Outsourcing, Organisational Performance and Employee Commitment

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Abstract
A growing trend in work organisation in Australia is for firms to outsource many activities that had been previously performed in-house. Outsourcing these activities, it is argued, will free up human and capital resources as well as allow for increased flexibility in the way labour is employed. Although the extent of outsourcing and other approaches to flexibility have been well documented in Australia, little attempt has been made to evaluate such practices. The purpose of this paper is to review the existing research and to evaluate the effect of outsourcing on firm performance and employee commitment. The research findings, which are based on four manufacturing companies, shows that employee commitment among contractor employees is generally high, although the economic benefits to the firm may take several years to realise.

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