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How has the world of work changed in the post-Fordism era? What implications does this have for the way people are managed?
Perfect work culture is considered as key to success in almost every company around the globe. The corporate thinking which has attained a maturity of thought of ‘perfect work culture' has come into picture after the evolution of HRM since 18th century. Since then many changes and evolution has affected the discipline of HRM. From all those the two mile stone which pinched it most ever were ‘Fordism' and ‘Post Fordism'. It started and named with ‘Henry Ford' the owner of Ford Company who introduced new HRM practices to increase company's productivity and profitability keeping in mind the strength (How much one can be stretched ?) of human being. The ideology of ‘Fordism' changed due to the great crisis of capitalism that began to appear in early 1970's and due to that crisis the period became the most important time of restructuring (1). The restructuring resulted in a new approach of handling work force and is coined as an era of ‘Post fordism'.
This paper focuses on post - fordist work culture and its implications on the organisation design. To understand post-fordist approach it's necessary to look at the concept of fordism in depth. Fordism as we know came into picture after industrial revolution happened in 18th and 19th century, it's the era when almost every western country exposed to a wide shift from traditional work practices to mass production and mass consumption. Now this is a vicious circle which can be explained as - :
This means that the huge number of work force available was used to mass produce those goods and the same class was targeted as consumers. To encourage them higher day wages, bonus and rewards were introduced. Now these appraisal tactics were designed such that production will get enhance. For ex- if the achievable production target is increased by certain percentage then all employees were rewarded accordingly. Results were tremendous ‘turnover dropped to about 54 percent, and overall productivity rose by around 50 percent, driven in large part by greater worker discipline'(2). Henry ford achieved that much success in terms of profitability because he fragmented the work and allotted the fragmented activities to different labourers, which resulted in deskilling of labourers, hierarchical organisational design and reduced cost of production. So, as we can see that there are some basic aspects of fordism which are mass production, deskilling of labourers, vertical responsibility allocation and standardised products. Soon this model was adopted by whole industrial sector.
Shift happened due to economic downturn in 1970 and to come out of that crisis companies were forced to take certain steps like exploring new markets also known as globalisation. Different needs arise to become global like innovation and flexibility in organisational structures. Now companies started outsourcing the work to third world countries in order to make much more profit. Market saturate because of the crisis so to make a shift it's necessary to move to other markets which have cheaper and abundant workforces. Globalisation resulted in logical changes to products and now consumers have choices. So the first basic principle of fordism which is standardisation frustrated and the new form of HRM started to take picture known as Post - fordism. The main needs which actually force the change of people management are to reduce costs, improve quality, be quicker in meeting market demands, and in innovation. In 1980's new forms of work organisation came into picture, which emphasise on multi skilling, team based work organisation and generally higher level of employee discretion in execution of work. A necessary feature of successful work organisation in these work system is trust in workers and for them to undertake their own quality inspection. These new work systems have been variously described as ‘Japanisation' (3), ‘World class manufacturing' (Schoenburger 1982), ‘flexible specialisation' (Piore and Sabel 1984), ‘Total quality management' (Wilkinson and Willmott 1995) or, simply ‘lean manufacturing' (Womack, Jones and Roos 1990). The human resource consequences of these new forms of work organisation have been termed as ‘high performance work systems' (HPWCs) in North America (Appelbaum and Batt 1994) and ‘High Commitment Management' (HCM) in the UK (Wood and Albanese 1995).