Time for a new covenant

It is time to forget the long cherished illusion that companies are responsible for providing job security.   In exchange for long-term job security, an employee was expected to turn in an acceptable job performance, follow the rules, and remain loyal to the company. Employer and employee alike mutually understood this unwritten covenant. As long as the competition followed the same covenant, it remained operational.

Under the old covenant, employees, whether they be engineers, technicians, or designers, usually worked for one or two firms throughout their working lives. They often "locked into" firms which provided retirement plans, medical coverage, vacations, life insurance, and career opportunities with job security. To encourage employees to stay, many firms followed policies of hiring new employees at, or near, entry level.

Adapt or die. However, today with the world of business changing so rapidly, no matter how big or strong a company is, it must con-tinually adapt or die. Unfortunately, this adaptation usually involves downsizing, right-sizing, re-engineering, layoffs or restructuring.

To cope in this dynamic situation, some argue that individuals should drop their traditional focus on employment and instead focus on employability. Each person must actively assume the responsibility for managing their own career. In adopting this proactive approach to their careers, they would operate more or less as free agents, much like professional baseball players.

However, there is a significant difference between the baseball business and business in general. The relatively small major league baseball community operates according to rules established by all players and owners together. The situation resembles a cartel, which is illegal for business in general. No such agreed-upon rules exist in the business world.   So, the key question is, can a satisfactory arrangement be worked out that creates a sense of community of common purpose and an employer/-employee relationship based on mutual trust and caring?

Alternatives. A possible answer is for both employer and employee to enter into a new covenant under which they share responsibility for maintaining each individual's employability. Employers would give individuals the opportunity to enhance their employability. In return, employees would offer improved productivity and a degree of commitment to company for the duration of their employment.

Management would en-courage all employees to develop their skills. To do so, management should in-form all employees about the direction of the business, communicate that ultimately they each bear the responsibility for developing their own competitive skills, and inform all employees that unless the organization provides goods and services that customers value, no one will have a job. At the same time, management must abide by the employee's right to be a free agent.

The company that recognizes this new covenant could have a huge strategic advantage. It could move swiftly without being ruthless. It could encourage people to grow, to change, and to learn. By teaching its employees these lessons, a company would also be learning them as well.

Ask the Manager

Q: What is the basic assumption behind the idea of a new covenant between employees and employers?

A: The new covenant is intended to provide a practical way by which employees can operate as free agents within a framework established with individual employers. The focus of the new covenant is to create a flexible, career-resilient work force, one where its employees will be committed to making the company a success. In helping shape the company's strategy, and looking out for themselves, they are also looking out for the company.

Everyone will be dedicated to continuous learning, a college degree will not be perceived asthe beginning of the end, as itwas under the old covenant. Rather it will be viewed as the end of the beginning. Every employee will understand market trends. They will identify and develop those skillsand behaviors in themselves thatthe company will need in the fu-ture marketplace. Employees will respond quickly to changing bus-iness needs and move to another company when such a relationship is no longer possible.

Q: Why should employers enter into the new covenant with their employees?

A: Today corporations essentially all have the same technology, the same networking systems and the same software. The only way they can beat out their competitors is by enabling their biggest asset--their work force--to be more innovative in using the technology to create new products and new services that sell.

Instead, throughout its decade-long restructuring, corporate America has primarily viewed workers as liabilities rather than assets. Only a handful of companies have committed the resources to help their work forces develop new skills.