This skills (Extrinsic and Intrinsic). In labour

This paper
will examine the use of numerical flexibility within the large British
retailing group Sports Direct. Numerical flexibility is the ability of the
firm to adjust the quantity of labour to meet fluctuations in demand (Caroli et
al. 2010). This will be done by exploration into the questions such as flexibility
beneficial for whom? Secondly focusing on job quality, this essay will explore
in more depth job security and the significant impact of zero-hour-contracts. Sports
Direct is the name most associated with zero hour contracts in the UK according
to the Business insider UK (Williams-Grut, 2016). There has been a large
increase in flexible working hour contracts therefore it is important to
understand simply why this has happened and exactly whom this benefits.

Job quality
to some refers to the nature, conditions and rewards of work. Job quality can
be described as multidimensional because it refers to many different attributes
of jobs, all of which have an impact on the well-being of workers (Munoz de
Bustillo et al., 2011). It is made up of extrinsic and intrinsic aspects. Examples
of extrinsic aspects of job quality are job security, working time, pay and
career progression. On the other hand intrinsic aspects are skills, work intensity,
agency and opportunity to voice. Green (2013) believes that job quality has
risen in certain aspects such as, the wages for an average job and the fact it
uses more skills (Extrinsic and Intrinsic). In labour economies, job quality
was traditionally understood as being represented by the wage level and in some
cases working conditions (Erhel and Guergoat-Larivière, 2010).

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Over the
past 15 years we saw the creation of over a hundred million jobs in the labour
market in an advanced industrialised world (Green, 2013). Warhurst and Knox (YEAR)
suggest that economist’s research into job quality typically focus on pay,
sociologists on skill and autonomy and psychologists in job satisfaction and
wellbeing. He further suggests that across disciplines, such as sociology and
psychology, they understand that good job quality in a job offers financial and
employment security.

Research
from Kalleberg (2011) and Munoz de Bustillo et al (2011) identifies patterns
and trends of job quality which has shown that many developed countries have
poor quality jobs. Although there have been some improvements within some
countries (Findlay et al, 2017), a number of previously good jobs are worsening
and there is growth in the number of bad jobs (Hurley et al 2015). Due to this
Kalleberg (2011) in his intervention called for a “new social contract” to
address the polarization of jobs and the precarity. This amongst other academic
contributions (e.g Grimshaw et al., 2008; Kalleberg, 2011; Osterman and
Shulman, 2011) demanding ‘new deal’, ‘new social contract’ or ‘new strategy’
for workers in bad jobs has lead to policy interventions to improve job
quality.

Munoz de
Bustillo et al (2011) discuss how we live in times of rapid change in the
structure and regulation of labour markets. This has been a result of different
forces, such as rapid technology growth, globalization, European integration, global
financial crisis (recession) and now more recently the potential effects from
Brexit. Growing increase of competition has lead to industries outsourcing and off
shoring to low-wage regions of the globe meaning a lot of jobs were lost in the
UK. This will cut labour costs for the industries however, labour laws and
regulations may not be as strict in the UK so working conditions in factories
tend to worse and this could lead to bad press for the company.

In the
period of the recession 2008-2009 debates regarding job quality have been
intensified and this has been partly framed in relation to the growth of
poverty in the UK. Real wages fell during the recession and early recovery and
have only partially recovered since; meaning average real wage values are
significantly lower than a decade ago (Blanchflower and Machin, 2016).

 Research into a long-term trend toward greater
insecurity of employment has been another strong area of focus; most recently
concerns have highlighted practices such as the rapid growth into the use zero
hours contracts (Brinkley, 2013). A zero hour contract allows employers to hire
staff with no guarantee of work. According to Brinkley (2013) zero hour
contracts are seen by some as part of the’ flexible labour market’ and is one
of the main reasons why unemployment has dropped in the past 5 or so years. Due
to deregulation of the labour markets and the rise of the service sector
employees were being given this contract. Few workers are attracted by the
flexibility offered by zero-hours contracts and agency working (Congress, T.U.,
2014). For example if an individual is at university or college or has a
part-time job zero hours contracts give them the opportunity to work without
having to give up their other commitments (Elliswhittam.com, 2017). This
links to having a good work-life balance which can be seen as beneficial both
to the individual and the employer regarding productivity.

 For others, they have entirely negative
connotations associated with labour market exploitation and the growth of
insecure forms of labour contract. There is even a common, and pejorative, term
to refer to these working practices: ‘flexploitation’ (Gray, 2004). For others implications
are associated with the fear of job loss for psychological distress are
comparable in their severity to those of unemployment itself (Burchell, 2011;
De Witte, 1999) as zero hour contracts and temporary contracts only usually need
to give a weeks’ notice period for dismissal. Furthermore, existing evidence suggests
that workers who experience greater feelings of job insecurity experience lower
life satisfaction (Green, 2009).

The flexible
contract covers unsocial hours working such as twilight shifts, 24–7 shift
rotations, Saturday and Sunday working, overtime (especially enforced and/or
unpaid), annualized hours, stand-by and seasonal work. Also such jobs typically
pay less than corresponding permanent jobs and are associated with lower levels
of job satisfaction and poorer work-related training, ceteris paribus (Bender
and Theodossiou, 2017). While ‘flexibility’ can encompass a range of employment
conditions, a common feature is less security in the employment relationship (Green
and Leeves, 2013). Furthermore, According to Pickavance (2014), these
agreements lead to high levels of insecurity, because of the shifting hours on
a weekly basis, which creates stress and anxiety for the employee.

There is a
significant proportion of the workforce who are employed in what might be
considered insecure and poor quality jobs (Bailey, 2016). Although researchers
like Green (2013) may argue that job quality has improved in some aspects
others tend to disagree. Brinkley 2013 argues that zero hour contracts have
symbolised a large concern that the labour market has moved to a more
‘contingent, less secure and more exploitative’ form of employment during a
time when jobs are scarce and people have no or little choice to accept any
work that is offered to them. Employee organisations tend to argue that the
zero hour aspect results in financial insecurity for workers who lack key
employment rights; employer organisations stress their utility when seeking to
meet fluctuating demand and argue that they play a vital role in keeping people
in employment (Pyper and McGuinness, 2015). However, the insecurity from the employee
could cause effects on productivity as they feel like a number and not a person,
thus causing problems for the organisation.

Zero hour
contracts tend to be mainly applied in the retail and hospitality sectors. Zero-hours
contracts effectively provide employers with a pool of people who are ‘on-call’
and can be used when the need arises. This is good for employers as they will not
be paying staff in less busier periods therefore saving themselves money.
However, for employees that have financial obligations this could have a
massive impact. Furthermore, the lack of a work guarantee and the related
unpredictability of work from week to week, even day to day, can put a large
strain on family’s e.g their ability to arrange childcare. Employee’s may not
be able to get a mortgage or loans as banks see that there is no guarantee of
hours so there is no guarantee or income.  

Research
from (CIPD, 2013) found that ‘Almost half of zero-hours workers say they receive
no notice at all (40%) or find out at the beginning of an expected shift (6%)
that work has been cancelled, and only about a third of employers tell us they
make a contractual provision or have a formal policy outlining their approach
to arranging (32%) and cancelling work (34%) for zero-hours workers’.  This has lead to job insecurity, an example of
poor job quality. Therefore what are the rights and wrongs of zero hours contracts?
Are they a way of employers reducing their labour costs and retaining maximum
flexibility in a time of economic uncertainty at the expense of job and
financial security on the part of the individual? Allegedly, some firms even
use zero-hour contracts to avoid paying for entitlements such as holiday and
sick pay. In 2015, Sports Direct hit headlines for doing
just those things and abusing the zero-hour contract. Employees reported being
penalised under a Dickensian workhouse ethic; seeing their hours cut if they
weren’t available to work on the whims of the retailer (Spruce, 2016).

 Sports Direct is the biggest sports retailer in
the UK market. Sports Direct has expanded enormously since 2009. However, it
has emerged that over 90% of its staff are currently employed on zero-hour
contracts, which has led to negative media coverage (Neville, 2013). MP Iain Wright called for major
reform to working practices and corporate governance at Sports Direct, after
publishing a damning report comparing working conditions at the retailer’s
warehouses to “a Victorian workhouse.” (UK Parliament, 2016)
Sports Direct has just 200 full-time employees at its Derbyshire headquarters
but employs more than 3,000 temporary staff there on temporary and zero hour
contracts (Grut, 2016). The report found:

·        
Workers had
effectively been paid below the national minimum wage;

·        
Some say they
were promised permanent contracts in exchange for sexual favours;

·        
Evidence of staff
mistreatment, including being penalised for matters such as taking a short
break to drink water and for taking time off work when ill;

·        
Serious health
and safety breaches, with repeated ambulance calls to the Shirebrook warehouse
including in one case for a woman who
gave birth in the toilet;

·        
Over reliance on
temporary staffing agencies who “do not seem to have a basic understanding
of employment law and practices.”

The above
express the use of poor job quality in sports direct. More specifically it relates
to the multi dimensional concept of work the physical working conditions (Munoz de Bustillo et al 2009
REF). The way the business model at Sports Direct is operated, in both
the warehouse at Shirebrook and in the shops across the country, involves
treating workers as commodities rather than as human beings with rights,
responsibilities and aspirations (UK Parliament, 2016). The astonishing
report from the MP’s suggest that the low-cost products for customers, and the
profits generated for the shareholders, come at the cost of maintaining
contractual terms and working conditions which fall way below acceptable
standards in a modern, civilised economy. Furthermore, Sports Direct
offers products at super discounted prices and this could be due to the
increased global completion as previously mentioned. Does this mean they have
to cut costs elsewhere to keep profit margins high? This suggests that sports
direct have taken advantage of the weakening of labour market regulation and as
Gray (2004) suggest flexploitation’.

Sports
direct is said to take a Low Road approach to their human resource strategy–
“neo-Fordist”: which means that it sees the employees as costs rather than
assets and relies heavily on coercion, or the stick strategy, to elicit
workers’ cooperation and effort through fear instead of commitment; More
traditional human resource management is better suited to ‘Low Road’ business
strategies that emphasise cost control and competition based primarily on price
(Gill and Meyer, 2008). Low Road organisations use ‘Numerical Flexibility’ (non
standard employment) as a means of containing costs relative to demand by
adjusting the quantity of labour employed (Gill and Meyer, 2008).