A key debate in research on corporate restructuring is whether this widespread and extensive transformation process made contemporary employment relationships more open—with firms relying largely on market forces to reward employees—or left them relatively closed, with wages remaining primarily a function of internal labor market systems, practices, and policies. Research in this arena has had conceptual and empirical challenges in clearly distinguishing between these contrasting perspectives, leaving open the question of whether corporate restructuring reflects a full-fledged transformation in wage patterns, determinants, and outcomes, or instead erosion around the margins. We seek to resolve this debate by extending, refining, and assessing a rent-destruction account of the effect of corporate restructuring on employment relationships—which we contrast with internal labor market approaches. Results from analyses of 25 years of personnel records from a Fortune 500 energy-sector firm are consistent with the rent-destruction account: employment relationships became more market-based following the onset of corporate restructuring—albeit with production workers’ contracts seemingly becoming more open than those of managers.
AkerlofGeorge A.YellenJanet L.1986. Efficiency Wage Models of the Labor Market. Cambridge, UK: Cambridge University Press.
2.
AltonjiJoseph G.WilliamsNicholas. 2005. “Do Wages Rise with Job Seniority? A Reassessment.” Industrial and Labor Relations Review58(3):370–97.
3.
BakerGeorge P.GibbsMichaelHolmstromBengt. 1994. “The Wage Policy of a Firm.” Quarterly Journal of Economics109(4):921–55.
4.
BaumolWilliam J.BlinderAlan S.WolffEdward N.2003. Downsizing in America: Reality, Causes, and Consequences. New York: Russell Sage Foundation.
5.
BeckerGary S.1994. Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education. Chicago: University of Chicago Press.
6.
BidwellMatthew J.2013. “What Happened to Long-Term Employment? The Role of Worker Power and Environmental Turbulence in Explaining Declines in Worker Tenure.” Organizational Science24(4):1061–82.
7.
BidwellMatthew J.BriscoeForrestFernandez-MateoIsabelSterlingAdina. 2013. “The Employment Relationship and Inequality: How and Why Changes in Employment Practices Are Shaping Rewards in Organizations.” Academy of Management Annals7(1):61–121.
8.
CappelliPeter. 2008. “Talent Management for the Twenty-First Century.” Harvard Business Review86(3):74–81.
9.
CappelliPeterBassiLaurieKatzHarry C.KnokeDavidOstermanPaulUseemMichael. 1997. Change at Work. New York: Oxford University Press.
10.
CappelliPeterShererPeter D.1990. “Assessing Worker Attitudes under a Two-Tier Wage Plan.” Industrial and Labor Relations Review43(2):225–44.
11.
CascioWayne F.YoungClifford E.MorrisJames R.1997. “Financial Consequences of Employment-Change Decisions in Major U.S. Corporations.” Academy of Management Journal40(5):1175–89.
12.
CastillaEmilio J.2008. “Gender, Race, and Meritocracy in Organizational Careers.” American Journal of Sociology133(6):1479–1526.
13.
CornfieldDaniel B.CampbellKaren E.McCammonHolly J.2001. Working in Restructured Workplaces: Challenges and New Directions for the Sociology of Work. Thousand Oaks, CA: Sage.
14.
DavisGerald F.2009. Manage by The Market: How Finance Re-Shaped America. Oxford, UK: Oxford University Press.
15.
DenckerJohn C.2012. “Who Do Firms Lay Off and Why?” Industrial Relations51(1):152–69.
16.
DiNardoJohn E.FortinNicole M.LemieuxThomas. 1996. “Labor Market Institutions and the Distribution of Wages, 1973–1992: A Semiparametric Approach.” Econometrica64(5):1001–44.
17.
DiPreteThomas A.2005. “Labor Markets, Inequality, and Change: A European Perspective.” Work and Occupations32(2):119–39.
18.
ElviraMarta M.2001. “Pay Me Now or Pay Me Later: Analyzing the Relationship between Bonus and Promotion Incentives.” Work and Occupations28(3):346–70.
19.
FernandezRoberto M.2001. “Skill-Biased Technological Change and Wage Inequality: Evidence from a Plant Retooling.” American Journal of Sociology107(2):273–320.
20.
Fernandez-MateoIsabel. 2009. “Cumulative Gender Disadvantage in Contract Employment.” American Journal of Sociology114(4):871–923.
21.
FreemanRichard B.MedoffJames L.1984. What Do Unions Do?New York: Basic Books.
GoldsteinAdam. 2012. “Revenge of the Managers: Labor Cost-Cutting and the Paradoxical Resurgence of Managerialism in the Shareholder Value Era, 1984–2001.” American Sociological Review77(2):268–94.
24.
GoldthorpeJohn H.2000. “Rent, Class Conflict, and Class Structure: A Commentary on Sørensen.” American Journal of Sociology105(6):1572–82.
25.
GoldthorpeJohn H.2007. “Class Analysis: New Versions and Their Problems.” Pp. 125–53 in On Sociology, edited by GoldthorpeJ. H.Palo Alto, CA: Stanford University Press.
26.
GordonDavid M.1996. Fat and Mean: The Corporate Squeeze of Working Americans and the Myth of Managerial Downsizing. New York: The Free Press.
27.
GormanElizabeth H.KmecJulie A.2009. “Hierarchical Rank and Women’s Organizational Mobility: Glass Ceilings in Corporate Law Firms.” American Journal of Sociology114(5):1428–74.
28.
HallockKevin F.2009. “Job Loss and the Fraying of the Implicit Employment Contract.” Journal of Economic Perspectives23(4):69–93.
29.
HavemanHeather A.BroschakJoseph P.CohenLisa E.2009. “Good Times, Bad Times: The Effects of Organizational Dynamics on the Careers of Male and Female Managers.” Pp. 119–48 in Economic Sociology of Work, Vol. 18, Research in the Sociology of Work, edited by Keister. Bingley, UKL. A.: Emerald Group Publishing Limited.
30.
HirschBarry T.AddisonJohn T.1986. The Economic Analysis of Unions: New Approaches and Evidence. Winchester, MA: Allen & Unwin.
31.
HollisterMatissa. 2011. “Employment Stability in the U.S. Labor Market: Rhetoric versus Reality.” Annual Review of Sociology37:305–324.
32.
JensenMichael C.1993. “The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems.” Journal of Finance48(3):831–80.
33.
KalevAlexandra. 2009. “Cracking the Glass Cages? Restructuring and Ascriptive Inequality at Work.” American Journal of Sociology114(6):1591–1643.
34.
KimChangHwanSakamotoArthur. 2008. “The Rise of Intra-Occupational Wage Inequality in the United States, 1983 to 2002.” American Sociological Review73(1):129–57.
35.
KochanThomas A.KatzHarry C.McKersieRobert B.1994. The Transformation of American Industrial Relations. Ithaca, NY: Cornell University Press.
36.
KristalTali. 2013. “The Capitalist Machine: Computerization, Workers’ Power, and the Decline in Labor’s Share within U.S. Industries.” American Sociological Review78(3):361–89.
37.
LazearEdward P.1979. “Why Is There Mandatory Retirement?” Journal of Political Economy87(6):1261–84.
38.
LemieuxThomasMacLeodW. BentleyParentDaniel. 2009. “Performance Pay and Wage Inequality.” Quarterly Journal of Economics74(1):1–49.
39.
MarshallAlfred. 1949. Principles of Economics. London, UK: Macmillan.
40.
MartocchioJoseph J.2015. Strategic Compensation: A Human Resource Management Approach. New York: Prentice Hall.
41.
MilkovichGeorgeNewmanJerryGerhartBarry. 2013. Compensation. New York: McGraw-Hill Education.
42.
MorganStephen L.TangZun. 2007. “Social Class and Workers’ Rent: 1983–2001.” Research in Social Stratification and Mobility25(4):273–93.
43.
MorrisMartinaWesternBruce. 1999. “Inequality in Earnings at the Close of the Twentieth Century.” Annual Review of Sociology25:623–57.
44.
OblojTomaszSengulMetin. 2012. “Incentive Life-Cycles: Learning and Division of Value within Firms.” Administrative Science Quarterly57(2):305–347.
45.
PetersenTrond. 1995. “Analysis of Event Histories.” Pp. 453–517 in Handbook of Statistical Modeling for the Social and Behavioral Sciences, edited by ArmingerG.CloggC. C.SobelM. E.New York: Plenum Press.
46.
PetersenTrondSaportaIshak. 2004. “The Opportunity Structure for Discrimination.” American Journal of Sociology109(4):852–901.
47.
PfefferJeffrey. 2001. “Fighting the War for Talent Is Hazardous to Your Organization’s Health.” Organizational Dynamics29(4):248–59.
48.
RousseauDenise. 1995. Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: Sage.
49.
ShleiferAndreiSummersLawrence H.1998. “Breach of Trust in Hostile Takeovers.” Pp. 33–68 in Corporate Takeovers: Causes and Consequences, edited by AuerbachA. J.Chicago: University of Chicago Press.
50.
SørensenAage B.1996. “The Structural Basis of Social Inequality.” American Journal of Sociology101(5):1333–65.
51.
SørensenAage B.2000. “Toward a Sounder Basis for Class Analysis.” American Journal of Sociology105(6):1523–71.
52.
SpilermanSeymourPetersenTrond. 1999. “Organizational Structure, Determinants of Promotion, and Gender Differences in Attainment.” Social Science Research28(2):203–227.
53.
Tomaskovic-DeveyDonaldLinKen-Hou. 2011. “Income Dynamics, Economic Rents, and the Financialization of the U.S. Economy.” American Sociological Review76(4):538–59.
54.
UseemMichael. 1996. Investor Capitalism: How Money Managers Are Changing the Face of Corporate America. New York: Basic Books.
55.
WesternBruceRosenfeldJake. 2011. “Unions, Norms, and the Rise in U.S. Wage Inequality.” American Sociological Review76(4):513–37.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
