psychological success and the boundaryless career

J O U R N A L OF ORGANIZATIONAL BEHAVIOR, VOL. 15.365-380 (1994)

Psychological success and the boundaryless

PHILIP H. MIRVIS PO BO.Y 265, Scinrll, Spring. MD 20860. U S. A.

AND

DOUGLAS T. HALL Bosroti C/iiiwrsirj, Sc,/ioo/ of'Motirrgririenr, 685 Cornmonneu/r/~ Are., Bosrori. MA O?.?/.i, C .5 .-I

Summary The boundaryless career could be a bane or boon to people's experience of psychological success. This paper describes the contours of the boundaryless career and then looks at how workers will have to deal with aging over several career cycles, integrate diverse experiences into their identities, and come to terms with new types ofemployer-employee relationships. This introduces the idea of finding psychological success in one's life work, encompassing not only a job and an organization. but also work as ;I >pause. parent. community member, and as a self-developer.

Introduction

Takatsuki, Japan - At 7:OO one Friday evening, when they would usually be dutifully ;it their desks. 40 or so executives of Sunstar Corporation stepped into the company's auditorium for the latest in Japanese employee training: a course in the art of being a family man.

From 'Japan's astounding future: Life with father', New York Times. November 12, 1993, p. 4.

Washington, D. C. - There's just one problem with working for a living: There's no time left for life. From 'Workers want to get a life', USA To&!, September 3, 1993. p. I .

The news from Japan is that heretofore stable employers are laying off people while other firms are moving them laterally and downward in a last-gasp effort to fulfill their promise of lifetime employment. Meanwhile, managers attend courses on how to be 'family men' and a newly-formed institute on leisure educates the nation about the benefits of relaxation and recreation. Now this concern with the perils of 'all work and no play' could have something to do with desires to enhance creativity in Japanese companies. And training for family men may be related to the nation's budding women's movement. Or both may be long linked to layoffs and the prospects of slower population and economic growth in the future. We could speculate endlessly about what is behind all of this, but limit ourselves t o the observation that corporate careerism in Japan seems to be going through a redefinition.

Definitions of work, nonwork, and careers are surely changing in America and in parts of Europe. A decade-and-a-half of corporate downsizing and broad-based de-industrialization

CCC 089437961941040365- I6 0 1994 by John Wiley & Sons. Ltd

366 P. H. MIRVIS AND D. T. HALL

has had employers reducing staff, shutting down facilities, and making more use of consultants and the contingent workforce. As a result, notions of cradle-to-grave job security have been shattered along with the psychological contract binding people to companies (DeMeuse and Tornow, 1990; Rousseau, 1990). Leisure time is also decreasing in the U.S. (Schor, 1991) and recent surveys find over half of the nation’s workers pining for more time with family and friends (Galinsky and Friedman, 1993). Here, too, it seems working people are struggling to manage the boundaries between work and other parts of their lives while trying to preserve some semblance of a career in the face of an uncertain future.

The new world of work

Broad-based industrial restructuring in the U.S. and elsewhere stems from globalization of the economy and movement to information-driven, increasingly service-based lines of business. The future is projected to have large firms, through multiple divisions as well as joint ventures, regional alliances, and private-public partnerships dominate major markets while entrepreneurs, franchisers, and small businesses provide raw materials and technologies, handle support services, distribute goods, and at the same time reach niche markets with their own products and services. This will see companies routinely reshaping and resizing themselves, regularly buying and selling off businesses, and periodically partnering with other institutions. These flexible firms, whether flying the flag of federalism or operating as virtual corporations, are coming to be called boundaryless organizations.

Under the most optimistic scenarios, people working in these organizations are expected to move seamlessly across levels and functions, through different kinds of jobs, and even from company to company through a boundaryless career. All of this will presumably be aided by new types of university, technical, and corporate-based education, increased flextime, sabbati- cals, and work-at-home options, so-called ‘mommy’ and ‘daddy’ career tracks, and all sorts of other support services, programs, and groups (Parker and Hall, 1993). Scholars and practi- tioners are today developing a picture of the boundaryless organization. But, to this point, we have only the barest outline of tomorrow’s boundaryless career.

Right now it looks ragged: people working long and hard and, in many cases, scared. Transi- tions from work to home to work, from assignment to assignment, and from company to company, voluntary and otherwise, seem abrupt, frenzied, and fractious. Levels of unemployment and underemployment are high and older workers in particular have been cut adrift from corporate ranks (Hall and Mirvis, 1993). Much has to do with the fact that needed transitio- nal structures and mechanisms - flexible work options, retraining and redeployment programs, family support services, career planning and placement assistance, and the like - are not yet in place to sustain the boundaryless career (Mirvis, 1993). Meanwhile, the public bemoans casualties of mergers and acquisitions, sympathizes with victims of layoffs and downsizing, and shakes its head at the shrinking few who remain loyal to their employers, typecasting them as modern-day Willie Lomans.

Our aim here is to look at the pluses-and-minuses of the boundaryless career for what Hall ( 1976) terms ‘psychological success’. This refers to the experience of achieving goals that are personally meaningful to the individual, rather than those set by parents, peers, an organization, or society. Most studies have considered this concept in connection with a neatly defined job, profession, or career path. The boundaryless career, however, will be marked by a variety of tasks, that may or may not be bundled easily into a job, periodic redefinitions of one’s profession, and fits-and-starts over the course of a career. To find meaning in this mix, people

PSYCHOLOGICAL SUCCESS 367

will have to ‘make sense’ of their constantly changing work agenda and integrate varied experiences into a coherent self-picture. Otherwise, the boundaryless career will seem aimless and could yield self-doubt and fragmentation. Looking ahead, it seems likely, too, that many of the factors that have supported and reinforced feelings of psychological success, including job security, increasing levels of income, and the status that derives from one’s position and employer, will be less accessible and more chancy. Hence, many more working people may have to reexa- mine their career aspirations and look to other sources of personal meaning to avoid the experience of psychological failure.

Setting new standards of success promises to be complicated for working people who will be asked to do more at work and in the way of their own personal development while at the same time being pressed by the demands of change and pulled by family, home, and civic obligations. How will people find the time to figure out what is personally meaningful for them? They will also have fewer stable attachments in the workplace and in mobile communities through which to gauge who they are and what they might become. How can people form a new work identity absent trustworthy role models, close peers, and a supportive reference group? These are but a few of the challenges to rede6ning psychological success that people will

encounter as they embark on a boundaryless career. At the same time, since this career will provide so few external guideposts and guarantees of success, there will be little choice but to look inside and probe personal values to fashion some kind of career development plan and identity in this new working world. This sort of introspection and life planning can be a lonely pursuit, undertaken in off-hours, and steered by self-assessment tests, self-help books, and job placement agencies. However, there is also reason to believe that the boundaryless career could itself ofleer up new opportunities, stimuli, relationships, and networks that people can use to remake themselves. We develop this point with a closer look at these new kinds of organizations and careers.

The boundaryless organization and career

Models of the boundaryless organization date from the 1960s when, for example, Bennis and Slater (1968) argued that ‘democracy is inevitable’ and advised organizations to devise ‘temporary’ structures to respond to rapid change in their environments. The next decade witnessed ‘collateral’ forms of organization where ‘temporariness’ would be built into project groups, ‘parallel’ structures where semi-permanent committees of workers and managers would oversee change efforts, and the ‘matrix’ organization which institutionalized cross-functional linkages and boundary-spanning work roles (Zand, 1974; Galbraith, 1977; Davis and Lawrence, 1977). By the 1980s, change had sped up to the point that organizations began an era of ongoing restructuring exemplified by new work designs, TQM and continuous improvement programs, and mergers, acquisitions, divestitures, and cross-company ventures in service of reinventing thecorporation (see Lawler, Mohrman and Ledford, 1992; Mirvis and Marks, 1992, for reviews).

Today this tumult is encapsulated in models of the boundaryless organization. Handy (1989) describes one such configuration in the form of a shamrock with three leafs. The first leaf, and the most important for continuity and organizational survival, contains a core stuf of managers, technicians, and professionals. These are highly skilled individuals who are expected to make a major commitment to the organization and derive much of their sense of identity from it. The second leaf is contractors, specialized people and firms, often outside the organization, who serve a variety of needs, including supply, distribution, and routine control functions.

368 P. H MIRVIS AND D. T. HALL

Their work is not part of the essential core technology and competence of the firm and can usually be done better, faster, and cheaper by someone else in a smaller, more specialized, and autonomous position. The third leaf is the contingent labor force. These are part-timer and temporary workers who provide a ‘buffer’ to the core workforce of a firm.

The logic behind three leaves is that they enable an organization to get a richer picture of its environment and flexibly respond to opportunities and threats -without a lot of overhead and bureaucracy. Specialists in organization design (Emery and Trist, 1973; Weick, 1977; Cohen and March, 1986; Wheatley, 1993) contend these advantages come from having sufficient variety in structure and skill such that a firm can better sense and interpret the complexity of its environment. In turn, minimal critical specification of job duties, coupled with the creation of more or less self-contained work units, allows companies to respond flexibly and fully to new circumstances. Finally, and key to the success of the boundaryless organization, is its capacity to self-design for these circumstances. This means moving people quickly into new assignments, forming them into new structures, and having them hit the ground running.

Extrapolating from these principles, Hall and Mirvis (1994) argue that people will need more varied work experience to cope with complexity and change in their task environment. They will also need to be flexible and will be required to self-design much of their personal and career development. In turn, the ability to learn-how-to-learn will be crucial to their success in cobbling together an enriching career path (Weick and Berlinger, 1989; Hall, 1991). Likely as not, working people tomorrow will have the opportunity to acquire and apply these skills as they move around the boundaries of organizations, retrain themselves or return to school, and otherwise adjust to changes in the employment market. This makes people’s know-how, self-direction, and learn-how core competencies for navigating the boundaryless career. The question of interest here, however, is where are the psychological shoals?

What is different about the boundaryless career?

Much of the theory and research on careers over the last 40 years has focused on the ways people work their way up an organization, emphasizing career stages, life-cycles, and ladders (Hall and Associates, 1986). This notion of a career was forged in the post-World War I1 era and appealed to people who grew up during or heard first hand stories of the Great Depression and the Great War. Many entered the workforce in the 1950s with the idea of a lifetime career with one employer. Those who began their careers in the next 30 years recognized, to some extent, the necessity of more frequent job changes, but most were still imbued with expectations of upward mobility and looked forward to mastering a job and then savoring the intrinsic and material satisfactions of seniority.

In the case of the boundaryless organization, however, career development may be more cyclical - involving periodic cycles of reskilling. In addition, it will be marked by more lateral, rather than upward, movement and culminate in a phased retirement. The problem is that this model of career progress is new and not yet accepted as the norm: it seems the antithesis of the onward-and-upward ideal that fires the success ethic. What is more, it does not fit the more conservative, but realistic, notion that, through hard work and diligence, one can ‘make it’ in a chosen field of endeavor. Accordingly, one major psychic challenge for working people will be to adjust their expectations about continuous upward mobility and career progress.

It seems inescapable, too, that workers will have to change jobs, companies, and even occupa- tions over their life course in the decades ahead. Even work for a single employer will feature frequent job rotation, developmental assignments, and transitions from the first to second and


third leafs of a company. Movement across these work boundaries promises to tax even the most personally adaptable worker. To complicate matters, there will continue to be work and home boundaries to manage: the number of dual-career couples will continue to increase and, whether coupled or not, many will have to cope with complex working conditions will also have to concern themselves with child- and elder-care. The resulting sense of role overload and conflict will pose countless practical problems and could fragment even further people ’s work identities and family systems.

Finally, it seems likely that the locus of career development responsibility will shift even more so to the individual in part because boundaryless organizations will not be able to meaning- fully plan an employee’s career. There will be simply too much uncertainty about future organizational needs to chart out prospective career paths and steer people through prescribed developmental sequences. This means that the individual will truly be on his or her own in developing a career. As appealing as this may sound to self-starters and self-developers, the sense of being part of something larger than one’s self, of having elders to guide a career, and of having the opportunity to mentor young people serves an important psychic function for all who are ‘members’ of a firm. Finding a substitute for organizational identiJication is yet another psychic challenge that will face those charting a boundaryless career.

A protean view of careers

To better conceptualize these psychic challenges and identify ways that people might address them, it is necessary to decouple the concept of a career from its mooring in any one organization and, indeed, from its exclusive association with paid employment. One recommendation is to see careers as ‘protean’ (Hall, 1976). The term is taken from the name of the Greek god Proteus who could change shape at will, from fire to a wild boar to a tree, and so forth. This career concept can be defined as follows:

The protean career is a process which the person, not the organization, is managing. It consists of all the person’s varied experiences in education, training, work in several organizations, changes in occupational field, etc. The protean career is not what happens to the person in any one organization.. . (Hall, 1976, p. 201).

There are several advantages that accrue from this career concept. First, it opens up new ways to think about work over time. Most employers tend to think about career development in terms of individuals developing from the early-to-mid stages of their employment and then either ‘plateauing’ or ‘dropping OF in terms of what they have to offer the organization (Barth, McNaught and Rizzi, 1993). The protean concept, however, also encompasses careers marked by peaks and valleys, by early or late blooming, and by movement from one line of work to another (Hall, 1993).

Second, it enlarges what we might call the career space. There is a tendency to associate a career with paid work and draw sharp distinctions between people’s work and nonwork lives. A more elastic concept, however, acknowledges that work and nonwork roles overlap and shape jointly a person’s identity and sense of self. In practical terms, an enlarged definition of career space enables people to consider seriously taking time off to spend with growing children or to care for aging parents under the rubric of attaining psychological success. Already there are examples of people ‘downshifting’ in their careers to pursue hobbies or regain peace of mind (Hyatt, 1990), doing volunteer work to give back to the community, and, of course,

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pursuing the option of working-at-home where housework can spill over into paid work and vice versa.

Finally, this career concept opens up new ways to think about the relationship between employers and employees. There is evidence that at least some of the most able and ambitious working people are taking charge of their work careers by ‘packing their own parachute’ rather than following a corporation’s definition of career development (Hirsch, 1987). These ‘free agent’ managers and professionals, like their sport’s counterparts, are constantly on the look out for better situations, more money, or extra leverage. Yet, even stars have to contend with problems of self-definition and normlessness that come from having to assume new roles in new situations and from lacking long-term identification with a ‘home’ team. Making sense of and coming to terms with the boundaryless career may be even more of a challenge to those who have neither the talent, nor means to live like stars.

In sum, the protean career concept gives us a more flexible way to see careers unfold over time and in space. While it shifts responsibility for career development even more so to the individual, it also opens up new possibilities on how to think about and plan a career. With this concept in mind, we turn to aging and its implication for psychological success in the new world of work.

Aging over career cycles

As people work their way through the boundaryless organization, we expect them to periodically plateau or pass their prime over their career age, rather than their chronological age. Research on plateauing indicates that a worker has become ‘mature’ when she or he has become established in a line of work and chances of upward mobility slow or stop. In fields with drastically shorter product and technology cycle times, becoming established happens in the 20s or the 30s (Hall, 1985). Looking ahead, it could be that just as the product life cycle is shortening in many industries, so too will the career cycle of many employees.

One way to help people develop over the course of a boundaryless career is to keep them moving through a number of career cycles of exploration-establishment maintenance-disengage- ment, rather than trying to prolong the maintenance stage of their career (see Figure 1). A career path in the shamrock-type of organization, for instance, might have people work in core areas for a time, take a job in a supplier company or consulting firm, work as an individual contractor on selected projects, and then return to the fold as a senior core contributor and mentor.

The practical and psychic benefits of seeing careers in terms of repeated developmental cycles could be substantial. For instance, a second cycle of career exploration might encourage a young person, after working for a time to pay off school debts, to travel or go overseas (like retirees) to rethink their earlier career decisions. National service is another option. Repeated cycles would invite an older person to phase from full- to part-time work in, say, a service outlet (like kids) rather than retire to the Sunbelt. McDonalds, Walmart, and several other companies are hiring older workers on this basis (Barth et al., 1993). The notion of going back to school to earn a degree, or new skills, or simply to self-improve also fits comfortably into a career concept of several cycles. So, too, does the decision of sociologists to start over in computer programming or a programmer to move into social service.

There will, of course, be material and psychological costs to this sort of career development pattern. For example, people who more or less start over in a new occupation will have less overall lifetime earnings than would accrue in the traditional single career path. Changing


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Figure I. Career stages (learning versus age). The new model: learning stages

companies can also be costly: early retired executives earn on average less than 85 per cent of their former salary when they move to another company and skilled manufacturing workers earn an even lesser percentage when they move to the service sector (Willis, 1987; Fisher, 1988). Furthermore, taking into account the costs of retraining and redeployment, plus the value of lost earnings, the boundaryless career may well prove less remunerative than the stable career paths of the past.

As to the psychic fallout, researchers have documented amply the emotional toll of unexpected job loss (Brockner, Davy and Carter, 1985) and the tension associated with ‘hanging on’ versus ‘letting go’ even in the case of a planned change in jobs or employers (Bridges, 1980). Sarason (1977) notes, as well, that many working people are imbued with the ‘one life/one career’ perspective that makes the idea of a career change especially threatening. Furthermore, there are bound to be problems of adjustment as people unlearn familiar work habits and skills and have to master new ones.

The foregoing suggests that one important way to experience psychological success over the ups-and-downs of career cycles is to eultivate adaptability. Hall (1986) refers to this as a ‘meta-skill’ as it enables people to accommodate to new tasks and relationships and to incorpor- ate new roles and responsibilities into their personal identities. What is important to recognize, moreover, is that personal adaptability is much sought after by boundaryless organizations: it is what they look for when they hire from the outside and what they try to develop in their ‘high potential’ employees. One survey of U.S. firms with 100 or more employees found that 56 per cent offered personal growth training to their employees (Gordon, 1988). It is not hard to imagine leading firms offering seminars on boundaryless career management as part of their training portfolio in the future. Indeed, companies may pay a ‘learning bonus’ to employees that begin a new and organizationally-valued career cycle and a premium for the new skills that are mastered. The larger point is that people who can adapt to thechallenges of aging over several career cycles will have increased security within their organizations and

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a better chance of finding a rewarding job should they choose to leave their company or be laid off.

Needless to say, it will be important to study how and when people learn to adapt to change in a career marked by several cycles. To what extent is career adaptability a function of personality or age and state versus a skill and outlook that can be developed? Are the tensions between, say, hanging on and letting go of one’s work identity different for people at different points in their lives? Could the demands of aging cyclically in a career in any way ‘speed up’ the psychological work associated with stages of chronological aging?

It will also be important to study what organizations can do to help people adapt: what personal growth training and developmental assignments best prepare people to engage in new career cycles and disengage from old ones? Should the boundaryless organization provide a safety net, incentives, and coaching to promote exploration and career learning, or put more emphasis on opportunities, competition, and self-help? Finally, we need to know in what kinds of firms and industries it makes strategic sense to invest in employee adaptability versus acquiring the talents of outside contractors and free agents (cf Marks, 1993; Useem, 1993).

An integrated identity

A recent survey finds that three-in-five American workers rate the effect of a job on their personal and family life as ‘very important’ in making employment decisions - far more so than wages, benefits, and even job security (Galinsky and Friedman, 1993). With 87 per cent of the American workforce living with at least one family member, finding time for spouse, children, parents, or partners is a major priority for more and more people. The survey reports that nearly half of the workforce rate the family supportive policies of employers as a key consideration in their job choice.

Demographic shifts in the workforce, coupled with the increased priority many people place on their family and personal life, make it imperative that companies respond to work/family issues. Hall and Parker (1993) make the case that just as companies are becoming more flexible in structure, staffing, and work systems, so also they need to be more flexible in the way they view work roles. Indications are that more and more firms are offering flextime, work-at- home options, part-time employment, and even job sharing and career breaks under the rubric of work/family programming (Parker and Hall, 1993). Furthermore, the ‘temporariness’ of work assignments in the future, coupled with advances in telecommunication technology, will afford many more people the opportunity to work part-time, or from their homes, or on a seasonal basis.

All of this flexibility, however, may well complicate and change people’s work identities. To this point, many people encapsulate their work, job, and employer in their work identities. As all three will change more often in a boundaryless career, questions of ‘what do I do?’ may be raised more frequently and insistently. Those who are part of dual career couples, have children, or care for elders will have to contend not only with changing expectations of their roles, but also with more options about how they might fill them. The key point here is that as new career options open up boundaries around work so also will they open up boundaries of identiti.

Of course, people’s work identity is but one aspect of their larger sense of self or, expressed another way, identity is made up of a collection of subidentities (Hall and Schneider, 1973). The syndrome of ‘career success/personal failure’ identified by Korman and Korman (1980) illustrates how some organization men compartmentalize their lives and fulfil their work-self


at the expense of other subidentities. The ranks of women caught up in this syndrome also seems to be growing. In some respects, the boundaryless career could heighten this self-fragmentation: the combination of psychic challenge and financial iasecUrity, for instance, could prove a narcotic to ‘workaholics’ (Maehiowitz, 1978). On the other hand, the boundaryless career could afford people the flexible time and space to explore other life roles more fully and even expand their sense of self.

Research by Derr (1986) suggests that people have different orientations to career success. For those concerned with getting dead, for instance, the prime objective is upward mobility. Others seek to be secure or strive to be free and autonomous. The goals are challenge and stimulation for those who want to get high. Finally, there are those who want to get balanced and combine personal and f d y life with career achievement. Although these career orientations seem to represent individual differeaces in temperament and aspiration, Derr’s research suggests that they can change in response to life experiences.

More flexible definitions of a Career will give people the freedom to change their career orientations over the life course. To illustrate: if we take seriously the notion that people will age over several career cycles, then an early career male, needing more education to move up the career ladder, may choose instead to emphasize his parental role, take more time off to be with young children, and ‘switch gears’ to a balanced identity, thereby putting off an MBA until his mid-30s or later or not at all. In the same way, a midcareer woman, early peaked in a small employer or functional career track, may ‘rev up’ by moving to a nonprofit service organization or simply increasing her volunteer time.

Naturally, there are practical and psychic impediments to changing one’s identity. For instance, however much a job or career change might enhance one’s self-picture, moving into the nonprofit sector or working part-time puts an added burden on spouses or children to provide added financial support or else necessitates a lowering of one’s lifestyle. Attempts to 6nd ‘balance’ in an organization can also prove costly: even seemingly ‘family friendly’ firms give the most kudos to those who ‘sacrifice’ their personal and family time to make heroic contributions. Indeed, the common complaint of the many women and fewer men who try to balance their work and family responsibilities is that their reputations, advancement potential, and ultimately their incomes all suffer (Googins, 1991).

As to the psyche, it is hard to imagine dedicated careerists, whether in Japan or the U.S. or Europe, letting go of their emphasis on corporation advancement and achievement to take extended time off to care for an aging parent and develop a more expansive view of their purpose in life. Studies of high achieving wreer women find that many attempt to be ‘super-mom’ - combing work success with model child rearing - and then experience commensurate levels of frazzle and burnout. It does not help, of course, that their spouse eschew doing a larger share of household chores.

Hall (1986) calls development of personal identity another ‘meta skill’ needed to experience psychological success over the course of a mreer. The challenge posed by the boundaryless career is for people to integrate many more stimuli and experiences into their sense of self. The once-favored notion that people typically compensate for a lack of psychological success in one life sphere by putting more of themselves into another treats identity as a ‘fixed pie’. Nowadays most scholars subscribe to the view that experiences in the many life spheres influence people’s identity (Staines, 1980; Voydanoff, 1988; Howard, 1992).

It will be important for researchers to assess how this ‘spillover’ of life experiences affects those who pursue a boundaryless career. To this point there is considerable evidence that work affects family life (Evans and Bartolome, 1980). As more people seek balance between work and family, or take time off from work to care for children, will we then find that family


life strongly influences people’s identities in the workplace? For example, do hard driving managers who become active and loving parents learn to handle people more affectively? Are people with complex and demanding home and personal responsibilities more pressured by their workloads? Or can they handle them better? What is of interest here is how people transfer learning from setting to setting over the course of a career (cf Barnett, 1993).

It will also be interesting to consider how people’s identities change and stabilize over a boundaryless career. For instance, are those who take a balanced orientation to a career during child rearing years more apt to dive into work as empty nesters? Or will they find a new form of balance through hobbies, community service, or doting over grandchildren? Will going-back- to-school be a once-in-a-lifetime option for people to enhance their earnings or become a periodic event for those who see themselves as ‘learning a living’? Will it be possible for people to truly integrate so many varied experiences in different settings into their self-picture? Or will people take on identities, much like they take on roles, in different settings and times?

Obviously companies that offer flexible employment options give people the chance to take on different career orientations at different points in their career. Yet this flexibility is counter- manded by the cultural and organizational message that the most successful people ‘eat, sleep, and breathe’ their jobs. This mixed message promises to complicate the boundaryless career and will surely have a bearing on people’s psychological contract with their employer.

Employer-employee relations

Rousseau (1990), drawing from legal scholars, has identified two types of employment contracts: transactional and relational. A transactional contract is defined in terms of a monetary exchange over a specified period of time with the employer ‘contracting’ for the application of specific skills to specific tasks and thence compensating the skillholder for satisfactory performance. A relational contract, by comparison, is not time bound; rather it establishes an ongoing relationship between the person and the organization, and involves the exchange of both monetary and nonmonetary benefits, such as mutual loyalty, support, and career rewards. From this vantage, one way to view the contemporary psychological contract between employers and employees is to say that it is shifting from a relational to transactional contract.

Who is likely to offer and get what type of contract in the years ahead? Setting this into a framework of strategic human resource management, Rousseau argues that ‘make’-oriented firms, in Miles and Snow’s (1984) terms, are more likely to establish relational contracts with people, while ‘buy’-oriented organizations are more likely to offer them transactional contracts. Using Handy’s (1989) framework, we can also hypothesize that those employees in the core of a business are more apt to have a relational contract while those on the second and third leaves will more likely have a transactional employment arrangement.

It is also possible that transactional contracts will become the norm in industry, particularly in the U.S. For instance, many of the traditionally career-oriented employers - IBM, Hewlett Packard, and AT&T among others - are increasingly hiring in managerial and professional talent and making continued employment explicitly contingent on the fit between people’s competencies and business needs. This ethic reaches its logical conclusion in Jack Welch, CEO of General Electric, who contends that GE offers its people a ‘one day contract’ (Tichy and Sherman, 1993).

Our own view is that boundaryless organizations will use both relational and transactional contracts - and in potentially very innovative ways. For instance, some employees might be treated like ‘partners’, with a share in ownership, participation in profit sharing, and even


emeritus status upon eventual retirement. Now, these terms generally apply to top level managers and high level individual contributors. In the future, they may also extend to customer service representatives, lathe operators, or programmers who are on a career laming path and acquiring varied skills and experience needed for flexible assignment througbmt an organization. By contrast, other otherwise highly paid professionals and managers, deemed specialists, might work on a fee-for-service basis and be treated as more or less ‘hired hands’. It is also possible that firms will have long-term contracts with, say, a consultant or key service provider and offer employment on a project-by-project basis to an early retired former executive or technician.

This shift in employment boundaries is bound to have an impact on people’s psychological boundaries. For some people, periodic and unpredictable changes in their employment status and degree of membership in a company are bound to create confusion and upset. Add to this the stress of changing assignments, work groups, work location, plus the possibility of unemployment, and the likely result is a fragmentation and, ultimately, loss of identity. In a very real sense, a firm’s boundaries will not ‘hold’ them as f i d y as in the past.

Others, however, will experience more degrees of freedom than ever before. Not only will it be easier for people to change jobs and employers, there will be less stigma attached to it - whether the action is voluntary or forced. In addition, it may also be easier for people to return to a previous employer. Companies like OE, that used to frown on people leaving the firm, have begun to rehire former employees as a way of obtaining skilled talent and capitaliz- ing on their shorter start-up time and learning curve. In this sense, the permeability of employment boundaries gives people more psychological freedom to explore ‘new’ identities and even return to ‘old’ ones with a richer sense of themselves.

It is also possible that transactional employment will give a boost to people’s self-esteem. Under the relational contract, the locus of responsibility is on the employer: job security is a company policy. Hence, employees can attribute steady pay increases and employment to standard practice rather than to their own unique effort and performance. As a result, to take an example, people who are plateaued in job secure organizations are never sure of their status: are they really seen as contributing or are they being kept on and humored because of their firm’s loyalty to longservice employees? This uncertainty can engage a vicious cycle affecting job performance and development. After all, why should plateaued employees upgrade their skills or take on developmental assignments when they will be valued and kept on in any case?

By comparison, under the transactional contract, the locus of responsibility is squarely on the individual: he or she is employed based on current value to the organization. The resulting sense of self-responsibility means that people can attribute continued employment to their own effort and achievement. This also puts added responsibility on them to continue to learn new skills, take on developmental projects, and develop further their core identities. This scenario becomes a virtuous cycle wherein people continue to add value to themselves and are seen as adding value by their employer.

What about organizational identification? Under the relational contract, through promotion- from-within, mentoring, socialization, and various rites of acculturation, many employees come to identify with an organization. In some cases, they fully internalize company values and link their identities to their organization. Although this varies by national and corporate culture (Etzioni, 1961; Ouchi, 1981), one’s level of identification is often expressed in response to the question: What do you do? People who have a sense of ‘we-ness’ with their firm typically respond: ‘I work for company X’.

Under the transactional contract, by contrast, identity develops more around a person’s skills and competencies, since that is the currency he or she has to exchange. This is today the identity of many skilled professionals whose response to the standard query is usually:

376 P. ti. MIRVIS AND D. T. HALL

‘I do Y’. It may come to define many more who pursue a boundaryless career in the future. In principle, this self-description is not associated with any particular organization - the organization is simply the place where professionals do their work. On the other hand, firms will likely find that their primary competitive advantage is people who have the skills, know-how, and discretion to manage the demands of fast changing work situations. Hence, it is expected that many employers will try to capitalize on people’s commitments to their work by making sure that they provide them with challenging and stimulating opportunities to ‘do their thing’.

Research implications

All of this raises some important questions for further research. For instance, which type of psychological contract is more apt to engender a sense of failure when people perform poorly? In the case of a relational contract, one may see oneself as having let down peers and the organization, incurring shame and a loss of self worth. This syndrome is common in Japanese organizations, where it is reinforced by national culture, in elite branches of the U.S. armed services, and, we suspect, wherever people intensely identify with their firms. At the same time, companies that offer relational contracts to employees often have support systems to help them cope with job failures and provide coaching and training to ensure that they learn from their mistakes.

Under the terms of the transactional contract, one is hired for one’s skills and expected to perform successfully. To the extent that transaction employees may get more cues that success is attributable to their distinct effort and skill, so also may they get more messages that failure is due to their deficiencies. Furthermore, these workers do not typically have access to a long- standing peer group or support system, nor are they often given a ‘second chance’ to redeem themselves. On the contrary, when their transactional contract is not renewed, the explicit and public signal is that they no longer add value to the company.

Other questions center on how employment contracts might affect the way people assume a work role. For instance, even when achieving success in their transactional employment, some will adopt a ‘spot market’ mentality and limit their investment to co-workers and the company. Those seeking fuller engagement may find, to their disappointment, that they are only ‘partially’ included in the core work and culture of the company. On the other hand, continuous movement across work boundaries gives people more contacts and networks and a fuller and deeper picture of what is going on in the firm. This could make transactional employees especially valuable and yield them something akin to a retainer and relational contract. Whether o r not the type of employment contract affects people’s influence in a company and a sense ot‘ belonging depends both on how employees play their multiple roles and how they are seen: iire they repositories and disseminators of knowledge (Nonaka, 1988) or just transitory figures who come and go?

It is also worth studying further the impact of choice in these different employment contracts. In years past, movement toward relational contracts was influenced by collective bargaining and common practice among leading companies. Today, by comparison, employers are seen as more o r less unilaterally dictating the terms. This has heightened fears of job insecurity (Mirvis, 1992) and bred mistrust of companies by employees (Mirvis and Kanter, 1992). It is also seen as a factor in crimes of revenge against management by displaced employees and in the turnabout-is-fair-play job-hopping among those with the wherewithal to move nimbly from company to company.


While we need to study the psychological costs to working people who are forced to undertake transactional employment, it is also worth examining what happens when people voluntarily pursue a boundaryless career. Leinberger and Tucker’s (1991) study of the sons and daughters of the ‘organization men’ profiled by Whyte (1956) is instructive in these regards. They found the offspring making work and job choices contingent on the fit to their lifestyles, family situations, and personal values. In so doing, these offspring seem to be fashioning a protean career identity and applying new standards of psychological success in their employment decisions.

Psychological success and life’s work

At this point, however, movement toward the boundaryless organization is well ahead of accep tance of the boundaryless career. Many people have resisted letting go of the seeming ideal of lifetime work with one employer as well as the stability offered by predictable career paths. As a consequence, when moved laterally, laid off, or forced to retire early, they experience their loss of status or employment in relational terms: they were ‘ d u d ’ by their companies and then ‘betrayed’, ‘jilted’ and ‘abandoned’ (Lewicki, 1981; Mirvis and Marks, 1992).

One prominent way that working people have coped with their disillusionment is by sliding into cynicism (Kanter and Mirvis, 1989). In so doing, they lower their expectations of and commitments to an employer, keeping their emotions in check and lowering their temperatures to a bearable degree. To this extent, cynicism is a functional reaction as it shields people from disappointment. At the same time, it plays havoc with the heart and hampers relationships with a spouse, family, and friends (Williams, 1989). As more and more people embark on boundaryless careers, however, better coping strategies will recommend themselves. One possibility is that people will identify themselves more so with their work and less so with any particular organization. Many seif-employed consultants already pursue these kinds of careers and their attachments to organizations may be a harbinger of things to come: as some describe it, rather indelicately, its just ‘sex’ not ‘marriage’.

At the same time, we expect leading companies to attempt to warm up and solidify this transactional arrangement by explicitly offering more stimulation and developmental experiences to people in exchange for their professional services. This will see employers making every effort to attract and retain people under the guidelines that employees change jobs frequently, move laterally willingly, and take increased responsibility for developing themselves and their careers. Life in the boundaryless organization could prove nourishing: no doubt task challenges and new relationships, when successfully managed and formed, will add significantly to people’s sense of achievement and enrich their social networks. It is also likely that these organizations will provide chances for people to teach in public schools, work on community projects, partici- pate in foreign joint ventures, get involved in environmental projects, and so on, all of which might expand people’s self-pictures and introduce them to new aspects of who they might become. The irony is that boundaryless organizations could offer to those employees able to negotiate its waterways the opportunity to have a onecompany career, gain positions of promi- nence and influence, and serve socializing and mentoring roles.

It will be useful to study under what conditions people grow from this kind of diverse, potentially identity-stretching experience and when it overwhelms them and causes a psychic shutdown. Likely as not, there will be points of optimal stretch where people can assimilate the rich variety of stimuli into their self-picture and beyond which they become saturated and lose their self-identity (cfGergen, 1991). In addition, it is worth examining under what conditions


people respond to this stretching by loyalty to their companies versus maintaining their emotional distance that keeps them ‘free’ to attend to the other demands and interests in their lives.

The path with a heart Our own hunch is that more of tomorrow’s boundaryless workers, like the sons and daughters of the organization men, will set their own career course. It could be that the interesting, fast-changing, and emotionally demanding work offered by tomorrow’s organizations will not prove to be the end-all and be-all to the self-developer. Aspirations of getting more time with family and pursuing personal goals hint at other dimensions to their identities. To the extent we can set aside simplistic notions that ‘self-actualization’ is the pinnacle of human motivation, this makes room to consider how family feeling, community membership, and spirituality are transcendent aims of human development.

In this light, Hall and Mirvis (1994) hypothesize that people’s core identities may be enlarged by incorporating what we call a commitment to their life’s work. In this framework, a person’s identity deepens, not only through cumulative work experiences and career achievement, but also through ‘work’ as a spouse, parent, and community member, and especially through ‘work’ on one’s identity. In many respects, the boundaryless career will give people the freedom and flexibility to more fully engage in life’s work and find, where desired, greater balance in their lives. It uill, however, be incumbent on individuals to integrate these diverse work and life experiences into their larger sense of self. They will also have to accept the financial and psychic tradeoffs that follow from the choice of a balanced career. Such choices can, of course, deepen the self: the process is referred to as finding one’s ‘calling’ (Peck, 1993) or as Shepherd (1984) calls it ‘the path with a heart’.

Where will people find role models and the social support needed to follow a self-styled path with a heart? For a period of time, anyway, this career orientation may be suspect in organizations and alternatively yield envy and disparagement from co-workers and superiors. As the boundaryless career becomes more commonplace, however, one will find many more fellow trakellers to provide guidance and some companionship. In this case, it will be important to study what tomorrow’s freelancers call their kingdom. Kahn ( 1 992), for example, finds that people’s social connection to co-workers enhances their ‘psychological presence’ at work. Does this mean, as Bennis and Slater (1968) hypothesized, that the capacity to quickly form close, personal, mthentic relationships with new people in new settings will be required to work effectively and derive social satisfaction in ‘temporary’ work situations? How about people who are shy, introverted, prickly, or who choose to work at home - how will they get the social support needed to sustain a boundaryless career?

We expect that many more working people in the future will use their social networks, rather than their organizations, as focal sources of identification. These networks, incorporating not only colleagues from past and present work assignments, but also fellow members of the PTA, maybe some neighbors, as well as spouses and children, could well provide a needed emotional anchor for those who opt for a boundaryless career. Furthermore, we expect to see more joining any of a myriad of voluntary associations, ranging from social support groups and service clubs to religious and cultural groups, to regain a sense of connection heretofore provided primarily hy their companies. It is not hard to imagine people on a boundaryless career respond- ing to the standard query with the reply ‘I do lots of different things’ and then elaborating on work projects, their roles as co-parents or as single ones, their pursuit of personal goals, and their membership in one or another social group. In the best of cases, people will have


found a ‘home’ in this complex social network, formed a more expansive career identity, and found new sources of psychological success.

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