The labor code provides that regular employees cannot be dismissed without cause and due process.
The stability of tenure of personnel is one of the 14 principles of management contributed by Henri Fayol. According to Fayol, employees work better when they are assured of job security and career progress. All their efforts and energies are directed toward work, rather than looking for another job and worrying about the future.
Insecure tenure and high rate of turnover adversely affect organizations. Related costs include the cost of hiring, training and decrease in productivity until the person who left is replaced and the replacement comes up to speed. Though the replacement can be a better employee, it is also possible that he is not.
Another cost that is difficult to quantify and is often overlooked is organizational memory. Let’s face it, not everything is documented. A lot of the knowledge and understanding of how the organization works resides in employees. This is especially true when the employees who leave have been in the organization for some time.
Thus, according to Fayol, employee turnover should be reduced and organizations should work toward securing long-term commitment.
Insecurity of tenure
In today’s job environment, is there still such a thing as security of tenure?
The collapse of major institutions makes us wonder whether there is such a thing as a stable organization. Who would have thought that institutions that have lasted for over a century, or even those that have previously been known as excellent companies, would one day cease to exist?
Mergers and acquisitions also contribute to the death of organizations, and to the insecurity of tenure as they usually result to redundancies, hence, job loss.
Organizations used to value loyalty among employees. However, when they realized how much loyalty was costing them, they were willing to let even loyal employees go.
Reengineering, restructuring and reorganization also imply job losses. While some of these strategies are necessary to ensure the survival of the organization, they are also often employed to improve the bottom line, with little thought to the impact on affected employees.
Contractualization and insecurity of tenure
The prevalence of contractualization, especially at lower-level positions, is perhaps one of the most deliberate efforts resulting in job insecurity. For a significant percentage of the work force, job security is a myth. All they know are five-month contracts, working through agencies, and receiving, perhaps, minimum-wage and mandated government benefits. Training and career advancement are minimal, if any.
Obviously, for a number of organizations, lower compensation cost, no possibility of employee union, and less number of people they need to manage offset the cost of hiring and training, and loss of organizational memory. Or else, they have found a way of eliminating or reducing the supposed cost of hiring and training. Loyalty is a nonissue, since all they need is a pair of hands. Is this the way to go? Organizations that follow this business model remain to be financially successful, even their reputation is seemingly unscathed by these practices that are actually less than ethical. How will these practices impact on organizations in the long run? Time will tell.
Individual response
Managers and entrepreneurs could benefit from thoroughly evaluating their options prior to implementing action that contribute to insecurity of tenure and resist the urge to blindly copy what others have done. This is from the perspective of personal accountability. Should these moves really be necessary, the next concern is how to implement them humanely.
Employees, including managers, who would like to lessen the risk of being booted out, and surviving the experience if it happens, would benefit from taking personal responsibility for their own careers. As job requirements change and as the environment becomes more competitive, it is necessary to acquire competencies to ensure employability and to keep up with the changing qualification standards of organizations.
–Mary Margaret Que / Mirror Image, Businessmirrorr
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