Labour trends and human resource management

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Unit 4

• Labour trends and human resource management

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Introduction (I)

• Asia-Pacific region at 2 distinct levels
• Aggregate or macro-level
• Demographic determinants of population and labour
  force growth
• Economies are not isolated, the labour migration
  between countries and how this affects labour
  market dynamics
• Organizational or micro-level
• How human resources are managed within the
  organization
• The relationship between external and internal
  labour markets is associated with features of
  firms HRM system

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Introduction (II)

• The degree of bureaucratization and
  professionalization of HRM
• Characteristics of HRM systems
• Supply and demand for labour and dynamism of
  external labour markets
• Labour organization
• Culture
• Those are associated with the complexity,
  formalization and centralization of labour
  markets within medium/large organizations

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The labour force in Asia-Pacific Borderless
frontiers (I)

• Labour demographics
• The demographic transition from high high to low
  birth and death rates began in Europe and North
  American with the Industrial Revolution
• During the period 1965-80, the world experienced
  a marked decline in crude death rates
• The rate of population growth declined in all the
  East Asian economies quite sharply
• Important implications for a countrys labour
  force
• Changes in urbanization, the age structure of the
  population and international migration

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The labour force in Asia-Pacific Borderless
frontiers (II)

• Urbanization
• Compared with the historical experience of
  developed nations, recent urbanization in
  developing countries
• Since 1970 the level of urbanization has been
  rising quickly among three ASEAN countries
• Indonesia, the Philippines and Malaysia
• Positive relationship between the level of
  economic development and level of urbanization
• High but the corresponding absolute increase have
  also been quite sizable due to the large
  population base
• Age structural change
• Pronounced fertility declines and significant
  mortality improvements among a number of
  countries in the Asia-Pacific regions

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The labour force in Asia-Pacific Borderless
frontiers (III)

• The declining dependency ratios are likely to
  facilitate their developmental process
• Low dependency ratios are expected to undergo a
  substantial increase, due to rapid rise in the
  proportion of the elderly
• Diversity and change
• The Asia-Pacific region has experienced rapid
  growth since Japans economic take-off in the
  1950s
• Export to world markets of labour-intensive
  manufactured products
• Textiles
• Garments
• Toys
• footwear

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The labour force in Asia-Pacific Borderless
frontiers (IV)

• Cheap labour was a significant national resources
  and export-oriented industrialization was a
  create full employment
• Declines in population and labour force growth
  led quickly to labour shortages
• Some export industries heavily dependent on
  unskilled labour
• Singapore and Hong Kong
• Labour shortages and rapidly rising wages forced
  manufacturing industries to make further
  adjustments to changing comparative advantage
• Some high-skilled labour also began to be
  imported into Indonesia and China was inadequate
  to meet the demand generated by rapid growth

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The labour force in Asia-Pacific Borderless
frontiers (V)

• Structural change in national labour markets in
  the East Asia region has largely the product of
  rapid economic growth
• NIEs and the ASEAN countries has encouraged firms
  to economize on the use of unskilled labour by
  moving up the industrial-technology ladder
• Producing workers suitably qualified by
  education, training and experience for high-skill
  jobs
• The Asian financial crisis of 1997 also brought a
  significant social impact
• Steadily improving employment prospects
• Deterioration in labour market conditions
• Substantial retrenchments in financial services
  and manufacturing sectors

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The labour force in Asia-Pacific Borderless
frontiers (VI)

• Reduced the employment prospects of the new
  entrants and re-employment prospects of displaced
  workers
• Rise in underemployment occurred under the
  displaced workers and unsuccessful new job
  seekers into the rural and urban informal sectors
• 2 features of economic systems amplify their
  effects in the 3 economies
• Absence of a meaningful social safety net
• Social assistance are also rudimentary and are
  limited to those who are incapable of work
• Social expectations in these countries have been
  shaped by a long period of increasing employment
  opportunities

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The labour force in Asia-Pacific Borderless
frontiers (VII)

• Government responded to rising unemployment in 3
  main ways
• Send home foreign workers
• Migrant workers were working illegally
• Such as Thailand and Malaysia
• Repatriation may not reduce unemployment
• Governments are trying to mitigate the
  unemployment problem is by encouraging those with
  farming roots to go back to them
• Indonesians government cut train fares for those
  making the annual trip to their home village
• Introduce job-creation programmes and plan social
  safety nets
• Coverage in return for trade unions agreeing to a
  change in the law to allow lay-offs

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The labour force in Asia-Pacific Borderless
frontiers (VIII)

• Labour migration
• The Asia-Pacific regions has experienced
  considerable change in the post-war period
• Transformation has been the increasing spatial
  mobility of people across national borders
• Migration to Southeast Asia occurred as Chinese
  trading posts were established countries
• Asia in the mid-1990s supplied around 40 per cent
  of the annual intake of immigrants
• With low fertility affecting the populations of
  the settler societies
• Asia seek out new opportunities and
  labour-deficit areas within Asia supply

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The labour force in Asia-Pacific Borderless
frontiers (IX)

• Asian migration patterns
• Great range of migration and development
  experience across the region
• China and Indonesia are geographically and
  demographically huge, with an enormous range of
  internal diversity
• The Philippines
• Emigration is the continued rapid growth rate of
  the labour force
• The composition of emigrant flows
• Unskilled laborer through the skilled technician
  to the white-collar service employee
• Balance between the sexes with women of all skill
  levels involved in migration

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The labour force in Asia-Pacific Borderless
frontiers (X)

• Indonesia
• Primarily made up of workers entering menial
  occupations in the Middle East and Malaysia
• More skilled in Indonesia are not so competitive
  as few are proficient in the English language
• No migrants from Indonesia with professional
  expertise or technical qualifications
• Hiring foreign workers
• Thailand
• Seek employment abroad to earn higher income
• The major destinations of Thai contract workers
  are the Middle East, Africa, ASEAN and other
  Asian countries

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The labour force in Asia-Pacific Borderless
frontiers (XI)

• Malaysia
• Explain its high and two-way labour mobility
  include
• Advanced stage of development and high wage
  levels compared with immediate neighbors
• Plantation and modern industrial sectors which
  accentuates the disparities of opportunity and
  income
• Vulnerability to global economic fluctuations and
  consequent labour surpluses and shortages
• Typical Malaysian migrant has tertiary education
  with a young family in a middle or senior
  management position
• Semi-skilled and unskilled workers, in the 1960s
  emigration from Malaysia was confined to the
  region, mainly Singapore

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The labour force in Asia-Pacific Borderless
frontiers (XII)

• Hong Kong
• The migration to Hong Kong of capital,
  entrepreneurial talent and labour from China was
  critical in the transformation from an entrepot
  to the industrial centre
• Labour came from 3 main sources
• Local
• The original source might have been China
• Direct migration from China
• Between 1976 and 1981 400,000 net additions to HK
• Skilled migration controlled either by the
  colonial administration to fill positions in the
  public service
• Or mainly British firms bringing in managerial
  staff
• HKs booming economy also attracts a large number
  of illegal migrants

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The labour force in Asia-Pacific Borderless
frontiers (XIII)

• Increasing numbers of overstayers from other
  parts of Asia
• Triggered regional migration as a process
  complementing the transfer of trade and capital
  and reinforcing the processes of regional
  integration
• Short-term workers who do not settle down
  permanently in their adopted countries
• Effect of market forces cause labour market
  increase internationalized on a global regional
  basis
• Policy liberalizations
• Information flows
• Technological developments

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Management of labour in Asia-Pacific (I)

• Responding to trends in the labour supply
• Education and training maybe necessary conditions
  for sustained economic growth
• 2 conditions must be fulfilled for a growing
  supply of educated labour to be utilized in
  high-return activities
• Rapid growth of labour demand relative to supply
  and skilled labour
• Labour market must perform efficiently
• Efficient, flexible and responsive to changing
  conditions
• East Asias rate of increase in wages is the
  result of slower growth of supply and more rapid
  growth of demand for labour

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Management of labour in Asia-Pacific (II)

• The early demographic transition also reduced,
  the rate growth of new entrants into the labour
  force
• The growth rapidly, labour demand in Asia has
  become increasingly skill-intensive
• Wage management with white collar and technical
  employment increased steadily during the 1970s
  and the 1980s
• The occupational composition of labour demand in
  the Asian economies reflected increase in the
  abundance of education labour
• Rising wages of unskilled labour eroded
  international competitiveness in labour-intensive
  manufactured goods

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Management of labour in Asia-Pacific (III)

• Reluctance of Asian governments to intervene
  heavily in the operation of labour markets
• East Asian economies avoided the creation of a
  high-wage labour elite
• Workers accept flexibility of wages rather than
  decline in real earnings
• Retained earnings accounted for higher proportion
  of investment finance, reducing reliance on
  underdeveloped capital markets
• Greater competitiveness in international markets,
  the faster rates of growth of output, employment
  and earnings

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Management of labour in Asia-Pacific (IV)

• Labour-management relations
• Employment relationship cannot be regarded as
  simply an exchange of labour for pay
• Goes beyond money to include a number of
  secondary issues
• Working conditions
• The length of the workings day
• Vacation time
• Measures of participation
• Union (mixture of movement and organization)
• Meet workers individual needs, protecting them
  from exploitation and negotiating improved wages
  and conditions

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Management of labour in Asia-Pacific (V)

• Collective purpose that extends to a political
  role
• Alternative focus for employee commitment
• Power base that can clash with the prerogatives
  of management
• Collective bargaining increase employee
  bargaining power and counter employers attempts
  to create competition between workers
• Obtain standardized wages and conditions at the
  best possible level
• Deal with employees on an individual basis
• Anglo and European nations take place through
• Personal contacts
• Allowing employers to offer pay increase to staff
  willing to accept such contracts

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Management of labour in Asia-Pacific (VI)

• Organizational change method
• Team briefings
• series of meeting and collect ideas and
  criticisms t be funneled upwards
• Quality circles
• Emphasizing direct dialogue between staff and
  line management on the subject of improving
  procedures
• Resisted the introduction of change methods
• Main source of union power as the filter of
  information and innovation
• Reduced to the primary subjects of pay, holidays
  and discipline, removing the unions form the
  discussion of procedures

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Human resource management (HRM) (I)

• HRM is a distinctive approach to manage people
• Uniquely important to sustained business success
• Recruiting capable, flexible and committed
  people, managing and rewarding their performance
  and developing key competencies
• The stress is on people as human resources
• The Harvard approach
• Element of mutually in all businesses
• Significant stakeholders in an organization
• Needs and concern, along with other groups such
  as shareholders and customers

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Human resource management (HRM) (II)
Beer or Harvard model of HRM
Stakeholder interests Shareholders Management Empl
oyee groups Government Community Unions
HRM policy choices Employee influence Human
resources flow Reward systems Work systems
HR outcomes Commitment Competence Cost
effectiveness congruence
Long-term consequences Individual
well-being Organizational effectiveness Societal
well-being
Situational factors Workforce characteristics Busi
ness strategy conditions Management
philosophy Labour market Unions Task
technology Laws and societal values
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Human resource management (HRM) (III)

• The Harvard model address 4 strategic policy
  areas
• Human resources flows, managing the movement and
  performance of people
• Effective recruitment programmes and selection
  techniques
• Placing them in the most appropriate jobs,
  appraising their performance and promoting the
  better employees
• Terminating the employment of those no longer
  required, deemed unsuitable or achieving
  retirement age
• Must ensure the right mix and number of staff in
  the organization

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Human resource management (HRM) (IV)

• Reward system
• Pay and benefits designed to attract
• Motivate and keep employment
• Employee influence
• Controlling levels of authority
• Power
• Decision-making
• Work systems, defining and designing jobs
• Arrangement of people
• Information and technology provides the most
  productive and efficient results

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Human resource management (HRM) (V)

• Policies result in the Four C
• Commitment of employees to the organizations
  mission and values
• Congruence
• Linking human resource objectives with the
  organizations goal
• Competence
• Developing an appropriate mixture of skills
• Abilities and knowledge
• Cost-effectiveness
• Delivering performance in a competitive manner
• Strongly influenced by behavioral research and
  theory and stands in the tradition of human
  relations

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Human resource management (HRM) (VI)

• Not demonstrate enthusiasm and commitment comply
• Decision-making is channeled through top managers
• Emphasis on participation throughout the
  organization
• The principal functions of HRM
• Planning
• Anticipates and maps out the consequences of
  business strategy on an organizations human
  resource requirements
• Ensure that the enterprises has the necessary
  people to follow the strategic plan
• Jobs which come into being, be ceased, or be
  changed
• Possibilities for redeployment and retraining
• Changes in management and supervision
• Training requirement

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Human resource management (HRM) (VII)

• Programmes for requirements
• Implications for employee relations
• Feedback mechanism for company objectives
• Methods for dealing with HR problems
• Inability to obtain sufficient technically
  skilled workers
• Information need to gathered through some form of
  human resource audit which linked to a
  conventional of organizations human capital
• Strengths
• Existing skills, individual expertise and unused
  talent
• Weaknesses
• Inadequate skills, talent which are missing in
  the workforce because they are too expensive and
  inflexible people

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Human resource management (HRM) (VIII)

• Opportunities
• Developed in existing staff and talent which can
  be bought from the external job market
• Threats
• The risk of talent being lost to competitors
• Such as Chwee-Huat (Singapore)
• Dependency on foreign workers
• Ageing workforce
• Impact of companies relocating their
  labour-intensive industries to other countries
• Problems related to privatization of
  government-linked companies

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Human resource management (HRM) (IX)

• Recruitment and selection
• Recruiting is the process of attracting job
  candidates who have the abilities and attitude to
  help the organization achieve its objectives
• Natural follow-up to human resource planning
• The ways for recruitment
• Advertisement
• Opening through company publications and bulletin
  boards
• Encourage present employees to tell their friends
  and relatives about job openings
• Exploring longer-term solutions to the dearth of
  management talent
• Education and recurrent training
• Example of Vietnam

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Human resource management (HRM) (X)

• The selection process begins
• Enterprise chooses the applications who best meet
  the criteria for the available positions
• Ensure the best available candidates are
  selected, an organization must compare the
  applicants against the criteria established for
  job
• Having 5 basic categories
• Education
• Experience
• Physical characteristics
• Personal characteristics
• Personality types
• The organization must use selection instruments
  that are both valid and reliable

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Human resource management (HRM) (XI)

• Retention and development
• The problem of retention is linked to 2 major
  factors
• Scarcity
• Volatile short-term political situation of some
  environments
• Undermines incentives that stress loyalty to the
  firm
• Process which managers obtain the skills,
  experience and attitudes that they need to become
  or remain successful leaders
• The reasons for employee training
• Reducing or preventing managerial obsolescence by
  keeping the individual up-to-date in the field
• Increasing the managers overall effectiveness
• Increasing the managers overall satisfaction
  with the job

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Human resource management (HRM) (XII)

• 3 main causes of obsolescence
• Inability to keep up with technological changes
  in the field
• Individuals to positions for which they are
  unqualified
• Managers get older they find it difficult to keep
  up with the latest developments in their field
• The ways to retain staff
• Establish the perception that personnel policies
  are fair
• Western egalitarianism
• Reward people within their cultural norms
• Generate a sense of belonging to the group
• Consistent long-term human resources policy
• Personnel prefer to be rewarded on the basis of
  behavior (Loyalty and honesty) rather than on
  quantifiable performance criteria

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Human resource management (HRM) (XIII)

• Growing competitive pressure many companies face
  is causing new pressures for the HRM function
• South Koreas Samsung Group announced a human
  resource scheme called the New Management
  Programme
• Recruit more women and devolve greater
  decision-making powers to local level managers
• However, employees are feeling more stressed with
  greater dissatisfaction about the ability to
  balance work and family life
• Employee development has become a concern to a
  number of government in the Asia-Pacific region
• Stepped in to facilitate market transitions
• HK as a example
• Employee Retraining Board was set up to provide
  employees retraining programmes (ERP) for
  unemployed manual workers

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Human resource management (HRM) (XIV)

• Training
• Process of altering employee behavior and
  attitudes in a way that increase the probability
  of goal attainment
• Learning is the acquisition of skills, knowledge
  and abilities that result in a relatively
  permanent change in behaviour
• Devote considerable resources to training and
  developing employees
• Cooperating with their host governments to
  develop school curricula that produce skilled
  workers
• Some secondary education emphasized qualities
  need to excel in a factory environment which
  discipline and memorization

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Human resource management (HRM) (XV)

• Management must be prepared to
• Make it clear that training has a high priority
• Reward those who train their people
• Actively participate in training programmes to
  keep abreast of the latest developments in their
  own areas of expertise
• Some ways for organization anticipates and plans
  for the types of training that will keep the
  workforce up-to-date
• Human resources management in the strategic
  planning process
• Affect what management expects of the employees
• Technological, social/psychological, economic,
  political and intellectual trends
• Resist the tendency to use training just to
  handle immediate, short-term problems
• Set a regular, criterion-based planning and
  review process
• Build a pool of potentially promotable individuals

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Human resource management (HRM) (XIX)

• Encourage input from those who will be trained,
  in designing and implementing training programmes
• Conduct human resource audits to measure the
  organizational climate
• Rely on periodic assessments for discovering who
  needs training
• Given subordinates the most effective on-the-job
  training
• Conducting needs analysis surveys
• Analysis questionnaires or procedures
• Termination
• Managers in charge of redundancy programmes
  typically focus on target numbers
• Retention strategies for key staff are even more
  during periods of redundancy
• Globalization is affecting the likely basis for
  termination
• Emphasized group harmony and age norms, the new
  HR policy emphasizes a performance-based system

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Implications of HRM and labour for organizational
development strategies (I)

• Sophistication and importance of people
  management is greater in larger organization
• Owners and employees may work closely on a
  personal level
• Larger organizations employ highly trained human
  resources practitioners using advanced selection,
  assessment and reward techniques
• Build up the formal structure
• Clearer division between specialist functions
• Focus on matching human resources to strategic
  objectives
• Larger organizations display some degree of
  specialization, centralization and hierarchy

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Implications of HRM and labour for organizational
development strategies (II)

• Diffusion of HRM ideas has led to a move away
  from the centralized HRM departments
• Division of work between various aspects of
  people management
• Senior management take responsibility for human
  resources strategy
• Line managers assume operational responsibility
  for their people
• Human resource specialists provide specific
  services ranging from administration to selection
  programmes and counseling

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Implications of HRM and labour for organizational
development strategies (III)

• Organizational structures can be regarded as
  people management systems
• Simple hierarchies along traditional lines to
  complex networks
• Based on informal working relationships
• Constrain or facilitate the freedom of employees
  to act and make decisions
• Classified into a number of types
• Functional, divisional, matrix, federations and
  networks
• Flexibility is required from employees and
  managers to meet increasingly competitive
  circumstances

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Outlook for the future (I)

• Labour factor continue to be central to economic
  growth and development in the region
• Low-cost, labour-intensive activities
• Data capture and entry
• Higher-skilled, knowledge-intensive activities,
  skilled labour continues to be the key resource
• Such as Asia-Pacific
• China, suppliers of labour for manufacturing
  activities
• India, demanding low cost clerical labour
• Japan, HK, Singapore and Taiwan pursued a
  strategy of upskilling and more into higher
  value-adding activities

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Outlook for the future (II)

• Demographic trends within the region
• Continue to rely on imported labour
• Maintain attractive working and living
  environments for globally mobile personnel
• NIEs strive to ensure the continuing movement of
  labour within the region
• Changing age structure of their populations
• Sizeable growth of the number of aged within
  their populations by the year 2025
• Declining birth rates and improved health mean
• Growth of long-term unemployed
• Limited the skills
• Shanghai (China, most intractable ageing problem
  anywhere in the world

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Outlook for the future (III)

• Integration of labour markets within the
  Asia-Pacific region
• Foreign direct investment and technology transfer
  within the region has been mirrored by labour
  migration
• Recipients of migrant workers who have moved
  from the rest of developing Asia
• Governments face a difficult task balancing
  political/social sensitivities with the
  commerical realities of labour needs as Asia

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Outlook for the future (IV)

• Convergence in HRM practices
• Trend away from collective towards personal
  contracts
• More Western organizations are adopting
  Japanese-style quality circles and team working
• Transplantation of practices and structures
• Maintain the three pillars of employment
• Applied to small core of regular employees
• Japanese companies have dismissed employees in
  the past
• Honda, Fujitsu and Sony move to a wage system of
  annual salary
• More organizations around the world begin to
  implement so-called best practices

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Unit 4

• The End