A Study on Job Context for Dispatched Workers in Taiwan

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(1)CHAPTER I. INTRODUCTION. To become more competitive is the most important goal and critical issue every company eager to achieve. One way to do that is to avoid unnecessary cost in each field. As everyone knows, human resources have become one of the most important assets a business has. Hence, there is a new trend of using more flexible and nontraditional workforces. That is: Dispatched workers. (This term is the one of the most use in Taiwan. In the U.S., “temporary workers” is the terminology used to describe this kind of work force. ) This chapter includes background of the study, statement of the problem, purposes of the study, significance of the study, delimitations and limitations, and definition of terms.. Background of the Study In a fast-changing economy, no one can afford to make bad hiring decisions. Every failed hire causes companies to throw precious dollars down the drain retaining recruits for the same position. “Working smarter” has become the slogan of the ‘90s for cost-conscious companies. One way many business have embraced the phrase is by using temporary workers—and not just for clerical tasks. Temporary workers are in positions previously filled by permanent employees, such as managers or scientists, and many have skills that did not exist even a few years ago. Demand for temporary workers in managerial, professional, and technical occupations is greatest in industries such as financial services, health care, telecommunications, and information technology.. 1.

(2) Externalization as a way of increasing firms’ flexibility Externalization may increase a firm’s flexibility in dealing with changing market conditions and organizational requirements in three ways. First, externalization reduces many types of employment and administrative costs. Firms can hire externalized workers without increasing the cost of health insurance, employer–funded pension plans, or unemployment insurance (Casey, 1989; Christopherson, 1989). Second, externalized workers are hired without expectation for long-employment and therefore can be let go without tarnishing a firm’s image (Osterman, 1988; Belous, 1989). Third, externalization may offer a firm a way to access to highly specialized skills that are needed for only a short period of time, such as engineering skills that are needed only for a single project (Gordon & Thal- Larsen, 1969). Both Lazerson (1988) and Belous (1989) reported using independent contractors allows a firm to offer a wide range of products without risking a large fixed investment in labor. Economists and business consultants say the rise of the flexible work force flows from a fundamental shift in how companies do business. “This all stems from the move to just-in-time manufacturing. You can’t have just-in-time manufacturing without just-in-time workers.” Besides, according to an investigation conducted by the104 Job Bank ( 104 人才派遣中心，2005 ), there are nine factors which enterprises will consider while using dispatched workers: 1. Controlling the cost on human resource (30.5%) 2. Selecting the potential workers for permanent use (18.9%) 3. Decreasing the administrative work (18.9%) 4. Adjusting to the seasonal demand for employment (16.8%) 5. Substituting the temporary job opening (15.8%) 2.

(3) 6. Fulfilling the demand for professional personnel on specific project (9.5%) 7. Controlling the cost on welfare (6.3%) 8. Meeting the company policy (2.1%) 9. Reducing the pressure of recruiting (2.1%). Further use of temporary workers and related HRM issues Today, companies have expanded their use of contingent staffing to include temporary lawyers, software engineers, editors, accountants and other professionals who have a significant impact on the organization and its internal and external customers. The volume and frequency of using temporary workers has also increased significantly, and in some companies-particularly during peak project periodstemporary workers can represent up to 40 or 50 percent of the total workforce. Additionally, the growing popularity of longer assignments for temporary workers has significant implications for the management of those personnel by client organizations. In particular, the attitude that temporary workers are somehow less valuable than their permanent counterparts, i.e. that they are "second class employees" of a sort, may result in a higher than necessary turnover among temporary workers. The idea that an organization has something to gain from the existence of people pursuing non-traditional career paths suggests that they also have something to contribute, but that notion seems to be intuitively challenging (Waterman et al, 1994). There were some interesting perspectives that organizational HR managers might want to consider. Participants gave examples of situations where they were contracted because of their organization specific knowledge but lacked some of the necessary technical skills or knowledge to fulfill the project. In a couple of cases organizations had supplied or funded the necessary training to bring them up to speed.. 3.

(4) It seems that many organizational managers are still following a more traditional view of HR practice which assumes that training and development, communication practices, feedback etc are issues for bona fide employed members of the organization only and that any relationship with a contractor (however well known) must be transactional. There remains a lack of awareness of possible reciprocal benefits from developing the competencies of contingent workers within the organization (Defillippi & Arthur, 1996; Quinn, 1992). The greater the performance ambiguity of the job, the greater is the firm's incentive to motivate employees by investing in positive work conditions (Bowles, 1999). However, the growing body of research remains largely limited to employees (typically referred to as "permanent employees") hired with an expectation, on the part of both employer and employee, of relatively long-term employment, whether full- or part-time. Very little research links progressive HRM practices and systems to the management of workers hired on a temporary basis who may not share their more permanent counterparts' expectation of relatively longer-term employment. There are few articles talking about the working effectiveness of dispatched workers used in Taiwan. Therefore, the current situation of the use of dispatched workers will be reviewed in this study. We will discuss on needs for improving performance of dispatched employees, and try to find out if there is possibility of further use of dispatched workers by client companies.. Statement of the Problem According to the research background, the statements of the problem are listed as follows: 1.. How are dispatched workers used by client companies in Taiwan? 4.

(5) 2.. How to improve the problems of using dispatched workers in Taiwan?. 3.. What is the future development in the use of dispatched workers by client companies in Taiwan?. 4.. How will the management mode of client companies be affected by using dispatched workers in Taiwan?. Purposes of the Study The purposes of the study follow as below: 1.. Identifying the context of the use of dispatched workers by client companies.. 2.. Exploring the needs of improving performance of dispatched workers.. 3.. Prospecting the future development of dispatching services in Taiwan.. Significance of the Study The study is to explore the need for improving work performance of dispatched workers in client companies, and the possibility of the further use of dispatched workers in Taiwan. The use of temporary workers is highly acceptable in several foreign countries, like the U.S. Taiwan government is also aware of this new trend of using more flexible work force. Hence, the dispatching service is categorized into one of the twelve industries targeted for current stage of service sector development. However, the concept of dispatching services is not prevalent among the public. Companies which would like to adopt the use of dispatched workers are almost foreign traders. In that case, the research aims to find out whether the trend of utilizing dispatched employees will develop increasingly in Taiwan.. 5.

(6) Delimitation and Limitation Delimitation 1. The study delimits to interview directors who can supervise the working condition of dispatched workers directly in the companies in financial insurance, information, and private security industries. Besides, there is still one interviewee from non-profit organization. 2. The study only focuses on the needs of improving work performance of dispatched workers; other issues related to the use of dispatched workers are not included.. Limitation 1. It’s difficult to choose interviewees in the same position, since this research aims to find directors who supervise the dispatched workers directly in client companies. So, the interviewees are selected randomly by the researcher. 2. Besides, since the directors chosen are not necessarily the HR managers, their answers to the questionnaire may not match the real situation in the companies perfectly. So, the information of the use of dispatched workers may not be complete. 3. The directors interviewed are from three industries and one non-profit organization, the size of their companies and association is different. Hence, the results of the questionnaire can not be generalized.. 6.

(7) Definition of Terms Dispatching Service – It’s a temporary employment relationship. Dispatched work agencies provide dispatched workers which they recruit by themselves to client companies to utilize. Once the assignment is finished, this temporary hiring relationship ends.. Dispatched Worker – In this paper, the term "dispatched workers" refers to individuals working through a dispatched work agencies agency on assignment to client companies that contract with the agencies. Their employment is mediated by dispatched work agencies but they are supervised by client companies.. Dispatched Work Agency – These agencies help to select, recruit, and hire employees (known as dispatched workers) based on the requirement of client companies. Besides, they substitute client companies to pay for dispatched workers. They charge for the service fees from the client companies by providing the above services.. Client Company – Another name for it is “user firms”. This is the actual place for dispatched workers to work. There is a business contract relationship between client companies and dispatched work agencies. They pay for dispatched work agencies, and these agencies help to pay for dispatched workers.. 7.

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(9) CHAPTER II. LITERATURE REVIEW In this chapter, the related literature reviews were arranged by researcher. The important concept of the study was divided into three parts: the content of nonstandard employment and temporary work, the operation of dispatching system in Taiwan, and the related HR problems for using dispatched workers.. Nonstandard employment / Contingent work Staffing strategies that combine traditional and nontraditional employees may help firms become more efficient, protect against layoffs, or use workers with special skills as the need arises. The perception of nontraditional work arrangements is mixed. Some people view this large and growing workforce as one which employers relegate to second-class employment- with no worker benefits, little or no mutual loyalty, and all risk borne by the employee- while employers benefit from lower costs. Others see the nontraditional workforce as an opportunity for workers to achieve a flexible work schedule, reach a better balance between work and other interests, gain new experiences, or bridge periods of traditional employment. The increase in nontraditional staffing arrangements may require reexamining definitions of employer, work, and workplace. The notion of a clearly defined employment relationship becomes difficult to uphold as changes in the organization of work facilitated by technological improvements have blurred the boundaries between standard and non-standard employment relations. Consequently, non-standard employment relations such as temporary agency work have become increasingly prominent ways of organizing work in recent years (Nienhüser & Matiaske, 2003; Bothfeld & Kaiser, 2003; Jahn & Rudolph, 2002).. 9.

(10) Definition of non-standard employment There are many different terms used in the literature to describe non-standard employment relations (Kalleberg, 2000). For example, non-standard employment relations have been referred to as flexible staffing arrangements (Abraham, 1988; Houseman, 2001), market-mediated arrangements (Abraham, 1990), flexible working practices (Brewster et al., 1997) or more generally as atypical employment (Delsen, 1995; De Grip et al., 1997; Cordova, 1986). However all definitions imply that non-standard employment departs from the standard work arrangement. Standard work arrangements are generally associated with full-time positions that are based on an indefinite contract and are performed at the employer's site under the employer's direction (Muckenberger, 1985; Bosch, 1986; Talos, 1999; Rogowski & Schomann, 1996). “Nonstandard” refers to any work arrangement other than a full-time wage and salary job. The term “contingent” refers to jobs that are of limited or uncertain duration. Overall, nonstandard jobs are far more likely to be contingent than are regular jobs. Consequently, the two terms are often used interchangeably. Contingent and nonstandard work often involve the participation of an employment intermediary. This is an arrangement where an individual works for one firm but is actually employed by another, such as a temporary help agency. The phrase “contingent work” was first proposed by Audrey Freedman in 1985 to refer specifically to “conditional and transitory employment arrangements as initiated by a need for labor-usually because a company has an increased demand for a particular service or a product or technology, at a particular place, at a specific time.” The term, however, took on a negative connotation, implying less job security, and soon became used to describe a wide variety of employment arrangements including part-time work, self-employment, temporary help agency employment, 10.

(11) contracting out, employee leasing, and employment in the business services industry. In fact, to some analysts, any work arrangements that differed from the commonly perceived norm of a permanent, full-time wage and salary job would be considered “contingent.” For many people, nonstandard or contingent work has come to represent a just-in-time work force, the human equivalent of just-in-time inventories. In order to turn the focus on the attachment between the worker and the employer and to identify a common underlying trait that could be used to classify workers, the Bureau of Labor Statistics proposed the following definition of contingent work in 1989: “Any job in which an individual does not have an explicit or implicit contract for long-term employment.” Essentially, contingent workers are individuals who hold jobs that are temporary or not expected to continue. In the UK the term for employment arrangements other than permanent full-time work is the flexible workforce, drawing on Atkinson and Meager's (1986) model of the flexible firm, in which they proposed the existence of a stable core workforce and a periphery of workers on a variety of less secure, shorter term or non-employed contracts. In the US the term contingent work (Marler et al., 1997) is commonly used to identify those who work with organizations on a part-time, self-employed, temporary and/or contractual basis. Two points are clear. Whatever the definitions, the number of people working on other than full-time employed contracts is growing significantly. Furthermore, the peripheral or contingent workforce (and this study uses the term contingent to avoid the derogatory overtones of 'peripheral') constitutes not just low paid, low grade workers, but highly skilled, highly experienced people (Casey et al., 1997).. 11.

(12) Classification of nonstandard employment. According to Alison (1995), the contingent work force is often considered to include workers in all of the following groups: •. Part-time workers. •. Many of the self-employed, such as independent contractors. •. Workers hired directly by companies for a temporary period. •. Workers who get jobs through temporary help supply services firms.. Edie and Eileen (1997) defined the scope of nonstandard jobs in a more detailed way, they pointed out that workers in nonstandard jobs include: •. Independent contractors (freelancers or independent consultants);. •. Contract workers (e.g., janitors or computer specialists employed at a janitorial or computer services fin that contracts to provide services to other firms where these employees actually spend their working hours);. •. On-call workers like substitute teachers;. •. Temps (workers employed by a temporary help agency);. •. Day laborers;. •. The self employed who own and run their own business; and. •. Workers employed in a regular employer-employee relationship who work less than 35 hours per week.. A striking aspect of today's economy is the number, scope, and growth of nonstandard work arrangements, specifically, alternative and contingent employment. Nonstandard employment is estimated to be as high as 33 percent of all employment (Belous, 1989; Houseman & Polivka, 2000) and includes alternative and contingent 12.

(13) work arrangements. Alternative employment arrangements comprise independent contractors, on-call workers, temporary help agency workers, and workers provided by contract firms (Cohany, 1998). Independent contractors are defined as people who work for themselves. On-call workers are workers who are mobilized and used as needed. Temporary help agency workers are employees who are paid by a temporary help agency. Contract workers are employees who are paid by one company but carry out assignments for another. According to February 2001 current population survey data (most recent BLS data available), 12.5 million workers, or about one in 10 employees, fall into one of these four categories. This includes 8.6 million independent contractors, 2.1 million on-call workers, 1.2 million temporary help agency workers, and 633,000 workers provided by contract firms. Another conceptualization of nonstandard employment is contingent work, defined as work without the expectation of continuity. Within this broad definition, finer distinctions have been attempted. For example, BLS data provide three successively broader estimates of contingency. Estimate 3, which measures contingency as the percentage of workers having worked or expecting to work in their current job for one year or less, puts the number of contingent workers at 5.4 million or 4 percent of employment. Several authors suggest, however, that the BLS data seriously underestimates the incidence of contingent employment, primarily because of definitional problems in enumerating contingency (Barker & Christensen, 1998). Available data reveal significant demographic differences. Contingent employees are more likely to be women than men, blacks and Hispanics than whites, and younger workers than older workers (Cohany, 1998). The likelihood of holding a contingent job is highest for workers in the construction and service industries. (Venkat, Stephen, Judith, & Max, 2003). 13.

(14) Background of nonstandard employment. Changes beginning in the mid-1970s created conditions that led countries, organizations, and workers to search for greater flexibility in employment. Consequently, the standard employment relationship began to unravel (Rubin, 1995; Cappelli et al., 1997; Cappelli, 1999). Global economic changes increased competition and uncertainty among firms and put greater pressure on them to push for greater profits and to be more flexible in contracting with their employees and responding to consumers. Sluggish economic growth triggered high unemployment that made it clear, especially in Europe, that economies were incapable of generating enough jobs to provide full-time wage employment for all workers (C’ordova, 1986). The adoption of nonstandard work was facilitated by technological improvements in communication and information systems that made it easier for organizations to specialize their production, assemble temporary workers quickly for projects, and rely more on outside suppliers. Labor laws designed to protect permanent employees also fueled the growth in nonstandard work by encouraging employers to avoid the mandates and costs associated with these laws (Lee, 1996; Cappelli et al., 1997). So too did demographic changes in the composition of the labor force, such as the increase in married women workers and older workers, who often preferred the flexibility available through nonstandard work arrangements (Pfeffer & Baron, 1988). (Quoted from Arne, 2000). Rationale for Nonstandard Employment. For employer. According to Venkat, Stephen, Judith & Max (2003), the benefits of using nonstandard work force can be divided into parts: 14.

(15) 1. Flexibility: The assumed principal benefit of a nonstandard workforce is the greater flexibility that it affords the organization. Because the firm has no long-term commitments to nonstandard workers, they can be deployed as market conditions warrant, providing considerable flexibility in the size of the employee pool (Belous, 1989). In highly cyclical or seasonal industries such as retailing, a nonstandard workforce allows the firm to smooth out its staffing profile. (Caudron, 1994). 2. Cost-saving: The nonstandard workforce can be hired as needed for specific skills or specialized know-how (Ettorre, 1994), without investing the time and resources required to develop employee skills for what may be a short-term project or a project deemed to be risky because technological advances may make the investment obsolete. 3. Avoidance of adjustment of the original salary structure: By hiring nonstandard workers for specific assignments, firms can avoid perceived wage inequity and its attendant problems (Frank, 1985). Frank (1985) offers the example of a high-paid consultant who receives continual assignments from a firm. Even when the workload justified it, the firm was reluctant to hire the consultant as a regular employee because other employees were apt to make pay comparisons when the consultant became an insider. The attendant equity perceptions associated with conversion of the consultant to full-time employee would have costly readjustments to the pay scale of all employees. 4. Emphasis keeping on core competencies: Nonstandard employment arrangements may be conducive to greater strategic focus. A firm may retain standard, full-time employees only in those areas that it deems its core competencies (Prahalad, 1993). By using a nonstandard workforce in all other functions, it may achieve. 15.

(16) better returns because its resources are invested in its areas of distinctive competence (Huber, 1993).. For employees. Benefits from nonstandard employment do not accrue solely to the employer. Employees may themselves seek such relationships for greater flexibility in adjusting work schedules to personal lives, or provide better work-home balance. Other nonstandard workers may appreciate the choice inherent in accepting a series of short-term projects, instead of being tied up in a long-term position with one firm. A final benefit of nonstandard employment is that employees may build up a more impressive portfolio of work experiences than may be possible by working for a single employer. This is especially the case with knowledge workers who may be particularly keen to enhance their market value by accumulating diverse and challenging work experiences (McGovern & Russell, 2001).. Temporary work Definition of temporary work The temporary help formula is simple: Temporary help supply firms provide temporary workers on a contract basis to client companies. Temporary workers are then under the client company’s direct supervision but receive a paycheck from the temporary help supply firm; the firm bills the client company for the worker’s wages, along with a fee for providing the worker placement service. Additionally, temporary employment tenure may range from a few days to a few years, depending on factors such as occupation, expertise, and demand for a particular skill. Unlike contract companies, which supply large groups of workers to a given firm. 16.

(17) on an ongoing basis, temporary help agencies provide firms with individual workers on an as-needed basis. In doing so, they allow customer firms to convert labor from a fixed to a variable cost.. Triangular relationship The defining characteristic of the temporary help industry is the triangular employment relationship (C’ordova, 1986; Moberly, 1987; Gonos, 1997; Vosko, 1997), in which the temporary agency is the legal employer, while the client organization supervises the employee. This raises complex legal issues as to which organization is responsible for complying with governmental regulations and especially as to who is liable for accidents and other aspects of the employment relationship. These debates are often framed around principles of “joint employer” or “co-employment” (e.g., Axelrod, 1987; Tansky & Veglahn, 1995). One of the key factors that determine whether or not an organization is a worker’s employer is the extent to which it supervises the worker’s activity (Carnevale et al., 1998). In order to avoid being considered a joint employer (and thus being liable for some employer responsibility), clients employing temporary help agencies (and contract companies) often use buffers to differentiate the way they treat contractors and regular employees (Jarmon et al 1998). The most severe buffer is time, specifying that the temp must leave after a fixed time period (Smith, 2000). (Quoted from Arne, 2000) The relationship between temporary help agencies, client companies, and the temporary (dispatched) worker is showed in the following figure:. 17.

(18) Dispatched Work Agencies. Business Contract. Client Companies. Relationship. Commanding Relationship & Hiring Relationship Labor Service Supplying (Labor Contract) Relationship. Dispatched Workers. Figure 2.1. The triangular relationship of the dispatching services. Source: Adapted from 成之約，民 87，4。. Temporary help firms pay temporary workers for every hour they work, billing the client company to pay the workers. The firms also charge a fee for their services, calculating hourly rates for workers as a portion of the amount the firm bills the client company. In 1996, temporary workers received an average of about 72 percent of the billable rate for all types of work, according to the National Association of Temporary and Staffing Services. As for the temporary help agency and the temp, there is an employer-employee relationship between them. Even though temps work at a variety of sites, in reality they work for, and receive their pay from, only one company--the temporary help agency. Agencies recruit prospective temporaries and determine their qualifications. Applicants are often required to furnish references from prior employers, educators, and acquaintances for additional background information. Agencies test applicants'. 18.

(19) skills and conduct interviews to determine each one's abilities, reasons for becoming a temp, availability, and expected pay rate. Once hired, the agency gives applicants an orientation and, in many cases, offers training to increase their skills for upcoming assignments. The training varies from word processing and computer programming to specific skills tailored to particular clients. The training not only provides temps with the skills needed for a broader range of assignments but increases their marketability for permanent jobs The American Staffing Association (formerly the National Association of Temporary Staffing and Services) estimates that 90percent of companies currently use temporary staffing to augment their full-time regular work-force. In 1998, ASA reported that U.S. companies spent $72 billion on temporary staffing services, driving average daily temporary staffing employment to 2.9million. According to the Bureau of Labor Statistics, employment of temporary workers is expected to increase 53 percent—nearly 1.4 million jobs—from 1996 to 2006, making the temporary staffing industry one of the fastest growing in the economy. (Linda, 1999) The occupations of these workers are equally varied. Temporary workers were found in both high- and low-skilled occupations. While most worked in administrative support (690,000; 42 percent) or industrial positions (396,000; 24 percent), a substantial number temped in executive, administrative, and managerial positions (105,000; 6 percent).. Background of temporary work. The temporary help industry in the United States originated in Chicago during the late 1920s, with the first agencies supplying calculating-machine operators on a temporary basis. By 1956 there were still only about 20,000 employees in the 19.

(20) temporary help industry (Gannon, 1984). Since 1972, employment in the temporary help services industry has experienced explosive growth, increasing at an annual rate of over 11%, and its share of total US employment has risen from under 0.3% in 1972 to nearly 2.5% in 1998. By contrast, total no farm employment grew at an annual rate of 2% during this period (Segal & Sullivan,1997; Laird & Williams, 1996). Changes in temporary work exhibit much greater variance than do other forms of employment and are very sensitive to the business cycle, rising and falling with the state of the economy (Gannon, 1974; Golden & Appelbaum, 1992; Segal, 1996). Temporary help agencies are also growing rapidly in Europe (Bronstein, 1991), though there is considerable variation among countries. Some nations feel that they are useful as employment intermediaries, while others object to them for reasons such as the principle that job placement should be done by public, not profit-making agencies. In the mid-1980s, temporary help agencies were authorized (subject to some restrictions) in Argentina, Belgium, Brazil, Denmark, France, Germany, Ireland, Japan, the Netherlands, Norway, Portugal, and Switzerland, among other countries. They were banned in Algeria, Costa Rica, Gabon, Greece, Italy, the Libyan Arab Jamahiriya, Madagascar, Mauritania, Senegal, Spain, Sweden, and Zaire (C’ordova 1986: 657, note 16). (Quoted from Arne, 2000) The growth of temporary help agency employment in both the United States and Europe has been generally driven by employers’ needs (De Grip et al., 1997), as well as by the entrepreneurial efforts of temporary help agencies themselves (Ofstead, 1999). Golden & Appelbaum (1992) found that the two-and-a-half times increase in the level of temporary help employment between 1982 and 1988 was due mainly to demand-side forces and employers’ needs rather than the supply of labor. Golden (1996) found this as well for 1982–1992, a period when employment in the temporary help industry in the United States more than tripled. Laird & Williams (1996) found 20.

(21) that supply (increase in married women workers) as well as demand variables contributed to the observed growth in the temporary help service industry between 1982 and 1992. [Golden (1996) also found that the proportion of married women in the labor force was positively related to temporary help agency employment levels, but its impact was dwarfed by the effects of demand-side variables.] However, Segal & Sullivan (1997a) point out that the rise in women’s labor force participation is probably not a driving force behind the growth in temporary agency employment because much of this has come from increased male participation in temporary work. Moreover, studies of the preferences of temporary workers have found that most (e.g., 60%—Cohany, 1998) work in temporary jobs involuntarily. (Quoted from Arne, 2000) The help supply services industry has accounted for a relatively large share of the overall job growth during the current economic expansion. Worried that the economic situation would suddenly reverse itself, employers hired temporary workers instead of expanding their permanent staffs. In doing so, businesses gave a push to a trend that goes back at least to 1982 and is likely to continue through the foreseeable future: The rapid growth of the contingent labor force. People also become temps because they cannot find permanent employment. During recessions, people may desire permanent employment but be unable to obtain it. The recent trend of corporate downsizing has forced many workers to accept temporary positions as a way of making ends meet while seeking permanent positions.. 21.

(22) Rationale for Temporary Work. For employers. The rapid growth of this industry came about largely because its clients find it advantageous to hire people for the short term. Clients can find new workers quickly without worrying about future layoffs. They save the time and expense involved in recruiting and training new workers, as well as avoiding much of the paper work related to personnel operations, such as filing payroll taxes and maintaining leave records. Instead, the client makes a single payment to the temporary services firm, which is responsible for insuring that all taxes are paid and all employment regulations observed. (Alison, 1995) Although contingent workers can be hired directly, most companies turn to a third-party supplier such as a temporary staffing company that will recruit, screen, select, place and manage the temporary worker while on assignment. This allows the company to use the temporary only for the time needed, while eliminating payroll, worker’s compensation and benefit expenses and responsibility, as well as relating administrative costs. (Linda, 1999). According to Arne (2000), organizations use temporary help agencies to lower recruitment and screening costs, by hiring employees who perform well: Houseman (1997) found that 21% of the establishments in her sample said this was a reason for their use of temporary help agencies (see also von Hippel et al., 1997). Organizations may also be able to reduce training costs through the use of temporary help agency workers, as is suggested by Krueger (1993), who reports the results of a survey that found that 62% of temporary help agencies trained clerical temps in the use of office software. 22.

(23) Besides, temporary workers are helpful in situations where permanent employees need to take extended time off due to illness, childrearing duties, family emergencies, or vacations. For example, hospitals supplement their regular nursing staff with nurses from temporary help firms to meet fluctuating patient loads without compromising standards of care or unreasonably increasing costs. Similarly, firms that need to retain the services of a highly skilled individual for a particular task but cannot afford to hire a permanent employee with a six-figure salary can hire a temporary consultant for the duration of a project. Temporary help agencies constitute a modern-day “reserve labor army” that helps employers to solve problems associated with understaffing as well as overstaffing positions with expensive full-time, permanent workers who may not be utilized. By using temporaries, employers can staff minimally and then add temporary employees on an as-needed basis. In support of this hypothesis, Houseman (1997) found that the seasonality of employment demand was positively related to both the incidence and intensity of organizations’ use of temporary help agencies (see also Abraham, 1990). While companies have always used temporaries to help out with special projects or at busy times, temporaries tended to be peripheral to the company’s main business. What appears to be new is that the use of temporaries has become an integral feature of firms’ personnel strategy (Nollen, 1996; von Hippel et al., 1997) that enables them to respond to the business cycle and makes their workforce problems more manageable and less costly (Gannon, 1974). (Quoted from Arne, 2000) Finally, according to Kevin, Damian, Jill, and Huw (2001), there are six factors which influence a host organization's decision to recruit temporary agency workers through one or more agencies.. 23.

(24) These are:. 1.. the desire for greater numerical flexibility due to increased uncertainty associated with technological change and new forms of competition;. 2.. the need to respond to changes in external labor market conditions;. 3.. the coupling of corporate performance targets to employment levels, leading to a need to mask true staffing statistics;. 4.. corporate level pressure to reduce labor costs;. 5.. the generation of internal flexibility in order to meet job security and redeployment targets for core staff; and. 6.. the provision of a cheap screening process to assist recruitment and selection procedures.. For employees. People choose temporary work for a variety of reasons, such as family responsibilities and schedule flexibility. Temporary positions allow parents with young children to have time for their family and still remain in the work force. Students often turn to temporary jobs to earn spending money or to help pay school costs. Recent graduates often accept temporary work to pay bills while sampling opportunities available in their chosen field or to obtain training and valuable work experience. Individuals who are retired or in need of supplemental income turn to temporary work to earn extra cash without having to make a long-term commitment to a single employer. Still others choose temporary work simply because they enjoy the diversity and challenge of working for different employers. The chief benefit temps enjoy is flexibility. Temps choose when to work. Upon receiving requests from their clients, the temporary help agencies determine which 24.

(25) employees are qualified and available for the assignments. They then contact a temp, explain the nature of the work, the employer, the duration of the assignment, the rate of pay, and the work hours involved. The temp can then choose to accept or reject the offer. Another reason for employees to choose a temporary job is that temporary jobs sometimes lead to permanent ones. When companies are looking to expand their permanent staff, they often choose prospective candidates from their temporary employees. In fact, the practice of offering permanent positions to people originally hired as temporary staff has become so common that many temporary help agencies assess their clients a fee whenever temporary employees accept offers of permanent employment. (Alison, 1995). Summary To sum up, the rationale for the use of nonstandard workers and temporary workers is almost the same. For example: these two kinds of employment both can provide flexibility to employers in the use of workforce and to employees in the choice of different jobs. The critical reason for companies to choose temporary workers is that temporary staffing company will recruit, screen, select, place and manage the temporary worker while on assignment. Hence, client companies can save both the time on finding the right people and the money on administrating them.. 25.

(26) Potential problems and related HR issues of using temporary workers Except to the benefits of using temporary workers, there are also some potential problems arising when the duration of using these workers becomes permanent and the volume of them increases more. Hence, the potential problems of using temporary workers and related HR issues will be discussed sequentially.. Potential problems of using temporary workers According to Lars (2005), the use of standard and non-standard employment relationships causes problems from a Human Resource Management perspective. First of all, regardless of the way the agency worker is managed, the agency and not the client is the legal employer of the worker and there is no contractual relationship between the client and the temporary agency worker (Mitlacher, 2004). This leads to several problems. As the agency workers perform their work at the client's site, the agency is usually not in a position to undertake some of the central tasks associated with being an employer (Rubery et al 2002). For example the agency is not in a position of supervising the work process or even establishing and verifying circumstances that might lead to disciplinary issues. This is even truer when the responsibility for setting performance standards for temporary agency workers does not lie with the direct employer but with the client. As the client is in many cases involved in actually monitoring performance of temporary workers and passing information to the agency, this information serves as the basis for positive or negative appraisals and career promotion (Rubery et al., 2002). As disciplinary issues are concerned the agency might completely rely on information provided by the client as the basis for disciplinary sanctions and even dismissals. 26.

(27) The second issue that might cause ambiguities through the use of temporary agency workers is the selection process. When a good part of recruiting and selection of personnel is done by the agencies the importance of this Human Resource function in client companies is weakening (Nienhüser & Baumhus, 2002). At this time not the selection of a suitable worker is the main focus anymore but the selection of an appropriate temporary work agency. The third ambiguities that arise when using temporary agency workers are often related to attitudinal issues (Koene & Riemsdijik, 2005). Especially loyalty, identity and organizational commitment are seen critical with regard to temporary agency workers. This is because modern organizations cannot succeed unless all workers agree to contribute to their mission and goals (Roussseau, 2004). Some CFOs note also that the high turnover rates of many alternative workers can cause serious security headaches. And at high tech corporations, finance executives worry that relying on outside workers may deplete talent. “You end up in a situation where some of your expertise is transitory.” The loss of control can be particularly damaging to a service company. “An alternative worker may not be on the company payroll, but customers don’t know that.” Also, according to David (2004), the following organizational factors are suggested as contributing to the likelihood that temporary workers may quit their assignments prior to the scheduled termination date:. 1.. inadequate socialization;. 2.. perceptions of organizational injustice;. 3.. exclusion from decision-making activities that affect their work lives;. 4.. low expectations for a permanent job in the firm;. 5.. relatively low age and tenure compared to permanent employees; 27.

(28) 6. relatively low tolerance for perceived inequity compared to permanent employees; and 7. relatively low levels of commitment toward the firm compared to permanent employees.. Certainly, one of the downsides of contingent workers is continuity. The lack of continuity can make teamwork building difficult. The gap in wages and between permanent and alternative workers doesn’t foster a sense of corporate oneness. Dissatisfied workers can affect profitability in other ways, as well, including diminished productivity. While these longer assignments provide stability for temporary workers who value it, they also create additional challenges for client firms that want to maximize the utility of their temporary workers. Temporary workers would like to have recognition from those organizations with which they have regular contact on the part of line managers and HR managers. They thought that policy and practice on the development of all contingent workers needs to be reassessed in view of their growing presence in organizations. Additionally, decreased loyalty and dedication to the employer are often apparent in long-term temporary workers who would prefer permanent positions. Perhaps even more problematically, client firms commonly view temporary workers as buffers against market downturns, effectively classifying those workers as expendable. Because of this view, client firms also allocate fewer resources to training and socializing temporary workers than to permanent employees (Wiens-Tuers & Hill, 2002). This "restricted investment" on the part of client firms reinforces feelings of second-class citizenship among temporary employees and has the compounded effect of limiting both involvement in, and identification with, the organization. 28.

(29) A broader concern is the nature of the employee's relationship with the firm. As firms weaken the ties of long-term employment and loyalty, it will be harder for them to inspire in their employees "the initiative, responsibility, and intensity of effort" required for success in today's economy (Stewart, 1997; Whitman, 1999). Individual loyalty to the organization is highly dependent on the organization's loyalty to the individual (Rhoades et al., 2001). The addition of a third party besides those of employer and employee adds additional complexity and uncertainty into the employment contract and performance. Especially when it comes to creating commitment and loyalty it becomes important that a diverse Human Resource Management is used to care for the special needs of temporary agency workers. For example, the training and development of non-core staff is not easily accommodated within either 'hard' or 'soft' versions of HRM. In the hard version, the question may be asked: why should an organization get involved in the development of staff with whom it does not intend to have a long-term relationship? The soft model of HRM, based on ongoing commitment in return for development, is also unlikely to sustain such training. Yet the point is made that changed times require a fundamental review of practices (Walton, 1996; Matusik & Hill, 1998). The philosophical underpinnings of HRM are up for renegotiation, and for those wedded to traditional HR practices this may be a challenge indeed. Client companies also lose some of the less tangible benefits that permanent workers might provide the company because temps have little incentive to be team players or to improve quality and productivity. Furthermore, managers and permanent employees still have to spend valuable time explaining office procedures because temps, no matter how qualified they may be, are unfamiliar with the layout and culture of their assigned firms and the idiosyncrasies of their fellow workers. 29.

(30) Table 2.1 lists some potential problems of using temporary workers. Table 2.1. Potential problems of using temporary workers Potential problems of using temporary workers 1.. Workers lack long-term “attachment” to their employers. Unattached workers are likely to withhold their loyalty and best effort.. 2. 3. 4.. High turnover rates of workers cause serious security headaches. The lack of work continuity makes teamwork building difficult. Restricted investment on the part of client firms reinforces feelings of second-class citizenship among temporary employees and has the compounded effect of limiting both involvement in, and identification with, the organization. The triangular relationship adds additional complexity and uncertainty into the employment contract and performance. Temps have little incentive to be team players or to improve quality and productivity.. 5. 6.. Related HR issues The above phenomena show that lots of improvements are needed for using of temporary workers. A Human Resource Management perspective has to be added to the current debate in order to gain insight on the role of Human Resource Management in triangular relationships. Since it’s unavoidable for companies to use temporary workers as a way of saving cost, how to improve workers’ performances becomes a critical issue to consider. Recent research reports positive associations between high performance human resource management (HRM) systems and organizational performance (Delaney & Huselid, 1996; Dess & Shaw, 2001; Huselid, 1995; MacDuffie, 1995). The systems described involve a number of practices including extensive employee training, employee participation and empowerment, job redesign, team-based production systems and performance-contingent incentive compensation. Foote and Folta (2002) affirmed the economic value to the firm of these HRM practices and systems of. 30.

(31) practice. It is not uncommon for firms that use temporary workers extensively to have positions for them that can last up to five years or longer, or to hire workers into temporary positions with an increased potential for longer-term employment. Many of these firms use the temporary employment condition as a pseudo-probationary period to preview workers from whom they screen out those who fail to meet performance criteria or do not otherwise “fit” the organization, or extend an offer of long-term employment to desired individuals. Such firms may find significant benefit in developing a stronger, more meaningful employer-employee relationship with their temporary workers. Once again, a key point for HR managers is that the department was rarely involved in such discussions and hence no strategic view was being taken about maximizing the resource base of the organization and how this could be congruent with the development of contingent staff. In the absence of HR involvement, line managers were making decisions, which may well not be to the benefit of individuals, the organization or the HR function itself. HR absolutely should be in the business of managing contingent workers if those workers make up a regular, significant part of an organization’s staffing, says Linda Merritt, human resources strategic planning director for AT&T. “It’s a workforce capability management issue,” she says. Contingent staffing “becomes a place where capabilities are housed. If you can’t see into it, you don’t know if it’s being managed well. Noe et al., (2000) argue that HRM practices help companies gain a competitive advantage over their competitors and Storey (2001) that this should be achieved through employee commitment rather than compliance with company rules. Drucker (2002) challenges the notion that temporary employees can develop commitment to 31.

(32) the organization to which they are contracted. The productivity of people, he argues, depends not only on how and where workers are placed, but also on who manages and motivates them – an area the temporary agency does not control. (Julia & John, 2002) Temporary employment contracts are characterized by ambiguity complicating the employment relationship, the status of the agency worker and the responsibilities of the parties involved (Rubery et al., 2000). We argue that this ‘fuzziness’ has also been translated to related HR functions and that where the employment contract and employment responsibilities are uncertain, the responsibility for, and the assignment of, HR functions also become ambiguous. Once we move outside the traditional employer-employee relationship with its implications of commitment, training, organizational identification and career development, the assignment of HR responsibilities becomes conjectural. At each organization’s workplaces, managers had to deal with the consequences of the corporate policy of using such workers. This raised not only employment and staff development issues but also the question of how to manage a relationship with the external organization charged with supplying a section of their workforce. Internally managers had to handle the demands of different groups of workers, all on different contracts and with varying degrees of security attached to each. (Kevin, Damian, Jill, & Huw, 2001) As temporary staffing becomes a more permanent solution for many organizations, HR professionals have looked for ways to better optimize this resource and improve the return on their investment. According to Linda (1999), managing the contingent workforce involves working closely with the staffing service to communicate expectations and issues. But equally important to the process is having a structured set of guidelines in place for the organization to follow when using temporary help. 32.

(33) These guidelines are:. 1.. Guidelines for ordering and managing temporary workers (some companies may require the manager to complete an online assessment form to determine if they need a temporary worker as opposed to a full-time, regular hire).. 2.. Policies that keep the company out of trouble legally (limiting the amount of time a temporary worker can be onsite to avoid being perceived as an employee, management guidelines, and so on).. 3.. Metrics and systems to monitor productivity, quality and internal customer satisfaction.. 4.. Written policies in employee handbooks that exclude temporary workers from benefit programs, stock options, etc.. 5.. Guidelines that state if, when and how temporary workers can apply for fulltime, regular positions.. Summary There are a lot of problems arising from the use of temporary workers, such as the lack of loyalty, high turnover rate, difficulty to build teamwork, lower involvement, and so on. To keep the use of temporary workers competent, client companies should adjust their human resource management system to cope with the following problems.. 33.

(34) The current situation of dispatched workers used in Taiwan. Characteristics of dispatching services In this chapter, the term “temporary workers” will be replaced by dispatched workers, since this term is the one used most often in Taiwan. The demand of using dispatched workers in Taiwan began from 1989. At that time, dispatched workers often took the roles of assisted workers of exhibitions. Then, because of a series of Asia economic storms and the trend of investment towards Mainland China, business used dispatched workers as a way of reducing cost. After developing for 12years, the use of dispatched workers is broadly accepted by the public. Recently, the work type for dispatched workers is changing from managerial and administrative work to professional and highly skilled work. The distribution of dispatched workers used in industries which are categorized according to the macro economy is showed below. Distribution of dispatched workers according to macro economy 16.00% 14.00% 12.00% Percentages. 10.00% 8.00%. 數列1. 6.00% 4.00% 2.00%. su ra la& In. In fo rm. an cia Fi n. a ti on & So. nc e. In du s tr y ftw ar St eI ee nd l& us M try ac hi ne ry In du s tr y Fo Pl o d as In tic du & str Ch y em Ta ic a rsp lI or nd tat us io try n Se rv ice In du Au s tr to y m o In b fo ile rm In ati du on str y Se rv ice In du str y St or ag Bu eI nd sin us es try sS El er ec v ic e tro ni in cC du str om y po ne nt In du str y. 0.00%. Industries. Figure 2.2. The distribution of dispatched workers according to macro economy Source: 楊朝安 (主編)，民 93，256。. 34.

(35) According to the executive Yuan, the proportion of part-time workers (In Taiwan, part-time work is generally defined as working less than 40 hours a week.) grew from 5% in 1992 to 7.29% in 2002. The cumulative rate of companies to use dispatched workers was 3.25% by 2003. Also, according to the statistics from the 104 Job Bank, the average numbers of dispatched workers registered on the website per month grow from 300 in 2004 to 500 in 2005. As for the occupations of dispatching, the numbers of dispatched workers who are in administrative support, customer service, and engineering field add up to 70 to 80 thousands of people approximately. Furthermore, there will be 200 thousands of people working as dispatched workers if the numbers of dispatched workers who are in security and cleaning industries are counted. 湯曉霖 (2001) pointed out that the trend of using dispatched workers is developing, there are about 1000 dispatched work agencies registering on the Ministry of Economic Affairs. International enterprises which are invested by foreign traders are the companies of the most use of dispatched workers. 蔡博全 (2000) also indicate that among the companies which hire dispatched workers, 26% of them are foreign traders. The size of those companies is bigger than the domestic ones and there is better welfare system in those companies. Most importantly, the parent companies of these international enterprises have adopted temporary helping services for years. The flexibility from the use of temporary workers let the enterprises cope with the changing market quickly and keep the cost on human resource more competent. Hence, the foreign traders in Taiwan accept the use of dispatched workers much more easily. In Taiwan, the preference for specific dispatched work force in different areas is distinct. For instance, the numbers of dispatched workers in service industry, especially financial industry, are at most in the northern part of Taiwan. However, in the southern part of Taiwan, dispatched workers work in the traditional industry 35.

(36) mostly. ( 許慈倩，2003 ) According to the study of 蔡博全 (2000), the work type of dispatched work includes: administrative personnel, assistant, secretary, central, accountant, recruiting staff, telephone marketing staff, customer service staff, and data-filling and data-arranging staff etc. On the other side, except to the administrative and industrial work, 李元隆 (2000) also found professional work type of dispatched work, such as professional personal interviewer, manager, engineer, and professional companion. An investigation of the duration of companies using dispatched workers showed that 40% of the enterprises use these workers for more than 1 year, 30% of the enterprises use dispatched workers for 3~6 months, 3% of the enterprises only use dispatched employees within 1 month, and the rest 34% of the enterprises use these workers for 1~3 months and 6~12 months separately. The meaning of these numbers represented that most companies utilize dispatched workers for 3~12 months (楊朝安，2004).. Future development of dispatching services In the US placements through temporary work agencies have been increasing in the upswings as well as the downswings of the economic cycle (Autor et al., 1999; Autor, 2000a, 2000b; General Accounting Office, 2000; Peck & Theodore, forthcoming). Whether this pattern is found in the UK is not dear. However, the data that are available on temporary work agencies in the UK suggest that this kind of employment has been on the increase over the last decade and that its expansion has been only marginally affected by the performance of the economy (Forde, 2000; Hotopp, 2000). (Quoted from Kevin, Damian , Jill & Huw , 2001) The trend of the development of dispatching services in Taiwan is similar to the one in the US and the UK. From the investigation of government and private 36.

(37) companies, like 104 Job Bank, it showed that the numbers of dispatched worker are increasing. Also, there will be more professional working opportunities for dispatched workers. Moreover, due to the situation that demand for dispatched workers keeps growing, in 2004, the Executive Yuan announced “Guidelines and Action Plans for Service Industry Development”, in which dispatching services is one of the twelve industries targeted for current stage of service sector development. In the plan, the development goals (or targets) are as follows: the number of firms providing manpower supply services will reach one to two thousand, with a total work force of 30 thousand including those engaged in manpower dispatching services. According to the plan, the industrial scope of manpower dispatching services was defined as: this is primarily a mode of employment that, apart from organizations specializing in providing manpower, includes the dispatching of part of the work force engaging in the security, cleaning, business consultancy, accounting, legal, computer software, and other such service industries. Development visions of the plan are listed below: Visions: 1.. As work patterns gradually become more diverse, employers will gain greater flexibility in utilizing human resources.. 2.. After the requisite legal regime is fully in place, manpower dispatching services will enjoy booming growth and generate a large increase in employment.. Potential problems from the use of dispatched workers From the above plan, the increasing use of dispatched workers can be forecasted. However, due to the lack of complete legal regulations and the uncommon understanding of dispatched work, several problems arise. According to 廖晟堃 37.

(38) (2004), problems of using dispatched workers can be categorized into four parts: 1.. Ambiguous triangular relationship The most specific characteristics of dispatched work lie in the existence of. triangular relationship. The basic problem is the question that who should be considered the legal employer of the dispatched workers. Most of the time, the dispatched work agencies admit themselves to be the employers of dispatched workers. However, these agencies can not anticipate the process of managing dispatched workers. 2.. The lack of legal regulations to protect dispatched employees Due to the lack of specific laws to follow, there are several fundamental. problems not to be solved. For example, who should be responsible for the situation once the dispatched workers got injured in their working place? Besides, there is no concrete standard for pension and dispersion fees. 3.. The wage and welfare gap between dispatched and permanent workers Although the salary of specific dispatched workers are higher than that of the. standard workers, dispatched workers may not enjoy the welfare system, such as labor insurance, health insurance, year-end bonus, and bonus for traditional festival, like ordinary employees do. The proportion of welfare which dispatched workers can enjoy is determined by the client companies or the dispatched work agencies. 4.. The quality of dispatched workers is not stable Nowadays, most of the dispatching work types belong to temporary and simple. ones. These kinds of jobs offer poor welfare to dispatched workers than to standard workers. Therefore, dispatched worker are still seeking to permanent jobs which can provide them the sense of security and belonging. This situation results in the high turnover rate and the unstable of dispatched workers.. 38.

(39) Suggestions for client companies In order to make good use of dispatched workforce, different suggestions are presented to the client companies as follows. Firstly, according to 張嘉惠 (2004), before the enterprises decide to introduce the dispatched work force, there are ten steps for them to consider: 1.. Finding out the goals and demands for the use of dispatched workers.. 2.. Setting up strategies of using dispatched workers.. 3.. Evaluating the fitness of work assigned to dispatched workers.. 4.. Evaluating the budget for using dispatched workers.. 5.. Mapping out the procedure of operation and the finance and welfare system.. 6.. Communicating with the supervisors and other employees of the department which the dispatched workers will be assigned.. 7.. Choosing the dispatched work agencies.. 8.. Providing the related information and requirement for dispatched workers to dispatched work agencies.. 9.. Contraction the partnership with dispatched work agencies.. 10. Supervising the quality of the contract and reviewing the results of using dispatching services. 廖晟堃 (2004) also point out four strategies for companies to refer while using dispatched employees: 1.. Defining the demand for dispatched work Before the enterprises begin to adopt the dispatched workers, they should analyze. the best allocation of human resource. Companies need to find out the demand of dispatched workers by identifying non-core works and highly- turnover appointment. They should communicate with the dispatched workers about the job content, related working requirements, expectation for the work completed, and the welfare enjoyed. 39.

(40) 2.. Strengthening the education training of employees Although dispatched workers are responsible for simple and regular work, client. companies have to hold a new-comer training session for them. In the session, the working environment, business culture, working hours and regulations of punishing and rewarding will be introduced. Hence, the dispatched workers can learn the needed knowledge and skills for work. 3.. Setting up the salary and welfare system The characteristics of dispatched work are temporary, short-termed, and not. stable, which can’t provide the sense of security and belongingness to employees working in this field. For this reason, the commitment and loyalty of dispatched workers tend to be lower than that of the permanent employees. To let the dispatched workers behave more responsible and enthusiastic, client companies should treat them as members of the organization and give them the same commitment and welfare as the standard employees accept. 4.. Using a fair system to evaluate the working effectiveness Utilizing the appropriate method to evaluate working effectiveness of dispatched. workers is important. There should be two ways for client companies and dispatched work agencies to review dispatched workers’ performance. According to the results provided by the user firms, dispatched work agencies can give well-behaved workers rewards and poorly-behaved workers warning for discipline management.. Studies on the improvement of working effectiveness for dispatched workers The problems of using dispatched workers and suggestions for client companies are addressed above. Nevertheless, there are few studies about how to improve working effectiveness of dispatched workers. The existence of a fair system to evaluate performance is essential; however, it will not necessarily lead to better work. 40.

(41) In this case, here comes the discussion of performance management system. Presently, organizations are faced with new competitive conditions, and have to cope with dynamic environments, which lead them to the era of continuous improvement, value-addedness, doing more with less, and productivity. These developments have brought performance management to center stage. Accordingly, organizations are beginning to implement performance management that reflects the new shape of the organization and its emphasis on integration of work, multidimensional influence, and flexible jobs (Mohrman & Cohen, 1995). As a HRD practice, performance management in organizations is viewed as the total system of gathering relevant information, providing specific feedback to individuals and work groups, and applying such information for the improvement of organizational effectiveness (Bernardin, Hagan, Kane, & Villanova, 1998). Therefore, performance management goes beyond the ratings and formats that have been the focus of so much research and practices. Instead performance management is a means to execute organizational strategy by signaling to employees what is really important in the organization, fixing accountability for behavior and results, and helping to improve performance. In addition, performance management should be considered as not so much an event, that is, an annual performance rating, as a continuous, action-oriented process that emphasizes setting expectations in advance, coaching and continuous performance improvement. (Eul-Kyoo, 2006) There are three important elements of performance management system, including defining employee performance, evaluating employee performance, and providing feedback on employee performance.. 41.

(42) Defining Employee Performance. Evaluang Employee Performance. Providing Feedback on Employee Performance. Figure 2.3. Basic Framework of Performance Management System Source: Eul-Kyoo, 2006.. Defining employee performance Defining performance is considered to be a critical part of performance management system and thus a number of performance evaluation research studies have focused on defining performance (Arvey & Murphy, 1998). In the process of performance management, identifying performance measures required for appraisal determines performance standards as levels of performance that correspond to pre-designated levels of individual and organizational effectiveness. From a rater’s point of view, performance standards form the frame of reference within which to judge a ratee’s performance. On the other hand, from a ratee’s point of view, it becomes an important mechanism to communicate with employees what is expected of them. Therefore, it is necessary to develop a clear understanding of exactly what is meant by performance before designing performance management system. Performance should be defined and clarified to emphasize both outcome and competency aspects of performance in order to avoid the tendency of seeing financial goals and productivity increases as only performance measures in organizations. In effect, performance must be viewed as the combination of competency as individual performance measure and outcome as organizational performance measure, tying with organizational strategy, values, cultures, and business needs as systems factors. Including the systems factors in the job performance is very important to define and. 42.

(43) measure performance because it will explain their effects on measuring performance (Eul-Kyoo, 2006).. Evaluating employee performance In general, as a critical part of a performance management system, performance evaluation is geared toward the attainment of performance information that can be used for administrative and development purposes. Organizations should realize that it is the employees’ perceptions of the performance evaluation purpose that affects their attitudes toward it. It is generally predicted that ratings obtained for administrative purposes, such as promotions, transfers, termination, and compensation, are likely to be more lenient and less accurate than those obtained for research, feedback, or employee development purposes (Jawahar & Williams, 1997). This is based on the premise that raters bias ratings obtained for some purposes versus others (Cleveland & Murphy, 1992). Raters may intentionally bias administrative ratings to avoid providing negative feedback to obtain positive consequences, or to motivate a poor performer. In contrast, ratings for the purpose of employee training and development are likely to encourage raters to honestly record their “true” evaluations of ratees’ work performance. In sum, for the results of performance management to be maximized, it is necessary to set up a fair and accurate performance evaluation process, which decreases the discomfort and dissatisfaction that raters and ratees have with the evaluation process. A fair and accurate evaluation process can be designed and implemented to include encouraging raters to provide feedback at frequent, regular intervals throughout the appraisal period, holding raters accountable for the ratings they provide to their ratees through setting policy for accurate ratings, monitoring ratees reactions to evaluation processes, letting ratees conduct self-appraisal and 43.

(44) examining the disparity between raters and ratees assessments, allowing raters and ratees to participate in designing evaluation process, and developing multi-source and multi-rater evaluation system (Eul-Kyoo, 2006).. Providing feedback on employee performance Evaluations of performance are fed back to the individual and relevant decision-makers. In a performance management system, feedback plays an important role both for motivational and informational purposes and for improved rater-ratee communications. For example, supportive feedback can lead to greater work motivation for employees and feedback discussions about pay and advancement can lead to greater employee satisfaction with performance management processes. In effect, providing people with feedback about their performance will have positive effects on their future performance (Taylor & Pierce, 1999). A feedback process must be a critical part of performance management system that influences individual and organizational goals. It is thus important to establish and implement a feedback process that provides clear, specific, and descriptive feedback, gives feedback in a non-threatening and supportive manner, involves employees in discussions about their career development opportunities and decisions, and offers reinforcement for good performance.. Summary Accordingly, the use of performance management system can improve the working effectiveness of employees. Three steps to evaluate performance are: 1.. Defining employee performance. 2.. Evaluating employee performance. 3.. Providing feedback on employee performance 44.

(45) Based upon the above discussion, there is a need to investigate the methods client companies use to evaluate the performance of dispatched workers. Hence, there will be items about working effectiveness of dispatched workers included in the questionnaire.. 45.

(46) 46.

(47) CHAPTER III. METHODOLOGY In this chapter, the method of the research would be stated in the following order: research framework, research methods, research procedure, and data collection and analysis.. Research Framework. The framework of this study was to understand the condition of using dispatched workers in client companies first, and then focus on the working performance of dispatched workers. Finally, by concluding these two parts, the research could point out the possibility of the further use of dispatched workers of client companies in Taiwan.. 47.

(48) The context of dispatched work. The purposes 1. Time saving 2. Lower recruitment costs 3. Flexibility. 1. Type of contract 2. Total time of use 3. Purpose 4. Timing 5. Type of jobs 6. Job contents. The impact. The improvement. 1. Positive impact 2. Negative impact. 1. Defining employee performance 2. Evaluating employee performance 3. Providing feedback. Figure 3.1. The research framework. 48.

(49) Research Method The research will use qualitative method. Brannen, Borg, & Gall (1989) point out the value of using qualitative techniques where research issues are not clear-cut and where respondents reply are likely to be complex, discursive, and grounded in the culture of the organization.. The instrument Due to the limited studies on the use of dispatched workers in Taiwan, in-depth interviews with open-ended questions will be utilized in the study. It’s more possible to get an all-around perspective of the necessity of improving working performance of dispatched workers through the use of this method. Also, according to Johnson & Christensen (2004), qualitative interview allowed the researcher to enter into the inner world of another person and to gain an understanding of that person’s perspective. Based on the literature review and the purpose of the study, the questionnaire is showed below.. The interviewee In this study, researcher wanted to understand the needs of improving working effectiveness of dispatched workers and the possibility of further use of dispatched workers. Hence, the interviewees were restricted to those supervisors who had direct contact and control of dispatched workers in client companies. Since the list of companies which adopt the use of dispatched workers was not available, the company chosen was randomly. Three interviewees were from financial and insurance industry which ranked at the first place of all industries utilizing dispatched workers. This rank meant the industry adopted the most use of dispatched workers. One interviewee was from information industry which ranked at the second 49.