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Denise Rousseau

Keynote

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I-DEALS: Idiosyncratic Deals For Better Career Management and Retention Denise M. Rousseau

Carnegie Mellon [email protected]

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What is an I-deal? (and what isn’t)

Impact on Career Mgt. & Retention

Making I-deals Fair (win/win/win)

Working I-deals into Org’s Culture

Background: The New Employability 1

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Psychological Contracts

Deal Characteristics‣ Old deal: Relational Contract

‣ New deal: Transactional Contract

‣ Better deal: Balanced* Contract

* Risk & Reward

‣ Paternalism‣ Org Responsible for Employee

Security & Career ‣ R&R Balance Protects Workers

‣ Few Guarantees‣ Worker Responsible for Security &

Career‣ R&R Balance Favors Organization

‣ Mutual Commitment and Accountability

‣ Win-win Partnership‣ R&R Balance More Equal

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Career Building Features that Help Balanced Deals WorkIt’s all about balancing Risk and Rewards….and

helping people be responsible for own careers.

‣ Voluntary – Offer choices in employment conditions (“terms”) in order to make job valuable. Are important employee goals in life being met?

‣ Market-discipline – “Terms” have value on the external market (not just inside org.) What future opportunities can job duties be converted to?

‣ Build Relational Capital – Cross-functional & inter-firm contacts (“the strength of weak ties”) make people better informed. Provides better awareness of opportunities and organizational needs.

‣ Civility – Safety nets and supports make people less vulnerable. Does employee have valuable resources (“go to hell money”) outside the organization? Revisit career goals periodically and adjust duties/supports.

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What are the Barriers to Creating a Better Balance Between Risk &

Reward??

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What’s an I-deal?

‣ Idiosyncratic deal (I-Deal): specific employment terms negotiated by an employee and granted by the employer.

• (either employee or employer can initiated i-deal)

‣ Compensation bundle: Combination of benefits & rewards employers offer workers

• (i-deals are part of this bundle)

‣ Psychological contract: Beliefs individual worker (or employer) holds regarding mutual obligations

• (i-deals create new obligations in Psychological Contract)

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Exemplars of I-deals

‣ Seniority’s Perks – veterans with same job title as junior workers typically have different tasks and perks than their more junior counterparts

‣ Stars Get To Customize – high performers with more flexibility in work arrangements than the typical employee.

‣ Remedies for Broken Promises – after a promised promotion fails to come through, employee who deserved it gets her preferred work assignment instead.

‣ Timely Rewards – upon successfully completing a risky and tough assignment, employee bargains to go part-time to finish up his doctorate.

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Differentiating I-Deals from Shady Deals

Idiosyncratic Deals

Preferential Treatment

Unauthorized Conduct

Process Negotiation Favoritism Usurping

BasisWorker Value to Firm

Relationship with Boss

Breaking the Rules

Beneficiary Worker andFirm

Worker andBoss Worker

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Differentiating I-Deals from Shady Deals

Idiosyncratic Deals

Preferential Treatment

Unauthorized Conduct

Process Negotiation Favoritism Usurping

BasisWorker Value to Firm

Relationship with Boss

Breaking the Rules

Beneficiary Worker andFirm

Worker andBoss Worker

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The Employment Arrangement “Bundle”

Position-Based

Standardized

Idiosyncratic

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Standardized


Position-Based

Idiosyncratic

Signals common fate and identity

Down plays status difference

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Idiosyncratic

Position-Based

Standardized


Employees have few common rewards

Employer is not generous

Rewards must be bargained for

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Idiosyncratic Deals Employees Negotiate

Career Developmen

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Taking off work two hours early each Friday to attend advanced degree program

Job content

Visibility

Time

Junior employee gets to present key report to corporate executives

Pay

Workload Reduced to help worker cope with stress

Interesting Work

Working on one large project rather than many small ones

Flexible Work Hours

Allowed to bank hours for future time off

Leave of Absence

Unpaid time off to pursue personal hobby

Raise in response to market data

Advancement

MatchingJob Offer

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Which I-Deals Support Balanced Psychological Contract?

Before Hire On the Job

Visibility to senior management Visibility to senior management

Challenging project Challenging project

Promotion opportunity Promotion opportunity

(Greater) Responsibility (Greater) Responsibility

Market-based Pay Increase Market-based Pay Increase

Special equipment Special equipment

Vacation Vacation

Travel Travel

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Which I-Deals Support Balanced Psychological Contract?

Before Hire On the Job

Visibility to senior management Visibility to senior management

Challenging project Challenging project

Promotion opportunity Promotion opportunity

(Greater) Responsibility (Greater) Responsibility

Market-based Pay Increase Market-based Pay Increase

Special equipment Special equipment

Vacation Vacation

Travel Travel

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Types of I-deals

Ex AnteHIRING

Basis:‣ Market-power of Worker

Content: Economic (money/hours, duties).

Implications: Need to restore/adjust internal equity over time.

Recruiting I-deals

Ex PostPERFORMANCE

Basis: ‣ 1. Relationship Quality‣ 2. Employer Dependence

on Worker‣ 3. Opportunity afforded

by transfer, promotion, etc.

Content: Widely diverse – Economic, Socioemotional, two-sided

Implications: Depends on “justice triangle”

Reward & Need I-deals

Ex PostRETENTION/

TERMINATION

Basis: ‣ 1. Market-power of

Worker‣ 2. Employer Dependence

on Worker

Content: Economic

Implications: Everybody else in that job now may be underpaid.

Threat-Based I-deals

Timing

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Which of do coworkers resent the most?

‣ At hire I-deals?

‣ On the job I-deals?

‣ I-deals made while threatening to quit?

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Coworkers resent…?

‣ I-deals made while threatening to quit

• Rewards disloyalty

• Suggests existing reward system is out of line with market

• Is the i-deal really a better performer?

• Or just more mobile?

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Balancing Flexibility and Fairness

Employee

Manager CoworkersTrust

Open Communication

On-goingManagement

of I-deal

• Relationship Quality• Relative Contribution• Burden Sharing

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When are Idiosyncratic Deals Seen as Fair?

‣ CHOICE: peers could have made the same choice • Cafeteria plans • I-deal acknowledged to peers

‣ NO COST: peers experience no negative consequences • Deal involves hours/activities others do not want • Peers aren’t interdependent with person with I-Deal

‣ WIN-WIN BENEFITS: peers benefit from another’s special arrangements

• Bragging rights: I-Deal allows employer to retain a “star” performer. • Enhanced employer reputation: “Great Place to Work”

‣ INDIFFERENCE TO TYPES OF RESOURCES INVOLVED: Particular resources matter less to peers than Universal ones

• Particular resources (support, mentoring) • Universal resources (money, goods)

‣ FRAMED AS EXPERIMENT: Special arrangement is presented as a way for employer to innovate

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Idiosyncrasy Across Settings

Innovative Settings

LOCATION: New settings (start-ups or newly created units); others with few rules and pro-innovation cultures supportive of workers.

PROCESS: Workers tend to structure their own jobs.

Acquiescence is used more often than negotiation.

Moderately Flexible Settings

LOCATION: Workplaces where local management is itself highly flexible or willing to trust particularly valued worker(s).

PROCESS: Employees operate within a broad zone of acceptance for trusted worker(s).

Both negotiation and acquiescence are used.

Bureaucratic Settings

LOCATION: Highly bureaucratic or restrictive workplaces.

PROCESS: Workers must negotiate around existing rules and regulations, reinterpreting rules and recalibrating expectations.

Negotiation is typically required because workers have limited opportunity to initiate change without approval.

Flexibility

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Managing I-deals

‣ SUPPLEMENTS NOT SUBSTITUTES – Broadly available support signals quality of employment relations

‣ EXPERIMENT – Use I-Deals as source of innovation and flexibility

‣ GOOD NEIGHBORS – Require I-Dealer to maintain good relations with coworkers as basis for I-Deal

‣ DON’T MAKE ME ASK – Assess and provide job-related supports (only special needs should require negotiation)

‣ BUILD ORGANIZATIONAL MEMORY – Keep track of I-Deals for future innovation, policy change, and equity.

‣ DON’T REWARD DISLOYALTY – Repeat bargainers erode their value to the firm and antagonize coworkers.

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The Future of I-Deals

‣ Basis of Network Organizations

• Looser ties reduce 3rd party comparisons

‣ Demographic Shifts

• Need to retain older workers

‣ Follows the growth of the economy

• Increasing with % critical workers

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Bottom Line

Idiosyncratic arrangements:

‣ Are increasing

‣ Useful as first step to identity innovations for broader workforce

‣ Can erode trust if used in place of standardized rewards

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Readings

‣ Pink, D. 2001. Free Agent Nation: The Future of Working for Yourself.

‣ Pink, D. 2009. Drive: Surprising science of what motivates us.

‣ Rousseau, D. M. 1996. Changing the deal while keeping the people. The Academy of Management Executive, 10(1): 50-59.

‣ Rousseau, D. M. 2005. I-deals: Idiosyncratic deals employees bargain for themselves. New York: ME Sharpe.