis defined as the ability of employers to sunder employment relationships without having to account for their actions in any way, only about 20% of the workers were vulnerable to this form of day-to-day uncertainty. Although even this proportion may seem unacceptably large to m a n y readers, it is dearly an exceptional form of employment relationship in today's labor market rather than the typical one, which, according to Sanford Jacoby (1985), prevailed under the "drive system" at the beginning of the 20th century. Nevertheless, deeper levels of protection of job rights seem to have faded off rather quickly. About one third of the workers were unprotected from instantaneous dismissal or the application of unwritten rules of performance and conduct, and about half lacked access to grievance procedures and the right to written explanations of involuntary terminations. Thus, jobs in this late-industrial setting contained important variability in both the presence and the extent of their protections of "rights of membership in a going concern," and explaining this variation is an important task of subsequent sections of this book. Comparing the prevalence of due-process rights among all workers and just those in nonsupervisory jobs (Columns I and 2) helps to establish one important generalization about their uneven spread in the economy: Due-process guarantees were not to be explained as a privilege enjoyed only by those higher up in an administrative hierarchy. In fact, on four out of five of these measures (or six of seven if the two mixed indicators are included), nonsupervisory workers were more likely to enjoy this protection than those one or more levels up in their firms. In part, this is a matter of style rather than substance--note that advance warning and severance pay were less likely to be provided to the rank and file--but it also suggests that where due process did exist, it was available to the humble as well as the exalted. Thus, although the contrast is not great, it is interesting that internal-labor-market practices were less prevalent among lower-level workers than among those higher in the chain of command, reversing the pattern observed for the dueprocess items. As the literature makes clear, bureaucratic personnel management has a control face, as well as a "protection" face. Table 3.1 indicates that formalized mechanisms of control are also very widely diffused in the contemporary employment scene. Written job descriptions and perfor-

64

Chapter 3

mance evaluations were provided to about three fourths of all workers and were used in nearly one half of all establishments. These frequencies are large relative to most other indicators of bureaucratic personnel management and suggest the possibility that these practices had diffused quite widely and had become institutionalized as culturally appropriate practices for managing relationships with employees in a variety of contexts other than large bureaucracies. Not surprisingly, written job instructions were distributed less frequently than job descriptions. Judged on the basis of the number of affected employees, personnel departments were also a staple feature of organizational life for most of the workers. In fact, because of their high frequency of occurrence, it is tempting to jump to the conclusion that the existence of these departments was the underlying cause of, or at least a necessary condition for, the other aspects studied here. However, compared to the other attributes, personnel departments were less frequently found on an establishment basis and appeared in only 27% of the cases. What this indicates is a stronger relationship between establishment size and the existence of personnel departments than was true for due-process rights or bureaucratic work control. Taken by itself, this finding does not disprove the claims of the institutionalists, who argue for the centrality of the personnel professionals, because the consistent use of the other managerial techniques, as opposed to their sporadic use, may depend on the presence of these formal personnel units within organizations. In the next section, we address this possibility through the use of a factoranalytic model of all of these indicators. Finally, we see in Table 3.1 that even where personnel departments did exist, they were not necessarily the dominant force that some accounts would have us believe. In fact, personnel departments did not play a substantial role in either screening or making the final hiring decision for a majority of jobs in this sample. Although the data are not available in this study, one would strongly suspect that the role of personnel departments in terminations is even less salient.

The Shape of Bureaucratic Personnel Management Although there were some interesting differences among these types of personnel practices in their apparent frequency of occurrence, these disparities may have been less meaningful than they seem at first glance. Imagine, for example, that every job that provided a worker with good internal mobility opportunities (Variables 17, 18, and 19 in Table 3.1) also provided significant due-process guarantees, sheltered its incum-

Bureaucratic PersonnelManagement

65

bents from external-labor-market competition, regulated them through bureaucratic control mechanisms, and placed them under the auspices of a well-established personnel department. Furthermore, suppose that this sort of pattern was generalized, so that every job marked by a less common bureaucratic personnel practice was of necessity also characterized by the more common practices. What this would mean is that the five dimensions suggested in Table 3.1 could really be subsumed under a single dimension of bureaucratic control, with the more narrowly dispersed practices simply representing a higher level of adoption than the more widely dispersed ones. Or to put the matter in statistical terms, these five dimensions might be regarded as a (Guttman) scale type of bureaucratic personnel management. Although the various theories of personnel management are not very explicit about this point, this sort of logic seems to underlie at least the Marxist approaches to the topic. In their view, bureaucratic control is indeed a "system," and the empirical prevalence of "bureaucratic work control" compared to "structured mobility chances" could be easily interpreted as managerial attempts to "get by" with the least expensive and least constricting forms of labor force control in situations where those techniques were sufficient to the task. These considerations imply that we need to look more closely not at the frequency of occurrence of these practices, but at the relationships among them. Two main questions can be addressed empirically: (1) To what extent do the five dimensions posited in Table 3.1 capture the variability among these items? (2) Assuming these five dimensions are sufficient, can they themselves be explained as realizations of some underlying single dimension of bureaucratic personnel management (perhaps of the Guttman scale variety)? To explore these questions with our data, we undertook a confirmatory factor analysis of the items in Table 3.1 using the LISREL technique for analyzing covariance structures. This analysis was carried out in two stages. In the first stage, we attempted to reproduce the tentative dimensional structure shown in Table 3.1. 2 Achieving successful results at this stage, we then attempted to estimate a "second-order" model in 2 Unfortunately,even the preliminaryresults could not be achievedwithout eliminating two of the items in Table 3.1. The items dropped were Number 7, " Employerhas set penalties for rule violation,"and Item 13, "Employeruses formalevaluationprocedures in hiring." The latter created problems because of its extremelyweak relationship to the other indicators. The highest zero-order correlationof this item with any other was .176 (with "written performanceevaluation"),and a majorityof these correlationswere less than .10.

66

Table 3 . 2 . E s t i m a t e d

Chapter 3

Lambda

Coefficients

Due process Employer must g i v e r e a s o n for firing R e a s o n for f i r i n g must be written Employer must give advance n o t i c e or severance pay Employee has grievance procedure A l l or m o s t r u l e s about employee conduct are written Employees are given company handbooks E m p l o y e e is g i v e n w r i t t e n performance evaluation E m p l o y e e is g i v e n written job description E m p l o y e e is g i v e n w r i t t e n j o b instructions Firm has person . nel dept. H i r i n g for j o b is centralized in p e r s o n n e l office I n s i d e h i r i n g for current position ( e m p l o y e e reported) Employee has had more than one job in company

from Confirmatory

Bureaucratic work control

Market sheltering

Factor Analysis a

Mobility assurance

.275 (10.9)

.

.

.

.

.491 (14.6) .521 (8.37)

.

.

.

.

.

.

.

.

1.00

.

.

.

.

Personnel formalization

.586 (6.49)

.431 (2.20)

--

--

--

.109 (4.45)

.849 (10.0)

--

--

--

--

1.00

--

--

--

--

.981 (16.6)

--

--

--

.591

--

--

--

--

(11.2) .

.

.

.

1.00

.

.

.

.

.235 (21.8)

--

--

1.00

--

--

--

--

1.00 (13.5)

--

--

(continued)

Bureaucratic Personnel Management

67

(Continued)

Table 3.2. Due process Inside hiring for current position (employer reported) Job is stepping stone to higher level position in organization (employee reported) Chances of promotion to higher level position are 75% or greater (employer reported) Job is part of a promotion ladder (employer reported)

-

Bureaucratic work control

-

-

Market sheltering

Mobility assurance

1.19 (8.74)

-

-

-

Personnel formalization -

-

1.23 (8.80)

1.00

1.43 (11.5)

aNumber of cases = 1738; T values in parentheses.

which the five latent variables derived in the first stage were themselves taken as indicators of a single underlying second-order latent variable. The key substantive results are presented in Tables 3.2 and 3.3. The factor loadings shown in Table 3.2 offer strong support for the model that groups these practices into five dimensions. As can be seen in the first line of Table 3.3, this model also provides an acceptable fit T a b l e 3.3. S u m m a r y of C o n f i r m a t o r y Factor M o d e l s of B u r e a u c r a t i c P e r s o n n e l I t e m s

Model

df

Chi sq.

p

Ajusted goodness of fit

1. 1st-order factors = 5 No 2nd-order factors 2. 1st-order factors = 5 2nd-order factors = 1 3. 1st-order factors = 5 2nd-order factors --- 2

82

99.79

.088

.985

87

181.89

.000

.972

86

152.57

.000

.977

68

Chapter 3

with the observed data. As expected, the distribution of company handbooks to employees and the implementation of written rules of conduct were each statistically significant indicators of the presence both of "due-process" rights and of "bureaucratic work control." Although it may not be immediately obvious that company handbooks should be related to the protection of employee rights, the courts, in several instances, have held that the policy statements proffered in these documents constitute legally enforceable contract claims. As for the dual character of written rules, this finding is consistent with the "industrial governance" model discussed above. Employer discretion is limited, although hardly eliminated, when rules and regulations are written and, in well-developed cases, codified. What may be more surprising in these results is the presence of two internal-labor-market dimensions rather than one. We have argued elsewhere (Villemez & Bridges, 1988) that there are persuasive theoretical grounds for analytically separating the "protection" (from market competition, that is) and the "mobility" dimensions of internal labor markets. Our findings here reinforce that earlier claim by demonstrating that this duality persists even when a broader range of related practices are included in a statistical model. And as we shall demonstrate in the pages below, these two internal-labor-market facets can also be differentiated in terms of their heterogeneous causes and consequences. In sum, our results allow us to state, in answer to the first question, that the five posited dimensions do indeed organize these variables rather well. In Table 3.4, the estimated correlations among these five latent dimensions are shown. The establishment and use of personnel departments quite clearly has the strongest links to the other dimensions identified here, and the degree of market sheltering has the weakest links. However, our most immediate concern is whether some single unitary "metadimension" might be uncovered that organizes these five latent

Table 3.4. Correlations among Latent Variables Estimated under Model 1

Due Bureaucratic Market Mobility Personnel process workcontrol sheltering assurance formalization Due process Bureaucratic work control Labor-market sheltering Mobilityassurances Personnel formalization

1.00 .53 .25 .16 .70

1.00 .30 .60 .59

1.00 .60 .42

1.00 .62

1.00

Bureaucratic Personnel Management

69

properties. Line 2 of Table 3.3 s h o w s model-fitting results for an alternative s e c o n d - o r d e r factor m o d e l with a single s e c o n d - o r d e r factor. 3 It does not fit the data v e r y well. H o w e v e r , inspection of the correlation matrix in Table 3.4 suggests that there are p e r h a p s two u n d e r l y i n g aspects of these systems: one related to internal labor markets that w o u l d be a cause of "labor-market sheltering" a n d "mobility assurances" a n d a s e c o n d d i m e n s i o n related to " p e r s o n n e l formalization," "bureaucratic w o r k control," a n d " d u e process." Nevertheless, w h e n this structure is i m p o s e d o n the model, there is not m u c h i m p r o v e m e n t . In fact, the m o d e l p r e s e n t e d in Line 3 d e m o n s t r a t e s that the estimated correlation p a t t e r n is such that e v e n a two-"metavariable" m o d e l fails to capture the diversity of these latent traits. In short, we are forced to conclude that the practice of bureaucratic p e r s o n n e l relations is i n h e r e n t l y multifaceted. To the extent that either a s y s t e m of control or a s y s t e m of rights exists, it is a loosely coupled one. Before turning to an examination of the causes a n d c o n s e q u e n c e s of these various dimensions, w e m u s t briefly c o m m e n t o n one m i n o r technical matter: the appropriate w a y to convert these g r o u p s of items into useful m e a s u r e m e n t scales. The options are combining the various items in each d i m e n s i o n b y using relatively equal weights or combining t h e m b y using the factor scores that e m e r g e as a b y - p r o d u c t of the confirmatory factor analysis. For reasons of simplicity, w e chose to do the former. N e v e r t h e less, w e did evaluate the consequences of this decision b y constructing the m e a s u r e s b o t h w a y s a n d c o m p a r i n g the resulting scales. The u p s h o t of these comparisons is that it probably makes little difference w h i c h set of scales is u s e d in the s u b s e q u e n t analysis. O n the three m o s t i m p o r t a n t d i m e n s i o n s (due process, mobility assurance, and m a r k e t sheltering), the correlations b e t w e e n the w e i g h t e d a n d u n w e i g h t e d scales for the corres p o n d i n g concepts r a n g e d from .83 to .96. Likewise, the w e i g h t e d a n d u n w e i g h t e d m e a s u r e s had nearly identical correlations with establishm e n t size. Thus, our decision to use the simple, equally w e i g h t e d , additive scales is not likely to have colored our findings v e r y much. 3 These models differ from the previous model (that described in Line 1) only in the way in which they represent the intercorrelations of the five "first-order" latent variables. In the model with no second-order factors (i.e., Line 1), these relationships are represented by the full correlation matrix of the latent variable errors. In LISREL terms, this is a PSI matrix with 10 estimated parameters. In Line 2, the model posits a single second-order factor that "causes" the first-order factor. Thus, the PSI matrix is replaced by five causal coefficients (one of which is fixed by design) and by a single variance term for the secondorder factor--a total of five estimated parameters. This accounts for the difference in degrees of freedom between the two models. Parallel modifications were made to arrive at the two-factor model summarized in Line 3.

70

Chapter 3

With these preliminaries behind us, we n o w investigate h o w various demographically defined groups compared in their involvement with bureaucratic personnel structures. This endeavor will also shed additional light on which of the foregoing theoretical accounts best explains these rather heterogeneous elements of bureaucratic personnel management.

4 The Scope of Bureaucratic Management In this chapter, we evaluate the spread of bureaucratic employment structures across different segments of the population defined with regard to sociodemographic categories, namely, age, race, and gender. The results of this investigation are interesting not only from a descriptive or "social accounting" viewpoint, but also for the insight they provide into h o w these structures affect employees' labor market behavior. That is, if we accept the basic premise that the five dimensions of bureaucratic employment structure are important because they establish more durable links between workers and firms than exist in an unstructured market, the prevalence of these links across different groups will depend on two main factors. The first factor is the relative ability of each group to effect such a connection or, to use terms prevalent in recent social stratification theory, the level of social resources held by each group. In general, we would predict that groups with better resources--more education, more work experience, and better representation in the current decision-making structure--would disproportionately populate the ranks of internal labor markets and rule-ordered personnel systems. However, an equally important factor is the motivation of each group to forge a stronger bond with particular employers. Because this concept is less familiar and, we would argue, often overlooked, some elaboration is in order. The degree of motivation for strong employment ties is a matter that depends upon each group's assessment of its alternative social and economic prospects. Groups that perceive, whether accurately or not, that they face discrimination in the broader labor market are likely to prefer arrangements that stabilize their relationships with particular employ71

72

Chapter 4

ers. On the other hand, groups with strong commitments to alternative bases of affiliation are less likely to prefer these arrangements. In fact, the most t h o r o u g h g o i n g version of this a r g u m e n t postulates that these alternative commitments m a y be not only of the e m p l o y m e n t variety, such as professional membership, but also of the "extraemployment" variety, such as family a n d h o u s e h o l d commitments. The nature of alternative e m p l o y m e n t opportunities is critical, however. As a starting point for our analysis, we draw on transaction cost analysis, which explicitly posits bureaucratic e m p l o y m e n t arrangements ("govemance structures") and market mechanisms as alternative m e a n s of regulating the terms of employment. The key i n d e p e n d e n t variable in that theory, however, is skill specificity--a factor w h o s e causes are not explained u n a m b i g u o u s l y in the theory but that appears to result in large measure from the nature of the technology a d o p t e d by particular firms for particular jobs: "Continuity of the e m p l o y m e n t relation is valu e d by both employer and employee for tasks that involve the acquisition of significant transaction-specific skills, while tasks for which skill acquisition is insubstantial a n d / o r general purpose do not create the same continuity of interests." (Williamson, 1985, p. 255). By implication, where this " h u m a n asset specificity" is missing, external markets are readily available as a means of adjusting worker and employer contributions a n d interests. 1 Our view is based on a s o m e w h a t different model, in which allowance is m a d e for the fact that nonskill considerations m a y influence the " g o v e r n a n c e ' - m a r k e t tradeoff. The most important of these are occupational institutions that arise not only in response to the degree of "firm specificity" of the work performed by a typical incumbent, but also in response to a variety of other social forces. A m o n g these forces are the political activities of the occupation, which result in licensure requirements a n d other restrictive practices, and, second, the occupation's efforts to build occupational social networks and other infrastructures that promote and facilitate intrafirm mobility a m o n g its members. In other words, if the degree of skill specificity is held constant a n d two kinds of 1 Actually,Williamsonalso introduced a second dimension in the classificationof types of employment relationships: the degree to which individual productivity is easily monitored or "metered." Thus, his analysis subdivides work arrangements where asset specificityis present into two subtypes, depending on whether individual productivity can or cannot be easily reckoned. The situation of high observability,he argued, leads to "obligational markets," and the situation of low observability leads to "relational teams." From the present point of view, this distinction is not particularlyimportant because both obligational markets and relational teams include mechanisms for encouraging the continuity of employment relationships between firms and workers.

The

Scope of Bureaucratic Management

73

work differ in the extent to which external opportunities (mobility chances) are institutionalized according to well-defined occupational channels, the less "occupationalized" job will be more likely to be part of a governance structure than the more occupationalized one. The logic of this proposition is derived from Hirschman's familiar "exit-voice" dic h o t o m y (1971) and, in contrast to the single-factor transaction cost model, rests on the assumption that the efficacy of labor markets, at least from the point of view of workers, is itself a contingent variable that cannot be a s s u m e d to be constant. 2 The identification of occupation-specific external markets as an alternative source of stability in e m p l o y m e n t transactions was anticipated by Althauser a n d Kalleberg (1981) in their five-element labor market typology (see also Stolzenberg, 1975). The three types of market arrangements in their scheme entail frequent recourse to between-employer movement: occupational "internal" labor markets (OILMs), occupational labor markets (OLMs), and secondary labor markets (SLAMs). Interfirm m o v e m e n t in the latter category (SLAMs) is largely r a n d o m and unstructured a n d differs markedly from that f o u n d in the first two categories: "Turnover is typical, expected by employer a n d employee alike . . . . Job training is simple and b r i e f . . , there is no inherent potential for orderly m o v e m e n t into other jobs" (p. 136). On the other hand, both occupational "internal" labor markets a n d occupational labor markets per se enable between-firm mobility that is purposive, normatively sanctioned, a n d initiated largely at the discretion of employees. In the Althauser a n d Kalleberg model, these two types are further differentiated by w h e t h e r external job m o v e m e n t necessarily involves a progressive e n h a n c e m e n t of workers' skills and responsibilities (in the "occupational internal" mode, it does). For our purposes, there is no necessity to distinguish b e t w e e n these two occupation-specific types of markets. In this sense, our usage is very reminiscent of Stinchcombe's identification (1979) of a "craft a n d professional" mobility type, in which "people keep the same occupation, but move a m o n g employers. Presumably the most c o m m o n cause of this p h e n o m e n o n is that t h e y are more valuable in the occupation in which t h e y have experience than they are on the open market" 2 There is the possibility, however, that occupational institutions have no direct causal influence on the governance-market tradeoff and that all of their effect is mediated by the degree of skill specificity.This view places occupation forces further back in the causal chain and locates them as a factor parallel to technology as a source of skill specificity. This channel of influence is consistent with a diverse literature that documents the role of occupational and professional groups in striving for work autonomy within larger organizations (Bucher & Strauss, 1961; Freidson, 1984). Although these effects undoubtedly exist, we believe they are not the whole story.

74

Chapter 4

(p. 239). In Stinchcombe's scheme and ours, it is crucial, however, that occupation-specific mobility not be confused with the disorderly movement endemic among jobs in the "secondary" or "open" type of external market. Where movement is haphazard and uncertain, little protection is offered to workers through the "exit" option, and pressure for internal "governance" solutions is not averted. Under these conditions, whether these bureaucratic arrangements are in fact achieved will turn on the resource considerations mentioned above. The transaction cost model also adds a second consideration to the explanation of the mobility component of structured employment relations: the difficulty of making short-run measurements of individual employees' productive contribution. The basic idea here is that, if information about an employee's worth is unreliable, either because the nature of the work inhibits easy observation, because the employee manipulates his or her presentation of himself or herself, or because the employer lacks appropriate measuring skills, it is advantageous for the employer to defer rewards through a sequential mobility process rather than deliver all of the benefits "up front." We might suspect that, if employers, a generally white, middle-class group, have particular difficulty in assessing the performance of minority group workers, a common strategy would be to assign them more frequently to job ladders-although ones at a fairly low level--than they would comparable white employees. This may be particularly true for minority individuals w h o are at the low end of the usual scales on which future productivity is judged, that is, education and experience. On this basis, therefore, we might predict a negative association between the conventional "human capital" factors and participation in job ladders for minority group workers. On the other hand, it is possible that a diametrically opposed set of forces is operating. If minority group members place greater value on job security and procedural fairness in their dealings with their current employers, it is likely that blacks with the most social resources would be those with the most success in obtaining bureaucratically structured jobs. Perhaps the most realistic expectation, therefore, is that education and experience for minorities are more positively related to due process and bureaucratic work control than they are to participation on job ladders. This hypothesis will be examined empirically when we look at the "within-group" results below. To return to our main argument, to evaluate the access of w o m e n and racial minorities to internal labor markets and other bureaucratic job structures, two major considerations must be addressed. The first is the issue of social resources. Are members of disadvantaged minority

The Scope of BureaucraticManagement

75

groups handicapped by a lack of education and continuous labor force participation in escaping from dead-end jobs? To what extent are they deprived of opportunities to acquire firm-specific skills that, if obtained, would induce employers to include them in schemes for enhancing mobility and firm commitment? The second is the matter of access to alternative employment prospects. To what degree do w o m e n and minorities work in occupational contexts in which orderly between-firm movement is difficult? To what extent does such difficulty impel them to seek a bureaucratic or organizational solution to the problem of employment stability? A somewhat different set of issues is posed in analyzing the relationship between age and participation in various internal-labor-market structures. By their very nature, internal promotion sequences and other governance mechanisms are implemented as career-organizing devices and, of necessity, are age-related. This patterning formed the basis of Kaufmann and Spilerman's innovative analysis (1982) of the relationship between age distributions and institutional forces across occupational groups. However, because their study regards the age structure of an occupation as the dependent variable, it is of only indirect relevance to our purpose of explaining how workers' ages affect their levels of participation in bureaucratic governance structures. We begin this endeavor by focusing on the two variables most strongly related to internal labor markets in our scheme: protection from outside hiring and mobility chances. The total effect of an individual's age on these variables may be usefully considered as the combination of two components. The first of these is the probability that an individual of a given age is part of a job ladder at any level or "rung." Because recruitment to job ladders typically takes place at the beginning of careers, most age-related change in participation rates on job ladders results from exits, not entrances. For example after age 30, very few workers are selected into "ports of entry," and as any cohort ages, the numbers of people exiting job ladders can be expected to increase--perhaps gradually at first, but then with increasing force. Thus, if this were the only operant consideration, we would expect that individuals' mobility chances and protection from outside hiring would decrease throughout the life cycle at an increasing rate. However, the second component we must consider is the conditional probability that an individual has either hiring protection or job mobility opportunities given that he or she is an internal-labor-market participant. The age patterning of these conditional probabilities is probably different for the two variables. For individuals in an internal labor market, mobility chances are probably high initially, level off, and then

76

Chapter 4

decline as workers reach the end of their productive careers. By contrast, protection from outside hiring is probably minimal at the "entry-port" career phase and gradually increases, although at a decreasing rate, as one's career in an internal labor market (ILM) progresses. In this model, the overall probability of being in a job with structured mobility opportunities or protection from outside hiring would be the product of the probability of being part of an ILM and the conditional probability of having structured mobility chances given membership in the ILM. Based on the discussion above, we would expect the age patterning of both mobility chances and hiring protection to have an inverted and somewhat asymmetric U shape. For mobility chances, the "hump" in the U should occur relatively early in the life cycle and should be followed by consistent declines in chances thereafter. For job protection, the peak levels ought to occur later in the career, with a somewhat steep drop off in subsequent years, as significant proportions of individuals leave ILMs. The other "governance" factors investigated in this s t u d y - - d u e process arrangements, bureaucratic work control, and personnel departments--have less significance as "career-organizing" mechanisms and are probably less patterned by age than the internal-labormarket variables. Consequently, the relationships between these variables and age is probably governed to a much larger extent by the factor of work experience than is true of mobility chances and job protection. That is, age as a sociological variable is necessarily related to a "socialresource" component (work experience) and a life-cycle component (career stage). For the ILM variables, the life-cycle component can be expected to exert a strong independent influence; for the other variables, this is less true, and after work experience is taken into account, any age effects should be slight. The social resources normally associated with the term human capital can also be expected to influence individuals' exposure to a structured employment relationship. In the institutional-bureaucratic theory, one would expect education to be strongly related to almost all aspects of these personnel structures. With their emphasis on written rules and procedures and with their proclivity to recruit workers on the basis of technical competence, bureaucracies tend to have more educated work forces and more structured personnel relationships. Furthermore, to the extent that education raises individuals' bargaining power with employers, they should enjoy better mobility prospects, more protection from outside competition, and more protection through due-process guarantees. The role of work experience is somewhat less clear-cut, but it is likely that it, too, functions as a resource that employees can bring to

The Scope of Bureaucratic Management

77

bear to enhance the institutionalization of their job security and their employment rights. With these considerations in mind, we are n o w in a position to state our expectations about the relative access that various groups have to structured employment relationships. White males should have consistently better mobility chances and protection from outside hiring than white w o m e n and blacks of either sex. These advantages in internallabor-market participation should, however, decline after education and work experience are taken into account. Similarly, we expect that white males have better opportunities to obtain postschool training, and since we expect a positive relationship between postschool training and mobility chances, white males' internal-labor-market advantages should be further reduced after training opportunities are statistically adjusted. On the other hand, white males are probably better positioned with regard to external mobility opportunities in occupational labor markets than are the other groups. Since we expect external occupation labor markets to be negatively related to internal markets and other bureaucratic employment mechanisms, controlling for this factor should increase our estimates of white males' position vis-a-vis the other groups. Predictions about how white males compare to other race and gender groups on access to due process, exposure to bureaucratic work control, and coverage by personnel departments would have to be tempered by the recognition that these work aspects, especially bureaucratic work control, are not themselves unmitigated benefits to all individuals. Although, in general, having one's work life subject to lawlike rules and procedures may seem preferable to serving at the whim of an arbitrary master, bureaucratic control comes at the price of a sacrifice of autonomy, flexibility, and, perhaps, creativity. For this reason in particular, we might expect that these aspects of structured employment relationships are more appealing to minority group members than to majority group members and that controls for social resource variables would not diminish these patterns.

MEASUREMENT CONSIDERATIONS

Appendix E contains a full description of the procedures used to produce one measure of employees' access to a well-defined occupational labor market. This measure is constructed entirely from a data source that is external to the MEWS study and its questionnaires: the January 1983 Current Population Survey (CPS). Through an analysis of job movement patterns of individuals classified according to the detailed occupa-

78

Chapter 4

tion scheme (at the three-digit level), a factor score was derived from the CPS that measures the extent of between-firm occupational mobility that is characteristic of each occupation. Individuals in the MEWS sample were then assigned the "occupational labor market" score that corresponded to their current occupation. As a supplementary measure, we included an additional variable that was based on individuals' responses in the MEWS survey. That variable is a dichotomy on which positive responses were accorded to those who said that they had had a distinct occupational preference w h e n they were searching for their current job and who reported that their first occupation for their current employer was the type of work they had been seeking. The reasoning behind this measure is that a successful within-occupation search depends to a considerable extent on the presence of a well-defined occupational labor market, particularly after education and work experience are taken into account, as they were in the subsequent analysis. In the analysis that follows, the CPS-based measure is referred to as "high-mobility occupation," and the individual job-search-based measure is called "successful occupational search."

FINDINGS

Because of the complexity introduced by the age variable, we will defer those results until we have completed a basic orientation to the differences between the race and sex groups. Table 4.1 contains a summary of the univariate distributions of the variables used in our models. The pattern of differences on the social resource variables--education and work experience--is close to expectations. White males had the highest mean years of schooling (nearly 14) and the longest mean number of years of work activity (about 18). Black males were, on average, the least-educated group, and white females had the shortest length of working life. In general, the work experience differences appear to be more dramatic than the educational ones. The training variables present something of an ambiguous message. White males reported by far the longest length of training--almost 21/2 y e a r s - - a n d black males reported the least, a figure close to 1 year on average. The levels of participation in white-collar jobs also follow an orderly pattern: Women were more likely to work in nonmanual jobs than men, and whites were more likely to be white-collar workers than blacks. The combined effect of these trends is such that white women were nearly twice as likely to work in white-collar jobs than were black men. This same pattern reoccurs with regard to external occupational-labor-market

The Scope of Bureaucratic Management

79

Table 4.1. Means of Independent and Dependent Variables

by Sex and Race Categories

Years of education Years of work experience Training by coworkers Length of training period (weeks) White-collar job Successful occupational search Occupation mobility score Age category (%) Under 25 25-34 35-44 45-54 55 and over Mobility Hiring protection Due process Bureaucratic control Personnel department Number of cases

Total

White female

White male

Black female

Black male

13.8 16.3 0.157 89.4 0.653 0.231 -0.120

13.7 13.2 0.167 47.0 0.792 0.273 0.060

14.0 18.1 0.144 124.5 0.594 0.220 -0.236

13.5 15.8 0.141 61.2 0.673 0.234 0.025

12.7 17.3 0.240 55.9 0.373 0.093 -0.303

14 35 22 16 13 1.70 1.47 2.60 2.80 3.21 2,487

17 34 21 16 12 1.54 1.25 2.60 2.85 3.13 825

12 36 23 17 13 1.76 1.60 2.50 2.67 3.20 1,307

12 34 23 18 13 1.86 1.38 3.04 3.22 3.50 205

12 41 21 12 14 1.84 1.74 2.98 2.96 3.29 150

participation, a l t h o u g h the size of the differences a p p e a r s to be d i m i n ished. N e v e r t h e l e s s , white w o m e n w e r e the g r o u p m o s t likely to be in a high-external-mobility o c c u p a t i o n a n d to h a v e f o u n d a job in a n occupation t h e y w e r e searching for, a n d black m a l e s w e r e the g r o u p at the o t h e r e n d of each of these continua. Because of the strong similarity a m o n g these patterns, it is t e m p t i n g to speculate that i n c u m b e n c y in a white-collar job is a factor that explains the possibilities for orderly external m o v e m e n t . As w e shall see shortly, there is only a w e a k association b e t w e e n these characteristics, a n d their effects on participation in internal-labor-market structures are largely i n d e p e n d e n t . Tables 4.2 t h r o u g h 4.6 p r e s e n t the differences b e t w e e n w h i t e males, black males, w h i t e females, a n d black females o n o u r five g o v e r n a n c e structure variables before a n d after the introduction of a variety of statistical a d j u s t m e n t s . (The race-by-sex g r o u p coefficients are b a s e d o n the "effect c o d i n g " m o d e l , in w h i c h the coefficient for a particular g r o u p r e p r e s e n t s the difference b e t w e e n that g r o u p a n d the overall m e a n . In this coding s c h e m e , w h i t e females w e r e the reference g r o u p that w a s excluded f r o m the equation. The coefficients for w h i t e females s h o w n in these tables w e r e derived b y calculating the a p p r o p r i a t e linear c o m b i n a -

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The Scope of Bureaucratic Management

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tion of the coefficients for the three "included" variables. 3) In each of these tables, four models are presented: (1) the uncontrolled differences between the four demographic groups; (2) the differences after adjustm e n t for the years of education a n d the n u m b e r of years of work experience; (3) the differences after adjustment for education, work experience, the status level of the job (white vs. blue collar), and two training v a r i a b l e s - - w h e t h e r training was provided exclusively by coworkers a n d the length of the training period in weeks; and (4) the differences after a d j u s t m e n t for all the foregoing plus the two external-market-related variables: successful occupational search a n d high-mobility occupation. Internal-Labor-Market-Access: W o m e n

It is c o m m o n l y asserted that w o m e n are particularly disadvantaged in competing for positions within internal labor markets (Evans & Nelson, 1989). Tables 4.2 and 4.3 provide data that largely substantiate the view that w o m e n are overrepresented in dead-end jobs. This is especially true with respect to white w o m e n , w h o are s h o w n in Table 4.2 to be significantly below average in their structured mobility chances and, in Table 4.3, to be significantly below average in their protection from outside hiring. Black w o m e n appeared to be in s o m e w h a t more ambiguous circumstances. Their structured mobility opportunities were slightly above average (although not significantly so), a n d their protection from outside hiring was slightly below average (although, again, not significantly so). Additional statistical tests revealed that the w o m e n as a group consistently faced more external competition t h a n did m e n (see Table 4.3), a n d their mobility chances compared to those of males were affected by a host of other variables, whose impacts we will consider shortly. It is worth repeating that black w o m e n were not particularly disadvantaged with regard to internal firm m o v e m e n t opportunities a n d that whatever "female" disadvantage existed s t e m m e d from the relatively bleak situation encountered by white w o m e n . Models 2, 3, a n d 4 of Tables 4.2 a n d 4.3 progressively take into account a greater variety of additional influences on internal-labormarket participation. In Models 2 and 3, for example, it is clear that the 3 The significance level for the white female variable was calculated by means of the "TEST" option in the Statistical Analysis System (SAS) regression procedure (PROC REG). The same option was used to conduct tests of statistical significance of other groups of variables in the equation, for example, the equality of the coeffidents for black males and white males. Note that the intercept in these equations is not the grand mean of each of the dependent variables but, because of unequal numbers of cases, is the unweighted mean of each of the subgroup means.

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The Scope of Bureaucratic Management

83

mobility disadvantages of white w o m e n were not due to their levels of human capital (as indicated by years of education and work experience in Model 2), nor were they due to placement in jobs that differed in terms of training opportunities or general status (white collar vs. blue collar). In fact, once these influences were taken into account, their disadvantage increased in size. That is, if the white w o m e n had been less well educated and had found their w a y to jobs with lower training opportunities, they would have had even fewer mobility chances than they did have. This pattern is somewhat different for the "sheltering" variable, where white women's greater market exposure was largely unaffected by controls for human capital and job training. Black women's internal labor market positions were less influenced by education, experience, and job status, mostly because black w o m e n as a group were closer than white w o m e n to the overall means on most of these variables. Model 4, which adds the impact of external-labor-market conditions, evokes some extremely interesting conclusions. First, both external-labor-market indicators have large and statistically significant effects in the hypothesized negative direction. It is particularly persuasive that the variable on the more remote source of data (a national CPS sample) has the larger impact. Thus, there is a good measure of support for one of the tenets of the "governance structure theory," that fungible jobs are less likely to be included in internal-labor-market systems than nonfungible or idiosyncratic ones. However, the pattern of results in this table seems not to reflect the nature of on-the-job or coworker training to the extent that the theory predicts. That is, the effects of external markets appear in a model in which training factors have already been controlled and the external market variables do not appear to diminish the role of the training variables much at all. That is, occupational markets, as we have hypothesized, seem to have a "life of their own," which is independent of the widely publicized matter of "firm-specific" skills or of asset specificity in general. An equally provocative set of findings, however, appears when we consider the impact of occupational external markets on the gender effects in these two tables. As we hypothesized, part of the reason that females in general, and white females in particular had less access to internal labor markets was that they had more involvement in external labor markets. For white females, the introduction of controls for external-labor-market viability sharply reduced our estimate of their lack of protection from outside hiring (in the institutional structure of their own firms) and moderately reduced our estimate of their disadvantages in gaining access to structured mobility opportunities. For w o m e n as a

84

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whole, the introduction of controls for external markets reduced their measured disadvantage in mobility opportunities to a nearly nonsignificant level, and there was a parallel effect for their deficits in protection from external hiring. What is impossible to know from this analysis, however, is the causal priority to be accorded to internal and external labor markets in this negative relationship. Do external markets assume increasing importance when members of an occupational group find their internal advancement paths stymied? Or does the ready availability of qualified incumbents obviate employers' need to construct buffered, internal sources of supply? We shall return to this question when we examine the effects of these variables on due-process arrangements, bureaucratic control, and employment under the auspices of personnel departments. Internal-Labor-Market Access: Blacks

The relevant results are again provided in Tables 4.2 and 4.3. Considered separately, black males and black females had relatively unremarkable patterns of access to structured promotion chances. When taken as a group, however, and compared to whites, it becomes clear that black workers enjoyed a more favorable position than white workers with regard to internal promotion chances. This is a rather surprising finding and deserves some additional exploration. First, this result does not necessarily imply that black workers were placed at a higher level than whites inside each employer's internal job hierarchy. Nor does it guarantee that in terms of actual promotion probabilities they would have surpassed whites. In fact, if members of each race group had been equally likely to be included on job ladders, and if at the same time, whites had been promoted faster than blacks, the percentage of blacks with "promotion opportunities" left would have exceeded the percentage of whites with promotion opportunities remaining. To put it differently, whites would have tended to "top out," and blacks would have had more unrealized opportunities. Another alternative explanation, which will have to wait for further empirical attention until the next chapter, is that the effect was mostly a "compositional" one: Blacks were more likely to be employed in firms and industries that had structured mobility chances, but within those types of companies, their relative access to job ladders may have been no different, or perhaps, may even have been inferior to whites' access. The matter of protection from external hiring competition is one that black males and females experienced differently. Black males were consistently more sheltered from external hiring than the average group

The Scope of BureaucraticManagement

85

(an effect that is statistically significant), and black females were consistently less sheltered than the average group (although the effect is not statistically significant). The overall black-white comparison on this factor depends, not unexpectedly, on which other variables are in the model w h e n the comparison is made. Before considering these other influences, however, it should be reiterated that our findings do not support a simplistic discrimination hypothesis that blacks are ubiquitously underrepresented in internal labor markets. In tracing the relationships among race, h u m a n capital, training, external labor markets, and internal labor markets, it is useful to restrict attention initially to black males. For them, the results showed that their mobility chances were especially good only in light of their diminished levels of h u m a n capital, training, and occupational status. That is, only w h e n these factors were taken into account did their structured mobility chances statistically exceed those of the average group. Interestingly, w h e n the viability of external labor markets is introduced as a confounding factor, their estimated advantage returns to its prior insignificant status. In other words, with the inclusion of their personal and training characteristics, black males had better internal mobility chances--but these could be explained away by their underrepresentation in externallabor-market occupations. When blacks are considered as a group, a very similar pattern emerges. It is somewhat clouded by the fact that black males and females had different relative levels of representation in the external market types of occupations. The patterns for protection from outside hiring are quite similar to these w h e n comparisons are made between blacks in general and whites in general, or w h e n they are made between black males and white males. In other words, there are initially no real differences; blacks appear to have surpassed whites w h e n human capital and training are factored in; those advantages disappear w h e n external market opportunities are introduced. These effects do not come through so clearly w h e n black males are compared to the "average group," but this speaks more to the special situation of white women than to that of black males. To summarize, in our study, there was a predictable, but not obvious, relationship between "minority" status and internal-labor-market participation. White w o m e n generally had less access to structured promotion opportunities and were in jobs that were less buffered from external hiring competition. The degree of their underrepresentation was diminished, but not explained entirely, by their greater representation in occupations where external markets were more important. Black males had higher ostensible representation in internal labor markets, especially in light of their weaker stocks of human capital and posthiring training. This appar-

86

Chapter 4

ent superior placement was coupled with greatly diminished access to structured occupational markets. When the later is taken into account, the levels of internal market participation look much less exceptional.

Due Process and Employment Bureaucracy: Women In the next two sections, our attention turns to those aspects of employment structure that are more concerned with procedural issues and less concerned with career issues per se. That is, in our study, even employees in dead-end, openly competitive jobs were affected by the availability of grievance mechanisms and the presence of systemized work and personnel policies. The results in Table 4.4 suggest that white w o m e n fared no better in gaining access to due-process mechanisms than they did in securing places on mobility ladders or in shelters from external hiring competition. Table 4.5 suggests that their jobs were also slightly less likely to be subject to bureaucratic control mechanisms, and Table 4.6 confirms that they were significantly less likely to be in jobs covered by personnel departments. There is an important difference, however, in these patterns compared to those in Table 4.2 and Table 4.3. White males tended to be in jobs in which these aspects of employment structure were even less salient than they were in white females' jobs. The same patterns also tend to hold for black males and black females, that is, men lagged behind w o m e n in their access to procedural regulation of the employment relationship. The overall gender differences are consistently strong enough, however, to produce statistically meaningful differences between all men and all w o m e n with regard only to the levels of bureaucratic control. The role of the human-capital, training, and occupational-labormarket variables is somewhat more confused here than it was in the analysis of internal labor markets. White women's deficits in due process, regulation by rules, and incorporation in personnel systems are mitigated somewhat when their position in occupational labor markets is taken into account, but their position on all three variables remains significantly worse than average. The patterns shown here do not refute the existence of an "exit-voice" tradeoff, but for white w o m e n the terms of the trade appear to be rather unfavorable. To obtain "average" levels of due process on the job, white w o m e n had to be in jobs with much lower external mobility opportunities than was true for the average group.

Due Process and Employment Bureaucracy: Blacks Black workers were, on average, much more likely than whites to be in jobs regulated by due-process provisions. This was true for black

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Chapter 4

males as well as black females. Considering black males and females as a single group, one also observes that their exposure to bureaucratic rules and personnel departments significantly exceeded that of whites as a group. The racial disparities in involvement with personnel departments seem to have been largely restricted to females, however. There is enough consistency in these findings to give pause to those w h o would interpret all social outcomes in terms of some global concept of "minority" status. Race and sexgroup patterns diverged routinely for these employment indicators, and it is difficult to assert that "employer discrimination" accounted for both white women's underinvolvement with due-process arrangements and black males' apparent immersion in them. The modified transaction-cost model, which posits external occupational mobility and internal allocation systems as alternative means of employment regulation, does fairly well in explaining the distribution of internal-labor-market opportunities--which is, after all, the problem that gave rise to its genesis--but it is less persuasive in accounting for racial patterns in employment "proceduralism." There are several possibilities. Foremost among them is that our measure of external occupational mobility is based on occupational membership and relies on the assumption that once occupation is taken into account, differences between individuals in ascriptive characteristics, such as race, will be of minimal importance in explaining job-seekers' success with other employers. This, of course, need not be the case. The systematic differences between occupations that we have discovered in no w a y foreclose the possibility that there are considerable racial differences within occupations in h o w effective they are as career-organizing devices for their incumbents. To evaluate this possibility and our hypothesis about the group-specific pattern of association between social resources and governance structure, we now turn to the within-group statistical models.

Patterns within Subgroups The relevant results are presented in Table 4.7, which focuses on the internal-labor-market variables, and Table 4.8, which considers due process and employment bureaucracy. With regard to mobility and hiring protection, there is little evidence that occupational markets were any less an alternative to internal markets for blacks than they were for whites. External occupational markets also seemed to function equivalently for males and females. Education was negatively related to structured mobility opportunities among white and black females, although this effect is statistically significant only in the latter group. Experience

91

The Scope of Bureaucratic Management

Table 4.7. D e t e r m i n a n t s of I n t e r n a l - L a b o r - M a r k e t C h a r a c t e r i s t i c s w i t h i n Race-by-Sex G r o u p s Structured job mobility

White females Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared White males Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared Black females Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared Black males Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared

b

t

-.033 -.026 -.192 2.49e-04 .182 -.123 -.282

-1.50 -4.90 -1.42 .809 1.38 -1.07 -3.94 .047

-.024 .008 .116 1.82e-04 .085 -.058 -.555

-1.25 1.66 .987 .681 .740 -.582 -8.91 .106

.028 -.019 -.196 3.45e-04 .520 -.174 -.332

1.55 -5.57 -1.71 2.53 5.33 -1.78 -6.28 .102

- . 014 .002 .062 5.68e-04 .189 -.454 -.460

- . 789 .523 .580 4.41 2.05 -4.94 -9.24 .115

-.132 -.022 -.220 2.05e-04 .198 -.082 -.356

-2.49 -2.23 -.748 .339 .781 -.343 -2.47 .039

.029 -.006 -.008 5.93e-05 .488 .047 -.566

.652 -.695 -.032 .118 2.32 .235 -4.74 .128

-.017 4.16e-04 - . 127 5.97e-05 .694 -.508 -.415

- .321 .038 - .439 -.095 2.54 -1.21 -2.79 .077

- .024 .003 .016 -3.30e-04 .105 -.341 -.490

- .477 .287 .056 -.545 .395 -.836 -3.39 .048

unstandardized regression coefficient t = value of t-statistic for each coefficient

Note: b =

Hiring protection b

t

Chapter 4

92

Table 4.8. D e t e r m i n a n t s of G o v e r n a n c e S t r u c t u r e C h a r a c t e r i s t i c s w i t h i n Race-by-Sex G r o u p s Due-process arrangements b

Bureaucratic control

Personnel department

t

b

t

b

t

White females Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared

.032 .002 -.233 5.3e-04 -.068 .088 -.271

1.85 .563 -2.18 2.18 -.654 .965 -4.78 .042

.058 -.001 -.316 2.8e-04 -.274 .03 -.133

2.83 -.219 -2.42 .841 -2.18 .274 -1.95 .025

-.011 .005 -.383 4.4e-04 .070 .214 -.216

-.427 .763 -2.34 1.16 .448 1.56 -2.53 .014

White males Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared

-.011 -.006 -.144 2.9e-04 -.060 -.085 -.189

-.689 -2.18 -1.49 2.54 -.724 -1.04 -4.23 .021

.036 .000 -.039 3.5e-04 .356 -.029 -.280

1.98 .081 -.355 2.70 3.77 -.305 -5.39 .085

.078 .016 -.044 2.2e-05 .046 -.109 -.383

3.77 4.10 -.030 .143 .416 -.973 -6.35 .075

Black females Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared

.036 -.008 -.403 -2.7e-04 -.012 .131 -.211

.941 -.013 -1.18 -.007 -1.89 -.313 -.621 3.3e-04 -.064 .347 .754 .153 -2.02 -.123 .025

-.375 -1.21 -1.82 .837 2.26 1.08 -1.46 .064

-.005 -.011 -.403 5.3-04 .275 -.036 -.395

-.098 -1.18 -1.49 .873 1.17 -.167 -2.97 .048

Black males Education Years of work experience Coworker training Length of training White-collar job Occupation search High-mobility occupation R squared

.078 .016 -.002 2.7e-04 .008 -.559 -.005

2.24 2.08 -.009 .626 .041 -1.96 -.050 .038

1.26 .018 1.62 .-.002 -1.23 -.281 .844 8.7e-05 1.77 .302 .959 -.148 -.847 -.105 .082

.305 -.193 -.827 .129 .965 -.282 -.574 .000

Note: b = unstandardized regression coefficient

t = value of t-statistic for each coefficient

.047 .014 -.284 3.8e-04 .390 .317 -.103

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93

was also negatively related to mobility in both these groups, a finding suggesting that our hypothesis about the use of mobility ladders as "internal" screening devices for minorities is accurate, if w o m e n can be considered a minority in this context. This support is only tentative, however, because there was a strong negative association of mobility opportunities with experience for white males as well. In fact, the relationship between work experience and access to mobility opportunities may have been largely a function of age for all g r o u p s - - a possibility that we will address in the next section. Table 4.7 also reveals some patterns that we did not anticipate in our theoretical investigation. The most important of these is that the relationship between training and the internal-labor-market variables held only for white males. This is difficult to reconcile with internal-labormarket theory, which does not qualify the applicability of its arguments to particular groups of employees. One possibility is that training had the expected relationship for the other groups as well, but that it disappeared when the occupational market variables were added to the analysis. In a separate analysis that is not shown, these models were rerun without the occupational market variables. There was no change in the pattern of results: Job training continued to be unrelated to internal labor markets except among white males. If we refer back to Table 4.1, we see that white males were also the group with the longest periods of job training by an extreme margin. In other words, the reason that women's and blacks' internal labor positions did not reflect their job training statuses may be that their levels of job training fell below a threshold level at which these effects begin. (Other research also shows that women, in particular, are less likely to have access to posthiring training opportunities; see Duncan, 1986.) Another fairly consistent pattern is that white-collar employment was associated with internal-labor-market standing for males but not for females. This does not necessarily mean that w o m e n were excluded from internal labor markets in white-collar j o b s - - w e know from other studies that they are involved in ILMs in some contexts (DiPrete, 1989)--but it does imply that white-collar work settings, the ancestral "home" of bureaucratic work arrangements, did not necessarily promote women's career opportunities in the same w a y they promoted men's. It is also true that women tended to be segregated from men in different kinds of white-collar occupations and that different results would have been obtained if we had made comparisons among managers, professionals, technical workers, and so on. Table 4.8 provides parallel information about the predictors of due process and bureaucratic work arrangements within each of our demo-

94

Chapter 4

graphic subgroups. The results are different from those for internal labor markets in several important respects. First, external occupational markets h a d the expected negative relationships to these variables for all groups except black males. This is evidence in favor of the proposition that external markets m a y not be particularly useful for black males as an alternative avenue for providing fairness and regulation of the employm e n t relationship. In other words, external market opportunities m a y not be structured in such a w a y that "exit" is a realistic alternative to "voice." The fact that black males h a d high relative levels of d u e process a n d low relative levels of occupationally structured external mobility is consistent with this interpretation. If one's outside prospects are dim, better to stay a n d fight than to trade the frying pan for the fire. Also as we expected, in this table, there are no negative relationships b e t w e e n education and structured e m p l o y m e n t relationships. However, we find positive relationships a m o n g all groups (including white males), casting doubt on the hypothesis that minorities are more willing than white males to spend their social resources on regulated e m p l o y m e n t relationships. Three other patterns are of some interest in this table. First, white-collar jobs are positively associated with bureaucratically controlled e m p l o y m e n t relations for all groups except white females. The lack of association for females is difficult to explain with the data at h a n d a n d suggests the possibility that u n m e a s u r e d occupational differences m a y have been playing a role. Second, the positive "lengthof-training" relationships n o w extend to white females as well as white males, at least with respect to access to due-process mechanisms. Third, there are n o w consistent negative relationships b e t w e e n "coworker"provided training and all three structured e m p l o y m e n t relationships a m o n g female workers (the level of statistical significance is low a m o n g black females, however). Although more definitive findings are deferred to the next chapter, it is likely that the negative effect of coworker training for females stems from a case of "spurious" causation. That is, for w o m e n , large firms m a y be places in which coworker-provided training is scarce a n d structured e m p l o y m e n t relationships are commonplace. It is likely that either or both of these relationships hold less strongly for male workers. 4 4 An alternative analysis was performed in which the coworker training variable was measured in a slightly altered fashion. Rather than indicating that "all" training was provided by coworkers, this alternative variable referenced the situation where at least "some" of the training was provided by coworkers. In other words, the alternate variable was a more inclusive measure of training being provided by coworkers. The result of using this changed variable was that the significant negative effects of coworker training disappeared. They were not, however, replaced by significantpositive effects, nor were the effects of other variables in the model affected.

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95

The weight of evidence about internal-external market relationships from these separate, subgroup analyses, however, rests on the side of consistency. For most groups and most variables, viable external occupational markets decreased workers' involvement with internal-labormarket mechanisms and, for the most part, with more general facets of employment bureaucracy. This consistency is even more surprising when we recognize that job training, education, and work experience were related to internal labor markets and employment bureaucracy in a much more varied fashion. Age-Group Effects In Figure 4.1, we have plotted the mean values of each dependent variable for five separate age groups. The scale for the two internallabor-market variables is shown on the right vertical axis, and the scale for due process, bureaucratic control, and personnel departments is shown on the left vertical axis. Both of the internal-labor-market variables follow the hump-shaped distribution that we predicted. Moreover, the peak mobility rates occur at younger ages than the peak rates of hiring protection. This is, of course, the pattern one would expect as individuals progress through the ranks of internal labor markets: Mobility possibilities level off as employees near the upper rungs of job ladders, but their protection from external competition continues to increase until late in the career. We suspect, but cannot prove, that the decline in job protection among the oldest workers represents not an increase in competition within internal labor markets, but an increased frequency of exit from ILMs per se. Rates of bureaucratic control and involvement with due-process mechanisms do not appear to have varied much across age groups. This is also consistent with our expectation that these variables have less importance than mobility structures and hiring protection as careerorganizing devices. There is, however, a strong patterning of involvement with personnel departments as workers age. Although we have no supporting data, personnel departments may be closely linked to the provision of retirement benefits by employers. If so, it would be reasonable for older employees to choose to work in those settings where retirement benefits are most likely. An interesting question is whether these age patterns were constant for the various sociodemographic groups that we considered in this analysis. Table 4.9 presents regression coefficients for age and experience, which, for reasons of parsimony, have been excerpted from a set of more comprehensive regression models that included all of the other variables included in the previous models. Thus, these coefficients are

96

Chapter 4

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,~,

Due process

Personnel department

Figure 4.1. Employment structure variables by age. uncontaminated by the effects of education, training, white-collar job status, and our indicators of external market viability. The coefficients for the age group variables are coded in a somewhat unorthodox fashion. Each coefficient represents the change of the named age category from the immediately preceding category. For example, the value of -.300 in the third row of the white female column of the "mobility" panel can be interpreted to mean that mobility scores for white females decline by a value of .3 between the 25-34 age group and the 34-44 age group, s The age coefficients were defined in this way to allow an easier comparison of age trends across the different subpopulations included in this table. Because bureaucratic work control and the presence of personnel departments seem to be largely unaffected by age and experience in these tables, we will restrict our attention to structured mobility, hiring protection, and due process. As an additional aid to interpretation, Figures 4.2, 4.3, and 4.4 present the predicted values from these models calculated across the various age levels. (The values assumed for the other variables were as follows: education = 13 years; length of job training = 52 weeks; training by coworkers = .2; white-collar job = .5; successful job-specific search = s The age variables have also been coded in such a way that the omitted category effect (for individuals under 25) would be calculated by multiplying the sum of the included category coefficients by minus one; that is, the sum of the coefficients across all five categories is zero.

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97

Table 4.9. Age and Experience Coefficients within Race-by-Sex Groups White females

White males

Black females

Black males

b

t

b

t

b

t

b

t

-.018 .177 -.300 -.038 .094

-2.14 1.24 -2.04 -.227 .461

-.010 .128 .076 -.240 -.162

-.965 .839 .538 -1.47 -.922

-.022 .132 -.532 .655 -.226

-1.31 .411 -1.76 1.95 -.546

-.019 -.152 -.559 .918 .319

-.765 -.379 -1.48 1.91 .591

H i n n g protection Experience .023 25-34 .397 35-44 -.389 45-54 .065 55 and up -.312

3.06 3.24 -3.06 .453 -1.78

.019 .417 -.010 -.272 -.453

1.90 2.91 -.075 -1.78 -2.74

-.006 .307 -.212 -.036 .073

-.399 1.14 -.835 -.128 .209

-.040 -.336 .609 .919 -.475

-1.68 -.861 1.66 1.97 -.905

Due process Experience 25-34 35-44 45-54 55 and u p

.007 .160 -.210 .001 .013

1.03 1.43 -1.80 .009 .081

-.014 -.065 .047 .120 .056

-1.61 -.506 .394 .869 .377

-.032 -.447 -.170 .718 .417

-2.69 -1.95 -.789 3.00 1.42

.013 .309 -.025 .169 -.367

.752 1.11 -.097 .508 -.982

Bureaucratic control Experience .000 25-34 .112 35-44 -.178 45-54 -.015 55 and u p .114

.060 .839 -1.24 -.095 .575

-.002 -.227 .075 .005 .173

-.227 -1.47 .523 .029 .931

-.009 -.069 -.072 -.008 .223

-.765 -.316 -.376 -.039 .798

.024 .026 -.611 .421 -.029

1.22 .086 -1.97 1.09 -.076

Personnel department Experience .001 25-34 -.054 35-44 -.066 45-54 .108 55 and up .109

.062 -.323 -.371 .547 .455

.000 -.124 .205 .223 .005

-.013 -.707 1.25 1.19 .025

-.016 -.087 -.047 -.381 .760

-.948 -.283 -.166 -1.22 1.90

-.005 .390 -.304 -.498 .897

-.166 .847 -.674 -.878 1.51

Mobility Experience 25-34 35-44 45-54 55 and up

Note: b = unstandardized regression coefficient

t = value of t-statistic for each coefficient

.25; and occupation mobility score = 0. The value of the experience variable used was calibrated to the age group in question as follows: under 25 years old = 1 year's experience, 25-34 = 10 years' experience; 35-44 = 20 years' experience; 45-54 = 30 years' experience; 55 and over = 40 years' experience. It should be noted that the addition of these experience effects eliminates any simple correspondence between the values in Table 4.9 and the values of adjacent age categories in the figures. That is, depending on the sign of the experience coefficient,

98

Chapter 4

2.5

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on

o

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0 Under 25

25-34

35-44

45-54

55 and over

AGE GROUP .L

White female

o

Black female

......

White male Black male

Figure 4.2. Predictedvalues of structured mobility:Raceby sex by age group.

increases in experience may completely offset the net effects of age, shown in the table, w h e n the predicted values are calculated). Inspection of the graphs in the figures and the corresponding coefficients in Table 4.9 reveals some interesting discrepancies. In Figure 4.2, the age patterns of mobility were quite different for white males and the other groups. Although the "humped" mobility shape is not especially pronounced for white males, it is clear that they were different from other groups in avoiding a sharp dropoff of access to structured mobility opportunities in their 30s and early 40s. (The declining values are statistically significant for two of the other demographic groups, the black and white females.) A somewhat surprising pattern is that black workers actually improved their mobility positions during their 40s. This pattern cannot be entirely exphined by the data at hand, although it may represent a kind of "equal employment opportunity" effect if the implementation of these laws made it possible for minority workers who had "topped out" on their old job ladders to move to new job ladders that had formerly been beyond their reach. Figure 4.3 displays the predicted values of protection from outside hiring by age for each of the demographic groups in our analysis. Once again, the white male sample is the one which most clearly reflects the

The Scope of Bureaucratic Management

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25-34

35-44

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White male Black male

Figure 4.3. Predictedvalues of hiring protection: Raceby sex by age group.

inverted-U shape predicted by internal-labor-market theory. The pattern for white females seems to represent a variant of this pattern: It appears to have two humps rather than one. This pattern, of course, would be consistent with a pattern of labor force involvement in which there was a withdrawal in mid-career, if not from the labor market per se, at least from internal-labor-market membership, followed by an increased involvement in the second half of the working life. (Although because the apparent increase in hiring protection for white females at the 45-54 age interval is not statistically significant, it may be more accurate to describe this pattern as one of staged withdrawal, rather than withdrawal followed by reentry.) At first glance, black males seem to present a somewhat anomalous pattern of access to job hiring protection. Once again, however, the decline between the first two age intervals is not statistically significant, and the pattern may be more fruitfully interpreted as a delayed version of the white male pattern rather than a contradiction of it. In other words, what we are observing is consistent with the hypothesis that black males have some difficulty in starting internal-labormarket careers but eventually achieve at least some incorporation into

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3.5 3 0o 0O w O

O rv a

2.5 2 1.5 1 0.5 0 Under 25

25-34

35-44

45-54

55 and over

AGE GROUP A

White female

o

Black female

......

White male Black male

Figure 4.4. Predictedvalues of due process: Raceby sex by age group.

these employment systems. (Recall that the simpler statistical model presented in Table 4.4, which aggregates across career stages, did not discern any significant difference between black and white male values on this variable.) Finally, we turn to the comparative age patterns of access to due process, which are shown in Figure 4.4. Referring also to the coefficients shown in Table 4.9, we observe that the age curves for the male subgroups, both blacks and whites, are essentially flat. Black females have significant declines in access to due process in the early career followed by a mid-career surge. We suspect that this may reflect a mechanism similar to that discussed in the previous paragraph; that is, black workers may have difficulty in launching bureaucratically organized careers but may eventually settle into jobs that offer hiring protection (in the case of black males) or due process assurances (in the case of black females). Why these two subgroups should gravitate toward different aspects of structured employment relations is, of course, mostly a matter for speculation at this juncture.

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SUMMARY

Structured employment relations were diffused unevenly across the labor force in our sample. Although this is not startling, the differences that occurred among blacks and whites and among men and women are not easily subsumed under a simple model of "minority" disadvantage. Although there are instances in which blacks and women were less likely to be involved in structured employment relationships than white males, there are also instances in which the differences ran in the opposite direction. In general, women were more weakly involved in internal labor markets than men. White w o m e n were significantly less likely than other groups of employees to have access to structured mobility mechanisms, a finding that implies that they were overrepresented in deadend jobs. Women in general, and especially white women, were also more frequently found in jobs where there was hiring competition with the external labor market. These differences did not result from any deficit of education, fewer years of work experience, or lack of job training that might have characterized female workers in the labor force. But this underrepresentation in internal labor markets for w o m e n did not extend to their involvement with other aspects of structured employment relations. Women were as likely as men to have access to due-process arrangements at work and were more likely to have their work lives bureaucratically regulated. Here, it is necessary to interject a word of caution, because patterns of involvement on these dimensions were markedly different for white women, who tended to be underrepresented, and black women, who were overrepresented. Thus, w h e n we speak of women as a group, what we are really referring to is a comparison of each group of women with men of similar race. As with the sex differences in internal labor markets, these comparisons are not affected much by taking other social resources into account. There is a completely different story when attention is focused on race differences. As a group, black workers were slightly m o r e likely to have access to structured mobility opportunities and a lot more likely to have access to due process, grievance arrangements, and bureaucratic work control. These differences only become more pronounced w h e n levels of social resources are factored into the comparison. What this means is that conventional theories of ubiquitous minority disadvantage are in need of substantial revision. As a step toward that revision, we have introduced an obvious, but often overlooked, set of considerations: workers' access to orderly external occupational labor markets. Here our results are completely un-

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equivocal. Using two measures of an individual's membership in "mobility-promoting" occupations, we find that 7 of the 10 predicted negative relationships held in our sample. Moreover, in each of the five pooled-sample models we examined, the factor of incumbency in a "high-mobility occupation" was the strongest nondemographic effect in the equation. Thus, for the first time to our knowledge, we have shown that there is a negative relationship between internal- and externallabor-market participation. It is also the case that this negative relationship prevailed for every demographic subgroup in our sample. The only instance in which it failed to materialize was for black males whose access to "non-ILM" governance structures seemed to be unrelated to their level of external occupational market participation. Equally important is what the effect of this factor is on the comparisons between race and sex groups. Thus, about half of white women's tendency to be excluded from internal labor markets is explained by their heightened levels of involvement in high-mobility occupations. Also, the tendency for black males to have higher scores on structured mobility and hiring protection disappears, in terms of statistical significance, when their underrepresentation in these occupations is considered. Nevertheless, external markets seemed to have less bearing on the race and sex differences in due process, bureaucratic work control, and exposure to personnel departments. What remains to be seen, however, is how structured employment relationships are influenced by organizational and industrial contextual factors. For example, to what extent are the differences between blacks and whites in mobility opportunities, due-process access, and exposure to bureaucratic work control accounted for by the different types of work settings in which these groups of workers tend to be found? If blacks are overrepresented in government employment, a bureaucratic employment setting par excellence, might that not explain their higher scores observed here? Might it even be possible that they lag behind white workers within these types of employment settings? It is to these issues that we turn in the next chapter.

5 Higher-Level Effects on Bureaucratic Control and Due Process in Organizations The Influence of State, Industry, Organization, and Job

Theories abound concerning the evolution and spread of due-process guarantees and bureaucratic control of jobs in organizations. Different theories have emphasized the importance of very different conceptual levels: the state, the industry or industry type, the organization or organizational cluster, and the type of job. In this chapter, we evaluate several of these theories using our data set, which allows us to assess the separate impact of each of those four levels.

PREVIOUS WORK

Though there is an almost complete historical overlap between the spread of due-process guarantees and the spread of bureaucratic control, most theories have focused on one or the other, the majority on the latter. A great deal has been written on the evolution of bureaucratic control, with straightforward theoretical and empirical assessments of higher-order effects on its spread. However, in culling the organizational literature for predictions and explanations of higher-order effects on 103

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the distribution of due-process procedures in the workplace, one finds, depending on focus, both a paucity and a surfeit of references: a paucity because very little has been written specifically about the causes of due process in organizations; a surfeit because there are a great m a n y references to the several competing explanations of the evolution of increased formalization in organizational governance, of which the expansion of due process is only one example. Students of the field have categorized the explanations of formalization in a number of different ways; we find a fourfold classification most useful. First, efficiency theories include both classical sociological approaches and standard economic approaches (e.g., Blau, 1970; Blau & Schoenherr, 1971; Pugh, Hickson, Hinings, & Turner, 1969; Stinchcombe, 1959; Weber, 1922/1947; Williamson, 1975). These argue, in general, that the functional problems created by the increasing size and complexity of organizations are solved by increasing the formalization of relationships within them. This increased formalization derives from a quest for efficiency, given an enhanced scale of operations. In general, formalization "makes duties less complex at the expense of greater structural complexity" (Blau, 1970, p. 212). Bureaucratic control is an obvious aspect of formalization; due process is simply the formalization of rights that accompanies the formalization of relationships. Efficiency theories, then, lead to predictions of increased bureaucratic control and due-process guarantees with increased size. One could derive further from them the expectation that extraorganizational, environmental factors should not reduce the effect of size. Political theories, primarily Marxist or neo-Marxist, focus on the inherent conflicts between owners or managers and workers and argue that the increase in bureaucratic governance is part of a strategy whose major goal is increased control over the workers (Clegg & Dunkerly, 1980; Gordon et al., 1982). Historical theories trace the evolution of bureaucratic governance structures and due-process accords to outcomes of the continuing battles between employers and unions (Freeman & Medoff, 1984; Jacoby, 1985; Miller & Form, 1964; Montgomery, 1979), or even to intraorganizational battles among managers (Burawoy, 1979). Institutional theories eschew both efficiency and manager-worker struggles as explanations for the spread of formalization, substituting imitation as the key factor. Organizational environments, the argument is, contain models of "proper" structural features (such as due-process systems), and organizations adopt these features even with no internal imperative driving them to do so. Such adoptions do confer resource and legitimacy advantages, but not necessarily efficiency or control advantages (see

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DiMaggio & Powell, 1983; Meyer & Rowan, 1977; Meyer & Scott, 1983; Tolbert & Zucker, 1983). Institutional theories lead to the expectation that organizational context should have a major impact on systems of control and on due-process procedures, and that this impact should be independent of individual organizational attributes such as size. The research in this chapter expands on four recent articles that do not fit neatly into any of the categories above, three of them spanning two or more categories (Baron, Dobbin et al., 1986; Dobbin, Edelman, Meyer, Scott, & Swidler, 1988; Edelman, 1990) and one self-consciously spanning them all (Baron et al., 1988). Two of these deal explicitly with control (Baron, Dobbin et al., 1986, 1988), and two focus on due process (Dobbin et al., 1988; Edelman, 1990). Baron, Dobbin et al. (1986) presented findings that emphasize the importance of government intervention during World War II in the development and diffusion of bureaucratic control, a finding that transcends both efficiency and control explanations and is consistent with institutional explanations. While allowing for the importance of firmlevel factors, and for the activities of management and labor, Baron, Dobbin et al. argued that such factors are insufficient explanations: "By sanctioning modem employment practices and by encouraging the diffusion of those practices throughout the economy, the state has played a major role in the spread of bureaucratic control and internal labor markets" (p. 379). In a later piece, the same authors (1988) argued for multiple causality in the development of bureaucratic control procedures. Bureaucratic control, they argued, did develop in some industries as a means of more effective control of workers. Banking, insurance, and trade firms "combined centralized personnel functions w i t h . . , formalization.., to facilitate control via long-term employment and internal labor markets" (p. 509). In other industries, however (e.g., mass production), efficiency considerations were paramount in the development of bureaucratic control systems, which developed as "adjuncts to scientific management." In still others, unionization and turnover pressures drove the development of systems that not only rationalized production but also rationalized the allocation and retention of personnel. The central argument is that modern bureaucratic control systems developed in several separate regimes, for different reasons, and although one finds the strands of development coming together, there are still differences among industries that mirror developmental differences. Edelman's event-history analysis (1990) of 52 organizations supports her argument that the expansion of due process in organizations was precipitated by an organizational response to threats posed by the

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legal environment. The civil rights movement of the 1960s lent normative legitimacy to earlier mandates governing the employment relation. Employers were not required by anything growing out of this movement to create grievance procedures for nonunion employees, yet they did anyway. Edelman maintained that they did so because of normative pressure: "The civil rights mandates did open organizational governance to public scrutiny, a n d . . , legitimated employees' demands for fair treatment" (p. 1408). The "rights-conscious" environment created by the civil rights movement caused the organizations most susceptible to social pressure to first seek models of governance that would appear to be fair, and they found them in the public sector, Organizations less susceptible to social pressure later imitated the structures of these first organizations. They did so because the changing normative structure increased the costs of seeming arbitrary: "The greater the symbolic value of grievance procedures, the more costly it becomes for employers to retain old (arbitrary) forms of grievance" (p. 1413). Employers were aided in discovering these costs by personnel professionals, who are a crucial intermediary in the diffusion of organizational practices. Edelman (1990) expected the primary determinant of attention to due process to be organizations' proximity to the public sphere, proximity being defined in three broad groups: the public sector itself, government contractors and government-regulated organizations, and private organizations operating primarily in the private market. An almost identical argument, though a somewhat broader analysis, was presented by Dobbin and his colleagues (1988), using the same data. They analyzed a model of due process in which the "publicness" of the sector is exogenous, along with the size and unionization of the organization; all three having direct effects on due-process structures, as well as indirect effects through the existence of a personnel office. They concluded: The emergence of formal personnel protections in organizations reflects several causal processes . . . . Organizational size seems to increase formalization. Unionization increases the extent to which grievance procedures are formalized. And public visibility and linkages to the federal government have increased formalization of due process protections in a period during which the state became active in this arena. (pp. 93-94) This research, as well as the research of earlier writers, suggests that higher-order effects on bureaucratic control and due process are complex and involve several levels. Both individual organizational attributes

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and organizational environments should have independent as well as interactive effects. In this chapter, we first investigate in more detail the extent to which organizational environments and then individual organizational attributes contribute to bureaucratic control and due-process procedures. We then examine the covariation of job attributes with the presence of bureaucratic control and due process. Specifically, we develop measures of government intervention, size, union domination, and competitiveness at both the industrial level and the individual organization level, and then we add relevant job-level measures. The effect of the variables at each of these separate levels controlling for the others allows us to evaluate the fit of each of the major explanations. This also enables a test and elaboration of the institutional perspective as it pertains to worker control and rights. Specifically, by having measures at several levels, we can sort through the implications of the several perspectives. For example, if we find systematic variation in bureaucratic control and due process across industries, this would support both political and historical theories. It would, that is, unless it could be further demonstrated that those industries varied systematically in some efficiency-related characteristic, like the average size of the organization. We can investigate even further than this, however. If we find, for example, that the average size of like organizations has an impact on control and due process as strong as that of organizational size itself, that finding will be a support for institutional theories, not efficiency theories. Despite the limitations of our data (it is cross-sectional, and we are often limited to single measures of complex concepts), we think this examination of attributes-within-context provides a valuable examination of the tenets of each form of explanation.

M E A S U R E S A N D DATA Industrial Measures

For the industrial measures, we use a rearrangement of some of the measures developed by Kaufman, Hodson, and Fligstein (1981). They combined many subscales to create new sectoral segmentation categories, but the subscales are usable on their own. Using industries as the unit of analysis, Kaufman et al. derived 25 factors from a wide variety of measures, then clustered industries into 16 groups based on their scores

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on these factors. For reporting purposes, they also combined the 25 factors into 10 "concept groups." We use four of these concept groups as separate environmental measures: government intervention, size, concentration, and unionization. The variables used to create the government intervention measure are government regulation; federal government purchases as a percentage of total output; federal government purchases per firm; state and local government purchases as a percentage of total output; and state and local government purchases per firm. These variables are all measured at the industry level and are derived primarily from the census Enterprise Statistics and the Department of Commerce Input/Output data. The size measures include employment per company; sales per company; assets per company; net income per company; value added per company; percentage of companies that are corporations; and establishments per company. Per company refers to a within-industry measure, of course, and the data come from the sources named above plus the Internal Revenue Service (IRS) Corporation Income Tax Returns report. The unionization measure is simply the percentage of all workers in the industry covered by collective-bargaining agreements (from Freeman & Medoff, 1979). The concentration measure derives from six variables, three eight-firm concentration measures (of employment, sales, and assets) plus percentage of industry sales in companies with over $250 million in sales; percentage of industry assets in companies with over $250 million in assets; and advertising per company (these data are all from Enterprise Statistics and the IRS volume).

Organizational Measures We attempt to match these industry measures with job- and organizational-level measures. For government intervention at the organization level, we created a 5-point scale: private organizations with no government contracts are scored I (if in the competitive sector) or 2 (if in the monopoly sector); private organizations with government contracts are scored 3; regulated profit-making organizations (e.g., utilities) are scored 4; and public sector organizations are scored 5. For size, we use both specific firm size and specific establishment size, defined as number of employees. For unionization we use a job-level measure: whether membership in a particular union is required to hold the job in question. An organization-level variable was less appropriate for this measure. Consider, for example, the case of a white-collar job in a bluecollar union shop. One would not necessarily expect the unionization of the blue-collar workers to have an impact on the white-collar job structure within the organization. For concentration, there is no possible

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organization-level analogue. It is purely an industry-level variable and does not make sense at a lower level. We measure instead competition: the number of direct, significant competitors that a specific firm or establishment has. Competition is an important variable in its own right; further, although concentration captures much more than competition at the industry level, it is, at least in part, a measure of such competition. Job-Specific Measures

We develop measures of five job-level variables, each of which should have some effect on either due process or bureaucratic control, or both. The variables are (1) authority, an index based on whether the job involves supervision of lower-level workers and whether the incumbent has hiring and firing authority over those workers; (2) harm potential, an index based on six items concerning the potential harm that could be done by an incumbent of the job, including equipment damage; physical harm to themselves or others; financial, reputational, or other harm to others; loss of money to the employer (plus the degree of loss); a n d disruption of overall operations; (3) reading, writing, two indexes based on whether the job requires the reading (composition) of a lot of written material, and whether this reading (writing) is an important part of the job; (4) learning time, the amount of time required for the "typical" employee to learn this job (in hours, logged); and (5) working conditions, an index based on whether job conditions are described as noisy, crowded, hot, cold, dangerous, dirty, and/or strenuous (a high score implies unpleasant conditions). Data

Our data consist of observations on approximately 1,600 job categories in almost as many different organizations in a single labor-market area (the Chicago SMSA). The sampling, as noted in Chapter 2, was of employed individuals, and organizational interviews (most with personnel directors) were conducted in a second stage after the respondents had named their place of work. This sampling frame resulted in a weighted random sample of employing organizations (weighted naturally by size of organization). FINDINGS Industrial Context and Organization

Examining zero-order relationships first, we find some support for all perspectives. As can be seen in Table 5.1, due process and bureau-

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Table 5.1. Means of Due Process and Bureaucratic Control, Percentage with

Personnel Offices; for Major I n d e p e n d e n t Variables

Due process

Industry Construction Manufacture (nondurable) Manufacture (durable) Transportation, communication, public utilities Wholesale and retail trade Finance, insurance, real estate Service (business) Service (personal) Service (professional) All others Establishment size 1-10 11-50 51-150 151-500 500 and over Firm size 1-25 26-100 101-500 501-2,500 2,501 and over Size context Small Medium Large

Bureaucratic control

Personnel office

Mean

N

Mean

N

%

N

1.6 2.5 2.6 3.1

73 222 415 182

1.4 2.6 2.7 3.0

52 184 351 141

36 78 81 90

55 188 365 164

2.4 2.6 2.0 2.1 2.9 1.9

373 163 106 37 273 10

2.5 3.0 2.2 2.2 3.1 2.1

288 133 90 31 245 10

64 81 41 32 79 40

304 139 90 31 255 10

1.7 2.0 2.4 2.7 3.1

238 480 412 437 684

1.6 2.1 2.7 3.0 3.2

134 322 273 319 477

24 30 72 94 100

139 325 285 333 519

1.4 2.0 2.4 2.7 3.0

241 223 259 221 929

1.3 1.9 2.6 3.2 3.1

177 187 217 187 757

3 33 71 89 94

181 190 221 193 816

2.4 2.4 3.0

542 982 330

2.7 2.6 3.2

448 814 263

66 70 91

472 837 292

cratic c o n t r o l v a r y c o n s i d e r a b l y b y i n d u s t r y , as d o e s p r e s e n c e of a pers o n n e l office. I n t h e h e a v i l y r e g u l a t e d t r a n s p o r t a t i o n , c o m m u n i c a t i o n , a n d p u b l i c utilities i n d u s t r i e s 90% of e s t a b l i s h m e n t s h a v e p e r s o n n e l offices; 80% of t h o s e i n d u r a b l e m a n u f a c t u r i n g h a v e t h e m ; o n l y a b o u t 33% of t h o s e i n t h e p e r s o n a l service a n d c o n s t r u c t i o n i n d u s t r i e s h a v e t h e m . A v e r a g e levels of d u e p r o c e s s a n d b u r e a u c r a t i c c o n t r o l c o v a r y similarly with industry grouping. Substantial variation by industry supp o r t s b o t h t h e political a n d t h e h i s t o r i c a l p e r s p e c t i v e s . T h i s is so, of c o u r s e , o n l y u n l e s s a n d u n t i l t h a t v a r i a t i o n c a n b e s h o w n n o t to h a v e

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actually been caused by underlying factors that would support another perspective. For one example, if industrial variation in an average size of organization exactly matches these findings, it would show that the variation across industries is actually due to efficiency causes, and that the seeming industrial relationship is an artifact of industrial-averagesize-of-place variations. The zero-order variation of all three dependent variables by size does support the efficiency theory explanations. With both firm and establishment size, there is a nearly perfect monotonic increase by size. The larger the establishment or firm, the more likely it is to have dueprocess procedures in place, bureaucratic control mechanisms instituted, and a personnel office (note that 100% of establishments with more than 500 employees have personnel offices). The fact that all three measures vary so substantially by size context, however, supports the institutional perspective, at least to the extent that individual organizational attributes are not perfectly coincident with context, something that will be examined below, as it cannot be ascertained through zero-order effects. Findings for the government intervention variables are similar. The extent of government intervention has a positive effect on all three dependent variables; so, too, does being in an industrial context where government intervention is prevalent. Like the findings for size, both organizational attributes and industrial context seem to have a substantial effect; independent effects will be sorted out below. The impact of this variable strongly supports the argument of Dobbin et al. (1988), though, as noted, it remains to be seen whether the effect is due to the publicness of the sector, as they maintained, or to direct organizational links to government, or to both independently. Union jobs are characterized by higher levels of due process, but not of bureaucratic control. This is an expected finding, as all arguments concerning the impact of unionization have to do with its effect on the elaboration of worker rights. There is no theoretical reason to expect a unionization effect on bureaucratic control. Union context seems to have a small effect on all three variables. Number of competitors has an effect only as one moves from none to some. Industrial concentration primarily affects the presence of a personnel office; it has a weak effect on due process and no effect on bureaucratic control. It should be evident at this point w h y students of the area can arrive at (and support empirically) so many competing explanations of the same phenomenon, All major perspectives--efficiency, institutional, political, and historical--are well supported by the data. It remains to be seen whether this is so in a multivariate analysis.

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We first regress due process and bureaucratic control on each of the independent variables, first entering the contextual form of the variable, then adding the organizational analogue. In a third equation, we add the variable that measures the presence or absence of a personnel office. Then, we regress the personnel office variable on first the contextual form and then the contextual and organizational forms of the independent variables. The logic of this system of equations follows from previous findings. If the institutional theories are correct, then the contextual variables should have a significant effect, and that effect should remain net of organizational attributes. A strict interpretation of efficiency theories would lead to the prediction that all of the effect of contextual variables should be removed by the addition of organizational attributes, and that the organizational variables (particularly size) should have a significant effect. However, the argument could be made that all that is required by efficiency theories is that organizational variables have an effect, no matter what else does--this would be a weak version of the theory. Some have suggested that due-process and bureaucratic control measures follow on the establishment of a personnel office, and that such establishment is the first significant act, from which the others follow. If this is so, the personnel office variable should substantially mediate the effect of the first two, if not remove their effect altogether. If it does, that fact alone will not necessarily challenge any of the various theories, as each of the theories could be, for simplicity, discussing only the reduced form of a model without getting fully into explanations of detailed mechanisms. A discovered indirect effect could be only a demonstration of the full model of that reduced form. That is, for any of the theories, showing the existence of an indirect effect through a personnel office could be seen only as more fully specifying the nature of the predicted effect, a prediction that concerns total effects. Nonetheless, such a finding would weaken some of the explanations (historical and political), perhaps strengthen others (efficiency and institutional), and would add texture to all. In the first column of Table 5.2, it can be seen that each of the contextual variables has a statistically significant effect on due process, supporting institutional theories. But the substantive effect is very weak indeed. Government domination context explains only 5% of the variance in due process, and that is the largest contextual effect. The context of industry concentration explains only 1% of the variance, and union and size context each explain 2%. When the organizationaMevel variables are added to each equation, the findings are mixed. The second column of Table 5.2 shows that being in a government-dominated context or a union context has a statistically

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T a b l e 5.2. Effects of I n d u s t r i a l a n d O r g a n i z a t i o n a l Variables

Due process Government domination (context) Government domination (organization) Personnel office R2

.22*

Industry concentration Organization competition Personnel office R2 Union context Union job Personnel office R2 Size context Firm size Establishment size Personnel office R2 Size context Firm size Personnel office R2 Size context Establishment size Personnel office R2

.19"

.12"

.11"

.05*

.05

.06

.46* .26

.08*

.04 .22*

.01

.05

.15"

.13" .21"

.02

.07

.15"

.01 .33* .27*

.02

.29

.15"

.01 .49*

.02

.25

.15"

.07* .46*

.02

.23

.01 .05 .47* .24 .04* .20* .47* .28

Bureaucratic control

Personnel office

.19"

.20*

.16"

.08*

.12"

.05*

.04

.05

.49* .27

.05

-.00 .25*

.00

.06

.11"

.12" -.06

.01

.02

.01 .23* .20* .21" .31

.12"

-.02 .37* .20*

.01

.26

.01 .31" .28* .29

.12"

-.02 .49*

.01

.23

.04 .27* .31" .28

.12"

.04 .41"

.01

.18

.17" .14"

.04

.06

-.03 .08* .49* .27

.13"

.06* .36*

.02

.14

.02 -.07* .51" .27

.19"

.18" .03

.03

.04

-.02 .23* .10" .31" .30

.20*

.01 .45* .33*

.04

.51

-.02 .26* .34* .30

.20*

.01 .66*

.04

.44

.01 .17" .41" .28

.20*

.09* .60*

.04

.39

*p < .05.

significant effect on due process net of the organizational analogues, but adding organizational size and number of competitors removes the respective contextual effects. That the measures of government-domination context and union context have a significant effect net of their equivalent organizational variables gives strong support to the arguments of the institutionalists. If efficiency were all that was at issue, context should be a marker only for the organizational-level variable, and its effect should disappear in the presence of the organizational measure. On the other hand, the findings with regard to size give strong and

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unequivocal support to the efficiency theory explanation. The effect of being in an industrial milieu characterized by large companies disappears entirely in the presence of organizational size (the standardized coefficient drops to a substantively and statistically insignificant 0.01). Clearly, the size of the company itself dictates the implementation of due-process mechanisms, and size context seems only to capture the unmeasured effect of actual company size (an effect probably present because of the stochastic effect of size context on organizational size; e.g., the likelihood of any randomly selected firm's being large is greater in a large-firm context). An institutional argument will not organize these findings: The actual size of the organization itself has the effect on due process; its environment does not. Note that firm size alone completely removes the effect of context, whereas establishment size does not (though it does reduce it substantially). The fact that both firm size and establishment size have strong independent effects adds further support to an efficiency explanation. Although these findings may, at first glance, seem contradictory or at least equivocal, they actually are not. The variables measure very different things, and, as implied by Baron and others, both theories can be partially correct if they address different phenomena. The effect of government domination, whether measured at the industrial or the organizational level, could never lend itself to an efficiency interpretation, for there is no logical connection between government domination and efficiency. If government domination affects the likelihood of implementation of due-process procedures, it must be either by fiat (rare) or for political reasons (broadly defined, all having to do with keeping the government, as a source of contracts or licenses, satisfied). If being in a government-dominated industry has an effect net of organizational domination, it must be because of imitation, calculated or uncalculated. Similarly, the impact of unionization (of organization or environment) on due process can be only tenuously related to efficiency. If the elaboration of due-process mechanisms is a rational response to "union environments," and if unions themselves serve an efficiency purpose, as argued by some (Freeman & Medoff, 1984), then an efficiency case might be made. However, both of these connections are aguable, and an institutional interpretation is more straightforward. The results for bureaucratic control are identical to those for due process, with two exceptions. As can be seen in Columns 4 and 5 of Table 5.2, industrial concentration has no effect on bureaucratic control. The more interesting difference is that, although union context has a positive effect on the level of bureaucratic control, a union job itself has a negative effect, and both are statistically significant net of the other.

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Though the effect of both is trivial (explaining 2% of the variance), the opposite signs bespeak different effects that have theoretical relevance. The fact that being in a union job lessens the likelihood of bureaucratic control, but that being in an organization that is in a unionized context increases that same likelihood, is strong support for the institutional explanation, for it makes clear that it is not the fact of unionization itself that affects the w a y the job must be controlled, but the environment of the organization that affects the w a y the job is controlled, for reasons not necessarily having to do with the nature of the job itself. When a personnel office is added to the equations (Columns 3 and 6), it has a substantial effect, but not one that removes all contextual and organizational effects. That is, only some of the effect of context and organization is indirect through a personnel office. However, it has a very strong independent effect; except for the equations with size independent, adding a personnel office quadruples the explained variance. Organizations with a personnel office are high in both due process and bureaucratic control. It is clear that the establishment of a personnel office is concomitant with the establishment of due process and bureaucratic control mechanisms; it is equally clear that it is not perfectly coincident with the establishment of them. It has an effect of its o w n and is not primarily a transmitting mechanism for any of the other independent variables. Finally, in Columns 7 and 8 of Table 5.2, we show the results of regressing having a personnel office on the same variables. All contextual variables have a significant zero-order effect on the existence of a personnel office; all save size context have a significant net effect as well. Of the organizational variables, only a union job does not have a significant impact, though a union context does, even net of a union job. The government domination and union effects are slight (explaining 6% and 4% of the variance, respectively), the concentration and competition measure is somewhat more substantial (explaining 14% of the variance), and the size effect is massive (explaining 51% of the variance in having a personnel office, with both firm size and establishment size having large and significant net effects). These results lend themselves only to an efficiency explanation. To function efficiently, larger organizations need personnel offices, and so do organizations in competitive environments (insofar as such environments imply competition for labor and the potential for a high labor turnover). Personnel offices, according to these data, are not copied from a mold, but adopted w h e n needed. It remains to examine the effects of each of these variables net of all of the others. In Table 5.3 the results of such an analysis are shown. Three equations are reported for each dependent variable: one with only

116

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Bureaucratic Control and Due Process

117

contextual variables; one with contextual plus organizational variables; and one with both of those plus the personnel office measure. Considering contextual variables alone, only government domination and union have a significant impact on due process; only government domination and size affect bureaucratic control and the presence of a personnel office (see Columns 1, 4, and 7). Net of the organizational variables, only government context affects both due process and bureaucratic control; the effects of union and size context drop out. Size context remains important for having a personnel office. Interestingly, for all three dependent variables, industrial concentration has an increased and statistically significant effect net of the organizational variables. That effect is negative. Because the major organizational effect is size, this means that large organizations tend to have personnel offices and to have higher levels of both due-process procedures and bureaucratic control mechanisms, but they have all three to a lesser extent when they are in highly concentrated industries. It is noteworthy that being in a government-dominated context significantly influences both due process and bureaucratic control, net of all other variables, including organization-level government domination. The effect of being in such a context is not large, but it is clearly a real effect, in no w a y spurious. The organizational variables are obviously the more important of the two sets. The contextual variables explain only 6% of the variance in due process and 4% in control; adding the organizational variables adds 28% to the first and 22% to the second. Adding a personnel office to each adds 2% and 4% respectively, and diminishes only the effect of size. When a personnel office is dependent, contextual variables explain 6% of the variance; adding organizational variables increases the explained variance to 52%, and both size and size context have a substantial impact. The number of organizational competitors continues to have a significant impact on having a personnel office; it has no net effect on either due process or bureaucratic control.

Job-Level Effects We next examine these models with additional variables to determine if the discovered contextual and organization-level effects persist in the face of explicit job-level controls. We expect both authority and harm potential to have a negative impact on both due process and bureaucratic control. Leicht and Wallace (1988) convincingly argued that workers w h o are in more vulnerable positions in the labor market are less likely to be insulated from the threat of job loss and are thus less likely to endorse the management view of necessary job arrangements.

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Those who are in less vulnerable positions by virtue of possessing personal, occupational, or organizational resources that are valued by the organization are likely to have a stronger attachment to the "goals and ideals of management" and are thus most likely to share management attitudes toward the rationalization of the labor process (Leicht & Wallace, 1988, p. 194). Both authority and harm potential are such resources and thus should serve as rough indicators of lessened vulnerability. Those in these types of jobs would have less need of bureaucratic controls and due-process guarantees. We would expect literacy requirements to have a positive effect on both due process and bureaucratic control. Though adequate language skills are a resource, they are not a particularly unusual resource in most organizations, and thus, the Leicht and Wallace argument does not apply. They instead should be indicators of formalization, a process that increases the amount of written rules and procedures in an organization. Thus, literacy requirements are most likely to be found in more formalized organizations, those with higher levels of due process and bureaucratic control. Learning time should have varying effects, depending on the type of job--effects that vary even in their sign. Though it may seem that those in jobs with a long learning time would be highly skilled and thus in privileged positions, countering this is the fact that careful controls would be necessary during the long learning process. For this reason, we would expect a weak positive relationship between learning time and bureaucratic control. Further, though a short learning time may be an indicator of a job employing workers who bring extensive developed skills into the workplace, it may also be an indicator of a low-skiU job. The former will be those with resources, the latter those without; in the first case, the relationship to due process should be negative, and in the second, it should be positive. Given a random mix of job types, these should cancel each other out. Finally, we would expect poor working conditions to have a positive impact on due process. In most instances, unpleasant working conditions cannot be remedied, so compensating differentials should exist, due process guarantees among them. There are no reasons to expect a relationship one way or the other with bureaucratic control. In Table 5.4, it can be seen that all expectations are realized. Authority and harm potential both have significant negative effects on due process and bureaucratic control. Literacy requirements have positive effects on both. Working conditions have a significant positive effect on due process, but no effect on bureaucratic control. Learning time, about which we had no explicit prediction, has a positive effect on both due

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119

Table 5.4. Job-Level Effects

Due process Job Authority Harm potential Reading Writing Learning time Conditions Context Government domination Industry concentration Union Size Organization Government domination Organization competition Union job Firm size Establishment size Personnel office R2

-.11" -.05* .12" .08* .07* .04*

.05

-.05* .01 .02 .01 -.01 .07*

Bureaucratic control

-.07* -.11" .15" .07* .12" .01

-.03 -.06" .07* .01 .05* .00

Personnel office

-.04 -.04 .10" .08* .09* .02

.01 -.00 -.01 .04 .03 -.03

.07* -.06 -.00 - .01

.05 - . 12" .00 .03

-.00 -.19" -.03 .18"

.08* -.02 .16" .26* .16" .20*

.06 .01 - .05* .23* .08* .28*

.03 .08* .02 .41" .34*

.36

.07

.33

.03

.53

*p < .05.

process and bureaucratic control. When controls are entered for industrial context and organizational variables, some effects remain. Authority still has a significant negative effect on due process but not on bureaucratic control, and harm potential still has a significant negative effect on bureaucratic control but not on due process. The existence of a reading requirement still has some net effect on bureaucratic control. The impact of working conditions on due process has a significant net effect. Job attributes do have a net effect on due process and bureaucratic control, even net of industrial and organizational variables. The effect is, however, a small one (compare the variance explained in Table 5.3 and Table 5.4), and organizational variables still bear the brunt of the explanatory burden. Internal Labor Markets

Though the theoretical literature on higher-level effects has focused on control and protection of rights, the development of internal labor markets is usually seen as being parallel to the spread of rights, although

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120

T a b l e 5.5. Effects of I n d u s t r i a l a n d O r g a n i z a t i o n a l Variables

on Internal-Labor-Market Indicators Hiring protection Government domination (context) Government domination (organization) Personnel office R2

.09*

.01

.01

Industry concentration Organization competition Personnel office R2

.21"

.17" .19"

.04

.08

Union context Union job Peronnel office R2

.18"

.17" .08*

.03

.04

Size context

.21"

Firm size Establishment size Personnel office R2

.11" .23* .17"

.04

.16

Size context

.21"

Firm size Personnel office R2

.12" .33*

.04

.14

.21"

.15" .30*

.04

.13

Size context Establishment size Personnel office R2

.07* .09*

Mobility

.02 .05 .28* .09

.16"

.13" .15"

.03

.05

.16" .11" .23* .13

.18"

.15" .18"

.03

.07

.12" .08* .27* .11

.13"

.14" -.08"

.02

.02

.11" .21" .16" .04 .16

.23*

.14" .25* .12"

.05

.16

.11" .27* .09* .15

.23*

.14" .33*

.05

.15

.14" .22* .13" .14

.23*

.18" .27*

.05

.12

.08* .11" .29* .13 .13" .08* .28* .13 .08* -.08* .32* .12 .14" .20* .08* .12" .17 .14" .23* .15" .16 .16" .14" .20* .15

*p < .05.

following from somewhat different causes. The causes cannot be entirely different, since the ILM can be itself characterized as a form of bureaucratic control. Because most analyses examine one or both of the two major components of internal labor markets (labor market protection and mobility opportunity), we add them here as well, simply replicating the previous analysis with different dependent variables. Previous research has identified size, unionization, and the existence of a personnel department as the major organizational determinants of internal labor markets (Baron, Davis-Blake, & Bielby, 1986; Pfeffer & Cohen, 1984). In Fable 5.5, we present the results for each influence separately. Note that government domination has little to do with protection; net of a personnel office, it has no effect at either the industrial or the organiza-

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121

T a b l e 5.6. M o d e l of I n d u s t r i a l a n d O r g a n i z a t i o n a l Variables Hiring protection Context Government domination Industry concentration Union Size Organization Government domination Competition Union job Firm size Establishment size Personnel office R2

.05 .15" .05 .03

--.03 .08 --.02 .08

-.03 .08 -.02 .07

--.02 .06* .07* .18" .19"

-.02 .06* .07* .16" .18" .04

Mobility

.10" .02 -.10" .26*

.04 -.05 -.13" .25*

.04 -.03 -.13" .23*

.02 .03 --.09* .25* .12"

.01 .03 --.09* .20* .08* .11"

*p < .05.

fional level. Government domination, however, does influence the establishment of job mobility chains, both in context and in fact. Concentration and competition, union context and union job, and size context and actuality all have net effects on both protection and mobility. It is interesting to note that, net of size, the existence of a personnel department continues to affect job mobility chains but does not have a net effect on protection. This is a reasonable finding, for the development of sheltered labor markets is a more straightforward concomitant of size, whereas the construction of detailed internal mobility paths is usually a task undertaken by those trained in personnel management practices. In the full model in Table 5.6, it is clear that industrial context has virtually no effect on protection, nor does the existence of a personnel office. As in the simpler models above, only the number of organization competitors, organization size, and the union status of the job affect whether the job is in a protected labor market or not. The existence of job mobility paths is affected by union and size context, by union and size at the lower level, and by the existence of a personnel office. Again, it makes sense that a personnel office would have an effect on mobility but not on protection. Similarly, it follows that a larger number of immediate competitors would increase the potential for attempts to shelter labor markets but would have no effect on mobility chains. The organizational impetus for the establishment of an internal labor market can easily be satisfied by sheltering the labor market, which helps ensure a reasonable labor supply; job mobility paths arise from other needs.

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Table 5.7. Job-Level Effects o n I n t e r n a l - L a b o r - M a r k e t I n d i c a t o r s Hiring protection Job characteristics Authority Harm potential Reading Writing Learning time Conditions Context Government domination Industry concentration Union Size

.21" .03 .12" - . 00 .10" .00

Organizational attributes Government attributes Organizational competition Union job Firm size Establishment size Personnel office R2

.07

.24* .03 -.00 .01 .09* -.03

Mobility

.05* -.03 .11" - ;03 .10" -.09"

.06* -.05* .08* -.02 .09* -.07"

-.02 .12" -.02 .04

.02 - .03 - . 10" .21"

-.04 .06* .12" .15" .18" .03

-.01 .03 -.04 .18" .07* .11"

.25

.04

.20

*p < .05.

Returning to earlier tables, we can see apparent indirect effects on mobility. Because the establishment of a personnel department has a strong positive impact on the development of such internal paths, it is clear from Table 5.3 that industry concentration will have a strong negative total effect on internal mobility. It is clear from Table 5.1 that those industries classified as being in the "core" in most schemes are those most likely to have personnel offices. It could be argued that a large part of the "dual-labor-market" effect discovered by sociologists and economists may be a partial function of the establishment of personnel offices in some industries and not in others. This seems so because the mobility component of internal labor markets weighs more heavily than the pro= tection component in dual-labor-market arguments, and it is the mobility component that is so influenced by personnel functions. Finally, we examine, in Table 5.7, the job effects on internal-labormarket indicators. We would expect jobs with longer learning times to be in internal labor markets, for the same reason we expected them to be bureaucratically controlled, and the results for both protection and mobility bear this out. Supervisory jobs should be protected and in mobility

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123

chains, and they are. The reading variable remains significant net of organizational and industrial controls, but we find no theoretical reason w h y this should be so. We suspect that, once again, literacy requirements are simply markers for formalization. Jobs with bad working conditions are also unlikely to be in mobility chains. This makes sense intuitively, but was not predictable. Note that presence of a personnel office still has the predicted positive effect on mobility structures, even net of job attributes. SUMMARY AND CONCLUSIONS Job-Level Effects We find the expected relationships: Less vulnerable jobs have less bureaucratic control and due process; poor working conditions are compensated for by due-process protection; and the need for literacy on a job is a sign of increased formalism, and thus of more control and due process. Overall, however, we find that the effect of job characteristics on both due-process guarantees and bureaucratic control structures is very weak; explanations at the organizational level are more appropriate. Industrial Context and Organizations Our findings support the arguments of Baron, Dobbin et al. (1986, 1988) as well as those of Dobbin and his colleagues (1988; Edelman, 1990). The state has dearly played a role in the development and spread of due-process procedures and bureaucratic control mechanisms. Both government domination in the industrial sector and organizational closeness to the public sector have been shown to have clear, nonspurious effects. Most important, government domination at either level was found not to have a significant effect on the likelihood of a personnel department's existing. This means that the domination affects the spread of rights and procedures only, not the spread of efficiency-linked units like personnel offices. Net of other factors, state-dominated organizations are more likely to have due-process and bureaucratic control measures in place; they are not more likely to have personnel departments. What spreads in such milieux are not just ideas for the efficient or even "proper" organization of work, but values and norms of governance. This goes somewhat beyond institutional arguments, as the spread is most likely not by imitation but by pressure brought to bear by normative legitimacy.

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The government domination effects, though present, are weak. Other effects abound, including those of size and unionization. It is clear that Baron, Dobbin et al. (1986) were correct in their call for more complex theories that mirror the complex reality of multiple causality across industrial types. By selective data dredging, we could fairly strongly support any of the major theoretical perspectives with portions of these findings. More important, with all of these findings, we cannot conclusively rule out any of them. In the development of organizational forms, there is, indeed, a drive toward efficiency. There are also imitation, politics, coercion, and a quest for control. The Baron et al. assumption of multiple streams of development most easily organizes these cross-sectional findings. The finding that industrial context has an independent effect on both due process and bureaucratic control, as well as on the formation of personnel departments, is an important one. It is as clear a documentation of the validity of the institutional perspective as there has been. On the other hand, the contextual effects are always much smaller than the organizational effects, which exist net of context. This is a clear validation of the efficiency perspective (for w h y else would organizational features have an effect net of environment?). The arguments are not mutually exclusive. This is shown most clearly by the fact that size context has as large an effect on the presence of internal labor markets as does the size of the organization itself. A combination of existing perspectives is needed to organize these findings.

6 Bureaucratic Structure and Attachment to Firms Linkages to Potential Mobility in the Market

INTRODUCTION Internal labor markets and other aspects of bureaucratic employment structures are often associated, at least in the folklore of American business, with the creation of strong bonds between workers and their firms. Writing about Sears, Roebuck and Company, Donald Katz (1987) offered the following observation: A firm policy of promotion from within, and the best profit-sharing and benefit program in the country, so completely enclosed the human ring of the company that by 1954 hardly any of the huge number of people working for Sears had ever worked anywhere else. A "psychological contract" Sears had made with its people was widely understood, and with it came the assurance that you could only be fired for stealing from the company or taking untoward liberties with your secretary (p. 14) In essence, job ladders, job protection, and due process are seen as having the power to lift relationships based on mere convenience onto a higher plane of social existence where the firm becomes a family and the exchange of work for money becomes a sacred pact. But is this conclusion justified? In this chapter, we are interested in exploring whether and how internal labor markets and other aspects of a bureaucratic employment structure affect the level of workers' attachment to their employers. The assumption of much previous work is that 125

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internal labor markets are implemented precisely because they do tend to tie workers to their current jobs. That is, what makes employers willing to shoulder a substantial share of training costs for "firmspecific" jobs is the existence of a mechanism, like a promotion ladder, that decreases employees' propensities to wander from the fold into the external labor market. We can identify three types of possible linkages between bureaucratic employment structures and employee immobility. These linkages are of the instrumental, the behavioral, and the normative type. The instrumental linkage is the one on which microeconomic theories seem to rely most heavily. In this approach, future promotions are part of a system of deferred rewards in which employees help finance their postemployment training by accepting lower-thanmarket wages during the active training period; these wages are replaced by higher-than-market wages after their training is completed and they have become more productive. The role of internal labor markets in such a system is to serve as a kind of guarantee or commitment from the employer that the higher rewards will in fact be forthcoming at the appropriate time. We would add that promotions themselves are an important symbolic reward that workers can be expected to factor into their calculus of moving versus staying. The implication of this instrumental approach is that internal mobility chances should have a direct and negative impact on workers' plans to seek employment elsewhere. The term behavioral linkage refers to an increase in attachment to current employers that is neither pure habituation nor pure loyalty, but that contains elements of both. It results from a withdrawal of interaction with the external market that has the result of making employees more dependent on their current jobs. This concept of employer dependence is closely related to some other ideas that have been used in recent labor market research. Of particular interest is the concept of market opportunity, which was used to predict attachment to employers in a study by Halaby and Weakliem (1989). They defined this factor as an employee's subjective estimate of the "likelihood that [the worker] will elicit a minimally acceptable offer" in an external job search (p. 559). It is actually measured by answers to the question, "About how easy would it be for you to find a job with another employer with approximately the same income and fringe benefits you now have?" Significantly, this variable is one of their model's strongest predictors of "attachment" to the current employer, as measured by the employee's prediction that she or he will not make an effort to find a job with a different employer in the next year. Like Halaby and Weakliem, we believe that this particular linkage can be defined largely in behavioral terms without making any presumption about workers' feelings or sentiments. In part, long-term relationships with employers are probably much like other lasting so-

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cial relationships. That is, they m a y be as likely to b e c o m e " l o v e - h a t e " relationships as they are to develop into marriages of quiet c o n t e n t m e n t . O u r a p p r o a c h to the behavioral linkage differs in several respects, however. First, e v e n assuming that a well-developed m a r k e t exists for the kind of w o r k that an e m p l o y e e does, there is the issue of h o w closely an e m p l o y e e ' s subjective experience of market prospects matches the objective opportunities that exist. 1 Currently e m p l o y e d workers differ in h o w salient external alternatives are to them, h o w m u c h t h e y k n o w about these alternatives, and h o w m u c h effort t h e y d e v o t e to e n h a n c i n g their knowledge. We argue that there is a varying t e n d e n c y a m o n g e m p l o y e e s to w i t h d r a w from market-scanning behavior, that this withdrawal increases employees' d e p e n d e n c e on their current e m p l o y e r s , and finally, that this withdrawal is itself influenced b y the bureaucratic e m p l o y m e n t structures we have identified in the p r e c e d i n g chapters. A l t h o u g h our m e a s u r e of this concept could easily be labeled market opportunities, the label u s e d b y Halaby a n d Weakliem, w e use the terms firm dependence a n d perceived lack of market opportunities precisely to emphasize the fact that opportunities in the market are not a p u r e l y objective a n d e x o g e n o u s factor. Thus, o u r principal expectation is that internal labor markets a n d "industrial justice" not only p r o d u c e security for some workers but m a y p r o d u c e it in the form of a cocoon. 2 Second, we are not p r e p a r e d to a s s u m e that the concept of an "offer distribution" of alternative e m p l o y m e n t prospects applies with equal force to all workers in the occupational system. Thus, w e w o u l d posit that the concept of market opportunity has greater relevance to the kind of strongly occupationalized labor markets that w e discussed in the preceding chapters. This is not to d e n y that, in instances w h e r e the d e g r e e of "marketization" is roughly equal, some market situations are objectively better t h a n others (e.g., graduate students in history have m o r e trouble finding acceptable offers t h a n graduate students in accounting). This difference is easily explained t h r o u g h the economic concepts of s u p p l y a n d d e m a n d . H o w e v e r , w e w a n t to e m p h a s i z e a different, m o r e qualitative distinction: the degree to which the external labor m a r k e t is 1 Others would point out that it is also a mistake to presume that the distribution of potential offers is exogenous to the search process itself. As Granovetter (1973) cogently observed, some jobs are actually invented when the prospective employer learns of the availability of a particular candidate. In other words, the "market opportunity" does not exist in the absence of an actor's consciously participating in some sort of search activity. 2 The use of the term dependencehere also conforms with the definition it is given in the literature on power relationships (Emerson, 1962). A central idea in theories of that type is that actors gain power over other actors with whom they are in exchange relationships when the others lack alternative "trading" partners. Thus, workers with no knowledge of potential alternative employment relationships are in a position of structural dependence vis-&vistheir current employers.

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well institutionalized. We expect that "high-mobility" occupations have two potential effects on employer dependence. The first is additive: The less institutionalized the external market the more dependence. But we also expect a nonadditive effect. We postulate that the presence of more viable external markets dampens the influence of bureaucratic employment structures on employer dependence. In other words, internal markets may be less effective in evoking a withdrawal from strong external markets than from weak ones. These predictions are summarized in Figure 6.1. The final type of linkage between bureaucratic employment structures and attachment to firms is normatively based and asserts that affective ties play a role in the attachment-mobility process. In fact, much of the recent work on the effects of bureaucratic employment structures is precisely motivated by the proposition that internal labor markets, due process, and bureaucratic control structures increase employees' subjective commitments to their employers. Following Lincoln and Kalleberg (1985), we can see that this happens in two ways. One channel of influence involves, in their words, "structures of legitimacy and legal order within the firm": Corporatist organization substitutes for the arbitrary power of supervisors or the domination of machines a complex system of formal rules and procedures which safeguard employee rights while delineating obligations in an impersonal and legitimate fashion. (p. 741) This legitimacy or acceptance of the organization's authority presumably translates into a positive evaluation of the employee's relationship to the organization and an unwillingness to leave. A second connection between bureaucratic employment relations and normative commitment stems from participation in internal labor markets. That is, paths of promotion through the company's organizational structure provide not only material incentives for staying put but also the intrinsic satisfaction of succeeding at the mobility "game." (This latter property of ILMs is much emphasized by Marxist theorists, w h o see in it a "hierarchy fetish.") In their work on Japanese and American manufacturing establishments, Lincoln and Kalleberg (1985) established that organizational deExternal market context Internal e m p l o y m e n t structure Bureaucratic Nonbureaucratic

Weak

Strong

+ 0

-

Figure 6.1. Level of employer dependence by internal and external market context.

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129

centralization and schemes for enhancing employee participation in decision making tend to increase commitment to current employers. However, bureaucratic employment structures of the formalization variety actually tended to depress levels of commitment in their U.S. sample. They attributed this outcome to the generally alienating properties of work within highly structured and large-scale organizations. Nevertheless, there are reasons to pursue this line of inquiry in our o w n analysis. One reason is that our study includes superior measures of internal labor markets and due-process machinery to those used by Lincoln and Kalleberg. A second contribution of our analysis is to test these effects in a wider range of employment contexts than appear in a study restricted to the manufacturing sector. As well as taking the difference between manufacturing and service activities into account, it is also essential to investigate any possible divergences between public- and private-sector e m p l o y m e n t - - a task that is very difficult if one restricts attention to manufacturing. In the analysis that follows, we investigate h o w bureaucratic employment structures are linked instrumentally, behaviorally, and normatively to attachment. Our efforts in the normative realm focus on employees' level of job satisfaction as an intervening variable. Although satisfaction is an imperfect substitute for a more direct measure of employer commitment or loyalty, it is worth including here for two reasons: (1) like commitment, satisfaction clearly refers to a subjective property of the employment relationship, and (2) prior research has demonstrated that satisfaction is a very powerful cause of commitment. Thus, Lincoln and Kalleberg discovered that the standardized path coefficient relating sarisfaction as a cause to commitment as an effect ranges in size from .797 to .803, depending on the assumptions about the role of other variables. Although this is far from demonstrating that the two concepts are identical, it does suggest that knowledge about job satisfaction is relevant to knowledge about normative commitment measured in other ways. Before summarizing the empirical hypotheses that are implied by each of these linkages, we must comment, briefly, on the concept of attachment itself. Specifically, our contention is that attachment as a dependent variable ought to be defined in more than purely behavioral terms. Although probabilities of leaving are closely related to attachment, there is a difference between the two ideas. Imagine a commuter locked in a rush hour snarl on his way home from work. Pounding his steering wheel, and desperately changing radio stations in search of a more optimistic traffic report, he squeezes to the right and exits from the freeway in search of a less frustrating alternate route. Did our harried traveler lack "attachment" to his usual thoroughfare? Although he departed from his usual and familiar ways, a

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lack of attachment hardly seems the appropriate term, for he h a d not e n t e r e d into a n y implicit or explicit contract to stay on course. A n y considerations of increased uncertainty, danger, or other trouble o n his n e w p a t h could be easily r e g a r d e d as factors subject to m o r e or less socially u n c o n s t r a i n e d and individualistic rational calculation. H o w e v e r , w h e r e w e work, with w h o m and w h e r e we live, and w h a t organizations w e belong to are all decisions of a different order. These are all relationships in which choices about exits are often discussed in the rhetoric of attachment. W h a t this m e a n s is that attachment is a concept that can be defined in behavioral terms, so long as we are clear that the behavior in question is intrinsically social behavior. Being attached m e a n s not only that one is less likely to leave, but that one is less likely to leave because of some countervailing and legitimate expectation that one will not leave, no m a t t e r h o w seemingly trivial those expectations m a y be. 3 Violating such expectations can, of course, be discussed in terms of the "cost" to the individual of incurring the disapproval of both self a n d others, but that misses the point. As soon as the individual reduces e v e r y aspect of the exit decision to c o s t - b e n e f i t terms, it is fair to say that attachment has already b e e n lost; attachment implies the impossibility of completely s u s p e n d i n g the point of view of the " o t h e r , " as one must, if it is entered into a c o s t - b e n e f i t calculation.

HYPOTHESES Major Variables The instrumental linkage suggests that the bureaucratic employm e n t structure is a direct a n d u n m e d i a t e d cause of a t t a c h m e n t to the firm. That is, giving u p one's place on a p r o m o t i o n ladder or forgoing the guarantees of due-process m e c h a n i s m s is a cost associated with changing jobs a n d will cause e m p l o y e e s to do so less often. The behavioral linkage, as defined here, implies several related empirical predictions. First, the higher the level of the bureaucratic employm e n t structure, the lower the level of perceived market o p p o r t u n i t y or, in the terminology that will be u s e d for the rest of this chapter, the 3 This can be clearly seen in the attempts of advertisers to introduce "nonmarket" considerations into consumer purchase decisions under the guise of "brand loyalty." More than attempting to induce repeat buying through simple habituation, the promotion of brand loyalty implies the creation of mutual obligations on both sides of the purchase. The producer promotes brand loyalty by suggesting a continuing obligation to satisfy the customer's wishes after the sale ("If you are in any way dissatisfied with this product, please return, etc.") in return for the customer's obligation to continue purchasing the product if he or she is "satisfied."

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higher the levels of "firm dependence." Second, we predict that the strength of the bureaucratic-employment-structure-firm-dependence relationship will vary, depending on the nature of the external labor market. Where external markets are most viable, the internal-marketdependence relationship will be weakest. Third, firm dependence itself will have a positive effect on attachment. There are two predictions that are consistent with the normative linkage. One is that individuals with higher levels of bureaucratic employment structure will have higher levels of job satisfaction. The second is that job satisfaction itself will promote attachment. It is readily apparent that the instrumental linkage cannot be tested by looking at the role of any intervening variables. Because our measure of attachment is not as robust as we would like, our attempt to pin d o w n the instrumental linkage is somewhat impaired compared to our investigation of the other two linkages. However, this is not as large a handicap as it might appear. For.one thing, attachment is very rarely measured longitudinally in this brand of research. Thus, what is usually measured is past mobility, where there is very limited knowledge about the prior employment contexts (see Cole, 1979), or mobility intentions, which may or may be realized in the future (see Halaby & Weakliem, 1989). In the latter case, researchers are often forced to rely on concepts measured by single indicators, with all of their inherent pitfalls. In that context, therefore, our indirect measure of attachment is not qualitatively different from other efforts in this area; it differs only in the degree of its connectedness to the underlying concept. Although we would, of course, analyze better indicators if they were available, there is still much to be learned from a careful investigation of the available data. O t h e r Variables

Of course, it is not just those employees in and out of internal labor markets and bureaucratic personnel structures w h o differ in their perceptions of h o w much market opportunity they have and in their levels of job satisfaction. Several other factors play a role in these phases of the attachment process. We will begin with those factors that are likely to influence firm dependence. One possible set of influences is those associated with an employer's "structural" position in the economy, that is, the employer's size and market power. Large, oligopolistic employers in the "core" sectors of the economy might be expected to offer workers conditions of employment that they might have trouble duplicating elsewhere. Or at least, employees in this sector might believe that they would have this sort of difficulty. Along these lines, Lincoln and Kalleberg (1985) found a consistent

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tendency for employees of larger firms in the United States to have higher levels of employer commitment than employees of smaller firms. Although a similar association may exist between size and firm dependence, it may be tempered by selection effects in hiring. Thus, if there is a positive selection process operating so that the most "attractive" workers are matched to the most dominant employers, the better objective prospects of these workers in the market may counteract any tendency toward greater dependence stemming from the size or market position of the employer per se. In the analysis that follows we are, therefore, sensitive to the issue of controlling differences in "worker quality." Another important, and sometimes overlooked, contextual factor in employment relations is the difference between working for a privateand for a public-sector employer. Even apart from the tendency for ILMs and bureaucratic structures to proliferate in the government sector, employment in the public sector is probably more secure than that in most private-sector jobs. (For example, Markey and Parks, 1989, found that people w h o are displaced from their jobs and change occupations are three times less likely than workers in general to have been employed in "public administration.') We would expect this tendency of the government to offer "lifetime" jobs to be reflected in a corresponding reluctance of government employees to actively pursue external opportunities and in an increase in employer dependence among them. At least conceptually, union membership is strongly related to participation in bureaucratic employment structures. For this reason alone, we would expect union participation to be associated with a diminishing of one's perception of external market opportunities. This prediction is buttressed by other studies that have demonstrated sizable negative effects of union membership on employee turnover. Of particular interest is an attempt by Richard Freeman and James Medoff (1984) to disentangle two possible competing explanations of unions' turnoverdampening effects. One way in which unions reduce turnover is to raise workers' earnings above the values that can be commanded in a competitive external market--an effect that they labeled the "monopoly effect." Alternatively, unions may reduce turnover by giving workers greater say in the operation of their firms: the voice effect. However, Freeman and Medoff found that "the voice effect dominates the monopoly wage effect. The reason that unionized workers quit less and accrue more tenure than otherwise comparable nonunion workers has more to do with the fact that unionism transforms working places through 'voice' than with the fact that it raises pay" (p. 95). But as we have made clear, our analysis focuses not on quitting per se, but on perceived market opportunities. Why should union workers be less involved in external markets than the nonunionized?

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One explanation is that suggested by Freeman and Medoff, that unions are associated with grievance mechanisms, specifically, and "industrial jurisprudence," more generally, and that these factors explain organized workers' withdrawal from the external market. Because we can impose direct controls for these characteristics, we can evaluate how much of the union effect is due to these specific institutional mechanisms. However, we do anticipate more wide-ranging effects. In some ways, the influence of union participation resembles that associated with government employment. Both are associated with specific institutional arrangements, such as formalized seniority provisions, that enhance employee job security, but both are also important at a symbolic level. In each case, a "third force"--the rational-legal legitimacy of the government in the public sector case, or the reputation of the union as a protector of the "little guy" in the other--vouches for the credibility of whatever specific arrangements may be in place at the level of day-today employment relations. Is it not plausible that workers place some trust in these symbolic trappings? If so, these are precisely the workers we would expect to withdraw from a more active engagement with the external market and who might lapse into a relationship of heightened dependence. Apart from these institutional and contextual factors, it is also necessary to consider how workers' perceived dependence on their employers varies according to more individual traits that may affect their standing in the relevant labor markets. For example, we expect that workers with more years of education will have heightened perceptions of external opportunity. Recent research has also suggested that attributes of individuals' current jobs may play a role in affecting their experiences of market opportunity. Thus, net of other factors, Halaby and Weakliem (1989) found that employees with more control over their immediate task environments have enhanced perceptions of their attractiveness on the external market and, correspondingly, diminished attachment to their current employers. 4 They observed a much weaker, but similar, influence of supervisory responsibility on perceived market opportunity. In the case of both supervision and control, they hypothesized the provision of "general training" through which employees who exercise authority and autonomy on their jobs become more valuable to other employers in the external market. Another possibility is that these job traits simply make workers better adapted to dealing with all kinds of external contingencies, including market opportunities, without neces4 Actually,we should say m o r e than correspondinglydiminishedattachmentto their current jobs. Because attachment is not at issue in this analysis, we can disregard the possible reasons for this unexplained portion of the negative relation between control and attachment.

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sarily providing them with a general skill that would be useful to another employer. In any event, our subsequent models include measures of both on-the-job control and supervisory responsibility. As a final control for the overall positioning of an individual worker vis-a-vis the external market, we have included the Socio-Economic Index (SEI) score for each respondent's 1980 occupation (Stevens & Cho, 1985). In part, this measure incorporates aspects of skill that are not fully picked up by our other measures of human capital. To a lesser extent, it may also tap into the "desirability" of the external occupational market that the individual confronts. Consider two identical workers in different occupations that have similar levels of external occupational mobility chances, but that differ in terms of "general standing" or occupational prestige. Compared to a worker in a more esteemed occupation, a worker in a less prestigious occupation may be less engaged in marketscanning behavior, simply because there is less to be gained from making a move when the overall level of occupational rewards is low than when it is high. Given the race and sex differences with regard to participation in internal and external labor markets that we discovered in Chapter 3, it is quite plausible that these "ascribed" factors would also influence workers' perceptions of external market opportunities. Although at least one study has demonstrated that w o m e n have turnover rates roughly equal to those of men, after occupational type is controlled for (Blau & Kahn, 1981), this does not foreclose the possibility that external market opportunities appear differently to w o m e n and men. Nor does the fact that w o m e n appear to gain as much from external market mobility as they do from internal market movement mean that they are equally aware of these possibilities (see, e.g., Felmlee, 1982). Rather, we would postulate that, for both female and black workers, lingering doubts about the fairness of external markets are translated into diminished perceptions of market opportunity and a greater dependence on current employers. Although at least one earlier study failed to find a relationship between race or gender and market opportunity (Halaby & Weakliem, 1989), this could stem in part from its omission of direct measures of the objective mobility properties of both the internal and the external markets. For example, we have seen that w o m e n are somewhat overrepresented in occupations with a lot of firm-to-firm mobility. If participation in such an occupation increases the perception of external opportunity and, in addition, if w o m e n are, net of this effect, slightly less likely to perceive good external opportunities, a model that fails to control for the objective condition of the external market will tend to show w o m e n and men as more equal in perceived market opportunity than they really are. A somewhat different set of considerations may apply, however, in

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making comparisons between black and white workers. Here, we have seen a tendency for the "disadvantaged" group to have somewhat greater levels of participation in institutional arrangements, such as internal labor markets and due-process systems, which could be expected to depress the perception of external opportunity. Furthermore, blacks may also be overrepresented in other groups that have low levels of perceived market opportunity, such as the unionized and the poorly educated. If so, we might expect to find a pattern in which black workers initially appear to have diminished perceptions of market opportunity that, after controls are introduced for relevant institutional and human capital factors, come to converge with the perceptions that majority workers have. In other words, blacks' greater employer dependence may be explained statistically by the other variables that are included in our model. Finally, it is necessary to consider the age patterning of employer dependence. We hypothesize that older workers will have less perceived market opportunity than younger workers. Partly, this is true for some of the same reasons that we set forth for black and female workers: that older workers both objectively and subjectively experience increased discrimination in hiring. In addition to this possibility, there is also a likelihood that, as workers approach the end of their careers, any investment in employer mobility will be less likely as there is less time for them to recoup the costs of that investment. Empirical support for this interpretation can be derived by assuming a parallel between employer mobility and occupational status mobility. As early as 1967, Blau and Duncan established that occupational status mobility dropped off rather consistently with age; that is, the intercohort association of earlier and later occupational status increased successively with the age of the cohort pairs. Consequently, we predict that workers will become more dependent on their current employers as they grow older. Turning to job satisfaction, our aim here is not to expound on and test a comprehensive theory of this concept. There have been m a n y inquiries into this subject (see, e.g., Gruenberg, 1980; Mottaz, 1985; Wright & Hamilton, 1978), but we are concerned only with augmenting them with regard to the link between employment structure, satisfaction, and labor mobility. Consequently, our selection of variables is guided only by the principle of including major confounding factors that may explain away any of the expected links between satisfaction and internal labor markets, grievance procedures, and other aspects of bureaucratic employment structures. Two kinds of influences may tend to disturb or distort the relationship between bureaucratic employment structures and job satisfaction. The first are factors that may be associated with "selection" effects: by and large, other personal characteristics of individual workers that have

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a direct bearing on both their levels of job satisfaction and their participation in bureaucratic employment structures. Age may have exactly this sort of influence. It has a well-established relationship to satisfaction, although one open to competing interpretations (Glenn & Weaver, 1982; Janson & Martin, 1982; Mastekaasa, 1983), and we have observed its relationship to internal labor markets in Chapter 3. However, other characteristics of this type also need to be taken into account, especially gender, race, and education. (We expect males and females to have similar levels of job satisfaction, blacks to have slightly higher levels of dissatisfaction, and more educated workers to be slightly unhappier in their work; see Lincoln & Kalleberg, 1985.) A second set of factors is those associated with the current job and its immediate context. Historically, job satisfaction research has drawn a distinction between extrinsic ("hygiene") and intrinsic ("motivational") factors associated with work, and our analysis includes both types (Herzberg, 1966). Our consideration of extrinsic factors focuses on the physical environment in which work is performed (heat, noise, cold, etc.) and the amount of earnings attached to each job. The measure of lack of job control, which we analyzed in conjunction with perceived market opportunity, is used to represent the effect of intrinsic factors. It is also important to take institutional and industrial factors into account. For that reason, we control for the degree of unionization (see above) and whether or not the individual is employed by a governmental body. 5

MEASURES Bureaucratic Employment Structure To this point, our efforts have been directed at explaining the various causes of the separate dimensions of bureaucratic employment structures: internal labor markets, due-process arrangements, bureaucratic work control, and personnel departments. With a shift in focus to the exploration of the consequences of these structures, an alteration in analytic strategy is warranted. For reasons of parsimony, the balance of our analysis is carried out by means of one aggregate measure of bureaucratic employment structure. This indicator is simply a linear combination of four of the five employment structure variables analyzed in the s Previous studies of the relationshipbetween unionizationand job satisfactionhave produced rather anomalousresults. For example, Freemanand Medoff(1984) reported that, although unions appear to provide many benefits to their members, the levels of job satisfaction of union members are lower. The results that we report below explain this result as a consequenceof other characteristicsof union members' jobs.

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p r e v i o u s chapters: s t r u c t u r e d mobility, hiring protection, d u e process, a n d the p r e s e n c e of a p e r s o n n e l d e p a r t m e n t . The d i m e n s i o n of b u r e a u cratic w o r k control w a s d r o p p e d for theoretical reasons. Unlike in the o t h e r four aspects, there is no r e a s o n to expect that m o r e formalized w o r k a r r a n g e m e n t s are associated w i t h greater a t t a c h m e n t of w o r k e r s to their e m p l o y e r s . In fact, in a n empirical analysis, Lincoln a n d Kalleberg (1985) f o u n d that formalization t e n d e d to be n e g a t i v e l y related to e m p l o y e r c o m m i t m e n t in the U.S. p o r t i o n of their sample. The final indicator is r e p r e s e n t e d on a scale of 0 to 4, for w h i c h the m e a n is a b o u t 2.2 a n d the s t a n d a r d deviation is nearly 1 (.948). 6

Firm Dependence To classify MEWS r e s p o n d e n t s as m o r e or less d e p e n d e n t o n their c u r r e n t e m p l o y e r s , w e relied o n their a n s w e r s to t w o c l o s e d - e n d e d questions. The first queried each w o r k e r a b o u t " h o w m a n y o p e n i n g s w i t h o t h e r e m p l o y e r s that fit y o u r training a n d e x p e r i e n c e " he or she h a d h e a r d about. Individuals' r e s p o n s e s w e r e fit into the categories of n o n e , one, two, or three or m o r e . (In the s u b s e q u e n t analysis, the res p o n s e s of " o n e " a n d " t w o " w e r e c o m b i n e d into a single category.) T h e s e c o n d indicator of this c o n c e p t w a s similar to H a l a b y a n d Weakliem's a f o r e m e n t i o n e d m e a s u r e of " m a r k e t o p p o r t u n i t y " a n d a s k e d w o r k e r s to estimate h o w long t h e y t h o u g h t it w o u l d take to find "a job at least as g o o d a n d at the s a m e level as y o u r p r e s e n t job." Possible r e s p o n s e s r a n g e d f r o m "a w e e k or less" u p t o "a y e a r or m o r e . " (The shortest t w o categories, "a w e e k or less" a n d " m o r e t h a n a w e e k but less t h a n a m o n t h , " w e r e collapsed in the final m e a s u r e . ) Table 6.1 p r e s e n t s the relationship b e t w e e n these t w o m e a s u r e s of firm d e p e n d e n c e . T h e r e is a clear positive relationship b e t w e e n t h e s e m e a s u r e s as s h o w n in this table. R e s p o n d e n t s w h o e s t i m a t e d that t h e y could find a 6 Although it would have been possible to maintain the bureaucratic employment structure variables in their original, unalloyed state, the reason for combining them is to avoid an unnecessary proliferation of findings of dubious theoretical relevance. Some preliminary analyses in which the various subdimensions were split apart revealed an additional layer of complexity that added little to the main thrust of the chapter's argument. For example, the relative importance of the various subdimensions changes when one is considering zero-order and partial correlations. Thus, due process has the strongest relationship to firm dependence at the zero-order level, but one of the weakest relationships after other variables are controlled for. As a second example, some of the subdimensions have stronger relationships in some subpopulations than in others; for example, mobility chances tend to increase the firm dependence of females but not that of males. In neither of these cases is there a ready explanation of these details from the more general theory that we are pursuing.

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Table 6.1. Relationship between Indicators of Firm Dependence Number of openings heard about in past year

Estimated time to find equivalent new job Don't know Less than a month One to six months Six months to a year A year or more Total

Don't know (%)

Three or more (%)

One or two (%)

None (%)

Total (%)

N of cases

.0 .1 .1 .0 .0

19.1 45.2 36.1 26.2 18.0

9.6 19.0 17.6 14.2 12.1

71.4 35.7 46.1 59.6 69.9

100.0 100.0 100.0 100.0 100.0

377 872 789 302 372 2,712

Statistics (excluding missing cases) Chi square 145.6 Gamma .321

6 df

n e w job quickly w e r e also m u c h m o r e likely to h a v e h e a r d of m a n y o p e n i n g s in the p r e v i o u s y e a r t h a n r e s p o n d e n t s w h o t h o u g h t it w o u l d take a long time to find a n e w job (45% vs. 18%). It w a s a p p a r e n t l y m o r e difficult for w o r k e r s to estimate a job r e p l a c e m e n t time t h a n to r e p o r t on the n u m b e r of o p e n i n g s h e a r d about, as there w e r e c o n s i d e r a b l y m o r e m i s s i n g a n d d o n ' t - k n o w r e s p o n s e s to that question. T h e c o m b i n e d index of firm d e p e n d e n c e w a s created b y assigning n u m e r i c a l scores of 1 t h r o u g h 4 to each of these variables a n d t h e n calculating the arithmetical m e a n . ( R e s p o n d e n t s w i t h m i s s i n g values w e r e g i v e n scores b a s e d on their r e s p o n s e to the n o n m i s s i n g variable.) The r e s u l t a n t firmd e p e n d e n c e m e a s u r e h a s a m e a n of 2.37 a n d a s t a n d a r d deviation of a p p r o x i m a t e l y 1.0, w i t h higher values r e p r e s e n t i n g l o w e r e d p e r c e p t i o n s of external o p p o r t u n i t y a n d , therefore, greater levels of d e p e n d e n c e .

Job Satisfaction Job satisfaction w a s a s s e s s e d b y r e s p o n d e n t s ' replies to t w o questions a b o u t their current jobs. O n e w a s a c o n v e n t i o n a l "overall" m e a sure of job s a t i s f a c t i o n - - " A l l in all, h o w satisfied are y o u w i t h y o u r job? Would y o u say y o u a r e . . . " - - w h e r e the r e s p o n s e categories r a n g e f r o m " v e r y satisfied" to " n o t at all satisfied." The o t h e r w a s w o r d e d as follows: " M o s t jobs h a v e g o o d a n d b a d points. If y o u w e r e to describe y o u r job w o u l d y o u say it h a s (1) n o b a d points; (2) m o r e g o o d points t h a n b a d points; (3) a n equal n u m b e r of g o o d points a n d b a d points; (4) m o r e b a d points t h a n g o o d points; or (5) n o g o o d points?" The m e a s u r e u s e d in o u r analysis is b a s e d on a c o m b i n a t i o n of r e s p o n s e s to these items, a n d h a s scores r a n g i n g f r o m 1 to 10.

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Attachment G i v e n the considerations m e n t i o n e d above, is it e v e n r e m o t e l y likely that a t t a c h m e n t can be m e a s u r e d in a t e l e p h o n e s u r v e y of e m p l o y e e s ? The a n s w e r is b o t h " N o t as well as w e w o u l d like," a n d " P e r h a p s well e n o u g h to m o v e f o r w a r d . " rn essence, w e believe that behavioralintentional m e a s u r e s of a t t a c h m e n t such as " H o w likely is it that y o u will m a k e a sincere effort to find a job in the next year?" are n o t necessarily flawed, but that t h e y h a v e to be i n t e r p r e t e d within the context in w h i c h t h e y w e r e asked. In the analysis that follows, o u r m e a s u r e of a t t a c h m e n t w a s s o m e w h a t less s t r a i g h t f o r w a r d t h a n the simple prediction of w h e t h e r or n o t the w o r k e r w o u l d try to leave, but w e believe t h a t it taps a n i m p o r t a n t aspect of a t t a c h m e n t as w e h a v e d e f i n e d it. The m e a s u r e w e u s e d w a s b a s e d o n t w o questions. T h e m a i n o n e a s k e d r e s p o n d e n t s to agree or disagree (either strongly or not) w i t h the following statement: "I a m a l w a y s o n the lookout for a job that p a y s m o r e t h a n m i n e . " Because of the explicit reference to " p a y " in this q u e s t i o n (we n o w prefer that the i t e m h a d a s k e d a b o u t a job that w a s s i m p l y " b e t t e r " t h a n mine), w e h a v e a d j u s t e d the a n s w e r s to this question b y taking into account the r e s p o n s e s to a second item. The control i t e m a s k e d r e s p o n d e n t s to agree or disagree w i t h "If the salary w e r e high e n o u g h , I could w o r k at a l m o s t a n y job." O u r belief w a s that, b y slightly d i s c o u n t i n g the " o n - t h e - l o o k o u t " r e s p o n s e s of the m o r e pecuniarily m o t i v a t e d a n d u s i n g " c o u l d - w o r k - a t - a l m o s t - a n y - j o b " instrumentalists, w e w o u l d p r o d u c e a m e a s u r e that w a s s o m e w h a t p u r g e d of its p u r e l y e c o n o m i c referent. 7

Other Variables Several o t h e r variables in this analysis d e s e r v e s o m e additional explanation. O n e is a m e a s u r e of work control that w a s a c o m p o s i t e of t h r e e questionnaire items f r o m the MEWS survey. T h e s e questions p e r t a i n e d to w h e t h e r it w a s i m p o r t a n t (or n o t i m p o r t a n t ) on each w o r k e r ' s job (1) to m a k e a lot of i m p o r t a n t decisions; (2) to follow exactly set routines a n d p r o c e d u r e s ; a n d (3) to be v e r y creative a n d original. 8 Working conditions 7 The mechanism for adjusting these scores was to compute the regression residuals of the "lookout" item when it was predicted from the "work-any-job" item. The linear equation from which the residuals were calculated had the following form: Y = 1.9724 + .2643 * X. The correlation between the two items was .29. 8 The combination of these measures was essentially similar to that carried out for the other indices created in the course of this analysis, with one exception. A preliminary examination of the data showed a clear tendency for a "response-set" type of bias on the question that was negatively worded--the importance of following "exactly set routines and procedures." For workers who responded "very important" to this item, index scores were calculated by averaging their responses to the other two items.

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were measured by two scales. The first was a measure of h o w free each job was from specific stressful factors, including noise, crowding, heat, cold, danger, dirt, and strenuous work. Scores on this scale ranged from a low of 7 to a high of 21, the high scores indicating the absence of poor conditions. Consequently, we describe this as a measure of job clemency. The second measure of working conditions was a simple summary description elicited from each respondent ("All things considered, would you say that the working conditions where you work are . . ."), to which responses ranged from "very pleasant" to "very unpleasant" on a 5-point scale. Finally, to measure the extent of each respondent's involvement with a labor union, an index of unionization was constructed with the following index values: 0 - job is not covered by a union contract; 1 - job is covered by a union contract, but respondent is not a union member; 2 - job is covered by a union contract and respondent is a member.

FINDINGS

Firm Dependence In Table 6.2, the means and standard deviations for variables included in our firm dependence and satisfaction analysis are displayed. Nearly all of the bivariate correlations are in the expected direction. For example, considering only ascriptive characteristics, we see that female, black, and older employees all expressed greater dependence on their current employers than male, nonblack, and younger workers. Not surprisingly, those with more education, those in higher-status occupations, and those in occupations where there was a lot of firm-to-firm mobility perceived themselves as having much more market opportunity than those at the opposite ends of these spectra. As we expected, there was also a significant positive correlation between participation in bureaucratic employment structures and the degree of firm dependence. However, some of the hypothesized correlations did not materialize in the bivariate analysis: (1) working in a "core" industry had little effect on one's knowledge of employment alternatives, and (2) the length of job training was also unrelated to firm dependence. Furthermore, of the remaining statistically significant correlations, that between establishment size and firm dependence was so small that it is substantively uninteresting. Among the strongest effects in this model is the large positive relationship between unionization and firm dependence. Although this was not unexpected, it remains an open question whether union members' lack of perceived opportunities can be accounted for by the other vari-

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Table

6.2. M e a n s , S t a n d a r d D e v i a t i o n s , a n d C o r r e l a t i o n s w i t h Firm D e p e n d e n c e a n d Job Satisfaction Correlation with N of cases

Firm dependence Job satisfaction I n d e p e n d e n t variables Sex (male = 1) Race (black = 1) Age in years Years of schooling Unionization Public sector worker Absence of work control Occupational socioeconomic index Supervisory responsibility Occupational external market Bureaucratic employee relations External bureaucratic interaction Age-bureaucratic interaction Core industry Job clemency Unpleasant working conditions Yearly earnings Length of training Establishment size

Mean

Standard deviation

Firm dependence

Job satisfaction

2,713 2,710

2.462 6.415

1.059 1.774

2,698 2,698 2,672 2,691 2,702 2,712 2,693 2,683

0.583 0.143 37.972 13.731 0.543 0.142 5.474 40.204

0.493 0.35 12.567 2.632 0.87 0.349 1.845 19.048

-0.066* 0.115" 0.182" -0.228* 0.243* 0.132" 0.192" -0.194"

0.021 -0.113" 0.131" 0.049* -0.092* -0.014 -0.198" 0.112"

2,713 2,680

0.783 0.091

0.87 0.755

-0.172" -0.238*

0.121" 0.072*

2,698

2.198

0.945

0.092*

0.048*

2,680

0.063

1.748

-0.239*

0.070*

2,672

-0.006

28.905

0.168"

0.132"

2,654 2,711 2,699

0.587 1.760 2.092

0.492 0.242 0.952

0.028 -0.091" 0.048*

0.022 0.287* -0.481"

2,483 2,573 2,652

19767 90.110 951.632

16258 250.269 2125.037

-0.086* -0.002 0.038*

0.114" 0.058* -0.021

*Correlation coefficient significantly different from zero, p < .05.

ables in the model. In particular, were the generally lower levels of education, socioeconomic status, supervisory status, and direct work control among union members to blame for this result? Or was there some unique factor in union membership itself that accounted for this pattern? To answer this and related questions, it is necessary to examine these relationships in a multivariate context. In Table 6.3, regression results are presented for three related models in which firm dependence is predicted from successively more factors. Beginning with the first model, shown in Columns I and 2, we see that there were significant effects in the predicted direction for the fac-

142

Chapter 6

Table 6.3. D e t e r m i n a n t s of Firm D e p e n d e n c e Model 1

Intercept Male Race (black = 1) Age in years Years of schooling Unionization Public sector worker Absence of work control Occupation SEI score Supervisory responsibility Occupational external market Bureaucratic employee relations Bureaucratic-mobility interaction R2

Model 2

Model 3

b

t

b

t

b

t

1.91 -.111" .338* .015"

27.8 -2.70 5.81 9.26

2.36 -.097* .140" .013" -.049* .170" .359* .060* -.003* -.061"

14.6 -2.38 2.46 8.43 -5.16 6.94 6.17 5.17 -1.96 -2.48

2.27 -.118" .096 .012" -.047* .160" .279* .057* .000 -.078* -.121" .055* -.046

13.5 -2.95 1.71 8.16 -5.00 6.56 4.82 5.03 -.295 -3.22 -1.96 2.62 -1.73

.048

.149

.175

Number of cases, 2,615 Note: *t significant p < .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

tors of race, sex, and age; that is, male, white (nonblack), and younger workers all perceived greater market opportunity than other individuals. The strongest influence appears to have been age, followed in order by race and sex. Thus, some elementary calculations on the basis of this model reveal that a black female at the age of 65 had a predicted level of firm dependence nearly 50% higher than a white male of age 20 (3.22 vs. 2.17). We shall return momentarily to the issue of how these differences are affected once other relevant predictors are taken into account. Columns 3 and 4 of Table 6.3 add relevant human-capital and jobrelated factors to the model we have been considering. As expected, there was a strong tendency for workers with more years of education, who worked in occupations with higher social standing, who had greater supervisory responsibility at work, and who had more control over their immediate jobs to have a greater awareness of external job prospects. (Note that the control variable is scored in such a way that high values indicate lack of control.) Also, those with the highest index of union participation and those who worked in the public sector had a diminished awareness of external market opportunities. These results not only confirm the predictions offered above but, in three of the six

Bureaucratic Structure and Attachment to Firms

143

cases, are very consistent with other research findings. Thus, in the Halaby and Weakliem study cited previously, union position, immediate job control, and supervisory responsibility were all associated with market opportunity in a w a y that parallels the one shown here. As an additional step in the analysis of firm dependence, we also took into account each employee's status vis-a-vis the bureaucratic employment structure in his or her workplace and the employer mobility prospects in his or her occupation. Furthermore, an interaction term was added to allow for the possibility of differing effects of bureaucratic employment structures under different external-employer-mobility regimes. These results are shown in Columns 5 and 6, and they confirm that not only did bureaucratic employment structure have an effect, but the size of its effect depended somewhat on the workers' external mobility prospects. The nature of these effects can be more clearly seen in Figure 6.2, where the effect of bureaucratic employment structure on firm dependence is plotted for five different values of external market viability. What is readily apparent from this plot is that the positive effects of bureaucratic employment structure on firm dependence not only are counteracted by being in an occupation with a more lively external labor market but, at very

3.1 2 SD below mean

2.g u.I o z uJ a z LU n I.U a rr It.

. .. •

oo~,

2.7

.o°°

B°

o°

OIOBOO PmQ~II ~OI O@

2.5 2.3 I

2.1

I

I

I

I

I

I

I

I

I

i

i ~

i

I

i

i

i

i

i

i

i

i

2 SD above mean 1.g 0

I

I

I

I

I

I

I

I

0.5

1

1.5

2

2.5

3

3.5

4

BUREAUCRATIC EMPLOYMENT STRUCTURE INDEX .......

-

-

Very low external market

Low external market

Neutral external market

High external market

Very high external"rnarket

Figure 6.2. Firm dependence by bureaucratic employment structure by sex by external market status: All workers.

144

Chapter 6

high levels of external market viability, are, in fact, reversed. That is, holding constant one's level of involvement with bureaucratic employment structures, moving up one "level" on the external market dimension decreases one's degree of dependence on the current employer. The reverse, however, does not hold. Although, in general, bureaucratic employment structures tend to decrease one's awareness of job opportunities elsewhere, when a certain threshold of external market viability is crossed, this relationship begins to reverse. (The exact point is at external occupational market index scores of 1.19, or 1.45 standard deviations above the mean of this variable.) Based on this pattern of mutual influence, we again conclude that it is essential in understanding patterns of labor mobility and firm attachment to understand the nature of the occupational circumstances in which workers find themselves. Table 6.3 also reveals an interesting pattern of results for the ascriptive variables of race, sex, and age. As we have already seen, black workers tend to be in a position of somewhat greater dependence on their employers than those of other races. However, as successively more factors are taken into account in these models, the race effect diminishes drastically. The largest decline happens w h e n education and the job-related variables are added to the model, reducing the race effect to about 40% of its previous size. What this indicates is that black workers perceive less market opportunity because they are, on average, less well educated, more likely to work for the government and to be in unions, and less likely to have control over their immediate work and to supervise other workers. As we noted in Chapter 3, they are also less likely to be in viable external labor markets. It is these conditions, taken together, that account for greater dependence on current employers among the black working population, and not some attribute more directly linked to their racial status per se. For female workers, the situation is different. Their lower perception of external opportunities has little to do with the characteristics of their jobs or their own characteristics as workers. The same is also the case for older workers, with age surviving the addition of job controls as perhaps the strongest effect in these models. There are, of course, competing explanations for the persistence of these effects. One possibility is that both women and older workers do anticipate some hiring discrimination and are likely to expect more difficulty in finding other jobs. Another potential explanation has to do with each of these groups' orientation toward further career development. In the case of age, older workers may manifest an increased orientation toward their present employers because the next move that they anticipate is to retirement rather than to another job. For women, it may be that external mobility orientations are pulled down because of the presence of a group of less-

Bureaucratic Structure and Attachment to Firms

145

careerist, more conditionally attached workers in the midst of a group with more work-centered life interests. This possibility is examined below. With regard to the education and job-related variables, the only effect that disappears in the final model is that of socioeconomic status. Although it originally had a significant negative effect on firm dependence, its direct influence is eliminated when controls for the market variables are introduced. Apparently, the effect of status is largely explained by the fact that more prestigious occupations are also those that have more active external labor markets. Once this factor of "occupationalization" is taken into account, status by itself does little to decrease dependence on current jobs. In our earlier discussion, predictions were also offered about the effect of some other possible causes of firm dependence that are not included in the models in Table 6.3. Following Halaby and Weakliem, we added income as predictor of firm dependence. In their model, higherincome workers were found to be less aware of external market opportunities, a regularity that these authors implied results from these individuals' having positions that are, in a sense, "overrewarded." Although income is not a significant predictor of firm dependence in our analysis and hence is not included in this table, the direction of the effect is different. Rather than suggesting that higher-income workers have "priced themselves out of the market," the direction of the association in our models indicates that they are worth what they're getting paid and have external opportunities commensurate with that status. Three other variables that also added nothing of significance to the models in Table 6.3 were establishment size, "core industry," and length of training in the firm. Our findings here replicate perfectly the lack of association between firm size, "core" industry status, and market opportunity that was reported by Halaby and Weakliem. Although the first two of these have been much heralded as important "structural factors" with important consequences for income determination, it is simply not the case that they have much direct influence on workers' perceived market opportunities. As noted above, only firm size had even a weak zero-order relationship to firm dependence, and even that appears to be explained by the other variables in the model. A possible limitation of the model we have examined in Table 6.3 is that it treats all workers as if they are affected equally by their internal and external market contexts. In Table 6.4 and Table 6.5, results are shown in which male and female workers' levels of firm dependence are analyzed separately. There are several variables whose effects vary only marginally between the sexes: union participation, education, and supervisory status (which has little effect in either case). However, an

146

Chapter 6

Table 6.4. D e t e r m i n a n t s of Firm D e p e n d e n c e , F e m a l e s Model 1

Intercept Race (black = 1) Age in years Years of schooling Unionization Public sector worker Absence of work control Occupation SEI score Supervisory responsibility Occupational external market Bureaucratic employee relations Bureaucratic-mobility interaction R2

Model 2

Model 3

b

t

b

t

b

t

1.82 .153" .018"

19.2 2.01

2.45 .004 .015" -.067* .215" .251" .036* .004 -.054

9.64 .049 6.34 -4.40 5.11 2.81 2.03 1.66 -1.38

2.17 -.026 .014" -.059" .160" .189" .036* .006* -.070 -.076 .072* -.089"

8.34 -.350 6.28 -3.93 3.78 2.14 2.06 2.70 -1.82 -.740 2.24 -2.06

.055

7.72

.119

.154

Number of cases, 1,094 Note: *t significant p < .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

interesting result is that the interaction between internal and external markets exists only among the female part of the sample. Both w o m e n and men have increasing degrees of dependence accompanying increased participation in bureaucratic employment structures, but for women, this relationship is nullified by increasing external-labor-market participation. The nature of this pattern is clearly illustrated in Figure 6.3, which plots levels of firm dependence by levels of bureaucratic employment structure separately for four different groups: (1) men in occupations with high employer mobility chances (one standard deviation above the mean); (2) men in occupations with low employer mobility chances (1 standard deviation below the mean); (3) w o m e n in high-mobility occupations; and (4) women in low-mobility occupations. The levels of all other variables are set at the means of the male distributions to allow direct comparisons of men's and women's outcomes. For three of these groups, there is a clear relationship between participation in bureaucratic employment structures and lack of perception of market opportunities. Only w o m e n in strong external market contexts are unaffected by participation in internal markets and other elements of employment bureaucracy. Thus, although w o m e n in high-

147

Bureaucratic Structure and Attachment to Firms

Table 6.5. D e t e r m i n a n t s of Firm D e p e n d e n c e , M a l e s Model 1

Intercept Race (black = 1) Age in years Years of schooling Unionization Public sector worker Absence of work control Occupation SEI score Supervisory responsibility Occupational external market Bureaucratic employee relations Bureaucratic-mobility interaction R2

Model 2

Model 3

b

t

b

t

b

t

1.87 .566* .012"

21.5 6.39 5.68

2.12 .312" .013" -.036* .122" .382* .085* -.006* -.065*

1.26 3.68 6.31 -3.00 3.97 4.96 5.53 -3.80 -2.09

1.99 .263* .012" -.037* .127" .305* .081" -.004* -.082* -.141 .057* -.017

9.57 3.12 6.07 -3.08 4.09 3.94 5.32 -2.52 -2.64 -1.82 2.05 -.493

.045

.178

.200

Number of cases, 1,521 Note: *t significant p < .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

mobility external labor markets are always less dependent than their counterparts in low-mobility external markets, the size of this difference clearly depends on the circumstances of the internal market. At low levels of the internal market, w o m e n who are in active external markets are only slightly less dependent than their female counterparts in more static occupations. At high levels of bureaucratic structure, this situation is dramatically reversed; w o m e n in low-mobility occupations are much more dependent than w o m e n in high-mobility occupations. This same comparison does not hold for men, and we are interested in explaining w h y it should exist. Although our answer must be partly speculative, we suggest that the firm-binding incentives associated with job protection and due process may be ineffective for a special group of female workers: those with limited career commitments. That is, if one's time horizon v i s - a - v i s a given employer is limited, mechanisms that for other workers would promote attachment might have little effect. This speculation, of course, depends on that group (women with lesser degrees of career commitment) being disproportionately represented in high-external-employermobility occupations, but such an association is not beyond plausibility.

Chapter 6

148

3

I.u o Z

2.9 2.8

LU 2.7 E3 Z

2.6 2.5

a

2.4

n-

2.3 2.2

2.1 2

t

0

0.5

i

I

1

'

1.5

I

I

2

I

2.5

3

I

3.5

(

4

BUREAUCRATIC EMPLOYMENT STRUCTURE Female--low external market Female--high external market

Male~ow external market ~

.

,.

Male--high external market

Figure 6.3. Firm dependence by bureaucratic employment structure by sex by external market status.

For women, it may be exactly the same group of occupations that permit mobility between one employer and another that permit mobility of a different kind, that is, from work to nonwork. Although career commitment is not directly measured in our study, data have been gathered on the number of work interruptions of at least a year that each respondent encountered. A sizable percentage of female workers experienced a hiatus in their careers (48%, compared to only 17% of the male workers). The effects of this somewhat elevated rate of intermittency are shown in Figure 6.4, where values of firm dependence are plotted against levels of bureaucratic employment structure separately for four grot~ps of women: those with and without career interruptions and, among both groups, those with high and low levels of participation in external markets. The results are quite dramatic. The only group of w o m e n that does not have a positive relationship between bureaucratic employment structure and firm dependence is the group with work interruptions w h o are also in occupations with high rates of interemployer mobility. Thus, the steepness of the relationship between women's participation in bureaucratic employment structures and their dependence on their employers depends on two other considerations: incumbency in an occupation where other employers compete for one's services and inclusion in a social role where responsibilities outside work compete for one's time and attention. Where one or the other is present, bureaucratic employment structures continue to increase de-

Bureaucratic Structure and Attachment to Firms

149

2.9 L~ 0 z u.I z uJ Q. uJ a

2.8 2.7 2.6 2.5 °e°

°

2.4 2.3

LL

2.2 2.1 2

I

0

I

0.5

1

I

1

1.5

2

I

2.5

I

I

3

3.5

I

4

BUREAUCRATIC EMPLOYMENT STRUCTURE .......

-

--

No interruptions~--Iow external market

Interruptions~ow

No intermptions~igh exlemal market

Interruptions--high

external market

external market

Figure 6.4. Firm dependence by bureaucratic employment structure by work interruptions by external market pattern: Females only.

pendence. When both are present, the relationship not only disappears but reverses. In sum, we have seen consistent evidence that bureaucratic employment structures, a composite of internal labor markets, due-process arrangements, and personnel departments, provide a barrier to one's awareness of external job opportunities. This, however, is only part of the story, for, aside from one's beliefs about alternatives, there is also the matter of one's willingness to pursue the "exit" option. As we have said, our major approach to this topic will be through the analysis of job satisfaction and its relationship to bureaucratic employment structures.

Job Satisfaction Returning to Table 6.2, we find reports of the zero-order correlations between the variables of interest and our measure of job satisfaction (Column 5). In general, the results are consistent with earlier empirical research. Black workers are significantly more dissatisfied than other employees, and job satisfaction tends to increase with age. Unpleasant working conditions have a strong negative impact on job satisfaction, and the absence of stressful factors on the job tends to increase it. Betterpaid workers tend to be happier, as do those in higher-status jobs and those with more supervisory responsibilities. Our results also replicate

150

Chapter 6

those of Freeman and Medoff in showing that unionized workers are more dissatisfied than those who are not involved in unions. Unlike in earlier samples, the more educated workers in our study tended toward higher, rather than lower, satisfaction. As predicted by our normative hypothesis, there is a positive correlation between job satisfaction and bureaucratic employment relations. Interestingly, those who are in more lively external occupational markets also tend to be happier on their current jobs. (This result would be expected if these people have a better opportunity to reach their "equilibrium" position in the market.) Thus, our model would predict the lowest level of satisfaction for those who are involved in neither internal nor external markets. It is necessary, however, to consider these relationships in a multivariate context. Table 6.6 provides the appropriate regression estimates. Black workers are consistently less satisfied than the comparison group of other workers, although about a third of their discontent is explained by other variables in the complete equation. Our results continue to confirm preTable 6.6. D e t e r m i n a n t s of Job Satisfaction, Total S a m p l e Model 1

Intercept Gender (male = 1) Race (black = 1) Age in years Years of schooling Unionization Unpleasant working conditions Job clemency Absence of work control Occupational external market Bureaucratic employee relations Establishment size Earnings R2

Model 2

Model 3

b

t

b

t

b

t

5.76 -.011 -.550* .019"

46.7 -.153 -5.29 6.39

7.22 .077 -.415" .013" -.033* .103" -.791"

19.05 1.18 -4.49 5.28 -2.52 2.56 -21.4

7.12 .042 -.382* .013" -.042* .086* -.785*

18.7 .606 -4.09 4.86 -3.17 2.11 -21.3

.807* -.127"

5.14 -7.02

.775* -.117"

4.94 -6.40

.104"

2.35

.097*

2.71

-2.9E-05 4.1E-06 .026

Number of cases, 2,392 Note: *t significant p ~ .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

.272

.276

-1.90 1.86

Bureaucratic Structure and Attachment to Firms

1~1

vious research that shows a positive association between age and job satisfaction. None of our models suggest that there is any difference in overall satisfaction levels between men and women. Once other variables have been controlled for, however, we do observe a positive relationship between union involvement and job satisfaction. This is a result of some interest, as other researchers have been puzzled by the recurrence of negative relationships between union membership and job satisfaction in their research (Freeman & Medoff, 1984). More detailed stepwise procedures than those shown in Table 6.6 reveal the reason for this reversal in the unionism-satisfaction relationship. The sign changes when our two working-conditions indices are added to the regression model. In other words, those with more union involvement tend to work on jobs that are more unpleasant and that have more physical "stressors" than those uninvolved in unions. Once this factor is taken into account, union members are, in fact, more satisfied than their nonunion counterparts. Not surprisingly, these two working-conditions variables and the absence of job control are all strongly associated with negative reactions to jobs. As we predicted, job satisfaction is enhanced by both favorable "intrinsic" and favorable "extrinsic" characteristics of jobs. This conclusion is also reinforced by the weak positive association between earnings and job satisfaction. Education, as in other studies (Lincoln & Kalleberg, 1985), is associated with lowered job satisfaction--a trend frequently attributed to the heightened expectations that accompany additional years of schooling. The significant positive relationship between participation in bureaucratic employment relations and job satisfaction persists after the introduction of controls for the aforementioned "confounding" variables. Thus, we are able to confirm the first link in the causal chain predicated by our normative hypothesis. Net of a host of other factors, workers in internal labor markets who enjoy due-process rights are more satisfied with their jobs. What remains to be seen, and what we shall attend to shortly, is what the effect of job satisfaction is on attachment to the current employer. Finally, we note that workers in larger establishments tend to be slightly less satisfied than those in smaller ones. This is somewhat inconsistent with the pattern that Lincoln and Kalleberg encountered in their U.S. sample; however, it is not totally surprising. Their research did show that some size-related aspects of organizations, such as centralization and formalization, were negatively associated with job satisfaction, and our size variables have picked up some of those effects, which were not explicitly entered into our statistical models. Before moving to consider some possible gender differences in the

152

Chapter 6

causes of job satisfaction, it is necessary to mention those variables that proved not to be associated with job satisfaction in our study. In four additional analyses, we attempted to discern satisfaction impacts for two industrial context variables (core sector location and government employee status) and for two job-related characteristics (length of job training and supervisory status). None of these variables had any significant impact whatsoever on job satisfaction and were excluded from further consideration. Although the two job-related factors did have an impact on satisfaction in the correlational analysis shown in Table 6.2, their positive effects are undoubtedly explained by the impact of other variables in our model, such as work control and internal labor markets. H o w well do these results generalize to the possibly separate experiences of work encountered by men and women? In Tables 6.7 and 6.8, we present the three regression equations of Table 6.6 after they were applied separately to the females and males in our sample. The differences can be summarized rather easily.

Table 6.7. D e t e r m i n a n t s o f Job Satisfaction, F e m a l e s Model 1

Intercept Race (black = 1) Age in years Years of schooling Unionization Unpleasant working conditions Job clemency Absence of work control Occupational external market Bureaucratic employee relations Establishment size Earnings R2

Model 2

Model 3

b

t

b

t

b

t

5.88 -.678" .016"

32.7 -4.69 3.57

6.26 -.450* .016" -.043* .068 -.724"

9.49 -3.464 4.11 -1.98 :978 -12.2

6.270 -.440" .016" --.052* .071 -.724

9.33 --3.34 4.04 --2.30 .988 --12.1

1.43" -.170"

5.26 -5.99

1.42" --.165"

5.20 -5.76

.092 .020 -2.9E-06 4.4E-06 .031

Number of cases, 1,006 Note: *t significant p < .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

.281

.280

1.19 .425 -.095 .921

153

Bureaucratic Structure and Attachment to Firms

Table 6.8. D e t e r m i n a n t s of Job Satisfaction, M a l e s Model I

Intercept Race (black = 1) Age in years Years of schooling Unionization Unpleasant working conditions Job clemency Absence of work control Occupational external market Bureaucratic employee relations Establishment size Earnings R2

Model 2

Model 3

b

t

b

t

5.66 -.389* .021"

37.8 -2.56 5.42

7.68 -.354* .012" -.021 .109" -.830*

16.8 -2.64 3.55 -1.26 2.19 -17.5

7.49 -2.88* .010" -.034" .078 -.816"

16.4 -2.11 2.92 -2.02 1.55 17.3

.485* -.100"

2.53 -4.24

.434* -.087*

2.27 -3.65

.111"

2.06

.158"

3.42

-4.1E-05" 4.9E-06"

2.36 2.00

.024

.270

b

t

.279

Number of cases, 1,386 Note: *t significant p < .05.

b = unstandardized regression coefficient t = t-statistic of coefficient

Women's levels of job satisfaction respond less to the market and organizational features of their jobs. Only for men do bureaucratic employment relations enhance job satisfaction, and only for men do large firms diminish job satisfaction. Men are more satisfied when they participate in occupations with lively external markets, but the relationship for w o m e n is not strong enough to be statistically significant. Furthermore, men are more likely than w o m e n to translate higher earnings into reports of greater job contentment. There are, however, some work characteristics that operate in the reverse direction; that is, they are more tied to job satisfaction for women than for men. For example, the absence of dirt, noise, crowding, and so on appears to please w o m e n more than it does men, as the coefficient for the "job clemency" variable in the female equation is three times larger than that in the male equation. Likewise, the absence of work control troubles w o m e n twice as much as it does men. Both of these results are also consistent with the fact that education is more negatively related to job satisfaction among women. In other words, w o m e n ap-

154

Chapter 6

p e a r s o m e w h a t m o r e r e s p o n s i v e to the intrinsic a n d extrinsic f e a t u r e s of their i m m e d i a t e job s u r r o u n d i n g s , a n d o u r interpretation of schooling is t h a t it m a k e s individuals m o r e sensitive to these job characteristics. Finally, for r e a s o n s that are difficult to explain, there is a greater difference in job satisfaction b e t w e e n black a n d w h i t e w o m e n t h a n exists b e t w e e n black a n d w h i t e m e n .

Attachment Referring to Table 6.9, w e find listed the z e r o - o r d e r correlations b e t w e e n o u r m e a s u r e of a t t a c h m e n t a n d other factors in o u r m o d e l . In general, those attributes that predict satisfaction also predict the likelih o o d of individuals' looking a r o u n d for alternative w o r k . U n i o n i z a t i o n a n d m e m b e r s h i p in a " h i g h - m o b i l i t y " occupational m a r k e t are b o t h related to satisfaction, but not to attachment. O n the o t h e r h a n d , establishm e n t size is related only to a t t a c h m e n t . This table also e n c o u r a g e s m o r e rigorous e x a m i n a t i o n of o u r basic h y p o t h e s i s - - t h a t bureaucratic e m p l o y m e n t job structures e n c o u r a g e a t t a c h m e n t as well as p r o m o t e job satisfaction. The requisite correlation is b o t h positive a n d statistically significant. As before, w e e x a m i n e these relationships w i t h a multivariate m o d el. H o w e v e r , because of the provisional nature of o u r a t t a c h m e n t m e a sure, o u r p r o c e d u r e s are slightly modified. First, w e e x a m i n e o n l y m o d els for the c o m b i n e d m a l e a n d female w o r k force. Second, the variables of earnings a n d firm size h a v e b e e n eliminated f r o m further consideration b e c a u s e (1) t h e y t e n d to r e d u c e the n u m b e r of cases for analysis m o r e t h a n is desirable for the analysis of a " w e a k l y m e a s u r e d " d e p e n d e n t variable, a n d (2) t h e y m a d e a statistically significant contribution o n l y in explaining job satisfaction a m o n g males. In addition, the analysis is differently s t r u c t u r e d because w e h a v e n o w i n t r o d u c e d m o r e t h a n o n e e n d o g e n o u s variable into the m o d e l at one time. The causal m o d e l w e p o s t u l a t e is of the recursive variety (i.e., there are no p a t t e r n s of m u t u a l causation allowed a m o n g the e n d o g e n o u s variables), a n d it is e s t i m a t e d b y m e a n s of o r d i n a r y least-squares techniques. 9 9 One of the basic assumptions of our theoretical model is that the behavioral, market link between bureaucratic structure and attachment that operates through firm dependence is conceptually independent of its link to attachment through job satisfaction. We know of no reason why satisfaction or perceived external opportunities should be related to each other, once their common causes have been controlled for. Thus, we postulate no direct causal path between these variables and only allow for the fact that their error terms may be correlated. An additional analysis showed that the correlation coefficient between the residuals of these variables was extremely low, of the order of about .03, which tends to confirm our view that the addition of a causal link here would change little.

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Bureaucratic Structure and Attachment to Firms

Table 6.9. Correlations of Explanatory Variables

with Job Attachment I n d e p e n d e n t variables Sex (male = 1) Race (black = 1) Age in years Years of schooling Unionization Public sector worker Absence of work control Occupational socioeconomic index Supervisory responsibility Occupational external market Bureaucratic employee relations External-bureaucratic interaction Core industry Yearly earnings Length of training Establishment size Job clemency Unpleasant working conditions

Job attachment 0.002 -0.096* 0.180" 0.068* 0.002 0.031 -0.039* 0.097* 0.093* 0.031 0.054* 0.024 0.006 0.113" 0.050* 0.048* 0.083* - 0.108"

*Correlation coefficient significantly different from 0, p < .05.

In Tables 6.10 and 6.11, we present the results of two analyses of attachment to employers. Table 6.10 presents reduced-form estimates, in which satisfaction and firm dependence are omitted as causes of attachment, and in which all of the independent variables are allowed to influence each of the endogenous variables. Table 6.11 presents the structural model in which the other endogenous variables are i n d u d e d as causes of attachment and in which insignificant causal paths have been removed from the equations for all of the endogenous variables. A comparison of the two tables allows us to sort out whether the effects of key independent variables on attachment are direct influences or mediated by either satisfaction or firm dependence. Unfortunately, as we expected, our measure of attachment is sufficiently unreliable so that we are unable to explain much of its variance. However, despite this limitation, several findings emerge rather clearly. As hypothesized, even after controlling for a range of human-capital, job, and industrial characteristics, bureaucratic employment structures increase the attachment of individuals to their employers. The effect of bureaucratic employment structures in Panel 1 is small but statistically significant. In addition, being black decreases attachment, as does having a job with many stressful working conditions. However, attachment is increased among those who are members of unions, who are older,

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Table 6.10. I n t e g r a t e d M o d e l s o f Firm D e p e n d e n c e , Satisfaction, a n d A t t a c h m e n t Reduced form models Firm dependence

Intercept Gender (male = 1) Race (black = 1) Age in years Public sector worker Supervisory responsibility Unionization Years of schooling Absence of work control Job clemency Unpleasant working conditions Occupational socioeconomic index Occupational external market Bureaucratic employee relations

Satisfaction

Attachment

B

Standard b

B

Standard b

B

Standard b

2.224 -.112" .092 .012" .297* -.073*

.000 -.053 .030 .143 .099 -.060

7.064 .081 -.467* .013" .130 .059

.000 .022 -.091 .090 .026 .029

- .662 -.026 -.182" .010" .021 .046*

.000 -.019 -.094 .181 .011 .060

.167" -.047* .059*

.138 -.118 .104

.090" -.050* -.118"

.044 -.073 -.122

.044" .007 .010

.057 .026 .027

.032 -.020

.007 -.018

.846* -.774*

.114 -.411

.059 -.055*

.021 -.077

-.001

-.014

.001

.006

.002

.048

-.223*

-.155

.104"

.043

.028

.031

.051"

.046

.084*

.045

.030*

.043

R2

.173

.275

.063

Number of cases, 2,587 Note: *t significant p < .05.

and who are supervisors. Our analysis is also similar to Halaby and Weakliem's (1989), at least as far as Panel 1 goes, in showing that the "total effect" of work control on attachment is virtually nil (see their Table 8, p. 582). By comparing these tables, it is possible to gain some additional insight into our original hypotheses. First, both firm dependence and job satisfaction display the expected positive associations with attachment. Although the effect of job satisfaction is markedly larger, in standardized form, we are able to confirm the behavioral as well as the normative hypothesis about attachment. Second, we can identify some variables whose effect on attachment does not appear until normative and perceived market opportunities are taken into account. In particu-

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Table 6.11. I n t e g r a t e d M o d e l s o f F i r m D e p e n d e n c e , Satisfaction, and Attachment Structural Models Trimmed structural models Firm d e p e n d e n c e

Intercept Gender (male = 1) Race (black = 1) Age in years Public sector worker Supervisory responsibility Unionization Years of schooling Absence of w o r k control Job d e m e n c y Unpleasant work. ing conditions Occupational socio . economic index Occupational external market Bureaucratic employee relations Firm d e p e n d e n c e Job satisfaction

Satisfaction

B

Standard b

2.263* -0.128"

0.000 -0.060

7.126" .

-0.012" 0.296*

-0.144 0.099

-0.482* 0.013" .

-0.075*

-0.062

--

0.169" -0.050* 0.058*

0.139 -0.124 0.102

-.

-.

.

.

.

.

Attachment

Standard b

B

0.000 .

-1.052" .

0.000

-0.094 0.095 . .

-0.146" 0.008* .

-0.076 0.152

--

0.045*

0.059

0.098* -0.040* -0.130"

0.048 -0.058 -0.135

0.031" -0.069*

0.040 -0.043

0.821" 0.773*

0.110 -0.410

B

.

.

--0.003*

Standard b

--0.084

-0.228*

-0.158

0.098*

0.040

--

--

0.053*

0.048

0.092*

0.049

--

--

.028* .069*

.044 .183

R2

. .

. . .173

. .

. . .274

.086

N u m b e r of cases, 2,587 Note: *t significant p < .05.

lar, the absence of work control operates in this fashion. Superficially, our results for the control variable mimic those of Halaby and Weakliem. The total effect of being able to control one's work is nil, but this is because the positive effects of being able to control one's work (or, in our case, the negative effects of lack of control), which are mediated by an intervening variable, offset the negative direct effects of work control on attachment. What differs in their account, however, is the specific intervening variable that produces this result. Their specification posits mediating effects for a variable they called "match quality": whether one is

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in a job that uses one's skills and ability. Our specification relies on a normative link through job satisfaction. Because our data do not include measures of skill usage (and apparently theirs do not include measures of satisfaction), this inconsistency cannot be resolved easily. The work environment variable of job clemency shows an opposite pattern. Once job satisfaction is controlled for, its effect on attachment disappears, a finding confirming the commonsense idea that people with stressful jobs do not like them much and attempt to find other work. This finding in itself is ample reason to justify including job sarisfaction in our model. Not only does it make a significant contribution to attachment, but it also explains completely the role of some other variables. This model also allows us to see the effect on attachment of our internal and external market variables in a somewhat different light. Being part of a lively external market has, on balance, no effect on attachment. However, this lack of impact really represents the combination of two mutually offsetting effects. Those in more viable external markets perceive better chances of finding alternative work, and this perception decreases their attachment. At the same time, they are more satisfied with their current jobs, an outcome we attribute to their greater ease of choosing a satisfactory employer, which tends to increase their attachment. For those in bureaucratic employment structures, the direct effect on attachment has disappeared from our model. Thus, through a combination of becoming more dependent on their current employers and more satisfied with them at the same time, these workers have become more attached. Previously, we entertained the possibility of a third linkage between bureaucratic structure and firm attachment--one based on the idea that internal labor markets, and especially mobility assurances, would directly increase employer attachment by using the promise of future mobility to offset the disadvantages of lower starting points. Table 6.8 shows that there is no direct effect of bureaucratic structure on attachment, as this model would imply. Furthermore, in a related analysis in which mobility chances replaced bureaucratic structure in our structural model, no attachment effects were revealed for that variable acting alone. Thus, we are unable to confirm that mobility guarantees, by themselves, have much bearing on attachment to one's current job.

CONCLUSIONS Our investigation began with the question of whether workers w h o participate in internal labor markets and other aspects of employment

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159

bureaucracy become caught in an all-encompassing w e b of loyalty, comfort, and commitment to their jobs. What we found were statistically significant tendencies for these job structures to be associated with decreased knowledge and confidence regarding alternative employment prospects and increased satisfaction with current job arrangements. These factors of greater employer dependence and increased contentment are associated, in turn, with a decreased tendency for employees to be looking around for better jobs. But are these statistical tendencies tantamount to workers' becoming trapped in their current jobs? Or more realistically, even if employees are not trapped in such jobs, are they stuck in so many ruts with their existing employers? H o w deep are these ruts? There are several indications that these paths, while worn rather well, are quite superficial. First, there is the fact that many other aspects of employees and their jobs have stronger relationships to perceptions of market position and to satisfaction than bureaucratic structure has. With regard to perceived market opportunity, one's age, education, union participation, degree of job control, and employment in the public sector all appear to make more of a difference than being involved in a bureaucratic employment structure. Young, college-educated privatesector workers w h o are the most involved in internal labor markets and due process believe that they have more market opportunity than older, high-school-educated government employees who are not involved in these arrangements. Likewise, race, working conditions, age, and job control all contribute more to job satisfaction than internal markets and other accoutrements of bureaucratic employment. Second, the relationship between bureaucratic structure and perceived market opportunity is tempered by one's objective position in an external occupational market, which also affects one's market "optimism" directly. In other words, employment bureaucracy has its strongest effects on those in occupations that offer the least frequent possibilities of external movement. However, students of attachment and commitment would do well to keep both sides of this relationship in focus. External markets matter but they cannot be assumed to be omnipresent or invariant. Workers, even those within internal labor markets, vary in their involvement in external markets, and this variation is related to their dependence, satisfaction, and attachment. Our analysis also reveals that labor market processes are arranged somewhat differently for males and females. First, w o m e n generally express less optimism about their chances in the external market, and this difference is not explained by their years of schooling, their level of unionization, their sector of employment, their immediate job responsibilities (supervision and control), or any other factor we can identify, including the mobility characteristics of their occupations. Furthermore,

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their perceptions about market opportunity are affected by bureaucratic structure in a conditional way: The effect depends on their level of participation in external markets. This conditionality does not obtain for men. Additional inspection of this pattern produced a clue to its explanation. The w o m e n with a history of work interruptions w h o work in occupations with much external mobility are those w h o are least likely to respond to the temptations of the internal market. What this result suggests is that the "isolating" function of bureaucratic structures depends on the dispositions of the group involved in them. Although these dispositions are themselves influenced, no doubt, by other structural considerations, it is important to recognize that the effects of internal labor markets and the like are not ubiquitous. Given the patterns we have found here, we would also expect that students, migrant workers, and others with limited time horizons are less influenced by internal labor markets and the structural elements associated with them. Overall, w o m e n and men differ less in their levels of job satisfaction and firm attachment than in their perceptions of market opportunity. However, we did discover that there were modest differences in what caused job satisfaction for the genders. Men appeared to be more sensitive to market types of influences (earnings and the viability of the external occupational market), whereas women were more affected by on-the-job characteristics of both the intrinsic and the extrinsic varieties. Our investigation of racial differences produced some interesting contrasts to the gender effects. Whereas gender differences in firm dependence could not be explained by controls for human capital and job characteristics, the racial differences in our sample were entirely attributed to these relatively objective factors. If blacks had equivalent schooling, equal levels of employment in private-sector and nonunion jobs, and equal participation in supervisory jobs and those offering work control, they would perceive just as much external market opportunity as other workers. One might expect that this pessimism about external opportunity is associated with increased levels of firm attachment among black workers. Surprisingly, it is not. Black workers are more likely to say they are looking for better-paying jobs, and controlling for perceived opportunity does nothing to change this result. The pattern here does reveal something of a double-bind situation. If blacks were in jobs with better market chances, they would perceive more opportunity. Although this lower level of perceived opportunity does not prevent them from looking for jobs, the jobs that would change their perceptions are not forthcoming. In other words, to hear about better jobs, one has to be in a better job. Blacks would like to bridge this gap but are simply unable to.

7 Employment Relations and Earnings As this chapter is being written, a skilled production workers' union for a major defense contractor is seriously considering its employer's proposal of a two-dollar-an-hour wage cut. The employer has offered to reconsider a proposed move to the Sunbelt if the union agrees to the cut; it is considered likely that the union will. In the same state, a union of public-sector professional workers is voting on whether to offer to forgo a 6% raise contractually scheduled to go into effect this month. The union's bargaining unit wants to offer to sacrifice the raise in return for a 12-month guarantee of no layoffs. It is doubtful whether the employer will agree, and many of the professional employees fear that they will be forced to take the substantial raise instead. At the same time, all over the country, college seniors are weighing employment prospects more than ever in terms of nonmonetary considerations. Times of economic recession and high unemployment make very evident a fact that is always true: The employment transaction between a worker and an employer involves more than a purely economic exchange of work for wages. Included in the exchange as well are important aspects of working conditions, job security, mobility opportunities, and many other nonwage attributes. Workers are often willing to trade a portion of their wage for these other attributes. Because employers are not ignorant of this fact, it follows that we can expect some relationship between earnings on the job and each of our employment relationship variables. PREVIOUS RESEARCH What this relationship should be has never been clearly spelled out in the literature. Stolzenberg (1978) claimed that higher levels of formal161

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ization in the employment relationship would lead to higher earnings returns to education. Increased levels of documentation, he argued, would place a premium on the ability to communicate in writing, and thus on formal education. Also, standardization of hiring and remuneration decisions would lead to the use of standardized criteria (such as formal education) for decision making and thus place a premium on education. In partial replications of the Stolzenberg study, Kalleberg, Wallace, and Althauser (1981) and Villemez and Bridges (1988) found only mixed support for this argument, but both demonstrated a relationship between earnings and organizational size, which, when added to Child's demonstration (1973) that organizational size is clearly related to other dimensions of organization structure, provides further reason to anticipate a relationship between the organizational attributes and environment of a job and its wage. Hodson (1984) documented that women, in particular, derived an earnings advantage from being in an organization with bureaucratic rules governing the employment relationship. More recently, we have begun to specify the relationship between earnings and organization and job attributes. In our first effort we looked more deeply at the effect of size of employer on earnings. We concluded: The employer-size effect on individual outcomes is partially a proxy for firm- and establishment-level attributes and industrial-sector attributes. Most importantly, we have shown that the effect is not mediated under all circumstances, and it is not uniform. . . . The effect of size is apparently mediated by the existence or lack of some form of internal labor market or union, by the importance of literacy skills to the job itself, by the location of the firm in the core or peripheral economic sector, but most importantly by the type of job at issue. (Villemez & Bridges, 1988, p. 253) The prediction that the employer-size effect on earnings would not be monolithic followed from the recognition that the saliency of organizational structure for individual earnings varies with the type of job. There are different types of size effects by occupation, as well as different reasons for those effects. At the simplest level, we hypothesized that the size effect on white-collar workers would follow from broadened opportunity structure, and that, for this group, the size of the organization would not be shown to be just a marker for certain types of organizational structure.. For blue-collar workers, by contrast, we expected earnings to be affected by size only to the extent that certain organizational characteristics followed from that size. The impact of size, that is, would be largely direct in the former case and largely indirect in the latter. We also

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163

argued that the more "place-bound" a worker (e.g., many blue-collar workers and many female workers at all levels), the greater would be the effect of organizational characteristics, especially at the establishment level. Our findings strongly supported all of the above expectations. In the same study, we also focused on two of the organizational characteristics in question: protection and mobility chances, the two major aspects of internal labor markets. We argued that protection should always be associated with higher earnings, as "protection from outside competition places the employee in the role of a partial monopolist vis-a-vis the employer and increases the employer's dependence on the existing workforce" (Villemez & Bridges, 1988, p. 241). However, using a straightforward, neoclassical "tradeoff" argument, we suggested that mobility chances may be negatively associated with earnings: Where training is firm-specific, employers and employees will share in the cost of undertaking this training.., but the apportionment of training costs between the parties is variable. The more risk the employee assumes in acquiring the training, the larger the portion of the costs borne by the employer (the risk derives from the employee's forgoing the opportunity to obtain training that has some value in the external market). With more structured mobility chances the employee's risk is reduced, and some training costs can be shifted to the employee in the form of a lower wage. (Villemez & Bridges, 1988, p. 241) We found unequivocal empirical support for the positive relationship between protection and earnings and weaker, but still convincing, support for the negative relationship between mobility chances and earnings. In later work, which did not specifically address the question of earnings, we pointed again to the complexity of the employment relationship (Bridges & Villemez, 1991). Bureaucratic governance structures in organizations have usually been seen as associated primarily with internal labor markets, but we have shown that both of these phenomena are affected by the presence or absence of viable external occupational labor markets. Playing off Althauser's report (1989) that ILMs develop from the need of employers for a nonexhaustible supply of scarce, highly skilled workers, we argued that a scarcity of such workers should follow either from low external market viability (no well-defined external-labor-market pool) or from conditions of short supply in a viable external market. Specifically, we developed from national data a measure of external market viability and found this characteristic of an occupation to be a strong predictor of individual job outcomes, including

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the existence of internal-labor-market attributes (structured mobility opportunities and job-hiring protection) and due-process guarantees. Our core hypothesis was that workers in the most viable external markets would be the least likely to have structured mobility opportunities, jobhiring protection, and due-process guarantees. Corollary hypotheses were that, for many of the other factors that had a positive relationship with the likelihood of developed governance structures (such as the skill level of the job and the length of training required), a positive relationship would be stronger in occupations with viable external markets. Though the findings were mixed for the corollary hypotheses, our core hypothesis received strong empirical support.

ANALYSIS AND RESULTS The predictions concerning the zero-order relationship between employment relationship variables and earnings that follow from these studies are straightforward. One would expect earnings to vary positively with protection and negatively with mobility chances, and for the relationship to differ by occupational level, gender, and external market viability. One could also predict a positive relationship between dueprocess guarantees and earnings, based mainly on the organization size literature, but there is little in the literature to generate any expectation about the impact of bureaucratic control on earnings. However, if one makes the logical assumption that the higher the level of bureaucratic control in the workplace, the less the employer's need for individual initiative and loyalty, then one can hypothesize a negative relationship between such control and wage levels.

Dependent Variables We examined the relationship of two quite different earnings measures, labeled "earnings" and "average earnings" in the tables. The first is the total income from the job for the year. This information was obtained from the respondent, with the use of several different questions for cross-checking. One question was straightforward: "How much did you make from your main job before taxes and other deductions?" and, in the small number of refusals, was followed up with "Was it (1) less than $5,000, (2) less than $10,000, (3) less than $15,000" and so on, until a "yes" answer was obtained. We also asked a series of questions that allowed us to reconstruct annual earnings as a check, obtaining information on the basis of pay (hourly, weekly, biweekly, monthly,

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165

etc.), pay per unit, and units worked per week, month, and year. This measure is the actual earnings of a specific respondent in a job according to the information obtained from that respondent. The second measure is the average earnings of all individuals in that particular job in that particular workplace. This information was obtained from interviews with employers. Employers were asked, "Considering all the people working in this job in your establishment, what is the average salary?" An attempt was always made to obtain typical yearly earnings, but interviewers were instructed to accept monthly, weekly, daily, or hourly earnings w h e n necessary. For some jobs, an hourly wage rate is the normal referent; for others a wage rate is meaningless, and annual salary is the proper referent. To compare such diverse jobs, it is necessary either to disaggregate annual salaries into a wage rate (assuming 35-40 hours per week and a 50-week year and dividing) or to aggregate hourly wages into annual earnings (assuming the same and multiplying). Because most of our sample were fully employed workers, we chose to aggregate where necessary. It is important to keep in mind that these two earnings measures are quite different. In the first case (earnings), the remuneration level is that of a specific individual in the sample; in the second case (average earnings), the remuneration level is not that of any individual, but an average for the specific job an individual in the sample occupied. Mean earnings was the expected value for all individuals in the sample, and mean average earnings was the expected value for all jobs in the sample (both samples were representative: The first was a simple random sample of employed individuals in the labor market; the second was a weighted probability sample of jobs in the labor market). Findings We first examine the relationship in the most straightforward fashion, regressing the log of earnings for each individual on the four employment relationship values for their establishment (due-process guarantees, bureaucratic control, protection, and mobility), along with basic human-capital measures (education and years of work experience). We include the human capital measures to control for the possibility that those with superior (or inferior) human capital may have ended up in organizations with features that enhanced (or diminished) their earnings potential. The first column of Table 7.1 shows that the relationships are as expected: due process, protection, and mobility all have significant positive effects, net of education and experience, and bureaucratic control has a significant negative net effect. Together the variables ex-

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T a b l e 7.1. E m p l o y m e n t R e l a t i o n s h i p Effects o n E a r n i n g s

Log average earnings

Log earnings

Education Experience Due process Public Private Bureaucratic control Public Private Protection Public Private Mobility Public Private Firm dependence Public Private Private/public sector R2

Model

Model

Model

Model

Model

Model

1

2

3

1

2

3

.08** .03** .06**

.08** .03** .07**

.08** .03**

.05** .01"* .00

.05** .01"* .00

.17"* .07** -.07**

-.07**

.07 .01 -.03**

-.03**

.01 -.08** .12"*

.13"*

-.00 - .03** .05**

.05**

.07" .13"* .05**

.05**

.02 .05** .02**

.02**

.04 .05**

.05** .01

-.02**

.26

.27

.05** .01"*

-.00 .00 -.02"* -.70** .28

.19

.19

.01 -.01 -.42** .20

*p < .05.

**p < .01.

plain 26% of the variance in log earnings, with the employment relationship variables contributing a significant portion of that; education and experience alone contribute 20% (not shown). Because we have shown in an earlier chapter that some of these independent variables covary with the degree of firm dependence, which itself can be expected to be related to earnings, we examine the same equation with our measure of firm dependence added. As can be seen in the second column of the table, firm dependence has a significant, though small, negative effect on log earnings, but none of the effects of the other variables are decreased by its addition to the equation. Whatever the effect of employment relationship variables on earnings, they do not operate through employer dependence. The negative effect of firm dependence on earnings is an interesting finding, and we take it up again in more detail below. As a final control, we add to the equation a d u m m y variable representing the public or private sector, along with multiplicative variables

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167

that are the product of the d u m m y variable and each of the non-humancapital variables. These variables do not add greatly to the explanatory value of the equation, but as can be seen in the third column of Table 7.1, they do allow us to examine each of the employment relationship effects separately for public-sector and private-sector workers. We expected differences in the effect of each of the variables across the two sectors, but given the paucity of comparisons in the literature, we did not have specific hypotheses, just broad, general expectations. Specifically, given the pervasiveness of due-process guarantees, bureaucratic control of job processes, and job ladders in the public sector, we expected the lack of variance would lead these (non)variables to have an effect on earnings only in the private sector. This expectation was, in retrospect, too broad and inclusive. Differences exist, and they are interesting, but they are not all as expected. The effect on earnings of being in the public sector is negative. This was expected and is confirmed by the large negative coefficient for the last term in the table; other things being equal, those in the public sector earn less than those in the private sector. There are also differences in the effect of employment relationship variables on earnings across the two sectors. The effect of due-process guarantees is positive in both sectors, but stronger in the public sector. By contrast, job protection and mobility have substantially stronger effects in the private sector (in fact, the effect of mobility in the public sector is indistinguishable from zero). The negative effect of bureaucratic control on earnings exists only in the private sector, appearing to have no effect whatsoever on earnings in the public sector. Finally, the negative effect of firm dependence exists only in the private sector; it has no effect whatsoever in the public sector. We can now offer more detailed explanations of each of these findings, including the one that did not match our expectations. To begin with the clearest confirmation, bureaucratic control has a negative effect on earnings, as predicted, but only in the private sector. It will be recalled that we argued that the higher the level of bureaucratic control in the workplace, the more safely one could assume a lesser employer need for individual initiative and loyalty; one can thus hypothesize a negative relationship between such control and wage levels. Why would this not be the case in the public sector? As we noted, bureaucratic control procedures are a common feature of most jobs in the public sector, and thus, the presence of such formal controls does not distinguish one job from another as in the private sector. The mean of our bureaucratic control variable for public sector jobs is almost 1 standard deviation above the mean for private-sector jobs. Further, the standard deviations about

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these means are approximately 60% smaller in the public sector: There is more bureaucratic control absolutely and less variability in its presence relatively. Simply put, in the private sector, the presence of bureaucratic control tells us something about the job; in the public sector, it does not. In the case of job protection and mobility, our expectations are partially supported but in such a way that it is clear that our reasoning needs elaboration. Our argument was as for bureaucratic control: The pervasiveness of internal labor markets in the public sector would make the presence of an ILM not necessarily a mark of a certain type of job. Note that the effect of mobility opportunity on earnings is not statistically significant for public-sector workers, and that the size of the effect of job protection on earnings is twice as large for private-sector workers as for public-sector workers. On the face of it, this finding supports our hypothesis, but if pervasiveness and the subsequent diminishing of variance were the only explanation, we would expect not just a smaller effect, but no effect at all. In the case of job ladders, the explanation of public and private differences is more complex. There is enormous variability in the type of job ladder across public-sector jobs. Some can, in fact, be planned dead ends, inhibiting advancement rather than promoting it. One cannot assume that, because most jobs are on ladders of some sort in the public sector, they are all on "good" ladders offering the potential for steady advancement to the top. Speaking of internal labor markets in the federal bureaucracy, DiPrete (1989) noted: The formal job ladders defined by the position classification system imply a career trajectory starting at the bottom of a ladder and moving up its rungs. These implied career trajectories can be distinguished from the career trajectories that an organization's employees actually experience. (p. 162) What is actually experienced, DiPrete pointed out, is a tiered system of ladders where, near the top of each job ladder, shifts to entirely different ladders through promotion are "increasingly n e c e s s a r y . . , because of job-ceiling effects" (p. 196). In the public sector far more than in the private, being on a ladder is not in itself consequential; which ladder one is on and where on it one is are the crucial factors. Due-process guarantees are the effect that was found to be empirically opposite our prediction. Far from being inconsequential in the public sector, they have a much stronger positive effect on earnings than they do in the private sector (see Column 3 of Table 7.1). All the reasons for a stronger effect in the private sector are present; levels of dueprocess guarantees are much higher and far more widespread in the public sector (the mean of our variable is significantly much higher in

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the public sector, and its standard deviation approaches one-half of that in the private sector). So the conditions of pervasiveness and relative lack of variation that led to a smaller effect in the case of bureaucratic control are present but do not lead to that result. Further investigation suggests an explanation for this seeming discrepancy. There are no systematic differences in the presence of bureaucratic control by job level between the two sectors. This is not the case with due-process guarantees. In the private sector, one finds the highest incidence of due-process guarantees in lower-level jobs; in the public sector, one finds the highest incidence in higher-level jobs. This fact alone means that we can expect the aggregate effect of due-process guarantees to be enhanced in the public sector and diminished in the private sector. The point can be demonstrated with even a crude occupational categorization. When we examine levels of due-process guarantees in both sectors separately for white-collar and blue-collar workers, the difference stands out. In the public sector, the mean of the dueprocess variable is higher for white-collar workers; in the private sector, it is higher for blue-collar workers. This pattern holds with few exceptions across each of the components of the due-process variable. Given the pattern, we suspect that the effect of due-process guarantees in the public sector is actually nil, and we are seeing instead an occupationlevel effect. The next table bears out this suspicion to some extent. In the private sector, given that occupational level runs counter to the effect, we think due-process guarantees have a genuine positive effect on earnings. Finally, we note that firm dependence is understandably less important in the public sector. The reader will recall that firm dependence is a job characteristic, not an individual characteristic. But whatever the nature of the occupation of those in the public sector, a change of firm within the sector is usually made with level and salary at least intact, if not increased. The notion of a change of firm in the public sector is itself problematic. Within the civil service, for most occupations, the entire federal (or local) public sector is like a single firm with many diverse establishments. Firm dependence, then, is not a serious detriment. In the second panel of Table 7.1, we report the same three equations as above, but with a different dependent variable. Instead of individual earnings, average earnings for the job were regressed on the independent variables. It is important to keep in mind that, unlike those in the first set of equations, these remuneration levels are not those of any individual, but averages for the specific job an individual occupies. Employers were describing a job and did not know that we had specific information from an individual in that job. We examine average earnings

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for the job to make even clearer that the discovered effects of employment relationship on earnings are not idiosyncratic. We include the education and experience of the single individual for comparability with the previous equations. This does not do violence to any assumptions, as there is no reason to believe that the educational credentials of our randomly selected individual in each job were not an adequate proxy for the educational credentials of all occupants of the j o b - - a factor we would wish to control for when assessing the impact of the employment relationship variables on remuneration. For bureaucratic control, protection, and mobility the findings are the same as for individual earnings, but all coefficients are smaller. The extent of control should affect the average earnings attached to a job, as should the degree of protection. It is not clear that the extent of mobility opportunity should do so, however. One could make an argument for such opportunities' increasing average salary (to retain workers with such opportunities), but one could also make the opposite argument (such opportunities are an attractive aspect of the job, allowing a lower wage to be competitive). Neither of these arguments are applicable, it turns out, and the reason for the significant positive coefficient seems most likely to be an odd feature in public bureaucracies, outlined below. Neither due-process guarantees nor firm dependence have an effect on average earnings, despite their effects on individual earnings. This is not an unexpected finding. Being in a firm-dependent job limits the type of cross-company mobility that increases salary and thus has a depressing effect on individual earnings, but this does not necessarily imply that firm-dependent jobs are lower-paying jobs. The due-process finding, however, is unexpected. We expected due-process guarantees to affect earnings through a size-of-employer mechanism, if in no other way, and that variable did have a positive effect on individual earnings. The same logic should apply to average earnings as well, however, especially when one recalls that average earnings as used here means average earnings for the particular job in the particular establishment. If the size of the employer drives the relationship, it should do so for both individual and average earnings. Why it does not turns out to be an occupation-level effect not allowed for in the initial formulation, a point we document in the next table and discuss below. When we again separate public from private sector, the results are much like those for individual earnings, with one interesting exception. For individual earnings, the mobility variable is significant only for those in the private sector. For average earnings, the mobility variable is signif-

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icant only for those in the public sector, which explains w h y it is positively significant overall. This is most likely the case because of the nature of public-sector job ladders, which seem to have more mobility opportunities available at the top than at the bottom. Consider DiPrete's findings (1989) from four bureaus of the federal bureaucracy: The proportion of positions filled from within the divisional job ladder decreased from Grades 12 through 15 in all four bureaus. In Bureau 1, 42% of all placements in Grade 12 were from the divisional job ladder, but only 16% of the placements in Grade 15 were from the divisional job ladder. In Bureau 2, the comparable figures were 43% and 10%, in Bureau 3, 73% and 47%, and in Bureau 4, 35% and 9%. Selecting officials were also more likely to reach across divisional boundaries at higher grade levels. Finally, the proportion of vacancies filled from outside the bureau itself tended to rise as the grade of the vacancy increased. (p. 180) Though it is not the point he is making, it is clear from DiPrete's findings that, in the federal bureaucracy, those at the higher levels have more varied avenues of mobility. They do not necessarily have to be on a particular ladder to jump to a higher job on that ladder; indeed, they do not even have to be in the same division. Because these higher-level jobs with more mobility avenues would also have higher average pay, the effect of mobility opportunity in our equation probably follows from this characteristic of public bureaucracies: Higher-level jobs offer superior mobility opportunities. Following up on indications that the effect of the employment relationship variables on earnings may vary by occupational level, we next rerun the basic equations reported above separately for white-collar and blue-collar workers. The effects on earnings clearly vary, even by this crude occupational categorization. If we compare the first two columns of Table 7.2, it is evident that due-process guarantees and bureaucratic control have an impact on earnings only for blue-collar workers. Mobility opportunity and firm dependence affect earnings only for whitecollar workers. Only protection affects the earnings of both occupational groups. The findings for average earnings are almost identical, but there are two easily explained differences. Firm dependence does not have a significant effect on average earnings for either group, and we would not expect it to, for the reasons noted above. A more apparently important difference is that the effect of due-process guarantees on average earnings is positive for blue-collar workers (like its effect on individual earnings for that group) but is significantly negative for white-collar workers. At first glance, this seems a strange finding, as there is no reason to expect a negative effect for white-collar workers. The finding,

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Table 7.2. Employment Relationship Effects on Earnings, by Occupation Type Log earnings

Education Experience Due process Bureaucratic control Protection Mobility Firm dependence R2

Log average earnings

White collar

Blue collar

White collar

Blue collar

.10"* .03** .01 -.02 .11"* .07* * -.02** .30

.06** .02** .15"* -.13"* .15"* .02 -.01 .24

.06** .01"* -.03* .01 .04** .03"* -.01 .21

.04** .01"* .06** -.08** .07** .01 .00 .17

*p < .05.

**p < .01.

however, is only an apparent effect, explainable by the distribution of the data. We noted above that the mean of the due-process variable in the public sector is higher for white-collar workers than for blue-collar workers; in the private sector, it is higher for blue-collar workers. This means that, w h e n we divide the sample into white-collar and blue-collar workers, a very large proportion of white-collar workers with high levels of due-process guarantees are from the public sector. There are evident gender differences in the earnings impact of the employment relationship variables. We separated the sample by gender and reestimated the basic equations, reporting the results in Table 7.3. We note initially that the income penalty for firm dependence seems to be a male phenomenon. This is not surprising w h e n one recalls that the penalty for firm dependence is a white-collar (even high-white-collar) penalty, and that job level is crowded with white males. Also of interest is the fact that both bureaucratic control and mobility opportunity have no effect on earnings within gender categories. This suggests that these two variables may distinguish between traditionally male and traditionally female jobs, with earnings higher in the former. The next two tables investigate this possibility. We reestimated the equation shown in Column 2 of Table 7.1, adding to it d u m m y variables for gender, race, and collar color. Of these, the gender variable is large and significant, being male having a substantial positive effect on earnings, net of education and experience. The significant effects of firm dependence and mobility opportunity disappear net of these individual variables (compare with Table 7.1), and the effect of bureaucratic control is diminished. To determine to what extent we were

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Table 7.3. E m p l o y m e n t Relationship Effects

o n Earnings, by G e n d e r Log earnings

Education Experience Due process Bureaucratic control Protection Mobility Firm dependence R2

Log average earnings

Male

Female

Male

Female

.06** .02** .06** -.04 .10"* .03 -.03** .27

.09** .02** .08* -.03 .12"* .04 .00 .21

.03** .01 -.01 -.01 .03** .00 -.01" .15

.07** .01"* .02 -.01 .05"* .03* .01 .22

*p < .05.

**p < .01.

finding an individual gender effect, we next added variables consisting of the percentage female and the percentage black in each of the occupations. These variables are not the percentage in either group in the particular establishment, but the percentage in the specific occupation or industry category in the Chicago SMSA (gathered from 1980 census sixTable 7.4. Individual, E m p l o y m e n t Relationship,

a n d O c c u p a t i o n a l Effects o n Earnings Log earnings

Education Experience Due process Bureaucratic control Protection Mobility Firm dependence Public sector Male Black White collar Percent black in occupation Percent female in occupation R2 *p < .05. **p < .01.

.08**

.02** .08**

-.04* .10"* .02 -.01 -.09 .49** -.08 .04

.36

.06** .02** .09** -.02 .08** .01 -.01" -.03 .24** -.04 .15"* -.27* -.62** .41

Log average earnings .04** .01"* .01 -.01 .04** .01 .00

-.06* .27** -.04 .08**

.28

.04** .01"* .02* -.00 .02** .01 .00 -.02 .10"* .00 .14"* -.26** -.44** .35

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Table 7.5. Individual and Job Effects on Employment Relationship Variables

Education Experience Public sector Male Black W h i t e collar Percent black Percent female R2

Due process

Bureaucratic control

.01 .00 .76** -.01 .18" -.00 .97** .10 .13

.05** .00 .31"* -.06 .24** .30** 1.03"* .14 .09

Protection Mobility Dependency -.04** .01"* -.32** .04 .13 .47** .55* - .80** .07

.00 -.01"* -.49** .19"* .31"* .66** .69** - .49** .07

- .18"* .02"* 1.26"* - .57** .30 -.58** 1.09" - .42 .10

*p < .05. **p < .01.

digit occupation-industry codes). As can be seen in the second column of Table 7.4, both variables have a significant negative effect on earnings (net of the gender and race of the job incumbent). Bureaucratic control is no longer statistically significant net of these variables. The effect of being male is halved, and the effect of being in a white-collar job becomes larger and more significant in the presence of controls for the "femaleness" and "blackness" of the job. Due-process guarantees and protection are barely affected by the addition of controls. Of all the employment relationship variables, these two seem to have the most consistent and nonspurious effect. Finally, we examine the direct effect of our control variables on each of the employment relationship variables. Table 7.5 reports coefficients from five equations, each with one of the employment relationship variables regressed on education, experience, d u m m y variables for public or private sector, gender, race, collar color, and percentage black and female in the occupations. The most consistently present effects are those of being in the public sector, which has a strong positive effect on dueprocess guarantees, bureaucratic control procedures, and firm dependency, as well as a strong negative effect on protection and mobility opportunity. Percentage black in the occupation has strong positive effects on all relationship variables (net of public sector and collar color). Percentage female in the occupation has negative effects on protection and mobility and no effect on the other three. Being in a white-collar job has a net positive effect on control, protection, and mobility and a strong negative effect on firm dependency.

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These findings help to illuminate some of our earlier findings. Though the amount of variance explained in each of the employment relationship variables makes it evident that much more is involved in predicting whether they are present or absent in any given job, that is not the purpose here: These relationships clarify the effects on earnings. Examining Table 7.5, one can partially characterize each of the employment relationship variables: Due process is a public-sector phenomenon, present in many jobs occupied by blacks; bureaucratic control is a public-sector, white-collar phenomenon, also present in m a n y jobs occupied by blacks; protection is a private-sector, male, white-collar phenomenon, as are mobility and firm dependency.

CONCLUSIONS We have found that the relationship between employment relationship variables and earnings is a complex one. We expected this, as our previous research has indicated unequivocally that the saliency of organizational structure for individual earnings varies with the type of job. Our previous argument that protection would always be associated with higher earnings because of the partial labor market monopoly of the employee and the employer's increased dependence on the existing work force was strongly supported: Protection is the one effect that remained in the face of all controls. However, many seeming effects are actually fully explainable by other factors incidentally associated with the employment relationship variables, factors such as whether the job is in the public or private sector, whether the job is white collar or blue collar, and whether the job is traditionally male or female. Employment relationship variables are affected by each of these, as are wage levels, and the correlations between the two are thus often at least partially if not wholly spurious. It is clear that simple hypotheses, such as the "tradeoff" argument for a negative relationship between mobility chances and earnings, underestimate the complexity of the relationships. Mobility opportunity is itself a complex variable, with no consistent relationship to earnings. Further, we have found before that the workers in the most viable external markets are the least likely to have structured mobility opportunities, job-hiring protection, and due-process guarantees. We have seen here that they are also likely to have somewhat higher earnings, further complicating the relationship.

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In short, we have found that some of the components of structured employment relationships do covary systematically with earnings. We have also discovered that they do not always covary in keeping with rational principles. That is, theories that assume earnings-opportunity or earnings-security tradeoffs are not consistently supported. Such tradeoffs seem to exist for certain levels of jobs, and for certain employment sectors, but certainly not for all or even most. There is no single, simple, or even straightforward relationship between earnings and other organizational job attributes. For some jobs, the relationship between earnings and "good" characteristics is inverse, supporting a neoclassical argument, but for others, the relationship is positive, supporting the dual-labor-market theorists' claims of "good jobs" versus "bad jobs." All we can assert after all this is that, in general, protected jobs, jobs with due-process guarantees, and jobs with mobility opportunities tend to pay better, whereas jobs with high levels of bureaucratic control and firm dependency do not pay as well. We must then immediately add that exceptions to this assertion occasionally overwhelm the regularities.

8 Conclusion

We began this book about employer-employee relationships with three related premises. The first, broadly stated, was that employment relationships are influenced by organizational environments and attributes. Because the establishment of an employment relationship is a commercial transaction between an individual and an organization, it may seem obvious that organizational considerations affect it. However, recognition of that fact has been hindered by using organizations' assumption, in both law and economics, of the status of "fictive persons." When this status is held in abeyance and organizations are seen for what they a r e as in the preceding chapters of this book--the effect of organizational properties and environments appears large indeed. Given that the employment relationship is, for most individuals, the central organization-to-individual tie in their lives, it has an importance far beyond its status as a market transaction. We have argued that, in establishing the relationship, organizations purposely invoke the concept of membershipand, having done so, move the transaction to a level above that of mere economic exchange. The worker-as-member metaphor makes it difficult for employers to act simply as one party in a straightforward economic exchange, as well as difficult for workers to think of employers in that same way. For one example, it usually makes economic sense at some point to replace workers of a certain age (and wage rate) with younger (and cheaper) workers, given that, in most occupations, the rate of increase in individual productivity inevitably decreases over time. That such rational behavior on the part of employers is sometimes illegal (as age discrimination) and is almost always seen as reprehensible (by nonowners) points to the fact that the employment relationship is not regarded as pure economic exchange by workers, the general public, or (occasionally) the courts. It is not consistently regarded as such by employers, 177

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either. Arguments that begin with the premise that the employment "contract" is primarily a rational, economic agreement cannot adequately explain the employment relationship. Our second premise was that there would be a strain toward institutionalization of significant portions of the employment relationship. The reasons would be that most employers are organizations, and that the natural tendency in any organization would be for such an important component of organizational functioning to become part of a set of standardized operating procedures. One outcome of this institutionalization would clearly be the removal of some degree of arbitrariness from the work lives of employees. A second result would be the creation of "good jobs" with internal opportunity structures and incentives. Yet another outcome, we assumed, would be an increased dependence among workers in such relationships, a dependence caused by losing touch with the external market and thereby, in effect, withdrawing from it. Our third premise was that heterogeneity in the population of employing organizations would lead to an uneven spread of these institutionalized outcomes across kinds of organizations and kinds of employees. The conventional wisdom is that employment relationships may "emerge" in very small, very new establishments (if then) but are most often rationalized and bureaucratized not only in larger organizations but also in those that imitate them. Likewise, workers differ in their tastes for different kinds of employment relationships, in their access to labor market alternatives, and in the strength of their bargaining positions vis-a-vis employers of all kinds. To assess the validity of these premises, we cast our investigation in the form of questions about the shape, scope, and consequences of bureaucratic employment relationships. In answering these questions, we have sought clues to regularities in the employment relationship as evidence of institutionalized structures that govern the form of these relationships.

THE SHAPE OF BUREAUCRATIC EMPLOYMENT RELATIONSHIPS

Bureaucratic employment relationships must be regulated in many diverse areas, among them hiring and wage setting, promotion and transfer, and performance evaluation and supervision. The dominant scholarly accounts of modern personnel management usually portray these areas as interlinked in a comprehensive and coherent system of

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organizational control. The reasons given for the systemic nature of this organizational form vary by theorist. Capitalist control theorists (e.g., Edwards) see it as the latest stage in a series of evolving forms of control systems designed explicitly both to impersonalize (and thus legitimize) control and to redirect workers' attention from large issues (their place in a capitalist system) to small ones (their place on a wage or promotion ladder). Bureaucratic governance theorists (sometimes called institutionalists, e.g., Selznick) attribute it to a natural tendency for bureaucracies to establish themselves in organizations as true "governm e n t s " - - t r u e in the sense that they regulate in the interests of all members and place real limitations on the actions not only of the governed but of the governors as well. Neoinstitutionalist theorists (e.g., Baron) argue that the system emerges largely as a product of the power of a new institutional group, the personnel department. Microanalytic theorists (e.g., Williamson) deny the existence of a "system" as such and trace the development of various practices to purely instrumental causes--all resulting from the need to minimize the cost of transacting exchanges. Save for the last-mentioned, the dominant models of bureaucratic personnel practice imply that the associations among the various dimensions of the employment relationship "system" should be at least partially accounted for by a common latent factor. We do find five coherent dimensions of organizational practices, those related to due process, bureaucratic work control, labor market sheltering, mobility chains, and personnel formalization. However, we do not find any evidence of a unifying, overarching dimension linking them all. That is, we find no "system" of bureaucratic personnel management, or, more precisely stated, we find that, if any system of control or system of rights exists, it is such a loosely coupled one as to be statistically undetectable. Further, we find that personnel departments play a less central role in this process than many believe (present in only 27% of the jobs in our sample, and playing a substantial role in screening and hiring for only a minority of the jobs where they are present). Both of these findings together call into question all three of the "unified-development" views of personnel management. Initially, then, exploration of the shape of bureaucratic personnel management produces results that fail to contradict only the alternative, rational "instrumental-cause" viewpoint. However, because this approach offers few predictions about the simultaneous occurrence of various "governance" characteristics, more definitive tests of its plausibility must be suspended until the scope and consequences of bureaucratic personnel management are considered.

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THE SCOPE OF BUREAUCRATIC EMPLOYMENT RELATIONSHIPS Individual-Level Effects on Governance

We expected to find bureaucratic employment structures unevenly spread across population groups, thus finding them so was not surprising. However, we offered a different explanation from the usual one of w h y this would be the case. The most general assumption of researchers has been that bureaucratic structures are important to most, if not all, workers because they establish more secure employment bonds than can be found in an unstructured market. They are indeed important, but we argued that the varying access of groups to these types of structures depends not only on their ability to establish such a relationship (the usual argument), but also on the strength of their desire to do so. We do not reject the usual argument that groups with superior social resources (education, experience, and dominant group membership) have disproportionate access to "good" jobs with internal labor markets and the protection of rules, but we do amplify it. We argue that, in addition to the ability to effect such ties, the motivation to do so is an important determinant of group representation, and that the motivation for strong employment ties depends on a group's estimate of its alternatives. Groups anticipating discrimination in the open employment market will prefer, other things being equal, a more stable and structured relationship with a single employer. One complication is that extraemployer structures also exist. The clearest example is the occupational labor markets and occupational "internal" labor markets (see Althauser & Kalleberg, 1981), which allow orderly and purposive movement across firms within an occupation. Briefly put, we argue that the greater any worker's access to an orderly external occupational labor market (of either type), the less that worker's motivation to seek a strong bureaucratic employment relationship. A second complication is that the impact of social resources on the establishment of a bureaucratic employment relationship should vary across groups. Bureaucratic procedures, especially work control structures, diminish autonomy and flexibility, and--lacking the expectation of discrimination without t h e m - - a r e not especially desirable. Thus, we would expect minority group members and w o m e n to have a stronger motivation to seek such relationships than white males. On the other hand, because of their superior social resources, we would expect white

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males to have greater access to the structured-mobility and labor-marketcompetition protections that employers offer. Following on the "loose coupling" of elements of bureaucratic employment systems that we hypothesized and discovered, we expected to find white males having greater access to internal-labor-market and hiring-protection structures, but w o m e n and minorities having equal or greater access to the "dueprocess" elements of such systems. This expectation was only partially borne out. White w o m e n are far less likely to have access to structured mobility mechanisms, net of human capital, than are white men; that is, they are far more likely to be in "dead-end" jobs. However, w o m e n are, on average, as likely as men to have access to due-process structures and are more likely to have their work lives bureaucratically controlled (white w o m e n are somewhat underrepresented in these arrangements as well, but black w o m e n are overrepresented). Black workers in general are more likely to have access to all aspects of bureaucratic employment structures (mobility, protection, control, and due process), which means that conventional theories of minority disadvantage in these matters need revision. We offer a partial explanation. The considerable involvement of white w o m e n in external occupational markets partially explains their noninvolvement in internal markets. Conversely, the underrepresentation of blacks (especially black males) in external markets almost completely explains their overrepresentation in internal markets. Our demonstration of a clear negative relationship between internal- and external-labormarket participation is an important step toward a more realistic theory of labor market disadvantage. The negative relationship held for every demographic subgroup in our sample. The distribution of these factors by age was also of importance. We predicted that the patterning of due process and bureaucratic work control formalizations by age, plus the presence of personnel departments, would actually be a function of work experience, but that access to internal labor markets would covary with age itself. Our argument was that age as a sociological variable has two aspects, a "social-resource" and a "life-cycle" component--the first most easily measured as work experience, the second as career stage. Most of the job governance factors investigated in this study were influenced by the first component; only internal-labor-market variables had career-organizing impact, and only they should have been influenced by the "life-cycle" aspects of age. Specifically, we predicted that age would have no effect on due process or control net of experience, and that access to internal-labor-market benefits would vary with age in an inverted, assymetrical U pattern (the peak coming earlier for mobility aspects of ILMs, later for the protection

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aspects). In general, these findings were supported, with the exception that age did have a consistently strong positive net effect on the presence of personnel departments in the organization. Higher-Level Effects on Governance

The findings concerning the distribution of due-process guarantees, bureaucratic control mechanisms, internal labor markets, and personnel departments raised anew the question of where such things come from. After reviewing the scores of studies that explain their origins by appealing to efficiency, power, or imitation, we concluded (with both Baron and his colleagues and Dobbin and his) that full explanations of higherlevel effects on the spread of such mechanisms transcend efficiency, control, and institutional explanations. Multiple causality in their development is clearly at work, and the nature of that causality varies across industries in ways that mirror developmental differences. Our findings support the contention of earlier writers that higher-order effects on bureaucratic control and due process are complex and involve several levels. We developed measures of government intervention, organizational size, union domination, and competitiveness at both the industrial level and the organization level, as well as job-level measures. The effect of the variables at each of these separate levels net of the others allowed us to evaluate the fit of each of the major explanations. We found that the effect of job characteristics on both due-process guarantees and bureaucratic control structures was very weak and that organization-level explanations were required. We found as well that the patterns in our cross-sectional data are consistent with the argument of recent theorists that the state has clearly played a role in the development and spread of due-process procedures and bureaucratic control mechanisms. Both government domination in the industrial sector and organizational closeness to the public sector were shown to have clear, nonspurious effects. Most important, government domination at either level was found not to have a significant effect on the likelihood of the existence of a personnel department. This meant that the domination affects the spread of rights and procedures only, not the spread of efficiency-linked units like personnel offices. Net of other factors, statedominated organizations are more likely to have due-process and bureaucratic control measures in place; they are not more likely to have personnel departments. What spreads in such milieux are not just ideas for the efficient or even "proper" organization of work, but values and norms of governance. This goes somewhat beyond institutional argu-

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ments, as the spread is more likely not by imitation but by pressure brought to bear by normative legitimacy. Government domination effects, though present, were weak. Other effects, including those of size and unionization, existed as well. It is clear that those calling for more complex theories that mirror the complex reality of multiple causality across industrial types are correct. We showed that, by selective data dredging, we could fairly strongly support any of the major theoretical perspectives with portions of these findings. More important, we showed that, with good data and careful analysis, we still could not conclusively rule out any of the theoretical perspectives. In the development of organizational forms, there is, apparently, some drive toward efficiency, but there are also imitation, politics, coercion, and a quest for control. An assumption of multiple streams of development most easily organizes our cross-sectional findings.

THE CONSEQUENCES OF BUREAUCRATIC EMPLOYMENT STRUCTURES An untested assumption of most employment relations research is that bureaucratic employment mechanisms are a defining characteristic of "good" jobs. Although goodness is often in the eye of the beholder, we can investigate the consequences of these employment arrangements. Do they deliver on the increased attachment that they promise? Do they increase employees' levels of satisfaction? And, regardless of either, do they come at the cost of decreased wages? Thus, we explored how internal labor markets and other aspects of bureaucratic employment structure affect the level of workers' attachment to their employers. We began with the assumption of most previous work that internal labor markets are implemented to tie workers to their current jobs by putting into place mechanisms (like promotion ladders) that decrease employees' propensity to enter the external labor market. We identified three types of linkages between bureaucratic employment structures and employee immobility: the instrumental, behavioral, and normative. The instrumental linkage, which informs microeconomic theories, treats internal labor markets as an employer commitment to a system of deferred rewards. In this system, employees help finance their postemployment training by accepting lower-thanmarket wages during the active training period. These lower-thanmarket wages are then replaced by higher-than-market wages after their training is completed and they have become more productive. Workers,

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of alternative employment prospects, decreased confidence in the ability to obtain a different job, and increased satisfaction with current job arrangements. Greater employer dependence and increased contentment were associated, in turn, with a decreased tendency for employees to be looking around for better jobs. These findings were tempered by the fact that many other aspects of employees' background and the characteristics of their jobs have even stronger relationships to perceptions of market position and to satisfaction than did bureaucratic structure. For example, age, education, union participation, degree of job control, and employment in the public sector all make more of a difference in the perception of market position than being involved in a bureaucratic employment structure. Those who believe they have the most market opportunity tend to be young, collegeeducated, private-sector workers, who are the most involved in internal labor markets and due process. Workers who are older, high-schooleducated government employees, and who are not involved in ILMs or due-process arrangements, feel they have less. Similarly, race, working conditions, age, and job control all contribute more to job satisfaction than do either internal markets or other aspects of bureaucratic employment. The relationship between bureaucratic structure and perceived market opportunity is also tempered by a person's objective position in an external occupational market. Employment bureaucracy has its strongest effects on those in jobs characterized by less frequent possibilities of external movement. These findings are quite strong, but a cautionary note is in order. External markets clearly matter but cannot be assumed to be determinant. Within all categories, workers vary in their involvement in external markets, and this variation is related to their dependence, satisfaction, and attachment. We discovered both gender and racial differences in these relationships. Overall, w o m e n and men differed less in their levels of job satisfaction and firm attachment than in their perceptions of market opportunity. Women were less sanguine about their chances in the external market, a pessimism not explained by their education, union status, employment sector, job responsibilities (supervision and control), the mobility characteristics of their occupations, or any other factor. However, for w o m e n but not men, the effect of bureaucratic structure on perceptions of market opportunity depended on their level of participation in external markets. Closer examination of this pattern produced a clue to its explanation. Women with a history of work interruptions who work in occupations with much external mobility are those who are least likely to respond to the temptations of the internal market. What this

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result suggests is that the "isolating" function of bureaucratic structures depends on the dispositions of t h e group involved in them, further evidence that the effects of internal labor markets and the like are not ubiquitous. Racial differences in these relationships were more straightforward. Whereas gender differences in firm dependence could not be explained by extensive controls, the racial differences in our sample were entirely attributable to objective factors like human capital and job characteristics. Our findings suggest that, if blacks had equivalent schooling, equal levels of employment in private sector and nonunion jobs, and equal participation in supervisory jobs and those offering work control, they would perceive just as much external market opportunity as white workers. One might expect that pessimism about external opportunity is associated with increased levels of firm attachment among black workers, but it is not. Black workers are more likely to say they are looking for better-paying jobs, even net of perceived opportunity. There is a double disadvantage for black workers. They are more "trapped" by internal markets than are whites, and they are employed in jobs with poorer market chances. Blacks as a group are seeking better opportunities despite their pessimism about their likelihood of finding them, but they are simply unable to find better jobs, given their starting point. That is, to hear about better jobs, one has to be in a better job. The covariation of internal organizational structures surrounding jobs and the external markets for those jobs is the best single example of our essential point concerning the influence of organizational environments and attributes on the nature of the employment relationship. But we have isolated many other examples in this book. Recently, some theorists have argued from a historical perspective that many components of the variables we have labeled employment relationship variables began in diverse streams in different industries and periods and came together in differing patterns depending on the confluence of origin and industry. That is, the employment relationship is not a simple contractual agreement driven by logical imperatives but is instead, at least in one sense, emergent. For instance, Baron and his colleagues (1988) argued convincingly that what they called "modern bureaucratic control" had its origins in at least three separate and distinct historical streams. They used a much broader definition of bureaucratic control than we do, one that includes most of our employment relationship variables in one form or another. They showed that banking, insurance, and trade firms institutionalized bureaucratic control by formalizing jobs, salaries, and promotions into internal labor markets (specifically creating what we have called protection and mobility opportunity). Mass-production in-

Conclusion

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dustries, on the other hand, institutionalized bureaucratic control through job analysis, detailed record keeping, and other adjuncts to scientific management (i.e., through what we have called bureaucratic control). In more technologically "advanced" sectors (such as petroleum and utilities), scientific management was eschewed, and systematized employment rules and seniority-based personnel practices were used instead (akin in part to what we have termed due-process procedures). Baron et al. (1988) concluded, "There appears to be a wide range of equally viable systems for structuring employment within a given organizational form" (p. 512). Finally, we turned to the issue of how bureaucratic employment structures and earnings interact. Given that the employment transaction between a worker and an employer involves an exchange of work not only for wages, but also for other important aspects of work, such as job security, mobility opportunities, and other nonwage attributes, it was reasonable to expect some relationship between earnings on the job and each of our employment relationship variables. The existence of such a relationship was documented by Stolzenberg (1978), who demonstrated that higher levels of formalization in the employment relationship would lead to higher earnings returns to education. Hodson (1984) documented an earnings advantage from being in an organization with bureaucratic rules governing the employment relationship. In our own work, we had discovered that the employer size effect on earnings was not monolithic. It followed from our early findings that the saliency of organizational structure for individual earnings would vary with the type of job. We discovered different types of effects by occupation, as well as different reasons for those effects. In other work, we had demonstrated that workers in the most viable external markets are the least likely to have structured mobility opportunities, job-hiring protection, and due-process guarantees. All of this led us to predict a quite complex relationship between earnings and the job-organization variables. We anticipated variation in the relationship but offered as general predictions, which followed from the literature, several expectations: that earnings would vary positively with protection and negatively with mobility chances; that this variation would differ by occupational level, gender, and external market viability; and that there would be a positive relationship between due-process guarantees and earnings and a negative relationship between bureaucratic control and wage levels (the latter based on the assumption that, the higher the level of bureaucratic control in the workplace, the less the employer's need for individual initiative and loyalty). We found bureaucratic control to have a negative effect on earnings,

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as predicted, but only in the private sector. As a possible explanation, we suggested that, because bureaucratic control procedures are such a common feature of most jobs in the public sector, the presence of such formal controls does not distinguish one job from another as it does in the private sector. Put another way, it seems that, in the private sector, the presence of bureaucratic control tells us something about the job; in the public sector, it does not. Discovered empirical differences between the sectors support this explanation. The mean level of control in the public sector is much higher, and the variance is lower there. The same argument about public- and private-sector differences could easily be applied both to job protection and to mobility opportunity, the two major components of internal labor markets. That is, following the previous logic, the pervasiveness of internal labor markets in the public sector should make the presence of an ILM not necessarily a mark of a certain type of job, and thus, ILMs should have an earnings effect only in the private sector. We did find a weaker effect in the public sector, but a statistically discernible effect did exist. We concluded that, for these variables, the relationship was even more complex. There is enormous variability in the type of job ladder across public-sector jobs. Some can, in fact, be planned dead ends, inhibiting advancement rather than promoting it. One cannot assume that, because most jobs are on ladders of some sort in the public sector, they are all on "good" ladders offering the potential for steady advancement to the top. The "pervasiveness" argument was weakened by its inherent incorrect assumption of the homogeneity of ILMs in the public sector. In the public sector far more than in the private, being on a ladder is not in itself consequential; which ladder one is on and where one is on it are the crucial factors. In the public sector, many w h o are on short, low-ceilinged ladders with small chance of crossover correctly perceive their jobs as offering only limited mobility opportunities despite their formally being on a ladder. Such jobs typically offer less. The same argument could be applied to due-process guarantees. That is, because they are more pervasive in the public sector, they should have a weaker effect on earnings there. However, the relationship between earnings and due-process guarantees was found to be empirically opposite to what our logic would predict. Far from being inconsequential in the public sector, the due-process-guarantees variable had a much stronger positive effect on earnings in that sector than it did in the private sector. This effect turned out to be due primarily to the fact that the presence of due process differed by job level between the two sectors. In the private sector, we found the highest incidence of dueprocess guarantees in lower-level jobs; in the public sector, the highest

Conclusion

189

incidence was in higher-level jobs. This fact alone meant that the aggregate effect of due-process guarantees was enhanced in the public sector and diminished in the private sector. We thus concluded that our findings were at least in part spurious. Controlling for the sectorial differences in the distribution of due process across occupational levels, dueprocess guarantees probably actually did have little effect on earnings in the public sector and a positive effect on earnings in the private sector. Of all our predictions, only one was strongly supported: that job protection would always be associated with higher earnings. We argued that this was most likely to be because of the partial labor market monopoly of the employee and the employer's increased dependence on the existing work force. Protection had a strong positive effect on earnings net of all our many controls. Most of the other variables' effects on earnings, however, were fully explainable by other variables incidentally associated with the employment relationship variables, and the correlation between the two seemed to be, in each case, at least partially if not wholly spurious. In summary, we found that some of the components of structured employment relationships covaried systematically with earnings, but not always in keeping with rational principles. Theories that assume rational choices such as earnings-opportunity or earnings-security tradeoffs were not supportable. Such tradeoffs seem to exist for certain levels of jobs and for certain employment sectors, but certainly not for all or even most. There is no single, simple, or even straightforward relationship between earnings and other organizational job attributes. For some jobs, the relationship between earnings and "good" characteristics is inverse, supporting a neoclassical argument, but for others the relationship is positive, supporting the dual-labor-market theorists' claims of "good jobs" versus "bad jobs." Very tenuously, we conclude that protected jobs, jobs with due-process guarantees, and jobs with mobility opportunities tend to pay better, and that jobs with high levels of bureaucratic control and firm dependence do not pay as well. We also conclude that exceptions to these broad generalizations can be expected to overwhelm the regularities on occasion.

THE FUTURE OF BUREAUCRATIC EMPLOYMENT RELATIONS

With the increase in economic pressures since the mid-1980s, bureaucratic employment structures have stopped expanding or, if some accounts are to be believed, may have even started a period of decline. Two developments in particular--the proclaimed end of the "New Deal"

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era of industrial relations (Kochan, Katz, & McKersie, 1986) and the growth of contingent employment relations (Abraham, 1990; Pfeffer & Baron, 1988)--have cast an ominous shadow across the face of institutionalized employment relations. Are firm governance structures on the brink of collapse, or are rumors of their death greatly exaggerated? What do the patterns reported in these pages portend for the shape of employment relations in the next century? To answer these questions, we need first to consider the various diagnoses that have been made of the sources of weakness in the oncestrong ties between employers and employees. One view is the "transformed-industrial-relations" theory associated with Kochan and his colleagues. At the risk of oversimplification, this theory emphasizes the role of three interrelated factors: (1) the decline of unionism; (2) a change in corporate employment relations strategy; and (3) a more competitive economic landscape. The second and third factors, acting through the first, have produced a breakup of the bureaucratic-union model of industrial relations that dominated the American scene from the late 1930s through the early 1970s. As a result, due-process rights and bureaucratic work rules have been supplanted by a new regime that stresses the manipulation and adjustment of the worker as an individual instead of his or her rights as an industrial citizen. Seen in terms of the typical organization chart, the new regime is reflected in the displacement of the industrial relations department by the human resource unit. From a second viewpoint, governance structures are also seen to be eroding because of the growth of contingent employment relationships between workers and their employers. This new abstraction, "contingent workers," is meant to encompass part-time employees, temporary employees (particularly those employed by intermediary organizations such as Manpower), and off-premises workers, such as telecommuters and other home workers. Here, the explanation for the rise of alternative arrangements has less to do with the downfall of unions and more to do with the expense of maintaining traditional internal-labor-market structures that encourage workers' expectations of permanent employment. Thus, it is held that the competitive, volatile economy of the n e w era requires flexibility in staff size more than it requires the organizational loyalty of a large cadre of "home-trained" and committed workers. Thus, the internal labor markets that create this training and commitment are less and less needed. Moreover, employment contingency is seen as being reinforced b y - - i f not responding t o - - a demographic shift in the work force away from white males to w o m e n and minority workers. Even if these groups have the same preferences for regular or long-term employment as their

Conclusion

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white male counterparts, "the availability of demographic groups with less power in the labor market and who are potentially available to accept these arrangements facilitates the development of externalization practices, which apparently rely heavily on these labor market participants" (Pfeffer & Baron, 1988, pp. 279-280). Our results suggest caution in projecting radical changes on the basis of either of these developments. Although both of these viewpoints are based on sound empirical footings--unionism is down, and part-time and temporary work are u p - - w e have reason to question some of the other premises in these arguments. Or stated somewhat differently, we think there are good reasons to expect countertendencies to the overt tendencies that they have discovered. We will begin with the decline-of-unionism thesis. First, it is worth noting that the "transformed-industrial-relations" model has little to say about internal-labor-market arrangements per se and instead focuses on what we have been calling due process and bureaucratic control. But for these outcomes, as their model predicts, unionism emerges as a strong predictor of the existence of due process, and size (which could be interpreted as a proxy for the threat of unionism) shows up as a strong predictor of the presence of both due process and bureaucratic work control. Nevertheless, we find other evidence that contradicts the "end-ofbureaucratic-control" thesis. Thus, unionization is a negative predictor of bureaucratic control, not a positive one as the theory predicts. Furthermore, industry concentration, which is presumably declining as a result of increased competition, is negatively associated with bureaucratic work control. That is, the secular trend in this variable should be increasing the pressures for bureaucratic control, not diminishing them. More important, government domination at both the industry and the organizational level is a strong, positive predictor of due process and bureaucratic control that acts independently of any union or competition effects that may exist. Thus, for the labor force as a whole, it seems premature to predict that the protracted demise of union membership will translate into the disappearance of due-process guarantees and bureaucratically controlled work arrangements. With regard to internallabor-market mechanisms, the effects of unionization are either not large enough or not in the right direction, so that the complete disappearance of unions would seem to be inconsequential. Thus, as we have stated repeatedly, the surest conclusion is that these institutional mechanisms result from multiple--and not single--causes. Turning to the contingent employment thesis, we find a story that is more complex, particularly with regard to the role of various status-

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based personal or demographic factors. In support of the theory, our analyses have shown that w o m e n as a group are less likely to be involved with the internal-labor-market aspects of hiring protection and job mobility. To the extent that w o m e n continue to make up a growing relative share of the labor force, there will be an increase in those w h o are "available" for contingent working arrangements. But this is far from the whole story. First, w o m e n are statistically more likely to find themselves in jobs with due-process mechanisms. (This tendency may also provide a partial offset of the impact of declining unionism discussed above.) Second, black workers are more frequently found in jobs with hiring protection, mobility chances, and dueprocess guarantees, and an increase in their numbers in the work force would decrease the availability of contingent workers. Third, all of the above generalizations need to be tempered with the knowledge of h o w access to external labor markets affects the relative standing of each of these subgroups on the governance structure variables. In general, when external market participation is brought into the picture, it tends to homogenize the differences among subgroups on the internal-labormarket variables. What this means for demographic effects on participation in the internal and the contingent labor markets is clear. To the extent that female and minority workers become more like others in their between-employer mobility chances, the less effect a changing work force composition will have on either of these factors. Finally, we need to address the impact of various organizational and industrial characteristics on the substitution of contingent for internal labor markets. Our results do confirm the pressure that more competitive external product markets put on internal labor markets, particularly the "hiring-protection" or sheltering aspects of these arrangements. As the amount of external competition increases at both the firm and the industrial level, workers can expect employers to attempt to forgo the costly business of hiring only from within. Paradoxically, these same tendencies may also result in an increase in bureaucratic control. What all the above forecasts have failed to consider sufficiently, though, is the role of government domination of or involvement in an industry and its various organizations. If government grows smaller as an e m p l o y e r - - a n d it would have to grow smaller at all levels, not just at the federal and state tiers--then the non-ILM aspects of bureaucratic employment would certainly diminish. And although it is difficult to forecast what government payrolls will look like in the middle run, it is even more treacherous to predict the attractiveness of the federal government as a model of employment practices that others will imitate. The legacy of the 1980s seems to be a large reservoir of distrust and

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dislike of national government and its legislative and executive functionaries. Although this sentiment was encouraged and manipulated by our national leaders in the Reagan and Bush eras, the Clinton administration has clearly tried to reverse the flow with a variety of initiatives ranging from national service to a federal health-care policy. Perhaps surprising only the Clinton Administration, the reinvention of the federal government as a source and symbol of collective pride has been met with reactions ranging from lack of interest to rampant cynicism. The real question, however, is the depth of these beliefs. A large part of the populace has always regarded the government as little better than a necessary evil. But throughout the 20th century, few have rejected the role of the American state as a provider and guarantor of individual rights. When considering h o w government influences employment practices, it is impossible to separate the position of the federal bureaucracy as a target of ridicule from its position as a model of h o w fairness and decency should be put into practice in the workplace. Employment bureaucracies will face a changed environment in the decades to come. Given the trends we have seen in this book, however, it is possible to narrow the range of possible outcomes. In the best of circumstances, governance structures will persist in roughly the same form as they have for the past few decades, with those being excluded from participation perhaps being replaced by new and demographically different groups of workers. In the worst of circumstances, they will meet the same fate as another social institution that has defined the 20thcentury American institutional landscape: home ownership. Like a stable employment relationship, it is a proposition that is attractive to most people, but it is also one that is increasingly elusive.

APPENDIXES

A Screening Questionnaire Study #410 Jobs and Workers in a Metropolitan Labor Market

Hello, is this

? May I speak with (1) the male head of (telephonenumber) the household; (2) anyone currently living in the household 18 years of age or older? My name is , and I am calling from the University of Illinois Survey Research Laboratory in Urbana. We are conducting a study in the Chicago area about the kind of jobs people have and h o w they found them. la. Are you currently working for someone else (as opposed to selfemployed) for at least 20 hours a week?

Yes (go to main interview) No

1st R 1 2

2nd R 3 4

3rd R 5 6

b. Does anyone in your household work for someone else for at least 20 hours a week?

Yes No (terminate interview)

1st 1 2

2nd 3 4

3rd 5 6 197

198

Appendix A

c. May I speak with that person please? (When new respondent answers, repeat introduction and Question la for next respondent. ) If someone works for themselves and for someone else at least 20 hours a week we want to interview them about their job for someone else.

B

Employer-Identification Question Sequence 38a. N o w I would like to ask you a few questions about your present job. What is your main occupation or job title?

b. What kind of work do you do; that is, what are your duties on this job?

c. In what type of business or industry is this; that is, what product is made or what service is given?

d. Is this mainly manufacturing, wholesale trade, retail trade, a service, or something else? (specify)

1 2 3 4 5

199

Appendix B

200

e. W h a t firm or c o m p a n y in the (Read response to Q u e s t i o n 38c) b u s i n e s s / i n d u s t r y do y o u w o r k for?

(name of firm or company) f. Does this firm or c o m p a n y operate at more than one location in the Chicago area? Yes N o (Skip to Question 39)

1 2

g. W h e r e is y o u r current job located? (What is the address?)

(street address)

(city or town)

C A Comparison of Similar Data Gathered from Workers and Employers Part of the impetus for the research project that gathered the data analyzed in this book was the absence of surveys of large random samples of workers that contained good organizational data. Previous to our effort, the most common data sources were intensive studies that gathered organizational data and job information on the employees of single organizations (occasionally of two or three organizations). Our innovation--a two-stage survey in which workers identify their e m p l o y e r - allows data to be gathered on large samples containing many organizations. The tradeoff, of course, is expense. If organizational data derived from questioning randomly selected employees could be trusted, only a single-stage survey would be required. We examine this point in this appendix. The quality of data acquired from workers about their workplace has never been systematically studied. It will not be systematically studied here, either. The MEWS survey was not designed to compare data gathered from workers and employers. Nonetheless, among the 200-plus questions asked workers and 90-plus questions asked their employers, we have found some informative points of comparison that help to shed some light on the question of the relative accuracy of organizational data from the two sources. We present six comparisons below, each intended to demonstrate (and, we think, demonstrating) that data collected from individual employees concerning organizational attributes and practices can be quite different from data on the same subject collected from organizational representatives. We order the comparisons from those 201

202

Appendix C

things the worker would have only peripheral experience with (size of establishment and independence of establishment) through those he or she would have some experience with (locus of hires into the particular job) and to those he or she should have great familiarity with (union coverage and the job skills required). In the comparisons below, it should be kept in mind that the organizational respondent was the one "responsible for hiring for the job in question," was usually a relatively highly placed executive or official in a large organization, and was often the owner of a small organization. Judging from the organizational interviews that the Principal Investigators (PIs) conducted themselves, it was not unusual for organizational respondents to send out for files and data when they were not sure of the answer to one of our questions. Organizational reports were also cross-checked with Dun and Bradstreet data whenever possible. In short, we have some confidence in the reports of employers for a variety of reasons. We--like all survey researchers--had no easy way to check the accuracy of the reports of the individual respondents. Our first comparison is the most straightforward and uncomplicated: size of establishment. Workers were asked, "Counting all types of workers in all areas and departments, about how many people work at the location where you work?" Employers were asked, "In total, h o w many full- and part-time employees work at this location?" Employers were also asked about the size of the larger firm, but workers were asked only about establishment size, as we assumed that their responses about the size of the company away from the specific location where they worked would be too much guesswork. This was a good assumption, as we found that the zero-order correlation between employee and employer reports of the size of the same establishment was only r = 0.47. Worse, that figure applies only to private-sector workers and employers. If we include the establishment size estimates of public-sector workers and employers, the correlation drops to r = 0.19, a not-unexpected result, given the inherent ambiguity of establishment size in the public sector. A person who works in a law firm that occupies the fourth floor of a building will usually count only fourth-floor occupants w h e n asked about establishment size; he or she will rarely be tempted to count employees of the accounting firm on the third floor or of the cafeteria on the first floor. However, w h e n an employee of the local IRS office, which occupies the fourth floor of a "government" building, is asked the same question, the response will often include other floors and other agencies. Because surveys generally ask the same questions of public- and private-sector employees, the 0.19 is probably not only the worse-case figure, but also the usual-case figure.

203

C o m p a r i s o n of Worker- a n d E m p l o y e r - G e n e r a t e d Data

Table C.1. Comparing Employee and Employer Reports of Establishment Size All establishments

Private-sector establishments

(%)

(%)

Percent of r e p o r t s w i t h i n N of each o t h e r N = 10 N = 50 N = 100 N = 200 N = 500 N = 1000 N = 2000

23.1 44.5 54.5 62.5 72.9 80.2 87.1

25.7 47.6 58.2 66.2 76.3 84.0 90.6

Percent of r e p o r t s w i t h i n N% of each o t h e r N= 5% N = 10% N = 15% N = 20% N = 25%

7.8 14.4 20.4 27.1 33.1

8.2 15.4 22.2 29.3 35.9

Table C. 1 reports the distribution of disagreement between employer and worker estimates of establishment size. As can be seen, fewer than a quarter of t]he matched estimates were within 10 persons of each other (23.1%). Half were between 50 and 100 of each other, three quarters within about 500 or so. Even at differences of up to 2,000, 13% of the estimates still fall out of the range. Estimates are closer in the private sector. They show a slight increase in agreement, with percentages higher in the second column of each row. Still, fewer than half (47.6%) of the estimates were within 50 of each other. A difference of 50 may be slight in a very large establishment (e.g., in one with 5,000 employees) and may represent a relatively much larger degree of error in a smaller establishment. To examine the differences in another light, the second panel of Table C. 1 reports the differences as percentages (calculated as employer size minus worker size divided by employer size). Only one third of the estimates were within 25% of each other (just over one third in the private sector). Only about 15% of the sample provided estimates within 10% of each other. Our experience during the survey, added to verification and crosschecking, convinced us that employer-given size was the most accurate, and we used that whenever possible in analyses involving size of place.

204

Appendix C

If we had had only the first-stage survey, of employees only, it is clear that we would have introduced substantial error by relying on workerreported establishment size. We can compare responses on one more purely organizational variable: whether the establishment is independent or part of a larger firm. Unfortunately, this question was not asked identically of workers and employers, so there is some ambiguity in part of the comparison (which we point to when we arrive at it). Employers were asked directly whether the establishment was "completely independent" or "part of a larger organization," and workers were asked only whether the company had more than one location. A comparison is possible, as any establishment with more than one location would not be characterized by an organizational respondent as completely independent. Table C.2 shows that, if we count all mismatches as errors, there is a 33% error rate [(241 + 252)/1,495]. Given the wording of the employee question, however, we cannot assume that all of the second 252 are errors (i.e., those who said "no" to more than one location when the employer said "part of a larger organization"). The specific question was "Does this firm or company operate at more than one location in the Chicago area?" The last four words of the question mean that that proportion of the 252 who were in multiestablishment firms with only one location in the Chicago area (but others in other SMSAs) answered correctly, and we cannot ascertain that proportion. Nonetheless, we can clearly count as error the 241 comparisons where the employer said the particular establishment was "completely independent" and the workers reported multiple locations. This represents a 16.1% error rate (241/1,495) from one perspective, but actually shows a much more serious error. Of the 667 single-establishment firms (as reported by owners and managers), 36.1% were misidentified by employees as multiestablishment firms. There was another item, like establishment size, in which workers and employers were asked virtually identical questions, the question having to do with the usual locus of hiring for the job in question (the worker's specific job). Workers were asked, "Are most people who do the same job as you, hired from within the organization, or are they hired from outside the organization?" Employers were asked, "Are vacancies for the job of [blank] usually filled from outside [name of company] or from within [name of company]?" Again, on this item, our faith is in the employer responses, as the employer respondents were those specifically responsible for hiring for the particular job (a screening question was "Are you the person responsible for deciding w h o m to hire as . . ."). Unlike size and organizational independence, hiring is something that each employee has at least some direct experience w i t h - -

Comparison of Worker-and Employer-GeneratedData

205

Table C.2. Employer/Employee Reports

on Independence of Establishment (Private Sector Only) Employee: Companyhas more than one location Employer

Yes

No

Total

Part of larger organization Completelyindependent Total

576 241 817

252 426 678

828 667 1,495

though not often the sort of experience that would provide an answer to the question asked. Table C.3 presents results comparing the responses to these two questions. Of the 617 jobs reported by employers as primarily using inside hires, only 319 (51.7%) were noted by the employees as being primarily inside hiring jobs. Of the 967 jobs reported by employers as being outside hiring jobs, only 603 (62.4%) were so reported by the occupants of those jobs. Even if we allow the most generous possible construction--counting all "don't knows" as agreement wherever they fall, and counting all employer and employee "boths" as agreement wherever they fall--the "error" rate is still over 22% [(219 + 205)/1923], a substantial margin. We put the word e r r o r in quotes to indicate that, although for analytical purposes an error was the result, it could sometimes result from accurate reporting. To take only the simplest case, an employee could be judging from the two hires made since he or she joined the company, both from outside, whereas the employer could be judging from the last 20 hires, 18 of which were from the inside. The difficulty lies with whom the researcher chose to ask the question, not with the judgment of that respondent. With a perfect respondent, an

Table C.3. Locus of Job Hires as Reported by Employers and Employees

Employee report Employer report Hiresinside Hires inside Hires outside Hires both Total

319 219 95 633

Hiresoutside

Hiresboth

Don'tknow

Total

205 603 174 982

75 99 58 232

18 46 12 76

617 967 339 1,923

Appendix C

206

"error" was the result for the researcher, a job in which 90% of hires have been from the inside should be classified as such and would not be so classified based on the best possible worker response. Finally, we compare information on three items that workers can be expected to have had direct experience with and on which they should have accurate information. We begin with union coverage and membership, derived from questions that are not directly comparable, having been asked in different ways of workers and employers. Employers were asked about union shops, specifically, "To be eligible for [job] is it required that the applicant be a member of a particular union?" Workers were asked a weaker form: "Is your current job covered by a union contract?" and, if yes, "Do you belong to that union?" Despite the different forms of the question (and the different information sought), a partial comparison is possible. If the employer accurately reported required union membership, then we should expect all employees in those shops to report coverage by a union contract and membership in the union. Table C.4 shows that our expectations are met to a greater extent than in the previous three tables. We can only compare where the employer said that union membership was required (if union membership was "not required," that says nothing about whether a union existed or not, so no comparison is possible). With these constraints, we can identify only 25 possible "errors": the 23 persons who said that their job was not covered by a union contract when the employer said that it was a unionTable C.4 Union Membership Reports

by Employer and Employee Employee:Job covered by union contract Employer: Union membership required

Yes

No

Total

Yes No Total

198 370 568

23 1,299 1,322

221 1,669 1,890

EmploYee: Belongto union Yes Yes No Total aNA = not applicable.

196 303 499

No 2 65 67

NAa

Total

23 1,299 1,322

221 1,667 1,888

Comparison of Worker- and Employer-GeneratedData

207

membership-required job, and the 2 (in the second panel) w h o said they didn't belong to the union the employer said was required. Even if this were all "error," it would be an error rate of only about 1% of the sample, and we cannot be certain that any contradiction was involved. It is possible that union membership is required for a job, but that no union contract actually covers the job. This is not a usual or likely event but is certainly possible in the small proportion of cases represented here. We conclude that, on this item, employee responses can be trusted (not the conclusion we might come to if our interest were in ascertaining whether the job was in fact in a union shop; given the results in the first three tables, we would expect more response error from employees than from employers). Another aspect that workers should have intimate knowledge of is what is required on their specific job. Of the many more-or-less comparable items on the two interview schedules, we present the two most comparable, dealing with the need for manual dexterity, and the ability to learn new things quickly. For the first, workers were asked, "Different things are important on different jobs. On your job, is it very important, somewhat important, or not at all important to be skilled in using your hands?" Employers were asked, "I am going to read a list of qualities which are sometimes important in choosing applicants. In selecting [for job], please tell me if it is extremely important, somewhat important, not very important, or not at all important that they are able to work well with their hands, that is, have manual dexterity?" The comparison in Table C.5 documents a surprising lack of agreement about the same jobs. Workers tended to think that more dexterity was required than did employers: Half of all workers said skill with their hands was a very important quality on their job, whereas only about a third of employers described the same jobs this way. Note that the highest level of agreement was in the "very important" category. When employers said manual dexterity was extremely important, 73.8% of the workers agreed with them (482/653). When they said it was unimportant, only about 50% of the workers agreed with them (180/321 or 340/661). In the most ambiguous middle category, there was the least agreement (21.7%), with 51.6% rating the job higher than the employer and 26.7% rating it lower. Overall, there was a sufficient level of disagreement to suggest caution in using the reports of workers on skill-level or skill-type requirements. Note, for example, that in almost 17% of the jobs in which the employees said manual dexterity was very important, the employers said that that quality was not very or not at all important [(92 + 62)/928]. In the other direction, of all the jobs in which the employers characterized manual dexterity as not very or not at all important, almost a quarter (23.3%) of the workers characterized it as being very important in those same jobs.

Appendix C

208

Table C.5. Employer and Employee Reports on the Importance

of Manual Dexterity for the Particular Job Employee: Importance of being "skilled in using your hands" Employer: Importance of being "able to work well with their hands"

Very important

Somewhat important

Not at all important

Total

Extremely important Somewhat important Not very important Not at all important Total

482 292 92 62 928

112 123 88 79 402

59 151 160 180 550

653 566 340 321 1,880

A similar c o m p a r i s o n can be m a d e on t w o other questions. E m p l o y ees w e r e asked, " D o y o u h a v e to k e e p learning n e w things on y o u r job?" a n d (if "yes"), "To w h a t d e g r e e do y o u h a v e to learn n e w things? Would y o u say a lot, s o m e w h a t , or a little?" E m p l o y e r s w e r e a s k e d the q u e s t i o n in the p a r a g r a p h above, w i t h a different ending: "I a m going to r e a d a list of q u a l i t i e s . . , please tell m e if it is e x t r e m e l y i m p o r t a n t . . , that t h e y are able to learn n e w things quickly, that is, are quick learners?" T h e c o m p a r i s o n is as bleak as in the p r e v i o u s q u e s t i o n (see Table C.6). W h e n e m p l o y e r s said the ability to learn n e w things quickly w a s ext r e m e l y i m p o r t a n t , only 35.9% of w o r k e r s in those jobs a g r e e d w i t h t h e m (and 20.7% of t h e m said t h e y n e v e r h a d to learn n e w things). A c c o r d i n g to the e m p l o y e r s , in o v e r half the jobs in o u r s a m p l e , the ability to learn n e w things quickly w a s e x t r e m e l y i m p o r t a n t ; according to the w o r k e r s the ability w a s required in only a b o u t o n e third of the s a m p l e jobs. Table C.6. Employer/Employee Reports of the Importance

of Learning Ability on the Particular Job Employer: How important is it for workers to be "able to learn new things quickly" on this job? Extremely important Somewhat important Not very important Not at all important Total

Employee: To what degree "do you have to keep learning new things on your job"? A lot

Somewhat

A little

Not at all

Total

353 228 14 0 595

349 258 25 7 639

78 95 12 2 187

203 171 25 10 409

983 752 76 19 1,830

Comparison of Worker- and Employer-GeneratedData

209

Other comparisons could be made from our data, but these suffice to illustrate the extent of the problem in this area. From these comparisons, we draw two conclusions. The first is that workers are very bad informants about organizational characteristics and should not be relied on to correctly report even simple things like workplace size and firm status. Nor are they much better at accurately reporting things like locus of hire for their job. The second conclusion is that even things directly and clearly known by workers--questions about attributes required by jobs (manual dexterity and quick learning ability)--obviously mean different things to employers and workers, and the two will report differently on the characteristics of the same job. In the first case (organizational and aggregate job characteristics), we are faced with inaccuracy: Workers are just plain wrong in their reports, and research based on these reports will be in error. In the second case, we are dealing with relative comparisons and subjective meaning; there is not necessarily error on either side, but great care is necessary in analysis to determine just what is being answered. In general, we would argue that the best strategy, when gathering data about a superindividual variable, is that the person responsible for having knowledge of that level of aggregation should be the source of the data rather than an individual whose only qualification for answering is being a part of the aggregate.

D Construction of Measures

D U E PROCESS A N D WORK RULES

Protection from arbitrary discipline and capricious treatment is a central feature of systems of bureaucratic personnel management. Table D. 1 summarizes the questionnaire items that are potential indicators of due process in work rules. The last two variables, which relate to the presence of written rules and set penalties for rule violations, are drawn from the employer questionnaire; all others are taken from the employee questionnaire. On all items, missing responses (code = 9) were eliminated from further consideration. Several items, however, were answered with responses of "don't know" or "not sure" or "it depends." In each instance, these responses were coded midway between the extremes of the explicit response choices. The rationale for this procedure is that professed ignorance probably results from respondents' trying to balance competing response tendencies and being unable to make a judgment at either extreme. Two pieces of evidence support our treatment of the responses in this way. One bit of evidence comes from inspecting the tabular relationships among these items. In Table D.2, we show how the nonstandard responses on certain items tended to generate middling responses on other items. In most of the instances shown here, the nonstandard responses did indeed fall between the other responses. Although a variety of technically sophisticated methods are available for determining the exact scoring of responses in situations of this sort, these methods are difficult to apply in the multivariate, as compared to the bivariate, case, and we are unpersuaded that the amount of improvement in the final scales would have justified the investment in applying these procedures. As an additional check on our coding decisions for these responses, however, we tested them in a supplementary analysis. In this 211

Appendix D

212

Table

Variable DPROC2

D.1. Measures of Due Process

Items E m p l o y e r m u s t give reas o n to fire

Reference

Initial c ode s a

Q50A

9 = Missing 8 = Don't know

Resulting c ode s

1 =Yes

Dropped ---* 1 ---~0 ---~2

DPROC3

Reason for firing m u s t be in w r i t i n g

Q50B

9 = Missing 8 = Don't know 7 = Depends 2=No 0 = DNA 1 =Yes

Dropped --~ 1 --* 1 --*0 --~ 0 --~2

DPROC4

A d v a n c e notice to fire?

Q51A

9 = Missing 8 = Don't know 7 = Depends 2=No 1 = Yes

Dropped --* 2 --* 2 ---~0 --*4

DPROC5

Grievance procedure

Q52

9 8 2 1

= Missing = Don't know = No =Yes

Dropped --~ 2 ---~0 --*4

DPROC6

Does establishment have w o r k rules in w r i t i n g ?

I19

9 8 1 2 5 3 4

= = = = = = =

Missing Missing All Most N o rul e s S ome None

Dropped Dropped ---> 4 --~ 3 --~ 2 --~ 2 --> 1

DPROC7

A r e t h e r e s e t p e n a l t i e s for ru le violations?

I20A

9 = Missing 1 = Yes--all 2 = Yes--some 0 = DNA 8 = Don't know 3=No

Dropped ~ 4 ---> 3 ---* 2 ---> 2 "--~ 1

2 = No

aDNA = does not apply.

test, we divided the questionnaire items into two groups, those from the employer questionnaire and those from the employee questionnaire. The employee responses used were DPROC2, DPROC3, DPROC4, and DPROC5; the employer responses used were DPROC6 and DPROC7. The items were coded according to the scheme given in Table D.1. We then estimated the canonical correlation between these sets of items, including within each set of items dummy variables representing nonstandard responses. For example, the employer variables were

213

Construction of Measures

Table D.2. Relationships between Selected Due-Process Items Must get advance notice of firing: % saying "yes"

Have formal appeal process if dispute: % saying yes

N

59 30 21

62 26 22

2,132 126 452

70 46 37

76 48 37

1,319 264 542

56 53 49 43 41

70 54 31 45 32

926 356 59 279 242

55 55 55 49 42

69 55 55 31 39

976 299 11 59 505

DPROC2. Employer must give reason if person is fired Yes Don't know No DPROC3. Reason for firing must be in writing Yes Don't know No DPROC6. How much of rules are in writing? All Most No rules Some None DPROC7. Are there set penalties for rule violation? Yes, for all Yes, for some Don't know No rules No

DPROC6, DPROC7, a d u m m y variable for the " n o rules" r e s p o n s e on the first variable, a n d a d u m m y variable for the " d o n ' t k n o w " r e s p o n s e on the s e c o n d variable. If the n o n s t a n d a r d r e s p o n s e s were severely miscoded, these d u m m y variables w o u l d have exhibited large stand a r d i z e d canonical coefficients. H o w e v e r , as expected, these coefficients were v e r y small (less t h a n .08) in every instance, a n d it is unlikely that our final scales are c o m p r o m i s e d b y our treatment of these responses. I N T E R N A L LABOR M A R K E T S As w e have explicitly a r g u e d in the text, internal labor markets n e e d to be r e g a r d e d as combinations of t w o discrete elements: the practice of inside hiring for jobs (the protection c o m p o n e n t ) a n d the a t t a c h m e n t of mobility assurances to specific jobs (the mobility c o m p o n e n t ) . Consequently, w e derived t w o additive scales describing each job o n these

214

Appendix D

Table D . 3 . Internal Labor Market Items

Variable PROTQ46

Item(s) A r e m o s t p e o p l e in y o u r job h i r e d from o u t s i d e

Reference Q46

or inside the company?

Initial codes a 9 8 4 2

= = = =

Missing Don't know No experiences Outside

3 = Half/half I = Inside PROTQ42A

Total number of jobs with current employer

Q42A

99,98 = M i s s i n g

1 = One 2 = Two 3-24

Resulting codes Dropped --* 0 ~ 0 ---* 0 --* 3 ---* 4 Dropped --~ 0 ---* 2 --* 4

PROTI2

Are vacancies for this job usually filled from outside thiscompany?

I2

1 = Outside 3 = Both 2 = Inside

MOBQ47

Is this job a steppingstone to another job in this company?

Q47C

9 = Missing 8 = Don't know 0 = DNA 2= No 3 = Depends 1 =Yes

Dropped --~ 0 ---* 0 --*0 ~ 3 ---~4

MOBIl3

If person is still with

113B

999 = M i s s i n g 0 = DNA 0%-10% 11%-74% 998 = D o n ' t k n o w 74%-100%

Dropped --~ 0 ~ 0 ~ 2 ---* 2 ~ 4

I14

9 = Missing 8 = Don't know 2=No I = Yes

Dropped --~ 2 --*0 ---*4

company in 10 years, what is chance of promotion?

MOBIl4

Is job p a r t of a p r o m o tion l a d d e r ?

~ 0 ---* 2 --~ 4

aDNA = does not apply.

dimensions. Each scale consists of three items, and procedures similar to those discussed above were used w h e n missing values were encountered on any of the constituent items. Table D.3 presents an overview of the questionnaire items used for the internal-labor-market variables. In this case, three items were taken from the employer interview and three from the employee interview. Again, certain items were answered with nonstandard responses. In particular, w h e n employees were asked about the usual source of recruits for their o w n jobs (PROTQ46), some were reluctant to choose one of the extreme categories and answered "half and half"; others professed to have too little experience in the company to be able to say.

Construction of Measures

215

Table D.4. Relationship between Selected Internal-Labor-Market Items

Item Are most people in your job hired from inside or outside the company? Inside Half and half Don't know Outside If person is still with the company in 10 years, what is the chance of promotion? 75%-100% 11%-74% Don't know 0%-10% Does not apply

Number of jobs in company % with 3 or more

Stepping-stone to another job? % saying yes

N

41 24 8 8

42 39 28 26

588 222 72 934

27 22 23 12 9

41 36 34 22 22

926 356 59 505 65

Similarly, w h e n e m p l o y e r s were asked about the p r o m o t i o n chances (MOBIl3) of individuals i n jobs (provided individuals stayed with the c o m p a n y at least 10 years in those sorts of jobs), some e m p l o y e r s w e r e unable to assess w h a t the p r o m o t i o n chances might be. In addition, because this question was p r e c e d e d by a question asking w h a t the chances w e r e that e m p l o y e e s w o u l d stay with the c o m p a n y for 10 years after t h e y e n t e r e d the job in question, the chances-for-promotion question was not asked of those e m p l o y e r s w h o said there was no chance of individuals in the job staying 10 years. O u r p r o c e d u r e for dealing with these ambiguities was similar to that u s e d for the due-process items. Table D.4 displays the tabular relationships b e t w e e n the items in question a n d some criterion items t a k e n f r o m the same c o n t e n t area. In the case of the employee-hiring variable, the " d o n ' t k n o w " r e s p o n s e s m a p p e d onto the criterion variables m o r e like the "outside hiring" r e s p o n s e than like a neutral response, a n d our coding of this item reflects that p a t t e m . For the e m p l o y e r mobility variable (MOBIl3), the " d o n ' t k n o w " r e s p o n s e s b e h a v e d after the fashion w e have n o t e d b e f o r e - - t h a t is, as neutral or middling r e s p o n s e s - - a n d w e r e c o d e d accordingly. Again, these decisions w e r e verified b y the canonical correlation p r o c e d u r e described above, the results indicating that the coding decisions were generally correct (i.e., the s t a n d a r d i z e d canonical coefficients for the n o n s t a n d a r d r e s p o n s e d u m m y variables w e r e quite small, b o t h relatively a n d absolutely; all w e r e . 15 or smaller).

E Classifying Occupations as Orderly External Markets Despite the obvious importance of the concept, little attention has been devoted to examining the degree to which occupations provide a context for orderly between-firm movement. Although other studies have examined aggregate transition rates among occupations and other labor force statuses (Hayward & Grady, 1986), studies of occupational patterns of movement among employers are quite scarce (Stinchcombe, 1979, is one exception). Even in cases where the desirability of data on interfirm mobility is recognized, researchers have often resorted to using the very poor proxy measure of interindustry mobility (Kaufman & Spilerman, 1982). The classification scheme developed here is based on an aggregate analysis of data from the January 1983 Current Population Survey, in which individual respondents were asked a variety of questions related to their occupational and firm mobility. Respondents who were working both at the time of the survey and one year earlier were asked, "You told me that [you] are now working as [occupation]. Were [you] doing the same kind of work a year ago, in January 1982?" For respondents w h o had changed occupations, a series of additional questions were posed. These included the name of the employer one year earlier and the detailed occupation, industry, and class-of-worker items used regularly in census data collections. All employed respondents were also asked h o w many years they had been working in their current occupation category and h o w many months or years they had been working for their current employers. From these basic items, a number of occupation-level indicators were created. Two of these were based on a measure that we call the occupationfirm tenure ratio, or hereafter OFTR. This measure is simply the ratio of 217

218

Appendix E

the number of months the individual had worked in his or her current occupation divided by the number of months worked for his or her current employer. Values below 1 on this ratio indicated people whose current occupation had changed since coming to work for their current employer. Higher values indicate those whose involvement with their occupation predated their involvement with their current employers. The assumption behind these calculations is that occupations in which workers changed firms while maintaining their occupational identities were occupations characterized by orderly and institutionalized occupational labor markets. All individuals in the CPS sample were then identified as to their status on two dichotomies: whether they were low-OFTR workers with a ratio value of less than one or whether they were high-OFTR workers with a ratio value greater than 3.5. These measures were then aggregated to the three-digit occupation level, and each occupation was characterized according to its proportion of high- and low-OFTR workers. For the occupations included in this analysis, the mean occupation had about 13% low-OFTR workers and about 14% high-OFTR workers. More important was the distribution of these proportions across occupations. Thus, occupations ranged from a minimum value of zero on the proportion of low-OFTR workers to a maximum value of .43 on low-OFTR workers. The distribution of the proportion of high-OFTR workers was similar: from a minimum value of zero to a maximum value of .48. (It should be noted that, at the occupation level, there is theoretically some built-in negative correlation between these ratios, but that, empirically, the conditions are not met for there to be much artifactual relationship here. Thus, occupations with 100% low-OFTR workers would have to have 0% high-tenure workers. However, as we have just seen, there were no 100% low- or high-OFTR occupations. Moreover, occupations with 0% low-OFTR workers would not have to have any high-OFTR workers, as all individuals could be in the 1 - 3 . 5 0 F T R range, and the same is true of occupations with 0% high-OFTR workers.) These two proportions then make up a positive indicator of an occupation offering orderly between-firm mobility and a negative indicator of it. The other two occupation indicators are based on responses to the questions about each individual's occupational status one year before the interview and their length of employment with their current employer. Each individual was classified as having experienced one of four types of occupational movement: (1) none, or same employer and same occupation as last year; (2) occupation "changer" and employer "stayer" in the previous year; (3) occupation "stayer" but employer "changer" in the previous year; and (4) both occupation and employer mobility in the

Classifying Occupations as Orderly External Markets

219

Table E.1. Correlation Matrix of Occupational Mobility Measures

1 1. Retrospective proportion of workers making within-occupation moves 2. Proportion of low Occupation-Firm Tenure Ratio (OFTR) workers 3. Proportion of high Occupation-Firm Tenure Ratio (OFTR) workers 4. Prospective proportion of employer changers keeping occupation

2

3

4

1.00 -.522

1.00

.346

-.390

.367

-.315

1.00 .264

1.00

p r e v i o u s year. T h e n , in the a g g r e g a t i o n process, each o c c u p a t i o n w a s characterized b y the p r o p o r t i o n of all of its current i n c u m b e n t s w h o w e r e "mobility t y p e 3%," that is, firm c h a n g e r s but o c c u p a t i o n stayers. At the o c c u p a t i o n level, values for this variable r a n g e d f r o m a l o w of 0% to a h i g h of 48%, w h i c h is quite h i g h considering the t i m e p e r i o d of interest w a s only one year. The final m e a s u r e w a s created b y a similar logic, except p r o s p e c tively rather t h a n retrospectively. Each individual w a s identified accord-

Table E.2. Factor Analysis of Occupational Mobility Measures

Eigenvalues before iteration Eigenvalue Difference Proportion Cumulative

Factor1

Factor 2

Factor 3

Factor4

2.095 1.348 0.524 0.524

0.746 0.068 0.187 0.710

0.679 0.198 0.170 0.880

0.480

Factor loadings 1. Retrospective proportion of workers making within-occupation moves 2. Proportion of low OFTR workers 3. Proportion of high OFTR workers 4. Prospective proportion of employer changers keeping occupation

0.120 1.000

Commonalities

.714

.510

-.701

.498

.508

.258

.488

.239

220

Appendix E

ing to the occupation he or she worked in during January 1982. For all individuals who changed employers in the next year, some changed occupations and some did not. For each 1982 occupation, a proportion was constructed of the number of employer changers who were also occupation stayers. Again, occupations where prospective employer movement was associated with occupational stability were regarded as "orderly-movement occupations." The range of values across occupations for this measure was from 0% to 100%. That is, in some occupations, all employer moves were also occupation moves, and in others, all employer moves were made within occupational boundaries. To create a summary measure of orderly occupational movement, these four indicators were analyzed with common factor analysis. The correlation matrix of the input variables is shown in Table E.1. As is readily apparent, all correlations are in the expected direction, and all are substantial. The results of the factor analysis are shown in Table E.2. The one-factor solution is revealed to be adequate, as the next largest eigenvalue falls considerably below the conventional cutoff criterion of 1.00. The factor pattern indicates that the best indicators of orderly movement are the retrospective proportion of all workers making between-firm within-occupation moves and the negative indicator of the proportion of the occupation, which is low-OFTR workers. Based on this analysis, factor scores were created for the set of occupations included in the analysis. Before inspecting the results of this scoring on an occupation-byoccupation basis, it is necessary to explain briefly the steps that were taken to deal with small cell sizes for some occupations. Although the CPS mobility questions were responded to by 69,637 workers, they were not evenly distributed across the 496 detailed census occupation categories. For the purposes of this analysis, we defined the minimally acceptable cell size as 20 workers. By this criterion, there were 336 occupations that qualified for inclusion. To avoid missing values on the remainder of the occupation sample, we collapsed some adjacent and/or related occupation categories. For example, 24 categories of post-secondary-school teachers that had sample sizes too small to be included on their o w n account were merged with the category "post-secondary-school teachers not elsewhere classified" and were entered in the analysis as a single observation. Or as a second example, the detailed category of "ushers" was merged with the detailed category of "guides." Thus, the factor analysis reported above was carried out on a sample of 345 partially grouped occupations that accounted for nearly all of the occupations in the original detailed list. (A residual group of 24 occupations still contained 20 or fewer observations and were dropped from the analysis.)

Classifying Occupations as Orderly External Markets

221

Table E.3. Factor Scores for Illustrative Group

of Census Occupations Occupation Lowest 10 occupations Locomotive operators General office supervisors Separating, filtering, and clarifying machine operators Production coordinators Purchasing managers Administrators, protective services Production testers Lathe and turning-machine operators Supervisors, production occupations Supervisors, cleaning and building-service workers Middle 10 occupations Eligibility clerks, social welfare Mechanical engineers Weighers, measurers, and checkers Religious workers, not elsewhere classified Therapists, not elsewhere classified Teachers, elementary school Authors Announcers Data-processing-equipment repairers Insurance sales occupations Top 10 occupations News vendors Animal caretakers Dental hygienists Shoe repairers Construction helpers Protective service occupations, not elsewhere classified Athletes Hoist and winch operators Drywall installers Short-order cooks

Score -2.56 -2.14 -2.11 -2.05 - 1.94 -1.93 -1.86 -1.84 -1.80 -1.79

-.030 -.026 -.024 -.019 .001 .003 .018 .020 .024 .030 1.54 1.59 1.65 1.70 1.77 1.80 1.85 1.98 1.98 2.21

A l t h o u g h this g r o u p i n g p r o c e d u r e is o p e n to criticism o n t h e g r o u n d s that some occupations with divergent mobility patterns may have been l u m p e d t o g e t h e r in t h e p r o c e s s , it is v e r y u n l i k e l y t h a t this a g g r e g a t i o n i n t r o d u c e d m u c h bias into t h e analysis. First, o c c u p a t i o n s w i t h f e w inc u m b e n t s n a t i o n a l l y w e r e also likely to h a v e relatively f e w i n c u m b e n t s

222

Appendix E

in the Chicago area and were thus less likely to have materialized in the MEWS study. Second, in most cases, the observations aggregated were quite similar, as in the case of college teachers cited above. Third, the results of the correlation and factor analysis were nearly identical for both the analysis of 339 ungrouped occupations and the analysis of 345 grouped observations. Table E.3 presents the aforementioned factor scores for three groups of occupations: those with the least orderly occupational mobility; those with middling levels (i.e., the 10 occupations with factor scores close to 0); and those with the highest factor scores. The last phase in the construction of these measures was to assign to each individual in the MEWS sample the orderly-mobility score for his or her detailed occupation.

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Index

Age discrimination, 177 Age factors in attachment, 135, 185 in bureaucratic control, 95, .96, 97 in bureaucratic employment relationships, 181-182 in due process access, 95, 96, 97, 100 in firm dependence, 140, 141 in hiring protection, 75-76, 95, 96, 97, 98-100 in job ladder participation, 75 in job mobility, 75-76, 95, 96, 97 in job satisfaction, 136, 149, 150, 159, 185 in personnel department access, 95, 96, 97, 181, 182 work experience and, 96-98 in work experience/job mobility relationship, 93, 95-98 Asset specificity, 17, 18 Attachment, 125-160 age factors in, 135, 185 authority and, 128 behavioral linkages in, 126-128, 184 definition of, 131 bureaucratic employment structures and, 136-137, 157, 158 in core industries, 132 decentralization and, 129 educational factors in, 133, 140, 141142, 185 external labor market participation and, 131, 158 firm dependence and, 131, 137-138, 140-149, 155, 156, 157

Attachment (Cont.) firm dependence and (Cont.) age factors in, 140, 141 bureaucratic employment structures and, 142-143 career hiatus and, 148-149, 159-160 in core industries, 140, 141, 145-146 definition of, 184 educational factors in, 140, 141-142 firm size and, 145-146, 154 income and, 145-146 job training length and, 140, 141, 145-146 race factors in, 134, 135, 140, 141 sex factors in, 134-135, 140, 141, 146149 social status and, 140, 141-142, 144 supervisory responsibility and, 140, 141-142 unionization and, 140, 141 work control and, 140, 141-142 firm size and, 132 in high-mobility versus low-mobility occupations, 147-149 instrumental linkages in, 126, 127-128, 183-184 definition of, 130-131 internal labor markets and, 125-126, 128-129, 131 job clemency and, 139, 157-158 job control and, 133-134, 139, 185 job satisfaction and, 131, 135-136, 138, 149-154, 155, 156, 157 age factors in, 136, 149, 150, 159, 185 231

232

Attachment (Cont.) job satisfaction and (Cont.) bureaucratic employment structures and, 149-150 due process access and, 151 educational factors in, 149, 150, 151 firm size and, 150, 151 in high-mobility occupations, 154 income and, 150, 151, 152-153 job clemency and, 153 job control and, 185 measure of, 138 race factors in, 136, 149, 150, 153, 159, 185 sex factors in, 136, 152-153, 154, 160, 185 unionization and, 149, 150, 151-152, 154 work control and, 153 working conditions and, 153, 159, 185 market opportunity in, 126-128 measure of, 138-139 normative linkages in, 126, 128-129, 184-185 in public sector, 132 race factors in, 134, 135, 140, 141, 160 sex factors in, 134-135, 140, 141, 146149, 160 Socio-Economic Index scores of, 134 supervisory responsibility and, 133-134 unionization and, 132-133, 140, 141, 154, 185 unionization index of, 139-140 working conditions measure, 139 Attitudes, relationship to behavior, 9-10 Authority attachment and, 128 cultural, 58 bureaucratic control and, 109, 117-118, 119 due process access and, 109, 117-118, 119 hierarchical structures of, 20 legality of, 24 in superior-subordinate relationships, 7-8 Banking industry, bureaucratic control institutionalization in, 186 Behavior, relationship to attitudes, 9-10

Index

Behavioral linkages, in attachment, 126128, 184 definition of, 131 Black men due process access by, 100 educational levels of, 78, 79 external labor market participation by, 85-86 hiring protection for, 84-85, 99-100 internal labor market participation by, 84-86 job mobility of, 80, 84, 85 job training length of, 78, 79 personnel department access by, 89, 90 white-collar job participation by, 78-79 Black women due process access by, 100 hiring protection for, 84, 85 internal labor market participation by, 82, 84-85 job mobility of, 80, 81, 82, 84, 101 job training length of, 78, 79 personnel department access by, 89, 90 Black workers internal labor market participation by, 181 job mobility of, 98 market opportunity perceptions of, 134, 135, 141, 142, 143, 144, 160, 186 promotion of, 84 See also Black men; Black women Blue-collar workers Chicago-U.S. comparison of, 31, 34 earnings of, 169, 171-172 Bureaucracies, as government, 57, 179 Bureaucratic control age factors in, 95 96, 97 earnings and, 167-168, 169, 170, 171, 176, 187-188, 189 government intervention in, 105 higher-level effects on, 103-124, 109 authority variable, 109, 117-118, 119 competition measure, 109 efficiency theories of, 104, 112, 113114, 115, 124 government intervention and, 108, 111-114, 116, 117, 123 harm potential variable, 109, 117-118, 119 historical theories of, 104

Index

Bureaucratic control (Cont.) higher-level effects on (Cont.) industrial measures, 107-108, 116, 117, 123-124 industry-specific variations in, 109111, 186-187 institutional theories of, 104-105, 113 internal labor market indicators of, 119-123 job-specific measures, 109, 117-119, 122, 123 learning time variable, 109, 118-119 literacy variable, 109, 118-119, 123 organizational measures, 108-109 per company measures, 108 political theories of, 104 unionization measures, 108-109, 111, 112-113, 114-115, 116, 117, 191 in white-collar employment, 94, 171, 173, 174, 175 working conditions variable, 109, 118, 119, 123 Marxist theory of, 65 multiple causality of, 105, 124 as organizational formalization, 104 personnel department access and, 112 unionization and, 191 workers' earnings and, 167-168, 169, 170, 171, 176, 187-188, 189 Bureaucratic employment relationships. See Employment relationships Bureaucratic employment structures, consequences of, 183-189 Bureaucratic-governance model, of personnel management, 56-58 Bureaucratic management consequences of, 7, 26, 27-28 industry-specific variations of, 21-22 scope of, 7, 18, 26, 27 shape of, 7, 18, 26-27 Bush Administration, 193 Capitalist control model, 54, 55-56 Career interruptions, of women, 148-149, 159-160, 185 Carter Administration, 53 Chicago Standard Metropolitan Statistical Area (SMSA), 30 economic characteristics, 31, 34

233

Chicago Standard Metropolitan Statistical Area (SMSA) (Cont.) establishment distribution characteristics, 33, 35 industry distribution characteristics, 33, 35 labor force characteristics, 32, 34 Civil rights movement, 106 Civil service PACE examination for, 53 See also Public sector Clinton Administration, 193 Company handbooks, 66, 68 Competition due process access and, 109 hiring protection and, 192 Conduct, rules of, 66, 68 Conflict, employer-employee Marxist theories of, 104 surplus values distribution issue in, 55 in worker control, 19-20 Construction industry employer survey data regarding, 46-48 personnel departments in, 110 Contingency theory, 11-14, 189-192 Core industries attachment in, 132, 140, 141, 145-146 bureaucratic management structure of, 21 firm dependence in, 140, 141, 145-146 market opportunity in, 145-146 personnel departments in, 110, 122 unionization of, 21 Current Population Survey, 50, 77-78 occupational mobility data of, 217, 218, 220 Decentralization, attachment and, 129 Dependence, in employment relationships, 4, 184 as behavioral linkage mechanism, 126 in high-mobility occupations, 128 See also Firm dependence Discrimination age-related, 177 bureaucratic employment relationships and, 71-72, 180 due process access and, 90 Drive system, of employment, 63 Dual labor market, 21, 122

234

Due process age factors in, 95, 96, 97, 100 black men's access to, 86, 90, 92, 94 black women's access to, 86, 90 company handbook distribution and, 66, 68 earnings and, 164, 165-166, 167, 168169, 171-172, 176, 188-189 frequency of use of, 61, 63 government dominance and, 182, 191 higher-level effects on, 103-124, 109 authority variable, 109, 117-118, 119 competition measure, 109 efficiency theories of, 104, 112, 113114, 115, 124 government intervention and, 108, 111-114, 116, 117, 123 harm potential variable, 109, 117-118, 119 historical theories of, 104 industrial measures, 107-108, 116, 117, 123-124 industry-specific variations in, 109111 institutional theories of, 104-105, 113 internal labor market indicators of, 119-123 job-specific measures, 109, 117-119, 122, 123 learning time variable, 109, 118-119 literacy variable, 109, 118-119, 123 organizational measures, 108-109 per company measures, 108 political theories of, 104 unionization measures, 108-109, 111, 112-113, 114-115, 116, 117, 191 working conditions variable, 109, 118, 119, 123 Marxist theories of, 56 of nonsupervisory workers, 63 personnel department access and, 112 in public sector, 182 questionnaire measures of, 211-213 as social pressure response, 105106 statistical indicators of, 68 white women's access to, 86, 87 women's access to, 86, 87, 181 work-rule indicators of, 211-213 Dun and Bradstreet, Inc., 49

Index

Earnings, and employment relationships, 161-176, 187-189 bureaucratic control and, 167-168, 169, 170, 171, 176, 187-188, 189 due process access and, f64, 165-166, 167, 168-169, 171-172, 176, 188-189 educational factors in, 161-162, 166, 187 external labor markets and, 188 firm dependence and, 166, 167, 169, 170, 172, 173, 174, 176, 189 firm size and, 162-163 effect of formalization on, 161-162, 166, 167, 169, 170, 176 hiring protection and, 163, 164, 165166, 167, 168, 170, 175-176, 187, 189 internal labor markets and, 188 job mobility and, 163, 164, 165-166, 167, 168, 170-171, 176, 187 in private sector, 166, 167, 168, 169, 170-171, 187-188, 189-190 in public sector, 166, 167, 168, 169, 170171, 187-188, 189-190 race factors in, 173, 174-175 sex factors in, 172-174 work experience and, 166 Education attachment and, 133, 140, 141-142, 185 black men's level of, 78, 79 earnings and, 161-162, 166, 187 firm dependence and, 140, 141-142 job mobility and, 90, 91, 94 job satisfaction and, 149, 150, 151 personnel structures and, 76 white men's level of, 78, 79 Efficiency, means-ends, 20 Efficiency theories, of bureaucratic control and due process, 104, 112, 113-114, 115, 124 Employer-Identification Question Sequence, 199-200 EmployingBureaucracy(Jacoby), 4 Employment, as economic contract, 1 Employment-at-will, 1 frequency of use of, 63 Employment opportunities, alternative, 72 Employment relationships, 4-28 age factors in, 181-182 bureaucratization of, 2 components of, 186-187

Index

Employment relationships (Cont.) contingency theory of, 11-14, 189-192 definition of, 2 discrete versus relational contracting in, 1-2 economic theories of, 3 employees' motivations for, 71-72 future of, 189-193 higher-level effects on, 182-183 hybrid approach to, 23-25 implications of, 14-19 individual-level effects on, 180-182 industrial-sectorial perspective on, 1516, 19-22 capital control model of, 54, 55 institutional approach to, 22-23 institutionalization of, 4, 178 long-term, 126-127 membership concept of, 3-4, 57-58, 63, 177 neo-classicial theories of, 16-17 neo-Marxist theories of, 3 organizational factors in, 177 organizational theories of, 3-4 scope of, 180-183 shape of, 178-179 social structure of, 2 technical-rational approach to, 7-19, 54, 55 transaction cost analysis of, 16-19, 54, 58-59, 72, 74, 90 Environment, organizational, 12, 13-14 Exchange transactions, 7-8 Exit-voice, 86 Expectancy theory, 9 External labor market. See Labor market, external Federal bureaucracy/government cultural authority of, 58 job mobility in, 53-54 PACE examination for, 53 public attitudes toward, 192-193 See also Public sector Firm dependence, 127 age factors in, 140, 141 attachment and, 131, 137-138, 140-149, 155, 156, 157 in core industries, 140, 141, 145-146 definition of, 184

235

Firm dependence (Cont.) earnings and, 166, 167, 169, 170, 172, 173, 174, 176, 189 educational factors in, 140, 141-142 firm size and, 145-146 job training length and, 140, 141, 145146 race factors in, 140, 141 sex factors in, 140, 141-142, 144, 146149 social status and, 140, 141-142, 144 supervisory responsibility and, 140, 141-142 unionization and, 140-141 work control and, 140, 141-142 Firm size attachment and, 132, 145-146, 154 comparison of employer-employee estimations of, 202-204 due process and, 108, 110, 111, 112-114 earnings and, 162-163, 187 job satisfaction and, 150, 151 market opportunity and, 145-146 Firm-specific skills/jobs. See Skill specificity Formalization attachment and, 129 earnings and, 161-162, 166, 167, 169, 170, 176 literacy requirements and, 118, 123 Goals, organizational, 10-11 classwide rationality of, 20 Goal theory, 9 Governance structures basic types of, 17-19 mismatches of, 19 model of, 24 Governance theory, of bureaucracies, 179 Government domination bureaucratic control and, 182, 191 due process access and, 182, 191 job mobility and, 120-121 normative legitimacy of, 182-183 personnel department establishment and, 123 Government intervention due process and, 108, 111-114, 116, 117, 123 internal labor markets and, 105

236

Grievance procedures unions' association with, 133 See also Due process Hierarchicalization, 55 High-mobility occupations attachment in, 147-149 dependence in, 128 external labor market access in, 102 job satisfaction in, 154 Hiring protection additive scales for, 213-215 age factors in, 75-76, 95, 96, 97, 98-100 attachment and, 125 for black men, 84-85, 99-100 for black women, 84, 85 competition and, 121 decline of, 192 earnings and, 163, 164, 165-166, 167, 168, 170, 175-176, 187, 189 firm size and, 121 industry concentration and, 121 job training and, 91, 93 unionization and, 121 for white men, 77, 181 Historical theories, of bureaucratic governance and due process, 104 Human capital, 17, 18 social resources assessment and, 76-77 Human relations theory, 8 Hybrid approach, in personnel management, 54, 55 Income attachment and, 145-146 job satisfaction and, 150, 151, 152-153 See also Earnings, and employment relationships Industrial governance model, written rules of conduct and, 68 Industrial relations bureaucratic-governance model of, 56-58 system model of, 24-25 Industrial-sectorial approach, to employment relationships, 15-16, 19-22 capital control model of, 54, 55 Industry concentration, job mobility and, 121, 122

Index

Institutional approach to bureaucracies, 179 to due process, 5, 113 organizational-governancemodel of, 54, 55 to organizational structure, 22-23 Institutionalization, of employment relationships, 4, 178 Instrumental linkages, in attachment, 126, 127-128, 183-184 definition of, 130-131 Insurance industry, bureaucratic control institutionalizationin, 186 Job, definition of, 50 Job clemency attachment and, 139, 157-158 job satisfaction and, 153 Job control attachment and, 133-134, 185 job satisfaction and, 185 See also Worker control Job descriptions, written, 61, 63-64 Job discrimination age-related, 177 effect on bureaucratic employment relationships, 180 Job instructions, frequency of use of, 61, 64 Job ladders age factors in access to, 75 attachment and, 125 in public sector, 168, 171, 188 Job mobility additive scales for, 213-215 age factors in, 75-76, 95, 96, 97 of black men, 80, 84, 85 of black women, 80, 81, 84, 101 Current Population Survey data regarding, 50 earnings and, 163, 164, 165-166, 167, 168, 170-171, 176, 187 educational factors in, 90, 91 government domination and, 120-121 industry concentration and, 121, 122 job training and, 91, 93 occupation-specific, 73-74 personnel department access and, 121, 122, 123 of white women, 101

Index

Job mobility (Cont.) of women, 80, 81, 83-84 work experience and, 90, 91, 93 Job satisfaction, 149-154, 155-156 attachment and, 129, 131, 135-136, 138, 149-154, 155, 156, 157 age factors in, 136, 149, 150, 159, 185 bureaucratic employment structures and, 149-150 due process access and, 151 educational factors in, 149, 150, 151 firm size and, 150, 151 in high-mobility occupations, 154 income and, 150, 151, 152-153 job clemency and, 153 job control and, 185 measure of, 138 race factors in, 136, 149, 150, 153, 159, 185 sex factors in, 136, 152-153, 154, 160, 185 unionization and, 149, 150, 151-152, 154 worker control and, 153 working conditions and, 153, 159, 185 bureaucratic employment structures and, 149-140 due process access and, 151 Job search, market opportunity in, 126128 Job-specific skills. See Skill specificity Job training coworker, sex factors in, 94 as instrumental linkage, 183 hiring protection and, 91, 93 internal labor markets and, 91, 93 job mobility and, 91, 93 length of for black men, 78, 79 for black women, 78, 79 firm dependence and, 140, 141, 145146 for white men, 78, 79, 93 for white women, 78, 79, 94 Job turnover union participation and, 132-133 of women, 134 Justice, industrial, 57 unions' association with, 133 workers" security and, 127

237

Labor market dualism of, 21, 122 efficacy of, 73 segmentation of, 15, 21 Labor market, external attachment and, 131, 158 black men's participation in, 85-86, 94 black workers' participation in, 90 bureaucratic employment relationships and, 180 classification of, 217-222 due process access and, 163-164 employer dependence and, 128 high-mobility occupation membership and, 102 hiring protection and, 163-164 "internal," 73 job mobility and, 163-164 market opportunity perception and, 185-186 occupation-specific, 72-74 relationship to internal labor markets, 95, 102, 181, 183, 184 secondary, 73 white women's participation in, 83 women's attitudes toward, 159 women's participation in, 83-84, 134 in high-mobility versus low-mobility markets, 147-149 workers' awareness of, 140, 141-142, 143 Labor market, internal, 1-2, 82 additive scales for, 213-215 age-related access to, 181-182 age-related job mobility in, 75-76 attachment and, 125-126, 128-129, 131 black men's participation in, 84-86 black women's participation in, 82, 84-85 contingent labor markets versus, 191192 declining need for, 190 due process access and, 119-123 as efficiency pressures response, 20 earnings and, 188 elements of, 213 employment stability rationing in, 5 government intervention in, 105 as instrumental linkage, 183-184 job training and, 91, 93

Index

238

Labor market, internal (Cont.) Marxist theory of, 56 mechanisms of, frequency of use of, 62-63 occupational, 180 protection versus mobility dimensions of, 68-69 relationship to external labor markets, 95, 102, 181, 183, 184 transaction cost theory of, 59 in white-collar employment, 91, 93 white women's participation in, 101, 102, 181 white men's participation in, 77, 181 women's participation in, 80, 81-84, 101 workers' security and, 127 Literacy due process access and, 109, 118-119, 123 formalization and, 118, 123 Manufacturing industry employer survey data regarding, 47 personnel departments in, 110 Market opportunity, 184 attachment and, 126-128 black workers' perception of, 134, 135, 160 in core industries, 145-146 external labor markets and, 185-186 firm dependence and, 131 firm size and, 145-146 in occupationalized labor markets, 127128 women's access to, 159 women's perception of, 134-135, 141, 144, 146, 185-186 workers' perception of, 127, 140, 141142, 143, 159 Marxist theories of due process, 56 of employer-employee conflict, 104 of internal labor markets, 56 of personnel management, 60, 65 of worker control, 55 Mass-production industries, bureaucratic control institutionalization in, 186187 Membership concept, of employment relations, 3-4, 57-58, 63, 177

Men job satisfaction of, 152-153, 154 See also Black men; White men Metropolitan Employer Worker Survey (MEWS), 29-51 "bottom-up" method of, 29-30 Chicago Standard Metropolitan Statistical Area data of, 30 economic characteristics, 31, 34 establishment distribution characteristics, 33, 35 industry distribution characteristics, 33, 35 labor force characteristics, 32, 34 comparison of employer-employee data, 201-209 employee sample of, 35-41 comparison with 1980 U.S. Census data, 38-41 response rate, 36, 40 employer sample of, 41-50 sources of bias, 44-51 limitations on study population, 30 random-digit dialing method of, 30, 35-36 Microanalytic theory, of bureaucracies, 179 Minority-group workers bureaucratic employment relations of, 180 as contingent workforce, 190-191, 192 due process access of, 181 employers' performance assessment of, 74 See also Black men; Black women Monopoly effect, in worker turnover, 132133 Needs theory, 9 Neo-institutionalist model/theories, 54, 179 New Deal System, 24-25, 189-190 Normative linkages, in attachment, 126, 128-129, 184-185 Obligational market, 18 Occupation, definition of, 50 Occupational mobility measures of, 217-222 See also Job mobility

Index

Occupation-firm tenure ratio (OFTR), 217-218, 219, 220 Occupations, classified as orderly external markets, 217-222 Off-premises workers, 190 Organizational environment, effect on employment relationships, 177 Organizational factors, in employment relationships, 3-4 Organizational field, 22, 23 Organizational-governance model, 54, 56-58 Organizational immortality, 23 Organizational size. See Firm size Organizational structure environmental context, 12, 13-16 firm size and, 12-13 technology's effect on, 11-12 Outside hiring comparison of employer-employee estimations of, 204-206 protection from. See Hiring protection PACE (Professional and Administrative Career Examination), 53 Part-time workers, 190, 191 Performance evaluation, frequency of use of, 61, 63-64 Personnel administration, cultural authority of, 58 Personnel department, 68 access to age factors in, 95, 96, 97, 181, 182 by black men, 89, 90 by black women, 89, 90 bureaucratic control and, 112, 115, 117 due process access and, 112, 115, 117 job mobility and, 121, 122, 123 by white men, 89 by white women, 86, 89 in core industries, 110, 122 prevalence of, 61, 64, 179 firm size and, 110, 111 industry-specific variations in, 109111 role of, 64 Personnel management bureaucratic-governance model of, 56-58

239

Personnel management (Cont.) capitalist control model of, 54, 55-56, 179 central institutions of, 55 control mechanisms of, 63-64 elements of, 53-70 institutionalist model of, 54 multifaceted nature of, 68 neo-institutionalist model of, 58 organizational control of, 179-180 organizational-governance model of, 54, 56-58 scope of, 60-64 shape of, 66-70 transaction cost model of, 54, 58-59, 62 unified-development theories of, 179 Petroleum industry, bureaucratic control institutionalization in, 187 Primitive team market, 17-18 Private sector earnings in, 166, 167, 168, 169, 170-171 bureaucratic control and, 187-188 due process access and, 169, 189-190 hiring protection and, 175 employer survey data regarding, 47, 49 Productivity, age-related decrease of, 177 Professional and Administrative Career Examination (PACE), 53 Promotion of black workers, 84 bureaucratic practices in, 1-2 as deferred reward, 126 as instrumental linkage mechanism, 126 as satisfaction source, 128-129 of white women, 85 Public sector attachment in, 185 due process access in, 182 earnings in, 166, 167 bureaucratic control and, 187-188 due process access and, 168-169, 189-190 firm dependence and, 169 job ladder access and, 168, 171 job mobility and, 170-171 employer survey data regarding, 47, 48, 49 government rational-legal legitimacy in, 133 job ladders in, 168, 171, 188

240

Race factors in attachment, 134, 135, 140, 141, 160 in earnings, 173, 174-175 in firm dependence, 140, 141 in job satisfaction, 136, 149, 150, 153, 159, 185 See also Black men; Black women; Minority-group workers; White men; White women Random-digit dialing, 30, 35-36 Rational action perspective, of employment relationships, 7-14 Rationality, bounded, 10-11 Reagan Administration, 193 Relational team market, 18 Retail trade industry, employer survey data, 47, 48 Sample, employee, 35-41 Sample, employer, 41-50 Sample selection bias, 49-50 Sears, Roebuck, and Company, 125 Segmentation, of labor market, 15, 21 Self-actualization, 8 Seniority, in workforce reduction, 4 Seniority systems, codified, 1-2 Sentiments, 10 Service industry employer survey data regarding, 47 personnel departments in, 110 Sex factors in attachment, 134-135, 140, 141, 146149 in earnings, 172-174 in firm dependence, 140, 141-142, 146149 in job satisfaction, 136, 152-153, 154, 160, 185 See also Black men; Black women; Men; White men; White women; Women Skill specificity, 17, 72-73, 83 comparison of employer-employee estimations of, 207-208 of minority-group workers, 75 training costs for, 126 Social resources, 180-181 human capital and, 76-77 of minority-group workers, 74-75 See also Education; Work experience Sodal rewards, in employment, 5-6

Index

Social status, firm dependence and, 140, 141-142, 144 Socio-Economic Index, 134 Spot market, 17, 18 Stratification, 5-6, 55 Subdivision, 55 Supervisory responsibility attachment and, 133-134 firm dependence and, 140, 141-142 in team markets, 18-19 Surplus values distribution, 55 Team market, 18-19 Technical-rational approach, to employment relationships, 7-19, 54, 55 Technology, effect on organizational structure, 11-12 Temporary workers, 190, 191 Tenure, of unionized workers, 133 Training. See Job training Transaction cost analysis, 16-19, 54, 58-59 skill specifidty factor of, 72 employees' productive contribution assessment in, 74 of internal labor market opportunities distribution, 90 Transformed-industrial-relationstheory, 190, 191 Transportation industry, personnel departments in, 10 Uncertainty, environmental, 13-14 Unionization attachment and, 132-133, 140, 141, 154, 185 bureaucratic control and, 114-115, 191 bureaucratic management structures and, 21-22 comparison of employer-employee estimations of, 206-207 in core industries, 21 decline of, 190, 191 due process access and, 108-109, 111, 112-113, 114, 115, 116, 117, 191 due process procedure formalization and, 106 firm dependence and, 140-141 firm size and, 121 hiring protection and, 121

Index

Unionization (Cont.) job satisfaction and, 149, 150, 151-152, 154 tenure and, 133 University of Illinois Survey Research Laboratory, 30, 36-37, 41, 42 Utilities industry bureaucratic control institutionalization in, 187 employer survey data regarding, 47 White-collar employment bureaucratic control in, 94, 171, 173, 174, 175 internal labor market access in, 91, 93 earnings in bureaucratic control and, 171, 173, 174, 175 due process access and, 169, 171-172, 175 firm dependence and, 173, 174 hiring protection and, 173, 174 job mobility and, 171, 173, 174 job training length and, 78, 79, 94 women's access to, 78, 79, 91, 93 White men bureaucratic employment relationships of, 180-181 educational levels of, 78, 79 external labor market participation by, 77 hiring protection for, 77, 181 internal labor market participation by, 77, 181 job mobility of, 77 age factors in, 98 job training length for, 78, 79, 93 personnel department access by, 89 postschool training opportunities of, 77 White women hiring protection for, 99 internal labor market participation by, 101, 102, 181 job mobility of, 80, 81, 82, 83 personnel department access by, 86, 89 promotion of, 85 white-collar employment participation by, 78-79

241

Wholesale trade industry, employer survey data, 47, 48 Women bureaucratic employment relationships of, 180 career interruptions of, 148-149, 159160, 185 as contingent workforce, 190-191, 192 due process access of, 86, 87, 181 earnings advantages of, 162 firm dependence of, 146-149 internal labor market partidpation by, 80, 81-84 job mobility of, 80, 81, 83-84 job satisfaction of, 152-153, 154 job turnover oL 134 market opportunity perceptions of, 134135, 141, 144, 146, 185-186 white-collar employment participation by, 78-79, 91, 93 See also Black women; White women Worker control employer-employee conflict in, 19-20 firm dependence and, 140, 141-142 job satisfaction and, 153, 159, 185 See also Bureaucratic control Work experience age factors in, 96-98 earnings and, 166 job mobility and, 90, 91, 93 Marxist theory of, 55 personnel structures and, 76-77 as social resource, I81 of white women, 78 Workforce reduction government-mandated notification of, 1 seniority in, 4 Working conditions attachment and, 139 bureaucratic control and, 109, 118, 119, 123 due process and, 109, 118, 119, 123 job satisfaction and, 153, 159, 185 Work-relation separability, 17 Work rules, as due process indicators, 211-213

PLENUM STUDIES IN WORK AND INDUSTRY COMPLETE

CHRONOLOGICAL

LISTING

Series Editors: Ivar Berg, University of Pennsylvania, Philadelphia, Pennsylvania a n d A r n e L. Kalleberg, University of North Carolina, Chapel Hill, North Carolina

WORK AND INDUSTRY Structures, Markets, and Processes Arne L. Kalleberg and Ivar Berg WORKERS, MANAGERS, AND TECHNOLOGICAL CHANGE Emerging Patterns of Labor Relations Edited by Daniel B. Cornfield INDUSTRIES, FIRMS, AND JOBS Sociological and Economic Approaches Edited by George Farkas and Paula England MATERNAL EMPLOYMENT AND CHILDREN'S DEVELOPMENT Longitudinal Research Edited by Adele Eskeles Gottfried and Allen W. Gottfried ENSURING MINORITY SUCCESS IN CORPORATE MANAGEMENT Edited by Donna E. Thompson and Nancy DiTomaso THE STATE AND THE LABOR MARKET Edited by Samuel Rosenberg THE BUREAUCRATIC LABOR MARKET The Case of the Federal Civil Service Thomas A. DiPrete ENRICHING BUSINESS ETHICS Edited by Clarence C. Walton LIFE AND DEATH AT WORK Industrial Accidents as a Case of Socially Produced Error Tom Dwyer WHEN STRIKES MAKE SENSE--AND WHY Lessons from Third Republic French Coal Miners Samuel Cohn THE EMPLOYMENT RELATIONSHIP Causes and Consequences of Modern Personnel Administration William P. Bridges and Wayne J. Villemez LABOR A N D POLITICS IN THE U.S. POSTAL SERVICE Vern K. Baxter

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