Exploring the employee's experience of an outsource transfer, under the ambit of Section 197 of the Labour Relations Act 66 of 1995

M.Phil. (Employment Relations)Outsourcing as a strategy has been utilised by many organisations as a strategic initiative to improve core business functions and reduce costs. In the South African context, outsourcing includes the forced transfer of employees from one organisation to another. This automatic transfer is facilitated through Section 197 of the Labour Relations Act of 1995. In principle employees have a choice to seek employment elsewhere, but such a move is often restricted by long tenures of service, the lack of opportunities in the labour market, the psychological contract of employees with their employer, social affiliation with colleagues, perceived job security and comfortableness with familiar surroundings. Due to the forced nature of the employment transfer, employees would be subject to a change in identification or belonging, organisational culture, structures, management, operating principles and salary structures. These changes may significantly affect productivity, employee commitment and job satisfaction. Research purpose The research study explores the experiences of employees in an outsource transfer conducted under the ambit of Section 197 of the Labour Relations Act of 1995. The study reconnoitres employees‟ reactions to the forced organisational change so as to identify important psychological and organisational processes. Motivation for the study Despite the increasing practice of outsourcing in South Africa and abroad, limited research has been conducted on the experiences of employees during an outsource transfer. Employees that have been subject to an outsourcing transfer would have experienced a grave impact on their employment behaviour and attitudes. This would affect their relationship with previous colleagues, career development, contribute to lower levels of commitment and negatively influence their psychological contract. All these elements may influence the success of the outsourcing of business and should be taken into consideration when organisations decide to embark on outsourcing parts of their business. This study explores the employee‟s experiences during such a transfer of employment as a means to provide insight into the effect these experiences may have on the success of an outsource event. This study would aid management, human resource professionals, organisational development practitioners and scholars in understanding the impact of an outsourcing business decision on employees. Research Approach In the study, I followed a qualitative research approach. I aligned myself with the constructionist research tactic and explored the research participants‟ social construction of the outsource transfer experience. The study was conducted using as a case study a South African information-technology outsource service provider. Case-study research methodology was employed and seven research participants provided their experiences in unstructured interviews. Data was also gathered through participant observation and human documents such as e-mails. Main Findings On analysing the research data, the research participants‟ experiences could be grouped according to phases in the outsource transfer, themes and categories of constructs. These themes, categories and constructs were related to concepts and theories that had emerged from literature. This in turn culminated in the development of an Outsourcing Transition Model which integrated the psychological theory in literature and the concepts that had emerged from the research. The model provides for a holistic view of psychological theory within an operationally categorised phased approach that is easy to interpret and apply