Two faces of organisations: which one is most attractive to you?

What does your employer mean to you? Is it just where you have a job to exchange your labour for money? Or do you feel part of a community? These views are not mutually exclusive, but greatly affect how you feel at work.

Pablo Picasso – Nous autres musiciens (1921)

The way we relate to our employing organisations can be viewed from different perspectives. Depending on the perspective you take, the way you relate to your work will be different. If you’re only there to perform your side of the contract, you might have a tendency to do the least that you can get away with in order to get paid, or only do more insofar that it’s appropriately rewarded. If you consider yourself to be part of a community, you might give your very best, depending on how strongly you feel embedded in that community. So these narratives greatly influence how you feel about your job.

The organisation as ‘an economic party to a contract’ or the organisation as ‘a community’ are two different narratives about what an organisation is. They help us make sense of our relationship with our employers. But sometimes these narratives are not aligned with each other and lead to confusion and frustration. For example, you’re in a well-paid job, but would like to do work that is more meaningful to you. Or, you’ve worked at your employer for a long time and consider yourself a loyal and appreciated team member, but don’t see this reflected in your salary. To understand this better, let’s examine each of these perspectives a little further.

The ‘economic narrative’: the organisation as a legal economic construct

Organisations are often constructed legally as so-called legal entities. What this means is that organisations are not tangible objects. Rather they are more like an ‘imaginary friend’ just like small children sometimes have. They only exist in our minds; you cannot ‘touch’ an organisation physically. But much like the child, we perform certain rituals together (e.g. the signing of ‘official’ documents) to transform this ‘imaginary friend’ into something that we all accept to actually exist even if it’s not physically there. Sociologists calls this a ‘social imaginary’. In Dutch a legal entity is called a rechtspersoon: a legal person, i.e. it’s pretended the organisation were a real person next to other ‘natural persons’.

The Dutch East India Company (VOC) was the world’s first public company as a legal entity
Willem van de Velde II – Dutch ships on a calm sea (ca. 1665)

The legal entity can then create a chain of contracts, legally linking the organisation to resource providers such as banks (capital), employees (labour) and suppliers (raw materials, products, services) and linking it to customers as a source of cash.

The organisation orchestrates the combination of the resources into products that are exchanged for cash. As long as costs are lower than revenues the organisation returns a profit. The organisation’s owners have the legal right to exercise the organisation’s contractual rights to direct resources as they see fit for the aim of maximising profit, which the organisation will pay out to them as dividend.

As such the vast majority of incorporated enterprises have only one raison d’être, namely making and maximising profit for the shareholders. Subsequently all initiatives and decisions are measured against the metric of profitability. That doesn’t mean that they’re blind to other societal demands, but making profit will always be a primary condition, as is also discussed here.

The invention of the (limited liability) corporation as an impersonal economic entity that is able to form legal relations with real persons has been of great importance to help humans organise themselves effectively and efficiently. They allow limiting and spreading risk promoting entrepreneurship. Other types of legal entities, such as foundations, cooperatives and associations are established in similar ways but usually have different aims, not primarily focussed on making profit.

According to this narrative an employee is a resource provider, namely of labour, in exchange for money. To the employee the employer is a kind of customer who pays for his service. A special kind of customer, often the only one, with whom he may have a longer term relationship, but it is still a customer. This narrative evaluates the merits of the employment relationship purely in economic terms – it is only sustainable as long as it is ‘value adding’ and ‘competitive’.

The ‘community’ narrative: the organisation as a community

Although many people can understand the intangible concept of a legal entity, in practice any organisation becomes tangible as a group of people that we interact with. They are our team, our managers, our fellow employees and could even extend to people from other organisations (e.g. customers or contractors) who we collaborate with.

People naturally form communities when they gather to perform a job
Bartholomeus van der Helst – Militia men celebrating the Peace of Münster treaty (1648)

It is part of human nature for such a group to start defining themselves as a community to a lesser or greater extent. A community is also a social imaginary. And as it is imaginary, it’s efficacy (it’s power to produce an effect) depends on the sense of community that it’s individual members experience.

McMillan & Chavis (1986) define a sense of community as: “a feeling that members have of belonging, a feeling that members matter to one another and to the group, and a shared faith that members’ needs will be met through their commitment to be together.”

It consists of four elements (citing from Wikipedia for brevity):

  • Membership, which includes five attributes:
    • Boundaries
    • Emotional safety
    • A sense of belonging and identification
    • Personal investment
    • A common symbol system
  • Influence
    • Influence works both ways: members need to feel that they have some influence in the group, and some influence by the group on its members is needed for group cohesion.
  • Integration and fulfillment of needs
    • Members feel rewarded in some way for their participation in the community.
  • Shared emotional connection
    • The “definitive element for true community” (1986, p. 14), it includes shared history and shared participation (or at least identification with the history).

It has been suggested that ‘membership’ and ‘shared emotional connection’ are the most important among these. In another post we established that employees start to experience their job’s as meaningless if employers don’t share their values. So it could be argued that in this narrative the employment relationship is evaluated in terms of ‘shared values’ and ‘common narrative’.

So why is this important? Because we can argue that the degree to which we experience a sense of community has a major influence on how we motivated we are to contribute to the community and hence the organisation.

Conflicting narratives

What happens if our ‘economic’ and ‘community’ narratives don’t align? Let’s examine how we may be impacted if they start to conflict. Take a look at the matrix below. You will note two factors on the axes:

  • Economic attractiveness of your job
  • Sense of community

It is important to note that economic attractiveness is determined by the total ‘package’ (or ‘employee value proposition’ in HR-speak) of ‘what’s in it for you’. This is not just about your salary, but also about learning and growth opportunities and secondary benefits.

It is also good to point out that economic attractiveness should be determined relative to your alternatives. I.e. you may be paid a low salary compared to the national average, but if you don’t have any better offers there is no reason for you to think that your job is economically unattractive. This may change when you start looking for a better deal. So it’s not about whether you think you’re paid well, but if you could be paid better.

What happens if you score low/low or high/high is pretty straightforward. You will either hate your job and quickly move on or love it and stay for as long as you can.

It starts to become interesting when you score low on one factor and high on the other.

For example if you really feel at home in an organisation, but are in an economically unattractive job, you may choose to stay and rationalise away the better economic opportunities you forego. However, at the slightest upset of your sense of community or if the economic attractiveness gap becomes so large compared to an alternative you will leave.

But the most painful situation arises in the opposite case; for example you’re in a well-paying job, but hate the place you work. The reason this is more painful is because staying will conflict with your values and erode you from the inside, filling the void with a sense of meaninglessness. Especially if you have no other opportunities outside work to relate to people you care about.

We will examine the implications of these narratives in future posts. For example, how could organisations strengthen their sense of community. But also, would it be ethical for organisations to play to the ‘sense of community’ if they will still primarily evaluate the employment relationship in economic terms.

I’m curious about your thoughts and ideas, so please leave a comment if you would like to share them.

References

McMillan, D.W., & Chavis, D.M. (1986). Sense of community: A definition and theory. Journal of Community Psychology, 14(1), 6-23.

Speer, Paul & Mcmillan, David. (2008). Validation of a Brief Sense of Communtiy Scale: Confirmation of the Principal Theory of Sense of Community. Journal of Community Psychology. 36. 61 – 73. 10.1002/jcop.20217.

Spitsbergen (2009)

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4 thoughts on “Two faces of organisations: which one is most attractive to you?”

  1. Hi Rik great blog again thanks! I hope in next blogs you will go a bit deeper into examples of organisations that genuinely are run following the community principle. I’m saying because I believe also in these organisations being cash positive should always be the nr1 priority, as this ultimately enables the (felt) community to stay in existence. A friend of mine had this super awesome growing innovative company with super engaged and exiting people working for him that felt part of the community. 4 months into this Corona crisis he has asked half of them to leave as the cash has run out.

  2. Interesting thoughts. I guess people can move back and forth between different areas of the matrix. During times with lots of exciting projects, economic attractiveness may take a back-seat in lieu of the intellectual stimulation that interesting challenges bring, at other times, when work “is slow”, a general feeling of dullness may creep in and move a person to a different corner in the matrix.
    Sometimes “enchantment” with a job suddenly stops due to a change in course that an organisation implemented. All to say that these things are so volatile and temporary. I find that advancing in age affects my value propositions when it comes to work. I guess in the end, when a basic level of financial security has been achieved, intellectual and emotional fulfilment are the main drivers of performing work. That may explain the many senior citizens doing voluntary/charity work, instead of just sitting around at home.
    Curious to read the next installment!

  3. You need to differentiate between companies and, lets say non-profits, plus academia. People tend to join industry for the money and fun, while non-profits and academia for fulfilment (sometimes as an escape from profit making when they had enough).
    I admit that even gangsters (The Dutch East India Company) had a community, competition and greed but rarely sense of purpose. This greed most of the time interferes with community creation.

    Learning and growth is overrated. Lets put it this way. How many people would be left to work if they were financial independent at the current level?
    While it is important to consider overall package, most of its a fluff, invented by public relationship teams to pay less money. A good analogy is organization’s social responsibility.
    It’s not an organization’s role. Company should pay taxes (not avoid them) and the government will provide social security.
    I also think that two-dimensional representation is too simplistic. You need to introduce safety, job security, etc. to make sense of it all. Governmental jobs are attractive despite lack of community and low pay, because you can do meaningless tasks and have job security.

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