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Labour trends and human resource management


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Title: Labour trends and human resource management

Unit 4
  • Labour trends and human resource management

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
  • The relationship between external and internal
    labour markets is associated with features of
    firms HRM system

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

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
  • Changes in urbanization, the age structure of the
    population and international migration

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

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
  • Export to world markets of labour-intensive
    manufactured products
  • Textiles
  • Garments
  • Toys
  • footwear

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

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
  • 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

The labour force in Asia-Pacific Borderless
frontiers (VI)
  • Reduced the employment prospects of the new
    entrants and re-employment prospects of displaced
  • 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

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

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

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

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

The labour force in Asia-Pacific Borderless
frontiers (XI)
  • Malaysia
  • Explain its high and two-way labour mobility
  • Advanced stage of development and high wage
    levels compared with immediate neighbors
  • Plantation and modern industrial sectors which
    accentuates the disparities of opportunity and
  • 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

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
  • HKs booming economy also attracts a large number
    of illegal migrants

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
  • 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
  • Policy liberalizations
  • Information flows
  • Technological developments

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
  • East Asias rate of increase in wages is the
    result of slower growth of supply and more rapid
    growth of demand for labour

Management of labour in Asia-Pacific (II)
  • The early demographic transition also reduced,
    the rate growth of new entrants into the labour
  • 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

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

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

Management of labour in Asia-Pacific (V)
  • Collective purpose that extends to a political
  • 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

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
  • 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

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

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
Situational factors Workforce characteristics Busi
ness strategy conditions Management
philosophy Labour market Unions Task
technology Laws and societal values
Human resource management (HRM) (III)
  • The Harvard model address 4 strategic policy
  • Human resources flows, managing the movement and
    performance of people
  • Effective recruitment programmes and selection
  • 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

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

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

Human resource management (HRM) (VI)
  • Not demonstrate enthusiasm and commitment comply
  • Decision-making is channeled through top managers
  • Emphasis on participation throughout the
  • 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
  • Possibilities for redeployment and retraining
  • Changes in management and supervision
  • Training requirement

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
  • Weaknesses
  • Inadequate skills, talent which are missing in
    the workforce because they are too expensive and
    inflexible people

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

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
  • 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

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
  • Having 5 basic categories
  • Education
  • Experience
  • Physical characteristics
  • Personal characteristics
  • Personality types
  • The organization must use selection instruments
    that are both valid and reliable

Human resource management (HRM) (XI)
  • Retention and development
  • The problem of retention is linked to 2 major
  • Scarcity
  • Volatile short-term political situation of some
  • Undermines incentives that stress loyalty to the
  • 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

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
  • 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

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
  • 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

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
  • Some secondary education emphasized qualities
    need to excel in a factory environment which
    discipline and memorization

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

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
  • 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
  • Emphasized group harmony and age norms, the new
    HR policy emphasizes a performance-based system

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
  • Larger organizations display some degree of
    specialization, centralization and hierarchy

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

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
  • Flexibility is required from employees and
    managers to meet increasingly competitive

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
  • India, demanding low cost clerical labour
  • Japan, HK, Singapore and Taiwan pursued a
    strategy of upskilling and more into higher
    value-adding activities

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

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
  • 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

Outlook for the future (IV)
  • Convergence in HRM practices
  • Trend away from collective towards personal
  • 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

Unit 4
  • The End