The effects of activation on employers of Reserve and National guard soldiers

EXECUTIVE SUMMARY This study examined the effects of military deployment or activation of reserve and National Guard soldiers on civilian employers. The sample was randomly selected from the [State] Employer Support of the Guard and Reserve employer database. The majority of organizations were not affected by activation. The distribution of strategies employed by transportation organizations to cope with the absence of the reserve employee was not random. The strategy most used by transportation organizations to cope with the loss of the reserve employee was overtime. Finally, the strategic employment of contract labor was found to reduce the number of months required to return to a normal level of performance. Keywords: Human resource, Human capital, Turnover, War, Employment INTRODUCTION Literature on the resource-based view of the firm argues that activation of reserve employees should have an adverse effect on an organization's resource mix (Allison-Aipa et al., 2005; Barney, 1991; Penrose 1959). The effect of activation on organizational operations will be explored relative to the organization's output, customer satisfaction, employee behavior, and the strategies employed by the organization to cope with the effects of activation. REVIEW OF THE LITERATURE Theoretical Foundation for the Study The Resource Based View (RBV) of the organization attempts to explain in part why organizations require resources to operate. Barney (1991) maintained that resources must be valuable, rare, inimitable, and non-substitutable. The premise for the RBV is that organizations that acquire the resources that meet Barney's four requirements will have an advantage to compete in the market over those organizations that cannot acquire resources. Not only are resources important to an organization's survival, interaction between the resources is important as well (Helfat & Peteraf, 2003; Penrose, 1959; Teece, Pisano, & Shuen, 1997). These authors suggest it is not enough to acquire resources; the organization must also apply the resources effectively to maximize the firms' output. Organizations go to great lengths to obtain and retain resources, particularly human resources (HR) (Conner & Prahalad, 1996). The loss of a reserve employee affects the relationships of the remaining employees in the organization. Not only is the individual inimitable, the synergy created from the relationships among employees, the interactions among the employees and customers, and the organization's capital, are also inimitable (Penrose, 1959). Within the constraints of economies and time, certain resources may be rare, non-imitable, and non-transferable (Barney, 1991). An organization cannot replace a deployed employee with a temporary employee and expect an immediate, positive return on investment (Doyle et al., 2004). Moreover, costs that result from searching for and training replacements have an adverse effect on an organization's bottom line (Golding, 2007; Settle, 2006). According to Becker, Huselid, Pickus, and Spratt (1997), organizational performance capabilities reside within the HR of an organization. Reed, Lubatkin, and Srinivasan (2006) also support the tenet that an organization's interactions present a resource that is unique and non-imitable. Thus, activation of reserve employees removes a valuable resource from the civilian employer, not easily replaced due to the inimitability of the resource and the inimitability of the relationships between the resources. Moreover, costs associated with searching and training replacement employees tends to detract from the company's pursuit of profits, which affects the organizations ability to accumulate wealth and resources necessary to compete in the market (Daywalt & Herman, 2006; Golding, 2007; Settle, 2006). Effect of Activation on Employee Behavior According to Schein (1990), "Every group and organization is an open system that exists in multiple environments. …