Employment

This article is about work. For the Kaiser Chiefs album, see Employment (album).

"Personnel" redirects here. For Military service members, see Military personnel.

Economics
GDP per capita by country
General classifications
Microeconomics Macroeconomics History of economic thought Methodology Heterodox approaches
Technical methods
Econometrics Experimental Mathematical National accounting
Fields and subfields
Agricultural Behavioral Business Computational Cultural Demographic Development Ecological Economic systems Education Environmental Evolutionary Expeditionary Game theory Geography Growth Health History Industrial organization Information International Labour Law Managerial Monetary and Financial economics Natural resource Personnel Public and Welfare economics Regional Rural Urban Welfare
Lists
Categories Economists Index Journals Outline Publications
Business and economics portal

Employment is a relationship between two parties, usually based on a contract, one being the employer and the other being the employee.

Employee

An employee contributes labor and/or expertise to an endeavor of an employer and is usually hired to perform specific duties which are packaged into a job.

Employer-worker relationship

Employer and managerial control within an organization rests at many levels and has important implications for staff and productivity alike, with control forming the fundamental link between desired outcomes and actual processes. Employers must balance interests such as decreasing wage constraints with a maximization of labour productivity in order to achieve a profitable and productive employment relationship.

Finding employees or employment

The main ways for employers to find workers and for people to find employers are via jobs listings in newspapers (via classified advertising) and online, also called job boards. Employers and job seekers also often find each other via professional recruitment consultants which receive a commission from the employer to find, screen and select suitable candidates. However, a study has shown that such consultants may not be reliable when they fail to use established principles in selecting employees. A more traditional approach is with a "Help Wanted" sign in the establishment (usually hung on a window or door or placed on a store counter).

Workforce organizing

Employees can organize into trade or labor unions, which represent the work force to collectively bargain with the management of organisations about working and contractual conditions.

Ending employment

Usually, either an employee or employer may end the relationship at any time. This is referred to as at-will employment. The contract between the two parties specifies the responsibilities of each when ending the relationship and may include requirements such as notice periods, severance pay, and security measures.

Wage labour

Main article: Wage labour

Worker assembling rebar for a water treatment plant in Mazatlan, Sinaloa, Mexico.

Wage labour (or wage labor) is the socioeconomic relationship between a worker and an employer, where the worker sells their labour under a formal or informal employment contract. These transactions usually occur in a labour market where wages are market determined. In exchange for the wages paid, the work product generally becomes the undifferentiated property of the employer, except for special cases such as the vesting of intellectual property patents in the United States where patent rights are usually vested in the original personal inventor. A wage labourer is a person whose primary means of income is from the selling of his or her labour in this way.

In modern mixed economies such as that of the OECD countries, it is currently the dominant form of work arrangement. Although most work occurs following this structure, the wage work arrangements of CEOs, professional employees, and professional contract workers are sometimes conflated with class assignments, so that "wage labour" is considered to apply only to unskilled, semi-skilled or manual labour.

Employment contract

Main article: Employment contract

Australia

Australian Employment has been governed by the Fair Work Act since 2009.

Bangladesh

Bangladesh Association of International Recruiting Agencies[1] (BAIRA) is an association of national level with its international reputation of co-operation and welfare of the migrant workforce as well as its approximately 700 member agencies in collaboration with and support from the Government of Bangladesh. The BAIRA Exporting skill manpower in different countries of the world.

Canada

In the Canadian province of Ontario, formal complaints can be brought to the Ministry of Labour (Ontario). In the province of Quebec, grievances can be filed with the Commission des normes du travail.

Pakistan

Pakistan has Contract Labour, Minimum Wage and Provident Funds Acts. Contract labour in Pakistan must be paid minimum wage and certain facilities are to be provided to labour. However, a lot of work has yet to be done to fully implement the Acts.

India

India has Contract Labour, Minimum Wage, Provident Funds Act and various other acts to comply with. Contract labour in India must be paid minimum wage and certain facilities are to be provided to labour. However, a lot of work has yet to be done to fully implement the Act.

Philippines

In the Philippines, private employment is regulated under the Labor Code of the Philippines by the Department of Labor and Employment.

United States

See also: United States labor law

In the United States, the standard employment relationship is considered to be at-will, meaning that the employer and employee are both free to terminate the employment at any time and for any cause, or for no cause at all. However, if a termination of employment by the employer is deemed unjust by the employee, there can be legal recourse to challenge such a termination. Unjust termination may include termination due to discrimination because of an individual's race, national origin, sex or gender, pregnancy, age, physical or mental disability, religion, or military status. Additional protections apply in some states, for instance in California unjust termination reasons include marital status, ancestry, sexual orientation or medical condition. Despite whatever agreement an employer makes with an employee for the employee's wages, an employee is entitled to certain minimum wages set by the federal government. The states may set their own minimum wage that is higher than the federal government's to ensure a higher standard of living or living wage for their residents. Under the Equal Pay Act of 1963 an employer may not give different wages based on sex alone.

Employees are often contrasted with independent contractors, especially when there is dispute as to the worker's entitlement to have matching taxes paid, workers compensation, and unemployment insurance benefits. However, in September 2009, the court case of Brown v. J. Kaz, Inc. ruled that independent contractors are regarded as employees for the purpose of discrimination laws if they work for the employer on a regular basis, and said employer directs the time, place, and manner of employment.

In non-union work environments, in the United States, unjust termination complaints can be brought to the United States Department of Labor.

Labor unions

Main article: Labor unions in the United States

Labor unions are legally recognized as representatives of workers in many industries in the United States. Their activity today centers on collective bargaining over wages, benefits, and working conditions for their membership, and on representing their members in disputes with management over violations of contract provisions. Larger unions also typically engage in lobbying activities and electioneering at the state and federal level.

Most unions in America are aligned with one of two larger umbrella organizations: the AFL-CIO created in 1955, and the Change to Win Federation which split from the AFL-CIO in 2005. Both advocate policies and legislation on behalf of workers in the United States and Canada, and take an active role in politics. The AFL-CIO is especially concerned with global trade issues.

Sweden

According to Swedish law, there are three types of employment.

• Test employment (swe: Provanställning), where the employer hires a person for a test period of max 6 months. The employment can be ended at any time without giving any reason. This type of employment can be offered only once per employer and employee. Usually a time limited or normal employment is offered after a test employment.
• Time limited employment (swe: Tidsbegränsad anställning). The employer hires a person for a specified time. Usually they are extended for a new period. Total maximum two years per employee per employer and employee, then it automatically counts as a normal employment.
• Normal employment (swe: Tillsvidareanställning / Fast anställning), which has no time limit (except for retirement etc.). It can still be ended for two reasons: personal reason, only strong reasons such as crime. Or: lack of work tasks (swe: Arbetsbrist), cancellation of employment, usually because of bad income for the company. There is a cancellation period of 1–6 months, and rules for how to select employees, basically those with shortest employment time shall be cancelled first.

There are no laws about minimum salary in Sweden. Instead there are agreements between employer organisations and trade unions about minimum salaries, and other employment conditions.

Working poor

Worker, Dhaka, Bangladesh.

Employment is no guarantee of escaping poverty, the International Labour Organisation (ILO) estimates that as many as 40% of workers as poor, not earning enough to keep their families above the $2 a day poverty line. For instance, in India most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks. This problems appears to be caused by the decreasing likelihood of a simultaneous growth in employment opportunities and in labour productivity. According to the UNRISD, increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%. Both increased employment opportunities and increased labour productivity (as long as it also translates into higher wages) are needed to tackle poverty. Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies. This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show. In Viet Nam, for example, employment growth has slowed while productivity growth has continued. Furthermore, productivity increases do not always lead to increased wages, as can be seen in the United States, where the gap between productivity and wages has been rising since the 1980s.

Researchers at the Overseas Development Institute argue that there are differences across economic sectors in creating employment that reduces poverty. 24 instances of growth were examined, in which 18 reduced poverty. This study showed that other sectors were just as important in reducing unemployment, as manufacturing. The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling.

Growth, employment and poverty
	Number of episodes	Rising agricultural employment	Rising industrial employment	Rising services employment
Growth episodes associated with falling poverty rates	18	6	10	15
Growth episodes associated with no fall in poverty rates	6	2	3	1

Models of the employment relationship

Scholars conceptualize the employment relationship in various ways. A key assumption is the extent to which the employment relationship necessarily includes conflicts of interests between employers and employees, and the form of such conflicts. In economic theorizing, the labour market mediates all such conflicts such that employers and employees who enter into an employment relationship are assumed to find this arrangement in their own self-interest. In human resource management theorizing, employers and employees are assumed to have shared interests (or a unity of interests, hence the label “unitarism”). Any conflicts that exist are seen as a manifestation of poor human resource management policies or interpersonal clashes such as personality conflicts, both of which can and should be managed away. From the perspective of pluralist industrial relations, the employment relationship is characterized by a plurality of stakeholders with legitimate interests (hence the label “pluralism), and some conflicts of interests are seen as inherent in the employment relationship (e.g., wages v. profits). Lastly, the critical paradigm emphasizes antagonistic conflicts of interests between various groups (e.g., the competing capitalist and working classes in a Marxist framework) that are part of a deeper social conflict of unequal power relations. As a result, there are four common models of employment:

1. Mainstream economics: employment is seen as a mutually advantageous transaction in a free market between self-interested legal and economic equals
2. Human resource management (unitarism): employment is a long-term partnership of employees and employers with common interests
3. Pluralist industrial relations: employment is a bargained exchange between stakeholders with some common and some competing economic interests and unequal bargaining power due to imperfect labor markets
4. Critical industrial relations: employment is an unequal power relation between competing groups that is embedded in and inseparable from systemic inequalities throughout the socio-politico-economic system.

These models are important because they help reveal why individuals hold differing perspectives on human resource management policies, labor unions, and employment regulation. For example, human resource management policies are seen as dictated by the market in the first view, as essential mechanisms for aligning the interests of employees and employers and thereby creating profitable companies in the second view, as insufficient for looking out for workers’ interests in the third view, and as manipulative managerial tools for shaping the ideology and structure of the workplace in the fourth view.

Globalization and employment relations

The balance of economic efficiency and social equity is the ultimate debate in the field of employment relations. By meeting the needs of the employer; generating profits to establish and maintain economic efficiency; whilst maintaining a balance with the employee and creating social equity that benefits the worker so that he/she can fund and enjoy healthy living; proves to be a continuous revolving issue in westernized societies.

Globalization has effected these issues by creating certain economic factors that disallow or allow various employment issues. Economist Edward Lee (1996) studies the effects of globalization and summarizes the four major points of concern that affect employment relations:

1. International competition, from the newly industrialized countries, will cause unemployment growth and increased wage disparity for unskilled workers in industrialized countries. Imports from low-wage countries exert pressure on the manufacturing sector in industrialized countries and foreign direct investment (FDI) is attracted away from the industrialized nations, towards low-waged countries.
2. Economic liberalization will result in unemployment and wage inequality in developing countries. This happens as job losses in un-competitive industries outstrip job opportunities in new industries.
3. Workers will be forced to accept worsening wages and conditions, as a global labour market results in a “race to the bottom”. Increased international competition creates a pressure to reduce the wages and conditions of workers.
4. Globalization reduces the autonomy of the nation state. Capital is increasingly mobile and the ability of the state to regulate economic activity is reduced.

What also results from Lee’s (1996) findings is that in industrialized countries an average of almost 70 per cent of workers are employed in the service sector, most of which consists of non-tradable activities. As a result, workers are forced to become more skilled and develop sought after trades, or find other means of survival. Ultimately this is a result of changes and trends of employment, an evolving workforce, and globalization that is represented by a more skilled and increasing highly diverse labour force, that are growing in non standard forms of employment (Markey, R. et al. 2006).

Alternatives

Workplace democracy

Main article: Workplace democracy

Workplace democracy is the application of democracy in all its forms (including voting systems, debates, democratic structuring, due process, adversarial process, systems of appeal) to the workplace.

Self-employment

When an individual entirely owns the business for which he or she labours, this is known as self-employment. Self-employment often leads to incorporation. Incorporation offers certain protections of one's personal assets.

Volunteerism

Workers who are not paid wages, such as volunteers, are generally not considered as being employed. One exception to this is an internship, an employment situation in which the worker receives training or experience (and possibly college credit) as the chief form of compensation.

Indenturing and slavery

Those who work under obligation for the purpose of fulfilling a debt, such as an indentured servant, or as property of the person or entity they work for, such as a slave, do not receive pay for their services and are not considered employed. Some historians suggest that slavery is older than employment, but both arrangements have existed for all recorded history. Indenturing and slavery are not considered compatible with human rights and democracy.

See also

• Automation
• Basic income
• Ethnic Penalty
• Employer branding
• Employment gap
• Employment rate
• Employment website
• The End of Work
• Equal opportunity employment
• Equal pay for equal work
• Job analysis

• Jobless recovery
• Labour economics
• Labour power
• Lump of labour fallacy
• List of largest employers
• Onboarding
• Payroll
• Personnel selection
• Protestant work ethic
• Reserve army of labour (Marxism)

References

• Dubin, Robert (1958). The World of Work: Industrial Society and Human Relations. Englewood Cliffs, N.J: Prentice-Hall. p. 213. OCLC 964691. 
• Freeman, Richard B.; Goroff, Daniel L. (2009). Science and Engineering Careers in the United States: An Analysis of Markets and Employment. Chicago: University of Chicago Press. ISBN 978-0-226-26189-8. 
• Lee, Eddy (January 1996). "Globalization and Employment: Is Anxiety Justified?  – via [[Questia]] (subscription required) [[Category:Subscription required using via]][[Category:Pages containing links to subscription-only content]]". International Labour Review 135 (5): 485–498. 
• Markey, Raymond; Hodgkinson, Ann; Kowalczyk, Jo (2002). "Gender, part-time employment and employee participation in Australian workplaces". Employee Relations 24 (2): 129–150. doi:10.1108/01425450210420884. 
• Stone, Raymond J. (2005). Human Resource Management (5th ed.). Milton, Qld: John Wiley. pp. 412–414. ISBN 978-0470804032. 
• Wood, Jack M. (2004). Organisational Behaviour: A Global Perspective (3rd ed.). Milton, Qld: Wiley. pp. 355–357. ISBN 978-0470802625. 

External links

• "Business Link". Businesslink.gov.uk. HM Revenue and Customs. 
• "Labor and Employment". Government Information Library. University of Colorado at Boulder. 
• "Overview and topics of labour statistics". Statistics and databases. International Labour Organization.