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Shatteml Work Lives: Older Workers, the Breakdown of Traditional Employment

Relatioaships, and the New Corporate Culture of Uncertainty

by

Heather K. Scott

A thesis submitted in conformity with the requirements

for the degree of Master of Science

Graduate Department of Community Health

University of Toronto

O Copyright by Heather K. Scott 1999

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SHATTERED WORK LIVES: OLDER WORKERS, TRE BREAKDOWN OF TRADITIONAL EMPLOYMENT RELATIONSHIPS, AND TIIE NEW CORPORATE CULTURE OF UNCERTAINTY

Heather K- Scon Master of Science. 1999 Graduate Department of Community Health University of Toronto

Current attempts to target the older worker during company downsizing campaigns have brought to the

fore issues concerning how this group may be uniquely affected by the stresses associated with the

uncertainty of organizational retrenchment. STUDY OBJECTIVES: The objectives of the present study

were: 1 ) to explore contextual features of the downsized workplace and how these are perceived by older

workers targeted by the early retirement incentive program (ERIP), and 2) to determine both the type and

extent of differences in employer-directed attitudes related to use of the ERIP as a downsizing

mechanism. RESEARCH DESIGN: Secondary survey data derived from the University of Toronto's

lssues of an Aging Workforce (IAW) Project were used to examine the comparative p e ~ c t i v e s of

employees of two large North American financial service institutions. One of the companies had

undergone a series of downsizings using the ERiP, while its counterpan had managed to keep its workers

relatively insulated from the threat of layoff. Employees at each company were compared on four

dimensions of commitment to the 'implicit career contract'. a conception based on the unique life

histories of older workers. RESULTS: Downsized employees were significantly more likely to repon the

presence of perceptible levels of retirement pressures at their workplace (xk43.37. d+3. p<.OOl).

Additional bivariate and multiple regression analyses revealed the level of contract commitment to be

consistently and significantly lower among workers at the downsized company. CONCLUSIONS:

Organizational pressures to retire that stem from use of the ElUP may cause workers to withhold certain

socio-emotional conmbutions to the firm in the form of loyalty and citizenship behaviour. From the

perspective of a traditional -best practice' approach to human resource management these tindings

suggest that campaigns of organizational downsizing which target the older employee may have

deleterious consequences for company function in the long term.

A number of people have played roles of vital support toward completion of this thesis. I must

first thank my thesis supervisor, Professor Victor Marshall. His mentorship and support has been

a constant source of inspiration. I am also grateu to my committee member Professor &nnis

Raphael who, in addition to providing key statistical support, has been extraordinarily generous

with his time and advice.

I must also extend thanks to Professor Ann Robertson for her feedback on an earlier

draft, and to Susan Underhill for her assistance with the data Special thanks are extended to my

mother, Patricia Scott, whose love and support has helped me to endure, I am also grateful to my

friends and colleagues, Ellie Berger and Marcy Facey. I feel remarkably blessed to have been

able to share this experience with them. Finally, to my dear friends Shan Khimji, Lee-Ann Wiun,

and Lisa Silver, many thanks for your unflagging patience and support while I disappeared into

the writing of this thesis.

I would like to acknowledge the Innovations Fund of Human Resources Development

Canada for fhding the program of research into "Issues of an Aging Workforce" conducted by

CARNET: The Canadian Aging Research Network. Data for this thesis were derived from this

larger project.

Table of Contents

Abstract

Acknowledgments

Table of Contents

List of Tables & Figures

Introduction

. i

ii

iii

vi

viii

PART 1 REMEW OF LITERATURE

Chapter 1. Age-Neutral Restructuring or Age-Biased Targeting? Older Workers and the New Regime of Corporate Downsizing 1

Chapter 2. The Social Contract, Corporate Culture, and the Implicit Career Contract: Changes and Consequences in the New Global Economy

2.1 The Breach of the North American Social Contract and the Breakdown of Traditional Employment Relationships

2.2 The Organization Man: Corporate Culture and the Implicit Career Contract

2.2.1 The psychological contract and the implicit career contract 2.2.2 The nature of employment contracts

2.3 Broken Promises: The Consequences of Downsizing as a Perceived Violation of the Implicit Career Contract

2.3.1 Perceptions of justice in the post-layoff work environment 2.3.2 Job insecurity in the post-layoff work environment 2.3.3 The psychological consequences of downsizing: a unified perspective

2.4 A Theory of Multiple Contracts

2.4.1 Women and implicit career contract commitment 2.4.2 The male family context

iii

Chapter 3. Implications for the Present Study 76

3.1 Shifts in The Social Contract as a Determinant of Implicit Career Contract Commitment: The Present Study 78

3.2 Objectives and Hypotheses 81

3.2.1 Employee perceptions of the organizational context 3.2.2 Employee commitment to the implicit career contract

3.3 Company Policy as a Determinant of Implicit Career Contract Commitment: A Case Study Comparison 86

3.3.1 The Sun Life and Prudential case study sites: portraits in brief 87

PART It METHODOLOGY AND RESULTS

Chapter 4. Methodology

4.1 The Data

4.1.1 The Sun Life employee sample 4.1.2 The Prudential employee sample.

4.2 Instrumentation

4.3 Descriptive Statistics

4.3.1 Demographics 4.3.2 Study measures

4.4 Bivariate Analyses

4.4.1 Employee perceptions of organizational context 4.4.2 Employee commitment to the implicit career contract

4.5 Multivariate Analyses

Cbapter 5. Shifts in the Social Contract, the Breakdown of Traditional Employment Relationships and Employee Commitment to the Implicit Career Contract

5.1 Results from the Present Study

5.1.1 ICC commitment as a function of employee status characteristics 5.1.2 The effects of employee withdrawal on organizational h c t i o n

5.2 Caveats for the Present Results

5.3 The Need for Future Research

References

Appendices

Appendix A. Sun Life and Prudential Employee Surveys

List of Tables and Figurn

Table 1. Rotated Factor Matrix for Implicit Career Contract Dimension Job Satisfaction 93

Table 2. Unrotated Factor Matrix for Implicit Career Contract Dimension Attitudes Toward the Importance of Organizational Citizenship Behaviour 95

Table 3. Second Order Factor Analysis onto Construct Implicit Career Contract Commitment 96

Table 4. Profile of Sun Life and Prudential Employees 99

Table 5. Mean Scores and Standard Deviations for the Dimensions of Implicit Career Contract Commitment 100

Table 6. Employee Perceptions of Organizational Context as a Function of Company Downsizing Policy

Table 7. Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment and Comparisons with F Values from the ANOVAs 104

Table 8. Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment as a Function of Company Policy and Length of Employee Tenure

Table 9. Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment as a Function of Company Policy and Occupational Status

Table 10. Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment as a Function of Company Policy and Gender

Table 1 I . Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment as a Function of Company Policy and Male Family Context

Table 12. Hierarchical Multiple Regression of Predictors of Implicit Career Contract Commitment Dimension Intrinsic Job Satisfaction

Table 13. Hierarchical Multiple Regression of Predictors of Implicit Career Contract Dimension Extrinsic Job Satisfaction

Table 14. Hierarchical Multiple Regression of Predictors of Implicit Career Contract Commitment Dimension Attitudes Toward the Importance of Company Loyalty

Table 1 5. Hierarchical Multiple Regression of Predictors of Implicit Career Contract Commitment Dimension Attitudes Toward the Importance of Organizational Citizenship Behaviour

Figure 1 . The Social Contract Employee

Figure 2. Shifts in the Social Contract

vii

Introduction

The global transformation of modem capitalism has spawned a systemic transformation in the

basis of social relations aad social institutions - i.e., the economy, government, and the family

(Rubin, 1996). As a consequence, traditional life course patterns are being drastically altered.

The transition to the new flexible economy has generated a trend toward growing instability and

disruption encountered during the course of individual work lives. International pressures to

compete, faster changing product markets, heightened demand from investors, and a period of

protracted economic recession have driven a trend toward organizational restructuring which

ostensibly aims to make business more competitive. Among the most popular cost-cutting

measures is one that most directly disrupts the working lives of individuals: reducing the size of

the employee complement, or downsizing. Although companies may employ several strategies to

achieve workforce reduction targets, early retirement incentive programs ( E m s ) have become

among the most common (Useem 1994; Marshall and Marshall 1996). This trend in corporate

downsizing schemes has meant forced early retirement for many older workers (Hall and M i ~ s

1994; Downs 1995). Anecdotal and empirical evidence suggests that for those workers who

manage to survive at least the first round of employee cuts, the post-layoff work environment can

be quite stressll, for a variety of reasons (Greenhalgh 1982). Probably foremost among them is

the fact that layoffs ofien cause survivors to wony about their own job security, particularly if

management has suggested that additional employee cuts are in the offing. Research into the

problem has shown that the culture of uncertainty that develops within the downsized workplace

can produce feelings of inequity and anger, leading to a lessening of organizational commitment

and job satisfaction among survivors (Broc kner 1 988). Furthermore, although downsizing

undoubtedly introduces instability into the lives of all employees fated to work for organizations

undergoing restructuring, workea over 50 are especially vulnerable to the consequences of such

disruption since they come from a generation that viewed loyalty and productivity as fair

exchange for the assurance of reasonably secure and well-paid jobs until retirement. Older

workea tendered their 'psychological contracts' with employers during a period of economic

expansion and relative accord between labour and capital. These implicit employment contracts

were traditionally understood as stipulating long-term, mutual exchange relationships, and

encouraged a kind of symbiotic relationship between employer and employee. Thus, the

dissolution of these contracts in light of recent waves of organizational restructuring is especially

stressful for older workers who, having entered into employment agreements believing that hard

work and personal sacrifice would secure their fitwe, are now often feeling forced into

retirement before they are ready.

Although there are studies investigating the so-called 'survivor sickness' suffered by

workers who watch the layoff of their colleagues, to date there has been no research into the

differential experiences of particular work groups targeted for layoff. It has been suggested,

however, that selective cuts, where fairness may be paifilly in dispute and uncertainty acute, are

likely more stressful than across-the-board reductions which, while extensive, may be buffered

by their symbolically egalitarian mode (Jick 1985). On this basis an examination of the effects of

targeted forms of downsizing seems well-warranted; however, when considered alongside

mounting evidence that early retirement schemes have become the fastest growing among all

corporate strategies to downsize (Hall and Mirvis 1994), investigating the consequences

associated with pressured foms of early exit seems a matter of additional urgency. Further still,

the political economy of organizational change cannot be viewed independently from current

demographic trends which have led some observers to refer to a 'greying' of the labour force

(Marshall 1996). The emerging demographic situation means that companies must rely in their

recruiting on a labour pool with fewer new entrants each year, and may ultimately face problems

with worker shortages as trends toward early exit continue. In this vein. company policies that

serve to target older workers during efforts to downsize may in the long-run do harm not only to

individual employees who feel scapegoated by employers to which many have devoted the

entirety of their working lives, but to industrial organizational function more broadly. Future

attempts to draw on an experienced labour pool could be frustrated by a lasting sense of betrayal

among workers who, barring financial necessity, may have long rejected the possibility of

returning to the vagaries of the corporate workplace. Without a greater understanding of how

workers forced into early retirement cope with the breakdown of their implicit employment

agreements, an invaluable future resource may be lost. Hence, the effects to workers undergoing

age-biased forms of restructuring has become an issue of pressing importance in part due to the

moral implications of policies that unfairly target these cohorts, but additionally out of a prudent

concern for the long-term consequences to individual and organizational function. Truly, the old

workplace contract that was built on both material and symbolic aspects of mutual exchange in

employment relations has, if not completely broken down, undergone a dramatic and profound

shift in its original focus. Whereas younger generations of workers who matured within an

economic environment of increasing volatility and change may prove relatively accepting of the

advent of the 'post-contract workplace' (Boyle 1998), members of older cohorts who were

inculcated with notions of the 'long and stable career rewarded by retirement' as part of the

North American social ethos into which they were socialized, have Likely been affected far

differently by the current shifts in the nature and structure of work. In this respect, the

psychological effects of work, as these are coloured by conditions of economic uncertainty, must

be viewed differently for successive cohorts. This fact, coupled with widespread use of corporate

restructuring campaigns that rely on workers taking early retirement, suggests that exploring the

reactions of workers targeted by the ERIP, who for a variety of personal and financial reasons are

compelled to work in spite of their employers urgings to the contrary, is an undertaking of great

timely importance.

To date, the glaring absence of direct research into the problem requires that relevant

alternative sources of literature be drawn upon. Fortunately, valuable inferences can be made

based on a review of three interdated areas of research into the socio-emotional consequences

of job insecurity and layoff. First, psychological contract theory deals with the nature of

employment contracts and the consequences associated with their violation. Knowledge of

factors that shape the formation and development of these implied contracts among older workers

helps to shed light on a generation's perception of current workplace changes. Second, equity

theory (Adarns 1965), invokes the notion of the psychological contract to delineate the nature and

extent of the exchange relationship that exists between employer and employee. The contract

specifies the contributions employees believe they owe to the firm as well as the inducements

they feel they are owed in return (Robinson and Rousseau 1994). If an employer is perceived as

having forsaken the terms of the original employment agreement (for example, by failing to

provide the employee with an acceptable level of job security after many years with the firm) the

employee will typically respond by attempting to redress the imbalance. Such responses often

involve forms of psychologicat withdrawal such as declines in organizational commitment and

job satisfaction. Finally, literature from within the organizational stress paradigm outlines

research concerned with the psychosocial dynamics of group process during retrenchment. The

uncertainties that surround massive and rapid forms of organizational change typically engender

forms of cognitive rigidity among employees that may initiate or intensify intra-workgroup

conflict. An attempt is made to integrate these theories through the invention of a novel concept I

have named the 'implicit career contract'. This conception is aimed at creating a focal point onto

which the principles of the three preceding strands of theory can reasonably coalesce to create a

composite tableau of the distinctive plight of the older worker undergoing target downsizing.

Specifically, the implicit career contract was developed as a symbolic expression of the kinds of

psychological employment contracts that older workers tended to form as a result of having

begun their careers during what several observers have referred to as the era of the 'social

contract'. This period was one characterized by expansive economic growth, stable product

markets, and general labowcapital accord. Workers within core industry generally entered into

employment relationships assured that the benefit of a lifetime of job security would accrue to

those who demonstrated the ability to work hard and be loyal. Hence, it is presumed that the

recent trend toward organizational downsizing that relies upon the early retirement of older

workers represents a major upset to the expectations regarding job security contained within

these workers' psychological employment contracts. These schemes likely seem unjust to

workers who feel targeted by them. Moreover, the pressure that often accompanies these

ostensibly 'voluntary' retirement campaigns may lead to a sense of uncertainty and insecurity

xii

about the future that older workers may k d difficult to cope with. This thesis endeavors to

provide a preliminary exploration of this phenomenon with the hope of gaining a greater

understanding of the effects of the post-social contract workplace on a generation of workers

who, in the ha1 stages of their career, are getting far less than what they had originally bargained

for.

The primary aim of the present study is to examine how current changes in the North

American socio-economic structure manifest at the level of the workplace to affect older

employees. In particular, an attempt is made to delineate the linkage that exists between what has

been described by observers as the move toward the post-industrial global economy with the

inception of specific campaigns of organizational restructuring and retrenchment; and, in turn,

how these changes at the institutional-level are furthermore connected to shifts in employee

perceptions of the employment relationship and related employer-directed attitudes. It is

therefore a fundamental presumption of this thesis that the unique work life course histories of

those who began careers during a period marked by unprecedented stability and prosperity (a

period often remarked upon as having been a kind of 'golden age' for labour1) have profoundly

influenced this generation's perception of the current changes in the nature and structure of work.

This thesis comprises five principal chapters. The first three chapters focus on a review of

the current literature and comprise Part I of the document. Chapter one is devoted to providing an

oveniew of the problem by citing evidence regarding the growing prevalence of organizational

downsizings that rely primarily upon the early exit of older workers to achieve reduction targets.

The second chapter constitutes the major portion of this thesis. It consists primarily of an

' See Palmer (1992).

analytical review of relevant literature, and a creative derivation of some theoretical approaches

for the purpose of carrying the research beyond that found in current publications. Briefly, the

chapter is meant to uniquely situate the older worker within the post-social contract workplace

through a historical description of the structural and cultural contingencies as they existed during

a period of labour-capital accord. Workers who began their careers under the full flowering of the

social contract formed compacts with employers that were based upon the fundamental notion of

an employer ensured career-job. Subsequent shifts at the structural level and related changes at

the level of the organization have functioned to undermine the traditional form of employment

exchange, and have issued an essential challenge to expectations held by workers within what I

have framed as the 'implicit career contract'. An overview of the potential psychological effects

of this challenge, as these relate specifically to organizational retrenchment, is provided through

a review of relevant literature regarding the general sociosmotional consequences associated

with layoff and institutional change. Finally, this chapter offers reasoning to suggest a theory of

'multiple contracts" for older workers marked by different status characteristics. For example,

the nature of the social contract workplace (typically comprised of an internal labour market, a

closed system of employment) was such that workers with management status as well as those

with lengthy tenure were generally assured of at least a modicum of increased job security

relative to their non-management and low-tenured counterparts. Managerial and highly tenured

employees are hence presumed to view the ratio of the employment exchange differently to the

extent they expect employers to provide them with incremental amounts of job security as a

fimctioa of theu seniority. Therefore, employees who appear to have made greater investments in

' See Boyle (1998).

xiv

their current work role due to particular status characteristics that affect how they view the

employment exchange, are likely to experience a deeper sense of implicit career contract

violation when confronted with targeted forms of downsizing. Due to their tendency to have been

socialized as breadwimers, male employees are dso presumed to have sunk more of their

psychological resources into the work role and thereby are expected to be more affected by the

downsizing event than women. Male family context is also considered a relevant variable in this

respect, for reasons that will be fleshed obt in the fmal part of the chapter.

Chapter three provides a brief summation of the main points derived from the literature

and consolidates the different theoretical perspectives using the implicit career contract as the

underpinning. Using this theoretical approach, an overview of the study objectives as they hi ve

been derived fiom the current literature is given, in addition to a description of the data used to

meet these objectives. Secondary data obtained fiom the Issues of an Aging Workforce (IAW)

Project conducted at the University of Toronto between 1993 and 1996, afford a means for

comparison of several employer-directed attitudes among older employees within two separate

work environments, one downsized by way of an early retirement incentive program (ERIP), the

other representing a more stable workplace form. Survey data from the firms of two large North

American financial service institutions provide the cases used to meet this objective. Finally, a

brief history of each organization focuses upon differences in these finns' policies with regard to

management of their older workforce.

Part II of the thesis is devoted tu testing hypotheses derived from the review of the

literature. It begins with Chapter four which provides an overview of the method used in the

present study and includes descriptions of the study sample, the instrumentation used to meet the

objectives, and the results of a series of factor analyses conducted for the purpose of validating

the 'implicit career contract' as a measurable construct. Subsequent results fiom a series of

bivariate and multivariate statistical procedures used to test propositions derived fiom the theory

are reported. Finally, chapter five comprises a discussion on the main findings, their implications,

and suggests directions for htwe research.

PART I

REVIEW OF LITERATURE

CHAPTER 1.

Age-Neutral Restructuring or Age-Biased Targeting? Older Worken m d the New Regime of Corporate Downsizing

The past two decades have been host to the fundamental transformation of the industrial

economies of the first world. The new capitalism in its global form has shifted its focus from

[North] American-centred industrial structures of mass production, to the development of

world-wide networks of information and product exchange. Driven by a confluence of

socio-economic pressures including increased foreign competition, rapidly changing product

markets, falling levels of productivity, and heightened demands from investors, corporations

have been responding by way of massive efforts to restructure, streamline, and downsize their

operations. This trend toward large-scale industrial restructuring began to surface in the 1970s

when factors such as global competition reduced profits among North American firms, leading

these firms to invest in more profitable low wage markets. Although such de-industrialization

continues, capital flight increasingly involves non-manufacturing ventures that merge with or

acquire business in developing countries and then move operations to these sites. In the process,

a growing number of costly white-collar employees in the U.S. and Canada are losing their jobs

to cheap foreign labour (Budros 1997). For instance, one report estimates that over the past ten

years more than 3 million white collar jobs were eliminated in the United States alone (Rifkh

1995). These losses can be largely attributed to increases in private North American (particularly

U.S.) direct foreign investment which, having reached a record $69 billion in the past five years,

reflect a basic shift in the way companies operate abroad. No longer are foreign markets

exploited merely for their ability to produce cheap labour-intensive goods; today, the undertaking

of large-scale service and information-centred projects (e.g., those that involve production of

weightless goods such as financial products, computer software, and telecommunications) is

increasingly shared with the international affiliates of corporations with an eye on maximizing

profits (Cameron 1998).

Organizational restructuring is generally defined as substantial company changes in

ownership, financial structure, or organizational form (Useem 1994). It ostensibly aligns

corporations with the demands that have accompanied the shift to a global economy, and as a

result, corporate leaders describe such adjustment projects as the necessary and fundamental

redesign of corporate structures and work systems. Unfortunately, however, company

re-organization is, more often than not, part of a broader campaign to downsize business units,

resulting in the displacement of hundreds if not thousands of employees. As a result, 'downsizing'

has become a veritable watchword for the nineties workplace. And, despite the fact that

downsizing has been considered a reasonable strategy for establishing a more competitive

business in the long-run, it is an increasingly popular short-term response to a fall-off in sales

(and profit) brought on by a sluggish or stagnant economy (Zeller and Mooney 1 992). In fact,

slashing jobs as part of a broader mandate of organizational restructuring has become a favoured

strategy for keeping shareholders happy. One study of share price reactions to company layoff

announcements between 1979 and 1987 showed that in the days immediately following the

announcements, stock prices rose an average of four percent (Cappelli, Bassi et ai. 1997).

Although the inevitable layoff of workers in the face of declining business has historically

been a common practice within competitive industry, large-scale work force reductions during

periods when business is thriving constitute a relatively new trend. Cappelli et al. (1997) have

shown that downsizings actually increased in both number and scale even as the North American

economy pulled out of the recent recessions and company profits rose. Similarly, according to

Budros (1 997), downsizing rates have actually climbed during business uphuns, undermining

firms' claims that they shed personnel in response to business downturns. This can be observed in

the fact that major downsizings in all economic sectors have continued well into the so-called

"recovery period" of the mid4 990s. What has appeared to shift however is the types of jobs that

are targeted for reduction. Within the past decade, company downsizings have begun to cut more

deeply into service sector and management jobs, and have increasingly affected the jobs of older

workers holding more seniority (Cappelli, Bassi et al. 1997).

Surveys routinely find that a majority of companies implemented downsizing or early

retirement incentive programs beginning in the early 1990s, in part spawned by the recession of

that period. For example, a U.S. survey revealed that 72.7% of companies had layoffs between

1990 and 1993, and 44% had introduced some kind of early or voluntary retirement program to

reduce employment (Wyatt, 1993). Likewise, in a survey of Canadian companies, 60% reported

decreasing the size of their workforce within the past five years, while a full one-third indicated

that "much emphasis" had been on early retirement incentives to achieve reduction targets

(Underhill, Marshall et al. 1997). Moreover, there is evidence to suggest that early retirement

schemes are the fastest growing among corporate strategies to downsize (Hall and Mirvis 1994;

Marshall and Marshall 1996). For example, according to a survey by the American

Manufactuter's Association (AMA), in the early 1990s retirement incentives spread more rapidly

than any other single approach (Useem 1994).

Corporate initiatives to shed employees via early retirement are often considered

relatively benign alternatives to other strategies of workforce reduction. In fact, the ERLP has

been frequently referred to in the literature as a means of "avoiding layoffs" (Greenhalgh and

Rosenblatt 1984; Useem 1994; Ayling 1997; Cappelli, Bassi et al. 1997). Such a perspective

fimctions to obscure the intense pressures often felt by older employees who work for

organizations that have chosen early retirement schemes as a way of reaching reduction targets.

For instance, one study of managerial and professional workers who had either taken retirement

or were within one year of doing so found that, save health, the reason most f'requently cited for

exiting the labour force was pressure within the workplace (Weiss 1971). Workers such as these

who are displaced as a result of feeling forced to 'voluntarily' retire or resign are not counted in

the typical layoff numbers. This creates the suspicion that statistics regarding labour force

displacement may be grossly underestimated (Downs 1995). Results from one survey conducted

by the American Association for Retired Persons (AARP) showed that of 10,000 respondents

aged 45 and older, two-thirds reported that they had left their jobs under duress. The same survey

also found that among 'retired' workers able to find other employment, four out of five reported

that the new job paid less than their previous one (Downs 1995).

In the U.S., recognition of the pressure many employees feel to 'elect' for early retirement

under the new corporate regime of downsizing is evidenced by a piece of legislation introduced

under the Older Workers Benefits Protections Act of 1990 (OWBPA). The act was drawn for

purposes of regulating the use of voluntary exit programs directed at senior employees. Early

retirement incentive programs (ERIPs) fall under this general category of so-called 'voluntary'

separation options. The logic behind these apparently optional exit programs is that both

participating and non-participating employees benefit since those choosing early retirement will

eliminate (or, considerably reduce) the need for the company to make involuntary terminations. It

is assumed that there are no losers, only beneficiaries (Zeller and Mooney 1992). In accordance

with the OWBPA, workers electing to take early retirement must sign a waiver which

relinquishes them of certain statutory rights - in particular, those rights associated with

protection under the Age Discrimination and Employment Act (ADEA). The waiver is meant to

ensure that departing employees over 40 feel as though they have been treated fairly, and as such,

do not wish to seek legal recourse on the grounds of age discrimination. Interestingly, despite the

institution of this ostensibly protective measure, many such cases have been brought to trial with

courts frequently finding 'undue pressure' where an employee had 'elected' early retirement.

Circumstances ruled as in violation of the Act include those where an employee signs a release

under threats of termination, where the decision to separate is forced upon an employee within an

unreasonably short time period (i.e., 24 to 48 hours), and where the employee is pressed not to

speak to an attorney while considering the proposed package (Zeller and Mooney 1992). It is

possible that these types of employer pressures are not uncommon, particularly since the

so-called 'voluntary' ERIP is typically designed to alleviate the need for companies to introduce

involuntary layoff measures. According to a report of the Risk Management Society (1994),

many companies have offered early retirement incentives as "a carrot" while continuing to

emphasize the prospect of job loss through layoff or termination. Thus, it is not inconceivable

that older workers may feel pushed out of their jobs not only by employers seeking to cut costs,

but by work peers who hope to avoid the involuntary phase of workforce reduction (Zeller and

Mooney 1992).

Canadian statistics on late life job displacement are similarly striking. One recent survey

of persons not in the labour force indicated that 21 1,000 Canadians had retired earlier than they

had planned. Economic reasons were cited most often, accounting for 88,000 such unanticipated

early retirements. Lowe (1992) estimates that about one-half of these early exits were due to

incentives, while the remainder were the result of plant closures or layoffs. While some

proportion of these incentive-driven early retirements were likely voluntary, it is probable that

like their U.S. counterparts, Canadian older workers feel enormous pressure to retire due to the

ever-present threat of layoff.

A major consequence of employer efforts to reduce their operation costs has been the

elimination of many high-level jobs. The growing popularity of team mechanisms and other

participative vehicles to structure employee interaction have lessened the need for dependence on

traditional management hierarchies (Kanter and Mirvis 1989). As downsizing efforts have come

to be increasingly aimed at middle-management, a disproportionate number of older, mid-career

workers have unexpectedly found themselves unemployed (Hall and Mirvis 1 994; Cappelli,

Bassi et al. 1997). Moreover, partly because the distribution of employment has been shifting

toward white-collar work, the 1989-1991 recession was the first in which more white-collar

workers were laid off than blue-collar with the job category containing executive, administrative,

and managerial positions experiencing the largest increase in displacements (Cappelli, Bassi et

af. 1997). This widespread move toward de-layering organizations coupled with the new

emphasis on horizontal rather than vertical forms of authority (e.g., as in the assemblance of

integrated work teams) has caused older white men -- the group historically most protected by

internal labour markets - to see their job security decline sharply in the past few years (Marcotte

1994). There is much evidence to indicate that the worldwide problem of structural

unemployment or labour force displacement (i.e., loss of work as a result of structural shifts in

the economy) will be intensified as the corporate strategem of downsizing continues to increase

in size and scope (Cappelli. Bassi et al. 1997). Moreover, in Canada and the U.S., senior

employees are among the demographic groups most vulnerable to job loss during organizational

restructuring due to their high compensation levels and narrow career experiences (Hall and

Mirvis 1994). A recent American study of displaced workers found that while the overall

incidence of displacement is increasing, it is especially high among older, more educated workers

(Farber 1995). Likewise, although Canada shows no rising trend in the general permanent layoff

rate, the rates among older, more highly paid workers (e.g., highly tenured and/or management

jobs) have increased over the previous decade (Picot and Lin 1997). Moreover, both Canadian

and U.S. data indicate it has become much more difficult for displaced workers (particularly

among those that are oider) to gain new employment as compared to the recovery period of the

1980s (Picot and Lin 1997). The trend toward permanent layoff -- in addition to the growing

difficulty of finding another job - among those groups of workers that previously had been

almost immune to displacement (e.g., older, higher paid, and often better educated workers who

frequently hold middle management or professional positions) has no doubt served to intensify

the sense of insecurity already pervasive in the nineties workplace. Indeed, this growing sense of

labour market insecurity has been captured by national survey data which indicate that Canadians

have become increasingly concerned about permanent layoffs since many feel job instability and

the possibility of job loss has increased in the 1990s (Picot and Lin 1997).

Although the increasingly volatile corporate workplace has undoubtedly been witness to

many older employees happily extricating themselves by way of the ERIP, it is equally likely

there are others who, for reasons that are both financial and emotional, experience a sense of

instability and betrayal. For those who began their careers during a period marked by the

installation of paternalistic-type policies toward labour, the recent profound shifts in this social

compact between workers and capital have come at a time when most older employees expect to

be rewarded for their years of service, dedication, and loyalty to organizations. The new

corporatism (like the new capitalism) is a radical departure from the traditional model into which

these workers were socialized. Today, job insecurity is pervasive even among the most senior

employees (Cappelli, Bassi et al. 1997). Additionally, many companies have continued to cut

back on pension and health benefits; in the U.S, many employees have been stripped of much

needed retirement health care coverage (Hall and Mirvis 1994).

Parallel to this reformulation of the traditional employment relationship, evidence for a

mounting cynicism within workplaces has begun to surface. The less secure and more fractious

North American workplace seems to be taking its toll on worker morale generally (Kanter and

Mirvis 1989; Centre for Studies of Aging 1995b). In fact, it may just be this decline in worker

morale and its impact on productivity which has led many studies of the technico-economic

effects of downsizing to conclude that outcomes of these cuts are generally negative (Budros

1997). In any event, it is a small wonder that older workers have become cynical given the

prevalence of targeted forms of layoff that fly in the face of the well-remembered and much

venerated corporate tradition of providing an added measure of security to loyal, tenured

employees. And indeed, the growing number of age-discrimination cases brought by employees

downsized out of their organizations are testimony to the fact that the targeting of older workers

in the new regime of corporate downsizing is widely recognized (Hall and Mirvis 1994).

Workers' cynical attitudes stem largely fiom the uncertainties associated with

organizational restructuring and retrenchment. These institutional-level shifts have been inspired

by a number of broad social and economic changes, and have served to weaken traditional, more

stable organizational forms. In particular, the massive trend toward downsizing has played a

major role in the reformulation of traditional work-life course patterns within which biography

unfolded fairly certainly under a socially constructed tri-partite age structure based on pre-work,

work, and post-work states (Kohli 1986). Career jobs ended predictably with the event of

retirement and access to state and private pension schemes. In contrast, the emerging pattern is

one in which growing numbers of older adults are forced out of the workforce long before they

are eligible for state or private pensions. Many are compelled to seek renewed employment,

which is typically at a lower level of pay, and often part-time (Marshall and Clarke 1998). The

emerging pattern marks the decline of traditional institutional structures (e.g., the downfall of the

modern bureaucracy and the internal labour market which together were responsible for creating

career paths that assured long-term employment and delayed rewards for contributions by way of

seniority rules and employer-sponsored pension plans), as well as a shift away fiom traditional

employment relations.

Closer examination of the effects of changes to traditional employment relationships has

become an issue of mounting importance since there has been a tendency to focus on those

workers who have already lost their jobs due to downsizing, while the plight of those still on the

payroll but caught amidst the tumult of unstable and uncertain work environments has been

relatively neglected. Questions regarding the effects of company layoffs on employees who must

endure several rounds of downsizing beg investigation. Although some general consequences of

this phenomenon - termed "survivor sickness" - have been well-documented (see for example,

Brockner, 1988), investigations into the possibility that symptoms suffered by survivors (e.g.,

reduced morale, high stress) differ in intensity across work groups have generally been

overlooked. For instance, it is highly plausible that older workers, having begun their careers

under the auspices of the internal labour market (ILM) and its virtual guamntee of security into

retirement, feel more burdened by the unpredictability of the new workplace than their younger

counterparts. Today's older worker matured during an era marked by a dramatically different

social and economic climate, one inarguably more inclusive and optimistic than that which now

prevails. Accordingly, expectations were shaped by the norms and ideals characteristic of this

climate. Previously, achieving full and stable employment into retirement for all persons

(particularly men) entering the labour force was viewed as a realistic and much venerated goal. In

fact, belief in such principles was hdamental to the middle-class ethos which took shape during

the period. The strong loyalties cultivated by firms that seemed to promise career-like ladders of

advancement in a lifetime of employment even hctioned to blur traditional distinctions between

the blue-collar orientation to occupational activity as "just a job" and the white-collar emphasis

on "careertt (Hardy, Hazelrigg et al. 1996). The collective mind-set was that secure gainful

employment would be assured to all citizens willing to work.

Currently, the relentless restructuring of work for the sake of enhanced corporate

competition has made the prospect of lifetime employment within a single finn an increasingly

elusive goal, perhaps with the exception of a select group of core employees3. lob insecurity has

become a defining feature of the nineties workplace, and its collective experience can be viewed

as to some extent uniting workers from all branches of employment. Despite this common plight,

however, it remains highly plausible that the unique life histories of older workers have caused

them to be especially vulnerable to the psychosocial consequences associated with the new

workplace culture of uncertainty. The particular socio-historical circumstances into which

workers over 50 came of age suggests the possibility this cohort's perception of the intensified

job insecurity taking hold throughout the economy, may have deleterious consequences for

worker ability to function within f m s that have grown increasingly unstable due to

restructuring. And, this may prove especially true among older workers whose organizations

have relied exclusively upon age-biased strategies to downsize their workforce.

On the other hand, it may be that because the changes in the employment system that

dominated the quarter century after 1945 began over two decades ago, many older workers may

have to a large extent modified (and moderated) their expectations regarding employment

security. In the same vein, it is equally likely that for workers who have managed to survive

recent decades of increased economic turmoil while maintaining reasonably stable employment

relationships, the corporate strategem to shed thousands of tenured employees via the ElUP is

intensely degrading. Having successfully managed the tumult caused by a continuous series of

The archetypal organizational fom for the new capitalism is known as the adhmcy. It's most defining feature is the way in which it structures employment relationships according to position held within the organization. Core employees are those considered essential to organizational memory and continuity, and tend toward long-term relationships with employers. Positions within the core of organizations are growing more scarce and usually require some form of specialized education or training. Peripheral employees, on the other hand, are meant to provide the organization with flexibility as aggregate demands fluctuate, and thus are subject to limited and transactional forms of relationships with employers (Rousseau and Wade-Benzoni, 1995).

restructurings and layoffs since the age of the new capitalism began, it can be supposed that this

group of workers hold most steadfastly to beliefs that mark the core cultural values characteristic

of the modem bureaucratic phase of industtial development - for example, the belief that loyalty

coupled with hard work amounts to the formula guarantee for continued job-related success and

security. These workea are apt to experience a deep sense of dejection as a consequence of

downsizing, a fact evidenced by the mounting cynicism detectable among older workers within

many organizations (Hall and Mirvis 1994). Demonstrations of cynicism are clearly reasonable

within a context of a growing number of employers that have chosen to violate the terms of the

traditional employment contract stipulating security into retirement for faithfd, tenured workea.

This glimpse of cynicism observed among this group may, however, only represent part of a

more complex emotional response that relates to deep feelings of anger and betrayal. Such

emotions could prove strong enough to compromise older workers' own commitment to the

contract. This thesis takes the position that an employee's psychological withdrawal from the

implicit contract due to its violation may have several negative consequences for specific

employer-direc ted attitudes, and which could ultimately adversely afXiec t organizational function.

The proposed shift that has occurred in older worker attitudes toward employers is most

appropriately considered within the context of several other features that may mar the culture of

workplaces that downsize according to the early retirement incentive program. For instance, it

has been shown that employees have responded to growing job insecurity and the incessant threat

of further workplace cutbacks with a general mistrust toward employers as well as their peers

(Kanter and Mirvis 1989). In this way, the breakdown of traditional employment relationships

may not only have hctioned to create a discernable 'culture of uncertainty' within the newly

restructured workplace, but may have additionally engendered a detectable culture of hostility.

Several studies on the dynamics of workplace retrenchment have focused on the intra-workgroup

conflict characteristic of organizations in the midst of massive and uncertain fonns of change

(Jick and Murray 1982; Jick 1985; Krantz 1985). A thorough consideration of these new

workplace cultures in terms of both their formation and impact is required to better appreciate the

gamut of emotions experienced by older workers who, feeling pushed into early exit, may

channel their anger into negative attitudes toward employers as well as toward younger cohorts

which have managed to escape the vagaries of targeted downsizing simply by virtue of age.

The next chapter attempts to flesh out this new workplace culture, focusing explicitly on

how it is experienced by the older worker. Using as the primary point of reference a concept

derived from organizational behaviour theory known as the 'psychological employment

contract', it will be shown that older workers are uniquely vulnerable to the effects of targeted

restructuring for reasons that can be traced back to the socio-historical circumstances under

which they tendered their original employment agreements. Specifically, the fact that workers

over 50 began their careers during a period of unprecedented economic prosperity, and at the

same time were kept relatively insulated from labour and product market driven insecurities,

played an integral role in fostering a workplace culture that centred on the ideal that commitment

to the organization bought one a lifetime of security. This workplace 'culture of certainty' was

part of a broader middle-class cultural movement for which ideals of egalitarian patterns of

lifestyle and consumption were hallmarks (Blau 1995). During the post-war boom all workers -- both blue- and white-collar - were encouraged to believe in a dream that imagined infinite

economic prosperity belonged to those who committed their lives to industries and their firms

which, at the time, were in an overwhelmingly dominant position in world capital markets. As a

consequence, workers developed strong loyalties to employers that seemed to promise accessible

ladders to promotion over a lifetime of secure and stable employment. In recent decades,

however, as the economic tidal wave finally began to break, these loyalties became Liabilities not

only for the employers who could no longer sustain them, but to workers themselves, devastated

by the breach of the promise that had itself been responsible for the creation of their collective

North American dream.

CHAPTER 2.

The Social Contract, Corporate Culture, and the Implicit Career Contrach Changes and Consequences in the New Global Economy

This chapter comprises four principal sections. The first is an account of the rise and fall of the

post-war social contract between labour and capital in response to massive economic change.

The breach of this macro-level contract has caused a fimdamental transformation in employment

relationships made evident by the basic changes that have occurred in both the structure and

culture of organizations. Specific reasons for the special plight of the older worker in the new

global economy are offered in the second section through an explanation of the linkages that

exist between macro-level phenomena (specifically, those embodied by the post-war social

contract) and the formation of micro-level employment relationships. With reference to

psychological contract theory, I argue that because the nature of employer-employee exchanges

are the product of the context -- social, cultural, and economic - within which they were formed,

older workers view their relationships with employers as bound as much by socio-emotional as

pecuniary concerns. I refer to the terms of this exchange as the 'implicit career contrd4, and

explore the nature of the beliefs and expectations implied by these contracts which were formed

during an era of relative economic stability and labour-capital accord. In the third section the

' It should be noted that because the 'psychological' and 'implicit career' contracts are hdamentaily similar concepts since each refers to workers' ideas and beliefs regarding the nature of the employment exchange, I have thus fm tended to use the tenns interchangeably. However, when referring to the experiences of older workers I prefer to describe these tacit employment agreements as 'implicit career contracts', since I believe the term to be more reflective of these workers' expectations with respect to a lifetime c a r under a single employer, and thus, more readily associated with the effects of career retrenchment in the new, post-contract workplace. A thotough discussion on these concepts with respect to their different utilities is off& in Section 2.2.1 of this chapter, following a more detailed development of the structure of work relationships and the impact on workers psychologicaily during the post-war economic boom.

consequences of implicit career contract violation, as these relate specifically to later-life career

instability and disruption due to corporate downsizing, are s w t i s e d by drawing upon three

prominent areas of research into the socio-emotional fallout associated with job insecurity and

organizational change. The fourth and final section of this chapter establishes reasoning for a

theory of multiple contracts by considering how employees with specific status characteristics

may have differential perceptions of contract violation due to downsizing, and the implications

for differences in psychological (i.e., attitudinal) outcomes.

2.1 The Breach of the North American Social Contract and the Breakdown of Traditional Employment Relationships

The development of the North American post-war social contract between labour and capital has,

historically, been heralded as a victory for workers and owners alike. The contract was created as

a result of the convergence of several socio-economic pressures unique to the era; in particular,

there was an increasing need for business to stabilize employment relations such that the

unprecedented growth in the industrial economy could be efficiently managed. The massive

expansion of industry provided capital with an unrivaled dominance in the world economy, a

status which afforded a measure of power to the industrial union movement. The economic

leverage of the strike, coupled with mass unionism which the strike power made possible,

resulted in a tacit compact between labour and capital (Piven and Cloward 1997). For workers,

the compact offered, for the first time, a modicum of workplace stability. Moreover, this bargain,

struck between big unioas and big business and supported by government through the creation of

an institutionalized regime of industrial legaliv, fostered the development of a unique and

powerfid set of cultural expectations which reflected the optimism of the labour-capital accord6.

The basis for this accord involving labour, capital and the state was an unprecedented

post-World War Two prosperity which bdarnentally altered the material context in which

workers lived their lives, both at the workplace and off the job. This prosperity, a fleeting

culmination of the promise of maximal productivity and consumption that had been proffered by

advocates of the ~ordist' regime, placed Noah American workers in an largely privileged

position relative to the economic realities of labour in other parts of the world (Palmer 1992).

The joined fortunes of the Canadian and American socio-economic systems during the

age of high Fordism that lasted from the late 1940s to the mid- 1970s, resulted in growing

concentrations of large blocs of financial and industrial capital. The overwhelming increase in

the size and scale of industries as well as the creation of more integrated assembly operations, put

The regime of industrial legality included designating long-standing employer tactics - company unionism and overt discrimination against trade unions - as unfair labour practices. Employers were impelled to engage in collective bargaining, workers were acknowledged to have the right to determine who would represent their interests in industry, and the state was granted the power to certify bargaining units (Palmer, 1992). The regime was embodied by a piece of U.S. class legislation known as the Wagner Act; its Canadian complement was the Industrial Relations and Disputes Investigations Act (IRDIA), 1948. Both were heralded as milestones in the advance of unionism (Palmer, 1992).

ti I refer to the labour-capital accord and the social contract interchangeably. Although several pieces of legislation (such as IRDIA) were integral to its development. the 'social contract' as it is defined herein comprises far more than a set of institutionalized agreements between labow, capital and the state. Rather, the term is meant as a cultural metaphor (Rubin, 1 996) designed to capture the norms of reciprocity and mutual obligation that were characteristic of the era. At least within core industry, the dominant belief system was premised upon an implicit and equitable exchange between workers and employers; in particular, workers came to expect long-term, stable forms of employment in return for providing firms with a reliable and productive labour resource (Rubin, 1996).

' Fordism is the term coined by observers to refer to the regime of accumulation characteristic of the era. it is associated with mass production, high wages, increased leisure time, and the deliberate structuring of labour into the republic of consumption. This new regime came to labelled 'Fordism' with deference to Henry Ford's pioneering introduction of both the assembly line and the fivedollar day in his Michigan automobile plants, which restructured fife on and off the shopfloor- It revitalized capitalism during the monopoly era and intensively colonized previously insulated areas of working-class life (Palmer, 1992).

pressure on business and its government allies to implement measures that functioned to stabilize

class relations and put profit on a more certain and predictable ground. These pressures coupled

with those generated by the organized trade unions which demanded the installation of a system

of rules governing employment practices that would reduce management's arbitrary authority

(Cappelli, Bassi et al. 1997), and acted to impel government and capital to legislate policies

designed to curb class conflict. The establishment of a placatory regime of industrial legality in

the form of collective bargaining rights, promotion ladders, and seniority privileges (including

enhanced job security) seemed to fit the bill; in fact, the measures adopted by capital during this

period seemed to many observers as so pro-labour that it has historically been regarded as

something of a 'golden age' for trade unionists (Palmer 1992). Meanwhile, against the backdrop

of a growing North American industrial monopoly, capital's concessions to labour made

excellent economic sense. By tying employees to firms through deferred reward systems (which

included provisions such as accessible promotion ladders, job security, and retirement pensions)

business could substantially reduce employee turnover, thus providing greater protection to its

training investments. Indeed, for firms that require a skilled labour force, high turnover rates pose

a heavy financial burden. By installing a set of standardized employment practices, business

could insure a stable pool of skilled workers on which it couid draw. This means of regulating

labour was realized through the creation of a closed employment system known as the 'internal

labour market' (LM)8.

~ l t h o u ~ h the prevailing system of employment in North America has traditionally been one in which fims have had great flexibility in making firm-specific adjusbnents in employment (is., closer to the external labour market model), the ILM is an important emblem of the social contract era since for the first time employment relationships were no longer, to the same extent, mediated by the market (Cappelli, Bassi eta!., 1997).

Unlike external labour markets (ELMS) which have become somewhat emblematic of the

new global economy, jobs within the ILM tend to be shielded fiom the direct influence of

competitive forces in the external market. The adoption of the ILM system model was meant to

complement the emergence of the modern bureaucracy in North American industry (circa 1 WO),

and to create an organizational system which would achieve maximal levels of efficiency and co-

operation among the growing ranks of middle-management and staff (Kanter and Mirvis 1989).

As such, large bureaucratic institutions were required to implement a complex set of

administrative rules governing employment relations that influence which persons attain different

organizational roles and economic status (Pinfield 1995). Under this system, fum behaviour is

governed by a hierarchy of company-specific rules and procedures designed to enhance the

predictability of both employer and employee behaviours. An intentional by-product of this

system is that it tends to strengthen employment relationships. The 'seniority-rule', for example,

is often used to determine eligibility for advancement or, during economic downturns, which

employees are the last to go. Under conditions of organizational decline, the rule of seniority

essentially establishes an inter-temporal 'loyalty contract' in which agreements are made between

past and future conditions. Within industries subject to elasticity in demand (e-g., the auto

industry), the choice of layoff cycles over that of reduced earnings as a means of regulating

fluctuating labour demand has found that senior workers prefer to deflect the main cost of the

regulative practice to junior workers, while junior workers have accepted the disproportionate

cost in retum for hture compensations (Hardy, Hazelrigg et al. 1996). In this example, the

closed-system firm tends to substitute mechanisms of 'loyalty' (or, worker attachment) for

mechanisms of 'exit' (i.e., firings, quits) as a means of regulating labour supply during periods of

low demand. One ofthose mechanisms of loyalty involves the notion of the 'career job', and new

employees join the f m with the understanding that the faithfirl employee can expect long-tenure

employment with the firm (although this latter part of the agreement remains implicit). Similarly

influential are the reward structures of the ILM in which the wage-rate schedule of rewards

emphasizes incentives designed to increase worker effort, ability, and in the process, loyalty.

Such firms tend to pay higher wage rates, encouraging sustained effort and loyalty on behalf of

workers facing periodic layoffs (Hardy, Hazelrigg et al. 1 996).

Among managers, the traditional closed system was especially loyalty invoking.

Managers understood their jobs as for life, subject to minimally acceptable performance

standards. Sharp divisions in both the responsibilities and practices between management and

labour ensure that managers do the majority of the 'thinking work', while non-management

engage in the physical or mechanical work involved in carrying out those decisions.

Consequently, employment policies tend to treat managers as the essence of the organization,

worthy of greater protection than that offered to other employees (Cappelli, Bassi et al. 1997). In

spite of these job enhancements, however, the fundamental structure of the ILM remains the

same for all employees. For example, like production workers, seniority provisions (e.g., with

respect to advancement to a higher paying job) motivate managers to remain with their employer

in order to retain job security. A common by-product of the seniority system is that a majority of

the employees of iirms with ILMs often have long service records (Pinfield 1995). Wages,

promotion prospects, and job security all get better the longer the employee stays. The chief

advantage for the f m in this arrangement is that it creates a stable and reliable reserve of skills.

By rationalizing and standardizing employment practices, companies can reduce the costs

associated with the uncertainty of open-market transactions since arms-length contractual

relationships on the open market can make it difficult to ensure a predictable, highquality supply

of goods and/or skills from a subcontractor who may, for instance, get a better offer fiom a

competitor (Cappelli, Bassi et al. 1 997).

Although ILM practices were never uniform across all sectors of the North American

economy, the advantages offered to employers by the closed system made it both relatively stable

over time and consistent across large sections of industry. In fact, so apparently successful and

entrenched were efforts to internalize employment that the models for 'best practices' in

personnel and human resource management developed over the past fifty years were viewed by

scholars and practitioners as the epitome of good business (Cappelli, Bassi et al. 1997). For

example, companies like IBM which offered virtually a lifetime of employment security and

career development were heralded as exemplars of worker commitment and performance. Indeed,

throughout the 1980s organization specialists argued that management should follow the

Japanese example by extending internal labour markets M e t , suggesting that companies

seemed more able to tap the resources of their workers by training and developing their skills

over a lifetime of work and by keeping employees committed to the company with offers of

lifetime job security (Cappelli, Bassi et al. 1997).

To recapitulate, the internalized employment system fimctions to reduce the uncertainty

of doing business by creating a stable reserve of firm-specific skills and cultivating employee

commitment, thereby keeping those skills fiom competitors. Employees tend to have

well-established working relationships with managers and co-workers because s w i g decisions

are made on the basis of clear administrative rules which Limit the competition between workers

for 'better' or more lucrative jobs, since such decisions are presumed to be based upon

unambiguous criteria (like seniority status) that ?nay or may not be related to job performance

(Pinfield 1995). The ILM was engineered to create aa ordcrly and predictable business structure

with organizational hierarchies that facilitate control over employee behaviour, and career

opportunities. However, an equally important consequence of the structural contingencies of the

ILM is the parallel development of an organizational culture that helps govern these exchanges.

Specifically, the characteristic features of the EM (e.g., early career entry, long-term retention,

development of organization-specific skills, assimilation into an organization's culture to

promote efficiency, and delayed rewards for contributions), support the development of relational

contracts with employees. These are contracts based upon socio-emotional as well as

monetizable elements, and governed by values of good faith and fair dealing (Rousseau and

McLean Parks 1993). Under the ILM, employment relationships come to be bound by a complex

array of implied obligations. Foremost among them is the expectation that job security

constitutes fair exchange for loyal and productive work. Widespread faith in this ostensibly

mutual sense of obligation has fostered a sense of dependency among workers who believe it to

be in the interests of employers to take care of them.

The social contract induced rise of a rational bureaucratic system provided a key

mechanism for managing interclass conflict then not simply by way of a set of well-entrenched

organizational policies and procedures, but additionally through the parallel development of a

workplace culture that promoted loyalty, and in its more acute form, dependency. Employers

were counted upon to follow through on the grand promises proffered by the social contract.

Indeed, it was customary for organizations to reinforce these loyaltieddependencies through

promulgating family-related metaphors to characterize the dynamic within theu firms. These

metaphors assigned employers the role of benevolent parent, presiding over the lives of their

dutifhl employee-childreng.

Beneath this quasi-familial social structure lay an economic inf'rastructure of

unprecedented proportion. The relationship between North American employers and workers was

marked by relative accord during this period precisely because the region's overwhelmingly

dominant position in world capital markets allowed it. In particular, an economic policy built

more upon the tenets of creative pragmatism than of laissez-faire led to the development of stable

and protected product markets by way of a government-sponsored regime of monopoly

capitalism. It was this dominant economic regime that made the social contract's promise of

economic prosperity and stability for all, possible. And by the 19609, with North America (and

particularly the US.) at the pinnacle of industrial development worldwide, the llfillment of this

promise was never more apparent. This was the height of modern day bureaucratic predictability,

an organizational system in which consistency, efficiency, and refmement of technology were

facilitated by the creation of EMS in which members who remained with the orgam*zation for

indefinite periods of time developed norms for dealing with each other and how they went about

their work (Rousseau and Wade-Benzoni 1995). These norms involved definite expectations

about rewards for contributions. Indeed, during the post-war era of monopoly capitalism when

North American technology afforded the region almost total dominance in the manufacture and

distribution of goods, it was considered incumbent upon industry shareholders to bear the brunt

it is noteworthy that in a study of the metaphors workers used to descnk recent changes within their organizations, family themes were most frequently cited to descrik how the work environment used to be, but is no longer (Kanter and Mirvis, 1989).

of periodic economic downturns. These expectations were realized to the extent that beneath

ILM protections, workers remained generally insulated fiom market-driven insecurities.

Consequently, work-life course patterns were for the most part predictable, with workers often

remaining employed by a single organization until their retirement.

Alongside the ILM and the norms of bureaucratic rationality that had taken hold more

broadly, another essential feature of the social contract was the state's adoption of the Keynesian

paradigmlo to guide decisions concerning macroeconomic adjustment. The invocation of this

brand of policy played an enormous role in fostering the climate of stability and optimism found

in the region during this period. The chief economic problem Keynesianism intended to address

was the tendency under the administered pricing arrangements of an oligopolistic brand of

capitalism, for production to outrun demand. To correct for this tendency, both American and

Canadian federal governments installed Keynesian monetary and fiscal policies designed to

sustain aggregate demand". These strategies functioned to protect workers and their dependents

from the worst consequences of business cycles, as well as the arbitrary decisions of business. In

turn, business was offered its own measure of protection as governments helped to maintain

steady levels of aggregate demand and price stability (Marshall 1994). The combined effect of

lo Also referred to as the 'New Deal' paradigm, this refcrence was inspired by the program of relief introduced by president Franklin D. Rooxvelt between 1933 and 1939. Based on a mandate of recovery and reform, the program aimed at solving the economic problems created by the depression of the 1930s. The New Deal included federal action of unprecedented scope to stimulate industrial recovery, assist victims of the Depression, guarantee minimum living standards, and prevent fbture economic crises. This contract with the American people lay the foundation for a greater federal commitment to manage the economy and the provision of aid programs for the needy (Polen berg, 1 995) .

" It should be noted that, while both Canada and the U S . adopted Keynesian social w e l k strategies, the Canadian government pmued a different and more welfke-oriented path than its American counterpart, thus setting up some national differences with respect to expectations regarding state involvement in economy management. Canadians have historically tended to be more pro interventionist government, and indeed, have come to expect more fiom the state as a protector of minimum living standards.

the policies inspired by the Keynesian regime was the establishment of a powefl, yet tacit

social compact between labour, capital, and government. The compact served to the

growing sense of entitlement among workers who believed themselves owed a level of economic

security that, at minimum, could be considered commensurate with the prosperity they had

afforded business through their commitment to the work of its firms. And, although several

groups remained excluded from the compact (e.g., within sectors of the economy where unionism

had made little headway), its influence upon the collective psyche of North American workers,

and indeed all members of the region, was profound. It became a widely held truth that as

members of the world's most profitable economy all were eligible to share in a vast and growing

wealth which, for a time, seemed without boundaries.

During the social contract era, the general consensus that existed among interested groups

regarding economic and social policy (a manifestation largely due to government's

unprecedented ability to bankroll it) functioned for a time to bury the fbndarnental and persistent

conflict that has typically prevailed in relations between labour and capital. An age of high

Fordism had enabled states to sustain the costs of expensive welfare systems that provided safety

nets to individuals who had fallen away fiom the protections of the ILM, as well as to those who

had been blocked from gaining access. Class harmony was perhaps the most valued commodity

of the post-World War Two period (Palmer 1992). As a condition of this accord, the employment

contracts forged between labour and capital charged employers with a paternalistic role in the

employment exchange. At minimum, firms were expected to provide jobs until retirement while,

for their part, employees were required to demonstrate satisfactory levels of productivity and

loyalty. The widespread endorsement of this 'best practice' approach to human resource

management helped to engender a culture of dependency within many organizations as

employees lay much of the responsibility for their own careers at the feet of employers. And as

we have seen, these dependencies were typically reinforced thmugh the policies and practices of

organizations themselves.

Although there were periodic downturns during this upward spiral of post-war economic

success, it was not until the early1970s that the state of class harmony that had prevailed for

nearly three decades gave way to a state of siege (Palmer 1992). A full account of the factors that

contributed to the hying of the accord, along with the economic structure that had supported it,

is beyond the scope of this thesis. However, a few notable trends made important contributions to

the decline of North American business in world capital markets. In particular, an economic

recession coupled with high inflation, accelerated global competition, changing markets, and

finally, industry's pre-occupation with diversification at the expense of production, were trends

that together spelled demise for the regime of accumulation that had once fixed labour and

capital in roles of mutual exchange. Unwieldy bureaucratic administrations and Keynesian

inspired policies proved largely insusteinable under conditions ushered in by a hyper-competitive

and rapidly changing global economy. Consequently, business and government were forced to

restructure institutions such that they would be better equipped to manage these new demands.

Economic globalization and several accompanying technological innovations served

largely to undermine the viability of the system of mass production credited with No&

America's sweeping economic success after the war. Important technical innovations generally

involved the substitution of ideas, skills, and knowledge for physical resources (Marshall 1994).

Increasingly bodies were replaced by machines, an event that has had enormous repercussions for

all workers, both blue- and white- collar. In response to pressures from investors, these

innovations were one aspect of an organizational movement to develop and implement a n ~ m b € ? ~

of cost-saving strategies, many of which focused on reducing the price of labour. Shedding staff,

reducing hiring, and shutting down facilities all became commonplace strategies for capital

seeking to lower payroll costs. Workers watched as hard won concessions during the social

contract years were rapidly retrenched while governments stood by unmoved. The threat of

capital flight worked to effectively emasculate administrations which, for the sake of domestic

markets, became inclined to favour management in labowrelated disputes. Over time, the net

effect of this decimation of labour power has been the demise of the traditional career contract,

on both an explicit and an implicit level. Currently, explicit agreements are being eroded as

companies cut back on health benefits, pensions, and retirement health care coverage, limiting

job mobility and making retirement a less viable option. Meanwhile, tacit contracts are similarly

under attack as employees express a sense of feeling devalued at work, and face an uncertain

fhre both on the job and in their lives (Hall and Mirvis 1995).

Observed changes at the level of the economy have translated at the institutional-level to

produce deep shifts in organizational structures. Organizations have abandoned the traditional

bureaucratic model of operation (including the ILM), in favour of systems proven more

responsive to the rapid market changes inspired by globalization. Hence the advent of the ad-

hocracy, a loosely structured organizational model ostensibly designed to maximize system

flexibility, and in the process contribute to individual ingenuity and autonomy. Although these

organizational adapations, wrought by a series of technological, social, and economic forces,

have been presented ftom the propitious platform of regaining lost economic ground, they have

additionally involved a series of fundamental changes in the nature and structure of work

(Rousseau and Wade-Benzoni 1995). In particular, there is a push for more contingent forms of

employment relations, governed by transactional contracts that focus primarily on pecuniary

rewards at the expense of socio-emotional concerns such as loyalty and commitment. The

growing ranks of 'peripheral employees' have contributed to the decline of traditional notions of

career as a relatively stable progression of advancement within a single organization until

retirement, replacing it with alternative work forms far less certain with respect to security,

mobility, prospects for labour force exit.

The changes in employment relations that began to take shape in the 80s appear drastic

because they represent sharp contrast to the practices that dominated after the war (Cappelli,

Bassi et al. 1997). The transition from modem capitalism has sparked a series of institutional

reforms aimed expressly at replacing the organizationally-based career contract with the new

protean, or self-based career (Hall and Mirvis 1995). Workers are no longer able to rely on

employers to lead them securely into retirement as the traditional work-life pattern, along with

the ethic of dependency it cultivated, has come under escalated forms of attack. These

developments have engendered a new workplace culture of uncertainty, supplanting the

traditional insular organizational culture of the post-war en. No more can employees depend

upon benevolent employers to exchange with them job security for a lifetime of hard work and

dedication. To the contrary, rules of seniority (the linchpin of the former employment system) are

frequently replaced with performance-based compensation schemes. Under this new system,

there is a tendency to view the employee as a mere disposable resource to be dispensed with if

deemed incapable of living up to an industry's performance 'standards'. Such workplace

meritocracies tend to be especially disadvantageous to older workers who, in spite of

immeasurable contributions made to firms during their years of peak performance, may

experience declines in output capability which could be used to legitimate their discharge during

cost-cutting campaign^'^.

Changes in the standards used to gauge employment compensation represent only one of

a series of indicators that mark the disturbing trend toward a drastic reformulation of

employment relationships. Formerly, these relationships were based upon ideals of mutual

obligation and reciprocal forms of exchange between employer and employee. At present,

however, the push to reorganize and restructure has functioned to alter basic principles regarding

what employees are owed by the f m s that employ them. These changes in expectations as to the

function of the employee-employer dyad can be traced upward to several structural-level shifts

that have affected exchanges among institutional actors, and are driven by the forces of

globalization and post-industrialization. Rubin (1996) has related these economy-wide changes to

a more general trend that involves a shift away from long-term exchange relationships in all

aspects of social life. She argues that contracts of exchange are increasingly becoming

short-term, temporary propositions, created on an ad-hoc basis. The new capitalism's ad-hocracy

can be viewed as the embodiment of this new form of contractual relationship since it relies upon

the flexible use of resources, and as such, establishes only ephemeral ties with resource

providers. However, these structural-type changes notwithstanding, it is the shifts that have

l2 One of the primary advantages of the traditional closed employment system is was that it tended to redistribute rewards in ways that assured inter-generational equity. Wages were generally held at higher than average productivity for new entrants, lower than average productivity for primegage workers, and higher than average productivity for older workers, smoothing out an individual's earnings profile over time (Cappelli, Bassi et a[., 1 H7).

occurred in the basic culture of workplaces that offer the most striking testament to the deep

changes in employment relations. Workers are told emphatically they must rely upon themselves,

not employers, for career-related provisions. In response, it is probable that workers have

recoiled from their own obligations to b s by way of reduced loyalty and commitment. This

lack of commitment to basic principles of reciprocity from parties on both sides of the

employment exchange has generated a climate of uncertainty within workplaces, with dire

implications for both employee and organizational hction.

In summary, the point must be emphasized that the conception of the 'social contract',

while a distinctive cultural metaphor, is representative of a particular socio-economic structure

which came to light only because the foundation had been laid by a post-war economic

monopoly. These structural contingencies were responsible for securing labour in a position

relative to capital that, for a time, was both satisfying and stable. Although the basic tension

between these two interested groups remained, it was obfuscated for a period due the unique

conjuncture in geopoliticaleconomic relations which had put the U.S. (and its northern partner)

in an overwhelmingly dominant position in world markets (Hardy, Hazelrigg et al. 1996). At the

institutional level, this dominance translated into the formation of internal labour markets as well

as the reciprocal employment exchanges made possible by this system. These organizational

forms were viewed by capital and governments alike as an effective means of cultivating

employee loyalty, maximizing productive potential, and reducing the costs of Worker

l3 According to Pinfield (1995), reasons for the origination, establishment, and elaboration of the ILM stem h m three historically relevant factors involving both business and government: I ) economic rationality embedded in transaction costs; 2) government intervention and guidance of employment practices which functioned to reinforce an ideology of bureaucratic rationality as a means of managing employment relations; and, 3) the effectiveness of rational ideology as means of managerial control (i.e., the belief that bureaucratic control evokes stable and predictable behaviour h m employees, thus simplifjing and legitimating managerial control).

commitment to firms under the social contract was cultivated largely out of employer-promised

provisions such as job security, benefits, and other protections fiom the vagaries of external

markets (Cappelli, Bassi et al. 1997). In contrast, today, shifting macroeconomic forces have

functioned to erode traditional organizational structures, causing employees to have to shoulder

many more of the risks of doing business. At many workplaces, levels of compensation and even

job security have been made contingent upon how an employee performs at work. Deep shifts in

the predominant culture of workplaces are furthermore indicated by the growing number of

companies actively trying to cultivate a sense of independence and self-reliance among their

workers. Even long-time employees are being encouraged to "take charge" of their own careers in

preparation for a time when they may no longer fit with the employer's changing mandate (see

for example, Centre for Studies of Aging 1996). Together these workplace indicators constitute

hard evidence that the employment relationships of the new capitalism are mediated by the

market much more powefilly than traditional forms (Cappelli, Bassi et al. 1997). Growing

numben of employers are engaged in explicit campaigns that draw upon both structural and

rhetorical mechanisms meant to refute traditional notions of career, now considered part of an

antiquated system of employment that is no longer sustainable. Companies want workers to

understand that no long-term commitment is expected fiom them since employers can offer them

no such promise in return. The legacy of these deliberate attempts to subvert traditional forms of

employment exchange is apt to involve demonstrable shifts in the attitudes of older workers who,

as a consequence of having invested many years in attempts to live up to their end of the

employment agreement, likely view current changes in the contract with a sense of insecurity and

betrayal.

Investigations into the effects of organizational efforts to retrench traditional notions of

career have shown that, in relation to their younger counterparts, older workers are generally less

receptive to the new reality of working for a company that demonstrates no sense of obligation

towards its employees (see for example, Centre for Studies of Aging 1995b; Centre for Studies of

Aging 1996). This fact is probably largely attributable to a general cohort effect that stems tiom

the norms and ideals held by workers who entered the labour force at a time when job stability

and employer reliability distinguished most large workplace structures (Rubin 1996). From this

perspective, the sweeping changes that have occurred in the rules of employment, which bespeak

the dissolution of the mutual sense of commitment that had once bound employer and employee,

are apt to be most disturbing to those workers who can recall a time when company loyalty

mattered. Kanter and Mirvis (1989, p. 91) have argued that the effects of these changes to

employment relationships could prove psychologically debilitating for older workers since,

"[North] Americans raised under the auspices of an ideology which claimed that everyone can be

a winner with hard work and persistence, [are now experiencing feelings ofl anxiety, anomie, and

envy".

The next section offers a more thorough examination of this linkage between macro-level

social realities and the psychological effects of work, as these vary during periods of economic

security and expansion versus those of instability and retrenchment. Drawing on the work of

Glen Elder (1985; 1991) who asked how psychological impact of work might vary during periods

of economic uncertainty and differentially by cohort, I wish to suggest an interplay between

individual perception and historical experience. For instance, Elder and OIRand (1 995) have

argued persuasively that, "...individuals' experiences in successive cohorts are uniquely

conditioned by their prior histories and wherein social contexts are themselves influenced as a

result of this engagement". This Linkage between biography and social structure, by way of its

influence upon one's socialized experience, profoundly shapes both individual perceptions of life

events as well as expectations for fitwe outcomes. On this basis it can be presumed that since

workers over 50 were generally subject to employment promises made from the standpoint of an

era characterized by unrestrained growth, unlimited affluence, boundless fuel, high productivity,

and stable and secure work opportunities, they have been uniquely affected by the new culture of

uncertainty pervasive in the nineties workplace. In other words, the contingencies of the post-war

social contract are played out at the level of the psychological or implicit career contracts held by

older workers, affecting the way they view work-related changes. Clearly, not d l workers were

fortunate enough to experience similar degrees of affluence, security and opportunity during the

post-war period; for example, workers in the periphery or secondary labour market (typically

immigrants and women) never benefitted to the same extent as employees in the core. This thesis

hence focuses on an examination of groups most advantaged by the social contract, namely,

native-born, white-collar workers within core industry. It is presumed that since the members of

this relatively privileged group share similar work-life experiences shaped by the structural and

cultural realities of the post-war social contract, they will thereby demonstrate like reactions to

organizational events such as downsizing which are in effect indicators of social contract

retrenchment.

23 The Organization Mad4: Corporate Culture and the Implicit Career Contract

In order to fully grasp implications surrounding the nature of the implicit career contract formed

during the era of accord, it is necessary to ticst consider the contingencies that existed between

the social contract as a cultural expression of historically specific norms of exchange, and a

social system which, in a hemarket society, is organized primarily around the dynamics of the

economy. Shifts at the level of economy have a powem influence on the chief institutions that

comprise social structure, as well as the relationships that exist between and among them (Rubin

1996). Therefore, systemic re-organizations of capital, like those that have occurred during the

transition to capitalism's latest 'global' variant'5 , give rise to the transformation of social

institutions that must attempt to become aligned with capital's changing agenda.

Consider, for example, the oligopolistic brand of capitalism that took shape after World

War Two. The monopoly held by North American producers spawned a unique set of strategic

social relations, and set a particular standard regarding norms of exchange. Core sector workers

were viewed as deserving of their good wages and relative security due to their contributions to

productivity; in the same vein, it became incumbent upon governments to help sustain this

affluence through providing support for formal state-capital cooperatives that allowed for capital

expansion both by surplus absorption (social capital expenditures), and by way of legitimation

functions (the social safety net). These norms of reciprocity among social actors at all levels

preserved the system by structuring co-operation between otherwise self-interested actors

l4 Whyte (1956)

Is See Ross and Trachte (1 990).

possessing unequal resources (Rubin 1996). Such exchange norms lay at the heart of the social

contract.

Thus, the position of international economic supremacy enjoyed by core industries

hctioned to systematically structure social relations both between and within firms.

Capital-to-capital relationships between the industrial structures of the core remained relatively

stable due to the lack of price competition characteristic of monopoly capitalism (Ross and

Trachte 1990). Moreover, capital-to-labour relationships (i.e., with respect to exchanges among

workers and employers) were similarly stabilized in the course of the emergence of the internal

labour market system. Large, capital-intensive industries and their f m s could afford to establish

closed employment systems that sheltered workers from fluctuations in conditions of supply and

demand. The structural features of the post-war economy were therefore integral to the creation

of meso-level institutional structures (e.g., those within corporate fms), and were additionally

responsible for the nature of social relations and exchange norms (e.g., as these existed within

employment relationships) according to which these institutions operated. And, it was this

concomitant structuring of employment exchanges that was essential to the development of the

norms and ideals now held by employees regarding the typical course of individual work lives.

As members of the internal labour market system, employees are covered by norms that

prioritize behaviours aligned with the company's organizational structure, objectives, and strategy

(Alvesson and Berg 1992). For example, recall that the rule of seniority tends to cultivate tacit

'loyalty contracts' with workers, in order to ensure a stable pool of skills upon which employers

can draw. Systems built on seniority provisions therefore prompt employees to demonstrate their

commitment to firms, and align personal goals with organizational mandates. Behaviours or acts

that demonstrate loyalty or commitment have their origin in the basic assumptions held by

employees regarding what inducements they are able to expect in return (e.g., good wages,

benefits, and job security). Validation of these exchange norms occurs from both within the ILM,

as well as beyond it. From an external point of view, the utility of these norms are measured by

real success in task accomplishment (e.g., an increase in f m prosperity). Internally, on the other

hand, validation stems from reductions in the anxiety associated with circumstances of

meaninglessness and unpredictability (Schein 199 1). During the age of high Fordism, the

conditions were such that the implicit career contract, in addition to the seniority rule upon which

it was based, was reinforced at both levels. Businesses flourished while employees counted on

protection fiom market-driven insecurities. Over time, the norms associated with the traditional

model of employment were strengthened since they forged alliances between labour and

management that facilitated both employee and organizational function.

The architects of the modem bureaucracy thus sought to enhance order through a set of

structural contingencies that effectively engendered an unwavering commitment on the part of its

members to a series of institutionally-defined goals. To be sure, corporations benefitted fiom a

culture which influenced workers in terms of high work morale, sacrifice and subordination to

authority figu~es'~. Predominant belief systems within these firms held that the artificial barriers

to individual success are few, and that economic rewards perforce accrue from hard work and

dedication to the greater organizational good. In fact, the sacrifice of individual needs in order to

l6 It has been suggested that corporations were able to implement cultures that privileged sacrifice and subordination due to the larger cultural movement embedded in the ethic of Protestantism (Weber, 1958). According to Weber, the processes of irtd~*alism (e.g., mechanization, standardization, mutinization) were abetted and legitimated by the dominant "modem" religion of the age. In this vein, the methodical, reliabley disciplined bourgeois citizen became the ideal industrr-al worker in a rational bureaucratized society (Casey, 1995).

better conform to the 'organizational role' became the way of doing business by mid-century.

And, it was made plain that there would be payoffs for the men who fit the mold (Kanter and

Mirvis 1989). This kind of manipulation of the 'organization man' was highly criticized by

William H. Whyte (1956) who called attention to strategies employed by modem institutions that

caused employees to lose their identities within the web of corporatism. This form of identity

hijacking by organizations generated deep feelings of attachment on the part of workers. The

ideals and beliefs held by the 'organization man', and which lay at the heart of this sense of

attachment, have been articulated by Whyte (1 956) in the following corporate maxim:

Be loyal to the company and the company will be loyal to you. Afler all, if you do a good job for the organization, it is only good sense for the organization to be good to you ... that [is] best for everybody (Whyte, 1956; p. 9).

Whyte (1 956) points to the 'human relations movement' as the primary source of corporate

manipulation. Drawing primarily upon the work of Elton Mayo", the human relations school

taught that exploiting "man's desire to be continuously associated in work with his fellows"

(Mayo in Whyte, 1956, p.35) represents an ideal way to further the interests of management. One

of the most important precepts derived From human relations research is that the happiness of

man depends upon his rootedness in stable groups (Whyte 1956). Both business and government

as purveyors of the modern bureaucracy recognized the utility of creating a structure that fixed

individuals to a satisfying place within the social order. It was this 'furing' of the interests of

labour relative to those of management that can be credited with establishing the requisite level

" Elton Mayo is widely considered to be the father of the human relations school. His most celebrated study took place at the Hawthorne, lltinois plant of Western Electric and is know well-known simply as the "Hawthorne experiment' (Whyte, 1956).

of societal stability for creation and maintenance of the social contract.

Grafting the tenets of the human relations school onto bureaucracy's ILM did have its

benefits for workers. In particular, they gained a measure of fraternity with management and the

pleasure of sanctioned association with their peers. Organization men additionally enjoyed great

prosperity (Kanter and Minis 1989). On the other hand, the structure of the modem firm

produced a generation of workers who were dependent upon employers for both financial and

psychological rewards. For example, by 1950, less than 20 percent of the American workforce

was self-employed'! People relied upon organizations for not just material progress, but for

identity affirmation. C. Wright Mills offers incisive commentary on the subject in his treatise

'White Collar' in which he argues that organization men were not fiee to chart their own life

course since "such power as [they] wield is a borrowed thing. [Theirs] is the subordinate's

mark ... the canned talk ...[ they] are the servant of the decision ... the minion of management" (Mills,

1956, p. 1 10) . Moreover, organizations sought to secure their hold on the will of workers by

constructing discourses that elevated companies an almost mythical status. Kanter and Mirvis

(1 989) offer a particularly striking example in this regard in their account of General Electric's

massive efforts to verse management in the teachings of the human relations school during the

1950s. The communication handbook distributed to trainees stated that its purpose was to

"endow this mythical personality which the employees call 'The Company' with qualities of

friendship, consideration, fairness, and competence" (Kanter and Mirvis 1 989).

In summary, the confluence of several economic, social, and political forces in the age of

I8 Regrettably, comparable Canadian statistics were unavailable; however, given that the economic development of the two countries has been largely parallel, it can be assumed that the U.S. model offers a teasonable estimate in this context

the modem bureaucracy, privileged a particular normative structure which in turn functioned to

privilege those who aligned themselves with the corporate agenda. This structure was based on

the scientific management19 of workers and production systems, derived fiom an assembly line

perspective of labour organization. The organizational experiences of individual workers during

this period must therefore be viewed as products of the broad social contingencies characteristic

of the era. The socio-political structure of the modem bureaucracy was the outgrowth of the

position of global economic dominance that was held by the state. Workers were shielded fiom

external market threats because such protections seemed to offer psychological benefits that were

good for the bottom line. More importantly, however, was the fact that firms could afford to

bankroll systems of employment that provided workers with a measure of security they believed

they had earned. These systems were often imbued with quasi-familial rhetorical forms meant to

cast employers in the roie of benevolent parent. However, such workplace niceties failed to

alter the fimdarnental conflict that remained embedded in the social relations of production.

Then, as now, the vulnerabilities of workers, both psychological and material, were exploited for

capital gain; employees were taught to trust in the endurance of the social contract which, in

reality, had been a highly contingent proposition fiom the beginning.

It is important to consider the legacy left by a system that had made promises to a

generation of workers that it could not keep. These promises were not made accidentally. The

ILM constituted a system of administrative rules and procedures that was intended to produce

l9 Scientific Management, also known as "Taylorism", was formulated by the industrial engineer Fredrick Winslow Taylor in the early 1900s. His basic principle relied on fhgmenting labour into its simplest tasks thereby reducing waste through gaining economy of time and motion and preventing "soldiering" on the pact of workers. Taylor's doctrine taught that it is more efficient to remove the tasks of conception, planning, and decision-making fiom the workers who would be employed to carry out scientificalIy designed tasks, eliminating conflict and other ineficiencies and preventing the sabotage of continuous, efficient operations (Casey, 1995).

order, predictability and stability. Steeped in the ethics of managerialism, these organizational

cultures favoured norms of rationality, objectivity, and universality. Thus, both normatively and

structurally, modern Western organizations have strived to eliminate, reduce, or suppress

ambiguities (Meyerson 1991). The deliberate construction of organizational order was

responsible for shaping the 'psycho' -structural aspect of firms, out of which the organization man

was created. Engaged in the traditional work-life course pattern, he' constructed his occupational

identity according to a relatively orderly sequence of pre-work, work, and post-work states2"

(Kohli 1 986). As a result, the organization man held a peculiar set of ideals and beliefs regarding

the nature of his relationship with his employer.

Figure 1 offers a pictorial representation of the linkages among the three levels of analysis

invoked to describe the plight of the organization man. First, the North American regime of

monopoly capitalism brought to the region an unprecedented and unrivaled level of affluence and

security. Social institutions embodied the confidence characteristic of global economic

dominance, and citizens were encouraged to share in the region's vast wealth. Workers prospered

as capital added layers to its organizations, invested in job training, provided generous wages and

benefits, and insulated employees from market-related insecurities. As a consequence,

employment relationships, at least implicitly, came to be bound by norms of exchange,

20 Known generally as the 'traditional pattern', the typical life course of the post-war era was characterized by a generally predictable ttuee phase sequence comprised of pre-work, work and post-work states. In that pattem, career jobs ended predictably with the event of retirement and access to state and private pension schemes. However, the extent to which this pattern was actually realized in different historical periods is a matter for historical mearch. It is clearly a male-model pattem, and it is the pattern that forms the basis of welfare state income security measures in the U.S., Canada, and elsewhere. As a consequence, it may be preswned to k a widely-held aspect of popular culture (Marshall and Marshall 1996).

The Social Contract Comprises the set of formal and informal agreements responsible for structuring

exchanges among labour, capital, and government.Creation and maintenance of the social contract for the quarter century following WWlI was enabled by the North American regime of monopoly capitalism which brought unprecedented levels of

economic affluence and security to the region.

Th_e_eM~dem~BJl~ea~~~a~yPa~dtbeILM Organizational structure that ensured a stable and mutual pattern of exchange between employer and employee. The internal labour market, a closed system of employment, was responsible for the notion of the career job and several

additional expectations that came to be associated with the traditional employment relationship.

T h_e-40rganizatioa Man.? Employees co-opted into corporate agenda.

Reflections of this manipulation were found in the culture of dependency that flourished in workplaces. Organization men became reliant upon employers to

provide them with stable and lucrative careers for life. These dependencies became manifest as a set of expectations embodied by the concept of the

implicit career contract

Firmre 1. The Social Contract Employee. The three levels of analysis represent the macro- structural contingencies of the social contract, the meso-level which pertains to those within the organization, and the micro or individual-level which relates to the ideals and beliefs held by within the implicit career contract of the 'organization man'. These levels are linked using bi- directional arrows to represent the mutual and generally stable pattern of exchange among them which, in turn, tended to reinforce the structural and cultural contingencies at each level.

reciprocity, and the mutual expression of loyalty and commitment. Such norms were often

reflected by paternalistic slogans which encouraged employees to feel as though they were part of

an extended 'family', with managers playing the role of benevolent parent (Noer 1993).

Reinforcements such as these were essential to the creation of the dependency cultures that

flourished within organizations, and ultimately shaped the exchange between individual and

organization in the form of an expectancy laden 'psychological employment contract'.

2.2.1 The ~svcbotonical - . contract and the imalicit career contract

The psychological contract describes the subjective aspect of the employment relationship

(Levinson 1962). It refers to the set of beliefs held by both employer and employee regarding

what exactly they can expect from one another during the course of their contractual exchange

relationship. Expectations such as these are nut written into any formal agreement between

employee and organization, yet they operate poweflly as determinants of behaviour (Schein

1965). Because the psychological contract is created within and shaped by a particular set of

social relations (eg, those inherent in the ILM), the psychological contract constitutes an

expression of the social context -- i.e., its culture, and therefore, its norms -- and as such, its

imprint on employees acts as a mechanism for the reinforcement of the social order of both the

organization and its larger setting (Nicholson and Johns 1 985). Consequently, a breakdown in

shared social understandings -- e.g., during periods of rapid sociai and economic change - results

in similar states of dis-integration and normlessness at the psychological level.

As a concept, the 'psychological contract' is usefbl as far as it goes; however, when

considering the interactions between the unspoken micro-level contracts formed during the

accord era and institutions as they were structured both formally and informally by the social

contract, I think it better to invoke a broader conceptualization of this linkage, one that conveys

processes that operate beyond the level of employee psychology. I have chosen to refer to this

wider conception of the employment exchange as the 'implicit career contract' (or, KC). In my

view, this phrase is a more apt descriptor for two reasons. First, persons who began their working

lives during the monopoly phase may be presumed to have viewed the life course as mainly

structured according to a single career with one employer. Recall that the nature of the ILM itself

reinforced this notion since it represented a deliberate attempt on the part of employers to

structure organizations to ensure stable and recurrent patterns of exchange. Consequently, the

L M became a material and cultural symbol of long-term and reciprocal commitments among

workers and employers, attractive and equitable wages, accessible promotion ladders, and job

security (Rousseau and McLean Parks 1993). in this respect, the notion of the 'implicit career

contract' is meant to signify workers' belief in the impression created by employers that careers

were stable, secure, and for life.

Second, inasmuch as the notion of career exists as a social construction of the post-war

era, the implicit career contract more effectively captures the reciprocai and generative link

between the social contract (another construction) and the expectations as they formed within the

psychological contracts of employees. Because implicit employment agreements are constitutive

of the whole socially sanctioned pattern of mutually understood rights, privileges, and obligations

between worker and organization (Schein l965), it seems to me most appropriate to view these

exchanges through a sociological lens. The psychological contract is not a static standard of

reference created in a vacuum of personal assumption and expectation; quite to the contrary,

these contracts emerge as products of interaction and communication within a social context. In

this way, the unspoken employment contract constitutes a psychological mechanism by which

collective influence is translated into individual behaviour (Nicholson and khns 1985).

Hence, the tacit employment agreements of older workers are herein referred to as

implicit career contracts. This phrase is meant to represent the whole set of expectations and

attitudes prevalent among workers who began their careers under the propitious conditions of the

employment system that dominated the quarter century after 1945. Thoughdid consideration of

the nature of the implicit career contract as a conception, and as a determinant of organizational

behaviour, first requires an appreciation of the nature of employment contracts themselves. On a

purely dyadic level, the employment contract sets the agenda for mutual sets of obligations

between parties (i.e., employer and employee). The following section explores how these

obligations serve to structure exchange relationships, and lays the groundwork for establishing

probable consequences associated with an employer's failure to h l fill the terms contained within

the implicit career contract.

2.22 The nature of em~lovment contracts

All employment relationships are structured according to the contractual agreements, both formal

and informal, that lie at the foundation of all exchanges between employer and employee

(Bernard 193 8). Therefore, an appreciation of how employment relationships have changed over

the past decades requires an examination of the shifts that have occurred in such contracts in

terms of how they establish both the inducements and contributions basic to organization

membership (Robinson 1995). Whether written or unwritten, a contract creates a belief in a set of

obligations existing between two or more parties. Contracts are therefore f'uadamental

determinants of employee attitudes and behaviour and alternatively, the actions taken by

organizations. Because organization-based contracts are essentially mixed-level phenomena in

the sense that they constitute constructions created out of an interaction between individual

cognition and organizational context, they therefore function not only to create the contexts of

work, but at the same time they are shaped by them (Rousseau and McLean Parks 1993).

Employment agreements fall under the general category of promissory contracts. These

types of exchange relationships are essentially based on a 'paid-for-promise' artangement,

whereby the commitment of fhre behaviour is offered in exchange for payment. Goods,

services, and money may be exchanged in the form of either promise or payment along with a

multitude of other non-monetizable, or socio-emotional, factors such as loyalty and fidelity.

Furthermore, because promissory contracts are tendered within a specific socio-cultural context,

the norms of the social contract are implicated in both the nature and the interpretation of

promises (Rousseau and McLean Parks 1993).

Because promissory contracts lie at the basis of an extensive network of mutually binding

obligations which construct organizations, they necessarily bction to reduce uncertainty by

creating expectations about outcomes. However, despite the ostensibly mutual expectations these

contracts create, the chance for conflict between contract parties remains since individual

perceptions of contract terms are always shaped, to some extent, by their own set of cognitions

and values. As such, the element of subjectivity persistent within the exchange relationship can

lead to disagreement between parties regarding contract terms and their meaning (Rousseau and

McLean Parks 1993). This subjective element is precisely what is meant by the 'psychological

contract' (Arsyris 1960; Levinson 1962).

According to Rousseau (1989), the 'psychological contract' is conceptually distinct fiom

formal contracts (written agreements with specific terms) on the basis that it constitutes an

individual's beliefs about the terns and conditions of a reciprocal exchange agreement between

that person and another party. Studies of the psychological contract focus on an individual's

belief in and interpretation of a promissory contract (Rousseau and McLean Parks 1993).

Because individual beliefs regarding mutual obligations provide the foundation for all contractual

exchanges, all contracts are findamentally psychological -- i.e., contracts exist as an individual

construction where the individual is party to the contract. As a consequence, psychological

contracts are characterized by perceptions, interpretation and sense making, and, if violated, by

strong emotions (Rousseau and McLean Parks 1993).

Despite the idiosyncratic component of contracts which affects how they are perceived

and understood by individual parties, the point must be emphasized that contracts are not created

in a vacuum; to the contrary, individual constructions of contract terms are necessarily affected

by the context (social, cultural, economic) in which they arose. In this sense, commitments on

both sides of the employment relationship are based, to a large extent on communications,

customs, and past practices. The meaning attached to these obligations are, in turn, shaped by

broad normative criteria which address shared, collective beliefs regarding appropriate behaviour

within a social unit. These norms of reciprocity and pro-social behaviour tend to create

obligations between work groups or within organizations (Rousseau and McLean Parks 1993).

Such culturally created obligations among groups constitute what herein has been referred to as

the social contract.

Promissory employment contracts are therefore largely a reflection of the broader social

context, and as such, should be viewed as a micro-level expression of the social contract.

According to Rousseau and Mc Lean Parks (1993, pS), this "intertwining of promissory and

social contracts creates a host ofcommitments and obligations often most apparent in their

breach or when undergoing change". In this regard, consider an older worker who has dedicated

over 25 years of service to his employer and is suddenly presented with the 'suggestion' that he

take early retirement. He is outraged by his employer's apparent lack of feeling toward his

long-standing loyalty, and feels as though he has been cheated out of the security he had been

promised under the conditions of his original employment agreement. Because this agreement

was founded under very different social and economic circumstances, a shifi in the way the

organization structures employment relations is suddenly out of step with this employee's

expectations with respect to contract fulfillment. The consequences of this disjuncture may

depend upon a number of factors, including the value of the remediation (if any) offered to the

employee by the organization (Rousseau and McLean Parks 1993).

Although the basic of the nature of the employment contract (i.e., its implicit terms and

conditions) is formed very early on, it remains somewhat dynamic, maintained through an

interactive relationship between individual and organization (Baker 1985; Rousseau and Wade-

Benzoni 1995). Over time, maturation effects occur (i.e., consequent to individual aging,

acquiring new skills, or valuing things differently) which may increase the value of the exchange.

Specifically, protracted exchanges create relationships involving trust, predictability, and delayed

forms of repayment such as career development and long-term planning for retirement. Such

relationships foster a form of reliance between parties which entails the need to maintain and

stabilize relationships through information exchange and concern for the long-term well-being of

the other (Rousseau and McLean Parks 1993). According to MacNeil(1974, p.702) , these types

of agreements executed over time come to be characterized by "the entangling strings of

fiiendship, reputation, interdependence, morality, and altruistic desires".

The fact that unspoken employment contracts are largely the product of the socio-

historical context in which they were created raises the point that the implicit career contracts of

individual work cohorts tend to stipulate similar terms; for instance, with respect to expectations

regarding employee tenure, wages, and job security. In work groups where contract parties agree

(e.g., employees and managers, employees with each other) contract terms act as social norms

specifying acceptable and appropriate behaviour. Shared contracts are shared normative beliefs

which can form the foundation of organizational or subunit culture (Rousseau and McLean Parks

1993). In this way, collectively held expectations about appropriate firm role behaviour create a

kind of contingency relationship among the implicit career contracts of individual employees.

Consequently, different social cues (for example, the apparently arbitrary layoff of a colleague

during a campaign of downsizing) function to alter individual worker beliefs regarding their own

relationship to the organization and their psychological contract with it. Employees therefore are

more or less consistently engaged in monitoring behaviours, using referent others (typically those

who share similar workgroup roles) as touchstones against which the fairness of exchanges with

employers can be evaluated. Other benchmarks used to establish equity are in the form of

traditions and past practices. Hence, changes in organizational practices and policies, particularly

those which negatively affect coworkers (as often occurs during campaigns of restructuring

and/or downsizing), function to: 1) decrease acceptance of the contract; and 2) increase the

incidence of perceived contract violation (Rousseau and McLean Parks 1993).

During the expansionist phase, the promissory contract that formed between employer

and employee tended to reflect the pattern of stable and recurrent exchange that the ILM made

possible. This system functioned to reduce uncertainty, develop firm-specific skills and employee

commitment, and helped keep those skills fiom competitors (Cappelli, Bassi et al. 1997). In this

way, the organization's exchange structure remained relatively stable, devoted to

paternalistic-type practices and policies that, in turn, fostered the development of a particular

brand of implicit career contract. These contracts were relational in the sense that employment

relationships were based upon exchanges concerned with both socio-emotional (e.g., loyalty,

support) as well as monetizable elements (i.e., pay for services in the form of wages, benefits,

and promotional opportunities); moreover, these relationships tended to be open-ended,

long-term, and offered a high degree of flexibility (Rousseau and McLean Parks 1993). The

promise to employees contained within the implicit career contract was thus largely constructed

out of a series of deliberate actions on the part of employers, which communicated to workers

that their employment agreements were hdarnentally bound by a mutual sense of obligation and

commitment. This brand of implicit career contract and the conditions that spawned it can be

held largely responsible for the creation of normative beliefs among workers that viewed

'job-as-property', as job holders came to believe in a strong sense of entitlement and ownership

in their jobs (Pierce, Rubenfeld et al. 1 99 1 ; S hahid 1 99 1).

To reiterate, as a consequence of several factors characteristic of the dominant

employment system of the period, the implicit career contracts formed by workers tended to

privilege a series of non-monetizable terms that made the employment relationship irreducible to

simple economics. Rousseau and McLean Parks (1993) have suggested that employers who

attempt to do so are viewed as cballeaging the socio-emotional basis of loyalty and commitment

to the relationship, and offer the example of creating severance packages for long-tenured

employees.

Thus, in view of the nature of employment contracts, it is evident that older workers

undergoing targeted forms of organizational downsizing will likely perceive the event as a

violation of the original contract terms. Having tendered implicit career contracts that were

shaped by the structural and cultural realities contained within the social contract, norms of

reciprocity between labour and capital were integrated into these individual-level contracts,

fhctioning to create the perception of a shared obligation between contract parties. Moreover,

the fact that non-pecuniary elements are integral to these contracts (e.g., feelings of loyalty,

fidelity and the like) makes employer offers for compensation in the form of severance ill-suited

to healing the socio-emotional rift created through implicit career contract violation. During the

period of expansion and labour-capital accord, the stability of predictable patterns of exchange

between employers and their workers, as these became legally and structurally mandated, led to

the development of strong expectations regarding employer reliability. Organizations were

deemed responsible for ensuring that such protections as job security, a good salary, and Fringe

benefits accrued to employees who proved themselves as dependable, loyal, and hard working. In

these respects, the employment contract under the post-war system held clear benefits for both

parties; as a result, it has been suggested that the bond between employer and employee was

stronger than at any other period in history (Tomow and De-Meuse 1994). The rejection of

several employer sponsored protections has surely proved devastating to many workers, however,

it is the failure to provide a basic security to employees in their jobs that represents the most

firndamental breach of promise contained within the implicit career contract. Workers may

concede that in an age of increased global competition firms must work toward improved

efficiency by reorganizing thei operations, and additionally that such restructuring could entail a

limited program of austerity with respect to the doling out of certain employee benefits.

However, when later-life employees are denied altogether the security of certain employment, the

prospect of job loss among those who feel unable or unwilling to retire early may prove

overwhelming.

As the social contract is increasingly hgmented due to the inexorable push of global

economic change, a likely consequence is that workers have tended to eschew the implicit career

contracts in favour of more functional perceptions of the employment relationship that has

become predominant within the post-contract workplace. As Rubin (1 996) has argued, the

combination of strategies adopted by corporations to maintain profitability has profoundly altered

the division of labour, the technology of production, and ultimately, the traditional employment

relationship that once characterized the economy. Increasingly, capital's move toward flexible

production is resulting in dualism in the s e ~ c e sector, structural unemployment, and a broken

social contract (Rubin 1996). Organizations undergoing change are often either unable or

unwilling to fblfill the promised contractual terms made to each employee (Robinson 1995). As a

result, growing numbers of employees are being displaced by the very organizations that had

once promoted cultures of dependency in their ranks. In essence, for their part employers have all

but explicitly declared the traditional career contract dead and, quite reasonably, workers have

likely responded by investing fewer personal resources into the employment relationship. For

older cohorts, however, the rejection en masse of the implicit career contract represents far more

than simply the need to adjust expectations to fit changing workplace contingencies. To the

contrary, these workers likely feel as though their employment agreement has been thoroughly

violated. Having fulfilled their part of the exchange through providing firms with a reliable

source of loyal and productive work, the failure of employers to see their workers into a secure

retirement is surely viewed as a wholehearted dismissal of the promise contained within the

implicit career contract. For highly tenured employees, this dynamic may be further complicated

by the duration of their employment within a firm since, as the effects of contract maturation

would suggest, lengthy employment relationships are associated with greater costs of exit, deeper

identification with the organization and its history, greater visibility and social significance

attached to the individual's role, and hence more implications for change (Rousseau and McLean

Parks 1993).

2.3 Broken Promises: The Consequences of Downsizing as a Perceived Violation of the Implicit Career Contract

In light of the foregoing discussion on the formation of employment contracts, it has been

established that older workers undergoing targeted forms of downsizing will likely feel as though

the promise contained within their early employment agreements has been wholly breached.

Furthermore, due to the contingency relationship that tends to exist among implicit career

contracts formed under similar socio-historical circumstances, we can presume that these

employees have a largely shared perception of the downsizing event. As such, it is likely that

feelings typically associated with implicit contract violation ace also held in common, thereby

eliciting similar kinds of reactions from members of the targeted group. This accepted, the

psychological responses related to this form of perceived violation require examination, in

addition to how these responses may come to have an impact upon both employer-directed

attitudes and, ultimately, organizational fhction.

Two strands of theory can be used to shed light on the individual effects of contract

violation. First, equity theory (Adam 1965) invokes the notion of the psychological contract to

delineate the nature and extent of the exchange relationship that exists between employer and

employee. The psychological contracts of employees specify the contributions that they believe

they owe to their employer, as well as the inducements they feel they are owed in return

(Robinson and Rousseau 1994). Perceived inequity between work outcomes (e.g., salary, rank,

security) and inputs (performance, seniority, prestige lent to the organization) is distressing,

thereby motivating employees to redress the inequity through behavioural or psychological

means (Brockner 1988). With reference to worker commitment to the terms of the implicit career

contract, if the employer is viewed as having failed to live up to their end of the agreement (for

example, by failing to provide an employee with a reasonable level of job security after many

years with the firm) then it becomes likely that the employee himself will recoil from his

commitment to the implicit career contract out of a quid pro quo concern for distributive justice

(i .e., achieving inputatput equity).

Research into the human costs of organizational retrenchment suggests that workers

experience other psychological states that have effects largely independent of perceived

inequities. Most notably, they often feel a profound sense of job insecurity which tends to

threaten workers' sense of control (Broclmer 1988). Feelings of powerlessness can be

enormously stressful and can adversely affect work-related attitudes and behaviours. Therefore,

the violation of the implicit career contract as a consequence of the insecurities produced through

targeted fonns of organizational downsizing must be considered alongside equity-related

concerns which stipulate that security needs be met out of fairness to hard working, loyal

employees.

2 . Perce~tions of iustice in the nost-lavoff work environment

Perceived obligations compose the fabric of the implicit career contract. These contracts consist

of sets of individual beliefs or perceptions regarding reciprocal obligations (Rousseau 1989). The

tacit contracts of employees therefore, specify the contributions they believe they owe to their

employer, as well as the inducements that they feel are owed in return (Robinson, Ktaatz et al.

1994). To be sustained, every contractual relationship must involve at least the perception of an

equitable exchange between parties. Equity theory (Adam 1965) invokes the notion of the

implied contract to posit that employees are highly motivated to attain fairness in their exchanges

with their work organizations. Employees' work outcomes (e.g., salary, rank, security) should be

commensurate with their work inputs (e.g., performance, seniority, prestige lent to the

organization). Perceived inequity between outcomes and inputs in relation to some standard --

typically the outcome-input relationships of coworkers past and present -- is distressing, thereby

motivating employees to seek ways to redress the inequity (Brockner 1988). With regard to the

traditional employment relationship and its underlying implicit career contract, norms of

reciprocity involved the exchange of employee services in the form of reliability, loyalty and

productivity for compensation that included good wages, career development opportunities, and

security into retirement. These norms subsequently formed the basis of what are referred to as

'anchors' (or, benchmarks) for future negotiations (Eisenhardt 1988; Conlon and Parks 1990).

Moreover, due to the matwational mechanisms inherent within long-standing contracts whereby

time tends to increase the costs of exit as a result of deepening emotional and economic

investment, the anchoring effects of previous contracts are strengthened over time, even if there

are economic reasons for changing the contract terms (Conlon and Parks 1990). Thus, if the

traditional career contract is regarded as the anchor against which all fbture negotiations will be

evaluated, then it is plausible that the current economic push to renegotiate employee contracts

such that they become based upon a more short-term, merit-driven, and monetizable form of

exchange, is perceived as fundamentally unjust. Feelings of injustice are a direct consequence of

perceived contract violation, and are essentially tied to long-held beliefs regarding what

constitutes fair and equitable treatment. For older workers caught in the midst of targeted

downsizing, violation of the implicit career contract and subsequent sense of injustice stem from

long-standing beliefs as to what they are owed by employers for dedicating years of loyal hard

work.

When considering simply the quid pro quo nature of the concerns associated with

distributive justice therefore, older workers perceive their implicit career contract to have been

violated by acts of organizational downsizing since their contributions to the tirm have not been

reciprocated as promised. Studies of survivor reactions to the layoff of coworkers illustrate how

downsizing causes workers to try and redress subsequent perceptions of contract violation and

inequity. Results from such investigations suggest that survivors generally experience the

greatest feelings of inequity if they both perceive the layoff as unfair and have a strong sense of

identification with those who have been laid off (Brockner 1988; Brockner 1990).

Genetally, workers who view management as having violated the rules of distributive justice

(i.e., have failed to provide for employees adequately in light of their contributions to the h),

react with anger and hostility directed toward the organization These psychological reactions

typically manifest as measurable reductions in the affected employees' organizational

commitment, productivity, perforname, and work motivation (Brockner 1988; Brockner and

Greenberg 1990; Konovsky and Brockner 1993).

The fact that older workers were socialized into workplaces that encouraged high levels

of loyalty and commitment to the firm may exacerbate the sense of injustice that comes with

implicit career contract violation through downsizing. For instance, a study by Brockner (1992)

found that workers who previously felt highly committed to the organization tended to react more

negatively to the layoff of coworkers they perceived to have been treated unfairly (i.e., let go

without sufficient cause). According to Brockner (1 992), because the relational elements of the

implicit contract include the expectation that employee demonstrations of commitment will be

reciprocated by the employer by way of fair and dignified forms of treatment, those who are

highly committed to the organization believe that they are llfilling their contract obligations.

Consequently, if the employer is viewed as having acted dai r ly (e.g., with respect to employee

layoffs), individuals who view themselves to be highly committed are subsequently more likely

to perceive the organization as having failed to live up to its end of the bargain. Moreover, since

commitment to the organization involves not just a belief in the organization's goals and values,

but is associated with deeper levels of attachment that involve feelings of identity and self-worth

(Kelman 196 1 ; Brockner, Tyler et al. l992), for individuals highly committed to their

relationship with an organization, unfair treatment represents far more than the denial of

resources; to the contrary, it represents a more global, long-term threat to a relationship

previously thought to be built on mutual loyalty and trust. Therefore, given that older workers

tend to be highly committed to the organization as a consequence of the proviso contained within

the traditional implicit career contract, it is reasonable to presume that the experience of contract

violation by way of targeted downsizing could result in severe declines in organizational

commitment demonstrated by this group.

According to Rousseau (1 994) although equitable outcomes (i.e., distributive justice) are

an important determinant of contract maintenance or breach, violation of the employment

contract is distinct from (although related to) unmet expectations and perceptions of inequity.

Like Brockner (1 988; 1992) has suggested, because employment contract terms are entwined

with emotions such as loyalty and trust, the psychology of contract violation constitutes more

than a perceived failure to have one's expectations met. While failed expectations have been

shown to cause employees to become less satisfied and demonstrate lower commitment to an

employer, the responses of employees who experience a violation on the other hand are generally

much more intense. Robinson and Rousseau (1994) have argued that the intensity of the reaction

is attributable not only to m e t expectations of specific rewards and benefits, but also to more

general beliefs about respect for persons, codes of conduct, and other patterns of behaviour

associated with relationships (see also Rousseau, 1989). For instance, a person may expect job

security in exchange for hard work and thus feel disappointed when his employer is unable to

protect him from changing market conditions. However, a person who believes he was promised

job security in exchange for hard work and does not receive it feels wronged. Broken promises

produce anger and erode trust, thus going beyond disappointment and invoking feelings of

betrayal (Robinson and Rousseau 1994).

Although still viewed from a justice perspective, theories of implicit contract violation

emphasize the emotional side of perceived contract breach, explicating the feelings associated

with violation as involving anger, resentment, bitterness, indignation and even outrage (Morrison

and Robinson 1997). Its focus is less about the rational calculation of withholding inputs in

relation to failed outputs (as in equity theory), rather it zeroes in on the socio-emotional bases of

employment relationships and how, over time, these invoke a broad array of non-monetizable

contributions and inducements which make changes to contract terms ripe for perceptions of

violation. Relational exchanges between parties to a contract value not only that which is

exchanged but the relationship itself; thus, if one party reneges on a promise the victim may

experience a profound psychological distress since the violation goes beyond the failure to

receive a paid-for-promise. Rather it concerns many broader implications associated with

contract breach, including violation of the standards of faith and goodwill that were once thought

to govern the relationship (Morrison and Robinson 1997). Studies on the effects of perceived

contract violation have shown that the experience leads to significant negative changes in

important organizationally directed attitudes including a decrease in the employee's level of trust,

satisfaction, and commitment toward the organization (Robinson and Rousseau 1994; Robinson

1995; Rousseau and Wade-Benzoni 1995). Robinson (1994) has fiuthermore concluded that

psychological or implicit contract violation does in fact appear to exceed the effects produced by

mere unmet expectations or inequity (Robinson and Rousseau 1994).

Violation of the implicit career contract then is not merely associated with failed

expectations about employer provisions of job security in retirement. Rather, it is additionally

determined by the expectation that the employment relationship is governed by the values of

good faith and fair dealing. That employees came to expect such relational elements to imbue

their implicit career contracts is largely a function of the social context in which these contracts

were formed; however, both the nature and extent of this expectation is furthermore related to the

duration of the employment relationship itself, as older employees who have remained with a

single employer for many years come to view the exchange as open-ended, and based more upon

non-pecuniary concerns. Hence, while perceived violation does result in the retreat fiom

employment obligations out of a quid pro quo assessment associated with distributive justice,

these withdrawals tend to be intensified when an employer's actions call into question the

relational elements of the contract. This is because these elements tend to be viewed by older

employees as the essential material responsible for binding parties together in the employment

exchange.

Evidence for this dynamic can be found in studies that operationalize the retreat fiom

employment obi igations as declines in employee willingness to perform extra-role, or citizenship

behaviours. These are organizational behaviours that go beyond those required by the employee's

job description, and as such do not constitute formal employment obligations. Instead these acts

are performed at the employee's discretion, presumably out of feelings of fondness and

attachment toward an employer. Referred to in the literature as organizational citizenship

behaviour (OCB), the term encompasses all employee contributions that are outside the realm of

required work duties. Although not explicitly recognized by the organization's reward system, it

is a widely held belief that organizations could not survive unless employees are willing to at

least occasionally engage in OCB (Katz 1964). However, it is a well-studied fact that employees

will engage in citizenship behaviouts only when they define their employment relationship as one

based on a fair social exchange. In this respect, the performance of these behaviows acts as a

form of re-payment to an organization for equitable treatment, and employees will withhold OCB

as an input when their employer provides inadequate outcomes (Organ 1988; Robinson and

Morrison 1995). Robinson and Morrison (1995) have investigated this contingency between

implicit contract fblfillrnent and the willingness to perform OCB and found that when employees

believe their employer has failed to fblfill its obligations (i.e., violated the employment contract),

they are less likely to engage in subsequent citizenship behaviours. Similar findings &om another

study by Robinson (1994) indicate that an employer's failure to fblfill its commitments as

stipulated by an employee's implicit contract is associated with a significant decline in perceived

employee obligations. Most notably, employees decreased their contributions to the firm in the

form of organizational commitment and extra-role behaviour (Robinson, Krdatz et a1 . 1 994).

Moreover, organizational commitment and employee satisfaction have been found to correlate

positively with OCB (OIReilly and Chatman 1986; Witt 199 1).

In light of the foregoing evidence, it seems that as employer obligations go unmet the

subsequent erosion of employee trust and good faith may in turn fhction to diminish his or her

willingness to perform his own relational obligations, manifested as a decline in organizational

commitment and citizenship behaviour. There is also evidence to indicate that this type of

violation of the employment contract leads to decreases in organizational satisfaction (Robinson

and Rousseau 1994; Robinson 1995; Morrison and Robinson 1997). Since loyalty and civic

virtue behaviours are inputs that employees provide to their organization in exchange for the

outputs that they receive (Organ 1988), if they perceive these outputs by their employer to be

insufficient they will be less inclined to provide the organization with discretionary inputs

(Robinson and Morrison 1995) . In this respect, the rehsai on the part of employees to perform

OCB subsequent to perceived contract violation not only highlights the significance of the

relational aspects of the employment exchange, but also brings to the fore problems associated

with employer attempts to compensate. Whereas matters of inequity can be remedied through

additional inputs on the part of employers (e.g., increased wages and promotional opportunities)

damage to the socio-emotional aspects of the implicit contract as in loss of trust and a sense of

betrayal cannot be so easily restored (Robinson and Rousseau 1994; Robinson 1996). Within

organizations engaged in protracted downsizing efforts aimed at older workers, this fact could

prove to have broad consequences with respect to these employees' productivity and work

motivation.

To recapitulate, when viewed from an equity perspective the employment relationship

during a campaign of downsizing is reevaluated by workers according to considerations of

justice. Quid pro quo concerns in this regard would suggest that the downsizing instrument is

viewed as hard evidence the employer has failed to fulfill the promise of job and retirement

security in exchange for years of hard work and loyalty. This is likely to be especially true for

employees with greater tenure since, as we have seen, with increased duration of the employment

relationship there tends to be a deepening of what is believed to be owed both materially and

emotionally. Workers forced to watch coworkers leave while under similar duress to retire are

likely to perceive the event not just as evidence of &air treatment, but additionally as a personal

&nt committed by the employer and a challenge to the relational elements that are believed to

underpin the implicit career contract. As a consequence, discretional inputs in the form of loyalty

and extra-role behaviour are doubtlessly scaled back. Moreover, the feelings of anger, resentment

and betrayal that typically accompany contract violation may cause concomitant declines in

employee satisfaction with work. Finally, because relational elements govern the implicit

contracts of older workers as much or more than pecuniary concerns, it is probable that a sense of

injustice caused by a campaign of targeted downsizing among these workers cannot be

adequately remedied through monetary compensation forms (e.g. the early retirement severance

package).

23.2 Job insecurity in the ~osblavoff work environment

While perceptions of fairness mediate the relationship between the objective event of layoff and

subsequent employee attitudes, survivors typically experience other psychological states that

have effects apart from those that result from perceived inequities. Otten they feel a profound

sense of job insecurity which may have a number of adverse effects on subsequent organizational

attitudes and behaviours. Prior theory and research on the effects of organizational stress in

general (Greenhdgh and Rosenblatt 1984), and job insecurity in particular (McGrath 1976; Jick

1979; Jick 1985) is thus relevant to an analysis of the reactions of employees undergoing

restructuring (Brockner 1988).

The formerly stable work environment as structured by the ILM facilitated the inclusion

of security needs as an integral part of workers' implicit career contracts. Recall that the

traditional employment relationship was built largely on the promise of job stability in exchange

for productivity and loyalty. Thus, the recent economic changes that have resulted in widespread

organizational retrenchment and an unraveling of the traditional employment relationship have

created a new set of workplace conditions likely viewed by older workers as a violation of the

implicit career contract. Employees caught by the sense of job insecwity that pervades the

nineties workplace are increasingly less able to alleviate these feelings by appealing to seniority

or productivity records. On this basis, implicit contract violation will predictably cause workers

to withhold contributions to the firm on the basis of perceived inequity. However, research into

the consequences of job insecurity suggests that its effects often go beyond those based on

evaluations of employer f h e s s . For instance, Brockner (1988) has argued that the sense of job

insecurity that permeates the post-layoff work environment threatens survivors' sense of

perceived control, leading to increased levels of stress. Stress, in turn, has the potential to have a

number of adverse effects on organizationally-directed behaviours and attitudes. In particular,

employees who feel threatened in response to the insecurity that imbues the downsized work

environment often demonstrate reduced organizational commitment and an increased tendency

for intragroup conflict (Brockner 1988; Brockner 1990).

Observers have suggested that the worker's response to the experience of job insecurity is

associated with the general process of psychological withdrawal reactions to loss (Katcher 1978).

A study by Greenhalgh, (1 979) for instance, documented the response of workers who had

managed to keep their jobs in a declining organization where coworkers had been laid off. He

found that the anticipation of job loss produced the same reaction as anticipated death. Workers

began the grieving process in anticipation of the loss and psychologically withdrew from the

to-be-lost object, in this case the job (Greenhalgh and Rosenblatt 1984).

Considerations of the effects of loss can be viewed h m two theoretical perspectives. The

iht, as we have already seen, involves issues of equity and the rational calculation of inputs to

outputs. Workers who believe an employer has not lived up to its promise of job security as

required by theu years of commitment to the firm will tend to withdraw h m their own

commitments, as these are stipulated by the implicit career contract. There is another perspective

however, that relates to a growing literature concerned with crisis, decline and uncertainty within

the organizational context. The notion of loss is fundamental to this area of research, and it has

been used to shed light on how the psychosocial dynamics of organizational retrenchment can

affect individual reactions to related events like downsizing. As with all events that involve deep

changes to familiar aspects of well-entrenched social practice, organizational downsizing

interferes with the achievement of a desired state or god4 For survivors, this goal is typically job

security which the constant threat of layoff has served to undermine. Furthennore, the attainment

of job security in the nineties workplace is increasingly independent from employee performance

records or seniority status. Thus, another facet of the new workplace culture of uncertainty

involves the breakdown in the ability to predict job-related outcomes on the basis of past

achievements. These ambiguities invoke feelings of powerlessness on the part of employees who

fear that performing well will not necessarily increase their job security (Jick 1985). This

un-coupling of the effects of performance on outcomes represents a classic stress inducing

experience. According to McGrath (1976, p. 1376), "other things being equal, the more uncertain

the relation between effectiveness of performance of the task and outcome of that performance,

the more stressful the situation". In other words, the greater the degree of uncertainty that

surrounds the performance-outcome relation, the higher the level of stress experienced by the

focal person. On this basis it can be supposed that the dissolution (i.e., the loss) of the

contingency that once existed between job performance and security has disrupted the work lives

of employees who premised their implicit career contracts on the belief they could secure their

hture through loyalty and pmductivity.

Individual reactions to forms of loss associated with membership in an organization have

been related to other forms of loss under the umbrella category known as "crisis behaviour

dynamics" (Jick 1985). Organizational retrenchment from this perspective is viewed in terms of

its crisis-like properties (Jick 1985; Krantz 1985), and the extent to which these changes lead to a

kind of "crisis syndrome" of related attitudes and behaviours. The experience of crisis syndrome

among organizational membership is determined both by the nature of the cutbacks as well as

various contextual conditions both inside and outside the focal organization (Jick and Murray

1982). Not unlike the equity paradigm which considers how individuals react to the loss of

organizational outputs, the crisis syndrome model is concerned with how individuals deal with

significant forms of loss (for example, job and/or economic security). In this way, both

paradigms provide fnuneworks for understanding changes in organizationally directed

behaviours and attitudes on the part of dissatisfied employees. On the other hand, whereas the

equity model places its focus on forms of employee withdrawal behaviour on the basis of a

rational calculation to withhold inputs based on a loss of outputs, the crisis paradigm extends this

reasoning to incorporate other forms of defensive retreat with an emphasis on increased in-

organizational conflict (Jick and Murray 1982). Periods of retrenchment hinder organizational

function not only due to subsequent declines in enipioyee productivity and commitment, but

through their creation of an uncertain and unstable work environments which cause employees to

feel stressed. High levels of stress among employees who fear for their jobs tends to create

tension based upon competition for scarce resources, inducing intragtoup conflict. In addition,

large-scale changes in the organization lead to a collective anxiety among workers who, in turn,

tend to manifest a cognitive rigidity that reduces their ability to adapt to these changes. Krantz

(1985) has suggested that such reactions on the part of workers constitute typical mechanisms of

social defense. These mechanisms are provoked by the anxiety that stems fkom the uncertainty

surrounding an organizational crisis brought on by massive change.

Stated in terms of the implicit career contract, the equity and crisis paradigms constitute

interrelated strands of theory that can be applied in order to flesh out both the individual

experience of surviving older workers as well as the broader cultural context of the organization

in which they reside. The implicit career contract as it was conceived under the full flowering of

the post-war social contract was based on an employment relationship structured according to

mutual obligation. This tacit agreement between worker and organization was reinforced by the

protections of the internal labour market as well as the culture of paternalism that grew out of it.

Older employees entered the labour force under the auspices of this traditional employment

culture, and those who have managed to survive a relentless number of organizational

consolidations, spin-offs and layoffs have come to expect less fkom employers, giving less of

themselves in return. Declines in individual contributions to the fm represent rational and

deliberate forms of action (or inaction) based on the benefits employees have accrued. On

another level, the psychosocial dynamics of retrenched organizations have been found to effect

the functional capacity of entire workgroups (Whetten 1980; Krantz 1985). From this crisis

perspective, anxieties experienced on an individual-level must be understood as linked with the

collective behaviour of task groups facing enormous organizational change. The combined

effects of the uncertainties involved, the sense of loss and failure, and the stress of massive

change tend to evoke very primitive states and corresponding regression in organizational

performance. Over time, these new forms of coping become institutionalized in stable and

persistent organizational cultures and structures which, in hun, create the context within which

members' behaviour and fhctioning become immediately adaptive (Krantz 1985). Thus, as

employers demonstrate decreasing commitment to the llfillment of the terms of the implicit

career contract, it is likely that older workers are demonstrating similar patterns of withdrawal.

These patterns are probably becoming solidified into new ways of managing the new culture of

uncertainty which may be adaptive in the short-term but could, however, ultimately prove to have

deleterious consequences for both individuals and their organizations. Employee declines in

commitment, reduced levels of job satisfaction, as well as the increased propensity to conflict

with other members of the workgroup are to be reasonably expected under circumstances of

organizational crisis, change, and retrenchment. However, these reactions must be considered

from a broad perspective that takes into account the fact that they comprise part of a fbndamental

shift in the nature of empioyment relations and as such are no more likely to subside in the near

fuRw than are employer efforts to dissolve traditional employment agreements. It is thus

important to examine more closely the specific nature and extent of these reactions by those

workers who may prove most vulnerable to these changes, as a consequence of having predicated

their work lives upon the belief that these agreements would take them securely into retirement.

233 Tbe osvcholonical conseauences of downsizin~: a unified ~ersnective

In view of the foregoing discussion of the psychological effects to workers of organizational

crisis and change, the key to understanding the workplace culture of the new capitalism is an

appreciation of the reciprocal re!ationship between individual psychology (as embodied in the

implicit career contract) and social systems created by their members. The loss of basic security

needs by all workers -- and of older workers in particular -- has likely evoked attitudes and

behaviours that not only amount to equity considerations such as reduced work effort, but are

furthermore related to the collective engagement of work groups and the impact of the collective

anxiety which stems fiom massive structural change. In this way, the implicit career contract

stipulates security as a condition of employment not simply out of a quid pro quo concern for

distributive justice, but out of a basic human aversion to uncertainty. This fact, we can assume, is

especially true for older employees who had previously understood their relationship with their

employer to be a lifetime proposition, and who are therefore likely to be exceptionally vulnerable

to this form of insecurity.

2.4 A Theory of Multiple Contracts

This chapter's review of the contingencies found within the traditional system of employment

noted the fact that workm with management status, as well as those with lengthy tenure, tended

to be availed of an added measure of career stability in accordance with their seniority status.

On this basis, it is presumed that the promise of job stability into retirement was of additional

salience to such workers since their personal investments in the firm were ostensibly aligned with

the incremental security their special status provided. Thus, the implicit career contracts of these

workers likely reflect the additional commitment they expect employers to bestow upon them by

virtue of this status. It is reasoned, therefore, that targeted forms of corporate downsizing will

cause workers with management status as well as those with lengthy tenure to feel a deeper sense

of violation that will result in a greater psychological withdrawal from their own contract

obligations; this, in turn, will manifest as more negative attitudes toward their employer.

Other potential cases where workers' backgrounds may become particularly relevant to

the nature of the expectations contained within the implicit career contract, and which therefore

have implications for their violation include those involving gender differences, and among men,

the family context. The following sections delineate the potential reasons for differences in this

context among men and women, and between men with families versus those without.

2.4.1 Women and im~licit career contract commitment

Thus far I have drawn solely on the traditional, male pattern model in order to make inferences

about the possible disruptive effects of organizational downsizing on the implicit career contracts

of older workers. Recall that within this traditional pattem, biography unfolds under a socially

constructed tri-partite age structure in which pre-work, work, and post-work states occur at

generally predictable and distinct phases of the life course. The career job ends with the event of

retirement and access to state and private pension schemes.

In contrast to the male-model employment pattern however, female patterns of

employment are marked by career intemption and a greater likelihood of part-time, part-year

employment -- although the differences between men and women have been declining (Blau and

Ferber 1985). As a result, women tend to be committed to multiple roles and expend a great deal

of effort fulfilling dual role obligations (Bielby and Bielby 1984). Female work commitment

encompasses a complex lifestyle in which both occupational and family attachments are

embedded (Bielby and Bielby 1988).

Bielby and Bielby (1988) have proposed a model for assessing the differences in

work-role commitment between men and women. The model takes into account three

perspectives on how commitments to adult roles are produced, and combines them to suggest

how women may experience lower levels of work commitment throughout their lives compared

to men. The first aspect of the model considers the cumulative impact of experiences and

investments in paid work and family spheres. It suggests that commitment is formed on the basis

of the cumulative impact of prior work experiences, measured by years of work experience, job

and organizational tenure. Thus, as a consequence of the tendency for women to have

discontinuous work lives, typically interrupted for a period of childbearing, it is presumed that

women are less committed to work roles.

The model also presumes that commitments to work and family roles are formed on the

basis of a rational exchange of costs and benefits associated with each. From this perspective, the

greater the resources one can contribute to an activity, the more one receives in exchange, leading

to greater commitment. Individuals (typically women) burdened with heavy family constraints

have less time and effort to devote to paid work activities, and hence are less committed to them.

Finally, Bielby and Bielby (1988) consider the impact of normative prescriptions for adult life on

subsequent role commitments. The different socialization experiences of men and women are

viewed as directly relevant to how they eventually balance their work and family roles. Given the

gender-role prescriptions into which women over 50 were socialized, it is reasonable to assume

that they are comparatively less committed to the work-role and may identify more with domestic

roles.

Traditional gender role norms thus tend to make some roles and experiences more salient

than others. Among older women, employment roles often exist alongside other kinds of

domestic or caregiving roles which may or may not involve the role of wife or mother. For

example, compared to their male counterparts, women in mid-life are more frequently the

primary caregiver for elderly parents or more distant relatives (Ingersoll, Starrels et al. 1996;

Ruhm 1996). Additionally, older women more often perform support roles through different

types of formal voluntarism (Romero 1987). Friendship networks also tend to be more extensive,

and the relationships more meaningful among older women compared to their male

contemporaries (Fischer and Oliker 1983; Barusch and Peak 1997). Overall, women in later-life

tend to be more reliant upon roles other than work for their emotional and psychological well-

being (Elwell and Maltbie-Camell 198 1). On the other hand, Kirnbrell(1995, p. 194) has

suggested that older men are more reliant upon work as a means for achieving social integration

since "from their earliest years they have been enculturated to see their identity as synonymous

with being a worker, being a provider, and being independent". McLanahan and Glass (1 985)

furthermore suggest that the association between work and masculinity has much to do with the

reason that employment is so fundamental to the psychological well-being of men. In particular

they note that '?he breadwinner role is viewed as a principle component of male identity"

(McLanahan and Glass 1985, p. 329).

Thus, as a product of their unique life histories, older male and female employees have

likely invested differently in their respective work roles. Specifically, men are apt to identify

most with their role as 'worker', whereas older women tend to make identity investments in a

number of additional social pursuits which lie outside the realm of work. In terms of the implicit

career contract then, it can be reasoned that due to distinctive sets of life course contingencies

that on the one hand have encouraged women to see themselves as defied more by their

relationships than by their work, and which alternatively, have influenced men to derive their

identities largely from the work role, older women have likely invested comparatively fewer

personal resources into the creation and maintenance of the psychological employment contract.

On this basis it is presumed that, although women undergoing targeted restructuring by way of

the early retirement incentive program will remain sensitive to the uncertainties and concomitant

stresses typically associated with the downsizing event, they are not expected to exhibit patterns

of psychological withdrawal h m the implicit career contract to the same extent as men. In other

words, under circumstances of targeted downsizing, men will demonstrate lower commitment to

the implicit career contract than their female counterparts.

2.4.2 The male farnib context

The Bielby and Bielby (1988) model helps one to conceptualize reasons why, in general, older

women may tend to be less committed to the work role. Women experience fewer social

pressures to prioritize the work role, and hence tend to be multiply committed to a number of

other social roles that typically include wife, mother, caregiver, volunteer, and friend.

On the other hand, as we have seen, men tend to see themselves as defined primarily by their

work and as a result presumably invest greater amounts of personal and emotional resources into

the creation and maintenance of the implicit career contract. Recently, however, Gerson (1 993)

has stated that the changing economy has, to some extent, resulted in a changing relationship

among gender, work and family. Specifically, she notes that despite the fact that masculinity has

typically been defined as the level of a man's commitment to work, current changes in

occupational structures that have eroded male bread-winning ability have encouraged the

redefinition of men's roles (Gerson 1993). A study by Glassner (1994) explored the impact of

these changing roles among male baby boomers who had experienced a major set back in their

career. It was found that although work does play an integral role in the construction of

self-identity among this generation, shrinking job opportunities and chances for advancement

have forced a reassessment of work and family commitments such that the latter have taken on

pronounced importance.

On this basis it is instructive to examine how men undergoing downsizing by way of the

early retirement incentive program are currently situated within the context of family since, in

spite of their historical tendency to prioritize work over other social role investments, a growing

sense of insecurity at work may fimction to encourage the reassessment of these priorities such

that the importance of familial concerns has been augmented accordingly. In this respect, it is

possible that men within the downsized environment who are currently married and have

children may have increased their commitment to their domestic roles, since work has come to

lack the stability required for a more certain return on their investment of personal and emotional

resources2'.

Therefore, taking into consideration their placement within the context of family, it is

likely that the investments men make into the implicit career contract may vary. As a

consequence of the growing sense of insecurity associated with the work role during downsizing,

men who are dually committed to both husband and father roles may choose to invest more

heavily in maintaining these familial ties relative to those that bind them to their employer, since

this latter attachment appears to have frayed. Although these men are expected to remain

sensitive to the uncertainties and concomitant stresses typically found within

the retrenched work environment, they will not experience the same degree of psychological

withdrawal from the implicit career contract as men differently situated within the family

21 This is not to suggest that men who are both marnamed and have children necessarily invest more personal resources into maintaining these familial ties relative to their work commitments. To be sure, there are single men who may devote little resources to maintaining ties with their employer and, conversely, there are of course married men with children who have all but dismissed their domestic responsibilities in favour of those that are work- related. However, in the context of the present study, use o f the male family context in this respect provides a satisfactory indicator of the potential moderating effect that male domestic roles (i.e., as father and husband) may have on men's perception of implicit career contract violation due to downsizing.

context?. Or, stated differently, under circumstances of targeted downsizing, men who are not

married with children will demonstrate less commitment to the implicit career contract compared

to their counterparts who have investments in both husband and father roles.

22~mong women, circumstances of the immediate family context were not considered relevant since it is presumed that, as a result of theu unique socialization pressures, older women have generally followed the norm with respect to traditional female life course patterns. In this respect, women in this age gmup are likely to weight social mles outside the realm of work with particular emphasis, causing them to have commitred less of their personal resources to the creation and maintenance of the implicit career contract. How women are currently situated within the family context is less relevant since, for example, they may no longer have children to care for or, their marriage@) may have ended. Rather, it is the historical pattern of privileging different social roles in the context of identity formation that is relevant here. For men, although they may have historically viewed themselves as primarily defined by thei employment mles, under the cirwmstances of downsizing it has become apparent that roles played within the immediate family (e.g., as husband and father) may have a moderating influence on implicit career contract investment and subsequently, on the perception of its violation.

CHAPTER 3.

Implications For The Present Study

Despite what we know ftom the literature on the effects to workers undergoing organizational

retrenchment, to date there have been no investigations into the psychological consequences to

cohorts whose early work experiences were uniquely conditioned by the structural and cultural

contingencies of the social contract. These contingencies were such that job security into

retirement came to be viewed as a requisite form of re-payment for a lifetime of hard work and

loyalty to the firm. Moreover, these exchanges were structured slightly differently according to

worker status such that managers and highly tenured workers could expect at least a modicum of

increased job stability relative to their non-management and low tenured counterparts. Recall

how the modem bureaucracy's internal labour market (ILM) was responsible for creating career

paths that assured long-term employment and delayed rewards for contributions by way of

seniority rules. These rules were largely responsible for the notion of the 'career job', and held

that longstanding loyalty to the firm would be rewarded through increments in seniority and job

security. The expectations associated with this work life course history are embodied within a

concept I have referred to as the 'implicit career contract' for the purpose of examining how

workers of this generation may be uniquely affected by campaigns of targeted downsizing via the

early retirement incentive program (ERIP). The nature of this traditional form of employment

agreement is such that it is concerned not merely with an equity in exchange (for example, what

an employee believes that he is owed by the firm after years of employment), but is additionally

shaped by relational elements that tend to deepen the commitment to the contract, and

conversely, intensify the psychological consequences associated with its violation. This thesis

proposes that downsizing by way of the ERlP is perceived by older workers as a flagrant

disregard for the terms contained within the contract, or violation. It is furthermore posited that a

violation of the relational aspects of the contract cannot be remedied through monetary forms of

compensation. As such, firms that offer severance packages to workers as an incentive for early

exit are viewed by workers as challenging the socio-emotional basis of loyalty and fidelity to the

relationship and as such the incentive packages are ill-suited to assuage targeted employees.

Because the implicit career contract is bdamentally tied to traditional notions of

employment relations which consider demonstrations of loyalty and commitment to the firm as

fair exchange for job security into retirement, the ways in which workers will respond to its

violation can be reasonably predicted. Employees who detect a rejection of implicit career

contract terms (e.g., as a result of an employer's apparent withdrawal of the promise to provide

job security until plans for a voluntary as opposed to pressured retirement are secured) likely

respond in kind through declines in company loyalty and related organizational citizenship

behaviom (i.e., contributions made to the firm that are generally considered to be outside the

realm of required work duties, although play a critical role in facilitating overall organizational

bction). Furthermore, as we have seen, the feelings of anger, resentment and betrayal that

typically accompany implicit career contract violation frequently result in concomitant declines

in job satisfaction. Finally, in accordance with the dynamics of organizational change as

suggested by crisis theory, workers who feel uncertain as to their hture within an organization

tend to adopt a protectionist stance that may lead them to conflict with other members of the

work group. Within firms that have chosen to implement an age-biased downsizing strategy (i.e.,

the Em), it can be supposed that older employees likely feel resentful that tbe burden for further

staff reductions bas been placed squarely upon them. It is therefore expected that such work

environments contain evidence of an inter-generational tension.

3.1 Shifts in the Social Contract as a Determinant of Implicit Career Contract Commitment: The Present Study

The objective of this study is to delineate the effects with respect to one aspect of the changes to

the social contract, namely, how these changes have come to affect older workers and their

ability to f'unction within organizations. It is supposed that the present effects on workers are the

result of broad shifts in the social contract, which in turn have fimctioned to undermine

traditional structures and cultures within f m s that had previously operated according to the

contingencies outlined within the traditional employment agreement. This study presumes that

macro-level shifts at the level of the political-economy have measurable repercussions at the

level of the individual worker. Given their historical work life course, it is reasoned that workers

50 and older will prove highly susceptible to these socio-economic changes as they are played

out within the organization. Employers that demonstrate their withdrawal of support for the terms

contained within the traditional career contract will elicit reactions fiom employees that show a

similar withdrawal fiom their own employment obligations. Moreover, the nature of the

traditional implied contract is such that it means something slightly different to different

subgroups of workers. As a consequence of having made differential investments into creation

and maintenance of the implicit career contract, workers with management status, high tenure,

those who are male, and men who are dually committed to work and family roles will likely view

a violation of this contract somewhat differently, with implications for differences in

psychological outcomes.

Figure 2 outlines the iterative exchange among the proposed levels of analysis. Applying

what is known with respect to current socio-economic changes and the move toward what has

been referred to by observers as a post-industrial global economy, it is possible to link these

changes with specific campaigns of organizational restructuring inasmuch as these are aimed at

making the organization more viable within the new macro-structural environment. These

organization-level (or, meso-level) shifts are in turn related to changes in worker perceptions of

the employment relationship specifically with regard to contributions that are owed to the

employer, and conversely, the inducements an employee believes should be received in return. It

is proposed that worker perceptions of the promises contained within the implicit career contract

differ according to the particular status group in which they are a member. As such, the model

includes a series of employee status characteristics expected to affect relevant psychological

outcomes. These are: occupational status (i.e., management versus non-management), length of

tenure (i.e., duration of the telationship with a single employer), gender, and among males, the

family context. The psychological outcomes proposed to be affected by the perception of implicit

career contract violation include, for reasons specified previously, job satisfaction, attitudes

toward organizational commitment, and attitudes toward company loyalty. Because it is assumed

that the implicit career contract stipulates such employee contributions as loyalty and

commitment, then lower relative levels of these measures in a comparison between two

organizations, one downsized the other not, is viewed as a proxy measure of lower overall

implicit career contract commitment. In accordance with available evidence, low job satisfaction

SHIFTS IN THE SOCIAL CONTRACI* Economy-driven systemic transformation of social institutions

and social relations

Institutional-Level Shifts Organhtional restructuring and retrenchment affects contingency norms in the employment

exchange

SPECIFIC WORKFORCE REDUCTION STRATEGIES - ag., the ERKP

Implicit Career Contract Shifts Perceived changes in the obligations that

bind employer and employee

FEELINGS OF INSECURITY I n c d tendency to conilict with otbcr membtn of the workgroup

t Gender

Occupational Statw Male Family Context - 1- Employer-Directed Attitudnl Shifts

Reduced levels of job satisfaction Lower perceived importance of company loyalty and performance of organzational

citizenship behaviour

-re 2= Shifts in the Social Contract*. Demonstrates how shifts in the social contract at the macro-level are linked to those at the level of the implicit career contract. The bi-directional arrows represent the iterative exchange among these levels as changes at any one level resonates at each of the others.

is generally associated with this form of psychological withdrawal from the organization and is

therefore included as part of a composite measure of implicit career contract commitment among

older workers. Additionally, with direct reference to the contextual features of the downsized

organization as far as these are marked by a distressing level of uncertainty, it is expected that

older workers will react to pressures for early exit exerted by a campaign of targeted downsizing

by conflicting with younger members of the workgroup.

3.2 Objectives and Hypotheses

The purpose of this study is to explore the relationship between company downsizing policies

that target older workers and subsequent changes in employer-directed attitudes, denoted as shifts

in employee commitment to the implicit career contract. The specific objectives of the present

study are: 1) to explore contextual features of the downsized organization and how these are

perceived by older workers targeted by the early retirement incentive program (ERIP); 2)

to determine both the type and extent of differences in employee attitudes related to use of the

early retirement incentive program as a downsizing mechanism; and, 3) to determine whether

company downsizing policy interacts with employee tenure, occupational status, gender, male

family context to produce significant predictors of low implicit career contract commitment.

Integrating current knowledge on psychological employment contracts, the principles of equity,

and the dynamics of organizational retrenchment, it is predicted that organizational downsizing

by way of the early retirement incentive program will have several negative socio-psychological

consequences for older workers. To this end, the present study tests two kinds of hypotheses.

The first kind focus on the comparative perspectives of older workers within downsized and non-

downsized organizations regarding the experience of retirement pressures, and the presence of

inter-generational conflict at the workplace. The second set of hypotheses examine differences

among workers within different employment contexts with respect to the four proposed

dimensions of implicit career contract commitment: job satisfaction-intrinsic, job satisfaction-

extrinsic, attitudes toward the importance of company loyalty, and attitudes toward the

importance of organizational citizenship behoviours.

3.2.1 Em~lovee perce~tions of the ornanizational context

1. Employees who work within the organization undergoing retrenchment by way of the

ERIP will report greater pressure upon older workers to retire from the company

compared to employees who work within the more stable environment.

2. Employees who work with the organization that has implemented the E R P as a

downsizing mechanism will report greater conflict between older and younger work

groups compared to employees who work in environments that have not been downsized

in such a manner.

3.2.2 Em~lovee commitment to the im~licit career contract

3. Based upon the general patterns of reaction among employees undergoing organizational

retrenchment, there will be a significant difference in employer-directed attitudes between

older workers within different employment contexts. Older workers whose employers

have implemented the early retirement incentive program (EW) as a mechanism to

downsize will likely demonstrate less commitment to the implicit career contract, relative

to their counterparts who work within more stable environments. The employerdirected

attitudes used as proxy measures of implicit career contract commitment include: 1)

attitudes toward the importance of company loyalty, 2) attitudes toward the importance

of organkarional citizenship behaviour, and 3) measures of job satisfaction. Low implicit

career contract commitment will translate as lower relative levels of job satisfaction, and

greater scepticism toward the value of both company loyalty and the performance of

organizational citizenship behaviours as important determinants of mobility within the

organization.

4. Based upon the evidence for a theory of multiple contracts, company downsizing policy

will interact independently with length of tenure, occupational status, gender, and male

family contefl to produce the lowest relative levels of implicit career contract

commitment. Specifically:

4ai. Highly tenured employees undergoing restructuring by way of the ERIP will

demonstrate lower implicit career contract commitment than employees with shorter

tenure.

4aii. Highly tenured employees caught amidst restructuring will be less committed to the

implicit career contract relative to their peers who work within the more stable

environment.

4bi. Employees with management status within the organization undergoing the ERIP

will exhibit lower implicit career contract commitment than employees with

non-management status.

4bii. Employees with management status and experiencing restructuring will show less

commitment to the implicit career contract compared to their counterparts who work

within a more stable environment.

4 c i Male employees caught in the midst of restructuring by way of the E R P will

demonstrate lower implicit career contract commitment relative to theu female

counterparts.

Comparisons made on the basis o f male family context refer to those msde between male employees who are both mmed and have children and those who are married, are mam*ed without children, or who are both unmamred and without children.

4cii Male employees targeted by the ERIP will exhibit lower levels of implicit career

contract commitment compared to men who work within the more stable environment.

4di. Within the company that has implemented the E W to downsize, married men with

children will demonstrate higher levels of implicit career contract commitment compared

to men differently situated within the family context.

4dii. Men who are not married with children and who work within the downsized

environment will demonstrate lower levels of implicit career contract commitment

relative to their counterparts who work within the non-downsized environment.

5. In accordance with a theory of multiple contracts, company downsizing policy will

interact independently with employment tenure, occupational status, gender, and male

family context, to produce stronger predictors of low job satisfaction, and greater

scepticism toward the importance of both company loyalty and the performance of

organizational citizenship behaviours (i.e., lower levels of implicit career contract

commitment), compared to the effects of company policy alone. In particular, within the

context of the ERIP, the employee status characteristics that will produce the lowest

levels of implicit career contract commitment include: high tenure, managerial status,

being male, and among men, not having investments in both husband and father roles.

3 3 Company Policy as a Determinant of Implicit Career Contract Commitment: A Case Study Comparison

Two case studies, drawn from a broader project of research into "Issues of an Aging Workforce"

(IA W)24 and conducted at the University of Toronto, were selected to meet the objectives of the

present study. Although both are large North American financial senice institutions, there is one

difference between them that makes them ideal for comparison. Management at the U.S.

company previously implemented a series of downsizings with an emphasis on early retirement

and, at the time of study, was undergoing yet another restructuring in the same manner. In

contrast, its Canadian counterpart had managed to keep employees relatively insulated from job

disruption and career instability. In fact, despite the increasingly widespread trend toward

downsizing in this sector, this latter company stands out due to its seemingly continued

commitment to the traditional employment contract. In particular, unlike its US. counterpart, the

Canadian company has maintained a reputation for rewarding tenured employees with a

relatively high level ofjob security until retirement. On this basis it is expected that the

psychosocial effects of the early retirement incentive program will be made evident through a

comparison of employee attitudes within these respective work environments.

" The Innovations Fund of Human Resources Development Canada funded a program of research between 1993 and 1996 into "Issues of an Aging Workforce"+ The research was conducted by CARNET: The Canadian Aging Research Network, based at the Centre for Studies of Aging, University of Toronto. Seven case studies were completed, along with supportive secondary analysis of existing data and literature reviews. For a comprehensive overview of Roject goals and research questions, the readet is referred to Marshall (19%).

3.3.1 The Sun Life and Prudential case studv sites: mrtraits in brief

1) Sun Life

The Sun Life Assurance Company of Canada is an intemational, private sector financial services

finn and, at the time of study, was the nation's largest. The firm provides a wide range of

financial products and services including life, health and disability insurance, annuities and

pensions, mutual funds and savings plans. and trust, banking and investment management

services. The parent company and its international subsidiaries serve four million clients in seven

countries including Canada, the US., Britain, Ireland, the Phillipines, Hong Kong, and Bermuda.

In 1992 alone, consolidated revenues were over $8 billion, and consolidated assets under

management totalled $79.6 billion (Centre for Studies of Aging 1995a).

Both the corporate and Canadian headquarters of Sun Life are located in Toronto. Major

fimctional divisions of the company include agency sales and marketing, computer systems,

pensions and group insurance, investment, finance and administration, human resources, and

public relations and communications. Within these divisions are over 1,000 individual job titles.

Some of the more common occupations include actuaries, underwriters, claims processors,

computer systems analysts, and investment managers. As of March 1994, the total count of active

Sun Life staff worldwide was 6,622; over half of these employees (3,397) were in Canada

(Centre for Studies of Aging 1995a).

The company has a traditional internal labour market policy. It generally recruits young

employees for entry-level jobs and promotes from within thereafter. Not surprisingly, increasing

age is associated with longer employment history at Sun Life. In large part due to the company's

enormous success it has resisted introducing formal downsizing strategies involving early

retirement or other severance programs. Employees have thus remained relatively secure in their

jobs (Centre for Studies of Aging 1995a).

2) Prudential

The Prudential Insurance Company of America is one of the largest diversified financial

institutions in the world and, based on total assets, was the largest insurauce company in North

America as of December 1993. The Company offers services and products in three main areas: I)

insurance, investments and home ownership for individuals and families, 2) health-care

management and other benefit programs for employees of companies and members of groups,

and 3) asset management for institutional clients and their associates. In 1993, Prudential

revenues exceeded $46 billion and total consolidated assets were approximately $21 8 billion

(Centre for Studies of Aging 199%).

The corporate headquarters are located in Newark, NJ, but the company has branch

offices worldwide and together these employ over 100,000 people. Common occupations include

insurance broker, agent, and financial advisor (Centre for Studies of Aging 1995b).

Prudential has reorganized and restructured several times and at the time of study was in

the midst of yet another restructuring. In an attempt to reduce its workforce, the Company

adopted a downsizing strategy in the form of an early retirement program called Combo 7. The

plan, which was offered only within selected business units management felt required additional

downsizing to reach top-quartile performance, allowed employees who were at least 48 years of

age by 1994 with at least 10 years of experience to be eligible for early retirement. Under Combo

7, employees were able to add seven years to their age or length of service in the combination

they deemed most beneficial with respect to pension payouts (Centre for Studies of Aging

1995b).

Combo 7 represents a standard severance package offered by employers looking to reduce

the size of the employee complement by way of age-biased forms of downsizing. Recall how

Rousseau (1993) and others have argued that these monetary forms of compensation typically

prove inadequate as measures for healing the socio-emotional rift that results fiom violation of

the implicit career contract. In the present case it is expected that workers at Prudential feel that

88

despite the amount of pension payouts, the pecuniary benefits offered by the company are not

enough to redress the sense of inequity produced as a result of their employer's failure to Live up

to the promise of job security in exchange for years of loyal and productive work. This is

expected to translate into lower levels of implicit career contract commitment among these

worken (along the four dimensions previously specified), relative to their counterparts at Sun

Life who are still able to enjoy the security benefits provided by a traditional employment

system.

PART 11

METHODOLOGY AND RESULTS

CHAPTER 4.

Methodology

4.1 TheData

As mentioned, the data for the present study were obtained fiom the Issues of an Aging

Workforce (LAW) Project conducted at the University of Toronto between 1993 and 1996. Data

sets were derived from two case studies selected for comparison: the Sun Life Assurance

Company of Canada and the Prudential Insurance Company of America. The data collection

phase at each site spanned approximately eight months. Data were gathered using a multiple

methods approach that included key informant interviews, focus groups, mailed surveys of

managers and employees, and archival sources such as human resource departments, company

annual reports and publications. It should be noted, however, that only quantitative data derived

from the employee survey were used to meet the objectives of the present study. Employee

samples fiom both the Sun Life and Prudential case study sites encompassed only individuals

who worked out of their respective corporate offices, and did not include insurance agents. All

were white-collar employees who performed duties ranging fiom professional and technical, to

sales and clerical.

4.1.1 The Sun Life em~lovee sam~le

Toronto is home to Sun Life's Canadian and international headquarters, made up of three sites: 1)

Corporate Headquarters, 2) Canadian Headquarters, and 3) the Atria. All employees @ = 1,593)

in these three locations, defined as the Toronto case study site, were sent the Employee Survey

through company mail. Most of the employees (907, or 58.8%) in the case study population work

in the Canadian Headquarters. The remaining employees are split roughly between the Corporate

Office (302, or 19.6%) and the Atria office (334, or 2 1.6%). For the Employee Survey, a total of

83 1 questio~aires were returned for a response rate of 52%. The relatively low response rate is

largely attributable to the fact that full personalization techniques as part of an active follow-up

strategy could not be used at Sun Life, as management considered it to be potentially too

bothersome to employees. As a result, no identification numbers were assigned to individual

questio~aires, and no fbrther personalized letters could be sent to respondents (Centre for

Studies of Aging 1995a).

Over 99% @=822) of the employees describe their current job as full-time employment

and only 1% @=9) as part-time employment. All part-time employees were excluded From the

analysis since their experiences differ from full-time employees and there are too few to support

analysis. Moreover, since the objective of the present study was to investigate the effects of a

specific company policy on older employees, the number of relevant cases for analysis has been

reduced M e r . At Sun Life, the number of completed questionnaires returned by workers 50

and older was 99, 12% of the total study sample.

4.1.2 The Prudential em~lovee sam~le

Three separate corporate offices, located in the northeastern United States, constitute the total

Prudential case study population (n = 8,115). A representative sample of approximately

one-in-five employees was drawn from each site and surveys were sent through company mail to

a total of 1,566 employees. The collective response rate for the Employee S w e y from the Fort

Washington, Newark, and Roseland offices was close to 70% (n = lO86), largely due to

management's allowance for fbll personalization techniques and an active follow-up strategy to

be used with respondents. Identification numbers were assigned to individual questionnaires, and

personalized letters reminding employees to respond were sent out on two follow-up occasions.

Adjusting for workers under 50, the total proportion of the original sample population eligible for

analysis in the present study is 9% (n = 137). All employees reported full-time job status.

4.2 Instrumentation

The survey instruments (Appendix A) share a common structure, employing the same research

themes and most of the same questions. This facilitated comparison of the employee responses

between case sites. The survey was designed by the IAW research team, drawing on questions

used in other surveys. A pilot test was conducted with a small group of employees from each site

(Centre for Studies of Aging 1995a; Centre for Studies of Aging 1995b).

Specific items within each survey constitute relevant research variables for meeting the

objectives of the present study. The majority of the independent variables were measured by

items that asked respondents to indicate such descriptive features as age, income, education,

gender, marital status, number of children, years on the job (i.e., tenure), and type of occupation.

Each of the variables was measured by a single item and has high content validity. One other

predictor variable, company downsizing policy, is given by the individual's employment within

either of the respective organizations.

The dependent variables, indicators of implicit career contract commitment, are defined

and measured as follows:

1. Job satisfaction: For the present study, job satisfaction has been defined as general feelings of

pleasure, freedom, and gratification associated with one's work. A total of six individual items

(A1 lc, d, e, f, G6a, b)= fiom the IAW survey were selected as face valid measures of job

satisfaction. Examples of items include, "I like my job" and "The work I do is one of the most

satisfying parts of my life". Respondents were asked to rate items on a Cpoint scale ranging from

strongly agree to strongly disagree. A factor analysis was performed to investigate whether these

items measure more than one dimension of the research variable. Results fiom the analysis are

presented in Table 1.

Table 1 Rotated Factor Matrix for Implicit Career Contract Dimen~ion Job Satisfaction

(Varimax Rotation)

25 Item designations concur with those listed in the Sun Life employee survey.

93

1

The pay is good

The benefits are good 1

My cbances for promotion are good Eigen values: Factor 1 = M O ; Factor 2= 1.29 Percentage of variance explained: Factor 1 =36.3; Factor 2= 16.1 n of respondents who provided answers to all items = 225 *Items were judged as measures of a factor if they met a loading threshold of -50. The hll factor matrix was used in the analysis and has been reproduced here. Cronbach's alphas for the intrinsic and extrinsic indices ofjob satisfaction are -78 and 52, respectively.

0.22

0.15

0.3 1

0.71

0.78

0.57

The items load onto two underlying factors pertaining to intrinsic and extrinsic measures of job

satisfaction. Three of these items (A1 if, (36% b) load onto the intrinsic dimension, yielding

factor loadings that range between .70 and .84. The remaining items (Al lc, d, e) load quite

highly onto the extrinsic dimension with loadings between .57 and -78. The Cronbach's alphas

for these indices are .78 and .52, respectively?

Mean scores for employee level of job satisfaction were calculated for each participant by

summing the scores of each subscafe dividing by number of items, with the lowest possible

mean score being 1, representing low job satisfaction, and the highest possible mean score being

4, representing high job satisfaction.

2. Attitudes toward the importance of company loyalty: This variable is defined as the extent

to which employees view company loyalty as an important determinant of 'getting ahead' within

the organization. A single item (BZk), scored on a 5-point scale ranging from not at all important

to extremely important, provided the measure for this variable. It is reasoned that the greater the

importance an employee places upon demonstrations of loyalty as a means for achieving mobility

within the organization, the more positive their attitudes will be toward company loyalty as an

employee trait. It is expected that older workers undergoing targeted restructuring will be less

inclined to view company loyalty as a means of getting ahead (or indeed, keeping one's job) at

the company, and will therefore tend to have a more negative perception of the loyalty trait.

3. Attitude toward the importance of organizational citizenship behaviours (OCB): This

variable is defmed as the extent to which employees view the performance of organizational

citizenship behaviours as important to 'getting ahead' within the company. Again, it is expected

that the greater importance an employee places upon such behaviour for achieving career

mobility reflects more positive attitudes toward these types of contributory behaviours in general.

*' Although the alpha value for the extrinsic job satisfaction index appears low, it is in fact quite acceptable given that only three items comprise the index. In this instance for example, if the number of items were increased by a factor of four to 12 items, the alpha would k inflated to a value of over .80. The formula for estimating the increase in the alpha score as a h d o n of an increase in the number of test items is the following: rk = kr, , / I + (k-l )t, , (Nunnally, 1978).

Three items (I324 e, and i) were used to create an index for this variable. A factor analysis was

performed to discern whether these measures tap into a common dimension. The results, outlined

in Table 2, show a single factor onto which each of the items loaded quite strongly, yielding

loading scores between .77 and .83. The Cronbach's alpha for the index was fairly high at .77.

Table 2 Unrotated Factor Matrix for Im~licit Career Contract Dimension Attitudes Toward the

Importance of brganizational Citizenship Bebaviour*

oeiated with getting ahead in the compa

bat iveness , inventiveness 0.82 I 1 Taking initiative Eigen value for Factor 1 =2.25; percentage of variance explained 256.3 n of respondents who provided answers to all items = 228 *The matrix could not be rotated as items loaded onto single factor. **[terns were judged as measures of a factor if they met a loading threshold of SO. The f i l l factor matrix was used in the analysis and has been reproduced here. The Cronbach's alpha for this index = .77

Mean scores for the organizational citizenship behaviour (OCB) index were calculated by

summing the items and dividing by five, the highest possible score being 5, indicating feelings

that the performance of OCB is extremely important to getting ahead, and the lowest score 1,

indicating feelings that OCB performance is not at all important to getting ahead in the

company". High scores on this variable are indicative of more positive attitudes toward

employee citizenship behaviour, whereas low scores indicate the contrary.

In order to W e r validate the concept of implicit career contract commitment, a second-

order factor analysis was conducted using each of the four preceding constituent dimensions: job

satisfaction-intrinsic, job satisjiaction-extrinsic, attitudes toward the importance of company

27 This item was recoded from the original survey format (a 0 through 4 scale) such that no respondent could receive a score of I~SS 61~1 one for this index.

loyalty, and attitudes towrnd the importance of orgmizational citizenship behaviour. Results

(Table 3) showed that all four finborder dimensions load strongly on the second, with attitudes

toward the importance of organizationaZ citizenship behaviour and job satisfaction (both types)

yielding the highest loadings. The alpha for this index was calculated at .54, a good result (see

footnote #20).

Table 3 Second Order Factor Analysis onto Construct Implicit Career Contract (ICC)

Commitment*

Job satisfaction (inhinsic)

I Job satisfaction (extrinsic) I 0.66 I . . -- - - - - . -.

Attitudes toward the importance of company loyalty I -

0.58

n of respondents who provided answers to all items = 227. *The matrix could not be rotated as items loaded onto a single factor. *+Items were required to meet a loading threshold of .5O. The full factor matrix was used in the analysis and has been reproduced here. The Cronbach's alpha for this index = 0.54

Attitudes toward the importance of OCB

The final two dependent variables pertain to employee perceptions of the organizational context

0.75

as these specifically relate to the characteristics of work environments undergoing retrenchment

8

Eigen value for Factor 1 = 1.77; percentage o f variance explained = 44.3

through downsizing:

4. Employee perceptions of pmsun on older workers to retire: This variable was measured

by a single item (F11) asking employees to comment on whether they feel there is pressure

within their work environment for middle-aged and older workers to retire. Responses were

measured on a 3-point scale, where a score of 1 indicates no pressure and a score of 3 indicates

Strong pressure.

5. Inter-generational conflict: Inter-generational conflict was measured by a single,

dichotomous bedno) item (G3) asking employees to report whether they fed there is tension

between older and younger workers.

Because neither of these latter two variables have been conceptualized as direct measures

of implicit career contract commitment but rather as indicators of environmental tension (a key

feature of the downsized workplace), these data have not been included in the fmal regression.

Instead, responses to these items were examined using a bivariate analysis technique that tests for

significant difierences in the response patterns of workers within each company.

Results

4.3 Descriptive Statistics

4.3.1 kmogra~hics

Table 4 outlines the demographic characteristics of the Sun Life and Prudential samples. For the

combined sample of Sun Life and Prudential employees, the mean age of the 236 respondents

was 55 years (SD = 4.2). Just under half(48%, n= 123) of the sample were male. A majority of

the total sample (56%) was married with children, however, among men just under a quarter

(23%, g=55) were thus situated within the family context. A slightly greater number of men at

Sun Life were both married and had children (29%, compared to only 20% at Prudential). Most

respondents were in non-management level positions (53%, g = 124), and of this sub-sample, just

under half @ = 60) were professionals. All other employees @ = 64,29%), performed support

services such as clerical or janitorial work. In accordance with Sun Life's internal labour market

policy, the average employment tenure of Sun Life workers was slightly higher compared to that

of employees at Prudential (22 and 20 years, respectively).

Given that both companies perform highly specialized financial service functions, it is not

surprising that a substantial minority of respondents (42%) hold a university degree.

Approximately one-fourth (1 2%) of these were graduate-level degrees (e.g., M.A. or Ph.D). With

regard to annual income, on average, Sun Life employees earned considerably more than their

counterparts at Prudential (amounts ranged between $60,000 and $79,000 versus $40,000 and

$59,000, respectively). It should be noted that despite differences in rates of exchange (both

Table 4 ProNt of Sun LSe and Ptwdentirl Employees @=236)*

Education Some HS Grad HS Some post Cert/dip/other BA/BSc MA/PhD

Company tenure 0-5 years 6- 10 years

11-15 years 16-20 years 21-25 years 26-30 years 3 1-35 years 36+ years

Income ($/yeat) <20,000 20-3 9,000 40-59,000 60-79,000 80-99,000 100,000 and up

I Gender Male Female

Age 50-54 years 55-59 years 60-64 years 65-69 years 70+ years

-- -

Family Context Mamed wkhildren Other

* Percentages may not add to 100 due to rount ++n's vary due to missing cases.

The n for this study was derived using a subsample of workers fmm both Prudential and Sun Life who were aged 50 and older.

with respect to relative currency value and in terms of purchasing powefl, for purposes of the

analyses herein these differences are not considered relevant since is presumed that it is the

psychologial impact of salary levels on workers that is probably more accurately tied to an

individual's income, relative to that of other employees in his or her company.

43.2 Studv measures

For the combined sample, Table 5 contains the means and standard deviations for the measures

of implicit career contract commitment: job satisfaction-intrinsic, job satisfocon-extrinsic,

attitudes toward the importance of company loyalty, and attitudes toward the importance of

organizational citizenship behaviour (OCB) .

Table 5 Mean scores and Standard Deviations for the Dimensions of Implicit Career Contract

(KC) Commitment @=236)

-

I Job satisfaction (extrinsic-type) 1 2.66 I 0.53 I I Anitudcs toward the importance of company loyalty 1 3.04 1.28 1 I Attitudes toward the importance of OCB I 3.9 1 0.85 1

Mean scores for the two indices ofjob satisfaction were quite high: 2.89 and 2.66 for intrinsic

and extrinsic measures of satisfaction, respectively. For attitudes toward company loyalty,

respondents tended toward the middle of the scale for an average score of 3.04. The mean score

" Currently, in accordance with official cumncy exchange rates, the Canadian dollar is worth approximately 6 5 cents U.S. In tern of purchasing power however (determined by the amount of goods that can be bought domestically with Canadian dollars compared with the same amount of goods U.S. consumers are able to purchase with their own cumncy), the current exchange value of the Canadian dollar is actually about .82 cents us.

for the attitudes toward the importance of organkatio~l citizenship behmiour index was

notably higher at 3.90, indicating that a considerable proportion of respondents view

commitment behaviours as holding some importance for getting ahead within the company.

4.4 Bivariate Analyses

4.4.1 Emalovee rwrce~tions - of omanizrrtional context

The first objective of the present study was to explore the contextual features of the downsized

organization and how these are perceived by older workers targeted by the early retirement

incentive program (ERIP). Hypothesis I and hypothesis 2 each involve categorical variables

concerned with employee perceptions of the organizational context as these relate specifically the

characteristics of the downsized work environment. Based on a review of the evidence, it is

proposed that older workers within the downsized environment (i.e., Prudential) will be more apt

than workers at Sun Life to report that there is pressure on them to retire, and more likely to

report the presence of an inter-generational conflict at their workplace. The hypotheses were

tested using a Pearson chi-square analysis to determine whether response patterns differed

between the two companies. Results are outlined in Table 6. A significantly greater number of

Prudential employees reported that there is mild to strong pressure for workers in older age

groups to retire (73% compared to only 34% at Sun Life). Additionally, over twice as many Sun

Life employees (35% compared to only 16% at Prudential) indicated that there is no such

pressure on employees at their company (x-3.37, &3, p<.001; Cramer's V=.43). This fmding

provides support for the proposition that older workers undergoing targeted downsizing by way

of the ERIP do feel there is greater pressure placed upon them to retire compared to their

counterparts who work within more stable environments.

Table 6 Employee Perceptions of Organizational Context as a Function of Company Downsizing

Policy &=236)

Reported level of pressure on middle-aged and older workers to retire"

No pressure

Mild pmsure

Sun Lire employees (%I

Prudential employees (%I I

1 Unsure I 3 1 I I I I

$=I 38, dp l , Q= 24; Cramer's V=.09

'Toasion among older and younger worken at the company (% Agree)b

, . - , , , , + - .

*,. 3 2.- . ; ;,. , +,,. . . 1 . I J -$P* k . ~.2s* ,&.c.-,3:~,-d ., . . %.r..,-.r... .- r.e-,.ir-rr.wr*wr.c("r?.:l%*-- . ..r 4, 4 . C . -

With regard to employee impressions of the presence of inter-generational conflict at their

workplace, results show that although a greater number of Prudential employees reported tension

~ ~ 4 3 . 3 7 , dF3, g<.OO l ; Crarner's V=.43

I- 26

- 9 ce2,&k krm. .+ f i c,4-9 L G r i &@~&.&$&?$ -U .G:-ii & . 21. : ;

between older and younger workers (34% compared with only 26% of Sun Life employees), this

34 ~ ~ & $ $ ~ ? ~ ~ ~ ; ~ z&,: ; ,l ,. . . . . : , , . , - . . . >:

difference was not statistically significant (~L1.38, df=l, .24; Cramer's P.09). Although

this finding does not l l l y support the proposition that older employees undergoing targeted

forms of downsizing will tend to conflict with younger members of the workgroup, the direction

of the results is suggestive. Further investigation into the crisis dynamics of workgroups

experiencing selective cuts using larger sample sizes and more detailed questioning in this regard

seems warranted.

4.4.2 Em~loyee commitment to the irn~licit career contract

Recall that the remaining objectives of the present study were to first discern whether employees

from each company differed sigdicantly on each of the indicators of implicit career contract

commitment, and secondly, to discover if these differences were intensified as a result of an

interaction between several relevant employee status characteristics and company downsizing

policy. Hypotheses three and four address these objectives, and were tested using analysis of

variance.

Company wlicv and im~licit career contract commitment

Hypothesis 3 predicts that workers within the downsized workplace will demonshate less

commitment to the implicit career contract compared to workers employed within the more

stable environment. Specifically, it is expected that workers at Prudential will score lower on

measures ofjob satisfactio fi-intrinsic, job satisjktion-extrinsic, attitudes toward the importance

of company loyalty, and attitudes toward the importance of organizational citizenship behatiour.

The analysis of variance required that several variables, suspected to potentially codound results,

be controlled. A preliminary correlation analysis revealed there to be significant associations

between several employee characteristics and the two outcome measures associated with implicit

career contract commitment. As such, the analysis of variance for intrinsic job satisfocon

controlled for differences in the employee samples with respect to gender, employee income, and

occupational status by treating each of these variables as co-variates, thereby partitioning out

their effects. Similarly, employee attitudes toward the importance of company loyalty was

significantly associated with gender, hence the independent effect of this variable was

additionally controlled. The analysis of covariance procedure allowed for a clearer implication of

company downsizing policy as the main correlate of implicit career contract commitment.

Results of the analysis are outlined it Table 7.

Table 7 Means (standard deviations) for the Dimensions of Implicit Camr Contmct Commitment

and Comparisons with F Values from the ANOVAs (p236)

ICC Commitment Dimension Sun Life Prudential F Value I L I

Job satisfaction (intrinsic-type)# 2.98 (0.65) 2.82 (0.68) < 1

I Job satisfaction (extrinsic-type) 1 2.71 (0.56) 1 2.62 (0.51) 1 1.87 1

I Attitudes toward the importance of company loyalty1 1 3.15 (1.30) 1 2.96 (1.27) 1 3.16. I

.

Attitudes toward the importance of 1 4.07 (0.74) 1 3.77 (0.90) I Total n I 99 I 137 I 236 Independent effects of gender, anrmal income, and occupational status held constant.

A

Independent e f f m of gender held constant. *E d o , ***p c.01

Findings indicate that, on average, employees at Sun Life did in fact score higher on each

measure of implicit career contract commitment than their counterparts at Prudential. However,

differences between employees within the two companies were significant only for attitudes

toward the importance of organizational citizenship behuviours @=7.79, g<.0 1). Additionally,

differences between employee attitudes toward the importance of company loyalty approached

conventional significance levels @=3.16, p<. 10). These findings suggest partial support for the

proposition that workers undergoing downsizing demonstrate lower relative levels of implicit

career contract commitment when compared to their counterparts employed within a more stable

environment.

Com~anv wlicv and em~lovee status characteristics: interaction effects

In accordance with a theory of multiple contracts, Hypothesis 4 has been divided into the

following eight related hypotheses predicting an interaction between company downsizing policy

and several relevant employee status characteristics:

Hyptkesis 4ui) predicts that highly tenured employees undergoing restructuring by way of the

ERIP will demonstrate lower commitment to the implicit career contract than employees with

shorter tenure.

Hypothesis 4aiO predicts that highly tenured employees caught amidst restructuring will be less

committed to the implicit career contract relative to their peers who work within the more stable

environment.

Based upon the increase in benefits, including job security, that had traditionally accompanied

longer employment tenure, it is presumed that highly tenured employees undergoing targeted

fonns of restructuring will experience a deeper sense of contract violation and, as a result, will

demonstrate less commitment to the implicit career contract relative to workers in each of the

comparison groups. A two-way factorial analysis of variance was performed to address potential

differences in worker levels of implicit career contract commitment between the companies, and

among employees with low and high tenure. The analysis required that employees at both

companies be divided into discrete categories corresponding to differences in tenure length.

Hence, workers who had been employed by their respective organization for 15 years or longer

were classified as highly tenured, whereas workers who had been employed with the organization

for fewer than 15 years received a low tenure classification. Results are outlined in Table 8.

Table 8 Means (standard deviatioas) for the Dimensions of Implicit Career Contract Commitment

as a Function of Company Policy and Length of Employee Tenure @=236)

I Job satisfaction (extrinsic-type)

I Attitudes toward the importmce of company loyalty " Attitudes toward the importanee of OCBb Independmt effats of gender, income, and (

Sun LUe Employees Prudential Employees (length of tenure)

ccupational status control led. 41ndependent effea of gender controlled. ' Main effect of company policy: F=3.72, r.05; main effect of tenwe: F40.15, eC.0 1

Main effect of company policy: F=5.34, ec.05; main effed of tenure: F=3.46, p<. 10

No interactions between length of employee tenure and company policy were detected. Thus,

despite the significant main effect of tenure regarding attitudes toward the importance of

company loyalty a=10.15, gc.01) and the trend-level effect for atfitudes toward the importance

of organizational citizenship behmtiours @=3.46, g<. 1 O), it is not possible to conclude that

highly tenured employees at Prudential are less committed to the implicit career contract than

low tenured Prudential workers, since similar relationships were found among Sun Life

employees. However, significant main effects for company policy for these two dimensions of

implicit career contract commitment suggest that both high and low tenured employees at

Prudential are less committed than their counterparts at Sun Life. This fmding indicates that

company downsizing policy has a negative linear relationship with implicit career contract

commitment. That is, despite differences in tenure, the company policy that firnctions to target

older workers during downsizing functions to lower employee commitment to the implicit careet

contract along two dimensions: attitudes toward the importance of company loyal@ and the

performance of organizational citizenship behaviours. Although these results do not support

either hypoftkesiF 4ai or kyptIlresis 4aiA, they do serve to further corroborate hypothesis 3.

Hypttkes& 4bf) predicts that employees with management status who work within the

organiaion undergoing downsizing by way of the ERIP will exhibit lower levels of implicit

career contract commitment than employees with non-ntanagentent status.

Hypothesis 4bii) predicts that employees with management status who work within the

organization undergoing restructuring by way of the ERIP will exhibit lower levels of implicit

career contract commitment compared to their counterparts who work within a more stable

environment.

Table 9 outlines findings concerning the relationship among implicit career contract

commitment, company policy, and occupational status.

Table 9 Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment

as a Function of Company Policy and Occupational Status a=236)

Sun Life Employees Prudential Employees (Occupational status) I

-- - -

I Job satisfaction (extrinsic-type) 1 2.76 (0.58) 1 2.74 (0.51) 1 2.69 (0.48) 1 2.58 (0.52) 1

independent effects of gender controlled. ' Main effect of company policy: F4.17, p<.05 Main effect of company policy: F=S.O7, pc.05

-- -- -

Attitudes toward the importance of company loyaltyfi

Attitudes toward the importance of OCBb independent effects of gender and income controlled.

3.00 (1.27)

4.03(0.69)

3.30 (1 -38)

4.04(0.86)

2.63 (1.24)

3.72(0.96)

2.99 (1.24)

3.79(0.87)

Congruent with the contingencies of the traditional employment relationship according to which

management employees were typically granted higher relative levels of job security, it was

expected that these workers should have an intensified sense of violation due to downsizing. As a

consequence, managers at Prudential were expected to demonstrate lower levels of commitment

to the implicit career contract relative to their counterparts in each of the comparison groups.

Contrary to this supposition, however, the results showed no significant interactions among these

variables. Though, aligned with earlier findings, significant main effects for company policy

were found for both attitudes toward the importance of company loyalty (E4.17, g<.05) and the

performance of organizational citizenship be hmtiours @=5 .O7, g<.05). Thus, though these results

do not directly support hypotheses 4bi or 4b& they do provide M e r evidence that for at least

two dimensions of implicit career contract commitment, Prudential employees demonstrate less

commitment to the contract than employees at Sun Life (hypothesis 3).

Hypothesiv 4ci) predicts that male employees caught in the midst of restructuring by way ofthe

early retirement incentive program will demonstrate less commitment to the implicit career

contract relative to their female counterparts.

Hypothesis 4ciO predicts that male employees targeted by the early retirement incentive

program will exhibit lower levels of implicit career contract commitment compared to men who

work within the more stable environment.

The Bielby and Bielby (1988) model suggests that, as a result of their unique life histories, older

male and female employees have likely invested differently in their respective work roles.

Specifically, whereas men are apt to identify most with their employment role, women on the

other hand tend to make identity investments in several other social pursuits, unrelated to work.

On this basis, it is reasoned that relative to their male counterparts, female workers identify less

with employment roles and have thus made fewer investments into the creation and maintenance

of the implicit career contract. Consequently, older female employees undergoing targeted

restructuring by way of the early retirement incentive program are not expected to exhibit

patterns of psychological withdrawal fiom the implicit career contract to the same extent as their

male counterparts. In other words, males who work within the downsized environment will

demonstrate less commitment to the implicit career contract relative to employees in each the

comparison groups (i.e., females in both the downsized and nondownsized environment, and

males who work within the more stable environment).

Results of the analysis are outlined in Table 10.

Table 10 Means (standard deviations) for the Dimensions of Implicit Career Contnct Commitment

as r Function of Company Policy a d Gender @=236)

Sun Lite Employees Prudential Employees (Gender) 11

Job satisfaction (intrinsic-type)I 1 3.10 (0.60) 1 2.80 (0.69) 1 2.86 (0.64) 1 2.80 (0.71) 1 Job satisfaction (extrinsic-type)' 1 2.66 (0.55) 1 2.82 (0.56) 1 2.57 (0.46) 1 2.65 (0.55) 1 Attitudes toward the importance of company loyaltyb 1 3.07(1.33) I 3.30(1.27) I 2.55(1.19) I 3.21(1.25) I Attitudes toward the importance of OCB 4.0 1 (0.77) 4.19 (0.69) 3.8 1 (0.8 1) 3.74 (0.96) Independent effects of income and occupational status controlled. ~ a i n effect of company policy: ~=2.99,& 10; main effect of gender: Ez2.95, p<. I 0 Main effect of company policy: 1=3.03, ~<.10; main effect of gender: E=6.53, gc.05

" Main effect of company policy: E=7.92, ec.0 I

Again, no interaction effects were detected in the analysis. Main effects for gender were found

for two dimensions of implicit career contract commitment: job satisfaction-extrinsic E=2.95,

Q<. 1 0) and attitudes toward the importance of company loyolty @=6S 3, g<.05), where women at

both companies received higher scores than men. Additionally, main effects for company policy

were found for three implicit career contract dimensions: job satisfaction-extrinsic a=2.99,

E<. 1 O), attitudes towmd the importance of company Ioyalty @=3 .O3, g<. 1 O), and attitudes

toward the importance of organizuiional citizenship behaviours @=7.92, ~<.01), although these

effects reached only trend-level for two of the three commitment dimensions.

In accordance with preceding results, it appears that despite employee gender, on the

whole Prudential employees are less cornmined to the implicit career contract than their

counterparts at Sun Life. With the exception of the present findings regarding extrinsic job

satisfaction which showed a trend-level relationship with company policy, the results are

congruent with those previously that show that older employees subjected to a company policy

involving aged-biased downsizing are less apt to agree that demonstrations of company loyalty

and the performance of organizational citizenship behaviours are important for securing hture

rewards fiom the company. Hence, while the present results do not provide precise support for

hypotheses 4ci. or hypothesk 4cK, they do suggest further support for hypothesis 3.

Hypothesis 4di) predicts that within the company that has implemented the ERIP to downsize,

married men with children will demonstrate higher levels of implicit career contract commitment

compared to men d~fferently situated within the family context.

Hypothesis 4dii) predicts that men who are not married with children and who work within the

downsized environment will demonstraie lower levels of implicit career contract commitment to

the relative to their counterparts who work within the non-downsized environment.

The traditional model of the work life course was conceived according to norms associated with

the male pattern during the modern era. Men were assumed to devote themselves primarily to

their work roles whereas women were viewed as identifying more with domestic roles (Bielby

and Bielby 1988). However, Gerson (1993) has suggested that the changing economy along with

related changes in occupational structures, have functioned to erode male bread-winning ability

and have forced a re-definition of men's roles. Shrinking job opportunities and chances for

advancement have necessitated a reassessment of work and family commitments such that the

latter have taken on pronounced importance in men's lives. Therefore, taking into consideration

the way men are presently situated within the context of f d l y , it is apparent that the

investments men make into the maintenance of the implicit career contract may vary accordingly.

On this basis it is presumed that married men who have children will not experience the same

declines in implicit career contract commitment as those differently situated within the family

context. Or, stated differently, men who are not both married and have children will demonstrate

lower levels of commitment to the implicit career contract than men who have such familial

commitments.

Results of the analysis (Table 1 1) revealed the presence of a trend-level interaction

between company policy and male family context for a single measure of implicit career contract

commitment: attitudes toward the i~portance of organizational citizenship behaviour @2.8 1 ,

g<. 10).

Table 11 Means (standard deviations) for the Dimensions of Implicit Career Contract Commitment

as a Function of Company Policy and Male Family Context @=123)

Sun Lifc Employees Prudential Employees (Mak family context)

Job satisfaction (extrinsic-type)

Attitudes toward the importance of company loyalty'

' Main effect of company policy: E4.16, p<.05 interaction effect (company policy*msle family context): F=2.8 1, g<. 10

- - -

Attitudes toward the importance of OCBb

2.75 (0.63)

3.21 (1.13)

Independent effects of income and occupational status controlled. 4.1 1 (0.70)

2.53 (0.42)

2.87 (1.45)

3.90 (0.82)

2.52 (0.41)

2.50 (1.32)

2.61 (0.51)

2.60 (1 .08)

3.67 (0.83) 3 -96 (0.77)

However, despite this neat significant interaction, the group means for this variable suggest a

pattern contrary to that which was supposed. Recall that it was reasoned that men undergoing

downsizing who have made extensive investments in familial commitments (as far as this is

made evident by the fact that they have both wives and children) will be less likely to

demonstrate psychological withdrawal fiom the implicit career contract, relative to their

counterparts in each of the comparison groups. Instead, the present results indicate that married

men with children are actually most apt to be sceptical towards the importance of organizational

commitment behaviour as a means of securing fbture rewards fiom their employer. In fact, the

sizeable difference in the scores for this contract dimension between married men at Prudential

and their counterparts at Sun Life would appear to suggest that there is something abut having

commitments to familial roles that makes downsizing more dificult psychologically, and hence

more likely to S e c t attitudes toward the importance of performing citizenship behaviours.

Perhaps the prospect of job loss for these men seems especially unjust since they have

dependents. In this vein, since organizational citizenship behaviour constitutes a primary means

by which employees seek to repay their employer for fair treatment, it may be that these

behaviours become particularly diminished in importance among men with families.

Congruent with earlier findings, there was a significant main effect of company policy for

employee attitudes toward the importance of company loyalty E4.16, g<.05). It appears,

therefore, that although this dimension of implicit career contract commitment does not interact

with any of the suggested employee characteristics, its levels are consistently lower among

employees within the downsized environment. Again, these results are in support of hypothesis 3

which supposed significant differences in the levels of implicit career contract commitment

between the downsized versus the stable work environment; although, it should be emphasized

that to this point results have shown this to be true only with respect to two of the four implicit

career contract dimensions: attitudes toward the importance of company loyalty and attitudes

toward the imprtance of organizational citizemh@ behuviour. Despite this encouraging finding,

the present data do not provide support for either hypthesls 4P1 or h y p t h s h 4dll

4.5 Multivariate Analyses

Predictors of im~licit career contract commitment

Hypthesis 5) predicts that cornpuny downsiring policy will interact independently with

employment tenure, occupational status, gender, and male w i l y context to produce stronger

predictors of low job satisfction, and a greater scepticism toward the importance of both

company loyalty and the performance of organizutionol citizenship behaviours (i.e., lower levels

of implicit career contract commitment), compared to the effects of company downsizing policy

alone. In particular, within the context of the E R P it is expected that the employee status

characteristics that will produce the lowest levels of implicit career contract commitment

include: high tenure, managerial status, being male, and among men, not having investments in

both husband and father roles.

A final multivariate analysis was conducted using hierarchical regression on each of the implicit

career contract dimensions in order to investigate the predictive effects of company policy while

simultaneously controlling for several employee background characteristics including income,

gender, occupational status, tenure, and male family context. In addition, the effects of a number

of interaction terms were investigated in accordance with hypothesis S which predicted that

interactions between company downsizing policy and several relevant employee characteristics

would prove stronger predictors of low implicit career contract commitment. Although to this

point the findings indicate that interactions among these variables do not account for a significant

proportion of the variance in implicit career contract commitment, use ofthe hierarchical

regression model allows one to capture the effects of these predictor terms individually, however

small, with the efffects of the preceding variables controlled. Hence, variables were entered

sequentially within a series of three independent blocks in the following manner: Block 1 - employee annuai income, gender, occupational status, tenure, and male family context, Block 2

represents company policy (i .e., the presence or absence of the ERIP), and Block 3 assesses the

interaction effects of the employee variables with company policy. Tables 12 through 15 show

the standardized beta coefficients and standard errors for the regression models for each indicator

of implicit career contract commitment.

Table 12 shows the intrinsic job satisfaction regression coefficients for three models. All

three indicate that only employee annual income accounts for a significant portion of the variance

for this dimension of implicit career contract commitment. The relationship between annual

income and intrinsic job satisfaction was positive, indicating that higher levels of income are

associated with greater satisfaction in this respect (P=.44, s.e.=2 1 ; ec.00 1). Neither the

introduction of company downsizing policy nor the addition of interaction terms to the model

functioned to improve significantly the proportion of variance explained.

Results for the hierarchical regression on extrinsic job satisfaction (Table 1 3 ) shows that,

for all three models, gender remains by far the strongest predictor. The direction of the

coefficients indicate that women are to a significant degree more satisfied with the extrinsic

aspects of their work (i.e., wages, benefits, and promotional opportunities) than their male

counterparts. A breakdown of these results using Peatson correlation analysis indicated that this

relationship held true among female employees at both Sun Life -. 15, r. 16) and Prudential

-.08, p=.34), although findings were only significant for the combined sample.

Table 14 shows regression results for employee attitudes toward the importance of

company loyalty. All three models show tenure to be a highly significant predictor of this implicit

career contract commitment dimension with the direction of the coefficient indicating that more

highly tenured workers hubour more negative attitudes toward the importance of employee

loyalty for getting ahead at the company. Separate correlation analyses on the company samples

showed this relationship between tenure and loyalty to be significant only among Prudential

employees (F -.23, p<.Ol), however, results f b m the Sun Life sample were trend-level in the

same direction r= -. 19, st lo). In accordance with the kypothab 5, Models 2 and 3 show the

interaction between company policy and male family context to be a stronger predictor (P= -.21,

s.e.=.52; g<. 10) of the loyalty dimension than company policy alone (p -. IS, s.e.=. 19; g<.05),

although the change in confidence level for these coefficients should be noted. Furthermore, the

addition of the company policy variable in Model 2 improved the percentage of variation

explained by two percent, a significant result &.05). The inclusion of the four interaction terms

again improved the proportion of explained variance by an additional 2 percent, although the F-

Change for this Block was non-sigmficant. The direction of the coefficients indicates that, as

predicted, the company policy to downsize is associated with more negative attitudes toward

company loyalty; however, the fact that married men with children undergoing downsizing

demonstrate less commitment to the implicit career contract is contrary to the original

proposition regarding the effect of the male family context. Again it appears as though married

men with children are more affected by the prospect of job loss by way of downsizing, perhaps

out of a intensified sense of injustice due to the fact they have dependents.

Regression results for employee attitudes toward the importance of organizationtal

citizenship behaviours are outlined in Table 1 5. Model 1 shows that only employee tenure shared

a significant association with this variable. The introduction of company policy to the equation

(Model 2) shows it to be a trend-level predictor of low implicit career contract commitment for

this dimension (p= -. 14, s.e.= .13; e<. 10). Note that the F-Change produced by the addition of

this variable approached the conventional level of significance; moreover, it improved the

percentage of the variation explained by a full 2 percent. Lastly, Model 3 outlines regression

results including the interaction terms. Company downsizing policy continued to have a negative

association with this aspect of implicit career contract commitment, but the relationship was no

longer significant. Furthermore, despite the interaction between male farnil' context and company

policy evident in previous analyses on these variables, the regression analysis failed to show any

significant associations between the interaction term and this dimension of implicit career

contract commitment.

Table 12 Hierarchical Multiple Regreasion of Predictom of Implicit Camr Contract Commitment

Dimension Intrinsic Job Satisfaction (p188)

Indebendent Variables

Income

Gender (male=l)

Occupational status ( r n r 1)

Tenure (high=l)

Male family context (married w/children= 1 )

Backmound Characteristics

Interaction Terms

Policy *Gender

Policy*Occupational Status

Polk y*Tenure

Policy*Male family context

Beta Coefficients (ae.)

Model 1 -

Model 2 Model 3

Table 13 Hierarchical Multiple Regression of Predictors of Implicit Career Contract Commitment

Dimension Extrinsic Job Satisfaction @=l83)

Inde~enden t Variables

Backround Characteristics

Income

Gender (male= 1 )

Occupational status (mgr=l)

Tenure (high= 1)

Male family context (married w/children= 1 )

Com~anv Policy (ERIP=l)

Intemction Terms

Policy *Gender

Policy*Occupational Status

Policy *Tenure

Policy* Male family context

Beta Coefficients (s.a

Model 1 Model 2 Model 3

Table 14 Bierarchid Multiple Regression of Predictors of Implicit Career Contract Commitment

Dimension Attitudes Toward the Importance of Company Loyalty @=184)

. .. - -

Indenendent Variables

Income

Gender ( m a l ~ l )

Occupational status (mgr= 1)

Tenure (high=l)

Male family context (married w/children= 1 )

Interaction Terms

Policy *Gender

Policy*Occupational Status

Policy *Tenure

Policy*Male family context

Model 1 r . - - - b

.OS (.04)

-.lS (.26)

9.02 (.24)

0.22 (.20)***

.06 (-26)

Beta Coeffieients (s.e.1

Model 2 Model 3

Table 15 Hierarchical Multiple Regression of Predictors of Implicit Career Contract Commitment Dimension Attitudes Toward the Importance of Organizational Citizenship Behaviour

@=184)

Indebendent Variables

Income

Gender (male= 1 )

Occupational status (mgr-1 )

Tenure (high= 1)

Male family context (married w/children= 1)

Interaction Terms

Policy*Gender

Policy*Occupatioaal Status

Policy *Tenure

Policy* Male family context

-

Model 1

Beta Coef!fwients (see.)

I Model 2 Model 3

The regression results failed to support hypothesis 5 which supposed that interactions

among relevant employee characteristic variables and company downsizing policy would prove

stronger predictors of low implicit career contract commitment than would company downsizing

policy alone. Despite tindings of a trend-level interaction between male family context and

company policy for a single implicit career contract dimension (i.e., attitudes toward company

loyalty), the direction of this relationship indicated that married men with children undergoing

downsizing are less committed to the implicit career contract compared to men differently

situated within the family context, an unexpected result. However, in spite of the lack of support

for this specific proposition, the present findings remain noteworthy in several respects. Fiat, in

accordance with the analysis of variance results, it appears that attitudes toward company loyalty

as a dimension of implicit career contract commitment is affected by the company policy to

downsize. Specifically, when added to the regression equation (Model 2) company policy

accounts for a significant increase in the amount of total variance explained @<.05), and

constitutes a significant predictor (P= -. 15, s.e.=. 19; gc.05) in the expected direction: downsizing

policy resulted in lower levels of implicit career contract commitment vis-a-vis company loyalty

when compared to the absence of such policy. Furthermore, the trend-level association that

remained between the interaction of male family context with company policy and attitudes

toward the importance of company ioyalty, provides evidence that demographic differences may

be relevant to the way organizational downsizing is experienced.

Second, with regard to employee attitudes toward the importance of organiza~ionul

citizenship behaviow; once again regression results are aligned with those detected by the

previous analysis of variance. The introduction of the company policy variable in Model 2

resulted in a near two percent increase in the total variance explained, a result that approached

conventional levels of significance (p<.10). Moreover, this variable proved to have a trend-level

association with this dimension of implicit contract commitment in the expected direction

@= -. 14, s.e.=. 1 3; p<. 1 0). Not surprisingly given the number of predictor variables in the

equation and the level of the initial effect, this relationship was suspended by the introduction of

the interaction terms in Model 3; however, the results remain suggestive when viewed in light of

the pattern of previous findings regarding attitudes toward organizational citizenship behaviour

among Prudential employees. Measures of this implicit career contract dimension were

consistently lower among older workers undergoing targeted downsizing compared with those

who worked within the more stable environment.

Finally, the lack of significant findings for the job sutisfactiun dimension of implicit

career contract commitment is also suggestive. In accordance with earlier analysis of variance

results, no relationship was detected between company policy and either extrinsic or intrinsic

forms of job satisfaction. A few reasons can be offered in this regard. First, given the theoretical

definition of the implicit career contract, it is less surprising to find that measures of extrinsic

satisfaction do not appear negatively related to company downsizing policy. That is, because it

was presumed that the sense of injustice brought on by downsizing would mostly affect the

relational elements of the implicit career contract since it is the breach of these aspects of the

employment relationship that cannot be remedied through pecuniary forms of compensation, it

would therefore matter less to workers caught in the midst of organizational downsizing whether

or not their benefits (e.g., in the form of severance) were financially adequate. To the contrary, it

would be expected that workers targeted by early retirement programs are more likely to suffer

declines in intrinsic forms of job satisfaction since this dimension has more to do with the socio-

emotional aspects of work, presumably most affected by implicit career contract violation.

However, since neither intrinsic nor extrinsic forms of satisfaction were found to be related to the

company policy to downsize older employees, and moreover, because levels of intrinsic

satisfacton appear strongly related to extrinsic rewards (i.e., annual income), it may be that either

the measures used in the present study are inadequate to establish a relationship, or, simply that

job satisfaction has little to do with organizational downsizing. The latter reasoning would

suggest that overall satisfaction with work is strongly tied to levels of compensation such that if

employees are paid well enough satisfection will remain high, in spite of having to endure

organizational upheaval and change. However, given the large body of research on workplace

stress that shows it to be associated with low levels of perceived control and, conversely, high

levels of uncertainty (as is typical during large-scale forms of organizational change brought on

by downsizing; see for example Karasek and Theorell, 1 !NO), this is not likely the case. More

possibly, the present findings are the result of either a failure of the study measures to adequately

tap the intrinsic job satisfaction dimension, or, may be an artifact related to the employee sample.

For instance, employees at Prudential were surveyed following the announcement of which

business units within the company would implement the early retirement incentive program (i.e.,

Combo 7) in order to reach reduction targets. That means that there was a good deal less

uncertainty as to who would be affected by the downsizing campaign at the time of the survey

than there had been in the weeks prior to the announcement. It may have been more enlightening

as to the effects on employee job satisfaction to have conducted the survey during this earlier

period.

In any event, the present results suggest that targeted forms of downsizing tend to foster a

pattern of psychological withdrawal among older employees that functions to negatively affect

attitudes toward the importance of company loyalty and the performance of organizational

citizenship behaviours. This may be largely due to the fact that each of these attitudes reflects a

desire on the part of the employee to repay the organization for just treatment - that is, an

aspiration to live up to his or her side of the mutual obligation stipulated by the implicit

employment agreement. The downsized workplace is hard evidence that for its part, the employer

has reneged on the deal. The following discussion section offers a more thorough treatment of

this supposition, evaluates its implications, and suggests directions for fbture research.

CHAPTER 5.

Shifb in the Social Contract, the Breakdown of Traditional Employment Relationships and Employee Commitment to the Implicit Career Contract

5.1 Results from the Present Study

The primary objective of the present study was to examine how current changes in the socio-

economic structure manifest at the level of the workplace to affect the lives of older employees.

For the most part, the results from the study supported the proposition that organization-level

changes that specifically target older workers as part of retrenchment efforts, do affect certain

employer-directed attitudes. Specifically, with reference to the implicit career contract, a

conceptualization based upon the distinct work histories of older employees, it appears as though

these workers may be withholding certain emotional contributions to the firm in the form of

attitudes toward the importance of company loyalty and the performance of organizational

citizenship behaviours as a consequence of being subjected to the indignity presumably

associated with targeted forms of downsizing. These attitudes were consistently lower among

Prudential employees despite the company's offer of a severance package to departing workers.

However, this pattern of psychological withdrawal among downsized workers, not observed

among their counterparts at Sun Life, did not include lower levels of job satisfaction as expected.

Previous research into the creation and maintenance of psychological contracts has shown that

the sense of anger and betrayal that typically accompanies contract violation has a strong

tendency to lead to declines in the employee's satisfaction with work. it was therefore supposed

that the lack of fmdiags in this respect in the present study may reflect the fact that workers at

Prudential had been made aware of the business units to be downsized prior to the administration

of the survey, thus substantially reducing the uncertainty associated with the restructuring. On

this basis the presumption is that employee job satisfaction is more dependent upon perceived

level of uncertainty than upon the employer's failure to live up to its obligations (e.g., with

respect to the promise of job security) established by the implicit career contract. So, whereas

employee job satisfaction may be affected by the immediate and acute conditions of

organizational uncertainty due to restructuring, decisions regarding whether demonstrations of

company loyalty and the performance of organizational citizenship behaviour no longer provide

important mechanisms for 'getting ahead' in the company, appear to be more lasting

compromises made by employees on the basis that their employer has perceptibly withdrawn its

commitments of loyalty toward them.

Findings from the present study also corroborated the position that older workers caught

amidst targeted foms of downsizing do feel there is pressure placed upon them by the

organization to retire. This form of perceived pressure is likely an integral feature of these kinds

of work environments, and may be inseparable from the stress experienced due to the uncertainty

associated with significant forms of organizational change. In this way, it is presumed that the

detection of such pressure by older workers likely contributes to their sense of contract violation.

As to evidence for the presence of greater levels of inter-generational conflict as a feature of the

downsized environment, although the results showed that more workers at Prudential reported

being aware of such conflict, the differences between the two companies were not significant in

this regard.

5.1.1 ICC commitment as a function of em~lovee status characteristics

For the most part, the results of the present study do not support the proposition that employee

characteristics such as occupational status (i.e., management versus non-management), length of

tenure, and gender affect ovedl commitment to the implicit career contract within the

downsized workplace. However, there was some evidence to suggest that male family context

was a relevant f ~ o r . Specifically, men who were both married and had children appeared to be

least committed to the implicit career contract at Prudential, suggesting an interaction between

company downsizing policy and this employee status variable. While this finding is incongruous

with the initial hypothesis regarding the effects of male family context on subsequent levels of

contract commitment following targeted forms of downsizing, it is however aligned with what

Boyle (1998) has referred to as a theory of 'multiple contracts', which the second main objective

of this thesis attempted to address. That is, social contract workers have different perceptions of

the implicit career contract and what it stipulates on both sides of the employment exchange as a

result of having invested differently in its creation and maintenance. For instance, there is some

early evidence that among laidsff white collar workers in particular, consequent attitudes differ

by gender and age, with the older white men feeling the most loyalty to the traditional version of

the contract (Boyle 1998). These findings, coupled with those of the present study, seem to

suggest that further research into the effects of demographic differences and their relationship

with work-related investments is well-warranted. Additionally, more scholarly work is needed

into the mediating effects of several other contextual factors as industry, family situation,

community, and the like. A thorough appreciation of the individual-level effects of the 'post-

contract' (Boyle 1998) workplace therefore seems to require development of a comprehensive

theory of multiple contracts, in order to more fully account for differences in employee attitudes

toward organizational change.

S a l e 2 The effects of emdovee withdrawal on ornrrnizrtional funetion

As we have seen, age-biased forms of downsizing that target the social contract employee tend to

result in a pattern of psychological withdrawal that includes the tendency for more negative

attitudes toward both demonstrations of company loyalty, as well as performance of

organizational citizenship behaviour. Specifically, among older employees to whom the

employer has directed this form of selective workforce reduction, it likely becomes apparent that

such demonstrations of fidelity and commitment will prove futile as efforts toward 'getting

ahead' at the company. At the individual level, such feelings warrant concern due to their

potential to affect feelings of self-efficacy among workers, which could lead to reductions in

several behaviours critical to organizational function. For instance, organizational theorists

routinely maintain that companies could not survive unless employees at least occasionally

engage in behavious that demonstrate feelings of loyalty and citizenship (Katz 1964). Findings

fiom the preseat study raise questions as to the consequences of employees withholding these

contributions out of a sense of contract violation, specifically with regard to organizational

function. If employees will engage in, or at least see the importance of engaging in,

demonstrations of organizational citizenship only to the extent that they are viewed as a form of

repayment for fair and equitable treatment, what then does this mean for organizations that have

violated the contracts of their employees though downsizing? The natural corollary of an

employee's withholding of organizational inputs is for him to resort to engaging in purely self-

interested forms of behaviour. Preliminary research into the long-term effects of organizational

downsizing has found that although employers adopt these strategies with intentions of achieving

appreciable increases in productivity and efficiency, workers who must endure prolonged job

insecurity while witnessing the layoff of their peers tend to turn inward, and ultimately become

less productive (Brockner, Davy et al. 1985; Brockwr 1988; De Meuse, Vanderheiden et al.

1994). Clearly, a complete evaluation of the costs of organizational downsizing must consider its

adverse human effects alongside those associated with organizational function more broadly.

5.2 CaveaQ for the Present Results

Despite the suggestive nature of this study's findings, there are several limitations inherent in its

method that must be borne in mind when interpreting the results. First, the measures used to

evaluate levels of implicit career contract commitment (i.e., its four dimensions: job sutisfaction-

intrinsic, job satisfaction-extrinsic, attitudes toward the importance of company loyalty, and

attitudes toward the importance of organization01 citizenship behaviour) were not developed for

this purpose. Items were merely selected from the IAW case study surveys on a prima facie basis

in accordance with their apparent fxe validity. The construct validity of these items was never

evaluated beyond the use of a factor analysis procedure in order to establish whether the items

had some kind of internal structure. While the results of this analysis suggested a structure in

agreement with the conception of the implicit career contract, a thorough assessment of this

construct and its measures is required before more firm conclusions can be drawn regarding its

usefblness as a measure of the effects of downsizing on older employees.

The cross-sectional design of the study prec iudes any conclusions about causality. While

the inclusion of a comparison or, quasi-control group of employees (i.e., the Sun Life sample),

was useful in order to highlight differences between the downsized and non-downsized work

environment, ideally this type of study should be conducted longitudinally with measures taken

during periods both pre- and post- the downsizing event. This method would allow for any

changes (or, 'shifts') in the perceptions and attitudes of employees to be more accurately

assessed. In the same vein, without the benefit of a repeated measures design the implication of

company policy (to downsize or, not) as the main correlate of the measures of implicit career

contract commitment is problematic at best. In the absence of a more direct measure of the

effects of the company poiicy to downsize, the possibility that several confounding factors may

be at play within the present results remains strong. For instance, there may be other aspects of

Prudential policies and practices that are responsible for the apparently lower levels of implicit

career contract commitment among its employees. This possibility is further complicated by the

fact that the companies selected for comparison are, in many ways, incomparable. For example,

despite the similarity in company-type in terms of the services and hctions they provide, the

decision to use two different firms within two separate countries may have introduced a host of

unknown confounding factors that relate to political differences both within the organization and

more broadly.

The small number of cases available for analysis was additionally problematic. In

particular, the fact that a relatively low number of respondents provided answers to only a small

number of items that comprised each implicit career contract dimension index, is indicative of

the potential inadequacy of the present study's representation of the phenomenon in question.

Moreover, the small sample size coupled with the large number of predictor variables included in

the fual regression analysis led to an unbalanced multivariate model (Cohen 1992). Greater

confidence in the findings could be obtained by repeating the study with a larger sample size in

the fbture.

5.3 The Need for Future Research

The results of the present study, as well as their limitations, have much to contribute regarding

implications for ftture research. Clearly, the strong potential for organizational downsizing to

negatively affects workers cannot be overlooked at either the individual or institutional level.

This thesis provides theoretical as well as some substantive support for this notion. It seems that

workers' attitudes toward traditional notions of company loyalty and citizenship may be largely a

function of the structural and cultural contingencies within the organization which, in turn, are

shaped by more broad forces at the macro-level. The deep changes to the economic structure that

have o c c d over the past two decades have contributed to the dissolution of the traditional

employment relationship as a product of the near d e h c t bureaucratic system of internal labour

markets. This thesis presumed that the unique work life history of the social contract employee

has distinctly shaped his perceptions of the changes in the nature and structure of work due to the

expectations that comprise the implicit career contract. Moreover, the effects of organizational

foms of uncertainty and change were presumed to be exacerbated by retrenchment schemes that

rely upon older workers leaving the organization. There is some evidence to suggest that a theory

of multiple contracts is necessary in order to better predict and understand the reactions of

individual subgroups of workers to downsizing and layoffs. However, while these reactions may

vary to some extent among different types of employees, to date findings in this context indicate

that they hold in common the potential to negatively affect individual as well as organizational

well-being. Consideration of the shortcomings of the present study, in addition to those of studies

past points to the need for more in-depth and systematic forms of evaluation of how individual

workers perceive their employment agreements in the new workplace, particularly in terms of

what they feel they are owed by employers. Additionally, more longitudinal research needs to

done in the area that explores the consequences of downsizing and other forms of organizational

change for both individuals and organizations in the long term. Clearly, the groundwork for

future research has been well-laid.

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#PENDIX A

Sun Life and Prudential Employee Surveys

EMPLOYEE QUEST IONNAlRE

Sun Life Assurance Company Study

February 1994

Funded by Employment and Immigration Canada, hnovations Branch

EMPLOYEE QUESTIONWRE, Sun Ufe Assurance Company Study

CARNET: The Canadian Aging Research Network at the University of Toronto is . conducting a study entitled The Older Worker in the New Global Economy.' The goal

of the sMly is to investigate age related eqsriences of the older worker at their place of employment. The research program.consisto of a series of case studies in different organizations located in &verse sectors of the economy. Sun Life has agreed to be a case study site. We ask you to parkipate in this study by completing this questionnaire. Pmdpation in this study is completely voluntary but your participation is of value in understanding issues rielated to aging in the workplace. The study results will be made available in a repoft to Sun Life employees.

As you answer the following questions, please keep in -mind that all of the information you give us will be held in strict confidence, and be used only by a small research staff at the University of Toronto. ihis informstion will be used only for the purpose of the study and will not be disdosed or released to anyone for any other purpose. The study

\ . results will. be released only in the form of percentages or grouped data. and no individual response will ever be known. H them are quertions you would rather not answer do not feel obligated to do so. The survey will take approximately 30 minutes. In completing this questionnaire you give consent to the use of the information you have provided for the purpose of the study.

1NSTRUCTIONS FOR FlLUNG OUT THE QUESnONNAlRE

1. For each question please circle the NUMBER that most accurately represents your response.

For example: 0 No (3 Yes

8 Don't know

When asked to 'specify" or adescribew, please .WRITE OR PRIM your answer.

1 3. An 'OUXR WORKERw in this study is defined as anyone aged 50 or over and a YOUNGER WORKER" is defined as anyone younger than 50. This definition is

I consistent with other research studies on aging.

SECTION A YOUR UWLOYMEBK HISTORY

A1 . Would you & d b e your wCIbnt job 8s-

A l a Why m you working kss thn fuI1 time? No Yes

1 P-t-w--Jww 2 parl-year job (9 a fewef months of wmk) 3 t 8 n p o r v ~ ~ pb (id CWld and my tbna) 4 canna job (yw ma coatacted for a specific period d time) 5 other

Pieas8 s m

A3. A n you working at mom thn one job for pay?

The next few questions deal wilh your job a Sun Life and the kind of work you are doing.

A4. What is your annn! m i o n at Sun Ula?

Cneryuurjab title

AS. - What kind of work do you do? (Please give a Snort desmptbn of yanaCIivitroi?s, egg.. supem&or of data entry unic organi2hg work schedluIes)

In what jab point atego y doas your position faJI?

A?. How long have you km in this at Sun We?

Enter nu* of - y r w S OR -- mom

Was this job a result of,

1 a pmfmtion 2 a demobkn 3 a lateral move 4 a redefirrition of my praviouD job. or 5 this w a ~ my firSI job at Sun Life

I 6 other Pkrsrrspdjt

AS. How long )tnn you been employed at Sun Ute?

A10. Since you begall to wwk a! Sun Life, how mmy different jobs hsM you had in this company- (including your cumnt job)?

Enter the number of diifarent j&s at th* m y

A1 1. The following s&t4manfS concern your wmnt job. Please indicate wttsther you lmngly bkagm, somewhat dhagm, somewhat agree, or strmngly agree with each ot the following statements.

a There is a lot of freedom todecide howtodo mywark

c. The pay is oood I 2 3 4

d. The benefiD am gwd t 2 3 4

e- MychancestorpromotiDn 1 2 3 4 Or career dmbpmm are good.

1. I like my pb. I 2 3 4

3 ~ 1 2 At any time prior to working at Sun Ute. wen you employed in any other job? (Do not cant@&

s u c h a s ~ c a m ' e r * ~ ~

A13. How many !he% haw you b n n out of work for 8 period of mom than six mm!b since you left

Thinking of your own Mum, do you .nrieimta that y w will,

1 -ninthasam job at Sun U k f o r ~ e ~ o f y o u r ~ He 2 mo~toad'itypeofjobatSwLife 3 movrWapbwilhadiffenmtcompony 4 amact yout sewices to Sun Life S go into business far ywrself (become self dffoyed) 8 don7 know

4 SECTION B WORKING AT SUN UFE

B 2 P k y e indiate whrtbr you feel each statement is not at all hapottan!, slightly important, - . +modmWy bnpmm, Onrlly importat or amrrnrfy mpomnt in grtting ahead In th& company.

c. Your SupewiWs opinion of you 0 1 2 3 4

-

f o seniority in me firm 0 1 2 3 4

g.HavhgkirdsinljOhar 0 1 2 3 4 -a

hH=hOoodppf- 0 I 2 3 4 - LT- - 0 1 2 3 4 j- Ability to work effadivay 0 1 2 3 4

with people

c. PRISM 0 1 2 3 9 (contilllous improvemeH)

e. Job enhfggnsrrt 0 1 2 3 9

f* Job mtawi 0 1 2 3 9

8 Dan3 know

85; Do you mink # lr llluly ypy will bse your jobor be laid off in the nerd year?

1 Yes

Do you feel you have been discriminated against or favoured, whik wotking at Sun Life?

B6b. In what ways have you been d ' i I n d e d against? Were you,

No Yes amtintBCVidWedurhiredforotherpbs 0 1

in this company b. not promoted or. assigned certain jobs 0 1 c.demoted 0 1

dnotgivan@btaining 0 1 e.paidhforttresamework 0 1 f. amf 0 1

-8-

SECTION C TECHNOLOGY-AND ORGANEAnONLIL CHANGE

. During the last three ymm, or less if you m new to Sun. Life, have them been any substantial changes in the mrehimy and quipment you use in your own job? (ind-g the iWuduction of mmers, software, or ammated teCnmhugyJ

0 No I Yes

8 Oonr know

0 No 1 Yes

When the management in your workpiace p l w to gy out major changes, such as new quipment or norganizstiins, do the employees have no. say, IWe. or much say over such ctrang8s?

1 No say 2 UUe say 3 Much say

8 Don't know

C4.

CS.

c6.

Cf.

a.

Would you say that tachmlogitol change hu provided you the opportunity to -

Do you think that tadmbgia l change ha8 inemsad o ~ n 8 ~ t ' r monitoring of your work?

0 No ' 8 Dor\'tknow t Yes

Do you think that monitorhg of job performanes at Sun Life Lr,

How many hours per working day do you normrlly usa a computer? --- How comfocbbk wwid you say you m urlng cornputem?

W. How much do you prrsorully us8 each of the foUowing technologies?

a.voicemail

b* FAX

c. Uedronic mail

d. Word P=-

e. Other software applications

f. Other automated processes

Pleasespeci&

b. Pkam Endic+te whether yw fed each technoloby hrr a rp-e or 'positive bnprct on your w o k

8 SECTlON D TRAINING AND EDUCATlONAL O P W m E S

1 Yes -

0 No Ma. Wha! are ywr masons for not taking -nag? No Yes

e Pmgramssuitabletomyneedsarendavaibbk 0 I b. TooLtteformea~nyage 0 1 c. I f e e d t k m w m 0 1 d. ~~~ 0 1 e. T'embafrassed 0 I f. Hdthmasons 0 t Q. h I a y ~ l e s d o m k 8 W ~ ~ 0 1 b 'Ndparmit ladby~rtotakecruncs 0 1 i Coufsestaoditfieult 0 1

i- 0 t h ~ P ~ S U ~ o 1

IF YOU HAVE NEVER TAKEN A fRAMNG COURSE GO TO QUESTION 08.

In the p8st ymr, Inr the mining you took been as of ywr regular job?

Onnll, rwW pu say the training yw had was...

Don't know

Yes

1 I 1 1

Don't know

In the last year, what was the approximate total pmanal you rpem to maintain or increase you job skills or general lnrowkdge?

9 07. P W e indit.U whrUm you took mining a development wunes for the following reasons.

No Yes

PLEASE ANSWER THE FOUOWNG W H m E R OR NOT YOU TOOK COURSES

SECTION E CARE RESPONSBIUnES

0 No

I I

1 Yes

Please describe the penon(s) tM you p H 8 cam to (their relationship to you, theit age and whether or not U~ey live with you) -

ik Yes

How many horn in total, in !im lrst wlr, have you spent &ng for family mmlrsn or friends with spacial needs?

0 No 1 Yes

How many lMng chadnn do you have (include rtep&wm)?

d, I brmeddomranoffewfa job transferto anOtnwcQ.

t I changed my sdwduie of work (8.g.. the hwn I 1 anived or lea, or hours I worked ondiffatentdays)

F2. Do you think pu will ntin in the me! ten -3

0 Uo - GO TO QUESTION F3. 8 Don't know

Yes

If you think p u will ntim in the nut ton ywn, please indiatr the likrUhood that etch of the foOorring items may infiuac8 your phnr Is il very likely, l&ely, tomrwha likely, not very IWly or not at ail likdy that each of the fellowing will Influmca your plans.

-

e.coaqmyearj,reriremplan. 1 2 3 4 5 f. My job endm and I will be uMMe 1 2 3 4 5

tofindetherwok g .Pnrsun i romcpmrkar to~* 1 2 3 4 S h. Waabg to Bop rrorlFhg. 1 2 3 4 s i Changes in wchmbgy. 1 2 3 4 5 j . R a a n t r a h o m ~ . 1 2 3 4 5 kCacllpuydownrbingor 1 2 3 4 5

If Your 8m Hurfsd, I. Your spouserpartnef's hea&h. 1 2 3 4 5 m Y o u r ~ s a p a m e f s m ~ 1 2 3 4 5 n. Pressure from your 1 2 3 4 5

to tatire.

GO TO - QUESTION Fb. M THE BOX. NEXT PAGE

Yes

1

1

1

1

Yes

1

1

1

I

1

Don't Know

8

8

Don1 Know

8

If you had the option, would you like to ntim gndually, for example. to go fmm full time to part time employment in your tut two yeam of wock?

0 No 1 Yes

Doer Sun We offar ntinment planing pmgrms?

0 No 8 Don'! know

I ' Yes F4a Have yau atended any of these nthamnt prognms?

0 Na 1 Yes

8 Oonr know

t3 Should you fomully ratin fmm Sun Uh, do yw anticipate working a! all aftafthot?

. Should you ntln from Sun Ufe, wha! do you think ~QW- income will be in your fim year following raiment? Conddrr all pordbb roums of income, induding prhrate and public

2: . pensions, LmnrtmrntPld annuity bromr, afnploymmt inconu, e k

. What do you thWt you (otrl incoma wiU be In your tM y a r doUonrlng,rainment? Consider rll porribk raunrr of buome, lndudfng priv8ta 8nd public pensions, hy~sunent and =--=pkym-he#nr,-

Fa. - Does your -foyer offer you a wmpmny pmrbn?

0 No 1 Yes

8 Don't know

- - -. . - - - - -

I Yes F9a Whd h tMI mrnda!ory Mmmmt age? ,,rage I FIO. Do you Mieve then stmld b. mudlory ntifemrtl

F11. Do you think !hem is p m r e for m M d l ~ g r d and old- worirers at Sun Uhto Mire am? 1 Than h m prasarn 2 Yes, miM pressurn 3 Yes. strong pressure

8 Oon't know

d. Do nat wan! to lrain. 1 2 3 4 - -

e. Are too cautkus. 1 2 3 4

In your-opinion, how much weigh! should be given30 seniority when considering someone for promotion?

0 Norre I Some 2 Agreatdsal

8 Don't know

0 No 8 Don? know

f Yes How much tension &them?

1 Namch 8 Oon't know

I - 2 Some 3 A great deal G3b. What is the reaton for this tension?

w

0 hki 8 Don't know

I Yes G5a. Ir thb a probkm for worldng nWronr a! Sun Ufe?

0 No 1 Yes

G5b. b this a problem for you?

0 No 1 Yes

OSc If yes, how is this o pmbhm for you? pibase give a shan des@?&n)

f. Older nwicars slwru(d rake when they can so as to gbe yaungerpeopb mreofacfiancsmthepb.

H3. Wlut is the h i g w g m or y..r of ngub school that you ham completed or received cfedit fot3

H3d. What is the h ighd degm you hM obtained?

H4. In what country m m you born?

2 -- H4a. Whlchcounry)

H4b. When did you first om to Canada to live? 19 yea,

H4c. Am you a Canadian citizen?

0 No 1 Yes

HS. Which ethnic glows do you most identify with? (ycv ntey hst up B hvo mpmses,)

b, or did, your rpouar ar putnat itM a work-mlrted pruton plan or RRSP pension plan (krM# CPPlQPP)?

HI. Amyou limited in the ldnd or'onwnt of activity you a n do at mtlr because of a long term condition or health problem?

No Yes Don't

b. your duties and respmsbita'es 0 1 c. phy~kalernrirPrvnerrtandequlpmef~t 0 t 8 1

H8. What warn your total yeam indMdua1 a d hwrr(lold incomes before deductions in 19931 -

a toar yaaty household Income

Lesd than SZO.000 pet year S 20,000 - s as99 S 30,060 - $39,999 S 40,000 - S 49- s 50,000 - s 59- $60,000 -$ma9 $70,000 - S 79,999 S 80,000 - S 89,B99 s 90.600 - $100,000 $1 00,000 - $149.999 s150.000 - s1wm t200,WO and wef per year

Less than 520,000 per year $20,000 - $29,999 S 30,000 - $39,999 S 40,000 - S 49,999 s 50,000 - $59,999 S 60,000 - $ 69,999 $70,000 - $79,999 d 80,000 - $89,999 S 90,000 - StO0,OUO St 00,000 - $149,999 slso,000 - $199,999 ~ , O O O and aver per yeat

HS. Do you own the horn you am D v h g in?

0 I d o t l o t o w n m y ~ 1 I own my home, but still have a matgage 2 I own my home, matgage free

H10. AppmxinWely what.&the value of your kana, if you wen to sell it today and dedua an mortgage still owing?

We M interested in my furtlwt torn- you wish O radu about aging in ths workplace. Please feel tree to use the spac8 k k W for ywr cornmen!&

EMPLOYEE QUESTlONNAlRE

Prudential Insurance Company of America Study

EMPLOYEE QUESTIONNAIRE, Prudential Insurance Company of America Study

CARNET: The Canadian Aging Research Network at the University of Toronto is conducting a study entitled "Issues of an Aging WorMorce." The goal of the study is to investigate age related experiences of the older worker at their place of employment The research program consists of a series of case studies in dfirent organizations located in diverse sectors of the economy. Prudential has agreed to be a case study site. We ask you to participate in this study by completing this questionnaire. Participation in this study is completely voluntary but your participation is of value in understanding issues related to aging in the workplace. The study results will be made available in a report to Prudential associates.

As you answer the following questions, please keep in mind that all of the information you give u s will be held in strict confidence, and be used only by a small research staff at the University of Toronto. This information will be used only for the purpose of the study and will not be disclosed or released to anyone for any other purpose. The study results will be released only in the form of percentages or grouped data, and no individual response will ever be known. If there are questions you would rather not answer do not fecl obligated to do so. The survey will take approximately 30 minutes. In completing this questionnaire you give consent to the use of the information you have provided for the purpose of the study.

INSTRUCTIONS FOR FlLLlNG OUT THE QUESTIONNAIRE

1. For each question please circle the N 1 I M that most accurately represents your response.

For examole: 0 No 8 Don't know .

(9 Yes

2. An "OLDER WORKER" in this study is defined as anyone aged 50 or over and a 'YOUNGER WORKER" is defined as anyone younger than 50. This definition is consistent with other research studies on aging.

SECTION A YOUR EMPLOYM€NT HISTORY

t

To win we will ask you a few questions about your employment history, including your job at Prudential.

A t Would you describe your cumnt job u..,

I full time I

2 part time (less than 30 hours pcr week)

Alr. Why am you working ira than full time? No Yes

a. My own illness or disability 0 b. Penonal or family responsibilities 0 c. I am going to school 0 d. I could only find part-time work 0 e. I did not want full-b'me work 0 f. Other 0

Please spec@

A2 A n you working at mom than one job for pay?

-

Yes A Z I w In total, how many houn do you work in a usual weak? haurn 1 The next few questions deal with your job at Prudential and the kind of work you are doing.

A3. At Prudential, which catagory would best describe your job?

1 Managernen t 2 Non-management

A3a. Do yau supmrvisa other peopk?

0 No 1 Yes

A4. What kind of work do you do? (Pkase give a shott desc,r$Hiim a i your acblites. e-0.. superviscr of data - entry unit; organizfng work schedules)

AS.

A6.

A?.

A$..

A9.

2

How long have you bean in your cumnt job auignmrnt at Prud*ltbL

Enter number of pats OR -- months

Was thk job a muH Of ., 1 a promotion 2 a d-on 3 a latefal move 4 a redefinition of my previous job, or 5 this was my fint job at Prudential 6 other Please specriL

How long have you been employed at Prudential?

Enter number of yeam OR mmonlhs

Since you began to work at PmdmtiaI, how many dilfrnnt jab h m you had in thb company (inchding your cumnt job)?

Enter the number of ditbmnt~obs at this company

A t any time prior to working at Prudential, mn you employed in any other job? (Do not count jobs such as paper camer, babysitting or tnose partbine pbs neM while rir hr'gh SCnmI or cdlege).)

u

1 Yes A8a. How many prior job. haw you hd? Number ofjobs

A1O. How many tbnm have you km out of wwk k r a prriad of mom than six months rime you left school ponnrmntty? (Do not rirdude ieaves such as matemdy ard&Miiy)

0 0 Never out of work

-- Enter the number of tim you have been out of work

AlOa. What was the main msan(s) br your king out of w o w (Far example, I heaith, l a y 4 , unable to get a pb, went back fo schod)

Considering your exprrknce, education and training, do you fed t h l you m ,. I underqualified for your job 2 well-matciied for your job 3 overqualified for your jab

8 Don't know

In genml, would you deserib. your total job history so far as.... (Please consider all jobs you have ever had both at Pnrdsnl ' and behm workirg Ibr PmdeWsl)

1 two or mere jobs moving up the organization 2 two or mcre jobs, moving both up and across the organization

.

3 two or mcre jobs, moving aaws the organization 4 two or mre jobs, moving both down and across the organization 5 two or mcn jobs, moving down the organization 6 few, if any, jab moves 8 don't know

Thinking of your own future. do you -that you will,

1 remain in tne same job at Prudential Ibr the rest of your working life 2 move to t different type of job at Prudential 3 move to a job with a different company 4 go info business for yourself (become self employed) 9 other Please speciiy 8 bon't know

SECTlON 6 WORKING AT PRUDENTIAL

The following questions are concerned with your thoughts and opinions about Prudential as a pQca b work and as an employer. Please remember all of your responses am completely confidential.

81. Please indicate whether you strongly disagm, somawhat dhrgm, sonwwk.1 r g m or strongly agme with each of the following statemam.

a. I decide when 1 take breaks an my job. 1

b. If I wanted to. h would be very hard t to change the I wanted to w o k

c. if I wanted to. k would be very hara 1 to change the Wum I wanted to work.

d- It would be vef! hard to take time cff 1 during my woeday to take care of personal or f miiy men.

BI. Continued

e. I have a lot of m o r n todeddehowtodomywo&.

f. I do ihe same (hings over and over. 1

g. The pay is good. 1

h. The benefitr an good. 1

i. My chances kr promotion are good. 1

j. My chances br canar development I are good.

k I like my job. 1

82. Please indicate Mather you feel each statanent b not at all important, slightly hnpomnt, modenMy important, gmtly important or extmmdy important in getting ahead in thb company.

a. QuaIi of work done 0 1 2 3 4 b. Qua* of work done 0 1 2 3 4

c. Your supewisots opinion of you 0 1 2 3 4

d. Dependability 0 1 2 3 4

e. Creativeness, inventiveness 0 1 2 3 4

f. Seniority in me m p a n y 0 1 . 2 3 4

g. Having friends in higher 0 I 2 3 4 management

h. Having good pmbssianal 0 1 2 3 4

knowkdge i. Taking inni(i 0 3 2 3 4

j. Abilii b work efkaivety 0 ? 2 3 4 P-Pk

-- - - -

k ~ ~ y a w to me company 0 1 2 3 4

I. Religious or poliligl h i n g s 0 1 2 3 4

m. Elbowing one's way to get ahead 0 1 2 3 4

n. AbTlii to cope with change in 0 1 2 3 4 the organization

o. Abil i to adapt 80 new 0 1 2 3 4 technokgies (e.g. computers)

83. How have you bwn rlhctrd ( d i m or pmonrlly) by the foIIawing abmrtirn work amngmnnb? Phase indicate on tho right whether you think the r(hct has km poaitivo or negative.

a. Work teams .

b. Downsizing c. Prudential

Core Values

d. Job sharing

e. Job enlargement

f. Job rotation

g. F lex-time

h. Flex-place

i. Employee empowefment

j. Service quality

Do you think it is likely that became d organizational chmngms at The Prudootbl Insurance Company of Amrrica, any associates will 1088 thdr job or k hid off in the next year?

0 No 8 Oonr know 1 Yes

Do you think it is likely ypy will iwr your job or k kid off in the mxt y m

0 No 8 Don't Itnow

I Yes

851. Do you think it is likely you will lase your job or k lald off in the next year... Don't

No Yes know

a. because of techno(ogial change 0 1 8 b. because of a general nduciion in 0 1 8

employment levels at P~dmtial c because! of organbatonal restructuring 0 1 8 d. for some other reason 0 1 8

Please spec@

Do you feel you have been dkliminmd against or favorad, whlh wwking at Pmdential?

0 Never discriminated against or WOC8d 8 Don't know

f Discriminated against 2 Favored

B6a. On what grounds was this?

B6b. In what wry. have you km dbabninated against? Wwe you...

No a not inteNiewe!d or hired for other plw 0

in this company b. not promoted or assigned certain pbs 0. c. not given job trai-ning 0 d. pad less for the same work 0 e. other 0

PIease spec*

Yes 1

1 1

1

1

SECTION C TECHNOLOGY AND 0RGANIZATK)NAL CHANGE

C1. During the M thm yean, h m thm km any substanbial changm in Me machinery and equipmmt you uu in your own job? (TClCIudr'liSg the intmdudion of computers. soAwam, or automated technolagyl

0 No 1 Yes

8 Don't know

C2. During the hat thm years, aput from dungr in machkmy, equipment, computers or automhd ?rtknokgy, have then been any subtmtbl changes in the assigned to you in your cumnt job?

0 No 1 Yes

8 Don't kccw

C3. When the managamt in your workphcr p(up to tuy out major changas, suck as new quiprmnt or norganizatbnr. do tho 8mpky.r hm no say, Uttk, or much say orm such changes?

I No say 2 Little say 3 Much say

C4. Would yau say that trcknokgical change ha pcovided you the opportunity 0 - 1 use fewer skills 8 Don't know 2 usemoreskilk, OR 3 there is no change

CS. Do you Link t h l trehndoghl chnga has drcmsod or incmmd managemenis monitoring of your mtk?

1 Decreased 2 Stayed the same 3 t nmased

C6. Do you think that monitoring of job pwtbrmulce at Prudrntbl h,

1 no probkm 2 a minor problem 3 a major problem

8 Oonr know

C7. How mny houn par working day do you normally a tompIlfrr3 hours

C8. How comfortable would you say y w am using tomput.n?

0 Not at all ,comfbrtable 1 Not very comiPttable 2 Comfortable 3 Very comfortable

8 Don't know

C9. How much do you pmomlly use wch of the Ookwing bchndogk.?

PLEASE ANSWER A l l THREE SECTlONS

a. Voice maf

b* FAX

d. Word processing

e. Other software applications

f. Automated voice r e m -

h. Other automated P-

P/ease spBClfL:

i. Other

a. To what extent have each of these

' technokghr changed your -3

Nura S a m Much

8

b. P m indimto wtraer you fed rpch techndogy has a nmgatke or positive impact on your w o k

SECTION D TRAINING AND EDUCATIONAL OPWRNNfflES

Dl. In the past yaw, h m you takm a mining or d e v 8 I o p ~ t couns(s), lasting one h P M day or mom, at Prudential? (indude seminars, cunibmnces, and wwkshops of an edccatond nabrm)

1 Yes

WM m your nuons for not talcing mining?

Programs ruitabk to my needs a n not availacie Too~6Prmeatmyage Not bcna([cial B mc at my *e in .v career I feei I how enough Not intemted Too hemy a wcrk lead Too e n l ~ Heatth rsasons Famdy msponsibihties dcc t leave enougn time Not permitted by supemisar to ake Courses are foo cmcirft

Yes

1 1 1 1 1 1 1 1 7 1 1

IF YOU HAVE NEVER TAKEN A TRAINING COURSE 4 GO TO QUESTION D8.

ln tha past you, has the mining you took km LPpyipd a8 put of your rqu(u job?

Did your tninkrg take place.... No

a. as on-thejob training b. by -ding a course or courses C. ltaugrnmyself d. I mMmd help from coassodates

Ownll, would you uy the mining you had was...

1 not at all effktive 2 son#whateffective 3 ellbdive 4 v a y efkdive

8 Don't know

Yes

8 Don't know

In the laqt ynr, how much time did you spmd in formal mining at Pnrdmtkl? (indude seminan. c o ~ m n c e s and wwkshws of an eduafional nature)

In the h. year, what was the approxbnat. total you rprnt to maintain or incmur your job skills or g m n l knowledge? (e.g. specr'al rirstiMe or dkge wms)

-- Ehter Wal hours OR -- Enfer total days

Phase indiuta whether you took mining or development courses for tkr following masons.

a. To impme job oppomnit#r or Ibr cam development b. For personal interest c. To increase earnings d. To improve job related skills e, othar ream(s)

-specdL

PLEASE ANSWER THE FOLLOWING WHETHER OR NOT YOU TOOK COURSES

D8. How mW&d are you with your opportunith for jobdatmd mining?

Not at all satisfied Not very satisfied Somewhat SatiSfjed Satislkd very satisfied

No Yes

0 1 0 1 0 1 0 1 0 1

Don't know

SECTION E CARE RESPONSIBILmES

Relationshipto you Age Does this parson h e with you?

No Yes

El b. How many houn in total, in the Irrt wnk, hm you spat crlng for family .

m m b m or friends with s-l n-?

Enb# tho number hairs

. . A n then any benefits, work amngemnB or progmm your anplayrr cu- othn that help you with camgiving to your oldar tdWva(~)?

0 No 1 Yes

8 Don't know

How many Wng childran do you h m (indud8 stap4tildnn)?

0 No children

I -- Enber number of driichn

I E3a. How mny childnn do you h m w m are age 18 or pungar? mter number

/ E3b. How many of hou shiidmn a n IMng with you? -- Enter number

E3c. How many childran of rgr am you financially nrponribl, for? GMr number

€4. The following q W o m m about work life and fam& mponrib~lltkt. Phase m d b

a. My supervisorlmanager shows (kxibility when I taco demands from my Amly responsibilities

b. I'm often sa tired at work because of the things I have to do ibr my krnily that it afkdo my ability to do my job

c. When I am working I am sa distracted by thoughts about my family responsibilities that it alkts my ability to do my p b

ES. Please indiub whether you did any of the followhg to handk probkm kbnm your wdc and family mponribllitkr in the p u t 6 months

NaPmaibln No Yes In job

a. I went to my supervirorimnagcr to discuss changes in my woMoad

b. I took a period of unpaid leave of a least a week 0 1

c. I turned down an m r of a job promtian. 0 1

d. I turned down an offer of a job tranrfcrto another city.

e. 1 worked at home during regularworking hours in order to handle pmMemp between my work and family responsibiiiies.

f. I changed my schedule of work (e.g., the hours I anived or left, or hours I worked on different days)

SECTION F YOUR THOUGHTS AND PLANS ABOUT m E N T

F1. At what age do you expect to n6h from tho work fom?

00 Don't plan to Mre

-- Enter the age you expect to nSn

8 Don't know

FZ. Do you think you will Wrs from Prudential before the and of 19913

o NO a ~ m ' t knaw

1 Yes

0 No 4 GO TO QUESTION F4. 8 h " t w

1 Yes

F3a. if you think you wHI ntl, li#n P ~ d m U d in the next tm y u n , pkno indicate tha likdihmd that of th. foikwing ibm my inrlumcr your plans. b it vry likely, likely, somawhat Iikoly, not very Dkdy or W at rl) Ikdy that arch of the folbwhg wPI Mwnee your plans.

Nat at all Not Vary Somrwhrt V@W w b w UwSy -b w

a ~y health. 1 2 3 4 5 b. To cam fbr mily mi)y. I 2 3 4 5

c. Adequate retirement income, 1 2 3 4 5 - - - - - - -- - - - - - - - - - - . -- -

d. Company retirsment p o l i . 1 2 3 4 5 e. My pb ending and 1 will be unable 1 2 3 4 . 5 to find other work

f. Pressurn from cu+mmam to mth. 1 2 3 4 5 g- Wanting 0 stop working. I 2 3 4 5 h. Changes in technology. 1 2 3 4 5 i. Prassure from employer. 1 2 3 4 5 jw Campany downsring or 4 2 3 4 5

reorganization.

k. Your spouWparbrets healttr. 1 2 3 I. Your spouse/pattn&s retiramant 1 2 3 m. Pressure from your spomdparbner 1 2 3 to Wre.

No Yes

a. Docs this early retirsmcnt option reduce 0 1 the amount ~ your monthly pension desk?

b- Does (his reduce the amount of your non-pension 0 1 benefit0 (i.e, medical or insurance)?

c, Do you have to have the company's approval 0 t to take advantage of an early retirement plan?

b them r ntinmont option undar the Prudential plrn to...

No Yes Don'tKnc~l

2. Ratbe lrdr (1.8, after age 65) 0 1 8

Should you take r btr retimnun option wwki this...

a. Increase the amount of your pension 0 ? 8 check?

b. Decrease the amount of your pension 0 1 8 check?

C. Make no difference to the amount of 0 1 8 your pension chW

F4. If you had the own, w u l d you Eke to ntin gradually, for exampk, to go fmm full tim to part thnr employment in your lrrS hno yern of woK)

0 No 1 Yes

8 Don1 know

0 No 8 Dong know

l 1 Yes Fa . Have you att8ndod my of these ntimm8rrt pmntn~?

0 No 'l Yes

8 Don't know

If you fomally m t h fmm Prudential, do you antidpat8 working again for a salary?

0 No 8 Don't b o w

tf you plan b continue to work for a r aftat your fomd ntimnent would thb be".

1 foracompany 2 for yourself

Would this be...

1 full time work for pay 2 part time wok for pay 3 temporary or casual work for pay

8 Don't know

8 Don't k n w

W. Shouid you m!h from Prudential, what do you think your- incorrn will b in your f int y u r following Mmnont? Conidrr all W b k .our#. of krconn, including printr and publk pamiom, imastmant and annuity imam, empbymm income, me.

F9. Do you kUm them rhoufd k mandatory retimmnt?

0 No 1 Yes

FlO. Do you think then is pressure for middlrrgrd and older asso&!m at Prudential to Wre eariy?

1 Then is no pressure 2 Yes, mild pressure 3 Yes, m g pressure

8 Don't know

SECTION G AGE AND WORK

GI. In your penoml expwhnce, thinking about the -older auocirta" (anyone a g d 50 or over) in geneml, PI- indicate whether you strongly d l a g m , slightly diugrw, slightly agm, or rtrongty agree with mcir aatmant, that older a ~ ~ , ,

a. Can adapt to organizational cbange.

b. Senre as mentors or teachers for younger associates.

c. Are highly respcted 1 2 3 4

d. Do not want to receive training. 1 2 3 4

e. Are too cautious. 1 2 3 4

f. Are mom nlik than younger associates.

g. Are marking time untii retirement 1 2 3 4

h. Are produdhe assucktes. 1 2 3 4

i. Carinot adapt b new technology. 1 2 3 4

j. Are harder to train. I 2 3 4

k. Dislike taking orders from younger -.

I . Are less likely to be promotea.

In your opinion, how much wdgW should k g i m to seniority wh.n comidrrhg sormom for promotion?

0 None 1 Some 2 A great deal

8 Don't know

In soma companies thm is r tamion botwwt youngw md older ampbyeurn Do you think thm b any such tension at Prudmtial?

1 Yes G3a. H ~ w m u t h ~ ~ bthue?

f Notmuch 8 Don't know

2 Some 3

1 A great deal ) G3b. What b the mason for this tension?

L

Should mining imrmtmanol k mrek mom hmtity,

1 in younger employees (under 50 ysus old) 2 in older employees (50 yeam old and over), or 3 age should make no diflbrsr!ce in opportunities for training

In some companies, younger employees joining the company have higher educrtionai qualiffdonr than employ- who ham bmn with th* company for mvenl yean. b thk the case at Prudonthl?

0 No 8 Don't know

0 No I Yes

GSb. Is thb a probkm for you?

0 No 1 Yes

8 Don't know

8 Don't know

G k . lf yes, how b thin 8 p m b b for you? fPIease give a shoe description)

aJhework1doisoneofthemast satsfying parts of my l i i .

b. Some of my main interests and 1 2 3 4 pleasures in lil'e am connected with my work.

d People who work for a long tbne 1 2 3 for a company should have more job security than people with fewer years SBIViCB.

e. Older employees should retire when t they can so as to give younger people more of a chance an me pb.

SECTION H YOU AND YOUR FAMILY

We would now like to conclude by asldng you some questions abut yourself and your family

HI. Are you ... 1 male, or 2 female

H2. In what year were you b m ? Enter year 19

H3. What is the highest grade or year of regular school that you haw completed or mrivad credit for3

H3a. Ekrmntay through High School

0 1 2 3 4 5 6 7 8 9 1 0 1 1 12

H3b. DM you gmd- from High School?

0 No I Yes

H3c. How many yean boyond high school did you sprnd in oduatlon (rg. Cot!Ununily Cdhge, Tlchnicai sckool, or Unhnnity)

H3d. What is tho highest d e g m you have obtrind?

1 Masters or doctorate 2 Badrelor or undergraduate degree 3 Dipbma, associate degree, certiiicate from a cmmumty college, technical

school, or similar educationai institub'on

4 Other P l e 6 ~ 8 s p e .

Pleaso indkata w h d w you m ,

1 Bbckl African Amen'can 2 Hispanic 3 0-1 I Asia i Pacific Islander 4 North Anrerican Indian 1 Alaskan Native 5 W h i i I Caucasian

What ir your marital status? Am you...

1 single (never married) 2 sepa raw 3 divorced

manied or partner widowed

b (was) your spousm or partner. ... .

1 working in the paid tabor fo ra far 30 hours per we& or more 2 working in the paid labor fom for less than 30 hours per week 3 not working at this time in the paid labor force 4 retired

What kind of work do8s of did your spouse or pubwr do? (Dacrlk main aceupation) (Please givs a fulpb me: e.g., medical lab dechnicien, aaceowrlng cMc, manager of M engineefbi diwemnt, secwldary seh46I teacher, supewkw of da$ eniry un& l a m . )

D # h or did, your spoux or partrwr have r work-daW m i o n phn or tax drhmd ponrion plan (besides Social Soewity)?

0 No 1 Yes

S Don't know

In what year was yout spouse or partner born? 19 Ehferyear

The next few questions refer to your incorn and financial sittdon. Remr%mbcr that aU the infomation you giva us b completety confidential and that no individual raspar# will ever be know.

including bonus and overtimo pry

Less than 310,000 per year S 10,000 - $19,999 S 20.000 - 3 29,999 $30,000 - d 39,999 S 40,000 - S 49,999 s 50,000 - S 59,999 S 60,000 - % 69,999 $70,000 - $79,999 $80,000 - $ 89,999 S 90,006 - %100,000 $1 00,000 - 5149,999 S15o.OOQ - $199,989 5200,000 and over per year

Do you ann or rent your midance you a n living in?

0 I rent my residence

Less than $10,000 per year S 10,000 -$19,999 $20,000 - $29,999 $30,000 - $39,999 S 40,m - $ 49,999 S 50,000 - S 59,999 3 60,000 - $69,999 S 70,000 - $79,999 S 80,600 - S 89,999 $90,000 - $1 00,000 $100,000 - $1 49,999 $150,000 - $199,999 $ZW,OOO and aver pet year

1 I own my residence, but still have a moqage 2 I own my residence, mortgage fres 3 Other Piease spBCIJY

H7a. AppmdmWy wM b the valw of your home, if you wwa to $all it today and daduct any mr!Qage rtia owing?

3 &fhated value

Not counting your home, -what is the vrh* of your total household assets? (indude tne value of wnides. savings atxwn&, ~rMcate$ bonds, s&isf annuities, loans owed b f lu your spouswpartner, tax dehmd pension pian, ptwpeqt olhsr then yow tmm, owned by yw and other memben of your housahoid. Subbact lZwn mh ail debts dywmlfand houSBhOM members)

W e r m i n t r ~ i n a y ~ r c # m r m b y w w i r h t o n H l o ~ a g i n g hthrwwkpbcc P W W f m to use the space klow br your corn-.