2022-08-10 04:08

Chicago-Kent Law Review

Volume 76

Issue 2 Symposium on Philosophical Hermeneutics and Critical Legal Theory

Article 16

December 2000

The New Deal at Work

Peter Cappelli

Follow this and additional works at: https://scholarship.kentlawjit.edu/cklawreview

Part of the Law Commons

Recommended Citation

Peter Cappelli, The New Deal at Work, 76 Chi.-Kent L. Rev. 1169(2000).

Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol76/iss2/16

This Article is brought to you for free and open access by Scholarly Commons (a) IIT Chicago-Kent College of Law. It has been accepted for inclusion in Chicago-Kent Law Review by an authorized editor of Scholarly Commons (a) IIT Chicago-Kent College of Law. For more information; please contact dginsberg@kentlaw.iit.edu.


Peter Cappelli*


Most observers of the corporate world believe that the traditional relationship between employer and employee is gone. But why the change occurred is not well understood, and what is replacing it often seems like a mystery.

What ended the traditional employment relationship is a variety of new management practices, driven by a changing environment, that essentially has brought the market—both the market for a ■ companys products and the labor market for its employees—directly inside the firm. And once inside, its logic quickly has become dominant, pushing out of its way the behavioral principles of reciprocity and long-term commitment, the internal promotion and development practices, and the concerns about equity that underlie the more traditional employment contract. The policies and practices that buffered the relationship with employees from outside pressures are gone. The end of employee loyalty to an organization, replaced by greater attachment to careers, is but one manifestation of this change.

Most attempts by companies to draw up a new contract represented wishful thinking as they sought simply to lower the expectations of employees by explicitly limiting the employers obligations on job security and career development (the dreaded 'employability” doctrine that pushes responsibility for careers onto employees), while assuming that most other aspects of the relationship, including high levels of employee performance, would continue. In fact, virtually every aspect of employment changes now that the market governs this relationship. From the difficulty that employers

* George W. Taylor Professor of Management, the Wharton School, University of Pennsylvania. The material in this Article is excerpted from Peter Cappelli, The New Deal at Work: Managing the Market-Driven Workforce (1999), and from a longer discussion of some of these issues in Peter Cappelli, Career Jobs Are Dead, 42 Cal. MGMT. Rev. 146 (1999).

have in recouping training investments to the substitutes that must be found for employee motivation and commitment, the new relationship dramatically changes how firms must manage their employees.

If the new employment relationship is not defined unilaterally by employer attempts to dictate a new deal, then what is it? It is tempting to think of the new relationship as something like free agency where legal contracts can be used to govern all aspects of the relationship, much as they do for professional sports or temporary help. There are some jobs where this model fits well, especially those where performance is easy to specify in advance and monitor after the fact. Jobs that can be contracted out, such as many positions in the world of information technology, fall into this category.

But for a great many positions, especially those in management, contracts struck in the market cannot define an employment relationship. At least some of the skills are unique to the employer and developed on the job, the tasks are interdependent with others or with systems in the organization, and performance is difficult to monitor accurately, all of which make contracts imperfect at best. Nor are managers professionals. Their work is governed by standards inside the organization, not professional codes, and their success is inextricably linked to that of their employer. The most important rewards for managers are still associated with promotion inside a company hierarchy.

The contradiction inherent in the new relationship comes from the fact that the nature of the work that most managers in particular perform does not lend itself to market-based relationships and contracts. It is much more suited to open-ended relationships where the obligations can be adjusted, performance can be observed, and rewards allocated accordingly as situations change. Some level of mutual commitment and trust to facilitate changing needs is inevitable as is the need to develop some unique skills inside the organization and to retain them indefinitely.

At the same time, the pressures from markets and the need to change organizations means that truly open-ended, long-term employment relationships are largely dead. The pressures to shed obsolete skills (compounded by the uncertainty of knowing which ones will be obsolete) and the problem of poaching skills from other employers make it difficult to main



















原文和译文剩余内容已隐藏,您需要先支付 20元 才能查看原文和译文全部内容!立即支付