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Office Space Management

In: Business and Management

Submitted By cathaila
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Office Space: Report, Group 35
1.) With reference to specific examples from the film, critically reflect on how Office Space illustrates tensions in the wage and effort bargain between management and workers.
The purpose of this question is to illustrate tensions in the wage and effort bargain between management and workers, more specifically, the wage and effort bargain issues that arise in the film Office Space. Throughout this essay we will discuss the theory behind the wage effort bargain and assess how the balance of power between the workers and managers affects the performance in the work place. We will begin with looking at the history behind the wage and effort bargain. We will also look at how the motivation of employees is effected, outlined through the characters point of view in the film Office Space. The film follows the working lives of the employees in the Initech, and how they are unfulfilled in their jobs.

The wage and effort bargain is a situation which occurs in the workplace between workers and managers. In a capitalist economy the main objective for firms is to maximise their profits. In order to do this, these firms must produce goods and services in order to accumulate more money than they invested in their business, and continue the circuit of capital. However, this firm must employ labour in order to initiate production. Therefore, these two parties will meet in the labour market and agree to enter into an employment relationship, specified by an employment contract. However, it is common for this contract to be afflicted with tensions associated with the wage and effort bargain. The wage effort bargain was first used by Hilde Behrend in 1957 and it became an internationally used term in the 1961’s in “Efficiency and Effort” by W. Baldamus. The worker aims to increase the wage they receive, however the capitalist aims to cut costs and maximise profits. However, when using piece rates the worker will aim to restrict output, as if there is an increase in production employers tend to cut the wage per piece. This results in the workers increasing productivity for little or no increase in their wage.

This wage and effort bargain arises as workers want to achieve an increase in their standard of living through the maximisation of their wages. However, these wages represent a cost to the capitalist firm. Increasing labour wages will cause the firms cost to increase and cause their profits to be squeezed. Thus, what will be seen as a gain for workers in terms of higher wages will be seen as a loss for employers in terms of lower profits. This can be seen as de-motivating to the worker and could result in a decrease of productivity, as the employee is only prepared to produce the effort that they believe is worth the wage they receive. Therefore motivation is a very important part of the wage and effort bargain as one of the main motivates at work for deskilled workers is money. This aspect is examined in Office space as Peter says how he would do absolutely nothing if he had 1 million dollars. This shows that he does not want to put the effort in at work, and would rather do nothing, meaning that when he is in work, he will do as little as possible. Another example of a lack of motivation in Office Space is when Peter is trying to avoid Lumbergh so that he will not be asked to work weekends. This means that he is not willing to put in extra effort and would rather do the minimum amount of work that is required.

Capitalists need employees to carry out the labour and create the products to make profit, while the employees need to sell their commodity to live. The Capitalist and employee create a Contract of Employment, were the employee gives up their rights of control over their labour, meaning the Capitalist has the right to use the employees labour whatever way he wants. A fair day’s work for a fair day’s wage can be used to represent the wage effort bargain as the Capitalist and employee both have different ideas on the amount of effort that needs to be put in for the contracted wage level. This can cause a problem between management and the employee. Again, this is shown in Office Space when Peter is trying to avoid Lumbergh so that he does not have to work weekends. Lumbergh thinks that Peter must work the weekends, but Peter feels that he should not have to work on the weekends, and that is why he is avoiding Lumbergh.

If profits increase for the Capitalist, the employee will feel that they are entitled to some of the profit. This is known as profit sharing and could be a method, used by management to increase motivation within the business. In Office Space, the company Initech do not offer profit sharing. This is shown when Peter is being interviewed by the consultant, Bob. Peter talks about how he doesn’t see a dime if he works hard and ships a few extra units for Initech. This shows the lack of motivation, as he goes on to say how he doesn’t care, as he feels that he does not get any reward for the company doing well. The effort of working harder and shipping more units does not get him any more money, so he does not feel he needs to put in the extra effort. In Office Space, the consultants inform Lumbergh that Milton had in fact been sacked 5 years ago, but due to a glitch in the system, he was still getting paid. The consultants go on to tell Lumbergh that they have fixed the glitch and now Milton is still working but is not getting paid. This shows that the consultants feel that Milton has not produced the effort for his side of the Contract of Employment, and that he needs to work without getting paid.

In the production process the capitalist has two inputs: constant capital and variable capital. Constant capital cannot be used by the capitalist to create value, however variable capital can. Human labour can be used as variable capital, thus it can create profit for the firm. The capitalist has to extract the maximum value from the workers. For the capitalist to remain competitive or gain a competitive advantage, they must try and increase their variable capital output, labour in this case. Managers can do this by hiring more workers, or making existing workers work more hours. In Office Space, Lumbergh sacks some workers, and then makes Peter work weekends. The employer can relatively dispose of an individual worker and replace them, with little cost to the firm, unless the worker is in a highly skilled sector of work. The employer has much greater financial resources than the worker, and the employer also owns the means of production, they can control labour in the process of production. In Office Space, consultants are brought in to improve efficiency and remove workers who are costing the business money who aren’t really needed. In When Tom is being interviewed by the consultants, they are asking him what exactly it is that he does at the company. He tells them what he does, and they believe that there is no need for Tom in the business, as he effectively does nothing.

If the Capitalist introduces new technology into the business, it speeds up labour productivity. The employee then thinks that the introduction of the new technology changes the effort bargain originally agreed and wants a pay rise. The Capitalist may grant the increase in pay or ignore it, it is purely contingent on their goodwill. If ignored, the employee knows that there are other workers like him, so they may threaten to go on strike in order to get the Capitalist to listen to them.

In conclusion, Office Space shows us all the tensions affiliated with the wage and effort bargain between management and workers. Through looking at the tensions in the workplace, we can see that the motivation of workers can be easily affected if management do not offer a financial reward, e.g. piecework. Office Space was a perfect example of this, with Peter unfulfilling his job, as he was not motivated financially. We also learnt that management need to cut costs where ever possible, so make the workers who are not needed redundant, which is again shown in Office Space, when the consultants are brought in to determine what employees the business does not need.

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